strength in numbers spring 2018 - mitchell charlesworth...vat on costs relating to funded...

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Strength In NumbersSpring 2018

Mitchell Charlesworth | Strength In Numbers

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Contents

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Welcome 3

E-commerce - It’s a small world after all… 4

VAT update 5

Tax Bites 8

To transfer or not to transfer? The pros and cons of moving your pension 11

Gender pay gap reporting 13

Due diligence 14

Mitchell Charlesworth news update 15

Mitchell Charlesworth upcoming events 19


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Welcome to the second edition of Strength in Numbers, our regular newsletter which brings together timely news and updates covering topics relevant to the everyday concerns of businesses and individuals alike.

Firstly, I would like to draw your attention to our new and refreshed website which is now live. The updated site includes changes to navigation and improvements to the structure of our content so it is easier to view information. It is also mobile responsive making it easy to navigate on a wide range of web browsers and portable devices. In addition to the changed design and layout of the pages, new functions have been added to make your experience of visiting our website much better. We hope you like the changes, and if you have any feedback, please let us know.

In this edition you’ll find articles from our corporate finance, payroll, wealth management, tax and VAT teams. We also draw your attention to gender pay gap reporting as organisations with 250 or more workers must publish their figures by 4 April 2018 for the first time.

A couple of reminders…

On 25 May 2018 new data privacy laws come into force and are set to be the biggest change in regulations around the handling of personal data in over twenty years. The General Data Protection Regulation (GDPR) replaces the current Data Protection Act 1998 and applies to all companies in the UK and the EU that process and hold personal data. Organisations must provide clear requests for consent in a format that is easily understood and accessible and individuals have the right for their personal data to be deleted on request.

Significant penalties can be imposed on employers who breach GDPR. If you are running a business you will need to find out what action you need to take to ensure GDPR compliance.

The Workplace Pensions Reforms are now in place and make it a legal requirement for all employers, of all sizes, to automatically enrol their employees into a workplace pension scheme. Doing nothing is not an option. Employers who continually fail to meet their obligations are likely to face substantial fines and, in the worst cases, imprisonment. If you need advice on managing your pension and payroll obligations under auto-enrolment please contact our auto-enrolment team.

Other news…

We were thrilled to be ranked as the 61st largest accountancy firm in the UK by Accountancy Age Top 50+50 league table; jumping up 3 places from last year. The ranking reflects the hard work and commitment of our partners and staff who consistently deliver a first rate service to our clients.

The firm has experienced strong growth over the last few years and we have continued to increase our client base in the region - you can read about some of our new client wins in this edition. As always, our priority is the success of our clients and we are focused on delivering technical expertise, sector specialisms and a broad range of advisory services for businesses and individuals.

We are committed to conducting business in a responsible way and making a positive impact in the communities in which we work and live. In 2017 we raised just under £6000 for various charities, including Macmillan, Children in Need and Parkinson’s UK. Staff across the firm’s offices also took part in the Trussell Trust’s Christmas campaign by donating a large amount of food and seasonal items for special Christmas packages distributed amongst the charity’s North West foodbanks. As part of our CSR strategy, we are looking forward to another successful year of fundraising for both national and local charities in 2018 which includes two brave runners participating in the London Marathon this April!

We hope you find the articles in this issue interesting and of practical use. If you would like to discuss any of the items in this newsletter or need advice on general financial, taxation and business matters, please contact your local Mitchell Charlesworth office.

Welcome

Paul WainwrightManaging Partner0151 [email protected]


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With global retail e-commerce sales expected to reach $4.5 trillion by 2021* the massive opportunities for global e-commerce are too big to ignore. The internet has made it easier than ever for small and medium sized businesses to join the global marketplace and reach customers all over the world.

Even as a beginner in e-commerce, the tools and resources are all set up for you. The statistics support the view that retail e-commerce is a good choice for entrepreneurs that are looking to start a new company, or those that are keen to diversify and expand their existing businesses.

E-commerce may be a fast growing industry, but a lot of traditional accountants have yet to catch up. Working with a specialist e-commerce accountant will ensure you receive the right financial advice and guidance on growing your online business.

Here at Mitchell Charlesworth, we understand that online marketplace traders may need help or assistance to launch their venture in the UK and EU. We can help you to set up a UK company and a UK bank account as well as provide you with product liability insurances. We can also help you to understand and comply with all the complex international regulations if you want to sell in EU countries and the US.

So far, we have assisted more than 200 online marketplace traders to set up UK companies, mainly on the Amazon platform.

Where ever you live in the UK, or even if you live on the other side of the world, this is not a barrier to running a successful online business. We advise UK clients who want to sell online in the UK, Europe and the US. We also have clients across the globe in the US, Australia and New Zealand who want to sell online in the UK and Europe.

