Category: Uncategorized

New Tax Year 2024/25

Posted on by Christine

As the 2023/24 tax year concludes, it’s time to get  your ducks in a row:

  • If it’s the first year you are required to file a self-assessment return you must register by 5th October  2024. We recommend registering as early as possible to ensure timely issuance of your Unique Taxpayer Reference (“UTR”) needed for filing by 31 January 2025.
  • The second payment on account for 2023/24 for those already within the self-assessment system is due by July 31, 2024. Late payments accrue interest (currently at a rate of 7.75% per annum).
  • The self-assessment return for the year ending 5 April  2024 must be filed by 31 January  2025 in order to avoid interest and penalties.  However, we recommend filing as early as possible in order to avoid the stress of the deadline, to find out sooner if you are owed a refund, or to give yourself time to pay the resulting liability.

Things to consider for the Tax Year 2024/25

  • Tax rates and bands have remained frozen since 2021/22 and are currently set to remain frozen until 2027/28. This has brought more taxpayers into the tax bands, a concept known as “Fiscal Drag”. The worst affected are those earning between £100,000 and £125,140. The tapered loss of personal allowance once income exceeds £100,000 results in an effective rate of tax of 60% but there are some things you can do to mitigate this. Additional pension contributions and qualifying gift aid payments can be made to extend the tax bands and restore some personal allowance,  which if properly considered can alleviate the impact of the 60% tax rate on this band of income.
  • Changes have been made to the rules on pension contributions. The maximum contribution for which tax relief is available (the pension annual allowance) has risen to £60,000 from £40,000 and the lifetime allowance has been abolished. “Catch up” contributions can be made if the full pension annual allowance was not utilised in any or all of the three previous tax years. This means that in 2024/25, if you have sufficient taxable earned income, a contribution of up to £200k can be made without incurring a tax charge if you have made no other pension contributions since April 2021.
  • The Capital Gains annual exempt amount has been halved again, this time from £6,000 to £3,000 per year. However, gifts between spouses remain exempt from capital gains tax (“CGT”) and consideration can be given to gifting assets or parts of assets to a spouse prior to disposal in order that the couple can each utilise their annual exempt amount.
  • For those considering making new investments it is worth noting that taxpayers can claim up to 30% income tax relief on EIS  qualifying investments, with up to £300,000 income tax relief available in the year of investment. Please note, investors have to hold the shares  for at least three years and the company must remain EIS-qualifying for three years. If not, the income tax relief is repayable to HMRC. The disposal of EIS shares is free of CGT when income tax relief has been claimed and not withdrawn by HMRC.
  • Basic-rate (20%) taxpayers can earn £1,000 and higher-rate (40%) taxpayers can earn £500 in savings interest per year with no tax. Additional rate (45%) taxpayers are taxed on all savings income they receive.  However, interest arising in an ISA is tax-free and savers can put up to £20,000 per year into an ISA. Stocks and shares ISAs have similar tax benefits, with no Capital Gains Tax arising on disposals within an ISA and no tax due on dividends arising from shares within an ISA. The government also plans to introduce a new “British ISA” which will offer retail investors a £5,000 tax-free allowance on top of their existing annual £20,000 limit. This means a couple can save £50,000 tax free in ISAs each year.
  • This tax year will be the last in which the non-domiciled remittance basis of taxation will apply. The government intends to abolish the “outdated” regime and introduce “a modern, simpler, fairer and competitive residence-based regime.”  There are expected to be transitional arrangements for those taxpayers currently resident in the UK but domiciled elsewhere, including a temporary 12% tax rate for previously unremitted income or gains. The draft legislation for the new regime is expected in Summer 2024 and we recommend that once the details are known, those taxpayers affected should reach out to discuss their options and for advice on maximising the benefits of any transitional arrangements available to them.

How can HNH Help?

At HNH, we offer comprehensive tax compliance services to ensure our clients’ self-assessment tax obligations are met efficiently and accurately. Our expertise extends from providing advice on self-assessment compliance to assisting with the registration process, guiding clients through every step seamlessly. We handle the preparation and submission of self-assessment tax returns, adhering to relevant regulations and maximizing potential reliefs, ensuring compliance and optimizing tax outcomes for our clients.

Our diverse clientele speaks to the breadth of our expertise and the trust they place in our services. From high-net-worth individuals seeking tailored tax solutions to shareholders of local and national corporations navigating complex tax structures, we cater to a wide range of clients. We also provide assistance to non-domiciled UK resident taxpayers, offering strategic tax planning advice to optimize their financial positions. Furthermore, local entrepreneurs benefit from our personalized guidance, ensuring their self-assessment tax obligations are managed efficiently, allowing them to focus on growing their businesses.

Our service offering also includes trust tax compliance, ensuring trustees fulfill their obligations accurately and efficiently. With meticulous attention to detail, we navigate the complexities of trust taxation, providing peace of mind to trustees and beneficiaries alike.

At HNH, we are committed to delivering exceptional service and expertise to all our clients.

Please contact any member of our tax team to discuss your requirements.

We are hiring -Deal Advisory Assistant Manager

Posted on by Derval Rooney

Location

  • Belfast / Hybrid Working

The Role

  • Due to continued growth in our Deal Advisory team, we are now looking to recruit an Assistant Manager. The role offers a great opportunity for those seeking to make a their first move into corporate finance and to join a dynamic team in an environment which offers autonomy and agile working.
  • The successful candidate will be involved in the provision of deal advisory services to a wide range of corporate and private equity clients in NI, ROI and GB.  The firm offers a route to a more varied accounting niche in the following areas:
  • – Company Disposals/Acquisitions
  • – Fundraising
  • – Private Equity Transactions
  • – Financial Modelling
  • – Buy-side due diligence
  • – Sell-side due diligence
  • – Financial and commercial appraisal
  • – Business planning

You will be responsible for:

  • – Responsible for supporting the M&A Director and Manager to identify, value, manage, execute, and plan integration of the pipeline of M&A targets
  • – Research potential M&A targets including market and sectors, product offering, competitors, financials, industry news etc.
  • – Gather financial results and operational KPIs to compare M&A targets
  • – Build relationships with our local finance, commercial and operational teams to facilitate deal process
  • – Work with and support our financial and other advisors during the diligence process of deals
  • – Monitor any deal data rooms and share relevant information with the team
  • – Perform ad-hoc analysis to address specific deal questions or estimate synergies etc.
  • – Working closely with the M&A Manager, prepare first drafts of concise analysis, charts or presentations covering deal rationale, trading, market etc. and developing long-term sustainable client relationships
  • – Participation in broader business development activities, to include identifying and pursuing opportunities to grow the practice, in terms of both client portfolio and service offering.

What skills / qualifications will you need?

  • – ACA/ ACCA (or equivalent) qualified;
  • – Ability to work independently, but also collaboratively as part of a team;
  • – Strong project management skills and the ability to deliver to deadlines;
  • – Strong interpersonal skills and ability to manage client expectations;
  • – Highly competent technical accounting skills, coupled with strong commercial awareness;
  • – Confident with Microsoft Office applications, particularly Excel and PowerPoint.

