All posts by Richard Hallsworth

The Perils of exceeding your pension lifetime allowance

There is such a thing as paying too much into pension. Last year it landed nearly 2,600 people with a sizeable tax bill.  The pension lifetime allowance is the government’s way of capping how much you can pay into a pension and still benefit from tax relief. From April 2016, this allowance was reduced to £1 million – with savings above it subject to 55% tax.

A freedom of information request from The Telegraph discovered a 33% increase in the number of people who received a tax bill for exceeding their lifetime allowance. The total amount raised over the 2016/17 tax year topped £120 million. That’s an average tax bill of £46,332, based on the 2,590 people who paid this extra charge. If you’re currently or projected to exceed the lifetime allowance, there are types of protection available from the government to help you.

Source: https://www.lovemoney.com/news/68102/pension-lifetime-allowance-tax-billsaving-too-much


Long-term sickness absence and dismissal

I have recently read about a case that went to Employment Tribunal, then to Employment Appeal Tribunal before concluding at the Court of Appeal. The case involved the dismissal of an employee who was dismissed following over a year’s sickness absence. The Court of Appeal ruled that this was unfair dismissal.

The Court of Appeal handed down its judgment in the case of O’Brien v Bolton St Catherine’s Academy Case number A2/2015/3377 (2017). This ruling is important as it gives employers guidance on dealing with long-term sickness absence and resulting dismissal.

Briefly, O’Brien (O) commenced work as a teacher for an Academy in 2005. In March 2011 she was assaulted by a pupil. O had a short period off work afterwards, but was terribly shaken by the incident. Following some further incidents in December 2011, O went off sick again with severe stress, anxiety and depression. After more than a year’s long-term sickness absence, the Academy sought clarification from her as to when she might be able to return to work and what adjustments (if any) it could make to facilitate a return. O was asked to attend a meeting to discuss these issues but refused because she felt it might upset her. Considering her refusal, the Academy asked O to “provide the information in writing” and this was provided by a letter from her GP in which the GP stated that he was “not confident” about when she might be able to return to work. As a result the Academy decided to hold a medical incapacity hearing under its formal absence management procedures and subsequently dismissed O. She then lodged an internal appeal. At that appeal hearing, O presented a fit note from her GP which stated that her return to work was “imminent” but did not give a likely or possible date. The Academy took the view that the GP’s report was suspicious and inconsistent because it only appeared after the dismissal had taken place.

O made a complaint for unfair dismissal and discrimination on the grounds of disability and won her claim at the tribunal. The Academy appealed to the Employment Appeal Tribunal which overturned that ruling. O then went to the Court of Appeal which restored the tribunal’s finding of unfair dismissal.

More importantly the Court of Appeal gave some useful guidance;

  1. Where an employee has been absent for a period of twelve months or more and there is no certainty about their return, a dismissal is not necessarily unfair. This is reasonable as these matters cannot remain open ended for such a long time period.
  2. With all matters, each case must be treated on its own merits and therefore the timing of the dismissal and its justification can vary from person to person and organisation to organisation. From a general point of view, if the situation is manageable then dismissal may well be unjustified even if it is causing significant problems and conversely if a situation is causing disruption and is unmanageable then a dismissal may well be justified. However, the benchmark is high in terms of the evidence required. It also follows that smaller employers will always dismissal for long term sickness absence easier to do than larger ones because they have far less resources at their disposal.


UK Food consumption – survey shows support for British farmers

Released at the end of last year, the Office of National Statistics has published the 2017 update to consumer food trends, giving some interesting reading for farmers.

For the first time in recent years, food prices started to rise in real terms in 2017, meaning that food price increases have exceeded the rate of inflation, with this increase being attributed to increases in the price of agricultural commodities and oil prices. Inflation appears to have hit across the board, with all baskets of food increasing, whatever the level of spend of the consumer.

Interestingly for farmers, with the cost of the back British farming campaigns constantly coming under scrutiny; of the consumers surveyed in 2016, 77% felt it was important to support British farmers, but only 45% felt that British food tasted better and 41% were prepared to pay more for British food. With 48% of those surveyed at least checking labels to see the origin of their food and 60% stating that they try to buy British when they can, it does at least appear that the campaigns are bringing the origin of food into consciousness.

