Our 2021 Manufacturing and Engineering Survey is now open!

It’s a challenging time for the manufacturing sector and the wider world as the COVID-19 pandemic continues to impact our daily and working lives. Last year, we undertook a national sector health check survey asking manufacturing firms across the UK how they have managed through the crisis.

We are running a second Manufacturing & Engineering temperature check to help us compile the latest nationwide picture of the state of the sector. Your feedback will help our specialist advisers gauge where the sector is and what can be done to respond to current challenges.  

This mini survey focuses on the impact of COVID-19 on the sector and how firms are responding to industry changes.    

The survey should take no longer than 1 minute. It will be used to compile benchmark data, which will help us better understand how the sector is responding to current challenges.  

If you have any queries about the survey or would like to know more about the services MHA Moore and Smalley provide, please contact Ginni Cooper, Partner and Head of Manufacturing and Engineering.

21 tips for 2021

21 tips for 2021

Planning for a better future

Now, for tomorrow

As the clock chimed midnight on 31 December 2019 and we hugged, yes hugged, our family and friends and wished them a Happy New Year little did we know what 2020 would bring.

We had no knowledge that in 2021 we would learn a whole new vocabulary. Coronavirus, lockdown, furlough and social distancing were soon to become all too familiar terms. As for Zoom? Well that was previously a 1980s classic tune by Fat Larry’s band!

In this review we look back at last year and also look forward to 2021, we share some of our best insight articles, videos, factsheets, reports and publications from 2020 and mix and match these with some great fresh content. All of our articles have one thing in common – planning for a better future. Now, for Tomorrow.

Looking after your mental health

Taking care of your mind as well as your body is always important but now, more than ever, it is essential.
We set out some tips to help and support you, your team and your family and friends during this time.

Building financial resilience

Back to basics became a key personal finance theme in 2020 and continues on into 2021. The economic impact of the pandemic has clearly resulted in many people’s finances becoming severely stretched. Read our tips on becoming more financially resilient.

EMI share option schemes

In difficult times it is important to consider the need to retain key value-generating employees that are critical to the survival and future success of a company. EMI schemes offer flexibility and for key employees are a great alternative to a bonus or a pay rise.

The impact of Covid on the world of work

A recent IMF report has concluded that the impact of Covid on the world of work is that it has accelerated existing waves of change which were moving through societies and the businesses which operate in them. How can you ensure these changes benefit your business?

Are changes to Capital Gains Tax (CGT) coming?

The Office for Tax Simplification has suggested some changes to CGT. If you are considering selling an asset, gifting a business asset, making a gift to a trust or carrying out IHT planning in the near future, it may be worth completing transactions sooner rather than later.

Our top tips on planning for retirement

Most of us will be looking forward to the day when we can stop work, retire and enjoy the lifestyle that we had hoped for. It does not matter if you are just starting out, have been working for some time or are approaching retirement we have some top tips to help you plan.

How can I attract and retain the best people?

As the pace of life moves faster and faster the demands on our time continue to increase. Many employees are now turning to their employer to help them manage their work-life balance.

How to manage cash flow in a small business

We help start-ups and small businesses to understand and manage their cash flow to their best advantage. Here are our 5 top tips to help you keep on top of your cash management.

Managing the art of good listening

Listening to your clients and customers is a key skill in business but can you really claim to be a good listener? Our podcast has useful tips to help you improve your listening skills.

Protect your investment portfolio

The pandemic has placed immense pressure on financial markets across the globe. Markets hate uncertainty and, in recent months, that has been one commodity not in short supply. Read our advice on how to protect your investments.

Year End Tax Planning Guide 2021

Our national tax team have worked together to create a handy Year End Tax Planning Guide, which is available for you to download for free. The guide is for individuals and companies and summarises some key tax and financial planning tips.

How hard are your cash deposits working?

Many of us know we should be looking at our cash deposits and switching them to a more competitive deal. Yet in reality many of us never get round to it due to the perceived hassle or because we think that the rates elsewhere are no better.

Taking advantage of digital solutions

In this insight post we set out ways to help you get the most out of your current bookkeeping software to help improve accuracy and efficiency.

Benefits of carbon and energy reporting

Quoted companies have been required to report on energy and carbon usage since 2013, but now large unquoted companies are also required to report on their carbon and energy use in the director’s report of their financial statements. Our latest insight helps turn this into a opportunity to tell positive stories and make operational changes.

