ADVISER www.scruttonbland.co.uk
| S C R U T T O N B L A N D | W I N T E R 2 0 1 6 |
All aboard the Oriental Express
The Construction Recruitment Gap – are apprenticeships the answer? Image is Everything – commercial photography advice Employees with Benefits – the changing face of the company perk
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WHOWE ARE Scrutton Bland is a leading provider of accountancy, tax, audit, insurance, employee benefits and independent financial planning advice to both business and private clients. Our philosophy is to offer clear, professional advice and to find the most effective solution to meet the individual needs of each client. We are committed to delivering great client service and constantly strive to exceed the expectations of our clients providing a proactive and supportive service. If you would like professional advice on any of your business or personal finances please contact one of our professional advisers who will be delighted to hear from you.
Merrick Hill, Victoria Road, Diss, Norfolk IP22 4HZ 01379 643 444 www.merrickhill.co.uk Milton Hall, Ely Road, Milton,
820 The Crescent, Colchester Business Park, Colchester Essex CO4 9YQ 01206 838 400
Fitzroy House, Crown Street Ipswich,
Cambridge, CB24 6WZ 01223 928 065
Suffolk IP1 3LG 01473 267 000 www.scruttonbland.co.uk
@scruttonbland @SbliveOnline
Scrutton Bland
OUR PARTNERS
Sharon Gravener Corporate Partner
Simon Pinion Business Advisory Partner
Jason Fayers Tax Partner
Tim O’Connor Managing Partner
Tim Mulley Senior Partner
Tim Long Insurance Partner
James Bolton Employee Benefits Partner
Nick Banks Business Advisory Partner
James Tucker Business Advisory Partner
Sue Gull Corporate Partner
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WELCOME | S C R U T T O N B L A N D | W I N T E R 2 0 1 6 | Welcome to the winter issue of Adviser magazine. In this issue we take a closer look at one of the region’s biggest business sectors: property and construction. ADVISER spoke to Gipping Construction about one of their most interesting recent builds, and we look at the issue of the skills gap within the industry. If you are planning a business construction project, do read our Top 10 Tips for financial project management. Have you ever bought anything at auction? Colchester auction house Reeman Dansie have been holding sales since 1881. ADVISER found out how electronic bidding is transforming the auction world, and how Oriental art is one of the fastest growing areas for collectors. Lastly, we have been delighted to feature the work of photographer Stephen Belcher in previous editions of ADVISER . We finally caught up with Stephen in between photo shoots for some of the UK’s biggest brands, and find out how good commercial photography can transform the image of your business. We always welcome your feedback on ADVISER . If you have any comments or suggestions please let us know at marketing@scruttonbland.co.uk
NEW PARTNER JOINS SCRUTTON BLAND AS WE OPEN A NEW OFFICE IN CAMBRIDGE
“Employee Benefits and Rewards are becoming increasingly important to all businesses as they look to add value for their employees and to attract and retain staff. Expanding into the this area illustrates our commitment to adapt to the changing needs of our clients.” “This is an exciting time for our business, we are not only expanding the services we offer, but opening an office in Cambridge is part of our strategy to widen our geographical reach.” You can read more about James’ views on Employee Benefits on page 16. James can be contacted at Scrutton Bland by emailing james.bolton@scruttonbland.co.uk
On 1 October Scrutton Bland started an exciting new chapter in the firm’s future with appointment of our 10th Partner. James Bolton will lead a new specialist Employee Benefit, Pensions and Rewards team who will provide services ranging from Flexible Benefits, Protection, Health & Wellbeing, Financial Education, to Pension Consultancy and Advice. James brings with him over 28 years’ experience in dealing with all types of Employee Benefits Pensions and Rewards and will be based at a new office in Milton Hall, Cambridge bringing the number of Scrutton Bland offices to four. Tim O’Connor , Managing Partner said: “We are delighted that James has decided to join our Partnership team. We are committed to growing the business and to expanding on our position of being amongst the few, if not the only, firm in this area who can offer a complete suite of advisory services to both corporate and private clients.”
