Andrew Brown
By Partner Andrew Brown

 

It’s difficult to overestimate the financial impact that the prolonged absence of the owner of a business (or one of its key employees) can have on that business. While the odds of a person dying during their working life, between the age of 25 and 65 are pretty good at only about 1 in 25, the probability of them suffering a serious or life-threatening illness is much greater at around 1 in 7, meaning that 14% of business owners will be affected in this way. The odds of a business owner either dying, suffering a serious illness, or of being unable to work for two months or more are a staggering 1 in 3. 

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Adam Croney
By Director Adam Croney

 

Cashflow is such a basic that almost all businesses will say they understand its importance. However, people often struggle with the tangible actions they need to take to effectively manage it. This is especially true if a change in circumstances places them in a situation they are unfamiliar with.

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Liz Marker
By Payroll Manager Liz Marker

 

During National Payroll Week, we are highlighting the importance of accurately running payroll. Here we outline the business benefits of outsourcing this key administrative function.

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Many business owners are not aware that they can establish personal life cover to benefit their family through their business and secure valuable tax relief on the premiums. These plans are available to provide cover for employees of limited companies, partnerships and charities. If you pay yourself a salary in most cases you are deemed to be an employee and so would qualify.

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Tom Stuckey
By Director Tom Stuckey

 

The VAT rules surrounding land and property are complex and can often be confusing, even to experienced professionals. This brief summary aims to explain the terminology, dispel some common misconceptions and briefly describe the VAT implications using a simple example.

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Do you have employees your business simply couldn’t do without?  This could be the business owner or director, key salesperson or any employee with specialist skills or expertise.  If one should die unexpectedly, as well as the emotional trauma of dealing with such a devastating event you have to consider the potential impact on the business and possibly a significant portion of its income, perhaps for several months. 

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Cat Williams
By Director Cat Williams

 

Protecting people and safeguarding responsibilities should always be a governance priority for all charities. Events over recent months have only highlighted this. It will continue to be a fundamental part of operating as a charity for the public benefit.

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A Thomas Westcott client has been shortlisted for the Young Entrepreneur of the Year award in the prestigious Great British Entrepreneur Awards. Harry Parslow set up his business, TourLife, five years ago when he was just 18 and recently expanded into a new office in Weston-super-Mare.

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As the Coronavirus continues its disruption across the world, you may be tempted to consider looking at your retirement funds to ease your short-term cash flow woes. 

You may have been saving into your pension for years with your eventual long-term retirement years in mind; whilst you may be able to access these funds if you are over 55, there are many pitfalls to consider with this action. Here are some examples:

  • If you are in business, your pension funds should be protected from insolvency creditors; by releasing excess funds early you could risk losing these valuable retirement funds especially if your business fails. You would then have no retirement savings to fall back on in the future.
  • The 25% tax-free lump sum is only available once; all further withdrawals are subject to income tax at your highest marginal rate. Combined with earned income or self-employed profits you could be paying far more tax on your retirement funds than necessary. 
  • If you access pension savings ‘flexibly’, take taxable withdrawals from a drawdown plan for example, this may severely restrict your ability to rebuild your pension funds in the future when times improve. Once your pension is spent, it is spent. A tax charge may apply on future money purchase pension contributions over £4,000 a year; this is called the ‘money purchase annual allowance’ or MPAA.
  • If your pension savings are in the right place, they could be exempt from inheritance tax in the hands of the next generation. By bringing the funds into your estate now, this could unwind years of prudent planning.
  • Investment markets have been impacted by the recent wave of coronavirus disruption; you may not receive the best value from your pension fund now; by taking withdrawals, you could miss out on the future ‘bounce back potential’ of these investments. 
  • If you go directly to your pension provider i.e. an insurance company, they may be unable to offer a flexible, tax efficient choice on any withdrawals and you could trigger the MPAA unwittingly. 

It is therefore sensible for you seek independent advice on this matter; you need to consider the long-term repercussions of short-term cash flow needs. We offer all enquiries a free initial consultation and we can advise you on your objectives and needs. 

By Simon Lake, Chartered Financial Planner

 

Thomas Westcott Chartered Financial Planners is authorised and regulated to provide advice on pensions and investments.

 

Chris Hill
By Partner Chris Hill

 

The significant and sudden contraction of business activity in the economy is impacting businesses of all sizes and in all sectors. As we all adjust to what is hopefully just a short term crisis, what steps can you take to manage the tightening of cash flow. Here are our Top 10 Tips:

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