Business Risks Protection

The team at Chapters Financial Limited is proud to offer service and advice to the directors and staff of Small to Medium Enterprises (SME's) across Surrey, Kent and the south east region.

In specialising in business planning, including pension, protection and investment planning, Chapters Financial Limited receives requests from companies and enquirers for information on suitable cover for professional risks. This subject is a specialist area requiring bespoke solutions to the company’s needs and individual objectives.

To offer help in this area, we feel greater value can be secured by referring these enquirers to the specialist team at MacQueen International, based in Guildford, who serve business owners and managers in providing protection for business risks. They offer independent advice, like us, and have the following pedigree:

• Member of the British Insurance Brokers Association;
• Authorised and Regulated by the Financial Conduct Authority
• Based in Guildford, Surrey, UK
  
• Offering a wide range of commercial insurances including a Specialists Division in the provision and management of Professional Indemnity insurance
  Established in 1986
• Brokers to the Chartered Institute of Logistics and Transport in the UK
  
• Martin Macqueen, Director at MacQueen International Insurance Brokers Limited notes:

Through our two operating Divisions, Corporate and Professional, we offer a personal service from the initial meeting to assess the risks associated with your business through to extensive marketing in the London companies and Lloyd’s market to secure best terms tailored to your specific needs, to hands on claims management, including negotiation with underwriter’s appointed loss adjuster, solicitor or other claims handler to ensure that the policy you purchased works for you, to protect your assets and your company’s reputation.

Like Chapters Financial Limited, we place a high value on the quality of service provided to our clients and we are recognised within the professional market as a competitive and resourceful broker in the management of our clients’ insurance programmes.

We are delighted to be associated with Chapters Financial Limited.

When discussing the products available, Martin has provided a few examples for information below:

Typically Directors and Officers policies are divided into two parts:

• Directors & Officers Liability Coverage: The insurance company will pay the loss of individual Directors and Officers when the company cannot indemnify the individuals
• Corporate Reimbursement Coverage: The insurance company will pay the loss of the company when it has provided indemnity to the individual Directors and / or Managers

However coverage can be extended to include:

• Full Employment Practices Liability – covers the company (as opposed to the individual Directors/Managers) legal liability arising from a wrongful employment act including unfair dismissal, race, sex, age and disability discrimination.
• Corporate Liability (entity coverage) includes coverage for the company (as opposed to the Individual Directors / Managers) where an action is brought in the name of the company as well as its Directors and Officers.

The cost of coverage is not expensive for the essential protection it provides the individual Director and Officer of the Company and should form part of your essential insurance portfolio.

For information, MacQueen International Insurance Brokers Limited is the appointed broker to members of the Chartered Institute of Logistics and Transport in the UK for the provision of professional indemnity and directors and officers insurance.

No individual advice has been provided during the course of this blog. If you require bespoke advice on your pension, protection and investment planning, then please speak to the team at Chapters Financial Limited on 01483 578800.

For advice on professional risks protection, please contact Martin MacQueen on 01483 306771 or martin@macqueeninternational.co.uk

Keith Churchouse FPFS
Director,
ISO22222 Personal Financial Planner

Chapters Financial Limited Chapters Financial Limited is not responsible for the advice or service provided by MacQueen International Insurance Brokers Limited.

Chapters Financial Limited is authorised and regulated by the Financial Conduct Authority, number 402899.

MacQueen International Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority, number 310867.

Larger Pension Contributions/ Pension Input Periods (PIPs)

Many clients and enquirers are aware that the tax year 2013/2014 has seen changes to the tax regime being applied to their income and allowances. A good example of this is the fall in the highest tax charge rate of 50% to a new lower level of 45%. More changes to the tax regime are due in the tax year 2014/2015 and one of these points, namely the Pension Input Period, or PIP for short may affect your pension planning in this tax year (2013/2014).

The Annual Allowance (the amount you can put into your pension without a penal tax charge being applied) is dropping to £40,000 in the 2014/2015 tax year from £50,000. It is important that you know the Pension Input Period (PIP) end dates for each of your pension plans to ensure that you do not exceed the limits, attracting a tax charge at your highest marginal income tax rate accordingly.

If the PIP end date for your pension falls in the new tax year 2014/2015, then any contributions will be tested against the reduced Annual Allowance of £40,000, rather than the current Annual Allowance of £50,000.

Remember that not all plans will have the same PIP dates and this should be checked on each plan that you hold.

It is also worth noting that Defined Benefit schemes (such as a Final Salary scheme) are valued using a factor of 16, plus lump sum where applicable, over the Consumer Prices Index (CPI). Therefore any increase in benefits increasing by approximately £2,500 for the year over CPI will breach the new reduced £40,000 Annual Allowance (2014/2015).  