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CONTENTS WHO WE ARE ..............................................3 GREaT BEaLInGS BUILdInG THE DREAM .................................................6 WHY ISN’T IT ABOUT ABILITY? ...................8 THE A-Z OF COMMONLY USED FINANCIAL TERMS.....................................10 THE INVICTA FOUNDATION .......................11 VAT ON RESIDENTIAL PROPERTY PROJECTS .................................................12 PLannInG FOR FUTURE GEnERaTIOnS...........................................14 EMPLOYEES WITH BENEFITS THE CHanGInG FaCE OF THE COMPanY ‘PERK’ .......................................................16 ALL ABOARD THE ORIENTAL EXPRESS ...18 Tax and TECHnOLOGY AN INEVITABLE PARTNERSHIP .................20 IMaGE IS EvERYTHInG .............................22 ANTIQUES AND INSURANCE ...................27 THE RECRUITMEnT GaP In PROPERTY AND CONSTRUCTION ..............................28 EADT BUSINESS AWARDS........................30 10 TIPS FOR ManaGInG PROjECT FINANCES ..................................................32 GETTInG THE SHOW On THE ROad .......35 ManaGInG THE COST OF dOInG BUSInESS .....................................37 RESTORATION AND REJUVENATION: HOW AN ARCHITECTURAL BEAUTY WaS BROUGHT BaCK TO LIFE.................38 CHARITY EVENTS ......................................40 FOOD FOR FEASTS ...................................42
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GREAT BEALINGS BUILDING THE DREAM
This isn’t the usual style of house you would expect to see in this part of Suffolk. Can you tell us a bit about the project? The project involved the demolition of an existing cottage and the construction of a high quality contemporary bespoke dwelling, discreetly hidden within a peaceful woodland setting. The house was designed by award- winning architects Wincer Kievenaar who are based in Hadleigh. They have an exceptional reputation and the partnership with Gipping worked really well. We hope this will be the first of many projects with them. The design seems to work so well in its environment, how did that come about? This was a contemporary replacement dwelling, whose owners wanted a design which was a modern addition to the landscape without being more visually intrusive than the original. The overall shape of the building is broken up by changes in the roof line, and the exterior timber finishes combined with the ceramic granite cladding have created a stylish yet functional modern family home.
How did you create a cutting edge yet ecologically sensitive interior? Wincer Kievenaar’s design of the house instinctively creates good shading benefits, and the large expanses of glazing reduce the need for artificial lighting. There are polished concrete floors, with underfloor heating on both levels, which have been combined with high performance ceiling finishes to overcome potential noise reverberation problems from the hard surfaces. Smart technology has been installed to control the lighting, heating and audio visual systems via smartphones, with the intention to make the whole home as future proof as possible. What do you most enjoy about working on projects like these? Gipping have already carried out several similarly high-end residential building projects in the region. The biggest buzz about them is that they are one-off designs, and for building professionals, working on them is both interesting and enjoyable. As I mentioned earlier, we have an excellent working relationship with Phil Branton and the team at Wincer Kievenaar, which brought together the joint expertise of builders and architects, and together I think we have created an exceptional home at Great Bealings.
Founded 12 years ago, Gipping Construction has become a well-known name throughout the region, establishing a name for themselves as a leading builder and developer on some high profile projects in schools, retail and commercial properties across East Anglia. Perhaps less well known is their considerable expertise in building some of the most visually appealing residential houses in the region. ADVISER spoke to andy Laflin, Gipping’s joint managing director about one of their recent projects, at Great Bealings near Woodbridge.
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What do you make of the skills gap in the construction industry? as a member of the Suffolk branch of the National Federation of Builders, and Eastern region chair, I’m well aware of the gap in construction skills that currently exists. at Gipping we work closely with local industry colleagues and the community to promote construction, and we had several apprentices working alongside experienced craftsmen at the Great Bealings house. The CITB is going through a period of change and also faces the challenges brought about by the, soon to be implemented, apprenticeship Levy. We at Gipping along with our colleagues in our region are in regular communication with the CITB to ensure we are in the strongest possible position ensure the skills gap can be bridged, but there is no doubt that there is a long road ahead and that we all need to pull together.
Could the construction industry be doing more to get young people into the building trades? We could always do more. The industry needs to get into schools to show young people the breadth of opportunities in property and construction. It’s no longer just ‘brickies and chippies’, there are so many other prospects in engineering, design, IT and electronics. The Apprenticeship Levy is coming soon, which will require all businesses with a wage bill of over £3 million to invest in apprenticeships, and that will help – although you’d hope that businesses of that size would already have training programmes in place!
What about the future for the industry as a whole? It’s an uncertain time for everyone at the moment, although there has been a slow increase in the number of houses built year on year across the country. Contracting is still tough, pricing is very competitive, but the demand for new homes remains high. at Gipping our ethos remains to go about our business in a way which results in all parties saying at the end of a project that with hindsight they ‘would do it again with Gipping’. Scrutton Bland have almost one hundred years of experience in advising property and construction professionals on their insurance, accounting, audit and taxation needs. If you would like to talk to us about your business please telephone 01473 267000 or 01206 838400 or see our website www.scruttonbland.co.uk
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WHY ISN’T IT ABOUT ABILITY?
Tim O’Connor , Managing Partner, and Angela Griggs , Assistant Audit Executive wonder why businesses are holding back from employing more disabled people.
