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.

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.

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.” 

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!

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.

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.

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.