What we offer

  • – The unique opportunity to work in an independent, locally managed, dynamic firm, with a focus on its people
  • – Competitive salary and performance related bonus
  • – Flexible hybrid working model

Interested?

  • We’d love to hear from you. If you would like to apply, please send a CV to careers@hnhgroup.co.uk with subject ‘Transaction Services’.  Please make sure your CV includes enough detail to show how you meet the criteria we’ve set out here.

HNH – A review on FY23 and a look forward to FY24

Posted on by Derval Rooney

As the nights get longer and we start to feel a bit of warmth in the air it is an apt time to reflect on the last financial year in HNH and look forward to the next.

The year ended March 2023 was one characterised by increasing economic and geopolitical headwinds, significant political change in GB and Scotland.

Across our service lines in FY23 (M&A, Transaction services, Taxation, FP&A, Restructuring, Forensics and Debt Advisory) we continue to focus, as we always have, on giving direct, honest advice to our clients with as much hands on support as we can bring to bear in whatever the project at hand is.  The advisory climate has become more challenging in the last 6 months but during this period we have enabled many of our clients to complete successful transactions, restructures and gather better information and clarity within their own businesses in order to help them plan strategically for the years ahead.   We are incredibly proud to be the adviser of choice to many NI and Scottish businesses, entrepreneurs and funders and we are delighted to be able to play our small role in their corporate journey.

Like many businesses we have been through our own changes.  At the start of the year Craig and Richard branched out and set up Raven Capital and at the end of the year James and his team moved on to KPMG. We wish each of them well and have no doubt their skills and experience will be well utilised in their new roles.

It would appear as we commence FY24 we have seen the worst of interest rate rises in the UK, inflation appears to be settling and the M&A environment is picking up after a slower calendar year Q1.  We are delighted to be starting the year with the appointment of new Company Shareholders and Directors – Rodney McCaughey, Derval Rooney, Neal Allen, Bruce Walker, Paul Gleghorne and Harry Linklater.  During the year we have welcomed 3 new starts, have seen 4 promotions and we hope to have 2-3 new starts over the next couple of months with further plans for growth across NI, Scotland and further afield.

FY24 undoubtedly will have some challenges but at HNH we remain firmly committed to investing in our client relationships, our team and our systems and processes to provide the best service we can in an environment that is enjoyable to work in. We are excited about the challenges and opportunities that lie ahead.

Business Advisory Services – “We Are Hiring”

Posted on by Derval Rooney

Due to ongoing growth in our Business Advisory Services Practice (“BAS”), we are now looking to recruit an Assistant Manager / Manager to join the firm. The successful candidate will report to the BAS Directors and will be involved in the provision of advisory and restructuring services to a wide range of stakeholders, including banks, funds, alternative lenders and corporates. The role will include the following:

  • Provision of professional advice and services to a wide ranging portfolio of clients, to include:
    • Turnaround options advice and business restructuring;
    • Debt and refinancing advice;
    • Accelerated M&A;
    • Independent Business Reviews;
    • Corporate simplification;
    • Corporate insolvency; and
    • Personal insolvency.
  • Business Development activities, to include identifying and pursuing opportunities to grow the practice, in terms of both client portfolio and service offering

Essential Criteria

  • CAI (or equivalent) qualified;
  • Ability to work independently, but also collaboratively as part of a team;
  • Ability to work efficiently and prioritise as needed;
  • Strong interpersonal skills and ability to manage client expectations;
  • Excellent technical skills, coupled with strong commercial awareness; and
  • Confident with Microsoft applications including Outlook, Word, Excel and PowerPoint.

This is a full time position and will be based in our Belfast office.

To apply for this position please submit a CV by email to careers@hnhgroup.co.uk by no later than 5pm on 14 January 2022.

The Autumn Budget approaches!

Posted on by Derval Rooney

As 2021 enters the last quarter, it’s hard to tell whether we are leaving a period of uncertainty or entering into a new phase of the last turbulent 18 months. Whilst the coronavirus pandemic no longer seems quite so traumatic (despite still being with us), the business world is now having to deal with the ongoing consequences of Brexit, labour shortages, supply chain malfunctions and a looming energy crisis. To some of a certain vintage this may have echoes of the 1970’s – but without the flared trousers and glam rock.

It is good to know however that some things don’t change and one of these is the Governments need to raise cash. As a result the 2021 Autumn Budget – to be held on Wednesday 27th October – will be the latest attempt by the government to pluck the maximum amount of feathers with the least amount of hissing (to paraphrase Monsieur Jean Baptiste Colbert). Chancellor Rishi Sunak will rise to his feet and deliver his second budget of the year following his April Budget which was delayed from 2020.

We already know that corporation tax rates are going to rise to 25% in April 2023 and that there will be a 1.25% increase in national insurance ( which will eventually become the new Health Levy) and dividend rates from 6th April 2022 to help fund the NHS and the health care sector. However, what else might be in the forthcoming Budget? Here are some possible changes. However, please do note that this is in the realm of speculation as I don’t have a hot line to No 11 Downing Street.

1. Capital Gains tax is still low by comparison to income tax. The current main rate of 20% could be uplifted as it is less than half of the top rate of income tax. Having said that, unlike income, capital gains are comparatively easier to defer and a large increase in the rates could end up yielding less tax as more people would delay making disposals. However watch out for an announcement of increased rates next April to ‘encourage’ capital disposals in advance of that – it’s one way of raising more capital gains tax quickly as folk rush to avoid the increase.

2. Sticking with capital gains tax, the Business Asset disposal Relief, the new name for the former Entrepreneurs’ Relief could be on the chopping block. The relief is worth up to £100,000 to those making gains up to £1m on trading business assets or shares, by applying a 10% rate to such gains. Recent economic reports have called into question the benefit of this relief as it does not of itself appear to encourage re-investment of proceeds. However the Chancellor will be mindful of the potential political backlash of removing this relief as it will hit mainstream tory voters the hardest.

3. There has been little change to inheritance tax over the last few years. It is not a big earner for the Government and once again a Tory Chancellor will be reluctant to ‘stick it’ to his core voters. Mind you some tweaks might be made around the edges that could raise a few pounds without cutting to the bone. A likely contender is the relief known as ‘gifts out of surplus income’, which currently takes out of the inheritance tax net regular gifts made from the income a person generates that is in excess of their normal living expenses. Another outside bet could be a reduction on the rate of business property relief, which for many business assets amounts to 100% of the value of such assets. In other countries, this relief is capped, for example in Ireland the relief is limited to 90%. Such a change would mean a limited but not insignificant amount of tax would be payable on the transfer of business assets following death or a transfer to a trust.

4. There has been considerable talk about a wealth tax coming into play. Whilst there is some support for this type of tax, the practical realities of applying such a levy are very challenging and the view from many commentators is that it is unlikely to raise much, if any, money. Once again it is not something one would expect from a Conservative chancellor.

5. Other possible targets include: an increase in VAT – possible by taxing certain foods at standard rates or putting a higher rate on certain luxury goods; limiting the capital gains relief on the sale of people’s homes to a capped amount; new or increased environmental taxes (especially given the proximity of the COP26 summit in Glasgow); and possibly a removal of the national insurance age limit so that all workers will be liable to national insurance charges no matter what age they are.