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Angela Griggs , Assistant Audit Executive
T here is still a force. There are various statistics and metrics but ultimately the story is the same: there is a vast untapped resource amongst disabled people who are skilled, experienced and eager to work. A recent survey carried out by Purple, a not-for-profit organisation who aim to help disabled people find permanent jobs, showed that 45% of businesses were apprehensive about hiring someone with a disability. The reasons stated by these businesses were varied, from a basic concern over their capability to do the job, to worries about saying or doing the wrong thing. The spectre of uncapped liability in the event of a disability discrimination claim inevitably concerns employers and this increases the perception of risk. As with all commercial decisions there needs to be a balance between risk and reward and the conversation about rewards is one that needs to start, as clearly for 45% of businesses they are not seeing beyond the risk. Every vacancy has specific requirements for skills, but added to that is the need for the right attitude and for someone to bring something to the wider team. If a non-disabled person applies for a job, employers will rarely worry about weaknesses if they aren’t relevant to the role. So if the skills and experience of a disabled person meet the needs of a vacancy then why is anything else relevant? When considering the positives that hiring a disabled person can bring to an organisation there is gaping inequality in employment rates between the disabled and non-disabled work
value of having an employer who understands that being disabled hasn’t stopped her from being good at her job: ‘I worked hard to become an accountant, and I was determined not to let the stroke stop my career.’ It is clear that both employers and employees benefit from people like Angela in the workplace. A disabled person will have probably had to overcome numerous hurdles to achieve what others may have been ‘given’ in order to do their job. This drive, determination and positive attitude is very much the stuff of strong role models. Another key concern for employers is the fear of saying or doing the wrong thing. There is a very real risk that this attitude becomes a vicious circle and only by employers engaging and communicating with groups like Purple can these concerns be overcome. There are a number of organisations who provide help and advice on the new Disability Confident accreditation introduced by the government, and which can help businesses to avoid missing out on potentially valuable employees. Purple is dedicated to building long-term relationships with businesses to unlock employment opportunities for disabled people. To find out more contact www.wearepurple.org.uk or tel 01245 392300. Information on the Government’s disability Confident accreditation can be found online at www.gov.uk/government/
strong evidence around the benefits to both employees and the employer. Firstly, employers with a diverse workforce have seen overall levels of absence through sickness reduce. It is harder to take a duvet day when a disabled colleague makes it in during even their most trying times. As for employees, it gives a very clear signal that their employer values every individual and looks beyond disability and recognises ability. Being ‘disability confident’, a term which is increasingly being used to describe an employer’s openness to employing disabled people is not just about recruitment, many businesses may be confronted with disability when members of their team acquire impairments. Having policies, processes and more importantly a culture that values the benefits that disabled employees can bring, will make dealing with these situations more comfortable if not easier. angela Griggs, audit executive at Scrutton Bland, is one such employee who understands first- hand the benefits of working for an employer who values her skills and experience. In 2011 Angela was taking down her Christmas decorations as she usually would when she suffered a stroke leaving her unable to work for two years. ‘It is hard to understand what something like this does to your confidence,’ angela recalls. ‘So many things I previously did without thinking suddenly became a challenge. The stroke also affected my motor skills, so Scrutton Bland made sure I had an ergonomic work station. We also structured a programme of work so I could rebuild my confidence without getting exhausted.’ Over five years later she recognises the
collections/disability- confident-campaign
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THE A-Z OF COMMONLY USED FINANCIAL TERMS Financial documents are full of strange acronyms and terminology which can be intimidating to the reader. James Wright , independent financial adviser, explains some of the most commonly used terms. “as a general rule you should always ask what the language on your documents means,” says James. “All of the independent financial advisers and specialists at Scrutton Bland are happy to explain, and if it has confused one person then there are probably others who are equally baffled!” Part One (A-E)
Debt to equity ratio A company’s level of debt (any type of borrowed money) divided by equity (the shareholders’ money in the business). Defined benefit pension a specific income derived from a pension pot built up using your contributions made whilst working (deducted before tax) and your employer’s contributions (if applicable) plus investment returns and tax relief. Defined contribution pension As above, however a defined contribution scheme depends on other factors such as the performance of the pension fund, the amount you pay in, and other choices. Depreciable amount The cost of a non- current (fixed) asset minus its residual value. Depreciation The allocation of the depreciable amount of an asset over its useful life. Derivative The collective term used for a wide variety of financial instruments whose price derives from, or depends on, the performance of other underlying investments. Diversification A risk management strategy which mixes an assortment of investments within a portfolio. Dividend The part of a company’s profits that are distributed to shareholders. The amount of dividend paid is proportionate to the number of shares held. Dividend yield The dividend per share (total dividends paid out, divided by total number of shares) expressed as a percentage of the market value of the share. Earnings per share Shows how much of a firm’s profits (after tax) is attributable to each share. It is one of the means of determining a share’s true value. Entity Something that exists independently, such as a business, and which has a separate legal personality.
Bond A type of IOU issued by a government or a company to raise money. Capital The financial sum which enables a business to acquire assets and sustain its operations. Capital expenditure (Capex) The money spent on the acquisition of fixed assets such as land, buildings and equipment. Capital Gains Tax (CGT) The tax on the gain made when an asset is sold. CGT is payable when the overall gains exceed your annual tax- free allowance (currently £11,100). Capitalisation issue The issue of new shares to existing shareholders, who do not pay for the new shares. It raises no new finance but changes the mix of share capital and reserves. (also known as a bonus issue.) Cash The cash on hand such as money held in a safe or as deposits in a bank that may be withdrawn on demand. Cash flow projections Statements of the cash expected to flow into and out of a business over a particular period. Contingent liability A potential liability that may occur, depending on the outcome of an uncertain future event. A contingent liability is recorded if the contingency is probable and the amount of the liability can be reasonably estimated. Corporation Tax payable by companies, based on the taxable profits of a financial period. Cost of equity The annual rate of return that an investor expects from a firm in exchange for bearing the risk of owning its shares. Current assets Anything that is expected to be converted into cash within 12 months of the date of the balance sheet. Current liabilities Monies owed by the business which are due for payment within 12 months of the date of the balance sheet. This includes overdrafts, taxes and payments due to creditors. Debtor A person or organisation that owes money to another person or entity.
