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  • Getting Value for Money on Storage Space with Accountancy SaaS 

     

    An accountancy firm without clients is like an empty suitcase – just dead weight. 

    First you need to cost in the transportation cost – how much your logistics provider will charge to migrate data and integrate it across relevant platforms.  

    Then there is a value-add charge encapsulating your weighted load. If you’re carrying excess baggage, redundant or missing data – what will be the cost and how can it be redistributed? 

    The workload at an accountancy practice can be divided among relevant stakeholders, with clients connected via an online system with priority tasks, and those clients who pay for more of your itemised services, assigned in a workflow allocation process which takes full account of upcoming deadlines based on the business’s reporting date.  

    Managing Accruals and Prepayments 

    Accruals must be fully addressed in a timely manner, that they are registered within the accounting period they relate to, and so that deferred income is carried over once payments have been processed in the cash book and bank account. 

    Another core component of bookkeeping practice is prepayments – classed as an asset when the business has prepaid the expense; and a liability where the prepaid income has been received but cannot be recorded in the ledger as such until such payment is timetabled based on its relevance to the current reporting period; that the payment can be reversed from an outstanding liability, and logged in the normal way at the commencement of the next reporting period. 

    Returning to our suitcase analogy, items are weighted based on the cost, in the context of turn on an asset. Are you getting value for money from your service providers on items assessed in terms of the cost of processing them? If you switch provider, can you guarantee a more cost-effective result? 

    Weighted Packet Margins May Surprise 

    Prior expectations of profitability are another example of excess baggage. While profitability ratios can be used to inform stakeholders of the efficiency with which a client business deploys its capital and accumulated credit owed to major debt holders, and the net vs gross profit ratios can indicate how a business is able to manage the costing on its current liabilities, – or expenses – financial reporting always logs the result at a time lag relative to the Statement of Financial Position (SFP) and the Profit and Loss Account (PLA). 

    And for this reason it is vital to keep updated accounts which are regularly refreshed, to ensure a snapshot of the business’s profitability, assets balance sheet and expenses management (itemised as fractions of net sales revenue), can be taken which reflects the payables and receivables control accounts in that forward orders, and credit purchases, are factored into the sales conversion pipeline. 

    Human Capital 

    Employees are a vital part of the business’s intangible capital assets. Skilled workers can mean the difference between returning and non-returning customers. So whatever the percentage increase in sales revenue attributable to marketing campaigns at cost, maintaining your brand identity and integrity requires re-investment, in relevant skills training and offering a sufficient reward – whether in the form of a commission, a bonus, or simply a competitive salary. 

    Matching pensions contributions, whether from salary sacrifice schemes or fixed-percentage contributions rate, is an important component of being able to invest in employee retention and ensure employee loyalty to the organisation, where they may  be transposed “sideways” to other internal roles, predicated on expertise and continuing relevance of their accumulated skills set, to the retainer organisation. 

    How to Meet Your Payroll Obligations 

    I am comfortable processing payroll and handling HMRC liabilities based on income bands and National Insurance categorisation. The new secondary threshold, over which a 15% NI contribution is mandated (up from 13.8%), of £5000 rather than £9,100, is especially onerous for managing the workforce in hospitality and can eat into marginal profits. Thereafter the Secondary Threshold will be increased in line with the Consumer Prices Index (CPI). 

    It is important to factor in that the Employment Allowance has been increased from £5000 to £10,500 to help eligible businesses offset costs. And additionally that the previous restriction that prevented businesses with a Secondary Class 1 NICs liability of over £100,000 p.a. from claiming the allowance has been removed. 

    I am also qualified to manage expenses with reference to VAT, particularly on charge-backs from capital expenditure on non-current assets. VAT owed from sales is straightforward to calculate, and liabilities can be matched relative to cash received back from HMRC on applicable purchases. 

  • Barratt Redrow analyst note

    Following its financial update for the 17-week period from 30 June 2025 to 26 October 2025 (the ‘period’), issued on 5 November 2025, the stock is down -4.70% over the week commencing Monday 8th December.

    With a strong forward orders book and integrated sales divisions, thanks to the Barratt-Redrow merger completed last year, the company has a clear blueprint for future expansion and is targeting an ambitious number of 22,000 home completions per year.

    All comparatives are to the 17-week period from 1 July 2024 to 27 October 2024 unless otherwise stated.

    Trading performance 

    The forward order book, including joint ventures, totalled at 10,669 as of 27 October 2025, compared to 10,706 homes over the equivalent period of 2024; net value of £3,281.4m for 2025, vs a comparable figure of £3,206.0m in 2024. This indicates that new homes sold have a higher realised value, although the company iterates its commitment to affordable housing, stressing the important role of the government in providing growth-enabling decisions and in timely consideration of planning permission on undeveloped sites.

