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Dispensations – Making record-keeping easier

Dispensations – Making record-keeping easier

If you are an employer then you will recently have had to submit your P11D forms, showing any expense payments and benefits paid to yourself and your employees.

A form P11D declares to H M Revenue & Customs details of any payments (other than those taxable through the company’s payroll) made to or on behalf of an employee, such as travel expenses, payment of medical insurance for an employee, reimbursement of expenses paid by an employee while on company business. Any item shown on the P11D is then declared by the employee on his/her tax return and the employee can make a claim to deduct any amount that was incurred in the performance of the duties of employment, so that the amount is not taxed.

Where an employer pays expenses on which no tax is charged, because the employee is able to claim a deduction on the basis that the expense was for business, there can be a way to simplify this process.

The employer may be able to obtain a dispensation from HMRC; this is a notice that removes the requirement for the employer to report certain expenses on the forms P11D, on which it is agreed that no tax charge arises. The employee then does not show those expenses, or make the associated claim, on his/her tax return.

The main expenses routinely covered by a dispensation are:

  • travel, including subsistence costs associated with business travel
  • fuel for company cars
  • hire car costs
  • telephones
  • business entertainment expenses
  • credit cards used for business
  • fees and subscriptions

In order for HMRC to grant a dispensation, the employer must have an independent system in place for checking and authorising expense claims, so that HMRC can be satisfied that only those expenses covered by the dispensation will be left off the forms P11D – any expenses not covered must still be shown.

 

This system generally means having someone other than the employee who is claiming the expenses checking that the:

  • amount claimed is correct
  • claim only includes items covered by the dispensation

If it is not possible to operate an independent system for checking and authorising expenses claims – e.g. because you are the sole director of your company and you have no other employees – a dispensation will only be given if:

  • all expenses claims are supported by receipts for the expenditure
  • it can be demonstrated that the claim relates to expenditure that can be covered by a dispensation

You can apply for a dispensation using HMRC’s online form by following the link at: http://www.hmrc.gov.uk/paye/exb/schemes/dispensation.htm#1 or by post. In either case, HMRC aims to respond within 15 working days. Alternatively your accountant will be able to handle the application for you.

In either case, you will need to supply details of the types of expenses and benefit payments to which you want the dispensation to apply.

You can apply for a dispensation at any time. In general, a dispensation takes effect from the date on which it is issued by HMRC ; however, HMRC may agree that your dispensation can take effect from the beginning of the tax year in which you applied for it.

Once granted, dispensations last indefinitely. However, HMRC reviews them regularly (usually at intervals of five years or less) to make sure that the conditions under which they were issued still apply.

 

PAYE Settlement Agreements (PSAs)

A PSA is an arrangement with HMRC whereby employers can settle the tax/NIC liability of their employees on three types of items – minor items, irregular items and items on which it is impractical to operate PAYE. Commonly, PSAs will apply to the tax due on the benefit arising on a staff party or outing, where the employer does not wish the employees to bear the tax, but other examples include a present for an employee, the cost of a spouse accompanying an employee on a business trip or on a benefit shared by several employees (such as non-business taxi fares) where it is impractical to attribute the cost to any one person.

The employer applies to HMRC giving details of the expense to be covered; if HMRC agree, the employer submits a calculation of the PSA payment – this is made up if the tax on the expense, grossed up to include the tax due from the employee for having his/her liability paid by the employer, plus Class 1B NIC.

An application for a PSA for a particular tax year can be made at any time during the tax year or even after, but HMRC’s agreement must be obtained by 6 July following the end of the tax year. The tax is due for payment on 19 October after the end of the tax year to which the PSA relates.

If you would like further information on dispensations or PSAs speak to your professional adviser.

Disclaimer

Umesh Modi BA ACA, is a Chartered Accountant and Tax Advisor, and a partner at Silver Levene (Incorporating Modiplus+). He can be contacted on 020 7383 3200 or umesh.modi@silverlevene.co.uk

Capital Gains Tax (CGT)

With income tax rates of up to 50% but a top rate of capital gains tax (CGT) of just 28%, it is worth knowing about CGT.

CGT is charged on gains made on the disposal of some capital assets. Gains (or losses) are broadly calculated as the sale proceeds minus the original cost of the asset and any incidental costs of both purchase and sale. Where shares are sold out of a larger holding of the same shares, strict rules determine which shares have been sold so that their original cost can be determined.

Where a disposal is a gift by one person to another or a sale between connected persons (other than between spouses), the market value of the asset is substituted for the actual proceeds – this can create a CGT liability where the donor has received nothing, so advice should be taken before making a gift other than of cash (which is exempt from CGT).

Where transfers are made between spouses, these are deemed to take place at nil gain/nil loss. If a couple separate, this treatment applies until 5 April after the separation – after that, until they formally divorce, the couple are treated as connected persons as above.

Gains and losses arising in the same tax year are aggregated and where a net gain arises of less than the annual exemption (currently £10,600 for 2012/13), no CGT is due. Where an overall loss arises in a tax year, that loss is carried forward and set against future years’ gains.

Where total net gains in the tax year exceed the annual exemption, the excess is taxable – at 18% for basic-rate taxpayers and at 28% for higher-rate and top-rate tax payers. However, a rate of 10% CGT is payable on some business disposals.

Exempt assets

As well as cash, certain other assets are also entirely exempt from CGT – cars, personal possessions worth up to £6,000 (e.g. jewellery, paintings or antiques), shares held in an ISA, certain UK government securities (e.g. gilts, premium bonds, national savings certificates), winnings (from betting, gambling or lottery), personal injury compensation and foreign currency held for personal use. Assets with an expected useful life of less than 50 years when acquired are also exempt, unless they have been used in your business. Shares qualifying under the Enterprise Investment Scheme (EIS) and the new Seed Enterprise Investment Scheme (SEIS) introduced in the 2012 Budget are also exempt, if various conditions are met.

 

Your home

A gain on the sale of your home is not automatically exempt, but under the “principal private residence exemption” will not be subject to CGT if the whole of the property has been used as your residence for the whole time that the property was owned.

Where a property was not your residence for the entire period of ownership, then a proportion, on a time-apportioned basis, of the gain arising on its sale may be liable to CGT, but various periods of non-occupation can be treated as periods of “deemed occupation” for the purposes of time-apportioning the gain – most importantly, where a property has been your residence at some time, then the final 3 years of ownership will always be treated as a period of occupation. Similarly, CGT issues can arise if part of the property was used exclusively for business purposes, in which case again a proportion of the gain on sale may be taxable.

If you have more than one property where you live at some time, then you can nominate which one will be treated as your “main” residence for the purposes of the above exemption. You can change the nomination as your circumstances change and with careful planning it can be possible to minimise or even completely avoid a CGT liability on two properties.

 

Sale of a business – Entrepreneurs Relief

When you sell a business asset – i.e. your business, your share in a trading partnership or shares in a trading company (or the holding company of a trading group) – then, provided certain conditions are met, the gain (up to a lifetime limit of currently £10m) is taxed at 10%. Relief also applies to certain “associated disposals” of assets used in the business.

The conditions are broadly that the asset being sold has been held for at least 12 months before sale and, in the case of shares in a company, that the holding was at least 5% of the company.

 

Trading profit or capital disposal?

Finally a word of caution – while a one-off or occasional disposal of assets should be liable to CGT, regular or frequent sales may attract the attention of H M Revenue & Customs and could be seen as a trading activity, the profits of which are liable to income tax and not CGT.

 

Disclaimer

Umesh Modi BA ACA, is a Chartered Accountant and Tax Advisor, and a partner at Silver Levene (Incorporating Modiplus+). He can be contacted on 020 7383 3200 or umesh.modi@silverlevene.co.uk

After the Budget

After the Budget: planning strategies to implement now

George Osborne’s 2012 Budget proved to be his most controversial to date, with widespread furore over the so-called ‘granny tax’, the ill-fated ‘pasty tax’ and the future cut in the 50p top rate of income tax.

Umesh Modi examines some of the Budget measures in more detail, along with the corresponding tax planning opportunities that may be available to you and your business.

Increase in the personal allowance

Further to the recent increase in the personal income tax allowance to £8,105, the allowance will rise again in April 2013, to £9,205 for those born after 5 April 1948. The advantage to higher rate payers will be countered by a lowering of the higher rate threshold, to £32,245.

In a bid to simplify the tax system, the Chancellor also announced that from 2013/14, the age-related personal allowances will be frozen. Their availability will be restricted to people born on or before 5 April 1948:

Born 6 April 1938 – 5 April 1948

£10,500

Born before 6 April 1938

£10,660

All individuals with adjusted net income of over £100,000, regardless of their age, will have their personal allowance (PA) reduced by £1 for every £2 that it exceeds £100,000, until it reaches nil.

The withdrawal of the PA produces a marginal tax rate of 60% (in 2012/13 the band is between £100,000 and £116,210), making it essential to have in place a robust financial planning strategy.

Key planning strategies

Maximise personal allowances

You should consider taking action to ensure that you are making the most of the PA, particularly if you will be affected by the forthcoming freeze in the age-related allowances.

If your spouse or partner has little or no income, you might want to consider transferring income (or income-producing assets) to them to ensure that they are able to make full use of their personal allowances.

Similarly, it is costly for one spouse or civil partner to be paying tax at 40% or even 50% while the other pays tax at only 20%. Equalising income where possible ensures that you will both pay tax at the lowest possible rate, thereby reducing the overall combined tax bill.

Reduction in the additional rate of income tax

From 6 April 2013 the additional rate of income tax, which is levied on those with incomes over £150,000, is set to fall from 50% to 45%. Consequently, the dividend additional tax rate will be reduced in line with this from 42.5% to 37.5% and trust rates will mirror these changes.

Giving careful consideration to the timing and structure of your income could significantly reduce your tax bill.

Key planning strategies

Consider deferring income

If you are likely to be subject to the 50% tax rate in 2012/13, you might want to consider deferring your income into the following tax year (beginning 6 April 2013). This could mean that you would benefit from paying income tax at the lower rate of 45%.

There are a number of ways to defer your income, including:

  • Delaying dividend payments: By electing to make dividend and bonus payments after 5 April 2013 and taking advantage of the lower tax rate, you could make significant tax savings.
  • Salary versus company loan: Taking a company loan in place of a salary during 2012/13, and then repaying the loan in the following tax year could also afford tax savings. However, consideration must be given to the broader tax implications of such action. Deferring income requires careful planning.

Maximise your pension contributions

For higher earners, maximising pension contributions (within limits) during 2012/13 will allow you to obtain relief at the higher rate of 50%. However, it is essential to seek professional advice before taking such action.

Corporation tax cut

The Chancellor doubled the reduction in corporation tax in the Budget, bringing the main rate down to 24% in April 2012.

The rate will be further reduced to 23% for the financial year commencing 1 April 2013 and to 22% for the financial year commencing 1 April 2014.

 

Key planning strategies

Consider the timing of expenditure…

While there is often a tendency to delay incurring expenditure to save money or aid cash flow, this might not be the most tax-efficient option. By incurring expenses shortly before the year end rather than after, relief for those expenses is obtained 12 months earlier. With the main rate of corporation tax set to fall further over the coming years, incurring expenses earlier rather than later may also provide relief at a higher rate.

… and the timing of income

 

These days there is little scope for deferring sales as businesses must include in their turnover the sales value of incomplete work, of unpaid bills (debtors) and of work completed but not yet billed. Under current guidance it does not matter when invoices are raised and, apart from the requirement to take account of the time value of money and the risk of default, it certainly does not matter when amounts are actually received.

Changes to the EIS & VCTs

The employee limit for both the Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCTs) is now fewer than 250 employees (previously fewer than 50), while the gross asset limit has risen to £15m before the investment and £16m afterwards. The maximum annual amount that can be invested in a company has also increased to £5m and the maximum annual amount that an individual can invest under the EIS is now £1m.

 

Meanwhile, a new Seed Enterprise Investment Scheme (SEIS) offers income tax relief of 50% for individuals who invest in shares in qualifying companies, with an annual investment limit for individuals of £100,000 and a cumulative investment limit for companies of £150,000. In addition, the scheme offers a capital gains tax ‘holiday’ for investments made.

 

Tax planning strategies

Review your investment strategy

 

Following the recent changes to both the EIS and VCTs, now could be the ideal time to review your investment strategy. Aimed at helping smaller riskier UK companies to compete for equity finance, the recent reforms may make this tax-favoured asset class much more attractive. If you are considering investing under either of these schemes, the changes could mean that you benefit from a considerable tax saving.

 

Smaller companies, meanwhile, may want to consider the possible benefits of the new SEIS.