As I noted above, the proceeding list is just my thoughts of what could happen and readers should not take any action based solely as a result of these suggestions. However if one was considering selling or gifting a business asset in the foreseeable future, it would be worth seeking professional advice before the 27th October as it may reduce the risk of unwelcome tax changes.

It was noted that when directly asked about further tax increase the Prime Minister avoided a direct answer and came out with the phrase the he was ‘zealously opposed to unnecessary tax increases’. Quite what will be deemed as necessary is something we will get a better idea of on Wednesday 27th October.

We Are Hiring – Tax

Posted on by Derval Rooney

Due to ongoing growth in our Tax Advisory Practice, we are now looking to appoint a Tax Manager. The successful candidate will deal directly with clients and also report to the Tax Directors and support them with the overall provision of tax services to our clients. The successful candidate will be involved in the provision of tax services to a wide range of clients, including HNWIs, OMBs, SMEs and larger corporates.

The role will include the following:

  • Provision of general tax advice to a wide ranging portfolio of clients, to include in particular advice on Corporation Tax, Capital Gains Tax, Inheritance Tax and Income Tax matters
  • Preparation of Tax Due Diligence reports and provision of advice in respect of M&A and funding matters
  • Ability to carry out detailed technical research
  • Business Development activities, to include identifying and pursuing opportunities to grow the practice, in terms of both client portfolio and service offering
  • Ability to deliver tax compliance services, including preparation of individual and partnership self-assessment tax returns and corporation tax returns

Essential Criteria

  • CAI (or equivalent) qualified
  • CTA qualified, with two years PQE
  • Experience of working in a similar role
  • Ability to work independently, but also collaboratively as part of a team
  • Ability to work efficiently and prioritise as needed
  • Strong interpersonal skills and ability to manage client expectations
  • Excellent technical skills, coupled with strong commercial awareness

Desirable Criteria

  • UK GAAP accounting experience
  • Experience of property tax-related matters, including VAT, SDLT and CIS matters
  • Experience in Trust Registration matters  

This is a full time position and will be based in our Belfast office. Remuneration will be in the region of £40-44k per annum plus benefits, depending on experience.

To apply for this position please submit a CV by email to careers@hnhgroup.co.uk by no later than 5pm on 29 October 2021.

Maven invests in rapidly growing eCommerce business Candle Shack

Posted on by Rory Moynagh

HNH acted as Lead Corporate Finance Advisor for rapidly growing eCommerce business Candle Shack in a £4.4m deal. Candle Shack, founded by Duncan and Cheryl MacLean in 2010, supplies candle making components as well as providing contract candle manufacture for high profile, luxury brands. The transaction includes £3 million of funding from Maven’s high net worth investment syndicate, Maven Investor Partners, as well as a £1.4 million debt facility from HSBC.

Neal Allen, Director in the Corporate Finance team at HNH, said: ‘One of the reasons that we established HNH in Scotland was to advise exciting, fast growing businesses and it has been fantastic to work with such a great example in Candle Shack. The deal is a validation of not only all of the inspiration and perspiration that Duncan and Cheryl have put in over the last few years, but also of the Scale Up programme and the next wave of entrepreneurs that are helping to drive the Scottish economy forward. ‘

Candle Shack employs 105 staff and operates from its 100,000 ft2 West Carron facility in central Scotland encompassing a fulfilment centre, development lab and manufacturing. The Company provides everything for an artisan manufacturer to make high quality candles, including fragrances, waxes, wicks, glassware, and bespoke branded packaging. Making fine candles is a technical endeavour and many of Candle Shack’s customers rely on the business for support, training, accreditation and for the testing of their candles. In addition, the company serves clients who require contract candle manufacturing services where the company deploys state of the art technology and artisan craftsmanship to produce candles for some of the world’s leading luxury brands. 

The company is regarded as the market leader in Europe currently serving over 34,000 loyal customers and has a reputation for high quality products and excellent customer support. Candle Shack has enjoyed strong sales growth over recent years benefiting from its focus on the premium and artisan segments of the market. Consumers are looking for unique, locally produced premium products at affordable prices and this is increasingly being met by artisan candle makers many of whom are Candle Shack customers. The company is also working hard to offer candle ingredients that are sourced sustainably, and this includes its best-selling own-brand, environmentally friendly wax blend.

Maven’s support will enable management to further scale the business, investing in new marketing and sales channels, expanding its EU operations, financing further product development, and improving operational efficiencies to enable Candle Shack to grow its customer base, broaden its offering and continue to offer customers a best-in-class service.

Duncan MacLean, CEO at Candle Shack, said: “Maven’s investment in Candle Shack will fuel our next phase of growth, increasing our ability to support thousands of niche home fragrance brands across Europe. We are excited to be partnering with such an experienced investor and with Maven’s support, are aiming to cement our position as Europe’s leading home fragrance supplies business.”

HNH advise on the sale of Powerhouse Generation Ltd and Powerhouse Energy Management Ltd to Cool Planet Group

Posted on by Rory Moynagh

HNH acted as Lead Corporate Finance Advisor for Powerhouse. HNH Head of Sustainability, Paul Gleghorne, commented “HNH were delighted to act for the company on this transaction. Powerhouse provides vital services to facilitate renewable energy on the grid and reduce energy demands of large consumers. The acquisition by Cool Planet Group will facilitate the growth of the company’s services in the sector.”

Powerhouse Generation Ltd was founded in 2013 as a DSU aggregator operating within Ireland’s electricity market. Since inception, Powerhouse has added DS3 trading and consultancy services to its offering. Powerhouse Energy Management Ltd was setup in 2019 and acts as an advisor and broker in the energy sector giving Powerhouse a full suite of energy management services.

HNH Head of Deal Advisory, Richard Moorehead, stated “this transaction is indicative of HNH’s increased focus on working with companies in the sustainability sectors, including renewable energy and waste management. These sectors are key growth areas for HNH and we are continuing to grow our Sustainability team in Belfast.”

Commenting on the acquisition, Richard Watson, Chairman of Powerhouse, said “we are looking forward to working with Cool Planet Group and accelerating our growth plans and expansion into new markets.”

Alan Keogh, chief executive of Crowley Carbon, says Powerhouse’s “demand response capabilities will compliment our existing offerings of solar PV, battery storage, electrification of heat, EV chargers and vehicle to grid, enabling us to reduce carbon and greenhouse gas emissions in plants for a net zero future. We can now create new offerings that combine energy efficiency, renewable power, EV-charging and sustainability and compliance reporting to help organisations reach their net-zero carbon goals.”

Tughans in Belfast, led by James Donnelly, acted as legal advisors to Powerhouse.

Business Support Assistant

Posted on by Rory Moynagh

As a result of our ongoing expansion, we are now looking to appoint a Business Support Assistant. The successful candidate will be the first point of contact for clients and be the face of the business. This individual will report to the Finance Director and will support them in the operational management of both offices. This individual will have exposure to all operational aspects of the business and senior staff. This is a key role for the organisation and this individual will be integral to driving initiatives and efficiencies throughout the business.

