This is because annuity providers will no longer be able offer a different annuity rate for male and females when calculating the amount of income your pension pot will buy.

Currently annuity providers use a number of different criteria to assess the level of income they will pay to you when you retire, such as your age, gender and where you live in the UK.

Typically a male buying an annuity today will receive a higher level of income at outset than a female of the same age. This because statistically, life expectancy for females is longer than males on average, and therefore annuity income is likely to be paid out over a longer time period.

In theory, this should mean that post December, annuity providers will pay a higher level of income to females than otherwise would have been the case pre-December and conversely a lower of level of income to male annuitants. Whether or not this proves to be the case remains to be seen.

Our view is that if you are male and are planning to buy an annuity sometime this year or next, you might want to consider the option of buying an annuity before December 2012.

Interestingly and perhaps unfortunately, this new ruling has come at a time when more individuals than ever reaching retirement age, having been born in the post war baby boom years.

Your health is another important factor too. Your medical history and / or certain lifestyle factors could mean that you qualify for a higher starting level of income at outset than buying an annuity using standard rates.

Shopping around for the most competitive annuity rate is therefore essential. It also makes sense to seek advice as there are number of other ways by which you can draw an income from your pension pot that may also be worth considering.

Buying a commercial property through a SIPP
Owning a property via a SIPP can be most beneficial because of the tax relief on the asset, which effectively means that the property is purchased at a discount price because of the corporation tax relief applied on employer contributions into the SIPP, and / or the income tax relief applied (at an individual’s highest marginal rate) on any personal contribution made into a SIPP.

If the property purchased is also used as the business owner’s premises, the rent is also being paid into the SIPP as well. This is a useful means to increase the value of pension savings because the rent does not count as a contribution which means that depending on the value of rental payments this could be greater than currently allowed by the £50,000 annual allowance.

It is also possible for multiple owners of the same business to pool together their individual pension arrangement using SIPPs to facilitate the purchase of a property.

Also it is not necessary for a SIPP to be of the same value of the property being purchased, this is because the SIPP can borrow up to 50% of its value on commercial terms.

The property can remain in the SIPP for life even whilst income is being withdrawn. This is because there is no longer a requirement for pension funds to be used to buy an annuity at age 75.

Owning the property via a SIPP offers some protection if business runs into trouble in the future as the business premises will be ring fenced from the other business assets.

There are of course some drawbacks which need to be considered, these include the liquidity of the asset may be an issue if the property needs to be sold in order to buy an annuity. Or where there is insufficient liquid cash or other assets in the SIPP in order to pay the maximum tax free lump sum when benefits are drawn.

The property will of course require regular maintenance and any rental arrangement will need to be formalised with an independent valuation and formal lease agreement. The SIPP provider will also charge for its services when initially buying the property and on an ongoing basis such as submitting VAT returns which can add an additional layer of costs. From experience, the VAT position also needs to be carefully considered during the early stages of buying the property.

The two consecutive periods of contraction of 0.3% and 0.2%, measured from the beginning of October 2011 to the end of December 2011 and from the beginning of January 2012 to the end of March 2012, confirmed what some of us already suspected.  Although only contributing approximately 7% to the UK Gross Domestic Product (GDP), the 3% decline in the construction industry was seen by many to have a significant bearing on the figures.

What does this mean to me? In essence probably not a great deal other than the word recession seems to endorse a sentiment of pessimism in consumer and household confidence. This sentiment is then generally replicated across businesses, with companies unwilling to invest and grow. At a time when households and businesses should be more optimistic, caution is likely to reign. 

Industry experts believe that until the Government develops a long term and cohesive growth strategy, rather than focusing solely on short term austerity measures we are likely to see much of the same, with periods of relatively small growth and contraction over individual quarters.

However as liquidator, perhaps surprisingly, a wrongful trading claim is not the simplest of actions to bring for two reasons.

Firstly, as a Liquidator you need to pin point the exact date when the company director(s) knew or ought reasonably to have known that there was no prospect of avoiding insolvent liquidation. It will be easier to demonstrate this if the director is an accountant! The test for directors competence is set out within section 174 of Companies Act 2006 and states that a director must exercise the reasonable care, skill and diligence of a person carrying out such a role. It follows therefore that ignorance is no defence.

The key here is the absolute need to pinpoint the “date of no return”. The decision in BNY Corporate Trustee Services Ltd v Eurosail went, amongst other things, to highlight that the mere existence of an insolvent balance sheet is not, on its own, grounds for a wrongful trading claim.

Secondly, you need to show that the position worsened year on year or month on month from the crystalising date you have identified.  If you can pin point that date, it is possible to bring an action for the loss suffered between the pin pointed date and the date of commencement of the liquidation. 

