With CIS comes great responsibility

The Construction Industry Scheme (CIS) has caused quite a bit of confusion since it was first introduced back in 1972.

It has taken on a number of names and forms over the last 40 years, and today exists as a means of deducting money at the source for tax payments related to certain types of construction work.

These deductions count as advance payments towards a subcontractor’s tax and National Insurance, and contractors must register for the scheme.

What does CIS cover?

Let’s have a quick refresh of what CIS does and does not cover.

According to HMRC, CIS covers most construction work to:

  • a permanent or temporary building or structure
  • civil engineering work like roads and bridges

Where CIS is concerned, this construction work can include:

  • preparing the site, eg laying foundations and providing access works
  • demolition and dismantling
  • building work
  • alterations, repairs and decorating
  • installing systems for heating, lighting, power, water and ventilation
  • cleaning the inside of buildings after construction work

However, you do not have to register for CIS if you only carry out certain types of jobs, such as:

  • architecture and surveying
  • scaffolding hire (with no labour)
  • carpet fitting
  • making materials used in construction including plant and machinery
  • delivering materials
  • work on construction sites that’s clearly not construction, eg running a canteen or site facilities

Here’s where it gets tricky

From a cash flow perspective, it’s far more beneficial as a subcontractor to be paid gross. This means the contractor is paying you in full, without deductions.

The onus is then on you to pay your own tax and National Insurance at the end of the tax year.

This allows you to maximise your take home and gives you more financial control – as opposed to having taxes deducted up front.

Gaining Gross Payment Status

To gain Gross Payment Status (GPS), you must:

  • Demonstrate that you’re completely up-to-date with any and all tax liabilities and filings;
  • And have a business bank account.

You must also pass a turnover test. HMRC will check to ensure your labour-only turnover exceeds:

  • £30,000 for Sole Traders
  • £30,000 per partner or £100,000 for the whole Partnership
  • £30,000 per director or £100,000 for the whole Limited Company

Losing Gross Payment Status

But once you’ve gained GPS, unfortunately, that’s not the end of the story. You can also just as quickly lose it.

At least once during a 12-month period, HMRC will undertake a scheduled review to make sure that the business continues to qualify for GPS. And the business can lose its status if, during the 12-month period:

  • Contractor returns have been received late on four or more occasions;
  • One contractor return is more than 28 days late;
  • PAYE or CIS payments have been late on four or more occasions;
  • PAYE or CIS payment is more than 14 days late;
  • Self-assessment payment is more than 28 days late;

Furthermore, GPS is likely to be cancelled if the following is overdue:

  • P35;
  • self-assessment return; or
  • a payment of £100 or more.

Note: Should HMRC withdraw your gross payment status, you can appeal, however, you must do so within 30 days of receiving the notice.

Have any other questions about CIS? Call us on 01228 534 371 to chat with one of our friendly advisors.

From ‘Xero Worries’ to ‘Zero Worries’: How we helped Coomara overcome cloud accounting apprehension

Xero worries to Zero worries

For many business owners, cloud accounting plays an essential part in their day-to-day. Both short and long-term plans are confidently put into action, underpinned by real-time, accurate, and up-to-date numbers.

But for some, the idea of switching to the cloud is, well, clouded by trepidation.

They just can’t overcome their concerns regarding security, usability, or accessibility, and sometimes there’s a reluctance to abandon a familiar (if outdated) spreadsheet or desktop accounting system.

As newly crowned Xero Platinum Partners, we see it as our duty to lead the way when it comes to cloud accounting, helping those apprehensive to make the switch see the light. And that’s precisely what we did for Pete Denston of Coomara Veterinary Practice.

About Coomara

A small, independent vet practice specialising in small and large animal care, Coomara is the quintessential family business, led by husband and wife team Pete and Charlotte Denston and their team of vets and support staff. They cover Carlisle and the surrounding areas and have done so since 1989. However, Pete and Charlotte first became involved with, and bought, the practice in 2013, which is when our working relationship with Coomara began.

Pete approached us and two other accountancy firms for advice prior to purchasing the business. We quickly spotted the viability and, backed by careful analysis and cash flow forecasts, this information encouraged Pete and Charlotte to take the leap.

A Major Challenge

Coomara is a well-established and well-liked business in Carlisle (one glance at their reviews will attest to this). But even the most successful of businesses will encounter tricky challenges sooner or later. For Pete, Charlotte and Coomara, this came in the shape of financial admin and internal accounting processes.