    The company said in a statement coinciding with the earnings report said,

    “Based on unchanged guidance for FY26, at 26 October 2025 the Group was 60%3 forward sold with respect to FY26 private home completions (FY25: 62%4 forward sold), of which 64% are either completed or exchanged (FY25: 65%). “

    Its land bank is comprised of 87,000 owned plots with an additional 12,300 plots contracted or controlled. It stated its expectation that land acquisition to be in line with replacement levels, alongside a growing ratio of the current level.

    As of June 2025, a further additional c.145,000 strategic plots are available for development, “complemented by Gladman’s promotional land portfolio of c. 114,000 plots.”

    Including Joint Ventures (JVs), the group posted 228 net private reservations per week, (FY25: 225), with a net private reservation per week of 0.572 (FY24:0.59). operating from a mean of 402 sales outlets (FY 25: 443). Streamlining its operations has been a positive consequence of operational synergies between wholly owned business divisions.

    In a forward-looking statement, the group emphasised, “We remain on track to deliver £100m of cost synergies with confirmed synergies now at £80m, an increase of £11m from the £69m confirmed at 29 June 2025. An incremental £45m of cost synergies will be delivered in FY26.”

    . 

  • High Rise on the FTSE100 20/09/25

    Centrica rose 6% over the week, Babcock International 6.2%. Let’s have a look at what’s driving these high equity returns.

    Centrica plans to bump investment in green activities by 50% from 2023-28, including energy security of supply and flexbility, renewable and low carbon generation, as well as customer offerings that support the transition to net zero, said the CEO in the annual report statement.

    They highlighted the net cash position vs free cash flow as supportive of growth positions in LNG storage and carbon capture technologies. The adjusted net cash position is £2858m up slightly yoy from £2744m in 2023. This reflects the contribution of expanding its operating base. The company describes itself as a “conduit” for energy security policy, with a key example being the February 2024 LNG supply deal with Repsol, also with the two natural gas purchase and sale agreements with Coterra Energy announced October 2024.

    As regards regulatory financial reporting standards under GAAPs, the company was forced to acknowledge a decline in free cash flow of £989m compared to £2207m in 2023, with also a decline in adjusted operating profit – £1.6bn vs £2.8bn in 2023. However its sustainability record indicates a long-term growth prospect. Centrica has already attained 30% green investment based on the EU’s Sustainable Taxonomy and publishes any deviations from official reporting guidance whilst remaining engaged with stakeholders’ policy feedback. It cites the installation of 1million smart meters in 2024 as part of a new Meter Asset Provider sideline, “providing the group with a steady source of income in years to come while still helping customers decarbonise.”

    Additionally the company highlighted acquisitions in “proven renewable technology generation”, namely wind and solar generators and acknowledged its loss-making Rough natural gas carbon-recapture project would need a costing review due to the exorbitant overheads in 2025 estimated at between £50m and £100m. They have already sunk £2bn into preparing the site for development but concede that “While the site plays an important part in the UK’s energy and price security, and can be a crucial part of the future hydrogen economy, making material losses is not sustainable on an open-ended basis,” and they promise investors to review their financial exposure with this in mind.

    Other more profitable expansions of its energy service offerings include a £70m investment in Highview Power’s Liquid Air Energy Storage in June, an the 20MW hydrogen peaker in Redditch.

    Its services offering has demonstrated an increasing level of customer satisfaction, the Chair highlighted in his statement that “Over the course of 2024, we’ve seen further progress in improving customer service in British Gas Services and Solutions. We’re also delivering an improved NPS, a key metric of customer satisfaction, in British Gas Energy.” NPS signifies a customer’s willingness to refer an engineer on the basis of home visit, assessed through individual questionnaires.

    He explained that in 2023 the installment of prepaid meters under warrant was paused on the grounds of affordability for customers, citing a “material risk of financial hardship,” although Centrica ried to mitigate the affordability barrier by investing in “a number of changes to our systems, processes, training oversight arrangements, and we remain committed to supporting our customers, particularly the most vulnerable.”

    In the context of debt relief, they spearheaded the “You Pay: We Pay” flagship scheme which 100% matches payments that eligible British Gas customers are finding difficult to pay into their account to decrease the outstanding balance. He points to the suggestion of a social tariff underpinned by data sharing as an alternative way of monetising delinquency or default in debt accounts.

    However, he also claims the company has voluntarily given £140m to support affordable energy initiatives since the beginning of the energy crisis, to beneficiaries including £20m in January 2024 to the British Gas Energy Trust.

