Make time for your own personal development

As a leader in your firm, you are focused on developing the people around you. But who is responsible for your own development?

If you want to help your employees to grow and develop, you need to invest time in developing yourself, as a leader.

In order to focus on your own personal development, you need to schedule time to do so. If you don’t, your team and your business could outgrow you and your own career could stagnate.

Lead by example
If you want your team to take the time to invest in their own personal development, you need to lead by example. If you make time to learn and develop new skills, your team are more likely to follow suit. You may even be able to make suggestions to your team members, based on your own learning and development experiences.

Embrace technology
Learning and development doesn’t have to involve taking several days out to attend a conference or training session. There is an ever-expanding range of learning opportunities available online. The beauty of this is that you can take courses and attend webinars at a time that works for you.

Find a topic that interests you
There is no point trying to develop your skills in an area that you have no interest in. You want to feel motivated and keen to develop new skills. Do your research and find a development opportunity that you are passionate about. Personal development should be an interesting opportunity, not a chore.

Distractions can be a good thing
Focusing on your own personal development gives you an opportunity to step back from your day job. We often come up with our best ideas when we are off doing something new or exciting. Taking time away from the day-to-day can help to provide new perspectives on things and re-evaluate your priorities.
When you get back to your desk, you may have new ideas and you should feel re-energised

What to do when a key team member leaves

People move jobs more frequently these days. Here’s what to do when a key team member decides to move on.

As talented employees grow and develop in their careers, it is inevitable that some will decide to branch out and move to another firm.

Be supportive

Congratulate them on their new opportunity. Thank them for their contribution to the firm and mention some of the highlights of their time with your company. You want them to leave on good terms and to remember your firm for the right reasons – that way they will be an ambassador for your business.

Ask questions

Ask them what they are excited about in their new role. This is an ideal opportunity to find out what may not have worked out for them at your firm – so that you can address any potential issues. It can also give you some ideas about what makes other firms more attractive from a career perspective – this could inspire some new thinking around career development at your own firm.

Business as usual

It is important to avoid burning bridges. In our increasingly networked professional circles, there is a good chance that you will cross paths again in the future. While they are working their notice, avoid cancelling meetings, etc. Include them in day to day matters up until the end of their time at your firm – you want them to leave feeling good about your business.

Let them go

There is no point trying to convince an employee to stay. Once they have decided to move on, in their own mind, they have already left. If you encourage them to stay on, they could feel pressured and resent missing out on a good opportunity at their potential new firm. If your business is a genuinely great place to work, they may come back again in the future, with some new ideas gained from their work experiences at other firms.

Building trust as a manager

In order to manage an effective team of people you need to win their trust.

If employees don’t have trust in their company and their managers, they can become disengaged. This can lead to high rates of staff turnover and those who stay are likely to be de-motivated.

Transparency

Honesty is the best policy. Communicate with your team,

ensure that they are kept in the loop regarding the firm’s strategic plans and that they feel that their views are heard (and listened to), by management. Ask them for their input and where you have made a decision, give them some background information, so that they can better understand the drivers behind that decision.

Employees are people, not numbers

It’s easy to get lost in the numbers. We all love sales figures, KPIs and metrics. However, if you invest some time in getting to know your team members, they will feel valued by the firm. You don’t need to become their best friend but you do need to get to know them better in order to get the best out of them, keep them motivated and help them to progress their careers.

Give credit where it is due

The best managers show appreciation and acknowledge the hard work that is delivered by their people. Various studies have shown that employees who receive recognition from their line managers were significantly more likely to trust them.

Prioritise the team’s interests

To gain their trust, managers should be their team’s best advocate. The best managers present their team in a positive light and are openly proud of their accomplishments. Mistakes should be seen as learning opportunities and managers should take responsibility for putting things right, rather than placing the blame on an individual.

Ask your team for feedback

The best managers ask their team members for feedback. Constructive feedback should always be welcomed. Nobody is perfect and even the best managers can learn from their team members. Asking for feedback will also help you to build trust and rapport with your team members.

COMPANY VAT PENALTY CAN BE A LIABILITY OF AN “OFFICER”

A recent case before the tax tribunal saw the liability for a late VAT registration penalty being passed on to a manager of the company. HMRC have the power to impose such a penalty on an individual where (1) there is a penalty payable by the company for a deliberate failure (2) the individual on whom HMRC seek to impose liability is an “officer” of the company; and (3) the deliberate failure is attributable to that officer.

5G Networks

5G is the fifth generation of mobile phone and data networks. The rollout has already started – here’s what you need to know.

Today’s mobile phone and mobile data networks tend to use 4G and in some cases, 3G infrastructure. The latest 5G network is designed to work as a “network of networks” in that it will bind together multiple existing and future standards, including the current 4G networks.

5G networks are estimated to be up to 20 times faster than 4G. The new networks will offer lower latency and much greater capacity to support growth in traffic. However, 5G will offer more than just increased performance. It will enable new services such as fast mobile broadband without the need for landlines, on the road it will allow communication between vehicles (another step closer to self-driving cars), better connectivity between smart devices, smart infrastructure such as factories and airports, etc.

From a business perspective, some manufacturers are already experimenting with things like predictive maintenance and smart infrastructure. The current default connectivity mechanism is Wi-Fi but this is not always convenient, reliable or compatible with the working environment. Private networks, enabled by 5G’s capabilities and coverage characteristics, will help businesses to overcome these challenges.

The increased speeds available on 5G will accommodate and improve the lives of those who work remotely.