If you would like to know more about this pension planning and your tax allowances then please contact the team at Chapters Financial Limited on 01483 578800.

No individual advice has been provided in the text of this blog. You should seek independent financial advice (IFA) in your own circumstances.

Keith G. Churchouse FPFS

ISO22222 Certified Financial Planner

Director and Financial Planner

Wedding Season Gifting / Allowances

As the summer approaches, so does the wedding season, usually at great expense to those involved, including parents.

As the big day arrives, many arrangements and expenses will need to be catered for and it usually a time when parents and grandparents, along with others think about making financial gifts to the happy couple.

Many of our clients and Blog readers will know that thy can gift away £3,000 in a tax year and for this gift to fall outside the donors estate from day one. If they did not use this allowance in the previous tax year, they can go back on year (£6,000 total).

For gifts on marriage, there are additional inheritance tax (IHT) allowances, as follows:

·         From a parent to a child on marriage: £5,000

·         From a grandparent (or great grandparent) to a grandchild on marriage: £2,500

·         Gifts from others as a single amount: £1,000

Further details are available on the HMRC website here: http://www.hmrc.gov.uk/inheritancetax/pass-money-property/exempt-gifts.htm#1

(Chapters Financial is not responsible for the content of external webpages)

You may want to take these gifts into account if a family member is getting married this summer.

You may also want to update your will to reflect this addition to your family and for future offspring. We do recommend that you keep your wills up to date and can recommend a local solicitor if you do not have your own contact/ arrangements.

I hope the day goes well!

If you would like to know more about this planning or your inheritance tax allowances then please contact the team at Chapters Financial Limited on 01483 578800.

No individual advice has been provided in the text of this blog. You should seek independent financial advice (IFA) in your own circumstances.

Keith G Churchouse, FPFS

Director
ISO 22222 Certified Financial Planner
Chapters Financial Limited

Chapters Financial Limited is authorised and regulated by the Financial Conduct Authority, number 402899. The Financial Conduct Authority does not regulate legal advice.

Investment Performance & Review 2013

2013 has started with many clients seeing positive returns on their investments, pensions and other holdings. It is always good to report such positive news, with many clients that we have undertaken reviews for being pleased with the progress made. This does not mean that we will not see additional volatility into the future. However is it encouraging to see fund values increasing in many instances. 

We gather information on investments from many sources to ensure and maintain a robust advice process. One source is our colleague, Stephen Williams, Managing Director at Cormorant Capital Strategies Ltd, who notes: 

Output and employment have sustained a curious push-me-pull-me trend in recent months. The first quarter of 2013 was no different. On the ILO* measure (perhaps the most credible of all the different measures); unemployment has drifted higher from 7.8% of the available workforce to 7.9%. At the same time the year-on-year increase in average earnings continued to slow; it now stands at just 0.8%, a full 2% lower than general inflation. In contrast to this increasingly gloomy backdrop came a surprisingly upbeat initial estimate for economic growth at 0.3% compared with the previous quarter (or 0.6% compared with a year earlier).

According to the Office for National Statistics the first quarter, it seems, was witness to a higher rate of growth than most had come to expect. Sensible observers were expecting a marginal gain (or decline) in the order of 0.1% to 0.2%. Both the Bank of England and the Office for Budget Responsibility were predicting that a triple-dip recession would be narrowly avoided. It was broad-based expansion in the service sector that led the growth, again (0.6% contributing 0.5%). Meanwhile production was flat and construction contracted, again (-2.5% contributing -0.2%).

Of course, that we describe growth in the region of 0.3% as ‘upbeat’ is testament to the duration of the current economic malaise. A full five years on, GDP remains 2.6% below the pre-recession level. Nevertheless, there are positive signs; equity markets are buoyant and eased credit conditions has inflated house prices a little. But both of these will need to be sustained if, in the absence of a sudden and somewhat unlikely rebalanced economy, we are to see any kind of momentum toward a real recovery.

Stephen Williams

Managing Director
Cormorant Capital Strategies Ltd

*International Labour Organization

The team at Chapters Financial has spent much time over the last years with existing clients and new enquirers viewing existing holdings and making changes where appropriate to meet both their attitude to investment risk and the objective of their plan, such as capital growth or income.

If you would welcome a review then please let us know and we can arrange to meet at a suitable time to undertake any agreed changes that may be appropriate in your circumstances. 

Past performance is not a guarantee of future performance. Fund values can fall as well as rise.

This Blog provides general information and should not be used as individual advice.
If you, your business or charity would like to receive individual advice on the issues of investment or pension planning , then please contact the team at Chapters Financial Limited on 01483 578800.

