Adviser Spring 2020

Spring 2020

Digital Predictions - developments in the world of finance

Common pitfalls in commercial property transactions The relentless rise in Professional Indemnity premiums Why you invest the way you do 0330 058 6559


Managing your finances and looking after your savings can be complex. If you need independent financial planning advice from an adviser you can trust, we are here to help. From investment strategies and growing your wealth to inheritance tax and preparing for retirement, our qualified advisers can support you at every step of the way. BECAUSE WE ALL NEED SOMEONE WE CAN RELY ON

0330 058 6559


Scrutton Bland Financial Services Ltd is authorised and regulated by the Financial Conduct Authority. Our FCA registered number is 209451. 0519/01/2020/MKTG

Spring 2020

WHO WE ARE Scrutton Bland Group provide a range of financial services and professional advice to both business and private clients. Our philosophy is simple, we believe in delivering clear, professional advice and are committed to finding the most effective solution for our clients.

CONTENTS Digital Predictions for financial services.�������������� 4 The Relentless Rise of Professional Indemnity Premiums���������������������������������������������������� 8 Common pitfalls in commercial property transactions ������������������������������������������������10 Chartering a great service - for the sixth year running ���������������������������������������12 Farm Sustainability from Data ������������������������������13 Keeping ahead of the pension scammers ��������16 Energy Efficiency ���������������������������������������������������������18 Up and Running �����������������������������������������������������������20 Moving Water�����������������������������������������������������������������23 How much is my data worth? �������������������������������26 Trust and the financial adviser �����������������������������28 Setting up a trust fund ���������������������������������������������30 IR35 is Changing ����������������������������������������������������������32 Making Tax Digital �������������������������������������������������������34 Mr 10%������������������������������������������������������������������������������36 Listening to local businesses�����������������������������������38 Behavioural Finance �������������������������������������������������� 40 What we do ��������������������������������������������������������������������42

820 The Crescent Colchester Business Park Colchester Essex CO4 9YQ 01206 838400

Fitzroy House Crown Street Ipswich Suffolk IP1 3LG 01473 267000

Chancery House Victoria Road, Diss Norfolk IP22 4HZ 01379 643444

Milton Hall Ely Road, Milton

Cambridge CB24 6WZ 01223 928065

Scrutton Bland Financial Services Limited is authorised and regulated by the Financial Conduct Authority, our registered number 209451. Scrutton Bland Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority, our registered number 828934.

0330 058 6559


A B O U T U S | S C R U T T O N B L A N D | 3

Digital Predictions for financial services Scrutton Bland predict what

will be big in the coming months

An acceleration in small businesses adopting cloud technology Cloud adoption rates have been growing fast so this may seem like an obvious prediction. But we think 2020 will be a big year for businesses moving their entire functionality to the cloud. The requirement for digital links from April 2020 as part of HMRC’s Making Tax Digital roll out compels businesses to link their systems. For micro businesses where everything is run from one programme, such as Xero, this is not a problem; most businesses of this size affected by Making Tax Digital have probably already moved to the cloud. The businesses that are mainly affected are those that operate many different systems and currently copy and paste information from one system to the other. Combine this “stick” with the “carrot” of efficiency gains, better reporting and a single source of data verification, and small to medium sized businesses are starting to bite the bullet and make the switch. In reality we don’t expect to see penalties for a lack of digital links to start hitting businesses until the end of 2020, as HMRC will only be aware that these aren’t in place when an onsite investigation is carried out, but we always advise clients to do this as you never know when an investigation may happen.

Predicting the future is always challenging, but Simon Pinion and Ryan Pearcy in the Systems Advisory Team at Scrutton Bland have attempted to do just that for the coming months. Here are a few of their expectations for the world of digital finance:

4 | S C R U T T O N B L A N D | D I G I T A L A C C O U N T I N G

Receipt capture upon payment Digital receipt capture has become

The benefits of open banking Open banking launched in 2018 but because the banks needed more time to finish building their architecture, a key part of the legislation, the Payment Services Directors 2 (PSD2), Strong Customer Authentication, was delayed until 14 March 2020. Open banking affects the way in which bank data is shared with other entities, via approved connections, and so affects most bank feeds and the applications that use these. Once it comes into force, consumers will be able to use a raft of new tools that provide services tied to their bank data. We think that this will be the year that businesses start using finance software to generate, manage and complete payments, further removing them from interactions with their bank. In addition, we also expect to see a raft of new tools that enable security checks of your finances and pre-authorisation (e.g. for anti money laundering) purely from enabling a connection into your bank data.

