Gerard Baltazar, In2Matrix becomes Chairman of Brokerslink Global Employee Benefits Practice

 

In2Matrix, the Global Employee Benefits brokerage are pleased to announce that its Chairman & CEO, Gerard Baltazar has accepted the role of Chairman of BrokersLink’s Global Employee Benefits Practice Group.

The Group will drive business development in the area of Global Employee Benefits for the Brokerslink network. It is an exciting time for Brokerslink as its sees an increased flow of multinational employee benefits opportunities which its members are well placed to support.

Gerard Baltazar, commented that he was “extremely proud to have been asked to lead the group with this exciting project and looks forward to growing Brokerslink’s Global Employee Benefits opportunities”

Sending your Self Assessment tax return

Millions of self-assessment taxpayers who have left their tax returns to the last minute are rushing to file online by Thursday night to avoid being hit by hefty fines.

HM Revenue & Customs said that 2.5m tax returns, of the 8.1m expected in total, remain outstanding. A large portion of these are likely to be filed on the last possible day.

However, accountants warn that more than 1m people will miss the midnight deadline, resulting in an automatic £100 fine, even if they do not owe any tax. Last year, HMRC issued fines of more than £600m by the end of June.

31 January deadline for online tax returns

You must send your online Self Assessment tax return by midnight on Thursday 31 January 2013.

The deadline is only later than 31 January if HM Revenue & Customs (HMRC) sent you the letter, telling you to complete a tax return, after 31 October 2012. In this case you'll have three months from the date of the letter.

If your online tax return is late, you'll have to pay a penalty. You can read more about penalties below in the section 'What happens if you miss the tax return deadline'.

Paying your tax

You must pay any amount due for 2011-12 by 31 January 2013. The payment deadline is the same whether you send a paper or an online tax return.

HMRC recommends that you make your Self Assessment payments electronically. It's safe and secure and provides certainty about when your payment will reach HMRC.

When you make a payment, be sure to use the right reference number. It's called a Unique Taxpayer Reference or UTR. For example 1234567890K.

What happens if you miss the tax return deadline

If you miss the 31 January deadline for online tax returns, you will have to pay a penalty.

The penalty is £100. You'll still have to pay this even if

• your tax return is just a day late
• you have no tax to pay
• you pay all the tax you owe before 31 January 2013

The longer you delay, the more you'll have to pay. There are additional penalties when your tax return is three, six and twelve months late. Together these could add up to a penalty of £1,600 or more, so make sure you get your tax return in on time.

Don’t send a paper tax return now - the deadline was 31 October 2012. You'll have to pay a £100 penalty straight away if you do and the daily penalties above will start even earlier. Send it online instead.

If you would like to find out more please contact us using grant@in2matrix.com for more information.

The information is intended to provide information only and reflects our understanding of legislation at the time of writing. Before making any decision, we suggest you take professional financial advice.

State pension shake-up

State pension shake-up

A new state pension system will pay more in 2017, but many – especially women – will be caught out by the small print.

The biggest shake-up of pensions for a generation has left thousands of women concerned that they will lose out on valuable pension benefits – even though the reforms were supposed to create a simpler and fairer system.

It isn't just women who are worried that they will now have to pay more to get a full pension. Many baby boomers, who are just a couple of years away from retirement, have been told they will need an additional five years' National Insurance contributions if they want to get the new higher state pension – worth £144 a week – in full.

Those who have taken early retirement or been made redundant in their fifties, or who have moved into part-time work, may struggle to make these additional payments, particularly as those worst hit need to make up five years' of NI payments but are just four years from retirement.

Almost half a million women born in the early Fifties have been at the sharp end of almost every pension change in recent years. Plans to raise the pension age for women from 60 to 65 were first put in place in 1995, with the ages being equalised by 2020. But in 2010 the Government speeded up this timetable, meaning that up to 400,000 women who were already in their fifties saw their retirement age pushed back again, with some facing a further 18-month delay.

But those who are due to retire after 2017 can also face problems. As stated above, some will not have sufficient National Insurance contributions (NICs) to get the full £144-a-week payment.

