March 13th, 2018
By the time Chancellor Philip Hammond rose to his feet in the House of Commons to deliver the first Spring Statement, he had already offered plenty of hints that this would be a low-key affair.
Gone was the primetime Wednesday slot after Prime Minister’s Questions, gone was the trailing of policy announcements in the days and weeks beforehand and gone was the set-piece photo call with the red box outside Number 11.
This was all carefully orchestrated. Mr Hammond could not have been clearer that there were to be no rabbits pulled from hats.
In line with the move towards a single fiscal event each year, this was to be a straightforward response to the Office for Budget Responsibility’s (OBR) updated economic forecasts, dispensing with the usual drama of Budget Day.
Indeed, Mr Hammond may well be relieved that he does not need to deliver a Budget until the Autumn. A year ago, his first Budget was widely seen as disastrous for the Government, with the Chancellor having to quickly backtrack on heavily-criticised tax rises for the self-employed, providing helpful ammunition for the opposition at the subsequent general election.
Nevertheless, being the first of its kind, the Spring Statement was still something of an unknown quantity and the business community was still curious to see what he might have to say as they waited for the cheers and jeers to quieten in the Commons.
As it turned out, the Chancellor stuck to his guns, saying at the start of the speech that the UK had been unique amongst major economies in making tax changes twice each year. He added the move to a single fiscal event is intended to give greater certainty to business.
There was a strong emphasis on jobs in the Chancellor’s assessment of the state of the UK economy. He noted that the wages of the lowest paid have increased by seven per cent since 2015 and that there are three million more people in work since 2010. He told MPs that the OBR now predicts 500,000 more people will be in work in 2022.
The OBR revised up its GDP growth forecast for 2018 from 1.4 per cent to 1.5 per cent. This is then predicted to remain in line with previous predictions at 1.3 per cent in 2019 and 2020, before rising to 1.4 per cent in 2021 and 1.5 per cent in 2022.
Following the recent rise in interest rates, the OBR now expects that inflation will now return to its two per cent target over the next year, while wages are expected to rise faster than prices over the next five years.
The Chancellor said figures show that the manufacturing sector has enjoyed its longest period of expansion for half a century.
The Public Finances
Moving to the state of the public finances, the Chancellor noted that the UK has now had its first sustained fall in public sector debt for 17 years, saying that this represents a ‘turning point’ for the economy.
Debt as a percentage of GDP is expected to fall from 86.5 per cent in 2018-19 to 77.9 per cent in 2021-22.
Meanwhile, borrowing is now forecast to be £45.2 billion in 2018, £4.7 billion less than had been predicted by the OBR in November 2017.
In the wake of what he was eager to present as positive predictions, the Chancellor said that he is on course to increase public spending at the Autumn Budget, so long as the OBR’s predictions for the public finances are borne out.
Mr Hammond said he was keen to support British business, before promising that the next business rates revaluation exercise will be brought forward by one year to 2021, meaning rates will better reflect current rental values.
He also said that there will be a review of how to tackle the problem of late payments, which are seen as an ever-increasing problem for SMEs in particular.
Continuing the theme, and appearing to go against the suggestion that there would be no spending commitments in the speech, Mr Hammond said the Education Secretary will make up to £80 million available to small businesses to take on new apprentices.
As had been widely expected, Mr Hammond took the opportunity to announce a number of consultations on the future of the tax system.
Top of the Chancellor’s list was a consultation on ‘Reducing single-use plastic waste through the tax system’. He said the Government is inviting views on how to tackle the problem of plastic waste through the tax system.
He also set his sights on large multinational digital businesses, publishing a position paper on ‘Corporate tax and the digital economy’, including measures relating to VAT.
Maintaining the focus on the digital economy, the Chancellor announced a consultation on the role cash will play. He said the Government will seek views on how to support consumers and businesses to use digital payments, while ensuring those who need to can continue to use cash. The consultation will also seek views on the use of cash in tax evasion and money laundering.
Meanwhile, the Chancellor also said that the Government would consult on extending tax relief for employees and the self-employed who fund their own training.
Although not mentioned in the Chancellor’s speech, the hours following the Statement also saw the Treasury publish a consultation into the VAT registration threshold, suggesting that the current flat threshold disincentivises businesses from pursuing growth.
One of the biggest advantages a politician has in Government is the ability to set the terms of the political debate and to mark where the dividing lines should fall.
