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Press Release: AD VALOREM ENHANCE SECURITY WITH DUO MFA IMPLEMENTATION 

At Ad Valorem, our team are committed to providing innovative solutions, bespoke financial advice, and first-class customer service. Over the last 18 years, our strive for continuous improvement has resulted in our investment in industry-leading technologies in order to provide the best collaborative experience possible – both for our team and our clients.

As a leading and trusted accountancy practise in the UK, we know that the security of our business is of critical importance in order to safeguard our client’s data – and in today’s increasingly hostile online environment, that means securing our network and infrastructure with a strong Multi-Factor Authentication (MFA) solution in order to protect vital business assets, valuable data and distributed devices. 

As such, we recently sought the services of our long-term IT provider 10-100 Consultancy to implement the market-leading MFA solution from Cisco’s Duo, in order to further enhance our IT security, and safeguard our users, devices, and applications.

What does implementing Duo Multi-Factor Authentication mean for our business?

Through implementing Duo MFA on all of our external facing systems, our business now has a multi-layered approach to cyber-security, effectively combining passwords and biometrics for device verification and mitigating the risk of data breaches and cyber-attacks on all user devices. On completion of the project, 10-100 will provide ongoing support to ensure successful user adoption throughout our team and continued productivity – delivered with zero downtime to our business.

Chris Kay, Technical Director at 10-100 Consultancy said, “With the ever-increasing prevalence of phishing attacks, it is now considered best practice to ensure that all systems which are accessible from the internet are protected by a 3rd form of authentication, over and above a username and password. By implementing Duo MFA, Ad Valorem have ensured that all their systems are effectively immune from phishing attacks.”By employing this security best practise, our team have committed to improving not just our cyber-security posture, but the user experience as well – bringing traditional accountancy into the digital age and modernising our technical solutions.

If you have any questions regarding the above please do not hesitate to contact us:

(E) enquiries@advaloremgroup.uk or (T) 01908 219100 (W) advaloremgroup.uk  

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As part of our 20th Anniversary Celebrations we wanted to share some of our amazing team with you, providing their insight into working at Ad Valorem over the years. Here is our Head of Operations, Alex Combes!

Click the play button to watch the video

(E) enquiries@advaloremgroup.uk or (T) 01908 219100 (W) advaloremgroup.uk  

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As the famous Beatles song says… ‘it was twenty years ago today’ that I took the leap from a stable well-paid job into the uncertain world of being a business owner!

I set the stall early by trying to fix the obvious issues that I saw with accountancy practices… offering direct debits, fixed fees and 30-day turnaround of accounts – nothing innovative there, just plain sense as far as I was concerned (although many said it couldn’t be done!). That is where we have hung our hat for the last 20 years – challenging the preconceived ways of running an accountancy practice, with success and the odd skinned knees!

We have continued our drive to create a truly scalable business with innovation at its core, that is a stimulating workplace for our 63 strong team and a base from which to offer an ever-expanding range of services to our SME clients. We have had the privilege to work with some truly inspirational mentors, team members and business owners. We’ve learned a lot along the way and long may it continue.

It just remains for me to say a big thank you to all staff and clients past and present – we couldn’t have done it without you! Looking forward to the next 20 years!

Nigel Adams FCCA – Managing Director

(E) enquiries@advaloremgroup.uk or (T) 01908 219100 (W) advaloremgroup.uk  

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On Wednesday 3rd March, Chancellor Rishi Sunak announced the 2021 Budget which outlined this year’s steps to provide financial support and new opportunities for residents of the UK. The Chancellor set out the government’s tax and spending plans for the year ahead, and announced new measures to help businesses and jobs through the pandemic and to support the UK’s long-term economic recovery with a series of tax-raising plans to help rebalance the UK’s finances.