They needed help with bookkeeping, balancing records, and VAT returns, among others, and were in desperate need of a simple, easy-to-use accounting system. We were only too happy to help.

The Solution? Enter: Xero

Pete required an accounting system that provided access to real-time, up-to-date numbers, and gave him an accurate picture of his practice’s financial wellbeing at the drop of a hat. For us, there was only one solution: Xero.

It’s known as the world’s most beautiful cloud accounting software for a reason, and after demoing the platform and taking Pete through its various capabilities, he was on board.

We took the lead with regards to set up and training, and now offer ongoing support to Pete and his team as they continue to use Xero to run and grow Coomara.

The result? Life is less stressful, there’s more time to run the business rather than getting bogged down in admin, and the access to real-time numbers has helped significantly improve decision making.

“Helpful and supportive…”

We continue to work closely with Pete, Charlotte and their team to ensure they’re making the most of Xero, its core features, and its wide range of add-ons.

Here’s what a far less apprehensive Pete had to say about his introduction to Xero and the cloud:

“The team at Saint has been very helpful and supportive in the running of my business. If I ever have a problem with Xero, I know that they’ll be able to either help resolve the problem or advise me on how best to sort it out myself if needed.”

Find Out How Xero Can Help Your Business

If you’d like to experience the benefits of Xero and cloud accounting, just like Pete and Coomara, we can help. Our team of Xero Champions are ready to show you the ropes. You’ll be saving time and money before you know it!

Simply click the link to Get Started with Xero, or call us on 01228 534371 to chat with one of our friendly advisors.

Good news! We’ve gone Platinum

We’re very pleased and incredibly proud to announce that Saint & Co is now a certified Xero Platinum Partner.

This has been a long road, from Bronze to Silver, to Gold and beyond, but it represents our unwavering commitment to the Xero platform, and our staff’s dedication to learning and improving every single day.

They’ve put in the hard yards, earning the appropriate certifications and delivering expert advice and guidance to our clients. A massive congratulations must go to each and every one of them!

What Does This Mean for You?

So, what exactly does our newly acquired Platinum status mean for you? In a word: Value.

As Platinum Partners, we are now in a position to pass on even more value to you by the way of access to promotions, expert assistance, consultancy, and project support.

Your experience with Xero is incredibly important to us, and our shiny new status will go a long way towards making it even better.

Find Out How Xero Can Help Your Business

Our team of Xero Champions are primed and ready to help you discover the many benefits of switching to a cloud accounting system, and to Xero in particular. You’ll quickly save time, save money, and wonder how you ever did without it.

Simply click the link to Get Started with Xero, or call us on 01228 534371 to chat with one of our friendly advisors.

 

 

Are staff pension contributions affecting your margins? Here’s what you can do

Are staff pension contributions affecting your margins? Here’s what you can do

Pension contributions increased from a minimum of 2% of qualifying earnings to 5% in April of this year, and they’ll increase again in April 2019 to a minimum of 8%.

So, what exactly does this mean for your business and its margins?

Well, the truth is, you simply don’t have any choice in the matter. You’re legally required to pay these pension contributions. All eligible employees must be enrolled, and you must make the minimum statutory payments on their behalf.

But you don’t have to let this fact eat away at your profit margins. You can do something about it. And it boils down to two options:

1. Raise your prices
2. Look for savings elsewhere

In this brief blog post, we’re going to explain a few ways to improve your profit margin against the backdrop of increasing staff pension contributions.

How to improve profit margins: 4 simple tips

1. Review your customers – all of them

It’s all too easy to fall into a pattern with existing clients. You know what they want, they know what you charge, and things just keep trundling along. But ask yourself: Could you be making more?

Perhaps it’s time to review your customers and the prices you’re charging, and work out if it still makes sense. For instance, have you raised prices to match any supplier price increases over the years? Are you providing more value but charging the same? Are your products or services now of a higher quality? Are your clients even sensitive to the odd price increase? Or will it send them running for the hills? And if it does, were they even the right fit for you to begin with?

Clearly, there’s a lot to consider, but this is an important first step towards increasing your profit margins, closely followed by…

2. Increase your prices

After conducting your customer review, you might find that one or two have been coasting along on a legacy pricing model – one that your business has done well to outgrow. And with ever-increasing and often unavoidable overheads, it’s vitally important that you monitor and review your pricing structure at regular intervals.