 

This article is based on current legislation and is of general interest only. Specific professional advice should be taken before acting on matters mentioned here.

 

Disclaimer

Umesh Modi BA ACA, is a Chartered Accountant and Tax Advisor, and a partner at Silver Levene (Incorporating Modiplus+). He can be contacted on 020 7383 3200 or umesh.modi@silverlevene.co.uk

 

Employer End-Of-Year Filing

This time of year is very busy for employers with the filing deadlines for various forms.

Employer year-end return – form P35

The deadline for the submission of the Employer Annual Return (P35) was 19 May 2012 and most companies are now obliged to file their return online. If you are an employer and have not filed your Employer Annual Return yet then you should now do so as soon as possible as penalties can be charged for late submission.

Return of expense payments and benefits – form P11D

The next deadline is for 2011/12 forms P11D which are an employer’s return of expense payments and benefits paid to employees and which must be submitted to H M Revenue & Customs (HMRC) by 6 July 2012.

Class 1A National Insurance Contributions at 13.8% are payable by the employer on certain benefits and this liability is due for payment on 19 July 2012.

There is a common misconception that business-related expenses paid to a director/employee do not have to be shown on a P11D. This is not the case, unless the company has a dispensation – see below. If there is no dispensation in place then all expenses and benefits paid or provided to or on behalf of a director/employee must be shown on a P11D. This will include:

• Amounts paid to an employee

• Amounts paid on the employee’s behalf, whether in cash or on a company credit card

• Expenses incurred by the employee and reimbursed to him

The amounts declared on the P11D will be taxable on the employee, but the employee can make a claim to HMRC that any business-related expenses/benefits paid to him or on his behalf should be deducted from the amount declared and so not be taxable on him; this is done by way of either a claim on a Self Assessment tax return or by an adjustment in the individual’s PAYE code.

Common expenses and benefits which you may need to consider are as follows:

Travel expenses: paid either to or for your employee must be declared – if these relate to business a claim may be made by the employee as above; home to place of business travel is not considered to be business-related.

Entertaining: both client and staff entertaining must be included; an employee can generally make a claim to deduct business-related entertaining; staff entertaining is exempt from tax and does not have to be declared if it is an annual event (such as a Christmas party), which is open to all staff and the cost of which is less than £150 per head – if the cost is over £150 per head then the whole amount is taxable on the employees.

Mileage allowance for use of employee’s own car – this will be tax-free, and therefore does not have to be declared, if the amount paid is within HMRCs authorised mileage rates which are available on www.hmrc.gov.uk . If the amounts paid exceed the allowed rates, then the excess will be taxable.

Private medical insurance – the amount paid to or on behalf of each employee must be shown.

Subscriptions – the amount paid must be declared – the employee may make a claim to deduct work-related subscriptions and HMRC publish a list of professional bodies, subscriptions to whom are accepted as being business-related.

Company cars – where any private use is allowed, the taxable benefit is calculated by reference to the car’s CO2 emissions and its cost. Where fuel is also provided an additional taxable benefit will arise.

Telephone expenses – where the company pays for an employee’s home or mobile telephone, the amount paid must be declared; a claim by the employee for business-related use can be made.

Where a company regularly pays expenses – such as travel or entertaining – all of which are business-related so that claims by the employees are allowed, the company can apply to HMRC for a dispensation from the need to report these expenses. If HMRC are satisfied that the company’s systems ensure that only business expenses are paid, then a dispensation will be granted and the expenses covered by the dispensation no longer need to be declared on the P11D.

Return of Employment-Related Securities – Form 42

Where any transactions have taken place involving the company’s shares, a form 42 may be required. This form discloses to HMRC any transactions involving directors/employees and which have taken place by reason of employment with the company. The issue of shares on incorporation or the transfer of shares between family member swill not generally have to be declared. The deadline for the submission of From 42 for 2011/12 is 6 July 2012.

Disclaimer

Umesh Modi BA ACA, is a Chartered Accountant and Tax Advisor, and a partner at Silver Levene (Incorporating Modiplus+). He can be contacted on 020 7383 3200 or umesh.modi@silverlevene.co.uk

Budget 2012

Following the 2012 Budget on 21 March 2012 we look at the main provisions, some of which were announced previously and confirmed in the Budget.

Income Tax Rates and Allowances

Up to and including 2012/13, the amount of an individual’s personal allowance depends on age and income in the tax year. From 2013/14, the amount of an individual’s personal allowance will depend on date of birth and income in the tax year.

Allowances:

Personal allowance

8,105

n/a

Personal allowance – born after 5 Apr 1948

n/a

9,205

Age allowance (65 – 74)

10,500

n/a

Personal allowance – born after 5 Apr 1938 but before 5 Apr 1948

n/a

10,500

Age allowance (> 75)

10,660

n/a

Personal allowance – born before 6 Apr 1938

n/a

10,660

Married couple’s allowance (>75)

7,705

tba

Age-related allowance income limit

25,400

tba

Income limit for personal allowance

100,000

n/a

Income limit for personal allowance – born before 6 Apr 1948

n/a

100,000

Income Tax bands:

The top rate of tax comes down to 45% from 6 April 2013.

Basic rate – 20%

0 – £34,370

0 – £32,245

Higher rate – 40%

£34,371 – £150,000

£32,246 – £150,000

Top rate – 50% for 2012/13 and 45% for 2013/14

Over £150,000

Over £150,000

The above rates apply to non-dividend income – dividend income is taxable at 32.5% in the higher-rate band and 42.5%/37.5% in the top-rate band (2012/13 and 2013/14 respectively).

There is a 10% starting rate for saving income only – available if an individual’s taxable non-savings income (after deducting the personal allowance) is less than the starting rate limit (£2,710 for 2012/13).

Child Benefit

The proposal to withdraw Child Benefit from higher-rate taxpayers was announced in the Spending Review 2010 but the Budget announced modifications – a new income tax charge will apply to individuals earning over £50,000 and receiving Child Benefit (or whose partner receives Child Benefit). For those earning between £50,000 and £60,000 the charge will be 1% of the Child Benefit for every £100 of income over £50,000; for those earning over £60,000 the charge will be the full amount of Child Benefit.

Non-domiciled individuals

A higher charge of £50,000 will apply to non-domiciled individuals choosing to be taxed on the remittance basis when they have been resident in the UK for at least 12 out of the 14 previous tax years.

Non-domiciled individuals will be able to remit overseas income/gains without a UK tax liability in order to make qualifying investment in unlisted companies (or those listed on AIM).

Savings and investments

Pension contributions:

The Annual Allowance for tax relief on pension contributions was reduced from £255,000 to £50,000 from 5 April 2011 and the Lifetime Limit is reduced to £1.5 million from 5 April 2012.

Seed Enterprise Investment Scheme (SEIS)

While changes to various conditions attached to the Enterprise Investment Scheme were announced in last year’s Budget to encourage investment, this year’s Budget announced the SEIS which applies from 6 April 2012 to shares issued in a stand-alone company which is less than two years old, with fewer than 25 employees and gross assets of less than £200,000 before the investment. The investor obtains a tax reducer at 50%, regardless of his actual tax rate on the cost of the shares up to a maximum of £100,000 and as long as his investment is in less than 30% of the company’s shares.

ISAs

From 6 April 2012, the ISA limit rises to £11,280, up to £5,640 of which can be in cash.

Businesses and Employers

Corporation tax:

From 1 April 2012, the main rate of corporation tax will drop to 24%, with further falls to 23% and 22% from 1 April 2013 and 2014 respectively. The small companies’ rate remains at 20%.

Capital allowances:

As previously announced, capital allowances reduce from April 2012 – the 20% writing-down allowance becomes 18% and the 10% rate which applies to certain assets (most notably high-emission cars) reduces to 8%.

The Annual Investment Allowance, which provides 100% tax relief on expenditure is reduced from April 2012 from £100,000 per annum to just £25,000.

Research and development expenditure:

The planned increase in R&D relief goes ahead – from 1 April 2012, relief will be 225%, with a small reduction in the repayable tax credit from 12.5p to 11p.

Employment Management Incentive Schemes (EMIs)

The maximum value of options which can be held by an employee under an EMI scheme is to be increased from £120,000 to £250,000.

Company car and fuel benefits:

Changes were announced which will take effect in 2014/15 and the following two years – there will be a 2% increase in car benefit with a new maximum of 37% of list price. From 6 April 2016 the minimum car benefit will be 15% but the 3% excess for diesel will be abolished.

Capital Gains Tax and Inheritance Tax

The CGT annual exemption remains at £10,600 in 2012/13, with CGT rates staying at 18% and 28% depending on income levels.

The nil-rate band for IHT remains at £325,000, with the IHT rate at 40%, but where at least 10% of an estate is left to charity, the IHT rate on the remaining estate will be reduced to 36%. .

VAT

From 1 April 2012, registration and deregistration limits increase to £77,000 and £75,000 respectively. The rate of VAT remains unchanged.

Disclaimer

Umesh Modi BA ACA, is a Chartered Accountant and Tax Advisor, and a partner at Silver Levene (Incorporating Modiplus+). He can be contacted on 020 7383 3200 or umesh.modi@silverlevene.co.uk

Following the 2012 Budget on 21 March 2012 we look at the main provisions, some of which were announced previously and confirmed in the Budget.

 

Income Tax Rates and Allowances

 

Up to and including 2012/13, the amount of an individual’s personal allowance depends on age and income in the tax year. From 2013/14, the amount of an individual’s personal allowance will depend on date of birth and income in the tax year.

 

Allowances:

 

2012/13

£

2013/14

£

Personal allowance

8,105

n/a

Personal allowance – born after 5 Apr 1948

n/a

9,205

Age allowance (65 – 74)

10,500

n/a

Personal allowance – born after 5 Apr 1938 but before 5 Apr 1948

n/a

10,500

Age allowance (> 75)

10,660

n/a

Personal allowance – born before 6 Apr 1938

n/a

10,660

Married couple’s allowance (>75)

7,705

tba

Age-related allowance income limit

25,400

tba

Income limit for personal allowance

100,000

n/a

Income limit for personal allowance – born before 6 Apr 1948

n/a

100,000

 

Income Tax bands:

 

The top rate of tax comes down to 45% from 6 April 2013.

 

 

2012/13

2013/14

Basic rate – 20%

0 – £34,370

0 – £32,245

Higher rate – 40%

£34,371 – £150,000

£32,246 – £150,000

Top rate – 50% for 2012/13 and 45% for 2013/14

Over £150,000

Over £150,000

 

The above rates apply to non-dividend income – dividend income is taxable at 32.5% in the higher-rate band and 42.5%/37.5% in the top-rate band (2012/13 and 2013/14 respectively).

 

There is a 10% starting rate for saving income only – available if an individual’s taxable non-savings income (after deducting the personal allowance) is less than the starting rate limit (£2,710 for 2012/13).

 

 

 

Child Benefit

 

The proposal to withdraw Child Benefit from higher-rate taxpayers was announced in the Spending Review 2010 but the Budget announced modifications – a new income tax charge will apply to individuals earning over £50,000 and receiving Child Benefit (or whose partner receives Child Benefit). For those earning between £50,000 and £60,000 the charge will be 1% of the Child Benefit for every £100 of income over £50,000; for those earning over £60,000 the charge will be the full amount of Child Benefit.

 

Non-domiciled individuals

 

A higher charge of £50,000 will apply to non-domiciled individuals choosing to be taxed on the remittance basis when they have been resident in the UK for at least 12 out of the 14 previous tax years.

 

Non-domiciled individuals will be able to remit overseas income/gains without a UK tax liability in order to make qualifying investment in unlisted companies (or those listed on AIM).

 

Savings and investments

 

Pension contributions:

The Annual Allowance for tax relief on pension contributions was reduced from £255,000 to £50,000 from 5 April 2011 and the Lifetime Limit is reduced to £1.5 million from 5 April 2012.

 

Seed Enterprise Investment Scheme (SEIS)

While changes to various conditions attached to the Enterprise Investment Scheme were announced in last year’s Budget to encourage investment, this year’s Budget announced the SEIS which applies from 6 April 2012 to shares issued in a stand-alone company which is less than two years old, with fewer than 25 employees and gross assets of less than £200,000 before the investment. The investor obtains a tax reducer at 50%, regardless of his actual tax rate on the cost of the shares up to a maximum of £100,000 and as long as his investment is in less than 30% of the company’s shares.

 

ISAs

From 6 April 2012, the ISA limit rises to £11,280, up to £5,640 of which can be in cash.

 

Businesses and Employers

 

Corporation tax:

From 1 April 2012, the main rate of corporation tax will drop to 24%, with further falls to 23% and 22% from 1 April 2013 and 2014 respectively. The small companies’ rate remains at 20%.

