The world wants to do business with Scotland

January 14, 2020

International trade event highlights opportunities and risks

International business opportunities have never been more exciting or potentially more rewarding for Scottish businesses and the business community should explore the huge potential on offer, delegates to an international business event recently hosted by Campbell Dallas were told.

The event in partnership with experts from affiliate firms in the Allinial Global network based in the USA, China, India and Ireland explored how Scottish businesses could begin trading with the four countries.

Expert speakers outlined the different economic and political profiles of each country, how their international business and tax systems are structured, and highlighted some of the key challenges and risks to consider.

Three consistent themes emerged during the presentations:

Firstly, it was clear that many countries are open for business and would like to do business with Scottish companies. This is particularly important given that we are now heading towards some form of conclusion to Brexit.

Secondly, whilst their tax and trade rules are different, there is a consistent desire to see international business dealings taking the form of inward investment, preferably involving a physical presence. Attractive incentives are increasingly being offered to encourage, retain and reward sustainable inward investment.

Thirdly and most importantly, whilst the rewards of international business can be significant, the cost of getting it wrong can be punitive. All the speakers said it was critical to obtain advice, even just a phone call or email, before committing to any form of business structure or enterprise.

Cormac Doyle, Head of Tax with EisnerAmper in Dublin, said that Ireland is proving a popular inward investment location as UK companies seek a more direct springboard into the EU market. Clearly many companies want to ensure they can continue to access both the Irish market and the much larger EU market as seamlessly as possible. There are attractive incentives to invest in intellectual property and knowhow and the Corporation Tax rate is also very competitive. An Irish business presence could offer Scottish businesses a key competitive advantage.

Gerard O’Beirne, a tax partner with EisnerAmper in New York also pointed to a range of incentives designed to encourage businesses to invest in the USA. He explained: “The government wants international businesses to be part of the economy from within, not just trade with the USA. To facilitate this shift, the Trump administration introduced the FDII legislation – foreign derived intangible income. FDII is designed to encourage investment in IP and the knowledge economy, with qualifying international ventures eligible for corporate tax rates as low as 13.25%.”

Amit Maheshwari, a tax partner with Ashok Maheshwari & Associates in New Delhi pointed out that the Indian government had made investment in manufacturing a major strategic target: “India has attractive incentives for businesses wanting to establish and grow a manufacturing presence in India. The incentives have been made more attractive and include lower corporation tax rates and a benign approach to the extraction of profits and dividends. The most popular business structure we now create for clients is the LLP (limited liability partnership) as it is frequently the most suitable model for the international trade tax regime.”

Alex Xie, a Tax Director with SBA Stone Forrester in Hong Kong said that China is also reaching out to attract inward investment with its own range of attractive tax and regulatory incentives: “China wants to undertake more international trade but realises that it has to help overseas businesses commit to engaging with the world’s largest economy. Key to encouraging international trade is a wider range of tax and trade incentives, plus corporation tax as low as 15% as long as it is a qualifying business activity within the high technology sector.”

The last few years have been challenging for all of us in business but our event was a welcome reminder that there is a world of business available to ambitious Scottish companies, and we should do our utmost to help them capitalise on the opportunities. The timing is good given that many tax systems have become more flexible and accommodating, with governments having a better understanding of how businesses operate. As such, the current range of incentives for international business are as good as any for a long time. However, it is always crucial to remember to seek advice before embarking on any significant investment. It is easier to prevent problems than it is to fix them.

Campbell Dallas has a range of materials exploring the legislative, political, economic and tax systems operating in each country. Businesses considering international trade can also benefit from a free initial exploratory discussion.

Fraser Campbell Accountant






Fraser Campbell, Head of Family Business and International Advisory Partner

For further information on expanding your business overseas contact me at:
0141 886 6644

The information in this blog should not be regarded as financial advice. This is based on our understanding in January 2020. Laws and tax rules may change in the future.

New Year brings new, welcome changes to loan charges from HMRC

December 30, 2019

The controversial loan charge was due to be levied by HMRC on loan balances from relevant planning outstanding as at 31 March 2019, resulting in a flurry of activity as taxpayers settled their affairs under the terms offered by HMRC or prepared to deal with the imposition of the charge.

However, following the recent review of the loan charge, it will no longer apply as widely as was previously proposed.

It should be noted that the fact that the loan charge is being dropped does not mean that HMRC will not continue to pursue companies for tax due under the original planning, but in some instances there will be repayments due from HMRC in due course where settlement has taken place.

The first category of change is where the loan was entered into prior to 9 December 2010. For loans entered before this date (when anti-avoidance legislation was enacted), the loan charge will no longer apply.

For loans entered between 9 December 2010 and 5 April 2016, the loan charge will not apply where the planning was fully disclosed to HMRC, and HMRC did not take any action. This will cover cases where HMRC did not open an enquiry, and presumably cases where HMRC did open an enquiry but closed the enquiry without proposing any adjustment.

Those who are still subject to the loan charge can spread the amount over 3 tax years evenly to potentially reduce the amount of the charge which will be due at higher rates of income tax. There are also certain relaxations in terms of Time to Pay arrangements.

Taxpayers who are due refunds from HMRC from settlements entered should begin contact HMRC once the amending legislation has been passed (which is forecast to be in summer 2020). Those considering what to include on their 18/19 tax return can delay filing their return until 30 September 2020 without suffering any penalties.

Each taxpayer who has been involved in relevant planning will need to take professional advice based on their individual tax pattern, and our team would be delighted to assist in this.

If you have any queries, please speak to your usual Campbell Dallas advisor.
0141 886 6644

The information in this blog should not be regarded as financial advice. This is based on our understanding in December 2019. Laws and tax rules may change in the future.

Quartet of new partners appointed

December 16, 2019

The success of our pioneering apprentice and graduate trainee development programme has resulted in four long-serving staff being promoted to the partnership in the New Year. The promotions are effective 1st January 2020.

All four new partners – Kirsty Murray, James McBride, Jennifer Alexander and Alan Brown – joined as graduate trainees and have been with the business for an average of 16 years.

After joining as a trainee in 2004, Kirsty Murray has been appointed as a new Tax partner based in Edinburgh. She has extensive knowledge of corporate and business tax and is acknowledged as a specialist in the technology, R&D and performing arts sectors. The appointment reflects her high standing with clients, and her key role in driving growth across the tax practice.

James McBride, who joined the business as a trainee in 2003, has been appointed as a new Audit partner based in the Glasgow city centre office. He specialises in providing external audit and business advisory services to a wide range of clients in the property, construction, housing association, charity and education sectors.

Jennifer Alexander has been appointed as an Audit partner after joining the business in 2001 as a CA trainee. Also based in Glasgow, she has developed an expertise in the charity and housing association sectors and provides business advice to food and drink, construction and property businesses.

After initially joining Campbell Dallas in 2003 as a CA trainee, Alan Brown has been promoted to Audit partner. He qualified in 2006 and has been progressively promoted during his 16 years with the firm, becoming a director in 2013. He has played a key role running the Glasgow and Scotland-wide audit team and is highly regarded for his extensive technical knowledge, acting for many of the firm’s largest clients in the food and drink and manufacturing sectors.

Commenting on the new partner appointments, managing partner for Scotland, Chris Horne said: “We would like to congratulate the new partners on their promotions and wish them every success as they continue to develop their careers within the business It is particularly rewarding to see young talent progress all the way to the partnership and in the last two years we have promoted 9 of our people, who started out their CA careers with us to the top level in the business.

“We are focused on developing our own people and on creating outstanding career opportunities for our people looking to develop a career in the accountancy profession. Since 2015 we have recruited 235 apprentices, graduate trainees and school leavers into this successful trainee development programme.”

Scott Moncrieff joined Campbell Dallas in May 2019, creating one of Scotland’s largest business advisory firms with a combined fee income of around £40m and employing over 550 staff.

The rise of overseas buyers and private equity continues to drive Scottish deal market

December 16, 2019

The last 5 years has seen a significant shift in the M&A market towards overseas trade buyers and private equity purchasers in both Scotland and across the UK. It is a significant shift in who does the deals, and how they are financed.

“The rise of the overseas buyer is partly down to the attractive pricing of UK corporates as a result of the continued weakness in Sterling. That’s not to say that UK buyers aren’t still around, but the political and economic uncertainty of the last few years has made them a bit more cautious. Strategic buyers – wherever they’re based – remain confident in the medium to long term prospects for the UK economy, and are continuing to make acquisitions. There also remains a lot of private equity funding looking for investment opportunities and PE house. Those based here in Scotland and further afield are actively seeking out and engaging with business owners to help them realise their ambitions and strategies.

The future of Entrepreneurs’ Relief remains a concern for a lot of business owners and those concerns, coupled with legislative changes, growing compliance regulations and perceptions of higher risk are still driving a substantial number of entrepreneurs to sell their businesses.

Notwithstanding these issues, we should celebrate the recovery in the Oil and Gas sector where there are clear signs of deals being done and confidence returning, which is great news for Scotland’s economy.

And we should be alert to the threats facing traditional retail, which has now become a turnaround sector as businesses try to remodel in the face of the online threat and adapt to a major structural change that is clearly now underway. Several well-known Scottish retail businesses have sadly closed, and it is important that any retailers facing problems should seek early help with their strategy and financial position.

Deal watchers will be aware that deals are taking a good 2 to 3 months longer than 5 years ago, which is an interesting and probably permanent, change. The extended deal process is due to buyers and sellers wanting to spend more time on due diligence to ensure the deal is ‘right’. It is better to take longer to get the right deal, than get a quick deal that is the wrong deal. Risk and compliance have risen to the top of the agenda, with the banking crisis, data breaches, fraud and cyber security driving many businesses to invest far more on risk and compliance.”

Looking ahead, Scotland’s corporate finance scene is suffering from a shortage of experienced younger corporate finance professionals and the uncertainty caused by the ‘B’ word has acted as a brake on business confidence and frustrated investment and M&A activity.

However, we anticipate busy sectors being environmental, specialist healthcare, fintech and cyber security. There are also a lot of dynamic, more “traditional” businesses, in specialist engineering, and manufacturing, that provide design, maintenance and support as well as a product to their customers, where there is encouraging potential for an active corporate finance market.

It has been a challenging year, but the environment for deal making is in healthy shape, with plenty of opportunities, willing sources of finance and key drivers, such as Entrepreneurs’ Relief, encouraging business owners to exit.

It will be a busy 2020 – and we are up for it!

Graham Cunning
0141 886 6644

The information in this blog should not be regarded as financial advice. This is based on our understanding in December 2019. Laws and tax rules may change in the future.

Changes to the reporting of disposals of residential property for UK residents

December 15, 2019

From 6 April 2020 changes to the way UK resident individuals, trustees and personal representatives report the disposal of UK only residential property come into effect. The changes will mainly affect those disposing of a second home, a rental property, or properties that have not been occupied as a main residence throughout the period of ownership.

Currently any UK resident individual, trustee or personal representative disposing of residential property is required to declare the disposal on a Self-Assessment Tax Return within nine months following the end of the year in which the property is disposed of.

Any Capital Gains Tax (CGT) due will also be payable by 31 January following the end of the year in which the disposal took place.

Those not within the Self-Assessment system can report and pay CGT using the ‘Real Time’ CGT service but must do so by 31 December following the end of the tax year in which the disposal takes place.

The new rule
From 6 April 2020, in a move to bring UK residents in line with non-UK residents (and to collect tax much sooner), the disposal of residential property will need to be reported to HM Revenue and Customs within 30 days of sale. Gains realised on the disposal of property that has been both residential and non-residential are to be apportioned. For the purpose of the start of the 30-day window, the date of sale is the date of completion and not the exchange of contracts, which is usually used for CGT purposes and will remain the date of sale for CGT calculation purposes. The payment of any CGT due will also need to be made within the 30-day window.

When does the rule not always apply?
This new rule does not apply in all cases. Those whose capital gain is fully covered by Principal Private Residence Relief, brought forward losses or those that have been realised prior to this disposal, their annual exemption or where a nil gain/nil loss arises, will not need to file a Return within 30 days and should report the disposal in the normal way via self-assessment where applicable.

Where a sale of a main residence which is only covered by partial relief e.g. the owner has had periods of absences, will need careful consideration to ensure the 30-day deadline is not missed.

Failure to file the Return within the 30 days will result in a late filing penalty of £100 being charged. Where a Return is still outstanding at 6 and 12 months, penalties of £300 or 5% of the tax due, if greater, will also be charged. Any late payment of the CGT due will incur interest charges. A penalty equal to 5% of the tax outstanding will be charged if the liability is not settled within 30 days of 31 January following the end of the tax year of disposal.

Additional 5% penalties will arise if the tax remains outstanding after a further 5 and 11 months respectively.

Losses available and CGT exemption
When calculating the CGT payable (for residential property gains the rate is normally 18% or 28% or a combination of both), losses available at the date of disposal and the annual CGT exemption can be used alongside a ‘reasonable estimate’ of the individual’s income for the tax year concerned. This is due to the fact that a disposal Return may have to be filed before the end of the tax year.

The estimated tax due will be regarded as a ‘payment on account’ until the actual amount can be calculated and reported to HMRC via the Self-Assessment Return. Any tax overpaid can only be reclaimed once a Self-Assessment Return has been submitted.

Therefore, if you are planning on selling a residential property after 6 April 2020 careful consideration beforehand may be required to ensure that all relevant information can be gathered, CGT calculations, and the required Return(s) prepared to allow for the submission of the Return(s), and the payment of tax due, within the 30-day window.

It is also worth highlighting here further related changes coming into effect from April 2020 which reduce the final period of ownership for private residence relief from 18 months to nine months, and in practical terms abolish lettings relief.

What happens next?
If you would like to discuss any of the above points in further detail, please speak with your usual Campbell Dallas contact or:

Aileen Scott
Head of Tax
0141 886 6644

The information in this blog should not be regarded as financial advice. This is based on our understanding in December 2019. Laws and tax rules may change in the future.

Business Property Relief

December 11, 2019

Business Property Relief (BPR) is a very valuable Inheritance Tax (IHT) relief for privately owned businesses and was subject to a recent review by the Office for Tax Simplification (OTS). This Insight highlights some key points to qualify for the relief.

Background to BPR

The IHT legislation contains a very valuable relief known as BPR. This relief mitigates the charge to IHT on any transfer of ‘relevant business property’ during lifetime or on death. Where an asset qualifies for this relief, BPR reduces the value chargeable to IHT by either 100% or 50%. BPR is currently an unlimited relief, unlike many other tax reliefs which have a monetary cap, and there is no clawback of the relief if the recipient immediately sells an inherited asset which qualified for BPR in the transferor’s death estate (although there can be a clawback for lifetime gifts).

Given that the current IHT rate on death is 40%, over and above the IHT threshold of £325,000, it is important that owners of privately-owned businesses undertake regular IHT/BPR reviews and that actions are not taken which result in full relief being lost.

Relevant Business Property

‘Relevant business property’ is defined as:

  • A business or an interest in a business, including a partnership (100% relief).
  • Shares in an unlisted company (100% relief).
  • Shares listed on the Alternative Investment Market (100% relief).
  • Quoted shares or securities where the owner has a controlling interest (50% relief).
  • Land, buildings or machinery owned personally and used in the individual’s partnership or a company which they control (50%).

BPR generally only applies where the ‘relevant business property’ has been held for at least two years. However, on a transfer of business interests to a surviving spouse/civil partner on death the spouse inheriting can include the deceased’s ownership period. Also, incorporation of a business does not generally affect the two-year ownership.

For BPR to apply, the business must not consist ‘wholly or mainly’ of holding investments. The legislation does not define ‘wholly or mainly’ but case law has established this as a 50% or more test. A hybrid company with trading and investment activities may qualify for BPR providing that the investment activities are not the main part. The business is looked at in the round along with such factors as:

  • The turnover and level of profitability relating to each part of the business.
  • Capital employed in each part of the business.
  • Management and employee time spent in each part of the business.

Having established that there is ‘relevant business property’, BPR is restricted by the value of any ‘excepted’ assets which are defined as assets not used wholly or mainly for business purposes in the two years immediately before the IHT event or not required for future use in the business. These will include assets such as surplus cash, yachts and houses which are used personally by the shareholders.

Qualifying for BPR and Not Qualifying

For certain types of businesses, there is a fine line between qualifying for BPR and not qualifying due to wholly or mainly holding investments. Recent tribunal cases have looked at the level of activity which is necessary for a livery and a holiday letting business to qualify. As a general rule, BPR is unlikely to be available for these and similar businesses unless substantial additional services are provided.

For example, in the case of HMRC v Personal Representatives of the Estate of M Vigne [2018], it was found that additional activities supplied by a livery, such as providing the horses with hay feed during the winter months, removing horse manure from the fields, checking the general health of each horse on a daily basis and providing on-site security, were sufficient to show that the business was not mainly one of holding investments, such that BPR was available.

By contrast, it was concluded in the case of HMRC v Mrs NV Pawson’s Personal Representatives [2013] that there was nothing to differentiate the business from any other furnished holiday letting business and BPR was not available on the basis that the business was mainly one of holding an investment.

Each case is decided on its own facts and it is particularly important for a full BPR review to be carried out in borderline cases as there may be actions which can be taken to help strengthen the position.

The Office of Tax Simplification (OTS) – Inheritance Tax Review 2nd Report July 2019

The OTS in their July 2019 IHT review have proposed a number of changes. BPR is covered in this report and they have commented that the ‘wholly or mainly’ test (50% test) differs from the test used for CGT for gifts holdover and entrepreneurs’ relief where the business has to be ‘substantially trading’. The latter generally involves an 80:20 split of trading vs investment, again with several indicators to look at including assets, income, expenses, time spent by employees and the history of the business.

The OTS comment that the differences between the CGT and IHT rules can distort behaviour and conclude ‘government should consider why the level of trading activity for BPR is set so much lower than the comparable reliefs for CGT. Aligning the BPR trading test with the tests for gift holdover and entrepreneurs’ relief would be a simplification. Having one test would be easier for taxpayers to understand and would reduce distortions to decision making’. Given these comments it may be that, at some point in the future, the rules to qualify for BPR will be tightened up such that it will become more difficult for hybrid companies to meet the rules resulting in a potential loss of BPR.

In light of these potential changes, it is all the more important for businesses with a mix of trading and investment activities to keep their operations under review to ensure that BPR is not inadvertently lost.

Planning for BPR in Privately Owned Businesses – examples

The following examples illustrate pitfalls to avoid in relation to BPR.

1. All or nothing relief
Windermere Ltd, an unquoted company, has 60% investment and 40% trading activities. The company’s shares would not be eligible for BPR as the business consists ‘mainly or wholly’ of holding investments.

Restructuring the company such that it is not ‘wholly or mainly’ an investment company should be considered to meet the BPR rules. This could be achieved with appropriate specialist tax advice by reorganising matters such that a new company, with identical shareholders, held all the investments leaving the existing company just with the trade.

2. Director’s loan account
Dwayne is a director/shareholder in Grasmere Ltd, a trading company. He has owned 50% of the issued share capital for the past ten years. The company owes Dwayne £100,000 which is held in his director’s loan account. Dwayne’s shares qualify for BPR on either a lifetime or death transfer. However, his director’s loan does not qualify for BPR.

In this situation converting the debt into share capital may enable BPR to be secured. If this is done by an ordinary share subscription, then Dwayne would need to hold the shares for a two-year period before they would qualify for BPR.

The alternative approach of a rights issue with the loan account being used to take up the rights issue is generally the preferred route. This is because the shares acquired under a rights issue are identified with the existing shareholding such that the two-year time period for ownership is met straight away. Care needs to be taken that all the legal formalities concerning a rights issue are met.

An alternative is for Dwayne to have his loan account repaid by Grasmere Ltd and for him to personally invest into assets which will qualify for BPR after a two-year period. This might be a portfolio of AIM shares or shares in another unquoted trading company.

3. Excepted assets
Derwentwater Ltd is an unquoted trading company. Kim, a widow, dies having owned 100% of the ordinary share capital of the company for over 20 years.

Under Kim’s will all her assets pass in equal shares to her two children. The probate value of the shares in Derwentwater Ltd is £1m which includes surplus cash not required in the business of £150,000. The executors, of Kim’s will, are satisfied that Derwentwater Ltd is not wholly or mainly an investment company and that BPR is due as follows:

Portion of value Rate
Probate value of shares in Derwentwater Ltd – £1,000,000
Less: value of excepted assets – (£150,000)
Value of shares qualifying for BPR – £850,000

The excepted assets valued at £150,000 are subject to IHT.

In this scenario a regular review of assets held in Derwentwater Ltd would have identified the excepted assets and action could have been taken to change matters to potentially secure more BPR.

4. Business premises owned personally and used by the family company
Emma owns a warehouse used by Ullswater Ltd, a trading company selling chocolates. Emma has a 65% shareholding in Ullswater Ltd and Charlotte has a 35% shareholding (not a family member). Emma gifts 20% of company shares to her son, David, who works in the business as part of the family’s long term IHT and income tax planning.

The gift of the shares does not give rise to CGT due to the availability of hold over relief and future dividends received by David will be taxed at a lower rate than in Emma’s hands. BPR applies so there is no IHT charge if Emma does not survive seven years from the date of gift (provided David still holds the shares at the date of death and assuming that the shares are not subject to a binding contract for sale and still qualify for BPR at the time).

However, in this scenario Emma loses control of Ullswater Ltd as her shareholding reduces to 45%. BPR is available on her shareholding but, having lost control of Ullswater Ltd, the warehouse no longer qualifies for BPR. This pitfall would have been avoided if Emma had gifted fewer shares (14%) and retained control of Ullswater Ltd.


BPR is an extremely valuable IHT relief in relation to both lifetime gifts and on death. It should not be taken for granted that BPR is simply available for shares in privately owned businesses as there are strict conditions for relief.

Full BPR can be lost because of a technicality. Regular reviews of the business profile should be undertaken so that BPR can be preserved or enhanced based on changing circumstances.

Planning early and taking specialist tax advice in advance will give the best results and ensure that hard earned wealth is protected from IHT.

For further advice on maximising BPR, please contact your usual Campbell Dallas advisor or:

Campbell Dallas staff portraits. Katy Burke.

Katy Burke
Tax Associate Director
0141 886 6644

The information in this blog should not be regarded as financial advice. This is based on our understanding in December 2019. Laws and tax rules may change in the future.

The tax considerations when leasing rural properties

December 6, 2019

As leasing of residential properties is becoming ever more popular within rural businesses, it is important that landlords are aware of their property tax obligations. A landlord must register with the council for the area in which the property is situated and ensure they advise HMRC of the income received, either via a tax return or a letter.

Landlord Registration
All local councils have a landlord registration department and, before you rent out any residential property, you should register with the appropriate council. Details can be found on the council’s website. There are additional requirements for HMOs (House in Multiple Occupancy).

Property rental income must be declared to HMRC and resultant tax paid. The amount of tax depends on the level of the profit and your personal circumstances.

Profit is calculated as income less allowable expenses and you need to declare this to HMRC via a Self Assessment tax return if you have income of:

  • £2,500 or more after allowable expenses, or
  • £10,000 or more before expenses

If your income is under these limits then you must still advise HMRC by writing to them.

Generally, property income should be declared by the person whose name is on the title deeds. If title is held jointly by married couples or civil partners living together, the income will automatically be split 50:50 unless a formal election is submitted to HMRC. If title is held jointly by any other people, the income is split in the same proportions as the ownership.

Expenses you can deduct include:

  • General maintenance and repairs – but not improvements
  • Mortgage interest – but changes are in place
  • Council Tax, gas, electricity, insurance
  • Maintenance contracts for heating systems etc.
  • Letting agent’s fees and management fees, tenancy renewal fees
  • Landlord registration fees
  • Telephone calls – the proportion relating to the letting activity
  • Motor expenses – the proportion relating to the letting activity
  • Replacement of domestic items
  • Accountancy fees

For further advice on the tax aspects of renting out properties, please contact your usual Campbell Dallas advisor or:

Karen Morrison, Tax Director, Campbell Dallas

Karen Morrison
Tax Director
01563 536 319



The information in this blog should not be regarded as financial advice. This is based on our understanding in December 2019. Laws and tax rules may change in the future.

Is your SME supply chain ripe for cyber crime?

December 4, 2019

The Office of National Statistics estimates that 4.5 million cyber crimes were committed in the UK in the 12 months up to March 2018. You are statistically more likely to fall victim to a cyber crime in the UK than you are to any other type of crime.

As the cyber security systems become more adept at preventing and pursuing consumer fraud, the cyber criminals have been targeting the public sector and larger organisations for their new revenue streams.

Amongst larger organisations, numerous cyber security breaches have occurred, impacting banks, police forces and even defence firms. Wipro, a major IT services business, recently reported a major attack on its IT systems, after it was targeted by a phishing campaign.

The problems being faced by large organisations should be a warning for SMEs, owner managed businesses, social enterprises and charities, many of whom are at high risk of becoming unsuspecting cyber victims. And it is their supply chains that offer some of the best opportunities for cyber theft. Why?

Smaller enterprises just do not have the scale, resources or systems to protect, prevent and counter cyber fraud. Furthermore, they tend to work with a much wider network of suppliers and intermediaries. A recent survey of IT risks amongst SMEs undertaken by Scott-Moncrieff (our sister firm in Scotland) highlighted the very low level of investment in cyber security, poor understanding of the processes involved, and their high levels of vulnerability to attack.

Any point in the supply chain that creates a break in the flow of relationships, information, products, logistics and services, creates a potential for weakness in systems, and a window of opportunity for the cyber crooks. Like a house purchase, the more links in the chain of suppliers, the bigger the risk, and the greater the costs, including:

  • Finding an alternative supplier
  • Business interruption or shut down
  • Scrutiny and fines from regulators
  • Loss of productivity
  • Reputational cost, loss of trust and subsequent loss of clients

Prevention of cyber crime is far more cost-effective rather than having to deal with the bureaucracy, cost and reputational damage of a security failure. Key cyber security strategies and solutions that should be considered include:

  • Adopting relevant industry guidelines and frameworks, we recommend the National Cyber Security Centre’s Small Business Guide as an excellent starting point
  • Invest in and keep investing in the latest technologies and systems, and ensure that your systems are regularly patched
  • Risk assess your suppliers and business relationships, if they are protecting your assets – do you know what their cyber security arrangements are? Have your suppliers invested in meeting cyber security standards? We recommend only working with suppliers who have complied with the UK Government’s Cyber Essentials standard, and if you are out-sourcing key processes only working with suppliers who can demonstrate compliance with ISO27001, an internationally recognised security standard.
  • Employ or engage specialists that really understand the issues, and know how to implement and manage the very best cyber security systems and solutions
  • Consider cyber insurance

Cyber risk is now a permanent feature of our lives, and increasingly so for businesses.  You need to understand and manage not just the risk to your own business but also satisfy yourself that the businesses you depend on are also taking the risks seriously.

Magda de Jager is a cyber security expert within the firm’s Business Technology Consulting team.

If you have any queries in relation to cyber security for your business and how you can best protect against cyber crimes contact:

Magda de Jager
Cyber Security Manager
0131 473 3500


Scott-Moncrieff joined Campbell Dallas in May 2019 to become part of the CogitalGroup.

The information in this blog should not be regarded as financial advice. This is based on our understanding in December 2019. Laws and tax rules may change in the future.

Latest IR35 changes will trigger soaring employment costs for businesses

November 26, 2019

New IR35 ‘off-payroll working rules’ due to come into force next year could cause a major increase in employee costs and trigger major cash flow problems for larger companies that routinely use contractors.

Craig Coyle, Tax Partner, says; “From April next year companies who engage workers ‘off-payroll’ and have a turnover of more than £10.2m will have to determine the employment status of that worker and, where required, withhold UK tax and National Insurance from their pay. The IR35 rules are aimed at those individuals working through personal service companies (PSCs) who would otherwise be considered as employees.”

The new rules will apply to companies defined as meeting at least two of the following:

• Turnover in excess of £10.2 million
• £5.1 million or more on the Balance Sheet
• More than 50 employees

Smaller companies operating below these thresholds will not be affected by the increased costs and bureaucracy of administering the new rules.

The new rules will have a significant impact on companies that routinely engage large numbers of contractors. Sectors that commonly engage contracting staff include banking, property and construction, media, entertainment and IT.

In addition to an increased compliance burden, companies will face increased labour costs from Class 1 Secondary National Insurance Contributions. They are also likely to have to face demands from workers for larger payments to protect their take-home pay. Craig Coyle estimates that a contractor previously earning £30,000 a year from a business in a self-employed capacity could cost the business as much as £10,000 in extra charges for income tax, NIC and pension contributions.

The soaring costs to businesses arising from the new rules could encourage behavioural change by businesses to avoid breaching the new thresholds, and hence limit additional income to HMRC and act as a cap on growth.

Craig Coyle says: “There will be a considerable financial incentive to downsize or create new businesses that fall beneath the thresholds and avoid the significant financial bureaucracy and costs of the new rules. We are also unlikely to see a reduction in PSCs as contractors align themselves with SMEs that avoid the new rules. Businesses that grow, or take on substantial contracts, could adapt by creating new corporate entities or separate trading subsidiaries.”

