call us
Glasgow
+44 (0)141 221 2984
Edinburgh
+44 (0)131 225 6366
Stirling
+44 (0)1786 451745
Dumbarton
+44 (0)1389 765238
Hamilton
+44 (0)1698 459444
Glasgow
+44 (0)141 221 2984

Edinburgh
+44 (0)131 225 6366

Stirling
+44 (0)1786 451745

Dumbarton
+44 (0)1389 765238

Hamilton
+44 (0)1698 459444
  • You are here:
  • Blog
  • >  French Duncan | Professional Chartered Accountants | Blog

Blog

Don't risk missing the Employment Related Securities (ERS) deadline

Don't risk missing the Employment Related Securities (ERS) deadline

When you hear the term Employment Related Securities what do you think? Do you know this term is used to refer to both tax advantaged schemes such as EMI, CSOP, SIP and non-tax advantaged schemes where options can be granted or shares gifted/sold to employees? Do you understanding all the reporting requirements involved? Do you know how to register for the service? Do you understand the tax implications and whether a scheme is tax advantaged or not? Do you even want to know, or is your time better spent elsewhere growing the business?

Where you are considering using share schemes to incentivise employees or merely awarding an employee with a bonus in the form of shares, these are questions that should be asked.

Following the filing changes so that all reporting must now be done online, the ERS online service has proven not to be a user friendly service. This has led to numerous employers getting in touch with us to assist with the filing of their annual returns and in the other cases where they have missed the 92 day notification deadline for EMI share options. The latter can have serious tax consequences. Where the notification is not made on time the EMI scheme would lose the numerous tax advantages that go with EMI scheme and instead for tax purposes would be treated as a non-tax advantaged scheme. The current deadline for ERS online filing is Friday 6th July 2018 – just over eight weeks away.

Our flyer touches on the recent filing changes as well as the additional specialised services we can offer to you. Get in touch and don’t leave it too late.

IR35 ruling in contractor's favour

IR35 ruling in contractor's favour

This blog was previously published on LinkedIn on 19th April 2018.

HMRC has been defeated in a new ruling affecting contracted workers assessed under the IR35 rules. It is an unusual decision given the nature of the engagement, and has done nothing to help clarify the already complex situation. The decision has also raised concerns over the use of HMRC’s online employment status tool.

The First Tier Tribunal (FTT) ruled in favour of Mark Daniels who provided construction management services via a personal service company. HMRC contended that a contract covering 2012/13 and 2013/14 should have been caught by IR35. However, the FTT found that the engagement was correctly categorised as self-employment.

The FTT looked at a range of factors to decide if Daniels was self-employed or not. The most important factors that led to the FTT’s decision were:

• Daniels had no entitlement to a notice period, sick pay, holiday pay, or any employment benefits. However, the vast majority of contractors don’t normally enjoy these benefits.

• Daniels was not being controlled or managed by the client beyond what was typical of a large construction project where there is a clear structure.

• Daniels was paid a daily rate, rather than a weekly or monthly rate.

The FTT declared Daniels self-employed despite the fact that he was not allowed to provide a substitute in his absence (and was not in position to provide a substitute in any case). He also took no financial risk, and the client provided safety equipment. These three factors would normally be strong indicators of employment.

The HMRC’s online employment status tool responds to the facts of Daniels’ case with, “We're unable to determine the tax status of this engagement”.

However, HMRC will stand by any non-IR35 outcome given by the status tool, provided the information submitted is accurate.

The impact of Brexit on the hospitality industry

The impact of Brexit on the hospitality industry

Ever since the vote to leave the European Union in the 2016 referendum, the question of what this means for the UK hospitality industry has been hotly debated, with some pundits predicting a crisis on the horizon. However, it may not necessarily all be bad news. Since my last blog on this subject in November of last year, there have been various reports published and of course we have had the Spring Budget.

One immediate effect of the vote was on inflation. After years of minimal price rises, the UK was suddenly looking at forecasts of 3% or more. In particular, rising food prices seemed like a threat to the bottom lines of restaurants and other catering businesses. However, recent bulletins from the Office for National Statistics indicate a 12 month rate of 2.5%, less than some have feared.

However, as far as the industry is concerned, the most significant impact of Brexit has to be on staff recruitment and retention. According to a recent British Hospitality Association report, approximately 3 million people work in the sector in the UK, and as many as a quarter of these are EU nationals. In London, this figure rises to 38%. Overall, 43% of low level, non-managerial jobs in hotels and restaurants are filled by overseas workers. As a result of proposed tougher rules on the migration of EU workers post-Brexit, the same report goes on to predict a scenario in which the industry will experience a shortfall of 60,000 workers per annum over the next few years.

If this prediction turns out to be true, it will undoubtedly pose a problem for the industry. While increased productivity and automation can mitigate against staff shortages, there is no escaping the fact that the sector is labour intensive, and a low ratio of staff to customers will almost inevitably result in a decline in the quality of service.

However, there may be some positive aspects. Because it equates to more spending power for visitors from abroad, the weak pound which has been the new normal since the 2016 vote has served the sector well. In addition, there is also good news for young people thinking about a career in the industry. According to CV Library, sector pay has seen rises of over 10% in recent years, the highest increase in any part of the private sector. Needless to say, these pay rises are a reflection of the recruitment gap post-Brexit and the difficulty hospitality businesses have in filling vacancies. But they also create an opportunity, a chance to sell the potential rewards of a career in the sector and thus attract more home-grown talent. Allied to improved training schemes, this might well help to make companies less reliant on a workforce from the EU in the future.