Understandably, business owners can be hesitant when it comes to increasing prices. They worry that doing so will result in loyal customers flinching and leaving in pursuit of a better deal. But the truth is, if you’re providing a fantastic service or a top quality product, most customers will accept a small bump in price over time. And chances are, those who don’t weren’t going to be long-term customers anyway.

If you’re still worried about increasing your prices, think about it like this: Operating at a 30% gross margin and putting prices up by 15% means you can afford to lose up to 33% (one-third) of your customers and still maintain the same level of income as before.

3. Prevent theft, fraud, and waste

The choice shouldn’t simply be increase price OR look for savings. Do both. And one of the best ways of protecting your profit margin is to prevent theft, fraud, and waste from occuring in your company.

Whether you have products or cash being stolen by staff or customers, or you have inventory, resource, or time being wasted in your business, it all adds up.

Consider implementing anti-theft systems, fraud protection protocols, and workflow management software to grab back what was once being lost to inefficient or malicious actions.

Even a minimal change in approach could pay dividends further down the line.

4. Negotiate a better deal

Finally, just as you’ve taken the time to review your customers, be sure to do the same with your suppliers.

Are you really getting the best deal possible? Are you being overcharged? Could you switch and save? A quick internal audit of your supply chain could lead to big savings.

And don’t be afraid to expand your focus to every aspect of your business: Broadband, telephone, banking, stationery, the list is endless. It might seem like penny pinching, but every penny counts!

And don’t forget the intangible benefits!

Yes, the pension contributions are unavoidable, but they don’t have to be bad news. It’s a real positive that you’re putting money aside for your employees and their futures, and if you communicate this properly, it could lead to a boost in morale and a redoubling of efforts.

Happy employees are more often than not invested in doing a good job, and increased productivity and enhanced levels of quality will only ever work wonders for your profit margin!
Increase your profit margin with Saint

Need some advice when it comes to reviewing prices, introducing efficient workflows, or decreasing tax liabilities? We can help. Simply fill out our contact form, or call us on 01228 534371 to get started.

Should I buy machinery and equipment before the accounting year ends?

As another financial year draws to a close, you might be wondering if now’s the time to make a last-minute capital purchase.

No matter how much money your business is turning over, purchasing new equipment is a big call and one that shouldn’t be solely dictated by the time of the year. Depending on the industry you’re in, machinery can cost tens – or even hundreds – of thousands of pounds, and along with operational and maintenance costs, a single purchase could significantly alter your bank account and balance sheet.

That being said, if you know you need new machinery, there is an argument for making the purchase before the accounting year ends.

Why Timing Your Purchase Matter

With a plan in place to purchase new equipment, it makes sense to incur the expense before the accounting year ends. That way you’ll receive the tax relief one year earlier than if you were to wait until the new accounting year begins.

An expense incurred entirely for business purposes can be deducted from your income, lowering your taxable profit, and in turn lowering the amount of tax you will be required to pay.

Which items are eligible?

Capital purchases are assets that offer a benefit to your business lasting more than a year. In addition to new machinery, you can also include computers, printers, smartphones, and tablets.

What’s more, other necessary business-related purchases such as print cartridges, stationery, web design, logo design, or office furniture should be ordered prior to the end of the accounting year to ensure you benefit from the earlier tax relief.

However, it’s vital that these purchases are made as part of a wider business plan, and not as a tax saving gambit. Otherwise, you run the risk of depleting funds and causing cash flow problems in exchange for superfluous items.

What Does HMRC Say?

HMRC offers a definition of ‘plant and machinery’ for items on which you can claim capital allowances. This covers a wide range of items, and the costs associated.

Using the Annual Investment Allowance (AIA), you can deduct the full value of a qualifying item from your profits before tax. You can claim AIA on most plant and machinery up to the AIA amount.

What doesn’t count as plant and machinery?

As per the HMRC website, you cannot claim capital allowances on:

  • Things you lease – you must own them
  • Buildings, including doors, gates, shutters, mains water and gas systems
  • Land and structures, eg bridges, roads, docks
  • Items used only for business entertainment, eg a yacht or karaoke machine

And you can’t claim AIA on:

  • Cars
  • Items you owned for another reason before you started using them in your business
  • Items given to you or your business

Always Seek Advice

These allowances can change from financial year to financial year, so it’s vitally important that you monitor the situation closely, or seek expert advice before making a significant business purchase.

We recommend sitting down with your accountant and planning the purchase of your next piece of machinery to ensure you see the full tax benefit.

Need Some Advice? Let’s Talk

Saint & Co has long worked with businesses operating in industries reliant upon heavy machinery, so we know a thing or two about planning and making major purchases.