 

Capital allowances:

As previously announced, capital allowances reduce from April 2012 – the 20% writing-down allowance becomes 18% and the 10% rate which applies to certain assets (most notably high-emission cars) reduces to 8%.

 

The Annual Investment Allowance, which provides 100% tax relief on expenditure is reduced from April 2012 from £100,000 per annum to just £25,000.

 

Research and development expenditure:

The planned increase in R&D relief goes ahead – from 1 April 2012, relief will be 225%, with a small reduction in the repayable tax credit from 12.5p to 11p.

 

Employment Management Incentive Schemes (EMIs)

The maximum value of options which can be held by an employee under an EMI scheme is to be increased from £120,000 to £250,000.

 

Company car and fuel benefits:

Changes were announced which will take effect in 2014/15 and the following two years – there will be a 2% increase in car benefit with a new maximum of 37% of list price. From 6 April 2016 the minimum car benefit will be 15% but the 3% excess for diesel will be abolished.

 

Capital Gains Tax and Inheritance Tax

 

The CGT annual exemption remains at £10,600 in 2012/13, with CGT rates staying at 18% and 28% depending on income levels.

 

The nil-rate band for IHT remains at £325,000, with the IHT rate at 40%, but where at least 10% of an estate is left to charity, the IHT rate on the remaining estate will be reduced to 36%. .

 

VAT

 

From 1 April 2012, registration and deregistration limits increase to £77,000 and £75,000 respectively. The rate of VAT remains unchanged.

 

 

Disclaimer

Umesh Modi BA ACA, is a Chartered Accountant and Tax Advisor, and a partner at Silver Levene (Incorporating Modiplus+). He can be contacted on 020 7383 3200 or umesh.modi@silverlevene.co.uk 

Protecting your business

Prepare for the unexpected and protect your company

The success of any company is often determined by the skills and efforts of key/essential individuals. Those efforts translate into a rewarding and successful business, so in essence the key individual and the business are inextricably linked.

What happens though, if something goes wrong? That is, what would happen to the business if anyKeyperson were to die or were diagnosed with a critical illness? Clearly the financial security of your company, your co-directors and families involved could be jeopardised.

The death or critical illness of a key person in your company could also threaten everything you have worked so hard to achieve.

This paper considers the impact that a critical illness, disabilityor death would have on the business directly and the individual’s family as a consequence and outlines some of the steps you could take to limit those effects.

  1. 1. Protecting the business

If you die or are diagnosed with a critical illness that results in you being unable to work, what would happen to your shares in the company?

If your family inherits your shares on your death, it might be impossible for them to take over your role in the company. Even if your co-directors, those who control and run the company,are prepared to buy your shares, they may not have the funds available to be able to buy your shares.

Typically for a company your family will have a number of options: –

  • Take a share of the company’s profits, but this could amount to very little if the company is struggling because of your absence.
  • Insist on winding up the company and receive a share of its value.
  • Sell your shares to remaining co-directors.
  • Sell the business in the open market– but this relies on finding a buyer who is prepared topay that price. This can be a potentiallylong and difficult process.

These options may not give you or your familythe full financial value of your shareholding. It may not give themthe security you might have wanted. However, with some forwardplanning you could create a much more attractive alternative.

The solution
One solution is for each director to take out life assurance and critical illness plans to cover their life, which are then put in trust for the other directors.

Then if you die or are diagnosed with one of the critical illnesses covered by a plan, the remaining directors will have the money to buy you or your family out of the company. This will also supplement any personal protection plans you have already made. This helps to ensure continuity and stability for the business and helps to provide financial security for your family.

  1. 2. Protecting your profits

It is most likely that not only would you provide the foundation of your company you are also likely to be make a vital contribution to its success.Therefore if you die, were diagnosed with a critical illnesses or were off work for an extended period due to illness or injury, then this could have a detrimental effect on your company’s ability to trade profitably now and in the future. The loss of a key person can cause far-reaching problems for a business such as: –

Loss of relationships– people like to deal with people they know and losing a key person can mean losing customers to your competitors and may lead to lower profits.

Loss of professional expertise– specialist skills and experience of your business can be difficult to replace and their loss could seriously affect your competitiveness.

Cost of recruitment– competitive job markets mean finding and training a replacement can be expensive and time-consuming. All of these issues could affect the profitability of your partnership – unless you’re financially prepared in advance.


The solution
One solution is for your company to take out life assurance and critical illness cover on the lives of its keypeople. This will help to compensate thecompany for any loss of profits, should akey person die or be diagnosed with acritical illness.

An income protection plan may also beestablished on the same basis. This will providethe business with a regular income if akey person is absent for an extended period due to illness or injury.


Conclusion
It is recommended that you take independent financial advice on these matters to ensure that you have considered the possible implications of losing a key person. It is also possible for the policies to be arranged quite tax-efficiently.

 

Disclaimer

Umesh Modi BA ACA, is a Chartered Accountant and Tax Advisor, and a partner at Silver Levene (Incorporating Modiplus+). He can be contacted on 020 7383 3200 or umesh.modi@silverlevene.co.uk

inheritance_tax_se_1914961d

A Look at Inheritance Tax

inheritance_tax_se_1914961dThey say that only two things in life are certain – death and taxes. But by knowing the basics of Inheritance Tax (IHT) it is possible to reduce your exposure to tax when you die.

On someone’s death, the calculation of IHT starts with the value of all the deceased’s assets, from which are deducted the amount of the deceased’s liabilities at the date of death and various exemptions – the most important of which are the spouse exemption and business property relief (BPR).

The part of the estate left to the deceased’s spouse is exempt from IHT, although if the spouse is non-UK domiciled the amount of the spouse exemption is restricted to £55,000.

Business property in the deceased’s estate – such as the value of a business, shares in the deceased’s company and assets used in a business – will attract business property relief (BPR) at either 100% or 50% depending on the type of asset, so the IHT on these will be either reduced or eliminated altogether.

The first, currently, £325,000 of the estate is then charged to IHT at 0%; this is called the nil-rate band and is set to remain at this level for the next couple of years at least. The excess of the estate over the nil-rate band is taxed at 40%.

For many people, there will be no IHT liability on death as the whole of their estate will be left to the surviving spouse; in that case, the nil-rate band is effectively unused, so on the death of the second spouse, the nil-rate band applicable to the estate of the surviving spouse will be increased by the percentage of the nil-rate band unused on the first spouse’s death. At present therefore, where the nil-rate band is unused on the first death, the nil-rate band on the second death is £650,000.

However this is not the end of the story. Where an individual makes a gift to another individual it is called a “potentially exempt transfer” or PET. If the donor survives for 7 years from the date of the gift, the value of the gift ceases to be part of his estate; however if the donor dies within 7 years then the value of the gift is added to his estate – where the gift was made more than 3 but less than 7 years before death and that gift is taxable, the rate of IHT is reduced.

So what can you do to reduce your exposure to IHT? Clearly reducing the value of your estate will minimise the amount of IHT you, or your spouse, will eventually pay.

While larger gifts are treated as PETs as above, it is worth noting that certain smaller gifts are entirely free from IHT so will reduce your estate regardless of when made – a single gift of up to £3,000 each year will be covered by the IHT annual exemption and will immediately fall out of your estate; the exemption can be carried forward for one tax year, so if you did not utilise it in 2010/11, you can made a gift of up to £6,000 in 2011/12. Each spouse has their own exempt amount, and each £3,000 gift is an IHT saving of £1,200 – a significant saving when taken over a period of years.

Similarly, any number of gifts of up to £250 per recipient can be made and are not treated as PETs.

Another very useful exemption is the exemption for “normal expenditure out of income” – where a series of gifts is made which can be demonstrated to be part of the donor’s habitual expenditure, to have come out of the donor’s after-tax income and to have left the donor with sufficient income to maintain his usual standard of living, then those gifts are not treated as PETs and will not be included in the donor’s estate regardless of when made. This can be particularly useful for, say, parents giving regular sums to children, as long as it can be shown that the above conditions are met.

Where possible, early IHT planning is of course advisable; insurance policies for IHT are available and your Financial Adviser can assist. Finally do ensure you have a valid and up-to-date Will to ensure that your estate is dealt with according to your wishes.

Disclaimer

Umesh Modi BA ACA, is a Chartered Accountant and Tax Advisor, and a partner at Silver Levene (Incorporating Modiplus+). He can be contacted on 020 7383 3200 or umesh.modi@silverlevene.co.uk

guide-to-tax-changes-year-end-planning

Year End Tax Planning

 guide-to-tax-changes-year-end-planningAs the end of the 2011/12 tax year draws nearer, this is a good time to review your tax position and take advantage of tax planning opportunities.

Tax Rates

For 2011/12, the 20% tax rate applies to taxable income of up to £35,000; income from £35,000 to £150,000 is taxed at 40% and income above £150,000 is taxed at 50% (dividend income is taxed at slightly different rates – 32.5% instead of 40% and 42.5% instead of 50%).

If you have a limited company and are considering drawing additional remuneration or dividends from the company, then you may want to base the decision as to whether to draw that income either before or after the end of the current tax year depending on the amount of income you have already drawn and therefore on what tax rate will apply to any further income. Determining the best timing – before or after 5 April 2012 – may enable you to utilise your basic rate band or avoid the 50% tax band.

Capital expenditure

The Annual Investment Allowance (AIA) currently stands at £100,000 per annum but will fall to £25,000 with effect from 1 April 2012 (for companies) or 5 April 2012 (for individuals and partnerships). The AIA provides 100% tax relief for capital expenditure qualifying for plant and machinery capital allowances up to the stated limit.

The timing of capital expenditure may therefore have a significant impact on your tax position so if you are considering further capital expenditure in the next couple of months, points to bear in mind are:

  • Have you already utilised your £100,000 AIA for 2011/12? If so, consider delaying the expenditure until after 5 April 2012, if the expenditure is £25,000 or less
  • If you have not utilised your AIA in 2011/12 and are planning significant capital expenditure, incurring the expenditure before 5 April 2012 (or 1 April 2012 as appropriate) will ensure the higher level of AIA

Pension contributions

There is no limit on the contributions that can be made by or on behalf of an individual into a pension scheme, although the amount of contributions on which tax relief can be obtained is restricted to the higher of 100% of relevant earnings and £3,600 (gross). Relief is available at the higher and top rates of income tax – the planned withdrawal of higher-rate income tax relief on pension contributions with effect from 6 April 2011 having been scrapped. However, if total contributions (made by the individual, the employer and anyone else on the individual’s behalf) exceed the “annual allowance”, £50,000 for 2011/12, a tax charge arises on the individual at 40% on the excess contributions.

Other year-end thoughts

ISAs: no income tax is payable on any income from the ISA investments. The maximum amount you can invest in 2011/12 is £10,680, of which up to £5,340 can be in a Cash ISA with the rest in a Stocks and Shares ISA. If you have not already done so, therefore, you may want to consider opening an ISA before 5 April 2012 to utilise this year’s maximum.

Enterprise Investment Scheme (EIS): income tax relief at 20% is available for investment of up to £500,000 in shares which qualify under the EIS; the conditions for the relief are complex, both for the investor and for the issuing company. Gains made on the disposal of EIS shares are tax-free as long as various conditions are met.

Similar reliefs to the EIS are available for investment in a Venture Capital Trust (VCT).

The Chancellor’s Autumn Statement announced plans to increase the maximum annual investment under the EIS to £1m from 2012/13 and to relax some of the conditions that have to be met by companies wishing to qualify under the EIS…

Annual exemption for capital gains tax: the annual exemption for CGT stands at £10,600 for 2011/12, so gains of up to this amount are exempt from CGT. If you have not made gains to utilise your exemption, you may wish to consider if you are able to do so before 5 April 2012.

Annual exemption for inheritance tax: a gift of up to £3,000 per year is exempt from IHT, thus reducing your estate and potentially saving IHT of £1,200. The exemption can be carried forward for one year, so if you did not use your exemption in 2010/11 you can make a gift of up to £6,000 in 2011/12, a potential IHT saving of £2,400.

Disclaimer

Umesh Modi BA ACA, is a Chartered Accountant and Tax Advisor, and a partner at Silver Levene (Incorporating Modiplus+). He can be contacted on 020 7383 3200 or umesh.modi@silverlevene.co.uk

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Self assessment – it’s time!

Self assessment – it’s time!tax_1815371b-460x288

If you have not already done so, now is the time to think about the deadlines for filing your 2011 tax return and paying your tax.

