OM00977_OM00977 Yeovil

Yeovil Business News
Summer 2013
old mill: listening, analysing, advising
Old Mill update
Welcome to the 2013 Summer edition
of the Yeovil Business News.
Chris Bowles,
Head of Business
Services
Our Shepton Mallet office has now relocated to our
new build offices in Wells and we have now been
there for a couple of months. However, we still have
the same telephone numbers, so if you need to
speak to your Old Mill contact you can ring them on
their existing number.
Preparation for the move went well as the skips in
the yard of the Old Mill testify. They coped with the
accumulated rubbish that had gathered over the
Checklist for recovery
Matt Dampier,
Business Services
Manager
At a June business breakfast we asked
nearly 50 companies whether trading
conditions had improved in the past
three months, whether they had stayed
the same or got worse. 100% felt that
conditions had improved!
past 25 years or so. Most fascinating was the
collection of IT equipment that was assembled in the
car park one day for the recyclers to collect. Some of
that from the 1990’s looked so old fashioned it
would not have surprised us to find a wind-up
gramophone handle on the side.
The earlier Yeovil office move last November also
went extremely well. Many of you will now have
seen the splendid premises. We, and indeed our
clients, are already finding the benefits of our teams
being able to work alongside each other in an open,
clear environment.
We hope you have an enjoyable summer and we look
forward to working with you over the coming months.
n Are
your creditors going to see recovery as a
chance to get loans, overdrafts etc repaid more
quickly? This is a leading factor in recovering
company failures.
n Any
business expansion is likely to lead to more
demands on your time – can you cope? Can you
prioritise? Can you delegate?
n When
will be the right time to take on more staff?
How can you ensure you take on the right staff?
Full time or part time? Long term or temporary?
Although many pundits are still sceptical as to
n Are you likely to be tempted to stock up in
whether the economic climate is yet ready for
anticipation of fresh demand? Will you be able to
sustained economic recovery, such a positive
maintain stock turn ratios?
indication of business confidence cannot be ignored. n Recovery is unlikely to be even across the board.
However, recovery itself provides fresh challenges.
Are you realistic in understanding the potential for
It is an often quoted reality that historically more
growth in the sector you operate in?
companies fold in the road out of recession than
These are only a few key heads up to the very
during the recession itself. We need to be alive to the
many questions you need to be asking. In some
dangers and plan accordingly.
cases the risks of getting some of these aspects
n Almost all growth will result in more stress on cash
wrong could be more damaging than the benefits
flow – are you working with your accountant to
of growing your business. Please feel free to talk to
work out careful plans to present to the banks to
your Old Mill contact to explore any of these and
other issues further.
ensure you have the cash you require to grow?
What is it that your business
is best at?
Craig Howes,
Business Services
Director
Some current business theory is around
the idea that the most successful
businesses are focused on doing what
they do ‘best’.
Is it an unrealistic assumption that you can run the
‘best’ restaurant? It depends very much on how you
break down the meaning of ‘best’.
n Can
n Will you make your name for the quality of your food?
n Will
This may sound so obvious that it is scarcely worth
a mention – until you start to talk to businesses
and find out that many are not even aware of what
their strengths are and that they dilute their effort
by being a jack of many trades – each of which
may make a profit – but could well be hindering
greater growth in a key area. How can they identify
what they can be ‘best’ at?
The subject gets confused by discussions of Unique
Selling Propositions and Niche Marketing. Yes these
things are important but the terminology sometimes
distracts people from seeing simple truths.
For an example let’s look at the restaurant sector.
Because there are relatively low barriers (costs) of
entry many people are tempted by the idea of
setting up a restaurant. They are sure they can be
better than anyone else. However, in reality it is not
a simple as it seems and many do not survive the
first year.
you have an award winning chef?
n What
is the atmosphere of your restaurant going
to be?
n Is
They build on their strengths and look to grow
through developing them. They need to be the
‘best’ in a particular field
you be the best in your town?
it the ‘place’ to be seen?
n What
age group does your restaurant appeal to?
n Are
you, as a restaurant going to be known for gut
stretching portions?
n Will
you focus on an ethnic speciality food?
n Will
the selection of wines on offer be a major draw?
Many more ideas could be added to this list but from
it a successful business is likely to focus on only one
or two to identify what they can be ‘best’ at.