Business Protection: Tax efficient life cover

Although state benefits provide some support, few families want to rely on the state to maintain their standard of living. It is therefore crucial to keep abreast of the level of your insurance cover. Our insight look at the different types of protection a business owner should consider.

Changes to the Annual Investment Allowance

The temporary increase in the Annual Investment Allowance (AIA) limit to £1,000,000 has been extended to 31 December 2021. Our insight provides what is AIA and what changes have been made.

Agriculture & Rural Business Newsletter

For most people 2020 will be remembered as the year of Covid 19, lockdowns, furloughing and in some cases, acute financial hardship. For the agricultural sector, it may, in the long term, end up being equally memorable but perhaps for different reasons.

Global event: In pursuit of tomorrow

As we emerge from 2020, a year which has shaken the global economy to its core and forced a reset of norms, how do we prepare to pursue tomorrow? Attend our global event with Kevin Gaskell, former CEO of Porsche, Lamborghini and BMW for advice and tips.

Coronavirus Business Interruption Loan Scheme (CBILS) FAQs

Our corporate finance team has been supporting clients in their CBILS applications ever since the scheme was announced. They have created a handy fact sheet setting out the answers to the most frequently asked questions about the scheme prior to it drawing to a close at the end of March.

Off Payroll Workers – Time to review existing arrangements

Major employment tax changes are coming into force soon and will affect any medium or large-sized businesses who engage individuals via personal service companies. In our webinar on 25 February MHA IR35 specialists will set out what you should be doing now to ensure that your business is compliant from 6 April 2021.

Don't miss out on future events, fact sheets and important updates

MHA Moore and Smalley and our national and global networks are committed to providing timely, pro-active advice to our clients. Sign up to receive our newsletters directly to your inbox and follow us on Twitter and LinkedIn to ensure you are amongst the first to find out how to access first class advice. Now for Tomorrow.

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How to manage cash flow in a small business

Whatever your business is and however big or small it is, you need control over your cash flow to make sure you stay afloat and keep moving in the right direction.

Let’s get our terms right: your cash flow relates to the predictions you can make about what your business can spend in the coming months.

We help startups and small businesses to understand and manage their cash flow right. In this post, we share our best tips on how you can do the same.

Make every penny count

It’s the old adage “look after the pennies and the pounds will look after themselves.”

Spending wisely means keeping a close eye on your outgoings and being able to justify every single business expense you make.

All expenses must bring new value to your business or they must represent an essential expense that you can’t avoid.

Remember: treat every penny as a prisoner.

Check who owes you money

It’s all too easy to generate and send invoices, then to forget about them and move on. But it’s wrong to assume that every invoice will be paid correctly or to the timescale you expect.

Do your checks: see that your invoices are paid properly and at the right times. If you’ve agreed 30 or 60-day terms of payment, your customers should stick to them. So long as both parties agree upfront, keep in mind that you’re allowed to set your own boundaries for payment.

The important thing is to follow up and ensure that what you’ve agreed is what’s actually happening.

This doesn’t have to be a manual chore. Cloud accounting software such as QuickBooks and Xero will show you at a glance who owes you money. Keeping a close eye on things should mean that more of your invoices are paid on time.

Keep your VAT money in a second account

If you’re VAT registered, it can be easy to forget that 20% of the takings that go into your main bank account will need to be paid back during quarterly VAT returns.

To avoid the risk of accidentally spending that money, we recommend creating a second bank account into which you place 20% of all income from your invoices.

That way, when it’s time to submit your VAT return, there’s no stress because you’ll always have funds available to pay the bill.

Set up alerts to check bank balances

Many bank accounts offer free SMS or app alerts to let you know when your balance is above or below a threshold. Take advantage of these so you can be informed of an unexpected drain or surplus on your account.

Checking your bank balance regularly is sensible practice – especially to help you avoid potential fraud – but the true view of your accounting situation should come from your accounting records, which we recommend storing through a cloud accounting package such as QuickBooks or Xero.

Let’s sum up

We hope these tips help you to take control of the cash flow in your small business.

If you need more advice or direct help managing your accounts, please get in touch with our Digital Solutions team at digitalsolutions@mooreandsmalley.co.uk.