    The financial year 2024/5 saw three phases of a share buyback program, starting with a £200m tranche in July 2024, then a £300m tranche in December 2024, culminating in a £500m repurchase of its own equity in February 2025, with the total value of share capital held by the company finalised at 25% of its total equity level.

    “Additionally, we returned share capital to investors in the form of dividends, which came to 4.5p at the end of 2024, inclusive of a 1.5p interim dividend outlined in July”.

    Babcock’s Annual Report for FY 2025 represents its first FTSE100 index listing after over 7 years absence. The company was pleased to announce revenue of £4,831m, of which underlying operating profit represented £363m, up from £238m in 2024, with underlying operating profit margin of 7.5%. It notes that Statutory Cash from Operations was £357m, down from £374m in 2024, but that the organisation found non-GAAP reporting standards to more accurately represent its financial position.

    Around 74% of Babcock’s revenue is from defence contracts, with 5% from civil nuclear. It points to a £10.4bn “contract backlog” of forward orders yet to be delivered. Its underlying free cash flow was £153m, with net debt levels excluding leases standing at £(101)m.

    The company’s key business divisions as follows:

    1. Marine – design, build and through-life support for warships and submarines, and associated weapons handling and launch systems; creation of secure military communications systems; and what is claims are “world-leading commercial liquid gas equipment systems.
    2. Nuclear – through-life complex engineering support to the entire UK submarine fleet; owner-management of infrastrcture including Devonport dockyard; UK civil nuclear new build, generation support and de-commissioning projects; other international contracts in civil and defence markets.
    3. Land – asset management and through-life support for complex military equipment as well as ongoing skills training for ground deployment; systems integration and engineering services in power gen, transport networks, and mining equipment.
    4. Aviation – flying training for UK’s Royal Airforce, French Airforce and French navy; through-life support of military flying assets and other air operation support “for government programmes, saving lives and protecting communities”

    The company says the average underlying operating cash conversion is higher than or equal to 80%, and highlights a number of innovations as follow:

    i) better alignment between project management, engineering and commercial functions to mobilise pipeline contracts, as part of Global Business Management System to ensure continuity and identify risk factors.

    ii) improved governance controls for bidding, strengthening the legal review process on tenders.

    iii) FY25 published first Supplier Assurance Handbook to mitigate procurement risk, “enhancing transparency by detailing our sustainability considerations, audit and development process.”

    iv) new AI functionality with capex developing Athena – “As we look to FY 2026, the program will focus on large-scale integration across the business, supporting our governance of costs and efficiencies.”

    v) In employee management, it has rolled out an Engineering Role Framework with on-the-job training in key competencies, developing a Production Support operative scheme to access a wider talent pool; apprenticeships in space systems and cyber security; and taking a leading role in the UK’s National Nuclear Strategic Plan for Skills.

    Wide Moats – the Investment Prospect

    • own initial assets, with long lifecycle
    • operational asset knowledge and capability transfer
    • strategic partnerships with high barriers to entry

    Looking ahead, FY25 saw a refocusing of the technology team, “establishing cross sector and country working groups for each of our strategic technology capability teams… These themes drive innovation, ensure our technology relevance and empower us to deliver cutting-edge, practical solutions.”

    Babcock CEO trumpeted an upgrade in the company’s medium-term guidance, and a 30% increase in full-year ordinary dividend as well as revealing a £200m share buyback program which will be rounded off in FY26.

  • Analyst note Costain

    Costain Group Annual Report states they “received prestigious recognition for our approach when we obtained the London Stock Exchange’s Green Economy mark.

    “This identifies companies that generate at least half of their revenue from products and services that contribute to the green economy. The mark is only held by around 6% of companies on the LSE.”

    Note that a £10million share buyback program concluded in November 2024. Over the previous financial year, cash from operations FY24 was £42.7m (FY23: £69.6m), “resulting from increased operating profits offset by year-end timings of certain cash receipts at the end of FY23 and FY24, together with some end of contract outflows in FY24.”

    The adjusted free cash flow in FY24 of £27.1m (FY23: £70.2m) was lower than the same period last year largely “due to the timing of year-end working capital and higher tax and expenditure payments” with internal adjustments as funding was diverted into updating infrastructure, requirements for new business systems; and increased cash flows on adjusting items, with turn on non-current assets offset against “reduced pension fund deficit contributions.”

    Liquidity considerations aside, the adjusted operating profit margin was 3.4% compared to 3.0% FY23 yoy, with 4.4% growth in H2 as Costain states it saw greater operating efficiency and productivity in the Natural Resources division, with higher marginal profits.