Application Programming Interface (API) link reduction and general API standards The last few years have seen huge improvements in software connectivity, enabling automation for businesses and individuals. This has all been enabled by software companies creating API connections into their data and processes to which other software connections and components need to connect. Currently each connection still has to be individually built and maintained, which requires time and resource. In the coming months we expect there to be a move towards a universal standard for API builds, which will ultimately speed up connections and lead to automation in this area. There is already an ISO standard for financial services API, and a standardised API for banking. We expect this to expand with a global standard for APIs, which ultimately will lead to greater integration, automation, security and functionality for consumers.

commonplace in finance systems with some businesses, such as Receipt Bank, creating solutions that streamline systems for their clients. The UK adoption of this has been strong and is generally the next step of system deployment following the implementation of a digital financial core (such as Xero). These systems still generally require some manual input, such as taking a picture, forwarding an email, or even requiring the customer to manually send the invoice across. We believe that this will change in the near future as systems integrations and automation enable digital receipt transfer to happen from simply making a payment. Imagine tapping to pay for a train ticket and this receipt is instantly available on your phone. Well, luckily you don’t need to imagine this, as Flux (www. already does this via Monzo and Starling banks and it will shortly be available to Barclays customers. We are predicting that this will expand into the business sector as receipt capture systems, such as Receipt Bank, or financial systems such as Xero, look to integrate with Flux and embed their capture system into their processes.

D I G I T A L A C C O U N T I N G | S C R U T T O N B L A N D | 5

Virtual Reality becomes practical Virtual Reality (VR) is already big in the world of gaming and has been used in some industries such as house selling, but we predict it will quickly expand further into real world applications in a big way. As VR technology has developed we have seen big improvements in the quality of visuals, lag time, nausea reduction and real time 360° cameras. This enables the application of VR software into areas such as medicine, and we expect this to expand. We also predict this will move into user experience, with VR events becoming possible (i.e. putting on a headset at home and integrating into the crowd at an event). We also predict VR will become part of the expansion of immersive fitness applications (such as Zwift and Peloton). With so much changing in the digital landscape it is imperative to talk to independent professional advisers in this field. At Scrutton Bland we value the importance of financial technology solutions and have created our System Advisory Service to ensure our business clients can stay ahead in this field.

And here are a few general digital predictions as well: Finally, foldable screens! 2019 was the year of failure for foldable screens, but as multiple phone companies plan to release new devices in 2020 we think this will be the year it becomes mainstream. At first glance, a foldable screen may seem like a gimmick, but the tech ultimately means you only need one device where people currently have phones and tablets. A phone that acts as a tablet and a laptop (with keyboard) is the ultimate goal, but this is unlikely to happen in 2020, and we don’t expect to see flexible screens, such as curved or roller screens this year. But it is the tech solutions in 2020 that will enable this area of technology to boom.

To find out more about our Systems Advisory Service or to speak to one of the team about your software structure and applications please email or call 0330 058 6559 .

Simon Pinion

Ryan Peacy

6 | S C R U T T O N B L A N D | D I G I T A L A C C O U N T I N G


Knowing whether you have the right systems and processes in place to keep your business fit can be difficult, particularly when you need to invest in software. Our Systems Advisory Service has been designed to support you:

Reduce costs on systems you don’t need

Save time wading through the maze of software options

Identify where you can streamline your processes

Outsource your system reviews, so you can focus on what you do best

Having a team around you who can ensure you have the right software in place gives you the peace of mind in knowing that you have the processes in place to meet your compliance requirements and support your business goals. Find out more about our service by contacting us at

0330 058 6559



The Relentless Rise of Professional Indemnity Premiums

Professional Indemnity (PI) insurance is a vital piece of business insurance for anyone who provides a professional service, gives advice, looks after data, or is responsible for Professional Indemnity in an organisation. However, recent months have seen insurance premiums for PI increase, as corporate business failures and natural disasters have pushed up the volume and size of claims. How PI Insurance protects a business The reason why PI is so important is that it The harder the market, the higher the premiums

The current market Over the past few years there has been a sharp increase in large scale ‘disasters’ which have resulted in significant insurance claims. Events like the collapse of construction giant Carillion, and the flammable cladding exposures leading to the Grenfell fire tragedy have triggered a number of large legal and financial claims which are still going on and which will continue to impact the financial markets for years to come. Added to which are the rising number of claims in an increasingly litigious society, which have all led a hardened PI insurance market within the sector.

provides protections for your business if you are found to be negligent or your products, advice or services contain any errors or omissions and you are then sued. PI insurance may be able to help you cover legal costs or rectify a mistake in your work that has caused the claim. Many professional bodies require a business to hold PI insurance before they can be considered as a member – these include contractors in the construction, IT, financial, and energy sectors. It is now, for example, very common for a construction contract not to go ahead until the contractor shows they have a specific level of PI insurance, so that all parties are protected by the insurer.

A ‘hard market’ means that demand for PI is the same or higher, however PI supply (from insurers) is low, and getting lower, especially given shrinking PI capacity at Lloyds. As a result, premiums are rising, and there may also be additional restrictions on your existing policy, and tougher criteria to meet in order to secure cover for your business. Further to this, many experts in the insurance industry are predicting that the PI market will continue to deteriorate in the coming months, making it increasingly difficult for many firms to secure adequate PI cover. As a result, it’s crucial for businesses to take appropriate actions to limit the impact of the hardened PI market on their cover options. The good news is that PI insurance is tax deductible, so speak to your tax adviser for more information.