Currently people need 30 years of NICs to qualify for the full basic state pension. This will rise to 35 years when the new pension is introduced. Many people have taken early retirement on the assumption they have paid sufficient NICs to qualify for a full state pension. This is not now the case.

For those who can afford it, making additional NICs can be a cost-effective way to boost your state pension. Voluntary NICs are currently £13.25 a week, or £698 for the year. The Treasury reviews NI rates on an annual basis, so previous years may be cheaper. You would only need to live for four years after retirement to recoup your money,

This is, of course, based on the current state pension, so arguably becomes even better value for those retiring after 2017. The cost of buying back years was likely to rise to reflect the higher benefit attached. Currently you can use voluntary NICs to buy up to six years' worth of benefits. However, the Government will extend this, so those retiring after April 2017 will have until 2023 to buy back years between 2006 and 2016.

Another option is to register as self-employed and opt to pay "Class 2" contributions. These are considerably cheaper (currently £2.65 a week) but also count towards your NI record. However, they are payable for the current year and can't be used retrospectively.

Those with just 30 years of NICs should remember that, although they won't get the full single-tier pension, they should still get around £123 a week, which is more than a full pension (£107 a week) under the current rules.

If you would like to find out more please contact us using grant@in2matrix.com for more information.

The information is intended to provide information only and reflects our understanding of legislation at the time of writing. Before making any decision, we suggest you take professional financial advice.

Child Benefit Changes

From 7th January child benefit will be means-tested and payments will be clawed back in households where one partner earns at least £50,000.

To recap what is Child Benefit?
Child benefit is a tax-free payment that is aimed at helping parents cope with the cost of bringing up children

• One parent can claim £20.30 a week for an eldest or only child and £13.40 a week for each of their other children
• The payments apply to all children aged under 16 and in some cases until they are 20 years old
• The system is administered by HM Revenue and Customs (HMRC) which pays out to nearly 7.9 million families, with 13.7 million children

So how will the High Income Child Benefit Charge work?

The charge will only apply to taxpayers whose income is more than £50,000 for the tax year. If both partners have income of more than £50,000 for the tax year, the charge will apply only to the partner with the highest income.

·         A partnership comprises:

·         a married couple living together;

·         civil partners living together;

·         a man and a woman who are not married to each other but who are living together; or

·         a man living with a man or a woman living with a woman who are living together as if they were civil partners.

For taxpayers whose income is between £50,000 and £60,000, the amount of the charge will be one per cent of the amount of Child Benefit for every £100 of income that exceeds £50,000. A taxpayer whose income exceeds £60,000 will be liable to the charge on the full amount of Child Benefit and so effectively lose all the advantage of Child Benefit. For example, Child Benefit for two children is £1,752.

For a taxpayer whose income is £54,000, the charge will be £700.80 – i.e. £17.52 for every £100 earned above £50,000. For a taxpayer whose income is £62,000, the charge will be £1,752.

An individual who has income above £50,000 but is not entitled to Child Benefit themselves will only be liable to the charge for any period of the tax year during which they are living with a Child Benefit claimant whose own income is below £50,000.

Child Benefit itself is not being made liable to tax and the amount that can be claimed is unaffected by the new charge. It can continue to be paid in full to the claimant even if they or their partner have a liability to the new charge. Child Benefit claimants will be able to elect not to receive the Child Benefit to which they are entitled if they or their partner do not wish to pay the new charge. The claimant may subsequently decide to withdraw that election if they or their partner are no longer liable to pay the charge.

The measure of income that will be used will be the individual's “adjusted net income”. This is an existing method of determining an individual's income and is currently used to work out entitlement to personal allowances for someone aged 65 or over or who has income over £100,000.

The amount of the charge will be collected through self-assessment and PAYE.

The HMRC have launched a calculator to work out how you will be impacted by the changes. The link is https://www.gov.uk/child-benefit-tax-calculator

It is possible to mitigate the loss by either sharing income with a spouse, or making pension contributions to bring your income below the limits. Specialist advice will be needed in this area, so please contact us using grant@in2matrix.com for more information.


The information is intended to provide information only and reflects our understanding of legislation at the time of writing. Before making any decision, we suggest you take professional financial advice.