This update originally appeared on the website of our colleagues at MHA Henderson Loggie

Brexit: At last, a Free Trade Deal

Brexit Deal: Imposition of Rules of Origin for goods set to be one of biggest changes for business

Following the news of a Brexit deal, Jonathan Main, VAT and Indirect Taxes Partner at MHA Moore and Smalley, says the agreement is excellent news for business but that businesses need to bear in mind that it does not eliminate the need to address rules of origins and other costly import formalities:

“A Free Trade deal with the EU is very good news, but it does not mean that everything will carry on as it does today. The deal means that there will be no import duties on the movement of goods produced in both the UK and the EU (the so-called ‘origin goods’). This is a massive boost for businesses on both sides. The most significant change businesses will have to navigate will be the rules of origin requirements.

“Unlike a Customs Union, a free trade deal is a bilateral agreement which only allows tariff free movement of goods produced in either the UK or EU. The finer detail of the trade deal will confirm the origin rules, but it may help to provide an illustration. For example, there are commonly three ways to assess the origin of clothing: the production of yarn; turning yarn into fabric; and turning fabric into a finished garment. Unless two of the three stages happen within either the UK or EU, the finished garment will not be a UK or EU origin good and as such will not benefit from tariff free movement between the EU and UK.

“Aside from rules of origin, import formalities will also rear their head. These will add to cost and reduce profit margins. Businesses importing from and exporting to the EU will need to consult with their customers and suppliers and decide who is responsible for import formalities. If the UK business agrees to take responsibility for import formalities, it will be shipping goods DDP (deliver duty paid) to its customers.

“DDP is one of a range of Incoterms, a set of internationally recognised rules which define the movement of goods between supplier and customer, and determine which party takes responsibility for freight, insurance, risk and import formalities on that journey. If a supplier sends goods DDP to its customer, it will have an obligation to register for VAT in the customer’s country, as it will be the ‘importer of record’ in that country. It may also have to appoint a fiscal representative to act on its behalf.

“No matter what the final fine print will look like, businesses in both the UK and the EU will need to adjust to the new way of operating and ensure they fully understand the impact on supply chains and profit margins.”

Find out more

In our latest Brexit publication we set out the key points to take-away from the announcement.

Attend our event

Join us for a post Brexit update and discussion on 6 January 2020. 

Government announces further extension to Furlough Scheme

On 5 November 2020 the Chancellor Rishi Sunak announced that the Coronavirus Job Retention Scheme (CJRS) – also known as the Furlough scheme – will be extended for a further five months.

The furlough scheme was initially extended until 2 December. However, evidence from the first lockdown showed that the economic effects are much longer lasting for businesses than the duration of restrictions. Hence the Government has decided to extend the scheme until the end of March 2021, with a review in January.

CJRS key points to note

  • The grant will be paid at the rate of 80% of reference pay, capped at £2,500 per month
  • Employers will therefore still need to pay:
  • Employer National Insurance Contributions (NICs), and
  • Pension contributions
  • Flexible furloughing will be allowed in addition to full-time furloughing
  • Neither the employer nor the employee needs to have previously used the CJRS that was in place from March to October
  • There will be no gap in eligibility for support between CJRS schemes

While the government updates the system, employers will submit their wage claim to the government, and be refunded afterwards. After that, they will be paid upfront to cover the cost.

Further details, including when claims can first be made in respect wage costs during November and how to claim this extended support through an updated claims service will be provided shortly.

It is still unclear what reference pay will be applied, as there are now ‘new’ employees able to participate. The working assumption is that, like the delayed JSS arrangements, it will be the higher of the normal regular contractual pay at 19th March or at 30th October. We will advise as soon as this is clarified or confirmed.

Qualification is as previously, but as a reminder:

Employers must have:

  • A UK bank account and
  • A UK PAYE scheme
  • Agree any working arrangements with employees

Eligible employees are:

  • Those on an Employer’s PAYE payroll by 23:59 on 30th October 2020. This means employees included in a Real Time Information (RTI) submission notifying payment for that employee to HMRC on or before 30th October 2020
  • Employees can be on any type of contract

Need further advice?

We will provide a further update when more details are known, but if you have queries in the meantime please contact our tax team if you require advice on this issues.

Budgeting for January 2021 tax liabilities

As we are fast approaching the deadline for 2019/20 Self Assessment tax returns to be filed and self assessment tax liabilities to be settled in January 2021 there may be an extra amount to be taken into account if you availed yourself of the option to defer the July 2020 tax payment on account due to having been affected financially due to COVID.

Personal finances may be constrained due to various issues such as a reduction in outside earnings or practice cash flow issues due to certain income streams reducing. If this has been identified as a cashflow issue by practice managers there may have been a reduction in drawings to ensure working capital is maintained.  This may have resulted in less available money to pay your tax bill in January.