    Total revenue from transport fell from 943.1m in 2023 to 845.8m in 2024, at a higher operating margin of 3.5% from 3.0%. Road and rail takings fell, although integrated transport projects experienced expansion of 92.7% The net business forecast is for an optimistic 5% growth rate for FY 2025 after an initial target of 4.5% over the course of 2025.

    As regards sustainability targets, their Scope 1 emissions reported 4,772 down from 4,875 (-2.1%) and Scope 2 (-3..16%) was 888 down from 1,299. Scope 3 emissions saw just a 1% increase from 281,765 FY23 to 278,248 FY24. In terms of accountability, Costain reports that 100% of relevant contracts were working in accordance with PAS 2080.

    Its ambitious target is for a 6% yoy reduction in Scope 1 and Scope 2 emissions, the same percentage for the absolute emissions value. In some ways accepting the limitations of its capacity to cap emissions is preferable to mis-reporting it, which happened recently with UK energy company Drax, whose share price fell over 10% in a day immediately after regulators signalled an investigation into whether the provenance of wood chips for biomass pellets was actually sustainable, and the emissions reporting for the diesel ships transporting wood chips from the US did not comprise a Scope 2 or 3 emissions estimate.

    Costain is targeting a dividend payout of 3x adjusted earnings. Payments were resumed in FY23 with a full-year dividend of 1.2p per share for the year, in line with the pension payments required for the year under the “dividend parity arrangement.” The board has approved a final dividend of 2.0p per share.

    The company is transparent about its desire to capitalise on the problems caused by climate change, and highlights the risk-based opportunities for its diverse business lines –

    “There is a high potential in the water sector – the capacity of sewage needs to be increased to deal with additional strains placed on it by rainfall intensity coupled with increased demand,” and considering the enhanced “maintenance and modification to improve the drainage capacity or resilience of its assets.”

    It highlights the initiative of a carbon tracker which will provide unified measures of resource usage across different project lines, and demonstrate areas of improvement relative to industry benchmarking.

  • Last Week’s Financial Round-up 08/09/25

    Gold pricing reached a new peak above $3500, alongside an 8.10% expansion in equity from Fresillo, a Mexican silver mining company incorporated in the UK which was one of the week’s high performers and infrastructural investment represents an effective counterpoise to gold contracts.

    According to the Times, growth obstacles for UK listed companies comprising “tax rises, slowing wage growth and sticky inflation” are affecting several service providers.

    Bunzl, for example, which sells PPE and sanitary equipment to healthcare and health and safety providers, as well as packaging, was poised to take advantage of new overseas markets as M&A revenue and adjusted operating profit for the year increased 7.9% with conversions indicated 3.1% revenue growth on an 8.3% operating margin.

    In its annual report, Costain reported cash from operations in FY24 was £41.7mn, (FY23: 69.6mn), resulting from “increased operating profits offset by year-end timings of certain cash receipts at the end of year FY23 and FY24, together with some end of contract outflows in FY24.”

    The company cited the “timing of year-end working capital” as well as “higher tax and capital expenditure payments” on investment in new systems and “higher cash flows on adjusting items”, although meeting the pension contribution deficit may have a detrimental effect on liquidity.

    Inflation proxy indicators

    Indeed, the CPI for July stood at 3.8%, up from 3.6% for June. The RPI, excluding the costing change in fuel and energy, was 4.8% for July, an increase from 4.4% yoy growth for June. The Producer Price Index (PPI) provides forward-looking outlooks of upcoming price increases based on slack vs actively engaged capacity, and acts as a measure of manufacturing inflation.

    The Purchasing Manager Index (PMI) provides an indication of future orders and growth outlook based on forward-looking pricing on manufactures and services.

    Trump’s foreign policy this month have not affected appetite for US 10-year Treasuries, which were stable as the return on Treasury bills, which must be held for 10 years until maturity, increased by 1bp from 4.27to 4.28.

    The coupon paid out on UK 10-year gilts rose from a yield of 4.84 the preceding week to 4.90 correct as of 2 September, reflecting market speculation surrounding suggested tax cuts to be announced in the Budget on 26 November, which may contain a new wealth tax to meet the current spending shortfall.

    Note that the Sentix Investor Sentiment Index, published today on forexfactory, was at -9.2 vs a forecast of -2.2; whereas the forecast for August was actually positive, and forward-looking analysts put the prediction at 6.2 where the actual value, predicated on a diffusion index based on surveyed investors and analysts, was -3.7.

  • Analysis of Developing country debt finance initiatives, with the outcome of the 2025 Sevilla Conference 13th June to 3rd July.

    Key points: 

    • 93% of the most Climate Vulnerable Countries (CVCs) face a debt crisis. 
    • Many spend up to 5x the amount of budget allocated to addressing climate change on serving debts. 

