Harris Lipman News Autumn indd by jennyyingdi


									                                                                                                         Autumn 2011

the strain?
HMRC tightens the
Time to Pay scheme
Making the most of
Social Media
The benefits of forward
thinking accounting

 Auditing your costs for maximum savings
 Harris Lipman announces EISA membership
 The benefits of partnership and shareholder protection
 Government cracks down on inheritance tax
 The tax advantages of incorporation for sole traders
 Now is the time to understand your inheritance tax position
 Individuals and small businesses miss out on tax breaks

                 Harris Lipman expands South Wales presence    Start preparing for automatic pension enrolement
                 HMRC launches new tax crackdowns              Harris Lipman supports charity golf day
                 Businesses receive further R&D tax benefits    Insolvency figures mask the true picture
                 Redundancy threatens late pension surge       Claim your full Capital Allowance entitlement

                         Welcome to the               further R&D tax benefits for businesses and       and the benefits for our clients of our EISA
                         latest issue of              the truth behind the latest insolvency figures,   membership and social media presence.
                         Harris Lipman                as well as automatic pension enrolment and
                         Head Lines, which            other pension matters.                           We hope you enjoy reading Harris Lipman
                         brings you updates                                                            Head Lines and that you find it useful. We’d
                         and practical                We also take a look at the benefits of            welcome your feedback on the content, or
                         advice on issues             partnership or shareholder protection,           ideas for topics that you’d like to see featured
                         that may affect              the latest crackdowns by HM Revenue &            in future, so if you would like to comment
                         you financially.              Customs, how individuals and businesses are      please email mail@harris-lipman.co.uk or call
                                                      missing out on tax breaks and a tightening       020 8446 9000.
Our bulletin contains a round-up of tax and           of the Time to Pay scheme, along with how
financial news and developments that we                businesses can make the most of their            For professional financial advice, tailored to
hope will be of interest to small and family          finances by auditing their costs and claiming     your individual circumstances, on any of the
businesses and private individuals.                   their full Capital Allowance entitlement.        topics covered in Harris Lipman Head Lines,
                                                                                                       please contact us.
In this edition, we consider the tax                  We conclude with how Harris Lipman has
advantages of incorporation for sole traders,         increased its presence in South Wales            By Barry Lewis, Senior Partner

Auditing your costs for
maximum savings
For more information please contact Ashok Shah, Partner - ashok.shah@harris-lipman.co.uk

                     In today’s business              As their business does not rely on               over 27 percent for their clients, many of which
                     climate, keeping                 supplier commissions, you may well stay with     are household names, including Timpson, Richer
                     costs under control              your existing supplier and are guaranteed        Sounds, Berwin Leighton Paisner, Trowers &
                     is more important                impartiality. They will go to a handful of       Hamlin, Norwood, Jewish Care, Barts & The
                     than ever. With                  suppliers and show you all of the prices         London NHS Trust and the United Synagogue.
                     staff and property               received, so that you are fully informed
                     costs taking a                   and can make a decision. If a change of          If you would like to discuss how they may
                     significant chunk                 supplier is requested, they will manage the      be able to work with you and your team to
                     of any business’s                whole process – effecting an introduction,       drive profits (so that we can help with your tax
                     margin, considering              completing the forms and ensuring that your      planning), please contact Simon Unger
what else money is spent on is becoming               cost centres are set up correctly.               at simonu@procurementgroup.co.uk or on
increasingly worthwhile.                                                                               020 8236 2504.
                                                      The part of the service which really impressed
In fact, Cardiff University Business School advised   us was that they check the prices you are        By Ashok Shah, Partner
that every £1 saved is equal to £19.50 of new         being charged match those that they have
sales generated. If this is true, then overhead       negotiated. You always maintain a direct
savings can greatly impact on profitability.           relationship with the supplier, so retaining
                                                      complete control.
We recently had an audit completed by The
Procurement Group and were impressed                  Common areas which they look into include
enough with the results to feel that we should        stationery, telephones, printer supplies,
offer this service to our clients. In essence, they   broadband, electricity, waste, mobiles,
will review whatever costs you want them to and       printing, copier contracts and gas. However,
make recommendations on how to reduce what            they also look at more obscure areas, such
you pay on an absolute like-for-like basis.           as light bulbs, washroom equipment and
                                                      supplies, postage and mains water.
This means they guarantee to at least maintain
product quality, service levels and payment           Indeed, there are over 30 different products
terms while delivering a lower price. They also       where they have delivered average savings of
manage contract expiries and do their best to
ensure that contracts are terminated in a timely
manner. Best of all you pay them out of the
savings made – 33 percent to them, 66 percent
to you for a year, thereafter, 100 percent to you.
Harris Lipman announces
EISA membership
For more information please contact Martina Fitzgerald, Partner - martina.fitzgerald@harris-lipman.co.uk

