News

Click to download the newsletter in PDF format.

Offices

We are reopening our office at No. 1 Bruntsfield Place to compliment the other No.1 sites at Inverleith Gardens and Meadowbank Avenue. These three great locations will allow clients coming from different parts of Edinburgh the convenience of visiting their most geographically suitable office, and miss out the inevitable traffic chaos confronting anyone travelling across town. Internal high spec technology (including web cam in every office) will enable everyone to link up no matter where you are and who you want to see.

The office at 70 Haymarket Terrace, EH12, will close shortly for refurbishment and details of its future use will be contained within later editions of the Gillespie Newsletter.

New Companies & Associates

We are launching three new companies to run in association with Gillespie Accountancy LLP which will continue to offer a full multi officed accountancy service to our business clients, geared to preparing full audited end of year trading accounts for the small ltd companies to partnerships (including Limited Liability Partnerships) and sole traders. The service also contains bookkeeping, management accounts, VAT Returns, Payroll & PAYE Returns, Corporation Tax Returns, Self Assessment Income Tax Returns, Capital Gains Tax, and Foreign income/non-residency etc, and of course Revenue Investigation defence work.

New Company No.1 – Tax UK Online Ltd will do exactly what it says on the tin… we hope to offer an instant response Online Tax Return service accepting the relevant online data from the client, transferring this onto our tax software, and sending a completed new style Tax Return to HMRC online after our qualified endorsement.

Because the service is totally online it enables us to reduce the level of fees and charges for our services to a level which we have always believed is more reasonable to the client, and because the service is web driven… it’s open to everyone from all over the UK.

New Company No.2 – Just Tax Online Ltd – this company will stand squarely between Tax UK Online and Gillespie Accountancy LLP, and provide a low-cost straightforward Tax and simple accounts service for small trades and furnished letting clients.

We anticipate this new business will resemble our original GTM Accountancy business, back in the 1980’s and 1990’s and offer a no frills accountancy package containing preparation of a profit & loss expenditure statement, together with an online tax return service, all endorsed by qualified tax technicians..

With Just Tax Ltd we hope to be able to reduce accountancy fee costs, and yet still offer a robust tax defence and a traditional accountancy service, utilising up to date online technology.

This service will also offer bespoke bookkeeping software to enable the small business/tradesman to retain and transmit only the basic relevant income and expenditure records for us to process online.

New Company No.3 – last but not least the third new company being introduced this month is “Makes Sense Ltd”.

Unlike the other 3 tax and accountancy businesses, the introduction of “Makes Sense” is all about our clients receiving rewards for introducing business to our various companies.

This is purely a marketing company which receives commission from the many varied services referred to our associated companies, and simply passes this commission on to the client

This means any client with a friend or relative requiring accountancy or tax assistance, or even thinking about moving house or re-mortgaging and requiring an accountants reference, or income confirmation, can receive not only the professional help they need from our associates, but also a commission share. Don’t miss out.

Also no need to think small… our Tax UK Online business looks after companies and multi employee sources. The commission could therefore be much bigger and repeated year on year!

New Website Formation

We are opening two brand new websites this month;

1. Gillespie Tax & Accountancy

2. Tax UK Online (incorporating Just Tax Online Ltd)

Both websites will contain details of the various services available but are distinctly different.

The Gillespie Accountancy LLP webpage’s are traditionally informative and comprehensive, informing the reader about the services already available from an established Edinburgh based accountancy group. Its sincere message is designed to increase confidence in the minds of existing and potentially new clients of our continuing intention to offer an intimidation free – 100% tolerant and caring accountancy service to the local business populous… no matter what size.

In short – it conveys a picture of a modern accountancy and taxation firm, using established methods backed by high spec technology and old fashioned customer service values.

The Tax UK Online website could not be more different. It’s purely a dedicated online website offering the UK tax-paying populous the option of a straightforward low cost online tax return completion and reporting system, with the guarantee of a qualified endorsement.

The system requires the highest spec technology available and multi-officed staffing to ensure a 24 hour response, and prompt tax return completion with instant submission online to the Revenue.