    One case study is Kenya, which after the pandemic in 2020 applied via the IMF for an austerity funding package, and was forced to cut public spending by 15%. 

    Nowadays, 35% of its debt is to private creditors such as Citigroup, Standard Bank and BlackRock. These lenders charge interest rates of up to 10.4%. 

    A recent Oxfam report found that for every $1 the IMF recommended low-income countries spend on public goals that promote development and wellbeing, they were instructed to cut four times more via austerity measures. 

    Another case study is Sierra Leone, where overseas capital after the civil war meant its public debt swelled from $1.2bn in 2002 to $1.9bn in 2022. Around 73% of the country’s foreign debt is owned by multilateral institutions such as the World Bank and the IMF, which refused to grant debt relief.  

    The value of its currency has depreciated 50% in 2023. Public spending was slashed in the aftermath. Almost 70% of children in Sierra Leone live in poverty, with parents unable to afford school fees. 

    In 2020 the UK passed the Debt Relief (Developing Countries) Act, which impelled private creditors to engage in debt relief under the 1996 heavily indebted Poor Countries (HIPC) initiative. 

    “A subsequent government review found the legislation to have been a success and to have had no adverse consequences for the UK economy. With the HIPC initiative now outdated, new legislation is urgently needed to apply to the current G20 Common Framework.” 

    p.12 ‘Jubilee 2025 – the New Global Debt Crisis’ 

    The Jubilee 2025 global debt crisis report calls for Special Drawing Rights – a financial tool composed of a diversified basket of widely traded currencies – to be more widely available. 

    (see ‘Public Climate Finance provided: an analysis by financial instrument’, 2020/ ‘Climate Finance Provided and Mobilised by Developed Countries in 2016-20′ 

    Finance by private lenders often comes with onerous interest rates due to the perceived risk of the investment, yet when the borrower defaults private venture capitalists refuse to engage in debt relief, leaving governments and multilateral lending facilities to finance the cost of bailout. 

    Climate change finance in 2020, according to OECD data, comprised just 26% in grants vs loans which have coupon payments priced in on the input capital in a forward-looking structure to make profit from the cost of capital.  

    OECD figures capture four distinct components of climate finance provided and mobilised by developed 

    countries: (i) Bilateral public climate finance provided by developed countries’ bilateral agencies and 

    development banks; (ii) Multilateral public climate finance provided by multilateral development banks and 

    multilateral climate funds, attributed to developed countries; (iii) Climate-related officially supported export 

    credits, provided by developed countries’ official export credit agencies, and (iv) Private finance mobilised 

    by bilateral and multilateral public climate finance, attributed to developed countries. 

    The report was jointly prepared by the OECD’s Environment and Development Co-operation Directorates. 

    It also benefited from dedicated 2020 data inputs by the OECD Trade and Agriculture Directorate (for the 

    majority of export credits) as well as donor countries (provision of 2019-2020 bilateral public climate finance 

    in advance of UNFCCC reporting, delayed to later in 2022). 

    Key findings: 

    Recap of 2020 figures and aggregate trends 

    USD 83.3 billion was provided and mobilised by developed countries for climate action in 

    developing countries in 2020. While increasing by 4% from 2019, this was USD 16.7 billion short 

    of the USD 100 billion per year by 2020 goal. 

     In 2020, public climate finance (both bilateral as well as multilateral attributable to developed 

    countries) grew and continued to account for the lion’s share of the total (USD 68.3 billion or 82%). 

    Private finance mobilised by public climate finance (USD 13.1 billion) decreased slightly compared 

    to earlier years, while climate-related export credits remained small (USD 1.9 billion). 

    Mitigation finance still represented the majority (58%) in 2020, despite a USD 2.8 billion drop 

    compared to 2019. Adaptation finance grew, in both absolute (USD 8.3 billion increase compared 

    to 2019) and relative terms (34% in 2020 compared to 25% in 2019). Such an increase is, to a 

    great extent, the result of a few large infrastructure projects. Cross-cutting activities remained a 

    minority category (7%) almost exclusively used by bilateral public providers. 

     Mitigation finance focused mainly (46%) on activities in the energy and transport sectors. In 

    contrast, adaptation finance was spread more evenly across a larger number of sectors and 

    focused on activities in the water supply and sanitation sector, and agriculture, forestry and fishing. 

    As in all previous years, loans accounted for over 70% of public climate finance provided (71% or 

    USD 48.6 billion in 2020, including both concessional and non-concessional loans). The share of 

    grants was stable compared to 2019 (26% or USD 17.9 billion). Public equity investments 

    continued to be very limited. 

