The problem is, the O.N.S. figures have been notoriously inaccurate in the past, with regular revision of the initial data.  In 2009 for instance, the third quarter was initially reported as a 0.4% fall and the fourth quarter a 0.1% rise.  Now the data shows rises of 0.2% and 0.7% respectively – a big shift!

There’s no way of knowing what kind of revision will be made to the latest figures, but if they’re similar to 2009 then the drop in the fourth quarter of 0.3% would become growth of 0.3% and the first quarter would go from minus 0.2% to plus 0.4%.  This is irritating because the O.N.S. need to understand that they create negative sentiment when they rush these figures out only to revise them later – and also that the national media seize on bad news and emphasise it without mentioning the positive stuff.

Did you know for instance that the CBI have recently reported that manufacturers are at their most positive for 2 years, while the Nationwide Building Society said consumer confidence was at its highest for 9 months?

Additionally, employment has risen in the last period reported with the private sector hiring new staff, more than off-setting the decline in the public sector.  The biggest rise in two years.  All good news.

It has to be said, the recovery is still not as strong as it could be – the USA is leaving the UK well behind, but the Americans recognise the importance of providing credit for businesses to grow and the importance of a strong housing market.  Our “leaders” on the other hand do not.  Mervyn King has been a disaster at the Bank of England, and George Osbourne needs to go back to school!

Fortunately a new governor will be appointed when King goes in a couple of months, and with a bit of luck – George Osborne might go and join the family design business.

In the meantime – ignore the bad news – we’re doing OK, but we could be doing a lot better if the politicians minded their own business.

This was one of the prices for trading with limited liability.

But no more, you can now able to make a free decision whether you are employed or self-employed, but with still having limited liability?

How I hear you ask? The answer is simple, it’s a structure known as a limited liability partnership (“LLP”).

LLP members are treated by HM Revenue and Customs as self employed. This has two advantages over being treated as an employee: -

1. Benefits in kind, are on the whole, not taxable;
2. National Insurance (NI) is at a much lower rate.

If we take a simple example of someone earning £100,000 per annum from his or her business to highlight the differences in National Insurance alone.

So in this simple example the business and individual being one and the same is over £13,500 per annum better off. Oh, and did we mention that benefits in kind aren’t taxable!

So onto locking in key people and increasing margins….

Within the published guidelines of HM Revenue and Customs, members of an LLP are self-employed for NI purposes, so in theory you could introduce every single person who works in your organisation as a member of the LLP.  Think of that additional employer’s national insurance contribution on every member of staff!

However, we would recommend not taking things quite as far as this, even if it is the logical step. Firstly, the widespread use of the “all personnel are members of the LLP”, even down to the part-time cleaner who would have a “master servant” relationship could mean that HM Revenue and Customs may look to revisit their current stance on who is self-employed for NI purposes. Secondly, considering our part-time cleaner, these lower-category employees tend to have a higher job turnover, and therefore there is an extra administrative burden with admitting and removing them from membership, plus any NI savings are insignificant.

So for this reason, we will focus on senior staff being admitted as members of an LLP, or perhaps applying a rule where company cars are provided, that anyone who is eligible for a company car is eligible to become a member of the LLP. 

From a practical point of view, being a member of an LLP does not necessarily mean that these individuals are given a say in the running of the business, or any share in the capital rights of the LLP. Both of these can be excluded relatively easily within the LLP agreement. It also doesn’t mean that the individuals have to have a share in any business profits, although in many instances the senior personnel we are talking about are going to have a degree of variable pay depending on the business (and their) results. Conversely, for certain non-sales non-profit targeted individuals; there is no reason why a fixed entitlement could not be included within the LLP agreement.

