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 period MTD VAT return due date Time 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-19 15 May 2019 – 30 July 2019 8 May 2019 – 04 August 2019
Quarterly (1 May 2019 – 31 July 2019) 07-Sep-19 17 June 2019 – 29 August 2019 8 June 2019 – 04 September 2019
Quarterly (1 June 2019 – 31 August 2019) 07-Oct-19 15 July 2019 – 27 September 2019 8 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 Greg McNally, our VAT Partner and Property & Construction expert. Our specialist VAT and Property & Construction teams are also able to advise you on this area.

To help you minimise its impact, Greg McNally will be holding a number of seminars that will outline the practicalities of the change.

Book your place at one of our events by clicking your preferred location below:

Aberdeen, 17 April 08:00 – 09:30

Ayrshire, 23 April 08:00 – 09:30

Edinburgh, 25 April 12:30 – 14:00

Glasgow, 24 April 08:00 – 09:30

Perth, 16 April 12:30 – 14:00

Stirling, 24 April 12:30 – 14:00

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 rates Rate   Taxable income band    Tax on band
% £ £
Starter rate 19 First £2,049 389.50
Basic rate 20 Next £10,395 2,078.80
Intermediate rate 21 Next £18,486 3,882.06
Higher rate 41 Next £119, 070 48,818.70
Additional rate 46 Excess

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

Allan Bird
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:

Additions £650k
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:

Allan Bird, Customs & Excise Manager
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:

Allan Bird

Customs & Excise Manager

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 do Deadline
Submit your P11D forms online to HMRC 6 July following the end of the tax year
Give your employees a copy of the information on your forms 6 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 benefits Must 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 Effective Employer Minimum Contribution Employee Minimum Contribution Total Minimum Contribution
Up to 5 April 2018 1% 1% 2%
6 April 2018 to 5 April 2019 2% 3% 5%
6 April 2019 onwards 3% 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 week No. of days holiday per year
1 8
2 13
3 18
4 23
5 28
6 33
7 38

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.

Spring Statement 2018: what you need to know

March 16, 2018

Philip Hammond delivered his Spring Statement on Tuesday 13 March. There was no red briefcase, no red book, and no tax changes as he delivered the statement in a speech lasting less than half the length of any of his previous statements.

The chancellor unveiled the latest economic forecasts alongside a raft of consultations.

Upcoming changes from April 2018

Auto Enrolment
From 6 April 2018, the minimum employer contribution towards an employee’s workplace pension will increase from 1% to 2%. These contributions are usually mandatory for workers aged between 22 and state pension age earning more than £10,000 a year. For more information see page 10 of our guide here.

National Living Wage & National Minimum Wage
National minimum wage rates for all ages and apprentices are increasing from 1 April 2018. For 18 to 20 year olds and 21 to 24 year olds it will be the largest increase in a decade. For more information see page 10 of our guide here.

Click here to read our guide for full details on all of the announcements.

The information in this article 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.

Celebrating National Apprenticeship Week 2018

March 9, 2018

This week (5-9 March 2018) celebrates apprenticeships in Scotland and across the UK.

At Campbell Dallas we developed a fully integrated apprenticeship & trainee programme nearly a decade ago and were one of the first in Scotland to implement it. We have young people completing apprenticeships in accounting (as you’d expect), learning & development, facilities management and office administration. Across the firm in Scotland we have 73 people completing either an apprenticeship or on the job training.

Apprenticeship Week 2018 imageAs a firm the benefits are two-fold; we have the opportunity to develop young people and help them pursue a lifetime career, whilst fostering a strong supply of educated professionals into our profession and others.

This week I caught up with two of our apprentices to find out why they chose an apprenticeship and how their journey is helping shape them. Fern is a Learning & Development Apprentice and Heather is an Accountancy Apprentice. Both of them joined the firm straight from school.

Why choose an apprenticeship?

Fern: My school was very university and college forward and did not promote modern apprenticeships as much as they did with university and college, but the idea of going on to do further education for 5 or so years did not appeal to me. I knew I wanted to gain work experience, but I also knew I wanted to receive a qualification at the end of it and that is why a modern apprenticeship was for me.

Heather: I chose an apprenticeship as I was able to gain invaluable business experience that I wouldn’t be able to get from university. This apprenticeship has given me the opportunity to work towards my professional qualifications whilst using the skills, qualities and knowledge I have developed through working at Campbell Dallas.

What has your experience been like?

Fern: So far, my experience of being an apprentice and getting to work for Campbell Dallas has been everything and more. The working environment of Campbell Dallas is refreshing and I enjoy coming in to work every day. Getting to work alongside my team and others is the best part about this whole experience. Even though I haven’t been an apprentice for that long I have loved every minute of it and I would recommend a modern apprenticeship to any school leaver who is not 100% about going to university or college. It has been the most rewarding experience so far.

Heather: My overall experience so far has been great. I have enjoyed gaining knowledge and experience working in an accountancy firm and using this to help me with my exams. I have also liked working with other trainees as I am able to see how this apprenticeship has helped to boost their careers.

What support do you value the most?

Fern: When I am not 100% sure about something I don’t worry about it because I know David will be there to help me and even when David is not there to help me out, Lauren or Jennifer are able to help me along the way which I value a lot. Without my team my experience so far would have not of been as amazing as it has been.

Heather: I value the support I have from my manager and team members as they are always happy to help me, as well as the support I have from my teachers and other trainees. It is ideal to work alongside qualified accountants as it helps to motivate me to my goal of becoming a fully qualified accountant.


If you are interested in finding out more about the different types of apprenticeships & training that we offer, read a little more about them here, or contact me at:

0141 886 6644


Additional resources:

Association of Accounting Technicians –
Kaplan –
Skills Development Scotland –

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.

Auto Enrolment 6 years on: The Pensions Regulator checks

February 28, 2018

The Pensions Regulator (TPR) has now begun carrying out spot checks on employers across the UK to make sure that they are complying with their workplace pensions duties and are providing staff with the workplace pensions that they are entitled to by law.

According to TPR these inspections help them to understand any challenges employers are facing, and whether it needs to make any changes to its guidance. This also enables them to identify employers who fail to meet their duties, and take enforcement action where necessary.

Auto enrolment has been a great success so far, with more than seven million people now saving into a workplace pension. It is important employers continue to make contributions into their employee’s pensions and these spot checks make sure ongoing compliance is being maintained.

As well as investigating any non-compliance, these inspections will also help shine a light on employer behaviour and allow TPR to see different types of employers’ schemes in practice and also identify best practice that others can learn from.

The Pensions Regulator have confirmed that they will continue with their checks over the coming months, generally sending a statutory notice to the employers they have selected ahead of their visits.

Get the process right

TPR is concerned that some employers are not following the correct procedures and during the course of their inspections have seen a number of instances of employers agreeing to opt staff out of a workplace pension before they have been enrolled. This is not in accordance with the auto enrolment rules. According to TPR:

‘Some employers claimed they were unaware as to the formality of their duties or the process they needed to follow, and had simply been trying to do their staff a favour by offering them the option of opting out up-front. But whether their motivation was genuine, or whether they were simply trying to get out of paying their staff the pension contributions they were due, the result was the same – they were in breach of their legal duties. Eligible staff need to be enrolled first, and can then opt out. One of the cornerstones of automatic enrolment is capitalising on inertia, and it has proved very successful so far, in helping people who might never have saved for retirement before.’

Auto enrolment for new employers

Under auto enrolment legislation employers have to enrol qualifying employees into a workplace pension. Duties include paying contributions on behalf of the employee. The process of auto enrolment has been phased in from October 2012, when the largest employers had to comply with the rules. However, the rules are set to change and new employers will have to comply with their automatic enrolment legal duties, as soon as they employ their first member of staff.

