Adviser - Spring 2016

Adviser - Spring 2016

Scrutton Bland

Adviser Spring 2016 magazine

10 steps for selling a business

Protecting your nest egg

History of Scrutton Bland

Cloud accounting: A clearer view

bland

Your local independent wine merchant

Please contact us for advice on: Everyday drinking wines Wines for special occasions Tastings, weddings and parties Corporate gifts

www.nethergatewines.com Gate House Farm, Depden Green, Bury St Edmunds, Suffolk IP29 4BZ 01284 852110 [email protected]

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z Adviser/ welcome

Who we are

S crutton Bland is a leading provider of accountancy, independent financial advice (IFA) and insurance broking services to both business and private clients. Our philosophy is to offer clear, professional advice and to find the most effective solution to meet the individual needs of each client. We have regional offices in Ipswich, Colchester and Diss from where we serve clients throughout the South East and East Anglia. Our specialist commercial business teams provide accountancy, tax, audit, insurance and business advice to owner-managed companies through to corporate operations. Our Private Client Service is tailored to providing IFA advice, tax guidance and wealth management services to private individuals. We are committed to our Client Care Charter and encourage our clients to give us feedback on their experience of our services. We genuinely strive to exceed the expectations of our clients and to provide a proactive and supportive service.

We are proud to be a trusted adviser to our clients and are always looking for more individuals and businesses to bring into the Scrutton Bland family. If you need help then we are here to provide it, we look forward to working with you.

Our Partners

Tim Mulley, Snr Partner Jason Fayers

Tim O'Connor, Managing Partner

Sharon Gravener

Simon Pinion

820 The Crescent, Colchester Business Park, Colchester , Essex CO4 9YQ 01206 838400 [email protected] www.scruttonbland.co.uk Fitzroy House, Crown Street, Ipswich, Suffolk IP1 3LG 01473 267000 [email protected] www.scruttonbland.co.uk

Sue Gull

Tim Long

Merrick Hill, Victoria Road, Diss, Norfolk IP22 4HZ 01379 643444 [email protected] www.merrickhill.co.uk

James Tucker

Nick Banks

@ScruttonBland

Scrutton Bland

Scrutton Bland Limited is authorised and regulated by the Financial Conduct Authority

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Adviser/ welcome

Introduction

W elcome to the first issue of Adviser magazine, a readable mix of timely financial advice, company profiles and charity news, for both individuals and businesses in East Anglia. In each edition we will tackle some of the biggest issues facing businesses in our region, and discuss ways in which you can take care of your personal finances. The coming of spring is such a positive time. The days are getting longer and warmer, there is new growth in the fields and gardens, and … it’s the end of the financial year! As accountants, tax advisers, insurance brokers and financial advisers, Scrutton Bland is well placed to provide financial services to anyone looking for assistance with the processes and procedures that need to be completed at this time of year, and this issue of Adviser gives some useful pointers on tax credits for research and development, and maximising business tax relief.

Catherine Britton, Editor

Erica Gilson, Editorial Director

Looking to develop your business? In this edition we take a look at the new regional Enterprise Zone sites that will be developed around Ipswich over the coming months, and aim to create 5000 jobs by 2021. If you are at the other end of the business timeline and are considering selling your firm, then Scrutton Bland’s managing partner, Tim O’Connor, provides his top ten pieces of advice for the business owner. Cyber crime is a problem that has hit the headlines in recent months, and the evidence is that fraudsters are becoming more and more sophisticated. Tim Mulley, senior partner at Scrutton Bland looks at the ways that some of the most recent schemes are targeting business professionals, and suggests ways to combat potential criminal activity. Scrutton Bland has always taken its corporate social responsibilities seriously, and has been a supporter of charities and organisations who have a positive impact on our local communities. This issue of Adviser includes a profile of Ipswich Basketball, whose Academy is sponsored by Scrutton Bland, and The J’s Hospice in Chelmsford, plus there are some great pictures from our tree planting event at Assington, near Sudbury. Finally, as a local firm of almost one hundred years standing, we thought it was time to look back to see how Scrutton Bland has developed over the years. Like any family history, there have been some interesting characters, both staff and clients! We extend our thanks to everyone who has contributed to this, and to all the articles in this edition.