Accounts payable The amount due for payment to a supplier of goods or services, also described as a trade creditor. Accounts receivable is the amount due from a customer, also described as a trade debtor. Accruals basis The effect of transactions and other events when they occur, and not when cash is received or paid. Accumulated depreciation The total depreciation of a non-current (fixed) asset, deducted from original cost to give a net value. Agricultural property relief A form of relief from inheritance tax, based on how the land or property has been used, and for how long. Annuity a financial product that can provide you with a lifetime income, usually on retirement. Annual percentage rate (APR) The annual rate charged for borrowing or earned through an investment, and is expressed as a percentage that represents the actual yearly cost of funds over the term of a loan. ‘Representative’ or ‘typical’ APR is the rate that at least 51% of people who are accepted for that product will pay. Articles of association A document which, along with the memorandum of association (in cases where that exists) form a company’s constitution, defines the responsibilities of its directors, the kind of business to be undertaken, and the means by which the shareholders exert control over the board of directors. Assets Things owned by a company which have a monetary value. ‘Fixed’ assets include buildings, plant, machinery etc. ‘Intangible’ assets include trademarks and brand names. ‘Current’ assets include stock, debtors and cash. Auditor An independent person legally authorised to sign off a firm’s financial statements as “true and fair” and prepared using the relevant legislation. Balance sheet A ‘snapshot’ statement of the financial position of a company showing assets, liabilities and ownership interest.
Look out for our next instalment of financial terms in the next issue of ADVISER .
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THE INVICTA FOUNDATION: HELPING THOSE AFFECTED BY SERVICE Colchester-based charity The Invicta Foundation was established in 2010 to help anyone adversely affected by active service within the armed forces.
T he Foundation was set up by Cheryl Hall and Stephen Robertson, parents of a severely injured serviceman, Ashley Hall when they struggled to find financial support for non- dependants once their son was discharged from hospital. Cheryl explained: “After Ashley got injured in Afghanistan, we spent the following ten weeks in Birmingham, sleeping in a hotel and spending our days by our son’s bedside. He’d lost both legs above the knee, his left thumb plus partial fingers on his left hand, his pelvis had been shattered and he sustained some damage to his back. The MOD had been a tremendous support when our son was in hospital, but once he was discharged there was a large gap in the care and support package available to us. As non-dependents, we were not covered by the MOD welfare programme or with any of the existing service charities. We had a choice: we could sit back and let it go, knowing that other families would continue to struggle, or we could start to do something about it. The Invicta Foundation was born.” The charity offers support, counselling and advice through its dedicated Forces & Families advice Bureau (FFaB), respite
November. For us, it is about awareness as well as funds. Anything anyone is willing to do is valuable to our cause.” For tickets to the Black Tie and Diamonds Christmas Ball on 25th November or for more information on how you can help the Foundation, please contact Cheryl or Stephen on 01206 617001 or email enquiries@ takes passion and dedication, but also brings with it a huge amount of responsibility. Ensuring that you have the right insurance covers in place can protect, not only your charity itself, but if you are a trustee can mitigate your personal liabilities. Some of the key areas you might need to consider are; trustee and management liability, professional Indemnity, loss of income, public liability, PR crisis management, legal expenses, buildings, contents and stock. Scrutton Bland work with a number of charities across the region to provide insurance, accounting and audit advice. To talk to one of our advisers please call 01473 267000 or 01206 838400 or go to our website www.scruttonbland.co.uk theinvictafoundation.org.uk Running or managing a charity
breaks via its own small holiday home in St Osyth, development workshops for veterans and service personnel, and donations and equipment to those in need. Based in Red Lion Walk in Colchester, the charity generates funds from local and national events, direct donors, its retail charity shop on Culver Street East and a lottery scheme. The Foundation has also been selected as one of the Colchester Mayor’s charities for 2016/17. However, the charity needs further support. Stephen added: “The long-term goal is to also have our own respite house where servicemen and women, and their support network, can go after they are discharged from hospital. We have the architectural plans but are looking for land to get it built. If we can get the respite house up and running, it will go a long way in helping to plug the gap in support that currently exists.” There are a number of ways local companies can lend support. Cheryl said: “We are looking for a bank of volunteers locally to support us with events, in the shop and at our head office on our campaigns. Local companies can also assist through donating staff time to our cause, through payroll giving or office fundraising days. We are also hosting a black tie ball and auction at Stoke-by-Nayland hotel in
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vAT ON RESIdENTIAl PROPERTy PROjECTS
Anyone embarking on a residential construction project, whether as a property developer, property investor, or even someone who is looking to build their own home will be aware of the substantial costs involved in such a project.