8 | S C R U T T O N B L A N D | I N S U R A N C E

What businesses can expect from a hard PI market The reduced appetite and capacity within the insurance industry for PI cover means that those insurers still in the market are now implementing more complex procedures to limit their exposure and reduce the risk of having to pay out costly claim settlements. These can include: • Higher premiums – having to compensate clients for larger and more frequent claims means that many insurers have increased their premiums; • Cover restrictions – there may now be additional restrictions or even exclusions on certain clauses in policy renewals, such as limiting cover, and an increase in the cost of higher levels of cover; • Extra information – businesses should expect to have to supply more detailed information about their operations and supply chain processes. There will be more of an emphasis on risk management and evidence of robust frameworks when it comes to outsourcing, supply chains and third-party risks.

Getting the best PI cover The PI market may be difficult at the moment, but there are a number of ways that businesses can ensure they create the most advantageous situation for themselves: Ensure your risk management processes are robust. Your broker will need to see that you have properly documented risk management frameworks, so make sure you keep records of these practices to show them when it’s time to renew your cover. Specifically, your risk management documentation should highlight:

Robust internal practices and standards to mitigate risks Secure effective contracts. The condition of the PI market means new and renewed contracts need to be watertight. Don’t rush your supplier agreements, take the time to work with contractors and third parties to establish a detailed contractual agreement which clearly outlines the responsibilities for both parties. Remember to keep a record of these contractual practices as part of your risk management process evidence for your insurer. Consult an independent and professional broker. An experienced and authorised broker will be able to guide you through the level of cover and policy options that your organisation needs. Furthermore, they are able to look at the whole of the market (rather than a limited range of choices) to find the most cost effective option for you. Scrutton Bland’s insurance advisers have extensive experience in PI and other business insurances. For more information on insurance solutions for your business contact Tim Mulley at or call 0330 058 6559 .

• Evidence of efficient cashflow processes and strong profit margins

• Effective supply chain management. This should include data supporting good relationships with suppliers, and evidence of due diligence relating to supply chain risks and liability agreements

T B C | S C R U T T O N B L A N D | 9 I N S U R A N C E

Common pitfalls in commercial property transactions

1 0 | S C R U T T O N B L A N D | C O M M E R C I A L P R O P E R T Y

Investing in commercial property is a popular option for many people wishing to diversify their property portfolio. Leases are often longer than on domestic properties, and yields can be higher than on a residential property. However, there are a number of financial pitfalls for the investor: Buying a property on instinct Finding an attractive and affordable property is exciting, but don’t be tempted to rush in with an offer. Decisions needs to be made based on the proposed purpose of the property, how it will suit a tenant’s needs and financial goals, and factors such as its location and condition. There may be pressure on you to get the transaction over the line as soon as possible, but compromising on due diligence will almost certainly cause problems later on. Forgetting to add in all additional costs There are numerous costs which need to be factored into the purchase. Ensure they have been researched and budgeted for as overlooked or miscalculated costs can quickly send the project over budget. Typical costs to build into a budget include: • Professional fees • Construction • Stamp Duty Land Tax • Operational and maintenance • Repairs and renovations • Environmental compliance certifications and checks • Waste management • VAT • Business rates during void periods VAT Commercial property transactions are one of the most complex areas of taxation and one where the services of a professional tax adviser is vital. There may be underlying tax issues with the building, and it is important to understand these as part of the due diligence process. For example, find out if there is an ‘option to tax’ on the property in place. This would most likely have been elected by the first occupier of the property and would have allowed the reclaim of VAT on the initial build cost.

Where an option to tax is in place, VAT will be chargeable on the purchase price – you can recover such VAT by putting in place your own option to tax; it will still have cashflow implications and it is important to remember the Stamp Duty Land Tax will be calculated on the VAT inclusive amount. Where you make your own option to tax you will be able to recover the VAT charged on the sale and on any works you undertake to the property, but you must then charge VAT on the rent, which in turn may make your property less attractive, particularly to tenants that will not be registered for VAT (for example, charities, educational bodies, medical/care businesses and financial services) Existing tenants Due diligence should also uncover any issues with tenancy agreements and the length of time an existing tenant may have on their lease. Obviously if the lease has a long time to run then your options for making changes are limited accordingly. Commercial properties are more susceptible to economic change so it is a good idea to ensure the building and tenants are flexible enough to adapt should the need arise. Debt Being able to service debt is a key requirement of commercial property transactions, and banks will secure debt against the property in order to recoup the money. If a tenant is already in place in the property then the income stream may be more secure, although tenancies may not always be desirable. Debt management has become an increasingly common problem on the high street as retailers struggle to survive, and even after a business has gone under (such as BHS a few years ago) their properties will often remain empty for some time. Ownership Talk to your legal and financial advisers to consider the most appropriate means of ownership. This could be through a limited company, a pension fund or as an individual. Ownership by an individual will give rise to a personal tax liability each year as any income in excess of the interest elements of mortgage repayments (if any) will be subject to the relevant rates of income tax.