But what practical tips can a professional adviser give their clients in the unwelcome event that a client appears to be heading towards an insolvent period of trading? A few are listed below:

• To seek advice at the earliest opportunity
• Document the decision to continue to trade and the reasoning and justification behind the decision
• Prepare realistic projections for on-going trading and contrast these with performance on a monthly/quarterly basis
• Be careful of incurring further credit
• Be mindful that directors have a fiduciary duty to act in the interests of the company and its creditors rather than their own
• Knowingly and wilfully trading whilst insolvent can remove the veil of limited liability and they really don’t want that to happen.

Some of the “dodgy” tax avoidance techniques he complained about were slightly surprising, because they didn’t sound very dodgy to me: some rich people give so much of their income to charity that they don’t have much left to pay tax on. What is surprising is that anyone would take exception to this. The charitable sector does a great deal of good in areas that the government fails to deal with properly, or chooses to leave to someone else. Donors might well be encouraged by the fact that their gifts are tax-efficient, but nevertheless they are making real gifts — the tax they save is a lot less than the amount they actually genuinely give away.

It seems a shame that the Government, in its desperate attempts to raise more cash, is in effect taxing the charity sector. The Government will listen to representations from charities about the proposed cap on donations that qualify for tax relief, but I think we can nevertheless expect to see charities lose out.

Odd also that this is the same Chancellor who plans to give Inheritance Tax incentives to those who leave at least 10% of their taxable estates to charity.

This will be a very gruelling walk of 20 to 25 miles over the rugged Dartmoor terrain taking in as many Tors (rocky outcrops, capping hills or high ground) as possible and at least 5 river crossings; all in an attempt try to raise £1,500 for the firm’s nominated charity Against Breast Cancer, an organisation dedicated to funding ground breaking research to improve detection and increase survival after diagnosis.

Andy Lloyd, Jacqui Warner, Martin Wright, Nicola Derek, Terry Still and I will be taking on this challenge and we have been on various practice walks runing up to the big day, and this is what happened on practice walk number three….

On Saturday 10 March we all set off on our third “training” walk.  The venue this time was the Peak District National Park, a little place called Hathersage.

The schedule was to commence the walk at 9am which meant leaving Oxford at around 6.30am. Unfortunately, a certain member in the team based in the North of Oxford thought they lived an hour further up the M1 and arrived 45 minutes late!  The advantage to my car was the fact that we had time to stop for breakfast at Trowell services, trouble was we were still there when the crew in the other car drove past!

On arrival in Derbyshire it was a glorious morning and after we had driven past many cyclists, runners and fellow walkers.  We arrived at the National Trust car park which gave us a deadline of Dusk to collect the cars.

The route was rough on the legs and feet, there were boulders, bogs and hills (or let’s call them undulations or inclines), we had a lunch stop in the windiest cave in existence, it was almost warmer on the ridge than in the cave. 

The sun shone most of the way round and in the areas that we could get out of the wind it was almost tropical, we had a sing song at about 8 miles, and having been in Derbyshire at the start of the walk at one point found ourselves in the City of Sheffield, very confusing.

Towards the end of the walk, Captain Walker (aka Martin) was asked on numerous occasions if this was the last hill – and he replied in the affirmative, there was just a small incline or an undulation around the corner and then we were there.  We have now confiscated Martin’s thesaurus – a hill is a hill after all!

The final part of the walk found us descending towards a river, it was a very steep descent and we were not sure if there was a bridge over the river and low and behalf there wasn’t a bridge but fortunately there were a few strategically placed rocks!

A couple of pints were consumed in the Fox & Hounds, where due to post walk high and the booze (in some cases not all…) the general consensus of opinion was that a blink could serve as a power nap if required!

Now the bit that matters, as you know we are raising money for Against Breast Cancer and would welcome any donations to this very worthwhile cause and to support us in our challenge.

Please follow the link below to the specially designed Justgiving page and if you would like to see more photos of the walks and the amazing scenery please look here

Speculation beforehand was largely about changes to pension tax relief. In the event none of those happened. However, and perhaps somewhat paradoxically, with the changes that were announced pension opportunities abound.

Here is our analysis and we have highlighted a few key planning points.

Budget highlights

• Personal allowance to be increased to £9,205 in 2013/14, and the higher
  rate threshold reduced by £1,025 to £41,450.
• Age allowance to be frozen from 2013/14 and then phased out.

Our comments – The tax free personal income tax allowance is being raised from £7,475 to £8,105 for the under 65s in 2012/13 and is set to increase to £9,205 from April 2013.  This provides a useful planning opportunity for couples where one spouse isn’t working. Income producing assets such as cash savings could be held in the non-earner’s name and thus be tax free. The intention is that the base Personal Allowance will increase and the higher allowances for those aged over 65 and 75 will be phased out so that there will be a universal Personal Allowance for all.

• Limit on maximum amount of income tax reliefs that can be claimed from
  2013/14.

