Tuesday, 9 December 2014

Failing to read the small print could prove a costly mistake

It’s very easy to unwittingly agree to things you didn’t realise you were signing up for!
How many times have you been asked to “just sign here” to open an account with a supplier?

Well, one of our clients opened several trade accounts for his limited company only to find, when the business stumbled, that he’d effectively signed away his car and his house.

The innocuous looking standard terms and conditions on the back of the account opening form actually contained a stringent personal guarantee.  He’d signed so the law assumes he’d read the small print first.

I personally walked away from an agreement recently because it said “if you don’t use the sessions within 90 days they WILL be forfeit”. 

When I worked it out, it wasn’t possible to use the sessions within 90 days as my trainer was planning a break during Christmas and the gym potentially needs to close to do building work.

Despite verbal assurances that they have never enforced the clause, I wasn’t willing to sign up.

So, my trainer has lost the advantage of me paying up front – I’m still going to do sessions as the Battleaxe needs to keep fit to wield a rolling pin with full force!

Insurance policies are another classic of this. People shop around for the cheapest deal only to find that there is a reason for that – they’re not covered when they want to claim because of the various exclusions on the policy. 

For example, you are only really covered for theft if you have window locks of a certain type fitted.

Oh, and don’t forget, in this season of goodwill, to check your rights to return goods that you buy as presents or in the sales. There may be time limits for returns; you may only be able to get a credit note unless the good are faulty; there might only be a limited time to activate an additional warranty.

So, whether it is business or personal, read the small print - or it could cost you dear!

Tuesday, 11 November 2014

Why would anyone in their right mind become an employer?

In recent times, I’ve come to wonder more and more why anyone in their right mind would become an employer!

Think about it: all of us who employ people will soon be in the depths of auto-enrolment pensions.  Even if no employees take up the scheme, the employer has to jump through the hoops of setting up a scheme and communicating loads of very technical details to employees.  That’s after dealing with a stream of employee questions because the adverts have been on TV.

Many are facing the situation that their Stakeholder Pension provider won’t convert an existing scheme to auto-enrolment and, because they’ve only been required to join in later in the process, that other providers are closing their doors to new applicants.  And now time is ticking with the penalties for missing deadlines being harsh.
The push for employees to be paid a living wage, not just the minimum wage, is growing.  Many smaller employers are facing constant downward pressures on their prices so will have to face the prospect of cutting employee numbers if they have to pay employees they keep more.

The prospect of overtime hours costing more for reasons from living wages to the recent holiday pay ruling (albeit that is likely to be appealed), may mean that some employers decide against allowing overtime because the added costs exceed the additional profit that can be made.

Then add in the fact that apparently ever-greater rights for employees to ask for (or is that demand?) flexible working patterns can and does cause real headaches for scheduling/resourcing.

With pricing pressures on one side and the cost of employing people on the other there can come a time when a company is struggling to survive.  Then the hard decision of reducing head count often has to be made and, oh boy, the cost and risk of doing that is daunting.  A long-standing employee could be entitled to several months’ worth of pay when you combine redundancy and notice pay – all at a time when the business is trying to save money and may be short on cash.

Oh yes, and small employers can no longer reclaim the cost of Statutory Sick Pay.  You’ll have heard about the £2,000 employer’s NIC rebate and that’s great but the cost of one employee being on extended sick leave soon takes away that benefit.  After that sick pay is a real cost to the business and there’s nothing they can really do but pay it.

I could go on - and yes, I know it’s a potentially depressing list!

That said, for me I know (looking round my offices) that the trials and tribulations are outweighed by the reward of building a happy and productive team.  Running a small business means working with staff who can (and should) become an extended family and, if you get it right, then each member of your team will actively strive to grow a prosperous future for the whole business and everyone involved with it.

Tuesday, 14 October 2014

Why? It ain't necessarily so!

As a small business owner, I have been watching the coverage of the various party conferences to learn just what each party is going to do to help ease the lives of the millions, like me, after the election next year.

