Monthly Archives: March 2013

John Gaunt and Partners latest news, Gambling C.O.P’s


Revised Gambling Codes of Practice

Posted: 27 Mar 2013 05:00 PM PDT

 

The Gambling Commission has recently issued revised consolidated codes of practice, the Commission issue codes of practice under section 24 of the Gambling Act 2005, about the manner in which facilities for gambling are provided to ensure that:

  • gambling is conducted in a fair and open way
  • children and other vulnerable people are protected from being harmed or exploited by gambling
  • assistance is made available to people who are, or may be, affected by problems related to gambling.

Codes of practice are either:

  • Social responsibility code provisions – which must be adhered to by all licence holders
  • Ordinary code provisions – these do not have the status of licence conditions but failure to take account of them can be used as evidence in criminal or civil proceedings.

LCCP were first introduced on the 1st January 2009 as the Gambling Act 2005 went live and was last published in March 2011. Since then three supplements have been issued and licence holders notified of the changes.

The information in these supplements has now been incorporated into this consolidated edition.

The Gambling Commission state on their website:

“a revised copy will be sent to licence holders. This will be sent out before the revised conditions and codes of practice come into effect. This gives licence holders time to learn about how any changes will affect their business. We only make changes to the LCCP where necessary and based on our experience of implementing the conditions and codes. Changes are only made following consultation.”

Should you have any concerns regarding the meaning or implementation of these codes please call to speak with a member of our Gambling Team, headed by Tim Shield, who would be happy to offer advice.

Statutory Code for Pub Co’s and Tenants, maybe next week.

Statutory code for Pub Co’s and Tenants

Government consultation could be launched in the coming week. Extracts from the Morning Advertisers article.

The Government consultation on a statutory code and adjudicator for the pubco-tenant relationship could be launched within the next week.

The consultation expected to last only six weeks depending on the Government timetable.

It is thought likely it will include a request for feedback on the option that a tied tenant should be no worse off than a free-of-tie tenant. This means that any pubco lease would be available free-of-tie with a rent at open-market rates.

This issue is likely to be the most controversial within the consultation document. It is expected to ask for comments on a range of issues, including the suggestion that the code covers only Pub Cos with more than 500 pubs, the future of the Pubs Independent Conciliation and Arbitration Service and how it might work with an adjudicator, as well as the extent of the powers an adjudicator should have.

This brings us back to a plethora of Pub Co’s with less than 500 pubs or a renamed major Pub Co with a load of pubs being called restaurants, diners, fast food outlets and very few being classed as tied pubs.

The Department for Business, Innovation & Skills is aiming to get the new legislation mentioned in the Queen’s Speech in May, industry insiders claim.

In February, the employment relations, consumer and postal affairs minister Jo Swinson said the Government was forced to intervene in the pubco-tenant relationship after evidence showed a “stalemate” within the industry.

The Campaign for Real Ale’s (CAMRA’s) head of policy Jonathan Mail said: “The big fight will be over the tied licensee being no worse-off than the free-of-tie licensee. At the moment, the licensee takes the risk and gets little of the reward. The pubcos just have not delivered.”

Federation of Licensed Victuallers Associations (FLVA) operations director Martin Caffrey was more sceptical about a free-of-tie option.

He said: “We want to see a fair division of that profit and free-of-tie discounts coming down through the pubcos to their tenants. [But] we believe that, if tenants try to negotiate a one-off deal as a free-of-tie opera-tor, they may be in a worse position.”

He also raised concerns about the proposed 500-pub limit, which would affect just six pub companies — Enterprise Inns, Punch Taverns, Marston’s, Star Pubs & Bars, Greene King and Admiral Taverns — claiming “there should be one rule for all”.

British Beer & Pub Association chief executive Brigid Simmonds said: “We will wait and see what is in the consultation.

“While it probably will include a question about a free-of-tie option, we have real concerns about the unintended consequences of going down this path.

“It is vital for the trade that the tied model works well as a successful business model for both partners — and it is not in their interests for it to be abused. We are, therefore, fully prepared for the model to be tested as part of the consultation.”

Alliance Online Catering Equipment – suppliers of Pub and Bar Equipment to the Licensed Industry

RPI being replaced by the RPIJ, essential reading for everyone, “What a Rip-Off”

 RPI being replaced by the RPIJ, at long last.

The RPI, an iniquitous system used by landlords of hiking rents above inflation, is being replaced by the RPIJ, this article shows how rents can be be further hiked beyond practical viability, perfectly legally, along with a vast number of other essentials, “What a Rip-Off”.

“Office of National Statistics / RPI 

News reaches us from the Office of National Statistics in a pronouncement on 19 March 2013, that the Retail Price Index (RPI) will suddenly be replaced by the RPIJ which stands for ‘Retail Price Index Jevons Method.   It appears that the RPI calculations were both inadequate and inaccurate to truly reflect inflation.

