Changes to Tax Relief on Interest for Landlords
As announced in the Summer Budget 2015 the taxation of rental would change significantly due to changes in how tax relief on interest costs would work.
Under the previous rules, expenditure on mortgage and loan interest and similar costs were allowed as an expense in calculating an overall rental profit, with tax payable on the net profit, or with the net loss being carried forward against future rental profits.
From April 2020, for people subject to income tax (i.e. not limited companies) with rental income from residential (but not commercial) letting income (excluding furnished holiday lets), interest is no longer deducted from profit before calculating tax. Instead, tax is calculated without reference to interest costs incurred, and then 20% of the interest costs are deducted from the resultant liability.
To aid the transition there are changes on the treatment with immediate effect. For 2017/18, 25% of interest costs are dealt with under the new rules. For 2018/19, 50% is subject to the new treatment. Then from 2020/21 onwards, the new rules have full effect.
7 Ways to prevent Cyber Attacks
This continues to be a hot topic with many news stories hitting the press over recent weeks. Our IT-Tech support team receive a call most days with questions about security or worries around such an attack.
The worry is the ever changing ways an attack may occur and for many small businesses, it is a constant challenge and concern keeping on top of ways to mitigate the risk.
So here are some ways you could help prevent a cyber attack
- Ensure your WiFi is secure and hidden from public access. If mobile, be wary of public WiFi points.
- Have a secure network, consider cloud servers and install a firewall for your internet connection.
- Install, regularly update and use reliable antivirus, antispyware software on every computer and device used.
- Be password conscious. Everyone in the business should have strong passwords, changed regularly and not the same for every requirement. Also look to use two factor authentication where available.
- Keep abreast of the news and learn from others. What they are doing to prevent and the mistakes made by others resulting in an attack.
- Assume you are always under attack! Truly trust your source and don’t take the bait. Be security conscious at all times. Question requests to open email, insert things into your computers (discs, USBs), download data or software.
- Train your employees around the principles of data safety and cyber security risks.
Not so much prevention, but ensure you take regular, at least daily, back ups of your data, just in case of need. Also look to encrypt your data.
A data breach may cost your businesses many pounds. If you are reliant on data, then a consideration is Cyber Liability insurance cover.
If we can help you stay safe and keep your data secure, then please call us.
Save on Relocation Costs (new or existing team members)
Are you having to attract new team members from outside your immediate catchment area to attract the best talent to your team?
Relocation packages are often offered from employers to new employees if the employment location is a distance from their home and designed to take the financial stress out of moving to a new work location. However, they are not limited to just new employees. Relocation packages can include a number of attractive benefits that would entice employees to move to another town or city for work.
From a financial perspective, the relocation costs, up to £8,000 and known as 'qualifying costs', are potentially exempt from reporting and paying Tax & National Insurance. Such costs may include:
- the costs of buying or selling a home
- moving costs
- buying certain things for a new home
Making Tax Digital delayed until 2020
The launch of HMRC’s Making Tax Digital for Business programme has been pushed back until 2020.
HMRC had planned to mandate the use of digital tax records for businesses by April 2018, but concerns were raised that the deadline did not provide enough time for businesses to prepare.
As part of the changes, only businesses with a turnover above the VAT threshold will “have to keep digital records, and only for VAT purposes” from 2019, and businesses will not be asked to keep digital records for other taxes until “at least 2020”. The government also said that for small businesses, digital tax returns will be voluntary.
However, there are many benefits to many businesses of utilising the software and technology proposed. If you would like to discuss how, then please contact us to review the benefits, as there is no need to wait until forced to change.
We will continue to keep you updated with the developments around MTD.
Protecting your business against Invoice Fraud
Invoice fraud is when a fraudster poses as someone else to notify you that supplier payment details have changed and provide alternative bank account information for receipt of future payments.
If you have met your bank manager recently, then for sure this will be a topic on the agenda. As mentioned in our previous months news, invoice fraud is on the increase. The fraudster could be posing as an external contact, such as a supplier, or even as a member of your own team (eg Director instruction to the finance team).
We were speaking to a local bank manager recently and the local branches had stopped 5 fraud attempts in the past week. Multiply this up to all area, all banks, then this is a hot topic.
So how could you protect your business further against potential invoice fraud?
- Make your team aware of such threats. Use examples to highlight the potential threat.
- Check and validate information received. This may be an invoice or a request to change the bank details. To validate, use your existing contact information, not that quoted on the same document and call them.
- If received by email, check the sender email address. Is it a ghosted address, where the fraudster has spoofed / mirrored the name of your contact, but the real address beneath is nothing related?
- Have specific points of contact at the companies you deal with and a common way you communicate with them (eg email, call), then if you receive something from another name, then it will look more suspicious.
- Adopt dual control procedures for changes made or payments to be made. A second eye on the information may see things you have missed.
- Read internal instructions carefully. Fraudsters pretending to be a senior authorising official are often very clever in mirroring the language used by the genuine person. However, they can slip on some phrasing or quote of the name (eg Andrew, when you know them as Andy).
- Adopt a purchase order system for supplies ordered. You can then match invoices received to your orders to at least check the invoice is expected and for what reason.
An important point to mention. If you change your payment instructions due to such a fraud and then send the request to the bank for payment to be made, then they will not accept any liability for the fraud and it will be your loss.
Return to work interviews
How do you manage your team’s sickness absences? Not just after the event but also creating a culture where a ‘duvet day’ is just not acceptable.
A return to work interview is just one recommendation by many HR advisers. They are a valuable opportunity for communication between employer and employee. They also act as a disincentive to casual absenteeism, whilst providing a good record of the sickness absence.
These can be informal, but always confidential meetings, where you should look to establish the reason for the absence, how the employee is now, update if related to previous absence, check the employee is fit to return to work and ensure that there is no assistance required from you going forward.
If you do not have absenteeism problems, then you may not conduct such interview for the single days and just consider longer term sickness, however in many businesses they are a useful tool to manage sickness levels.
We recommend you take professional HR advice and are happy to recommend providers should you wish to further review such areas.