For more information on auto enrolment and your obligations, please contact your usual Campbell Dallas advisor.

Kickstart debuts in Scotland with cash for new entrepreneurs

February 26, 2018

Scotland’s next generation of entrepreneurs are being urged to enter a competition that offers substantial cash and mentoring support, and which has just launched in Scotland for the first time.

The KickStart project, which is open to 18 to 25-years-old entrepreneurs, offers the winner a grant of £10,000 along with £10,000 worth of mentoring and accountancy advice, whilst two runners-up will each receive £5,000 worth of mentoring and advice.

The competition, which launched in 2013 by Baldwins, is now being rolled out in Scotland by Campbell Dallas & Springfords.

Chris Horne, Managing PartnerChris Horne, Managing partner at Campbell Dallas, 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.”

The awards are not restricted to any sector and everyone who enters will have the invaluable experience of preparing a business plan. Ten entrepreneurs will be interviewed about their ideas, with three being invited to present to more than 400 people at Edgbaston Cricket Ground in Birmingham on Thursday, November 15.

Kickstart-2017-103_2Last year, 19-year-olds Harry Smith and Jack Cornes won the top prize for their concept of wall-climbing painting robots, with the investment enabling them to develop an investor-ready prototype.

David Baldwin, Director at Baldwins, has overseen the Baldwins KickStart Young Entrepreneur project since its inception.

He 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.”

The deadline to apply for the Awards is Friday, August 31; to enter click here.

Could you benefit from farmers’ averaging relief?

February 21, 2018

Farmers’ averaging relief is a government incentive to assist farmers and market gardeners to smooth fluctuating profits, by averaging profits over a period and being taxable on that average.

From 2016/17 new rules were introduced for farmers’ averaging relief with the relief being extended to cover either a two year or a five year averaging period. The Government has suggested that over 29,000 farmers can benefit from the changes, saving an average of £950 a year.

The relief is available to sole traders or partners but not limited companies and is not available in the year a business commences or ceases.

For two year averaging there must also be a difference of more than 25% between the years being averaged. For five year averaging there must be more than 25% between the latest year and the average of the previous four years.

Farmers’ averaging relief can be particularly beneficial where:

  • There are unused personal allowances in a particular tax year
  • There is a loss
  • Profit is being taxed at higher rates and this is unusual
  • There are one off other income sources or claims for other reliefs in the year

Any claims for averaging are included in Self-Assessment Tax Returns and have time restrictions. Claims must be made within 22 months after the end of the latest year of assessment being averaged.

If you think you may benefit from an averaging claim, or want to discuss any of the points raised in this blog, please get in touch with me:

01224 623 111

Helpful links:

The information in this blog should not be regarded as financial advice.  This is based on our understanding in February 2018. Laws and tax rules may change in the future. Campbell Dallas is not responsible for content contained on 3rd party sites.

How to best protect reimbursement of Practice rental costs

February 16, 2018

The Campbell Dallas dental team are busy completing the annual GP234 form on behalf of our many dental clients who offer NHS services. The form has a filing deadline of 28 February 2018 to ensure receipt of the four quarterly payments due for financial year 2018/2019.

On the face of it, this is not the most onerous of tasks given the only disclosure is a percentage figure based on a simple arithmetical calculation but scratch below the surface and you will quickly discover a series of technical details to be taken into account.

Making sure the numbers add up

The form reports a Practice’s NHS earnings as a percentage of total Practice earnings. Please take care when filling in as there are clear guidelines from Practitioner Services as to what should be included either by way of NHS earnings or total Practice earnings. For example, are you comfortable with how to treat private work carried out on an NHS patient? How do you treat the various NHS allowances? Where do you include retail sales or any grant receipts?

Late submission

The filing deadline is 28 February 2018 to ensure full receipt of the Practice entitlement for 2018/2019. If you submit one day late you lose the first quarter payment, with no hope of an appeal. There are also subsequent staggered dates for late filing after which subsequent quarter payments will also be forfeited.

Counter signing

Those already familiar with the form will be aware both the designated dentist and Practice accountant need to sign the form. As a point of particular interest, the form is sent to ‘Practitioner and Counter Fraud Services’ and therein lies the alert – counter fraud. Whilst the GP234 form has been in existence for only a relatively short time, I’m surprised there has been little by way of audit, so far, to vouch authenticity of the prior submitted claim for percentage NHS earnings. The roll out of the auditing process is perhaps long overdue and is likely to cause complexity when it arrives.

By counter signing the form, your accountant is also exposing themselves to a possible future accusation of fraud if they have not carried out sufficient background checks on the Practice data before signing off. If notice of an intended audit arrived in the post tomorrow, would your records support the percentage calculation enough to withstand scrutiny? That’s the true test.

The mechanics

As a firm, we have spent appropriate time to make sure we fully understand the mechanics of the calculation and as a result our many dental clients are fully protected if the news of an impending audit arrives. If an accountant simply accepts a suggested percentage NHS figure without proper verification, both parties risk future consequences.

If you have any concerns about your annual GP234 form please get in touch:

01786 460 030

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

Important Tax Changes for Commercial Leases in Scotland

February 9, 2018

Land and Buildings Transaction Tax (LBTT) replaced Stamp Duty Land Tax (SDLT) in Scotland for land transactions in Scotland, including the grant of commercial and agricultural leases, from 1 April 2015.

The LBTT rules for leases are significantly different to the SDLT rules. In particular, if you are the tenant under an agricultural or commercial lease and if you submitted an LBTT return to Revenue Scotland when you took out your lease, you need to submit additional LBTT returns to Revenue Scotland every three years during the currency of your lease, to cover changes during the previous three years.

There is no three year review process for leases taken out before 1 April 2015, which remain within the Stamp Duty Land Tax system unless and until they are varied or extended, which may bring them into the LBTT regime.

Revenue Scotland will shortly start to issue reminders for the first batch of three yearly lease reviews which fall due on or after 1 April 2018, that being the third anniversary of the introduction of LBTT. Revenue Scotland aims, but cannot guarantee, to issue reminders around three months in advance of when the review return is due, which is thirty days after the third anniversary of taking out the lease

If the rent payable under the lease and/or the term of the lease have been increased during the first three years, additional LBTT may be due, while if the rent and/or term have decreased, an LBTT repayment may be due.

If there have been no changes during the review period, while no additional LBTT will be due, a return is still needed.

A penalty of up to £1,000 may be charged for a late return even if no tax is due. Higher penalties, linked to the tax payable, may be charged where a return is late and tax is due.

If you don’t receive a reminder, the return still needs to be made on time. Revenue Scotland will not accept the absence or non-receipt of a reminder as an excuse for late filing

In addition to the three yearly review return, you also need to submit an additional LBTT return to Revenue Scotland if you assign your lease to someone else or if the lease comes to an end. These requirements have been in place since the introduction of LBTT on 1 April 2015.

The application of LBTT to leases is a complex and involved subject. If you need further information or advice on three year review returns or on other LBTT related issues, Campbell Dallas has extensive experience of advising clients in this area.

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

01738 441 888

Helpful links:

The information in this blog should not be regarded as financial advice.  This is based on our understanding in February 2018. Laws and tax rules may change in the future. Campbell Dallas is not responsible for content contained on 3rd party sites.

Could R&D Tax Relief apply to you?

January 18, 2018

During the 2017 Autumn Budget, the Government outlined a long term vision for investment in UK science and innovation by announcing a £2.3 billion investment in Research & Development.

This investment is intended to contribute towards a Government target of UK Research and Development becoming 2.4% of GDP by 2027.

The announcement means that companies can continue to claim Research & Development tax credits. These tax credits provide generous corporation tax relief to companies who incur qualifying revenue expenditure on Research and Development.

What constitutes as Research and Development?