Coincidentally, I unearthed a Jimmy Somerville compilation CD. As I read down the play list, the titles of the songs were exactly the words coming out of my mouth as I listened to the politicians who were trying so hard to win my vote in 2015.

‘Why? It Ain’t Necessarily So!’  So many things unanswered and so many sweeping statements with no proper reason or explanation. What I heard left me ‘Disenchanted and Screaming’ at the TV because their view of ‘Tomorrow’ does nothing substantive to help people running businesses.  Quite the reverse in some cases!

Obviously that is contrived, but then messages I wanted to see coming out of the conferences were that:
  • red tape and compliance costs were going to be cut;
  • HMRC would be reviewed root and branch to work with businesses;
  • the draconian and impractical employment laws would be relaxed for smaller businesses; that there would be more incentive for businesses to grow ­­- so many rules kick in when a business reaches a certain size;
  • we would see a big rise in the VAT threshold keeping lots of tradesmen who deal mainly with domestic consumers out of the VAT threshold making it easier for them to make a living without having to raise their prices just because they need to charge VAT;
  • enforceable and effective sanctions for persistent late payers.
Unlike those in jobs, there is no minimum wage for the self-employed and many really are living in Breadline Britain still, despite the economy showing signs of picking up.  Many can’t get credit because they are self-employed or, if they do, they pay a premium rate for it. During the recession, many have drained their savings and maxed out their credit cards to cover the consequences of late payment by customers or even bad debts so are paying interest at high rates, whilst their late paying customer is watching Sky TV on their brand new 3D TV.

Whoever wins the next election will be the one that has policies that help to stabilise the backbone of the British economy – the small business. To quote more from Jimmy – ‘Read My Lips’, ‘Make Me (Us) Feel Mighty Real’ and give small businessmen ‘Something To Live For!’

Monday, 22 September 2014

One month each year as unpaid as Government lackeys

Every day small businesses across the land are acting as unpaid administrators for HM Government and the burden is getting bigger and bigger.  Looking at the time that I have spent in the last 12 months:
  • Pensions auto –enrolment – researching, talking to advisors, filling in forms, providing information - 3 days
  • Real Time Information payroll – including additional time sending reports and liaising with HMRC re their misallocation of payments/failure to give credit for Maternity Pay - 2 days
  • Pre-employment right to work checks for new employees - 1 hour
  • Government generated surveys - 2 days 
  • Money laundering checks on new clients and routine updates - 6 days
  • Down time Health and Safety reviews/PAT testing etc - 1 day
  • VAT returns - 4 days
  • Other bits and pieces including keeping up to speed on changes - 3 days
Total: 22 days

Whilst these are only indicative, we are spending about a month a year on unproductive time caused either by HM Government requirements or its inefficiencies.  We are not a complicated business so I dread to think how much time some businesses are spending either in time or professional fees.

So many times Government initiatives are heralded as helping to simplify things, but its systems just aren’t able to cope with it.  On Real Time Information (RTI) alone, one part of Her Majesty’s Revenue and Customs (HMRC) acknowledged that it could see the maternity pay, but the debt collectors couldn’t.  I heard myself saying “take me to court and I’ll take great pleasure in telling the world about HMRC’s inadequacies”. Even the National Audit Office says that its systems are “not fit for purpose”.

In the run up to an election, I would call for every political party to look at proposals to reduce this burden to business.  Businesses are finding it tough enough in these rocky financial times and need to be left to getting on with earning money to pay their bills and their employees, not spending time acting as unpaid civil servants.

Tuesday, 19 August 2014

Why not celebrate our Yorkshire roots?!

By Amanda Vigar, Managing Partner, V&A Bell Brown LLP

Earlier this month, we celebrated Yorkshire Day (August 1) – a day when us Tykes joyously celebrate our roots! It’s a day when Yorks dialect and heritage is revelled in. Yorkshire people worry that it has become a media and marketing jamboree, perpetuating stereotypes of whippets, black puddings and flat caps. But I say, why not celebrate a day dedicated to God’s own country?