It appears that the Office of National Statistics which calculates inflation by looking in detail at the changing price of a representative sample or basket of around 700 goods and services, will now refine the long established RPI calculation system for a different formula which, surprise surprise, calculates a final inflation figure that is consistently lower than that which has been long established under the RPI standard calculations.

For example, the ONS confirm that in the past 10 years, the basket of prices has increased by 31.9% under RPIJ, compared with 38.1% using RPI.

Not that we have the vaguest understanding of the technicalities underlying this startling confession, but it appears that since the RPI was launched in 1947, the average inflation price has been using the “Carli” method.   RPIJ uses the alternative and more accurate Jevons method.  

This takes us directly to the insidious annual rent rises in a huge number of pub leases that are automatically linked to increases in the RPI as it has hitherto been calculated.   It appears that this insidious annual rise over the last 10 years is out of kilter with reality.   It is suggested that you don’t hold your breath hoping for a refund from your Pubco / Brewer as the rock solid defence is that they have acted in accordance with established principle which, after all, only changed when the ONS made their pronouncement on 19 March 2013.

In February, the RPI was 3.2%.   However, the RPIJ for the same month is actually 2.6%.   Please ensure that you specifically remind your Pubco that under the terms of your existing lease, RPI does now not exist and we suppose, a commercial side letter will have to be issued by your freeholder to make the correction into RPIJ.  

Consumer Price Index (CPI)

Regarding the reality of RPIJ as detailed above, it was interesting that the Punch Growth leases were heralded as being of significant advantage over standard Pubco leases as the automatic annual rent rises were proposed to be linked to CPI.   As it would appear that we have now had the universal replacement of RPI with RPIJ, it is interesting to reflect on how the CPI is actually calculated.   It transpires that the ONS has confirmed that CPI in February rose to 2.8%, its highest level since May 2012 which puts it almost exactly on par with RPIJ which is actually lower at 2.6%.  

It still does not excuse the basic system which automatically ratchets up rents, having no regard to the profitability of the property which in the current and continuing recessive times, still is a negative rather than a positive”

The ONS stated that as from 19th March the “old” RPI was null and void.From that date RPIJ came into effect.

 

 

 

An extract from This is Money, straight from the Treasury

Families may have been ripped off for decades by annual increases in bills linked to inaccurate inflation figures.

At the same time as the Office for National Statistics (ONS) published the CPI figures it was also forced to admit its retail prices index (RPI) measure was inadequate and had been replaced.

The ONS said the measure had been swapped for the ‘improved’ RPIJ

Inflation woes: Consumer price index inflation is likely to rise over the next couple of years before falling again, according to forecasts (Source: Bank of England)

RPIJ will be based on the same basket of good used to measure RPI currently but it uses a different formula to calculate a final inflation figure – which turns out be significantly lower.

And the difference in the calculations have revealed a huge gap between the inflation measures.

In February, RPI was 3.2 per cent, but RPIJ – published for the first time yesterday – was 2.6 per cent.

Over the past decade, prices have increased by 31.9 per cent according to RPIJ, but 38.1 per cent using RPI.

Since RPI was launched in 1947, the ONS has worked out average prices using the ‘Carli’ method.

But RPIJ uses the alternative ‘Jevons’ method – which explains the RPI – J

Other countries that used the Carli method, such as America, Canada and Sweden, have axed it. Britain is the last to do so.

Bu RPI is still being used to work out annual increases on many essential household bills, such as water bills and rail fares.

The Campaign for Better Transport showed train fares would be lower this year if RPIJ had been used instead of RPI.

A season ticket from Milton Keynes to London was £4,408 in 2012. This year, the same ticket costs £4,620. But it would have risen to only £4,562 under RPIJ, a saving of £58.

Stephen Joseph, chief executive of the Campaign for Better Transport, said: ‘There are two main problems with the way Government calculates rail fares.

‘One is the policy of above inflation hikes, which needs to end, the other is the use of RPI, which now looks untenable.

‘Many regular train users would find themselves paying hundreds of pounds less each year if the more accurate RPIJ measure were adopted.’

The impact on water bills is similar. The average water bill increased by £13 this year to £388, but it would have risen by £11 if RPIJ had been used. This difference would be hugely significant if applied over a period of many years.

A spokesman for Ofwat, the water regulator, said: ‘We have committed to using RPI as the measure of inflation up until 2020.’

Please view our other web site for Information, Help and Advice www.usenumberone.com

“20-20 Voice”, Cancer Appeal, this is well worth reading.

“20-20 Voice” Cancer Appeal

A worthy cause that needs your support, unfortunately several friends and colleagues have suffered with this nasty cancer.