Tax UK Online presents an exciting and challenging project, but one that had to be taken due to forthcoming government legislation which will forbid the submission of the 2007/08 paper style Self Assessment Tax Return after 31 October 2008!

Tax Cards 2008/09

Available to clients and friends

Supplies of our brand new style 2008/09 Tax Cards introducing Tax UK Online are freely available at all our offices. It is a handy pocket sized information card containing a host of relevant facts on tax rates, allowances, etc and important factual data for 2008/09, including Alistair Darling’s recently reviewed budget allowances to replace the “stolen” 10p rate (see further commentary in this edtion).

(Those receiving this Newsletter by email can see that we have made an attachment to give the email correspondent a taste of what the card contains. They can pick up their real card and their copy of the real Newsletter at any of our offices.)

We have also prepared some notes on the effects of the changes and reasons behind the Chancellors latest u-turn.

More U-Turns than an Edinburgh Taxi Driver

(and how this will affect our clients)

Alistair Darling bowed to pressure last month with a £2.7 billion hand-out for low and middle-income earners to compensate for the removal of the 10p band.

The chancellor increased the personal tax-free allowance from £5,435 to £6,035, compensating four out of five of the 5.3 million who had lost out.

For most low to middle-income earners, the changes put them back where they would have been before the abolition. There are still losers, and higher rate tax-payers may be unexpected winners.

This might help explain…

What was announced?

In last year’s budget, the government abolished the 10p income tax rate, which everyone paid on earnings up to £2,230 above the personal allowance.

The abolition paid for a 2p reduction in the basic tax rate from 22% to 20%. However, the move brought a backlash, forcing Darling to raise everyone’s personal allowance by £600, backdated to April 6.

When will I see the benefit?

From September all taxpayers will see a one-off increase in their pay packet of £60 and then a rise of £10 per month for the rest of the tax year. That is a total £120 for all 22m taxpayers earning up to £40,835 (the new personal allowance of £6,035 plus the upper threshold for the basic rate, £34,800).

How are higher-rate taxpayers affected?

Had the chancellor simply raised the personal allowance by £600, higher-rate taxpayers would have been £240 better off – twice the benefit for those in the basic band – as £600 of income would have been taken out of 40% tax.

However to counter this Darling has reduced the level of income at which anyone can start paying top-rate tax… by £600 from £41,435 to £40,835. This will push another 150,000 people into the higher income-tax band, but will be offset by the £120 benefit from the raising of the personal allowance go status quo – apart from Nic’s.

Experts say higher-rate payers could perhaps benefit next year, i.e. 2009/10, as in 2007 Gordon Brown pledged to align the upper earnings limit for 11% National Insurance contributions (Nics), now £40,040, with the point at which you start paying higher-rate tax. Frankly we doubt this will happen – the giving is likely to be

This is essentially an unplanned 10% tax cut on about £600 of earnings, leaving higher-rate payers £60 better off from April (but will they notice £5 per month extra? We doubt it).

And lowest-income earners?

While about 600,000 people earning less than £6,035 will no longer have to pay tax, there are still approx 1.1m households earning £6,035 to £13,355 per annum, and they will lose out by up to £112 a year.

Why? Because they lost by as much as £232 when the 10p rate was abolished and they will only gain £120 from the rescue package, so better but completely fixed.

Childless workers under 25 or who work less than 30 hours a week lose most as they don’t get working tax or family credits.

When do the changes come into effect?

The changes will come into effect in September 2008, but are backdated to April 6. Darling will set out his proposals for 2009/10 in November’s pre-budget report (can’t wait).

How will it be paid for?

The government will borrow money to pay for the changes, expected to cost 2.7 billion. Capital Economics said this could increase public sector debt by some 0.5% of GDP. And remember the chancellor is getting richer every day the fuel prices remain high and get higher the taxes on the fuel and the price of fuel. But he won’t tell you this

The Tax Man Cometh

HM Revenue & Customs have now targeted the private rental sector, utilising 19(1) (c) of the Taxes Management Act 1970 to enforce all letting agents to disclose their client details, the rental properties that these clients own, and the amount of rental income collected. This is an attempt to unveil infringers for the non declaration of both income and capital gains taxes.