Typical duties will include:

  • Front of house – greeting clients, answering phone calls, organising meeting rooms and preparing and distributing mail.
  • Finance assistant – supporting the Finance Director in maintaining financial records to include completing daily bank reconciliations, recording supplier invoices, generating client invoices, preparing monthly payment runs, processing employee expense claims and filing documentation as required.
  • HR and Personnel – Co-ordinating travel, accommodation and conference requirements for employees and visitors, supporting staff in the co-ordination of external marketing events, assisting with the onboarding of new staff and supporting the Finance Director in the monthly payroll process (to include the management of annual leave).
  • IT and Property – Managing and re-ordering of office stationery and office supplies, supporting staff to resolve day-to-day IT issues and building relationships with key suppliers.

    • The above list of duties is not exhaustive, and the individual may be required to undertake other tasks as directed by the Finance Director.

    Essential Criteria

  • Minimum of 2 years’ work experience in a similar role.
  • Confident with Microsoft applications including Outlook, Word, Excel and PowerPoint.
  • Experience of finance-related administration.
  • Strong verbal and written communication skills.
  • Excellent planning and organisational skills to include demonstrable experience coordinating internal and external events.
  • Confidence to work with and take instruction from all stakeholder levels.
  • Strong attention to detail.
  • Ability to work independently, but also collaboratively as part of a team.
  • Ability to work efficiently and prioritise work as needed.

    • Desirable Criteria

  • Experience working within a similar professional service environment.
  • Experience of HR related administration to include payroll.
  • Experience of marketing related administration.
  • Experience with Xero accounting software.

    • This is a full time position and will be based in our Belfast office. Remuneration will be in the region of £18-22k per annum depending on experience.

    To apply for this position please submit a CV by email to careers@hnhgroup.co.uk by no later than 1700 on Friday the 9th of April 2021. Where possible, you should state any experience you have had, which shows how you meet the criteria specified above, when you submit you CV application.

    Budget 2021 – the start of the road to recovery?

    Posted on by Rory Moynagh

    In his second Budget, the Chancellor focused on three main areas – supporting business and people; fixing the public finances; and building the future economy. The total government support programme for the last fiscal year and this coming year, the detail of which was contained in the first part of the Budget speech, will have cost over £400 billon. The impact of this supercharged public expenditure on the national debt has been enormous and will continue to be so for decades to come. Unsurprisingly, the second part of Mr Sunak’s speech turned to the daunting task of what to do about this debt, which is soon going to peak at almost 100% of national income. Having discounted doing nothing, cutting public expenditure or raising income tax or VAT rates, the Chancellor announced that most tax reliefs and exemptions would be frozen until at least 2026 and that the corporation tax rate for large companies would rise to 25% in two years’ time. In the third and final part of his speech Mr Sunak announced incentives to encourage capital investment by businesses, continued short term stamp duty help for house buyers and a short term continuation of a reduced VAT rate for the hospitality industry. There was no mention of a further Budget later in the year but given the scale of the fiscal issues caused by the Covid 19 pandemic, it would not be surprising to see the Chancellor back on his feet with additional fiscal measures before Christmas.

    Some of the key tax-related points are set out below:

    1. Capital Gains Tax (“CGT”) and Inheritance Tax (“IHT”) – there have been no changes to the headline rates or reliefs for either CGT or IHT. Business Asset Disposal Relief remains available for CGT purposes for total qualifying lifetime gains of up to £1m, while Business Property Relief for IHT is also unchanged. The IHT nil rate band will continue at £325,000 from 6 April 2021 until 5 April 2026.
    2. Income tax allowances and thresholds – the personal allowance, basic rate limit and higher rate threshold will all increase with effect from 6 April 2021 as previously announced, to £12,570, £37,700 and £50,270 respectively. Thereafter, these allowances and limits will be frozen (i.e. with no further CPI increase) until 5 April 2026.
    3. Increase in corporation tax rate – the main rate of corporation tax for will increase from 19% to 25% with effect from 1 April 2023.
    4. Corporation tax small profits rate – a small profits rate of corporation tax of 19% will be introduced from 1 April 2023 for companies with profits of £50,000 or less.  Companies with profits between £50,000 and £250,000 will be taxed at 25% but will be able to claim marginal relief.   These thresholds are proportionately reduced for the number of associated companies and for short accounting periods.
    5. Use of trading losses – companies and unincorporated businesses will be able to carry back trading losses of up to £2m per annum incurred in the years ended 31 March 2021 and 2022 for a period of three years rather than one year. This should facilitate tax refunds for formerly profitable businesses temporarily hit by the lockdown.
    6. Capital Allowances – the Annual Investment Allowance of £1m has been extended to 31 December 2021.
    7. Super deduction for qualifying plant and machinery – from 1 April 2021 to 31 March 2023, fixed asset investments qualifying for main rate capital allowances will be relieved by an enhanced temporary 130% first year allowance or “super deduction”.  Investments in capital assets which qualify for special rate relief, will be eligible for a 50% first year allowance.
    8. Pension Lifetime Allowance – similarly, the standard Lifetime Allowance for pensions will be frozen at £1,073,100 from 6 April 2021 to 5 April 2026.
    9. Stamp Duty Land Tax nil rate band – the increase of the nil rate band for residential property in England and Northern Ireland to £500,000 will be extended from 31 March to 30 June 2021. It will then reduce to £250,000 from 1 July to 30 September 2021, and then to the standard amount of £125,000 from 1 October 2021.
    10. VAT for tourism and hospitality – the temporary reduced rate of VAT (i.e. 5%) for hospitality, holiday accommodation and attractions will also be extended for 6 months to 30 September 2021. It will then increase to 12.5% from 1 October 2021 to 31 March 2022, after which it will return to the standard rate of 20%.
    11. Research and Development (“R&D”) tax relief – for accounting periods beginning on or after 1 April 2021, the amount of SME payable R&D credit that a company can receive in any one year will be capped at £20,000 plus 3 times the company’s total PAYE and NIC contributions.
    12. Freeports – a number of ‘Freeport’ tax sites will be created at various locations around the UK, allowing businesses in these tax sites to benefit from a number of tax reliefs. Eight Freeport sites have been announced in England, and the Government will consult with the devolved administrations on its intention to create similar sites in Northern Ireland, Scotland and Wales.

    If you would like to discuss any of the matters arising from today’s Budget, please contact Eamonn Donaghy, Mark Hood or June Barton.

    Deal Advisory Openings

    Posted on by Rory Moynagh

    Due to the buoyant M&A market and with a strong and growing pipeline for FY22, we are seeking to recruit into our Deal Advisory team.

    • – Assistant Manager/ Manager ideally with lead advisory or FDD experience
    • – Chartered Accountant with 2+ years PQE
    • – Based in our Belfast office

    For more detailed information on the opportunities, or to submit a CV, please contact us via careers@hnhgroup.co.uk

    Business Support Measures for Firms

    Posted on by Rory Moynagh

    James Neill and Cathy McLean are delighted to be presenting to the Law Society of NI this Wednesday as part of their CPD programme.