We hope you enjoy this first issue of Adviser, and please don’t hesitate to get in touch with us if you have any comments or suggestions for future issues.

Catherine Britton, Editor [email protected]

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Adviser/ contents 18

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Contents

24-25 In tune with the landscape An appreciation of music at Snape Maltings

26-27 Students set for business The work of Anglia Ruskin University

28-29 Charity risk management Advice on how to get the balance right

36-37 Beware: Cyber crime They may be targeting your business

30-31 New Enterprise Zones Regional opportunities for business

38-39 Transforming lives Spotlight on the J’s Hospice

40-41 Dates for your diary What’s on the charity calendar

32 From little acorns Tree planting expedition at Assington

33-35 May the Forge be with you Handcrafted ironwork made in Suffolk

42 Is your company missing out? Tax relief for research and development

Scrutton Bland’s Adviser magazine is designed and published by BBP (Blake Bryson Publications Ltd), The Black Barn, Hall Road, Lavenham, Suffolk CO10 9QX www.bbpmagazines.com Printed by The Lavenham Press

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The history and the journey

How Scrutton Bland became the business it is today

W hat’s in a name? For many firms today, their name has no connection to their product or service. You only have to think of Google, Ocado or Aviva, which mean little in isolation

but those earning over £160 a year would have been liable. So, for example, a lieutenant who earned £355 and seven shillings per year would be liable for income tax and after the tumult of war there were many thousands of people whose financial affairs needed sorting out.

until after some intensive marketing they enter the consciousness of the consumer. But for older firms such as Marks & Spencer, Rolls Royce, John Lewis and Barclays, the company was named after the founders. And so it was with Scrutton Bland. The Scrutton part of Scrutton

Alfred Scrutton’s grandson Tean Butcher still holds the family papers, and says that his grandfather is remembered as an entrepreneur who started Scrutton and Goodchild as a young man in his twenties, when he saw a timely business opportunity. Alfred was one of nine siblings; two of his brothers had died in the war, and tragically his sister Eva, who

Bland dates back to the partnership of Alfred

Scrutton and Francis Goodchild who began their firm in Ipswich in 1919 when they saw that many men returning from the Great War had tax problems. Income tax during the war had risen from a standard rate of 6% in 1914 to an astronomical 30% in 1918. A serviceman would have earned £18 five shillings a year so would not have met the income tax threshold,

was a nurse during the conflict, died in 1919 when the Spanish influenza epidemic swept the country. A strict Methodist and a Freemason, Alfred was teetotal throughout his life, although Tean says “he did lapse a bit in his later years”. His routine was always to have a good lunch with his clients followed by a half hour’s nap in the office, when the staff

Above: Fitzroy House, the new Ipswich offices of Scrutton Bland opened in 2014

had to tiptoe past his door. Alfred gave up practicing accountancy in the 1950s, although he continued to look after his favourite clients until well into his retirement. Scrutton and Goodchild set up their offices at The Thoroughfare in the centre of Ipswich, above what is now Coe’s newsagents and from certain angles and at particular times of the day you can still see the traces of the gold lettering that spelt out the company name.

Scrutton and Goodchild set up their offices at The Thoroughfare in the centre of Ipswich, above what is now Coe’s newsagents

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Adviser/ history

T he business prospered during the 1920s, and soon needed to move to larger premises on Museum Street. These offices had originally been the Black Bell Inn which was then

knocked down to create a new building which opened in 1938, designed by Baker and Burton and built by H Everett and Son. The Black Bell had been a Cobbold’s

pub, which sold locally-brewed Tolly Cobbold ale. The Cobbold family were an audit client of Scrutton and Goodchild, and every year a team of auditors would stay in a cottage in the grounds of the brewery, and on their arrival would find several crates of Tolly Cobbold, carefully labelled as ‘auditors’ samples’. Needless to say, this was an auditing job with no shortage of volunteers. One year the audit team were having a quiet afternoon and decided to liven things up by making paper planes. Aerobatics were in full swing when the door opened and one of the Cobbold family directors entered the room. Attempts to cover up what had been going on were futile – would this be the end of their favourite job? Far from it, Mr Cobbold enthusiastically picked up a paper plane and joined in. ’

Far left: The Black Bell Inn before being converted to Scrutton and Goodchild offices. Left: Scrutton and Goodchild’s new Art Deco inspired offices in 1938.