Please see below a few key points taken from last weeks budget:

Measures to mitigate the impact of Coronavirus:  

  • Extension of the Coronavirus Job Support Scheme (‘furlough payments’) to September 2021 across the UK, with employer contributions to salary from July.
  • Fourth Self Employment Income Support Scheme grant covering February to April 2021 to claim from late April. This is similar to the first three grants – and newly self-employed people who filed 2019/20 tax returns by 2 March may be eligible to claim for the first time.
  • No further support announced for people working as directors through their own personal companies.
  • Range of ‘Restart’ grants for businesses reopening after lockdown.
  • Recovery Loan Scheme from 6 April 2021: government to guarantee 80% of eligible loans from £25,000 to £10 million to give lenders confidence to support UK businesses, with some other loan schemes coming to an end on 31 March 2021.

Reliefs Extended:

  • Stamp Duty Land Tax Holiday on property transactions up to £500,000 extended from 31 March to 30 June 2021, with £250,000 threshold up to 30 September 2021.
  • Duties on alcoholic drinks and fuel frozen for the second year running.

Tax Year 2021/22:

  • Small increases in main Personal Allowance, Basic Rate Band and National Insurance thresholds confirmed, as already announced.
  • Lifetime Allowance for tax-advantaged pension funds, Inheritance Tax nil rate band, Capital Gains Tax annual exempt amount, ISA subscription limits all frozen at 2020/21 levels.
  • No increase in CGT rates announced, contrary to some speculation in advance, but there is the potential for this to be reviewed via a consultation later this month.
  • Corporation Tax rate remains 19% until 31 March 2023.
  • Personal Rate Tax bands and Personal Allowance are being frozen going forward.

To read the full 2021 Budget and Updated Tax Rates please click the links below. 

Ad Valorem Budget Summary 2021

2021/22 Tax Rates

If you have any questions regarding what was outlined in the budget update please do not hesitate to contact us:

(E) enquiries@advaloremgroup.uk or (T) 01908 219100 (W) advaloremgroup.uk  

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R&D tax relief – upcoming changes

After a recent announcement from HMRC new rules will come into effect from 1 April 2021 for SME businesses. The new rules are being implemented to target fraudulent claims using UK companies to claim a repayable credit even though no R&D is being carried out in the UK. 

The new rules apply a cap on the amount of payable R&D tax credit an eligible loss-making company can claim. It is important to note that the new rules only apply to loss making businesses or where your R&D claim takes you into taxable losses. The cap will affect claims for accounting periods commencing on or after 1 April 2021. 

What is the cap? 

The cap limits the payable R&D tax credit to three times the total annual PAYE and NIC liability of the company plus £20,000. 

I’m claiming R&D tax credits, will I be affected?

If your claim meets any of the below criteria, you will not be affected.

  • You claim under the RDEC Scheme (large company) 
  • Your R&D claim doesn’t take you into taxable losses in the accounting period
  • Your payable R&D tax credit is less than £20,000 

A company may also not be capped if it meets the criteria of the following two tests:

  1. The company’s employees are creating, preparing to create or actively managing IP arising from the R&D project. 
  2. The expenditure on subcontracted work or agency workers is less than 15% of the overall R&D expenditure. 

Even though the new cap is designed to target fraudulent claims, there will be many genuine SME claims who will be affected by the new rules. If SMEs outsource large elements of their projects or have large consumable costs, they may well be impacted by the new cap. 

If you have any questions about the new claim cap rules then please contact us using our details below: 

(E) enquiries@advaloremgroup.uk or (T) 01908 219100 (W) advaloremgroup.uk  

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THE NEW VAT RULES FOR CONSTRUCTION SECTOR START ON 1 MARCH 2021

INTRODUCTION

New VAT rules are due to come into effect this March which will impact on accounting for VAT for transactions in the construction sector. The new rules are called “the domestic reverse charge for supplies of building and construction services”. 

The new “reverse charge” system of VAT accounting will affect sub- contractors supplying their services to other contractors in the construction sector. 

Under the new rules, supplies of standard or reduced-rated building services between VAT-registered businesses in the supply chain will not be invoiced in the normal way. Under the new reverse charge system, the sub-contractor will not charge VAT on their invoice to the contractor for whom they are working and will not account for output VAT, although they will identify the rate and amount of VAT due and notify their customer that the VAT must be accounted for by them on their VAT return.  The sub-contractor will there be paid only the net value of the work done without the VAT.