Keith G. Churchouse FPFS
ISO22222 Certified Financial Planner
Director and Financial Planner 

Chapters Financial Limited is authorised and regulated by the Financial Conduct Authority, number 402899.

The Financial Conduct Authority does not regulate Tax advice

Chapters Financial Newsletter

At Chapters Financial Limited, we like to keep our clients and enquirers informed of topical issues and topics that bear relevance to their financial planning. The May 2013 Newsletter has just been produced and will shortly be made available to our clients and contacts in the next few days.

In this blog, I have provided a flavour of what is included, amongst other topical issues, for your consideration.

If you would like to consider the potential for this planning further then please contact the team at Chapters Financial.

Inheritance Tax & Charitable Giving

We are pleased to have received many enquires seeking advice on ways that inheritance tax can be saved. As a highly topical subject, many clients and enquirers also consider charitable giving as a way of saving inheritance tax, both through their lifetime and through their wills. We have introduced a new Webpage entitled Charitable Giving, which details the opportunities further. If you would like to know more or to consider ways of supporting local organisations in an efficient manner then please contact Keith Churchouse.

Auto-Enrolment/ Workplace Pensions reminder

The implementation of Auto-Enrolment with the use of Workplace Pensions is well under way for many employers, starting with the largest employers and moving in company size to the smallest by 2016/2017. We have received many enquiries from Business owners on this subject and are well placed to provide advice and service in implementing the relevant requirements. If you would like to know more or to know when your business’s Staging Date is then please let us know.

The New Financial Conduct Authority

As noted in previous Newsletters, the Financial Services Authority has now ended and has been replaced by the new Financial Conduct Authority at the beginning of April 2013. We are pleased to have met with the new regulator in early April following their transition and we welcome this change and look forward to their work into the future.

New Chapters Financial APP

At Chapters Financial Limited, we try to keep ahead in terms of our communications and the way these can be received. Many of you will have visited our website to access Blogs, Podcasts, Press Comment and other information. This information can also now be accessed by our new APP, suitable for Computer tablets and Smartphones. Please see our website to download your additional access to news, updates and information from Chapters Financial Limited.

No individual advice has been provided during the course of this blog. If you would like to receive individual advice on the topics above, or receive our regular newsletter, then please contact the team at Chapters Financial Limited on 01483 578800.

Keith G. Churchouse
FPFS ISO22222 Certified Financial Planner Director and Financial Planner

Chapters Financial Limited is authorised and regulated by the Financial Conduct Authority, number 402899.
The Financial Conduct Authority does not regulate Tax advice.

Personal Tax Allowance Trap

As you may be aware, one of the targets within the current coalition government was to raise the personal allowance to a limit of £10,000 within this parliamentary session. This process has been accelerated and will now come into force as from 06 April 2014. This sounds as though it is great news for everyone, as it appears as if no one will pay any tax on the first £10,000 of income in the tax year 2014/15. However, if an individual receives income in excess of £100,000 in the tax year then the personal allowance is reduced by £1 for each £2 of income in excess of £100,000.

60% Effective Income Tax Rate

So what does this mean for the people with income in excess of £100,000? It means that they have an effective income tax rate of 60% on any income between £100,000 and £120,000 in the tax year 2014/15 (between £100,000 and £118,880 in tax year 2013/2014). This is due to the 40% of higher rate income tax applied at this level, plus the loss of 20% of effective basic rate band allowance.

Penalty or Opportunity?

How can this be when the additional rate of income tax is meant to be 45% (as of 06 April 2013)? Surely a 60% effective rate of income tax is very punitive? Yes, I would have to agree that it is. So what can anyone do about this and try and mitigate this harsh effective tax band? The most immediate and effective option is to consider personal contributions into a pension scheme. If the spare capital and enough headroom within an individual’s maximum annual pension contribution allowance (£50,000 in 2013/2014) are available, then contributing an amount to effectively reduce one’s income to a level of £100,000 (or closer to it) for the tax year could be an extremely effective method of mitigating, and in fact capitalising on this effective tax rate band of 60%.

Summary

If this situation applies to you and you do have annual income in excess of £100,000, have you considered the benefits of engaging a professional Financial Planner to consider your options at these threshold points?

No individual advice has been provided during the course of this blog. The use of allowances and contributions into pensions should be planned for carefully and if you would like to receive individual advice on the topics above, then please contact the team at Chapters Financial Limited on 01483 578800.

Simon Hewitt BSc (Hons) Dip PFS
Financial Planner
Chapters Financial Limited is authorised and regulated by the Financial Conduct Authority, number 402899.
The Financial Conduct Authority does not regulate Tax advice.

