How to use property and business premises to build a healthy pension pot

How to use property and business premises to build a healthy pension pot

22.6.2022 | Tax

How to use property & business premises to build a healthy pension pot

Head of taxation at Beatons, Andrew Diver, gives his advice on two efficient ways of preparing your finances for retirement years.

Pension planning can be an overwhelming thought, and many people may take a ‘hope for the best’ attitude towards ensuring they will have adequate income in later life. Some will have ‘pension pots’, which could be standard pension accounts or might be property or similar.

But do you have a plan for your retirement years, and are you aware of how to manage your pension investments?

Property as a pension fund

Many people still remember the headlines of pension fund failures such as Equitable Life and the Mirror Group, when owner Robert Maxwell looted cash from the company’s pension fund.

As a result, not everyone trusts their money to a pension fund, preferring to invest more directly into assets such as property, where they can more directly improve its value through property improvements.

Residential Property can be a good investment but cannot be held directly within a pension fund. Whilst Beatons cannot provide investment advice, it is interesting to note that in general terms, share prices (represented by FTSE 100) and UK house prices have, since 2015, broadly kept pace with each other; however, there is more volatility in shares.

That doesn’t mean there aren’t drawbacks to investing in property, and investors should be mindful of the additional tax costs associated with doing so.

Tips for choosing the property as part of a retirement saving plan

Tip 1:  Consider who is going to be the beneficial owner of any property? Is it more tax efficient in terms of tax on rental income and capital gains, for it to be held jointly or solely by a spouse?

Rental income can also have the effect of reducing the level of personal allowances or result in the clawback of child benefits, for example.

Tip 2: If you have a high rate of income tax and high mortgage interest payments you might wish to consider transferring properties into a limited company as there are no restrictions on the extent to which mortgage interest can be set against rental income.

Tip 3: Keep a surplus of cash if you invest in property to meet any immediate needs. Properties can take time to sell and turn into cash and there are costs associated with selling (legal fees, estate agents etc).  You may also be required to pay capital gains tax. This tax would be due within sixty days if you are selling a residential property.

Tip 4: If you have surplus buy-to-let properties you might consider transferring these into a trust which can prevent capital gains tax charges and potentially prevent inheritance tax being payable on the property in the event of your death.

Beatons can advise on any matters related to property as a pension fund.

Turning business premises into pension funds

One of the most tax-efficient ways for owners of limited companies to operate is for the business premises to be held in a pension fund.

Tax-free growth
If the company was the original owner, the proceeds can be paid from a pension fund into the business to help cash flow.  As the property increases in value, it benefits from the tax-free environment that the pension offers.

Increased payments into the pension fund

The company could then make rental payments for the premises which would go into the pension fund.  This enables the company to effectively contribute more to the pension fund each year than simply the £40,000 annual pension allowance (or a lower tapered amount for higher earners).

Another element of considering business premises as a pension fund is that the fund can also borrow up to 50% of the purchase price, to purchase property (subject to lenders’ criteria and trustees’ agreement). Therefore, it may be possible to purchase the company business premises even if there are currently insufficient funds in the pension scheme.

Having the business property in a pension fund can have multiple benefits.  Removing the company premises from the company balance sheet removes it from the commercial risk of business. It also enables the company to reduce the value of its asset (through additional dividends) which can then reduce the value of shares to be offered to employees.  Additionally, it can allow a more efficient sale of the business, as separate from the premises the business will be more affordable for a potential purchaser or alternatively, it enables a substantial tax-free sum to be paid into the pension fund.

Andrew Diver says: “Planning for your pension is important, especially at the moment as the cost-of-living soars and the tendency might be to focus on immediate finances. This is understandable but could leave many people paying the price later on. Instead, it’s a good idea to seek advice as pension planning can throw up many questions, particularly if you are dealing with any of the above situations. Beatons can advise on all of these subjects as well as anything else related to pensions, tax and all accounting queries.”

For more information, please contact info@beatons.co.uk 01473 659777

Container haulage specialist appoints Financial Controller

Container haulage specialist appoints Financial Controller

22.6.2022 | Haulage

Container haulage specialist appoints Financial Controller

Katrina Howieson joins VKVP Haulage’s senior management team.