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German language. After he returned to Scrutton and Goodchild, if he needed to write a confidential document it would always be in German, which made it almost impossible for anyone else to understand. T he business continued to prosper, so much so that in 1968 they merged with their Ipswich competitor, Nankivell & Sanderson to create Scrutton, Goodchild and Sanderson with branches in Dovercourt, Diss and Saxmundham. The merger meant that the firm doubled in size, and there were now two buildings on either side of Museum Street. The original building (the ‘old’ building) was cold and draughty, although complaints by the staff fell on the deaf ears of Gordon Goodchild who favoured thick tweed suits in the winter and told them that they should simply wear more clothes. In 1972 John Pickering joined the firm, and worked his way up to become a partner in 1983. John got to know some of the older partners over the years, and recalls that in a recent conversation Gordon Goodchild revealed that he didn’t want to be an accountant at all originally, and had taken eight years to pass his exams: “In those days you followed your father’s expectations”. According to company legend there was one occasion when one of the partners was ‘accidentally’ locked in the strong room, although the circumstances of how and why it happened are now forgotten.

J ohn Davey and Cyril Smith at Scrutton, Goodchild and Sanderson’s Saxmundham office in 1983

B ack in Museum Street, Messrs Scrutton and Goodchild had been joined by several new partners: Cyril Smith; Frank Gower; Gordon Goodchild (son of founder Francis Goodchild) and John Davey who came in after the Second World War. Like most businesses of the time, the practice was run on strict hierarchical lines, with very different methods of working than today. Mr Scrutton would park outside the office on Museum Street, leaving his keys in the car, and go in for work, confident that nobody would dare to touch it. At lunchtime he would go home to dine, then have a sleep (never to be disturbed) and return to the office for the afternoon at about 3pm. There were sometimes arguments between the partners, which in the days before email was a problem if they refused to speak to each other, and Cyril Smith recalled regularly being used as a go-between to convey messages. The war years inevitably caused some major upheavals in the staffing of the business. Accountancy was a ‘reserved occupation’ which meant that staff were not obliged to enlist, although many of them did serve in the armed forces. Scrutton and Goodchild partner Cyril Smith was a signalman in the Royal Corps of Signals but was captured during the Desert War in November 1941. His son Graham still works in Scrutton Bland’s Ipswich office and recalls that after his capture his father was initially transferred to Italy and then to Stalag 4B near Dresden where he remained until the German camp was liberated in May 1945. The living conditions were appalling although Graham says that his father always spoke about the kindness of local people who provided soap and other small luxuries in exchange for cigarettes which had been sent to the prisoners from home. One interesting result of his internment was that Cyril became fluent in the

The original certificate of insurance dates the foundation of Bland & Son to June 1919

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Adviser/ history

Bland Fielden senior staff circa 1970. Back row: Tommy Parr (insurance manager), Leslie Baker (general accounts manager), Alan Martin (audit manager), Bob Fisher (building society manager), Ben Herbert (senior exec), Ernest Purser (manager – worked for Bland Fielden for 61 years), Gerald Bird (tax dept), Dick Phillips (partner, general accounts), Tom Lachohee (senior exec), Charlie Bareham (tax dept manager), Frank Eldred (audit senior exec), Laurie Loxley (audit manager). Front row: Charles Lissimore (audit manager), Yvonne Whyman (receptionist), Geoffrey Lockhart (partner), Christine Pittock (manager, general accounts), Russell Wray (partner), C Lupton Fielden (partner), Eric Bland (partner), George Digby (partner and former Colchester United player), Yvonne Ling (audit manager), Clifford Robins (partner).