Preparing your return

Whether you are filing your return yourself or compiling information for your accountant, the paragraphs below set out some of the more common information that you (or your accountant) will need to complete your 2011 return, which covers the tax year ended 5th April 2011 (6th April 2010 – 5th April 2011):

Business income:

 

If you are a sole trader or in a partnership you will need the accounts which ended during the tax year 2010/11, for instance accounts for the year ended 31 December 2010 or for the year 31 March 2011.

If your business started recently or ceased during the tax year the position will be more complex and your accountant will be able to advise you further.

If you trade through your own limited company, or are someone’s employee, then you will need your P60 and P11D for 2010/11, showing your earnings and any benefits/expenses. Company dividends paid to you in the year ended 5 April 2011 will also be included in your 2011 return.

Unearned income:

Unearned income received between 6th April 2010 and 5th April 2011 will be shown on your 2011 return, whether from UK or overseas sources – e.g. interest, dividends, rental income (less associated expenses) and pension income, so you will need statements, tax certificates and dividend vouchers. Where an investment is held jointly, your share of the income is shown.

If you are non-UK domiciled then the new regime for non-domiciled individuals will be relevant to you – you chose whether to pay UK tax on your worldwide income or whether to be taxed on the remittance basis (i.e. only on that overseas income which you have brought to the UK) in which case you may be required to pay a £30k “remittance basis charge”. This is a complex area and your accountant will be able to provide more details.

Capital gains:

Details of the sale of capital assets – e.g. property, investments – during the tax year will be needed for your return i.e.: the cost and sale proceeds, and any associated expenses.

 

The sale of your home will generally be exempt from capital gains tax as long as the property was used as your main residence throughout the time you owned it, so any gain (or loss) will not be included on your return.

Other matters:

Tax relief is given for charitable payments under gift aid or covenants made in the tax year and for pension contributions paid by you; investments qualifying under the Enterprise Investment Scheme will also reduce your tax liability.

 

Filing your return

The deadline for the submission of paper returns has already passed, but for online filing of returns the deadline for the 2011 tax return is 31 January 2012.

If you are filing your return online yourself, the first step is to register at www.hmrc.gov.uk for online services. You will then receive, by post, confirmation of your User ID and an activation PIN needed to get started. Once you have activated your account you will be able to prepare and submit your return online.

Paying your tax

As well as being the deadline for the submission of your 2011 return, 31 January 2012 is also the deadline for payment of your tax liability for 2010/11 – if you have already made payments on account towards the year, you may have to pay a balancing payment; if your payments on account exceed your actual liability the overpayment will either be refunded to you or set against future payments. If you are required to make payments on account towards your 2011/2012 liability, the first of these will also be due on 31 January 2012.

 

It is worth considering at this stage whether the funds you will need to pay the tax will be readily available, in case it is necessary to give notice on an account or otherwise make funds available for the payment date.

Interest and penalties

If your return is submitted after 31 January 2012, you will be charged a £100 penalty; where a partnership return is submitted late, the penalty is £100 per partner. Penalties increase steeply if the return is more than 3 months late.

Interest will also be charged from 1 February 2012 on any unpaid tax (the current rate is 3%, but could change before this date). If any part of your balancing payment remains unpaid as at 28 February 2012, a surcharge of 5% of the unpaid tax will be added to your liability, with a further 5% surcharge added on 31 July 2012 on any tax remaining unpaid at that date.

HMRC enquiries

If you submit your return before the deadline, H M Revenue & Customs have 12 months from the date after your return was submitted to raise an enquiry into it. However, if your return is submitted late, HMRC’s period for raising an enquiry is extended.

 

Disclaimer

Umesh Modi BA ACA, is a Chartered Accountant and Tax Advisor, and a partner at Silver Levene (Incorporating Modiplus+). He can be contacted on 020 7383 3200 or umesh.modi@silverlevene.co.uk

 

 

 

outsourced-bookkeeping

How Long Should You Keep Books & Records?

outsourced-bookkeepingThere is no simple answer to this question because different types of record are covered by different types of legislation, as shown by the following summary:

Value added tax

By law, VAT records have to be kept for six years unless HM Revenue & Customs allows a shorter period. Any request you make to keep records for a shorter period must be accompanied by a full explanation of why it is considered impractical to keep the records.

 

PAYE

HM Revenue & Customs recommends that pay records be kept for at least three years after the income tax year to which they relate.

 

Taxes generally

For periods before the start of self-assessment HM Revenue & Customs can issue an assessment at any time up to six years after the end of the chargeable period to which the assessment relates. There is no limit in cases of fraud or wilful default. All business records must be retained for a period of (broadly) six years.

 

Company records

Under corporation tax return, accounting records must be preserved for six years from the end of the accounting period.

With regard to the statutory books, there are no specific requirements, but the Companies Act states that an entry relating to a former member of the company may be removed from the Register of Members 10 years from the day he or she ceased to be a member.

Also, the Register of Directors and Secretary must include details of past directorships held within the preceding five years.

 

Government grants

Documents relating to Government grants must generally be kept for four years from receipt of the grant. Where grant aid is still being received, no documents should be destroyed without consulting the relevant Government department.

 

 

Employers’ Liability policy certificates

The former requirement to keep Employers’ Liability policy certificates for 40 years has been replaced by guidance. Businesses are reminded that their potential liability for illness and injury at work does not end when the policy expires. Records should be retained to ensure that any future claim can be met.

 

Limitation Act 1980 – general periods

The 1980 Act allows an action to be brought on a contract for up to six years from the event (e.g. breach) that gave rise to the claim.

Where a contract is under seal (or deed), the time limit is twelve years.

These periods govern how long invoices and other documents should be retained as evidence in case of a claim by, or against, another party.

Conclusion

Taking into account the various requirements outlined above, we recommend that you keep all records for at least six years after the end of the accounting period or tax year.

This article is based on current legislation and practice and is for guidance only. Specific professional advice should be taken before acting on matters mentioned here.

Disclaimer

Umesh Modi BA ACA, is a Chartered Accountant and Tax Advisor, and a partner at Silver Levene (Incorporating Modiplus+). He can be contacted on 020 7383 3200 or umesh.modi@silverlevene.co.uk

paye-crumbling-370x229

PAYE The basics

paye-crumbling-370x229If you have employees you are required to operate a Pay-As-You-Earn scheme, to deduct income tax and national insurance contributions from their salary and to pay it over to H M Revenue & Customs (HMRC).

The tax is calculated according to the amount of tax-free income available to the employee and this is notified to the employer in a tax code, which is issued to each employee by HMRC according to his or her circumstances. National Insurance contributions are calculated by reference to published tables.

PAYE must be operated if the employee’s salary reaches the national insurance lower earnings limit – £102, per week, £442 per month or £5,304 per year for 2011/12.

Getting started
To operate PAYE you will need to register as an employer – this can be done online or by calling the New Employer Helpline (0845 60 70 143) and once registered you will receive a scheme reference.

Operating a payroll
Whether you use payroll software or keep records manually, the following forms will be relevant to you:

  • Forms P9T, P9X and P7X – notices of coding: HMRC will issue each employee with a tax code, at the start of the tax year and during the year if circumstances change. Income tax is calculated in accordance with the tax code
  • Form P11 – employee deductions sheet: each time you pay an employee you record the pay and deductions here

Each time you pay your employees you must give them a pay statement – such as a payslip – showing the gross pay, the deductions and the net pay.

What payments does PAYE apply to?
PAYE is applied to all payments received by an employee including:

  • Salary
  • Overtime, shift pay and tips
  • Bonuses and commission
  • Expense allowances paid in cash
  • Statutory Sick Pay and Statutory Maternity (Paternity or Adoption) Pay
  • Payments on termination of employment (unless exempt from tax)
  • Certain non-cash items such as vouchers.

Paying HMRC
Amounts deducted each month must be paid over to HMRC by the 19th of the following month or by the 22nd if you make electronic payment, although small schemes are able to pay quarterly.

 

At the end of the tax year
At the end of each tax year, you are required to:

  • Submit a form P14 for each employee showing the deductions for each employee in the year
  • Submit a form P35 – employer’s annual return: this shows the total deductions in the year and is submitted to HMRC by 19th May after the end of the tax year. Most employers are now required to complete this online, in which case the online submission of the P14s generates the P35.
  • Give all employees a form P60 for their records by 1st June following the end of the tax year – this must be in paper format

If an employee has received any expense payments or benefits in kind during a tax year, then you must submit a form P11D (or P9D if the employee earns less than £8,500 per annum), showing the value of the expenses and benefits received. The form must be submitted by 6th July following the end of the tax year. Class 1A national insurance contributions are payable on the value of certain benefits and payment is due on the same date.

Leavers/joiners
When you take on a new employee, who has had a previous job (or who has been on benefits), he or she should provide you with a form P45, which will show the tax code and earnings since the previous 6 April. This enables you to operate the correct code when you pay the employee.

If the employee has no P45, then you must complete a form P46 for the employee to establish the correct code.

When an employee leaves, then you in turn provide a form P45 with the employee’s details which is then given to a new employer.

Forms P45 and P46 are now generally completed and submitted online.

Forms and guidance is available at www.hmrc.gov.uk/paye.

Krystyna Knight, of Silver Levene provided research for this article.

Disclaimer

Umesh Modi BA ACA, is a Chartered Accountant and Tax Advisor, and a partner at Silver Levene (Incorporating Modiplus+). He can be contacted on 020 7383 3200 or umesh.modi@silverlevene.co.uk

Pensions and Tax

1. Basic planning to reduce marginal rates of tax

The Personal Allowance is lost when earnings equal £114,950

Since 2010/2011, a 50% rate of tax now applies to individuals with taxable income in excess of a higher rate limit of £150,000 per annum. In addition to increased rates of income tax for high earners, those with an ‘adjusted net income’ in excess of £100,000 have witnessed their basic personal allowance reduced or removed entirely since 6 April 2010.

There will be a loss of £1 in personal allowance for every £2 of income earned over £100,000. The personal allowance is lost when earnings exceed £114,949 (the personal allowance for 2011/2012 is £7,475) – giving an effective 60% tax bill on this band of income.

Looked at another way this is a 20% increase in tax on a band of £14,950. That is almost £250 extra tax every month

Example – 125% tax relief

Salary

£114,950

£114,950.00

Pension contribution (Net)

£0

(£14,950.00)

Personal Allowance

£0

£   7,475.00

Income Tax

£ 38,980.00

£ 32,252.50

National Insurance

£ 5,680.04

£   5,680.04

Net Disposable Income

£ 70,289.96

£ 62,067.46

As a result of making pension contributions totalling £14,950 in the year, net income falls by £8,222.50.

For a post-tax cost of £8,222.50 the gross pension payment is £18,687.50 (with basic rate tax relief added). In effect this is an uplift of 125%. Part of the reason for this is that the personal allowances are re-instated.

This also works for higher income levels however the uplift will be different.

2. Pension carry-forward

What are the pension annual allowance rules from 2011/12?

Although the basic annual allowance framework remains in place, there are some important changes to the rules from tax year 2011/12 onwards:

  • The annual allowance from tax year 2011/12 is £50,000 (significantly lower than the previous £255,000). This will initially be a fixed amount, but may increase over the longer term.
  • Unused annual allowance from the previous three tax years can be carried forward to offset excess provision in the current tax year.
  • A variable annual allowance tax charge of up to 50% applies to pension provision above the annual allowance (not the fixed 40% charge that applied in tax years before 2011/12).

What are the pension annual allowance carry forward rules from 2011/12?

From tax year 2011/12, in some circumstances any unused annual allowance from the previous three tax years can be carried forward to the current tax year. This can allow pension payments valued above the standard annual allowance to be made in a tax year without triggering a tax charge.

The carry forward rules are intended to help people whose pension provision is normally within the annual allowance, but who have an unusually high level of pension savings in a tax year.

Carry forward and tax relie

Where unused annual allowance carried forward from an earlier tax year is being used up, the usual pension tax relief rules still apply to any contribution above the standard annual allowance:

  • Tax relief only applies to personal contributions up to 100% of the individual’s relevant UK earnings for the current tax year; and
  • Relief against corporation tax on employer contributions is subject to the usual wholly and exclusively test.

Example 1 – carry forward calculation

Hermione is a self-employed individual earning £200,000 a year. Over the years she has paid periodic large single contributions to a SIPP, but only paid £30,000 in 2009/10 and 2010/11 because of the impact of the special annual allowance rules for those years.

Now she is looking to take advantage of the carry forward rules in 2011/12 to catch-up on some of the missed pension provision. Her recent contribution history and carry forward calculation are as follows: –

Tax year

Pension Premium

Unused allowance

Cumulative carry forward available

2008/09

nil

£50,000

£50,000

2009/10

£30,000

£20,000

£70,000

2010/11

£30,000

£20,000

£90,000

This means that, on top of the standard £50,000 annual allowance, she could pay up to another £90,000 to the SIPP for 2011/12 without facing an annual allowance tax charge.

