All posts by Richard Hallsworth

Essential planning for your business

If there are any clear themes emerging from the year, it is the importance of the political situation for the economy. Brexit, the US mid-term elections, China – what the politicians have to say is affecting the Euro in your pocket, pension pot and investment portfolio. With such uncertainty with the UK’s exit deal, January is probably the deadline for any agreement to meet the March 2019 deadline, assuming a deal is reached. Time is running out for all concerned.

For the Irish economy, the war of words means uncertainty. Investors dislike uncertainty, so the lack of political consensus is keeping investors from putting money into an otherwise healthy economy.

The government is preparing its contingency plans on the areas where they have direct responsibility and on measures that need to be taken on an East-West basis, such as customs and veterinary controls on ports and airports. This includes a “no return” policy of a border on the island of Ireland.

What should your business be doing to prepare for the different scenarios for 2019?

A risk management plan and a business impact analysis are now essential for business continuity.

By understanding potential risks to your business and finding ways to minimise their impacts, you will help your business recover quickly if an unwelcome Brexit occurs.

Your risk management plan should detail your strategy for dealing with risks specific to your business. It’s important to allocate some time, budget and resources for preparing a plan.

Ask “what if” questions and “Brainstorm” with employees, your financial adviser and most importantly your accountant to get different perspectives on the risks you may face.

Once you’ve identified risks relating to your business, you’ll need to analyse their likelihood and consequences and then come up with options for managing them. Talk to us about helping you come up with solutions and performing “What if” analysis on your business. We have the experience and tools to help you.

Be positive! 2019 can be the best ever year for your business! Talk to us! Tel 01522 815100


Nicholsons raised over £4,300 Charity

Over the last year Nicholsons Chartered Accountants has been proud to have supported the Lincs & Notts Air Ambulance as their ‘Charity of the Year’; raising a total of £4,327.20 for such a fantastic cause.

It has been a busy year and the staff have participated in various fund-raising activities including cake baking, dress down days and a charity badminton event. Nicholsons Charity Ball was the main fund-raising event, which raised an amazing £7,000 and was split between the Lincs Air Ambulance and L.I.V.E.S

Gail Paton, a director at Nicholsons said “We have enjoyed supporting the Lincs & Notts Air Ambulance and after our visit to the base earlier on in the year, it gave us a far better understanding of the work the team do and the critical care they provide. It also   highlighted the importance of keeping this vital service in the air.”

Gemma Shaw from Lincs & Notts Air Ambulance said, “We have thoroughly enjoyed working with Nicholsons and their efforts in the amazing fundraising they have hosted throughout the year. We are over-whelmed by the generosity of those who supported our charity. Your support ensures we can continue to provide a lifesaving service to those incidents and accidents where the skills on our helicopter can really make the difference between life and death.”

Each year the staff are given the opportunity to nominate their preferred charity to become the firm’s ‘Charity of the Year’. The firm’s 2018/19 charity will be St Barnabas Hospice, as voted for by the staff.  The team at Nicholsons are already planning to hold their next  Charity Ball.

 

 


Organising your legacy

Understandably, it can be very upsetting to think about how your loved ones will react when you are no longer here. But by considering the financial complexities that may arise, you could put meaningful plans in place that reduce some of the burden. Dealing with a deceased’s affairs can be complex and potentially very expensive. The executor of your estate – usually a family member – will have to apply for special legal authority (probate). Amongst the range of responsibilities, they’ll have to find all your financial documentations, send death certificates to organisations who hold your money, pay off any debts you have, follow the instructions of any will in place, and work out whether your estate has an inheritance tax liability.

The last point is especially important. If the value of all your possessions is above your individual threshold – £325,000 if you’re single or divorced, or up to £650,000 if you’re married or widowed – everything above it will be subject to inheritance tax, charged at 40%. The gradual roll out-of a residence nil rate band – worth £125,000 for the 2018/19 tax year – can help you leave a property you have lived in to a direct descendent. However, not everyone can benefit from this additional allowance.

Although these threshold amounts seem high, it might surprise you how much your estate is actually worth. Your estate includes everything you own – property, cars, jewellery, savings, investments and even antiques.

A growing issue

The amount of annual revenue the government has raised through inheritance tax has more than doubled since the 2009/10 tax year – with a record high of £5.2 billion collected in 2017/18 *. The Office for Budget Responsibility forecasts further significant increases in revenue over the next few years. When you die, the executor of your estate will be tasked with providing accurate information on the value of your possessions, and they’ll need to get it right. HMRC will carefully examine the calculations and has shown it’s prepared to challenge valuations.**

Even with recent record inheritance tax intakes, HMRC has revealed there’s a £600 million shortfall between what it collected and what it believes it’s owed.  If your estate has an inheritance tax liability, in most cases your loved ones will have six months to find the money to pay it, or interest is charged on top. The estate usually can’t be released until inheritance tax is paid. So it could cause a lot of headaches and frustrations for your family, if they have to deal with an inheritance tax bill.

What are your options?

With inheritance tax bills typically running to thousands of pounds, it makes sense to consider it as part of your planning. With the right plans in place, you could reduce or even eliminate a liability. By speaking to a financial adviser, you can benefit from an expert helping you build the kind of legacy you want to leave behind, whilst minimising any burden on loved ones. This includes looking at whether inheritance tax is something you need to plan for.

* https://www.gov.uk/government/statistics/inheritance-tax-statistics-table-121-analysis-of-receipts

** https://www.independent.co.uk/money/spend-save/hmrc-inheritance-tax-billrise-23-per-cent-inland-revenue-treasury-a7860626.html

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 & trust advice.