You don’t have to be too long in the tooth these days to remember a time when everyone knew everyone else. Relatively recently geographical loyalty was almost ingrained into the national psyche. TV series like ‘Last of the Summer Wine’ celebrated Yorkshire pride and plucky regional spirit. Back then, anywhere outside Holmfirth where the rag tag characters lived, was seen as a bit foreign; everyone existed in a microcosm. Everyone knew everyone else and everyone else’s business. Or that’s the way it seemed.

Skipton was recently lauded as the finest place in Britain to live because of a combination of low crime rates, top-class schools and great transport links. It also, like Holmfirth on a smaller scale, has a thriving high street that is not dominated by national chains and identikit facades. But there’s no denying that places like this have changed from years ago.

There’s a refreshing change in that newcomers to an area can feel accepted within months rather than a lifetime.  There are however many good things to lament about the death of belonging. The absence of a sense of community may lead to alienation among the younger generations, in particular. The lack of jobs and the non-existence of a ‘job for life’ facts can lead to problems in formerly close knit communities.

One of the ways of increasing the feeling of belonging is to try and put the people back into business. This can be achieved with a more customer focused approach with the aim of building up long-term working relationships.
In my own accountancy practice, we like to put the people back into business. In practice, this means that we work with numerous people in all sorts of trades and occupations; we have built strong relationships based on trust with our clients; clients know they can meet with the same person every time and are not simply assigned to whoever is available; and we value each and every client, no matter how big or small.

On balance, these days we probably have a better deal. Today, we can celebrate our Yorkshire roots, without feeling trapped by them. We can enjoy our heritage without feeling defined by it. We can celebrate all that is best in our county while welcoming neighbours and those who are attracted to settle here. We haven’t got everything quite right, but we are certainly on the right tracks.

Thursday, 14 August 2014

West Yorkshire Business Jury delivers unanimous verdict in favour of new flexible working rules

The West Yorkshire Business Jury , which is run by Holmfirth firm of accountants and business planners, V&A Bell Brown, has delivered a unanimous verdict in favour of new flexible working rules. 

The jury, which is made up of business owners and directors from the West Yorkshire area, returned a 7-0 vote in favour of the recent announcement that allows all employees to request flexible working hours from their employers.  

Business Battle-axe Amanda Vigar, managing partner at V&A Bell Brown, who delivered the ruling, believes that flexible working arrangements can help with staff morale and motivation. 

She said: “I have allowed staff to have flexible working arrangements for some time now, and it has worked very well. As long as flexible working doesn’t have an impact on the bottom line, then it could be good for business. 

“It may well be difficult for smaller businesses to accept flexible working arrangements but larger small and medium sized companies are more likely to be able to afford to be flexible with staff. There are numerous benefits to flexible working including increased staff morale and well-being and numerous studies have shown that this can impact positively on the bottom line by decreasing levels of stress and increasing levels of motivation.”

Mark Sanderson, director at QED Finance, agreed with Amanda as he feels that the new rules will help firms recruit loyal workers and retain their best performers.

He said: “Extending the right to request flexible working will help to create a cultural shift towards more modern, 21st century workplaces where working flexibly is the norm. Firms that embrace flexible working are more likely to attract and retain the best talent and reap the benefits of a more motivated workforce.”

Charles Brook, of Brook Business Recovery, agreed with the new rules in principal, but believes that it may prove to be more difficult for smaller firms to implement. 

“From an employer’s perspective, it’s good to have staff who feel they can legitimately approach their employer. However, because of the close relationships small employers have with their employees, they may feel unduly pressured to agree with these arrangements, whereas larger employers will have less emotional pressure to agree with requests.”

Mike Funnell, of Power Tool Services, also believes that it is a good idea, but some professions may not be able to grant employees such flexibility.

He said: “Obviously, it is very good news and will help with staff morale and productivity. Although employers would love to grant flexible working hours, it depends on the process and nature of work. Then again, the employee knew what hours they would be expected to work when they agreed to do the job.” 

David Richter, of Coral Homes UK, feels that the new flexible working rules will be beneficial to staff, as long as it doesn’t conflict with efficiency.