Holdings within a limited company will be subject to a lower rate of Corporation Tax (typically 19%), however other taxes such as Stamp Duty Land Tax and Capital Gains Tax will need consideration if existing properties owned personally are to be moved into a limited company. Ownership through a pension scheme is a popular option and the transfer of an existing commercial property to a pension scheme can be attractive as the income is ring-fenced within the pension fund and the income only taxable on the recipient of the fund when the pension is drawn down. If there are any borrowings secured on the property this can cause issues in transferring to a pension fund and lenders may seek alternative means of security against the existing debt. Failing to consider your future intentions To go back to the first point made in this article – failing to think about your ultimate objective for the property will impair your chances of making a successful return on the project. Is it a long- or short-term venture? Is it a one-off sale? Professionals such as solicitors and financial advisers will help by flagging up possible pitfalls and helping you with due diligence and negotiating your way through documentation. The days are long gone when everything can be done on a handshake, so make sure you listen, consult and communicate to determine the most effective course of action. Scrutton Bland have over a hundred years’ experience in working with clients on their business property negotiations, and have specialists in areas such as accountancy, Stamp Duty Land Tax and other areas of tax legislation. For more information contact Ben Cussons , Business Advisory Manager by emailing or calling 0330 058 6559 .

P E R S O N A L F I N A N C E | S C R U T T O N B L A N D | 1 1 C O M M C I A L P R O P E R T Y

Chartering a great service - for the sixth year running

Having a Charter mark from your professional body is the ultimate accolade. It indicates that your organisation has the attained the highest levels of proficiency and quality control in your sector, and that these criteria have been independently assessed. So it was a great pleasure for the team to learn that they had been recently awarded the prestigious Chartered status for financial planning services, for the sixth year running.

The Charter award for corporate financial services is conferred by the Chartered Insurance Institute (CII) who are empowered by the Privy Council and is designed to ensure that only the UK’s premier Chartered firms qualify for Chartered status. The award is conferred on an annual basis and is designed to measure and assess a list of defined characteristics that according to the CII “articulate professionalism” in this field. They include providing evidence for: • Corporate governance and systems that exert appropriate levels of control over the running of the business including risk management, maintaining adequate capital, record-keeping, training and competency programmes

Encouragement of professional standards for employees through support for technical training and the development and encouragement of appropriate behaviour. Grant Buchanan, Financial Planning Partner at Scrutton Bland summarised what this award means for his team: “Having corporate Chartered status is the gold standard award for firms of financial planners. It confirms that we have satisfied rigorous qualification criteria such as retaining highly-qualified staff who are able to give independent financial advice across the board, and not just in one area such as pensions or Inheritance Tax. Using a Chartered firm means that our clients can be absolutely confident that they will be looked after by professionals who are committed to the highest standards of service.” Kurt Walsh, Compliance Officer for Scrutton Bland commented “I’m especially pleased about this year’s renewal as the CII criteria for corporate Chartered status has increased considerably over the last twelve months.”

• A culture that encourages the fair treatment of customers

1 2 | S C R U T T O N B L A N D | I N D E P E N D E N T F I N A N C I A L P L A N N I N G

Farm Sustainability from Data

How data in a farm enterprise can help you, your advisers and suppliers collaborate to get you fit for the future. The past year has seen a number of changes impacting the political, social, economic and technological challenges facing the farming industry. We now have a government with a mandate to push through a programme of legislation, the major component of which is Brexit. The outcome of leaving the EU is still not known as trade agreements and legislation are still to be negotiated, and of course this will have a significant impact on farming businesses and the markets for their goods.


B U S I N E S S P R O F I L E | S C R U T T O N B L A N D | 1 3

Farm Sustainability from Data

T here is also the issue of climate change which has gained momentum in the past twelve months and is an agenda that the farming industry must address. More recently there has been a focus on farming practice and the relationship between agriculture and climate change with documentaries such as Apocalypse Cow and a millennial generation adept at social media who are broadcasting their advocacy of veganism and the merits of plant-based diets. This challenge to public perception will need to be met in conjunction with the requirements of the Agricultural Bill which was recently presented to Parliament. Theresa Villioers, former Environment Secretary said at the time: “This is one of the most important environmental reforms for many years, rewarding farmers for the work they do to safeguard our environment and helping us meet crucial goals on climate change and protecting nature and biodiversity.” An obvious focus of this reform will be to measure and appraise the natural capital of a farm or estate. It will be the management and appraisal of this capital that can maximise opportunities for farmers in the future. It may also present a challenge to accountants such as Scrutton Bland in the way these measurements are disclosed on a farm balance sheet. Cloud accounting can be effective for farming enterprises needing to capture financial insights about their business and can offer scope for integration and capture of data from the various sources of data to enhance and simplify the way natural capital is measured and presented. The cloud is now a concept understood by most – it is essentially a platform of servers not on (your) site which holds your data and permits you to access those records remotely from your desktop, tablet or smartphone. A key benefit of the cloud is to facilitate collaboration through remote access, since with the data owner’s permission, their accountants, consultants, bankers and other advisers can all access the information.