What do the actor Michael Douglas, the footballer Bryan Robson and the cricketer Geoffrey Boycott have in common?

Is it Fame? Fortune?  Wonderful careers?

 Yes – they have all that! But there is something far less glamorous that ties these individuals together.

For all their positive notoriety in the press, how much media coverage did they receive when it was confirmed that they had throat cancer? The answer is hardly any at all and this is the major problem with Head & Neck cancers, even though instances have dramatically exploded by 600% over the past decade!

It is hardly surprising that Head & Neck cancers take a back seat. There is so much advertising and support through events like ‘Race for Life’, ‘Pink Ribbon’ and ‘The Moonwalk’ just to name a few, that publicise and raise money for Breast, Prostrate, Bowel and Lung cancers. These charities are all vying for your cash with vigour and that can leave little space for public awareness of the traumas of Head & Neck cancers, but we at “20-20 Voice” aim to change that as soon as possible.

It may surprise many to know that of all the cancers, we (Head & Neck cancer sufferers) have the best survival rate as radical surgery is usually the only option. We undergo a 10hr surgical procedure (laryingectomy) to remove the voice-box.  Apart from this being such a ‘major surgery’, it leaves the patient soundless; totally unable to communicate vocally. This is a major shock to the system, be assured of that!

In hospital the ‘lary’ (laryingectomy patient) is on safe ground as the nurses & doctors are fully recognisant of our condition. But once away from that safety zone, a whole new, sometimes very difficult world awaits. Can you imagine not being able to telephone for an ambulance in an emergency? How to comfort a loved one is distress? How to gain attention when someone has turned away from facing you?

It has amazed myself, and others, just how underfunded our ENT cancer units really are as the NHS has suffered cutback after cutback thanks to political dysfunction. As the money is withdrawn, modern technology however fights on and now not only has the ability, via a RhinoVideoLaryngoscope, to video deep inside mouths & throats, but also to project the images onto a 30”, full colour, TV screen (which is 15 x’s larger than was previously available) thus allowing consultants to espy any cancerous cells normally hidden deep within us. This, of course, ensures quicker diagnosis leading to more immediate treatment, which in turn saves the patient time & stress (& probably the biopsy process). The hospitals save valuable ‘man-hours’ creating an all-round, win/win situation!

The jackpot, of course, to all of this is earlier detection catches the cancerous cells at an early stage, immediately making the problem area more treatable without the use of major surgery! Voices can be saved!

What price would you put on your voice?

Here comes the ‘But.’ The prohibitive cost of a brand new RhinoVideoLaryngoscope!  At £50,000 per machine, it is no wonder that under-funded hospitals have to beg, scrape & borrow to be able to acquire such equipment. “20-20 Voice” Cancer Appeal intends to change that through creating public awareness and major nationwide fundraising.

This is where we ask you to get involved. The greatest fundraising industry of our time is the hospitality sector where a simple “20-20 Voice” collection tub on a bar can easily raise £200-£300 per annum. We need to appeal to as many pubs & clubs as possible to support our quest and ensure that treatment is available for this ‘silent cancer’ no matter what part of the country a sufferer may live.

We are receiving requests for equipment on a daily basis so we need to raise more funds as quickly as possible. We have willing supporters holding Rummage Sales (April 13th Loughborough), Mkt Harborough street collections (April 27th), “20-20 Voice” Spring Disco (May 25th), Leicester à Skegness bike ride (Aug 17th). But it is not enough!  We need more supporters. We need your help!

If you feel that you can support us please contact me (Phil Johnson) at admin@2020cancerappeal.org and we’ll soon see what we can do together to raise funds to save lives & voices!

Thank you

Phil Johnson

Chairman

“20-20 Voice”Cancer Appeal

Comment: Phil the Chairman has a voice box and agreed to give me a call one evening, I needless to say forgot.

The phone rang and I picked it up and a totally mechanical voice tried to talk to me, I damaged my hearing in a past life, drilling and blasting rock tunnels, and assumed it was a canvassing call from some offshore con man, finally putting the phone down.

The phone rang again, a few minutes later and a clear ladies voice said she was calling from 20-20, because Phil had tried to call me.

The terrible realization that I had put the phone down him, left me speechless and then totally apologetic, how could I be such an idiot to not realise.

Fortunately Phil was obviously well used to it and laughed when he realised, he couldn’t talk and I couldn’t hear, we had no chance of a constructive phone conversation, add my Wife in, who had an eye operation, she couldn’t see, Phil couldn’t talk and I couldn’t hear, we were like Three Wise Monkeys and we all laughed, but Phil’s story is a great achievement and not one that I would like to go through.

If you feel that you would like to support this very worthy underfunded charity, by having a collecting box in your pub or restaurant please contact Phil.