                      We have further             to make investments in smaller, high risk         in legislation and is often consulted by
                      demonstrated our            companies more attractive by offering a           Government departments on such matters.
                      commitment to               range of tax reliefs – including Income Tax
                      helping business            and Capital Gains Tax – to investors who          We also have access to other members,
                      growth by joining           subscribe for qualifying shares in qualifying     including potential sponsors, fund managers
                      the Enterprise              companies. Firms who are eligible for the         and corporate finance advisers. This gives us
                      Investment Scheme           EIS are usually small, unquoted trading           an advantage in that we can do much more
                      Association (EISA).         companies which finance their trading              than simply advise clients on the EIS – we
                                                  activities by issuing new shares.                 can put them in contact with people looking
                      The EISA is an                                                                to invest in businesses such as theirs.
independent, not-for-profit organisation           As many smaller firms are still struggling
which aims to encourage private investment        to raise finance through more traditional          As a firm, we have long been committed to
into small and growing companies through          methods such as bank loans. These same            helping small and medium-sized businesses
the Enterprise Investment Scheme (EIS).           businesses are often unaware that alternative     realise their maximum potential. I am delighted
                                                  forms of accessing capital are available,         that our membership of EISA will enable us to
With many smaller firms still struggling to        such as the EIS.                                  help even more companies grow.
secure loans from banks due to ongoing
restrictions, the EIS is being promoted as an     Our membership of the EISA gives us access        To find out how the scheme can help you raise
alternative way to raise finance.                  to a wide range of experts, including the         the capital you need, please contact Martina.
                                                  association’s Tax and Technical Committee,
The Government scheme is designed                 which can advise on potential changes             By Martina Fitzgerald, Partner

Tightening of the Time to
Pay scheme
For more information please contact Freddy Khalastchi, Partner - freddy.khalastchi@harris-lipman.co.uk

                      HM Revenue &                on the grounds that the company has               Another significant development is that HMRC
                      Customs (HMRC)              preferred to use the money elsewhere and,         recently announced that it will stop publishing
                      is now refusing             therefore, the shareholders should support        figures for the number of businesses which
                      applications                the company.                                      are using the scheme. This has triggered
                      under Time to                                                                 fears that the scheme is about to be wound
                      Pay (TTP) where             Many companies pay dividends as part of a         down, although this is something that HMRC
                      dividends are               tax-efficient remuneration package. However,       has denied.
                      used as a form              it seems that HMRC takes the view that if a
                      of remuneration.            company has cash available to make a non-         However, the number of rejected applications
                                                  contractual payment to its shareholders, then     rose by a third year-on-year in the second
TTP, introduced in November 2008, normally        it can pay at least part of its tax debts.        quarter of 2011. Indeed, the number of
allows companies and individuals to defer                                                           approvals plummeted by nearly 50 percent
and pay by instalment any taxes that they         This policy will almost certainly hit small and   in the year to June, while the value of the tax
owe, in a bid to assist with temporary cash       medium-sized businesses hardest, potentially      payments deferred tumbled by 42 percent.
flow problems.                                     leading to cash flow problems and may force
                                                  more businesses into increased hardship,          Therefore, any business considering making
HMRC’s new position is that where a               with some being forced to enter into a formal     an application to the scheme should take
company asks for a TTP arrangement and            Company Voluntary Arrangement (CVA),              note of these points.
recently paid out a dividend while running        administration, pre-pack administration or
up a tax debt, HMRC will refuse a TTP             even liquidation.                                 By Freddy Khalastchi, Partner
Now is the time to understand
your inheritance tax position
For more information please contact Matthew Truran, AWD Chase de Vere - advice@hl-wealth.co.uk

The coalition Government has frozen the Nil Rate Band – the threshold beyond which
inheritance tax (IHT) becomes payable – at £325,000 until at least 2014.