Those companies affected by the new rules will be required to determine the employment status of the worker, however HMRC will decide whether they agree with the assessment made. There are several complex indicators that will guide the decision, including whether the company or the employee provides the tools for the job, how the worker will be paid for their services and their exposure if the company experiences financial problems.

Craig Coyle urges companies to start planning as soon as possible: “These new rules will have a significant impact on the already hard-pressed construction industry, and we would encourage all property and construction businesses to familiarise themselves with the new rules as soon as possible. Those businesses that already fall into the new thresholds should review their contracting arrangements, budget for increased costs and consider alternative methods of engaging with contractors. Failure to comply with the new rules could be costly, or worse.”

It is recommended that you check HMRC’s new online ‘Check Employment Status for Tax’ (CEST) tool, which will allow businesses to determine worker status:

If you have any queries, please contact your usual Campbell Dallas advisor.

Craig Coyle - qualified Chartered Tax Advisor and a Chartered Accountant




Craig Coyle

0141 886 6644

Brexit and the direct tax implications

November 6, 2019

The UK now has an extended deadline of 31 January 2020 to achieve Brexit as the country enters a 6 week period of campaigning in the run up to a General Election on 12 December 2019. Business should review how Brexit will impact them and in this update we consider the direct tax implications for companies.

The three areas we will consider are EU Directives, EU State Aid and UK Companies in International Structures.

EU Directives

Three main directives issued by the EU have a bearing upon UK direct taxes. These are the Parent & Subsidiary Directive; and the Interest & Royalties Directive; and Mergers Directive.

The Parent & Subsidiary Directive operates so as to prevent withholding taxes on dividends between EU companies where there is significant participation. Upon leaving the EU this could mean that UK companies find withholding taxes being applied on dividends received. Of course, we do still have tax treaties with each country which could limit this effect. Due to the uncertain landscape, groups should urgently consider whether there is a case for accelerating dividends from their EU subsidiaries.

The Interest & Royalties Directive similarly prevents withholding taxes on payments between EU companies. As with dividends we would therefore need to revert back to tax treaty rates with the individual countries and groups should urgently consider whether there is a case for accelerating royalties and/or interest payments.

The Mergers Directive essentially works so as to ensure cross border mergers within the EU are offered the same tax breaks as wholly UK mergers. This of course seems perfectly sensible in the context of the EU model and therefore the UK did legislate to comply with the directive However with the UK ceasing to be a member state of the EU, the domestic legislation would not provide protection for UK companies. Therefore, any group presently undergoing restructuring or merger transactions and expecting to benefit from this Directive should urgently review their position.

State Aid

Whilst the loss of application of EU Directives could mean a potential tax increase for UK companies, there could be some better news from the UK no longer being bound by EU rules on State Aid limitation. In particular, the UK government could potentially make the following tax reliefs more generous:

• Research & Development Tax Credits (R&D)
• Enterprise Investment Scheme (EIS) relief
• Enterprise Management Incentive (EMI) share options
• Venture Capital Trust (VCT) relief.

UK Companies in International Structures

Notwithstanding Brexit, the UK remains a very tax effective holding company regime, with key exemptions for certain gains realised and dividends received.

Coupled with a main rate reducing to 17%, exemptions for overseas branch profits, and no withholding tax on dividends paid, the UK continues to be competitive in attracting international groups.

In the meantime, if you would like to discuss the potential implications for your own business, please get in touch with your usual Campbell Dallas contact.

Mark Pryce
0141 886 6644

The information in this blog should not be regarded as financial advice. This is based on our understanding in November 2019. Laws and tax rules may change in the future.

Tax relief for farmers and landowners

October 21, 2019

Farmers and landowners have enjoyed a tax system that has allowed succession to take place with little or no tax liability. Generous reliefs from Inheritance Tax (IHT) and Capital Gains Tax (CGT) are available, and even on death the family farm usually passes to the beneficiaries with little or no tax due.

The Office for Tax Simplification (OTS) recently reported to the Chancellor outlining eleven recommendations for the reform of IHT, therefore some changes to these tax reliefs may be ahead.

What might these changes look like?

The OTS reported findings that show IHT is little understood, and when you consider that fewer than 25,000 estates are liable to IHT each year, this is perhaps not surprising. This figure represents less than 5% of deaths, however more than 10 times as many estates are required to complete and submit forms.

The recommendations cover three primary areas – lifetime gifts, the interaction between IHT and CGT, and businesses and farms. Many people are aware of the 7-year clock that starts when one individual makes a gift to another. Many people are also aware of the annual IHT exemption of £3,000, a figure which hasn’t changed since the 1980s. The OTS has recommended replacing the annual exemption and the marriage gifts exemption with an overall personal gifts allowance, and recommended that the level of this exemption and the small gifts exemption are reviewed. There is also a recommendation to reform the normal expenditure out of income exemption or replace it with a higher personal gift allowance.

A further key recommendation is a reduction in the 7 year period to 5 years, along with the abolition of the taper relief provisions that apply if tax becomes payable on a gift that has failed the 7 year test. The taper relief provisions are complex and not easily understood.

The second area considered by the OTS relates to the interaction between IHT and CGT. The OTS has concluded that the complexity of this interaction can distort decision making. Currently there is generally no CGT on death. Instead, assets form part of the estate subject to IHT and the value of the assets passed to the beneficiaries is rebased to the market value at the date of death. This means, for example, assets that are inherited by a spouse are free of IHT and can be sold shortly after with little or no gain over the date of death value. There is therefore no CGT due either.

The OTS has therefore recommended that the CGT rules be amended rather than the IHT ones, so that assets covered by any sort of IHT exemption will not be rebased to market value on death but will be inherited at the deceased’s original base cost. This would mean if they were sold by the recipient there would be a far larger gain, most likely giving rise to a capital gains tax liability.

If any of these recommendations are followed through by the Government, there are likely to be winners and losers. Whilst the reduction in the 7 year period following a gift would certainly be welcome, the change to the rebasing provisions would almost certainly see the tax liability of beneficiaries rise substantially, perhaps resulting in fewer disposals of inherited assets.

Based on current political uncertainty, a new Government could take a more radical approach. A “wealth tax” is a realistic option and probably a vote winner. Several European countries have adopted a wealth tax, where individuals pay an annual tax based on their total wealth or property owned.

Our advice to farmers who have succession options available is to make use of the generous tax reliefs available as they may not be available if legislation changes.

If you have any queries please contact your usual Campbell Dallas advisor.

Andy Ritchie
01738 441 888

The information in this blog should not be regarded as financial advice. This is based on our understanding in October 2019. Laws and tax rules may change in the future.

Perth accountancy firm achieves 60% growth

October 14, 2019

A pioneering apprentice and graduate trainee recruitment programme and a strategy of developing internal talent has helped drive expansion of the Perth office of fast-growing accountancy firm Campbell Dallas.

The Perth office currently generates fee income of more than £4m, an increase of 60% since 2017 when Campbell Dallas opened a new £1m office in Perth city centre.  Total staffing has risen to 5 partners and 61 staff, and a new recruitment drive is planned for additional professional staff at all levels.

The Perth office currently has 19 trainees working towards accountancy qualifications, and overall 25% of the staff currently are completing a professional qualification.

Andy Ritchie, Head of Campbell Dallas’ Perth office said:

“The last two years have seen rapid expansion of our business in Perthshire, and the decision to focus on developing our own talent and supporting an extensive trainee programme has been key to our growth.  Looking ahead, there are encouraging prospects for the Perth office and we have expanded our range of services and specialists in order to help our clients capitalise on the opportunities ahead.”

He continued: “The Perthshire and Tayside economies are highly diversified and several key sectors, such as tourism and services are performing strongly.  Several major infrastructure projects, such as the A9 upgrade, could help drive further economic activity, and complement the success of the Dundee Waterfront development.  The Perth office has the capacity to support further expansion and we plan to recruit additional staff during the next 6 months.”

John Todd, who recently qualified as an accountant in the Perth office, said: “The level of support and motivation I received from my team and the whole Perth office was crucial in helping me pass my professional exams.  The wider student network across the firm is also very helpful as it allows us to discuss exam tips and strategies and to benefit from the mentoring and advice that is on offer.”

In the last 5 years Campbell Dallas has recruited 119 apprentices and graduate trainees across Scotland.

Campbell Dallas and Scott Moncrieff recently merged, creating one of Scotland’s largest business advisory firms with a combined fee income of around £40m and employing over 600 staff working from 10 offices.

Andy Ritchie

Andy Ritchie

01738 441 888


Tribunal rules that locum GP was entitled to sick pay and holiday

October 10, 2019

A judge has ruled that a locum GP who was working for an out-of-hours provider should have been treated as a worker who was eligible for sick pay and holidays following an appeal from the provider.

Under the current system of employment law, individuals are either employed, self-employed, or have ‘worker’ legal status. This determines whether they have access to employment rights such as sick leave, paid annual leave, protection from discrimination and national minimum wage.

In this case, Dr Narayan, regularly worked the same shifts, had no obligation to accept work and could take holiday when she wished to, while Community Based Care Health was not obliged to provide any work.

Community Based Care Health argued that Dr Narayan was self-employed and therefore not entitled to receive paid holiday. However, the judge reviewed 13 different factors – including equipment, indemnity, who supplied medication and the ability to work for other organisations – and concluded that she should have been classed as a ‘worker’.

It should be noted that there is a difference between employment tribunals and tax law. Worker status is not recognised in tax law and the doctor concerned in this case would have remained self-employed, with no consequent IR35 liability.

The Government has promised to introduce new tools to help individuals understand how to determine their status in light of upcoming changes to the off-payroll working rules by April 2020.

Practices need to be aware in light of this decision of the potential for locums that have a long-standing relationship with the Practice, to claim holiday pay over a number of years. It is therefore essential to have documentation in place in such instances that correctly set out each respective sides’ responsibilities.

If you have any queries please contact your usual Campbell Dallas advisor.

Neil Morrison
01738 441 888

The information in this blog should not be regarded as financial advice. This is based on our understanding in October 2019. Laws and tax rules may change in the future.

IR35 Off Payroll in the Private Sector Rules Published

September 27, 2019

The draft reforms for the off-payroll legislation, commonly known as IR35 have now been published by the Government and are contained in the Finance Bill 2019-20. These provide that private sector firms who enter into contracts or make payments to workers engaged through a Personal Service Company (PSC) on or after 6 April 2020 will need to check the individual’s “deemed” employment tax status.

Reforms in the public sector were introduced in April 2017 with the prospect of this extension into the private sector introduced in the 2018 Budget. The legislation will come into force from 6 April 2020.

Where the individual’s role does look akin to an employment type one the engager, agency or third party paying the worker’s company will need to deduct income tax and national insurance contributions (NICs) and pay Employer NICs.

The responsibility for determining whether the off-payrolling rules apply will move to the organisation receiving the individual’s services.

The proposed reforms
A company that qualifies as a “small” business will not be required to apply the new rules. In these circumstances there is no change and the PSC will assess their own IR35 position, as they are required to currently, and be liable for income tax and NIC deductions, as appropriate.

A company will be regarded as small for this purpose if it has two (or more) of the following:

• Turnover – not exceeding £10.2 million.
• £5.1 million or less on the Balance Sheet.
• Number of employees not exceeding 50.

Any business so identified as small using the above guidance will still be required to apply the new rules if it is a subsidiary of a large or medium sized parent.

Further, anti-avoidance provisions are intended to ensure a business will not be able to contrive a situation which artificially creates a small business exemption.

The impact

Where an individual works for a medium or large sized engager outside of the public sector, through their own PSC and falls within these rules:

• The party paying the worker’s PSC (the fee-payer) will be treated as an employer for the purposes of income tax and Class 1 NICs.
• The amount paid to the worker’s intermediary for the worker’s services is deemed to be a payment of employment income.
• The party paying the worker’s intermediary (the fee-payer) will be liable for secondary Class 1 NICs and must deduct tax and NICs from the payments they make to the worker’s intermediary in respect of the services of the worker.
• The person deemed to be the employer for tax purposes must remit payments to HMRC and to send HMRC information about the payments using real time information (RTI).

Client-led disagreement process

A status determination statement outlining the end-client’s IR35 status decision must be provided to both the contractor and any party directly engaging the contractor (typically an agent). Until this is provided the end user will remain responsible for collecting income tax and national insurance. If the contractor does not agree with the IR35 status decision, there is a new client-led disagreement process. This requires the end-client to review a decision and provide a reasoned response within 45 days. If this deadline is not met the end-client will assume the IR35 liability.

The responsibility to deduct the payments for tax and NIC are therefore effectively transferred from the fee-payer to the end-client if the end-client defaults. This is a crucial aspect; the end-client could quite easily find themselves in a situation where they are technically in breach of the rules through an administration mistake.


HMRC will be publishing detailed guidance for organisations and both general and targeted education packages, including webinars, workshops and one-to-one sessions with businesses in particular sectors.

Improvements are also expected to HMRC’s Check Employment Status for Tax (CEST) tool and, following testing by legal and operational experts and stakeholders, are expected to be available later in 2019.

Good News

On a positive note the Government has confirmed that the reform is not retrospective and that HMRC will not carry out targeted campaigns for earlier years where a PSC falls within the new IR35 rules from April 2020.
Instead HMRC are indicating that they will be ensuring businesses comply with the reform for new engagements. As such, an organisation’s decisions about whether workers are within the rules should not automatically trigger an enquiry into earlier years.

Next Steps for Businesses

Businesses that are caught by the new rules must act now by carrying out employment status assessments of their contractor workforce and establishing suitable administration systems and protocols.

Whilst these reforms might seem somewhat draconian, there is no doubt that businesses will still be able to engage legitimate contractors who will fall outside of the new rules.

We can support a business through the entire process and are specialists in complex IR35 and employment status reviews.

If you have any queries, please contact your usual Campbell Dallas advisor or:
0141 886 6644

The information in this blog should not be regarded as financial advice. This is based on our understanding in September 2019. Laws and tax rules may change in the future.

Proposed Inheritance Tax changes for Excluded Property Trusts

September 18, 2019

Draft legislation in Finance Bill 2019-20 includes changes which could result in higher inheritance tax charges for some excluded property trusts from the date of Royal Assent onwards.

The current position

Under current legislation, non-UK assets within a trust qualify as ‘excluded property’, meaning that they are outside the scope of UK IHT, where the settlor was neither UK domiciled nor deemed domiciled (by virtue of being a long-term UK resident) at the time the settlement was made.

Where non-UK assets are transferred between trusts, these will only be treated as excluded property in the second trust if the settlor of the second trust was neither UK domiciled nor deemed domiciled (as a long-term UK resident) when the settlement was made.

The 2017 Court of Appeal decision in Barclays Wealth Trustees (Jersey) Limited & Michael Dreelan v HMRC confirmed in relation to transfers between trusts that the ‘time the settlement was made’ refers to the initial creation of the settlement, not the date of the transfer. Therefore, excluded assets transferred between trusts created while the settlor was non-UK domiciled should retain their excluded property status.

A logical extension of this principle might suggest that when determining the excluded property status of later additions to an existing excluded property trust, only the domicile status of the settlor at the time the trust was created is relevant. However, the court did not specifically rule on this point.

What is proposed?

Draft Finance Bill 2019-20 clarifies that non-UK assets cannot be excluded property where the settlor was actually UK domiciled or deemed domiciled (as a long-term UK resident) at the time the assets were added to the trust (this is opposed to considering the domicile of the settlor at the time the settlement was first created).

In addition, it is proposed that non-UK assets transferred between trusts will not be treated as excluded property where the settlor was UK domiciled or deemed domiciled (as a long-term UK resident) when the transfer occurs.

The draft legislation was published on 11 July 2019 and was open for consultation until 5 September 2019. It was proposed that the legislation would apply to all chargeable events, being IHT ten year charges and exit charges, from the date of Royal Assent onwards. It is intended that this will be the case regardless of whether trust additions were made before or after the date of Royal Assent. The proposals for transfers between trusts are only intended to apply to transfers which take place on or after the date of Royal Assent, so do not have a retrospective effect.


Ravi settled two offshore trusts, the first in 1995 and the second in 1998, when he was neither resident nor domiciled in the UK. He moved to the UK in 2001 and became deemed UK domiciled from 6 April 2017 as he had been UK resident in at least 15 of the previous 20 tax years. In 2021, the 1998 trust received a transfer of non-UK assets from the 1995 trust.

The next ten year anniversary of the 1998 trust will occur in 2028. Under the proposed new legislation, the funds added in 2021 will not be excluded property at this date as the transfer was made when Ravi was deemed UK domiciled. These funds will therefore be subject to a ten yearly IHT charge at a maximum rate of 6%. In addition, if any of the transferred funds leave the trust, they may be subject to an IHT exit charge. Relief would be available to reflect the fact that the property added in 2021 has not been held in the trust for the full 10 years.

The transfer of assets from another trust with the same settlor will also have ‘tainted’ the trust from an income tax and capital gains tax perspective, which could result in higher income tax and capital gains tax charges in the UK.

Had Ravi left the excluded property in the original trust, it could have continued to benefit from IHT protection as it was settled before he became deemed UK domiciled as a long-term resident. The trust would also have retained its protection for income tax and capital gains tax purposes, provided it had not been tainted in any other way.

Action points

Individuals considering settling non-UK assets into trust and offshore trustees should take advice to ensure that they preserve the excluded property status of assets currently held in trust and do not inadvertently fall foul of the new rules.

Offshore trustees should also notify affected clients of the changes.

Campbell Dallas has substantial experience in working with non-domiciled individuals and offshore trustees and can assist with matters such as the following:

• Maximising IHT protection where possible by advising upon the segregation of trust assets where transfers in and/or additions have previously been made.

• UK tax planning for additions to settlements. Where an individual has become UK domiciled or deemed domiciled as a long-term resident, particular care is needed when adding funds or value to trusts. In addition to the potential IHT consequences, settling new assets or adding value into an existing trust can ‘taint’ that trust such that it loses its protected status, with adverse income tax and capital gains tax implications. There may be alternative options which are more efficient from a UK tax perspective.

• UK tax planning for trust restructures, particularly in the light of the proposed changes which could result in assets transferred between trusts losing their excluded property status.

• Reviewing existing and proposed trust structures from a UK tax perspective.

If you have any queries please contact your usual Campbell Dallas advisor or:
0141 886 6644

The information in this blog should not be regarded as financial advice. This is based on our understanding in September 2019. Laws and tax rules may change in the future.

VAT update: HMRC policy U-turn on certain no-show deposits for tour operators

September 12, 2019

The VAT treatment of payments for unfulfilled supplies has been a topical area in VAT for many years. In the latest policy paper from HMRC dated 6 September 2019, HMRC has admitted to making an error when updating its policy affecting the Tour Operators Margin Scheme (TOMS).


Prior to 1 March 2019, HMRC accepted that certain retained deposits for unfulfilled supplies were deemed to be compensation payments and outside the scope of VAT. This treatment was widely seen within the travel and hotel sectors.

Following the EU Court ruling involving Air-France-KLM, HMRC changed its policy advising that from 1 March 2019, output VAT would be due on all retained payments for unused services and uncollected goods. The policy change would be wide-reaching and HMRC changed many of its VAT Notices accordingly, including the TOMS VAT Notice 709/5 – where HMRC advised that cancellation fees and forfeited deposits should be included within the selling price under TOMS, which subsequently increased the VAT liability.

HMRC’s recent policy paper (Revenue and Customs Brief 9 2019), advises that HMRC made an error when changing the policy for TOMS supplies. The paper explains that the tax point rules under TOMS are different to other types of supplies, and certain deposits should still be excluded from the TOMS calculation.

Under TOMS, there are two methods of determining the tax point of supplies – Method 1 and Method 2. We have replicated these from the policy paper below:

•    “method 1 and account for VAT when the traveller departs or the accommodation is occupied”
•    “method 2 and account for VAT when taking payment if it exceeds 20% of the sale price – if they receive a deposit of 20% or less then the treatment in method 1 applies”


If you use TOMS Method 1, no tax point is created until the traveller departs or the accommodation is occupied, therefore you must not include deposits within the TOMS calculation for supplies which customers fail to take up. In addition, if you use Method 2, deposits representing 20% or less of the price of the supply should be excluded from the TOMS calculation.

If you have accounted for VAT on such deposits, then you should be entitled to a refund from HMRC.

If you think you could be affected by this policy change, or if you have any wider VAT questions, please contact:
0141 886 6644

The information in this blog should not be regarded as financial advice. This is based on our understanding in September 2019. Laws and tax rules may change in the future.

HMRC delays implementation of VAT reverse charge for construction businesses

September 10, 2019

HMRC has announced a one year delay on the implementation of VAT reverse charge to 1 October 2020. Whilst this is good news for construction businesses who were not yet prepared, it may cause additional work for those businesses who were ready to go.

HMRC has said they recognise that some businesses will have changed their invoices already to meet the needs of the reverse charge and cannot change them back in time. Therefore they will take the change in implementation date into account where genuine errors have occurred. This does not mean that businesses can continue to issue such invoices, and steps should be taken to revert to pre-implementation invoicing.

Also, where businesses have already opted for monthly VAT returns, they should reverse this as soon as possible.

Those businesses not yet ready for the original implementation date should now take advantage of the extra time available and consider the software changes required, and extra funding requirements – if applicable.

Veronica Donnelly - Chartered Tax Adviser and Associate of the Institute of Indirect Taxation

Veronica Donnelly

0141 886 6644



The information in this article should not be regarded as financial advice. This is based on our understanding in September 2019. Laws and tax rules may change in the future.

Will VAT now be added to Botox procedures?

September 3, 2019

A recent VAT tribunal decision has led to headlines such as “Botox is not a medical procedure so VAT will have to be added”.  However, this is not necessarily the correct interpretation and caution should be exercised.

Skin Rich lost at a VAT tribunal in June 2019 because some of its treatments were not diagnosed by a medical professional and for those that were, the court was not satisfied that the evidence produced was sufficient to prove a medical purpose for the treatments.

The test for medical exemption in relation to VAT remains the same; the supply must be made by a person on a medical register, or someone supervised by that person, and the treatment must be one of medical care. The appropriate records must be kept to evidence these treatments and their purpose, and it is on this evidence that HMRC will rely.

The Court agreed that a treatment may have a cosmetic benefit but this does not preclude it also having the principal purpose of protecting, maintaining or restoring health. This should have resulted in an agreement to VAT exemption except that the Court went on to say “on the facts we do not find that this principal purpose has been established”. The issue was ultimately one of record keeping and evidence.

On a more positive light, the case clarified that it is not necessary for medical practitioners to have detailed specialisms on their medical registrations in order to demonstrate the required expertise. They do, however, have to provide other evidence to demonstrate their qualifications, experience and training.

Also, the discussion around the provision of care in any hospital or state regulated institution provided some useful insights. In this circumstance, where injectables “were administered by trained practitioners to improve a client’s appearance and make them feel better about themselves,…such treatment is of a medical nature and can comprise ‘care’”.  This is useful for Care Quality Commission (CQC) or Healthcare Improvement Scotland (HIS) registered clinics.

Our advice continues to be for businesses to look very carefully at their record keeping and evidence of medical purpose. There are no shortcuts. Where you can clearly evidence a medical purpose then VAT is exempt.

If you have any queries, please speak to your usual Campbell Dallas advisor.
0141 886 6644

The information in this blog should not be regarded as financial advice. This is based on our understanding in September 2019. Laws and tax rules may change in the future.

Getting a net bang for your buck?

August 30, 2019

Current exchange rates make investment in UK commercial property cheaper for overseas investors, but the tax environment is less friendly than it previously was.

The current exchange rate for US dollar investors in UK commercial property would seem to make investment in the sector from overseas an attractive proposition. At the time of writing, the exchange rate is £:$1.23. This compares to a rate of £:$1.66 just five years ago. To put this into context, a commercial building valued at £2.3m would now cost $1m less than it would have 5 years ago.

The investor still has to consider rental yields, capital growth and the risk of sterling devaluating further, but on paper the investment seems considerably (just over 25%) more attractive than it was back in 2014 – all other things being equal.

One thing which is not equal, however, is the tax treatment of the investment in UK commercial property.

April 2019 changes

Since 6 April 2019, gains made on the disposal of UK commercial property will be taxed on non-resident individuals at 20% and (since 1 April 2019) on non-resident entities at corporation tax rates (currently 19%). The rules can also apply where the shares in a UK company which is “property rich” are disposed of.

Properties held prior to this date are rebased to their market value on the date on which the new regime was introduced, such that only increases in value from April 2019 will be taxed. It is therefore worth obtaining a valuation for any property held at that date as this will be helpful on eventual disposal.

The benefits of holding UK property through offshore structures have therefore been removed, and it is worth considering moving structures onshore to reduce the costs of maintaining offshore structures.
Those with such structures should seek advice to consider what the best way forward is before there is time for significant gains to accrue.

If you have any queries, please speak to your usual Campbell Dallas advisor.
0141 886 6644

The information in this blog should not be regarded as financial advice. This is based on our understanding in August 2019. Laws and tax rules may change in the future.

VAT on cottages for farms, estates and holiday lets

August 26, 2019

The VAT rules on rented houses on Farms and Estates can be complex. If a house is occupied rent free by an employee who is engaged in taxable activities of the business then VAT on repairs and improvements can be recovered on your VAT return in the usual way. If the house is let to the employee or to a third party, the rental income is exempt and therefore partial exemption rules should be followed.

Partial exemption can be complicated but, in simple terms, if the VAT inclusive spend on cottage repairs and improvements along with any other ‘exempt’ expenditure exceeds £45,000 in one VAT year, then all the VAT on the costs will be dis-allowed. This ruling is often misunderstood because spending £45,000 on a rental property is not a regular occurrence.

Normally Farms and Estates spend modest amounts on cottage repairs and therefore fall under de-minimis rules and receive full VAT recovery without having to apply the rules. If there are regular projects to renovate and upgrade rental properties then it can make sense to have a rolling program doing one house per partial exemption year to take advantage of the £45,000 upper limit under partial exemption. If the house has been empty for over two years or you are converting a non-residential property into a residential one, then the VAT could be charged at 5% instead of 20% giving an immediate saving.

Holiday lets

As the rural tourism market has grown, there has been an increasing trend to develop holiday letting businesses on Farms and Estates. The supply of holiday lets is a service and a standard rated supply for VAT purposes, unlike the letting of a surplus cottage to a third party. For that reason it is not unusual to separate the holiday letting business from the VAT registered Farm or Estate business for VAT purposes, but any planning needs to take into account the initial capital expenditure incurred to create the holiday lets.

This type of VAT planning applies to Farms and Estates with perhaps two to three holiday lets. However, for those businesses looking to develop the luxury caravanning and camping sector, the likelihood is the turnover associated with that will exceed the VAT registration threshold and the VAT rules will apply. There is specific VAT legislation dealing with caravan pitch fees and any rural business involved in this sector would be well advised to ensure they are applying the rules correctly.

We recommend you seek advice from a VAT specialist when carrying out work to any property. Our VAT team at Campbell Dallas would be happy to discuss your project with you and advise on how to minimise your costs. Please contact your usual Campbell Dallas advisor or:
01738 441 888

The information in this blog should not be regarded as financial advice. This is based on our understanding in August 2019. Laws and tax rules may change in the future.

Is the new ‘Sustainability’ model for GP premises unsustainable?

August 23, 2019

Younger GPs seem to be turning their backs on the proposed ‘sustainability’ financial model for GP premises. Neil Morrison, Head of Medical with Campbell Dallas, explores the issues, the pros and the cons.

Aside from pensions, the other hot financial topic across Scotland’s medical profession is the proposed “National Code of Practice for GP Premises”.

The code was first issued in Scotland in November 2017 and is part of the new GP contract introduced in April 2018.

The document outlines the Scottish Government’s strategy to create a sustainable environment and market for the ownership and use of GP premises. The ownership and transfer of ownership of medical ‘bricks and mortar’ has become an increasingly onerous issue. Traditionally, when they retired, GPs would sell their equity in a medical practice building to a younger partner.

Owning and managing premises is time-consuming, costly and bureaucratic. GPs want to focus on patient care rather than on thorny and draining issues such as valuations, dilapidations, surveys and roof repairs. The premises problem is proving an issue for younger GPs and disrupting the traditional transfer of premises ownership model. Essentially, too many younger GPs do not want to know.

The new premises strategy aims to mitigate the premises problem by gradually moving towards a model where GPs do not own (or lease) their premises.

The financial mechanism is the new ‘GP Sustainability Loans’. From 2018 to 2023 each property-owning practice will be eligible for an interest free loan of up to 20% of the value (assessed on an existing use basis). Further loans of up to 20% of the premises value will be available every 5 years thereafter.

As capital repayment is not required and the loans are interest free it seems an attractive proposition. Furthermore, the GP practice retains the full entitlement to notional rent, providing for very positive cash flow.

