The Summer 2019 edition of our newsletter is now available to download here.
This year, the 22nd annual Hunts Post Business Awards 2019 will take place at the Burgess Hall, in St Ives, on Friday 1 November and will be hosted by voice of Strictly Come Dancing and the National Lottery draws, Alan Dedicoat.
As always, we anticipate an exciting evening full of glitz, glamour and great achievements.
This year, in a change to proceedings, we are sponsoring the Family Business of the Year Award, which recognises businesses where the family’s involvement has spanned at least two generations.
Have you integrated your family values into your business and used them as a ‘competitive’ advantage?
Are you successfully planning for succession?
Does your strategy for the future keep your family at the helm?
Are you enjoying controlled and sustainable growth?
If these things ring true for you, then this year’s business awards could be your time to shine.
Entries are now open for this category, as well as a whole host of others including ‘Employer of the Year’, ‘New Business of the Year’ and the ‘Innovation Award’, to name but a few.
Partner Toni Hunter, who will reprise her role on the panel of judges for this year’s awards, commented: “After a number of years sponsoring the Business Development category, we are excited to be taking on something a bit different for 2019.
We work with many successful family-run businesses in our capacity as chartered accountants and business advisers, and we are thrilled that the Hunts Post Business Awards are providing this type of organisation with a platform for recognition.
The calibre of entrants, no matter the category, is always remarkable, which makes my role as a judge extremely difficult.”
Lulu joined George Hay in July 2017 as a Trainee Accountant in our Huntingdon office. She completed her AAT qualification in April 2019 and is now studying towards ACA, with the intention of achieving chartered status.
Q1. Describe George Hay in one word?
Q2. We hear that you’re quite a dab hand at cooking! What’s your signature dish?
I’d probably say, traditional Chinese Dumplings with Leek and Pork filling!
Q3. Describe yourself in three words?
It’s always difficult to describe yourself, so I asked my colleagues! Hard-working, organised and dedicated.
Q4. Can you tell us one interesting/fun fact about yourself, that we wouldn’t already know?
When I was in middle school, we used to sing a song at the start of every lesson, and I was a lead singer!
Q5. This month marks your 2nd year at George Hay! How has your role changed in that time and what do you enjoy most about working here?
My role has definitely changed; the level of responsibility I have has increased in those two years. One of the best things about working for the company, is the variety of work that comes my way.
Q6. I think it’s safe to say summer is here! So, if you were out for the day and the ice cream van turned up – what would you buy?
I don’t eat ice cream that much, so I can’t say I have a favourite. I think I would just pick at random and hope for the best!
Q7. What motivated you to pursue a career in accountancy and what advice would you give to other people wanting to do the same?
I was good at maths when I was at school; my maths teacher used to ask me to help to correct class work for other students. Accountancy is not only about maths though – it involves problem-solving and an eye for detail too, which I like!
The advice I would give to others is that it is hard work, (winning the lottery would obviously be easier), but in all seriousness – if you are dedicated and willing to put in the hours, the results are worth it!
Q8. What would we find at the top of your bucket list?
I would love to go walking through the rain forest in South America and to go on Safari!
Q9. Your website profile tells us that you haven’t always lived in the UK – can you share with us something you love about the UK, and something you love about where you grew up?
I love the nature and scenery in the UK! Something I love about my hometown is that, you will never have to eat the same thing twice – there is such an abundance of different foods that you could experience something new 365 days a year!
In my hometown, there are also lots of different festivals that we observe throughout the year – which are great!
Q10. What do you hope to achieve at George Hay, in the next 12 months?
I’ll be continuing my studies, and hopefully a few steps closer to achieving chartered status.
On Wednesday 10th July, we joined a number of other local businesses in exhibiting at the St. Neots Business Showcase.
The weather was on our side and our Huntingdon-based chartered accountants, Samantha Green and Joe Kokotka, enjoyed a morning of meeting and speaking to business owners, passers by and even the Mayor!
We also ran a competition, offering a prize for the person who answered the following question correctly (or provided the closest guess) – ‘In what month and year did the rate of VAT officially increase to 20%?’
The correct answer was, of course, January 2011! The winner was Danny Nourse of Shift Momentum, pictured below receiving his prizes from Samantha.