If you’re not quite sure if and when to pull the trigger on a new piece of equipment, we can guide you through the important considerations, and explain the various tax implications.

Simply fill out our contact form, or call us on 01228 534371 to get started.

How is Brexit going to affect my business?

How is Brexit Going to Affect My Business

Whether it’s hard or soft, one thing’s for sure; Brexit is going to impact your business.

According to an article in the Telegraph, both UK and EU small businesses are most likely to be hit the hardest by Brexit. And with a recent leaked government memo suggesting that the UK will be worse off, no matter the scenario, it’s important that you take the time to consider the consequences of the referendum on your business.

We appreciate that for many of our clients, this is a time of real uncertainty – and that uncertainty is unlikely to lift anytime soon. That’s why in this blog post, we wanted to offer a brief overview of our understanding of the situation as it stands.

In particular, a number of the businesses we work with import from, and trade with, Europe. The future of this business relationship with the continent is obviously a concern for many, and it’s something we’ve been keeping a close eye on.

The Curious Future of Trading with the EU Post-Brexit

For many businesses, exporting products to other countries is a terrific source of revenue, while importing materials can result in lower manufacturing costs. However, this could all change in the not-too-distant future.

If you currently trade with the EU, you’ll be well aware how intertwined it is with the single market. Should Brexit negotiations result in trade becoming more difficult, it could pose a huge risk to your business.

Where exports are concerned, the Office of National Statistics states that 48% of the UK’s total goes to the EU, while 59% of imports into the UK come from the EU. In 2016, imports to the UK from the EU totalled £318bn, while exports in the opposite direction were worth £235bn.

No matter how you slice it, these are significant numbers set to be exposed to a great deal of volatility and uncertainty in the coming months.

And After Brexit, VAT Could Be Paid Upfront on Imports

Earlier this year it was reported that, under the proposed legislation, over 130,000 UK businesses would have to pay VAT upfront on all goods imported from the EU post-Brexit.

Fast forward to this month, and the VAT problem remains, with many businesses unprepared for the tax implications of Britain leaving the European Union. Being forced to pay VAT upfront could result in additional and complicated paperwork and acute cash flow challenges.

And if you’re reading this thinking ‘my business doesn’t deal in imports, nor is it close to the VAT threshold, so this won’t affect me’ be prepared to think again!

The fact that so many businesses will need to pay upfront and recover money at a later date could have a potentially huge knock-on effect to other companies operating in the same or similar industry or marketplace.

For example, your business may be asked to shoulder some of the burden by paying your UK-based suppliers upfront for materials they’ve imported from the EU, therefore exposing your business to the same cash flow challenges and risks.

Getting Your Business Ready for Brexit

March 29, 2019, will be upon us before we know it. It’s vitally important that you take the necessary steps to prepare your business for Brexit sooner rather than later.

Some early key considerations should include:

  • Supply chain auditing – Even if your business is as ready as it can be for Brexit, you could still encounter disruption if your suppliers are not. It’s therefore worthwhile auditing your supply chain to ensure every link is robust and ready.
  • VAT and cash flow – As mentioned earlier, if you’re trading with the EU, you will need to be prepared for the possibility of paying VAT up front. Implementing a cash flow forecasting system is highly recommended.
  • Intellectual Property (IP) – European patents should still apply in the UK after Brexit, but other areas of IP, such as designs and trademarks, could lapse. Check the Brexit IP page for more information.
  • Employee nationalities – You will need to understand the rights and status of your EU workers to ensure you are employing them legally post-Brexit.
  • Contingency planning – There is simply no guarantee that everything will operate smoothly come March 30, 2019. Border procedures could quite easily grind to a halt, so you will need a contingency plan if you’re importing goods or services.

ICAEW has a terrific checklist to help you plan for Brexit. We recommend you take the time to review their resources in depth.

Need Some Advice? Let’s Talk

With over a century in business – and counting – Saint & Co. has witnessed and overcome a great deal of business challenges brought about by a shifting political landscape.

We can help you prepare for the upcoming changes and challenges posed by Brexit. Remember, it’s never too early to start planning.

Simply fill out our contact form, or call us on 01228 534371 to get started.

Going for Xero Gold

 

Going for Xero Gold

We have some good news to share: Saint & Co. was recently awarded Xero Gold Partner status.

So, what exactly does this mean for both us and you?