 

New Products and Ideas

New Products, interesting drinks, good value wines, food products and any other things that are of help or interest to people in the industry.

Give me a factual account, without any commercial blurb and I will publish the article on my site www.buyingapub.com with details of your company and a link at the bottom of the article.

I like good informative articles, because they get read, if they have commercials all the way through them, they don’t, a touch of humour also helps.

Articles in Word and no pictures, we try to provide information.

If that’s of any help to anyone.

Email your article to info@buyingapub.com

Barfly

Howard & Co. Budget Newsletter, well worth reading

Budget Information

Howard & Co., Chartered Accountants, www.gmhoward.co.uk, 01284 704363

Welcome… To our Budget newsletter.
This newsletter aims to summarise the main measures that affect our clients. If you need further assistance just let us know.
We are committed to ensuring all our clients don’t pay a penny more in tax than is necessary.
Please contact us for advice in your own specific circumstances.
We’re here to help!
Budget March 2013
· Employers
· Cars, Vans & Fuel
· Business Taxes
· Individuals
· Capital Taxes
· VAT
Employers top
Employment Allowance The big news for employers is a new Employment Allowance of £2,000 per year for all businesses and charities to offset against the cost of employer’s class 1 NI contributions. This should provide a real reduction in the cost of employing workers by all types of businesses – not just new employees taken on by new businesses. The new employment allowance will reduce employer’s NICs paid after 5 April 2014.
NI rates 2013/14 For 2013/14 the main rates and thresholds for NI contributions are:
Lower Earnings Limit (LEL) for Class 1 NICs – £109/week Employer’s class 1 above £148/week not contracted out – 13.8% Employee’s class 1 not contracted out from £149 to £797/week – 12% Employee’s additional class 1 above £797/week – 2% Self-employed small earnings exemption – £5,725 per annum Self-employed class 4 from £7,755 to £41,450 per annum – 9% Self-employed class 4 additional rate above £41,450 per annum – 2% Self-employed class 2 – £2.70 per week Voluntary contributions class 3 – £13.55 per week
Contracting Out Contracted out rates for NI are 10.6% for employees and 10.4% for employers, but those reduced rates only apply for members of salary-related pension schemes. All contracted out rates will cease in April 2016, when the new flat rate state pension comes into effect.
Employee Shares Employee share schemes can be incredibly complex to set up and administer. However, the Government believes employee involvement in the companies they work for is a good thing, and employees owning shares in their employing company is the way to achieve this.
Employee shareholder status. A new type of share scheme will permit employees to take up shares offered by their employer, in return for giving up certain employment rights such as the right to statutory redundancy pay. Normally an employee is taxed on shares received, like salary, but the first £2,000 of shares awarded to the employee under this scheme will be tax and NI free. The employer will be able to give up to £50,000 of shares to each employee, but any value of shares above £2,000 will be immediately taxable and subject to NICs.
When the employee sells those shares any gains they make will be tax free, even if the employee has taken up the full quota of £50,000 of shares initially. The company will be able to claim tax relief on the value of shares given to employees. This new scheme is due to apply for shares provided on and after 1 September 2013.
EMI shares. The Enterprise Management Incentive scheme (EMI) is an existing share scheme that allows smaller companies to award up to £250,000 of share options to key employees. The shares are not tax free on disposal, but employees can now qualify for entrepreneurs’ relief which applies a tax rate of 10% on any taxable gains made on the EMI shares. The employee must still work for the company at the time he sells the EMI shares and must have held those shares for at least one year.
That last condition can cause a problem, as the employee usually holds the EMI share options and sells the actual EMI shares as soon as they are acquired. The law will now be changed to allow the period of holding EMI share options to count as a period of holding the EMI shares. Also, if the company is taken over or re-organises its shares, any shares acquired in exchange for EMI shares count as if they were EMI shares.
Other share schemes. Other tax advantaged share schemes normally have to be individually approved by HMRC, but the Government has proposed that employers will be able to self-certify share schemes from 2014. This will make it easier for companies to set up a share scheme for their employees.
Loans to Employees Employees who take an interest-free or low-interest loan from their employer are treated as receiving a taxable benefit if the loan exceeds £5,000 at any point in the tax year. This threshold will rise to £10,000 from 6 April 2014. This increase is designed to allow employees take loans to buy annual rail tickets, which now exceed £5,000 in many areas, although applies to loans for any purpose.
The rules for loans made to company owners have been tightened up – see loans to participators below.
Cars, Vans & Fuel top