As part of our ongoing 80th anniversary celebrations, the partners of George Hay offered up to 80 hours for staff to undertake honorary/voluntary work of their choosing.
Sarah said: “It was great to be able to go and help out at the cub’s annual camp this year, held at the Tolmers campsite in Cuffley. The children took part in a variety of activities including high ropes, climbing walls and an inflatable obstacle course. I started volunteering when my son joined cubs, as there was a dire shortage of volunteers within the group. It’s a fantastic opportunity to learn new skills and meet many different people. By volunteering, the children are able to benefit from experiences that they might otherwise not have had access to, no matter their background.”
… Biggleswade-based Simon Mayes also spent a day volunteering for Project 41 at Woodside Church in Bedford. The organisation offers a range of services, including ‘Centre 41’ which gives people a chance to participate in group games and activities and discuss the issues they are dealing with. They also facilitate a pop-up Food Bank, providing food to people who are facing financial difficulties.
Simon said: “It was a great experience, meeting and talking to the many different people who come along to the drop in centre. Helping out at the Food Bank in the afternoon, it was amazing to see the volume of donations and how these make such a difference to those people who find themselves unable to afford the necessities and so need to depend upon their community for support.”
Many taxpayers (though it is not clear exactly how many) may find that the payment on account demands they are expecting this month don’t arrive, meaning they could get a shock after Christmas.
This is because of problems with HMRC’s IT systems, during self-assessment tax return season, which affected calculations for 2018/19 payment on account.
Payment on account explained
Self-assessment taxpayers with annual tax demands of £1,000 or less, or those who have 80 per cent or more of their total annual tax collected at source (i.e. PAYE), do not have to make payments on account.
However, most individuals within self-assessment, with a tax bill of £1,000 or more, will settle their liabilities in instalments. This is done by making payments on account in January and July, followed by a final balancing payment in the next January.
The amounts that are due depend on the individual’s tax liability from the previous year.
Demands become disaster
Late in 2018, it became apparent that HMRC systems had not always processed payments on account for 2018/19 correctly. Consequently, a number of taxpayers’ self-assessment statements did not include demands for the January 2019 payment on account.
Unless those affected made contact with HMRC to correct their position at the time, they will not have received a demand in June or July for the second payment on account, which would be due by 31 July 2019.
The Association of Taxation Technicians (ATT) has been told by HMRC that taxpayers do not need to do anything, if they have not received payment on account demands for 2018/19.
Instead, the taxpayer will receive a demand from HMRC for the full amount of tax in January 2020. HMRC has also confirmed that it will not charge any interest for late payment – assuming no further IT glitches!
Sarah Dixon, Tax Manager at George Hay, said: “In the event that a taxpayer does not make any payments on account during 2019, then the tax bill that arrives in January 2020 could be significantly larger than expected.
Individuals whose demands are delayed, should either set aside the funds needed ahead of January 2020 or, if they wish, they can make a voluntary payment on account to HMRC of their July payment – and their January payment if that was also missed.
The risk with making a voluntary payment is that, where HMRC has no record of an outstanding liability, its systems may see this as overpayment and automated refunds may be triggered at a later date.
We have had a couple of instances where clients who have made the payment, have been refunded by HMRC. We have advised these clients not to spend the money, so that they can be confident that they have the funds available to fulfil their obligations in the new year.”
How can we help?
If you have concerns about this announcement, or about fulfilling your tax liabilities, we would urge you to get in touch with your usual adviser.
If you’re not already working with us, by entrusting us with your annual tax return you can rest assured that we will handle your affairs efficiently, accurately and compliantly.
We will ensure that you are kept up to date with the latest news and updates relating to self-assessment and your tax obligations, and we can help you to fulfil your responsibilities accordingly; saving you time and money, helping you to grow your business and eliminating anxieties in the process.
HMRC is changing the way in which building contractors will account for VAT, on some of their supplies, from 1 October 2019.
Businesses that undertake either of the following activities, will be required to comply with the new rules:
- Buys in construction services, from other builders, then makes an onward supply of these services to another customer.
- Sells construction services to other builders, where those builders then make an onwards supply of those services to their own customer.