That is what the Chancellor appears to have aimed for with his first Spring Statement. He made a clear statement of intent on the Government’s direction of travel on tax and spending by hinting at spending increases in the Autumn Budget.
Much of the debate in the coming months is likely to revolve around the question of who should benefit from any increases.
So while there were no specifics on tax and spending for businesses to take away from the speech, there were important indications about what may be to come for businesses and the economy.
March 9th, 2018
Congratulations to Aimee Harrison, winner of this years “Apprentice of the Year” at the Lincolnshire Media Business Awards.
Aimee Harrison joined Nicholsons Chartered Accountants as an apprentice on 27th June 2016 through the apprenticeship scheme run by Lincoln College under the direction of Nigel Hullett. During the first couple of months at Nicholsons, she was assigned to work with Senior Accountant, Steve Robinson, where she gained valuable experience and a better insight into accountancy and the wider business world.
On the 8th September 2016, Aimee started attending Lincoln College one day a week to continue with her training.
Having decided on a career as an accountant, Aimee had already taken matters into her own hands and achieved her Level 2 and Level 3 AAT exams whilst studying at home. So for her it was a natural progression for her to attend college to take her AAT level 4 exams.
The AAT level 4 core exams were Financial Statements of Limited Companies, Management accounting: Budgeting, Management Accounting: Decision and Control and the Synoptic Exam. Aimee took her final exam for this level on the 29th June 2017.
Aimee also had to take another two options, however with her dedication she pushed herself forward and took three options, business tax, personal tax and external auditing; meaning that she would then be exempted from all further exams but one, in the first level of her ACA studies. Aimee felt these would help her with work in the office.
As part of her apprenticeship, Aimee has to complete a Level 4 Business Skills qualification consisting of 8 units; this will help her to develop skills useful when working in a relationship based business including presentation and communication, along with team work. This is a self-learning project which Aimee will do in the workplace and research additional elements that will help her have a better understanding of a business.
Not only with her commitment to studying before joining Nicholsons, but with her continued dedication Aimee has propelled herself through her year at Lincoln College by the achievement of an additional exam. Aimee knows that her commitment to her studies will have a huge impact on her chosen career allowing her to achieve her ambition and qualify as an accountant. Her commitment became clear when she received a certificate from Lincoln College for her 100% attendance over the last year as well as being awarded a merit with a pass rate of 84% for her AAT Level 4 having passed all her exams first time.
Aimee is committed to the business through her studies. She will start studying to achieve her ACA qualifications in September 2017 which will take her 2 – 3 years. By working whilst studying Aimee will be able to combine her on the job practical work experience with her studies. She is also Xero certified which means Aimee can advise and implement cloud based software for clients.
Seeing Aimee achieve her goals helps to raise morale within the team and to encourage recently appointed apprentices to take the same pathway. With each step Aimee’s results enhances the level of expertise the firm offers their clients. Aimee has been happy to get involved in a number of social events helping to organise them as well as participate.
Aimee is also a member of the Nicholsons Social Committee and contributes to putting forward ideas, implementing them and raising money for the firm’s charity.
Aimee will graduate from college in October 2017 and will continue to study towards her ACA qualifications through Kaplan. Her studies will be partly on-line and part self-study with Aimee’s commitment and motivation she may well complete her training well within the 2 – 3 years. Once qualified Aimee would like to progress with her career at Nicholsons, taking on more work and responsibility and becoming a senior member of the team.
d news from Nicholsons about upcoming events amongst other things.
November 22nd, 2017
When Chancellor Philip Hammond stepped up to the despatch box, he would have been acutely aware of the pressure he was under.
Some 24 hours before the Chancellor was due to open his famous red box, the Office for National Statistics (ONS) confirmed a wider deficit than anticipated for October.
Ahead of the Budget, business leaders had urged Mr Hammond to get to grips with Brexit headwinds and the UK’s productivity problem, while his party’s own MPs were demanding action on issues such as housing and social care – which many believed had played a major part in the shock loss of the Government’s majority in June.
There was personal pressure too. Some eight months ago, the Chancellor’s previous Budget unravelled at alarming speed (unpopular plans to increase National Insurance contributions for some self-employed workers were dropped within seven days). He could ill afford another flagship policy disintegrating.
All things considered, Mr Hammond had the difficult task of delivering a financial statement which was both radical enough to reset the political agenda and robust enough to avoid a repeat of the spring’s hasty u-turn. Could the Chancellor – whose fondness for figures has earned him the nickname “Spreadsheet Phil” – deliver?