Edward Grant Joins In2Matrix

A leading figure in the personal finance sphere, Edward Grant, BA (Hons) FPFS FRSA, joined In2Matrix on 3 September 2012 as Director of the Private Clients Division. Edward will be based at the In2Matrix office in London.

Edward is a Chartered Financial Planner who is passionate about helping individuals, families, companies and trustees to secure and understand their financial future.

In a career spanning more than 20 years, Edward has held management roles in the international life offices of major firms, including Zurich Financial Services, Royal & Sun Alliance and Providence Capitol.

Edward is a past President of the Personal Finance Society (PFS, http://www.thepfs.org/), which is the UK’s largest financial services professional body, with over 31,500 members (June 2012). He remains a Member of the Board of Directors.

In 2012, Edward was appointed a Vice President of the Chartered Insurance Institute (CII), the largest financial services professional body in the world, with over 105,000 members. He sits, too, on the CII Professional Standards Board, which he joined in 2011.

Edward’s reputation in the industry is underlined by his being one of the inaugural Chartered Financial Planners; and he is also a Fellow of the Personal Finance Society. His wealth of experience has led to him being called upon to lecture across the country on tax and trust matters and financial planning, both to fellow professionals and to clients.

Assurex Global Ranked #3 In the World

In2Matrix: Part of a Global Success Story

In 2011 In2Matrix became a partner firm and shareholder of Assurex Global. Together, this gives us a global presence in over 90 countries with in excess of $28 billion in premium. In2Matrix continues to be independent, management-owned and not a PLC.

And, thanks to our partnership with Assurex Global, we are now in the Premier League of Insurance Brokers. Each year, Business Insurance magazine ranks the "World's 10 Largest Insurance Brokers" by brokerage revenues. Based on the 2011 brokerage revenues, Assurex Global is third on the list. In2Matrix congratulates Assurex Global and all its partners that contribute to its on-going success and this rise in worldwide rankings.

World's 10 Largest Insurance Brokers*:

*Source: Business Insurance magazine, "World's 10 Largest Insurance Brokers, 2011"

In2Matrix New Global Consulting Division

In2Matrix is an insurance broker with offices in the UK, Moscow, Cyprus, Kazakhstan and Ukraine. In addition, it has a presence in over 100 countries through an independent broker network. In2Matrix has recently announced the launch of its new division In2Matrix Global Consulting. In2Matrix Global Consulting is essentially a one stop solution offering technical consulting for multinationals, with services such as cross border pooling, placement of business, captive insurance, sector and country benchmarking, employee benefits management and administration. The team pools in the expertise and resources of some of the best consultants in the industry.

The Chairman & CEO of The In2Matrix Group, Mr Gerard Baltazar (GB), and the Head of In2Matrix Global Consulting, Mr Davor Lalic (DL), talk about the strategic focus and the strengths of this new division.

Essentially, what is In2Matrix Global Consulting about and what are the benefits they offer?

DL: In2Matrix Global Consulting offers global insurance solutions for multinational corporations through alternative risk financing. We specialise in services ranging from multinational pooling and reinsurance to captive solutions, Pan European plan design, and expatriate cover.

We cover the entire spectrum of employee benefits.

Where is this division based and who will be directing it?

GB: In2Matrix Global Consulting is based in London and is headed by Davor. It is oriented towards multinationals, focusing primarily on small and medium sized enterprises (‘SMEs’). We also have the capabilities and resources to cater to large multinationals.

Our uniqueness is that we can offer SME’s as well as large multinationals anything from local plan design to global risk solutions like multinational pooling or employee benefits captives, all under one roof as a one stop shop service. In fact, we are one of the few consulting firms globally who can offer captive implementation and active management of employee benefits programs.

Who will it be servicing and who are typical clients?

DL: Whether it is product design, product placement, benefit strategy or on-going advice on employee related issues and business practices in different parts of the world, we can advise and effectively execute integrated custom tailored solutions.

GB: I would like to add that there is a misconception in the market that global solutions are the need of only larger organisations. As a matter of fact smaller multinationals can benefit greatly from the cost efficiencies of a global proposition.