We are currently working with a US businessman who runs a successful e-commerce business selling stationery products on the Amazon platform. We have advised him on how to set up his UK company, register for UK VAT and ensured he is compliant with all legalities and taxes in the UK. We have also advised on EU VAT and helped him register in other European countries.E-commerce can make a great lifestyle business. For budding entrepreneurs it is one of the fastest routes to starting your own business. It is also ideal for those who need more flexible working arrangements or want the freedom of being able to travel and experience other cultures but still need to fund their adventures! We work with a semi-retired couple who have set up an e-commerce business and are now travelling the globe as their business allows them to work from anywhere in the world.

E-commerce is a rapidly changing environment with new technologies, new ways to take payments and an increasingly international customer base. We provide a complete e-commerce accounting package which includes all the accounting services, tools, and technology support you need to keep your accounting well-maintained and running smoothly.

As our clients are scattered across the UK and the rest of the world, we use the latest technology to give advice and support remotely. There are numerous software packages and applications we use to keep in touch with our clients, including Skype, GoToMeeting, Dropbox, online content, videos, cloud-based accounting software like Xero, remote access, bank feeds and corporate finance products.During our time dealing with the e-commerce community we have also various contacts and connections in obtaining finance for traders, online training for traders, freight forwarders and translation services whom we could connect you to.

If you would like more information on how we can support your e-commerce business please contact Marlon Armstrong.

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E-commerce - It’s a small world after all…

Marlon ArmstrongPartner01244 [email protected]


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VAT on costs relating to funded occupational pension schemes

HMRC has updated their internal guidance in relation to funded occupational pension schemes. In the UK, HMRC’s policy has been to distinguish between costs incurred in relation to the:

Setting up and day to day administration of occupational pension schemes

Investment management relating to the assets of occupational pension schemes.

HMRC allowed employers to deduct VAT incurred in relation to the administration of an occupational pension scheme but considered that investment management costs related solely to the activities of the pension scheme. However, changes were to be introduced on 1 January 2016 following the Dutch case PPG as it was decided that PPG was entitled to deduct the VAT incurred on both management and investment services provided that there was a direct and immediate link between the services and its own taxable supplies.

Following PPG, HMRC planned to change its policy on the recovery of input tax on the basis the employer would be able to deduct input tax if it receives the supply of services. However, due to the complexities of the interaction of VAT and pension and financial service regulations the changes were delayed twice and expected to be introduced on 1 January 2018. The internal guidance now states that HMRC has come to the view that the existing rules for input tax deduction will continue to be available to taxpayers going forward, together with the newer options following PPG.

To continue with the existing rules:

Businesses can reclaim VAT in relation to the administration of the fund. The business must have a VAT invoice in their name, even if the trustees contract and pay for the services

The pension fund, if it is registered for VAT, is entitled to reclaim VAT incurred on investment advice subject to its partial exemption position

Where a supplier issues a single invoice for the supply of administration and investment services the cost can be apportioned. HMRC will accept by way of simplification that 30% of the cost relates to administration and the VAT on this amount is reclaimable by the business.

To adopt the PPG position:

In addition to the administration services, the employer is entitled to deduct VAT on investment services. HMRC will not accept that the VAT incurred in relation to a pension scheme is deductible by an employer unless the services are provided to the employer and the employer is a party to the contract for those services and has paid for them

To adhere to regulatory requirements HMRC accept that a tripartite contract between the trustees, the employer and the provider would meet this condition

If there is any recharge by the employer to the pension fund or a decrease in contributions by the employer, this is a supply for VAT purposes and VAT will need to be charged

It should be noted that it is HMRC’s view that where an employer pays directly for asset management costs under a tripartite contract the employer is not entitled to a Corporation Tax deduction. This is on the basis that the cost will not be recognised in the P&L and it is not a pension fund contribution.

Businesses with defined benefit pension schemes should review the costs they are incurring for the administration and management of the fund to ensure they are maximising their VAT position.

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VAT update


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VAT change to Vehicle Finance Agreements - Mercedes-Benz Financial Services UK Ltd

This decision, released in October 2017, related to the VAT treatment of the Agility finance agreement. This type of agreement appears to sit in between the more traditional hire purchase (where the customer wants to purchase the vehicle) and the vehicle lease (where the customer does not want to purchase the vehicle). The Agility agreement is a rental agreement but with an option to purchase. The taxpayer was of the opinion that this was a supply of services and therefore VAT was due with each payment whereas HMRC stated it was a supply of goods and VAT was due upfront.

The CJEU agreed with the taxpayer that the agreement constituted a supply of services and VAT was due on each monthly payment. Whilst the decision relates specifically to Mercedes-Benz Financial Services UK Ltd, this decision will apply to other providers offering similar finance agreements. The main point is that the agreement must show that it is unclear whether there would be a transfer of ownership and there must be no clauses in the contract insinuating that there will be a guaranteed transfer of ownership.