There is however for these certain individuals a potential downside as well as the tax, NI and zero benefit in kind tax side, and that is by becoming a member, and therefore self-employed they would forfeit any rights under employment legislation, such as rights to redundancy pay, unemployment pay and other benefits if things went wrong. Therefore sometimes there may need to be a sweetener for these individuals, and they come in abundance with an LLP – less NI paid on an individual basis, no company car tax for the individual – and for the business itself, saving 13.8% of the gross pay costs is a significant saving, perhaps some of this saving could be the cherry on top by offering the individuals a 5% increase on their remuneration, and as a business your still 8.8% better off!

There are many more benefits to be gained from LLP status, the relevance of which will depend on your current situation and your longer term financial objectives.

But you’re definitely missing out on some great opportunities if you don’t take a closer look at this strategy.  Incidentally, many of those I’ve spoken to on this subject tell me their regular advisors say LLPs are not for them – this couldn’t be further from the truth.  Fact is many advisors are ignorant of the opportunities and frequently don’t understand the benefits.  So if you’ve been given this advice I urge you to look again.

I’ll be pleased to discuss this with you if you’d like to get in touch email me at ted@cavendishmaine.com

However, certain transactions still remain entirely tax free, for example:

• Free or subsidised meals provided on the employer’s premises, which are available to all staff.
• Expenses incurred in the provision of any pension, annuity, lump sum, gratuity, or similar benefit given to an employee or to any member of the employee’s family or household on the employee’s retirement or death.
• Places in nurseries on premises made available and managed by the employer.
• Contributions towards ‘Use of Home as Office’ (£3 per week without the need to keep supporting evidence of cost).
• Childcare vouchers or employer supported childcare (up to £55 per week).
• Contribution towards incidental overnight expenses, when you stay away from home for at least 1 night on a work journey (no limit).
• Job related living accommodation.
• Trivial benefits, including a small gift in recognition of a particular event (e.g. marriage or birth of child), a seasonal gift or provision of free tea and coffee (no limit).
• Long service awards, for those with over 20 years service, where the cost does not exceed £50 per year of such service.
• Awards to employees under formally constituted suggestion schemes.
• Provision of a parking space at or near the employee’s place of work.
• Provision of subsidised public road transport to and from work, which is available to all employees.
• Provision of a bicycle for mainly home to work commuting and other business use, which is available to all employees.
• Annual parties where the cost to the employer does not exceed £150 per head.
• Sports facilities made available to employees which are not available to the general public.
• Mobile phones, where the contract is between the employer and the supplier.
• Certain work related training expenses.
• Removal expenses resulting from a change in job, up to the first £8,000.
• The personal use of an employer’s computer, in certain circumstances .

The foregoing list is extensive, and provides a number of significant opportunities for the creative employer, to enhance benefits without incurring additional tax charges for either party.

If you would like additional information on any of the above please contact Jeff Fuge on 01275 813035 or email jeff@cavendishmaine.com

• Experience of Hull, P & I and Cargo.
• Recently obtained a Master of Laws qualification in International Maritime Law.
• Possesses the LLMIT (Lloyd’s and London Market Introductory Test).
• Has some knowledge of Marine Cargo Claims.
• Will relocate anywhere in the UK.
• Available immediately.

For more details call Sophie Simmonds on 01275 813019 quoting reference SS/26493

• In excess of 25 years insurance broking experience, which includes working for some of the industry’s largest and most respected brokers.
• A proven track record of developing and retaining SME to mid market sized clients, with premiums typically in the £20,000 – £100,000 range, with some risks being significantly larger.
• Manages a book of business valued at in excess of £200,000 income, including many different types of client, from a variety of sectors.
• Confident pipeline builder, with an excellent ability to self generate and network contacts.

For more details call Stephen Mallaband on 01275 813025 quoting reference SM/01912

• 12 years claims experience, having handled Motor PI, EL/PL and Property files.
• Has experience working for brokers, solicitors and Insurers.
• Motivated to provide a high level of service, is very professional to clients and wants to progress and achieve more within the industry.
• Seeking an EL/PL claims opportunity.