David said: “In general, I have no issues with the revised flexible working rules as long as it doesn’t conflict with efficiency. Businesses have worked hard during the economic downturn to progress, which has been achieved through increased efficiency in difficult conditions, so what you can’t have is people undermining this and only wishing to work flexible hours to suit themselves.” 

Morgan Wilson, of Juice Learning, believes that flexible working hours are fundamental for organisations, but only if the employee is willing to show their employer the same level of support.

He said: “I am absolutely for the new flexible working rules, which can be a massive help for employees, especially those with families, so long as it isn’t taken for granted. Employees should be prepared to give the same back to their employers when patterns of work increase, for example.”

Max Earnshaw, of Earnshaw Kay, rounded up the verdict by agreeing with Morgan, as he feels that it is a good idea, especially in small and medium sized businesses. 

He said: “As a matter of course and wherever it is possible, we operate flexible working arrangements for our staff. I think in a small and medium business environment it is general practise, as long as it is viable and doesn’t impact on business.” 

Tuesday, 22 July 2014

Mixed blessings of Le Tour

Just like the race itself, the local community saw winners, losers and even injuries!

There is no doubting that, for the visitors and spectators, Le Tour weekend was a success.  The goodwill of the crowd cheering on the riders as they sped past was clear for all to see.  For a few brief hours, parts of Yorkshire were in the gaze of millions of people and we certainly seemed to impress.

But what about the local businesses and others wanting to go about their day to day lives?

Many cafes and B&Bs have reported record takings for the weekend; although this is tempered by the fact that they only had so much capacity and it is a busy time of year anyway.  Many of them have said that takings were not significantly more than normal.  On the other hand, many establishments off the main route have said they were quieter than normal – their regulars had gone away to avoid the mayhem!

Local businesses saw disruption from the Friday before the race with parking and traffic restrictions.  My own business was only given ONE parking permit for the Friday for 12 members of staff!  Our cleaning staff couldn’t get in at the weekend because of the restrictions and we faced traffic delays for several days.

Low paid carers going about their normal routine visits often faced detours of over 25 miles to get to see vulnerable people reliant on their services.  Several have told me that they got paid no more and their day was several hours longer because of the disruptions.

And what do we have to show for the weekend other than some rather tired looking bunting and a few yellow painted bicycles that are still littering the route?  Hopefully, people will have seen enough of God’s Own County to entice them to visit us over the next few years.  But unlike the Olympics, and despite the millions spent on the weekend, there is no tangible legacy, no permanent facilities left behind. 

Whether you are a winner or a loser following Le Tour, it was a spectacular weekend showing Yorkshire at its best!

Tuesday, 24 June 2014

Do SMEs get a fair deal from banks?

The banking sector has often been accused of favouring big business over small and medium sized businesses (SMEs.) It certainly seems that way. From speaking to SMEs on a daily basis, it appears that high street banks still say an emphatic ‘no’ to smaller businesses seeking finance to grow, or even to renew broken or out-dated equipment.  

While we know that banks have been badly affected by the tumultuous recessionary years, they do seem to forget one fundamental fact: SMEs are the very lifeblood of our economy. Now it seems that high street banks may be hindering smaller businesses from gaining access to finance from alternative providers and forcing them to take out business accounts to get a loan. Delays in financing may put the company under undue financial pressure and lead them to taking out more expensive borrowing than necessary.  This may simply because they need to replace vital equipment and don't have time to go through all the hoops that the banks want them to!

More diversity and competition in the banking sector is vitally important if we are going to have a lasting recovery built on business investment and exports.

A new survey, commissioned by Chancellor George Osborne, will reveal that smaller companies still feel that they are being shut out by the banks when it comes to lending. The survey, undertaken by the British Chambers of Commerce (BCC) and the Federation of Small Businesses (FSB), will rank the different banks based on how well they are meeting the needs of small companies.

It’s good news that the Government is backing a new and independent website called Business Banking Insight (BBI) which is designed to give clarity around the services smaller businesses receive from their banks. The website will identify how SMEs rate their banks based on performance, service and business understanding. The review was launched in November, under the remit of identifying the best SME bank in the UK, as well as providing data to allow SMEs to find the bank most suitable for them. It feels like this is too little too late, however, as SMEs are looking at getting back on track right now for recovery.