     Over 2016-2020, climate finance provided and mobilised mainly targeted Asia (42%) and middleincome 

    countries (43% and 27% for lower- and upper-middle-income countries respectively). 

    Further, 50% of the total was concentrated in 20 countries in Asia, Africa and the Americas that 

    represented 74% of all developing countries’ population. 

    Mobilisation of bi-lateral finance initiatives depend on indigenous institutions’ ability to structure project finance deals with repayments assured, in meeting creditors’ requirements for return on principal by integrating multiple funding channels as each project enters its operational development phase. The loan may be collateralised with the cost of equipment subject to fixed or floating charges, and revenue streams must be channelled appropriately via so-called ‘waterfall’ or ‘mezzanine’ financing.  

    The report states that 

    Grants represented a much higher share of finance for adaptation and cross-cutting activities than for mitigation between 2016 and 2020. Grants typically support capacity building, feasibility studies, demonstration projects, technical assistance, and activities with low or no direct financial returns but high social returns. Public climate finance loans are often used to fund mature or close-to-mature technologies as well as large infrastructure projects with a future revenue stream, which are predominant for mitigation finance as well as in middle-income countries. 

    Grants represented a larger share of climate finance for SIDS, LDCs and fragile states, compared to developing countries overall. Countries within these three categories often present economic and socio-political conditions that do not favour loan-based finance due to limited absorptive and repayment capacity. Recipient institutions and projects in middle- and high-income countries tend to have a relatively higher capacity to seek, absorb, deploy and repay loans. 

    A common fallacy is that development finance is often mis-allocated or appropriated by illegitimate and/or corrupt regimes. In fact, after the Jubilee 2000 campaign for fair development finance, in nations where debts were cancelled the proportion of children finishing primary school went from 45% to 66%, the report claims. 

    The Jubilee 2025 report calls for the following actionables: 

    1. Private creditors legislation to be updated. 
    1. Systemic change of the IMF ensuring fairer (more proportional) allocation of voting rights. 
    1. A public global debt registry, to hold all borrowers and lenders accountable.  

    “Legislators in key financial centres like the UK and New York could introduce requirements that make loan enforceability contingent about timely disclosure in the registry. It should be independent from lenders and borrowers and could sit within a UN framework.” 

    Cites EURODAD, Bogota Declaration, 2023 (see extracts below) 

    1. Automatic debt cancellation following a natural disaster or economic crisis. 
    1. Comparable treatment for all creditors. A system to be introduced whereby those setting lower interest rates on repayment not to be required to service debt relief in the same proportion as those setting higher repayment rates. 
    1. A new global debt framework, as with the 2023 UN Tax Framework Convention, passed by the UN General Assembly, where the 4th International Financing for Development Conference timetabled for June 2025 could provide a springboard for further legislative change. 

    Global south CSOs demand justice and a change to the rules on debt and financial architecture – Eurodad 

    The poly-crisis facing Global South countries is reversing hard-won gains in poverty reduction as deep fiscal consolidation and austerity programmes dominate macroeconomic policy. Global debt policies launched by the IMF and the G20 failed, and many Global South countries are required to service multilateral, bilateral, and private sector debt crippling their ability to respond to domestic socio-economic pressures, and in effect de-invest in public services. 

    Global South’s constraints are both historical and contemporary. The colonial and neocolonial order continue through soft diplomacy and drip dependency in the form of official development assistance, foreign direct investment, and the promises of billions from the Global North private sector; coated with policy interventions that have seemingly targeted creating a hospitable environment for foreign capital to enter and exit Global South with minimal values being retained on Southern countries. This extractivism in policy advice has been long argued as contributing to the underdevelopment of the Global South. 

    We are alarmed that Southern countries remain locked in a vicious cycle of debt, climate, and extractivism, which deepens their dependence on commodities, increases environmental harm, and at the same time, sustains the uneven power structures between North and South, between lenders and borrowers…. 

    The 70 delegates assigned to the Bogota declaration, which was hosted by Columbia on 20-21 September 2023, represented experts and activists from civil society organisations, social campaigners, 

    and pan-national networks . 

    We, as CSOs and networks that historically work on debt across the globe, demand to 

    decision makers at national, regional, and global levels: 

    • Reform of the global debt architecture that addresses unsustainable and illegitimate 

    debts, by bringing transformative change to the current unfair and persistently 

    unbalanced rules. Towards this end, we further demand: 

    OUTPUT DOCUMENT 3 

    o Automatic debt service cancellation mechanism that protects countries of 

    the Global South from extreme events related to political, climatic, 

    environmental, economic, and security shocks. 

    o Improved debt contracts aligned with responsible borrowing and lending 

    principles, including state contingent clauses, such as climate or pandemic 

    clauses. 

    o Binding responsible lending rules for all creditors, including private lenders of 

    sovereign debts. 

    o The elimination of austerity and fiscal consolidation measures and IFIs’ 

    conditionalities. 

    o Advance towards the establishment of a fair, independent, transparent, timely 

    and binding multilateral framework for debt crisis resolution (under the 

    auspices of the UN and not in lender-dominated arenas). 