                      With the average          Each UK domiciled individual is able to leave       From April 2012, those leaving at least 10
                      house price in Greater    £325,000 free of inheritance tax. Assets in         percent of their estate to charity will benefit
                      London currently at       excess of this Nil Rate Band are subject to tax     from a reduced rate of IHT of 36 percent on
                      £419,000, those who       at 40 percent.                                      the remainder of their taxable estate.
                      have deferred making
                      decisions regarding       Gifts to charities and political parties are free   What can I do to reduce the bill?
                      their own IHT planning    of IHT.
                      can no longer afford to                                                       Make a will
                      delay action.             Charitable legacies
                                                                                                    The primary purpose of a will is to ensure that your
                                                In his 2011 Budget, George Osborne                  estate is distributed according to your wishes.
How much inheritance tax will my family         announced a further proposal to incentivise         However, it can also be used to arrange your
have to pay?                                    charitable giving through a reduction in IHT.       affairs in a manner that is efficient for IHT purposes.
Gifting                                               to transfer money into a trust. Use of a trust      this purpose in trust ensures the proceeds
                                                      enables the donor to maintain control of the        are paid outside of your estate and are not
Each individual may gift £3,000 per year free         monies in question – who gets access to             subject to IHT.
of IHT. If you didn’t use last year’s allowance,      what and when.
you may carry this forward to this year,                                                                  Next steps
allowing you to gift a total of £6,000. It is         Certain investment-based trusts exist
possible to make additional gifts on                  that enable the donor to receive capital            First and foremost, it is important to
the occasion of the recipient’s wedding or            and/or income from the trust, should this           understand your own IHT position, the
civil ceremony.                                       be required.                                        magnitude of any potential liability and the
                                                                                                          impact on your family.
It is worthwhile considering whether such             Alternative investments
gifts are affordable and desirable. In practice,                                                          By Matthew Truran, AWD Chase de Vere
however, the limited nature of these gifts            Some investments are free from IHT,
may mean that they make little impact on the          including qualifying woodland and farmland.         In order to review your situation and asses
overall IHT position, as growth in the value          On a smaller scale, some investment                 your estate for IHT purposes, please contact
of the estate may offset any benefits derived          companies offer access to investments               Matthew Truran at hlwm@awdcdv.com or on
from gifting.                                         that qualify for Business Property Relief           020 7065 1755.
                                                      and are free of IHT two years after the initial
It may be possible to transfer more                   investment.                                         Matthew is an independent financial
substantial sums from the taxable estate                                                                  adviser, who works for our partners
under the ‘regular gifts from normal                  It may also be that some or all of your             AWD Chase de Vere. He will be able to
expenditure’ exemption. You can gift an               own existing business assets and                    undertake an initial assessment of
unlimited amount from your income, as long            interests are free from IHT. If this is the case,   your circumstances and outline the
as you have sufficient left to maintain your           it is important that you are aware of how any       options available to you to organise
current standard of living. It may be possible        future changes to your business or to your          your affairs in a manner that is tax-
to create additional income from investments          own circumstances may impact on this.               efficient, but also ensures your own
or pensions to facilitate such gifting. These                                                             financial wellbeing.
gifts are often used to fund pensions or              Life insurance
other savings plans on behalf of a child or                                                               Harris Lipman Chartered Accountants is
grandchild, for example.                              If it is not possible at this stage to reduce       an introducer-appointed representative
                                                      the IHT liability arising from your estate, you     of AWD Chase de Vere Limited, which is
Using trusts                                          may wish to take out a life assurance policy        authorised and regulated by the Financial
                                                      to pay the tax bill as it arises, leaving your      Services Authority.
It may not be appropriate or desirable                estate intact for your beneficiaries.
to make gifts directly to your children or                                                                The Financial Services Authority does not
grandchildren. In which case, it is possible          Writing any life assurance policy taken out for     regulate tax advice, trusts or will writing.

The tax advantages of
incorporation for sole traders
For more information please contact Neville Chajet, Partner - neville.chajet@harris-lipman.co.uk

                         As the last Budget           Indeed, the Corporation Tax rate for small          company structure is the best option.
                         saw the retention            companies with profits below £300,000 now
                         of the 50 percent            stands at 20 percent, while larger companies        As well as the tax savings, incorporation also
                         top rate of Income           benefited from an increased rate drop to 26          provides Limited Liability, which ensures that
                         Tax for those                percent. For the latter, the rate of Corporation    individuals are not personally liable for all
                         earning over                 Tax will be 23 percent from 1st April 2014.         debts should the business hit trouble in the
                         £150,000, it also                                                                future. In addition, it may be easier to secure
                         brought further              Additionally, a company structure provides          external funding for Limited Companies and
                         reductions in                flexibility in extracting profits to another tax      some larger businesses will be reluctant to
                         Corporation Tax.             year if the business does particularly well, an     deal with sole traders.
                                                      option that is not available for sole traders.
Consequently, sole traders should consider the                                                            Professional advice should always be sought
structure of their business to see whether it would   The incorporation of a sole trader can              before taking any steps to incorporate.
be beneficial to incorporate as a Limited Company.     generally be achieved without immediate
While individuals who are self-employed are           tax charges. However, it is important to            If you are interested in discussing this further,
liable for Income Tax on profits as they arise,        consider how profits will be extracted from          please contact us.
companies are a separate legal entity and it is the   the company – whether that will be by salary
company which pays the tax on its profits.             or dividend or a mixture of both – to see if a      By Neville Chajet, Partner
HMRC launches new tax
For more information please contact Annette Escorce, Tax Manager - annette.escorce@harris-lipman.co.uk