    They will be discussing the various changes we are witnessing across our advisory practice including current market trends, updates within forensic accounting, the introduction of new insolvency legislation and the widespread support available to firms.

    Tickets can be booked via the following link: Business Support Measures for Firms Registration, Wed 10 Feb 2021 at 13:00 | Eventbrite

    Applications Sought For Finance Director

    Posted on by Rory Moynagh

    HNH is a multi-disciplinary financial advisory firm, combining a boutique business model with an international reach. We are based in Belfast and Edinburgh with over 25 qualified professionals serving clients throughout the UK and Ireland. We do not offer any “traditional” accountancy services and therefore have no retained clients for whom we provide audit or accounts preparation services. We therefore are able to avoid the inherent conflict of interests that can arise within a full service accountancy firm.  

    As a result of our ongoing expansion we are now looking to appoint a finance director who will work closely with the directors in respect of the strategic and financial matters of the business and who will oversee the operational management of the offices and accounting and compliance obligations of the business. The successful candidate must demonstrate experience of working at a senior level both independently and in a team and have strong communication and IT skills.  

    Candidates must have a recognised professional accounting qualification and have extensive post qualification experience. The role will require at least 3 days a week but in the initial six months could extend to 5 days a week. Remuneration will be £60k per annum on a full time basis.

    To request a copy of the detailed job specification, person specification and selection and interview arrangements, please email careers@hnhgroup.co.uk. To apply for this position please submit a CV by email to careers@hnhgroup.co.uk by no later than midnight on 30 September 2020.

    COVID-19: Some key tax considerations

    Posted on by Rory Moynagh

    The impact of the Coronavirus pandemic has been unprecedented, certainly for anyone born after the Second World War, and it would be fair to argue that the Government’s financial response to that impact has been just as unprecedented.

    It is understandable that the tax implications of the measures which have been introduced have not been at the forefront of anyone’s mind in the last four months, but nevertheless it is worth reminding ourselves of some key points which will be of increasing relevance in the months ahead.

    Coronavirus Job Retention Scheme

    Probably the most high-profile of all of the measures introduced in recent months is the Coronavirus Job Retention Scheme (“CJRS”), which has been available to employers as a grant to cover up to 80% of their employees’ wages (up to a maximum of £2,500 per month), plus relevant employer’s National Insurance Contributions (“NICs”) and auto-enrolment pension contributions. The CJRS will be amended over the course of the next few months (to allow the employer to bring back employees on a part-time basis, and to reduce the percentage of wages covered by the scheme on a phased basis), and is currently scheduled to end on 31 October 2020.

    From an employer’s perspective, the tax treatment of any CJRS grant received is quite straightforward – it will be taxable income, subject to income tax or corporation tax as appropriate. The payments made to employees (for which the grants have been claimed) should continue to be deductible as a business expense.

    Grants made under the Self Employed Income Support Scheme are similarly subject to income tax and self-employed NICs, and should be reported on an individual’s self-assessment tax return.

    Tax Deferrals

    One of the first measures to be introduced to assist individuals and businesses was a deferral of VAT and income tax payments, as follows:

    • VAT – any VAT payments due between 20 March and 30 June 2020 could be deferred until 31 March 2021. Effectively, this allowed a business to defer one quarter’s VAT payments. However, any VAT payments due on or after 1 July 2020 remain payable by the normal due date.
    • Income tax – the second payment on account for the 2019/20 tax year, which would otherwise be due on 31 July 2020, can be deferred until 31 January 2021. There is no requirement to tell HMRC about any intention to defer, and interest and penalties will not arise provided payment is made by 31 January 2021.

    While both of these measures look attractive and from the perspective of immediate business requirements, it should be emphasised that they are deferral measures only, and not a write-off by HMRC of a tax liability. They will therefore lead to (potentially significantly) higher tax payments required in the first quarter of 2021, and should thus be properly factored into future cash flow planning.

    Utilisation of losses

    The economic downturn brought about by COVID-19 will undoubtedly lead to some businesses incurring trading losses in the current period. Such losses can be used to shelter other profits and gains arising in the same period, and can then be carried back to set against income and gains (subject to certain restrictions) arising in the immediately prior year, thus leading to repayments of income or corporation tax.

    In the worst case scenario, a business might be forced into a cessation of trade by current economic conditions. In those circumstances, trading losses can be carried back up to three years before the period of cessation (as opposed to the one year carry-back for ‘standard’ trading loss relief claims), thus potentially giving rise additional tax repayments.

    Company wind-up – Members’ Voluntary Liquidation

    Where a company’s trade ceases and there is no likelihood of it starting up another business in the short to medium term, the shareholders might also decide that the company itself should be wound up. In such a case, where there are still reserves that might be returned to shareholders, the most tax-efficient method of extraction is likely to be a Members’ Voluntary Liquidation (“MVL”). The funds distributed to shareholders should be subject to capital gains tax rather than income tax and, where Business Asset Disposal Relief (formerly known as Entrepreneur’s Relief) is also available, the tax rate would be reduced from 20% to 10% (subject to a lifetime limit of £1m of gains).

    It should be borne in mind that there are certain anti-avoidance provisions which can apply when carrying out an MVL, particularly around the area of ‘phoenixism’. This is the situation whereby an individual receiving the liquidation distribution continues to carry on, or be involved with, the same trade or a trade similar to that of the wound up company at any time within two years of the date of distribution. If the legislation applies, it can give rise to the distribution being taxed as income at up to 38% rather than capital being taxed at 10%. Specialist advice should always be sought before any MVL process is commenced.

    Finally, it is worth reminding ourselves that nothing about the future is certain and it is very possible – even very likely – that the Government will introduce further changes to extend and bolster the relief available to individuals and businesses alike, whether this be by extending the time period for existing schemes and programmes, or introducing brand new measures. With that in mind, the Chancellor’s financial statement, due to be delivered on Wednesday 8 July, is being keenly anticipated, and we will summarise the key measures following their announcement.

    On the flip side, the Government is likely to introduce new tax-raising measures to start to pay the Coronavirus bill. It will be very important to pay heed to the tax consequences of these measures, even if the ‘cash’ tax impact may not arise for some time to come.

    Financial Analysis Amidst a ‘Smash and Grab’

    Posted on by Rory Moynagh

    Within the construction industry, ‘smash and grab’ is the term used to describe an adjudication that seeks to recover funds due to a contractor. The contractor will claim payment for an amount stated in an interim application process, regardless of whether the sum represents the ‘true value’ of the works. This may arise out of technical argument based on the failure of the payer to serve a valid ‘withholding’ or ‘payless’ notice in the required timeframe.

    Accordingly, a payer losing a smash and grab adjudication must pay the contractor the awarded sum, however they may attempt to hold off until the ‘true value’ is confirmed. Payers may have concerns around the recovery of such amounts if it later transpires that the ‘true value’ is less than the amounts claimed.

    Stay of Execution

    The payer may seek a stay of execution with regards to payment and it is during this part of the process that financial analysis may play a key role in the argument surrounding the need for a delay.