Restaurants are far from the only sector where this sort
of exercise can be carried out. Try it for the sector that
your business operates in and see if you can identify
what your business can be ‘best’ at. There is very likely
to be something and perhaps that is where you should
be focusing your growth and marketing plans. Will this
help you and your business achieve the aspirations
you have? You are far more likely to enjoy the journey
if you are doing something you are really good at.
At Old Mill the thing we feel that we are ‘best’ at is
helping people meet their aspirations in both
business and personal life – we do not believe you
can ever fully separate the two. If you would like to
have further discussions about how Old Mill could
help you, your business or your family please do not
hesitate to contact us.
“You are far more likely to
enjoy the journey if you are
doing something you are
really good at.”
Finance options
Cash flow benefits
n If
Graeme Tate,
Business Services
Manager
Are you thinking of buying an asset for
your business? Have you considered that
the way you purchase assets for your
business could make a huge difference
to your tax liability and dramatically
affect your cash flow?
Whether you are thinking of buying plant and
machinery, a new vehicle or upgrading your PC,
you need to carefully consider which method of
purchase is going to be most beneficial to your
business. Below we have outlined the various
benefits of the main options – purchasing outright,
hire purchase and lease.
Purchasing outright or by hire purchase
Whether you purchase outright or by hire purchase,
the asset will be capitalised on the Balance Sheet of
the accounts and Capital Allowances will be received
on the cost, but the rate will depend on the type
of asset.
Tax benefits
nA
number of asset types qualify for the Annual
Investment Allowance (AIA), which gives 100%
allowance on the cost of the asset purchased.
Cars do not qualify for AIA, but can still get a
100% capital allowance, so if purchasing a new
car, please consult your Old Mill advisor.
n The
AIA is an extremely beneficial allowance,
however, we would strongly recommended you
discuss any proposed asset purchase with your
accountant to ensure it qualifies and confirm how
much spend is covered by the AIA. The
Government’s policy on the AIA is constantly
changing so you don’t want to get caught out, and
you must be aware that the AIA limit is also split
between any related companies.
n Tax
relief will also be obtained on the business
element of any finance charge when purchasing
through hire purchase, and as many dealers offer
very attractive finance/HP packages for companies,
hire purchase can sometimes be more appealing
than buying something outright.
n You
may also be able to claim back VAT but
the rules are complicated so consult your Old
Mill advisor.
a business was to spend £50,000 on qualifying
plant and machinery during the year ended 31
March 2014, it would receive the AIA at 100%. This
would have the effect of reducing the business’
taxable profit by £50,000.
n By
purchasing an asset that qualifies for AIA you
receive the allowances on the asset in the first year
rather than over the life of the asset which provides
a real cash flow advantage.
n Be
aware that if you have received relief on the
purchase of an asset, if you were to then sell it,
HMRC may ‘claw back’ the allowances by taxing
the sale proceeds.
Operating lease
If you lease the asset it is not included on the Balance
Sheet, therefore no capital allowances are available.
Tax benefits
n You
can still get some tax relief however, as the
rental payments are charged to the profit and loss
account hence reducing the taxable profit. The
impact of this is that the tax relief is received over
the life of the operating lease agreement rather than
in the year of purchase if the asset receives the AIA.
n You may also be able to reclaim VAT and offset your
payments against taxable profits, but again, the rules
are complicated so consult your Old Mill advisor.
Cash flow benefits
n Depending
on who your lease agreement is with,
you may be able to boost cash flow if the residual
value is fixed as this can reduce payments.
n You
may also be able to tailor your repayments to
match your cash flow.
For your consideration
n If
you have cash tied up in capital assets, you could
enter into a sale or leaseback option to finance this
over a number of years.
n Your
status as an unincorporated business or limited
company may also affect your purchase method,
depending on when you would like to receive the
tax relief for your purchase to save the most tax.
n If
purchasing a property you could also consider
using a separate vehicle such as a SIPP or SSAS
pension scheme to purchase the property for you,
for various different tax advantages.
n The
security you offer either personally or through
the business may affect the deals you are offered.
How Old Mill can help
New from Old Mill
Old Mill has a wide range of contacts
that can help you with asset purchase,
whichever method you choose.
The text for this article comes from
one of a new range of leaflets from
Old Mill aimed at helping businesses
understand more about dealing with
the key issues facing them.
As we have illustrated, it is possible to acquire
exactly the same asset yet have a completely
different tax treatment depending on whether it is
bought outright, bought on HP or rented via an
operating lease. It is therefore paramount to
receive professional advice when you start
considering acquiring a new asset.