                      Whilst its previous        trading will be targeted, the majority of eBay       straightforward opportunities for customers to
                      campaigns                  traders should be unaffected.                        put their records in order on the best possible
                      have targeted                                                                   terms. This will be followed by swift action
                      plumbers, medical          A further target for HMRC is individuals and         against those who choose not to make the
                      professionals and          businesses which are trading above the VAT           most of such opportunities.
                      restaurant owners,         threshold without having registered. The VAT
                      HM Revenue &               threshold is currently £73,000 turnover on a         Mike Wells, HMRC’s Director of Risk and
                      Customs (HMRC) is          rolling annual basis.                                Intelligence, said: “Our campaigns are
                      now stepping up its                                                             designed to ensure tax is paid so that the
                      tax investigations         People in the latter category will receive letters   money is available to spend on public services
of specific sectors, including tutors and         advising them to register by 30th September.         used by everyone. The aim is to make it easy
those who buy and sell items for profit on        In addition, full disclosure will be rewarded        for individuals and businesses to contact us,
the popular auction site eBay.                   with a penalty rate of just 10 percent on VAT        make a full disclosure of their income and face
                                                 that has been paid late.                             a reduced penalty on any tax owed.”
Among those being targeted are private
tutors and coaches who earn their main or        The campaigns will see HMRC use the very             So far, HMRC has raised over £500 million
secondary income from private lessons,           latest in technology, including “web robot”          from voluntary disclosures and a further £100
whether they are qualified or not, ranging        software, to search masses of online data            million from follow-up activity.
from national curriculum tutors to fitness or     in order to pinpoint hidden relationships
lifestyle coaches.                               and inconsistencies, as well as income and           If you are targeted by HMRC, the team at
                                                 lifestyle anomalies.                                 Harris Lipman can provide advice and help
HMRC will also be looking to pinpoint                                                                 you lodge a claim. For more information,
individuals who are making significant profits     HMRC says its campaigns are designed                 please contact us.
on eBay without paying the tax due. As only      to focus on areas where it has identified
those with a substantial income from online      significant underpayment and provide                  By Annette Escorce, Tax Manager

Government cracks down on
inheritance tax
For more information please contact Michael Bernstein, Partner - michael.bernstein@harris-lipman.co.uk

                     While we have               Last year, the taxman investigated 9,368             and beneficiaries should obtain several
                     reported on HM              house price valuations and clawed back               valuations from chartered surveyors or
                     Revenue & Customs’          almost £70 million in IHT.                           professional valuers.
                     (HMRC) crackdown
                     on online traders           IHT is levied at 40 percent when the                 HMRC will open an investigation based on
                     and VAT rule                assets, minus any debt, of a person’s                several risk factors, with part of the remit being
                     breakers earlier            estate exceed £325,000, or £650,000                  a check on whether the declared income
                     in this newsletter,         for couples. However, if HMRC investigates           correlated to the individual’s lifestyle. In the
                     the department              an IHT property valuation and finds it is             case of gifts, they would look for evidence
                     is also actively            incorrect because insufficient care was               such as a copy of the donor’s bank statement.
targeting estates and beneficiaries for           taken in obtaining it, the beneficiaries
underpayment of inheritance tax (IHT).           can face penalties of up to 100 percent of           Donors should, therefore, pay gifts by bank
                                                 the additional tax liability, in addition to the     transfer and have supporting documentation
Its scrutiny of Land Registry data on house      tax due.                                             to give to their lawyer and accountant. Gifts of
purchases and sales is particularly affecting                                                         unlimited amounts can be given free of tax if
those who receive a gift or inheritance to buy   If a property is sold for less than the valuation,   the donor lives for another seven years.
property, as well as those who use this money    the estate can come back and ask for the
to pay a sizeable amount off their mortgages.    value to be revised. Therefore, executors            By Michael Bernstein, Partner
Harris Lipman expands South
Wales presence
For more information please contact John Cullen, Partner - john.cullen@harris-lipman.co.uk