    HNH has been instructed to provide financial analysis or advice in one form or another as part of an increasing number of ‘smash and grab’ adjudications in the last 12 months. On most occasions, it has been our role to provide an independent view on the financial standing of the contractor.

    Test of Insolvency

    The tests of insolvency outlined in the Insolvency (Northern Ireland) Order 1989 or Insolvency Act 1986 (England and Wales) are typically the first ‘go-to’ when considering the financial position of a company.

    The Order / Act outlines the various tests that are referred to as the ‘Cash Flow Test’. It is stated that a company is insolvent if it is otherwise proved to the satisfaction of the High Court that the company is unable to pay its debts as they fall due.

    The Order / Act also states that a company is insolvent if it is proved to the satisfaction of the High Court that the value of the company’s assets is less than the amount of its liabilities, taking into account contingent and prospective liabilities. This is often referred to as the ‘Balance Sheet Test’.

    Commercial Approach

    The Tests of Insolvency outlined in statute are often considered black and white, however it is useful to remain mindful of key case law on this matter. In the matter RE: BNY Corporate Trustee Services Ltd v Eurosail (2013), the Court ruled that the balance sheet test should adopt a commercial position and consider when prospective and contingent liabilities were likely to fall due.

    Instead of a mechanical exercise of comparing the value of a company’s assets against the value of its liabilities, a more sophisticated test should be adopted, requiring a judgment as to whether the present assets of a company will reasonably enable the company’s present and future liabilities to be met.

    Ratio Analysis

    The Tests of Insolvency are limited to considering whether a company may or may not be insolvent at a point in time. For those companies that are teetering on the edge due to cash flow pressures, further analysis may be undertaken to outline potential concerns.

    Additional analytical tools which are useful to measure financial health are various ratio calculations, particularly the financial gearing ratio of the company. Financial gearing refers to the relationship, or ratio, of a company’s debt to equity.  When there is a high proportion of debt to equity, a business is said to be highly geared.

    Banking covenants are most represented in terms of financial ratios which highlights the significance of these calculations. A borrowing company may agree to maintain a financial ratio, such as the debt of equity ratio or others such as interest coverage ratio or the ‘current’ ratio which measures the capability of a busines to meet its short-term obligations. Each of these ratios are regularly monitored to evaluate the risk of failure of a business.

    Recent Judgement of the High Court in Northern Ireland

    James Neill of HNH was instructed in a recent case heard by the High Court in Northern Ireland during the Covid-19 lockdown, which was decided solely on the papers. The case centred around the enforcement of an adjudicator’s award following a smash and grab adjudication. The written evidence put forward analysed the financial position of the contractor by reference to the Tests of Insolvency and the debt to equity ratio.

    The judgement noted that whilst the contractor was not insolvent the company appeared to be facing cash flow pressures and relatively high gearing. The Judge decided that, whilst the contractor had a right to rely on the smash and grab adjudication, there was a risk that the company would struggle to pay back the full amounts if ordered to do so. A stay of execution for 14 days was granted to allow sufficient time for the ‘true value’ adjudications to be concluded.

    Insolvency Advice

    Outside of the forensic analysis and provision of expert opinion with respect to the position of the contractor, those facing smash and grab adjudications may find themselves having to make payments of amounts not previously anticipated.

    It is useful to understand the various scenarios which may unfold if adjudications are successful and upheld. How will the payer’s cashflow be impacted? Will the payment of smash and grab adjudications place the payer in a risk of insolvency?

    Key to a successful financing strategy is to address the issues head on, make a focussed plan for a sustainable recovery and seek professional advice as soon as possible. Early advice and acting quickly is often integral to the implementation of an effective turnaround.

    COVID-19 – The global start-up and the inevitable scramble for liquidity

    Posted on by Rory Moynagh

    There is no doubt that business owners and directors are in panic mode. This is totally understandable as this type of crisis is unprecedented – there is no tried and tested toolbox of previous experience on which to rely. There are so many questions right now and, honestly, as advisers we are often no better informed.

    However, we will get through this and we must use this time wisely to make sure we make informed strategic decisions out the other side. What is certain is that it’s very much a level playing field post COVID-19 and we must all plan for life as a ‘start-up’ regardless of how many years a business has been in existence.

    So what does life as a ‘start-up’ look like, what funding is required, where is that funding coming from, why is liquidity key and why is ‘wait and see’ not an option?

    Strategies for life post – COVID-19:

    • Build an integrated financial model – Key business decisions are often made on ‘hunches’, ‘gut feels’, ‘split second opportunities’ and some of the very best businesses have been founded on those decisions. However, in uncertain times, good business decisions must be made on an objective, rational basis and fundamentally, upon sound financial reasoning. For too long, recovery has been based on ‘gut feels’, but with multiple stakeholders involved in recovery, the objective of getting all stakeholders to the same ‘feeling’ is often unachievable. Yes, financial models are based on assumptions but if the assumptions are fair and honest then the numbers don’t lie.
    • Stress test your P&L and liquidity – It’s imperative to run sensitivities against your financial model. This might be uncomfortable but you need to know your boundaries for failure and survival. Understand the pinch points and get ready to manage them. You will be surprised how far your historic relationships with customers and suppliers will get you – they often need you as much as you need them!
    • Look after your staff – Fear and panic are debilitating to both business owners and employees and that’s understandable as each have their own worries and personal circumstances to consider but both need each other. Strong leadership and emotional intelligence at this time will drive loyalty and commitment from staff long after COVID-19 has left us.
    • Prepare to succeed – Plan for changes in consumer behaviour and identify new world opportunities.
    • Right size your business – Your business does not need to look the same post COVID-19 as it did pre. It can get back to its original position in time but that does not need to be immediate. I will anger some by saying this but ‘pride and ego’ is not an option right now.
    • Customers – Review your customer segments for liquidity and repayment risk. Yes repairing revenue streams will be important but not at all costs. There will inevitably be failures in the new business environment.
    • Suppliers – Consider de-risking and shortening the supply chain. Your supply chain may be in a location that continues with COVID-19 restrictions when you do not. Use this time to communicate with key suppliers or new potential suppliers to understand their challenges, timescales, credit issues, shipping issues etc.
    • Funding partners – Whether they be debt or equity, communication and support is key. It is a challenging time for all parties given the uncertainty but clear communication of a well thought out financial plan highlighting the impact of COVID-19; the steps taken to date; and the rebuild plan post COVID-19 is the only way to navigate funding structures.

    Life as a ‘start-up’ – CBILS, liquidity and other forms of funding

    Bank and lenders are currently dealing with a colossal number of requests for moratoriums, CBILS support and any other form of support available. The general feedback from all lenders is that they desperately want to help but despite an 80% guarantee from the government, CBILS still have a number of key criteria that must be met and the lending decision must still make commercial sense. Add to this the sheer volume of requests and remote working and it’s understandable to see why it’s hard for all involved.

    Whilst I appreciate there are immediate cash requirements for many businesses, it strikes me that the reality of knowing what quantum of support is required is some time away. There are still too many unknowns and without careful consideration of what the ‘new world’ looks like, it’s nearly impossible to know what support is required.