Example 2

Freya earns £80,000 a year and has already paid £50,000 to her SIPP to use up her annual allowance for the tax year 2011/12. She received a large inheritance and would like to make a further pension contribution to use up unused annual allowance from previous years.

Her history of pension funding for the previous three tax years and her carry forward calculation are as follows: –

Tax year

Pension Premium

Unused allowance

Cumulative carry forward available

2008/09

£10,000

£40,000

£40,000

2009/10

£70,000

(£20,000)

£20,000

2010/11

£15,000

£35,000

£55,000

The key point to note is that, because Freya’s contributions for 2009/10 were more than £50,000, this has used up some of her unused allowance from 2008/09.

She decides to pay a further £30,000 to her SIPP, giving her a total pension payment of £80,000 for tax year 2011/12 (the largest personal contribution she can obtain tax relief on). This will use up the £20,000 unused allowance remaining from 2008/09 plus £10,000 of the unused allowance from 2010/11, leaving £25,000 of unused allowance from 2010/11 available for future years.

This article is based on current legislation and practice and is for guidance only. Specific professional advice should be taken before acting on matters mentioned here.

Bill Herlihy, of Silver Levene provided research for this article.

Disclaimer

Umesh Modi BA ACA, is a Chartered Accountant and Tax Advisor, and a partner at Silver Levene (Incorporating Modiplus+). He can be contacted on 020 7383 3200 or umesh.modi@silverlevene.co.uk

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Income Tax – the basics

dg_077353

This month we take a closer – although necessarily fairly simplified – look at how an individual’s income tax liability is calculated.

Step 1 – identifying total income

An individual’s total income tax liability for a tax year is calculated on all the various sources of income in that year, so the first step is to identify the taxable amount of income received from each source – such as:

Employment income

The gross earnings will be shown on form P60, but to this must be added the value of any benefits in kind from form P11D. The PAYE deducted is taken into account at Step 4.

Self-employment or partnership income

The amount of taxable income, either from self-employment or from an individual’s share of a partnership’s profits, will, in general, be the amount of net profits (after business expenses and capital allowances) for the accounting period that ended during the tax year in question, although slightly different rules apply in the first and last tax year in which a business is carried on.

Pensions

The state pension is paid gross so the taxable amount is the amount received; other pensions are generally paid after deduction of PAYE, and the taxable figure is the gross amount on form P60 and again any PAYE is taken into account at Step 4.

Interest

Most interest is received net of basic rate tax but the taxable amount is the gross (i.e.: the net interest plus the tax deducted) with the tax already paid deducted at Step 4.

Rental income

The taxable amount is the rent received less expenses relating to the renting of the property. Where there is more than one rental property, income and expenses from each are added together.

Dividends

Dividends are received net of a 10% tax credit – the taxable amount is the net dividend plus the tax credit, with the tax credit taken into account at Step 4.

The sum of all the taxable amounts is the individual’s “total income”.

Step 2 – arriving at taxable income

From the amount above can be deducted various items, the most common being the following:

  • Certain allowable losses
  • Certain interest payments and pension payments
  • Personal allowance – where an individual’s total income exceeds £100,000 the personal allowance is reduced by £1 for every £2 over that threshold until it is completely removed

 

Step 3 – taxing the income

For 2011/12 the tax rates are as follows:

Income

Tax rate on non-dividend income

Tax rate on dividend income

1 – 35,000

20%

10%

35,001 – 150,000

40%

32.5%

Over 150,000

50%

42.5%

It is necessary therefore to determine which income falls into which rate band and to do this, earned income is treated as the first “slice” of income (so that the deductions at Step 2 are deducted first against this type of income), with non-dividend investment income treated as the next slice and dividend income as the top slice.

Where the individual makes charitable donations or pension contributions net of basic rate tax, so that basic-rate tax relief is obtained when the payment is made, the amount of the basic rate band is extended to give higher-rate tax relief for these payments.

To the extent that each slice of income falls into each band, the above tax rates are then applied accordingly and the tax at each rate is calculated.

Step 4 – taking account of tax already paid, tax credits and tax reducers

From the total tax are deducted the following:

 

  • Tax reducers, such as relief under the Enterprise Investment Scheme
  • Tax credits on dividends
  • PAYE deductions from earnings or pensions
  • Tax deducted at source from savings income

The resulting amount is the tax payable for the year; where the PAYE or tax deducted on savings income exceeds the liability, a refund is due; however tax credits on dividends cannot create a repayment.

Step 5 – paying the tax due

Subject to any payments on accounts already made for the year in question the tax liability id due for payment by 31 January following the end of the tax year.

Krystyna Knight, of Silver Levene provided research for this article.

Disclaimer

Umesh Modi BA ACA, is a Chartered Accountant and Tax Advisor, and a partner at Silver Levene (Incorporating Modiplus+). He can be contacted on 020 7383 3200 or umesh.modi@silverlevene.co.uk

Capital Allowances – the changes ahead

Capital Allowances – the changes ahead

A company, sole trader or partnership which buys equipment for ongoing use in the trade, is not generally permitted to write off the whole cost in the year when the expenditure is incurred. Instead, depreciation is usually charged, writing off the cost over the expected useful life of the asset. However, although a business can depreciate its assets over whatever period it deems appropriate, for tax purposes depreciation is replaced by capital allowances at rates prescribed by law.

The capital allowances regime has changed regularly over the last few years and is set to changes again in 2011/12, so what follows is a summary of the current position and next year’s changes.

Plant, machinery and equipment
For 2011/12, the Annual Investment Allowance (AIA) stands at £100,000. This means that the first £100,000 of expenditure by a business on qualifying assets receives a 100% capital allowance – effectively writing off the cost in the year of purchase.

If qualifying capital expenditure by a business exceeds the limit, the excess cost is “pooled” and the rate of capital allowances given (“writing down allowance” or WDA) is either 20%, for assets in the “general” pool or 10% for assets in the “special rate” pool (broadly, integral features, long-life assets and high-emission cars).

In the 2011 Budget, the Chancellor announced that capital allowances will be restricted from April 2012. For 2011/12, the AIA will be reduced to £25,000 and the rates of WDA will fall to 18% for the general pool and 8% for the special rate pool.

Where a business’s accounting period straddles April, a “hybrid” rate will apply in the accounting period covering April 2012, whereby the rates before and after the change are time-apportioned.

Business considering investment in new equipment etc in the coming months should therefore consider doing so before April 2012 to take advantage of the higher AIA. The exact timing of expenditure should be looked at extremely carefully, especially where the accounting period straddles 1 April (for companies) or 5 April (for unincorporated businesses) as the AIA is time-apportioned:

Mr A prepares his sole trader accounts to 5 April – his AIA for the accounting period to 5 April 2012 will be £100,000, so qualifying expenditure incurred on or before that date of up to £100,000 will be covered by the 100% allowance. Expenditure after 5 April 2012 will be subject to the AIA of £25,000.

X Ltd prepares its accounts to 31 December – its maximum total AIA for the accounting period to 31 December 2012 will be 3/12 x 100,000 + 9/12 x 25,000 = £43,750; however, the actual AIA which can be claimed will depend on the exact timing of the expenditure – where expenditure is incurred on or after 1 April 2012, the maximum amount of qualifying expenditure on which the AIA can be claimed will be limited to £18,750 (i.e.: 9/12 x £25,000).

Businesses considering making an investment in assets qualifying for capital allowances should consult their professional adviser to ensure that allowances are maximised where possible.

Cars
The capital allowances regime for cars has changed significantly in recent years – the rate of capital allowances given on the cost of a car now depends on the car’s emissions. For cars bought from April 2009 onwards:

  • Low emission cars (110g/km or less) – attract a 100% first year allowance, so the entire cost is written off in the year of purchase
  • Cars with emissions of over 110g/km up to 160 g/km – the cost goes into the general pool and attracts capital allowances at 20% (18% from April 2012)
  • High emission cars (over 160 g/km) – the cost goes into the special rate pool and attracts capital allowances at 10% (to be 8% from April 2012).

For cars bought before April 2009, the old rules continue to apply until the car is disposed of or April 2014, whichever is sooner. Under the old rules, cars costing less than £12,000 were pooled but a car costing over £12,000 was kept in a separate pool, on which the maximum annual capital allowances were £3,000. Under the new regime, where there is any private usage, a car will continue to be kept separate so that a private use adjustment can be made to the allowances.

It is worth noting that under the new rules, motor cycles are specifically excluded from the regime for cars; expenditure on motor cycles is treated as expenditure on plant, machinery and equipment. 

Krystyna Knight, of Silver Levene provided research for this article.

Disclaimer

Umesh Modi BA ACA, is a Chartered Accountant and Tax Advisor, and a partner at Silver Levene (Incorporating Modiplus+). He can be contacted on 020 7383 3200 or umesh.modi@silverlevene.co.uk

 

 

 

formation_incorporation_advantages_startup

INCOPORATION – THE FACTS

formation_incorporation_advantages_startupIntroduction

One of the most inevitable questions an individual will come across during the life of their business will be whether or not to operate as a limited company or not. Umesh Modi explains the facts and puts to bed all those concerns anyone may have had once and for all!

The decision to go it alone can be daunting enough, therefore the simplest way of getting started is usually to operate as a Sole Trader. At the initial stages this can have its own advantages especially where losses or relatively low profits are anticipated in the opening years. However as your business matures it is likely that your business may be better off as a Limited Company. It is at this point many people are apprehensive as the red tape involved in running a company is often perceived by many as being over complicated and time consuming. Though this can be true to some extent, with the aid of a good accountant the process today with the aid of online filing, this can be a seamless and pain free experience than originally anticipated.

The Advantages of a Limited Company

One of the main advantages to incorporating is the ‘limited liability’ of having your business as a separate entity. This offers the ability of keeping your business affairs separate to that of your personal affairs, and to anyone who works for themselves will know this can be a very thin line indeed! However more importantly unlike a sole trader, where ones personal assets such as a house or car can be at risk of being seized to pay the debts of your business in times of crisis; a limited company will shelter such burden and responsibility. The shareholder liability is essentially only limited to the amount he or she has invested in the company.

It is important to note that a company has the same rights as an individual; a corporation can own property, carry on business, incur liabilities and sue or be sued. You as the shareholder of the company cannot be held responsible for the debts of the corporation unless you’ve given your personal guarantee. Other advantages of operating via a limited company are;

§  Corporations Carry On – A company has an unlimited life span unless it is wound up. The corporation will continue to exist even if the shareholders die or leave the business, or if the ownership of the business changes hands.

§  Raising Money Is Easier: Corporations also have more ability to raise money, which may make it easier for your business to grow and develop. While corporations can borrow and incur debt like any sole proprietorship, they can also sell shares and raise equity capital. This is a big advantage because equity capital generally does not have to be repaid and incurs no interest. (Of course, by issuing shares, you are reducing your percentage of ownership in the company.)

§  Income Splitting: Another tax advantage of incorporating is income splitting. Corporations pay dividends to their shareholders from the company’s earnings. A shareholder does not have to be actively involved in the corporation’s business activities either to receive dividends. Your spouse and/or your children could be shareholders in your corporation, giving you the opportunity to redistribute income from family members in higher tax brackets to family members with lower incomes that are taxed at a lower rate.

§  Increased Business? – Having ‘Ltd’ as part of your company’s name may increase your business, as people perceive corporations as being more stable than unincorporated businesses. If you’re a contractor, you may also find that some companies will only do business with incorporated companies, because of liability issues.

§  Potential Tax Deferral & Income Control. Saving the best to last is the potential tax saving a limited company can offer.  As a sole trader you will be taxed on the net profit with little or no potential of tax saving. However, with a limited company your income and indeed your tax liability have greater flexibility.   By having a company you can decide the best way of extracting your money, this alone can offer you a tax saving as deferring paying some tax (by taking out less) will enable you to realise tax savings if you are then in a lower tax bracket, or if the tax rates have, as in recent times change.

How it works – a simple example

Let us first look at the difference in the tax liability for a sole trader and a company with a net profit of £120,000.

 

Self-Employed

Company

 

 

Profit

£120,000.00

£120,000.00

 

 

 

Total Tax & NIC

£45,723.00

 

Corporation Tax

 

£24,000.00

Difference

£21,723.00

 

A Sole trader is subject to income tax and class 4 National insurance on the net profits of his trade. A company’s profit on the other hand is subject to corporation tax, currently this is at 20%.