                        Harris Lipman             branch specialises in offering corporate                would give us a real advantage in doing that.
                        has expanded its          recovery and insolvency services – which is
                        presence in South         fitting given that the new office was previously          “We already had a number of contacts
                        Wales with the            occupied by the Insolvency Service.                     based in the area, so it seemed a natural
                        opening of a new                                                                  development for us to set up an office there.”
                        office in Swansea.         The Swansea office is headed up by partner
                                                  John Cullen, and is managed by Mark Evans.              The new office can be found at Suite 4,
                       The new branch                                                                     Fourth Floor, Sun Alliance House, 166-167
                       complements our            John said: “We were looking to extend the               St Helen’s Road, Swansea, SA1 4DQ.
                       Cardiff office, which       service we provide across South and West
was set up in 1998. Like Cardiff, the Swansea     Wales and felt that having a base in Swansea            By John Cullen, Partner

The benefits of partnership
and shareholder protection
For more information please contact Martin Atkins, Partner - martin.atkins@harris-lipman.co.uk

                     One area of potential        Not only will such an agreement help prevent            Firstly, the Articles of Association or a
                     conflict in a business        disputes at a highly sensitive time, but it will also   Partnership/Shareholder Agreement may cover
                     partnership is what          enable the business to continue without the need        these issues, and it is important to ensure that
                     happens when one             to sell assets in order to buy the vacant share of      the terms of these documents do not contradict
                     of the partners or           the business. It will also enable the beneficiaries      the partnership or shareholder protection.
                     shareholders dies or         to make the most of the deceased’s hard work,
                     becomes seriously ill.       and offer the partners and shareholders peace of        Furthermore, it is important to ensure the
                     Should they die, the         mind that their loved ones are provided for.            policies are drafted such that the surviving
                     issue arises of who                                                                  individuals can only use the funds obtained to
                     receives their share         In addition, provision can be made for partners         buy the deceased’s interest in the business.
of the business and at what price.                or shareholders who become seriously ill,
                                                  giving them the option of continuing in the             By Martin Atkins, Partner
This can result in disputes between the           business or receiving suitable capital upon their
beneficiaries of the deceased and the remaining    enforced retirement.
partners or shareholders. For example, the
beneficiaries may have little interest in the      Before putting such an agreement in place,
business or could be hostile to the way it is     a number of points will need to
currently being run. Equally, the company will    be considered.
not want to pay a dividend to a new shareholder
who contributes very little in terms of the
organisation’s success.

Such disputes can be avoided through the
use of partnership or shareholder protection,
which is linked to life insurance policies that
each partner or shareholder agrees to take
out and maintain. These policies are written
in trust by each individual for the others and,
on the death of one of them, the funds can
be used to compensate the deceased’s
beneficiaries and dependants for their share.
Businesses receive further
R&D tax benefits
For more information please contact Chris Maloney, Manager, Business Services - chris.maloney@harris-lipman.co.uk

Figures from HM Revenue & Customs (HMRC) show that since tax credits were introduced in 2000
as a means of reducing a company’s or organisation’s tax bill by more than its expenditure on
qualifying R&D costs, 51,060 claims have been made (up to the end of the financial year 2008-09).

                       Generally speaking,       attractive to smaller businesses, as the rate    £980 million in tax credits. The total
                       the tax credits           of relief increased from 175 percent to 200      paid out in tax credits since 2000 is nearly
                       are available for         percent for small and medium firms. This          £5 billion.
                       costs such as R&D         means that for every £100 of qualifying
                       staff, materials,         costs, such businesses can reduce the            As Harris Lipman appreciates that
                       software and utilities    income on which Corporation Tax is paid by       claiming this tax relief can be a complex
                       used for the project,     a further £100.                                  process, we have developed links with
                       and payments                                                               tax boutiques which specialise in this area.
                       to clinical trial         There will be a further increase to 225          As they are respected by HMRC,
                       volunteers. In order      percent in April 2012. However, the              submitting a claim through them makes
to qualify, the research project must            rate for larger companies will remain at         the process much more straightforward
seek to achieve an advance in science            130 percent.                                     – with only a contingency fee charged.
and technology.                                                                                   For more information or to apply, please
                                                 In 2008-09 alone, there were 8,540               contact us.
Following the Chancellor’s latest Budget,        claims – the highest annual figure since
this tax relief has become even more             the R&D scheme began – which attracted           By Chris Maloney, Manager, Business Services
Redundancy threatens late
pension surge
For more information please contact Michael Bernstein, Partner - michael.bernstein@harris-lipman.co.uk