Cloud technology can make processes more efficient and evolves with your business to integrate as required. The catalyst for cloud technology in financial systems has been Making Tax Digital (MTD), legislation with which most farming businesses should now be compliant. Of course, the original intention of MTD was for all taxes to be submitted digitally. However the timescale for this was derailed by Brexit and only VAT has been mandatory to date. In 2017, the Government stated that they would not mandate other taxes before April 2020 and , and further clarity is expected. As a firm advising clients on accounting systems, we have recommended that a cloud- based accounting system is devised which is fully compliant with MTD, so for example the business can readily submit a quarterly submission of a statement of profit and loss. It is obviously important that these submissions are accurate, and that valuations are as exact as possible, with a system to measure and track growing crops and livestock which can then be integrated into the farm’s accounts system. There are some established platforms to achieve this, such as Gatekeeper, Geofolia and Muddy Boots which offer integration into the cloud. This data migration has enabled new software to disrupt the status quo, and one platform that has achieved this is Xero software, which is Scrutton Bland’s preferred cloud accounting package. Xero links seamlessly with your bank, and a bank feed pulls data from your bank account into your business software to reconcile against payments and invoices entered. This can reduce time spent processing data. Receipt Bank is another effective piece of software which captures a digital image of an invoice from a scan, photo or email which can then be read and processed within other accounting software such as Xero. The hard copy can be thrown away since a digital copy is retained behind the entry in Xero. This makes tracking and understanding costs easier. There are alternatives such as AutoEntry and Hubdoc (which is now also part of Xero).

Receipt Bank and Xero are the beginning of something called an App Stack: a multiple app system which enables more than one application to work together through integration and sharing of data. With the needs of our agricultural community in mind, we have developed a core App Stack for farming clients which also adds a programme called Figured that takes data from Xero and provides enhanced financial reporting and forecasting. We are pleased to be at the centre of the agricultural accounting resource on Xero’s website. Interestingly, Xero has now developed a designated resource for agricultural accounting on their website, which I would suggest is indicative of the opportunity they perceive exists in providing a progressive accounting platform for farmers. Scrutton Bland don’t work exclusively with Xero and it is interesting to see how other providers are adapting. Farmplan has developed a partnership with Receipt Bank and AutoEntry to enhance data capture and they have recently announced a cloud version of software becoming available in 2020. Landmark have also announced an association with AutoEntry and Receipt Bank, and last year released bank- matching functionality through importation of bank transactions. Other apps may complement and enhance a cloud based solution for farm businesses. Vend is cloud point-of-sale software which could be deployed in a farm shop or retail enterprise. Re-leased and Arthur Online are property management software solutions which could assist with the management of a property portfolio. While Insightly is a customer relationship management software to assist with retention of customer details for example to market a holiday letting enterprise. It is clear that cloud-based financial systems are the way forward for progressive business owners. Xero and similar programmes have fuelled the development of a plethora of software applications that can integrate to create a cloud eco-system to enable data to be shared, and to enhance visibility on performance. A system can be devised in the cloud which can capture data and, theoretically, drive efficiency in the automation of process. It is important to understand that this may not necessarily reduce the cost of administration, but it will add value by increasing the capacity of time and resource spent on administration to analyse the data.

1 4 | S C R U T T O N B L A N D | A C C O U N T I N G F O R A G R I C U L T U R E

Practical examples using Xero and Figured:

• PRODUCTION COSTS. A core function of Figured is crop trackers to measure margin by enabling input costs to be allocated against a budget by crop or by field. This can provide insights into the cost of production and derive a crop breakeven price. There is a warehouse function to account for inputs purchased not applied. • ANNUAL BUDGETING . An annual budget can be set and locked. Integration with Xero then pulls through actual data and a budget can then be set as a rolling forecast for the financial year showing the actual plus budget for an outturn. This helps give visibility on funding and assists pre-year end planning to consider, for example, investments to secure capital allowances, or other strategies to mitigate tax such as pension contributions. • CHANGING CIRCUMSTANCES. There is also a useful scenario planning tool which can take the financial data and enable parameters to be changed in order to assess affordability of debt or sensitivity to subsidy reform for example. Farming has had many effective data capture processes over the centuries, enabling the decisions of past generations of agricultural pioneers to provide opportunities for their descendants. As we face the challenges of farming in our current era, it is up to us to harness the best of today’s innovative solutions to maximise the benefits for our own communities whilst ensuring our land and what it produces remains an asset that is sustainable and enduring for the next generation.