Well, Xero awards several different status levels, ranging from Partner to Platinum Partner, with Bronze, Silver, and Gold in between. Each level achieved is an indication that certain criteria has been fulfilled, particularly the number of clients subscribed to use Xero.

Our Journey to Gold Champions

Using Xero was a deliberate and careful decision. It wasn’t something we rushed into. We carefully examined a number of solutions for our clients, before working closely with Xero for around a year to determine if their platform met the needs of our existing clients.

Over the past 12 months, our partner, Carlisle Accountant, Stuart Farrer – who was heavily involved with introducing Xero to the company – gave up time to attend workshops and travel to observe what other firms were doing well. Thanks to his dedication and input, and the hard work of our team in general, we have managed to convert over 350 clients to Xero’s cloud accounting software.

Retaining Our Status, and Aiming Higher

Growing to that number of subscriptions has directly contributed to achieving the gold status level, but it can change on a monthly basis. Part of the criteria also refers to the number of staff we have certified to use Xero, so we’ve spent even more time and resource training our team to make the most of Xero and its features.

We want to ensure that our clients will receive an answer to almost any query when it comes to using Xero and that being on the cloud complements their day-to-day business activities.

And with the platinum status in our sights, we need to retain our high standards of customer care, and our dedication to learning and improving.

What Can Xero Do For You?

When we introduce you and your business to Xero, you’ll have the opportunity to streamline your accounting processes. You’ll have 24-hour access to review your financial information via your own dedicated real-time dashboard, allowing both you and us as your accountant to make faster, better decisions.

Instead of dropping off documents or emailing information, you’ll enjoy a modern and up-to-date accounting system that will improve financial management and decision making within your organisation.

What’s Next for Saint and Xero?

Thanks to our newly acquired gold status, some of our partners have been invited to special Xero events, giving them a fresh perspective on the platform and an opportunity to expand their knowledge; something that we can then pass directly onto our clients.

Stuart and Michelle will also be attending Xerocon London in October. It’ll be yet another chance to enhance their understanding of Xero and its accounting system.

And we’ve also been running our own Xero client events (with lunch!). Our last one saw around 50 clients, many of whom weren’t on Xero at the time, attend and learn how cloud accounting could boost their business.

Learn More About Xero

If you’d like to learn more about how Xero can improve your accounting and financial management, chat with one of our friendly team members.

Simply fill out our contact form, or call us on: 01228 534371

Cumbria Flood Recovery Fund application deadline extended to 30th September 2017

The Cumbria Flood Recovery Fund 2015 was set up for those affected directly or indirectly by storm damage and flooding in December 2015.

Cumbria Community Foundation said that the Fund “has supported more than 3,000 households and helped communities rebuild after the floods.   Over £9 million has been awarded in total, with more than £2.5 million being invested in resistance and resilience measures for both households and communities, to help minimise the extent of damage in the future.

Cumbria Community Foundation have advised that the deadline for applications to the Cumbria Flood Recovery Fund 2015 has been extended to 30 September 2017 and are encouraging households to apply to the Fund by the same date as all district councils who are providing the Property Level Resistance (PLR) grants have extended their deadline to 30 September.

Priorities for grant making are:

  • Individuals and families suffering hardship as a result of the storms and floods
  • Community relief and ‘community rebuilding’ projects

For further details or to apply visit www.cumbriafoundation.org.

New Tax-Free Childcare Scheme

New Tax-Free Childcare Scheme

At the end of April 2017, the new Tax-Free Childcare scheme was launched by the government. The government has started inviting parents to apply for Tax-Free Childcare beginning with parents of the youngest children and parents of disabled children.

This may be of interest to you as:

  • if you are an employer, you may be asked questions about the new scheme by your employees
  • you may be interested in using the scheme yourself, particularly if you are self-employed, as this is the first childcare scheme providing a tax break for the self-employed.

What is Tax-Free Childcare?

Eligible parents will open an online childcare account. When a parent pays into the account, the government will pay in an extra 25%. So if £80 is paid into the account, the government will automatically add £20. The maximum government payments are £2,000 per child per year. This means annual childcare costs of £10,000 per child can be met by £8,000 of payments by the parents and £2,000 by the government.

For a disabled child, the maximum top-up payments are £4,000.

How much parents pay into their Tax-Free Childcare account, and when, is up to them.

Who can qualify for Tax-Free Childcare?

Parents need to be ‘working parents’ paying for ‘registered childcare’ for children under 12 (or under 17 for disabled children). If parents are not living together, the qualifying parent depends upon with whom the child usually lives.