Where a VAT registered business has entered into an Agility agreement (or similar with a different provider) they would not have been able to reclaim any VAT as this type of agreement was seen as a sale of the vehicle and taxpayers cannot reclaim VAT on the purchase of cars. However as this arrangement is now seen to be the lease of a vehicle it falls under different rules. Therefore a business with this arrangement is entitled to claim 50% of the VAT incurred on the lease costs (subject to the normal input tax rules).

If you believe you have one of these arrangements we recommend that you speak to your provider to assess whether you are due a refund of VAT initially paid on the vehicle.

VAT treatment of disbursements - Brabners LLP

Brabners, like many conveyancers, were treating the cost of property searches as disbursements and as a result were not charging VAT when these costs were billed to clients. HMRC assessed Brabners for underpaid VAT on the basis that the property searches did not qualify as disbursements.

A disbursement is where one party makes payment on behalf of another for goods or services used and enjoyed by the other party. HMRC argued that these searches were a cost component of providing the conveyancing on the basis that Brabners had an obligation to provide sound legal analysis and comment on the searches commissioned. It therefore formed part of their service and should be subject to VAT.

HMRC accept that where a search is passed on without analysis or comment that it can qualify as a disbursement. Typically this will be the search agencies only as solicitors have a duty of care to review the searches before they are provided to the client. HMRC also accept that Postal Searches can be treated as disbursements. Following this decision, solicitors should review any disbursements they make and consider whether these actually qualify as disbursements in light of this decision (and HMRC existing policy) or whether they form part of the service supplied to their clients.

VAT information sheet 07/17: construction services and zero-rated relief

This information sheet outlines when the construction of a dwelling or a building constructed for a relevant residential purpose or relevant charitable purpose on a site previously occupied by another premises, can be zero-rated. It has been released to update/reinforce their policy following 3 tribunal decisions. The information sheet defines some key terms which are vital for determining whether the building is constructed, altered or extended which in turn determines whether the construction qualifies for zero rating. For example HMRC will now allow for a very minor part of a building to be retained above ground level if it’s small enough to be ignored as ‘de minimis’. The information sheet also defines what HMRC will accept as a façade and the evidence required that facades are being retained as a condition or requirement of statutory planning consent.

The final point in the information sheet relates to the construction of buildings that incorporate existing buildings. HMRC accepts that in order to establish whether a building is being constructed the nature of the work needs to be taken into account. The retention of a minimal amount of an already existing building will be sufficient to disqualify the work from zero-rated relief, however the incorporation of an entire building into a development may qualify if the works

VAT update continued…


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are so extensive that they can’t be described as works of alteration but are to be as the construction of a building. Where the size of the addition to the existing building greatly exceeds the original building and the function changes HMRC is prepared to accept that such works are entitled to be zero-rated.

Any business in the construction industry should take the time to read this information sheet.

https://www.gov.uk/government/publications/vat-information-sheet-0717-construction-services-and-zero-rated-relief/vat-information-sheet-0717-construction-services-and-zero-rated-relief

Making Tax Digital (MTD)

Making Tax Digital will come into effect from April 2019 and will impact all businesses who are over the VAT registration threshold. The impacted businesses will be required to keep their records digitally and provide their VAT return to HMRC through MTD compatible software.

The government plans to make the necessary changes to the VAT regulations no later than April 2018 allowing software developers and businesses 12 months to prepare for the changes. The regulations will provide that a business in scope for MTD must use functional compatible software to meet the new requirements which means a software program or set of compatible software programs which can connect to HMRC systems via an Application Programming Interface (API). The functions of the compatible software must include:

Keeping records in a digital form as required by the regulations, this includes:

• business name, principle place of business and VAT registration number - this ‘designatory data’ will also include information about which VAT accounting schemes they use

• the VAT account that each VAT registered business must keep, by law - the VAT account is the link – the audit trail – between primary records and the VAT return

• information about supplies made and received

Preserving digital records in a digital form as required by the regulations

Creating a VAT return from the digital records held in functional compatible software and providing HMRC with this information digitally

Providing HMRC with VAT data on a voluntary basis

Receiving information from HMRC via the API platform in relation to a relevant entity’s compliance with obligations under the regulations.

For businesses using a scheme such as the flat rate scheme or retail scheme there may be different requirements to those stated above. Exemptions from these requirements are available in certain circumstances. https://www.gov.uk/government/consultations/making-tax-digital-reforms-affecting-businesses/making-tax-digital-for-vat-legislation-overview#annex1

Alison BirchDirector of VAT 0161 [email protected]


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Tax Bites

OVERSEAS INTERESTS - OFFSHORE TAX LIABILITIES TO BE DECLARED BY 30 SEPTEMBER 2018 UNDER NEW REQUIREMENT TO CORRECT (RTC) RULE

If you have any unpaid tax relating to overseas assets, income or activities it is important to disclose this to HMRC before 30 September 2018. HMRC are proposing to impose stricter penalties for the non disclosure from 1 October 2018, (Failure to Correct penalty) with the minimum penalty expected to be 100% of the tax owed, and may be higher depending on the particular circumstances.