For tax purposes, HMRC define Research and Development as work on a project that seeks to achieve an advance in a field of science and technology.

The research and development must be relevant to the firm’s trade and companies that incur qualifying revenue expenditure are entitled to claim a corporation tax deduction.

Examples of Qualifying Revenue Expenditure includes (but is not limited to):

  • The Costs of Employing Staff who are directly engaged to work on qualifying Research & Development Activities.
  • Consumables and Materials that are used in R&D work.

Corporation Tax Deduction

Small and Medium sized enterprises (SME)

Small and Medium sized companies can claim Research and Development tax relief on qualifying revenue expenditure at a rate of 230%.

These companies are defined as those with fewer than 500 employees, having a turnover of not more than €100 million and/or assets of more than €86 million.

If an SME company makes an R&D tax relief claim and is loss making, the company can surrender the tax relief for a repayable tax credit which is equal to 14.5% of the enhanced deduction (or the unrelieved loss if lower).

Large Companies

Large companies (those who are not within the definition of small and medium-sized companies) could claim R&D enhanced deduction of 130% from any taxable profits. This scheme expired on 1 April 2016 and was replaced by the Research and Development Enhanced Credit Scheme (RDEC).

RDEC Scheme

The RDEC scheme provides large companies with a tax credit akin to a grant which can be used to offset corporation tax or certain other liabilities. These companies can claim a payable tax credit of 12% (increased from 11% with effect from 1 January 2018) of the enhanced deduction.

The increase in the tax rate for RDEC companies is the second since the scheme was introduced by the Government in April 2013. This rate increase is particularly prevalent for large companies, as the corporation tax rate has reduced to 19% with effect from 1 April 2017.

This increase in the RDEC rate will enable companies claiming under the RDEC scheme to invest more in qualifying expenditure. This is an encouraging measure although it should be noted that there was a desire from the SME community for their rate to be increased, in order to allow the benefit for tax paying companies to be on a par with the decreasing corporate tax rate.

Please note that the RDEC is a standalone credit that is brought into account as a receipt in calculating taxable profits.


It should be noted that claiming for R&D tax credits can be a difficult and time consuming task, as the legislation and reporting requirements are strenuous.

There are various aspects to an R&D claim that should be considered by prospective claimants:

  • Eligibility
  • Grants
  • Subcontracting Costs
  • Going Concern
  • Unpaid PAYE/NIC/VAT Liabilities

R&D reports must be submitted to HMRC in the correct format and match specific criteria that is outlined by HMRC guidance. If the report is not in the criteria that is outlined, you are at risk of submitting an inaccurate claim.

What does this mean for you?

According to the statistics released in 2017, there was a 19% increase in the total number of R&D tax credit claims made in the 2015/16 tax year.  The advantages of applying for R&D Tax Relief are significant and if you think you are eligible, please contact Campbell Dallas for further assistance.

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

0141 886 6644

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

Carillion liquidation – could you be affected?

January 16, 2018

On 15 January 2018, the court appointed the Official Receiver as liquidators of:

  • Carillion Plc
  • Carillion Construction Limited
  • Carillion Services Limited
  • Planned Maintenance Engineering Limited
  • Carillion Integrated Services Limited
  • Carillion Services 2006 Limited
  • Employees, customers and suppliers can visit a dedicated website page with further information.

If you think you may be affected by this, and as a result require advice or guidance, whether it be on how best to get in touch or deal with the liquidator, or if you think it may place you or your business in financial difficulty, please get in touch and our team will be able to provide the best advice to assist you.

Campbell Dallas Glasgow staff. Derek Forsyth.Derek Forsyth

Head of Business Recovery & Insolvency | 0141 886 6644


Blair_WebsiteBlair Milne

Partner, Business Recovery & Insolvency | 0141 886 6644

Making Tax Digital for rural businesses

January 15, 2018

As we approach the 31 January filing deadline for annual self-assessment tax returns, it is worth remembering that full implementation of the forthcoming Making Tax Digital (MTD) regime by HMRC will potentially mean the end of the annual tax return for millions of people.

The MTD vision set out by HMRC is to make the tax system for businesses operate much more closely to “real time” with quarterly reporting, as opposed to the current system of reporting information on tax returns and paying liabilities long after the end of the tax year. Due to various delays such as a lack of developed software capable of dealing with MTD on both sides and the snap general election in June 2017, the plans for the implementation of the MTD regime have been pushed back from the original timetable; some of the most difficult elements have been deferred until “at least” April 2020. MTD will radically change the administration of the UK tax system.

By way of a recap, under MTD most rural 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 and get more organised and into the habit of keeping proper books and records as they go along.

The idea of quarterly reporting is intended to provide HMRC with an accurate snapshot of the business trading performance, with summary details submitted throughout the year of turnover and expenses. However, without the usual accounting adjustments (accruals, prepayments, stock and tax allowances being amongst others) being added in to the mix; there is a real concern that the actual position will be very different in reality. The inclusion of quarterly stock figures in particular for farming businesses will be time consuming. The seasonal nature of farming means that quarterly updates are unlikely to provide meaningful business management information or figures from which a tax liability can be accurately estimated.

For rural businesses the poor internet connection speeds and lack of broadband infrastructure in rural areas have been cited as reasons for a phased introduction of the MTD plans.

The main initial focus is now on VAT only under MTD which will now be compulsory from April 2019 onward for all businesses above the VAT threshold of £85,000. If you have a VAT registered business and currently operate a manual bookkeeping system now is the time to consider moving to computerised records. It is also assumed that the previous announcements on MTD quarterly reporting for direct tax will largely remain in place from April 2020 onward. Further announcements on both are expected.

There is a temptation to put MTD to the back of our minds following the revised implementation timetable, however, change is on the horizon and businesses need to be digitally ready when the time comes. All rural businesses must now start to move over to a fully compliant digital record keeping system whether it is based on Cloud Accounting or desktop software applications. It will take several years to plan, design, implement and test new systems so that they are fit for purpose. Time is now of the essence as the countdown to MTD continues.

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 January 2018. Laws and tax rules may change in the future.

Why options might be the right option for your business

January 4, 2018

Recruitment and retention of staff is always an issue for businesses, and this is increasingly the case in a labour market with relatively low unemployment and where Brexit may cause further restrictions in the availability of staff. Indeed, the marginally higher tax cost to potential candidates of living in Scotland may also make it more difficult to recruit.

When you are looking for, say a new manager in your business, it can be difficult to identify quality candidates or to persuade them to move to your company.

Obviously paying a higher salary can be persuasive in these circumstances, but this has immediate financial implications in terms of the payroll cost (and also perhaps an increased fee payable to the recruitment consultant). Other soft benefits such as pension and health insurance can be considered, but again these have an immediate cost which will be suffered even if the new recruit proves to not be as high a performer as you had hoped for, or moves elsewhere for a higher salary in due course.

Share options are a way to help with recruitment and retention of key individuals, with the upfront cost being limited to professional fees. The most tax advantageous kind of share options are Enterprise Management Incentives (EMI). An EMI option scheme would enable you to offer a share in the business to potential recruits (or existing staff) such that they are keen to come and work with you (and stay with you for the long term) to grow the value of the company.

Options would generally be capable of exercise only on a future sale of the company. A value is agreed for the option, which will be at a discount to the value of the company. Imagine the company is worth £1m. Options could be given over 5% at a price of say £10,000. This value is agreed with HMRC in advance. If the company is then sold for £2m in future, the employee exercises their options, and then sells their shares. They would receive £100,000 (being 5% of £2m), less the £10,000 option price. They would pay tax at 10% on their gain. The current shareholder would receive £1.9m, which is £900,000 more than his or her shares were worth before taking on the new manager.

There is no tax to pay on the issue of the options, only on exercise, and so no need for the company to fund anything other than the professional fee cost.

