Business Blog

Welcome to the Ellingsworths business blog, a series of posts with features, information and business insights aimed at entrepreneurs and owners of growing businesses.

Ellingsworths are accountants based in Wolverhampton and serving the West Midlands area. 
Just call one of our friendly team on 01902 896 730 or email us on enquiries@ellingsworths.co.uk 

We will be delighted to help.

House Builders Facing Skills Challenge

posted 21 Sep 2015, 10:33 by Richard White   [ updated 21 Sep 2015, 10:41 ]

The Construction industry is growing - fewer than 460,000 homes were constructed between 2011 to 2014 figures from the National Housing Federation show, despite forecasts that 964,000 homes were required.

The Construction Industry Training Board (CITB) has stepped up efforts to attract and train a new generation of construction staff.

The new Go-Construct website provides information for Construction Employers including the routes to taking on Construction Apprentices:



Go Construct Video 2 mins



New rules on smoke detection safety for landlords

posted 16 Sep 2015, 01:19 by Richard White   [ updated 16 Sep 2015, 01:41 ]

The Smoke and Carbon Monoxide Alarm (England) Regulations 2015 are expected to come into force on 1 October this year (2015). The Regulations lay a responsibility on private landlords of rented dwellings to ensure that working alarms are provided and maintained.
The landlord must ensure that when the premises are occupied under a tenancy that:
  • A smoke alarm is equipped on each storey of the premises on which there is a room used wholly or partly as living accommodation;
  • A carbon monoxide alarm is equipped in any room of the premises which is used wholly or partly as living accommodation and contains a solid fuel burning combustion appliance; and
  • Checks are made by or on behalf of the landlord to ensure that each prescribed alarm is in proper working order on the day the tenancy begins if it is a new tenancy.

Under arrangements made by the Government, a number of UK Fire and Rescue Services are currently urging private landlords to act now to ensure that they are ready for the new regulations for which purpose they will be distributing (a limited number) of free smoke and carbon monoxide alarms to qualifying private (relevant) landlords. There are potential penalties of up to £5,000 for non-compliance.

Construction Business? Key changes to Health & Safety regulations just released

posted 7 Apr 2015, 03:52 by Richard White   [ updated 26 May 2015, 04:54 ]

Construction Business? - key changes to Health & Safety regulations just released, including work on domestic properties:

Link provided below.


The Construction (Design and Management) Regulations 2015 (CDM 2015) came into force on 6 April 2015, replacing CDM 2007.

This publication provides guidance on the legal requirements for CDM 2015 and is available to help anyone with duties
under the Regulations. It describes:

■ the law that applies to the whole construction process on all construction projects, from concept to completion; and


■ what each dutyholder must or should do to comply with the law to ensure projects are carried out in a way that secures health and safety


http://www.hse.gov.uk/pubns/priced/l153.pdf


New National Minimum Wage rates announced

posted 30 Mar 2015, 03:58 by Richard White

Minimum Wage
The government has announced the National Minimum Wage rates to take effect from 1 October 2015. The recommendations of the Low Pay Commission (LPC) have been accepted, with the exception of the apprenticeship rate.  The apprentice rate will see its largest ever increase of 57p to £3.30 per hour, 50p higher than that of the LPC recommendation.
 
The new rates from 1 October 2015 will be as follows:

The adult rate will increase by 20p to £6.70 per hour

The rate for 18 to 20 year olds will increase by 17p to £5.30 per hour

The rate for 16 to 17 year olds will increase by 8p to £3.87 per hour

The apprentice rate will increase by 57p to £3.30 per hour

The accommodation offset increase from the current £5.08 to £5.35
  
These represent  the largest real-term increases in the National Minimum Wage since 2007, and more than 1.4 million of Britain’s lowest-paid workers are set to benefit from the 3% rise.

 
Prime Minister David Cameron has said that the increases will offer more financial security to workers, and in particular, encourage more young people to see apprenticeships as a promising career choice.  However, the Director General at the British Chambers of Commerce has suggested that the rise in apprenticeship rate may negatively impact demand for apprenticeships among those firms that are only just getting by.
 
Views on the government’s announcement are mixed. Whilst some believe that setting the minimum wage too high will lead to fewer job opportunities, the general secretary of TUC, Frances O’Grady, said the rate increases would go nowhere near enough to end “in-work poverty”.
 
Labour has promised the minimum wage would rise to £8 per hour over the course of the next parliament if it wins in the May general elections.
 
For companies that employ individuals at or around the National Minimum Wage level, they will need to schedule and plan for the increases set out above and factor the changes into future business planning.  