Opening his address to MPs, Mr Hammond argued that the UK economy continues to “confound those who talk it down” and said that he was determined to invest in technological advances and seize the opportunities on offer.
He acknowledged that ongoing negotiations with the EU were at a crucial stage and with this in mind he would put aside an additional £3billion for Brexit preparations over the course of the next two years. He assured the House that the Treasury was drawing up plans for every possible outcome.
Outlining forecasts by the Office for Budget Responsibility (OBR), Mr Hammond said that the organisation was predicting that another 600,000 people would be in work by the 2020s.
Worryingly, the nation’s productivity has not improved and the predictions for growth have been cut substantially. The OBR now projects growth of 1.5 per cent this year (downgraded from two per cent in March). The forecast for next year is 1.4 per cent, and 1.3 per cent for both 2019 and 2020.
There was better news on borrowing, with Mr Hammond confirming that the forecast for this year is £49.9billion (£8.4billion less than had been projected in the spring).
And as regards the deficit, he said that the OBR figures suggested that the Government was on track to meet its target of reducing the deficit to below two per cent of GDP by 2020-21.
Ahead of the speech there had been no small amount of speculation that the VAT threshold for businesses was to be lowered.
But the Chancellor confirmed that the registration threshold will in fact remain at its current level (£85,000) for the next two years, shying away from a contentious change.
Mr Hammond did hint that he would be considering some form of reform and said he would hold a consultation as to whether the system could be altered to “better incentivise growth”.
In relation to business rates, Mr Hammond said he had listened to concerns from business leaders. With this in mind, he has decided to bring forward the switch from the Retail Price Index (RPI) to the Consumer Prices Index (CPI) by two years. The change will now take effect in April 2018 and is expected to be worth £2.3billion to businesses over the next five years. In addition, the discount for pubs (rateable value less than £100,000) is to be extended to March 2019.
In another boost for businesses, Mr Hammond announced that he would be allocating an additional £2.3billion for investment in research and development (R&D). The main R&D tax credit will be increased to 12 per cent.
These measures were described as “the first strides towards the ambition of our industrial strategy to drive up R&D investment across the economy to 2.4 per cent of GDP.”
Amid uncertainty over the impact of Brexit, the Chancellor also confirmed that the Government would be prepared to replace money from the European Investment Fund if necessary.
Mr Hammond said the Government was committed to supporting electric vehicles. Among the measures announced by the Chancellor were a £400million charging infrastructure fund.
As far as diesel cars were concerned, the Chancellor confirmed that vehicle excise duty for new vehicles that don’t meet the latest standards will increase from April 2018. The money raised will be invested in a £220million clean air fund.
£30million will be made available to enhance digital connectivity on the trans-Pennine route and councils will be able to stake a claim to £1billion for high-investment projects.
A new rail card for commuters aged 26 to 30 will enable around 4.5million travellers to get a third off rail fares.
To cheers from his own benches, Mr Hammond confirmed that Stamp Duty would immediately be abolished for first-time buyers for homes worth up to £300,000 (and on the first £300,000 of properties up to £500,000). There are hopes this will stimulate a slowing property market.
There was good news for the majority of air passengers, with the announcement that from April there would be a freeze on short-haul air passenger duty and long-haul duty for those in economy. The measures will be funded by increasing taxes on private jets.
The threshold for the basic rate of income tax will rise to £11,850 in April 2018, with the higher rate threshold to climb to £46,350.
An increase to the National Living Wage, set to take effect in April, was also confirmed. It will rise from £7.50 an hour to £7.83.
Duties on beer, wine, cider and spirits will be frozen, although tobacco tax will continue to rise at inflation plus two per cent.
More money is to be made available to the devolved administrations (£2billion for Scotland, £1.2billion for Wales and £650million for Northern Ireland). As had been trailed beforehand it was confirmed that both Police Scotland and the Scottish Fire Service would be made exempt from VAT going forward.
Facing increasing demands to address the growing strain on the health service, Mr Hammond outlined plans for an extra £10billion in capital investment over the course of this Parliament. There was also a commitment to make additional money available to improve pay levels for NHS workers.
The introduction of Universal Credit has come in for considerable criticism in recent weeks, with many opposition politicians urging the Government to pause roll-out of the changes.
Mr Hammond acknowledged that many Britons were facing a squeeze on their finances and, in an effort to address the controversy, confirmed that £1.5billion would be spent on efforts to make the system more generous.