The deadline date coincides with the introduction of the Common Reporting Standards, which will see more than 100 countries exchange data on financial accounts, a move which will greatly enhance HMRCs ability to detect offshore tax non compliance.

What income is considered to be an Offshore Tax Liability?

Taxpayers can disclose their income from foreign sources such as holiday home rental income, bank account interest , and dividends under the current Requirement to Correct arrangements ,which covers income tax, capital gains tax and inheritance tax.

Anybody unsure of their tax compliance obligations should contact us for further advice. If you need any assistance in reporting your liabilities, please do not hesitate to contact us as we can liaise with HMRC on your behalf regarding these matters making the process less stressful for you.

CURRENT YEAR PAYE UNDERPAYMENTS AND TAX CODES - WHY AM I PAYING MORE TAX THAN NORMAL IN 2017/18?

For the 2017/18 and subsequent tax years , HMRC are collecting potential PAYE tax underpayments ‘in year’.

If your tax code number is amended and as such your tax liability increases , you may have underpaid tax from 6 April up to the date the new tax code number is operated. In previous years, you would have been notified of the potential underpayment and it would be collected via a restriction in the following years tax code number .

However, for the 2017/18 and subsequent tax years , HMRC will include a restriction in your current tax code number to collect the potential estimated tax underpayment accruing.

So:

A potential 2017/18 tax underpayment previously would have been collected via a restriction in the 2018/19 tax code number and/or via Self Assessment

Under the new rules the potential 2017/18 tax underpayment will be collected via a restriction in the current 2017/18 tax code number.

There are three ‘hardship’ exceptions to this;

The underpayment deduction cannot be more than 50% of the income

The ‘potential underpayment restriction can’t result in a doubling of the tax liability

The underpayment must be less than £3,000 (this figure includes any 2016/17 actual and the potential 2017/18 underpayments).


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LANDLORDS AND MORTGAGE/FINANCE RELIEF RESTRICTIONS

HMRC have introduced further changes from 6 April 2017 with regards to expenditure that can be claimed against rental income. HMRC abolished the annual wear & tear allowance from 6 April 2016 and replaced this with the actual cost of replacing domestic items. Landlords can deduct mortgage interest on loans taken out to purchase their rented properties, to calculate their taxable rental profit. From 6 April 2017, this relief is to be restricted to basic rate and will be phased in over a four year period.

1. 2017/18: 75% of the interest will be deductible as an expense when calculating taxable profits and the remaining 25% will be a basic rate tax credit.



4. 2020/21: 100% of the interest will be relieved at basic rate.

The calculation is fairly complex so below is a simplistic example to show the impact from 2016/17 to 2020/21 using the 2016/17 personal allowances and rate bands;

2016/17 2017/18 2018/19 2019/20 2020/21

Rents 70,000 70,000 70,000 70,000 70,000

Loan Interest 30,000 22,500 15,000 7,500 0

Net rental income 40,000 47,500 55,000 62,500 70,000

Less:

Personal Allowance 11,000 11,000 11,000 11,000 11,000

Taxable income 29,000 36,500 44,000 51,500 59,000

Income tax due 5,800 8,200 11,200 14,200 17,200

Less:

20% tax credit for interest 0 1,500 3,000 4,500 6,000

Total tax payable £ 5,800 6,700 8,200 9,700 11,200

The mortgage interest restrictions will have a significant impact on gross income in later years.

The interest relief restrictions do not apply to properties qualifying as ‘furnished holiday lets’ and ‘commercial properties’.


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REPORTING OF UK RESIDENTIAL PROPERTY DISPOSALS FOR NON RESIDENTS TO HMRC - 30 DAY DEADLINE

From 6 April 2015, HMRC need to be notified if you’ve sold or disposed of a UK residential property, within 30 days of conveyance. This applies if you’re a:

Non-resident individual

Personal representative of a non-resident who has died

Non- resident who’s a partner in a partnership

Non-resident landlord

Non-resident Trustee

Non-resident company or fund

UK resident meeting split year conditions (i.e. part non UK resident, part UK resident).

How to tell HMRC?

The disposal must be reported online using the non-resident Capital Gains Tax return form NRCGT (www.tax.service.gov.uk/shortforms/form/NRCGT_Return).

This must be done within the 30 day deadline even if:

There is no tax due for payment

A loss has been made

You are registered with HMRC for Self Assessment

You are registered with HMRC for Corporation Tax

You send HMRC Annual Tax on Enveloped Dwellings (ATED) or ATED-related Capital Gains Tax returns.