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T he amount of VAT which can be significant component of the overall cost of the project. For the property developer or investor, the VAT cost can erode their return on investment and for the home owner can place a strain on personal finances. Thankfully, there are a number of circumstances in which building works should be either charged out at a 5% VAT rate or even at a 0% vaT rate (no vaT). However, due to the complexity of the VAT legislation, a contractor may mistakenly apply a 20% VAT rate to such works, or the contractor may choose to charge VAT at 20% to protect themselves from a potential assessment by HMRC if they are unsure whether a lower rate should be applied. Construction of a new build When undertaking a new project it is important to be aware that any works incurred in relation to the construction of a new residential property should be charged at a 0% VAT rate. In other words, the builder will still need to provide a VAT invoice but no VAT is charged on the works carried out. It is important to remember that works carried out by any sub- contractors such as electricians or plumbers in relation to such construction and any building materials supplied in the course of the construction which are incorporated into the fabric of the building should also be charged at a 0% VAT rate. If the works involve the demolition of an existing property prior to the construction of a new house, it is important that any such existing building is demolished in its entirety before such works are commenced. Otherwise, the works could be seen as a conversion of an existing building. incurred on engaging contractors to carry out building works can be a
But what happens if the wrong VAT rate is applied by the contractor? If the wrong VAT rate is applied by a contractor and this is discovered after the invoice has been paid, there is no facility for the recipient of the works to obtain a refund of the overpaid VAT from HMRC, unless the person is building or converting a home in which they will live. Instead, a refund would need to be obtained from the contractor who carried out the works. This may be problematic in many cases, particularly if the relationship with the contractor sours during the course of the project. The rules around residential property projects are complex, and there a number of conditions which need to be satisfied in order for a lower VAT rate to be applied. However, it is important that both the contractor and the client are clear at the outset of any project on the correct rate of VAT which should be applied. Gavin Birchall leads Scrutton Bland’s Property and Construction sector group and is a Tax Director at Scrutton Bland . If you have any queries on the issues raised by this article please call any member of our Property and Construction Tax Team (jason Fayers, Gavin
If you are engaging an architect, project manager, surveyor, or a person acting as a consultant their services are still required to be charged at a 20% rate. However, if the builder is engaged on a “design and build contract” so that the builder is responsible for commissioning an architect to carry out the design of the property, the services of the architect can be wrapped up within the 0% VAT rate applied by the contractor. What about converting a residential property? In these circumstances a 5% VAT rate should be applied to construction services which are supplied in relation to :- • the conversion of a non- residential building such as an office, farm building or warehouse into flats or houses; • the conversion of a house where additional dwellings are created; • works carried out to residential property which has been empty for more than 2 years Refurbishment of residential properties A 20% VAT rate should apply to any refurbishment works carried out to an existing residential property where use remains the same after the works. For example, where there is one house before the works and one house after the works (except if the house has been empty for 2 years), a 20% vaT rate should be charged.
Birchall or Sarah Gamblin) on 01473 267000 or 01206 838400 .
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PLANNING FOR FUTURE GENERATIONS
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The world of pensions is constantly evolving with new products, government legislation and external factors all shaping the way we view our strategy towards saving for retirement. F or savers who may have already accumulated considerable funds and who may be looking for a cost- effective, flexible pension arrangement to create better planning options in order to retain wealth for the family, one intelligent alternative is a pension ‘wrapper’ known as a amily Pension Trust. Some of the key features to be found in a Family Pension Trust are: • The structure, a hybrid of a Self-Invested Pension Plan (or SIPP) allows for wider investment opportunities than other pension schemes;
• Investments can be made by some individual members or by groups of members joining together;
a Family Pension Trust (Family SIPP) is a cross between a Small Self-Administered Scheme (SSaS) and a Self-Invested Personal Pension (SIPP). Each member within the Trust retains control of his or her investments under the scheme and members may join together to pool some, or all of their pension fund within one or more investment funds, to access new investment opportunities. Currently many people limit their pension contributions each year in order to try and avoid exceeding the Lifetime Pension Allowance since any pension savings over the current limit could be taxed at 55% (subject to the type of pension they have). By consolidating their funds, the group could in aggregate potentially hold assets in excess of the lifetime allowances of individual members, (but the individual Lifetime Allowances still apply). The unique features of the Family Pension Trust create significant wealth planning opportunities and there are a wide range of investment options to invest in, such as stocks and shares, funds, bonds and commercial property. another benefit can be that the value of the Family Pension Trust is not included in the estate value at the time of death, which means that full control remains with the surviving members of the scheme. Furthermore, the probate process is avoided and funds pass directly to those they were intended for. No other investment proposition allows this level of flexibility at the current time.
• Diverse approaches to risk can be catered for;
• Flexible benefit options within the scheme allow retirement income to be phased; • Multiple common investment funds can be set up, for example to purchase commercial property, which can then be held within the fund; • Each scheme will have a dedicated administrator, making it a bespoke service; With recent changes in legislation, and the rising need and desire for people to provide greater sums for their children, grandchildren or other possible future successors, this is a great option for people wishing to pass their wealth on to future generations, and which sits outside their estates. The added bonus of schemes like this is that the individual would retain full control of the plan during their lifetime. Scrutton Bland’s financial advisers provide independent advice from across the whole market, and can guide you through the minefield of pension providers to find the best option for you. Contact Grant Buchanan at 01206 838400 or grant.buchanan@ scruttonbland.co.uk or visit our website www.scruttonblandifa.co.uk • The scheme can cost less than multiple bespoke SIPPs.