However, problems began to surface when property-owning practices started to receive initial valuation letters based on the Sustainability Loans. The valuations tended to be considerably higher than those provided by independent surveyors who were using the same ‘Existing basis’ methodologies. The long-term funding implications for the Scottish Government were shaping up to be unsustainable!

If it is too Good to Be True
The subsequent lack of detail and the commitments required from GP led to a growing concern, particularly amongst younger GPs. More and more were mulling over the viability of the new model. If it looks too good to be true, then it probably is!

Whilst virtually all property-owning practices registered an interest in the Sustainability Loan Finance, a large number have chosen not to progress an application.

The younger GPs are most concerned about the potential problems and issues. The feedback we are receiving from our wide medical client base indicates widespread anxiety about the risk, which is in turn acting as a blockage to the GP premises market. If younger GPs are unwilling to adopt the proposals, it will impact significantly on the sustainability of GP practices, GP recruitment and career progression, and in turn on medical care.

The Scottish Government clearly has a major problem on its hands.

In the meantime, the good news for younger GPs is that the traditional providers of finance for GP practices, namely banks, remain very keen to lend. The terms offered compare favourably with virtually every other business sector with finance available up to 100% of property values, a lower rate of interest and capital repayment profiles over many years.

As a result, more and more GP Practices, including many of our clients, are deciding to renew their loan facilities with their banks rather than entertain the Sustainability Loan finance product.

Arguably, more considered consultation could have helped prevented the ‘Sustainability Loan’ proposals from looking increasingly unsustainable.

The Medical Practice team at Campbell Dallas has extensive experience researching, negotiating and managing the finance and loan requirements of GP practices.

For further information, please contact Neil Morrison.

Neil Morrison
01738 441 888

The information in this blog should not be regarded as financial advice. This is based on our understanding in August 2019. Laws and tax rules may change in the future.

The Office of Tax Simplification’s (OTS) review of Inheritance Tax

August 22, 2019

The Office of Tax Simplification (“OTS”) has recently published their second report following the review of Inheritance Tax (“IHT”) which included 11 recommendations. These recommendations can broadly be categorised into three areas, namely, lifetime gifts; interaction with Capital Gains Tax (“CGT”); and IHT reliefs associated with businesses and farms. Some of the key recommendations have been summarised below.

Lifetime Gifts – time limits and taper

When an individual makes a gift to another individual for IHT purposes this gift is only a Potentially Exempt Transfer (“PET”) because it is necessary for the donor to survive seven years from the date of the gift to be completely free of IHT. If the donor does not survive the gift by seven years the IHT that may be chargeable is reduced on a sliding scale (known as taper relief) depending on how long they survived.

At the time of death, obtaining information relating to gifts made seven years ago can be difficult as it is difficult for executors to obtain bank statements and other financial records more than six years old.

Furthermore, the application of taper relief is complicated and not understood properly – it is a reduction in the tax payable not a reduction in the value of the PET.

OTS therefore recommends that taper relief should be abolished and shorten the survivorship period from seven to five years.

Lifetime Gifts – normal gifts out of income

Another significant reform that was included in the report relates to exemption for normal expenditure out of income. Where an individual has excess income, they can gift that excess income free of IHT if a pattern can be established.

OTS recommends either this relief is reformed to reduce the administrative burden in calculating the excess income. One of their suggestion is to limit the amount of income to a fixed percentage based on the most recent tax return.

The alternative recommendation is that the relief is abolished altogether and replaced with a higher personal gift allowance. OTS has not suggested a limit but a £25,000 personal gift allowance apparently covers the value of 55% of all normal expenditure out of income claims.

Interaction with CGT

Currently, when an individual inherits assets on death, these assets benefit from a market value uplift for CGT purposes so that the inherent gain is wiped out. The reason for this uplift is to mitigate double taxation on the basis that the asset would be subject to IHT on death. Therefore, the individual inheriting the asset does not pay CGT in relation to the growth in value associated with the asset whilst it was previously owned by the deceased.

The capital gains uplift applies to all assets and therefore it also applies to assets that would not otherwise be subject to IHT by virtue of certain exemptions. These exemptions could include spouse exemption, or other IHT reliefs such as Business Property Relief (“BPR”) and Agricultural Property Relief (“APR”). Where assets qualify for IHT reliefs, the recipient of the inheritance would inherit the asset free of IHT and is potentially able to sell the asset with no CGT. This circumstance gives rise to zero taxation.

The OTS mentions in their report that the CGT uplift on death distorts decision making when it comes to giving assets away. This is because, if an asset qualifies for IHT relief, it is usually more beneficial for the individual to pass these assets on death to benefit from both the IHT exemption and the CGT uplift.

The OTS therefore recommends removing the CGT uplift for assets that benefit from IHT exemption so that the recipient acquires the asset with the original acquisition cost of the deceased.

IHT reliefs

Many business owners and farmers have relied on a form of IHT relief called Business Property Relief (BPR) and Agricultural Property Relief (APR) when planning to pass their business to the next generation. One of the main conditions for BPR to apply is that the business must be wholly or mainly trading. This test considers a trading business to be one where its trading activities is greater than 50%.

For CGT purposes, when an individual gives away or sells their business to a third party, they may qualify for CGT reliefs such as gift relief or Entrepreneurs’ Relief. To qualify for such reliefs, the business must also qualify as a trading business. However, unlike BPR, to qualify for CGT reliefs the bar for assessing the trading activities is higher as it is necessary for the business to be substantially trading which HMRC suggests is greater than 80%.

OTS recommends that the Government should consider whether it is appropriate for the business test to be different for IHT and CGT.


It is still early days whether these recommendations may be introduced as law but they are certainly suggestions the Government will consider in an attempt to simplify the IHT regime. This can only mean that changes are afoot and it will be necessary to consider the impact on an individual’s estate and review one’s Will. Please get in touch with your usual contact for further details regarding the above or information relating to the other recommendations contained in the report.

If you have any queries on IHT, please speak to your usual Campbell Dallas advisor.

Aileen Scott
0141 886 6644

The information in this article should not be regarded as financial advice. This is based on our understanding in August 2019. Laws and tax rules may change in the future.

‘No quick fix’ for Scots’ doctors in UK review of medics pensions

August 8, 2019

Doctors and GPs in Scotland are likely to have to wait for some time before they see any positive changes to their taxation as a result of a commitment by the UK government to review how doctor’s pensions are taxed, a leading accountant specialising in the medical sector has warned.

Neil Morrison, Head of Medical with Campbell Dallas said:

“It is good news that Government ministers are proposing to change pension rules so that doctors can work additional shifts and treat more patients without suffering financially. A new consultation will be undertaken by the Department of Health and Social Care on the new proposals which will give senior doctors flexibility over the amount their personal and employer pension contributions.

“It should allow senior clinicians to do additional work without breaching their annual allowance and incur higher taxes. The Treasury will also review the highly unpopular tapered annual allowance, which has also led to much higher taxes for doctors. However, this whole process is going to take a considerable amount of time to finalise and for new pension rules to be adopted. As such, there are no quick fixes for Scottish doctors,” said Neil Morrison.

He added: “Doctors and GPs in Scotland will have to continue managing their income, pension contributions, finances and tax within the existing tax framework. We have many clients working in the medical sector that have suffered significantly higher tax bills in the last couple of years, and it is likely that these challenges will remain for the time being. It is essential that doctors ensure they arrange their income and pension in the most tax efficient manner.

“The situation is also slightly different in Scotland, and it will be up to the Scottish Government to decide how best to adopt the proposed revisions to pension rules. Unfortunately, this will also add further time to the process, however, we should welcome the fact that the current unpopular pension regime is being overhauled.”

Neil Morrison - a Partner in our Perth office


Neil Morrison

01738 441 888


The information in this article should not be regarded as financial advice. This is based on our understanding in August 2019. Laws and tax rules may change in the future.

Major changes to the ability to reclaim import VAT

July 30, 2019

HMRC has issued Revenue & Customs Brief 02/19 which seeks to clarify its policy regarding who can act as the importer of record and recover the associated import VAT.

The brief advises that HMRC has become aware of situations where agents and non-owners of goods are acting as the importer of record and reclaiming import VAT. HMRC has confirmed that the correct procedure is for the owner of the goods to act as the importer of record and to seek VAT recovery in accordance with section 24 of the VAT Act 1994.

HMRC accepts that its previous guidance was unclear on the correct procedure, therefore it will not take retrospective action provided the parties involved acted in good faith and there is no risk of duplicated VAT claims.

HMRC’s new policy will be adopted from 15 July 2019. Claims for import VAT recovery will only be permitted where the legal owner of the goods acts as the importer of record and is entitled to reclaim the import VAT.

The clarification represents a significant change for organisations involved in the importation of goods.

How could you be affected? 
• If you purchase goods from outside the EU where ownership of the goods passes to you following importation into the UK (for example on incoterms DDP delivered duty paid), the supplier of the goods will be responsible for importing the goods into the UK, and the customer can no longer act as the importer of record for VAT purposes. The supplier may also have a requirement to register for UK VAT.

• If you purchase call-off stock where title to the goods remains with the supplier until you call-off following importation into the UK, the supplier would be responsible for importing the goods and the customer can no longer act as the importer of record for VAT purposes. This could result in wider commercial and contractual issues between the parties. There are customs procedures such as ‘customs warehousing’ which can help to mitigate the exposures.

• If you are involved in work on goods where the goods are temporarily imported into the UK and then exported back to the owner, you should consider the use of VAT Duty relief schemes such as Inward Processing Relief.

Organisations should consider the impact of these changes and make arrangements to ensure contractual terms are constant with the VAT policy and any costs and disruptions are minimised.

We are pleased that HMRC are unlikely to take retrospective action prior to 15 July 2019. If you have received assessments from HMRC within the last 4 years in relation to import VAT recovery, our team are on hand to help with any queries you may have. There may be scope to query assessments where import VAT was reclaimed in circumstances similar to those described in the brief.

This represents a significant change which could adversely affect suppliers and customers in the supply chain both practically and financially. If the UK leaves the EU without a deal, the impact of this change may well be greater.

For more information, please speak to either Martin Keenan within our Indirect Tax team or your usual Campbell Dallas contact.
0141 886 6644

The information in this blog should not be regarded as financial advice. This is based on our understanding in July 2019. Laws and tax rules may change in the future.

Aberdeen-based Williamson and Dunn to join Campbell Dallas

July 26, 2019

Long-established Aberdeen accountancy firm, Williamson and Dunn, is to join one of the UK’s leading business advisory groups Baldwins to become part of the fast-growing CogitalGroup on 2 August. Based on West Craibstone Street, the firm was founded in 1880, employs 5 partners and 36 staff and has a fee income of more than £3m.

In October 2017, Campbell Dallas and Springfords became the first Scottish firms to join Baldwins followed by Sinclair Scott in May 2018 and Scott-Moncrieff in April 2019.

Baldwins, a Cogital Group company, now has 88 offices throughout the UK as part of its national strategic expansion plan, employing 2,700 staff with an annual turnover of approximately £200m.

This latest deal underlines Baldwins’ further investment in Scotland as all staff and partners will transfer to Campbell Dallas, joining one of Scotland’s most innovative and fastest growing accountancy practices with 47 partners, nearly 550 staff and a combined fee income of circa £40m. The enlarged business will trade as Campbell Dallas from the West Craibstone Street offices whilst the Campbell Dallas office on Carden Place, which employs 2 partners and 10 staff, will continue business as usual.

After Baldwins’ deal with Campbell Dallas, plans were announced to drive growth in Scotland through a combination of acquisitions and organic expansion.

Williamson and Dunn provides accountancy, advisory, tax, audit, financial planning and compliance services to more than 1,000 owner managed businesses, entrepreneurs, and private individuals. The firm is known for its expertise in the family business, farming, fishing, property, healthcare, construction, estates and charity sectors.

George Flett, senior partner of Williamson and Dunn said: “Joining Baldwins and the CogitalGroup will enable us to provide our clients with access to a full range of accountancy services and specialists across Scotland, the UK and internationally. We will also gain access to industry-leading financial technology that will allow us to provide outstanding customer service. Our staff will also gain access to challenging and rewarding career opportunities at all levels across the wider group. The accountancy market is changing rapidly, and we hope our clients will quickly see the benefits of the deal.”

Chris Horne, managing partner of Campbell Dallas said the deal was a good move for both firms: “Williamson and Dunn is a highly respected Aberdeen firm with a long history of advising businesses and private clients, and we are delighted to welcome them to Campbell Dallas. The deal provides Campbell Dallas with further scale to expand our client base in Aberdeen and throughout the North East and provides staff with the chance to develop their careers across a larger business. Working together, we will offer the best technology driven services to our clients.”

Scott-Moncrieff joined Campbell Dallas in April this year, adding 16 partners and 220 staff. Campbell Dallas is now one of the largest full-service accountancy firms in Scotland outside of the ‘Big 4’.

Shaun Knight, Board Director at Baldwins, added: “Expanding in the North East is a significant move and underlines our commitment to further growth in Scotland. We welcome our new colleagues and look forward to working together as we continue to build a progressive and disruptive business in the fast-changing accountancy market.”

Entries open for young entrepreneur awards

July 18, 2019

Scotland’s next generation of entrepreneurs are being urged to enter a competition that offers substantial cash and mentoring support to kick start their business.

The KickStart awards, which are open to 18 to 25-year-old entrepreneurs, offers the winner a grant of £10,000 along with £10,000 worth of mentoring and accountancy advice. Two runners-up will each receive £5,000 worth of mentoring and advice.

Chris Horne, Managing Partner, said: “KickStart offers a generous package of cash and advice to young Scots’ entrepreneurs with an exciting business or innovative idea.

“Scotland is famed for its young entrepreneurial talent but with so much economic uncertainty at present it is essential that we support the next generation of entrepreneurs as they build their businesses. We hope as many new Scots’ entrepreneurs will take up the challenge and showcase their talent, and their ideas, on a national stage.”

Ten entrepreneurs will be interviewed about their ideas, with a final three being invited to present to more than 400 people at Edgbaston Cricket Ground in Birmingham on Thursday, November 14.

Last year’s Scottish winner, Michael Harkins from Livingston, landed the £20,000 investment for his shell-shaped swimming aid, known as Turtle Pack, that sits on a child’s back and allows them to swim freely without the need for armbands and handheld floats.

Michael said: “This money is going to go a long way and allow me to scale up the manufacturing of the product so I can fulfil large scale orders.”

David Baldwin, Director at Baldwins, added: “The KickStart programme has developed an enviable reputation for developing talented home-grown entrepreneurs, and the growing standard of entries that we receive year-on-year shows us that there is still more to come.

“Our 2018 winner Michael Harkins was a classic example – he spotted an issue with existing swimming apparatus while going about his daily routine as a swimming instructor, and with the right help and advice, he has turned a concept into a product that is now on the market.”

The deadline to apply for the Awards is Saturday, August 31. To enter, click here.

New talent programme success drives 25% expansion of Campbell Dallas Glasgow office

July 12, 2019

The success of Campbell Dallas’ pioneering apprentices and graduate trainee recruitment programme has resulted in the firm announcing a 25% expansion of the Glasgow office at Braehead by 4000 sq. ft with the capacity for up to 80 staff.

The internal transfer of 30 staff from the existing ground floor offices together with 15 new apprentices and graduate trainees being recruited in 2019 under the Campbell Dallas’ ‘Earn and Learn’ next generation development programme will account for around half of the additional space.

Since 2013 Campbell Dallas has recruited 119 apprentices and graduate trainees, including a record intake of 13 school leavers joining in 2018.

In addition, a recruitment drive for additional professional staff at all levels is expected to see the extra space fully occupied by the year end, taking staff working from the Glasgow office to more than 200. The firm is investing over £250,000 on the installation of utilities, cabling, technology, work-stations and office equipment.

Peter Gallanagh, partner in charge of the expansion, said: “The extra space will be a huge asset to the Glasgow office, which has seen double digit organic growth over the last five years. The additional capacity will allow us to continue our strategy of investing in our people, the latest technology, office systems and mobile working facilities.”

Top 100 Global listing for Campbell Dallas high flyers

July 10, 2019

David Booth, a newly appointed partner with Campbell Dallas, and Shahbaz Mirza, Campbell Dallas’ Digital Transformation Leader, have been named as rising stars in the ICAS Top 100 Young global CAs, a prestigious list of emerging talent identified by ICAS as the next leaders in the accountancy profession.

Peers across the industry were asked to nominate CAs under 35 that they believed to be excelling and showing leadership in their careers, thereby representing the best of ICAS across business, industry and public life.
Aberdeen-based David Booth, who was appointed a partner on 1st July, specialises in advising SMEs, owner managers and private equity backed businesses across a range of sectors including farming, oil and gas, retail, construction and property.

Glasgow-based Shahbaz Mirza is driving Campbell Dallas’ digital and cloud accounting offering. He has delivered digital innovation strategies for many government bodies and has extensive experience advising FinTech businesses in the UK and Middle East. This is the second year he has been named in the top 100 global CA’s list.

Chris Horne, Managing Partner at Campbell Dallas said, “We are delighted that David and Shahbaz have been recognised by ICAS as being amongst the best emerging talent within the accountancy profession. At Campbell Dallas we have a proven track record in developing emerging talent across the business and the achievements of David and Shahbaz reflect the quality of our people and the firm’s commitment to supporting our staff as they build their careers”.

Debbie Brodie promoted to Director in personal insolvency team

July 9, 2019

Campbell Dallas has promoted Debbie Brodie to the new post of Director within the firm’s Glasgow-based personal insolvency team. In the new role she will be responsible for directing the personal insolvency team and developing the range and scope of services provided by the firm in the personal insolvency market.

Debbie has more than 16 years experience of providing specialist advice and management of personal debt issues for a wide range of clients in Scotland. She has also played a key role managing the growing personal insolvency team, which consists of specialist debt advisers and insolvency experts. She has experience in all forms of statutory personal insolvency, the Debt Arrangement Scheme and post-appointment trading cases.

Commenting on her promotion, Debbie Brodie said: “I am delighted to have been promoted to the position of Director. Personal Insolvency is a highly complex area in which we are dealing with frequent changes in legislation whilst working with a wide range of clients who are often facing difficult issues. The team at Campbell Dallas adopts a very sensitive, client-focused approach, and I look forward to continuing to grow the department and extend our range of services.”

Commenting on her appointment, Derek Forsyth, Head of Campbell Dallas Restructuring and Insolvency department said: “Debbie is a major asset to the firm and in particular to our personal insolvency clients and to the team of specialist staff that she has carefully developed over the years. She has also made a significant contribution to the expansion of our personal insolvency department and to Campbell Dallas’s standing as a major player in the personal insolvency market. As such her promotion to Director is very well-deserved.”

Campbell Dallas announces new Partner appointments to support Aberdeen and Stirling growth

July 1, 2019

Campbell Dallas has appointed David Booth and John Gold as partners effective 1st July as the firm ramps up plans to expand the Aberdeen and Stirling offices. The new partner appointments are the first to be announced by the firm following the merger with Scott-Moncrieff in late April.

Based in the Aberdeen office, David Booth is a qualified CA specialising in advising owner managers and private equity backed businesses across a range of sectors including farming, oil and gas, retail, construction and property. He joined Campbell Dallas in 2018 from a Big 4 firm since when he has worked closely with Aberdeen senior partner Ian Williams to expand the client base and develop the firm’s services. David Booth comes from a well-known local farming family and has extensive knowledge of the business issues facing the rural sector.

John Gold is both a qualified CA and a Chartered Tax adviser. He is based in the firm’s Stirling office where he specialises in advising SME’s and owner managers on tax and financial strategies including succession planning, IHT and wealth planning. He qualified as a CA with Campbell Dallas in 1999 and has played a key role driving the growth of the Stirling office.

Commenting on the promotions, Scotland Managing Partner Chris Horne said: “David and John have made a major contribution to the growth of the Aberdeen and Stirling offices and played a key role in delivering excellent client service. Campbell Dallas, as part of the CogitalGroup, is leading the change in the profession as compliance becomes more automated and valued accountancy services becomes more advisory focused. Great technology still needs great people and I am delighted that John and David will be joining the partner group at Campbell Dallas to help deliver further growth.”

Following the new appointments there are now 47 partners across the business. The recent merger between Campbell Dallas and Scott-Moncrieff created one of Scotland’s largest business advisory firms with a combined fee income of around £40m and employing over 500 staff working from 10 offices.

Construction SMEs face mounting pressures

June 28, 2019

The Construction industry is an important part of the Scottish economy, employing around 175,000 people with an annual output value of around £14bn.

Despite this, some recent high profile insolvencies and reports highlight an increasing number of small and medium sized construction companies are showing signs of critical distress, once again drawing some negative headlines for the sector.

Concerns about the UK economy and whether it can withstand a no-deal Brexit, coupled with longer running issues such as high import costs and skilled worker deficits, have been cutting through and impacting key investment decisions. A recent report by the Federation of Master Builders highlighted that the first three months of 2019 saw the first fall in workloads for SME construction firms in six years.

In addition to the ongoing political uncertainty and its impact on workload, there are many other challenges facing SME businesses in the sector. Labour shortages and rising material costs are eating into margins, and intense competition for the little work that is being put out to tender is forcing contractors to bid exceptionally low.

With increased pressure on wages, an expected increase in material prices and still the widespread issue of poor payment performance, it is an industry with real cause for concern.

Changes to the way in which construction businesses will account for VAT, which come into effect from 1 October 2019, will add to these existing pressures for a large number of sub-contractors in the supply chain. Many firms will no longer be able to charge, collect and declare VAT which may reduce cash flow in their business by up to 20%. The impact will be significant for many. A recent article by Greg McNally, VAT Partner, goes into these changes in more detail.

While these issues are worrying, there are ways to manage the impact. Our Business Improvement Services team is vastly experienced in working with businesses in the construction sector and can assist in areas such as profit improvement, cash flow management and external funding. Our team can explore various ways in which you can improve the performance of your business, increase agility and the options available to help you. Analysis techniques can help you understand where gaps are and help inform a range of solutions.

For more information, please contact Blair Milne, Business Recovery Partner, or a member of our Property & Construction team.
0141 886 6644

The information in this blog should not be regarded as financial advice. This is based on our understanding in June 2019. Laws and tax rules may change in the future.

MTD for VAT: Registration action required and your how to guide

June 21, 2019

Many businesses will be aware of the MTD requirements for VAT which came into force on 1 April 2019 and may already be using compatible software or be in the process of setting this up. It is likely that you have already discussed what you need to do with your usual contact at Campbell Dallas, however please read the following to make sure you are fully compliant.

Please note, if Campbell Dallas prepare and submit your VAT returns, everything will be done on your behalf and you do not need to worry about the steps detailed below.

As a reminder, VAT registered businesses with a taxable turnover above the VAT threshold (currently £85,000) are now required to use the MTD service to keep records digitally and use software to submit their VAT returns.

If you are already submitting VAT returns through software such as Xero, Farmplan, Farmdata, Sage or Quickbooks, or are about to use bridging software, such as our CoZone client portal solution, you may think you are already MTD compliant. However, there are a few things you need to do before this is the case.

Firstly, consider when you need to register for MTD. This is determined by your VAT return periods and if you have a direct debit set up for paying HMRC or not. Please see the table below:

First MTD VAT return periodMTD VAT return due dateTime frame to register for MTD (direct debit payers)Time frame to register for MTD (non-direct debit payers)
Quarterly (1 April 2019 – 30 June 2019)07-Aug-1915 May 2019 – 30 July 20198 May 2019 – 04 August 2019
Quarterly (1 May 2019 – 31 July 2019)07-Sep-1917 June 2019 – 29 August 20198 June 2019 – 04 September 2019
Quarterly (1 June 2019 – 31 August 2019)07-Oct-1915 July 2019 – 27 September 20198 July 2019 – 04 October 2019

You can register earlier than the dates above, however, we strongly recommend you make sure you have given yourself plenty of time to complete the whole process before the next VAT return is due, in case you encounter any technical difficulties. Allow at least 24 hours after submitting the last non-MTD VAT return before registering. As the system is new and due to the significant volume of sign ups, we have in some cases seen delays of up to 10 days to complete the registration process.

You may have received a letter through the post from HMRC with details of how to register. If not, please use this link:

When registering, you will need your HMRC login details, VAT number, UTR number for the business and company number (if applicable). Once this has been done, you should receive an email from HMRC within 72 hours confirming you have registered for MTD. Please do not try the next steps or attempt to submit an MTD VAT return until you receive this email. Check your junk mail if it has not appeared in your inbox.

Once you have received this email, ensure your accounting software is set up for MTD. This may be as simple as clicking a button to enable MTD, however additional steps may be required depending on the software used.

If you have a direct debit set up for paying your VAT to HMRC, update your details on the new HMRC portal once you have received the confirmation email. Again, leave plenty of time to update the system as some of our clients have experienced delays and technical difficulties when submitting these changes. Once all of the above is done, you should be ready to submit your first MTD VAT return.

If you are concerned about any of the above and have not already spoken to your usual contact at Campbell Dallas regarding the next steps, please get in touch now to discuss what may be required.

If you wish to discuss our CoZone MTD bridging solution, please let us know.

Amy Weatherup
01738 441 888

The information in this blog should not be regarded as financial advice. This is based on our understanding in June 2019. Laws and tax rules may change in the future.

‘It’s our own Uber moment’

June 14, 2019

Our Digital Transformation Leader, Shahbaz Mirza believes accountancy is fast approaching its own “Uber moment” as the profession faces up to significant disruption as result of technology. The challenge is how a traditionally “bricks and mortar” business can go digital.

Shahbaz says “My role is constantly evolving and changing over time, because technology is constantly evolving and changing how business operates. It is my responsibility to drive change initiatives that are going to improve the business model, the technology model, and the people model for the firm as a whole.

This means that “digital transformation” is about more than apps – it’s about the people too. Shahbaz says: “If you look at some traditional accountants, they can be very siloed… we’re trying to ensure that our people can learn collaboratively, through teamwork and problem solving.”

On being #ProudtobeaCA, Shahbaz says: “Just because you’re a CA doesn’t mean that you have to fit into a stereotype… when you go to ICAS events you appreciate how many different types of CAs there are, and what they do, and what they’ve achieved, and that’s really inspiring.”

For anyone thinking about becoming a CA, visit our careers section.

Buying a Dental Practice?

June 6, 2019

Buying a dental practice can be exciting, profitable and rewarding. It can also be fraught with risk and become a costly mistake. Roy Hogg, Partner, Head of Dental and Scottish Chairman and National Committee Member of NASDAL, offers some key buying tips.

If you’re at the stage of considering purchasing your first Dental Practice, or even looking to expand by opening in another location, there are some crucial points to consider. It is undeniably an exciting step forward, but it is incredibly important to think about and plan for the potential risks that may be involved.

If the purchase involves a practice which is already trading, this can easily make the transaction more expensive. This type of purchase will also require more financial and legal due diligence.

Another option may be to open a ‘squat’ practice. This option allows you to effectively start with a blank canvas and create a practice that matches your vision. While this way may seem tempting, there is also the added pressure of having no previous foundations to support you. Everything down to the last detail needs to be planned and thought out – people, training, equipment, hours, marketing and even uniforms.

Building a team that can support you from the initial steps of acquiring a brand to it becoming a reality, is a very significant step. As in the example of a ‘squat’ practice, every little detail needs considered, and having specialist support behind you that has extensive Dental sector experience will undoubtedly make this easier.

This support team will include the likes of:

• Dental Accountant (must be NASDAL member)
• Dental Solicitor (must be NASDAL member)
• Dental Bank
• Dental Valuer / Agent

As the transaction progresses, every GDP (General Dental Practitioner) should invest time to ensure they fully understand the process and the management of each step of the transaction.

Checking whether there is a sales prospectus for the practice helps give an early indication of how professional the seller is, or not. Ensuring that who you’re buying from is reliable and organised will certainly help. At the very minimum, you should ask to view the last 3 years trading accounts. It’s important that these are finalised and have been signed by a qualified accountant.

I would actively encourage preparing a financial projection, and in many circumstances these will be a mandatory request by the bank. Documenting the financial viability of the project is hugely important. It’s expected that the acquisition will cost a significant sum, so every possible assurance that the business can run successfully is highly advisable.

Ultimately, it’s important to emphasise the need to get the process right. I’d highly recommend avoiding taking any shortcuts – no matter how tempting – as this will only increase the potential future risks.

If you are considering buying a dental practice and would like to discuss what to look out for and your options, contact:

Roy Hogg
Partner, Head of Dental and Scottish Chairman and National Committee Member of NASDAL
01786 460 030

The information in this article should not be regarded as financial advice. This is based on our understanding in June 2019. Laws and tax rules may change in the future.

Taxation of Vans – Employer Tax Update

May 17, 2019

The tax treatment of vans has become more complicated following a recent case which has been upheld at the Upper Tribunal (UT) in favour of HM Revenue & Customs (HMRC) relating to what constitutes a “van” for benefit in kind (BIK) purposes.

HMRC challenged Coca Cola’s treatment of three vehicles: a first and second generation of the VW Transporter T5 Kombi and a Vauxhall Vivaro.