File sharing across networks and communication over services such as Skype will be faster, slicker and more stable. More reliable connectivity and better conference calls / video conferences will undoubtedly encourage more businesses to adopt remote working. This may help to cut down on commuting, putting less pressure on transport networks and reducing employee stress.

5G is being rolled out by various network providers including EE, O2, 3 and Vodafone. They have started by launching 5G in major cities such as London, Manchester, Birmingham, Belfast, Edinburgh, Glasgow, Liverpool, Bristol, etc.

Over time coverage in these cities will improve and the availability of 5G will grow. There are various online coverage tools which show the availability of 5G on a map and are useful for helping businesses to decide whether they are ready to invest in 5G now or wait until the new network is better established. A range of 5G devices and data SIM cards are already available from the various network operators.

IHT RELIEF FOR BUSINESSES AND FARMS

There is currently a very generous 100% relief from inheritance tax for passing on businesses and farm land during lifetime and on death. The rationale for Business Property Relief (BPR) and Agricultural Property Relief (APR) is to enable businesses to be passed on without the need to sell off assets to pay the IHT due on the transfer.

Currently if a business is wholly or mainly for the purpose of investment, then it will not be eligible for BPR. This is not always straightforward to determine.  Many estates include both trading and non-trading business assets, and establishing whether this test is met can be difficult to establish. The ‘wholly or mainly’ test is generally considered to be a greater than 50% test and the OTS are suggesting that the test should be aligned with the much stricter 80:20 test that applies for CGT gift of business asset holdover and entrepreneurs’ relief. If introduced many more business transfers would be liable to IHT.

On the positive side the OTS have recommended that IHT business property relief should be extended to include Furnished Holiday Lettings aligning the tax treatment with that of Income Tax and CGT where they are treated as “trading” providing that certain conditions are met.

NO TAX FREE CGT UPLIFT ON DEATH

Although the OTS were tasked with simplifying inheritance tax, they also considered the interaction with CGT as many asset transfers potentially have both CGT and IHT implications. Currently there is no CGT on assets transferred on death and the recipient inherits the asset at its market value.

It has been suggested that the capital gains tax uplift on death distorts decision making relating to assets that benefit from an exemption from Inheritance Tax. Where an individual holds such an asset that has risen in value, and is considering transferring it during their life, they are often advised to retain it until death rather than giving it away during lifetime, because of the tax benefits.

Where a business is retained until death, any potential capital gains are wiped out and there is no Inheritance Tax to pay. This could lead to an asset being retained rather than being transferred to the next generation at the time that is right for the business.

We will again monitor the progress of this proposed change as it is likely to have significant implications on family business succession planning.

CGT LETTING RELIEF RESTRICTION

Currently letting relief provides up to a £40,000 deduction in computing the capital gain on the disposal of a property that was at some time the taxpayer’s main residence. The relief is the lessor of £40,000, the gain attributable to the let period, and the amount of private residence relief. For a couple this could potentially exempt up to £80,000 of the gain from CGT.

The draft legislation will limit letting relief to those situations where the owner remains in shared occupancy with the tenant, i.e. has lodgers living in the house.

If you were hoping to take advantage of letting relief on the sale of a property, you might want to consider disposing of the property before 6 April 2020 to take advantage of the current rules. Contact us for advice in this area as we can estimate the additional tax that might be due following the withdrawal of this generous relief.

CGT PRIVATE RESIDENCE RELIEF CHANGES

Draft legislation to be included in the next Finance Bill will make important changes to the calculation of CGT private residence relief. As announced in the Autumn 2018 Budget, there will be a reduction in the final period exemption to just 9 months and stricter conditions for letting relief to apply (see our next blog post).

Currently where a property has been the taxpayer’s main residence, the last 18 months of ownership counts as a period of deemed occupation. This will be reduced to just 9 months for disposals on or after 6 April 2020. It is understood that this is being introduced to counteract “second home flipping” allegedly used by MPs when they sell their London residences.

OFF-PAYROLL WORKING RULES GOING AHEAD

The draft Finance Bill clauses issued for consultation on 11 July include legislation to extend the “off-payroll” working rules to the private sector from 6 April 2020. These changes will have significant implications for workers providing their services through personal service companies and also the end user organisations that engage such workers.

End users will be required to determine whether the worker would have been an employee if directly engaged and hence the new rules apply to the services provided by the worker via his or her personal service company. This will be a significant additional administrative burden on the large and medium-sized businesses who will be required to operate the new rules. The current CEST (Check Employment Status for Tax) online tool would be improved before the proposed start date.

“SMALL” EMPLOYERS EXCEPTED

“Small” businesses will be outside of the new obligations and services supplied to such organisations will continue to be dealt with under the current IR35 rules, with the worker and his or her personal service company effectively self-assessing whether the rules apply to that particular engagement.

The draft Finance Bill confirms that the definition of “small” is linked to the Companies Act 2006 definition.

This is where the business satisfies two or more of the following conditions:

  • Annual turnover of £10.2 million or less
  • Balance Sheet total of £5.1 million or less
  • 50 employees or less

There will be an obligation to pass details of the status determination down the labour supply chain. The liability for tax and national insurance will be the responsibility of the entity, paying the personal service company. However, if HMRC are unable to collect the tax from that entity, the liability will pass up the labour supply chain, thus encouraging those entities further up the supply chain to carry out due diligence.

Please contact us if you would like to discuss how the proposed changes are likely to impact on your business.