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Harrison Salmon Handpicked as Leading Accountancy Firm

Harrison Salmon Associates have been selected as one of the UK’s leading accountancy firms by Handpicked Accountants – a new initiative designed to help business owners find a reliable accountant in their local area.

The Handpicked Accountants website was launched earlier this year by Begbies Traynor Group plc and features accountants from across the UK who have proven over time to be ethical, trustworthy and experts in their field.

The website also provides news, articles and advice of an accountancy and business nature on issues such as tax, cash flow and director responsibilities.

David Tattersall, Head of Client Relations at Handpicked Accountants, commented:

“Harrison Salmon Associates is an excellent accountancy firm with a strong reputation across Lancashire and the North West. They are highly regarded as being a credit to their profession through their key focuses on client growth, community and investment in their people.

“We’re delighted to feature Harrison Salmon Associates on Handpicked Accountants which recognises the leading accountancy practices across the UK.”

You can view our profile page on Handpicked Accountants HERE.

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Public Sector Contracts

When you work as a contractor through your own personal company, you will be aware of the IR35 rules, which have been around since April 2000. If you contract for a Public Sector Body (PSB) you should be aware that the application of the IR35 rules has changed significantly since 6 April 2017.
For contracts in the public sector the decision as to whether the individual worker is within IR35 now lies with the end client – the PSB. This organisation is supposed to use an online employment status tool provided by HMRC to help it
reach a conclusion on the worker’s IR35 status, but most don’t.
If the PSB decides that IR35 does apply, the fee-payer, who is normally the employment agency who arranged the contract, must deduct tax and NI from theamount invoiced by your company. No allowance is made for the 5% expenses normally permitted, or for any pension contributions your company may pay on your behalf.
If the PSB decides that you are outside IR35, the fee-payer can pay your company without deducting tax or NIC. However, the agency continues to be liable for PAYE and NIC due, should HMRC decide that the IR35 decision made by the PSB was incorrect.
To avoid difficulties, some public bodies are taking contractors on to their payrolls, which is what the Government
wants them to do. However, most public bodies can’t afford to pay the pension contributions and benefits that workers
are entitled to, so will continue to engage contractors.
Before you agree to a new contract, check whether the end client is part of the public sector. This includes any organisation which is covered by the Freedom of Information Act, such as police, schools, NHS, local authorities
and the BBC. Top-secret spying agencies: (GCHQ and MI5) are not covered. You may need to revise your fees to cover the tax deductions. •

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Connectivity Made Simple Event 15th June 2017

The Internet of things (IoT) is becoming an increasingly growing topic of conversation both in the workplace and outside of it. It’s a concept that not only has the potential to impact how we live but also how we work. But what exactly is the “Internet of things” and what impact is it going to have on you, if any?

Kathryn Mumford, Director of Harrison Salmon Associates will welcome you to the event and provide an agenda for the morning.

10:00-10:30am | Speaker 1: Chartered Marketer and Business Owner Jean Atkinson will be guiding us through how and where the Internet of Things (IoT) alongside automation can support business growth, efficiency and productivity. Using real life examples from owner-managed, SME and International businesses, Jean will provide her top tips on introducing IoT and automation into your business. www.edenmarketing.co.uk

10:30-11:00am | Speaker 2: Tim McIntyre is Senior Account Manager at Xero and will be taking us through the benefits of streamlining day to day procesing, freeing you time to spend on added value client services and less on compliance. www.xero.com

11:00-11:30am | Speaker 3: Michael Hall is Head of Growth at DueCourse in Manchester . Getting paid is part of a chain that drives businesses, drives innovation and the business economy itself. Michael will be sharing his expertise and providing guidance on ways in which businesses can get paid quicker. www.duecourse.com

12noon: Conclude event

To book please click here 

Thursday 15th June. Leigh Sports Village. WN7 4JY. 10am – 12noon

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Jointly Held Let Properties

From 6 April 2017, if you let residential property as an individual, you won’t be able to deduct all of the finance costs from your rental income. This blocking of deductions for loan interest and other finance charges is to be phased in over four years. Where your let property is mortgaged, you will be taxed on the rental income before deduction of interest charges. Your marginal tax rate may increase to 40% or 45%, and you could make a real loss after paying tax. Where your family receives child benefit, that could be clawed back in full as a result of your higher taxable income. A partial solution to this problem is to give a share in the let property to your spouse or civil partner. Such a gift won’t attract Capital Gains Tax if you and your spouse are living together during the year of the gift. The aim is to spread the income from the let property over two basic rate tax bands, and two personal allowances, to reduce the total tax payable. For maximum flexibility, the property should be held as ‘tenants in common’, so you can determine the exact share in the property that you each own; say, 10% and 90%. Your solicitor should draw up a trust deed which states who holds which share (or ‘beneficial interest’) in the property. If you want to be taxed on the property income in line with your beneficial interest, you and your spouse need to submit an election on Form 17 to HMRC, and include a copy of the trust deed. Without the Form 17 election you will both be taxed on 50% of the income from your jointly held property, whatever your underlying beneficial interest. You can’t submit a Form 17 election if the property is held as ‘joint tenants’ rather than as ‘tenants in common’. Legal advice should always be taken when changing the ownership of a property and, where the property is mortgaged, the permission of the lender will be required

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VAT Flat rate changes

The VAT flat rate scheme (FRS) allows small businesses to simplify their VAT records and, in many cases, keep a slice of the VAT they collect on behalf of the Government. Unfortunately, there has been abuse of the FRS, so HMRC is changing the rules. From 1 April 2017, it will be more difficult to make money out of the FRS. A VAT registered business which spends less than 2% of its gross turnover, or less than £1,000 per year on goods, will have to use an FRS percentage of 16.5%. The ‘goods’ counted for this test don’t include food and drink for the employees, motor expenses, or capital items. The high percentage of 16.5% means the business will have to pay over almost all of the VAT it collects, with no deductions permitted for VAT incurred on purchases. Businesses which operate in the knowledge and service sectors are unlikely to benefit financially from using the FRS after 1 April 2017, although the simplification for VAT records remains. If your business supplies services (anything from hairdressing to consultancy services) and you use the FRS, we should talk about whether you should remain within the FRS and, in some cases, whether you should even remain VAT-registered. •

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Reclaim VAT on Purchases

Most business owners apply to be VAT registered sometime after they start trading. They wait until the business is successful enough to make VAT registration worthwhile, or delay
registration until their sales reach the compulsory VAT threshold (£83,000).

In either case, the business can reclaim VAT on goods purchased in the four years before the date the VAT registration became effective, if the goods are still held on that date. ‘Goods’ for these purposes includes fixed assets. VAT on services paid for prior to registration can only be reclaimed if the invoice for the services is dated up to six months before the VAT registration date.

If you registered for VAT in the last four years, it is worth checking your old receipts to see if you can reclaim VAT on earlier purchases. Over the last five years HMRC has been challenging claims for VAT on pre-registration purchases, particularly for expensive assets such as vans. They said the claim had to be reduced to reflect the wear on the van between the date of purchase and the VAT registration date. This is not what the law says, and HMRC has now admitted that they were wrong.

If you have reclaimed only a proportion of the VAT incurred on the purchase of assets acquired before your business became VAT registered, you can now amend that claim. Where HMRC sent you a demand for VAT overclaimed you can get that VAT back.

Call us on 01942 682550 to see how we can help.

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