If a property was jointly owned each owner must tell HMRC about their own gain or loss. There are special rules if you gift a UK residential property to your spouse, civil partner or to charity.

When is payment of the liability due if applicable ?

Payment of any non-resident Capital Gains Tax liability should be made within the same 30 day period. The exceptions to this are if you already have an existing relationship with HMRC i.e. you complete annual Self Assessment tax return forms. In such instances you can:

Defer payment to the normal due date for example 31 January following the end of the tax year of the disposal

Pay when the tax return is submitted.

Penalties

Penalties and interest are imposed for failing to notify HMRC of the property disposal within the 30 day deadline as below;

£100 penalty for up to six months late

A further £300 penalty for more than six months or 5% of the tax due whichever is greater

A further £300 penalty for more than six months or 5% of the tax due whichever is greater.

A further penalty will be imposed if the Capital Gains Tax is not paid by 31 January following the end of the tax year of the disposal. The penalty is 5% of the tax outstanding for payment.

Please contact our Head of Tax, Tim Adcock, if we can assist you with any tax query.

Tim AdcockPartner 0151 [email protected]

Tax Bites continued…


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Since the arrival of pension freedom, individuals in defined benefit (DB) pension schemes have the option to transfer into a defined contribution (DC) pension scheme, as long as they have not already started to take income from their pension.

The pension provider Royal London*, has produced a useful guide to transferring your DB pension, and we’ve highlighted the key points, which say that there are five reasons why you might want to transfer your DB pension and five reasons why it might not be a good idea.

The views expressed in this article do not constitute financial advice and neither promote or discourage pension transfers. The Financial Conduct Authority is clear that a sensible starting point is the assumption you are likely to be worse off if you transfer out of a DB scheme.

Five good reasons to transfer

1. Flexibility

If you transfer your money from a DB pension into a DC pension you have much more choice about how you use your money. You can decide how you want to spread your income through your retirement rather than having a rigid amount throughout.

2. Potential access to more tax-free cash

You can take up to 25% out of a pension tax-free. However, with some DB pensions, you can take less than this. If you transfer to a DC pension, you may be able to take more money out without paying tax on it.

3. Inheritance

If you transfer your pension the value of the assets in the pension or investment could pass onto your heirs when you die. If you die before the age of 75 then there will be no tax to pay on the cash balance left for your successors. With a DB pension scheme there may be a ‘spouse’s pension’ but the amount may be limited.

4. Health

If you suffer from poor health you may be better off transferring to a DC pension. The amount you’d be able to transfer would be based on average life expectancy rather than how long you’d be likely to live for. This means you should get a bigger amount of money to spend.

5. Concerns about your employer’s financial health

If the employer who sponsors your final salary pension scheme is at risk of going bust you may not get all of the pension you were expecting. The Pension Protection Fund would step in, however, it won’t necessarily pay the full pension that you’re entitled to.

To transfer or not to transfer? The pros and cons of moving your pension

* To read the Royal London guide in full, click on the following link: https://www.royallondon.com/Global/documents/GoodWithYourMoney/COMPANY-PENSIONS-FIVE-REASONS-TO-TRANSFER-OUT-AND-FIVE-REASONS-NOT-TO.pdf


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Five good reasons not to transfer

1. Certainty

If you happen to live longer than average then a DB pension lasts as long as you do. If you transfer your pension and manage it yourself you are taking on the uncertainty about how long you are going to live.

2. Inflation

A DB pension will give you better inflation protection and greater certainty. If you transfer your pension, you’d have to factor in the potential impact of rising prices over the course of a long retirement and make provisions for it yourself.

3. Investment risk

If you are in a DB pension scheme the ups and downs of the stock market make no difference to the amount of pension you receive - the scheme still has to pay your pension and the employer has to bear the investment risk. When you transfer your pension you are transferring investment risk onto your own shoulders and what you have to live on will depend on what it is invested in.

4. Provision for survivors

DB pension schemes will normally pay a pension for your spouse and some schemes will offer benefits for dependent children. If you transfer your pension the amount of money you would get to reflect survivor benefits would probably be well short of what you would need to buy equivalent benefits as an individual.

5. Taxation

If you have a large pension pot there could be tax consequences of switching your pension. Under current tax rules, you can build up a pension of £1 million and not have to pay tax charges on it. If you have a DC pension then it is based on the value of the fund being £1 million or more. For DB pension schemes a different (and more generous) process applies. The amount of pension is multiplied by 20 and any tax-free lump sum is added in. the result is then tested against the £1 million threshold.

If you are thinking about transferring a DB pension, you need to take advice from an independent financial adviser unless the pension is worth less than £30,000. Transferring from a DB pension to a DC pension is an important decision, so make sure you understand the implications fully before proceeding.

If you would like advice on whether to transfer your pension please contact Mike Wall.