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EMPLOYEES WITH BENEFITS THE CHANGING FACE OF THE COMPANY ‘PERK’
The link between wellbeing and productivity in the workplace has long been understood by many businesses, but the increased focus on issues such as absenteeism and press attention around the pension gap has highlighted the need for all organisations to take a serious look at the Employee Benefits that they offer. A dviser spoke to James Bolton , Scrutton Bland’s newest Partner, whose remit it is to create and develop Employee Benefit schemes for corporate clients, about the changing attitudes of employers regarding the importance of employee engagement. Q. Some of us are old enough to remember the introduction of the Luncheon Voucher, is this kind of thing that is meant by Employee Benefits (EB)? A. Essentially yes, the Luncheon Voucher was developed as a ‘perk’ encouraging employees to stay with a company and was often tax efficient. In fact they are still around today!. However, the industry has moved on a long way since then and today’s employee benefits are much more about combining an employer’s responsibility to meet its duty of care for staff with rewards and benefits which attract, motivate and retain them.
Q. Why would an employer need employee benefits and rewards? Surely a pension scheme is enough? A. Pension schemes can be a valuable part of an employee benefit package but should be reviewed periodically to ask whether they are understood by the members; if the funds performing well and appropriate, and finally, whether charges are competitive and the member options and administration working efficiently. There are also many other benefits and rewards which can be considered and which employees value such as healthcare, protection and wellbeing benefits which can include things like health cash plans, life assurance and critical illness cover or even discounts for gym membership and discount shopping vouchers. A. Staff bonuses can be a useful way of rewarding staff, however they can become pretty expensive as bonuses are taxed and liable for national Insurance (nI). I believe that a ‘real’ benefit for employees must add value in some significant way. This could be a tax/nI benefit such as pension, group life or cycle schemes which are not taxed on the employee. It may be that the premiums/ costs of a benefit are significantly discounted versus the cost of the member providing it themselves such as Medical Insurance or Income Protection. Or it might be that the benefit programme provides an immediate gain such as discount vouchers, dental cover and gym membership. Q. Wouldn’t it be easier just to give staff a bonus?
Q. The term ‘financial education’ often comes up in conversations about Employee Benefits, what does it actually mean? A. This can encompass many aspects but essentially it’s helping your employees understand their wider finances, benefits and options. It can include help answer questions such as: When can I afford to retire? What investment options might be right for me? What difference would it make if I pay more into my pension? What happens to my fund and other assets if I die? What retirement options do I have and what is right for me? This education can take the form of presentations, online calculators and one- to- one advice surgeries. Q. People are used to making choices about their lifestyle decisions How are employee benefits providers keeping up with this? A. There have been a lot of changes in Employee Benefit offerings in recent years. It is essential to make sure that the benefits remain competitive and the fees and premiums are appropriate. Personal delivery and service is more important than ever. Members are also demanding more choice to get the benefits which they want. What is suitable for Millennials may not be appropriate for Generation x or wanted by those approaching retirement. ‘Flex’ benefit schemes can meet this demand and be managed and administered via online systems. These have improved significantly in recent years and the costs of implementing and running them have fallen.
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Scrutton Bland opened their new Cambridge office in Milton Hall, Ely Road, Milton, Cambridge on 1 October 2016
Q. Isn’t this expensive for employers and employees? A. Not necessarily. Employees are usually the most expensive and valuable resource that the business ha on its balance sheet. It is therefore important to make sure that they are motivated and understand the benefits on offer. Recruitment and training of new staff can be very expensive and the benefits can sometimes help retain employees. Simple things like providing Total Reward Statements make sure that the employee knows the content of their benefits package. Offering some flexibility on what the employee chooses can ensure that they get things that they want and value, and the benefits spend is not wasted. It’s also important to ensure that the benefits are regularly re-broked and the premiums and costs are competitive. All of these strategies can reduce waste and costs for the employer. Q. You hear about Employee Benefits and rewards in relation to big companies, is it just for large organisations? A. I have advised small family-run businesses and multinational PLCs. The benefits offering must of course be appropriate to the business and its employees and tailored accordingly. The budget and what their competitors offer will also be important. There are some exciting benefits and great ways to package these for employers, whether they have just a handful of employees or many thousands.