Company Car Benefit The taxable benefit of having the private use of a company car is based on a percentage of the original list price for the vehicle. For 2013/14 the percentage varies from 5% for vehicles with CO2 emissions up to 75g/km, 10% from 75 to 95g/km, and increases by 1% for every 5g/km of CO2 emissions, up to a maximum of 35%. This scale of percentages increases every year such that a higher amount of the list price of the same vehicle is taxed each year.
From 6 April 2015 cars with CO2 emissions in the band 0-50g/km will be taxed at 5% of list price, and those in the band 51-75g/km with be taxed at 9% of list price. Cars with CO2 emissions of 76g- 94g/km will be taxed at 13% of list price, with the percentage increasing in 1% steps for each additional 5g/km, up to a new maximum of 37%. Further increases in the percentages of list price have been published for the years 2016/17 to 2019/20.
Fuel Benefit Where a company car driver receives free fuel, the taxable benefit is calculated as the percentage of the list price for the car applied to the fuel charge multiplier set at £21,100 for 2013/14 (£20,200 for 2012/13). The maximum taxable benefit of receiving free road fuel for private use will increase from to £7,070 (2012/13) to £7,385 for 2013/14.
The taxable benefit when fuel is provided for private use in a company van will rise from £550 for 2012/13 to £564 for 2013/14. In future years the fuel benefit multiplier for cars and the van fuel benefit will increase in line with the rate of inflation as measured by the RPI.
Business Taxes top
Cash Basis Unincorporated businesses will be permitted to calculated profits and losses for tax purposes using the cash accounting basis, rather than the standard accruals accounting basis. The cash basis ignores all creditors, debtors, prepayments and accruals, and includes flat rate amounts for certain expenses such as a motoring or use of home for business purposes.
This cash basis will be compulsory for anyone who claims Universal Credit, but it can only be used by businesses whose turnover, when they start to use the cash basis, is under the VAT registration threshold. The business will be required to continue using the cash basis until it is no longer suitable for them, perhaps when the turnover exceeds a certain threshold. This will prevent businesses from opting in and out of the cash basis to gain a tax advantage. The cash basis can be applied from 6 April 2013.
Partnerships The taxation of partnerships can be very complex, so the Government has asked the Office for Tax Simplification to make suggestions to simplify tax for partners and partnerships.
Alongside this review the Government is considering changes to the self-employed status of the members of LLPs, and restrictions on the variation of profit allocations within the LLP. These changes may make the taxation of LLP members more like employees of companies for some members. Any changes to the taxation of partnerships or LLPs will not take effect until at least 2014. However, if your business operates as an LLP please talk to us about how the structure could be changed if the tax changes prove to be hostile to LLPs.
Corporation Tax Rates The corporation tax rates for small and large companies will be aligned at 20% from April 2015. This will remove the need for the associated companies rule and the marginal rate of corporation tax will disappear.
The small companies rate is already at 20% and the main rate will be 23% for the year beginning 1 April 2013, 21% for the year beginning 1 April 2014 and then 20% for the year beginning 1 April 2015.
Loans to Participators Where a company that is controlled by its directors or five or fewer shareholders, makes a loan to a participator (typically a shareholder/director), there are tax consequences. The company must pay 25% of the loaned amount to HMRC if the loan is not repaid within nine months of the end of company’s accounting year. This rule is widely taken advantage of by company shareholder/directors who repay the loan just before the nine month deadline and immediately take out a replacement loan from the company. New tax avoidance rules will apply from 20 March 2013 such that:
– loans channelled through third parties to shareholders will be included in these rules; – transfers of assets from the company will be treated as loans; and – the immediate replacement of a repaid loan will not count as a repayment of the first loan.
If you have taken a loan from your own company we need to discuss whether you will be caught be these new tax avoidance rules.
Capital Allowances The rates and thresholds of the main capital allowances will apply as follows for 2013/14:
Main pool: writing down allowance: 18% Special rate pool: writing down allowance: 8% Annual Investment Allowance (AIA) cap: £250,000
Expenditure within the AIA cap qualifies for 100% allowance in the year the asset is bought. The AIA cap was changed in April 2012 and January 2013, so great care is needed to calculate the available AIA for accounting periods which straddle the change. The AIA cap is due to revert to £25,000 on 1 January 2015.
Individuals top
Personal Allowances The standard personal allowance will rise to £10,000 from 6 April 2014, a year earlier than expected. The age related allowances are frozen until 2015. The allowances as they have been announced for 2013/14 are:
Personal allowance (born after 5 April 1948): £9,440 Personal allowance (born between 6 April 1938 and 5 April 1948): £10,500 Personal allowance (born before 6 April 1938): £10,660 Minimum married couples allowance*: £3,040 Maximum married couples allowance*: £7,915 Blind person’s allowance: £2,160 Income limit for allowances for age related allowances: £26,100 Income limit for standard allowances: £100,000
