NEWS/01/08

Wills Accountants

In this issue

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02Charities: The 2006 Charities Act

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03Client Focus: Plymouth Music Zone

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04Focus on: The Companies Act

New faces at Wills Accountants

The firm has recently been boosted by the arrival of three new faces.

Mike Swain has moved to Plymouth after practicing in Paignton and Torquay. He is Association of Accounting Technicians qualified and is currently studying for the Association of Chartered Certified Accountants exams. He hopes to qualify later this year. He has advised a variety of organisations from sole traders through to limited companies.

Jody Chan-Penney joins us as a trainee following two years with another accountancy firm in Plymouth. Her experience includes payroll, bookkeeping, preparation of accounts and tax returns. Jody takes over the operation of our payroll bureau.

Teresa Dyer boosts our administration team and will be sharing reception duties with Irene.

“We are very pleased to welcome Mike, Jody and Teresa to the firm. Their arrival provides us with further strength in depth and enables us to advise more companies and individuals throughout the Westcountry,” said William Wills, Managing Director.

ContactsWilliam WillsTel: 01752 253545 william.wills@willsaccountants.co.uk

Phil SoutterTel: 01752 253545 phil.soutter@willsaccountants.co.uk

Susan WillsTel: 01752 253545 susan.wills@willsaccountants.co.uk

The Companies Act 2006 – the largest Act ever!Following a consultation period of eight years, the Companies Act 2006, with 47 parts and 1,300 clauses, is the largest Act ever to emerge from Parliament and brings about the most far-reaching changes to company law since Gladstone’s Acts of 1844 and 1845.

In general, the Act is intended to simplify and modernise current company law so that it meets today’s business needs, provides flexibility for the future and remains accessible for those who use it.

Implementation of the Act is over a period of time – in some areas the law has already changed and in others implementation will be from 6 April 2008 and 1 October 2009. The timetable has already slipped and there is a feeling that implementation should have been on a big bang approach when all was ready.

For the first time the Companies Act 2006 sets out legislation relating to duties and responsibilities of company directors. Guidance suggests that a director should act in the best interests of the company; obey the company’s constitution and decisions taken under it; be honest and remember that the company’s property belongs to it and not to you or the shareholders; be diligent, careful and well informed about the company’s affairs; ensure the company keeps a record of your decisions; avoid situations where your interests conflict with those of the company; remember that you remain responsible for the work you give to others; and seek external advice where necessary.

If we can help further in this area please contact William Wills.

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This newsletter has been supplied for general information. It does not constitute financial or other professional advice and should not be relied upon as such. Specific advice should be taken about individual circumstances.

Disclaimer

E mail@willsaccountants.co.uk W www.willsaccountants.co.uk

10 The Crescent, Plymouth PL1 3AB T 01752 253545 F 01752 228819

Wills Accountants Limited is Registered in England No. 2911589 Registered as Auditors by the Association of Chartered Certified Accountants

Ten years & counting......Where has the time gone? It only seems like yesterday that Sue, Phil and I were sitting down and decided to start Wills Accountants Limited.

We have had an interesting journey, experiencing many of the difficulties and frustrations encountered by any small business but we have enjoyed it and look forward to the challenges that the future brings.

The business environment continually changes – there is now more legislation than ever – not just affecting accounting and taxation but every aspect of running a business. There is certainly a feeling that business owners are doing the government’s job for them in more than one way.

Whilst we have to deal with the technical issues one of the delights of running a business is the people – our staff, our clients and our contacts. Without people the figures can become meaningless. One of our main aims must be to ensure that we can explain technical issues in a straightforward way and apply them to the client’s circumstances so that we really help them in running their affairs.

One of the early highlights for us was the award of the Investors in People accreditation in July 1999, which has subsequently been

renewed. We found this a valuable process in that we had to take a step back from what we were doing and work on the business as opposed to in the business. This is one of the more difficult aspects, especially when you are hands on and enjoy doing the work!

Our team has grown over the years and we are especially pleased that three of our team are currently studying for professional exams. We continually need to ensure that our staff are technically up to date to enable us to provide a quality service.

What will the next 10 years and beyond bring? This is very difficult to predict although there will be continued developments in the use of technology. We are now filing more and more returns electronically and this process will continue. We will strive to ensure that we make best use of the technology available.

There will be changes in the way in which work is undertaken. There is already a move towards outsourcing or basic processing work being undertaken overseas. I do have some difficulties with this and am keen to support local jobs for local people. We will continue to offer a quality local service to our clients. The dreams of a paperless office should start to become more of a reality – well we can but hope!

No doubt there will be more and more legislation coupled with the usual phrases that are used to encourage entrepreneurship and small businesses. Let us hope that there is simplification and clarity to enable us all to get on with what we do well – our work.

Finally many thanks to all our staff, clients and contacts for your support over the last 10 years and we look forward to continuing to work with you and develop stronger relationships in the future.

William Wills Managing Director

From left to right: William Wills, Mike Swain, Teresa Dyer and Jody Chan-Penney

The Government announced in the Pre Budget report (PBR) that it intends to abolish some tax reliefs and replace them with a flat rate of 18% for gains exceeding the annual allowance.

The proposals are subject to consultation by HM Revenue and Customs, but as they currently exist they could influence your plans to sell before or after April 2008.

Although these proposals may impact on you if you are selling property, shares or other assets, you will also need to consider them if you are intending to hold onto your property, shares in your company or other assets. There may also be action you could take before April 2008 to make use of the current relief available.

Broadly, if the proposals are implemented as they currently stand; it will mean that after 6 April 2008, individuals who sell non-business assets will be subject to less tax, while those selling business assets are likely to be liable for significantly higher Capital Gains Tax bills. There are exceptions to this generalisation due mainly to the abolition of indexation allowance and taper relief for assets sold after 5 April 2008.