The trick is then how these profits are extracted out of the company and into the pockets of its shareholders i.e. you!

The most common method is to vote a small salary of £6,000.  There is no tax due on this amount as it is below the personal allowance of £6,475. The remainder is extracted via a dividend. Dividends come with a 10% tax credit (as corporation tax would have already been paid) this essentially means that where a dividend falls within the basic rate band, there is no more tax to pay. Higher rate tax payers have to pay a further 22.5% of the dividend.

 

 

Tax

Corporation Tax   (as above)

 

£24,000.00

 

 

Example 1

 

 

Amount Extracted

£40,000.00

 

 

 

 

Salary

6,000.00

Nil

Dividend

34,000.00

Nil

Total

40,000.00

 

 

 

 

Total Income Tax + CT

 

24,000.00

Saving through incorporation

£21,723.00

Example 2

Amount Extracted

£60,000.00

 

 

 

 

Salary

6,000.00

Nil

Dividend

54,000.00

5,145.63

Total

60,000.00

5,145.63

 

 

 

Total Income Tax + CT

 

29,145.63

Saving through incorporation

£16,577.37

*The above illustration if for the Tax year 2011/2012. The tax liability is based on the assumption that the individual has no further income for that Tax year.

Disadvantages of a limited company

So far incorporating your business sounds like a great idea but there are also potential disadvantages to incorporating that need to be considered as follows.

1. Another Tax Return – When you incorporate your small business, you’ll have to file two tax returns each year, one for your personal income, and one for the company. This, of course, will mean increased accounting fees; however the overall affect is generally outweighed by the tax savings.

2. Increased Paperwork – As mentioned there is a lot more paperwork involved in maintaining a corporation than a sole proprietorship or partnership. This includes minutes from meetings, corporate documents etc.

3. Some Tax inflexibility’s – Unlike a sole proprietorship or partnership, corporate losses can’t be deducted from the personal income of the owner. A corporation doesn’t have the same flexibility in handling business losses as a sole proprietorship or a partnership. In a corporation, however, these losses can only be carried forward or back to reduce the corporation’s income from other years.

4. Liability May Not Be As Limited As You Think – The prime advantage of incorporating is the gaining of ‘limited liability’, however in some cases this may be undercut by personal guarantees and/or credit agreements required by many lending institutions. If a company has insufficient assets to secure a loan, creditors often insist on personal guarantees from the business owner(s), so although technically the corporation has limited liability, the owner still ends up being personally liable if the corporation can’t meet its repayment obligations.

Abbreviated disadvantages

1. Another Tax Return – An Additional Corporation tax Return will be required as well as your personal Tax return

2.      Increased Paperwork – A company is required to keep a record of more information with regard the conduct and decisions made within the company. i.e. minutes

3. Losses – corporate losses can’t be deducted from the personal income of the owner.

4. Personal Guarantees- . If a company has insufficient assets to secure a loan, creditors often insist on personal guarantees from the business owner(s)

Conclusion

 

So, Should you incorporate your business? In a nutshell the advantages clearly still exist; I would however strongly recommend that you discuss your personal situation with your accountant. Each situation is unique and only once the exact picture is considered can one assess whether incorporation will be worth it to you! But if you’re looking for greater flexibility in planning your taxes, this is certainly the right path.

 

 

Disclaimer

Umesh Modi BA ACA, is a Chartered Accountant and Tax Advisor, and a partner at Silver Levene (Incorporating Modiplus+). He can be contacted on 020 7383 3200 or umesh.modi@silverlevene.co.uk

thebudget

What the budget means for you

thebudgetBudget 2011
George Osborne, delivered the 2011 Budget on 23 March 2011 and we look at the main provisions, some of which were announced previously and confirmed in the Budget.

Income Tax Rates and Allowances
Allowances:

Personal allowance

6,475

7,475

Age allowance (65 – 74)

9,490

9,940

Age allowance (> 75)

9,640

10,090

Married couple’s allowance

6,965

7,295

Age-related allowance income limit

22,900

24,000

The personal allowance will be increased to £8,105 in 2012/13.

Tax rates:

Basic rate – 20%

0 – £37,400

0 – £35,000

Higher rate – 40%

£37,401 – £150,000

£35,001 – £150,000

Top rate – 50%

Over £150,000

Over £150,000

The basic rate band will reduce to £34,370 in 2012/13. Other rates and allowances will be increased by the rate in the RPI.

Savings and investments
Pension contributions:

The Annual Allowance for tax relief on pension contributions is reduced from £255,000 to £50,000 from 5 April 2011 and the Lifetime Limit is reduced from £1.8 million to £1.5 million from 5 April 2012. Members of registered schemes will be able to carry forward unused Annual Allowance for up to three years.

Furnished holiday lettings:

The current rules on furnished holiday lettings have been preserved although with some restrictions:

  • To qualify as a furnished holiday letting, from April 2012, the property must be available for letting for at least 201 days per annum and actually let for at least 105 days
  • From April 2011, losses on FHLs will not be available to offset against other income.

Enterprise Investment Scheme:

From 6 April 2011, the rate of tax reducer relief for EIS investments will increase to 30% of the investment and from 6 April 2012, the investment limit for EIS shares will increase to £1 million per annum. The same increases will apply to investment in Venture Capital Trusts.

There are also changes designed to increase the number of companies which can take advantage of the scheme:

  • The number of employees a qualifying company can have will rise from 59 to 250
  • The size limit for a qualifying company will rise from £7 million to £15 million
  • Maximum annual investment will rise from £2 million to £10 million

ISAs

From 6 April 2011, the limit increases to £10,680, with the cash limit increasing from £5,100 to £5,340.

Businesses and Employers

Corporation tax:

From 1 April 2011, the main rate of corporation tax will drop to 26%, with further falls to 25% from 1 April 2012, and to 24% and 23% in the following two years. The small company rate reduces to 20% from 1 April 2011.

National Insurance:

The much-discussed rise in National Insurance Contributions goes ahead from 6 April 2011:

Class 1 for employees:            12% (up from 11%) on earnings of £139 – £817 per week and at 2% (up from 1%) thereafter

Class 1 for employers: 13.8% (up from 12.8%) on earnings over £136 per week

The Chancellor announced consultation on merging income tax and national insurance as a way to reduce the administrative burden on employers, although any changes are likely to be a long way off.

Capital allowances:

Capital allowances are to be reduced from April 2012 – the 20% writing-down allowance becomes 18% and the 10% rate which applies to certain assets (most notably high-emission cars) reduces to 8%.

The Annual Investment Allowance, which provides 100% tax relief on expenditure will be reduced from April 2012 from £100,000 per annum to just £25,000.

A short-life asset election will be available from April 2011 onwards for any asset with an anticipated life of up to 8 years

Research and development expenditure:

The current 175% relief for qualifying R&D expenditure by small/medium-sized enterprises will become 200% from 1 April 2011 and then 225% from 1 April 2012. The minimum expenditure limit of £10,000 is abolished, enabling companies to claim for smaller amounts.

Approved mileage rate and company cars:

Currently employees may be paid a tax-free mileage allowance of up to 40p per mile for the first 10,000 miles and up to 25p thereafter for using their own car for business purposes. The 40p allowance rises to 45p per mile from 6 April 2011, although the 25p rate remains.

Company car and fuel benefits:

The percentages and CO2 emission bands used to calculate the benefit are adjusted slightly and fuel benefit rises to £18,800 multiplied by the percentage appropriate to the car concerned.

Capital Gains Tax and Inheritance Tax

The CGT annual exemption rises from £10,100 to £10,600 from 6 April 2011; the cumulative lifetime limit for entrepreneur’s relief for gains on the sale of businesses increases from £5 million to £10 million.

The nil-rate band for IHT remains frozen at £325,000 until 2014/15 but will be increased from 2015/16 in line with the Consumer Prices Index.

VAT

Registration and deregistration limits increase to £73,000 and £71,000 respectively. The rate of VAT remains unchanged.

Krystyna Knight, of Silver Levene provided research for this article.

 

Disclaimer

Umesh Modi BA ACA, is a Chartered Accountant and Tax Advisor, and a partner at Silver Levene (Incorporating Modiplus+). He can be contacted on 020 7383 3200 or umesh.modi@silverlevene.co.uk

 

 

 

 

lease-pitfalls

8 ways to avoid lease pitfalls

lease-pitfallsNegotiating a lease is never easy and, as competition law changes, pharmacists now have even more to consider when sealing the deal. As pharmacy leases last an average of 15 to 20 years, it’s important to ensure your lease covers all eventualities, say healthcare lawyers Charles Russell. At the company’s conference last month, associate Claire Timmings and solicitor Jennifer Hotston explained the common pitfalls to consider before signing that all-important contract.

1 Check your exclusivity rights
Exclusivity clauses may make sound business sense, but changes to the Competition Act mean these could be deemed anti-competitive in future. From April onwards, the Competition Act will apply to land agreements, meaning exclusivity deals in shopping and health centres might constitute a breach.

 But Ms Timmings and Ms Hotston say this is unlikely to have an adverse effect on pharmacies. “It’s always necessary to consider the specific facts of the case, and the Office of Fair Trading expects only a minority will be deemed anti-competitive,” they explain. “If there’s a breach, in the worst case scenario it could veto the whole agreement, but most courts will try to exclude the offending provision.” According to the experts, breaches are most likely to occur in rural locations, where competition is less rife.

2 Negotiate a get-out clause
Pharmacy contracts tend to cover a long period, which means it’s important to have some flexibility if circumstances change. Charles Russell advises pharmacies to negotiate five yearly tenant-only breaks, which would allow the tenant to walk away from the property if it’s no longer profitable. This would ideally include a break allowing you to relocate with the nearest GP practice if the situation arises.

3 Ensure you can renew
Renewing your contract should be a simple step, but complications can arise when landlords have other interests at heart. “Consider that the landlord can refuse to renew under certain circumstances, for example if there’s an opportunity to redevelop the property or they require the property back for their own purposes,” say Ms Timmings and Ms Hotston. They advise tenants to protect themselves by building an option to renew into the contract.

4 Specify your permitted use

Charles Russell lawyers advise pharmacies to carefully consider their permitted use. “If you are classified as a dispensing pharmacy this only allows you to sell medication, while a retail pharmacy includes other products, and a wider retail lease would allow you to sell a broader range of goods, such as mobility aids,” they explain.

5 Verify planning permission
Planning permission is a major consideration when signing your lease, as this can impose a number of restrictions. If your pharmacy only sells a small percentage of retail products, you are classified as a D1 – a non-residential institution. However, retail pharmacies are automatically an A1 classification, which is more difficult to secure. Charles Russell lawyers warn this could be a potential issue for pharmacies located in health centres. “Health centres have a D1 planning classification and the planning consent often doesn’t mention a pharmacy,” explain Ms Timmings and Ms Hotston. “This is worth bearing in mind if your pharmacy has a wider retail use and falls outside of the D1 category.” Hours of use and delivery times are also subject to planning permission, so tenants are advised to check for any restrictions.

6 Authorise alterations
Tenants will naturally wish to make alterations to their properties, but this can sometimes cause conflict with the lease. Even seemingly minor alterations, including changes to the signage, should be approved. “When you’re negotiating the lease, you need to include certain exclusions that will allow you to do certain things to your pharmacy,” say Charles Russell lawyers. “External alterations such as air conditioning, signage and security grilles should be approved in the lease.”

7 Protect against uninsured risks

Damage to your pharmacy is stressful enough without worrying about the terms of your lease. But leases often state that tenants are responsible for repairing damage, and might also stipulate that rent is paid while the property is unused. This can be particularly crucial in cases such as flooding, where the property may be unfit for use over a period of months. “Try to include specific provisions so that your pharmacy is covered,” advise Ms Timmings and Ms Hotston.

8 Review your rent
Rent reviews can be calculated in a number of different ways, and your landlord’s chosen method could make a significant difference to your outgoings. “Most rents will increase along with the Retail Prices Index, but you can look at alternatives such as increasing with the Consumer Price Index,” say the Charles Russell lawyers. Another option is to look at an open market rent, which reflects what a willing tenant would pay for the property in your area. But Ms Timmings and Ms Hotston advise against the option of setting rent according to local health centre traffic. “We wouldn’t recommend that from a tenant’s perspective, as it often doesn’t account for a decrease in numbers, and the number of visitors to the local health centre doesn’t necessarily correlate with pharmacy traffic,” they explain.

Tips for your CPD entry on lease negotiations

Reflect Do I understand how upcoming legislation could affect my pharmacy?

Plan Read this article and review my pharmacy’s lease.

