- IT TAKES A TEAM TO PICK A PLUM
- BUDGET 2015
- PERSONAL TAX RATES AND ALLOWANCES
- TAX BANDS AND RATES FOR 2015/16
- STARTING RATE OF TAX FOR SAVINGS INCOME
- PROPOSED PERSONAL ALLOWANCES TO COME
- PERSONAL SAVINGS ALLOWANCE
- HELP TO BUY ISA
- PENSION FREEDOMS FOR THOSE WITH ANNUITIES
- NATIONAL MINIMUM WAGE RISES
- AUTO ENROLMENT GUIDANCE FOR SMALL EMPLOYERS
- BUSINESS RATES SYSTEM – HAVE YOUR SAY
We are pleased to announce that Walker Thompson has recently assisted in the arrangements for the sale of Coventry IT company Plum Software Ltd to Australian based software specialist Praemium
The legal work was undertaken by Hawkins Hatton with a team led by partner Colin Rodrigues and senior solicitor Ruth Murday. Hawkins Hatton are a niche corporate law firm based in the West Midlands.
The negotiations in the deal were managed jointly in the process by the two firms who worked extremely closely with the Plum Directors – Ann Dempster and David Felix-Davies.
Making no excuse for the awful pun, the work enabled Praemium to pick a plum business in the UK
Praemium is a global leader in the provision of investment administration and managed accounts as well as in financial planning technology platforms. They currently administer in excess of 300,000 investor accounts covering approximately £50 billion in funds globally and currently provides services to approximately 700 financial institutions and intermediaries.
Ann and David have developed the Plum Software business over a number of years and will continue to play an active role in the company following the sale. Plum Software covers a wide range of IT services to include training, customer care and help desk, programme development and application service provider access.
Walker Thompson have been Plum’s accountants for a number of years and we were called upon to ensure that all of the financial information required by the purchasers was provided in a clear and concise manner.
Ann and David from Plum said “Hawkins Hatton and Walker Thompson were instrumental in putting this transaction together and their combined expertise helped everything go smoothly and quickly. Now Plum has access to new clients on a worldwide basis, and the synergy between Praemium and Plum will allow Plum to continue their development within the UK to be one of the foremost software houses serving the financial services industry.”
Colin Rodrigues from Hawkins Hatton said, “As with any cross-border transaction it is not a question of following a process, it is trying to ensure the understanding between the parties is reflected in the documentation given that the risk of appreciation differs from one jurisdiction to another.”
Ruth Murday from Hawkins Hatton said “It was a pleasure to work with clients who were single minded in their goal and wanted to undertake a transaction which would not only secure but also enhance the standing of Plum’s offering in the UK. Given the time difference a transaction like this can only work by having a very efficient delivery process for information and I was able to co-ordinate all of this to ensure that tight deadlines could be complied with.”
Walker Thompson were clear in understanding that the concept of accounts is global. Information can be presented quite differently from one jurisdiction to another. It is important to ensure that the key information required by any purchaser is provided in a transparent manner to facilitate the commercial negotiation and doesn’t create obstacles to complete the transaction.
Walker Thompson will work with existing and new clients as they work on succession planning whether that is through the family or by external sale or through merger. It is never too early to start planning.
If you would like to discuss the process further please contact Sherod, Chris or Kim on 024 7663 5522.
George Osborne presented the final Budget of this Parliament on Wednesday 18 March 2015.
In his speech the Chancellor reported ‘on a Britain that is growing, creating jobs and paying its way’.
Towards the end of 2014 the government issued many proposed clauses of Finance Bill 2015 together with updates on consultations. Due to the dissolution of Parliament on 30 March some measures have been legislated for in the week commencing 23 March, whilst others will be enacted by a Finance Bill in the next Parliament (depending on the result of the General Election).
The Budget proposed further measures, some of which may only come to fruition if the Conservative Party is in power in the next Parliament.
The articles which follow summarise some of the key changes.
Internet link: GOV.UK Budget
For those born after 5 April 1938 the personal allowance will be increased to £10,600. For those born before 6 April 1938 the personal allowance remains at £10,660.
The reduction in the personal allowance for those with ‘adjusted net income’ over £100,000 will continue. The reduction is £1 for every £2 of income above £100,000. So for 2015/16 there is no personal allowance where adjusted net income exceeds £121,200.
The basic rate of tax is currently 20%. The band of income taxable at this rate is being decreased from £31,865 to £31,785 so that the threshold at which the 40% band applies will rise from £41,865 to £42,385 for those who are entitled to the full basic personal allowance.
The additional rate of tax of 45% is payable on taxable income above £150,000.
Dividend income is taxed at 10% where it falls within the basic rate band and 32.5% where liable at the higher rate of tax. Where income exceeds £150,000, dividends are taxed at 37.5%.
From 6 April 2015, the maximum amount of an eligible individual’s savings income that can qualify for the starting rate of tax for savings will be increased from £2,880 to £5,000, and this starting rate will be reduced from 10% to 0%. These rates are not available if taxable non-savings income (broadly earnings, pensions, trading profits and property income) exceeds the starting rate limit.
This will increase the number of savers who are not required to pay tax on savings income, such as bank or building society interest. Eligible savers can register to receive their interest gross using a form R85.
Internet link: GOV.UK Budget
The Chancellor announced that the personal allowance will be increased to £10,800 in 2016/17 and to £11,000 in 2017/18. The Transferable Tax Allowance will also rise in line with the personal allowance, being 10% of the personal allowance for the year.
The higher rate threshold will rise in line with the personal allowance, taking it to £42,700 in 2016/17 and £43,300 in 2017/18 for those entitled to the full personal allowance.