The case relied on two factors in deciding whether the vehicles could be considered goods vehicles as defined by legislation. The first being whether the vehicle was of a construction to transport goods and the second being whether the vehicle was primarily suited for the transport of goods.

Although all are constructed for the transport of goods, the inclusion of the second row of seats, which are removable, and side windows meant that there was a question whether transporting goods was the primary purpose.

The UT supported the First Tier Tribunal’s (FTT) decision that the VWs were not suitable vehicles and that the Vivaro was. The difference being that the second row of seating in the VWs stretched the width of the vehicle and was bought in this form. Given the dual purpose, it could not be said to be primarily suited for the transportation of goods.

The Vivaro’s scenario was slightly different as it did not have the extra seats included in production but was subsequently modified to add them. Its second row of seats only covered half the width of the vehicle with an area left for goods alongside which was sufficient to allow the UT to accept the FTT’s decision.

What’s the impact?

This decision will potentially affect employers and employees using such combi style vans.

The employee may now have an income tax liability as they will be treated as having a car benefit. A van benefit itself may not have been applicable for the employee if private use was insignificant. As a car however, commuting would be considered a private use and so a BIK will likely be reportable on form P11D. The benefit value is calculated based on the vehicle’s CO2 emission and its list price. The value placed on the benefit can therefore be substantial.

The charge to the company is the Class 1A National Insurance which is payable on the value of the benefit provided.

For capital allowances purposes, the same construction and primary purpose tests apply. It is therefore likely that where 100% annual investment allowance in the year of purchase applied previously, only writing down allowance at 18% or 8% will now be available annually.

There should be no change to the treatment of vehicles for VAT purposes with its car definition unchanged.

What to do now?

HMRC have yet to update their guidance in relation to the approach that should be adopted for combi vans as a result of this case. However, in light of the judgement, a fuller understanding of the vehicle is needed to establish whether it falls into the van or car category.

We expect to see HMRC challenge the treatment of more vans where a second row of seats are present.

In practice, however, our recent experience shows that HMRC are on some occasions willing to consider other factors such as the type and nature of business, industry sector and factors surrounding actual use. This recent case gives HMRC additional weight to their challenges on whether a vehicle should be treated as a car rather than a van.

You may wish to review your current fleet and keep the above in mind if looking to acquire new vehicles.

We always recommend that accurate mileage records are kept for your company vehicles.

If you have any queries regarding this, please do not hesitate to get in touch with your usual Campbell Dallas contact.

Mark Pryce

0141 886 6644

The information in this article should not be regarded as financial advice. This is based on our understanding in May 2019. Laws and tax rules may change in the future.

How can you know what you don’t know?

May 3, 2019

Having spent 33 years advising businesses on how best to procure something they frequently needed (debt), and then helping the business owners look after what they had accumulated (cash), it is only when you move into a different role that you realise what a great educator the passage of time can be.

Businesses and their shareholders have seen significant change from their banks in recent times, whether it involves their debt being sold, a requirement of growth funding, being moved to specialist lending (sometimes referred to as bad bank), sector over-exposure, limited appetite for the lending opportunity or the often-heard refrain of: ‘It’s too early’.

Since leaving the banking world, during which time I learnt a huge amount and worked with some great people it never ceases to amaze me how that knowledge and network can help businesses with one of their most critical business relationships – namely managing their bank, or banks.

Entrepreneurs want to run a successful business, but it does not always mean they are fully equipped (they can’t know what they don’t know), on how best to engage with their banking partner to achieve the most appropriate outcome.

A major change in recent years has been the growing importance of language – how to best understand the credit appetite and sector position of the lender, how to position your request, benchmark your total facility and spend time maintaining or creating alternative relationships.

No lender ever wants to lose a customer if they can help it, as winning a new one or a re-bank as it is now called is increasingly challenging and costly against a market in which there is currently more supply of debt than demand.

It is very important that business owners should focus on creating a strong multi-layered relationship with their existing lender even if they hold cash as you never know when you may need to make that call.

However, should you encounter challenges in any aspect of your requirement or are just looking for a sounding board, it is a good plan to consider asking someone who will ‘Know what you don’t know’ – saving you time, money and pain.

For more information contact:

Murdoch MacLennan

Partner, Banking Specialist and Head of Brewing & Distilling

0141 886 6644

The information in this blog should not be regarded as financial advice. This is based on our understanding in May 2019. Laws and tax rules may change in the future.

Scott-Moncrieff joins Campbell Dallas to become part of the CogitalGroup

April 17, 2019

Scott-Moncrieff, Scotland’s longest established accountancy firm, is to join forces with Campbell Dallas to become part of the fast-growing CogitalGroup.

The deal, which is for an undisclosed sum, will see all 16 Scott-Moncrieff partners and 220 staff transfer, creating one of Scotland’s largest accountancy and business services firms. The joint business will employ 45 Partners and over 500 staff in Scotland, operate from 11 offices from Inverness to Ayr, and have a combined fee income of approaching £40m per annum. The deal will take effect from 3 May.

The deal with Scott-Moncrieff follows on from Campbell Dallas joining Baldwins and the CogitalGroup in October 2017. At that point, plans were announced to drive growth in Scotland through a combination of acquisitions and organic expansion.

Stewart MacDonald, Managing Partner at Scott-Moncrieff, said: “Joining Campbell Dallas and the CogitalGroup presents an exciting opportunity for our clients and our people. CogitalGroup leads the industry in using technology to deliver cutting edge services to clients, with the ability to adapt quickly to changing client needs. Together, Scott-Moncrieff and Campbell Dallas will be able to provide our clients access to a wider range of additional services and to more efficient ways of working.”

Scott-Moncrieff provides a broad range of audit, accountancy and business advisory services to SMEs, public sector organisations, charities, entrepreneurs and private individuals. The firm’s sectoral strengths lie in financial services, technology, manufacturing and the public sector. The expanded business will provide the full portfolio of accountancy and advisory services together with an extensive expertise in industry sectors ranging from brewing and distilling to farming, education, professional partnerships, dental and medical practices.

Chris Horne, Managing Partner of Campbell Dallas, added that the merger is a pivotal deal for the firm and for Scotland’s accountancy sector.

He said: “By joining with Scott-Moncrieff the whole UK business gets access to one of the country’s strongest public and third sector firms as well as expanding our geographical footprint in the North and East of Scotland. The combined business will have the largest VAT team in Scotland and provides us access to specialist services in areas such as IT strategy and cyber security. All services we see our clients needing more of in this time of rapid change. We will also be providing our staff with more opportunity for rewarding and varied careers whilst we remain focused on being the leading adviser to entrepreneurial businesses and providing the best technology driven client services.

“The deal with Scott-Moncrieff adds significantly to our credentials and adds their expertise in the public sector and charities to the portfolio. We welcome our new colleagues and look forward to working together as we continue to build a progressive and disruptive business in the fast-changing accountancy market.”

Shaun Knight, Board Director at Baldwins, added: “This exciting news underlines our commitment to further growth in Scotland and will give businesses the ability to access our specialist services including banking and finance, insolvency and forensic accounting.

“We are looking forward to welcoming our new colleagues who share a similar ethos to our own and this is a fantastic opportunity to strengthen our position in the country.”

Stamping out Missing Trader Fraud

April 11, 2019

The Government has prepared draft VAT legislation, expected to come into force from 1 October 2019, to tackle an estimated £100m tax loss in missing trader fraud.

This will mean sub-contractors in the supply chain will no longer be required to charge, collect and declare VAT. For sub-contractors this could mean simplified VAT accounting, but a reduced cash flow in their business of up to 20%. For larger firms there may be cash flow benefits, but increased accounting responsibilities.

What is the problem?
Missing trader fraud, also known as carousel fraud, has been around for 20 years. At its simplest form, a business is created and enters into a supply chain. Sometimes these supplies take place and on other occasions the whole supply chain is fabricated. At one point in the chain, VAT may be collected which is not remitted to HMRC. In addition, HMRC are concerned about businesses that register and reclaim input tax on projects that do not exist. By the time HMRC realise the fraud, the VAT repayments have been taken and the fraudulent parties have moved on.

What steps have the Government put in place?
Missing trader fraud is common across a number of sectors including mobile phone supplies, and gas and electricity commodity trading. HMRC introduced legislation to utilise a “reverse charge” to tackle this problem, and it is has been successful in these sectors. It is this legislation that will be extended to the construction sector.

What is the reverse charge?
Ordinarily it is the supplier in any transaction that is required to charge and account for VAT. The reverse charge moves this responsibility onto the customer. Essentially the supplier will only charge and receive the net amount, whereas the customer will charge itself VAT which it can then recover according to normal rules.

Let’s say that a subcontractor was due to charge £100k on a standard rated project. It would normally collect £20k as output tax and remit this to HMRC on its next VAT return. Following the changes, the subcontractor would only charge and collect £100k, and therefore any intent to ‘go missing’ would be avoided.

As for the contractor, they would have normally paid out £120k to the subcontractor, and reclaimed the £20k of input tax on its next VAT return. Following the changes, it would now only pay £100k and would charge itself £20k on its next VAT return. Assuming this relates to a taxable supply, and there is no partial exemption, then this £20k would be recoverable on the VAT return. This would therefore have a net nil effect on the return, and would effectively be a paper exercise.

As for fraudulent traders who fabricate supplies – they could normally make a claim stating that they had paid subcontractors say £120k, reclaiming £20k of VAT before disappearing. Following the change, there would be no VAT to pay or claim on the supply, which would prevent fraudulent claims from being made.

Want to find out more?
The draft legislation that has been published would see the reverse charge apply to ‘specified supplies’ of services. The type of services that are included and excluded are based on the definition of ‘construction operations’ and the rules that are currently in place for the Construction Industry Scheme.

For more information please contact Veronica Donnelly, Partner and Head of VAT. Our specialist VAT and Property & Construction teams are also able to advise you on this area.

The information in this blog should not be regarded as financial advice. This is based on our understanding in April 2019. Laws and tax rules may change in the future.

Superannuation: Employer Rate Change

April 8, 2019

As all Practices will now be aware, the employer rate of superannuation increased on 1 April 2019 from 14.9% to 20.9%. This will impact on GP partners as well as Practice staff.

It has been confirmed that this increase will not be a cost to Practices as funding will be provided to meet the increase. What is still not clear however, is the mechanism for calculating the refunds and timing of payments.

A further update was issued on the week beginning 25 March which advised discussions were ongoing between PSD, Scottish Government, SGPC and BMA to find a resolution. AISMA firms have also been consulted and we provided our comments.

Practices have been advised that their payroll systems require updates now for the employer rate change. They have also been requested to continue to remit the monthly superannuation contributions to the Scottish Public Pensions Agency (SPPA) by the due date of the 19th of the following month.

It is possible that Practices may receive funding for the increase in relation to GP partners that have opted out of the superannuation scheme. This would therefore be a net gain for such individuals and Practices. We have been notified that the legal position is currently being checked as to whether there is an obligation or not to provide such funding.

If you have any queries on superannuation, or any other financial matters, please do not hesitate to contact your usual Campbell Dallas advisor or:

Neil Morrison
01738 441 888

The information in this blog should not be regarded as financial advice. This is based on our understanding in April 2019. Laws and tax rules may change in the future.

Employment Tax Changes 2019/20

April 4, 2019

With the start of a new tax year on 6 April 2019, there are some changes to bear in mind going forward.

PAYE and NICs – Scotland v rUK

There is an acceleration in the increase in the personal allowance from £11,850 up to £12,500.  Originally expected to rise to this level by 2020/21, this increase has been brought forward to April 2019. There have also been increases in the basic rate and National Insurance thresholds which are all set to benefit the taxpayer.

Although the personal allowance is decided by the UK government, income tax thresholds are determined by devolved parliaments. The rates payable by Scottish taxpayers are out of sync from rUk in the 2019/20 tax year with 5 income tax rates adding considerable complexity. Tax rates are determined by where the tax payer resides, not where they work and are indicated on tax codes by a prefix of “S” for Scottish taxpayers. HMRC will notify employers of any amendments via P6 or P9 notices.

Scottish ratesRate  Taxable income band   Tax on band
Starter rate19First £2,049389.50
Basic rate20Next £10,3952,078.80
Intermediate rate21Next £18,4863,882.06
Higher rate41Next £119, 07048,818.70
Additional rate46Excess

Pensions & Scottish Taxpayers

“Net Pay” pension schemes members have their pension contributions deducted before Income Tax is applied to their pay and are therfore largely unaffected by the above noted devolved Scottish tax changes.

However, pension schemes using the “at source” mechanism, will continue to claim tax relief at the rate of 20% for members who are Scottish taxpayers. For pension scheme members who are Scottish taxpayers liable to income tax at no more than the Scottish starter rate of 19%, or who pay no tax, current tax rules will continue to apply. This means that scheme administrators will continue to claim relief at 20% in respect of these individuals, and HMRC will not recover the difference between the Scottish starter and Scottish basic rate.

Scottish taxpayers liable to income tax at the Scottish intermediate rate of 21% will be entitled to claim the additional 1% relief due on some or all of their pension contributions above the 20% tax relief paid to their scheme administrators. HMRC have indicated that whilst they will not be able to correct this directly with the pension scheme, they will adjust the tax code to provide tax relief through the payroll.

Scottish taxpayers liable to Income Tax at the Scottish higher rate (41%) and Scottish top rate (46%) will be able to claim additional relief on their contributions up to their marginal rate of tax. This should be done either in their Self-Assessment tax return or by contacting HMRC.

Pension Contributions

April 2019 sees the final increase in the Automatic Enrolment minimum pension contributions rate. From April, the minimum contribution rate increases to 8% of which a minimum of 3% must be an employer contribution.

Student Loans

There are increases to the thresholds for both Plan 1 and Plan 2 Student Loan deductions. April 2019 will also see the first Post Graduate Loan (PGL) deductions. Employers will continue to apply student loan deductions based on the information contained within the P45, Starter Checklist or SL1 notice from HMRC. Instructions to operate a PGL will come from HMRC in the form of PGL1 notification.

National Minimum Wage and Statutory Payments

Increases to the National Minimum Wage across all age groups take place from 1 April 2019. The new rates are as follows:

Aged 25 and above                          £8.21

Aged 21-24                                         £7.70

Ages 18-20                                          £6.15

Aged under 18                                   £4.35

(but above compulsory school leaving age)

Apprentices aged under 19          £3.90

Apprentices aged 19 and over     £3.90

(but in the first year of their apprenticeship)

Increases for statutory payments such as Statutory Maternity, Paternity, Adoption and Shared Parental Pay and Statutory Sick Pay take place from 6 April 2019.


From April 2019, the statutory right to receive an itemised payslip will be extended to all workers, not just employees. For those whose pay varies depending on the number of hours worked, their payslip must show the amount of time they are being paid for. Employees are defined under the Employment Rights Act 1996.

Company Cars

Increases of 3% on the calculation percentages used on all CO2 emission rates and an increase in the fuel benefit charge will see company car drivers pay more for their benefit. The diesel surcharge increased from 3% to 4% from April 2018. However, new diesels that comply with the Euro 6d emissions standard (also referred to as RDE2) do not attract this surcharge.  With Euro 6d testing not being mandatory on new cars until January 2021, it is unlikely that diesel company car drivers will benefit from this just yet.

For 2019/20, the 3% increase applies to all cars including electric and Ultra Low Emissions Vehicles (ULEV’s).  ULEVs are cars with CO2 emissions below 75g/km. However, from 2020/21 all electric cars attract a benefit in kind percentage of just 2% – a reduction from 16% in 2019/20.  The calculation percentage of hybrid cars will be assessed by the number of miles they can be driven in all-electric mode ranging from 2% for electric range of over 130 miles to 14% for less than 30 miles. These represent significant savings for the tax payer and worth considering if you’re looking to change company car soon.

Other expenses and benefits

Employers who reimburse subsistence costs at HMRC benchmark rates will no longer have to check receipts from April 2019. However, they will still need to keep records demonstrating the expense was incurred for qualifying business purpose.

Currently where employers pay contributions to a life assurance policy or a qualifying recognised overseas pension scheme (QROPS) and the beneficiary is the employee (or certain members of the employee’s family), no benefit in kind exists. From April 2019 this exemption is extended such that the provision of death or retirement benefits will not be subject to tax when the beneficiary is any individual or a registered charity.

Working Practices

Following the Independent Taylor Review of Modern Working Practices and the subsequent release of the Good Work Plan, the gig economy and employment status continue to receive attention. There have been promises of clearer guidance from HMRC along with developments to its Employment Status Indicator tool but with many cases still being decided by the courts, uncertainty looks likely to continue into 2019/20 and beyond.

The Good Work Plan also outlined changes to the holiday pay reference period for the calculation of holiday from 12 weeks to 52, a ban on employers making deductions from tips and gratuities and a right to a written statement outlining contract and rights from day one for all workers, not just employees.

The Future

Whilst there remains much uncertainty ahead, there are some changes already announced for April 2020. These include:

  • extension to the off-payroll working legislation to those engaged through personal service companies to most of the private sector
  • Secondary Class 1 NICS (employers) payable on termination and redundancy payments above £30,000
  • Executive Pay Ratio reporting

For more information, contact:

Mark Pryce

0141 886 6644

The information in this article should not be regarded as financial advice. This is based on our understanding in April 2019. Laws and tax rules may change in the future.

VAT Brexit Guide for Business

April 3, 2019

As you may already be aware many VAT registered businesses have been receiving letters from HMRC recommending that an EORI number should be applied for in preparation for Brexit.

In the current climate, subject to further votes, a no-deal Brexit outcome still remains a possibility and regardless of what and when any current rules may change we recommend that all businesses involved with the movement of goods, should apply for an EORI number as soon as possible.

What you do need to do:
•    Apply for an EORI number now, which takes 2-3 days
•    Apply for Transitional Simplified Procedures, a quick, same day process
•    Communicate with your current agent or get one
•    Take advantage of Postponed accounting for import VAT

For our full VAT Brexit guide, click here

Veronica Donnelly
0141 886 6644

The information in this blog should not be regarded as financial advice. This is based on our understanding in April 2019. Laws and tax rules may change in the future.

Increase of automatic enrolment contributions

March 29, 2019

As of 6 April 2019, the minimum contributions you and your staff pay into an automatic enrolment workplace pension scheme will increase. With the deadline fast approaching, it is expected that you’ll have made your staff aware of the changes. Businesses could face a fine if the right minimum contributions are not being paid from 6 April 2019.

Does the increase apply to you?

If your staff are in a pension scheme for automatic enrolment, you need to take action. All employers are required to make sure at least the minimum amounts are being paid.

For those businesses that don’t have staff in a pension scheme for automatic enrolment, or if you are already paying above the minimum amounts, you are not required to act. Likewise, if you’re using a defined benefits pension scheme the increases do not apply.

What are the increases?

Contribution percentage

Employers will be required to make at least the minimum contribution of 3%, while staff must make up the difference. For those employers that have decided to make the total minimum contribution, staff will not need to pay anything towards their scheme.

The amount paid into the pension scheme will vary depending on the type of scheme and the rules of that scheme. The amount staff contribute could also vary depending on the type of tax relief applied by the scheme.

There are certain considerations that must be taken into account when calculating contributions for the minimum 8% rate:

• Salary
• Wages
• Commission
• Bonuses
• Overtime
• Statutory sick pay
• Statutory maternity pay
• Ordinary or additional statutory paternity pay
• Statutory adoption pay

What actions are required?

Under the Pensions Act 2008, it is the responsibility of the employer to make sure the right minimum contributions are being paid. To ensure the right contributions are made from 6 April 2019, follow the steps below:

1. Work out which increases apply
2. Work out which staff it applies to
3. Make sure the way you calculate contributions and pay them to the pension scheme is ready to apply the increases

To discuss how to implement these changes, please contact your usual Campbell Dallas advisor, or:

Carol Wright - Partner, Edinburgh, and Head of Payroll in Scotland

Carol Wright

Partner and Head of Payroll

0131 440 5000

The information in this article should not be regarded as financial advice. This is based on our understanding in March 2019. Laws and tax rules may change in the future.

Case opens doors for significant tax relief claims for silos in Scotland

March 18, 2019

The result of a recent high profile tax case has opened up the opportunity for farmers to save significant amounts of money by being able to now claim tax relief on specialist buildings and structures, according to Andy Ritchie, head of Rural at Campbell Dallas.

The case was based on tax relief claimed on a new grain drying and storage facility by Mr Stephen May, a farmer in North Devon. Mr May required a facility for drying and conditioning of the grain after it had been harvested, and for storing the grain until it was sold. The facility was constructed on his land and he asked the supplier “to manufacture and supply a grain store building purposely designed for the customer to include control of temperature and moisture levels for grain”. Although based in Devon this was a grain store facility very similar to many throughout Scotland. The findings of the case should encourage cereal farmers to review future and even previous expenditure on similar buildings.

Crucial to the decision was that the structure needed to be classed as a ‘grain store’ or ‘silo’ – Tax Legislation allows silos to be claimed as plant and machinery. HMRC challenged the claim arguing the facility was a “building”. HMRC were willing to accept that 20% of the costs should qualify for allowances, the tax payer arguing that the entire expenditure should qualify.

The evidence demonstrated that expenditure on the structure cost was approximately double what a general purpose agricultural building would have cost, and was unsuitable for use as a livestock building. The tribunal was also happy to accept that the storage was temporary even although the grain could be in store for 9 months.

In reaching their findings the tribunal noted that “to an observer with no specialist knowledge of agriculture, it simply looked like a large steel-framed barn or shed with a concrete floor, in which piles of grain were lying on the floor, however, the facility was specifically built and designed to serve the purpose of drying the grain following harvest and maintaining it below certain temperature and moisture levels pending sale.” The tax tribunal concluded that the whole structure, not just the moveable items within it, were integral to its function of drying, conditioning and the storage of grain.

Prior to the decision, most grain buildings and structures were deemed not eligible for capital allowances. Since the abolishment of the Agriculture Buildings Allowance in 2011 most agricultural buildings constructed have not been eligible for capital allowances. Under the new Structures and Buildings Allowance, it is possible to offset 2% of expenditure on buildings each year for the next 50 years but qualifying for plant and machinery allowances is far more advantageous.

Andy Ritchie of Campbell Dallas warned that “the decision in this case does not allow any farm building to be treated as Plant & Machinery, it does however create opportunities for some structures and buildings to be treated as plant.” He advises “farmers should review recent expenditure on any buildings that are specialist in their purpose such as grain store and cold stores. The key to a successful claim is to seek professional advice to ensure they fully understand the Capital Allowances legislation, case law and understanding farm processes”.

For more information, contact:

Andy Ritchie

Andy Ritchie

01738 441 888

The information in this article should not be regarded as financial advice. This is based on our understanding in March 2019. Laws and tax rules may change in the future.

Contractors face loans tax hit

February 27, 2019

On 5 April contractors paid by loans could face significant tax charges.

Many contractors have been engaged through structures whereby part of their remuneration was as a loan rather than PAYE. New legislation introduced by the UK Government means that for any loans which remain outstanding as at 5 April 2019, the amount of the loan will be subject to income tax as earnings in the current tax year.

As a result, many contractors will face significant tax liabilities where they have participated in this type of planning for a number of years. Those with the funds available may still be able to settle with HMRC ahead of the deadline date (although the official date by which HMRC were accepting settlement offers has passed, it may not be too late to reach an agreement), or alternatively the loan can be repaid.

Income tax would then be repayable when those funds are drawn down at a later date, but this could be done over a number of tax years rather than the full amount being taxed in the one year (and therefore more likely mostly at the higher/additional rate of tax).

However, many contractors will find themselves in a position where they are not able to do so, and it is highly unlikely that criticism of the fairness of the legislation in the House of Lords and elsewhere will result in any material changes.

Whilst HMRC will allow time to pay for those agreeing a settlement, it may still be that some simply are not able to meet their liabilities; in which case they should take professional advice on how best to approach the position. Whilst the three options of settlement, paying back the loan or paying the loan charge may not be available to all, simply doing nothing is not an option.

There are a number of personal debt solutions available, depending on your individual circumstances, and usually the earlier you seek professional advice the more options remain available.

If you are affected, speak to one of our tax or personal insolvency advisors to make a plan of action for your individual circumstances.

Craig Coyle - qualified Chartered Tax AdvisorCraig Coyle, Tax Partner
0141 886 6644

Blair Milne - qualified Insolvency PractitionerBlair Milne, Restructuring & Insolvency Partner
0141 886 6644

The information in this article should not be regarded as financial advice. This is based on our understanding in February 2019. Laws and tax rules may change in the future.

Digital tax deadline being ignored by Scottish businesses

February 19, 2019

The vast majority of Scottish SME’s are not ready for the ‘Making Tax Digital’ (MTD) revolution, according to our research across a broad section of Scottish businesses.

MTD affects VAT registered businesses including sole traders, partnerships, companies, LLPs and charities with a taxable turnover above £85,000. In limited cases there is a six-month extension, otherwise all affected businesses must comply from 1st April 2019, which means keeping digital books and records and filing VAT returns using MTD compatible software.

Only 13% of all VAT returns are currently submitted via software, highlighting the scale of change required, irrespective of other pressures businesses are currently facing. There will be a ‘soft landing’ for HMRC penalties during the first year, but only in respect of certain digital links for transfer or exchange of data between software programs or applications used in the MTD for VAT process.

Businesses will be liable for fines that will vary according to the nature, and extent, of any non-compliance. MTD is being rolled out as part of the Government’s drive to digitise the tax system and reduce some of the estimated £33bn tax gap caused by issues including error, lack of care and criminality.

Fraser Campbell, Head of Family Business at Campbell Dallas, said: “MTD is being overlooked by too many businesses and it is going to become a costly oversight if there is little change to the current low rate of engagement. The media focus on the business community is understandably Brexit-centric, however, the reality is that MTD is equally pressing, if not more so. We would urge any companies that have yet to tackle MTD to do so with some urgency.”

At Campbell Dallas we have been raising awareness around MTD for the past 2 years and have just launched a further series of seminars, drop in days and workshops across Scotland for any business requiring support to become MTD-compliant, and to understand the processes involved, and the costs of inertia.

Find an MTD event near you

With MTD events across all of our offices; including seminars, drop in days and training workshops, contact us at to sign-up and find out more.

You can also find out more information here about what MTD is and how to become compliant.

By submitting your details, you consent to Campbell Dallas contacting you to notify you of events you may be interested in. We won’t share your information with any third party organisations.

The information in this article should not be regarded as financial advice. This is based on our understanding in February 2019. Laws and tax rules may change in the future.

Buy-to-Let or Buy-to-Lose?

February 18, 2019

Tax rates and legislation have increasingly been used as a matter of policy in recent years to make ownership of buy-to-let residential properties less attractive to individuals.

The Government introduced changes such as ADS (Additional Dwelling Supplement) and the restriction of mortgage interest relief to discourage the purchase of second homes by property investors and buy-to-let landlords. The rationale behind this was to ease the UK-wide housing shortage and prevent housing prices being driven up by investors with multiple properties and holiday homes.

The most recent change in the current Scottish Budget is to increase the rate of ADS from 3% to 4%. A buy-to-let investor buying a flat for £200,000 will now pay £8,600 more in LBTT (Land & Buildings Transaction Tax) than a first-time buyer.

Together with the restrictions on relief for mortgage interest, and increasing income tax rates in Scotland, both the tax costs of entry to the sector and ongoing tax costs have significantly increased.

Those looking to invest should consider using a limited company structure to lower the ongoing tax cost, given comparatively low corporation tax rates and the availability of full tax relief for interest. However, lenders may seek a higher rate of interest for corporate debt.

Investors with existing portfolios should consider whether moving these to a corporate structure is the right thing to do. Depending on the individual fact pattern, the cost in terms of LBTT, Capital Gains Tax and refinancing may give rise to a favourably short or inimically long payback period compared to any ongoing income tax savings. There may be steps which can be taken to mitigate that cost which our tax specialists would be happy to advise on.

If you want to discuss any of the points raised in this blog please get in touch with me here, or:

Craig Coyle
0141 886 6644

The information in this blog should not be regarded as financial advice. This is based on our understanding in February 2019. Laws and tax rules may change in the future.

Annual Allowance tapering: beware the potential impact on your tax bills

February 14, 2019

A significant number of Hospital Consultants have contacted us in recent months requesting tax advice in relation to Annual Allowance charges. In most cases they weren’t aware of the change made on 6 April 2016 which has resulted in unexpected pensions savings tax liabilities for the first time.

The Annual Allowance tapering rules introduced for the 2016/17 tax year meant that instead of a pensions savings limit of £40,000, this could be reduced to as little as £10,000 depending on levels of ‘threshold income’ and ‘adjusted income’. It is not just salary and pension growth that is considered. Other income such as private fees, dividends, bank interest or property rents are included in the calculation.

There is the ability to use unused relief brought forward from the three previous fiscal years to mitigate against any excess arising, and in the 2016/17 tax year this covered most pension savings excess charges that arose for our Consultant clients. However, much of the unused relief available for that tax year was used, leaving little to carry forward to the 2017/18 tax year.