Options can include performance conditions such that they can only be exercised if the employee hits certain performance targets. This would help to ensure that the growth in value in our example above is due (at least in part) to the performance of the manager rather than it being his or her good fortune to be employed at the time. They can also be structured such that the employee does not share in the historic value of the company.

If you would like to offer options to new recruits or to help retain and motivate existing staff, please speak to your Campbell Dallas contact who will refer you to a member of our Tax Consultancy Group team. The team have significant experience of agreeing valuations with HMRC and tailoring option schemes to suit the requirements of our clients.

0141 886 6644

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

Scottish Draft Budget 2018-2019

December 15, 2017

Scotland’s Finance Minister Derek Mackay announced Scotland’s Draft Budget 2018-2019 on 14 December. Within the Budget there were no surprises regarding Scottish income tax bands diverging from those across the rest of the UK, with several more bands added. Following on from the UK Government’s Stamp Duty announcements in November, Mackay also made some changes to the Scottish Land & Buildings Transaction Tax levels.

All of the announcements made are subject to Parliamentary approval over the next few weeks.

Read our updated Scottish & UK Budget summary here.

If you would like to discuss any of these matters please contact your usual Campbell Dallas advisor or call us on 0141 886 6644.

The information in this article should not be regarded as financial advice. This is based on our understanding in December 2017. Laws and tax rules may change in the future.

Find out about other updates on the Scottish Government’s website here.


Agricultural wages – rates and holiday entitlement

December 15, 2017

As the holiday year for agricultural employees is about to come to an end, employees need to have taken their full holiday entitlement by 31 December. Generally agricultural employees are not entitled to be paid extra for statutory holidays that they have not taken. The holiday entitlement varies depending on the number of days worked per week but for a standard five day week, an agricultural employee is entitled to 28 days holiday per year plus Christmas Day and New Year’s Day. If the number of days worked varies from week to week, the average number of days per week, over a 12 week period, will be used for the calculation.

The minimum hourly rate that each employee is entitled to depends on certain criteria. This rate is generally £7.50, however if an employer wishes to pay more than this rate, they can. Modern apprentices have a different rate and if employees are studying a Level 2 modern apprenticeship they are entitled to be paid a minimum of £4.14 per hour. This is only for the first 12 months of employment with the same employer and thereafter the minimum hourly rate goes up to £7.50.

The rate also varies if the employee holds certain agricultural or horticultural qualifications (SVQ Level 3, NC, HNC or HND) they are entitled to be paid an additional £1.14 per hour above the standard minimum of £7.50.  This increase also applies to employees who hold a Level 3 Modern Apprenticeship, issued by Lantra, but only if the employee has been with the same employer for more than 26 weeks.

For any hours worked as overtime, this is calculated by multiplying the overtime hours at a minimum rate of £11.25 (time and a half of the standard hourly minimum). The overtime hours are established depending on how long the employee has worked for the employer. For the first 26 weeks of employment, overtime will be calculated for any hours worked in excess of 8 hours per day or 48 hours per week. For employees who have been in the same employment for over 26 weeks overtime will be paid on any hours worked in excess of 8 hours per day or 39 hours per week. It is either paid because the hours worked exceed 8 hours per day or 39 hours for a week but not both.

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 December 2017.

Autumn Budget 2017 Highlights

November 24, 2017

Following the Chancellor’s Budget announcements on Wednesday, our experts have brought together some highlights as a summary of the key points that may affect you and your business.

Individual/personal taxes

  • Personal allowance – increased to £11,850 in April 2018 from £11,500 (England, Wales and NI only)
    • The response to this in the forthcoming Scottish Budget in December will be interesting. The Scottish Government is currently consulting on changes to income tax rates and bands, which are devolved to Holyrood.  Experience from last year suggests that the increase in the personal allowance may be mirrored, but the increase in the level at which higher rate tax is paid is less likely to be matched.  However, it may be that the Scottish Government does something more fundamental in this area – this is highly unlikely to be a tax cut, particularly for higher earners! Based on current tax rules Scottish tax payers earning a £60k salary will pay at least £600 more tax p.a. than their counterparts in the rest of the UK. This will also throw focus on to the difference between income which is taxed at devolved rates, and dividends which continue to be taxed at UK rates (along with capital gains).  A significant change may lead to taxpayers wanting to consider their structure, and in some cases residence.
  • Taxing gains on UK immovable propertyRow of houses_UK
    • The government announced that from April 2019 tax will be charged on gains made by non-residents on disposals of all types of UK real estate, extending existing rules that apply only to residential property. The measure will expand the tax base of both the corporation tax and capital gains tax regimes. Indirect disposal rules will apply in certain cases involving the sale of a ‘property rich’ entity. Properties will be rebased from April 2019 so that only gains accruing thereafter should be taxed under the new rules. This measure is intended to more closely align the tax treatment on non-resident owners of UK real estate with that of UK residents, and reduce the incentive to hold UK property through offshore structures, often in low tax or no tax jurisdictions. Although the core features of the provisions are stated to be fixed, a consultation was launched on Budget Day and comments are sought by 16 February 2018. Non-resident investors should consider the potential impact for them of this fundamental change.
  • Investment and growth
    • The government is concerned that companies should not be discouraged from seeking external investment because that would lead to the dilution of individual shareholders below the 5% threshold for entrepreneurs’ relief purposes. They will consult on a new mechanism to allow individuals to retain the benefit of the relief on gains accrued up to the point of the new investment.

Business taxes

  • R&D tax credits – being allocated a further £2.3 billion for investment in R&D and increasing the main R&D tax credit to 12%
    • This is a welcome increase in the credit which large companies can claim on qualifying expenditure from the current level of 11%.  Unfortunately, there does not seem to be a similar increase in the (admittedly more generous) provisions for SMEs.  The increase is effective for expenditure incurred on or after 1 January 2018, and so care will need to be taken by companies with a year end other than 31 December around this.  R&D can be claimed by companies which innovate, and is not limited to the more cutting edge hi-tech companies which the name perhaps suggests.  Companies which think they may benefit from the relief should speak to their Campbell Dallas contact.
  • Enterprise Investment Scheme (EIS) allowance doubled to £2mTeam coworking
    • This increase is only relevant where the amount above the current limit of £1m for individuals is invested in “knowledge intensive companies”.  This is a category of company created by previous changes to the EIS rules, and given certain preferential treatment at that time.  These companies will also now benefit from being able to receive an increased amount of EIS investment per annum of £10m.  There is also some relaxation in how “old” the company can be and still qualify for EIS status.  In order to be a knowledge intensive company there will be a number of tests, including some around the amount of costs incurred on R&D/innovation and the number of employees with higher education qualifications engaged in R&D.  The intention here is to enable these businesses to access more funds to grow from external investors.  The difficulty with such businesses for the UK economy is that they are often acquired by larger tech companies (often from the US) with deep pockets before they grow into large businesses in the UK.  How effective this measure is in dealing with the problem remains to be seen.
  • Corporation tax – remains at 19%
    • The main rate remains at 19% despite wide rumours of a cut to 15%.
  • Corporation tax – indexation allowance
    • For company held properties; indexation allowance is being frozen up to 1 January 2018. This measure is most likely to hit long term property investors who currently benefit from inflation based increases to the base cost of their investments on the ultimate disposal of their land and buildings.
  • North Sea oil and gas industry – corporation tax changes to encourage fresh investment North Sea Oil Rig
    • Where oilfields are transferred to new owners post 1 November 2018, the new owners will now be able to claim tax relief for costs of shutting down the oilfield, decommissioning and clean-up costs. This should make it more attractive to invest in older oilfields where there is still some remaining energy production capacity by passing the corporation tax history from the old to the new owners.
  • Income tax is being applied to royalties on UK sales paid to low tax jurisdictions from 2019
    • This is a measure targeted at multinationals who deliver digital content, and hold their intangibles in low tax regimes.  Withholding tax will be applied to the royalties paid on use of those intangibles insofar as they relate to UK sales.  The Government realises that this is something of a patch, and that further international cooperation and pressure is required in order to remedy the perceived avoidance by such companies.  They have set out a position paper to this effect, and state they will be looking to work with other jurisdictions to achieve this.
  • Employer tax – IR35
    • Off-payroll working rules for the public sector were reformed in April 2017. According to the Government, early indications suggest they believe public sector tax compliance is improving as a result and therefore a possible next step would be to extend the reforms to the private sector. Such measures are intended to counteract individuals who effectively work as employees even if they choose to structure their work through a company by taxing them as employees. A consultation will now take place in 2018. Extending the public sector rules to all companies is likely to increase the pressure on SMEs from a legal, operational and compliance perspective.