* given where one partner was born before 6/4/1935, as 10% reduction in tax due.
Income Tax Bands and Rates The income tax bands for 2013/14 are:
Savings rate* (10%) – 0 to £2,790 Basic rate (20%) – 0 to £32,010 Higher rate (40%) – £32,011 to £150,000 Additional rate (45%) – over £150,000
*The savings rate of 10% only applies if the individual’s net non-savings income does not exceed the savings rate limit.
The additional rate was reduced from 50% in 2012/13.
The higher rate and basic rate thresholds can be increased by paying personal pension contributions or gift aid donations.
Pension Allowances The annual allowance and lifetime allowance will both reduce in 2014/15 as shown below. The annual allowance can be expanded by unused amounts of allowance brought forward from the previous three tax years.
The lifetime allowance limits the amount of tax advantaged funds a person can draw on at retirement. If the pension fund is greater than the lifetime allowance when the scheme member starts to take his benefits, the excess is taxed at 55%. Individuals with funds that already exceed the lifetime allowance can apply for fixed protection of the existing value of their fund.
Annual allowance: 2012/13: £50,000, 2013/14: £50,000, 2014/15: £40,000 Lifetime Allowance: 2012/13: £1,500,000, 2013/14: £1,500,000, 2014/15: £1,250,000
Pension Drawdown Some individuals can choose to drawdown amounts from their pension fund instead of buying an annuity with the funds on retirement. The maximum amount of the permitted drawdown is increased from 100% of the equivalent annuity value of the fund, to 120% of that same annuity value. This change comes into effect from 26 March 2013.
Capital Taxes top
Capital Gains Tax The thresholds for capital gains tax (CGT) have increased slightly for 2013/14:
Annual exemption: £10,900 (2012/13: £10,600) Annual exemption for most trustees and personal representatives: £5,450 (2012/13: £5,300) Rate for gains within the basic rate band: 18% (no change) Rate for gains above the basic rate band: 28% (no change) Rate for gains subject to entrepreneurs’ relief: 10% (no change) Lifetime limit for gains subject to entrepreneurs’ relief: £10 million (no change)
Selling to Employees When a business owner sells his business, they can qualify for entrepreneurs’ relief if they sell the whole business, or a significant part which can be operated as a separate business. This relief reduces the tax payable on the sale to 10%.
The Government is proposing a new capital gains relief to encourage business owners to sell a controlling interest in a business to the employees who have worked in the business. This new tax relief will not apply until April 2014.
Seed Enterprise Investment Scheme (SEIS) The SEIS was introduced for investments made in small new trading companies from 6 April 2012, with a limit on investments under the scheme of £150,000 per company. Each investor can subscribe for up to £100,000 of SEIS shares per tax year and get 50% income tax relief.
If that investment is funded using a capital gain made in 2012/13, 100% of the reinvested gain is exempt from CGT. The CGT exemption was to be limited to investments made only in 2012/13, but it has been extended for two further years at the rate of 50% of the gain, not 100% of the gain. This is still a significant tax saving.
The original SEIS rules contained a serious trap for investors. A company acquired from a formation agent could not qualify; it had to be incorporated with individuals rather than another company as the original subscribers. This administrative niggle has been removed for shares issued from 6 April 2013, but not for companies formed earlier.
Inheritance Tax The inheritance tax (IHT) nil rate band will remain frozen at £325,000 until 2017/18. This is the amount of a deceased person’s estate that is free of inheritance tax.
The estate value is arrived at after deducting any debts owed by the deceased, and the value of any assets that qualify as business property, agricultural property or woodlands. A number of tax schemes exist to make use of these deductions for debts to reduce the value of the deceased’s estate on death, and hence reduce the IHT payable. To block such tax avoidance schemes the deduction of debts from the value of an estate will be prevented where:
– the debt is not repaid to the creditor; or – the loan was used to acquire property which is exempt from IHT.
These changes will apply from the date Finance Act 2013 is passed.
VAT top
Rates The VAT rates remain unchanged at…
Lower rate: 0% Reduced rate: 5% Standard rate: 20%
The registration and deregistration limits from 1 April 2013 are…
Registration turnover: £79,000 (1 April 2012 – £77,000) Deregistration turnover: £77,000 (1 April 2012 – £75,000)
Need Help? top
New Clients Welcome top
Please contact us if we can help you with these or any other tax or accounts matters.
In addition, if there’s anyone else who you think would benefit from the newsletter, please forward the email to them or ask them to contact us to be added to the newsletter list.
If you are not already a client and are interested in becoming one, we would love to come to meet with you to discuss how we can help and provide you with a competitive quote for our services.
All new client consultations are provided free of charge and without obligation.