Xero is becoming one of the most popular cloud based business finance solutions – globally. It is perfect for agri businesses as it can seamlessly integrate with agri specific apps which provide farmers with better oversights for livestock quantity and value. It also allows you to create and send personalised online quotes from wherever you are and collaborate on business information in real time with your accountant or bookkeeper. Sync Xero with third-party agriculture apps for crop and livestock tracking and more.

Figured is a complete online livestock crop and production tracking, farm budgeting and forecasting tool that gives you accurate data in one place, in real time.

For more information about cloud accounting for agricultural businesses contact Nick Banks on or call 0330 058 6559 .

Keep on top of your expenses with one tap. Just photograph your receipts and Receipt Bank will extract the data and post in directly into your accounts.

A C C O U N T I N G F O R A G R I C U L T U R E | S C R U T T O N B L A N D | 1 5

Keeping ahead of the pension scammers In 2019 there were 3.2 million victims of financial fraud, and the Financial Conduct Authority (FCA) reported that the average loss was £91,000. The FCA and the Pensions Regulator (TPR) have been working to raise awareness of pension scams in pension holders aged 45-65, the group identified as being most at risk, as the latest research from the FCA suggests that 42% of pension savers – or over five million people in the UK – could be at risk from the scammers.

1 6 | S C R U T T O N B L A N D | D I G I T A L A D V I S O R Y P E R S O N A L F I N A N C E

Top tips on how to spot a scam COLD CALLERS. This is the number one method for scammers to contact their potential victims. Despite government legislation banning cold calling on pensions, and a possible £500K fine, sadly this is still going on. If you are phoned, sent a text message or even have someone call at your door offering a ‘free pension review’ and you don’t recognise the company, or their credentials aren’t watertight, then hang up, or don’t engage with them. Thankfully the FCA also report that 95% of unexpected pension offers are rejected. TOO GOOD TO BE TRUE. Use your common sense. If the investment scheme you are shown is offering ‘guaranteed’ very high returns, provided you sign up within 24 hours then walk away. Take your time to check the details of the deal, and don’t be pressurised into making a hasty decision. ASK FOR THEIR AUTHORISATION. If your financial adviser only has a mobile phone, a PO box number and no office address, alarm bells should ring. Any reputable adviser will be registered with the Financial Conduct Authority (FCA), and you can look at their register to check that the firm you are dealing with is authorised. If something goes wrong, and the firm isn’t authorised by the FCA then you are unlikely to get your money back and you won’t have access to the Financial Services Compensation Scheme. BEWARE OF ‘EXCITING’ INVESTMENT OPPORTUNITIES. Scammers will offer to invest your pension in what may sound like state- of-the-art schemes, in things like biofuels, renewable energy bonds or overseas property. These may sound persuasive and exciting but these ‘amazing deals’ are rarely what they say they are. DON’T ALLOW REMOTE ACCESS. There are some horrendous accounts of people being contacted by fraudsters claiming to be from large organisations such as ‘BT Openreach’ who then get permission to install ‘security software’ on their computer or phone. THEY’RE NOT YOUR FRIEND. Scammers are becoming increasingly sophisticated in the way that they use psychological techniques to build up a rapport with their victim in order to influence their behaviour. If in doubt then contact their company independently to check, but never use the number you’ve been given by the people wanting to install the software.

Ways to avoid a scam PROTECT YOUR PERSONAL DETAILS. Financial services firms such as Scrutton Bland will have complex and secure authentication systems to protect your data and any financial transactions. Don’t give bank details over the phone in a public place or where you can be overheard. CHECK THE ACCOUNT YOU ARE PAYING INTO BEFORE TRANSFERRING CASH. There have been several instances of solicitors or estate agents email accounts being hacked, allowing the scammers to change account details, so clients then sent large sums such as house deposits straight to the criminals. LOOK AT THE WEB ADDRESS. Internet addresses starting http aren’t safe, always use ones that start https and have a padlock symbol to ensure that the page is secure. If you are being asked to click on a link then hover your mouse over the link to check the address. If it looks odd – particularly if the end of the link doesn’t seem right – then don’t go any further. GET IMPARTIAL ADVICE FROM AN AUTHORISED SOURCE. There is free information at the Government website and The Pensions Advisory Service. If you need advice on investments and pensions then always use an authorised and independent financial adviser who will have had to undergo stringent checks to ensure the advice they give is accurate, relevant and impartial. Most people tell themselves that they are clever enough to spot the signs of a pension scammer and that this would never happen to them. However the figures that are reported suggest that this is a real problem. Victims are left devastated by what has happened to them, so make sure that you and your loved ones get good advice to protect your pension pot.

For more information on pensions and saving for retirement contact James Wright at or call 0330 058 6559 .

P E R S O N A L F I N A N C E | S C R U T T O N B L A N D | 1 7

Energy Efficiency

Are you compliant?

Streamlined Energy and Carbon Reporting (or SECR) is the name for the government’s programme of legislation relating to energy, carbon reporting and taxation.