    In essence, lender support in this environment has three key facets. Firstly, to support immediate requirements; secondly, to support the inevitable working capital required in the post COVID-19 workout; and thirdly, the Bank must take reasonable steps to protect its capital.

    In panic mode, it’s understandable why borrowers focus on the near term but it’s the medium term that will define business recovery.

    We are all essentially ‘starting again’ so how does this affect the normal working capital cycle and why might tools like CBILS be key to helping restart business? In essence, what do we need to consider in funding the working capital of a ‘start-up’ economy?

    • Employees
      • Employees are the one certain cost that must be paid.
      • The JRS has been welcomed with open arms but how does it end? When does it end? Will it be tapered off? Will it end immediately? The reality is we don’t know but we can make assumptions and model accordingly.
    • Customers
      • Customers will no doubt push for extended credit terms.
      • What will consumer spending patterns be and how will this affect turnover? Many will have suffered income losses or job losses which could significantly reduce normal spending patterns.
      • Credit insurance may become more challenging in the market and those that use invoice discounting to fund working capital may have issues with old debts, credit risk and insurance that could impact upon funding or bring new risks to your balance sheet beyond this shock.
    • Suppliers
      • Will supply need to come from a local source and with a new relationship will there come constrained credit terms?
      • Do you need to hold stock in case of a second wave of COVID-19 and what are the working capital and cash implications for attempting to mitigate this risk?
      • Suppliers will want paid up front as they manage their own cash positions and bad debt risk.
      • Logistics/shipping times could continue to be interrupted or delayed depending on the geography of sourcing of your materials and how that location is coming out of lockdown.
    • Capital Expenditure / R&D
      • Is there a requirement to integrate e-commerce / supplier or customer microsites
      • Is IT infrastructure spend required to plan for a second phase of remote working or indeed as a longer term plan for the business?
    • Non-core divestments
      • Do you have non-core assets or businesses in your group that it may be worth considering disposing of to generate cash?
      • Market valuations are likely to be low for assets like this in the immediate term but could planning for this be a method to get a cash injection in the future to focus on core strategic activities?
    • Business interruption claims
      • How long will a claim take? Will the insurer pay out or will litigation be required? How is litigation to be funded?

    I’m not sure any of us actually know the answers to each of the questions above. The exact work out will likely become clearer as time progresses but despite these unknowns we must start considering them now and modelling what our own ‘start-ups’ looks like. It’s often said that models aren’t worth the paper they are written on as something always changes. I think in this instance that has in many ways never been truer but without key financial information or scenario analysis how can a business owner ever make an informed decision?

    HNH Announces New Office Opening

    Posted on by Rory Moynagh

    We are delighted to announce the opening of an office in Edinburgh.

    Announcing the opening, Craig Holmes said “We can now build on the great foundation we have established in Belfast since our opening in 2011 and extend our offering and influence to Scotland.  We have made this move with the full support and encouragement of our existing clients and business partners who all welcome this geographic extension of our services”.

    Two experienced deal advisory Directors have now joined us in Scotland – Harry Linklater and Bruce Walker.  Both have operated exclusively in the Scottish deals market for the past twenty years and bring with them a depth of experience and relevant networks.

    Two further Directors have been recruited and they will join Harry and Bruce in Scotland when they are permitted to do so under their transitional arrangements.

    Harry Linklater said of the opportunity “Having developed client relationships over time with a focus on the Scottish SME sector, the opportunity to continue working with long established contacts within a progressive advisory focused firm such as HNH is greatly anticipated. As we build our presence in Scotland as HNH, we will aim to leverage the firm’s proven activity levels with equity and debt funders across various locations, which we hope offers the Scottish market something new and different”.

    Bruce Walker who joins after 25 years with KPMG says “I am extremely excited to be joining the HNH Group and getting in at the start of building their business in Scotland and beyond.  HNH has a strong reputation in Northern Ireland and a long list of completed M&A transactions.  I look forward to working with the award-winning Belfast team and building a sustainable business in Scotland.  My focus will be M&A and Debt Advisory”.

    Initially HNH Scotland will focus on M&A, Debt and Transaction Services where they will work very closely with the existing HNH teams.

    HNH Scotland will also have access to the Business Restructuring, Tax Advisory, Forensic and Human Capital teams that operate from Belfast.

    Inspire partnership announcement

    Posted on by Rory Moynagh

    HNH Group are thrilled to announce that we’re partnering with Inspire as our charity of choice.

    We are completely on board with Inspire CEO Peter McBride’s philosophy of bringing your whole self to the office every day. So, it’s a natural fit to partner with an organisation who does such great work in this area.

    Back in February this year, HNH Human Capital Director Sarah Orange was invited along to an Institute of Directors event where Peter spoke and it struck a chord.

    “My experience of corporate environments is that the idea of bringing your whole self to the office each day is inhibited by rigid structures and stale expectations,” she said.

    “It would be a boring place if we were all the same.

    “Embracing diversity is healthy and makes for a more productive working environment as well.

    “Therefore, it’s our responsibility as an employer to encourage our staff to thrive.

    “It’s an environment we’ve always tried to embrace here at HNH, where an open door policy and shared ambition isn’t stifled by hierarchy.”

    There are plenty of opportunities to collaborate with Inspire in 2019, so stay tuned for some fun activities and content on our social media channels.

    LinkedIn:
    HNH Group
    HNH Human Capital

    Twitter:
    @hnh_group
    @hnhhumancapital

    Facebook:
    HNH Group Global
    HNH Human Capital

    ‘Bankruptcy Tourism’ – The End?

    Posted on by Rory Moynagh

    News has begun to surface in recent days that the Bankruptcy term in the Republic of Ireland (ROI) may be reduced from three years to one year, to bring Irish bankruptcy law into line with legislation in the UK.

    The move for this legislative change is being pioneered by Labour Longford – Westmeath TD, Willie Penrose who has been a long standing critic of current Irish bankruptcy law.

    Mr Penrose is reported as stating “This is critical, the current situation where it is three years bankruptcy here and one year north of the Border is rather silly and impractical”.

    The less onerous duration in Northern Ireland has led to ‘Bankruptcy Tourism’ in recent years – referring to the practice of ROI residents travelling North to avail of the 12 month UK bankruptcy regime.

    Although supported by the Labour party, the Dáil’s Department of Finance has previously opposed any such change, and failed to raise the issue in the Government’s mortgage arrears package earlier in the year.

    The Minister for Justice, Frances Fitzgerald may be bringing the proposed legislation change to the Cabinet in the next number of weeks.

    James Neill, Managing Director of HNH Group and a Licenced Insolvency Practioner, commented on the proposed change; “This is a potentially ground breaking development in bankruptcy law with a far-reaching impact across both the island of Ireland and UK. It is particularly pertinent when you consider the current stage of our recovering economies, both north and south of the border and has the potential to further stimulate recovery in Ireland”.

    With the upcoming Irish general election in the spring of 2016 it will be interesting to see whether this potential legislation change will become a bi-partisan issue supported across the isle or whether it will become an election sticking point that parties will bump heads over.