For 2017/18, we have seen several significant liabilities arising – generally five figure sums. There has also been a knock-on impact to the assessment of Payments on Account due for the next tax year (2018/19) which has essentially added the same liability again, split between January and July 2019.

One way to avoid the significant cash flow impact caused by the pension savings charge is to elect for “scheme pays”. Consultants should seek advice from their IFA before opting for this, but it is important to note that for those wishing to use this option for 2017/18, the deadline for making the election is 31 July 2019.

Under Self Assessment, the onus is on the tax payer to correctly complete their tax return. Whilst SPPA will issue Annual Allowance statements to those individuals exceeding pension savings of £40,000 in a year, they do not know who will have a tapered Annual Allowance limit and who will not. Therefore, Consultants with tapered Annual Allowance limits will need to specifically request their pensions savings information from SPPA. It should be noted that such information will, as a matter of course, be forwarded direct to HMRC for all Consultants.

If you would like to discuss your own personal circumstances regarding the taxation of your pension savings please contact a member of our specialist medical team.

Neil Morrison
Partner and Head of Medical

The information in this blog should not be regarded as financial advice. This is based on our understanding in February 2019. Laws and tax rules may change in the future.

Dundee-based Land & Building Services in Administration

February 6, 2019

A long-established Dundee-based construction company, Land & Building Services Limited, has been placed in administration with Derek Forsyth and Blair Milne, partners with Campbell Dallas, appointed joint administrators.

Founded in 1990, Land & Building Services provided a broad range of services to the construction sector and had worked on several award-winning projects, including Scotland’s oldest iron bridge, and winning recognition for its work from the Saltire Society and Historic Scotland.

The administration has been caused by difficult trading conditions and the loss of a major client, resulting in severe and unsustainable cash flow problems.  Land & Building Services Limited has ceased trading with immediate effect, and all 27 staff have been made redundant.

Commenting, Derek Forsyth, Business Recovery Partner with Campbell Dallas said: “The trading and cash flow problems affecting the construction sector are well-documented, and unfortunately Land & Building Services has been affected by these issues, together with the loss of a major client (McGill & Co Limited) in the Tayside market.

“We will now be marketing the company’s assets for sale, including remaining contracts, and a wide range of plant and equipment, and would urge interested parties to contact us as soon as possible.  We will also be working closely with the relevant agencies, including the Redundancy Payments Office, to ensure the employees receive as much support as possible.”

For more information contact:

Campbell Dallas Glasgow staff. Derek Forsyth.

Derek Forsyth

0141 886 6644



This information should not be regarded as financial advice. This is based on our understanding in February 2019.

Time claims right to benefit from increased Annual Investment Allowance

February 4, 2019

Annual Investment Allowance (AIA) allows you to deduct the full value of a qualifying item from your profits before tax and can be claimed on most plant and machinery up to the AIA amount.

From January 2019, the allowance was increased from £200k to £1m, therefore businesses purchasing plant and machinery should consider the allowance and the timing of claims.

I was recently speaking with an arable farming client who grows a substantial area of potatoes and the topic of AIA came into discussion. Due to good cereal and potato prices and yields, which were more substantial than he had anticipated in the middle of the dry summer, his profits for the year to 31 March 2019 could be between £500k and £600k. Some of the client’s tractors and potato equipment needed to be replaced and he was keen to take advantage of the increased AIA threshold. He enquired if spending £600k on new equipment between 1 January 2019 and 31 March 2019 would eliminate his taxable profit, which would mostly be chargeable at tax rates of 40%.

On further discussion he told me the cost of the new equipment was £600k and he was to gain £100k from trade-ins. He had also bought a tractor at a cost of £50k in May 2018.

Unfortunately it isn’t as simple as spending £600k to eliminate £600k profit from tax. Firstly he needed to consider the level of AIA available to the partnership. This is calculated as:

1 April – 31 December 2018 £200k x 9/12£150k
1 Jan – 31 March 2019 £1m x 3/12£250k
Total AIA available£400k

The client’s gross expenditure on plant and machinery in the year to March 2019 would be £50k on the new tractor plus £600k on the new plant. He would also have plant disposals of £100k for the trade-ins. This meant there was no pool of unclaimed allowances brought forward.

His maximum capital allowances claim would be:

Qualifying for AIA(£400k)£400k
Less disposals(£100k)
Writing Down Allowances (WDA) x 18%(£27k)£27k
Pool carried forward£123k
Allowances Available£427k

Although the proposed purchases would make a big dent, they wouldn’t eliminate projected profits entirely.

AIA can only be claimed in the period that you bought the item and if the AIA has changed in the period you’re claiming for, then you need to adjust the amount you can claim. Timing of capital expenditure and your accounting year end needs to be carefully considered to maximise claims during the two year window where AIA is £1m.

For further information or to discuss making an AIA claim, contact:

Alan Taylor
01738 441 888 | 01224 623 111

The information in this blog should not be regarded as financial advice. This is based on our understanding in February 2019. Laws and tax rules may change in the future.

Campbell Dallas are not responsible for content contained on 3rd party websites.

Preparing your business for Brexit

January 30, 2019

Although changing daily, we are fast approaching the March Brexit date without an agreement with the European Commission. One thing that remains clear however, is that a pro-active approach to strategic contingency planning is the best way to prepare your business. This approach will place businesses in the best position to take advantage of opportunities in new domestic and overseas markets. In this blog I will look at the key areas I believe are vital to take into consideration to ensure continuity and success for your business.

Get an EORI number

If the UK leaves the EU without a deal, you will need an EORI (Economic Operator Registration and Identification) number to be able to import or export goods to, or from, the EU. This will come into force from 11pm GMT on 29 March 2019. It makes sense to apply for an EORI number now. If you trade internationally you will already have one. For more information and to apply, visit the Government guidance here.

Achieve AEO accreditation

A widespread lack of AEO accreditation (Authorised Economic Operator) across Scotland’s businesses could result in a dramatic reduction in exports to Europe. As a former AEO specialist with HMRC, I would urge companies trading with the EU to address the AEO issue as soon as possible, and develop a plan to ensure they can undertake ‘frictionless’ post-Brexit exporting.

AEO status endows a business with a ‘Trusted Trader’ badge, which is expected to provide a fast track customs process in a post-Brexit EU. The AEO status will help provide frictionless trade with the EU, and will be the benchmark for compliance with customs systems, controls and financial solvency. Exporting without AEO status is likely to become increasingly onerous, costly and unattractive, with the risk that many of Scotland’s businesses will find exports less attractive.

AEO status currently confers fast-tracking of goods at border customs. It can also help reduce costs and delays, with AEO accredited companies likely to enjoy priority treatment. We are concerned at the low awareness of AEO in Scotland, and that application levels for AEO status are negligible. Companies need to start the process now, as there will soon be a bottleneck of applications and delays for a process that currently can take up to a year to complete. AEO authorisation embraces customs simplifications, security and safety or a combination of both, and companies can choose which level is most suitable. Businesses must meet strict criteria set down by HMRC, who require several days on company premises to review procedures and personnel.

In Germany, in 2017 over 6000 companies had AEO accreditation, but in the UK the figure was just 600. We have a long way to go and Scotland’s businesses need a great deal of support from the business community to ensure they become AEO-compliant as soon as possible.

Take advantage of subsidised training

The UK government have released new funding to help businesses prepare for the processes needed to export. HMRC is making up to £8m available to help businesses already involved or intending to become involved in import or export customs declarations. The grants are available on a first come first served basis, with £2m allocated for Staff Training and £3m for IT improvements. Businesses could be entitled to up to 70% towards training on Customs compliance including declarations, clearance procedures and Customs regimes such as warehousing and inward processing, all of which are eligible under the grant scheme. The IT grants are up to a maximum of nearly £180k to help create “ready-made” IT solutions that will help make customs declarations more efficient. Applications will close on 5 April 2019, or earlier once all the funding is allocated, so I would encourage applying for the funds as soon as possible. For more information and to apply, visit the Government guidance here.

What else can you do?

There are many other things that can be done now in order to prepare for Brexit. Key areas that should be reviewed and invested in now include:

  1. Supply chain analysis
  2. Customs data tidy-up (in-house systems and controls)
  3. Customs regimes such as inward/outward processing and Customs warehousing
  4. Currency risk level
  5. Contract reviews
  6. Impact of limited availability of labour from EU

At Campbell Dallas we can support with contingency planning and cost-benefit analysis, including calculation of potential new duty liabilities and assisting with improving all areas of Customs and trade to reduce exposure; helping put in place efficient customs facilitation with the correct level of competence.

Uncertainty is high, specifically for the SME market and we believe that businesses who engage in Brexit planning and future scenario business planning will be better equipped to deal with the new frameworks, regardless of the Brexit outcome.

If you want to discuss any of the points raised in this blog please get in touch with me here, or:

Veronica Donnelly
0141 886 6644

The information in this blog should not be regarded as financial advice. This is based on our understanding in January 2019. Laws and tax rules may change in the future.

Campbell Dallas are not responsible for content contained on 3rd party websites.

2019 Resolution: capitalise on low business tax rates and invest

December 27, 2018

Scotland’s businesses should capitalise on historically low corporate tax rates by investing in their businesses during 2019. There has probably never been a better time to take advantage of various tax incentives for business investment.

Whilst changes to corporate interest deductions are hitting large businesses hard, there are very attractive incentives for certain expenditure suitable for all companies, including capital allowances, investment in R&D and a new regime designed to encourage investment in buildings and structures. There are also tax incentives for investment in energy/efficiency-savings related projects, which attract accelerated or even 100% tax relief.

We now have one of the lowest corporation tax rates for many years, and the rate is set to fall to 17% in 2020, with speculation that it could fall even further to encourage post-Brexit inward investment. However, businesses need to be mindful that several of these allowances will stop in April 2020, so there are compelling reasons to take advantage of these deals sooner rather than later.

Due to the complexity of some of the incentives it is easy to fall foul of HMRC and incur significant charges and penalties.

HMRC is supportive of computations which include well laid out cost analysis and facts documenting and underpinning claims, but they take a grim view of unsubstantiated and arbitrary allocations, and where the paperwork is not robust. Long-life assets, whilst often highly subjective, can be a trap for the unwary as recent Revenue challenges have shown. Effective use of Annual Investment Allowances rules speeds up tax relief and will be increased to £1m for two years from 1 January 2019. The timing of spend and ensuring correct documentation are therefore crucial.

That said, a sound tax relief strategy boosts cash flow, sharpens competitiveness and enhances profitability. Notwithstanding the economic uncertainty, we should all resolve to make 2019 the year in which we take advantage of low corporate tax rates by investing in the future of our businesses.

If you want to discuss any of the points raised in this blog please get in touch with me here, or:

Mark Pryce
0141 886 6644

The information in this blog should not be regarded as financial advice. This is based on our understanding in December 2018. Laws and tax rules may change in the future.

There’s a Brexit Brewing…

December 19, 2018

Fuelled by the increasing popularity of craft beer and artisan gin, the Brewing & Distilling sector has grown vastly in recent years. With Christmas and Brexit upon us, this could well be the making or breaking of those established and new to the industry.

An article [1] last month voiced ambitious growth plans for Scottish brewers. The strategy, coming from an industry body, urges Scottish drinkers to ditch imported beer for local brew. This, together with other initiatives such as cost cutting and financial efficiencies, aims to grow the sector to £1bn by 2030.

The backbone of the plan is to create a strong Scottish brand which would be recognised and desired worldwide. The plan would involve successful utilisation of the export/EU movement market.

As an industry VAT expert, EU movements and exports are very much the focal point of both drinks businesses and their supply chains. We are seeing drinks businesses looking to streamline their EU VAT obligations. For some this will be the use of Fiscal Representation overseas, or clever use of different Incoterms within business contracts, to pass the VAT burdens on to their customers and avoid unnecessary EU VAT registrations.

On the flip side, we have EU businesses contacting our UK storage and logistics companies looking to stock pile product ahead of March 2019. These businesses are stocking up in the UK to avoid potential UK Duties in the event of a no-deal Brexit. Some might say this is a wise move, but do our logistics companies have capacity to store such quantities?

Below are key areas in relation to VAT which those in the brewing & distilling sector should be aware of:

  • Place of supply – Consider the place of taxation of your international sales. Ensure you are aware of your overseas VAT liabilities and plan ahead of large contracts or proposals.
  • Incoterms status – Linked with the place of supply, your Incoterms status will have a big impact on your liability for overseas’ import VAT and Duty. Where commercially possible, consider the different options available.
  • VAT registration status – If you do have a potential EU VAT registration requirement, take advice in advance. Some EU countries require formal fiscal representation. It is also worth noting that there are some generous EU warehousing options available, however please be aware that there are often subtle differences between member states.
  • Bonded warehouse facilities – Efficiencies are available for both UK and overseas businesses within the sector. These can be achieved either through your own facility or through your storage/logistics provider.
  • Brexit – We will all be keeping our eyes on the seemingly endless possibilities Brexit could bring, including changes to Duty, VAT and EU movement/distance selling rules. To highlight one interesting point from the many HMRC publications….a promise from HMRC that “UK VAT-registered businesses will be able to account for import VAT on their VAT Return rather than paying import VAT on or soon after the time that the goods arrive at the UK border.” This will be welcomed by many in this ‘unlikely’ event from a VAT/cash flow perspective, however, we would note that Duty would continue to be due at the point of entry, unless you have use of a Bonded Warehouse system.

If you would like to discuss this or other concerns affecting your business, please contact me here, or another of our Brewing & Distilling industry specialists.

Martin Keenan
0141 886 6644


Campbell Dallas are not responsible for content contained on 3rd party websites.

The information in this blog should not be regarded as financial advice. This is based on our understanding in December 2018. Laws and tax rules may change in the future.

Campbell Dallas secures sale of business and assets of Cairngorm Mountain Limited (in administration) as a going concern

December 17, 2018

Highlands and Islands Enterprise (HIE) is to resume control of operations at Cairngorm Mountain with immediate effect.

HIE owns Cairngorm Estate and had leased the resort to operator Cairngorm Mountain Limited (CML), which went into administration on 29 November 2018.

The agency established a new subsidiary and has now reached agreement with the joint administrators, Blair Milne and Derek Forsyth, partners at Campbell Dallas, to acquire the business and assets of CML.

Staff and other assets will transfer to the new company, which will trade as Cairngorm Mountain (Scotland) Limited. The new company will honour season tickets purchased for this winter season.

Charlotte Wright, HIE chief executive, said engagement with local business and community groups will continue to be important going forward. She added:

“We are very pleased to have worked with the administrators to achieve a really positive outcome from a highly challenging situation. The deal that we’ve reached will protect jobs and bring stability to the business, which plays an important role in the wider local economy.

“The immediate focus of the new operating company is to ensure the best possible experience for visitors this winter, particularly while the funicular is inactive, and bring some stability for staff and local businesses that rely on Cairngorm. This includes operating the new snowmaking equipment and ski tows, as well as catering and facilities at the base station.”

Blair Milne, joint administrator and business recovery partner at Campbell Dallas added: “We are pleased to have secured an early sale of the business and assets of CML. The deal ensures continuity of operations and employment at Cairngorm Mountain and we would like to thank all parties for their support as we worked towards securing a going concern sale.”

Image credit: dnaveh /

Scottish Budget fails to grab headlines

December 17, 2018

The Scottish Budget took place last Wednesday but was rather overshadowed by events at Westminster that day, and perhaps therefore failed to attract much attention. However there are some key points that are worthwhile reviewing.

Income Tax
The announcements around Income Tax were much less dramatic than in the previous year, when we had the introduction of several new bands and rates for Scotland. The main measure this year is that the higher rate threshold is unchanged, thus increasing the differential between Scottish and English taxpayers.

This means that Scottish taxpayers earning between £43,430 and £50,000 will now pay a higher rate of income tax than those in England by some 21%.

This becomes more of a disadvantage when we then consider the difference between the higher rate of Scottish income tax and National Insurance Contributions (NICs). This means that someone earning a salary in the range of £43,430 to £50,000 will pay 41% in income tax and a further 12% in NICs on the top slice of their earnings, equivalent to a marginal tax rate of 53%.

Those earning up to £26,990 should pay less income tax than other UK taxpayers.

However, someone earning £50,000 will pay more than £1,500 per annum in additional tax, increasing to almost £200 per month for those earning £120,000.

It remains to be seen whether this will drive any behavioural changes, such as a move to incorporation and pay by dividends.

The rates and bands for non-residential buildings are to change, with the lower rate reducing from 3% to 1% but with this band reducing in its scope by half. The higher rate will increase from 4.5% to 5%. The net outcome is that transactions for less than £350,000 will cost less in LBTT, whereas those for above that amount will cost more.

The other proposed change relates to residential property and is to increase the Additional Dwelling Supplement (‘ADS’) from 3% to 4%. ADS is intended to apply to all purchases of residential property other than the purchase of a main residence, and this increase is targeted to further support first-time buyers or penalise the buy-to-let sector, depending on your point of view. On the purchase of a £200,000 property, the LBTT cost will be £8,000 higher for someone acquiring the property as an investment or second home.

The Scottish Budget is subject to a final vote in February 2019 and may be amended before this given it requires the support of other parties to pass through the parliament. The Scottish Government have also said they may revisit matters in the event of a no-deal Brexit.

For more information on the contents of this blog, please contact me here, or speak to our tax team to discuss how changes in the draft Scottish Budget may affect you or your business.

Craig Coyle
0141 886 6644

Full details of the draft budget announcement can be found on the Scottish Government’s website here.

Campbell Dallas are not responsible for content contained on 3rd party websites.

The information in this blog should not be regarded as financial advice. This is based on our understanding in December 2018. Laws and tax rules may change in the future.

CogitalGroup Update

December 17, 2018

Our parent company CogitalGroup provides an update on progress since its launch two years ago and publishes its Annual Review, Blue 2018 as it reveals it is in current talks on a potential American deal with a business with annual revenues of between $250m and $500m.

Annual review highlights:

  • In its second year, CogitalGroup has established itself as a leading provider of business services to entrepreneurial and private companies in the UK and Nordics
  • Rapid expansion in core UK and Nordic markets with over 90,000 clients, and 6,000 employees operating from 177 offices in seven countries
  • Increasingly diversified offering clients a wide range of critical business support, BPO and related advisory services
  • Continuing to deliver on its growth strategy with the largest acquisition since the launch of the Group, Wilkins Kennedy, bringing significant strength in the key south of England markets
  • Strong financial performance with annualised revenue and earnings before interest, tax. depreciation and amortisation now at £453m and £68m, 64% ahead of the levels at launch in December 2016

For further information contact:

Hannah Anderson, CogitalGroup
+44 (0) 203 668 0344

What a tax relief it’s Christmas!

December 10, 2018

There’s no better time to be nice to staff and customers than at Christmas. There are some decent tax reliefs available to add some festive spirit! However, it can be easy to get carried away and be left with a big red face later on when HMRC and their elves inspect which taxpayers should be put on the naughty list. There are certain (Santa) clauses you need to keep a close eye on during the holiday period.

1. Christmas parties
The cost of these or another annual function is an allowable tax deduction for businesses. This doesn’t however apply to sole traders or business partners of unincorporated organisations (but it will apply to their employees). There will be no chargeable taxable benefit for the employee as long as:

  • the party or social event is open to all employees, or all at a particular location if you are a multi-site operation. If the event is only open to the Directors, however, a tax charge arises.
  • the cost per head isn’t more than £150 including VAT, transport or accommodation provided.
    • Beware though – the £150 isn’t a tax allowance! If you provide two or more annual parties or functions and the £150 limit is exceeded, a tax charge arises (and not just on the difference) of the additional one(s) in full on a cost per head basis.
    • Further, where staff bring guests along to the party and you meet their costs too then if the cost per head exceeds £150, there is additional tax.
    • Note: total cost should be divided by the total number of employees and guests attending to arrive at cost per head.
    • Additional tax liabilities can be dealt with by either (a) agreeing a PAYE settlement agreement whereby the employer agrees to pay the extra tax or (b) reporting on the individual’s P11D as a benefit in kind.
  • VAT is recoverable on staff entertaining expenditure but not for guests so input VAT will need to be apportioned.

2. Client entertaining
This is never an allowable deduction for business tax purposes and input VAT cannot be recovered on it.

3. Business gifts to customers
These are only allowable as a tax deduction if the total cost to one individual per year is less than £50, the gift bears a conspicuous advert for the business and it isn’t food, drink, tobacco (unless they’re samples of your products) or exchangeable vouchers.

4. Gifts to staff
HMRC will consider a benefit exempt if it is deemed to be a trivial benefit. For it to be considered a trivial benefit, it must cost £50 or less, and not be part of the employees contract or a reward for performance. It must not be cash or a cash voucher. Therefore seasonal gifts such as a turkey, bottle of wine or box of chocolates are likely to be exempt.

5. Vouchers
Cash vouchers are subject to tax and National Insurance. Non-cash vouchers up to £50 may be considered a trivial benefit and therefore exempt provided they are not given as a reward for performance.

6. Christmas bonuses
These are subject to PAYE and NI as additional salary.

If you want to discuss any of the points raised in this blog please get in touch with me here, or:

Mark Pryce
0141 886 6644

The information in this blog should not be regarded as financial advice. This is based on our understanding in December 2018. Laws and tax rules may change in the future.

Contractors and Tax – where are we?

December 6, 2018

In 1999 Chancellor Gordon Brown was fairly new to his role. As well as cutting Corporation Tax to “the lowest rate amongst major industrialised countries” of 30%, he also undertook to “introduce rules to prevent individuals avoiding income tax by providing personal services through intermediaries, such as service companies”.

These rules became known as IR35.

Almost 20 years later and corporation tax is set to drop to 17%, and we are still talking about IR35, originally introduced to tackle the problem of “disguised employment” through an intermediary company.

The press release itself identifies the problem of an individual engaged as an employee on Friday, returning on Monday to perform the same role through a limited company, and less tax/NI being paid as a result. 18 years on from when the rules were introduced, there still seem to be lots of one man service companies operating in what could be considered to be grey areas in terms of IR35 compliance. How did this happen, and what is the likely resolution?

The Present

Principal Limited is a limited company. Sue wants to provide services to Principal. If Sue engages with the company, the company will have to decide whether or not the relationship is one of employment for tax purposes, and therefore whether or not PAYE should apply to payments made to Sue.

However, if Sue provides her services to Principal Limited via an engagement with Sue Limited, then Principal Limited do not have to consider whether or not Sue is an employee. The tax analysis is pushed back on to Sue/Sue Limited in terms of whether or not IR35 applies.

The difficulty of this for HMRC is that there are thousands of Sues, and that having the resources to police IR35 then becomes challenging, as the amount of tax at stake in each case is relatively small, but each is particular to its own facts and circumstances, and so there can’t be a single decision at tribunal which helps HMRC establish a firm basis for dealing with what they consider to be non-compliant contractors.

This changed in the public sector from April 2017. In the example above, if Principal Limited was a public sector body, it would be required to consider whether or not there was effectively an employment relationship – Sue Limited can no longer be used by it as a shield.

Public sector bodies have interpreted the rules cautiously and often prefer to apply PAYE (sometimes on a blanket basis where it should not actually be due). The online tools provided by HMRC to help guide compliance are too crude to function effectively. There is anecdotal evidence that this has led to contractors who have the option of working in the private sector of seeking the same “net” pay, and therefore either making it more difficult for the public sector to obtain the best people or increasing costs, such that any extra tax take is in effect lost.

However, HMRC/the Treasury wish to introduce something similar in the private sector, and issued a consultation document (Off-payroll working in the private sector) in May 2018, with intention to legislate from April 2020.

The Future

It is clear that IR35 has not been effective in solving the problem which it sought to address, as non-compliance rates are estimated at 90%, and instead simply acts as something which creates uncertainty. HMRC effectively acknowledge that they are unable to effectively police the system, hence the wish to bring in something akin to what they have in the public sector whereby the burden of compliance will in effect fall on the engaging company, leaving HMRC with fewer customers/targets to check the compliance position of.

As many respondents to the consultation have pointed out, this is an unfair burden on businesses, particularly at a time where the status of employees and the self-employed is increasingly complicated. The courts recognise there is now something called a “worker” for employment law purposes which is not however recognised by the tax system.

There is likely to be an adverse impact on cash flow, and also a risk of a competitive disadvantage against other businesses which apply a more “liberal” interpretation of the new rules.

The correct answer is surely to increase HMRC resource in order to properly monitor a new, more transparent system. However, it is more likely that we will end up with something similar to the public sector rules moving into the private sector in 2020.

Construction Industry Scheme

Of course, those in the construction sector already have a similar set of rules in terms of the Construction Industry Scheme (CIS). CIS broadly applies where a business spends more than £1m a year on construction operations in furtherance of a business. Construction operations is widely defined, and so the rules will have to be applied to most payments made.

Payments must be made net of tax (at 20%) unless the sub-contractor is registered with HMRC and has gross payment status. The aim of the rules is to prevent payments disappearing into the black economy. Taxpayers can be both contractors and sub-contractors in respect of a project, if for example they are paid by the developer and then pay sub-contractors in turn.

Loss of gross payment status can have significant cash flow impact, and care must in turn be taken by any contractors that they operate the scheme correctly to ensure they do not face penalties or lose their own gross payment status.

Anyone operating in construction should ensure they are therefore aware of and complying with their requirements under CIS, whether they are contractors, sub-contractors or both.

For more information on the contents of this blog, please contact me here, or speak to our Property & Construction team to discuss how you can ensure a robust business model fit for the future and competitive, growing industry.

Craig Coyle
0141 886 6644

The information in this blog should not be regarded as financial advice. This is based on our understanding in December 2018. Laws and tax rules may change in the future.

Campbell Dallas appointed administrators to Cairngorm Mountain Limited

November 30, 2018

Cairngorm Mountain Limited, the company that operates the Cairngorm Mountain Funicular Railway and associated visitor attractions, has been placed in administration.

Joint administrators, Blair Milne and Derek Forsyth, partners with Campbell Dallas, will continue to trade the business whilst progressing discussions with a potential purchaser for a sale of the business and assets as a going concern. There are no immediate plans to make any redundancies.

Opened on Christmas Eve in 2001 following an investment of around £20m, the Cairngorm Funicular Railway carries around 300,000 tourists and sports visitors every year. Extending to 2 kilometres in length, it is the highest mountain railway in the United Kingdom. The funicular has been closed since Monday 1st October to allow for a detailed assessment of the structure that supports the tracks. These investigative works remain on-going.

The administration has been caused by unsustainable cash flow problems. Cairngorm Mountain Limited employs around 70 staff and had a turnover of £3.5m to 31st December 2017.

Commenting, Blair Milne, Business Recovery Partner with Campbell Dallas said: “Due to the extended closure of the Funicular Railway at Cairngorm Mountain, for safety reasons, the business has become unsustainably loss-making. The Directors of the business had been in discussions to try to find suitable solutions, including a managed transfer of the business to another party, however those negotiations did not progress. Under mounting cash flow and creditor pressures the Directors were left with no alternative other than to place the business into administration. The joint administrators will be seeking to achieve a sale of the remaining business on a going concern basis as early as possible.”

The Cairngorm Railway and Mountain Snowsports centre are owned by Highlands and Islands Enterprise (HIE) and operated on its behalf under a lease by Cairngorm Mountain Limited.

For more information contact:

Blair_WebsiteBlair Milne
0141 886 6644



This information should not be regarded as financial advice. This is based on our understanding in November 2018. Laws and tax rules may change in the future.

Image credit: dnaveh /

Record deal flow drives expansion of Campbell Dallas Corporate Finance

November 14, 2018

We have expanded our Corporate Finance team after recording a record number of deals and a marked rise in fee income during the last 12 months.

The firm has completed 15 international and domestic deals across a variety of sectors, advising on disposals, acquisitions, fund-raising and financial due diligence, with fee income rising by a record 40%.

Graham Cunning“We have never been busier” says Graham Cunning, Head of Corporate Finance in Scotland for Campbell Dallas. “The deals market in Scotland has been buoyant and we have seen an encouraging increase in client referrals and new business wins. The expansion of our firm in Edinburgh and Ayr has brought new opportunities and is also allowing us to offer clients access to the full range of specialist corporate finance expertise from across the business.”

Campbell Dallas has made three new appointments within the Corporate Finance team – Andrew Rennie joined as a Manager from global advisory firm AlixPartners; Jessica Orr joined as an Executive and George Wait became the first corporate finance Graduate Trainee.

Graham Cunning added: “Our expanded team will not only allow us to do more deals but will also give us capacity to initiate more transactions, a skill that has been in short supply in Central Scotland in recent years. Our deal pipeline remains strong with several larger transactions on the horizon, despite the ongoing Brexit uncertainty. It is interesting to note that we have seen a continued flow of buyers making unsolicited approaches to high quality Scottish companies, with foreign buyers continuing to take advantage of the weakness of sterling. There are also many Scottish businesses that have made acquisitions in the UK, Europe and further afield.”