The contractor receiving supplies from the sub-contractor will be obliged to enter the VAT identified on their sub-contractor’s invoice in box 1 of their VAT return as well as claiming this back in box 4 of the return.

This is intended to ensure that VAT is correctly accounted for on supplies by sub-contractors, some of whom were allegedly fraudulent businesses not paying over the VAT charged to HMRC.

The new reverse charge will apply to a wide range of services in the building trade, primarily those activities covered by the construction industry (CIS) payment rules. Note that normal VAT invoices will continue to be issued to domestic customers and other “end users” as defined under the scheme. 

SERVICES TO WHICH THE REVERSE CHARGE APPLIES 

You must use the reverse charge for the following services:

  • constructing, altering, repairing, extending, demolishing or dismantling buildings or structures (whether permanent or not), including offshore installation services.
  • constructing, altering, repairing, extending, demolishing of any works forming, or planned to form, part of the land, including (in particular) walls, roadworks, power lines, electronic communications equipment, aircraft runways, railways, inland waterways, docks and harbours, pipelines, reservoirs, water mains, wells, sewers, industrial plant and installations for purposes of land drainage, coast protection or defence.
  • installing heating, lighting, air-conditioning, ventilation, power supply, drainage, sanitation, water supply or fire protection systems in any building or structure.
  • internal cleaning of buildings and structures, so far as carried out in the course of their construction, alteration, repair, extension or restoration.
  • painting or decorating the inside or the external surfaces of any building or structure.
  • services which form an integral part of or are part of the preparation or completion of the services described above – including site clearance, earth-moving, excavation, tunnelling and boring, laying of foundations, erection of scaffolding, site restoration, landscaping and the provision of roadways and other access works.

You cannot use the reverse charge for the following services, when supplied on their own:

  • drilling for, or extracting, oil or natural gas.
  • extracting minerals (using underground or surface working) and tunnelling, boring, or construction of underground works, for this purpose.
  • manufacturing building or engineering components or equipment, materials, plant or machinery, or delivering any of these to site.
  • manufacturing components for heating, lighting, air-conditioning, ventilation, power supply, drainage, sanitation, water supply or fire protection systems, or delivering any of these to site.
  • the professional work of architects or surveyors, or of building, engineering, interior or exterior decoration and landscape consultants.
  • making, installing and repairing art works such as sculptures, murals and other items that are purely artistic signwriting and erecting, installing and repairing signboards and advertisements.
  • installing seating, blinds and shutters.
  • installing security systems, including burglar alarms, closed circuit television

HOW TO PREPARE FOR CHANGES

It is important to make sure your accounting systems and software can deal with the reverse charge. You should also consider whether the change will impact your cash flow and most importantly – make sure all your staff who are responsible for VAT accounting are familiar with the reverse charge and how it will work.

WHO DOES THE REVERSE CHARGE APPLY TO? 

Typically it will affect sub-contractors supplying their services to other contractors in the construction sector. 

This applies if the services provided are:

  • standard rated or reduced rated, and
  • within the scope of CIS.

Supply and fit

Although the provisions apply principally to services in the construction sector, they cover all supplies of labour and materials in a single contract or transaction.  This is the case even where only the labour element must be reported under CIS.

Labour only sub-contractors

The reverse charge applies to services provided by labour only sub-contractors. The labour only sub-contractor is responsible for the works carried out and therefore subject to the reverse charge provisions.  This can be contrasted with a supply of staff, which is not covered (see “Employment businesses” below), since in those cases the supplier takes no responsibility for the work done.

KEY DEFINITIONS AND SPECIFIC GUIDANCE ON WHETHER THE REVERSE CHARGE APPLIES 

End users

The reverse charge is not intended to apply where a contractor works directly for an end user.  End users are consumers and businesses, or groups of businesses, that are VAT and Construction Industry Scheme registered but do not make onward supplies of the building and construction services supplied to them, namely those who have an interest in the land where the work is being undertaken.  Where the end user is VAT and CIS registered, the reverse charge does not apply to supplies made to them where they notify the contractor in writing that they are an end user.