We ask our twelve SME business owners in the next Business Jury (www.businessjury.co.uk) whether SMEs are really getting a fair deal from banks.

Tuesday, 27 May 2014

Another potential HMRC omnishambles?

Barely a week goes by without HM Revenue and Customs getting us into another fine mess; or a potential one. I could hardly believe my ears, when I heard that Mr Taxman may soon have the power to seize money from bank accounts. HMRC wants the power to take money from any account – including ISAs and incredibly also joint accounts – if it believes that someone owes taxes or money is owed as a result of tax credit overpayments.

This strikes me as yet another barmy plan by Mr Taxman designed to frustrate and to charge us tax that we may not even owe. Also, what happens if the account is a joint one and an innocent party is penalised? Many couples do not even know what their other half is contributing to the account or may not even be aware that he/she is being chased for tax.

Even the Treasury select committee has attacked the plan: “This policy is highly dependent on HMRC’s ability to accurately determine which taxpayers owe money and what amounts they owe – an ability not always demonstrated in the past. Incorrectly collecting money will result in serious detriment to taxpayers.” I couldn’t have put it better myself. It all feels rather like HMRC in asking for this power is trying to set itself up as some sort of state-sponsored pay day lender. Currently only by securing a court order can HMRC seize tax owed from bank accounts. These new plans will almost certainly result in error and potential fraud.

HMRC insists it will not take any money unless the person has at least £5000 left across all their bank accounts, including ISAs, after the debt has been paid. It will not create or increase overdrafts – that is the plan anyway. Innocent victims of the policy could include pensioners who put money into a joint account, managed by younger relatives. If their younger relative owes taxes, the money could be seized, even though it belongs to the elderly person.

Around 17,000 people a year will be affected by the plans which will apply to anyone who owes more than £1000 and has at least £5000 left across all bank accounts – including ISAs. HMRC plans to only target those who have long-term debts and have received at least four demands for payment. The plans are currently going through a consultation phase and, if approved, will be implemented in 2015/16.

This tactic should absolutely be the option of last resort and should only happen after a court order has been secured to prevent any ‘omnishamble’ type mishaps. HMRC should look at instituting a more rigorous incremental system of fines, seek a court order for recovery and, if all else fails, sell on the debt to a reputable business debt collection agency – but only once steps 1 and 2 have been followed.

Tuesday, 6 May 2014

Another "borderline insane" plan from HMRC

It appears that HMRC has hatched yet another plan to frustrate us: Mr Taxman is looking to sell off our anonymised tax data to private firms. Hot on the heels of the now delayed plans for an NHS database that would place all our medical files online, HMRC seems to have surpassed even itself this time round.

A HMRC spokesman has said that they would only “share data where this would generate clear public benefits, and where there are robust safeguards in place.” It goes on in a similar fashion, stating that anyone accessing data would be subject to the same “confidentiality” provisions as HMRC staff, including a “criminal sanction” for unlawful disclosure of taxpayer information. If given the go-ahead, the plan would allow HMRC to release the data to third parties including companies, researchers and public bodies.

I agree totally with former Conservative minister David Davis who has labelled the plans “borderline insane.” They are really another example of HMRC ineptitude; but, worse still, they are right up there with the shelved plans to put our medical data online. The Care.data initiative is currently suspended after fears were raised as to exactly what information would remain anonymous.

While HMRC has said it is committed to confidentiality, I am more than a little sceptical. It defies logic that we would remove any restraints at a time when data can be collected in huge amounts and can travel round the globe in a matter of milliseconds. One would have hoped that HMRC would have learned that trying to sneak plans like this under the radar is not the way to build trust or develop good policy. The officials who drew this up clearly have no idea of the risks to data in an electronic age. What’s more, HMRC records are woefully inaccurate, so is the data they provide going to be of any real use?