Deals advised on by Campbell Dallas Corporate Finance include:

  • Sale of GP Green Recycling to Enva
  • Sale of 2 care homes owned by the Balmer family to Renaissance Care
  • Sale of insurance broker Clark Thomson to Marsh Group
  • Incremental’s acquisition of Gap Consulting
  • Cefetra’s acquisition of Premium Crops
  • Daabon’s acquisition of Glasgow-based Soapworks

Commenting on sectoral trends, Graham Cunning said: “We have seen a lot of activity in healthcare, IT services and the wider environmental industry. We are also seeing technology driving increased deal activity in the biopharma, financial services and online learning/education sectors.

“Looking ahead, we are working with many business owners on more strategic matters, such as planning for growth, succession, or a sale or MBO in a couple of years. This pipeline of activity augurs well for deal-making in Scotland, as businesses and entrepreneurs are clearly looking beyond Brexit, and focusing on opportunities rather than the uncertainty.”

For more information contact or call 0141 886 6644.

The information in this article should not be regarded as financial advice. This is based on our understanding in November 2018. Laws and tax rules may change in the future.

Improve cash flow through your capital allowances

November 7, 2018

In recent times we have seen an unprecedented level of investment in the Brewing & Distilling sector as producers seek efficiencies and capacity to meet demand. Whether you are a start-up, entering production for the first time, an existing producer expanding your capacity, or one of the majors, getting your capital allowances strategy right from the outset can have a significantly positive impact on your cash flow in the short and long term.

Depending on the size of your investment you may have the cash or, more typically, you will require some external debt to enable the project to be completed. So the less net cash you need to spend or the more you have to service your debt, the better it is for stakeholders.

Capital allowances on moveable plant and equipment are well documented and are a useful incentive for companies to invest, however not so commonly known or utilised are the opportunities to claim for embedded capital allowances. Following the Autumn Budget, certain new qualifying non-residential structures and buildings will be eligible for a 2% flat rate allowance over 50 years on original expenditure. This applies where all new contracts for the physical construction work are entered into on or after 29 October 2018.

Most projects differ substantially in nature and one size does not fit all. However having a strategy in place as early as possible gives you the best chance of maximising the best outcome. This involves a deep understanding of the project and all the costs (ground works/professional fees, plant, land, equipment and now on structures and buildings) to clearly understand what is qualifying and what is not. Many are surprised at what can qualify when the right approach is adopted by someone who has much experience in dealing with capital allowances.

Projects which include elements of energy saving giving rise to enhanced capital allowances are particularly attractive, couple these with short life assets, integral fixtures and granular cost apportionment results in a greater level of allowances being achieved saving cash, reducing debt or generating more free cash. However, time is of the essence for making claims on certain energy saving or environmentally beneficial assets as the 100% first year allowances will end from April 2020. Additionally, from April 2019 the special rate pool allowance reduces from 8% to 6% on certain additions such as integral features.

HMRC are taking a closer look at what assets are classed as qualifying and if your analysis and paperwork is not as robust as it should be you may be under potential threat of having some of your allowances disqualified. Long life assets treatment can be a hidden danger for the unwary. Proper consideration of the availability of the £200,000 Annual Investment Allowance (AIA) can bring forward tax relief in some situations. In particular, the AIA will be temporarily increased up to £1m for a two year period from 1 January 2019 therefore the timing of  capital expenditure spend is crucial.

Think about capital allowances as early as possible, engage someone who has the experience and expertise to maximise them and you will benefit from additional cash flow.

If you would like to discuss the benefits of allowances or if your business can qualify please contact:

Murdoch MacLennan

Partner and Head of Brewing & Distilling

0141 886 6644

This information should not be regarded as financial advice. This is based on our understanding in November 2018. Laws and tax rules may change in the future.

Personal insolvency cases rise 23% whilst construction, retail and hospitality are majority of corporate insolvencies

November 2, 2018

UK Government statistics* just released have revealed that there were 3067 personal insolvencies in Scotland in the quarter to 30th September, an increase of 23% on 2017.  There were 232 corporate insolvencies, which is on a par with 2017, however construction, retail and hospitality accounted for more than 50% of the total.

Derek Forsyth, Head of Business Restructuring and Insolvency at Campbell Dallas, expressed concern: “On the personal insolvency side, this shows a substantial increase in the number of people who are now no longer able to make ends meet, and reflects to a large extent factors such as the lack of wage inflation, zero hours contracts, high utility costs and the general uncertainty over employment prospects”.

On the corporate side, Derek Forsyth highlighted that more than half of the companies going through an insolvency process in the quarter were in either the construction, retail or hotel and leisure sectors.  “This trend is alarming, particularly as we go into a traditionally difficult quarter for the construction and rural hotel sectors, and whilst retail sales will generally be up, the traditional high street stores continue to be affected by high costs and online sales. The impact of the budget increase in the National Living Wage will affect margin, making trading conditions even more difficult”.

He added: “The construction sector in Scotland has seen a number of high profile casualties in the last few months, with a large number of creditors losing out, and employees losing their jobs. There has been much commentary recently about the potential adverse impact of Brexit on EU citizens working in the hotel and leisure sector, and on the retail side, whilst such as House of Fraser will always attract headlines, there are many medium and smaller outlets similarly being affected. The proposed reintroduction of Government preferential claims from 2020 in the Budget will adversely affect the returns to the ordinary creditors.”

Derek Forsyth urged companies to plan ahead for the next quarter, which is traditionally challenging, with cash flow problems being a frequent cause of failure:  “It is vital that directors and stakeholders take all steps to plan ahead and ensure that their businesses are robust and financially viable, and do not become part of the next quarter’s statistics.”

For more information, contact or call 0141 886 6644.

The information in this article should not be regarded as financial advice.  This is based on our understanding in November 2018. Laws and tax rules may change in the future.

Government stats for Scotland see pages 16/17.

Campbell Dallas are not responsible for content on third party sites.

Your 2018 Autumn Budget Summary

November 2, 2018

Following the UK Autumn Budget announcement on Monday, please find a Budget Summary here highlighting the key issues likely to affect you and your business.

Fraser Campbell, Head of Family Business, was a guest panellist at the recent Herald Budget Briefing Breakfast discussing the impact of the Budget for businesses in Scotland.

Some key themes are highlighted below:

  • The widening tax gap between Scotland and England means Scottish businesses will need to think how to bridge this gap to attract talent.
  • The budget has been described as an artificial budget ahead of Brexit and advice to businesses is to prepare and plan for Brexit now. Fraser commented that businesses with a complex supply chain should carry out analysis now with a warning that a lack of preparation will slow the economy down.
  • Tax Partner, Craig Coyle noted the changes to Entrepreneurs’ Relief that shares will now need to be held for two years rather than one for disposals on or after 6 April 2019. He advised those thinking of a sale to organise their structure earlier as a result. Also, with some changes to what types of shares qualify, anyone whose shares have non-standard rights should seek advice.
  • For the brewing & distilling sector, the panel agreed that the government were doing the right thing to freeze tax on spirits, beer and cider to help the Scottish economy grow.
  • Fraser also highlighted that the impact of reforms to individuals working under IR35 is hugely significant and a hidden tax rise.

The Scottish Budget will be presented by Derek Mackay MSP, Finance Secretary on 12 December 2018 with Scottish tax rates for the year ahead announced then.

If you would like to discuss any Budget implications for you and your business, please contact your usual Campbell Dallas advisor or any of our service or sector line specialists listed on our website.

Springfords Accountants to be known as Campbell Dallas

October 31, 2018

With effect from 1 November 2018, Edinburgh-based Springfords Accountants will change its name to Campbell Dallas.

When both firms joined the CogitalGroup the business has worked seamlessly with Campbell Dallas’ offices in Aberdeen, Ayr, Glasgow, Kilmarnock, Perth and Stirling. Since October last year this has provided clients with an extended range and depth of services and advice in areas such as cloud accounting, corporate finance, tax planning and VAT, together with strong industry knowledge in the brewing & distilling, healthcare and rural sectors.

Chris Horne partner at campbell dallas chartered accountantsCommenting, Managing Partner Chris Horne said: “This is simply a change of trading name to align with the rest of the Scottish business and I believe a positive step for our clients and for our fast-growing business, with decision making and planning continuing to be made at a local level by the current Edinburgh Partner team.”

“We are committed to maintaining a very high level of client service as we develop one of Scotland’s most entrepreneurial accountancy firms.”

Campbell Dallas promotes Nicola Campbell to Partner in Kilmarnock

October 31, 2018

Campbell Dallas has promoted Nicola Campbell to Partner, based in the firm’s Kilmarnock office.

Nicola joined Campbell Dallas in 2006 as a trainee accountant, and has since progressed rapidly through the business, qualifying as a CA in 2010. She now leads the development of the Kilmarnock office, working closely with colleagues in the Ayr office on the expansion of the firm’s client base across Ayrshire.

Nicola specialises in advising owner managed businesses and advises on a wide and diverse mix of management issues as well as the normal full suite of corporate and personal compliance services. Additionally, Nicola has participated in the HG Capital rising female leadership forum, a career development programme for emerging talent.

Campbell Dallas promotes Nicola Campbell to Partner in Kilmarnock

Chris Horne and Nicola Campbell (L-R)

Commenting on her appointment as Partner, Nicola Campbell said: “I am delighted to have been promoted to Partner, and would like to pay tribute to the outstanding training I have received with Campbell Dallas. 15 out of the firm’s 30 partners have been promoted from within, illustrating the quality of opportunity available to everyone that chooses to join Campbell Dallas.”

Chris Horne, Managing Partner, added: “Nicola is a major asset to the firm and our clients, and her promotion to Partner is the deserved reward for her talented work with clients and colleagues. I am delighted to have her join me in the firm’s Partnership group. Nicola is well-known in Kilmarnock and will continue to play a key role with clients as we develop our business across Ayrshire.”

The changing digital age & the future of business

October 17, 2018

It is 10 years since Lehman Brothers collapsed and marked the start of an international banking crisis. Over the last decade the banks have rebuilt their balance sheets and worked through issues arising from years of bad lending and poor practices. Pre-2008 the paperwork and agreements from many lending institutions were inadequate. Nobody wants to return to irresponsible lending, but the consequences of stricter lending policies is the significant increase in time taken and costs of raising finance.

It is not only the banking sector that has experienced increased costs and administration. For accountants, solicitors and other professional firms there has never been more legislation to contend with. Anti-Money Laundering, Data Protection and the Criminal Finances Act are only some of the recent changes that have fundamentally changed how professional firms manage clients, data and their workforce. Some of these changes are necessary, but it is clear that legislative changes are struggling to keep pace with the new digital age.

With an ever increasing amount of data held electronically professional firms need to invest heavily in technology and training. To do this needs strong leadership as investment in technology can go badly wrong and is costly. The majority of professional firms in Scotland are partnerships with less than 10 partners. For some firms there may not be consensus amongst the partners that their business is changing. Older partners close to retirement may naturally not see a return for long term investment in technology. The speed of change in technology is so quick that even if the commitment is there from the leaders in the business the decision on systems and implementation will be difficult.

The way that accountants communicate with clients will change hugely in the next 10 years. In 2016 it is estimated only 40% of all transactions were in cash. By 2026 it is predicted this will drop to below 20%. The millennial generation do virtually all their banking, shopping and socialising online. Many millennials are running and managing businesses, and within a decade many more of them will be. Their expectations will be completely different from the generation before.

For the accounting profession, software is increasingly removing the manual work to prepare accounts, payroll, VAT and tax returns. Banks will now feed transactions direct into accounting software, which removes data entry. Software can read and match invoices received, and increasingly artificial intelligence will be used in accounting and auditing. The importance of adding value will be vitally important, as large international businesses will do the simple processing far quicker and cheaper than smaller local firms.

A decade from now, businesses and how they operate will have changed even more. At Campbell Dallas we are already helping our clients future proof their business in the digital age by migrating to the cloud ahead of Making Tax Digital, which for VAT registered businesses begins in April 2019. We believe those firms that manage to embrace technology and make the relationship with their clients easy, secure and with added value will flourish in this fast-paced digital age.

If you want to discuss any of the points raised in this blog please get in touch with me here, or:

01738 441 888

The information in this blog should not be regarded as financial advice. This is based on our understanding in October 2018. Laws and tax rules may change in the future.

Countdown to Making Tax Digital – a conundrum for rural businesses

September 28, 2018

Making Tax Digital (MTD) affects VAT registered businesses with turnover greater than £85,000

From April 2019, all affected businesses will be required to keep digital books and records and must set up a digital tax account with HMRC to submit VAT returns online.

As the accounting system must interact digitally with the HMRC business account, entering VAT return figures manually into the Government Gateway system will no longer be viable. All affected businesses who cannot comply with these new rules risk financial penalties and business disruption associated with being classified as “non-compliant “ by HMRC.

The new MTD regime poses special challenges for rural businesses. In 2017, during the MTD consultation phase, the National Farmers Union (NFU) proposed an exemption for the 5% of the population without access to highspeed broadband.

However, this plea was largely ignored as under MTD for VAT a business will not have to adopt the MTD rules where HMRC is satisfied that:

“It is not reasonably practical to use digital tools to keep business records or submit returns for reasons of age, disability, remoteness of location or for any other reason”. An application process will be required.

Recent announcements from HMRC of how businesses will adopt digital and software links suggests that HMRC are likely to take a tough stance when it comes to granting exemption on the grounds of location. Although where a business currently has an exemption from online VAT filing it is anticipated this will be rolled over for MTD for VAT. The situations where a remote location exemption will be given is likely to be only in very limited circumstances. A further consideration for all businesses is that the new MTD for VAT regime coming into effect next April is just the initial instalment under HMRC’s digital plans. Electronic submission of quarterly income tax and corporation tax figures are expected to be required by HMRC during 2020.

Furthermore many farms and landed estates are subject to special tax rules, partial exemption and other complexities. This makes development of appropriate and relevant software and APIs much harder given it is a niche market.

What options are available to rural businesses to comply with MTD?

  • When HMRC discuss MTD and “Digital Tax”, the mention of laptops, smartphones, tablets and Application Programming Interfaces (“APIs”) is always high on the agenda. APIs let software systems talk and interact with each other electronically, rather than manual data input. HMRC believe that by insisting on the use of APIs in business’s accounting systems there will be a significant reduction in tax return errors, leading to better tax compliance. It will also inevitably make it easier for HMRC to conduct Audits and allow their software to interrogate data to look for mistakes and inconsistencies that currently demand a huge amount of Tax Inspector resource. Therefore, for all businesses, including rural businesses to reach full compliance with HMRC what is required is a new approach to digital accounting and record keeping plus access and connectivity to the internet either directly or indirectly.
  • Whilst some desktop accounting software packages and local area network (“LAN”) based systems (and in very limited cases even some spreadsheet based approaches to preparing VAT returns) will be feasible in the short term, the consensus in the tax and accounting profession is that businesses will need to move to some form of Cloud accounting package.
  • In recent months, competition in the market for Cloud accounting services has become fierce, resulting in providers reducing licence fee subscriptions to entice businesses to adopt the Cloud. The key players being Xero, Sage, Quickbooks and FreeAgent and larger/ more sophisticated businesses opting for enterprise platforms such as Netsuite and SAPbyDesign.
  • To run Cloud, fast internet speeds are necessary and for rural business this is the major barrier. The lack of land based broadband services in countryside locations is problematic but new remote satellite highspeed broadband with fixed price upload and download data allowances from the major satellite providers could provide adequate and more affordable online access to allow Cloud Accounting to be adopted for the rural sector.
  • For those rural businesses not moving to Cloud Accounting there is certainly a conundrum to be solved and choices to be made as the countdown to April 2019 ticks ever closer.

Consider the following for MTD compliance:

  • Retaining a manual book-keeping system is no longer an option from April 2019.
  • The use of spreadsheets is limited and only available as a short term measure; there is considerable uncertainty over whether such an approach will be available and how it will work in practice;
  • Investigate whether your existing desktop accounting package meets MTD criteria and speak to your software provider about their developments. Some providers will no longer support certain non cloud products. For many rural businesses, the existing VAT return / accounts outsource process and relationship with the accountant will need revisited for MTD compliance – in the absence of internet access, “physical” information such as paper invoices, receipts, other manual records will still need to be sent to your accountant, however under MTD this will now need to be transformed into the required digital format which adds more time, effort and inevitably cost to the process. Delivering data to your accountant via encrypted USB or similar device may be a short term solution.
  • We are not expecting any further delays or deferment of MTD; so now is the time to take action.

For more information, please contact our MTD expert Mark Pryce. Our specialist Cloud Accounting team will also be able to help you prepare for April 2019.

The information in this article should not be regarded as financial advice.  This is based on our understanding in September 2018. Laws and tax rules may change in the future.

Drinks exports threatened as Scots’ companies fail to adopt AEO status, warns customs expert

September 26, 2018

A widespread lack of AEO accreditation (Authorised Economic Operator) across Scotland’s brewing and distilling sector could result in a dramatic reduction in exports to the EU, a leading Customs trade expert is warning.

Allan Bird, a Customs & Excise manager with Campbell Dallas, and former AEO specialist with HMRC, is urging B&D companies trading with the EU to address the AEO issue as soon as possible, and develop a plan to ensure they can undertake ‘frictionless’ post-Brexit exporting.

He said: “AEO status endows a business with a ‘Trusted Trader’ badge, which is expected to provide a fast track customs process in a post-Brexit EU. The AEO status will help provide frictionless trade with the EU, and will be the benchmark for compliance with customs systems, controls and financial solvency. Exporting without AEO status will become increasingly onerous, costly and unattractive, with the risk that many of Scotland’s thriving drinks businesses will find the export market less attractive.”

Allan Bird added: “AEO status will confer fast-tracking of goods at border customs. It will also lead to a dramatic reduction in costs and delays, with AEO accredited companies likely to enjoy priority treatment. We are concerned at the low awareness of AEO in Scotland’s brewing and distilling sector, and that application levels for AEO status are negligible. Companies need to start the process now, as there will soon be a bottleneck of applications and long delays for a process that currently can take a year to complete”.

AEO authorisation embraces customs simplifications, security and safety or a combination of both, and companies can choose which level is most suitable. Businesses must meet strict criteria set down by HMRC, who require several days on company premises to review procedures and personnel.

Allan Bird pointed out that in Germany, in 2017 over 6000 companies had AEO accreditation, but in the UK the figure was just 700. “We have a long way to go and Scotland’s brewing and distilling companies need a great deal of support from the business community to ensure they become AEO-compliant as soon as possible.”

For more information please contact Allan Bird, Customs & Excise Manager here. Our specialist VAT and Brewing & Distilling teams will also be able to offer you support on this.

Campbell Dallas has scheduled events across Scotland during October on AEO and Brexit-related exporting issues. Click the links below to register to attend:

Aberdeen – 31 October

Edinburgh – 24 October

Glasgow – 3 October

Perth – 23 October

Stirling – 24 October

This information should not be regarded as financial advice. This is based on our understanding in September 2018. Laws and tax rules may change in the future.

How to thrive during the ‘Peak Gin’ period

September 18, 2018

Gin has been a phenomenon in the last few years and as I walk down the drinks aisles of many a supermarket the choice of spicy, floral, sloe, navy is vast.

Gin is huge and gin is popular. This popularity has fuelled the exponential growth of businesses such as Fever Tree which is now valued at £4billion on a forward price earnings of 79 times earnings (as at 5 August 2018). There are now shortages of lime, pink grapefruit and pink peppercorns – showing how our tastes have changed. This is an excellent example of disruptive businesses riding high on a change in consumer tastes.

So is this gin boom here to stay?

In my opinion tastes have changed forever. However like many a ‘boom’, there will be winners and losers – new sustainable businesses and others that will struggle to survive.

I’m not sure we are at ‘peak gin’ but it may be some time soon as customers start to understand the quality variances between the various gins.

If you are growing your gin businesses you need to look at the sustainability of the product and ensure you have the appropriate working capital structure and funding.

If you are worried about ‘peak gin’ then you need to ensure you have a robust business model that will survive the top of the market and is future proof. Below are just some of the factors to consider for business growth:

• Are you appropriately capitalised?
• Have you got the right funding package both asset based and other?
• Have you maximised your capital allowances?
• Have you reviewed your R&D tax credits?
• Is your excise duty right?
• Is the culture of the business right?
• Do you have the right leadership team in place?
• Do you know your customer and your market?
• How are you different from the other gins out there?

Having considered these factors and having a plan in place will ensure that you survive ‘peak gin’, whenever that comes. Who knows, you could be the gin version of Fever Tree with 80 times multiple!

For more information on the contents of this blog, please contact me here, or speak to our Businesses Improvement team to discuss how you can ensure a robust business model fit for the future and competitive, growing industry.

Donald Boyd
0141 886 6644

The information in this blog should not be regarded as financial advice. This is based on our understanding in September 2018. Laws and tax rules may change in the future.

Eligibility for Rollover Relief during a Compulsory Purchase process

September 10, 2018

Where the owner of land is obliged to sell because an Authority exercises a statutory power to require the sale, the owner may claim a special form of Rollover Relief on any gain which arises, provided the proceeds (not just the gain) are reinvested in other land.  Neither the land disposed of, nor its replacement, needs to have been/be used for a trade or any particular purpose.

The special Rollover Relief can be claimed by individuals, trustees and companies. The owner (including sitting tenants) must make the claim in writing within four years, following the end of the tax year to which the sale relates. The time limits for reinvestment are the same as the normal Rollover Relief, which is 12 months before and 36 months after the sale.

Points to bear in mind:

  • You cannot roll over into your Principal Private Residence (PPR) or into land which becomes your PPR within six years of you acquiring the land. If you do, the Rollover is undone.
  • Land is defined as an interest or right over freehold and leasehold land and includes buildings on the land which were already there when you acquired the land. Buildings subsequently constructed do not qualify.
  • For the relief to apply, the land must be acquired by an Authority exercising its Statutory Powers.
  • The owner must not have taken any steps, by advertising to dispose of the land or made his/her willingness to dispose of it known to the Authority.
  • The consideration (proceeds) must be applied by the landowner when acquiring new land.
  • The tax legislation makes no reference to “territory”; meaning this would apply to the UK and EU, however, if your reinvestment ambitions extend beyond the EU, you should seek an advanced non-statutory clearance from HMRC, just to play safe.

If you become the subject of a Compulsory Purchase, our experts at Campbell Dallas can advise on your eligibility for Rollover Relief.

For more information contact:

Ian Williams


01224 623 111 | 01738 441 888

The information in this blog should not be regarded as financial advice.  This is based on our understanding in September 2018. Laws and tax rules may change in the future.

Declare offshore income in September, or face punitive fines warns tax expert

September 5, 2018

Taxpayers with undeclared income generated from offshore assets and investments only have September in which to declare their earnings, or potentially face a standard penalty of 200% of underpaid taxes, a surcharge of 50% for deliberate avoidance, and the prospect of being named and shamed, a leading tax expert is warning.

Ian Williams, a partner with Campbell Dallas, says taxpayers and trusts with undeclared income can take advantage of a disclosure ‘window’ before the new rules come into force on 1st October 2018.

Campbell Dallas, Perth. Staff Portraits. Ian Williams.He said: “Disclosure will apply to undeclared offshore income, assets, transfers and investments, and the applicable taxes include Income Tax, Capital Gains Tax and Inheritance Tax.  Qualifying disclosures will be subject to interest charges and the ‘general’ penalty regime, ranging from 0% to 30%, but deliberate behaviour will attract significantly higher penalties.  In the latter category, taxpayers or trusts should seek urgent assistance to notify HMRC.”

He added: “If HMRC has not received disclosures by 30th September, the new punitive regime comes into force.  Penalties may be negotiated down to 100% if there is full disclosure and co-operation, and the defence of ‘reasonable excuse’ is available, but there is little room for manoeuvre due to ignorance or human error.

“We would urge any taxpayers or trusts that may be in this position, to seek advice as soon as possible.  The financial consequences of not doing so could be ruinous, and the reputational damage from being named and shamed could last a lifetime.”

Campbell Dallas has highlighted other points that will apply from 1st October.

  1. Further penalties of 50% will apply if a taxpayer has been moving assets between jurisdictions to deliberately avoid taxes.
  2. An ‘asset-based’ penalty for serious cases of fraud, with penalties of up to 10% of the asset value.
  3. The ‘Naming and Shaming’ option will apply for tax owing over £25000.
  4. HMRC will be able to extend the current timeline of 6 years up to 10 years
  5. In the event of fraud, the extension will be up to 24 years.

Ian Williams added: “With global sharing of data and information, HMRC is increasingly aware of offshore investments and assets, and therefore of the income that is being generated.  The only way to deal with this new tax order is to comply with the legislation, and to resolve any unpaid taxes sooner rather than later.”

This information should not be regarded as financial advice. This is based on our understanding in September 2018. Laws and tax rules may change in the future.

Customs implications for brewers and distillers post-Brexit

August 31, 2018

With growth in the drinks industry expected to continue, established companies are thriving while craft beer and creative gins are increasing their market share. Consumers flock in numbers to try the endless options available from unique production.

From existing large scale operations to up-and-coming brewers and distillers, Brexit could prove to be an obstacle for growing businesses. Successful trade negotiations with the EU will be vital to avoid a ‘no deal’ scenario. While much of this is outwith a company’s control, there is still opportunity to plan carefully and adopt the most efficient customs procedures.

Companies could be forced to trade with the EU as a third country, subject to declarations in and out of the UK. The UK would have to forfeit EU commercial policy benefits and preferential arrangements bringing additional costs and time management. The movement of excise goods, spirits, beer and malt, could become more complicated. To and from the EU, new cross border customs procedures could result in increased costs and potential delays for businesses. As a result, the EU will expect the UK to adopt efficient control measures to supervise cross-border movements. We therefore cannot underestimate the dangers or overestimate our ability to do this successfully.

The Government have recently initiated the release of a series of technical notices providing businesses with scenario based guidance: ‘Trading with the EU if there’s no Brexit deal’.

Two key areas to consider for international trade operations are:

  • Authorised Economic Operator (AEO) status

AEO accreditation is becoming more prevalent commercially and with customs authorities. Having AEO approval may well become the route for frictionless trade. There are many benefits that come with AEO status including simplified declaration procedures, guarantee waivers/reduction and EU-wide recognition. As subject experts and ex-customs officers, we are trained in AEOC simplifications and AEOS security and safety to help brewing & distilling businesses prepare for a smooth and successful application.

  • Customs/excise warehousing procedure

Excise warehouse approval and warehousekeeper authorisation allows you to store spirit production until the duty point is passed, normally when released for sale. A customs warehouse enables suspension of import VAT and duty payments until released to free circulation. Both options have a clear cash flow benefit. Having an approved warehouse ensures efficient processes are adhered to and that there is effective maintenance of records. Waste can be accounted for and reclaimed with this facility.

For more information regarding the customs implications for brewers and distillers and guidance on what you can do to prepare for Brexit, contact:

Veronica Donnelly

VAT Partner

0141 886 6644

The information in this blog should not be regarded as financial advice.  This is based on our understanding in August 2018. Laws and tax rules may change in the future.

The disposal of assets in historic houses – to VAT or not to VAT?

August 24, 2018

Running a historic house and its associated lands as a family estate or trust has become the most popular way to ensure estates, their history and stories survive for future generations.

Often, this means the house and many of its rooms & contents are opened to the public. Where a historical house charges admission, any of the assets on public display, such as furniture, antiques or works of art are viewed as business assets. HMRC has recently updated its guidance on assets used by historic houses.

If the business is VAT registered, output tax would be due upon disposal. An exception to this is where the disposal is either by private treaty sale (privately arranged sale to UK national museum, gallery or Art Collections Fund), or for acceptance in lieu of estate duty, capital transfer or inheritance tax. In these cases, the disposal is exempt from VAT, however, in order to qualify for this exemption, the work must be of national, scientific, historical or architectural interest.

Alternatively, if the assets were treated as private assets, any subsequent disposal would be outside the scope of VAT. Newly acquired assets can be treated as private assets by contacting HMRC’s VAT helpline and providing them with the relevant information. It should be noted that if the asset is treated in this way, any input VAT incurred on the acquisition cannot be recovered. Existing business assets can be reallocated as private assets however it must be shown that the asset is no longer used for business purposes, for example, by moving it to a part of the house used for private purposes only.

It should be noted however that if the owner was entitled to recover input VAT when the asset was acquired, then output VAT must be accounted for when the asset is reallocated as a private asset. If VAT was not charged on the acquisition (such as an inherited asset), then no VAT is due on the reallocation.

Where goods are bought partly for business and partly for non-business use the portion of their input tax in relation to their business use of the asset can be reclaimed. If the asset is used partly for private use, all the input VAT can be recovered however output VAT should be accounted for each quarter for the private use.

For more information on the contents of this blog, please contact me here. Our specialist VAT department will also be able to offer you support on this or any other area of VAT.

Ian Craig
01738 441 888

The information in this blog should not be regarded as financial advice.  This is based on our understanding in August 2018. Laws and tax rules may change in the future.

