January Newsletter

January Newsletter


Conservative party elected with working majority:

Now that Boris Johnson and his Conservative party have won the General Election will we finally “Get Brexit Done”?  More importantly, can the Government now get on with running the country and sorting out urgent issues such as the NHS?

The date of the Budget has been set for the 11th of March. That Budget is likely to include some of the tax measures included in the Conservative Party election manifesto. The manifesto promised that there will be no changes to the rates of income tax, national insurance or VAT.

The manifesto stated that the corporation tax rate would remain at 19% instead of reducing to 17% on 1 April 2020 to provide an extra £6 billion for the NHS.  Businesses would however benefit from a planned increase in the structures and buildings allowance from 2 per cent to 3 per cent. That allowance provides tax relief for the construction or renovation of commercial buildings.

The manifesto also announced that the national insurance threshold would be raised to £9,500 in 2020/21, from the current £8,632.

The party’s ambition was to raise the threshold to £12,500 in line with the income tax personal allowance.

Now that the General Election is out of the way, the tax changes in the draft Finance Bill scheduled to take effect from April 2020 are now more likely to go ahead.

The key tax measures “in limbo” until legislated in Finance Act 2020 are:                                   

- Extending the “off-payroll” working rules to the private sector

- Restricting R&D repayable credit for SMEs

- The proposed 2% reduction in P11d car benefits

- Limiting CGT private residence letting relief

If the changes to CGT private residence letting relief go ahead from 6 April 2020, it may be worth considering the disposal of a property that currently qualifies for this relief before 6 April 2020.  The “off-payroll” working rules will almost certainly proceed, even if not from 6 April 2020, and thus businesses and workers affected should prepare for the planned changes. Contact us if you need help in assessing the likely impact on your business.

 

Advisory fuel rate for company cars:

 

These are the suggested reimbursement rates for employees' private mileage using their company car from 1 December 2019. Where there has been a change the previous rate is shown in brackets. 

Engine Size

Petrol

Diesel

LPG

1400cc or less

12p

 

8p

1600cc or less

 

9p (10p)

 

1401cc to 2000cc

14p

 

9p

(10p)

1601 to 2000cc

 

11p

 

Over 2000cc

21p

14p

14p

Note that for hybrid cars you must use the petrol or diesel rate. You can continue to use the previous rates for up to 1 month from the date the new rates apply.

 

New year’s resolutions to save tax:                            

At this time of year we think about New Year’s resolutions. It is also a good time to start planning your tax affairs before the end of the tax year on 5th April. 

An obvious tax planning point would be to maximise your ISA allowances for the 2019/20 tax year (currently £20,000 each).

You might also want to consider increasing your pension savings before 5 April 2020 as the unused annual pension allowance is lost after three years.

For those looking to do some inheritance tax planning it would be a good time to review (or make) your Will.

 

How to avoid becoming a micro-manager:

Holding your employees accountable without micro-managing can prove difficult for any business owner or manager.

We have all been in a situation where we know we can do something better ourselves. We find it difficult to watch someone make mistakes but if we interfere we can end up falling into the trap of micro-managing our employees.

Micromanagement is the ultimate controlling management style. It involves trying to manage and personally control, monitor and approve every decision, every team member or every situation. 

From an employee’s perspective it is demoralising as they feel that they aren’t trusted and that their manager is always checking up on them.

If you struggle with delegation, you are more likely to become a micro-manager. Delegation isn’t easy. To begin with, you need to be comfortable with the fact that you can’t do everything yourself. You then need to identify the tasks that you are happy to delegate to others. In some cases it can be helpful to set out your strategic plan in writing then transfer the necessary knowledge to a team member that you know will be able to handle the task. 

Over time, you will learn to let go of the notion that everything needs to be perfect. In reality, nothing is perfect. In business, everything should be fit for purpose but this doesn’t mean it must be 100% perfect.

In order to avoid micro-managing your employees, begin by hiring good people. If you hire a team of people who inspire confidence and are keen to take on responsibility, you will feel more comfortable trusting them to do their job. Before hiring a new team member, consider the current needs of the business, the team dynamic and make sure that any new recruits will fit well within the existing team.  If you trust and respect your people, they will perform well and you will find it easier to step back and let them do their jobs.

Finally, empower your team members to make decisions. Arrange regular update meetings regarding progress, make yourself available in case they have any questions that they want to run by you, but give them ownership of their objectives and make them accountable for delivery of their responsibilities