Yeovil Innovation Centre
The Yeovil Innovation Centre is a hub for
local innovative businesses and Craig
Howes and Graeme Tate from Old Mill
have supported the centre from its outset.
The first batch also includes, Start Ups,
Incorporation, Management Accounts, and Tax Tips.
If you would like a copy of any of these please
email [email protected].
The aim was to make getting business advice a more
positive experience and whilst spending time on
reporting and the compliance side is important, so is
moving the business forward. With four sessions now
under their belts, Craig and Graeme are looking to
hold more going forward, maintaining their
relationship with the great work of the innovation
centre and bringing local businesses the advice and
guidance that they need.
Now with over 20 businesses located within the
innovation centre including Daedalus Aerospace and
the Western Gazette the centre is a hub for local
Jake Memery from Daedalus Aerospace Ltd
business activity.
comments; “I have used Old Mill for approximately
the past six years, both for my limited company when
With the support from Gerard Tucker and Mike
I was contracting, and now for my company,
Bartlett at the innovation centre, Craig and Graeme
have set up drop in sessions which Craig explains; “in Daedalus Aerospace Ltd. I have always found them
to be both extremely helpful and pleasant to deal
essence, some businesses may feel that accountants
are less accessible than they ought to be for example with, but more importantly for me, I have always felt
having their office based in the town centre. However, like they provide a very personal service.”
we have provided an alternative to businesses based
If you would like to book in for a drop in session
in the Innovation Centre and hope to roll this out to
the local community by providing a ‘drop in’ centre on please contact Graeme Tate on 01935 709358.
W: www.yeovilinnovationcentre.co.uk
site, where they can raise any tax or accounting
@YeovilInnovate
concerns without having to leave the centre.”
Left to Right: Bev Lane, Paul Tett, Sarah King, Jake Memery, Daniel Hyndman, Craig Howes, Jo Colwell and Graeme Tate with
Robin Davies. Picture by Laura Jones at the Western Gazette.
CLIENT
PROFILE
Client Profile
The Blue Ball Inn
The Blue Ball Inn is a multi-award
winning restaurant which is situated on
the foot of the Quantock Hills and has
been run by Kieran Dickens and Lee
Atkinson since early 2010.
The converted 18th century thatched barn provides a
wide ranging menu using locally sourced ingredients
complemented with a large selection of local ales
and ciders.
Although the business was started during the
recession when many others were struggling, Kieran
and Lee have put their success down to providing a
friendly and relaxed atmosphere. And with this
preparing delicious seasonal food from locally
sourced ingredients from farmers, growers and
merchants who care as much about the quality and
welfare of their produce as they themselves do.
Kieran comments; “the location must also take some
credit, with fantastic views of the tranquil surroundings
and a beautiful garden it is perfect for al fresco dining
especially throughout the Summer months.” With
these factors it means that both the locals and holiday
makers regularly return to enjoy the food, drink, views
and to soak up the atmosphere.
Looking towards the future Lee and Kieran are
looking to continue their successful business by
maintaining their high level of quality which is
absorbed throughout the food, restaurant,
employees and accommodation. Lee comments;
“We are delighted with the success we have received
so far, and Old Mill have already taken the stress out
With not only a successful restaurant Kieran and
Lee have expanded to provide bed and breakfast
accommodation which includes two double letting
rooms and a self-contained family cottage. Lee
comments; “situated in Triscombe, our Quantock
bed and breakfast cottages are the ideal base from
which to explore England's first designated area of
outstanding natural beauty. We provide tailored
packages to accommodate our guest’s needs and
we take bookings throughout the year, including
Easter, Christmas and New Year.”
of setting up the business and our limited company,
alongside the VAT registration and PAYE scheme.
We are looking forward to working with Craig and
Graeme and continuing our relationship with them
as the business continues to grow into the future.”
For more information please contact Kieran or Lee
on 01984 618242 or visit www.blueballinn.info.
The Blue Ball Inn
@blueballinn
Ensure your life cover
payouts go to your loved
ones rather than HMRC
Julia Banwell,
Chartered
Financial Planner
There are few clients without some form
of life cover, to cover their businesses,
families, loans or mortgages. It is an
important part of the overall financial
plan and is often an area which is
forgotten about.
There are many instances where clients have one
policy, then another, and another, all for various
sensible reasons. It can be less expensive to
amalgamate these into the one policy, saving
multiple policy fees, which also reduces the number
of direct debits from your accounts each month.