Q. How would an employer go about setting up an employee benefits scheme? A. Initially it is important to step back and take stock of what you currently offer. This ‘audit’ of the existing benefits can be a useful exercise in itself. Benefits tend to grow and evolve over time and often people forget who, why or what the benefits are covering. Following this audit it’s then essential to consider what the employer is trying to achieve and what are the motivating factors for your employees. It may be that a simple repackaging and communication of the existing benefits is all that is required or possibly a total restructuring and launch of a new benefits offering. We will always work closely with a business’ HR and finance teams to put together a timetable and project plan when launching any new employee benefits or communication strategy. The key to an effective EB package is identifying what your objectives are and ensuring that they meet the needs of your employees. James joined Scrutton Bland on 1 October and is based in the firm’s new office in Cambridge. With over 28 years’ experience in dealing with Employee Benefits james is well positioned to lead the specialist Employee Benefit, Pensions and Rewards consultancy team who can advise clients on a wide range of services ranging from Flexible Benefits, Protection, Health & Wellbeing, Financial Education, to Pension Consultancy and advice. If you would like to know more or discuss your specific Employee Benefits needs, James can be contacted at james.bolton@scruttonbland.co.uk or by calling 01223 928065 .
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ALL ABOARD THE ORIENTAL EXPRESS Daniel Wright , auctioneer and valuer at local
auction house Reeman Dansie looks at recent developments in his profession.
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Last August Reeman Dansie’s Fine Art and Antiques sale became the focus of national and international collectors and dealers. The object generating all the interest was a small blue and white Chinese dish decorated with dragons. The piece (above) was in less than fine condition, as according to family tradition it had for some years functioned as a dog’s feeding bowl! The surface was punctuated by ancient staple repairs, often a sign of authenticity and suggesting that at some point it was considered important enough to preserve. Most significantly, the ornament included a six-character Chinese dynastic script mark denoting the Ming dynastic reign of Chenghua (1465-1487), and after furious bidding the 30cm dish sold for £90,000. T he recent dramatic growth of the Chinese economy has brought with it a comparable growth in the market for Oriental art including ceramics, Reeman Dansie’s forthcoming bi- monthly Fine Art and Antique sale contains another good selection of Oriental gems. Of particular note is an 18th century pale green jade carving of a mythical beast, estimated at £6,000 - £9,000, whose workmanship demonstrates the ingenuity of the carver who has utilised the natural inclusions in the stone to determine and create the design. Jade is traditionally highly prized, since the density of the material meant that until the Daniel continues “Our saleroom is now a prime hunting ground for the Chinese collectors, and we are aware that masterpieces of Oriental art may still lay undiscovered in the homes of our region. So do please contact us if you have any Oriental pieces for which you’d like an expert opinion, even if they are stapled together!”
carved jade and ivories, bronzes and other items. Interest has been led by wealthy oriental buyers keen to buy back items of their cultural heritage. Many of the best items were originally exported to Europe during the flourishing trade in the 17th and 18th centuries, when artefacts were exported to satisfy the European taste for Oriental works of art. The political leaders of the 1960s Chinese Cultural Revolution regarded any attention and appreciation of China’s past artistic achievements as regressive, and the period saw the systematic widespread destruction of huge quantities of antiques and works of art in both public and private collections. The recent collecting spree is going some way to redress these losses, with an almost entirely one-way traffic of Chinese works of art back into the country. The Chinese public attach great honour to the purchasers’ transactions, seeing it as restoring ownership of their country’s heritage. This is not to say that Chinese collectors are not also looking for other ways to spend their new-found wealth and the country’s buyers now dominate the international auctions for vintage wine, whisky and prestigious wristwatches.
Reeman Dansie salerooms are located at 8 Wyncolls Road, Severalls Business Park, Colchester CO4 9HU tel 01206 754754 email auctions@reemandansie.com www.reemandansie.com The Scrutton Bland insurance team provide insurance broking services for all types of household policy, including arranging specialist cover for art, antiques and jewellery. If you have any questions about whether your valuables are covered, or simply want to find out more about our insurance services contact Natasha Sadler on 01206 838400 or natasha.sadler@ scruttonbland.co.uk
advent of modern power tools, working the semi-precious stone was an arduous process and a palm-sized carving such as this could be the result of months of work. “It is almost certain that the buyer of such a piece will be Chinese and will probably never have heard of Reeman Dansie Auctioneers or even Colchester,” says Daniel. “Our auctions are conducted online, with all lots carefully catalogued and illustrated with multiple high-resolution images ensuring that buyers from all over the world can make informed decisions about lots which they are considering buying, without ever needing to attend our saleroom. They can then bid online live during the auction. Nowadays when auctioneering I might sell 50% or more of the lots to online bidders, and whilst we may have a full to bursting saleroom of potential buyers, we may also have up to 1500 online bidders registered at any one time for our sales, spread across the globe, ensuring that we achieve excellent hammer prices for our clients.”
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TAX AND TECHNOLOGY AN INEVITABLE PARTNERSHIP Tax Directors Faye Howard and Graham Doubtfire look at the advances in technology which are helping Scrutton Bland stay ahead of the curve in electronic tax reporting.