    Restructuring & Insolvency – Technical Update: Pension changes following the April 2015 budget (August 2015)

    Posted on by Alison Jones

    The position of pensions in Bankruptcy proceedings has been clear throughout the recession, pensions remain outside of the Bankruptcy estate and available for a Trustee in Bankruptcy in only one of two ways:

    1. Identifying excessive pension contributions in the period preceeding Bankruptcy; or
    2. The Bankrupt becomes entitled to their lump sum during their 12 month period of Bankruptcy.

    As a result, unless a borrower is of pensionable age (65), and hasn’t already drawn their lump sum then pensions are often excluded from discussions with creditors.

    Changes

    However, recent changes to pensions legislation in April 2015 have fundamentally changed two aspects of the old regime:

    1. Borrowers now have ‘flexible access’ to pensions from age 55; and
    2. Pension draw down restrictions are abolished i.e. borrowers can now draw down up to 100% of their pension by way of a lump sum.

    Prior to April 2015, an individual was entitled to drawdown 25% of their personal pension as a tax free lump sum upon reaching the pensionable age, with the remaining 75% to be used to provide an income – normally by way of an annuity or setting up a pension drawdown.

    Following Government changes which came into effect on 06 April 2015, an individual is entitled to drawdown their pension with no restriction i.e. they can withdraw their whole pension as a lump sum, if desired, once they have reached the normal minimum pension age – currently 55 (or earlier if in ill health or if the individual has a protected retirement age).

    The first 25% will still be tax free, with the remaining 75% subject to tax at the individual’s marginal income tax rate.

    Impact in Insolvency

    In an insolvency scenario, these changes present borrowers with access to funds which may assist in discussions with creditors outside of Bankruptcy.

    If a borrower is over 55 with personal indebtedness, then the ability to drawdown all of their pension as one lump sum, or stage over a period in order to minimise their tax liability, may present the borrower with an opportunity to reach a compromise with his / her creditors. It should be noted that pensions are intended to provide an income for retirement and so it is important for borrowers to take professional advice before making any such decision.

    The flexibility afforded to the borrower from such Government changes may also allow for increased application in an Individual Voluntary Arrangement (“IVA”), both as an alternative to, or as an exit mechanism out of, Bankruptcy. Drawing down an initial lump sum and staggering further drawdowns over a period, could present a borrower with an ability to provide his / her creditors with an enhanced IVA proposal. Furthermore, drawing down their entire pension pot (albeit with additional tax implications) may allow the borrower to agree a shortened IVA term with his / her creditors. It is also worth noting that any borrower not of pensionable age but in the process of proposing an IVA (and is likely to reach pensionable age during the term of the proposed IVA) may be able to offer additional funds into the Arrangement once they have reached pensionable age, in order to achieve acceptance from the body of creditors.

    The recent changes also have implications in Bankruptcy and the ability of the Trustee to seek an Income Payments Order (“IPO”) against the Bankrupt’s pension entitlements for the benefit of his / her creditors. The application in a formal Bankruptcy scenario is considered in recent case law, namely Raithatha v Williamson [2012] and Horton v Henry [2014].

    Contrary to the decision of Raithatha v Williamson [2012], in Horton v Henry [2014] the Judge held that a Bankrupt only becomes entitled to a payment under his pension after there are definite amounts which have become contractually payabe. An IPO attaches to a payment to which the Bankrupt is entitled. However, until the Bankrupt has exercised the option to choose between the various different ways in which pension benefits could be taken, the Bankrupt was not entitled to any payment at all against which an IPO could be made.

    Therefore, unless a Bankrupt has already agreed his / her pension drawdown method, a Trustee cannot force a Bankrupt to do so, thereby preventing a possible IPO from such pension entitlements for the benefit of the Bankrupt’s creditors. If, however, a Bankrupt’s pension is already in payment, a Trustee in Bankruptcy could seek an IPO in appropriate cases.

    This judgment of Horton v Henry [2014] is subject to appeal, with a hearing in the Court of Appeal now delayed until January 2016.

    Whilst this position in Bankruptcy remains unclear, it is again worth stressing the considerations outside of Bankruptcy for both borrowers and creditors alike.

    For those borrowers aged 55 with a pension fund, there is now a route to access substantial funds that could be provided to creditors in order to avoid potential Bankruptcy.

    HNH announce exam success and promotions in Business Restructuring

    Posted on by Rory Moynagh

    HNH are delighted to announce that both Rachel Foster and Rory Moynagh have recently passed the Certificate of Proficiency in Insolvency (CPI) exam. Both Rachel and Rory have also been promoted to Managers within the Business Restructuring department as the department continues to grow. James Neill (HNH Restructuring Partner) commented, “I am delighted that the hard work of both Rachel and Rory has paid off and that their ongoing professional development continues to strengthen the HNH Restructuring team”.

    RSA Inter-Provincial Series

    Posted on by Rory Moynagh

    At the weekend the Northern Knights squad completed their final training session before their first match in the RSA Inter-Provincial series, a one day match in the ‘RSA Inter-Provincial Cup’ (IP50) against Leinster Lightning on the 6th May at The Hills Cricket Club, Dublin.

    Following the selection of the final Northern Knights squad, the Knights unveiled another fine addition to their squad, new key sponsor, Horwood Neill Holmes.

    Horwood Neill Holmes will be the main sponsor for the Northern Knights during the series and Wayne Horwood said: “It’s great to see the RSA Inter-Provincial series across the three formats of the game. They are a key stepping stone for players into the full Ireland squad. HNH are delighted to sponsor the Northern Knights and I look forward to a good summer of competitive cricket and hopefully a few new international players selected on the back of their performances in the RSA Inter-Provincial series.”

    Northern Knights selector, Kyle McCallan said about the squad: “I’m delighted with the make up of the Northern Knights squad with all players showing good early season form. An away tie versus Leinster Lightning will be a tough start to the series, but I’m confident that this squad has the ability to get a win at the Hills CC on Bank Holiday Monday.”

    Looking forward to the first match, Head Coach Eugene Moleon said: “The squad has been announced for the first game and everyone is looking forward to the challenge. Guys have shown good form early on. We have a good blend of senior players and youth. I am glad to say from players, to coaching staff to admin officer, we will be giving it our all for the Northern Knights. Please support us in this series.“

    The RSA Inter-Provincial series will see the Northern Knights, Leinster Lightning and the North West Warriors play three day cricket for the RSA Inter-Provincial Championship, in one day competition in the RSA Inter-Provincial Cup and in a T20 competition, the RSA Inter-Provincial Trophy. For the full Northern Knights fixtures please check the NCU website: www.northerncricketunion.org

    Reflecting on the first squad selected, NCU Chairman, Brian Walsh, said: I would like to wish Andrew, Eugene, Gavin and the team all the best for the match at the Hills and indeed for the season. I would also thank Wayne and Alan Waite for their valued sponsorship.”

    The Northern Cricket Union looks forward to seeing cricketing fans from across the Union come together to support the Northern Knights. Congratulations to those selected and Good Luck to the team!