VAT/Indirect taxes

  • VAT threshold for small businesses frozen for two years at £85,000VAT
    • This could be a warning of a reduction of the threshold in two years’ time. 83% of those polled by VAT Partner Veronica Donnelly agreed this was an indication of exactly that.
  • Making Tax Digital (MTD) regime
    • There were no major announcements or changes to the proposed MTD regime which makes electronic record keeping mandatory for VAT from April 2019. A reduction in the VAT threshold at some point in late 2019 timed to coincide with widening the scope of MTD to smaller business seems highly likely.

If you would like to discuss any of these matters please contact your usual Campbell Dallas advisor or call us on 0141 886 6644.

View a copy of our Budget summary here.

The information in this article should not be regarded as financial advice. This is based on our understanding in November 2017. Laws and tax rules may change in the future.

How Minimum Unit Pricing could impact the drinks sector

November 17, 2017

This week the UK Supreme Court has backed the Scottish legislation to implement minimum unit pricing (“MUP”) for alcohol after a five year legal battle. The Health Secretary, Shona Robison, is now expected to confirm the timescales and the Scottish Government’s next steps. Before the new legislation can be put into place, a Business and Regulatory Impact Assessment is required by Parliament and a consultation on the proposed level of 50p for the MUP is expected.

But how will this new legislation affect a drinks sector business?

To assess this we need to understand why the Government chose to use MUP and what Scotland’s position is in relation to the rest of the UK.

What’s behind Minimum Unit Pricing?

The Government’s aim of introducing MUP and thereby increasing the cost of alcohol is to reduce excessive alcohol consumption and ultimately reduce alcohol-related health and social issues. A study by the University of Sheffield indicated that increasing the price of alcohol would significantly reduce the number of alcohol-related hospital admissions, and that MUP in particular would target the price of cheap alcohol sold in large volumes, commonly consumed by those with excessive drinking problems. Whilst an increase in VAT or duty on alcohol would also increase the total price; VAT increases would have a greater effect on more expensive alcohol (as opposed to large cheap quantities).

Alcohol duty has not been devolved to the Scottish Government and the creation of MUP could be an effective method to increase the costs of alcohol in an effort to reduce consumption. It should be noted that MUP is not a tax and therefore the benefit of any increase in price is retained within the drinks industry supply chain and/or retailers.

What’s the likely impact on a drinks sector business?

MUP could have a positive impact on the margin across the drinks industry supply chain for sales in Scotland, which is under significant pressure at the lower price point due to increasing duty and VAT charges. The increased price of drinks imposed by MUP will solely benefit the retailer/supply chain, and will not be returned to Government as VAT or duty charges. There will, however, be increased pressure on volumes and bottle sizes sold in Scotland and other countries that follow suit, as consumers are likely to favour smaller sizes in response to the price increase caused by MUP.

The impact of MUP is likely to vary significantly across businesses in the drinks industry depending on the distribution of potentially increased margins across the supply chain and the price point of products. The effects of the new legislation looks to be significant for products where prices are either directly affected by MUP or where prices are in excess of, but close to MUP for the product type. The introduction of MUP may have a fundamental impact on the positioning of those products, potentially resulting in a significant change in market share.

What’s the position of Scotland relative to the UK?

Scotland now stands as the first country in the UK to introduce MUP. England had previously considered MUP, however, in 2013 decided not to implement it but to keep it under review. Scotland, however, may have set a precedent for changes to come as MUP is also being considered in Wales and Northern Ireland, as well as in the Republic of Ireland. Following the UK Supreme Court ruling it will be interesting to see whether the UK Government will propose MUP for England and/or an increase on alcohol duty for the UK as a whole.

If there is a significant difference in pricing between the various UK regions there may be an element of cross border alcohol tourism – which would impact vendors closer to the English/Scottish border.

Campbell Dallas has a dedicated Brewing & Distilling team with extensive experience of business planning and operational/financial modelling in the drinks sector. We can assist you in providing key summaries across a range of scenarios to facilitate decision making and establish alternative plans.

If you are in the drinks industry, supply chain or retail, or have an interest in the impact of alcohol pricing and would like more information or assistance get in touch with me:

0141 886 6644

Harro is Corporate Finance Manager and a member of the Brewing & Distilling sector team at Campbell Dallas. He has recently been involved in the disposal of a family owned whisky distillery and has experience in commercial finance, fundraising and operational/financial modelling in the drinks industry.

The information in this blog should not be regarded as financial advice.  This is based on our understanding in November 2017. Laws and tax rules may change in the future.

Is your family business working for you?

November 14, 2017

Focus on direction & management and bottom-line performance

In the pursuit of prosperity, and for some, survival, the impact of strong direction and management on bottom line performance is evident. With commercial demands increasing at staggering pace, it is vital to empower management as a force for positive bottom-line impact in a business to:

  • Isolate the true and proportionate causes of any shortfall
  • Distinguish realities from theories
  • Rescue the controllable from the inevitable
  • Deny the background noise of ‘ the economy’ or ‘market’ taking control over future prosperity

How do you even know if your management team is delivering? Ask yourself some simple, key questions:

  • Are you on target?
  • Are you reaching potential and do you know what that potential is?
  • What’s stopping you reaching your potential?
  • Could it be your structure, leadership or management requires to be re-visited?

Performance management, applied in control analysis and action, constitutes one of the highest standards in management development, yielding some of the most dramatic results.

Examples include:

  • Sales results in customer spend and conversion;
  • Profit results in cost and added value
  • Business retention results in customers and sales
  • Human resource results in staff retention and development
  • Growth results in investment and innovation

Whatever your market, direction and management should remain top in the control stakes, since that control exists on the three levels of strategy, initiative and response. Even when it appears “external” factors are calling the shots, it falls on direction and management to set and review strategy, initiate contingencies, and respond to wider elements.

Such is the potential for management impact on total performance, assessing and appointing management, is effectively buying control analysis and action.

To empower direction and management you can get help with various tools including;  management planning models, board-level snapshot reviews, and fast track analysis and action projects.

Aim for management performance with impact and value … earning profit; agreeing a non-profit mission and purpose, providing employment, leaving a legacy, and reaching full potential.

Consider for your business, where interventions are called for to make direction and management a force for positive bottom-line impact and ensure that your family business is working for you.

Billy Andrew is a consultant at Family Business Solutions, who will be guest presenters at the next Campbell Dallas event for family businesses at our Stirling office on 22 November.

Please click here to register for this free event.

The information in this blog should not be regarded as financial advice.  This is based on our understanding in November 2017. Laws and tax rules may change in the future.

The Farmhouse: an asset worth treating right

November 3, 2017

The farmhouse is the centre of most things in a working farm.  At times it can be the office, home, canteen, workshop extension and boardroom.  For an accountant it can be a complex area covering many different areas of tax.  For farmers, understanding the different areas should help maximise savings and reduce tax where possible.