                      Research by HSBC            bulk of their pension fund in the last ten years     due to their careers ending ahead of plan.
                      has shown that              of their working life could be in for a shock,
                      substantial numbers of      as a report by Aviva demonstrates that more          With the Government determined to increase
                      employees in the UK         than 25 percent of over 55s are currently not        the pension age to 66 in 2020, individuals will
                      are part of the ‘Ostrich    in employment due to redundancy or ill health.       be forced to wait longer for assistance from the
                      Generation’, who                                                                 state, making them more reliant on private pension
                      refuse to undertake         Once those aged over 55 are out of work, it is       funds. Consequently, it is to be hoped that those
                      any financial planning       harder for them to find a job than earlier in life,   taking an ostrich approach to their financial future
                      for their retirement.       according to 74 percent of respondents. As a         will soon become an endangered species.
                                                  result, more than a third (34 percent) found they
However, any ‘ostriches’ hoping to saving the     had to scrimp more than expected in retirement       By Michael Bernstein, Partner

Making the most of
social media
For more information please contact Barry Lewis, Senior Partner - barry.lewis@harris-lipman.co.uk

                      Accountants who             highly effective method in catching the              diverting traffic to our website, with a
                      are shunning the            attention of new clientele and reaching a            total of 145 referred visits, followed by
                      use of social media         new audience.                                        Twitter with 93 visits and then LinkedIn with
                      are missing out on                                                               53 visits.
                      the benefits that            Barry Lewis said: “By having a social media
                      forward-thinking            programme in place at Harris Lipman, we              “There are a number of ways that Harris
                      accountants, such           have been able to reach an audience that             Lipman reaches a wider audience by having
                      as Harris Lipman,           we have not been able to before. Having a            a Twitter account. We reach prospective
                      are enjoying.               presence in the social media world means             clients by ‘following’ accounts that new
                                                  we are more visible to potential clients and         clients may also be following, and people
As the popularity of social media networks        can also sustain close relationships with our        who are following our clients – who are
continues to rise, we are seeing positive         current ones.”                                       following us – will see that they are following
results from our social media programme,                                                               Harris Lipman and may be encouraged
which is comprised of a daily blog, three         It is important that our accounts are regularly      to follow us if they are in need of financial
daily tweets, a LinkedIn account and a            updated - an empty Twitter or Facebook               advice,” Barry said.
Facebook Page.                                    account would offer a worse impression of
                                                  the firm than not having one at all.                  Indeed, we proved just how cutting edge
Rather than just relying on traditional                                                                Harris Lipman had become with the launch
methods of networking, we are able to             “We have a daily blog, which covers topics           of our very own Apple App for users of the
use our social networks to keep clients           currently in the news that will be of interest to    iPhone. The LipmanLogic game appeared to
up-to-date with news from the firm,                our clients. We also post three daily tweets,        read players’ minds by inviting them to think
update them on financial, business and tax         which include links to business news stories,        of a number and then correctly guessing what
news and also sustain relationships with          and we have a good number of followers,”             it was.
them online.                                      Barry added.
                                                                                                       Martin Atkins said: “We’ve always tried to be
Even though we continue to use the                During the month of May, the Harris Lipman           at the forefront of new technology and use
more traditional methods for networking           website received a total of 3,672 visitors           the latest methods to communicate with new
with prospective clients, such as word-           and 673 of those were from referring                 and existing clients.”
of-mouth and personal networking,                 sites. Facebook proved to be the most
social media has established itself as a          successful social networking site in                 By Barry Lewis, Senior Partner
Individuals and small businesses
miss out on tax breaks
For more information please contact Russell Whitlock, Partner - russell.whitlock@harris-lipman.co.uk

                        According to a study         of child benefits, child tax credits, working tax      These figures make shocking reading,
                        by Unbiased.co.uk,           credits and pension credits remain unclaimed          especially when implementing a few
                        taxpayers will               and £1.3 billion is wasted through poor               basic tax saving measures could make
                        pay over £13.5               inheritance tax planning.                             all the difference. At Harris Lipman, we
                        billion more tax                                                                   can advise on all aspects of minimising
                        than necessary               Small businesses fair no better, with 19              tax liabilities, including estate, personal
                        this year, simply            percent of the SMEs which responded to a              and corporate tax planning, as well as
                        because they have            survey by Clydesdale and Yorkshire Banks              retirement strategies, trusts, executorships
                        failed to plan. This is      missing out on potentially valuable tax breaks        and self assessment.
                        a significant increase        and grants.
on last year’s figure of £9 billion.                                                                        Therefore if you, or one of your friends, would
                                                     Furthermore, around 16 percent said they              benefit from independent, tailored tax advice,
Nearly 90 percent of people have taken no            did not know where to turn for advice on              please contact us.
action to reduce their tax liabilities in the last   regulation, and 15 percent admitted having
year. As a result, more than £8.5 billion worth      difficulty understanding new rules.                    By Russell Whitlock, Partner