The sale of tax data would have to be subject to the high level of rigour and scrutiny that are simply not the hallmarks of how HMRC has tended to operate. There is no logic in flogging highly confidential information; and it has the potential to pose a major threat to the confidentiality of our nation’s tax affairs. Why isn’t Mr Taxman seeking to put his own house in order first before playing fast and loose with extremely confidential data? It really does beggar belief; and I truly hope that these plans are consigned to the scrap heap as soon as possible.

Friday, 4 April 2014

The Companies House 'omni-shambles'

By Amanda Vigar, Managing Partner, V&A Bell Brown LLP

At a time when small and medium sized businesses (SMEs) are still struggling to make ends meet, I could not believe my ears when I learned that Companies House and HMRC are complicit in allowing debt-ridden companies to avoid their creditors.

Companies House are automatically striking off companies that haven’t filed their accounts or annual returns despite objections from creditors. In the past this was swayed by objections from HMRC - who are often amongst those creditors - but they no longer seem to be objecting if the amounts owed to them are small.

Quite rightly, Companies House is asking creditors to show that they have a valid debt and that it has been chased, but there comes a point when it’s not economically viable for small businesses to carry on pouring good money after bad! It doesn't mean that the debt is any less valid! Their only hope then is that someone else stumps up the money to take the company through proper insolvency proceedings. But alas, Companies House doesn't see it that way and actively strike companies off for pure administrative non-compliance.

Whilst I normally have sympathy with HMRC, in these situations, it’s often HMRC that gets hit hardest. HMRC loses the tax/VAT/PAYE from the business that has gone bust AND the creditors get a bad debt write off claim too - so HRMC loses out twice over! So why aren’t they objecting to Companies House and stopping them from allowing the offending Directors to walk away from their responsibilities, often scot free?

SMEs are the life-blood of our nation’s economy, after all, and it serves no one any good at all to be forced under - except the real tax evaders, that is!

Too often Directors stick their heads in the sand and hope things will go away whilst taking others down with them. The Government needs to insist that to get rid of a company either the Directors have to confirm that the company has satisfied all its creditors or that a proper insolvency process is gone through. Small businesses don’t have the financial or time resources to do this for themselves, so for once the Government needs to stop treating them as unpaid tax collectors and policemen and help them to get paid for the work they’ve done in good faith.

Tuesday, 4 March 2014

Keep our vital rural services local!

The vital importance of thriving villages cannot be underestimated. Not only should our villages and market towns look picturesque but they should also be able to provide services to their residents. They should not fall to the level of pretty ‘window dressing’ for the tourist trade. However important tourism is to these local economies, it would be a travesty and a scandal if people struggled to work and live there!
The Post Office, in particular, provides a place for people to pay their bills, collect benefits, get their car taxed and buy stamps locally. Sadly, the number of branches has dwindled from about 25,000 in the mid-1960s to around 11,500 today, according to figures from the Post Office. Although so much can be done online nowadays, this doesn’t replace the community spirit that local businesses can provide and you can’t get the emergency pint of milk and a loaf of bread online!
I am delighted to have helped a local businessman buy secure a Post Office licence in a small West Yorkshire village. The successful acquisition has rescued the village Post Office from closure – more about this success story very soon!
Older people, more often than not, have to rely on other dwindling local services, and our vanishing rural bus routes too. They are, quite literally, a life-line for our elderly population. Anyone of a certain age will remember with fondness days gone by when one could count on being able to buy groceries, sort out finances, pick up parcels, send letters to friends and relatives overseas or even buy a local paper without having to drive to a soulless shopping centre miles away.

I am judge and juror on the West Yorkshire Business Jury (www.businessjury.co.uk) which periodically asks a dozen local businessmen and women a topical question. One of our most recent verdicts was that the high street needs to adapt or die. One juror, Frances Bennett of geotechnical services company Ashton Bennett, applauded Mary Portas' review for the government which recommended the ideas of the Transition Town movement. The movement champions community-owned bakeries, food-growing projects and even community-owned energy. Let’s apply that brilliant ethos to our villages as well!

Wednesday, 5 February 2014

It's too early for a rise in the national minimum wage!