Mike WallChartered Insurance Practitioner 0151 [email protected]

To transfer or not to transfer? The pros and cons of moving your pension continued…


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All employers with 250 or more employees are now required to publish an annual report of their gender pay gap statistics. This is part of a Government move to reduce the pay gap between men and women.

Overview

The first disclosure has to be made by 4 April 2018 based on data collected on 5 April 2017. Thereafter this will need to be reported annually, not just on the employer’s website, but also a dedicated Government website, meaning that the information is available to all.

With less than a month to go until the deadline, thousands of employers have not yet provided their figures.

The report needs to highlight:

The difference between the mean hourly rate of pay of male full-pay relevant employees and that of female full-pay relevant employees (‘the mean gender pay gap’)

The difference between the median and the mean hourly rate of pay of male full-pay relevant employees and that of female full-pay relevant employees (‘the median gender pay gap’)

The difference between the mean bonus pay paid to male relevant employees and that of female relevant employees (‘the mean gender bonus gap’)

The difference between the median bonus pay paid to male relevant employees and that of female relevant employees (‘the median gender bonus gap’)

The proportions of male and female relevant employees who were paid bonus pay (‘the proportions of men and women getting a bonus’)

The proportions of male and female relevant employees in the lower, lower middle, upper middle and upper quartile pay band (‘the proportion of men and women in each of four pay quartiles’).

If an employer fails to comply with the legislation it could result in enforcement action taken by the Equality and Human Rights Commission and possibly cause damage to their reputation, as seen recently at the BBC, which resulted in six of its leading male presenters agreeing to take pay cuts after Carrie Gracie’s resignation as BBC China editor.

Report narrative and pay policies

Whilst employers will have to publish the differences in pay between male and female employees, there is no legal requirement to publish a narrative explaining their gender pay gap figures.

More information can be found on the Government’s website:https://www.gov.uk/government/news/gender-pay-gap-reporting

You will also have to provide data to HMRC here:https://www.gov.uk/report-gender-pay-gap-data

And once completed you can view results here:https://gender-pay-gap.service.gov.uk/Viewing/download

For further information concerning gender pay gap reporting or nay other payroll query, please contact our Director of Payroll, Ken Davies.

Gender pay gap reporting

Ken DaviesDirector of Payroll 0151 [email protected]


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Due diligence

When buying or selling a business due diligence is a critical step in the evaluation and validation of a company and / or its assets prior to the exchange of contracts. The process provides an independent, comprehensive review of the target and should provide a significant contribution to the decision making process.

Without doubt, the success of an acquisition or investment will be significantly influenced by the extent and quality of the due diligence undertaken as an essential element of the overall investigation into a business. Financial due diligence provides comfort to all parties by analysing and validating the assumptions and views being made, ensuring that future risks are identified and addressed.

In today’s challenging economic environment, sellers, investors and funders are more cautious about the risks they take. Every piece of information is crucial to a deal, leaving no room for error or omissions when it comes to financial due diligence, so professional guidance and support during this process is imperative for a successful transaction.

No two transactions are ever the same and we would always recommend a purchaser undertake a due diligence review, to provide a comprehensive, accurate, actionable risk management tool to help drive your transaction through to a successful completion.

What needs to be covered in a due diligence review?

In-depth analysis of the historic performance of the target business including cash flows, assets and liabilities

Review and testing of management forecasts, including working capital requirements as well as key assumptions relating to projected growth and associated costs

Review of the underlying financial systems and controls

Examination of the synergies expected from combining the target business and purchaser

Assessment of the businesses tax position.

Buyers Due Diligence

When purchasing a business, a specialist evaluation of the opportunity is essential to providing reassurance and identifying future risks.

The scope of the review we carry out is tailored to your requirements; focusing on areas such as company structure, deal structure, financials, contracts, forecast assumptions and potential tax implications, highlighting any critical elements early on the in the process.

Vendor Due Diligence

When a company reaches the point of sale, a transparent overview of the business can help to grow its value in the market. Financial health including its historical, current and future performance is a key aspect for buyers and funders in their appraisal and valuation.

Vendor due diligence aims to highlight and address areas in the business that are likely to be of concern to buyers. Highlighting these early may enable the vendor to address the issue, or at least to prepare a better negotiating position ready for when the buyers raise the points.

How we can help

Our multi-disciplinary, due diligence team, lead by an investment industry expert, are well placed to provide a full range of services in a timely manner, offering relevant, value added advice and reports focusing on the most critical elements in each transaction. All aspects of our service are led by Directors or Partners with many years of deal management experience.

For more information please contact a member of our team below.