Income Tax

For sole traders and partnerships the running costs of the farmhouse will be an expense of the business.  These costs will normally be reflected in the annual accounts as expenditure or property improvements.  A private use proportion of expenditure will be disallowed in the income tax computation.  There is no statutory percentage, although the commonly accepted basis is two-thirds private, one-third business.  Different methods of apportionment can apply depending on circumstances, such as there being more than one farmhouse in a business.


Confusingly the VAT treatment of expenditure on the farmhouse differs from Income Tax.  Purchase or input VAT can be reclaimed on expenditure such as property repairs or improvement.  The maximum claim possible is 70% of the VAT.  There is no set percentage and the level of reclaim should be calculated on a “just and reasonable basis”.   For major renovations, expert help should be sought with a consistent and methodical approach used.

Annual Tax on Enveloped Dwelling (ATED)

Farmhouses owned by Limited Companies or a mixed partnership that includes a corporate entity should consider if ATED applies to them.  This legislation was brought in to target wealthy foreign owners of UK residential property, but has resulted in a form filling exercise for many.  It is only farmhouses with a value at 31 March 2017 greater than £500,000 that are caught.  A return must be completed claiming relief from ATED, however be careful of the rules.  In certain circumstances relief is not available, such as when the farmhouse is on separate title from the agricultural land.

Inheritance Tax

There are many tax cases and legislation concerning the farmhouse so a short article can only provide a few pointers.   Agricultural Property Relief (APR) is a relief from Inheritance Tax and assets qualifying will get either 100% or 50% relief.   The loss of APR on an asset can mean Inheritance Tax is payable at 40% on the death of the owner.

One common APR restriction is the farmhouse is not occupied for the purposes of agriculture at the point of gift or owner’s death.  Often changes are made with the best of intentions.  For example an elderly family member may retire from the partnership due to ill health or incapacity, but continue to reside in the farmhouse.  On the death of the owner the farmhouse is not being used for the purpose of agriculture, so it cannot qualify for APR.

Another concern is where the property owner leaves the farmhouse due to ill health.  The farmhouse is left empty with the family awaiting the possible return.  Where the farmhouse is empty for many months followed by the death of the owner a claim for APR can be denied.  HMRC can and will argue that the property was not occupied for the purpose of agriculture on the owner’s death.  This is where a good adviser can help the family put things in place to help protect the position.

Additional Dwelling Supplement (ADS)

The ownership of a farmhouse outright or even part ownership through a partnership will be counted as a residence for the purpose of ADS.  Where an owner purchases a second dwelling costing more than £40,000 the ADS is applied.  ADS is a 3% charge of the purchase price and is payable together with any Land and Business Transaction Tax due.

Capital Gains Tax

When a farmhouse is sold or gifted, Capital Gains Tax will apply.  This is another complex area with lots of opportunities to tax plan and get it wrong.  Where an owner has resided in the property there is normally no Capital Gains Tax liability as the property would be their principal private residence.  It is more complex where the property is owned by a partnership, but occupied by only one partner.

The above is only a brief summary of some basic tax and VAT points for the farmhouse.  Expert advice can help in most situations.  It is often too late once the tax or VAT enquiry commences or the death of a family member results in a large and unexpected Inheritance Tax bill.

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 November 2017. Laws and tax rules may change in the future.

Are you exit ready?

October 31, 2017

For entrepreneurs, selling a business successfully can be a significant life event. In addition to the sense of achievement this brings, realising value built up over years of hard work can provide them with the means to pursue other cherished business and personal goals. However, in our experience, that value can be eroded materially if exit readiness is not considered carefully at an early stage, being at least a full year before any potential sale.

Whilst this article focuses on tax considerations, early planning is essential more generally to identify and carry out any actions needed to ensure that the business is an attractive commercial proposition. As regards tax, the business’s own position can affect the price that a purchaser is willing to pay for it; whilst the holding structure and availability of tax reliefs can affect the amount of tax suffered by the sellers on that price.

Tax position of the business

Often, an exit is achieved by selling the company carrying on the business. In that case, the purchaser will wish to understand and investigate the company’s affairs. It will typically engage professional advisers to carry out due diligence on key areas, including tax. Where issues are identified, the price may be reduced or deferred in part until the matter is resolved with the tax authorities. Normally, the sellers will also have to give warranties and indemnities to protect the purchaser if further liabilities are discovered after the sale has completed.

We recommend that an early review is carried out to identify and resolve any such matters before the sales process begins. That assists in preserving value, simplifying the sale and presenting the business as well managed and controlled. The review should also consider the availability of any tax assets (e.g. tax losses, R&D tax relief or capital allowances) which may increase the value of the company.

Holding structure and availability of reliefs

 As far as possible, the business and the way it is owned should be structured to be tax efficient for the entrepreneur when the ultimate sale takes place.

In that regard, we encounter holding structures which would result in multiple layers of tax when returning sales proceeds to the ultimate owners. With early action, it can be possible to restructure and simplify the position to avoid unnecessary tax charges.

Tax reliefs have been introduced to incentivise the establishment and growth of new businesses. However, they are subject to detailed conditions and their availability should not be assumed without checking the position.

For instance, many business owners will be aware of Entrepreneurs’ Relief which, when available and claimed, provides for a lower 10% rate of capital gains tax, subject to a lifetime limit of £10m of qualifying gains. We have seen a number of cases where the expected relief would not in fact have been available because of a failure to satisfy the conditions relating to the owner, the shareholding and/or the company’s tax status. Since, typically, these conditions require to be met throughout the year before the sale takes place, it can be too late to rectify the position if this is identified during the sales process. However, if the sales process is deferred or aborted, value can be lost if economic conditions change before the business is sold at a later stage.

Given the above, we strongly recommend that exit readiness is considered at least a year, but preferably longer, before any potential sale and monitored thereafter. Whilst not all business owners will be working towards a clearly defined exit timetable, this should still be considered given the potential for an exit to be triggered by a change in plans or circumstances, such as an unsolicited approach.

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 October 2017.

Hungry buyers and tax fears driving business sales

October 24, 2017

I’ve been taking a look back at recent deal flow, up to and during the Summer, for clues as to what’s possibly driving the upturn in business sales that I am seeing across the board.

There has been a marked upturn in sales of businesses as business owners mindful that there may be changes to Entrepreneurs Relief, combined with a healthy pool of potential buyers looking to invest in Scottish companies are helping to maintain a strong market.

Interestingly, deal making remains buoyant despite the disruption that is likely as Britain enters Brexit negotiations. The short term prospect of Scottish independence would appear to be fading, so that is also probably a key factor encouraging strong demand from buyers to acquire businesses based in Scotland. Sectors drawing most interest of late have included business services and healthcare.

We are seeing a number of unsolicited approaches being made directly by buyers to business owners, which is another sign of a strong market. The buyers are both trade and mid-market PE houses, and are not just based in the UK, but also in Europe and the US, the latter helped by the fall in the value of Sterling. Buyers are doing their homework, will look to develop a relationship with the business owners, and are often willing to pay a premium for having exclusivity on the deal.

This is a healthy deals market, and business owners wanting to exit should really bring forward their plans, and invest time to ensure that their businesses are presented in the best light.   Entrepreneurs Relief remains with us, but a government review is underway, and for a Chancellor looking for cash at every turn, it could become a relic of corporate tax history.

Growing demand for strategic planning to drive growth and sales

There is a significant move towards strategic planning as boards and shareholders are increasingly investing in planning to improve performance and maximise the appeal of their business.

While the ultimate goal might be a business sale, the strategic planning process can also be used to ensure the business is ‘investor ready’ as well as generating better returns from trading.  However, becoming more ‘strategic’ can also create challenges for the owner managers as they grapple with cultural and organisational changes as the business grows and moves from being an owner managed SME into a small corporate.