I could not believe my ears when recently the Chancellor George Osborne stuck his neck out on the national minimum wage. He called for a hike in the NMW to £7 to compensate low-income workers for the economic crisis. This is all well and good and of course I’d love for everyone to be paid a living wage. But, and it’s a big ‘but’, can I venture to suggest that now is not the time to be saddling small and medium sized businesses (SMEs) with unrealistic additional costs? Of course, it is not the right time when the economy is still in its earliest, most tentative steps on the road to recovery.

I work with scores of SMEs and, on a daily basis, they complain that they feel like the ‘forgotten army’ powering the economy, creating jobs and prosperity but remaining unthanked for that vital job. I agree wholeheartedly with the CBI’s stance on this proposal which postulated that an “unaffordable rise would end up costing jobs” and recommended that the Low Pay Commission should make the final decision. The Commission was set up in the first place to stop such political posturing!

Interestingly, the Chancellor did not suggest a new level for the NMW, but his officials have been studying the implications of an increase from the current level of £6.31 an hour to £7 by 2015.

Even mooting a rise is a dangerous game to be playing at a time when SMEs are only starting to re-gain confidence and start hiring again. The looming threat of a pay hike will not help to stabilise matters but will instead force businesses into a bunker-like mentality. They will, in simple terms, be more inclined to shelve their aspirations or plans to hire and will be more likely to carry on with their existing staff levels.

If the new NMW levels are implemented, it could well mean that businesses may, however reluctantly, choose to shed staff. Now, that would be unforgivable. So, come on Chancellor choose your moments please! A couple more years of growth in the economy will mean that SMEs are more likely to be able to bear an increased wages burden. That would be the ideal time to talk publically about a wages hike.

Smaller businesses should be supported and encouraged to grow whilst still giving lower paid earners more in their pockets. I’d recommend taking more earners out of tax and NIC (particularly employers’). That way, more people will be able to come off benefits – a net saving to UK PLC!

Tuesday, 7 January 2014

Don't make January a taxing time...

The January bookkeeping blues are looming, as small business owners across the UK are getting their books in order to submit tax returns by January 31. The penalties for late submission and payment are severe, with a fine of £100 levied for being just one day late. Don’t wait until the last moment to submit as well, as the Government Gateway may crumble under the pressure and you may be left fighting against the clock, and lose.

Try to make the practice of ‘keeping good books’ your New Year’s resolution and follow these simple steps to take the pain away:

•             Get a head start with your accounts. HMRC states: “You must keep records of all your business transactions.” Getting into the habit of keeping good bookkeeping records is essential to the smooth running of every business, no matter how big or small. It’ll amaze you to hear how many people have not budgeted for their annual tax payment. Don’t let your tax obligations take you by surprise, but instead budget for the ‘worst’ (or best, as you’ll be operating a more successful business!) case scenario.

•             Do everything you can to take the surprise out of tax planning. Let your accountant and accounting software do the hard work for you. As well as allocating time each week to review and update the books, small business owners should set time aside each week to go through the books and ensure that their accountant is kept in the loop, particularly about any unexpected changes in the business’s fortunes in order to avoid any surprises when tax returns need to be submitted.

You still have time to make this January’s deadline, so here’s what you need to know:

-              You have already missed the October 31st deadline for submitting your tax return by post; you must instead submit your tax return online by January 31st 2014.

The penalties for late returns are pretty steep and the longer you delay, the more you’ll have to pay:

-              One day late: A fixed penalty of £100. This applies even if you have no tax to pay or have paid the tax you owe.

-              Three months late: £10 for each following day – up to 90 days, maximum £900. This is as well as the fixed penalty above.

-              Six months late: £300, or five per cent of the tax due, whichever is the higher. This is as well as the penalties above.

-              12 months late: £300, or five per cent of the tax due, whichever is the higher. In serious cases you may be asked to pay up to 100 per cent of the tax due instead. These are as well as the penalties above.

The last thing anyone would want is to be burning the midnight oil in a frantic rush to get a tax return submitted by the deadline. So, speak to your accountant or bookkeeper to find out how you can help make January a less taxing time.