Do I need to comply? UK organisations that fall into the scope for SECR are quoted companies, or large unquoted businesses and LLPs, that fulfill at least two of the following three conditions:

What will I need to do? SECR requires that companies meeting this criteria include the following information for the financial year in their annual director’s report:

SECR replaces the Carbon Reduction Efficiency Scheme (CRC) which ended in April 2019, with SECR replacing the mandatory reporting, and CCL replacing the taxation element. It will affect around 11,900 large UK companies, with approximately 1,100 located in East Anglia. As part of the government’s Clean Growth Strategy, the SECR framework is one of a range of policies designed to support business and industry in improving their energy productivity by at least 20% by 2030.

• at least 250 employees

• energy consumption (electricity, gas, transport; carbon emissions (scope 1 & 2)

• an annual turnover greater than £36m

• emissions intensity ratio (such as tCO2e/£ turnover)

• an annual balance sheet total greater than £18m.

• energy efficiency narrative

The above conditions apply to the financial year in which they are reporting.

• the methodology used for reporting

Public Sector organisations are exempt, and users of less than 40,000 kWh per year are also out of scope.

The reporting period is based on the company’s financial year to align with existing financial and strategic reporting. Reporting is at Group level, but can exclude holdings that do not meet the criteria.

1 8 | S C R U T T O N B L A N D | E N E R G Y S E R V I C E S

Businesses within scope of SECR will be required to provide a narrative report on any energy efficiency action, or no action, taken during the financial year being reported. When and how? Companies within scope need to report in line with the SECR framework in their directors’ report or corresponding section within their annual report, for financial years beginning on or after 1 April 2019. Unlike ESOS (the Energy Savings Opportunity Scheme), SECR does not require independent verification assurance, though specialist advice may be prudent. Enforcement will be managed by the new Auditing, Reporting and Governance Authority (ARGA).

The above is a summary of the SECR requirements. For more details please speak with Scrutton Bland or contact Paul Copsey at Auditel, who provide energy management services and deliver SECR & ESOS compliance for businesses and charities throughout East Anglia. Paul can be contacted on 01394 338655 , or or visit

Scrutton Bland’s tax advisers have extensive experience in tax advice relating to changing legislation, and can call on the professional expertise of our insurance, financial planning, and accountancy teams to provide a joined-up approach to business advice. To get in touch please email or call 0330 058 6559 .

E N E R G Y S E R V I C E S | S C R U T T O N B L A N D | 1 9

2 0 | S C R U T T O N B L A N D | B U S I N E S S P R O F I L E

Up and Running

For over 20 years, Suffolk-based Enertor have been helping elite athletes to stay injury free - including Premier League footballers, Tour de France winners, and Olympic champions including the legendary Usain Bolt. ADVISER spoke to their CEO, Nick Beresford, about the technology behind their unique insoles, and the way the company has brought together scientific developments and marketing to create a successful brand.

There are lots of insoles on the market. What makes yours different? Many years of research and development have helped us perfect the technology used to create our insoles. What makes them absolutely unique is our patented shock-absorbing smart material which helps minimise the ground forces affecting joints, muscles and tendons. We’d like to think we have leveraged the medical qualities of the product to create something affordable that has numerous applications in sports, business and everyday life.

You worked with the Ministry of Defence to test out the insoles, which must have been challenging! Several years back we were able to run some clinical trials, working with several academic and medical partners to test our insoles on the British Army. You can imagine that they were fairly rigorous! The results (published in the American Journal of Sports Medicine) showed a reduction in injuries of 66% by Enertor insoles versus the control group, which was pretty conclusive. We’ve now been working with the British Army for over ten years, and Enertor are the only shock-absorbing insoles mandated by them, including the Royal Marines and the SAS. What have been the motivating factors in developing your products? Technological excellence is key to everything we do. Enertor has undertaken far more rigorous testing and research than any other insole companies and can back up its claims. For example, in a specific trial on plantar fasciitis (pain around the heel and arch of the foot), Enertor insoles were proven to help 91% of sufferers. The shoe industry typically invests its money in quality uppers and soles but even the top brands spend less than £0.50 on the actual insole, which is often made with cheap standard insole material like EVA which loses its ‘bounce’ very quickly.

B U S I N E S S P R O F I L E | S C R U T T O N B L A N D | 2 1

Why should someone use an insole in their sports shoes? We wear shin pads for football, mouth guards for rugby and helmets for cycling, yet the part of our bodies taking 98% of the impact during sports is our feet, which often lack adequate protection. Our insoles have been tested to last up to 2,000 road miles, the equivalent of four pairs of trainers. I’d like to add that Enertor is trying to educate everyone to take more care of their feet, not just athletes. We need to encourage people to wear insoles all of the time, in leather shoes, work shoes etc, not just while they exercise, which is a common mistake. We can’t wait to ask you about … Usain Bolt! I know – it’s a great endorsement isn’t it? We work with a number of world class athletes in various sports, but having the backing of the world’s fastest man gives us huge credibility, not to mention opening doors with other organisations. We’ve worked with him since the run up to the 2016 Olympics, when he needed to stay free from injuries whilst going through some of the most rigorous training in his career. He liked our products so much he agreed to become a brand ambassador and is now a shareholder in the business. Plus I have to say he’s a very nice guy to know! We’re now working with England Athletics, including a number of athletes who’ll be competing in the Tokyo Olympics this summer.