VKVP Haulage has appointed Katrina Howieson as its new financial controller, effective immediately, continuing to fulfil its strategic vision for the company.

Responsible for managing the company’s finance team, its processes and reporting structures, Katrina has over 17 years of experience and works directly with VKVP’s senior management to further develop the business.

Mark Bennett, operations director at VKVP, comments: “Katrina is a real asset to our team and her experience working across a range of industries, including IT, construction, and of course shipping, enables her to bring a broader financial perspective to our operations.”

Katrina says: “I have joined VKVP Haulage at an exciting time; the business has an established position in the industry and is continuing to grow. Everyone at VKVP has a great can-do attitude and enthusiasm to move forward.  

“I’m looking forward to improving the business’s long and short-term growth strategies and supporting the directors who want to see efficiencies from a strong finance function.”

 Year-on-year growth has also seen VKVP Haulage progress its equipment investment programme, with new vehicles and trailers scheduled to join the fleet later this year.

 To find out more about VKVP Haulage, visit: vkvp-haulage.co.uk

CILT and LOGISTICS UK launch unique Government-backed campaign, Generation Logistics

CILT and LOGISTICS UK launch unique Government-backed campaign, Generation Logistics

22.6.2022 | Logistics

CILT & LOGISTICS UK launch unique government-backed campaign, Generation Logistics

Initiative aims to attract, identify and develop a new and diverse generation of talent to fill industry-wide vacancies  and future-proof the sector.

The logistics industry has taken a decisive step to address the industry’s long-term recruitment and staff retention issues with the launch last week of a major new awareness and recruitment campaign, Generation Logistics. Co-ordinated by the Chartered Institute of Logistics and Transport (CILT) and Logistics UK, in partnership with the Department for Transport, the campaign has already gained significant support and sponsorship from a wide range of businesses of all sizes from across the logistics industry.

By shining a spotlight on the skilled, complex nature of the UK’s interconnected logistics industry, as Phil Roe, President of Logistics UK, explains, the campaign aims to attract, identify and develop a new and diverse generation of talent to fill vacancies industry-wide and future-proof the sector:

“Generation Logistics will provide our industry with the capability to attract and retain the skilled and ambitious workforce it needs as our role in society continues to flourish,” he explains. “After the recognition of our workforce as key workers during the COVID-19 pandemic, it is critical that we protect and enhance our talent pool to keep our sector developing and thriving to support all sectors of the economy; Generation Logistics will give us the opportunity to do just that, by attracting and retaining the very best talent from across the country.”

The Secretary of State for Transport, Grant Shapps MP, is delighted that the government is supporting the campaign: “I am proud to confirm government support for the Generation Logistics campaign. The pandemic has once again demonstrated the strategic importance of supply chains and their associated workers. Their work to keep the UK moving was exemplary, and I have nothing but admiration for those unsung heroes who keep the UK trading, keep food on our shelves and provide our factories, shops, hospitals and schools with the supplies they need. Logistics workers make a substantial difference to our lives, every day.

“However, we have a new challenge facing us as we look to the future of freight. We need to attract a diverse and skilled workforce to play a key part in a new, exciting era transforming an industry at the forefront of innovation and technology. There are thousands of logistics roles available to people from all backgrounds, experience and skills. This campaign will showcase those opportunities in artificial intelligence, advanced robotics, autonomous vehicles and the decarbonisation of the supply chain. This industry campaign is integral to not only supporting the growth of this vital sector but also ensuring we have the workforce needed for now and the future.”

Sharon Kindleysides, Chief Executive of CILT, comments: “Generation Logistics brings together operational logistics organisations, government, CILT (UK), Logistics UK and sector trade bodies to create and support a campaign that will raise the positive profile of the sector and inform and attract the resources and talent that we need to meet the future demands that will be placed on us. The sector has been recognised as critical infrastructure over recent years, and Generation Logistics will highlight the huge range of roles and career development opportunities that are available at all levels and across all modes and activities.”