Contrary to the practice of some other consultancy firms we not only advise, but also support the implementation of the global programs, which is key to their success.

DL: We are one of the most experienced Employee Benefits Captive Consultancy firms in the world. Considering the fact that there are only 71 network fronted employee benefits captives in place globally, very few independent consultants have either the broad based technical bandwidth or the global reach and experience to actually advise on Global solutions, and further carry through the implementation process.

The very nature and scope of Global solutions, requires a high level of domain knowledge and expertise under one umbrella, and we can confidently say that In2Matrix Global Consulting has it, and is uniquely placed to cover the entire gamut of services demanded by such Global solutions.

GB: Typical clients are SME multinationals. However, In2Matrix Global Consulting is able to offer a unique new proposition to companies that would like to participate in the multinational pooling programme, without being a multinational on its own. This is a first in the global market place.

How does In2Matrix Global Consulting differ in its services from its major competitors Marsh, AON etc., what makes it unique? What are the costs of engaging in this proposition?

DL: What differentiates us from our competitors is that we actively manage our clients’ accounts on a daily basis and participate proactively in the risk of our clients’ global programs. We engage on a success fee basis, which means that we share the risk with our clients. We do not charge upfront fees for our consultancy services on pooling or captive propositions, as is the general practice. As far as I know we are unique in this.

How do clients make a decision about whether a global solution will be beneficial?

DL: Every client or prospect who engages with In2Matrix Global Consulting receives, prior to an agreement, a high level simulation and projections of the recommended global solution or of the proposed global programme, which highlights the improved efficiencies and indicates the cost benefits and profitability.

GB: The final decision naturally rests with the client. But we feel that by engaging on the basis of a success fee with no upfront cost, the client should be able to make a decision with greater comfort, as compared to when an upfront cost is involved. This is not just about cost savings. The other advantage of pooling is to be able to integrate the policy making process, centralise decision making and improve financial reporting.

What would you say to companies that are hesitant or have not embraced a global proposition? What message would you have for them?

GB: My message is this: If your Head of HR, or the Head of Finance or the CFO comes to you with one million euro, and asks you to throw it out of the window, would you do it? The answer is ‘no’. However, this is exactly what is happening if you do not embrace a global proposition where you can make substantial cost reductions and are able to centralise the decision making process.

DL: It is important to note that these savings can be achieved without affecting the local benefit design or benefits levels. This is because our unique expertise empowers us to leverage the economies of scale of a multinational organisation in order to achieve the best price in the global market, for the benefit of our clients.

GB: That is exactly the point. Each country has certain benefits in place. We are not going to go in and say to a client that they have to change everything. No, we are simply taking and consolidating what the company already has in different parts of the world. It is about financial efficiencies and about restructuring a company’s employee benefits finances.

We are not saying reduce employee benefits. We say deliver them more efficiently and at lesser cost. In2Matrix Global Consulting will not just show you how, but will also help you do it.

How does multinational pooling work?

GB: Instead of approaching insurance companies in each country individually, there is one pooling network insurance company which is the one point contact for all countries. The pooling network maintains relationships with local insurance companies all over the world. So if you have 1,000 employees working in 6 countries for instance, you can approach the pooling network just once – rather than having to source and negotiate with 6 individual insurance companies.

DL: It is basically an accounting function, consolidating the accounts of all local insurance policies without changing the basis of the cover. The policies in local countries do not even have to have the same benefits structure, or the same insurer. This enables you to think and deliver locally, but plan and act globally, picking the cover that is right for the organisation while reaping the cost benefits that come with economies of scale.

Here is a basic example. On the left without pooling and on the right after pooling. The blue part on the top is the so called multinational dividend or the savings achieved through pooling.

Do you have any feasibility studies?

DL: One of our global clients has a multinational pool in place that consists of 3,676 lives in 7 countries and they currently pool Life, Disability and Accident contracts with an overall pooled premium of £602,921.

We have been managing the pool actively for the past four years and the local contracts are underwritten very competitively, however by focusing centrally on locally profitable contracts, the pool return in 2008 was 37%, in 2009 65% and in 2010 53% of the annual premium. We are currently awaiting the figures for 2011 and are confident that the pool will achieve a similar performance.