Then and now Can you remember what you were doing this time ten years ago? You probably just used your mobile phone to make calls. And in the tax world, you may have been contemplating that new-fangled self-assessment way of filling in your tax return. undergo another cultural shift as the government’s ‘Making Tax Digital’ initiative aims to get all businesses and self-assessing individuals submit all tax data electronically rather than on paper. And mobile phones? Well you probably have text messages, photos, emails, lots of social media, plus banking and business apps installed on your phone, as well as possibly the odd Pokémon Go game that you’re keeping quiet about. Getting your head in the clouds The government initiative Making Tax Digital aims to get all business and self-assessed private individuals to send their tax returns electronically by 2018. However the electronic tax compliance process will be much easier for Scrutton Bland business clients who have signed up to SBLive, a cloud-based accountancy package launched six months ago. SBLive can provide clients with live information regarding their business’, payment notifications, invoice creation and expense processing as well as a host of other features designed to make managing a business’ finances faster and easier. Using Cloud technology, today’s business owners can access live information from smartphones, a laptopor tablet, which obviously creates much greater flexibility to run your business from work, home or wherever they happen to be. Fast forward ten years and the tax return process is about to
SBLive and digital tax accounts The beauty of SBLive is that it places our clients ahead of the digital tax learning curve. Scrutton Bland offer training courses and one-to-one support for all SBLive clients so everyone feels confident and in control of the new system. And when other businesses are worrying about the 2018 electronic tax system deadlines, SBLive clients can relax knowing that their software will seamlessly transition to the electronic tax compliance requirements. Better business planning The other big advantage for tax planning is that the management information provided through SBLive is available simultaneously to both client and adviser. So, for example, if your business has a particularly good month then your adviser can get a better understanding of the tax liabilities you are likely to incur and in turn can suggest solutions to mitigate the tax liabilities well in advance of your tax bill. This has huge planning implications, since it allows Scrutton Bland’s tax advisers to proactively identify issues with you as they happen, rather than waiting until after the event to collate the figures. Taking a practical example, it means that if your business sees a rise in income in December, your tax adviser can look at your cash flow to start planning ahead to suggest income tax liability solutions, instead of having to respond reactively at the end of the tax year.
Tax and the Private Client If you would benefit from individual tax planning then it may be worth considering Scrutton Bland’s Private Client Service. This facility draws on the expertise of the professional advisers across the whole firm, who work together to create bespoke financial planning, tax and insurance advice that is specifically tailored to your own needs. Think of it as tax planning taken to the next level, and for individuals with large or complex fiscal portfolios it is an efficient and cost-effective way of ensuring that their assets are being managed at the highest level, both from a tax and investment perspective.
To find out more about the Private Client Service contact Graham doubtfire on 01206 838400 graham.doubtfire@ scruttonbland.co.uk or Faye Howard on 01473 267000 faye. howard@scruttonbland.co.uk
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To learn about SBLive go to www.sblive.co.uk email info@sblive.co.uk tel 0333 234 7144
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IS EVERYTHING
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Many people think that the art of photography is simple to master. The advent of smartphones makes it easier than ever before to snap a picture and upload it to your website or social media in seconds. So why isn’t that good enough for your business? And why don’t the pictures you take on your phone come out quite as well as the ones the professionals take? A DVISER spoke to commercial photographer Stephen Belcher about the best ways of taking photographs to improve the What are the main points that a business needs to think about when working with a photographer? I always tell businesses that the main point So what happens on a commercial shoot? If you watched a video of a photo shoot you would see lots of people moving in and out of shot, perhaps hundreds of times over the course of a day, moving the props and lighting around and adjusting everything,
image of your business. Stephen, who lives in Bures, Suffolk, has studios in London and Suffolk and works with a number of big name clients including The Conran Shop, Heal’s furniture, Pure radios and Twinings tea as well as a portfolio of East Anglian clients including Titchmarsh & Goodwin, Made by the Forge and Andrew’s Butchers in Hadleigh. How do you approach a new job? It’s very important to have a proper consultation with the client so that both of us are clear about what’s required. I familiarise myself with whatever is being photographed, and discuss the location and budget. It’s vital to understand what the client wants to get out of the shoot. Is it a seasonal campaign or a suite of photographs that they will use for years to come? Often I will draw diagrams to show them ideas, as it’s easier to explain a concept with a picture.
of the photograph is that it has to hold the viewer’s attention. That is true both for the printed and digital page. You have a matter of seconds (if that!) to engage with the user, and to hold their focus on that page. A good strong image is so important. Remember that lots of people view websites on their phones, so you need pictures that can reduce to thumbnail size and still be identifiable. It’s a good idea for businesses to review their images regularly to elevate themselves above their competitors. When would you say it’s acceptable to use a picture taken with your phone? ‘Point and click’ phone pictures are great for social media when you’re reporting where you are, or if you’ve seen something funny or interesting that your friends might like. But the quality will not be good enough for commercial use. Professional pictures take hours to set up and shoot. They are then edited which often means hours of painstaking correction work with the latest software.
sometimes by millimetres. If the budget allows there will be stylists and lighting technicians on the team who are experts in setting up the location and creating the mood. It’s all about getting the product photographed in the very best conditions. What’s best for showing off a product: studio or location? Both have their place. If you are creating a campaign for hundreds of products – for example an online sale – then cut outs against a white background might be best. However there is strong evidence that photography showing people enjoying a product in an aspirational setting will maximise sales. One of my furniture clients had always used technical studio shots, but I persuaded them to try some lifestyle pictures and sales went up by 20%. That’s an extreme example, but lifestyle images really do work!
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