Tax Year Allowances – The old & the new

As we approach the end of tax year (05 April 2013), and approach the new tax year of 2013/2014, you will probably see much in the press, on our website and in our newsletters about how tax allowances and tax rates will change from the start of the next tax year (06 April).

As the old saying goes “there are only 2 things in life which are certain, death and taxes”. With careful financial planning and implementation, you may be able to mitigate the tax you pay on your assets and investments in the future.

I have highlighted below some of the areas where careful use of individual allowances can help with your financial planning, provided they are implemented before the end of the tax year.

Of course, some allowances, such as the ISA are usually renewed each year, so you can use your allowance again early in the forthcoming tax year 2013/2014.

Individual Savings Account (ISA) £11,280 2012/2013 and £11,520 2013/2014

This is the most obvious allowance to most investors, allowing either tax-free savings, via a Cash ISA, or tax efficient investment, via a Stocks & Shares ISA. The only tax which applies to the Stocks & Shares ISA is the 10% dividend tax credit which applies to any dividend income which the investment produces and this is non-re-claimable.

The annual allowances must be used within the tax year or there are lost forever, i.e. “Use-it or Lose-it” basis. In the current tax year (2012/13) an individual (not a minor) has a total allowance of £11,280 of which up to a maximum of 50% can be placed into a Cash ISA with any balance remaining is available for investment into a Stocks & Shares ISA. The total annual allowance for tax year 2013/14 (starting 06th April) rises to £11,520.

Junior Individual Savings Account (JISA)

Being very similar to the adult ISA, the Junior ISA allows a child under the age of 18, who was not entitled to a Child Trust Fund (CTF), to have either a Cash Junior ISA or Stocks & Shares Junior ISA or both but the total annual amount is £3,600. The child owns the Junior ISA and will take control of it after their 16th birthday, however cannot access the funds until after their 18th birthday. This allowance is due to increase in the new tax year 2013/2014 to £3,720.

When the child reaches the age of 18 the Junior ISA will automatically switch to an ISA. Some suggest that this can be a very useful method of saving / investing for future further education/ university fees.

Capital Gains Tax (CGT)
On most assets, whenever an individual buys an asset and realises a gain on the asset then Capital Gains Tax could potentially be applicable. Currently this is set at flat rates of 18% for nil and basic rate income tax payers and 28% for higher and additional rate income tax payers.

However, every individual has the use of an annual capital gains tax allowance, currently £10,600 in tax year 2012/13. This allowance increases in the new tax year 2013/2014 to £10,900.

For reference, Trusts also have the use of a CGT allowance at half the standard individual amount.

Pensions

Relatively recently (06 April 2011), the annual allowance for investments, from all sources, into pensions was severely reduced from £255,000 gross (tax year 2010/11) to £50,000 gross in a year. This annual allowance continues until the beginning of the tax year 2014/15, when it is due to reduce to £40,000 gross.

However, unlike the ISA and the CGT allowance already noted, previous unused years allowance can potentially be carried forward into the current tax year (where available and legislation continues).
Therefore, this option can be attractive to a higher, or additional, rate income tax payer receiving relief at either 40%, or 50%. Advice should be sought from an Accountant to ensure that an individual has the capacity to contribute tax efficiently within the allowances.

Inheritance Tax

Many people are aware of the Inheritance Tax (IHT) threshold, known as the nil-rate band (NRB), per individual is currently £325,000 (2012/13). Above this value, the remaining estate is liable to IHT at a flat rate of 40%.* Many of these people are also aware that the unused portion of IHT NRB is passed to the surviving spouse, or civil partner, to use on their death for their estate.

Making sure a valid and robust Will is in place is a cornerstone of financial planning and you may want to re-visit this issue with your solicitor.

However, what many people are not aware of is the annual gift allowance of £3,000 per donor, which falls outside of their estate immediately. Again, if the previous year’s annual gift allowance has not been utilised then you can effectively gift a total of £6,000.

* You may be able to reduce this tax rate by making a gift from your will to Charity. Please read our webpage ‘Charitable Giving’ for further details.

Summary

The time is of the essence whenever the tax year end is concerned, both to use up available allowance where prudent and possible in this tax year and to look at the new allowances early in the forthcoming tax year 2013/2014.

No individual advice has been provided during the course of this blog. The use of allowances should be planned for carefully and if you would like to receive individual advice on the topics above, then please contact the team at Chapters Financial Limited on 01483 578800.

Simon Hewitt BSc (Hons) Dip PFS
Financial Planner

Chapters Financial Limited is authorised and regulated by the Financial Services Authority, number 402899.
The Financial Services Authority does not regulate Tax advice.