You have benefited from business angel investment. Can you say how that worked for you? Our business has grown very quickly over the past few years, and although we already have the backing of some great investors, we still need capital to realise the commercial opportunities in front of us. We were fortunate enough to work with Anglia Capital Group, who selected us to pitch at one of their investor events; as a result we were able to attract funding from a number of local investors. Anglia Capital Group were really supportive and helpful, I’d recommend them to anyone needing investment as their business is growing.

Scrutton Bland has over one hundred years’ experience in providing independent professional advice to businesses at all stages of their development. If you are considering angel investment or any other type of investment, contact our Corporate Finance team by emailing or by calling 0330 058 6559 . Scrutton Bland work with Anglia Capital Group to host a number of pitching events for start-up and early stage enterprises throughout Suffolk, Norfolk and Essex and work with investors who are looking to assist business growth by becoming a ‘business angel’. To attend one of these events please email or visit for more information.

2 2 | S C R U T T O N B L A N D | B U S I N E S S P R O F I L E

How DXB Pump & Power is surging ahead Moving Water

Our region is full of specialist businesses, quietly building up their expertise to deliver professional services and successfully delivering projects to local, national and international clients. One such unsung success story is DXB Pump & Power, a pumpset manufacturer which designs and builds pumping solutions for managing waste water, flood control and industrial applications such as tank cleaning and pipeline testing. ADVISER spoke to Simon Ruffles, their CEO, to find out more about how the business has grown and to hear about some hair raising adventures in some of the most inhospitable parts of the world.

B U S I N E S S P R O F I L E | S C R U T T O N B L A N D | 2 3


Your business was founded in 2017, although you have thirty years’ experience in this field. How difficult was it to strike out on your own? Getting the company up and running was challenging for the first eighteen months as there are high barriers to entry. Customers in our markets are very conservative and that means going through extensive processes like pre-qualification and registration on supply chains of the largest companies like aggregate companies or an oil company. We knew we could design and manufacture market-leading products and we are all passionate about what we do, but passion doesn’t overcome reluctance or fear of change in business and that is a major challenge in this country.

What were the main challenges that you faced and how did you overcome then in the early days of business? The main challenges in the early days were all connected to cashflow, but that’s the same for any company if you don’t raise capital. We were fortunate in that we sold my previous company in which I was a shareholder and I reinvested in starting our own pump manufacturing business with my colleague with whom I had worked for the last fifteen years, and who is still on board as our Ops Manager. Getting suppliers and customers on board was a challenge but we had some fantastic support from privately owned suppliers whose management understood and bought into our vision. It was the large, often publicly owned companies that run their businesses based on credit ratings agency reports that were the most challenging. Having said that our two key suppliers, both publicly owned gave us over a £100,000 of open credit in our second year which helped us move the business forward. Getting rest and sleep is a major challenge in the early days. Not only do you work 12-14 hours a day, when you come home, you are worrying about cashflow, VAT returns and designing equipment that people want. Having been Managing Director of a previous company, I knew what the challenges were and about time management, but its extraordinary how these challenges seem larger when you are tired every day! We won a contract for almost a million pounds in 2018 from one of the world’s largest mining companies in Africa, but had to work from 6am to 9pm most days, six days a week for four months to complete the project. After we finished and shipped it, it took us a week to recover both in terms of energy and enthusiasm.

Unusually for a business operating in heavy industry, the equipment you use is environmentally friendly. Can you explain more about that? To differentiate ourselves from other European manufacturers we have to constantly innovate products that surpass the market needs or wants. We are not the least expensive option in the market, but we do offer a premium quality product with a long warranty. The major environmental push at the moment is for battery powered equipment and that’s fine, but it comes with hidden environmental costs (like mining the battery ores) offshore. We looked at the market and decided we needed to be the company offering the cleanest possible pumps in terms of a “global environmental footprint” and we decided on Stage5 diesel engines from Germany and Sweden. Combining these engines with the most efficient pump designs from America, we have designed pumpsets that move the most amount of water per hour using the least amount of fuel and generating the smallest amount of pollution and that’s why cities in countries like Sweden and Denmark now demand our equipment. However, it’s not just about the environment these new pumps, run slower, have less wear and use less oil and fuel so running costs are much lower improving the profits of their owners as well.

2 4 | S C R U T T O N B L A N D | B U S I N E S S P R O F I L E

Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 32 Page 33 Page 34 Page 35 Page 36 Page 37 Page 38 Page 39 Page 40 Page 41 Page 42 Page 43 Page 44

Made with FlippingBook Learn more on our blog