In terms of the more specific product differentiation increasingly used to create a unique selling point for produce, fair trade and rainforest alliance products seem to be profiting while the organic tag does not seem to have been able to increase its level of spend over the last five years. There has however been more success in marketing with labels such as free range and sustainable; freedom foods sales alone increased by 29% in 2015.

When it comes to Brexit negotiations the statistics are mixed, giving few clues as to what would constitute successful negotiations. 49% of food consumed in the UK in 2016 was deemed to be of UK origin, with 30% from the EU, however the value of food imports was in excess of exports for all categories of food. Beverages were the exception due to exports of Scotch Whisky far exceeding the value of any imports. Within the top ten foods exported in 2017, Whisky was the number one, beer number four, with beef and pork at seven and eight respectively.

In 2017 the top three markets for UK food exports were Ireland, the USA and France; China and Hong Kong being the only other countries outside the EU to also feature in the top ten. Interestingly the five fastest growing export markets in the year were the Philippines, Latvia, Iceland, South Korea and Romania – of the top 20, 12 are countries outside of the EU, perhaps a reflection of the Brexit uncertainty.


Small Business Conference for business owners and managers

Are you a business owner or manager? Need advice and support to grow your business?

Nicholsons Chartered Accountants invite you to attend their Small Business Conference on Thursday 8th March 2018 at Lincoln Drill Hall – 8am – 12noon.

The Conference is aimed at business owners and managers and begins with a networking breakfast, giving you an opportunity to visit stands and discuss business matters with likeminded people. Seats will be taken as the expert speakers take to the stage to talk about the challenges that small businesses face today. Nicholsons has also secured a keynote speaker from small business software technology company XERO who will be discussing “frictionless finance”.

Other topics covered will include;

Getting the Legals right – Employment issues – Staying safe online – Marketing challenges – Health and wellbeing – Latest technology and more.

Alongside the conference there will be an area for trade stands where delegates will be able to go and talk to the experts, who in return, will be able to offer further support and advice on a range of business matters.

XERO, Wilkin Chapman,  F1 Group,  Firecracker,  Barclays,  Knapton Wright,  DBS Internet Marketing,  Lincolnshire Chamber of Commerce,  Lagat Training,  Thompson & Richardson,  Federation of Small Businesses.

Don’t miss this opportunity book your place today by emailing linda.clark@nicholsonsca.co.uk or go to Eventbrite.


Thinking about the unthinkable

Every year millions of people are hurt financially by unforeseen health issues, demonstrating the importance of having protection in place.

There are not only emotional, but financial consequences from unexpected ill health, such as receiving a cancer diagnosis or a death within the family. And it’s a more common occurrence than you might expect. August 2017 research from Aviva* found nearly one in three of us have experienced long-term leave from work due to significant health reasons, of these people, 77% have seen their finances suffer consequently. The effects can be severe. Nearly a third saw their income drop by a quarter. On average, having to dip into savings and investments ate up 40% of people’s overall provisions. One in six had to take the more drastic step of downsizing their home or – in extreme cases – became homeless. Nearly two million people don’t think they’ll ever financially recover. No one ever knows what’s around the corner, and ill health can happen to anyone. But at what would already be an emotional time, experiencing financial concerns would only increase the stress and anxiety. That’s why it’s so important to have plans in place for the unexpected – and to keep making sure those provisions reflect any changes in your family’s circumstances.

Protect your future

The most obvious place to start is to have some form of protection in place. Income protection, for example, is a type of insurance that kicks in should your main source of income unexpectedly stop. If you were to have to take long-term leave due to illness or an accident – or even if you were made redundant – you’ll have a back-up source of income to cover your lifestyle. For many people, repaying a mortgage is the biggest monthly outgoing – and certainly the longest-lasting commitment. By arranging to have mortgage protection, your repayments can be covered, for a period, if something unexpected happens. This can give you time and breathing space in difficult circumstances, and reduce the risk of losing your home.