O ver the county border in Essex, the ‘Bland’ part of the firm was also going strong, the result of an equally long heritage. Charles Bland was a co-founder of the Colchester Permanent Building Society in 1877. But in 1919, his son Frank, after distinguished military service in the First World War, saw that the town needed an insurance company as well as the building society and set up his own practice at 356 Crouch Street in June that year. Afewyears later in 1926 ‘The Limes’, a large eighteenth-century former school, came up for sale on Sir Isaac’sWalk in the centre of Colchester, and Frankmoved the business to the handsome newpremises where it remained until 2007. When James Herbert (always known as Ben) joined the firm in 1937 at the age of fourteen, the premises housed three partners: Frank Bland (managing partner), Cyril Lupton Fielden and Russell Wray. The building also briefly demands for space meant that Bland Fielden and Co, and Bland & Son soon had to add an extension to the main building. This was followed by several other office additions and soon the cottages in the grounds, plus the house at the end of the drive (which became the office reception) were all taken over accommodated an office for the Forresters’ Brotherhood, but the

Inset left: The Bland Fielden offices at Sir Isaac’s Walk, around the time it was purchased in 1926. Above; The same building, converted to Scrutton Bland offices, in around 2005

to accommodate the growing firm. Ben remembers working to an office routine of 9-6, with one-and-a-quarter hours for lunch. Thursday was a half- day, however, everyone had to work a full day on a Saturday. All staff had to sign in each morning, usually under the watchful gaze of Mr Bland, and it was not until after the Second World War that the working day changed to 9-5.30 (with an hour for lunch) and the half- day switched from Thursday to Saturday, which remained a working

day until 1976. The 1930s saw a period of national economic depression, which perversely saw an increase in business for Bland Fielden and Co with financial liquidation work for firms that were closing down. Branch offices were opened in London, Frinton, Halstead, Sudbury and Witham. One slightly unusual new business connection was with the organisers of greyhound racing in Essex who required a company representative to attend every race meeting in Walthamstow, Dagenham ’

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’ and Southend in order to verify the tote dividends. It was not until several years later that someone realised that Essex County Council had mistakenly awarded the contract to Bland Fielden instead of the local bookmakers JJ Bland. Like Scrutton and Goodchild, many of the staff at Bland Fielden in Colchester served in the armed services when war broke out in September 1939. Ben Herbert joined the RAF in 1941 when he turned 18, but before then was placed on firewatching duties in the firm’s offices each night, ready to deal with the incendiary bombs that were dropped over the town. The lawn and part of the gardens were turned over to “dig for victory” which was the lunchtime and evening task of staff not on active service. Once the war was over Bland

Fielden was forced to build more offices to house the returning forces personnel, including Eric Bland, who came in after the death of his father, Frank Bland. Eric had served with distinction as a fighter pilot and was awarded an immediate DSO following a courageous raid on a German U-Boat in October 1943, which culminated in the loss of two

B y now the building was showing considerable signs of wear and tear. Brian recalls the day the glass car port collapsed (thankfully no one was injured) and also has memories of numerous boiler breakdowns and power failures, the latter often caused by overloaded circuits as staff used electric fan heaters to keep warm. Despite the many extensions and additions to The Limes, the gardens and lawn were still superb, although walking on the grass was absolutely forbidden. The grounds were maintained by Doug Inns, who was a good gardener but not a great handyman. Senior partner Tim Mulley recalls asking him to repaint an office, and was slightly surprised when Doug did so in record time. It was only later when Tim went to move a desk that he