 

 


Apprenticeship scheme provides rewards

Work experience during his time at school helped Billy Toulson to decide on what career path to take. Out of the five different businesses Billy worked at, he most enjoyed his week working in an account department within a local business.  He didn’t want to commit to going to university so enrolled at Lincoln College.  During his time at College, Billy took his Level 2 and 3 AAT exams, this confirmed his choice of career and after approaching a couple of accountancy firms, he was offered a position at Nicholsons in June 2016 on the apprenticeship scheme run by Lincoln College under the watchful eye of Nigel Hullett. Billy continued with his studies and past his Level 4 AAT exam within the first year.

During his second year at the firm and as part of the apprenticeship requirements Billy had to study to gain his Level 4 Business Skills so that he could complete the apprenticeship scheme which came to an end in October 2017.

Billy has recently started studying for his ACCA and has just passed his first exam, he now has another nine exams to take and hopes to become a fully qualified accountant within the next three/four years. Once he is qualified, he would like to work in the agriculture department dealing with farm accounts.

During his time at Nicholsons Billy has been working in the agriculture team under the guidance of Senior Accountant Graham Pogson.  He also works closely with Richard Grayson, Head of the Farming team. Being a key member of the agriculture team has given him the opportunity to work on the accounts of some of the firm’s larger clients as well as being the key contact for several of the firm’s smaller clients, especially those that do their VAT returns monthly/quarterly. The number of clients he deals with is steadily growing giving Billy the chance to develop his role.  He also crosses over into the audit team as some of his work involves carry out audits.

Throughout his training Billy has worked hard to achieve his goals and as he continues to study his work within the agriculture team increases giving him more responsibility.

Billy is a member of the Farming Group as well as a member of the firm’s social committee and is active with ideas in helping to raise money for Charity and sort out events.


The value of Financial Advice

Only four in 10 UK adults trust regulated financial advisers, according to the Financial Conduct Authority’s (FCA) Financial,  Lives Survey, published in June 2018.* This is despite 42% of the near 13,000 people who took part in the study admitting they are dissatisfied with their financial circumstances.  Only one in 20 have received regulated financial advice in the last 12 months related to investments, saving into a pension or retirement planning. Another quarter state they might need financial advice.

Many of us face a whole range of long-term financial decisions; from planning for retirement, investing for the future, to choosing the right mortgage for our circumstances. Speaking to an expert adviser could help you to make more informed decisions. Yet 34% don’t know where to start to look for an adviser.

Are you confident to make your own decisions?

This lack of trust in financial advice comes despite the fact the FCA also found we have low levels of confidence in making our own major financial decisions. Just 27% of UK adults feel they know enough about pensions to choose ones suitable for their circumstances, without consulting a financial adviser. 29% know enough about investments to make their own choices. Even with mortgages, only 39% know enough to decide a suitable product without an adviser.

Only 16% of us believe we are highly knowledgeable about financial matters. Making a poor financial decision could have significant ramifications. It could leave you worse off in the longrun, potentially prevent you from achieving your goals, or cause you to downgrade your lifestyle or expectations. If you don’t feel you know enough about the options in front of you, there could be a greater risk of getting it wrong.

Speaking to a professional

When it comes to servicing your car, you rely on a mechanic. If you’re feeling unwell, you trust a doctor to provide a qualified opinion. And when it comes to your personal finances, it can also pay off to speak to a relevant professional. An adviser can take the pressure and workload from you. They will take the time to understand your objectives and circumstances, to research and recommend suitable options for you to consider. They’ll ask important questions you might not have considered. Their in-depth knowledge of the products could help you to make more informed decisions. Even if you’re financially savvy, an adviser can offer the extra knowledge and insight you may need.

There is a fee to pay, which can be off-putting some people. But with the right advice, you could ultimately make better financial decisions that – in the long-run – more than offset the charges involved. July 2017 research by the International Longevity Centre shows that people who take financial advice are £40,000 better off on average compared to those who don’t.**  Ultimately, a financial adviser can leave you feeling more confident about the future. And that you have the right plans in place towards achieving your long-term ambitions.

*https://www.fca.org.uk/publication/research/financial-lives-consumersacross-uk.pdf

** http://www.ilcuk.org.uk/index.php/publications/publication_details/the_value_of_financial_advice

The value of your investment can go down as well as up and you may not get back the full amount invested. Investments do not include the same security of capital which is afforded with a deposit account.


The hefty cost of renting

It’s an age-old debate: is it better to purchase your own home, or to cut out the hassles of property ownership and just rent? Is having a mortgage a huge burden, or is renting just throwing your money down the drain?

According to June 2018 figures by the housebuilder  Strata, the financial difference – over a lifetime – is vast. If you rent for life, it will cost you £1.1 million more than purchasing your own home. The research compared the cost of owning a UK home to average monthly rental payments, over a 60-year period. An average first time buyer will spend around £430,000, whilst lifetime renters will reach a total of £1.6 million – 280% higher.

 

how will the 2017 general election affect business in lincoln


Mind the state pension gender gap

The UK state pension can be a valuable source of income during your retirement – especially for men.  April 2018 research by Which? found that – over the course of a typical 20-year retirement – men receive an average of £29,000 more state pension than women.

In August 2017, the average weekly amount women received was 81.9% of the amount received by men. This is a slight improvement on recent years, although still a considerable gap. Of the 12.9 million people currently receiving state pension, the amount that 8.4 million receive is based solely on the National Insurance (NI) contributions.

You currently need to have made 35 years’ worth of NI contributions to qualify for the full state pension, but many women – who may have taken a career break to have children, for example – fall short of the full criteria.