Act Consult legal advice if necessary

Evaluate Is my pharmacy protected against lease pitfalls?

digestive-health

Digestive health

digestive-health

Kathy Oxtoby explores this £100m market ranging from indigestion to irritable bowel syndrome

 

“A patient kept coming to the pharmacy for indigestion remedies. An MUR picked up an underlying problem. So we referred them to their GP and the diagnosis was gastric cancer, which was caught in time,” recalls Sukhy Somal, services support manager for Midcounties Co-operative Pharmacy.

As Ms Somal’s experience shows, digestive health is not only a large part of pharmacy business – covering such conditions as indigestion, bloating and constipation – but an opportunity to identify warning signs of more serious conditions where swift intervention could save lives.

Daniel Patterson, pharmacist at the Co-operative Pharmacy, Biddulph, Stoke-on-Trent, believes this category offers the profession the satisfaction of being able to provide treatments that can bring “immediate relief for patients with such distressing conditions as indigestion, diarrhoea and constipation”.

According to data analyst Kantar Worldpanel, pharmacy’s share of the indigestion and stomach upset market has fallen to 27 per cent on the back of a sales decline (see Market Insight, right). However, POM to P switches of products such as Pantoloc Control and Zanprol, which help to reduce stomach acid, and Buscopan Cramps, which is designed to relieve abdominal cramps (see Product Watch, p32), give the profession an opportunity to offer treatments for digestive health problems that are not available on the supermarket shelf.

The chance to sell such products also means pharmacists can have conversations with customers to help them in the short-term, rather than having to make an appointment with their GP, says Ms Somal.

Some pharmaceutical companies are also developing indigestion products to make them more palatable to customers. “One of the main problems with indigestion/reflux tablets is the fact that they can taste chalky or gritty. Gaviscon has recently launched Gaviscon Strawberry Tablets, which have been developed to tackle these consumer perceptions,” says a spokesperson from Gaviscon. 

With so many products for customers to choose from, pharmacists need to ensure staff have the right training to meet their needs. Pharmaceutical companies such as GSK offer online training for pharmacy assistants, including tools to aid counselling for conditions such as constipation. “This is a delicate subject, so pharmacists should offer communications training, including looking at patient body language, so staff have the right skills to manage this category in a professional way,” says Croydon pharmacist Shailesh Amin.

Staff should also be encouraged to think about digestive health not just in terms of a single product sale, but as a chance to treat side effects. “For example, when a customer buys a product to treat diarrhoea, staff should ask whether they are eating and drinking, and if they need a rehydration product. It’s not just about one condition – other products may also help,” says Ms Somal.

Pharmacists should also view seeing patients with digestive problems as a chance to identify more sinister conditions. “You need to build a picture of the patient. When someone is always coming in for cream for piles or constipation relief we need to find out why,” says Ms Somal.

She advises pharmacists to flag up warning signs, such as blood in the stools, so they can refer customers to their GP to make sure their symptoms are not masking more long-term or serious problems.

Pharmacists can also play an important role in providing dietary, exercise and lifestyle advice to patients. Mimi Lau, director of professional services for Numark, says: “We are often in danger of focusing too much on the right treatment or cure, but we should also be thinking about prevention – and this is an ideal area for our input. So, for instance, we should help identify the triggers for IBS with a patient.”

Simple information about a healthy diet “can help people take control of their problems and save them from suffering from chronic conditions”, says Boots pharmacist Angela Chalmers, who manages the multiple’s Goodge Street branch in London.

Mr Patterson stresses the importance of the consultation room to discuss customers’ issues in a private environment.

“Being able to talk one-to-one means we use our skills to help patients to get to the root cause of their problems and suggest products to help them,” he says.

Indigestion can be a confusing category for customers, so pharmacists should try to ensure their merchandising strategy makes the selection process as easy as possible, Ms Henshaw says. Indigestion remedies should be in a prominent place and signposting should be used to help customers navigate the various sub-categories.

She advises that H2 receptor antagonists need to have their own designated space allocation as they have a different active ingredient and should be merchandised accordingly. Merchandise with all upper and low GI sections next or near to each other, including anti-diarrhoeal, laxatives and rehydration treatments, she suggests.

Mr Patterson says pharmacists can also promote the digestive health category on a seasonal basis – for example, smaller packs of indigestion and diarrhoea packs can be placed near summer travel products.

For Mr Amin, this category is one of the most satisfying for pharmacy. “With digestive health we not only have an armoury of products that means we can offer instant relief – it also allows us to provide lifestyle advice, and prove to the public we’re not just drug specialists, but also experts in managing treatments.”


Market Insight: Stomach upset and indigestion

The indigestion and stomach upset market is in slight year-on-year decline of 0.6 per cent, which has improved when compared to the -1.3 per cent performance in the year to September 5, 2010. It is dominated by the indigestion category, which accounts for over 90 per cent of the sales.

While shopper numbers are down year-on-year, the downward trend has stabilised from July. On average, shoppers have spent £8.23 per year. This has gone backwards, partly due to a drop in average spend to £8.17 in December that reflects increased promotional activity over the ‘indulgence’ period.

Own label continues to grow share, accounting for just over 20 per cent. However, customers are buying fewer packs (4.9 per cent less compared with 2 per cent less on branded), and paying more for the product. The average price of own label is £1.96, up 13.5 per cent year-on-year; this compares with £2.97 on brands, down 0.5 per cent.

Pharmacies’ share of indigestion and stomach upset has fallen to 27.3 per cent on the back of a sales decline. That said, Boots is still the clear number two retailer in this sector, with nearly 15 per cent of spend.

There is a continuation of customer numbers in pharmacies falling. This is offset by the fact they are spending more each time they visit through trade-up within brands.

Market changes:

Indigestion

Total market value
£91.7 million -0.6%

Pharmacy   
£3 million -6.1%

Stomach upset

Total market value
£9.4 million +3.2%

Pharmacy   
£24.7 million -2.1%

Branded vs own label

Indigestion and stomach upset
Branded
£80.6 million -2.5%

Own label   
£20.5 million +7.9%

Source: Kantar Worldpanel, 52 weeks to January 23, 2011. Data and analysis provided for C+D by Kantar Worldpanel (strategic insight director Tim Nancholas)

Best-selling indigestion and stomach upset brands

1 Gaviscon
2 Rennie
3 Remegel
4 Andrews Liver Salts
5 Zantac
6 Alka Seltzer
7 Bisodol
8 Wind-eze
9 Milk of Magnesia
10 Pepcid

5 tips for boosting your digestive health service

1. “This is a vast category so you need to understand exactly what problem your customer has – whether it’s heartburn or IBS – so you can offer the right treatment.”
Sukhy Somal, services support manager, Midcounties Co-operative Pharmacy

2. “Know about the latest digestive health products, and make sure you offer training for staff about them before they go in store.”
Samiah Tambra, pharmacist manager, Midcounties Co-operative Pharmacy, Pennfields, Wolverhampton

3. “Keep it simple. Easy adjustments to diet, such as eating a bowl of high fibre cereal and a tangerine, and drinking a large tumbler of water, gives patients realistic goals to ease their constipation.”
Angela Chalmers, pharmacist manager, Boots, Goodge Street, London

4. “See customers in your consultation room to give them the opportunity to ask questions about their condition, to avoid them feeling embarrassed talking about what are often taboo subjects.”
Daniel Patterson, pharmacist,
Co-operative Pharmacy, Biddulph,
Stoke-on-Trent

5 “Refer customers to their GPs if they suffer from indigestion regularly or if it causes severe pain and discomfort. They could be suffering from a hiatus hernia, helicobacter pylori infection or a peptic ulcer.”
Lynne Henshaw, director of marketing, Numark

Case study

Midcounties Co-operative Pharmacy, Pennfields, Wolverhampton
Samiah Tambra

“Last year, when we remerchandised the pharmacy, we decided to make a special feature of digestive health. Recent POM to P switches mean we can offer more products in store. The category also gives us the opportunity to offer advice and support that customers won’t find in their supermarket.
“Our digestive health fixture displays a wide variety of products, from anti-spasmodics to constipation treatments, allowing patients to look at the range without having to approach the counter to ask embarrassing questions. Leaflets about various digestive problems, such as irritable bowel syndrome and stomach cramps, are also part of the display to give customers information about these conditions.

“As well as making digestive health treatments easily accessible for customers, we also make sure staff know about new product developments, providing relevant training to ensure they can offer the latest advice and ask the right questions effectively and with sensitivity.

“We also take part in awareness campaigns such as Bowel Cancer Awareness Month and IBS Awareness Month. It’s all about demystifying digestive health and educating people about their ailments and how to manage them in the best way. Often, people don’t deal with their digestive problems until it gets to the point they need to see their GP. But it might be that their condition could have been better controlled – and pharmacy is ideally placed to offer preventative measures, which also frees up GP time.”

Product watch

Buscopan Cramps

Manufacturer: Boehringer Ingelheim

Classification: P

For: The relief of abdominal cramps

Active ingredients: Hyoscine butylbromide

Contraindications: Buscopan Cramps should not be administered to patients with myasthenia gravis, megacolon and narrow angle glaucoma. They should not be given to patients with a known hypersensitivity to hyoscine butylbromide or any other component of the product

Tel: 01923 229251
Format/pack size: 20 tablets
Pip code: 353-1738
RRP: £4.48

Dulcobalance

Manufacturer: Boehringer Ingelheim

Classification: P

For: The relief of constipation

Active ingredients: Macrogol 4000

Contraindications: Severe inflammatory bowel disease (such as ulcerative colitis, Crohn’s disease) or toxic megacolon, associated with symptomatic stenosis; digestive perforation or risk of digestive perforation; ileus or suspicion of intestinal obstruction; painful abdominal syndromes of indeterminate cause; hypersensitivity to macrogol (polethylene glycol) or to any of the excipients

www.constipation-facts.co.uk
Tel: 01923 229251
Format/pack size: 10 sachets
Pip codes: 353-1746
RRP: £5.10

 

Pantoloc Control

Manufacturer: Novartis Consumer Health

Classification: P

For: Relief for frequent heartburn and acid reflux sufferers; one tablet can suppress acid secretion for up to 24 hours

Active ingredients: Pantoprazole 20mg

What’s new? Pantoloc Control was launched last spring, supported by a £2m advertising campaign, following 2009’s approval of the POM to P reclassification of PPI (proton pump inhibitor) pantoprazole
Contraindications: Hypersensitivity to the active substance, to soya or to any of the other excipients; co-administration with atazanavir

Tel: 01403 218111
Format/pack size: Gastro-resistant tablets: 7; 14
Pip codes: 354-5449; 354-5456
RRP: £7.05; £12.15

Brand Watch: Dioralyte

Available for nearly 30 years, Dioralyte continues to be “the best selling oral rehydration therapy”, says Ros Munday, OTC commercial manager for Sanofi Aventis.

The travel sector is an important market for the brand, Ms Munday says, with the sachet format of Dioralyte making it easy to take on holiday abroad, where food poisoning and dehydration risks are high.

Ms Munday expects Dioralyte sales to be strong in the spring, especially among parents “as rotavirus is easily spread among children under five, within nurseries and at school”.

Extensions to the brand include Dioralyte Relief, which contains rice starch, to reduce the duration of diarrhoea, and the latest development in the range – Oralyte, a ready-to-drink oral rehydration therapy.

“Oralyte is marketed for parents to buy for their children, due to the improved blackcurrant flavour, making it easier for children to stay hydrated on the go. The stand-out, attractive, colourful packaging is appealing to children and parents, highlighting the ease of use with great tasting flavour,” says Ms Munday.

The launch activity for Oralyte will include a trade and consumer advertising campaign, as well as product information and training materials for pharmacy staff.


Tips for your CPD entry on digestive health

Reflect Do my patients get the most out of digestive health products?

Plan Review common digestive presentations, and my and my staff’s knowledge and sales protocols.

Act Read this article, and review available training as necessary.

Evaluate Do my patients get better digestive health advice?

[source]
business-record-keeping

Time To Prepare –Business Record Keeping Checks

business-record-keepingIn an ideal world businesses would keep all their receipts and invoices in a logical, coherent and easy to access manor; unfortunately thisideal does not always prevail. HMRC have cottoned onto this fact and in this age of general empty coffers they have decided that they are going to target people who fail to maintain their records and their initiative to do this will start in the latter part of 2011.

HMRC under took a consultation to consider this matter in December 2010 full details can be found on the HMRC site. HMRC are not going to be introducing new legislation in order to implement this crackdown. They will be using existing laws and simply enforcing them.

 

 

What Records Need to Be Kept

Unincorporated Businesses

Records must be kept so that your Tax Return can be completed fully and accurately.Businesses at the very least mustmaintain a record of all sales and takings and a record of all purchases and expenses.  If the business is also VAT registered, then VAT accounts, VAT sales, purchase invoices and import and export documents must all be kept.