Brian McCannPartner0151 2552300brian.mccann@ mitchellcharlesworth.co.uk

Jerry ScrivenDirector of Corporate Finance0151 2552300jerry.scriven@ mitchellcharlesworth.co.uk

Paul Hollowday Head of Investor Due Diligence 0151 2552300paul.hollowday@ mitchellcharlesworth.co.uk


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Mitchell Charlesworth news update

ENTRIES FOR 2018 MERSEYSIDE INNOVATION AWARDS NOW OPEN

Entering its 22nd year, the Merseyside Innovation Awards (MIA) are now open for submissions, which will see one applicant win £10,000 in the accolades’ final later in the year. Renowned for celebrating creativity across Merseyside, the MIA has a long history of contributing to the economic development of multiple businesses and the region as a whole. An inclusive award, the MIA commends companies both large and small. The Awards see a monthly winner selected between January and May. Three entrants are then selected for the final in July, where the selected winner will receive a £10,000 cash prize. The runners up each receive a cash prize of £2,500. Last year, Marlan Maritime claimed the prize, narrowly beating gas safety-monitoring company Gas Tag and virtual reality social media app, vTime.

Commemorated for its coastal surveillance and innovative use of radar in monitoring tidal patterns, Marlan Maritime provides engineers, conservationists and councils with up-to-date information about the ever-changing patterns of shorelines. Discussing how the MIA has impacted Marlan Maritime, Managing Director, Alex Sinclair, said: “Interestingly, winning the MIA in 2017 has fundamentally changed our perception of what we are doing. Prior to the award, we believed in what we were trying to do, we believed that it is going to make a positive impact to people living on and working with the coast. After winning, we knew that other people believed it too.” 2018 will also see the return of the Prestige Award, specifically for larger businesses with a turnover of £1m to £25m, which in 2017 was awarded to EMS Healthcare, a mobile healthcare provider, in recognition of the vital services they provide to users across the region. Brian McCann, MIA founder and partner of Mitchell Charlesworth, commented: “The breadth of innovation and creativity within the MIA continues to astound myself and the judging panel. Year-on-year, dynamic innovations from multiple industries are put forward with the potential to be genuinely impactful to our region and I am eager to see what 2018 has in store for the MIA.”

For further information about the MIA and to find out how you can apply in 2018, please visit: http://www.merseysideinnovationawards.co.uk Potential applicants can also discover more about the MIA by attending a networking lunch on Tuesday 10th April at Sci-Tech Daresbury. To register your interest, please email: [email protected]

Mitchell Charlesworth is proud to sponsor the Merseyside Innovation Awards.


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KRESTON MEMBERS AWNI FARSAKH AND MITCHELL CHARLESWORTH COLLABORATE TO HOST UAE VAT SEMINAR IN DUBAI

We are a North West-based firm but our reach is global. As a member of Kreston International, we are able to connect with a global network of independent accounting firms to share knowledge, best practice and technical know-how and offer a global service delivery to our clients.

We recently joined forces with fellow Kreston firm, Dubai-based Awni Farsakh & Co. to deliver a seminar on the introduction of VAT in the UAE and also to assist each other with our respective clients in the region. Alison Birch, Director of VAT at Mitchell Charlesworth, travelled to Dubai and presented to 53 delegates from over 34 companies on preparing for the launch of VAT.

The seminar was well received and a number of clients asked for follow up meetings and proposals to prepare for VAT. Coverage of the event on social media also led to another enquiry from a UK business with an entity in the UAE wanting support with the introduction of VAT. As a result of the partnership, we were shortlisted for a Kreston International Collaboration Award.

MITCHELL CHARLESWORTH CLIMBS THE RANKS IN ACCOUNTANCY AGE TOP 50+50

Mitchell Charlesworth has been ranked as the 61st largest accountancy firm in the UK in a top 100 league table compiled by Accountancy Age; jumping up 3 places from last year.

The Top 50+50 is published each year and ranks UK accountancy firms by total UK fee income. Mitchell Charlesworth increased fee income to £9.2m in 2016-17, the highest since the firm began in 1885.

Managing Partner Paul Wainwright said: “We are thrilled to move up the Accountancy Age league table which is a reflection of the hard work and commitment of our partners and staff who consistently deliver a first rate service to our clients.

“The firm has experienced strong growth over the last year and we have continued to increase our client base in the region. As always, our priority is the success of our clients and we are focused on delivering technical expertise, sector specialisms and a broad range of advisory services for businesses and individuals. Our clients not only want quality accountancy and taxation services but we are seeing increased demand for support in specialist areas such as wealth management, corporate finance and payroll.”


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NEW CLIENT WINS

Following a competitive tender process Mitchell Charlesworth was chosen to support multi award-winning charity, Autism Together, with a range of specialist advice, including audit, accounts, tax and VAT services.

Robin Bush, CEO, Autism Together (pictured on the right of Sue Stubbs and Philip Griffiths) said: “We’ve a busy and exciting few years ahead of us as we work to fulfil our ambitions. I’m sure our whole autism community – our service users, our families and carers and our staff – will benefit from having Mitchell Charlesworth as part of the team.”