New VAT Partner and International Customs Specialist as Campbell Dallas expands Indirect Tax Practice

August 6, 2018

Campbell Dallas has appointed a second VAT Partner and a specialist Customs International Trade specialist within the firm’s fast-growing Indirect Tax practice.

Glasgow-based Greg McNally has been promoted to VAT Partner and will provide specialist VAT and Indirect Tax advice to clients and intermediaries across Scotland. He has over 18 years’ experience working on a broad range of VAT assignments and has developed particular expertise in land and property transactions, and the construction, sports, leisure and charity sectors.

Greg is Chair of the Scottish Chapter of the VAT Practitioners Group, is a Chartered Tax Adviser and a regular speaker on VAT and Indirect Tax at conferences and events.

Allan Bird is a Customs International Trade specialist and joins Campbell Dallas as a Manager from HMRC where he dealt with VAT compliance and legislation on numerous complex cross-border transactions. He has also worked across the whisky, oil and gas, and aircraft sectors providing risk assessments, compliance reviews, AEO certification and international trade support. He will advise Campbell Dallas’ clients on complicated VAT issues expected to arise from Brexit, including inward processing relief, end use, warehousing, temporary imports, tariffs, valuations, origin and legislation.

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Pictured left to right: Greg McNally and Allan Bird

Commenting on the appointments, Veronica Donnelly, Head of VAT with Campbell Dallas said: “Greg is a highly skilled and experienced VAT and Indirect Tax practitioner with a strong commercial focus. He is a major asset to our growing client base, and I am delighted to confirm his promotion to Partner.

“Allan’s detailed knowledge of Customs compliance will bring a new dimension to our business and will be of considerable benefit to clients engaged in or planning to export. Post-Brexit, the export/import business will be much more complicated, and costly mistakes will be much more probable. Both Greg and Allan will help clients navigate VAT legislation, identify efficiencies in the transactional nature of the VAT supply chain, and generally help ensure our clients are compliant with the law.”

If you would like to discuss any VAT or Customs related queries and how they may impact you or your business, please contact our VAT team here.

This information should not be regarded as financial advice. This is based on our understanding in August 2018. Laws and tax rules may change in the future.

Proposed changes in VAT legislation

August 1, 2018

HMRC recently announced proposed changes to be introduced in the Finance Bill 2018-19.

Changes to VAT Grouping Eligibility

The draft legislation proposes to allow non-corporate bodies, such as a partnership or an individual to join a VAT group.

Under the previous rules, in order to join a VAT group, an entity was required to be a corporate body established or with a fixed establishment in the UK. Following the changes, a non-corporate entity will be able to join a VAT group provided they have a business establishment within the UK and share common control.

HMRC has published a policy paper containing the VAT grouping eligibility criteria changes. These changes are due to take effect from Royal Assent.

New Late Filing and Late Payment Penalty System for VAT

The default surcharge regime for VAT is being replaced from 1 April 2020. The new penalty system will introduce separate penalties for late payment and late filing. This new system will be harmonised across Corporation Tax, Income Tax Self-Assessment and VAT.

For late payment penalties, the penalty will be based on the lateness of the payment:
• No penalty will apply if the tax due is paid within 15 days of the due date.
• A reduced penalty will apply to payments made between 16 and 30 days from the due date.
• If the tax is not paid after 30 days, two penalties will be due. The first on day 30, based on the payment activity in the month and the second, when the outstanding balance is paid in full.
The above penalties can be suspended if a Time to Pay can be agreed.

Late filing penalties will be based on a points system, where a business will earn a penalty point for failing to file a return on time. Once the business reaches the maximum amount of points, they will be liable to a financial penalty. The maximum points threshold will vary depending on whether the business submits annual, quarterly or monthly returns.

New Draft VAT Legislation on Treatment of Vouchers

Changes are being introduced to the VAT treatment of vouchers issued on or after 1 January 2019. The purpose of the legislation is to provide clear definitions between Single Purpose Vouchers (SPV) and more complex Multi-Purpose Vouchers (MPV), and to harmonise the treatment of vouchers across the EU.

From 1 January 2019 a voucher will be considered an SPV where the ‘place of supply’ of the ultimate goods or services is known at the time of issue, and where the voucher can only be used for goods or services at a single rate of VAT. VAT will be due at the appropriate rate on the sale of the SPV.

Any voucher that is not an SPV, will be considered an MPV. VAT on this category of vouchers will be due when the voucher is redeemed in exchange for the goods or services. Intermediaries distributing MPVs will not be making a supply for VAT purposes, and this may have an impact on their VAT recovery position.

Under the new legislation, postage stamps and tickets, including travel or admission to a venue or event are specifically excluded and will not be considered vouchers. These will be treated under the normal tax point rules.

If you would like to discuss any of these changes and how they may impact you and your business please contact our VAT team here.

This information should not be regarded as financial advice. This is based on our understanding in August 2018. Laws and tax rules may change in the future.

Campbell Dallas advises GP Green Recycling on sale to Enva

July 27, 2018

Campbell Dallas’ Corporate Finance team advised the shareholders of GP Green Recycling Ltd on its recent successful sale to Enva, a provider of end-to-end waste management solutions in the UK and Ireland for an undisclosed sum.

GP Green Recycling, based in Blantyre, South Lanarkshire, is one of Scotland’s largest recoverers of organic wastes, recycling organic waste materials into a soil conditioner and high-grade compost certified to British Standard PAS 100.

Graham CunningJim Gilchrist, founder of GP Green Recycling who will retire following the sale, said: “This is a very exciting time for GP Green Recycling, customers and staff. A lot has been achieved during my tenure and I am confident that Enva can further develop the business, serve our customers well and provide opportunities for our employees.”

Graham Cunning (pictured left), Head of Corporate Finance at Campbell Dallas said, “The deal is a great example of a buoyant M&A market for quality businesses. Funding is readily available for deals, and Scotland remains an attractive economy for buyers. Vendors just need to ensure they prepare their business for sale and take time to do so.”

UK Aesthetics sector targeted by HMRC Hidden Economy Team

July 17, 2018

One of the UK’s leading experts on tax rules in the Aesthetics sector is warning that HM Revenue and Customs Hidden Economy Team is targeting aesthetics businesses to ensure correct taxes are being paid, particularly VAT.

Cosmetic businesses that have provided treatments on which VAT is due, but not charged the VAT, will be at most risk of investigation, possibly resulting in fines and penalties. The main risk to a business is the attempted backdating of VAT registration, which can in some cases go back to the business’s first trading year.

Veronica DonnellyVeronica Donnelly, a VAT partner with accountants Campbell Dallas, and the UK’s leading Aesthetics VAT specialist, is urging businesses to ensure their treatments comply with guidelines that VAT can be exempt when a treatment is undertaken as part of a health care programme. She explained that there are two essential tests that must be applied to ensure the treatment is VAT exempt:

“The first test is that the practitioner must be on a statutory register and working within their area of expertise as a surgeon, doctor, dentist or nurse.

“The second test is more open to interpretation, as it focuses on patient health, and whether the treatment provided is of medical care. This is the area that can cause most difficulty, with some businesses applying the wrong test in relation to VAT, potentially making incorrect decisions that leave them exposed to enquiries from HMRC, and the risk of falling foul of VAT laws.”

Veronica Donnelly added: “VAT is a European Tax and importantly, HMRC in the UK does not have the final say in how VAT law should be interpreted. HMRC’s focus on the patient perspective was successfully challenged in a landmark ruling by the Court of Justice of the European Union. The CJEU determined that whether a treatment qualifies as ‘purely cosmetic’ is a matter for the medical professional providing the treatment, not the patient’s opinion. Despite the ruling, VAT in Aesthetics remains a complex area, and is open to interpretation by the treatment provider, and in turn by the Tax authorities.”

Aesthetic businesses are being urged to use the two tests to help ensure that they correctly apply VAT exemption to a treatment. Any treatment that does not pass the tests must be charged at the standard prevailing VAT rate, currently 20%. Treatments provided and decisions on VAT exemption must be accurately and properly recorded.

Veronica Donnelly stressed that whilst well-managed clinics have little to fear, the Aesthetics sector has grown rapidly, and there will be many practitioners and businesses that are at risk of an enquiry:

“Public finances are under considerable strain, and HMRC is looking to dramatically increase tax revenues. The Hidden Economy team is a specialist group that targets sectors where there are likely to be good recovery rates, and the Aesthetics sector is on their radar. We would urge any practitioner or business that is concerned to contact us as soon as possible. We have an extensive team and a quick VAT health-check could help avoid serious financial problems. The only way to deal with tax is to comply with the law, and ensure the correct taxes are paid.”

For more information, contact a member of the Campbell Dallas VAT team here.

This information should not be regarded as financial advice. This is based on our understanding in July 2018. Laws and tax rules may change in the future.

Getting more out of summer with a work placement

July 5, 2018

Throughout the year we invest in the development of our people through coaching & mentoring. Across the firm we currently have 80 people completing apprenticeships or professional qualifications.

During the summer months this number increases when we employ school and university students for anything from 4-8 weeks on a paid internship basis. This year we have 12 interns across the firm, spread throughout our 6 offices.

Each year a number of the interns come to us through our links with Career Ready and others are university students who are studying towards accountancy or finance degrees.

The Career Ready interns are paired with a mentor throughout their 5th year of high school and as part of this programme they experience the world of work with us over the summer months. The internship element provides the students with invaluable experience and helps prepare them for the next stage in their life after school. Its aim is to prepare them for the world of work and we are here to help them on that journey.

Those who join us from university for a summer internship also gain many complementary skills and knowledge as they enter a busy working environment, which brings to life the daily experiences of being a professional in a progressive and fast-paced accountancy & business advisory firm. They can put into practice what they have been taught and make a real difference to the firm during their time with us. After completing their degree, many summer interns join the firm to complete their professional qualifications.

As a firm we are not only supporting our local communities and the next generation of accountancy professionals, but we also learn about ourselves and the skills our people have. Learning and growing is a two-way process and supporting an intern is a fantastic development process for many of our people across the firm who are involved each year.

If you are interested in finding out more about our graduate & trainee opportunities, read a little more about them here, or contact me at:

0141 886 6644

Beneficial Land and Buildings Transaction Tax (LBTT) changes for first time home buyers

June 29, 2018

LBTT replaced Stamp Duty Land tax (SDLT) for land transactions, including purchase of dwelling houses, in Scotland from 1 April 2015.

Two recent changes have been made to the LBTT rules, which may be of benefit to Scottish home buyers.

Firstly, a new LBTT relief has been introduced for first-time buyers of dwellings in Scotland which the buyer, or buyers intend to occupy as their only or main residence.

A first-time buyer is someone who has never previously owned a dwelling, either in Scotland or anywhere else in the world. Where more than one buyer is involved, all must be first-time buyers for the relief to be available.

The relief is available for transactions taking place on or after 30 June 2018, and where the contract was entered into on or after 9 February 2018.

The new relief raises the LBTT Nil rate band for first-time buyers from £145,000 to £175,000. This means that first time buyers pay no LBTT on a property worth up to £175,000, while first-time buyers buying a more expensive property receive a discount of £600 on their LBTT bill.

In addition, the rules extending relief from Additional Dwelling Supplement (ADS) for spouses, civil partners or co-habitants who jointly purchased a new main residence to replace a main residence they both lived in, but which was owned by only one of them, have been given retrospective effect back to the introduction of ADS on 1 April 2016.

Previously this relaxation applied only for purchases taking place on or after 30 June 2017. So if you paid ADS on such a purchase before 30 June 2017 you may now be able to reclaim this from Revenue Scotland.

If you wish to discuss these issues, and understand if you may benefit from these changes, please contact Colin McHardy.

0141 886 6644 | 01738 441 888

The information in this blog should not be regarded as financial advice.  This is based on our understanding in June 2018. Laws and tax rules may change in the future. Campbell Dallas is not responsible for content contained on third party sites.

Call to protect companies engaging with R&D Tax Credit consultants

June 25, 2018

A leading Chartered Accountant and business advisor has called for tougher rules governing the provision of Research & Development (R&D) tax relief consultancy to provide more adequate protection for UK companies. Introduced in 2000, R&D tax credits are designed to drive competitiveness in British business by incentivising companies to invest in innovation.

While the Government has recently bolstered its support towards R&D, announcing a further £2.3bn investment for it in last November’s Autumn Budget, it has also put forward extra resources to tackle tax avoidance, evasion and non-compliance. This tightening of scrutiny means that companies now face a much greater risk of being subjected to more in depth HMRC investigation and potentially significant tax geared penalties if, on enquiry, it is found that they have been party to the submission of erroneous or unverified R&D tax relief claims.

Since the introduction of R&D tax credits, several dedicated R&D firms have emerged across the UK offering to prepare companies’ claims for relief on certain categories of innovation expenditure. Unlike other business advisory professionals including accountants, lawyers and pensions specialists, some R&D tax firms have not been subject to any form of regulation or governance.

Mark Pryce, a Glasgow-based partner with accountants and business advisors Campbell Dallas, says “R&D tax credits are a great measure, intended to drive innovation and enhance the economy. A rise in unmerited claims leading to large scale adjustments being required by HMRC across companies’ tax returns in the UK could force the Government to close down the scheme.“ Mark says he is coming across more situations where overly enthusiastic salespeople and cold-callers can over exaggerate what should be considered as true R&D within the spirit of the scheme; with some making incorrect suggestions on what might qualify to encourage potential clients to sign up to their commission based fee engagements.

“It is easy enough to set up as a R&D tax relief ’expert’ without much governance or compliance. We need to see more protection being offered to companies to ensure they will be dealing with experienced R&D tax credits consultancy firms who are well equipped with technical and professional competence as well as high ethical standards in this complex area of tax. To protect companies and ensure the scheme will be maintained in the longer term, HMRC could start by giving accreditation to those firms adhering to self-regulation, for example via a risk scoring system where the professional standards and experience of an advisor would be factored into R&D tax credit claims being submitted. This approach would also fit with HMRC’s aim to work more closely together with agents and advisors to raise the bar,” he says.

“R&D tax is a complex area where claimant companies need to adopt, often with the help of a specialist third party consultant, a scientific and academic approach to track how they are developing true innovation and raising standards within their industry. Most companies that legitimately qualify will have taken that approach or will work with an advisor who can help put processes in place before making a claim. Working with firms who are regulated or who self-regulate will reap the most benefits for businesses looking to claim. At Campbell Dallas we are monitored by ICAS and ICAEW. As a result, our accountants and advisors must participate in extensive training and must continue to participate in ongoing professional development to comply with institute regulations. Our team are also highly experienced when it comes to handling claims and getting the right advice in place for clients. As a result, we understand the boundaries of the scheme and the process in depth.”

The call for greater protection for companies is also coming from within the R&D tax credit advisory sector. Edinburgh-based Jumpstart, which advises companies throughout the UK, is calling for a benchmark to be set to ensure all consultants operate with high standards.

Scott Henderson, Jumpstart’s Managing Director, says: “There are many highly knowledgeable R&D advisors in the market providing invaluable guidance for clients and helping them recoup significant tax breaks for their investment in innovation. There are, however, also a number of mushroom companies operating in our sector with low professional standards. Not only do they threaten the reputation of our sector but they can also have a detrimental impact on the businesses they advise. Making an erroneous claim can lead to a company being subjected to a review of their tax records from the previous six years which can be extended if HMRC inspectors believe deliberately misleading transactions have been submitted. Those which breach the rules not only face having an existing claim fully retracted but also put at risk their eligibility on any future claims.”

Last year Leeds-based Brewology, a specialist design and manufacturing supplier to the brewing industry, was placed in administration following issues with HMRC over disputed R&D tax credits and a demand for a trading bond of over £200k. While the company was saved from administration last March when it was relaunched as PD Brew, it provides an example of how a mishandled claim for R&D tax relief can backfire on a business.

While welcoming the prospect of HMRC taking the lead role as a R&D tax advisor regulator, Jumpstart’s Scott Henderson feels the Government department would unlikely be in a positon to put forward the required resources. His view is that self-regulation, with the creation of a voluntary quality standards society, would be a more viable first step. “This would require credible and reputable R&D tax relief advisory firms to come together to agree a set of standards and develop a certification scheme, ideally modelled along the lines of ISO accreditation,” he says. “Businesses could then be reassured on the quality of advice by working with an accredited firm or individual.”

“We will continue to push for a workable form of regulation as we believe it’s in the long term interest of firms in our sector that invest in quality people and proper management systems. Removing rogue elements will ultimately protect companies who rely on external expertise in applying for R&D tax credits.”

For more information contact Mark Pryce:

0141 886 6644

The information in this article should not be regarded as financial advice. This is based on our understanding in June 2018. Laws and tax rules may change in the future.

Punitive regime looms for undeclared offshore tax

June 20, 2018

Leading tax expert, Ian Williams is warning that new legislation targeting taxes from undeclared offshore income will bring a punitive regime of penalties starting at 200% of underpaid taxes, a surcharge of 50% for deliberate avoidance and the prospect of taxpayers being named, shamed and potentially jailed.

Ian, a partner with Campbell Dallas, is urging taxpayers and trusts with undeclared income to take advantage of a disclosure ‘window’ before strict new rules come into force on 1st October 2018.

Campbell Dallas, Perth. Staff Portraits. Ian Williams.He said: “Disclosure will apply to undeclared offshore income, assets, transfers and investments, and the applicable taxes include Income Tax, Capital Gains Tax and Inheritance Tax. Qualifying disclosures will be subject to interest charges and the ‘general’ penalty regime, ranging from 0% to 30%, but deliberate behaviour will attract significantly higher penalties. In the latter category, taxpayers or trusts should seek urgent assistance to notify HMRC.”

He added: “If HMRC has not received disclosures by 30th September, the new punitive regime comes into force, with draconian penalties of 200% plus. These could be negotiated down to a minimum of 100% if there is full disclosure and co-operation. The defence of ‘reasonable excuse’ is available, but by and large there is little room for manoeuvre due to ignorance or human error.

“We would urge any taxpayers or trusts that may be in this position, or even think they may be affected, to seek advice as soon as possible. The financial consequences of not doing so could be ruinous, and the reputational damage from being named and shamed could last a lifetime.”

Campbell Dallas has highlighted other points that will apply from 1st October:

1. Further penalties of 50% will apply if a taxpayer has been moving assets between jurisdictions to deliberately avoid taxes
2. An ‘asset-based’ penalty for serious cases of fraud, with penalties of up to 10% of the asset value
3. The ‘Naming and Shaming’ option will apply for tax owing over £25,000
4. HMRC will be able to extend the current timeline of 6 years up to 10 years
5. In the event of fraud, the extension will be up to 24 years

Ian Williams added: “With global sharing of data and information, HMRC is increasingly aware of offshore investments and assets, and therefore of the income that is being generated. The only way to deal with this new tax order is to comply with the legislation, and to resolve any unpaid taxes sooner rather than later.”

For more information, contact a member of the Campbell Dallas tax team here.

This information should not be regarded as financial advice. This is based on our understanding in June 2018. Laws and tax rules may change in the future.

Keeping up to date with your Benefits in Kind

June 18, 2018

If you’re an employer and provide expenses or benefits to employees or directors, and haven’t recorded them through your payroll, you might need to tell HM Revenue & Customs (HMRC) and pay tax and National Insurance on them.

Examples of expenses and benefits include:

  • company cars
  • health insurance
  • travel and entertainment expenses
  • childcare

There are different rules for what you have to report and pay depending on the type of expense or benefit that you provide.

Record keeping
You must keep a record of all expenses and benefits you provide to your employees as HMRC may ask to see evidence of how you accounted for each expense or benefit at the end of the tax year.  Records must be kept for 3 years from the end of the tax year they relate to.

Reporting and paying
At the end of the tax year you’ll usually need to submit a P11D form to HMRC for each employee you’ve provided with expenses or benefits.


What you need to doDeadline
Submit your P11D forms online to HMRC6 July following the end of the tax year
Give your employees a copy of the information on your forms6 July
Tell HMRC the total amount of Class 1A National Insurance you owe on form P11D(b)6 July
Pay any Class 1A National Insurance owed on expenses or benefitsMust reach HMRC by 22 July (19 July if you pay by cheque)

Remember you’ll get a penalty of £100 per 50 employees for each month or part month your P11D(b) is late. You’ll also be charged penalties and interest if you’re late paying HMRC.

If you have any queries on whether you need to complete P11Ds, or to discuss any of the points raised in this blog please get in touch with me here, or:

01738 441 888

The information in this blog should not be regarded as financial advice.  This is based on our understanding in June 2018. Laws and tax rules may change in the future.

Making Tax Digital: penalties and special cases

June 12, 2018


HMRC has announced that a new points-based system for MTD non-compliance is likely to be introduced, although further details are still to be finalised.

This is in addition to the existing VAT penalties regime for late payment.

Points will be applied each time a MTD report is submitted late. This could be potentially problematic for taxpayers with multiple businesses (for example, those with, say, both a trading business and a lettings business, as they will be required to submit separate MTD reports for each business on time).

If the taxpayer reaches their MTD points threshold, they become liable for financial penalties. In some situations, it may be possible to appeal against points and penalties, however, this is expected to be successful only in limited and exceptional circumstances.

The new penalty points system for non-compliance with MTD is not expected to be applied until 2020, so there is an element of a “soft landing”. However, businesses who fail to comply risk the associated reputational damage to their track record and relationship with HMRC. In addition, it is still uncertain as to whether the current VAT surcharge system will apply to VAT returns submitted under MTD within that “soft landing” period of 2019/20.

Special cases

Where businesses are subject to special VAT regimes, such as Partial Exemption, there are further implications in terms of compliance with the MTD regime which need to be considered in terms of the end-to-end reporting requirements. However, many of the software developers now offer a range of apps and there are other solutions available which are capable of digitising the relevant calculations. If your business is subject to a special VAT regime, we would recommend that take specific advice from our dedicated VAT team, who will be able to guide you through these complex regulations.

If you want to discuss any of the points raised in this blog please get in touch with me here, or:

0141 886 6644

The information in this blog should not be regarded as financial advice.  This is based on our understanding in June 2018. Laws and tax rules may change in the future.

Making Tax Digital: record keeping and software

June 6, 2018

Record keeping under MTD

As it stands, there is no indication from HMRC of any changes to either the information businesses will be required to submit or to any deadlines for filing information and making VAT payments.

Submissions will still need to be made to HMRC at least quarterly, however, under the new MTD regime, this will need to be done through the business’ Digital Tax Account. It will still be possible under MTD to submit returns to HMRC monthly.

The key change under MTD relates to how businesses record, calculate and submit VAT return information.

Under the new regulations, businesses must record all transactions digitally, keep those records in “functional compatible software” (i.e. software and spreadsheets that can connect to HMRC via an approved interface) and preserve digital records in compatible software for up to six years.

Businesses using spreadsheets to maintain records may still be able to do so under MTD, but HMRC has advised that such systems will need to link to and be submitted digitally through MTD-compliant software.

HMRC has already confirmed that the new requirements will not mean businesses need to retain their invoices and receipts digitally but they must retain information relating to:

• The business name, principle place of business and VAT registration number
• Details of which VAT accounting scheme the business uses
• The VAT account that each VAT registered business must keep by law
• Information relating to supplies made and received, broken down into sub-totals for each rate of VAT (many businesses will not currently capture this level of detail).

MTD-compatible software

If a business currently uses a software package to record all VAT records, then it is recommended they should determine that a) the software is MTD-compliant and b) that it is using a version of the software that is MTD-compatible under the new regulations. Assuming the package is MTD compliant, then there should be minimal changes needed under MTD.

However, if the software used is not compliant, then the business will need to explore the available options in order to comply under MTD and well in advance of the April 2019 deadline.

For those businesses which do not currently use software to maintain their records, the new regime will mean there could potentially be significant changes needed to change or update their business systems and working practices to allow the transition from a manual to a digitalised process.

Software requirements

Businesses must use software that can connect to HMRC’s systems via an Application Programming Interface (known as an API) in order to comply fully with MTD. As such, the software must be able to:

• Keep and preserve digital records in accordance with MTD regulations
• Create a VAT return with digital information held by the software in order to send this information electronically to HMRC
• Provide certain VAT data albeit on a voluntary basis to HMRC
• Receive information from HMRC via the API platform with regard to an entity’s compliance with obligations under MTD regulations.

In the next blog I will be looking at penalties and special cases.

If you want to discuss any of the points raised in this blog please get in touch with me here, or:

0141 886 6644

The information in this blog should not be regarded as financial advice.  This is based on our understanding in June 2018. Laws and tax rules may change in the future.

Campbell Dallas appointed administrators to Lambert Contracts Ltd

June 5, 2018

One of Scotland’s leading construction companies, Paisley-based Lambert Contracts Ltd, has been placed in administration.

Lambert Contracts undertook a wide range of building and construction work, specialising in insurance reinstatement and fire contracts, in addition to general property maintenance, installation and repair work.

With offices in Paisley and Aberdeen the company employed 85 staff and engaged a significant number of labour-only sub-contractors. Founded in 1985, Lambert Contracts had a turnover of £14.7m in the year to 30 April 2017.

Derek Forsyth and Blair Milne, Partners with Campbell Dallas, have been appointed joint administrators.

Commenting, Head of Recovery Derek Forsyth said: “Lambert Contracts is a well-known name in Scotland’s construction sector with an excellent reputation for the quality of its client base and projects. Although the company has a large turnover, it had been suffering from cash flow problems and despite best efforts to raise additional funding administration was the only option.

“Unfortunately, 77 staff have been made redundant with immediate effect with the balance of 8 staff being retained in the short term to assist with the wind-down of the business. We will do our utmost to provide as much support as we can to the employees. We will also be looking to sell any assets to generate value for creditors and would urge interested parties to contact us as soon as possible.”

These are challenging times for the construction and property sector. Campbell Dallas would urge any other businesses in the sector facing trading or cash flow difficulties to get in touch direct in early course to obtain informal advice and guidance on options that may be available. In our experience, the earlier advice is taken, the greater are the options available.

For more information contact:

Campbell Dallas Glasgow staff. Derek Forsyth.Derek Forsyth
0141 886 6644




Blair_WebsiteBlair Milne
0141 886 6644



This information should not be regarded as financial advice. This is based on our understanding in June 2018. Laws and tax rules may change in the future.

Campbell Dallas high flyers listed in Top 100 CAs across the globe

May 31, 2018

Victoria Walker and David Samborek from our Glasgow office have been named in the 2018 ICAS Top 100 CAs in the world, a prestigious list of rising stars that the body recognises as the ones to watch in the future profession.

Peers across the industry were asked to nominate CAs under 35 who they believed to be excelling in their professional lives, representing the best of ICAS in the fields of finance, business and beyond.

The list includes CAs from Scotland, London and those based as far and wide as Dubai, New Delhi, Toronto, Sydney and Los Angeles.

Chris Horne, Managing Partner at Campbell Dallas said, “We are delighted that Victoria and David have been recognised by their professional institute as rising stars, but not at all surprised. At Campbell Dallas we have a strong pedigree in providing talented advisors across the business and this recognition underlines our commitment to ensuring our staff are supported and encouraged in their roles”.

Congratulations to all of the nominees and those who made the final list in this year’s ICAS Top 100 Young CAs 2018.

Making Tax Digital: background and regulations

May 29, 2018

We have now passed a major milestone after years of proposals & consultations and it is less than a year until the first wave of businesses will be required to submit tax information online. In this three-part series I’ll be looking in-depth at Making Tax Digital (MTD) and what this means for businesses across the country. I’ll look at what MTD actually is, who it affects, what businesses will be required to do, the software needed to comply and summarise the potential penalties for those who fail to comply.

What is MTD?

MTD is a Government initiative affecting the way all taxpayers will deal with their tax affairs in the digital age. The aim of this new legislation, through increased automation and reduced human error, is to improve efficiency and to ultimately make the tax system operate much more closely to “real time”.

The next key implementation stage of this new regime will come into effect from 1 April 2019 and will be compulsory for more than 1.2million VAT-registered UK businesses.

HMRC has advised that all other taxes, for businesses and individuals, are not due to come under the new regime until at least April 2020. However, there is a growing expectation, arising from HMRC sources, that April 2020 will in fact be the date for quarterly reporting to come into force for the majority of businesses.

Under MTD, most businesses, self-employed and landlords will be required to keep track of their financial affairs digitally. They will be required to use digital tools, such as software or apps, to keep records of their income and expenditure.

The MTD VAT regulations

All VAT-registered businesses (both incorporated and unincorporated) with a turnover above the current VAT threshold of £85,000 will, from 1 April 2019, be required to record and send their VAT information to HMRC digitally via Making Tax Digital-compatible software.

This new VAT regime applies to sole traders, partnerships, companies, LLPs and charities. Whilst more than 99% of all VAT returns are currently sent to HMRC electronically, this will no longer be enough to be MTD-compliant. Only 13% of VAT returns are submitted via software, so statistics suggest that the majority of UK businesses will need to look at making the move to MTD-compatible software in order to be compliant under the new legislation – and ideally well in advance of the April 2019 deadline.