The regime for charging companies corporation tax on their chargeable gains has not been changed so they will still be entitled to indexation allowance but not taper relief.

If you would like to find out how these proposals may impact your situation, please contact Susan Wills.

Capital Gains Tax Reforms - How will they affect you?

Changes to Capital Allowances

In the last Budget, some sweeping changes were announced to the capital allowance regime with effect from 6 April 2008 (1 April 2008 for companies). The changes are still not finalised even though they take effect in a few months time.

Instead of First Year Allowances of 50% on new capital additions, there will be an annual investment allowance of up to £50,000. This means that all new additions up to £50,000 per annum will qualify for 100% allowances but expenditure above this amount will only qualify for writing down allowances.

Care will be needed in the transition period from April 2008. For example a company with an accounting year end of 31 August will only be eligible for an annual allowance of £20,833 in the period up to 31 August 2008 since there is only 5 months falling after 1 April 2008. A taxpayer with an accounting period year of 30 September will be eligible for an annual allowance of £25,000 since there are 6 months falling after April, and so on.

These changes will benefit small businesses but will be a tax increase for businesses that habitually spend more than £100,000 on new additions per annum.

Writing down allowances will be reduced from 25% to 20% from April 2008. It does not sound much but on a capital allowance pool brought forward of £25,000 it means at least an extra £250 tax to pay.

Allowances on Industrial Buildings are to be phased out over a four year period up to 5 April 2011.

If you would like to discuss these changes in more detail, please contact Susan Wills.

Right, close your eyes and count to 10…and when you open them you’ll see Plymouth Music Zone (PMZ) doing something it’s never done before – playing music with accountants. Yes, accountants. But why? This award winning community music organisation is more used to working with around 1200 children and young people every week in schools and other places throughout the city. Our bright bubbly branding boasts the slogan, “Music Making a Difference”, hinting at the way we use music as a tool for personal and social change.

So where do accountants fit in to that I hear you ask? Especially since PMZ attempts to make a real difference to people’s lives by providing high quality opportunities for young people and training and employment for adults through music workshops that profess to be about quality and innovation as well as fun and inspiration. A far cry from an excel spreadsheet - and not quite what you’d imagine your average accountant might need...

Not surprisingly though, the man behind this intriguing one-off special merger is far from average. Phil Soutter is PMZ’s accountant and auditor and our main man. A man who has achieved what many think is the impossible by demystifying accounting to such an extent that people actually listen with baited breath (well nearly). A man who works with an equal measure of rigour and

humour to ensure PMZ has that all important firm financial footing for the future. A man who works for Wills Accountants. It was Phil’s great idea to celebrate his company’s 10th anniversary in style by supporting PMZ in the process. Cue January 17th. A night at Plymouth Music Zone where employees from Wills Accountants and all their friends and associates have the chance to explore any secret musical desires in the colourful comfort of our bespoke music education centre - with Music Leaders on hand to show the way. People will be able to let their rock

and roll hair down or just sip cocktails in our Sensation Music Station, the only multi-sensory music studio of its kind in the country. But why does that help us? Well, while everyone gets to have a cracking evening, the kind donations we receive are reinvested in the work we do

with some of the most vulnerable and disadvantaged young people in Plymouth.

And the reason we are extra excited about having this pioneering cacophony of numerical experts and their associates round for the evening is simple. Plymouth Music Zone has just won the Social Enterprise of the Year Award, the latest in a string of accolades (Phil keeps accurate count) that is helping to heighten the profile of the work we do and the social outcomes we are dedicated to achieving. By reaching out and building crucial links with the business world we get to deepen our impact further. By offering our expertise to create specially tailored corporate team-building packages, we can not only give businesses something invaluable but they get to give something in return. By buying into our services they can make a massive difference to others too – because every penny goes back into those people who need it the most. Businesses and Social Enterprises can help each other to help other people help themselves. We do that through music - and you could do it through us.

Today it’s accountants, tomorrow who knows? But it all adds up to something potentially very powerful and special indeed. So Happy 10th anniversary to Wills Accountants, we could end up celebrating more than we ever imagined…

In 2007 the phased introduction of the 2006 Charities Act began. The following are the key areas:

• Charitable Purposes and Public Benefit – the Act defines thirteen charitable purposes and trustees must now show how the purposes of their charity provide public benefit

• SORP, Charity Accounts and Reporting – along with some other measures, the Act makes changes to the different types of scrutiny for charity accounts, bringing company and non-company charity accounts into line with each other

• Audit threshold – increasing the threshold for audit to income greater than £500,000

• The Charity Tribunal – the Act establishes a new Charity Tribunal, a further avenue of appeal for trustees wishing to challenge a legal decision of the Commission

• Mergers and Collaborative working – development of a register to show charities that have merged and to simplify the transfer of gifts and legacies to new charities

• Charitable Incorporated Organisation (CIO) – this new charity structure will

allow trustees to form a company but without needing dual registration with both us and Companies House

• Registration Threshold – raising the registration income threshold to £5,000

• Trustee liability – making trustee liability relief available

The Office of the Third Sector and Charity Commission have jointly produced a guide to the Charities Act 2006. Go to www.charitiescommission.gov.uk look under “popular questions” for “How do I find a summary of the Charities Act”, this should lead you into the download of a copy of the publication “Charities Act 2006: What Trustees need to know”.

To find out more, please contact Phil Soutter.

Plymouth Music ZoneDebbie Geraghty, Development Director from Plymouth Music Zone, tells us why hanging out with accountants can be good for you…

“It was Phil’s great idea to celebrate his company’s 10th anniversary in style by supporting PMZ in the process.”

Focus on Capital Gains & Allowance...

Key Points from the Charities Act 2006

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NEWS/01/08