SCHOOL LETTINGS SOLUTIONS

School Lettings Solutions (SLS), one of the fastest growing sport and leisure companies, has appointed Mitchell Charlesworth to provide accounts, payroll, corporate tax, personal tax and VAT services, as well as forecasting and financial management advice. The firm’s corporate finance arm, MC Vanguard, will offer SLS additional guidance on achieving its growth strategy.

The appointment comes as part of SLS’ ambitious growth plans, after the company secured a six-figure investment to support its expansion, with the help of MC Vanguard.

Scott Warrington, director at School Lettings Solutions, commented: “We are the largest school lettings provider in the country and our staff, customers and partner schools deserve the best when it comes to our services. By working in partnership with Mitchell Charlesworth, we feel we can achieve this and continue our growth towards 200 schools and beyond over the next 12 months. The expertise, practices and support Mitchell Charlesworth provides us with will give us strong foundations to achieve success and we’ve been hugely impressed with their team so far.”


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MITCHELL CHARLESWORTH REVEALS CHARITY MONIES RAISED IN 2017

2017 saw a busy fundraising year for staff at Mitchell Charlesworth. All five of their North West based offices took part in various charity days held throughout the year raising a huge total of just under £6,000!

The charities included Macmillan, Children in Need, Genetic Disorders and Parkinsons UK to name but a few. Staff got involved in the charity days by participating in dress down, donning their Christmas jumpers, donating prizes for staff raffles, baking delicious treats to sell and getting stuck into some competitive games!

As well as raising money on the designated charity days, Mitchell Charlesworth also participated in the annual Peel Ports Dragon Boat race in support of Claire House and Alder Hey Hospital. Profits from the annual North West Housing Conference, which is co-organised by Mitchell Charlesworth and Brabners LLP, were donated to homelessness charity Crisis.

Staff across the firm’s offices also took part in the Trussell Trust’s Christmas campaign by donating a large amount of food and seasonal items for special Christmas packages for distribution amongst the charity’s North West foodbanks.

Mitchell Charlesworth extends a very special thank you to all staff for their continued support and generous donations to help raise as much money as possible for these worthy causes.

As part of its CSR strategy, Mitchell Charlesworth is looking forward to another successful year of fundraising for both National and Local charities in 2018 which includes two brave runners participating in the London Marathon this April in support of both National and Local charities… watch this space for updates!

MITCHELL CHARLESWORTH BOOSTS CORPORATE RECOVERY AND INSOLVENCY TEAM

Mitchell Charlesworth has boosted its corporate recovery and insolvency team with the appointment of Julie Webster from RPG Business Recovery.

Julie, who joins as an associate in the Manchester office, has nineteen years’ experience in restructuring and insolvency across a variety of sectors including retail, leisure and construction. A licensed insolvency practitioner, Julie qualified with BDO and has undertaken secondments with Royal Bank of Scotland and the Co-operative Bank, working in their debt recovery teams.


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Mitchell Charlesworth upcoming events

Thursday 15 March 2018, 8am - 10am

10 Steps to Buying and Selling a BusinessVillage Hotel, St David’s Park, Ewloe

Tuesday 10 April 2018, 1pm - 2pm

Meet the Sponsors Lunch - Merseyside Innovation Awards 2018Sci-Tech Daresbury

Wednesday 18 April 2018, 8am - 10am

Demystifying the Management Buy Out ProcessCrowne Plaza, Liverpool City Centre

For more information please visit:www.mitchellcharlesworth.co.uk/events

To book your place please email:[email protected]

Whilst the information is believed to be true, the communication may not be comprehensive and recipients should not act upon it without seeking professional advice.Registered to carry on audit work in the UK and Ireland and regulated for a range of investment business activities by the Institute of Chartered Accountants in England and Wales. Mitchell Charlesworth is the trading name of Mitchell Charlesworth LLP, registered in England and Wales number OC391811. A list of members is available for inspection at our offices. Any reference to a partner in relation to Mitchell Charlesworth LLP means a member of Mitchell Charlesworth LLP. Registered address: 3rd Floor, 5 Temple Square, Temple Street, Liverpool L2 5RH. A member of Kreston International - A global network of independent accounting firms.

www.mitchellcharlesworth.co.uk

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CHESTER 24 Nicholas Street, Chester CH1 2AUT: 01244 323051 F: 01244 344535

LIVERPOOL 5 Temple Square, Temple Street, Liverpool L2 5RHT: 0151 255 2300 F: 0151 255 2301

MANCHESTER Centurion House, 129 Deansgate, Manchester M3 3WRT: 0161 817 6100 F: 0161 817 6101

WARRINGTON Victoria House, 488 Knutsford Road, Warrington WA4 1DXT: 01925 635141 F: 01925 655839

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strength in numbers spring 2018 - mitchell charlesworth...vat on costs relating to funded...

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