The main criteria for a parent are:

  • earns on average at least £120 a week
  • earns less than £100,000 a year
  • not receiving other support for childcare such as Child Tax Credit or Universal Credit.

The self-employed parent can average self-employment income across the year to meet the minimum income requirement.

If the parent has a partner, he/she also needs to be working and satisfy the criteria above.

It is possible for an individual who is not the parent to qualify if the child usually lives with them. The income criteria would apply to that individual (and their partner).

Partners are people who are:

  • married or in a civil partnership, and live together in the same household, or
  • a couple who live together as if they are married or in a civil partnership.

Registered childcare

Only childcare providers registered or approved by a UK regulator can sign up to receive Tax-Free Childcare payments. HMRC has written to childcare providers, asking them to sign up online for Tax-Free Childcare. Parents will be able to check online who is registered for the Tax-Free Childcare scheme.

Parents will send payments online from their Tax-Free Childcare account to the bank account of the registered childcare provider. Therefore when a provider receives a payment from a parent, this will include both their payment and the government contribution.

What if you have an Employer Supported Childcare scheme?

As an employer, you may have set up and still run an Employer Supported Childcare scheme. Employer supported childcare, commonly by way of childcare vouchers, has provided tax and national insurance efficient benefits for many employers and employees. Many schemes have been set up under a salary sacrifice arrangement. The employee receives a childcare voucher which, within certain limits, provides income tax and national insurance savings.

An employee cannot benefit from both an Employer Supported Childcare scheme and the Tax-Free Childcare scheme. However, employees are free to choose between the schemes if already in an Employer Supported Childcare scheme or join such a scheme before April 2018.

This choice is, of course, dependent on you continuing to offer a scheme. If you do continue to run a scheme, your employees will need to decide what to do. There are winners and losers when the two schemes are compared. For some, this will be a difficult choice to make.

The government has provided a ‘childcare calculator’ which provides an estimate of the financial support parents may be able to receive after they have answered a number of questions on their childcare costs and income. The calculator is available at www.gov.uk/childcare-calculator

Your childcare voucher provider should also be able to supply information to your employees to help them decide what is best for them.

30 hours free childcare (please note that this applies to England only)

The government is introducing an extension to the current schemes available in England for free childcare for three and four-year-olds. The current scheme provides 570 hours of free early education or childcare over 38 weeks of the year (typically taken as 15 hours a week over 38 weeks). It is available for all three and four-year-olds. The 30 hours scheme potentially extends the entitlement to an additional 570 hours. However, not all children will be entitled to receive the extra hours. The criteria for the extension are similar to the criteria that apply for the Tax-Free Childcare scheme – for example the requirement for parents to be working and not earning above £100,000 a year.

The scheme will begin in September 2017 but eligible parents can apply for the Tax-Free Childcare and the 30 hours schemes through one online application. See the link below.

New government website – Childcare Choices

The government has recently launched a website – Childcare Choices – which guides parents through the various ways help is, or will be available. Please see: www.childcarechoices.gov.uk

The childcare calculator which has been referred to above in the section ‘what if you have an Employer Supported Childcare scheme?’ is also useful.

Currently, parents with a child under four on 31 August 2017 or disabled can apply through the Childcare Choices site. Parents will be able to apply for all their children at the same time when their youngest child becomes eligible.

Other parents can request to receive an email from the government as to when they are able to apply. The link is also available on the Childcare Choices site. All eligible parents will be able to join the scheme by the end of 2017.

Information sheets for employees

If you would like to provide information to your employees about Tax-Free Childcare we can supply you with an information sheet. Please contact us and we will supply you with a digital version.

We hope you find this information useful. Please do not hesitate to contact us if you have any questions.

Motor racing sponsorship was tax deductible

Motor racing sponsorship was tax deductible

In order for an expense to be deductible against business profits, it must be incurred “wholly and exclusively” for the purposes of the trade.

In a recent tax case, a hotel owner near Silverstone sponsored his granddaughter’s career as a racing driver by making payments through his company. The argument was that this would promote the motorsport credentials of the hotel, rebranded as Silverstone Hotel. The granddaughter was well known in motor racing circles and her endorsement of the hotel was designed to promote the company’s business.

HMRC sought to disallow the expense on the grounds that there was a “duality of purpose” and consequently not incurred wholly and exclusively for the purposes of the hotel trade. However the Tax Tribunal allowed the company’s appeal and consequently, the payment was tax deductible.

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