Budget March 2015 - At a Glance

posted 19 Mar 2015, 11:25 by Richard White   [ updated 26 May 2015, 04:46 ]

Introduction

The Chancellor announced his "Britain is walking tall again" budget today and it does seem there are lots of things to be positive about:

    • The economy grew by 2.6% in 2014 - faster than any other advanced economy. The UK growth forecast for 2015 has been revised upwards from 2.3% a year ago to 2.5%.
    • Unemployment fell by 102,000 in the three months to January 2015 and the employment rate is 73.3% - the highest level since comparable records began in 1971. Unemployment is predicted to fall from 5.7% at the end of 2014 to 5.3% this year.
    • Falling world food and oil prices mean that inflation forecasts are revised down to 0.2% for 2015. The Chancellor confirmed the consumer price index inflation target remains at 2%.
    • The Chancellor plans to use funds from bank sales, lower interest charges on government gilts and a smaller welfare bill to pay down the national debt.

Business

  • Corporation Tax - The main rate for corporation tax will be cut to 20% from April 2015
  • National Insurance - Businesses will no longer have to pay NICs for employees under-21 from April 2015. They wall also be abolished for apprentices under 25 from April 2016
  • Business Rates - Small business relief will be extended until April 2016. Inflation linked increases to business rates will be capped at 2% until April 2016
  • Diverted Profits Tax - A new tax aimed at large companies that artificially shift profits offshore will come into effect from 1 April 2015
  • Entrepreneurs Relief - Entrepreneurs relief will only be available to those selling genuine stakes in businesses
  • Bank Levy - The annual bank levy will be raised to 0.21%
  • Travel & Subsistence - Relief will be restricted for individuals working through intermediaries such as umbrella companies from April 2016
  • Farmers - Farmers will now be able to average their income over 5 years for tax purposes from April 2016
  • Help to Buy ISA - The Help to Buy ISA is designed to help first time buyers save for a deposit on their first property

Budget 2014 - at a glance summary

posted 20 Mar 2014, 05:23 by Richard White   [ updated 26 May 2015, 04:46 ]

For Businesses

The key budget announcements affecting businesses included:
  • Exports - lending available to exporters has been doubled to £3Bn
  • Business Rates - Discounts for businesses in enterprise zones have been extended for 3 years
  • Research & Development - the R&D tax credit for small loss-making firms has increased from 11% to 14.5%
  • Capital Investment - The Annual Investment Allowance (AIA) will be doubled from £250k to £500k from April 2014 and will be extended to December 2015
  • Apprenticeships - the apprenticeships grant for small employers has been extended
  • Housing - Small house building firms will have access to £0.5Bn of finance.

For Individuals


The key budget announcements affecting individuals included:
  • Income Tax - The tax free annual personal allowance will increase to £10,500 from April 2014. The higher rate threshold will rise to £41,865 from April 2014 and will rise by a further 1% to £42,285 in 2015. The transferable tax allowance for married couples and civil partners will rise to £1,050.
  • Pensions - People retiring with defined contribution pensions will receive free one to one impartial guidance about their pension. The guaranteed income requirement for flexible drawdown eligibility will be cut from £20k to £12k. Tax on pension amounts taken as a lump sum, over and above the 25% tax free entitlement will be charged at normal marginal income tax rates rather than at 55% from April 2015. Compulsory annuities will be scrapped and there will be more flexibility when drawing an income from a pension
  • Pensioner Bond - a new Pensioner Bond will be introduced National Savings and Investments from January 2015. The rates will be set in Autumn 2014, but are expected to be 2.8% for a one year bond and 4% for a three year bond.
  • Premium Bonds - The current investment cap will rise from £30k to £40k in June 2014 and will increase to £50k the following year. The number of million pound winners will be doubled.
  • ISAs - Stocks and shares and Cash ISAs will be merged to create one New ISA with a tax free limit of £15k from 1st July 2014. The Junior ISA allowance will increase to £4k per annum
  • Investment - The Seed Enterprise Investment Schemne (SEIS) has been made permanent. A new 30% Scoial Investment Tax Relief on investment in social enterprises is introduced
  • Fuel Duty - the fuel duty rise planned for September 2014 has been scrapped
  • Tobacco Duty - Tobacco duty will continue to rise at 2% above inflation
  • Alcohol Duty - The alcohol duty escalator has been scrapped. Alcohol duty will rise in line with inflation with the exception of Scottish whisky and cider which are frozen.
  • Beer Duty - Beer duty will be cut by one pence a pint

Minimum wage rises up to £6.50 an hour

posted 13 Mar 2014, 04:13 by Richard White   [ updated 26 May 2015, 04:47 ]

A million workers will receive their first real-terms rise for six years

The national minimum wage will increase by 19p an hour to £6.50, the government has announced. The new rates will be implemented in October and will be to the benefit of a million workers.


Business Secretary Vince Cable confirmed he had accepted a recommendation from the Low Pay Commission that the minimum wage should increase by 3% and for the first time in six years that the rise will be higher than inflation.