Wise words from Lester Pyatt

My beef about “The Quality Factor”

Ever since this recession started I have resisted advising landlords of the easy option. Sure there is a market for the £4.49 “eat as much as you can school dinners market” But let me ask you this? If by lord of miracles if we were all given a million pounds tomorrow where would these outlets offers and Groupon style deals be?.

 

“Perceived value” sales bundles means you can protect cash margins ,but requires some hard work acquiring promotional stock from your suppliers.

3 course Mothers/Easter day menu with free drink, flower for mum or Easter egg for kids.is adding perceived value, whilst still attaining a high price point.

 

I predicted some time ago that in the future there will be a renaissance in small independent quality butchers, grocers and farm shops as we get more and more cheesed off with grocery giants offering bland tasteless vegetable products from the other side of the world, with fruit so battered and bruised we have to throw half of it in the bin.

 

There has been too much David v Goliath pressure by the big supermarkets on the likes of farmers to produce “product for peanuts” whilst they continue to make massive profits, and that’s why when you compromise on quality we all start wondering whether we really did eat a piece of Shergar!!.

 

Let it be a lesson, that in the end quality wins, and maybe just maybe a trip down your country pub for a homemade steak pie and with meat locally sourced from the farmer in the village, and a pint of hearty ale will allow us to win the hearts and minds of the “value” customers defecting from this horse meat scandal.

 

Lester Pyatt

The Pub Specialist

www.omark.co.uk

 

Common Sense Guide to Buying a Pub

 

 

Buying a Pub or Bistro

The Common Sense Guide to Buying a Pub is now available to purchase as an ebook through www.smashwords.com. for $5.99 or UK equivalent approximately £4.00, depending on the exchange rate.

In addition you can read some the book before you buy, the book was written for the UK Market, but a lot of the general Business Information is International.

The biggest problems in any business are time and money, if one piece of information in this ebook saves you time or money, the cost of the book is minimal.

To read the whole book on line, click on this Link,

If you would like your own copy, please go www.smashwords.com.

Appendix

Allergens have been identified as a possible source of problems  Read More

Scores on the Doors an essential for all businesses involving Food Hygiene, Read More

Credit and cash Flow  More

Energy Performance Certificates and  M.E.E.S.

We have a large range of FAQ’s, Check lists on buying a range of businesses and a considerable number of supportive companies specialising in the topics that you need to run a business, especially licensed property. More

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Common Sense Guide to Buying a Restaurant

Buying a Restaurant, Buying a Bistro,

Coffee Shop, Café, Small Hotels

The Common Sense Guide to Buying a Restaurant is now available as an ebook through www.smashwords.comand their outlets for $5.99 or the equivalent UK Value approximately £3.75. The reason that we have done this is to get the essential information to a wider audience, in the hope that more people will find it easier to make a success out of their businesses.

In addition you can read some the book before you buy, the book was written for the UK Market, but a lot of the general Business Information is International.

The biggest problems in any business are time and money, if one piece of information in this ebook saves you time or money or both, the cost of the book is minimal.

 

Morgan & Clarke, March Newsletter, some very serious points

MORGAN & CLARKE  MARCH 2013 NEWSLETTER NO. 18

Pigeon House, The Broadway,

Oakridge Lynch, Stroud, Glos. GL6 7NU

Email: info@morganandclarke.co.uk   Phone:  01285 719292

www.morganandclarke.co.uk

(Also at:  London, Cardiff, Matlock, Braunton, Lewes)

 

 

It’s a strange feeling when you get bitten in the backside by something that is so obvious that you should have seen it coming.   That rather big bite is called ‘midweek trade’.   During February, almost without exception nationwide, Clients have suddenly come to the realisation that their midweek trade has all but disappeared.   We did some further research and asked the specific question rather than waiting to be told.   Again and again we had the same answer – “where has it gone?”.  

 

A small example that underscores the position is as follows.  

 

Middle-aged husband and wife, children long since flown the nest, welcoming supply tied village local that they had the habit of visiting three times a week on generally a Tuesday night and Friday night and Sunday lunch times after they had walked the dog round the village prior to coming home for a well earned Sunday roast.   He always has a pint of premium bitter and she has a generous glass of white wine.   They only ever had two drinks each at any one pub visit.   Those two drinks were £7.85 per round, or £15.70 per visit.   They suddenly realised that they were spending £47.10 on their three visits a week, or £2,449 per year.   Looking at the price of the weekly shopping bill and petrol prices, they decided to cut out the Tuesday night.   Once you lose the habit, it does not get re-kindled.   Their midweek visit has effectively now gone for good.  

 

1. The Statistics

With the acknowledgement of some help from CAMRA, the following statistics are particularly telling:

 

       £20,000,000 – the hole in the Treasury Revenue caused by the Duty Escalator.

       42% – the increase in Beer Duty in the last five years.

       18 – number of pubs still closing weekly as the pub trade suffers.