As you may be aware, when you receive rental income from the letting of your property, you were obliged to declare any net profits or losses to HM Revenue & Customs at the end of each tax year, even if the net rent did not necessarily cover the mortgage interest.

Additionally, when you have sold your investment property, you should be aware that there may be Capital Gains Tax implications to consider.

This is not meant to be a scaremongering article, but as a bulletin update on the latest Revenue’s taxpayer hitlist.

If you are at all concerned simply call George or Scott (at Meadowbank). The chances are there will be no profit to tax if a mortgage is on the let property, but this income source still must be returned.

Gillespie Corporate Golf Days (2008)

Now that summer has arrived (allegedly), Gillespie’s will be planning several corporate golf days for our clients over the Summer and Autumn months.

We are using this initiative to launch our brand new “Just Tax Online” service, designed to simplify Accounts and Taxation Returns, and more importantly drastically reduce Accountancy fees.

The initial competitive rounds will be held on Fridays at Goswick Golf Club Berwick-Upon-Tweed, with the Grand Final being held at Craigielaw Golf Club. Furthermore we will provide transport, food, and also do a prize-giving at every stage of the event.

Please let us know ASAP if you are interested in taking part in what we hope will be a continuing sequence of events exclusively run for our clients, and also guests of clients… every year.

Please call Elinor direct on 0131 552 9100 or email gillespie4@btconnect.com to register your interest. We need to know the following information;

• Mobile Number/ Email Address

• Dates you are unavailable i.e. holidays etc

• Home Golf Club and handicap.

Mortgage Partner/Financial Services Associates

Each edition will contain an article written by one of our several Financial Consultancy Associates.

This month we are introducing Alan Watson, Director at The Stockbridge Group Ltd, who despite the recent rumoured doom and gloom still has this upbeat message for our clients;

As one of Gillespie’s preferred Independent Financial Advisors, and Mortgage Broker, we are very pleased to be a participant in the first edition of the Gillespie Newsletter.

Potential homebuyers, people wanting to remortgage, capital raise or consolidate debt, or the thousands approaching the end of fixed rate deals are finding the current mortgage market challenging, with lenders pulling products and pushing up rates. And the Bank of England has warned the squeeze on the availability of mortgages may continue for sometime to come. As well as fewer products being available, lenders are becoming stricter about who they will lend to.

Although at first glance it may not appear easy to obtain a “cheap” mortgage compared to even a year ago, there are still deals to be found.

Using a mortgage broker who has access to technology is vital at a time when lenders rates are being withdrawn at little or no notice. The best-buy tables in Sunday’s broadsheets are often redundant by 9am on the Monday morning!! In addition, a specialist mortgage broker will often have access to exclusive products that may not generally be available.

Established in 1996, the Stockbridge Group (www.stockbridgegroup.net) is such a specialist broker. They offer a full impartial advice and recommendation service to clients’ of the Gillespie Group. From first time buyers through to new purchasers, remortgages or buy to lets, their team of specialist consultants can provide assistance with what is likely to be your biggest financial commitment.

Alan Watson

Stockbridge Group Limited

17-21 Assembly Street

Edinburgh EH6 7BQ

Tel: 0131 454 2300

Fax: 0131 454 2301

Client Network Page

This section is all about our clients. Not only do we have over 2000 in number, the various trades and the services within our client bank is staggeringly comprehensive. Since we know what everybody does for a living we thought our clients would like to know also. We are very pleased therefore to help our clients network their services – through our website – to our other clients.

See www.gillespietax.co.uk and simply provide the details of your trade or service on offer to other Gillespie/Just Tax clients.

Or alternatively call Elinor and tell her you wish to participate in the Client Networking Programme. She will need to know;

• Your Name

• Trade/Service/Job Description

• Telephone Number & Email address

• Your contact preference