engines of his B-24 Liberator, and having to ditch the plane into the sea with the loss of two crew members. As well as the additional financial work, there were also opportunities for social outings and events. Mr Fielden had a connection with the operatic society and Ben Herbert remembers the office staff going for a Christmas meal at Jacklins restaurant (now part of Williams & Griffin) followed by a show at the Hippodrome (now a nightclub). There were also cricket matches played against other local firms such as Luckin and Sheldrake (accountants) and the occasional football match. In 1948 Colchester Town played Blackpool in the FACup and Bland Fielden paid for two coaches of employees to travel north to see the match. Colchester lost 5-0 and to make matters worse one of the bus drivers nodded off at the wheel so the journey was further extended while he was made to have a nap in a layby. Accounts executive Brian Waller joined Bland Fielden and Co. in 1970. This was still a pre-computer era: ledgers were typed out and duplicated with carbon paper, items were manually posted as debits and credits, and of course all the accounts were balanced by hand. Brian had to tear up the unwanted documents as there were no shredders, and all the secretaries dreaded being handed paperwork from Russell Wray which would be covered with his annotations and crossings- out and had to be retyped from scratch. At the end of each day all the desks were covered with white dust sheets and each morning Brian had to uncover partner Clifford Robins’ desk, dust it, and then manually write out the FT index from the Daily Telegraph for him.

realised that Doug had painted all around the office furniture, but had left the original paintwork behind undisturbed. Customer service, then as now, was an integral part of the business service, and this meant accommodating the clients when they brought in their annual accounts, no matter how their books were delivered. Brian Waller was called on to deal with the yearly paperwork for a fish

Doug Inns, gardener and handyman at St Isacc’s Walk, Colchester

merchant based in West Mersea. Their accounts had been delivered in fish crates, and Brian says, “The smell was so bad that we couldn’t bring them indoors, so they had to be stored in the old air raid shelter in the grounds”. Sporting fixtures remained a highlight for many of the staff, and in the 1970s and 80s the Bland Fielden cricket team often

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Adviser/ history

At the 2015 Scrutton BlandAGM Neil Hewitt brushes up his target technique

Managing partner since 2013, Tim

O’ Connor joined Scrutton Bland in 2002 and is seen here on his first day as a partner in April 2004

Scrutton Bland’s office in Colchester

played against Scrutton, Goodchild and Sanderson. Former partner Robin Twinn remembers: “We had to include the senior partner Geoffrey Lockhart in the team. He fielded in the slips so he did not have to run a lot (not because he could catch, which he couldn’t) and batted early but did not score many (if any) runs, whereas Scrutton Bland had John Davey in their team who deserved his place. Otherwise, we were not too bad and did beat other teams. We also had a very successful mixed hockey team at a time when, I believe, we had three members of the Colchester Ladies’ team working for us”. In more recent years a wide variety of games have been organised for the AGM, which have taken on a more inclusive approach. Eric Bland finally retired in the late 1980s, and with his departure the Colchester Permanent Building Society work ceased, as that part of the business merged with the Cheltenham and Gloucester Building Society. I n 1990 after just over 70 years of business, and with some clients who had remained with them for the whole of that time, the two firms of Scrutton, Goodchild and Sanderson (in Ipswich) and Bland Fielden (in Colchester) merged to create Scrutton Bland. Their geographic range now covered Suffolk and north Essex, with branch offices in Ipswich, Colchester, Saxmundham, Diss, Witham and Frinton-on-Sea. Services included accountancy, tax, audit, corporate finance and independent business advice across multiple sectors ranging from agriculture, transport and distribution, construction, education, charity, medical and many more. The new century brought fresh changes as Scrutton Bland consolidated its position in the financial services

sector and enhanced its credibility within the global financial field. Merrick Hill, a well-known local insurance broker based in Diss, was the fifth acquisition to the Scrutton Bland group in 2004. In 2006 Scrutton Bland became a member of Nexia International, a worldwide network of independent firms of accountants, which enables the firm access to international referrals and high-level technical input for complex tax and audit issues. In 2007 Scrutton Bland Limited joined the Willis Commercial Network, part of Willis Towers Watson, the fourth largest insurance broker in the world. T here were physical changes to the firm too as the Ipswich, Diss and Colchester offices all moved to new premises. Merrick Hill moved to a more convenient office space on the outskirts of Diss, and in February 2007 the seventy or so members of staff in Colchester relocated to a brand new open-plan office building in Colchester Business Park. In 2014 Scrutton Bland’s Ipswich offices were moved to what had been the old Churchill insurance building, now developed to create an impressive 15,700 square foot premises on four floors. The newly-named Fitzroy House (called after the adjacent street) is located on the site of Ipswich’s Temperance Hall, built in 1839 as a venue for the town’s societies and discussion groups under the auspices of the teetotal movement which aimed to persuade the population to abstain from alcohol. It is an appropriate nod to Alfred Scrutton, Methodist teetotal founder of the original Ipswich part of the firm, who would surely have approved of the successful development of the group.