These changes are an essential part of the business evolving to a more corporate structure run by a senior management team with the processes and infrastructure needed to take it to the next level. Becoming more investor attractive does not mean being less entrepreneurial, it just means the entrepreneur is being supported in all the key areas that need addressing in a growing business.

The MBO is looking good as PE houses hunt deals

Looking ahead for the next few months into early 2018 we are likely to see more management buyout (MBO) activity. This is going to be driven by PE houses like Maven, NVM, YFM, and Mobeus, who have all recently raised buyout funds as a result of recent rule changes, which meant VCT funds could no longer be used to invest in MBOs.

The buyout funds are now in place and these PE houses are out looking for new opportunities, actively marketing themselves, meeting companies and seeking to back entrepreneurial management teams with their funds and expertise.

Happily Oil and Gas is showing some early signs of recovery, but transactions in this sector are challenging to progress and complete. A sharp upturn in the sector is highly unlikely, rather a more gradual improvement in M&A is more likely.

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 October 2017.

Campbell Dallas Joins the Baldwins Group

October 3, 2017

Scottish accountancy firm Campbell Dallas has joined Baldwins, a market leading accounting, tax and advisory firm which is part of the CogitalGroup, an international business services group. Since the launch of CogitalGroup in December last year the group has been growing rapidly.

The deal will see all Campbell Dallas partners transfer across to Baldwins and the Campbell Dallas trading name will be retained.

Campbell Dallas Managing Partner Chris Horne said; “Joining Baldwins will allow us to increase our investment in the business, in particular technology, and continue to grow our market share. We are firmly focused on the owner managed business and entrepreneurial market, which is also the area of focus for Baldwins and the wider CogitalGroup, so there is a great deal of common ground in terms of strategy and culture.

“Going forward it will be very much ‘business as usual’ and we remain firmly committed to our four guiding principles for managing the business – happy staff, quality advice and service, happy clients and financial strength, but with our business now enhanced by the scale, investment capacity and specialisations within Baldwins and the CogitalGroup and the added benefits of being part of an international group.”

David Baldwin, a director at Baldwins, added; “Joining forces with Campbell Dallas will lead to further growth for both businesses. We are delighted to welcome Campbell Dallas to the Group. Campbell Dallas is widely regarded for its focus on the SME sector, and is an entrepreneurial, growth-oriented business.  We very much look forward to working together to grow the newly enlarged business”.

Reducing construction waste in your business with Zero Waste Scotland

September 21, 2017

With the UK government supporting over £500 billion in infrastructure projects, with half to be completed before 2020, there is more pressure than ever on the construction sector to deliver.

This pressure is increased due to constraints in labour, resources, and compliance for small and medium enterprises (SMEs). Additionally, the Asian infrastructure market is set to expand at an even faster rate, making resources for construction use volatile in both price and availability. The Construction Products Association have reported that 88% of contractors and manufacturers have seen price rises in the past year alone for construction products in the UK. As price becomes more volatile and resources become scarce, UK SMEs need a way to reduce their exposure, future proof their business and continue to meet client expectations.

Reducing material waste and integrating this with project management is becoming a focal point of many in the construction sector to help alleviate this pressure. The construction sector is the largest consumer of resources, making up 50% of Scotland’s total waste – 15% of raw materials end up in the skip, and many in landfill.

Managing the waste from an infrastructure project starts early on in the process, with emphasis on design responsibility. However, waste management spreads out over the entire construction value chain, all the way to on-site construction. For many SMEs, time pressures, uncertainty of cost savings, and access to finance understandably prevent businesses from reducing material costs on their own.

To allow SMEs to explore waste management solutions, Zero Waste Scotland (supported by the Scottish Government) have outlined support for construction businesses; ranging from direct impartial technical advice, tools and guides, and financial support with funds and loans.

For more information, or to find out what support is available for your business, contact Zero Waste Scotland:
0808 808 2268

The information in this blog has been supplied by Beyond Green in September 2017. It should be viewed as general guidance only and is not intended to replace professional advice.

Campbell Dallas turnover rises 17% to £14m

September 15, 2017

Independent accountancy firm Campbell Dallas has reported a marked increase in turnover of £14m for the year end to May 2017, a 17% uplift on 2016 (£11.9m), and over 40% increase on 2012 (£9.7m).

Managing Partner Chris Horne said that the growth was in line with expectations as the business continued to work to a five-year growth plan, commenting:

Chris Horne, Managing Partner “We have continued to invest strongly to maintain a high-quality working environment for our colleagues who continue to deliver outstanding service to our clients.  We have four guiding principles for managing the business – happy staff, quality advice and service, happy clients and financial strength.  These core principles underpin, and are driving our strong financial and business performance.  It is very encouraging that over 80% of our growth has been organic.  The acquisitions should make a very positive impact next year.”

During the last year, Campbell Dallas acquired Kilmarnock-based White & Co and most recently in July, Perth-based Bell & Company joined the business.  Bell & Company was a long established and well respected local firm and their agricultural and rural expertise enhances Campbell Dallas’ strength in that sector.

The last year saw strong performances by the Corporate Finance, Restructuring, Tax and Family Business units, with the firm involved in a growing number of high profile deals and new business wins.

The last year also saw Campbell Dallas invest nearly £2m in its IT systems, offices and development of staff, including a £500k commitment to the recruitment and training of apprentices, a programme that has attracted considerable praise from the business and political communities.  The firm also maintained its commitment to sustainability and community by acquiring electric pool cars for staff use, installing solar panels and by raising £50,000 through the Campbell Dallas Foundation, which encourages staff to raise funds and volunteer for their preferred local causes.

Chris Horne added: “We were very pleased to be voted ‘Firm of the Year’ at the Scottish Accountancy & Finance Awards for the third successive year.  We have made significant progress developing the business and creating an exciting and rewarding environment for our staff.  The next five years hold great promise for Campbell Dallas as we look to expand our client base and reach across Scotland.”

The Debt Arrangement Scheme – If Carlsberg did payment plans!

September 12, 2017

Following the Bank of England’s warning that consumer borrowing over the last year has been soaring, and lenders face action for irresponsible lending, there is a growing risk of a tsunami of consumer indebtedness once again sweeping across the UK.  Unsustainable debt causes major problems and misery for individuals and their families, and is a costly burden to society.

Everyone is better off if bankruptcy can be avoided.  We consider an effective debt management solution – the Debt Arrangement Scheme (DAS) – that could provide help to many more people looking to find a way out of their debt problems.

The Debt Arrangement Scheme, which is implemented via a Debt Repayment Programme, may be the answer for those who aren’t necessarily insolvent but who need some breathing space when it comes to their debts.

DAS is a statutory, government backed scheme which if approved, protects debtors from their creditors by taking action for recovery of the debt, whilst also freezing interest and charges.  It affords those in debt a reasonable period to repay their debts back in full.

In some cases, those who are unable to meet their monthly contractual obligations jump feet first into insolvency, just to get the creditors off their back, stop the constant phone calls and sometimes, the astronomical interest that is applied.  Consumers get trapped in a debt cycle, paying minimum payments that often only cover the interest on the loan.  This is never a good move.

Any debt advisor knows that they must provide anyone who approaches them with the best advice for their individual circumstances and in some cases, insolvency is not always the most appropriate.

DAS is a statutory repayment programme therefore assets are not considered, so property and other assets, such as a car or furniture, are protected.  Campbell Dallas always ensures that each person who approaches us for advice is aware of ALL their options and given the information they require in order to make an informed choice.

DAS is recognised as a statutory scheme across Scotland, and most of the larger creditors such as banks, HMRC and councils have dedicated teams who deal with those customers taking part in the scheme.