For more details call Adrian Richards on 0121 353 9550 quoting reference AR/26674

• A wealth of Marketing experience gained from within the General Insurance & Financial Services industries.
• Strong, ‘all – round’ generalist Marketing professional.
• Ability to manage other Marketing professionals.
• Experience of producing annual marketing plans and controlling extensive budgets.
• Member of the Institute of Direct Marketing and Chartered Institute of Marketing.
• Possesses Postgraduate Diploma in Marketing (CIM).
• Available immediately.

For more details call Sophie Simmonds on 01275 813019 quoting reference SS/23402

• A bright and highly articulate Account Handler, looking for a challenging new client service position within a busy insurance broker.
• Confident at handling all classes of commercial risk, within premiums up to £50,000.
• Capable of handling high volume, as well as more complex risks.
• Highly recommended for interview.

For more details call Stephen Mallaband on 01275 813025 quoting reference SM/01090

• A highly successful specialist Personal Injury Solicitor and Legal Auditor with extensive experience in the auditing of personal injury cases.
• Most recently worked as Managing Partner of a Legal Firm where he headed up the Personal Injury Department.
• Experience of undertaking fast – track and multi – track claims of various values including; EL/PL, RTA and Industrial Disease.
• Both claimant and defendant experience and effective management capabilities.
• Available immediately.

For more details call Sophie Simmonds on 01275 813019 quoting reference SS/26672

• Handled Commercial Motor Claims, covering credit hire, recovery, disputed liability, damage and has been handling Motor PI claims for the past 2 years.
• 6 years experience and throughout this time, has developed a high level of technical knowledge.
• Understands the CPR and uses regulations to handle files in an efficient and professional manner.
• Seeking a Motor PI opportunity, with a solicitor, Third Party Administrator or Insurer.

For more details call Adrian Richards on 0121 353 9550 quoting reference AR/26755

• Over 10 years personal and commercial Motor Claims experience.
• 6 years experience of specialising in Personal Injury Claims.
• Ability to handle multiple complex claims from cradle to grave.
• Fast – track and multi – track experience.
• Experience of dealing with various medical reports and schedules.
• Able to deal with psychological fast track injury files with reserves of around £60,000.
• Fraudulent claims handling experience.

For more details call Sophie Simmonds on 01275 813019 quoting reference SS/25967

• Commercial Loss Adjuster, who has dealt with Commercial Property claims, CAR and Domestic household files.
• Deals with files from start to finish, including investigation and report.
• Over 30 years claims handling and adjusting experience.
• Seeking a commercial adjusting opportunity.

For more details call Adrian Richards on 0121 353 9550 quoting reference AR/26741

• In excess of 10 years underwriting experience, working for one of the industry’s leading insurance companies.
• Specialist property underwriter, having been trained by one of the markets key Property figures.
• Confident and competent at handling all sizes of Property risk, from SME through to large complex corporate risks.
• A proven track record of developing and retaining business, with an excellent market reputation.
• Has a superb network of broker relationships which they are able to use to drive income.
• Is part CII qualified and intends to complete the qualifications.

For more details call Stephen Mallaband on 01275 813025 quoting reference SM/01913

• An experienced commercial Underwriter & Account Executive.
• Cert CII qualified.
• Has previously achieved  in excess of 100% of target whilst maintaining a profitable loss ration from assigned brokers.
• Risk management experience.
• Experience of dealing with various commercial products including; fleet, property liability, personal accident and goods in transit.

For more details call Sophie Simmonds on 01275 813019 quoting reference SS/26398

• A highly skilled Commercial Combined Underwriter who has made themselves an enviable reputation in the Bristol market.
• A Development Underwriter with exceptional sales skills, coupled with superb technical ability, but who’s primary skill set is in new business identification and underwriting.
• A very strong panel broker relationships in the local market, and with a proven  track record of hitting targets
• Capable of managing complex risks.
• Highly recommended for interview.

For more details call Stephen Mallaband on 01275 813025 quoting reference SM/01090