 

The businesses or their accountant would then use these records to create a profit and loss account – which shows the sales income received and the expenses paid, and what profit/ loss has actually been made. The records must be kept for a minimum of 5 years after the normal filing deadline eg: 2009/10 must be kept until 31st January 2016.

 

Companies

Companies must maintain accounts records (including detailsof assets, liabilities, income &expenditure); business records (bank statements andpaying-in slips, accounts books, purchases and sales information).

 

Business records must be kept for minimum 6 years from the end of the Corporation Tax account period.eg: example, if your accounting period ends on 31 March 2009, you’ll need to keep the records for that period until at least 31 March 2015.HMRC have a comprehensive though not exhaustive fact sheet called to maintaining records which can be accessed from the following url: http://www.hmrc.gov.uk/factsheet/record-keeping.pdf

 

How to keep your records

The law does not dictate how records must be kept. .However HMRC recommend originalpaper documents that show tax has been deducted are kept eg;P60.

 

Other records can be kept electronically (on a computer or any storage devicesuch as disk, CD, memory stick or microfilm) as long as the method used captures all the information on the document (front and back) andallows the information to be presented in a readable format should HMRC ever need to access it.

 

HMRC Business Record Checks

HMRC intends to start selecting business records on the basis of risk assessments and in some cases on a random basis to identify businesses that have poor record keeping.

HMRC will give 7 days’ notice and at a prearranged time enter the businesses premises and check statutory business records where this is required to check the tax position.

The visit can take a matter of hours or in the base of a large complex business this can take several days if not more. They will typically look at a sample or the records and in some cases take some records away. If any business assets are kept at another location HMRC may also wish to visit them

If you run your business or keep stock or other assets at home HMRC should be told of this in advance. In this case the visiting inspector will only enter those parts of your home which are used for business purposes unless you invite the Inspector into other parts; which is not advisable.

A factsheet can be found on the HMRC site which states the procedures involved with such compliance checks. Please see the following: http://www.hmrc.gov.uk/compliance/cc-fs3.pdf.

Following the Visit

After the visit HMRC will “grade” the records they have seen and will rank it the quality of the records they see. The current suggested (not confirmed) ranking system is as follows

Good Records

 

– Documented acknowledgement of the perceived adequacy.

– A potentially lower risk of future compliance checks.

 

Minor record keeping failures

 

– Documented explanation to the trader of the findings of the Business RecordsCheck and of the actions expected to be taken to rectify the position going forward.

– A slightly increased risk of future compliance checks.

 

No records or significant record keeping failures

 

– Documented explanation to the trader of the findings of the Business RecordsCheck and of the actions expected to be taken to rectify the position goingforward.

– The award of a penalty (see below).

– The likelihood of a future Business Records Check (where the penalty forcontinued and significant record keeping failures apply) and/or and increased likelihood of other compliance interventions.

 

 

If a business is deemed by HMRC to have failed to maintain satisfactory records a maximum penalty of £3,000 will be imposed.

Are You Prepared

Administration and record keeping is not the most exciting part of a business however considering the potential ramifications of noncompliance it is worth considering: “are you prepared for this increased scrutiny?”, “how would your business rank”? In light of the fact HMRC are suggesting they will commence these checks in the latter half of this year it may be time to consider looking at your record keeping systems and preparing for a potential “Business Records Check” vist.

Jasbinder Bahara, of Silver Levene provided research for this article.

Disclaimer

Umesh Modi BA ACA, is a Chartered Accountant and Tax Advisor, and a partner at Silver Levene (Incorporating Modiplus+). He can be contacted on 020 7383 3200 or umesh.modi@silverlevene.co.uk

SMOKING-CESSATION

SMOKING CESSATION

SMOKING-CESSATIONThe buoyant OTC smoking cessation market, currently worth almost £108 million a year, looks set to continue to grow during 2011.

This is good news ahead of the No Smoking Day national promotion on March 9, which will prompt customers to seek advice on stopping smoking.

Another boost in the months ahead could come from government policies outlined in the public health white paper, which has signalled that pharmacists are considered key players in promoting smoking cessation.

And product innovation and pharmacy education are driving growth in OTC smoking cessation sales. With regard to the former, products such as the Nicorette Invisipatch and NiQuitin Minis (see Market Insightand Brand Watch) are proving to be popular with quitters. Hopes are also high for Nicorette Quickmist, a fast-acting mouth spray due to be launched soon, according to Zul Mamon, director of retail operations and member services at support group Avicenna.

Boots has seen increasing sales of lozenges, inhalators and nasal sprays, a spokesperson says: “Our own-brand Boots Pharmaceuticals NicAssist is the most popular brand with our customers. Many of our customers like clear patches and the inhalator is popular with people who have trouble avoiding smoking when in social situations.”

Mr Mamon stresses that pharmacy education should not be underestimated: “In a recent Avicenna and McNeil trial, pharmacy education was shown to be the key success factor, with participating pharmacies doubling their market share from 9 per cent to 18 per cent across the category.”

Gavin Birchall, head of operations at the MedicX Pharmacy group, says smoking cessation is a real opportunity for pharmacists to make a significant impact on a high-profile national health issue. MedicX’s pharmacy teams have been working closely with commissioners to ensure they are playing as wide a role as possible in delivering smoking cessation services, both through retail sales of nicotine replacement products and counselling.

Where possible, they have been working to integrate their skills and services with wider NHS stop smoking teams and to seek innovative new strategies for delivering services. 

“Pharmacists should be actively communicating with the relevant people and promoting the services they can provide and proposing a service to commissioners if there isn’t one commissioned in their area,” Mr Birchall advises.

Numark communications manager Emma Charlesworth says there is plenty of scope in the pharmacy to actively promote smoking cessation products and services. 

“Many pharmacies still keep smoking cessation products on the back wall, primarily due to the high value of most of the lines,” she says. “Numark recommends that, where possible, all smoking cessation products should be merchandised on the GSL fixture; customers often prefer to self-select within this category and then approach the pharmacist or medicine counter assistant for advice.”

And No Smoking Day chief executive Dan Tickle advises pharmacists to make the most of the heightened public awareness around the national campaign next month: “This will be a brilliant opportunity for pharmacists to remind the public and local community that they are there to provide help and support to anyone thinking about stopping smoking.”


Market Insight: smoking cessation
First, a caveat: the smoking cessation market is complicated by the fact that the same products are sold on prescription as well as OTC, so analysis of the OTC market in isolation is only part of the picture. This is further complicated by the various NRT voucher schemes in operation.

The OTC market is growing – in fact, it’s one of the strongest OTC markets in terms of growth. However, from a prescription perspective the market slowed down in 2010.

In terms of brands in the OTC smoking cessation market, Nicorette is unchanged overall with NiQuitin and Nicotinell showing strong growth. But own label (which refers to grocery own-labels only and does not include Boots) is in fact showing the strongest growth in the category.

What we have seen in the OTC market is a long-term trend towards promotions, with less being paid per pack. The most recent data shows that unit sales have grown at the same rate as value sales and, given that own label is growing strongly and is usually lower priced, that would indicate that there is less of that promotion going on this year than previously.

In terms of formats, gum has the largest market share at around 40 per cent, but this is in slight decline – as are patches, which have around a quarter of market share. Lozenges, on the other hand, have been increasing their market share, at the expense of gum and patches, and now hold almost 23 per cent. So lozenges are driving the market this year, led by GSK’s NiQuitin Minis – which shows in the growth of the NiQuitin brand this year – and own label to a lesser extent.

Best-selling smoking cessation brands
1. Nicorette
2. NiQuitin
3. Nicotinell
4. Own label

Market changes 2009-10

Total market value
£107.6 million + 4.7%

Pharmacy
£55.6 million -2.5%

Grocery
£51.1 million + 9%

Source: SymphonyIRI Group value sales, 52 weeks to December 25, 2010. Data and analysis provided for C+D by Martin Wood, SymphonyIRI business unit director

Case studies

Co-operative Pharmacy, Broom Leys Road, Coalville, Leicester
Anoop Mistry

Branch manager Anoop Mistry set up a smoking cessation service six months ago in his Coalville pharmacy, which is currently achieving a quit success rate of over 60 per cent.

Up to 30 patients a month are signing up for the service, which is run in conjunction with the local PCT.

Two members of staff have been trained to provide smoking cessation alongside Mr Mistry. The service is promoted through Department of Health starter Quit Kits and leaflets provided by both the PCT and the Co-operative Pharmacy. 

News of the service’s success rate is now attracting new customers, and Mr Mistry has been talking to local GPs about how the service can be taken forward under GP commissioning.

“The service is not just important to the company, it is also about helping individual patients to improve their health and on a national level helping the NHS to achieve national targets,” Mr Mistry says. 

“When I look at the big picture it gives me great satisfaction.”

Chapel Lane Pharmacy, Farnborough
Mak Johal

Numark member Mak Johal has been running a successful smoking cessation service in his pharmacy for four years. A higher than usual number of staff have been trained to run the programme – two pharmacists, four technicians and two counter staff – so that customers are not left waiting around. The pharmacy has two consultation rooms.

Mr Johal has informed local GPs about the service and now receives 
a number of referrals from them. This suits people who find the pharmacy is more accessible. He is currently signing up around 10 new patients a week.

“Our ingredient for success is to offer a personal service and give people quality time,” Mr Johal says. “If you treat the person as an individual and ensure they get one-to-one attention it makes them feel important and that giving up smoking is important. That’s our ethos with all our services – that’s where we score.”

5 tips to boost your smoking cessation sales
1. Locate smoking cessation products near the pharmacy counter so that a member of the team is always available to answer questions and offer support.
2. Maintain a well-stocked display – various formats and strengths of products are designed for use by different types of smokers.
3. Ensure educational literature is available 
for smokers or their partners to take away.
4. Highlight the free smoking cessation services available in the pharmacy by placing appropriate signage at strategic points in 
the retail area, such as on the tooth whitening and breath freshener fixture 
in the dental section.
5. Listen carefully to customers and be open and non-judgmental – people can be sensitive about stopping smoking.

Product Watch

Clinomyn smokers’ toothpaste
Manufacturer: Lornamead
Classification: non-medicinal
For: Deep-cleaning to help remove stains on teeth caused by tobacco or nicotine (as well as coffee, wine and some foodstuffs)
Active ingredients: Fluoride; polynam polishing particles
What’s new? Clinomyn smokers’ toothpaste 
is approved by the British Dental Health Foundation
www.clinomyn.com
Tel: 01276 674000 
Format/pack size: 75ml tube
Pip code: 005-3868
RRP: £1.79

Nicorette Invisi 25mg patch
Manufacturer: McNeil Products
Classification: GSL
For: The relief and/or prevention of cravings and nicotine withdrawal symptoms associated with tobacco dependence. The product is indicated to aid smokers (including pregnant and lactating women) wishing to quit or reduce prior to quitting, to assist smokers who are unwilling or unable to smoke, and as a safer alternative to smoking for smokers and those around them
Active ingredients: Nicotine
Contraindications: Nicorette Invisi patches should not be administered to patients with known hypersensitivity to nicotine or any component of the patch 
www.nicorette.co.uk
Tel: 01344 864042
Format/pack size: 7-patch pack 
Pip code: 340-3094
RRP: £15.58

Brand Watch: NiQuitin
Sales of NiQuitin products, which include NiQuitin Clear patch, gum, lozenge and minis, grew by 10 per cent during 2010 to nearly £35 million (SymphonyIRI Group value sales, 52 weeks to December 25, 2010).  

NiQuitin Minis have driven category growth, says data analyst SymphonyIRI Group, and the Minis cherry-flavoured lozenges, launched in November, are the most recent addition to the product portfolio.

January saw the launch of the Future You TV advertising campaign that aims to help smokers visualise their goal of becoming smoke-free, and NiQuitin’s free online support programme, NiQuitin Quitmaster, provides a tailored toolkit of motivation and advice to help on the “quit journey”. A week’s free trial of NiQuitin 21mg patches formed part of the Department of Health‘s Quit Kit campaign. 

“Pharmacists play a crucial role in helping people to quit, providing invaluable advice and guidance,” says NiQuitin group brand manager Lizzie Champion. 

“NiQuitin supports pharmacists by providing educational and point of sale materials throughout the year.”

Tips for your CPD entry on smoking cessation

Reflect Do my patients get the most out of smoking cessation products?

Plan Review my and my staff’s knowledge and sales protocols.

Act Read this article, review available products and arrange training as necessary.

Evaluate Do my patients get better smoking cessation advice?

 

[SOURCE]

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