Life cover has become less expensive in more recent
years and we are making considerable savings for
some clients.
Additionally, when reviewing the life cover
arrangements I have seen an increasing number of
clients with policies taken out some time ago,
perhaps through the bank, which are in a single
person’s name. These policies, if not written under
trust, would form part of the deceased’s estate and
thus potentially be subject to inheritance tax. This
can mean that a policy with a death sum assured of
£100,000 would only actually generate a payout of
£60,000 for your business or family, after inheritance
tax has been paid.
Matt Haines,
Business Services
Assistant Manager
It is very straightforward to review your policy and to
place it under trust and at Old Mill we are happy to
help. Another benefit is that if the policy were ‘under
trust’ the proceeds would be paid out immediately
on production of the death certificate, without the
need to wait for probate to be granted. This can help
to immediately ease cashflow worries at a very
difficult time.
The new Gender Equalisation rules came into force
on 21 December 2012. It is now an opportune time
to reflect on the cover that you have, consider
whether it remains appropriate for your needs, and
to review the existing arrangements. The new rules
mean that the life cover rates are being equalised for
both men and women and, as a result, it is fully
expected that the life cover rates for women will
increase (and, conversely the rates for men should
reduce). We are already seeing life companies
changing their rates now, ahead of the scheduled
date, and so it will provide another reason to check
that the monthly premiums you are paying remain
competitive.
When we review your life cover, we will take into
consideration that if you have a company, it can be
possible to have the life cover paid for by the
company, through a relevant life plan. This saves
Corporation Tax and means that any income
received from the company does not need to be
spent on life policies. It can be very effective for both
tax planning and a way to increase drawings from
the company for directors.
The Introduction of Real Time
Information (RTI)
introduced a temporary concession to October 2013.
They have now announced a further relaxation of this
concession, extending the deadline to April 2014.
The introduction of the ‘live’ system of
reporting staff payments to HMRC from
April 2013 seems largely to have passed
by without too much fuss. For people
either using up to date payroll software
or an outsourced service it happened
almost automatically.
Under the terms of HMRC’s relaxation arrangements
employers are able to make submissions under RTI
when they complete their main payroll run,
providing that is on or before the last day of the tax
month (5th). This may be after payment to
employees has been made.
However, HMRC realised straight away that for the
minority, mainly very small companies, there were
real issues of implementation and as a result
This change means that employers will not be forced
to alter their payroll operations until the end of the
year. In effect 2013/14 is now a pilot year for most
small businesses. This is only a temporary relaxation
however. If you need advice as to how you can get
ready please contact us.
Recruitment
At Old Mill we are always interested in
talking to people who are looking for a
career in Accountancy or Financial Planning.
Our business is our people. We have a high
commitment to training our staff for professional
qualifications in both disciplines.
If you know of someone looking to develop their
career, maybe a graduate or somebody who already
has some level of qualification or experience and
wants to develop further, it is well worth them
contacting us.
While our website contains details of our current
vacancies, we are always on the lookout for talent.
CVs should be sent to [email protected]
with a covering note.
Contact Old Mill
Head of Business Services
Chris Bowles
Tel: 01749 343366
Email: [email protected]
Jon Burt, Melksham
4 Challeymead Business Park,
Melksham, Wiltshire SN12 8BU
Tel: 01225 701210
Fax: 01225 709817
Email: [email protected]
Simon Hartley, Dorchester
The Old Rectory, South Walks Road,
Dorchester, Dorset DT1 1DT
Tel: 01305 268168
Fax: 01305 268688
Email: [email protected]
Richard Reynolds, Wells
Bishopbrook House, Cathedral Avenue,
Wells, Somerset BA5 1FD
Tel: 01749 343366
Fax: 01749 344986
Email: [email protected]
James Fowler, Exeter
Leeward House, Fitzroy Road, Exeter
Business Park, Exeter, Devon EX1 3LJ
Tel: 01392 214635
Fax: 01392 214690
Email: [email protected]
Craig Howes, Yeovil
Maltravers House, Petters Way, Yeovil,
Somerset BA20 1SH
Tel: 01935 426181
Fax: 01935 431852
Email: [email protected]
www.oldmillgroup.co.uk
The content of this newsletter is for general information only. It should not be relied on and action which could affect your business should
not be taken without appropriate professional advice. Please contact your usual Old Mill contact or local Old Mill office.