Emergency funds

In terms of your savings and investments, every financial adviser will highlight the importance of having emergency funds in place for unexpected events. It reduces the need to dip into your investments, which have been positioned for the long-term and might not be as accessible. With your pension, for example, there could be unintentional consequences should you unexpectedly have to access it to cover an income shortfall. It could trigger a large tax bill, and reduce how much money you have to fund retirement.  Other types of insurance can also help you. For example, life insurance will support your family if you were to pass away by paying out a lump sum.

Speak to an expert

As part of any considered financial strategy, it pays to look at all eventualities and to plan for the unthinkable. A financial adviser will be able to help you develop your finances, putting in place protection arrangements and ensuring you have emergency funds. With their advice, any bumps on the road don’t have to adversely derail you and your family’s financial future.

*https://www.aviva.co.uk/media-centre/story/17814/12-million-ukadults-suffer-financial-hardship-due/

The value of your investment can go down as well as up and you may not get back the full amount invested. Levels and bases of and reliefs from taxation are subject to change and their value depends on the individual circumstances of the investor. The Financial Conduct Authority does not regulate Taxation and Trust advice


Changes to Annual Returns for charities

There have been some changes to the charity annual return which came into effect on the 1st January 2018. These are in response to the consultation in the latter part of 2017 and will come into force for those charities with financial years starting from 1 January 2018.

The annual return has historically been used to collect changes to the registered data of the charity. Going forward this will be done through an online system so changes can be made as and when they happen, thus leaving the return for more financial and regulatory information.

An additional requirement will be in relation to income from outside the UK. It is appreciated that this may well require charities to change how they collect and collate their data, therefore this information will be voluntary initially, and only become mandatory in 2019, thus allowing charities to adapt their systems accordingly.   There are various requirements depending on the size of the entity so it is worth checking on how the requirements will relate to your charity to ensure that you can capture the correct information.

Following on from the increased disclosure requirements in accounts around remuneration, there are not surprisingly, new questions around remuneration which cover all salary, benefits, pensions etc, along with details of the highest paid employee, although this latter information will not be made public.

One area which had been proposed was for gift aid information to be collected through this return. This has now been dropped with discussions instead taking place with HMRC to look at gathering the information directly.

If you would like to discuss how the changes to the new annual return will impact on your charity please contact Emma Murray on 01522 815100 or email emma.murray@nicholsonsca.co.uk.


Lincoln City – the story continues

LCFC…the story continues

In true spirit, team Nicholsons has continued to support Lincoln City at home and away. The away games have included Notts County, Crewe and Cheltenham, to name just a few.

October started brightly for the Imps with a 2-1 win over Chesterfield; Lincoln having 80 minutes of control before a “soft” penalty left them with 10 minutes of holding on until the whistle. Lincoln City’s achievements are still bringing the fans together and another bumper crowd of 9,485 at the Chesterfield game saw Lincoln City top the average attendance table for the season in League 2. Following two dour league 0-0 draws against Cambridge and Crawley, an excellent 1-0 win at Swindon, from a Sean Raggett header, gave the team a much needed boost, however, a 1-0 loss at Cheltenham then brought disappointment on a very windy day.

The team made progress through the group stage of the much maligned Checkatrade trophy, by beating multi-million pound assembled Everton under 21’s and Notts County. An entertaining 3-2 win over Accrington Stanley has set the team up for a tough away trip to Rochdale in the new year in the last 16 of the competition. Lincoln are now the only league 2 club left in the northern section of the draw. Unfortunately, the FA Cup heroics of last season were not to be repeated this year. Despite a good performance at League 1 Wimbledon, the Imps ended up 1-0 down.

The mixed league form in November continued with an excellent 4-1 win at Crewe. This was followed by a 2-1 loss at home to Coventry in what was probably the best atmosphere of the season at Sincil Bank, and then a 1-0 loss away at Colchester.

The atmosphere around the club is buzzing once again as three successive league wins in December have propelled the Imps into the play-off zone. With Matt Green back amongst the goals and fan favourite Matt Rhead extending his stay at Sincil Bank until summer 2019, the new year can be looked forward to with real enthusiasm by players and supporters alike.