Welcome to our latest newsletter, over the past twelve months we have been continuing to expand primarily due to existing client recommendations and for this we thank you! As part of this expansion our team has grown, check out the back page for an introduction to all our team members. We hope you enjoy reading this newsletter and find it useful and remember we are here to help you, so please contact us if you need further information on any of the topics covered.
Kym (Director and Senior Accountant)
Focus on employers.
National Minimum Wage Increases
On 1st October 2015, the national minimum wage rates will increase:
• The main adult rate (for workers 21 and over) will increase by 20p to £6.70 an hour
• The rate for 18-20 year olds will increase by 17p to £5.30 an hour
• The rate for under 18 year olds will increase by 8p to £3.87 an hour
• The rate for apprentices (aged 16-18 and 19 or over in the first year) will increase by 57p to £3.30 an hour
Why your firm needs a grievance procedure
Why your firm needs a grievance procedure
As an employer, you need to have reasonable procedures in place to resolve workplace disputes. Those procedures cover two areas - your complaints against an employee or where your employee has concerns, problems or complaints.
Where one of your employees has concerns, problems or complaints about their working conditions or relationships with colleagues, these are “grievances”. An employee is entitled to raise a grievance with their manager about any aspect of their working life that they are unable to resolve informally.
Why have grievance procedures?
Resolving workplace disputes quickly and effectively is good management practice, although there is more to it than that. Having procedures in place to deal with workplace disputes ensures that employees are not treated unfairly or inconsistently. The employees will also know that their grievances will be listened to, and if necessary appropriate action will be taken to resolve the issues.
Written grievance procedure
Your grievance procedure needs to be in writing so that employees will know what to do if they have an issue about any aspect of their working life, be it about their work or their relationship with a colleague. Managers will also know what to do if they are approached informally by an employee about a grievance they have, or if a formal grievance is raised.
It can be tempting, particularly in smaller businesses, not to have a formal written grievance procedure and to rely on informal measures instead. However, this carries the risk of inconsistent application and interpretation, and employees are left unsure of how their workplace dispute will be resolved. This can also lead to legal complications for the business in the future. As such, it is important to have a written grievance procedure in your firm.
A reasonable grievance procedure
ACAS has issued guidance about formulating your grievance procedure. The guidance is not prescriptive, but employers are expected to follow it. The guidance recommends adopting what it describes as "reasonable" procedures..
Authority versus leadership
A great manager is one who is a true leader. They tend not to be authoritarian in their approach.
An individual in authority makes use of power in order to get people on side or to undertake an activity with him or her. Such a person has the backing of whatever laws or rules are there and therefore they are able to get others to perform their part in achieving a particular objective. By contrast, a leader gets people to perform a task or embark on a journey out of their own interest. These people are able to identify with whatever the leader is doing and as such make conscious efforts to work towards the same goals as the leader in order to achieve set objectives.
Authority comes in various forms and can be seen by the way a particular person exerts his or her power on others. A leader allows those who follow to make their own choice: This is the most significant distinction between a leader and someone who has authority. A leader always ensures that his or her followers make their own choice to follow his or her lead without being forced or asked to do so. Anyone in your business can become a “leader” irrespective of their formal role within the firm. Just because you have a formal title of “manager” does not mean you are a leader. Here are a few leadership tips:
Have a clear vision
If you don't know where you are heading, how will you know when you have arrived at the destination? Put differently, it is essential that you create a clear vision of what you want the team to achieve so that it can be understood by everyone.
Learn to be a good listener
You are the leader and have many ideas, opinions and solutions. Your team know this but also want to be able to offer their views and feel like they have been heard. A good leader recognises this and focuses most of their communication on listening.
Be someone who makes decisions
As a leader you need to weigh up the upside and downside of any particular option and then decide. Team members may not always support your decisions 100% or may not have taken exactly the same decision. On the other hand they will respect you for making a decision and doing so quickly.
Empower your team
One of the big advantages of a team is the range and variety of skills and experience that is available. You know what you are good at and not so good at, so empower those to do what they do best.
TAX RELIEF FOR REPLACING FURNITURE IN LET PROPERTIES
The government announced in the Summer Budget that from April 2016, the current 10% Wear and Tear Allowance for furnished lettings will be replaced with a relief that enables all landlords of residential dwelling houses to deduct the costs they actually incur on replacing furnishings in the property. This will give relief for capital expenditure to a wider range of property businesses.
The proposals are being consulted on during summer 2015 and will give greater consistency and fairness across the residential property letting sector.
The new relief will apply to all landlords of residential dwelling houses, no matter what the level of furnishing. Those operating furnished holiday lettings businesses will continue to claim capital allowances instead of the new replacement basis. If enacted, the new rules will apply from 6 April 2016 for income tax purposes and 1 April 2016 for corporation tax.
The new replacement furniture relief will only apply to the replacement of furniture, furnishings, appliances and kitchenware provided for the tenant’s use in the dwelling house. The initial cost of furnishing a property would not be included.
This will put the old concessionary basis that applied up until 5 April 2013 on a statutory footing, and is welcome news for those letting properties unfurnished and providing white goods, carpets and curtains, where relief had been withdrawn for a three year period. It is also good to see the government responding to lobbying from the accounting profession and letting sector to restore the tax relief. Please contact us if you are potentially affected by these changes.
BANK AND OTHER INTEREST TO BE PAID GROSS FROM APRIL 2016
As announced in the spring 2015 Budget, a new personal savings allowance will be introduced from 6 April 2016. This will be £1,000 a year tax free for basic rate taxpayers and £500 a year for higher rate taxpayers, but nil for those with income over £150,000.
As a consequence, tax will no longer be deducted at source from bank and building society interest. HMRC have launched a consultation to review whether changes should also be made to the rules on deduction of tax from other types of savings income such as “peer to peer” loans.
Remember also that the first £5,000 of dividend income will be tax free from 6 April 2016, but it remains to be seen whether this will apply to directors of their own companies
TAX DIARY OF MAIN EVENTS FOR OCTOBER / NOVEMBER 2015
Corporation tax for year to 31/12/14
PAYE & NIC deductions, and CIS return and tax, for month to 5/10/15 (due 22 October if you pay electronically)
Corporation tax for year to 31/01/15
PAYE & NIC deductions, and CIS return and tax, for month to 5/11/15 (due 22 November if you pay electronically)