Harris Lipman supports
charity golf day
For more information please contact Kash Kurup, Partner - kash.kurup@harris-lipman.co.uk

                         We have further             Barry Lewis, senior partner at Harris Lipman, said:   “I am delighted that the event raised such a large
                         strengthened                “As a firm, we believe it is important to support      amount, which I know will make a real difference
                         our commitment              good causes, which is why we were                     to the lives of those being helped by Drugsline.”
                         to supporting               pleased to be able to sponsor
                         worthy causes by            the Ladies Charity Golf Day.                          By Kash Kurup, Partner
                         sponsoring a charity
                         golf event.

                           The Ladies Charity
                           Golf Day fund-raiser
took place at Abridge Golf and Country
Club, in Stapleford Tawney, Essex, raising
more than £15,000 for Drugsline.
Drugsline is a charity offering a wide range of
free prevention, education, counselling and
support services to people with drug and
alcohol-related issues, as well as their family
and friends.

The charity runs a helpline and drop-in centre,
both of which are staffed by volunteers and
entirely dependent on donations. It also
operates an outreach programme for more
than 30,000 pupils in Essex and Hertfordshire
each year, raising awareness of the issues
surrounding addiction.
Insolvency figures mask the
true picture
For more information please contact Jonathan Bass, Insolvency Manager - jonathan.bass@harris-lipman.co.uk

                         The latest figures        business without filing for insolvency has hit a           Firstly, many of these businesses are no
                         from The Insolvency      record high.                                              longer facing significant financial problems
                         Service show that the                                                              because their situation has now become
                         number of compulsory     Therefore, it would seem that many firms are               critical instead. Additionally, the level of
                         liquidations and         either deciding to shut up shop before they               significant problems is always higher in
                         creditors’ voluntary     reach crisis point or have suffered so much               the first quarter due to the amount of
                         liquidations grew by     that they feel there is no point trying to rescue         overdue accounts which need to be filed
                         4.4 percent year-on-     the business.                                             by 31st December.
                         year in the second
                         quarter of 2011. The     Indeed, the latest Red Flag Alert Report from             The latter of these is borne out by the fact that
rise to 4,233 liquidations was also a 2.7         Begbies Traynor shows that the number of                  the level of significant problems has remained
percent increase on the previous quarter.         businesses which are facing critical financial             virtually stable when compared to the second
                                                  problems in the second quarter of this year has           quarter of 2010, with a rise of just one percent.
Meanwhile, the number of other corporate          risen by 12 percent quarter-on-quarter. As a
insolvencies – including receiverships,           result, 5,179 companies are now facing critical           At Harris Lipman, we specialise in insolvency
administrations and company voluntary             problems, with total liabilities of almost £60 billion.   and business recovery, and have extensive
arrangements – dropped by six percent                                                                       experience in resolving financial challenges.
compared to the second quarter of 2010.           While the fact that the number of companies               Therefore, if your business or that of a friend
                                                  facing significant financial problems fell by 48            is experiencing financial problems, then
However, this is not the complete picture.        percent over the same timeframe may seem                  please contact us immediately.
Companies House recently revealed that the        like good news, there are a number of factors
number of businesses which are going out of       that take the gloss off these results.                    By Jonathan Bass, Insolvency Manager

Claim your full Capital
Allowance entitlement
For more information please contact Robin Hopkins, Manager, Business Services - robin.hopkins@harris-lipman.co.uk