Intermediary suppliers

Intermediary suppliers are VAT and CIS registered businesses that are in a corporate group with an end user as defined above. If an intermediary supplier buys construction services and re-supplies them to an end user in the same corporate group, they are all treated as if they are an end user and the reverse charge does not apply, if they notify the contractor that they are an end user. 

Employment businesses supplying construction workers.

Employment businesses are treated differently for the purpose of the reverse charge. Supplies by employment businesses (also known as labour agencies) are not subject to the reverse charge, even if those supplies are within the scope of CIS. Employment businesses supplying construction workers are, for VAT purposes, treated as supplying staff rather than building and construction services.

USING THE REVERSE CHARGE: SUPPLIERS 

You must use the reverse charge from 1 March 2021, if you are VAT registered in the UK, supply building and construction industry services and:

  • your customer is registered for VAT in the UK.
  • payment for the supply is reported within the Construction Industry Scheme (CIS).
  • the services you supply are standard or reduced rated.
  • you are not an employment business supplying either staff or workers, or both.
  • your customer has not given written confirmation that they are an end user or intermediary supplier.

The practical steps you will need to take are:

  • Check if your customer has a valid VAT number.
  • Check your customer’s CIS registration.
  • Review your contracts to decide if the reverse charge will apply and tell your customers.
  • Ask your customer to confirm whether they are an end user or intermediary supplier.
  • Make arrangements to alter your invoicing to identify the rate and amount of VAT due but not to charge it to your customer, also ensuring that a narrative appears on the invoice instructing the customer to declare the VAT on their VAT return.
  • Find out how to record the reverse chargeable transactions in your accounts. 
  • Analyse the impact of the new rules on your cash flow and consider applying for monthly VAT returns.

USING THE REVERSE CHARGE: CUSTOMERS

You must account for the reverse charge from 1 March 2021, if you are VAT registered in the UK, receive supplies of building and construction industry services and:

  • your supplier is registered for VAT in the UK.
  • payment for the supply is reported within the Construction Industry Scheme (CIS).
  • the services you receive are standard or reduced rated.
  • your supplier is not an employment business supplying either staff or workers, or both.
  • you are not an end user or intermediary supplier who has notified your suppliers of that fact.

The practical steps you will need to take are:

  • Check if your supplier has a valid VAT number.
  • Check your supplier’s CIS registration.
  • Review your contracts to decide if the reverse charge will apply and tell your suppliers you will not accept normal VAT invoices.
  • Make arrangements to account on your VAT returns for the VAT identified as due to HMRC on your suppliers’ invoices.
  • Ensure that you refuse any normal VAT invoice issued to you by a sub-contractor where the reverse charge should be applied.
  • Make arrangements to pay only the net value of the work to your sub-contractors.
  • Find out how to account for the reverse charge transactions in your accounts. 

BUSINESSES THAT ARE BOTH SUPPLIERS AND CUSTOMERS 

Many businesses in the construction sector are both suppliers and customers, who will be affected in relation to purchases and sales. The above practical steps will need to be taken in respect of both.

SUMMARY

If you are a sub-contractor you should also be aware that your customers will no longer be paying you VAT, which will reduce the gross value of payments coming into your business. So you should consider and plan for the impact of this on your day-to-day cashflow. Please talk to us about projecting your cash flow forward so you can manage the change.  

If you are a sub-contractor using the VAT flat rate scheme, it may be beneficial to leave that scheme as you may be entitled to a VAT refund on your expenses from 1 March 2021. 

If you are likely to be affected by these changes and we can work with you to ensure you are ready for the new system when it starts. We are cloud accounting specialists and can recommend the right software to you comply with the new rules and advise on other changes to help you and your business.

If you would like any more information on the new VAT rules for the construction sector then please contact us using our details below: 

(E) enquiries@advaloremgroup.uk or (T) 01908 219100 (W) advaloremgroup.uk