Key points in the changes are as follows:
  • The rate for 18 to 20-year-olds will go up by 10p to £5.13 an hour, a 2% increase.
  • The rate for those aged 16 and 17 will rise by 7p to £3.79, also a 2% rise.
  • Apprentices will earn an extra 5p an hour, taking their wages to at least £2.73.
  • The consumer prices index (CPI) rate of inflation is currently 1.9%.
"The recommendations I have accepted today mean that low-paid workers will enjoy the biggest cash increase in their take-home pay since 2008," declared Mr Cable.

He also put forward the suggestion that companies should consider helping their staff to share in the benefits of an improving economy.

"I urge businesses to consider how all their staff - not just those on the minimum wage - can enjoy the benefits of recovery," he suggested.

Despite this latest rise, the national minimum wage is still well below the definition of low pay, as set by the Organisation for Economic Co-operation and Development (OECD).

This represents two-thirds of the median full-time hourly wage - about £7.71 an hour. About five million UK workers currently earn below that level.

The latest figure is also well below the living wage, which is £8.80 per hour in London, and £7.65 in the rest of the country.

"Across the country, people are struggling to make ends meet,"  commented Dave Prentice, the head of the Unison trade union. "The sooner we move to a living wage, the better," he said.

In January this year, Chancellor George Osborne said he backed the idea of the national minimum wage reaching £7 an hour by October 2015.

The latest announcement could pave the way for that to happen, but it would need a rise of more than 7% next year in order to do so.

UK Economy to hit pre-recession peak by the summer

posted 10 Mar 2014, 04:18 by Richard White

The size of the UK economy will by this summer overtake the peak level it reached before the 2008 financial crises according to a business advocate group.

The British Cambers of Commerce (BCC) believes that by the end of the Quarter Ended 30th June 2014 GDP will be greater than that seen at the start of 2008.

The BCC has upgraded its forecasts predicting growth of 2.8% this year - up from its previous estimate of 2.7%, but it has still stressed that there are "unacceptably high" levels of youth unemployment.

Our economic recovery is gaining momentum," said BCC director general John Longworth.

"Businesses across the UK are expanding and creating jobs, and our increasingly sunny predictions for growth are a testament to their drive and ambition."

Key points from the BCC predictions include:

  • Consumer spending will be a major driver of economic growth for the next three years
  • The group also predicts the first increase in UK interest rates will come at the end of 2015, rising from their historic low of 0.5% to 0.75%.
  • It expects further modest increases will see the rate rise to 1.5% by the second half of 2016.
"We urge the chancellor to use this month's Budget wisely by incentivising businesses to hire young people so that the next generation of workers are not left behind." stressed Mr Longworth. He also called for more business investment and better access to finance for companies.


Employment - Permanent jobs in the UK rise at fastest pace for almost four years

posted 7 Mar 2014, 03:19 by Richard White   [ updated 26 May 2015, 04:47 ]

Permanent jobs in Britain rose at their fastest pace for almost four years last month and salaries are also on the rise according to a survey released today, another in a number of indications of a recovery in the jobs market.

A monthly index measuring permanent job placements compiled by data firm Markit increased to 65.2 in February 2013, representing its highest level since March 2010, this compares with a figure of 62.1 in January 2013. Values over 50 represent growth in the number of placements. 

The survey also showed that salaries for permanent staff rose at the fastest rate since October 2007, while interestingly the number of temporary placements eased.


The Bank of England has been keen to emphasise the link between employment rates and its approach to setting interest rates. Based on evidence in the three months to December 2013, the Bank stressed that it was in no hurry to raise interest rates.

Economists polled by Reuters expect that unemployment will fall in the current quarter and will continue thereafter to reach 6.7 per cent by the end of 2014.

Bank of England keeps interest rates at record low

posted 6 Mar 2014, 04:30 by Richard White   [ updated 26 May 2015, 04:48 ]

UK interest rates have been held at 0.5% for another month, the Bank of England has said.

The decision by the Bank's Monetary Policy Committee is made five years after the record low level was first introduced.

It is the first rate decision since the bank amended its "forward guidance" policy that made a link between borrowing rates to unemployment figures. It is thought by some analysts that rates are unlikely to rise before the spring of 2015.

The Bank also kept its £375bn quantitative easing (QE) programme unchanged.

The move equates to a half-decade of ultra-low interest rates and has seen returns on savings severely hampered, whilst on the other hand mortgage borrowers have reaped the benefits of lower repayments.

The committee's interest rate decision was the first to be based on "fuzzy guidance", which links borrowing rates to the speed at which the economy uses up spare capacity, as measured by 18 indicators.

Howard Archer, chief economist at IHS Global Insight, said: "The Bank of England clearly wants to nurture recovery and not to risk choking it off by raising interest rates too early or too fast." The Bank is likely to raise the interest rate to about 1% over the course of 2015, then to 2% by the end of 2016, Mr Archer said.

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