Therefore early notice of your 31 January 2021 tax liabilities is vital to ensure you have enough in the bank (either personal if you pay it yourself or the practice bank account if this is paid via the practice) to settle the July 2020 payment on account and the January 2021 balancing payment for 2019/20 and the first payment on account for 2020/21 which will also be due in January 2021.

However a lifeline has been offered if individuals are experiencing financial difficulties due to the COVID-19 pandemic with Self Assessment customers being able to apply online for additional support to help spread the cost of their tax bill into monthly payments without the need to call HM Revenue and Customs (HMRC).

HMRC have said:  

The online payment plan service can already be used to set up instalment arrangements for paying tax liabilities up to £10,000. From 1 October 2020, HMRC has increased the threshold to £30,000 for Self Assessment customers, to help ease any potential financial burden they may be experiencing due to the coronavirus pandemic.

The increased self-serve Time to Pay limit of £30,000 follows the Chancellor of the Exchequer’s announcement on 24 September to increase support for businesses and individuals through the uncertain months ahead.

As part of his speech, the Chancellor announced that Self Assessment customers could pay their deferred payment on account bill from July 2020, any outstanding tax owed for 2019 to 2020 and their first payment on account bill for this current tax year in monthly instalments, up to 12 months, via this self-serve tool. Customers who need longer than 12 months to settle their tax liabilities are invited to contact HMRC in the usual way.

Customers who wish to set up their own self-serve Time to Pay arrangements must meet the following requirements:

  • they need to have no:
    • outstanding tax returns
    • other tax debts
    • other HMRC payment plans set up
  • the debt needs to be between £32 and £30,000
  • the payment plan needs to be set up no later than 60 days after the due date of a debt

Customers using self-serve Time to Pay will be required to pay any interest on the tax owed. Interest will be applied to any outstanding balance from 1 February 2021.

If your Self Assessment debts are over £30,000, or you need longer than 12 months to pay your debt in full, you may still be able to set up a Time to Pay arrangement by calling the Self Assessment Payment Helpline.

If you anticipate that profits have reduced in the 2020/21 tax year please contact us to consider reducing your 2020/21 payments on account due January and July 2021. We can prepare draft calculations to estimate your 2020/21 tax liability. Fees will be available on request.

Contact us

If you require any advice regarding the above please get in touch with Lisa Pennington, Healthcare Services Director, or alternatively contact us here.

The Engine Issue 8

Read the detailed review from our recent national manufacturing temperature check

The COVID pandemic has undoubtedly had a significant impact on our lives and on business changing the “normal” to “new normal” and six months after the first nationwide lockdown across the UK, MHA surveyed its manufacturing clients and contacts across the country to assess the impact this was having.

We posed six questions which we intend to return to on a quarterly basis to see how the answers might change and in this edition we provide a summary of our findings and measure the overall mood of the industry during this difficult period.

The next article we focus on is the manufacturing outlook from the view of the North West and West Midlands regions of the UK. Showing a spotlight on what regional industries are trading well and recovering quicker, also highlighting where government support is needed the most to help manufacturers return to pre-COVID levels of trading.

No insight would be complete without talking about the other hot topic of the moment – Brexit. With negotiations between the UK and EU no closer to agreement the scales are tilting ever more to the UK leaving the EU with no deal in place.

Head of Sector at MHA UK, Chris Barlow comments on what the industry views are towards a no deal Brexit and what he recommends manufacturers need to put in place now to protect supply chains, operations and international trade.

Contact us

To discuss any of the matters raised in this edition please get in touch with Ginni Cooper, Partner or alternatively contact us here.

This update originally appeared on the MHA-UK website.

Using Personal Data & Data Protection after 1 January 2021

Regardless of whether the UK and the EU agree a trade deal, if a business needs to continue to receive personal data from the EU for business use, they may need to take action on data protection.

If no UK data adequacy decisions have been made by the end of the transition period, UK businesses will need to map out data flows with their EU partners and put alternative transfer mechanisms in place to continue to lawfully receive personal data from the EU. Most commonly, this will require standard contractual clauses being put in place.

Businesses will also need to familiarise themselves with the data protection provisions of the Withdrawal Agreement, to ensure they are in a position to comply.

Refer to the Information Commissioner’s Office (ICO) website as they have detailed guidance on any additional steps businesses may need to take and an interactive Standard Contractual Clauses tool to use.

Further guidance is available online by searching for ‘using personal data from 2021’ on the GOV.UK website.