The Chancellor announced that legislation will be introduced in a future Finance Bill to apply a Personal Savings Allowance to income such as bank and building society interest from 6 April 2016.
The Personal Savings Allowance will apply for up to £1,000 of a basic rate taxpayer’s savings income, and up to £500 of a higher rate taxpayer’s savings income each year. The Personal Savings Allowance will not be available for additional rate taxpayers.
These changes will have effect from 6 April 2016 and the Personal Savings Allowance will be in addition to the tax advantages currently available to savers from Individual Savings Accounts.
The Personal Savings Allowance will provide basic and higher rate taxpayers with a tax saving of up to £200 each year.
Internet link: GOV.UK News
The government has announced the introduction of a new type of ISA, the Help to Buy ISA, which will provide a tax free savings account for first time buyers wishing to save for a home.
The scheme will provide a government bonus to each person who has saved into a Help to Buy ISA at the point they use their savings to purchase their first home. For every £200 a first time buyer saves, the government will provide a £50 bonus up to a maximum bonus of £3,000 on £12,000 of savings.
Help to Buy ISAs will be subject to eligibility rules and limits:
• An individual will only be eligible for one account throughout the lifetime of the scheme and it is only available to first time buyers.
• Interest received on the account will be tax free.
• Savings will be limited to a monthly maximum of £200 with an opportunity to deposit an additional £1,000 when the account is first opened.
• The government will provide a 25% bonus on the total amount saved including interest, capped at a maximum of £3,000 which is tax free.
• The bonus will be paid when the first home is purchased.
• The bonus can only be put towards a first home located in the UK with a purchase value of £450,000 or less in London and £250,000 or less in the rest
of the UK.
• The government bonus can be claimed at any time, subject to a minimum bonus amount of £400.
• The accounts are limited to one per person rather than one per home so those buying together can both receive a bonus.
• As is currently the case it will only be possible for an individual to subscribe to one cash ISA per year. It will not be possible for an account holder to
subscribe to a Help to Buy ISA with one provider and another cash ISA with a different provider.
• Once an account is opened there is no limit on how long an individual can save into it and no time limit on when they can use their bonus.
The government intends the Help to Buy ISA scheme to be available from autumn 2015 and investors will be able to open a Help to Buy ISA for a period of four years.
Internet link: GOV.UK factsheet
The Chancellor has announced a new flexibility for people who have already purchased an annuity. From April 2016, the government will remove the restrictions on buying and selling existing annuities to allow pensioners to sell the income they receive from their annuity for a capital sum.
Individuals will then have the freedom to take that capital as a lump sum, or place it into drawdown to use the proceeds more gradually.
Income tax at the individual’s marginal rate will be payable in the year of access to the proceeds.
The proposal will not give the annuity holder the right to sell their annuity back to their original provider. The government has begun a consultation on the measures that are needed to establish a market to buy and sell annuities and who should be permitted to purchase the annuity income.
The government recognises that for most people retaining their annuity will be the right choice. However, individuals may want to sell an annuity, for instance to pay off debts or to purchase a more flexible pension income product.
We will keep you informed of developments.
Internet link: GOV.UK News
The National Minimum Wage (NMW) is a minimum amount per hour that most workers in the UK are entitled to be paid. NMW rates increases come into effect on 1 October 2015:
From 1 October 2015:
• the adult rate will increase by 20 pence to £6.70 per hour
• the rate for 18 to 20 year olds will increase by 17 pence to £5.30 per hour
• the rate for 16 to 17 year olds will increase by 8 pence to £3.87 per hour
• the apprentice rate will increase by 57 pence to £3.30 per hour
Penalties may be levied on employers where HMRC believe underpayments have occurred and HMRC ‘name and shame’ non-compliant employers.
If you have any queries on the NMW please get in touch.
Internet links: GOV.UK News
The Pensions Regulator (TPR) has launched a new step-by-step guide to help small businesses get ready for their automatic enrolment duties.
According to TPR the online guide has been written specifically for employers with between one and 50 staff.
The guide which is broken down into 11 steps, considers the legal requirements and what employers need to do to comply with their obligations.
Executive director for automatic enrolment Charles Counsell said:
‘We are determined to do all we can to reach out to all small and micro businesses preparing for their automatic enrolment duties. We want to make the process as simple as possible so that employers can avoid the risk of non compliance.’
‘Our new online 11-step guide is a key part of a wide package of measures we are rolling out to give more than a million employers all the information they need, written and produced in a way they makes sense to them.’
‘Our message to employers is ensure you know when your automatic enrolment duties begin and start planning in good time. The regulator’s website should be the first port of call for all employers and their advisers as it offers essential information about each task an employer will need to accomplish in order to comply and avoid penalties.’
If you would like help with Auto Enrolment please do get in touch.
The government has launched a wide-ranging review of national business rates in England.
HM Treasury’s ‘wide-ranging review’ of England’s non-domestic rates system will report its findings before the 2016 Budget. The Treasury’s discussion paper invites responses from a wide range of stakeholders on issues such as commercial property use, how the rates system can be modernised, and whether business rates should continue to be based on property values.
Written responses will be accepted from the beginning of April until 12th June 2015.
Chief Secretary to the Treasury Danny Alexander said:
‘Our system of business rates was created nearly 30 years ago. Since that time, the worlds of commerce and industry have changed beyond recognition. I’ve been impressed by the representations made by the business community and I know that business rates are a considerable cost.
The government has taken measures to help businesses by capping rates and introducing reliefs for smaller businesses. But now the time has come for a radical review of this important tax. We want to ensure the business rates system is fair, efficient and effective.’
Internet link: GOV.UK News