The Business Exchange Swindon & Wiltshire October 2014 - Page 9

FINANCE Hear It From The Experts… “You can’t download an ice cream!” Article by Richard Buzzoni “No matter how much digital evolves, you can’t download an ice cream. You’re always going to need packaging”. This comment was recently made by the long-time owner of a print packaging company, and echoes the sentiments of many business owners in the printing industry, who have had a tough time weathering the sea of change from traditional print days to the new digital era. But, as all senior management in this trade know, they must adapt in order to continue to play a crucial role in the communications mix. The printing houses that will thrive are the ones that change their mindset and focus on offering solutions and services rather than selling products. A marketing manager doesn’t need a printed brochure. He needs a solution to convey his message to his potential customers. This change in mindset, however, means investing time and resource, so some business owners have turned to raising funds to accommodate the necessary changes. However, some directors that started their printing businesses over 25 years ago, do not want to go through this next phase of changes and are taking the opportunity to retire - either selling their business, or encouraging management to take over, Watersheds have gained a wealth of experience working together with business owners in the printing industry, ensuring the successful sale of their business, which is the ultimate reward for their many years of hard work. Watersheds always welcome an initial phone call with business owners to discuss your options. Individual case studies of our deals with print businesses are available to view on our website and if you would prefer, we can send you copies by email or in the post. Please call Caroline Wilson on 01604 660 511 or email: Ask AMS Advice for small businesses Are there rules around giving mobiles to my staff? Employers may provide many benefits to employees on top of salary or wages. Some benefits can be tax-effective, because employer and or employee may save tax by providing the benefit rather than cash. What is Salary Sacrifice and why do people do it? ‘Salary Sacrifice’ is a mechanism where a formal agreement is made jointly by an employer and employee, to reduce an employee’s salary in return for some other benefit. The point of this arrangement is generally to save National Insurance – and this saving can then be divided between the employer and the employee. How to do it - Firstly, one needs to seek professional advice from a Financial Advisor - as any salary sacrifice must be carefully set up in order to achieve its aims, and be safe from any HMRC challenge that the sacrifice isn’t genuine. How savings can be made by sacrificing National Insurance • Pension contributions - Example: an employee can agree to sacrifice £100/ month of their gross salary in return for the employer paying an extra amount into the employee’s pension fund. The National Insurance saved would typically be £25.80 (12% for the Employee and 13.8% for the Employer). The sum saved is £25.80. Added to the sacrificed £100, it can be invested into the pension fund. Comparison: if the employee made a personal contribution into their pension fund without the salary sacrifice, there would be £25.80 less in the fund. So, there is potentially a big advantage (25.8% of the sacrificed amount) for many employees. • Private health insurance (and other taxable benefits in kind) Salary can be sacrificed and the employer can pay the premiums. National Insurance would still be payable by the employer, but the Employee’s National Insurance (at 12%) is saved. • Childcare vouchers - An employer offering childcare vouchers can agree a salary sacrifice arrangement which saves an employee income tax, as well as National Insurance - so it’s possibly worth 32% (of the value of the vouchers) to the employee; and 13.8% to the employer. Peter Bromiley ACA Technical Director - AMS Accountancy Ltd. WINNING TEAM NOMINATED FOR AWARD AGAIN Swindon-based Chartered Accountants Dennis & Turnbull have been nominated as finalists to defend the British Accountancy Award they won last year; ‘Independent Firm of the Year - South West’. Normally if an employer provides an asset to an employee for personal use, the employee must pay tax on 20 % of the asset's value for a whole year. However, a mobile phone is exempt from this tax. This means that when an employer provides a mobile phone to an employee, the employer can deduct the cost from taxable profits and the employee doesn't have to pay tax on this benefit even for private calls. However, you MUST ensure the contract is in the name of the business and NOT the employee Peter Bromiley ACA , AMS Accountancy Ltd., Swindon SN5 7XF 01793-818400 The winning team at last year’s award ceremony. Carl Reader, director at Dennis & Turnbull, has also been nominated as a finalist for the ‘Practitioner of the Year’ award. Attracting more than 500 leading accountants from practices all over the country, the awards showcase the achievements of small local firms to national and global players who have demonstrated an excellence in their profession over the course of the last 12 months. Dennis & Turnbull’s nominations recognise the level with which this local firm is working at, providing clients with a class-leading personal service, adding value, not numbers. “We are delighted to be back at the British Accountancy Awards for 2014 and it would be great to retain the award we won last year and maybe add a second as well,” said Carl. This year the awards ceremony is being held at The Brewery in Central London on 25 November. THE BUSINESS EXCHANGE 2014 9