This week’s bulletin contains an update on client reviews, whilst covering some updates that are being made to client portfolios.
We’ve also included a brief guest piece from our friends at Williamson & Croft accountants in Manchester that may be helpful to business owners. They have written a short summary of the financial support measures that are available to business owners, how they apply and what the implications are. The feedback we have been getting from our many business owner clients is that there remains a lack of clarity from the government, whilst in some cases their accountants are failing to provide them with pro-active advice. If this is the case Williamson & Croft are happy to have an initial discussion without charge to help you understand your options.
Feel free to read selectively and don’t hesitate to get in touch if you would like to discuss anything that is written below.
Keeping your Finances Under Review
Our business continues to operate as usual, with the only difference being our team are working from home. We continue to administer your affairs as usual and remain available to advise you on all aspects of your finances.
Client reviews are continuing as normal and are being held using our video conferencing software. It’s easy to use and enables us to speak to you face-to-face via video link. It is rather like Skype, which I know many of you are already familiar with. This enables us to share key documents and information with you that will appear on the screen of your computer or laptop so we can discuss them together.
Feedback from clients who have now been through this process has been excellent. Moving forwards, when the world finally gets back to some sense of normality (whatever that may be!), we will be offering future reviews in this format if it is more convenient. However, I would like to make clear that it will not be replacing traditional face-to-face advice and review meetings can continue to be held at our offices as usual if preferred.
Lettie is in the process of arranging client reviews as per your usual schedule, but if you would like to have an ad-hoc review of your finances please just let us know and we will set up an online meeting.
Updates to Investment Portfolios
This week Tatton’s Investment Committee decided to rebalance all client portfolios back to a ‘neutral’ position. This means selling down some of the ‘safer’ holdings that make up portfolios (such as cash, gilts and bonds) and using the proceeds to buy more equities (shares). This enables us to take advantage of the opportunity that recent stock market falls have created, buying more equities whilst they are cheaper, to potentially benefit from future growth.
Each portfolio has a cap and a collar on how much can be held in equities at any one time. This is to ensure that your risk and return profile is always kept within a certain banding. For example, a balanced portfolio will always have somewhere between 50% to 70% invested in equities. The ‘neutral’ position of a portfolio like this would be holding around 60% in shares. Being ‘overweight’ would mean holding around 70% in shares, whilst ‘underweight’ would be 50% in shares.
This system allows the manager to make tactical decisions about how to position a portfolio depending on what is happening in markets and the economy. Our client portfolios were positioned underweight in equities going into the Coronavirus crisis, which helped to protect against the worst of the stock market falls. The new neutral position helps us to buy more shares whilst they are cheap, which should help portfolios recover with time, without taking a great deal more risk.
As always portfolios remain under review and will be updated automatically when it is deemed right to do so. We will keep you informed.
Coronavirus Job Retention Scheme Update
An update has been made by HMRC regarding the coronavirus job retention scheme and the application process. This will affect all employers with furloughed employees and any directors who have or are considering furloughing themselves.
The application process and portal will go live on the 20th April. So, from this date businesses will be able to apply for the furloughed employee grants.
In order to make a claim you must;
Have created and started a PAYE payroll scheme on or before 28 February 2020:
Be enrolled for PAYE online – this can take up to 10 days: and
Have a UK bank account.
Company Directors
HMRC guidance confirms our understanding that directors, including those who are directors of their own personal service company, can be furloughed.
It is important to remember that if you are furloughed you shouldn’t be working unless you need to carry out specific duties to fulfil your statutory obligations (e.g. filing the company accounts and other duties imposed by the Companies Act). The guidance from HMRC states, ‘furloughed directors should not do work of a kind they would carry out in normal circumstances to generate commercial revenue or provide services to or on behalf of their company’.
Tax Consequences of The Grant
The grant paid to you is subject to tax and it is included within the business taxable profits for income tax or corporation tax purposes. The salary payments and associated NIC and pension costs continue to be tax-deductible in the usual way.
If you would like any further information on your options or any of the other changes announced, please get in touch with us. Feel free to contact our offices on 0161 399 0121 / 0151 303 3112 or by email info@williamsoncroft.co.uk