This update originally appeared on the website of our colleagues at MHA Monahans.

Remote Working – are you sure of the impact on your business?

Impact of Remote Working

As we have entered a second national lockdown in the UK and other countries globally are maintaining their own domestic restrictions, it is imperative to consider what impact remote working may have on your business.

Remote working can be broadly described as an employee performing their working duties in a location other than their usual place of work (for example, working from home instead of their usual office environment).

Whilst the idea of remote working is not a new one, recent events have forced many businesses to embrace this method of working, often to the fullest extent possible. The COVID-19 pandemic has led to the closure of international borders and countrywide lockdowns and this has had a significant impact on all workforces, whether they were already globally mobile or have had to become so due to these restrictions.

Remote working from outside the UK

Employees that work remotely, but still within their own country, are unlikely to create any global compliance issues for their employer. However, employers that have employees working for them outside of the employee’s home country will need to look closely at how this affects their business.

For many jurisdictions, an employee working in a country will bring with it associated compliance obligations, and costs, for the employer. This may be in the form of:

• a requirement to register the employer as having a presence in that country
• the operation of tax and social security withholding
• or an assessment to determine whether the employee has created a Permanent Establishment (PE) for corporation tax purposes.

Whilst this may bring associated administrative expenses for your business, failure to address these local compliance obligations can lead to costly penalties and difficulty to resolve any historical issues.

Moreover, as each country tackles the COVID-19 pandemic in their own way, it does mean less consistency when considering mitigating circumstances. For example, one country may lift travel restrictions before another, so an employee may still not be able to return to their usual country for work purposes but the authority in the host country may no longer allow a relaxation of local employer compliance obligations.

The key initial thoughts for your business – so you can be sure of the impact – are therefore:

• Do you have employees working across borders? Are you satisfied you have considered all local employer compliance obligations and accounted for these costs?
• Are you sure you know where all your employees are working? The pandemic has led to many different working patterns that may not yet have been communicated to you by your employees.
• If you are considering implementing, or updating, a remote working policy, possibly following a request from your employees, are you comfortable you can track their working pattern for employer compliance purposes?

Contact Us

Please get in touch by emailing us at info@mooreandsmalley.co.uk, if you need support.

This update originally appeared on the website of our colleagues at MHA Macintyre Hudson.

Self-Employment Income Support Scheme (SEISS) Grant Extension

Following the Chancellor’s announcement, as part of the Winter Economy Plan the SEISS continues to be a key part of the financial support that the Government, via HMRC, is providing to many self-employed people to help get through the economic downturn caused by COVID-19 and the lockdown.

Are you eligible?

To be eligible for the scheme you must meet the following criteria:

  • Currently be eligible for the SEISS (although you do not need to have claimed the previous grants – this is explained below)
  • Declare that you are currently actively trading and intend to continue to trade
  • Declare that you are currently impacted by reduced demand caused by COVID-19 in the period of 1 November to the date of your claim

You are currently eligible for SEISS if you meet the following conditions. The first condition is that your self-employment income is less than £50,000 and the self-employment income must be more than half of your total income. This is met in one of the two following ways:

  • Your self-employment income for 2018/19 is less than £50,000 and the self-employment income is more than half of total income for 2018/19.
  • Your average self-employment income for 2016/17, 2017/18 and 2018/19 is less than £50,000 and that average is more than half of the average of your total income for the same three years.

The other conditions are that you:

  • Have submitted your Income Tax Self-Assessment tax return for the tax year 2018-19
  • Traded in the tax year 2019-20
  • Are trading when you apply, or would be except for COVID-19
  • Intend to continue to trade in the tax year 2020-21
  • Have lost trading/partnership trading profits due to COVID-1

How does the grant extension work?

The extension will provide two grants for the six month period from November 2020 to April 2021. The grants will be paid in two lump sums, the first for the period from the start of November until the end of January, the second for the period from the start of February to the end of April. The second grant may be adjusted to respond to changing circumstances.

This grant is subject to Tax and National Insurance Contributions and will amount to 20% of your average monthly qualifying trading profits capped at £1,875 per month. This has dropped from the previous 70% with a cap of £2,190.

Making a claim

The government will release full details about when and how you can make a claim soon although we expect you will have to apply online via the government website.

Contact us

If you have queries regarding the SEISS please contact our tax team if you require advice on this issues.

A version of this blog originally appeared on the website of MHA member firm, MHA Tait Walker.