The Stamp Duty announcement has stolen the headlines, but the Chancellor announced a number of measures apparently designed to show he was taking problems facing the property market seriously.
The Chancellor admitted that young people were concerned about their prospects. While he said there was no “magic bullet” to fixing some of the problems, Mr Hammond gave a commitment that £44billion would be made available over the next five years to address some of the major problems.
It was also announced that councils will be given powers to charge a 100 per cent premium on council tax on empty properties. This is something which a number of local authorities have been lobbying for.
Hard on the heels of the Paradise Papers controversy, the Chancellor said that HM Revenue & Customs (HMRC) would redouble its efforts to tackle offshore tax avoidance. This strategy is calculated to raise £200million a year.
Ahead of any Budget, the media often speculate about whether the Chancellor will pull “a rabbit from the hat”; announcing an audacious policy decided to win favour with voters. The Stamp Duty changes certainly fit the bill and are likely to dominate the headlines in the days ahead.
As far as businesses are concerned, there will no doubt be relief that the changes to the VAT threshold which had been rumoured in advance of the speech failed to materialise.
Critics may say that the Budget otherwise erred on the side of caution, with an emphasis on prudence over particularly radical announcements.
And the Treasury will no doubt be mindful that the OBR forecasts, which suggest the economy is rather weaker than was thought back in March, could mean that challenging times lie ahead.
November 14th, 2017
Building relationships and ensuring consistency is a core value at Nicholsons. Retaining a great team is a way that we can achieve this and therefore it’s fantastic when we can celebrate big milestones. Elaine Faithhorn joined Nicholsons in October 1987 and is therefore celebrating 30 years of service.
After working in London, Elaine came to Lincoln from Kent and joined as an assistant to the IT Manager. At this time the firm only had one computer however, after two years Elaine took over the firm’s internal accounting function when her colleague retired and has continued to work in the same department dealing with company bookkeeping, time and fees Ledgers, payroll and basic HR matters ever since.
Having seen many changes over the years from the time when clients accounts were typed out using a typewriter with carbon paper to now where they are sent digitally via the firms portal, from using software such as Wordcraft to Word, Lotus to Excel and from Sage to Xero. Elaine has had to adapt to the changes and has enjoyed attending courses to update her skills.
In 2004 Nicholsons moved from Newland in the city centre to their present out of town office at The Point on Weaver Road. The move to the new offices brought with it a different working environment, a light and airy open plan office with modern facilities.
Richard Hallsworth, Director said “Elaine has been a valuable member of the team and having her experience and knowledge is a great asset to everyone here. We are very keen to retain our employees and provide regular opportunities for training. Our congratulations go to Elaine on achieving 30 years at the firm”.
When Elaine is not at work she enjoys travelling, playing golf – both here and abroad. Coming from a large family Elaine also enjoys getting together with her family.
September 29th, 2017
Marketing Manager Linda Clark celebrates her first year at Nicholsons Chartered Accountants. Linda joined the firm in September 2016 to oversee the marketing department.
With well over 100 people attending her first event, the firm’s Farming Forum, Linda has continued to enjoy many more successful events such as the Lincolnshire Show, planning and organising the Finance Management Forums, a range of business seminars and Charity events.
Linda says “It has been a busy year as there has been a lot of planning and preparation to do to start building on projects to raise the profile of the firm. We have been involved in some great local marketing initiatives including the Knights’ Trail and the sponsorship of Lincoln City Football Club. With many events behind me, I am pleased to say that I am looking forward to implementing the plans we have made for the next year.”
Inspiring Leadership and the Finance Management Forum are just two events being organised for the autumn, but are there many more ideas in the pipeline. Nicholsons is looking forward to delivering its marketing plan and working in partnership with other businesses.
Richard Hallsworth, Marketing Director at Nicholsons says “When Linda joined the firm our objective was to raise our profile. With the positive feedback received, we are confident that we have achieved our aim. This year our marketing plans will be more targeted, to deliver a comprehensive range of business services to our clients to help them run their businesses successfully. “
The Firm is planning a “Small Business Conference” on Thursday 8th March 2018 at the Drill Hall and will once again run their annual Charity Badminton Tournament, also in March, raising money for the Lincs Notts Air Ambulance.
In her spare time Linda likes travelling, DIY and gardening. She is also Secretary to Newark Wine Society and Flintham & District Ploughing Match and Show.