Most people have heard of bankruptcy however in most cases, those in debt decide to struggle on, fearing insolvency is their only other option.  They worry about losing their home or their jobs, and are unaware of DAS because it is never explained to them.

There are 2 types of DAS products available, DAS and Business DAS.

An individual DAS helps individuals, couples, sole traders and the self-employed whereas Business DAS helps partnerships, trusts or unincorporated bodies.

How does it work?

  • You must seek money advice from a DAS approved money advisor, like ourselves.
  • Your surplus income is worked out using the Common Financial Tool, which is used to assess household income and expenditure across all statutory debt solutions in Scotland.
  • Your creditors are given time to consider the proposal.
  • Interest and charges are frozen as long as the programme is approved.
  • You pay what you can reasonably afford to a Payment Distributor each month and they pay it to your creditors on a pro rata basis.
  • Your plan will last until all creditors have been paid in full, however this must be within a reasonable timescale, usually no more than 5 years for Business DAS and 10 years for DAS.

Nicola Standen is a Manager and adviser in the Personal Debt team at Campbell Dallas.  She can be contacted at:

For more information on personal debt solutions provided by Campbell Dallas go to

The information in this blog should not be regarded as financial advice.  This is based on our understanding in September 2017. Laws and tax rules may change.

Is self-employment right for you?

September 11, 2017

The recent Taylor review into working and employment practices has put the spotlight on the growing number of self-employed workers in the UK.  While much of the focus has been on the reduced job protection and lack of employment rights faced by the self-employed, there are also important benefits for those who take this path.

Business Expenses

If you are self-employed you can deduct expenses from your business income for example, travel, telephone, insurance, use of home as office and employment costs.  You may also be entitled to capital allowances on eligible capital expenditure and interest on loans taken out to finance the business.

In contrast, employees can only deduct work-related expenses when they are wholly, exclusively and necessarily incurred in the performance of their employment – usually limited to business travel and professional subscriptions.

National Insurance (NI)

Highlighted by the Chancellor’s abortive attempt to raise Class 4 National Insurance, there is a discrepancy between the amount of NI paid by the self-employed and employed.  The self-employed currently pay weekly Class 2 NI of £2.85 and Class 4 NI at 9% on profits between £8,164 and £45,000 and 2% on profits above this.

However, the employed pay Class 1 NI at the higher-rate of 12% between £8,160 and £45,000 (2% above this).  The employer also pays Class 1 secondary NI at 13.8% which increases their wage bill and feasibly decreases the amount payable to the employee.

Following Philip Hammond’s U-turn and given the current minority government, it appears attempts to equalise the amount of NI paid by the employed and self-employed are on the back-burner for now.

Tax Compliance

A disadvantage of self-employment is the administrative burden of keeping business records, submitting accounts and tax returns alongside the associated cost of professional advisers.

Being self-employed can also result in the need to register for VAT if you make taxable supplies exceeding £85,000 per year.  VAT returns need to be submitted and amounts due paid to HMRC quarterly.

From a cash flow perspective you will pay income tax annually on 31 January and 31 July rather than have tax deducted at source under PAYE.  This can be advantageous from a cash flow perspective however you will need to ensure enough is set aside to pay the tax when due.

Loss of Employment Rights versus Flexibility

Another important consideration is the trade-off between the flexibility of choosing how and when you work against losing access to employment rights; particularly the rights to statutory sick or maternity/paternity pay.

By going alone you gain the ability to maximise your income and grow your business and can potentially employ family members to pay a wage utilising their personal allowance and reducing your taxable income.  Conversely, you lose access to colleagues’ expertise you may have had and are also at greater risk, for example of being sued personally if you carry-out defective work.

Whether self-employment is the best option for you, will depend on your personal circumstances and future intentions and should be discussed with a professional tax adviser.

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

0141 886 6644

The information in this blog should not be regarded as financial advice.  This is based on our understanding in September 2017. Laws and tax rules may change.

VAT explained: farmhouse expenditure and fuel scale charges

September 8, 2017

It has been agreed by HM Revenue & Customs (HMRC) for several years now, to allow 70% of input VAT to be reclaimed on expenditure related to a farmhouse provided the following conditions are met:

  • The property must be a typical working farmhouse
  • The business must be that of a full-time farming activity
  • The work done must be in repair and/or maintenance of the farmhouse

Where farming is not the full-time activity of the business, or the farmhouse would be considered primarily a family home rather than a working farmhouse, the 70% allowance would not be applicable.

Where this could be misconstrued is when the work done is deemed to be an alteration, extension or improvement in nature, and HMRC would review these circumstances on a case by case basis. In the majority of such cases, HMRC would generally not allow the business to reclaim more than 40% of the VAT on the expenditure. For example, if there is work done to extend a property, and the extension created office space which would otherwise not be available for the farming business, the 70% VAT reclaim would be considered appropriate. However if the extension created additional bedrooms and hence no additional benefits for the farming business, the percentage of VAT that could be reclaimed is likely to be low.

The same rules apply for farm cottages as long as these are occupied by someone who works at the farming business full-time and the occupier is not charged rent for living there. If a cottage is part-owned by a full-time worker, there will be restrictions on the amount of VAT you are able to reclaim, which would again likely be treated on a case by case basis.

VAT Fuel Scale Charges

VAT Fuel Scale Charges (FSC) are used to work out how much VAT on fuel you should pay back if you use a business car for private purposes. This excludes commercial vehicles, such as pick ups, where the VAT can usually be reclaimed in full. If using the FSC, you should reclaim the VAT on all fuel purchases and put the FSC adjustment through on each VAT return period.

The FSC is calculated based on the CO2 emissions of your vehicle and you can generate your FSC here. It will take you through three short questions:

  • Which period do you want to calculate the FSC for? (e.g. 2016/17, 2017/18)
  • What accounting period would you like to calculate it for? (e.g. monthly or quarterly depending on the frequency of your VAT returns)
  • What is your car’s CO2 emissions band? (This is found in your vehicle log book or can be checked online here )

The FSC is generated and it is the VAT element which should be used as the overall adjustment. You should increase box 1 on your VAT return by the VAT amount and box 6 by the ‘basic charge’. This may have to be a manual adjustment, or if you have an accounting package there may be a function you can use to post the adjustment. In accounting terms, your motor expenses increase by the VAT element of the FSC.

However, you should always assess whether it is worthwhile to put through the FSC. For example, if the VAT being reclaimed on fuel each VAT period is less than the VAT charged on the FSC itself, it would not be beneficial to use, and you should instead not reclaim any of the VAT on the fuel purchased.

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 September 2017. Laws and tax rules may change.

Partner Aileen Gates wins Women’s Award

September 1, 2017

At the inaugural Scottish Women’s Awards held on Wednesday 30 August, Partner and Head of Tax Aileen Gates won the Women’s Award for services to Accountancy and Finance.

The purpose of the awards is to acknowledge and celebrate the achievements of women across all sectors in Scotland. At a black tie event at the Crowne Plaza in Glasgow, the finalists were celebrated for their amazing breadth of talent, dedication, hard work and success across the country.

Open nominations were received from the public to draw up a finalist list, with winners announced on the night.

Guests at the event commented on the inspirational night for women and the huge array of talent represented in one room.

Accepting her award, Aileen explained she had taken a table of ‘strong women and rising stars’ at Campbell Dallas to motivate and inspire women across the profession and highlighted that Campbell Dallas provides a flexible and supportive working environment for all staff that enables talent to flourish.

Aileen Gates is a Partner and also heads up the firm’s Tax Consultancy Group. She has a background in law and qualified with the Chartered Institute of Tax. Aileen provides bespoke solutions for many Campbell Dallas clients. She is a regular columnist for Business Women Scotland advising on business issues across the sectors and is a regular speaker at conferences and events.