                      Millions of pounds          can submit claims on behalf of our clients.               With the Government considering changes to
                      of Enhanced Capital         The specialist consultancy team, headed up by             the ECA legislation which would require fixtures
                      Allowances (ECA)            a former HM Revenue & Customs inspector,                  to be pooled into a one or two year period
                      remain unclaimed,           works in conjunction with a RICS qualified                 following purchase, there has never been a
                      as businesses               quantity surveyor to access the property and              better time to ensure you have claimed for
                      remain unaware              determine the value that can be claimed for.              the full value of qualifying expenditure for your
                      of the benefits that                                                                   business. This is especially true, considering
                      can be obtained             The organisation aims to provide clients with             that the same pooling period would apply to
                      by submitting               a tax refund and reduced tax liability, as well           historic expenditure once the legislation
                      claims for items            as ongoing benefits. Indeed, their extensive               was introduced.
such as their lighting and radiators.             knowledge and experience within the field has
                                                  allowed them to identify over £20 million of              Additionally, the service works on a contingency
While Harris Lipman has always been happy         unclaimed ECA in recent months.                           basis, so if you do not receive a tax refund,
to submit ECA claims for clients, these tend                                                                then no fee is charged. Therefore, there is no
to be limited by the fact that clients will not   There are a number of business properties                 financial risk attached to making a claim.
keep accurate records for every fixture and        which are likely to have unclaimed ECA,
fitting installed in a commercial property.        including hotels, holiday parks, nursing                  For more information or to apply, please
                                                  homes, care homes, pubs, restaurants,                     contact us.
However, we are now working with a                offices, clubhouses, doctors surgeries and
dedicated ECA surveying organisation which        dental practices.                                         By Robin Hopkins, Manager, Business Services
    n me
                                                                 Below are just some of the value-added services
                                                                 we can offer to your business:
                                                                 - Helping you develop and grow your business                                                    - Investigating potential targets for acquisition
                                                                 - Implementing and improving systems                                                            - Succession planning
                                                                 - Review of your profit improvement potential                                                    - Estate and inheritance tax planning
                                                                 - Assisting on the collection of debts                                                          - Implementation of accounting software

       Start preparing for automatic
       pension enrolment
       For more information please contact Martin Atkins, Partner - martin.atkins@harris-lipman.co.uk

                                           The latest Scottish                          To ensure that firms are fully ready for these                                    The regulator is also providing further information
                                           Widows UK pension                            duties, the Pensions Regulator has begun                                         on its website, including guidance for payroll
                                           report is just one of                        writing to organisations 18 months ahead of                                      software developers and large companies, a
                                           a number of surveys                          their compliance date. This will then be followed                                summary of the new duties for employers and a
                                           which demonstrates                           by a second letter nearer to the deadline.                                       five-step action checklist. These will be followed
                                           that the working                                                                                                              by interactive tools for smaller businesses and a
                                           population is not                            With the new pension duties set to be                                            trustee checklist later in the year.
                                           saving enough for                            phased in between October 2012 and
                                           their retirement.                            February 2016, every employer should                                             To find out how Harris Lipman can help lower
                                                                                        check the approximate date on which they                                         the financial impact of complying with these
       One of the measures implemented by                                               will need to comply. This is especially true for                                 duties, please contact us.
       the Government to tackle this issue is the                                       those with more than 250 staff, as the largest
       automatic enrolment of all eligible employees                                    companies will be required to enrol first.                                        By Martin Atkins, Partner
       into a qualifying workplace pension scheme.
                                                                                        Indeed, by October 2011, nearly
       Employers will also be required to make                                          600 organisations – which
       minimum contributions to the scheme. During                                      together employ a third of
       the introductory phase, the contribution level                                   the country’s workforce
       will be set at two percent, increasing to a                                      – will have received
       minimum of five percent and eight percent in                                      their first letter.
       2016 and 2017 respectively.

       Therefore, all employers need to ensure they
       offer a qualifying pension scheme ahead
       of their compliance time and plan for the
       resultant financial impact. The Government
       offers a default pension scheme, the National
       Employment Savings Trust (NEST) for firms
       which do not want to organise their own.

       London Office                                                                         Thames valley office
       2 Mountview Court                                                                    Sandford Gate
       310 Friern Barnet Lane                                                               East Point Business Park
       London, N20 0YZ                                                                      Oxford, OX4 6LB                                                                       Email:            mail@harris-lipman.co.uk
       Tel: 020 8446 9000 Fax: 020 8446 9537                                                Tel: 01865 910150 Fax: 01865 910101                                                   Web:              www.harris-lipman.co.uk

       DISCLAIMER: The matters discussed in this newsletter are by necessity brief and comprise summations and introductions to the subject referred to. The content of this newsletter
       should not be considered by any reader to comprise full proper legal advice and should not be relied upon. 75% recycled content - at Harris Lipman we feel we have a social responsibility
       to help our environment. Registered to carry on audit work and regulated for a range of business activities by The Institute of Chartered Accountants in England & Wales.

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