    Recent data publicly available on lending structures in Sierra Leone reported that the share of development cooperation that used budgeting execution procedures was 1 in a ratio of 1 to the use of auditing procedures. However, financial reporting procedures were used by 0 participants in PFM systems, and just 0.21 used procurement systems.  

    Forward spending plans were not dated more than 1 year in advance, with medium-term spending forecasts of two to three years virtually nonexistent, although the share of development cooperation on the national budget was at a ratio of 1:1:1 comprising reporting to the international management system, reporting at the expected frequency, and provision of the information requested. 

    The extent of parliamentary oversight on development cooperation stood at a ratio of 0.5:1 with respect to the regular provision of development information to parliament. The share of development cooperation reported on the international budget was 0, although the legal and regulatory environment for CSO was recorded at 0.75, resulting in CSO development effectiveness rated at 0.63. 

    The Sevilla Platform for Action on debt relief, resulting from the global consultation and consensus from the 13th June to the 3rd July, follows while the International Business Program alongside the development aid review assembled private sector stakeholders to ensure they are engaged with decision making related to debt structuring, project finance and initiatives to enhance global trading links. 

    The manifesto states its mandate (to): 

    1. To catalyze investments at scale and close the SDG financing gap, initiatives will help countries mobilize tax revenue; scale up blended finance, including guarantees, and local currency lending by MDBs; and increase financing for crisis response. 
    1. To address debt challenges, initiatives include a global hub for debt swaps for development; a ‘debt pause clause alliance’ to incorporate such clauses in lending; and a borrowers’ forum. 
    1. To support architecture reform at national and global levels, initiatives include a coalition of countries and institutions for country led and owned platforms; a coalition of countries that will include measures of vulnerability beyond GDP in all financing operations; and efforts to update the role of development cooperation at the global level. 

  • Capital Gains Tax Exemptions. Learn how to avoid CGT on qualifying investments and settlements

    All assets are regarded as chargeable assets except for those which are specially exempted from CGT. The main exemptions are as follows: 

    1. A taxpayer’s private residence 
    1. Motor cars, including vintage and veteran cars (although not personalised numberplates) 
    1. Items of tangible, removable property (referred to as “chattels” which are disposed of for £6,000 or less. 
    1. Chattels with a predictable useful life of 50 years or less, unless used as business and eligible for capital allowances (Chapt 19) 
    1. Gilt-edged securities and qualifying corporate bonds (Chapt 20) 
    1. National Savings Certificates and Premium Bonds 
    1. Foreign currency (if acquired for private use) 
    1. Winnings from pools, lotteries, bettings etc 
    1. Decoration for valour (unless purchased by acquirer) 
    1. Damages on compensation received for personal or professional injury and compensation for mis-sold personal pension schemes 
    1. Life insurance policies (unless purchased by a third-party) 
    1. Shares in a Venture Capital Trust (Chapt.6) 
    1. Investments held either in an Individual Savings Account (ISA) or a Child Trust Fund (Chapt.60 

    2012-13, the max capital allowance of an ISA was capped at £11,280. Notes interest and dividends arising from ISAs are exempt from income tax. Capital gains (and losses) arising from ISAs are exempt from CGT. 

    Notes 2 types of ISA: 

    1. Cash ISA is deposited with a bank or building society and is held in a savings account. 
    1. Money investment in a stocks & shares ISA is used by the ISA provider to acquire stocks & shares on the saver’s behalf. 

    Venture Capital Trusts 

    A Venture Capital Trust (VCT) is a company which is approved as such by HMTC. The main conditions which must be satisfied before IMRC approval can be obtained are as follows: 

    1. The company’s ordinary shares must be listed on an EU stock exchange 
    1. Its income must be derived wholly or mainly from shares and securities and no more than 15% of this income may be retained by the company 
    1. At least 70% of its total investments must consist of “qualifying holdings” and at least 70% of these holdings must consist of “eligible shares”. Broadly, shares or securities owned by a VCT rank as qualifying holdings if they were newly issued to the VCT and are shares or securities of a company which would be a qualifying company for the purposes of the EIS (Enterprise Investment Scheme). Eligible shares exclude redeemable shares. 
    1. No holding in any one company (other than in another VCT) can represent more than 15% of a VCT’s investment. At least 10% of a VCT’s investment in a company must be held in the form of eligible shares. 

