… to all clients and friends of Drummond Laurie. I hope that 2020 is a happy, healthy and prosperous one for everyone.
As we entered last year we were counting down to a Brexit Day on 31st March 2019 after 2½ years of tortuous discussions and negotiations. Here we are a year later and after what surely [hopefully!!] was the most tortuous year yet, and we finally are within sight of the finishing line at the end of January when the UK will eventually leave the EU. Of course, this is not the end of the Brexit story and we now face a year of negotiating a future trade agreement with the EU. It is expected that with a sizeable and workable majority in parliament the UK Government will now have the negotiating powers to fast track this process and ensure that we do not end up in a “no deal” situation in a year’s time.
Aside from the political landscape, 2019 was the year in which Making Tax Digital [MTD] finally arrived after several years of build-up and a few false starts. All VAT registered businesses have now implemented MTD and it is fair to say that within our client base at least, the process has been managed in a controlled and sensible way. At Drummond Laurie we embraced the initiative and proactively guided our clients through the process, thanks to our Julie McVicar for her tireless work on this area. Of course, VAT is only the beginning and we await word from HMRC on the timetable for rolling MTD out to other taxes.
2019 also saw the increase in Pension Auto-enrolment contributions to their current and final [for now] levels of 3% for employers and 5% for employees. All employers have now enrolled and indeed, many have already been through the triennial re-enrolment process. In our experience, the opt-out rates have been lower than may have been expected which is encouraging and suggests that the big majority of people are taking seriously the matter of providing for their wellbeing in retirement. Once again, Drummond Laurie have been at the forefront of guiding our clients through what can be a complex process and ensured that they always comply with the rules set by the Pension Regulator.
The last 12 months has also seen the gulf in the levels of tax paid by people in Scotland diverge even further from those paid by everyone else in the UK. Whilst the difference at this stage may not be of a size to result in high earners relocating south of the border, they are certainly of a size to influence the location of people looking to set up a business in the UK or the location of people coming to the UK. This should be a real concern to those of us living in Scotland as it is clear that we need to attract more taxpayers to come to our country. Despite a huge volume of evidence which demonstrates that lower tax rates result in higher tax revenues, the Scottish government seem set on going in the opposite direction. As the U.K. moves towards lower taxes it will be interesting to see how long the Scottish taxpayers are prepared to accept this situation.
So what should we be focussing on as we enter a new year? As always, we would encourage you to ensure that you have your business plans clearly set out for the 12 months ahead [as a minimum]. Do you have appropriate funding in place to support your plans? Are there opportunities to squeeze more cash from your existing working capital? Do you have a clear picture of where your turnover is going to come from in the coming year? Are you investing time and resource in developing the next products, processes, etc. which will keep you at the forefront in your field? We are all aware of the saying “To Fail to Prepare is to Prepare to Fail”. At Drummond Laurie we work with many of our clients to ensure that these critical matters are under constant review and so avoid falling into this “failure trap”.
As always, our team at Drummond Laurie stand ready to provide advice and guidance on all of the above and the many more challenges which will lie ahead of us in the coming year. Please do not hesitate to contact us to discuss these at any time.