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There is plenty of advice and media coverage for new business start-ups. But what if you are thinking about selling your business, or handing it over to internal colleagues through a management buyout? Managing partner Tim O’Connor lays out ten pieces of invaluable advice to help the potential business seller 10

Tips for Succession and

deferred consideration or possibly an earn out whereby the business assets are sold for a lump sum with the right to further payments that are contingent on the performance of the business over a defined period. 4) The crying game If you do enter into an earn out arrangement, make sure it is clearly drafted, without ambiguity and considers the games that either side might try to play to maximise/minimise an earn out. If it ends in tears, make sure that they aren’t yours. 5) What deal are we doing? It is surprisingly common to see two sides walking away from the early discussions of a sale thinking they have agreed to quite different deals. Clear and concise Heads of Terms help to ensure that both sides know what they are agreeing to and they also serve as a good briefing document for the

1) No time like the present Start grooming your business for sale at least two years in advance of your planned disposal date. This might mean bolstering the management team, to make you less critical within the organisation, which might also then help to identify a potential buyer. You should also review the financial information you need and keep. Make sure your business is fit for your disposal plans. 2) Is there anyone out there? There is a chance that you already know someone that is interested in your business,

so look to the obvious exits first. Marketing a business is expensive and difficult and a direct approach to someone you think could be interested might yield benefits. Management buyouts are still very common and successful, so look inside as well as out. 3) What is the right value? Probably if neither the buyer nor seller agrees the value then it is about right! Sellers have all sorts of emotional investment in a company that a buyer is never going to pay for. Consider palatable options to help push the price of the business up, such as

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Adviser / corporate finance

Selling a Business

transparent. It is likely to come to light during due diligence or when making disclosures under warranties. There is nothing worse than a deal falling over because new information is revealed at the eleventh hour. 8) Lean on your advisers If you think selling a house is tough, selling a business is far tougher! A company is a very complex asset and the seller needs to keep running the business as well as dealing with the sale. The accountants and lawyers are there to help and advise, so don’t be afraid of letting them do it. It is often said that deals always take twice as long and cost double what was originally expected, which would seem to imply that the expectation is wrong. Getting it right is important for both sides, so use the expertise of your advisers. 9) When do you walk away? Unless the grooming for sale has been extremely successful there is often the expectation of a consultancy period after the sale has concluded. The focus is usually on keeping this period as short as possible, but particularly with an earn out there is a vested interest for you as the seller in remaining involved. Make sure there is clarity in what is expected during the period after a sale, in respect of working hours and more importantly your employment status. Often consultancy agreements could be renamed employment contracts and you need to make sure that if your status is challenged you do not lose out. 10) What comes next? It is not uncommon for sellers to say that the period following the sale feels like a bereavement. The selling process is so intense and all consuming that the after- effects are often not considered. Sellers have sunk vast amounts of time, energy and love into their businesses and giving it away, albeit for a nice cheque, inevitably has a psychological impact.

professional advisers. Simple points need to be clearly addressed, for example, are we buying shares or assets? Will there be completion accounts? What is the structure for payment? 6) Knowledge is power Be prepared for what information will be needed by a buyer and make sure you can readily obtain it. It is much harder to be tripped up during a due diligence process if you have anticipated what might be asked. But bear in mind that knowledge is powerful for both sides, so make sure confidentiality agreements are in place with sufficient weight to enforce and ensure >Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 32 Page 33 Page 34 Page 35 Page 36 Page 37 Page 38 Page 39 Page 40 Page 41 Page 42 Page 43 Page 44

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