The changes have come about, because of HMRC’s concern that some supplies are prone to VAT fraud; for example, where the supplier charges VAT to the customer and receives the money, but never declares it on a VAT return.
Under current rules, a builder charges VAT to a customer, collects the VAT accordingly and accounts for it within the relevant VAT return.
The introduction of the ‘reverse charge’ procedure means that from October, the builder will invoice his customer without charging VAT and the customer will make the necessary entry on his own VAT return.
The rules will apply to ‘construction services’, the definition of which mirrors that used for the Construction Industry Scheme (CIS).
The domestic reverse charge will affect supplies at the standard or reduced rates of VAT (either 20 per cent, or 5 per cent), where payments are required to be reported under the CIS.
This typically constitutes construction work on permanent or temporary buildings/structures and civil engineering works. For example:
- Installation of systems for heat, light, power, water or ventilation
- Painting and decorating
Certain services are excluded from the rules, including where the recipient is not registered for the CIS, where the supplies are zero-rated and where the supplier and recipient are landlord/tenant. A full list of exclusions can be found here.
As a result of the changes, many construction businesses will find themselves in a position whereby they must identify instances where they supply services to other businesses in the sector (rather than to a consumer of those services) and determine whether these fall within the list of specified services.
Businesses that are caught by the reverse charge VAT will no longer charge VAT on their services; instead, the recipient will charge themselves VAT.
Those affected will need to ensure that their accounting systems are capable of processing reverse charge supplies and be committed to carrying out regular checks to ensure that supplies and purchases are correctly treated.
Construction services may be charged VAT at different rates dependent upon what work is being undertaken i.e. 20 per cent, 5 per cent, or zero-rated. The onus will now be on the contractor, to verify the correct rate to be used for the reverse charge (or if it is to be used at all).
Subcontractors may need to consider the loss of cashflow, as a result of the changes. Using VAT to fund cashflow, between the time it is received and the time it has to be paid over to HMRC, will no longer be possible.
Subcontractors will also be responsible for confirming that they are working for a VAT registered business and whether they are working for an end user, or for someone connected to an end user, including landlords and tenants.
Overall, the new rules mean that the construction sector is likely to face considerable scrutiny from HMRC, in the foreseeable future. It may therefore be wise to evaluate VAT and CIS compliance across the board.
HMRC has confirmed that it will apply a light touch approach, when dealing with errors that occur in the first 6 months after introduction, but only when businesses are seen to be trying to comply with the new legislation.
However, businesses that knowingly claim end user status, when the domestic reverse charge should have been applied, will still be liable for the output tax that should have been paid and may incur penalties.
How can George Hay help?
We can help those affected to make any necessary changes, in respect of accounting procedures and software, to accommodate the new rules.
Our experts will also work with you to ensure that you know how to process affected transactions correctly, after 1 October 2019.
With the implementation only a matter of weeks away, it’s worth speaking to any VAT-registered subcontractors you work alongside, to ensure that they know exactly what is required of them under the new rules.
New measures, unveiled by Small Business Minister Kelly Tolhurst, could see large firms facing significant fines for failing to pay their small and medium-sized suppliers on time.
Late payments and poor payment practices result in the closure of more than 50,000 small businesses each year, according to the Federation of Small Businesses (FSB), costing the economy roughly £2.5 billion.
In 2018, Britain’s small businesses collectively spent around £6.7bn to collect money they were owed – clearly impeding the plans that organisations might have had, to invest this money elsewhere.
In an attempt to increase transparency, company boards will now be held accountable for supply chain payment practices as opposed to just finance directors.
The new measures will also force audit committees to report payment practices in company annual reports.
The government will consult on intensifying the powers of the Small Business Commissioner, to hold to account the minority of larger businesses who neglect to make payments within the allotted time-frame.
Under the proposals, the Small Business Commissioner could have the power to disclose payment terms and practices, as well as to impose financial penalties or obligatory payment plans on large businesses that are found to have inequitable or late payment practices.
The Small Business Commissioner will also assume responsibility for the voluntary Prompt Payment Code of best practice.