For those companies or unincorporated businesses with a turnover that falls below the VAT threshold, entering into the MTD VAT regime is optional. Those businesses which sign up, either on the basis of turnover or choice, will remain in the regime, even if turnover falls to a level below the VAT threshold.

There are some limited exemptions from the new regulations; these are on the grounds of disability, religious belief or if the business is the subject of an insolvency procedure.

In the next blog I will be looking at record keeping and software requirements.

If you want to discuss any of the points raised in this blog please get in touch with me here, or:

0141 886 6644

The information in this blog should not be regarded as financial advice.  This is based on our understanding in May 2018. Laws and tax rules may change in the future.

Making Tax Digital at the House of Commons

May 25, 2018

Earlier this week I attended a Making Tax Digital (MTD) forum at the House of Commons. At the forum were various Members of Parliament, fellow accountants, software providers and highly engaged Government representatives.

It was not surprising to hear from the Financial Secretary to the Treasury that the Government is fully committed to MTD and indeed he stated, “there will be no further delays”.

At Campbell Dallas we have been preparing for MTD for the past two years and we are now on the final countdown to the first businesses being required to submit tax information online in April 2019. The message is loud and clear that MTD is coming and is not going away.

In the background there remains lots of technology challenges for HMRC to test and implement. In particular, working on new APIs between the Government’s new digital system and software suppliers & developers. So, it is possible, even likely, that given the short time period remaining to April 2019 there will be glitches, IT issues and problems with the systems.

My recommendation is to plan early for compliance with the MTD regime. In my opinion it would seem sensible to opt for the larger and well-established software solution providers. They have committed lots of resources and have dedicated helplines and teams of staff at the ready to help their customers with problems, which will inevitably come with the introduction of new technology; particularly in the beginning.

Spreadsheets may not be the best option to use in practice as HMRC are focused on mainstream software links and digital applications. Creating robust bolt-ons and APIs to link spreadsheets into the overall MTD framework is likely to be lower down their priority list and may end up not enabling businesses to meet their reporting requirements.

It is vital to engage with your business advisors and discuss how you can migrate to a digital platform in plenty of time. Cloud accounting and digital platforms also offer a new basis for a more valuable pro-active relationship which is focused on business advisory.

Campbell Dallas is already on the front foot in advising clients on MTD compliance and can offer a digital relationship with clients who want to ensure they are meeting requirements and at the same time, improve their business. A recent estimate by a leading software provider suggests an average SME business could save around £17k per annum by switching to digital cloud accounting. I would suggest this is a prudent estimate given the many other intangible benefits available.

Next week I will be posting the first blog in a three-part series looking in-depth at MTD from a practical business viewpoint.

If you want to discuss any of the points raised in this blog please get in touch with me here, or:

0141 886 6644

The information in this blog should not be regarded as financial advice.  This is based on our understanding in May 2018. Laws and tax rules may change in the future.

Auto Enrolment Update

May 23, 2018

The legal minimum pension contributions under auto enrolment were increased effective from 6 April 2018.

The new minimum contribution limits, effective from 6 April 2018 until 5 April 2019, have been set at a total minimum contribution of 5% of qualifying earnings, comprising an employer minimum contribution of 2% and an employee minimum contribution of 3%. For many employers and employees alike this is a significant increase from the previous minimum contribution limit of 1% for both employers and employees.

The minimum contribution limits are set to increase again from 6 April 2019 to 8% of qualifying earnings, as reflected in the table below:

Date EffectiveEmployer Minimum ContributionEmployee Minimum ContributionTotal Minimum Contribution
Up to 5 April 20181%1%2%
6 April 2018 to 5 April 20192%3%5%
6 April 2019 onwards3%5%8%

These changes do not affect employee eligibility criteria for automatic enrolment. This criteria remains unchanged.

Re-enrolment Reminder
Every employer has re-enrolment duties which must be completed approximately three years after their original staging date. Employers can choose their re-enrolment date from within a six-month window, which starts three months before the third anniversary of their automatic enrolment staging date and ends three months after it. Employers must assess certain employees at the re-enrolment date. Eligible employees who have opted out more than 12 months before the re-enrolment date must be re-enrolled into the scheme. A re-enrolment declaration of compliance will also have to be completed by employers. This is a legal requirement and if employers do not comply, they could be fined.

Seasonal workers
If you employ seasonal workers e.g. potato roguers and fruit pickers then you must ensure sure you properly assess these employees for auto enrolment purposes. They are not exempt. There is the option to postpone assessing these employees for a period of 3 months which many employers find useful.

If you would like to discuss any of these points further, please contact me:

01738 441 888

Further information regarding assessing the eligibility of your workforce and your duties as an employer including those for re-enrolment can be found at:

The information in this blog should not be regarded as financial advice. Laws and tax rules may change in the future. Campbell Dallas is not responsible for content contained on 3rd party sites.

EMI given go-ahead with EU State Aid approval

May 16, 2018

On 4 April this year, HMRC announced that the tax benefits of options granted under an EMI scheme would be put on hold temporarily as the necessary EU State Aid had expired.  Under this guidance, any EMI options granted after 6 April 2018 could not be guaranteed to bring the tax benefits usually associated with the scheme.

The EU Commission announced yesterday (15 May 2018) that EU State Aid is now again in place, meaning that EMI options will now once again attract these tax benefits.

Subject to the withdrawal negotiations, this is stated to apply until the UK ceases to be a EU Member State.

You can read the press release from the European Commission in full here.

It is not yet clear whether options granted from 7 April 2018 to today’s date will be qualifying; however, the wording of the EU announcement suggests that State Aid will be given retrospectively to cover this period. HMRC is due to provide further details in the coming days.

For more information on granting EMI options in your business or for guidance if you have been affected by this delay, contact our Tax team for guidance.

This information should not be regarded as financial advice. This is based on our understanding in May 2018. Laws and tax rules may change in the future. Campbell Dallas is not responsible for content contained on 3rd party sites.

Ayr Firm Sinclair Scott joins Campbell Dallas

May 14, 2018

Ayr-based Sinclair Scott, a long-established independent accountancy firm stretching back more than 100 years, has joined Campbell Dallas.

The deal will see all 20 staff and 2 Partners transfer to Campbell Dallas and add around £1.3m of fee income per annum.  Campbell Dallas acquired Kilmarnock-based White & Co in October 2016, and is now one of the largest full-service accountancy firms in Ayrshire with a staff and Partner complement of 38.

The deal with Sinclair Scott is Campbell Dallas’ first following joining forces with Baldwins in October 2017, when the firm announced plans to drive growth in Scotland by a combination of acquisitions and organic expansion.

Sinclair Scott provides a broad range of accountancy, advisory, tax and compliance services to a mix of owner managed businesses, community enterprises, entrepreneurs, and private individuals.  The firm has a strong client base in the charities, rural, farming and healthcare sectors.

L-R: Campbell Dallas Managing Partner Chris Horne, Andrew Sinclair and Stephen Wilkie

L-R: Campbell Dallas managing partner Chris Horne with Andrew Sinclair and Stephen Wilkie

Chris Horne, managing partner of Campbell Dallas said the acquisition was an exciting move for both firms: “Sinclair Scott is a highly respected local firm with a long history of advising businesses and private clients, and we are delighted to welcome them to Campbell Dallas. The deal provides us with further scale and reach to expand our client base throughout Ayrshire and the South West of Scotland as well as building on our sectoral expertise within the medical, dental and rural sectors.  It also provides our staff access to rewarding career opportunities across our growing business.

Andrew Sinclair, Partner at Sinclair Scott added: “Joining Campbell Dallas presents an exciting opportunity for our clients as we can now offer a full range of advisory services together with access to specialist technical knowledge in areas such as international tax, VAT, corporate finance, banking and re-structuring. The move will also enable significant investment in IT, providing clients with access to the latest online portals and platforms that comply with HMRC’s focus on ‘Making Tax Digital’.  It will remain ‘business as usual’ for our clients, many of whom have been with Sinclair Scott for several decades, but we can now offer them access to the resources of one of Scotland’s most ambitious accountancy firms.”

Know your obligations as a residential property landlord

April 19, 2018

There are many obligations, which as a landlord of residential property, you are liable to carry out. This blog will focus on discussing two core obligations, that as an expert in property and taxation, I encourage you to carry out.

Landlord Registration

All local councils have a landlord registration department and before you rent out any residential property, you should register with the appropriate council. Details can be found on your local council’s website. There are additional requirements for HMOs (House in Multiple Occupancy).

The Scottish Government is currently undertaking a consultation exercise, seeking views on expanding the information provided by those who apply to be a registered landlord and on changes to the current application fee structure. Meetings are being held throughout the country, with one being held on 11 May 2018 in Kilmarnock. To reserve a place you can contact the Landlord Registration team at

For more information on the consultation exercise and events in other locations across Scotland please see


Many people I have spoken to don’t realise that they have to declare their property rental income to HMRC and pay the resultant tax. The amount of tax depends on the level of the profit and your personal circumstances.

Profit is calculated as income less allowable expenses* and you need to declare this to HMRC via a self assessment tax return if you have income of:

  • £2,500 or more after allowable expenses, or
  • £10,000 or more before expenses;

If your income is under these limits then you must still advise HMRC by writing to them.

Generally, property income should be declared by the person whose name is on the title deeds. If title is held jointly by married couples or civil partners living together the income will automatically be split 50:50 unless a formal election is submitted to HMRC. If title is held jointly by any other people, the income is split in the same proportions as the ownership.

*Expenses you can deduct include:

  • General maintenance and repairs – but not improvements
  • Mortgage interest – changes to the level of relief to be phased in over the next 4 years
  • Council tax, gas, electricity, insurance
  • Maintenance contracts for heating systems etc.
  • Letting agent’s fees and management fees, tenancy renewal fees
  • Landlord registration fees
  • Telephone calls – the proportion relating to the letting activity
  • Motor expenses – the proportion relating to the letting activity
  • Replacement of domestic items
  • Accountancy fees

It is vital that you consider your circumstances in relation to both of these areas. It will make arranging your finances and cash flow much simpler in the long-term, and importantly ensures you are complying with the current rules.

If you are unsure about what this means for you, or would like to discuss any of these points further, please get in touch with me here, or:
01563 536 319

The information in this blog should not be regarded as financial advice. This is based on our understanding in April 2018. Laws and tax rules may change in the future. Campbell Dallas is not responsible for content contained on 3rd party sites.

The benefits of woodland should not be ignored

April 17, 2018

As of 1 April 2019 forestry will become fully devolved to the Scottish Parliament following the passing of the recent Forestry and Land Management (Scotland) Bill. The support provided for the forestry sector and integration with other existing land uses will be covered in the new Scottish Forestry Strategy being prepared by the Scottish Government.

Forestry is high up the agenda for the Scottish Government mainly due to climate change targets. It is estimated the Scottish forestry sector is worth over £1bn to the economy and supports over 25,000 jobs. Indeed the Scottish Government has committed to increase the annual tree planting target from 10,000 hectares per annum to 15,000 hectares per annum by 2025.

There are attractive funding incentives available to landowners which have been put in place to help achieve these ambitious targets. With these funding incentives the land can still qualify for Basic Payment. There is also a Timber Transport Fund of £7m, which seeks to support sustainable timber transport in Rural Scotland. This funding highlights a strong commitment being made from the Government to kick-start this sector. Other developments have also emerged through compliance with the Woodland Carbon Code which provides the opportunity for forestry owners to sell the rights of carbon captured by newly planted trees.

There has been a resurgence in the demand for wood used for wood burners and there continues to be ongoing investment in biomass technology that benefits from renewable heat incentive payments. This ensures that woodlands which were not financially worth being actively managed previously have become a possible income source for farmers.

Existing undermanaged woodlands could be brought back into production to produce an income stream for farmers. Farmers can use woodlands and forestry to diversify their financial risk as direct support for farming is likely to be reduced.

The benefits of commercial woodlands for flood mitigation, rural employment, shelter for livestock and carbon fixation are being increasingly championed and in general woodlands support overall biodiversity.

Timber prices have risen in the past few years and one factor of this is the drop in value of the sterling. The Government’s pledge to raise new housing supply will also boost the timber prices. The low interest rates has led investors to consider non cash, long term and low risk investments such as commercial forestry as alternative investments.

We have seen a rise in the number of discussions with clients about planting trees, felling trees, selling forestry land or buying land to create a forestry business and discussing the tax implications of forestry in general.

As a reminder the key tax points to consider are:

  • It is generally advantageous to have the forestry business in a VAT registered entity.
  • When buying and selling forestry land check if it has been opted for VAT purposes and consider the Land and Buildings Transaction Tax (LBTT) implications.
  • Income realised through the sale of timber is exempt from income tax. Grants are tax free, with the exception of payments made in compensation for agricultural income foregone.
  • There is no tax relief for losses or capital purchases.
  • There is no capital gains tax liability on the gain in value of commercial tree crops. Any gain on disposal of the woodland is split between trees and land. The element relating to trees is tax free and the element relating to land is taxable.
  • There is no inheritance tax on death if forestry is held for two years and commercially managed.

Forestry must be commercially managed when considering it as long term investment, perhaps as an Inheritance Tax (IHT) asset protection strategy. The forestry business should also have maintenance costs, a forestry management plan and either its own set of financial statements or its own enterprise accounts within a larger business to qualify for tax reliefs.

The combination of a number of factors has seen a renewed interest in commercial woodland operations. Actively managed commercial woodland on farms creates financial benefits when managed alongside the existing land uses. In addition, the benefits of woodland supporting overall biodiversity should not be ignored.

If you would like to discuss any of the points raised in this blog please contact me:

01738 441 888

The information in this blog should not be regarded as financial advice.  This is based on our understanding in April 2018. Laws and tax rules may change in the future.

Construction sector failures likely to escalate without cash flow intervention

April 16, 2018

Scotland’s construction industry is facing an unprecedented sequence of problems that are likely to trigger further business failures, particularly amongst smaller supply chain contractors, according to one of Scotland’s leading Restructuring experts.

Derek Forsyth, Head of Recovery at Campbell Dallas, is warning that the ‘Big 4’ of issues – a marked fall in major public infrastructure projects, prolonged severe weather, the collapse of a first-tier contractor and persistent economic uncertainty – is affecting order books and compounding cash flow problems across the industry.

He said: “This is probably the most challenging period I have known for the construction sector.  The industry is beset with an endemic cash flow issue that has never really been resolved.  Businesses will retain cash for as long as possible, which tends to affect smaller companies trading from one job to another.  Coupled with fewer contracts and the wider economic and weather issues, many companies are facing a very tough time.

He added: “The Carillion collapse once again exposed the vulnerability of smaller firms down the supply chain to the failure of the principal contractor.  Given that payment can routinely take several months, sometimes 6 months or longer, it is unsurprising that banks are unwilling to increase borrowings when payment terms and compliance are so uncertain.  Perhaps the banks need help from Government to ease the cash flow problem.

Derek Forsyth continued: “There is a pressing need for intervention to ensure that smaller businesses are paid in a timely manner.  One option could be to have an independent body that could be charged with managing a Construction Cash Flow facility, initially for publicly financed projects.  Scotland’s construction industry is a vital part of the economy, and much could be done to inject structure and greater certainty into the payments process, in turn helping prevent so many failures.  It is clearly evident that margins are sustainably tight, and the tenders process continues to support this situation, keeping profit levels depressed”.

For contracting companies concerned about their cash flow, Campbell Dallas has prepared some guidance on how to manage their contracts more effectively:

  1. Know the forensic detail on numbers to ensure long term profitable work
  2. Walk away from deals that will only enhance short term cash flow
  3. Ensure all terms and conditions are documented and legally binding
  4. Agree and manage any variations in the contracts
  5. Invest resources to ensure payments are made to plan
  6. Manage own sub-contractors efficiently and fairly
  7. Maintain good banking relationships
  8. Keep projects on budget

Derek Forsyth concluded: “It is important that key stakeholders involved in Scotland’s construction industry work together to ease these problems and provide support to any businesses affected by badly managed contracts and a lack of cash.  Companies may have plenty of orders but until changes are made to the cash flow culture and system, companies should remember that winning work does not mean staying in business.”

Murdoch MacLennan, Head of Banking advisory services at Campbell Dallas, also added: “There are specialist funders to the sector who provide facilities that can ease cashflow.  However, ultimately to make it all work, the main contractor needs to be able to pay their sub-contractors.”

Scotland’s construction industry has an annual turnover approaching £15 billion and employs around 175,000 people.

If you want to discuss any of the points raised in this news article please contact:

Derek Forsyth
0141 886 6644

This information should not be regarded as financial advice. This is based on our understanding in April 2018. Laws and tax rules may change in the future.

New agricultural wage rates in Scotland

April 12, 2018

From 1 April 2017 the Scottish Government aligned the agricultural wages review to fall in line with the national minimum wage and national living wage changes. The new rates are published annually on 1 April, after review by the Scottish Agricultural Wages Board.

Detailed below are the changes to agricultural wage rates in Scotland from 1 April 2018:

  • The minimum hourly rate has increased to £7.83 for all agricultural workers, irrespective of age or duty.
  • Overtime must be paid to an employee who works more than 8 hours a day or 48 hours a week for the first 26 consecutive weeks and 8 hours a day or 39 hours a week thereafter.  The overtime rate will be 1.5 times the agreed hourly rate.
  • An additional sum of £1.20 per hour can be paid to workers with appropriate qualifications.
  • A minimum hourly rate of £5.00 for workers who undertake an SCQF level 4/5 or equivalent in agriculture.
  • The dog allowance has increased to £6.00 per week for each dog up to a maximum of 4.

If an employer wishes to pay more to a worker employed on particular duties then they can do so, however, they cannot pay less than the minimum stated above.

Another consideration for employers is the yearly holiday entitlement. This runs from 1 January to 31 December and it depends on the number of days worked by the employee. Where the number of days worked varies from week to week, the average number of days worked per week over a 12 week period should be calculated. Please see below the holiday entitlement: 

No. of days worked per weekNo. of days holiday per year

If you want to discuss any of the points raised in this blog please get in touch with me:

01738 441 888

The information in this blog should not be regarded as financial advice.  This is based on our understanding in April 2018. Laws and tax rules may change in the future.

Businesses urged to review EMI schemes in light of HMRC announcement

April 9, 2018

On 4 April 2018, HMRC announced that there is to be a temporary expiration of EU State Aid approval for EMI Schemes, which came into effect at 11pm on Friday 6 April 2018. At this time, the length of the delay is unknown.

Whilst any options granted before this deadline will remain unaffected, an important point of note is that those granted after this date, and prior to State Aid approval being received, may not be eligible for the tax advantages that would usually be afforded to EMI options and may as a result be taxed as unapproved (and non-tax advantaged) share options.

HMRC has advised that any companies planning to grant EMI options should postpone until a further announcement is made.

If you are planning to grant EMI options or you are in the midst of putting a scheme in place in the near future, contact our Tax team for guidance or to discuss the implications of this announcement.

A copy of the full HMRC announcement can be found here.

This information should not be regarded as financial advice. This is based on our understanding in April 2018. Laws and tax rules may change in the future. Campbell Dallas is not responsible for content contained on 3rd party sites.

Scottish businesses wasting millions on poor VAT management

April 3, 2018

Partner and our head of VAT, Veronica Donnelly, has warned that Scotland’s owner managed businesses are struggling to manage VAT, a problem that is costing Scotland’s economy millions of pounds of lost revenue.

Veronica is one of the UK’s leading experts in VAT and is urging Scotland’s owner managed businesses to place VAT at the top of the financial agenda, and do a thorough review of how they currently manage VAT.

She said: “Very few businesses have the systems and expertise to manage an increasingly complex and onerous tax. The VAT system now has so many variations for products, sectors and situations it is no wonder business owners are finding it difficult to manage. Poor VAT management can seriously limit investment, curtail expansion and restrict the ability of businesses to create employment opportunities, particularly for young people. In the worst case, failing to manage VAT efficiently can cause serious cash flow problems and threaten the viability of the business.

She added: “We are encouraging Scotland’s owner managed businesses to undertake a comprehensive review of VAT. It could save their companies a great deal of money and be the most cost-effective investment they have made in the business for many years.”

HMRC estimates that Scotland’s contribution to VAT receipts is nearly £10 billion for 2016-17, or 8.3% of all UK VAT receipts. The Office for National Statistics estimates that across the UK, VAT will raise over £120 billion in 2016-17, or 16.9% of all receipts, equivalent to £4500 per household. The estimate for 2017-18 is nearly £126 billion. VAT is the third largest source of government revenue after income tax and national insurance.

VAT was launched in the UK on 1st April 1973, three months after the UK joined the European Union on 1st January and replaced the Purchase Tax which had been the principal tax on luxury goods since 1940.

If you are concerned about VAT and require guidance use this link to arrange a call back and a member of our team will be in touch.

This information should not be regarded as financial advice. This is based on our understanding in April 2018. Laws and tax rules may change in the future. Campbell Dallas is not responsible for content contained on 3rd party sites.

Don’t leave UK farming out in the cold

March 27, 2018

As an accountant I know about formal arrangements; the ones which involve paperwork. I am also aware of many more informal ones that make everyone’s life run a bit more smoothly such as, “Will I pop down with the teleporter to help out and you could give me a hand with that other job that needs two tractors”.  A few weeks ago Central Scotland ground to a halt for three snow days. Many of the farmers where I live were out clearing roads, driveways and school playgrounds. Of course farmers are not obliged to do this, but they do it because they know the local people, it is their local community, they care about their environment and it contributes to the general smooth running of people’s lives. Often people forget that farming doesn’t stop when the snow comes and actually for livestock farmers in particular, excessive snowfall and low temperatures makes their job a lot harder.

On the Saturday at the local supermarket many of my neighbours were comparing the empty shelves to Soviet rationing. Indeed, there was no milk or bread and very little fruit or vegetables. This was a reminder to many people of what farmers actually do. It wasn’t because the cows weren’t getting milked, it was simply that the milk couldn’t get transported from the farms to the processing plants and then onto the supermarkets. I suspect this reminder will be short lived. Continuous education is essential when it comes to sharing the good work the farming industry does. I also couldn’t help but think clearing roads for no reward was a brilliant example of “public goods for public money”.

We are hearing a lot about “public goods for public money” in the context of Brexit and the future of agricultural support.  To my mind these are just words and currently serve no practical application to planning your business. What I would say is that there is little mention of food production and the direction of travel is definitely environmental, with the new buzz words being “natural capital”. Of course environmental doesn’t necessarily mean farming butterflies. Perhaps it would be an idea to open peoples’ minds (farmers and non-farmers) to the different definitions of environmental, in the context of good commercial farming practices. I expect the environmental enhancements likely to be incentivised in the future are:

  • Soil fertility
  • Managing run off
  • Water quality
  • Filtration systems
  • Managing peatland to create carbon sinks
  • Woodland management

It can be easy to see these enhancements as a distraction to the core purpose of food production but l guess it comes down to how much the financial incentive is and how the incentive is given. Financial incentives are not always in the form of subsidy. An alternative could be tax incentives. Ultimately if these activities are to co-exist with food production, the reward for changing behaviours needs to be attractive enough to make them happen. Similar to renewables – who would have solar panels without the feed-in tariff?

The best people to make these things happen are farmers & land managers. It is important the politicians do not lose sight of this because commercial farming makes the countryside what it is, creates the public goods people want access to, which in turn drives the leisure & tourism sectors. It is a complex ecosystem of business & commerce and the farming industry needs to continue educating consumers about what public goods are, so that public money can follow it. If we cannot articulate a public good then attracting public money will be challenging.

If you want to discuss any of the points raised in this blog please get in touch with me here, or:

01738 441 888

The information in this blog should not be regarded as financial advice.  This is based on our understanding in March 2018. Laws and tax rules may change in the future.


Are you ready for Gender Pay Gap reporting?

March 23, 2018

If you’re an employer with 250 employees or more you will now need to publish your gender pay gap data annually. New Government legislation requires employers with 250 or more employees to publish statutory calculations every year showing how large the pay gap is between their male and female employees.

The figures must be calculated using a specific reference date – this is called the “snapshot date”.  The snapshot date each year is

  • 31 March for public sector organisations
  • 5 April for businesses and charities

What do I need to do?

  • Employers must publish their gender pay gap data and a written statement on their company website and report their data to Government online using the gender pay gap reporting service 
  • An employer must comply with the regulations for any year where they have a ‘headcount’ of 250 or more employees on the snapshot date but employers close to the employee threshold may consider the advantages of publishing.
  • The regulations apply the same definition of employee as the Equality Act 2010. This is a broad definition which includes zero hours’ workers, apprentices and some self-employed people.
  • There are six calculations to carry out, and the results must be published on the employer’s website and the Government website within 12 months. Where applicable, they must be confirmed by an appropriate person, such as a Chief Executive.
  • Gender pay reporting is a different requirement to carrying out an equal pay audit.
  • Employers have the option to provide a narrative with their calculations. This should generally explain the reasons for the results and give details about actions that are being taken to reduce or eliminate the gender pay gap.
  • While the regulations for the public, private and voluntary sectors are near identical, and the calculations are directly comparable, the public sector regulations also take into account the public sector equality duty.

Employers need to remember that gender pay gap reporting is now an annual requirement and progress on closing the gap will be expected every year.  Whilst there is no financial penalty for not publishing, the Equality and Human Rights Commission will be able to issue court orders to those employers who do not report on time and failing to publish will be considered unlawful.  The media interest is likely to be high in relation to companies that miss the deadline.

For further information please refer to:

This information should not be regarded as financial advice. This is based on our understanding in March 2018. Laws and tax rules may change in the future. Campbell Dallas is not responsible for content contained on 3rd party sites.

Changes to Intangible Regime are tangibly close

March 19, 2018

“The intangible represents the real power of the universe. It is the seed of the tangible.” Bruce Lee

HM Treasury have been pondering the tax treatment of the intangible and published a consultation document on the corporate Intangible Fixed Assets regime on 19 February.

The document notes the “growing importance of intellectual property to the productivity of modern businesses” and feels that “it is now the right time for a more comprehensive review of the regime”.

Value and impact of Goodwill

The most significant recent change in this area was in the Finance Act 2015, where the previously available deduction for the amortisation of acquired goodwill (where the trade and assets of a business are acquired for more than the fair value of the assets, then the balance is effectively goodwill) was denied from 8 July 2015. This has meant that purchasers of business have been more likely to buy shares (to help the tax position of vendors) as the upside of the goodwill deduction on a trade and assets deal was no longer available to them. The Government has asked for views on the impact this has had on businesses, and suggest in the document that there is a feeling that this deduction puts the UK regime at a competitive disadvantage to most other regimes. Whilst noting the relief was expensive, there appears to be some appetite for reintroducing it, which should be welcomed, as it is felt this would enable more transaction activity to take place.

New v old

At present, assets which existed at 1 April 2002 are not subject to the same regime as newer assets, and it is proposed that this distinction is abolished. This may result in tax relief being available for the amortisation of such assets where this was not previously the case.


Another point which the Government is seeking to address is what seems to be an unfair distinction between tangible and intangible assets in certain circumstances. Picture a structure with a holding company with a property used in the business, and a trading subsidiary. The property can be passed down to the subsidiary without a tax charge arising due to the group relationship (yay!). However, in the past if the subsidiary then left the group within six years, then what is called a degrouping charge arose, such that the initial transaction was in effect treated as having occurred at market value (boo!). If the Substantial Shareholding Exemption applies (which it does in our imaginary example), the degrouping charge is however effectively exempt due to that Exemption (yay again!).

Using the same facts as above, but replacing the property with an intangible asset (such as a patent or trademark), the Exemption does not cover the degrouping charge under the intangibles regime (boo!). The discussion paper seeks views on how to address this anomaly (the obvious suggestion being to change to the rules governing tangible assets).

Unwanted election

At present, tax relief for intangibles (where available) either follows the amortisation in the accounts or alternatively an election can be made for a fixed annual deduction of 4% of cost on a straight line basis. The consultation does not seem keen to increase this rate to match higher overseas rates, and indeed seems to question whether or not relief should be given at all for assets which are not decreasing in value. Views are sought on this.

Why consult?

The purpose of the consultation is to seek to make UK businesses more likely to invest in intangibles, to make the UK more attractive to mobile businesses and also a more attractive place for multinationals to own their IP, presumably all with a view to increasing tax revenues. However, there is an awareness that all these lovely extra tax reliefs come at a cost, and a question is raised as to whether the tax relief could in some way be aligned to a requirement for the IP to generate income. This sounds like it may involve an additional compliance burden, and it will be interesting to see how this develops.

The discussion paper is open for comments until 11 May 2018. Some of these changes could have significant impact on the structuring of transactions, and it is hoped that certainty is achieved as soon as possible thereafter, such that the tangible seeds of the changes can grow.

If you want to discuss any of the points raised in this blog please get in touch with me here, or:

0141 886 6644

The information in this blog should not be regarded as career or financial advice.  This is based on our understanding in March 2018. Information may change in the future.  Campbell Dallas is not responsible for content contained on 3rd party sites.