    Income tax relief is available to taxpayers who subscribe for newly-issued shares of a VCT. This takes the form of a tax reduction equal to 30% of the amount invested, subject to an investment limit of £200,000 per tax year. This reduction takes priority over the tax reductions relating to certain payments by the taxpayer (see Chapt.4) and the tax reduction relating to the MCA (see Chapt.3) To qualify for income tax relief, the taxpayer must hold the shares for a minimum holding period of at least 5 years. 

    Dividends on the first £200,000 of VCT shares acquired in each tax year are exempt from income tax and any capital gain or loss arising from the disposal of these shares is exempt from capital gains tax, regardless of whether or not the shares have been held for the minimum holding period. 

    Enterprise Investment Scheme (EIS) 

    *Dividends on the scheme are subject to income tax in the usual way* 

    a) Income tax relief is available to taxpayers who subscribe to newly issued ordinary shares in “qualifying cos”. Features include: 

    – less than 250 employees 

    – permanent establishment in UK and have gross assets not exceeding £15mn immediately before the share issuance, and not exceeding £16mn immediately after it. 

    – the co. Must have raised no more than £5mn under the EIS and other venture capital schemes in the previous 12 months. 

    b) A taxpayer’s EIS investments of up to £1mn in tax each year are subject to tax relief. 

    c) Relief takes the form of a reduction in the amount of tax due to the taxpayer’s chargeable income equal to 30% of the amount invested in qualifying cos during the year. This reduction takes priority over the tax reductions relating to certain payments (Chapt.4) and MCA (Chapt.3) 

    d) The taxpayer must not be connected to the co. At any time during the two years prior to the date of the investment and the three years following the date. Broadly speaking, an individual is connected with a company for this purpose if he or she is an employee of the co, or, together with associates, owns more than 30% of the co’s ordinary shares. 

    1. Any capital gain arising on the eventual disposal of the shares is exempt from CGT but any loss arising on the disposal is eligible for relief, and the loss may be relieved: 
    1. As a capital loss, in the usual way or 
    1. Against the taxpayer’s total income for the year in which the loss is incurred after the prev. Year (see Chapter 12) 

    When calculating the allowable loss, the shares are deemed to have been acquired for their issuance price, less the tax reduction obtained when shares were purchased. 

    The taxpayer must retain the shares for a minimum holding period of at least 3 years or both the income tax and capital gains tax reliefs are lost. 

    Seed Enterprise Investment Schemes 

    The money raised by the new share issue must be spent within 3 years of the share issue. You must spend the money on either: 

    a qualifying trade 

    preparing to carry out a qualifying trade 

    research and development that’s expected to lead to a qualifying trade — such as a project to make an advance in science or technology 

    You cannot use the investment to buy shares, unless the shares are in a qualifying 90% subsidiary that uses the money for a qualifying business activity. 

    1. Subject to certain conditions tax relief is available to investors who subscribe to ordinary shares in a co. which is carrying on a new business, although not one which started more than two years before the share issue.  
    1. The co. Concerned must be an unlisted trading company with a permanent establishment in the UK, have fewer than 250 employees and its assets less than £200,000 before the SEIS investment is made. Also, the amount of all SEIS investment received by the company must not exceed £150,000 (correct as of last published edition of Alan Melville’s ‘Taxation’ 2012-13. 
    1. During the period from the co’s incorporation until the third aniversary of the share issuance, the investor must not own more than 30% or more of the co’s share capital, or be an employee of the company other than the director. 
    1. Tax relief takes the form of an income tax reduction equal to 50% of the amount invested up to a limit of £100,000 p.a. 

    *As with the main EIS, any SEIS investments made during a tax year may be carried back and treated as if made in the previous years. 

    Income from Trusts and Settlements 

    A trust or settlement is an arrangement whereby property is held by persons known as trustees, for the benefit of persons known as beneficiaries. This fall into two main categories: 

    1. If one or more persons are entitled to receive all the income which is generated by the trust property, then those persons are “life tenants” and the trust is a “trust with an interest in possession”. 
    1. If there is no life tenant and all the trustees have the discretion to distribute as much or as little of the trust income to the beneficiaries as they see fit, the trust is referred to as a “discretionary fund”. 

    Trusts with Vulnerable Benificiary 

    This special tax regime ensures that the tax liability of this type of trust is reduced to the amount of tax that would have been payable if the trust income and gains had accrued directly to the beneficiary concerned. 

    A “vulnerable beneficiary” may be either a disabled person or (in certain circumstances) a minor. Trustees who wish to claim the special tax treatment available under this regime must make an appropriate election to HM Revenue and Customs. Once made, such an election is irrevocable.