In addition, the government also announced the following:
- A tough approach to large companies which are failing to observe the Payment Practices Reporting Duty – a mandatory requirement on large businesses to report payment practices to a national database, twice a year. The legislation allows for prosecution where businesses do not comply, and fines may be imposed. The government will consult on handing these powers to the Small Business Commissioner.
- A ‘Business Basics Fund’ competition of up to £1m in funding, to encourage businesses to use technology to simplify invoicing, payment and credit management and ultimately to boost productivity.
Small Business Minister, Kelly Tolhurst, said: “These measures will ensure that small businesses are given the support they need and ensure that they get paid quickly – ending the unacceptable culture of late payment.”
The Small Business Commissioner’s Office was set up by government in 2017 to tackle the issue of late payments. To date, it has recovered over £3.8 million and additional powers will hopefully enable it to level the playing field for the UK’s 5.7 million small businesses, delivering on the modern Industrial Strategy’s ambition to make Britain the best place to start and grow a business.
Martin Williams, partner at George Hay, comments: “In business, we are all aware of the phrase ‘Cash is King’; a company may have all the revenue in the world, but without good cash flow it can easily fail which is certainly not good for individuals and the economy overall.
Late payment has long been an issue for small-to-medium sized enterprises, holding them back in respect of growth and making it difficult to compete with larger suppliers and businesses in the marketplace.
It is clear that the consequences of late payment for smaller enterprises do not uphold a strong, fair for all, economy, or a business culture that places importance on good payment practice.
Ending the culture of late payments will pave the way to boost SME productivity, remove barriers to growth and improve cash flow.”
How can George Hay help?
We have many years of experience working with SME’s, across a range of industry sectors, and we understand the impact that an inconsistent stream of income can have on these businesses.
We can help you to take control of your cashflow and drive your business forward. We will work diligently with you, to put a realistic plan together that will cultivate confidence within your business and ultimately facilitate growth.
We also support a range of online accounting and bookkeeping software packages, including Xero, Sage and Kashflow, meaning we can easily take care of your cloud accounting needs.
If you’re concerned about late payment or you’re interested in streamlining some of your processes to improve productivity, contact our team of experts in Cambridgeshire, Bedfordshire or Hertfordshire, today.
Local chartered accountants, George Hay, recently celebrated the 25th Anniversary of the opening of their Huntingdon office, with a lunchtime reception at the Town Hall.
In doing so, the firm brought its audit, accountancy, taxation and business advisory services to ambitious businesses and individuals throughout Cambridgeshire and beyond.
In the years since, they have worked alongside numerous developing and fast-growing organisations – some of whom they have supported from inception, right through to the eventual sale of the business – and, in the process, they have fostered many great friendships.
John Bridge OBE DL, Chief Executive of Cambridgeshire Chambers of Commerce, was also in attendance and delivered a short speech in front of guests.
On attending the event, John said: “I was delighted to attend, to congratulate Barry, Toni and their team on this significant achievement and to explain how they have been able to convince me that “Tax is Fun”, through their ability to create strong, lasting personal relationships and with their exceptional technical expertise.”
Barry Jefferd, Tax Partner at George Hay, said: “Having been with George Hay for over 30 years and having played a key role in the establishment of the Huntingdon office, I am delighted to be celebrating its 25th Anniversary.”
“We are extremely proud to have maintained our position in the marketplace here for over two decades, the result of a lot of hard work, and to have supported so many other successful businesses with their ventures in this time.”
“We’d like to give thanks to all those who have contributed to our success, both clients and colleagues, and we look ahead to the next 25 years with great anticipation!”
On Wednesday 10 July, we’ll be exhibiting alongside other local businesses at the St. Neots Business Showcase, which has been organised in partnership with St. Neots Town Council and the Huntingdonshire Chamber of Commerce.
Visitors will be able to come and speak to local businesses, from in and around St. Neots, about the products and services that they have to offer.
The event will run from 10:30am-2:30pm, on the Market Square and is free to attend.
If you’re in the area, come and speak to our qualified chartered accountants, Joe Kokotka and Samantha Green, who will be on hand to answer your questions and tell you a bit about how we can help ambitious local businesses and individuals.
Find out more about the event, here: https://www.eventbrite.co.uk/e/st-neots-local-business-showcase-tickets-62142697481