In addition to a comprehensive web portal containing careers advice and guidance, features, video content, jobs and news, the campaign will focus on a number of key demographic areas, all of which could be inclined towards taking up a role in logistics. As Roe continues, it is critical that as many people are made aware of the opportunities available to them as possible:

“Before the pandemic, logistics was a largely hidden industry, yet acted as a vital cog in the wheel of our interconnected economy. It is vital that our sector now takes advantage of its new-found awareness to highlight the complexity and technological developments involved in moving goods to their destinations, to encourage new recruits into our industry and protect our supply chain. We often say logistics is the country’s ‘hidden secret’ – Generation Logistics is the campaign which will challenge that perception and bring the sector to the forefront of people’s minds, as a forward-thinking, fast-paced modern industry with much to offer today’s employees, as well as the workforce of tomorrow.”

Last week’s industry launch took place at Multimodal at the NEC in Birmingham, where Trudy Harrison MP, Under- Secretary of State for Transport, met some of the campaign’s sponsors and took part in a round table to debate the issues facing logistics recruiters today. And while the launch of the campaign to consumers is set for 26 July 2022, there is still time to get involved as a sponsor, as Ms Kindleysides confirms:

“The sector has really stood up to the challenge of funding an industry-wide campaign like this, and we are so grateful for the support we have received thus far, alongside, of course, vital government funding. But alongside commercial sponsors and other industry bodies, we still have scope for more sponsors to get on board and take advantage of the awareness that Generation Logistics will create. To find out more about becoming a sponsor and the benefits on offer, please visit Generation Logistics.

Image, L-R: Phil Roe, President, Logistics UK; David Browne, General Manager, Maersk; Maggie Simpson OBE, Director General, Rail Freight Group; Trudy Harrison MP, Parliamentary Under-Secretary of State, Department for Transport; Paul Farr, Managing Director – Ground & Rail, CEVA Logistics and Paul Durkin, Chief Customer & Innovation Officer, Wincanton.

Change to safety and security declarations announced

Change to safety and security declarations announced

21.6.2022 | Customs

Change to safety and security declarations announced

Government announces raft of customs easements to support industry and improve flow at UK borders.

Traders, hauliers and carriers are set to benefit from four Safety & Security (S&S) facilitations, which will come into force from 1st July 2022 for EU and the rest of world trade.

The facilitations are as follows:

  • Making S&S Movement Reference Numbers (MRNs) optional in the Goods Vehicle Movement Service (GVMS), for both imports and exports
  • Removal of S&S requirements on outbound inter-port transhipments (when moved under transit and a single transport contract)
  • Removal of S&S requirements on Merchandise in Baggage, for both imports and exports
  • As part of the package of easements, empty units exported under a transport contract will no longer be required to complete S&S declarations

Removing the need for S&S declarations (also known as Exit Summary or EXS declarations) will reduce the burden on hauliers and carriers, allowing empty containers, pallets and vehicles to move more quickly and efficiently.

Also from 1st July 2022, carriers can complete inputs into the GVMS without entering any S&S declaration reference numbers. Including the S&S declaration reference number has previously been encouraged, and this remains an option; however, users now can complete the form without it if they choose to.

For the latest guidance please contact BIFA.

Ask your MP to press the Chancellor for a fuel duty rebate

Ask your MP to press the Chancellor for a fuel duty rebate

21.6.2022 | Haulage

Ask your MP to press the Chancellor for a fuel duty rebate

The RHA is calling on the Chancellor for a 15ppl fuel duty rebate for hauliers and coach operators. 

The Association is pressing the Treasury hard for this measure, to bring down rising operating costs, reduce inflationary pressures and boost the economy. Similar to schemes in several European countries and supported by a number of MPs. But it needs to get more parliamentarians on its side to help win the argument, so they’re asking you to help.

The RHA has produced a template email on its Contact your MP website, making a case for a 15ppl ‘essential user rebate’, which they urge you to send to your MP.

It would be helpful if you could add your own perspective on cost pressures and how a fuel duty rebate could make a difference to your business and beyond.

How it works

Click on this link and type in your postcode (this can be your home address or business address).

It will take you to the template page, where your MP’s details will be automatically populated.

Add your perspective to the message (feel free to amend as much as you want).

Press send.

If you live in a different constituency from where your business is based, feel free to send it to both MPs. The second time, you’ll need to go back to the landing page and type in the other postcode.