Our comments – Our initial assessment is that this will not impact on you making pension contributions and it is thought to be targeted at loss relief but one of the unintended consequences might be to discourage philanthropists from making significant charitable donations. The detail of this change will need to be examined further.

•  Additional rate of income tax reduced to 45% from 2013/14.

Our comments – This gives high earners an opportunity to maximise pension contributions in 2012/13 and use up any remaining carry forward allowance from 09/10, 10/11 and 11/12 to benefit from 50% tax relief whilst it is still available.

It is worth remembering that the Personal Allowance is lost at a rate of £1 for every £2 of income over £100,000. From 6th April 2012 this will mean that income in the bracket £100,000 to £116,210 will be taxed at 60%. This can be mitigated by making a pension contribution and/or charitable donation.

For example, someone with income of £130,000 in 2012/13 would achieve an effective rate of tax relief of just over 50% by paying £30,000 gross into their pension.

• From 1 October 2012, standard rate VAT will be charged on the provision of self-storage facilities and approved alterations to listed buildings. Standard rate VAT will also apply, where it does not already do so, to the sale of hot food, cold food consumed on the supplier’s premises, sports drinks, holiday caravan purchases and rental of hairdressers’ chairs.

Our comments – VAT on “hot pies” has been grabbing the headlines, but there are some nasty surprises for charities in relation to Listed Buildings-see here.

•  7% SDLT rate for residential properties valued at over £2 million and new
  measures to counter ownership through corporate entities.
• No changes to main pensions tax reliefs.
• Restrictions on the tax relief available on benefits from regular premium life
  assurance policies.
• Child benefit to be phased out where income is over £50,000.

Our comments- . The measure of income will be “adjusted net income” which means it will be possible to make a pension contribution or gift aid charitable donation to bring income down to under £50,000 if it is desirable to do so.

• Corporation tax main rate cut to 24% from April 2012 and to 22% by April
  2014.

Our comments – incorporating your business still makes sense from a tax and NI savings point of view.

• Voluntary cash basis based on turnover for tax on profits of small
  unincorporated businesses.
• An increase from £120,000 to £250,000 in the individual grant limit for EMI
  schemes.
• A further tightening of the car benefit rules through to 2016/17.

• Certain hot food and other “catering”
• Sports Nutrition Drinks
• Self-Storage
• Hairdressers’ Chair Rental
• Holiday Caravans
• Approved Alterations to Listed Buildings

While the addition of VAT to the price of hot pies has grabbed some attention, it is the last point on the list which may cause particular pain. Perhaps that is why HMRC tucked it away at the end.

Current Position
Oxfordshire probably has more than its share of Listed Buildings. The current position is that an alteration to a Listed:

• dwelling; or
• building used for qualifying charitable purposes; or
• building used for a qualifying residential purpose; (e.g. student accommodation; care home; or hospice) can be zero-rated.

There is an anomaly here, in that repairing a listed building is liable to VAT, but putting an extension on it can currently be zero-rated. However, the relief is still extremely valuable. It has helped Oxford Colleges extend student accommodation; Hospices provide further beds; church groups convert disused buildings into village halls; and householders (and not all listed dwellings are mansions) carry out necessary structural underpinning.  Many of these projects would not have gone ahead if VAT was chargeable on the work.

What’s changing?
From 1^st October, the relief is due to be withdrawn. For contracts in place prior to Budget Day, (21 March 2012) work can be zero-rated up until 20 March 2013. Otherwise, any work performed on or after 1 October 2012 will become standard-rated. And HMRC have introduced anti-avoidance rules to prevent getting zero-rating by invoicing in advance of work done on or after 1 October.

What next?
Well, HMRC would like to hear, by 4 May 2012, from those affected by the changes (the consultation document can be found here). This will presumably give time for representations to be considered before MPs debate the Finance Bill. Finances being what they are, I don’t imagine the Government will reverse the measure or reduce the rate of VAT on all building works to 5%, however.  

What I would like to see is a deferring of the start date. In particular for charities who often need to raise funds over an extended period. Adding 20% to a project cost isn’t going to help. So I would like to see a transitional arrangement where a charity may still enjoy zero-rating if say 50% of the funding has been raised.

In the meantime, there are still some VAT reliefs available in particular circumstances if you and your accountants look hard enough…

Whilst this will be good news for many retirees who perhaps might not have been able to build up sufficient NI contributions to achieved the full basic state pension and the state second pension for employees, what will happen to the state pension for those individuals who are on course to achieve in excess of £140pw?.

This news does feel like a typical double edge sword in that for many individuals to be better off with increased state pension benefits there must be some who will be worse off. Particularly when George Osbourne has said that the changes will not cost the Government anymore than the current state pension system.

Keeping record of everyone’s State Pension entitlement must cost a significant amount of time and resource for the Government, so in effect simplification of the current system could also be viewed as a cost cutting measure too.

Full details have not yet been announced and will follow later in the spring, so it is a case of watch this space in the meantime.