Autumn Newsletter 2011 Connecting Tax Mileage Allowance Payments Danny Roper Local support for you and your business Agriculture IT Consultancy Mortgages Food Prices in Britain Website The Big Fix Development Kevin Batty Bart Centlewski Joanne Faithorn Accountancy • Tax • VAT • Audit • Business Services Employer Services • Bookkeeping • Wealth Management • IT Consultancy Agriculture • Strategy & Business Development Editorial David Allen Strategy & Business Development Partner [email protected] Childcare vouchers Welcome to the Autumn Childcare vouchers are an alternative to paying childcare fees to a registered edition of our Accountancy childminder. £55 per week can be received tax free towards the cost of childcare. Newsletter Childcare vouchers enable your employees to pay for childcare out of their gross income (before tax). While this does not sound much, the benefit is The Bank of England recently downgraded huge. As an employer, you do not pay National Insurance on the value of the its growth forecasts for the next three years, vouchers provided to your employees; therefore they can save between £916 cut its longer term inflation projections and £1,195 per year. and warned that the risks remain “on the There are several ways to deal with childcare vouchers – you can simply give downside”. your employees the vouchers on top of their normal salary or do what is called Inflation could peak at 5% in the next few a ‘salary sacrifice’, for example, months before falling back at the end of the Your employee gives up £1,000 of salary year and dropping below the 2% target if rates After tax and National Insurance that is only worth around £700 in their pocket rise in line with market forecasts. In return they get £1,000 of vouchers so they are £300 better off Changes in the market are to be expected in The number of children you have does not affect this because the tax free today’s business environment and as a result limit is the same whether you have 1 child or 10. of these developments is anything that we This scheme must be offered to all employees and cannot be made through do today really considered to be “business a salary sacrifice scheme for employees earning at or near the National as usual?” Rather than analysing these from Minimum wage (£5.93 per hour up to 30 September 2011). This does not, behind your desk, this is the ideal time to look however, apply to directors’ salaries. to the future, identify economic shifts early All is not lost for directors on a minimum salary and turn them into viable business strategies. As a director of your own company, this scheme can also work in your This newsletter includes articles that give favour. For husband and wife companies where the directors take a information about securing you and your minimum salary and company dividends, the scheme means that they can family’s future and looks at ways to save Tax take an additional £2,860 each tax free per year towards their childcare costs. and VAT. It tells you how we can help you look after your employees and gives you an Depending on the individual circumstances of the directors, this can be a insight into our client, Professional Darts huge benefit and can make a big difference to their income. For example, if Player, Peter Manley. a husband and wife are both directors in their own company and are paying £175 per week for childcare costs, this equates to a total of £9,100 per year. As a firm we are here to help you through the However, if they were to claim childcare vouchers of £55 per week each, they would only have to pay the additional £65 per week in childcare costs good times and the bad so please get in touch. out of their own pocket, thus saving them £5,720 per year. Please note, this scheme can also affect your Tax Credit entitlement, but how much depends on your own personal circumstances. If this scheme is relevant to you and you would like to know more, please David Allen contact us. Strategy & Business Development Partner www.david-allen.co.uk Strength in our people Rachel Park Trainee Independent Financial Consultant [email protected] Rachel Park joined our Wealth Management team on 1 June as a Trainee Financial Consultant After leaving school at cannot wait to be able to help clients your assets to help secure your long the age of 16, Rachel with their immediate needs and future term future. planning”. started work at the Bank Kevin Collier specialises in Pension of Scotland in Annan. We are delighted to have Rachel on and Retirement Planning, Jonathan During her time at the board and believe that she is already a Connell specialises in Investment bank she had several valued member of the team. Planning and Joanne Faithorn specialises in Mortgages and Our growing team know what works roles which included Protection. If we can help you with and what doesn’t and what some of that of a Customer anything, please give us a call. Adviser, a Banking the challenges are that individuals and businesses face in today’s increasingly Adviser and a Mortgage complex and rapidly changing Reviewer. environment. Alison Welton Rachel’s training at David Allen Drawing on their years of experience Business Development Partner Wealth Management includes our independent consultants provide all aspects of administration, specialist advice and offer tailored the submission of new business, solutions to help protect and build compliance, product research and advising clients on areas that are specific to their own personal and business circumstances. Whilst training, Rachel will complete the Diploma in Regulated Financial Planning which will enhance her skills and give her the required knowledge Wealth Management and qualifications to become a Offering sspecialistpecialist advice on aallll of the following: Financial Consultant. Pension and Retirement Planning In her spare time Rachel enjoys Investments spending time with her friends and Mortgages family. Her other interests include Equity Release swimming and walking. Protection Rachel comments “I love working School Fees Planning with the public and once qualified I Long Term Care www.david-allen.co.uk Wealth Management Mortgages - The Big Fix Joanne Faithorn Independent Financial Consultant [email protected] In today’s society, a should see lending levels continue to house purchase is often increase in the second half of the year Lasting Power of Attorney seen to be your single as confidence returns and, as data Everyone knows the importance of biggest investment... the from the Council of Mortgage lenders writing a will to ensure your loved reports, the number of first-time ones are provided for when you die, flip side of that is that a but have you ever questioned what mortgage is often your buyers has reached a 10 month high. would happen if you are unable to make decisions during your lifetime biggest expense. In recent years around a third because of absence, accident or ill- As the Bank of England base rate of all home loans were actually ness? remains at a historic low, borrowers remortgages... millions of borrowers This scenario happens more often took advantage of the UK’s hugely face a tough choice when deciding than people think. If you haven’t whether to pay for the certainty of a competitive mortgage market, and got power of attorney specifying fixed rate or take their chances with a the main reason was... to save money; who can look after your affairs, the Court of Protection will intervene. base rate tracker or even to remain on big money. However in the current a variable rate mortgage. economic climate not all homeowners There is however an easy way to are in a position to remortgage. avoid the Court of Protection, and Whilst initial rates payable on tracker that is to grant someone you trust mortgages are currently significantly At David Allen Wealth Management a lasting power of attorney (LPA), giving them the right to look after lower than fixed rates only hindsight we offer mortgages from the ‘whole of specific aspects of your financial will determine which will prove the market’ ensuring you get the best deal affairs or health and welfare should best choice in light of future base rate to suit your individual circumstances. you be unable to do so. changes. However, the mortgage market is The LPA must be registered before it vast, deals come and go and the can be used and it is recommended “Bank of England lending criteria changes daily, so our that registration is done as soon as base rate remains at a specialist advice really can make all the form is prepared, firstly, to avoid any delays in emergencies, and historic low” the difference. secondly because if you’ve made mistakes and it is declared void it will be too late. Recently we have seen lenders develop and distribute some David Allen have a team of special- ists who can guide you through the innovative ideas to suit today’s current whole process… for more informa- market. From introducing a ‘hybrid’ tion call Carrie Taylor on 01228 tracker-to-fix product, to fixed rate 711 888 or email [email protected]. with no early repayment charges, the options becoming available to Please note: Your home may be repossessed if you do not keep up repayments on your both new and existing borrowers mortgage. www.davidallen-ifa.co.uk Wealth Management 10 Reasons to use a Financial Consultant Kevin Collier Independent Financial Consultant [email protected] Many people think that financial advice is only required by the very rich.