       180 – full and part time jobs lost every week due to pub closures.

 

It is a sad fact of life that the increase in Beer Duty has resulted in a massive fall in taxation revenue rather than generating extra income for Government.   The counter-argument runs – if on 20 March taxation remains the same or even increases – that the health lobby will argue vociferously that the NHS is being over-burdened by drink-related referrals.   It is of small comfort that the UK is now the second highest beer tax regime in the whole of Europe, just after Norway.   As our simple example showed above, the increase of 42% in beer taxation since 2008, would indicate that going to the pub is now becoming a luxury and is almost looked upon as an unaffordable social activity.   If the taxation position does not change and VAT is not reduced on restaurant and pub sales (fat chance of that happening!), the only way to ensure pub viability is through the substantial reduction in rent or a massive increase in product discounting, which are the only two flexible items that are capable of change in a profit and loss account.  

 

2.  Utilities

We thought you might be interested in anecdotal evidence from Michael Axford of the Goat Inn, St. Albans.   Michael wrote in and said:

“Just thought you may like to know that Total Gas and Power are not opening any new accounts for pubs any more.   Just tried getting a quote for electric and I already have a fully paid up, never missed a payment account with them, for gas.   Same thing happened with HSBC when we asked them for a new Business Account with a small overdraft.   HSBC policy is that they will not touch any pubs that might need an overdraft facility, however small.

 

I guess it’s just a sign of the times………”

 

3.  Food

We are forever being told by the major Pubcos that the provision of hot plated food is an automatic “traffic generator” and certain to add profitability to any trading operation.   This automatic mantra should be compared with an ever-increasing level of pub food operated under franchise rather than direct operation, which we are seeing increase week-on-week.   This always generates the automatic response from the Pubco Retail Field Staff that genuine income is being lost and that if you are professional, you can always run a highly successful direct catering operation.

 

Whilst we always support and applaud successful food operations and indeed there are still a large number out there, thank goodness, the following illustrates that even highly geared professionals are not automatically guaranteed a smooth ride.  

 

The 42 strong seafood change, Loch Fyne Restaurants owned by Greene King, has recently reported a decline in pre tax profits from £1.36m down to £414,000 for the year ending 29 April 2012.   Overall turnover dropped from £49.2m down to £46.5m and the operating profit fell from £1.6m down to £769,000.   The reduced trading performance over a relatively small number of sites, was attributed by a Greene King spokesman to:  “a combination of site-specific trading circumstance and the general weakening of the UK consumer environment”.

 

Telling observations from a highly professional and motivated restaurant group.

 

4.  Client Reaction

Following the conclusion of negotiations for a significant rent reduction at the Bell, Caerleon, just outside Newport, South Wales, our Client Lee Taylor wrote the following:

 

“I am more than happy for you to use us in your literature, in fact I insist upon it.   I would say that lessees should always have their own independent valuation completed and this should then form the basis of the negotiation.  Do not provide any information that they are not legally obliged to and always see it through to the end with arbitration used instead of PIRRS.  

 

I would also advise the provision of a small fighting fund so the means are available to take the fight to them.  As inevitably when a rent reduction is realised over the term of the review period, the initial outlay is a very small percentage of the overall monetary saving which is all bottom line profit.

 

Don’t be bullied, coerced or misled into accepting any settlement that you know not to be fair and equitable.   Thank you very much for all of your help.   It was very much appreciated”.

 

The Bell was a standard example of the provision of an upfront, free of charge, strength of case rent review, followed by agreement with a full and detailed Rental Report & Valuation and the subsequent opportunity of a face-to-face discussion with Lee Taylor, David Morgan of M & C and the Enterprise Inns’ Regional Manager.  Lee Taylor subsequently finished off negotiations, firmly in line with David Morgan’s rent valuation.  Job done!  

 

5.  And Finally

Two brief one-liners.

“Alcohol is not the answer but then again neither is milk”    and

“Alcohol may indeed not be the answer, it just makes you forget the question”

 

 

Best wishes from the Team at M & C

Email:  nigel@morganandclarke.co.uk

Phone: 01285 719292

Comment from Barfly,

The stark reality is that, the business that a Pub or Restaurant enjoys is it’s market share at that moment of time, any growth in most cases is at the expense of another Pub or Restaurant, the market is shrinking due to legislation, the recession, smoking ban resulting in people drinking at home using cheap super market booze.

As M&C have said the mid week business is declining, pubs used to be open seven days a week, then closed on Mondays, add on Sunday evening during the Winter.  

Soon, in rural areas they could be closed three days a week, it all needs innovative change and hard lobbying of your local MP to get legislation changed.

Alliance Online Catering Equipment – suppliers of Pub and Bar Equipment to the Licensed Industry