When all the best laid (succession) plans go wrong!

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

When Jeremy Clarkson was unceremoniously removed from Top Gear, who thought that Chris Evans would be leading a completely new team of presenters?

It will be interesting to see just what impact Chris has. having, apparently, only agreed to take it on if he is allow a free hand on forming its future. Mind you, is he just the first in through a rotating door trying to get things back on track (like the football managers that now seem to leave before they’ve even started) or will he become the saviour of Top Gear?

In recent years, in the business world, we’ve seen the likes of M&S struggle to find the right new leadership to pull their businesses round after they have lost their way. Each time, there was hope that it would all come good, the flame flickers for a while (think Stuart Rose and Per Una) and yet now M&S seems again to be a bit of a lost soul on the high street.On the other hand, when Apple lost Steve Jobs, the naysayers predicted the end of Apple and yet in the few short years since his untimely death the value of the company has more than doubled under his hand-picked management succession team.

Looking at all the business succession activities, there are no hard and fast rules on what will work. But one thing for sure is: if you don’t plan ahead for the future management of your business it is bound to fail especially if the exit of a key member of senior management is unplanned! That means having more than just a plan A too.

One of the first questions I ask both a business owner or someone looking to start-up is “what is your exit plan?” Most people just look at me blankly because they haven’t even thought about exit! Yet, without a plan they have no idea how to shape their business in the next 5, 10 or 25 years. People who do keep that end goal in sight at all times are much more likely to succeed.

Even better, make sure you can have more than one route through to that end – just in case your managing director decides to punch your key customer!

Business Battle-axe pledges to keep watch on the Government

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

Congratulations to Sajid Javid MP on his appointment as Secretary of State for Business, Innovation and Skills and to Damian Hinds MP as Exchequer Secretary.

Both are new to their jobs, so let’s get them started on the right tracks and remind them that the Battle-axe will be watching every move they make. 

Of course, she will also be letting them know (directly) what she thinks of their performance!  One wonders if the rolling pin will get through security at the House of Commons?

Sajid has started by making the right noises.  One of his first pronouncements was to recognise small business (the Government’s beloved SMEs) as the "engine room" of British industry, vowing to get "heavy-handed" regulators off their backs.  

A welcome sentiment, but the proof of the pudding will be in how much he can achieve in the next five years with the dark satanic red-tape mills of the EU still working overtime!  

Sajid needs to be telling Mr Cameron to take a hard line in Europe on the mountains of regulations they produce every year.  Up and down the UK entrepreneurs are swamped with unpaid admin work they do for the government (and Brussels) – you may remember the article about it a few months ago where it was estimated that an average small business spends 22 days a year on it. 

If anything is going to put off people from setting up in business or employing people it's the pain and non-value added admin that goes with it.

As a former banker Sajid should know how the banking system works. I will be expecting him to look at why the banks are still making big noises in public about lending to SMEs then forcing them to jump through so many hoops that they are put off applying for the finance needed to develop their businesses. 

Maybe we should just give up on the banks and ask him to expand the Growth Fund programme that has seen critical expansion money being lent to the life blood of the UK economy. 

How about using the cash from the sale of the taxpayers shares in Lloyds and maybe one day RBS to top up the fund?

Or better still why not give more enhanced reliefs for entrepreneurs investing into the future of their business – not just on exit but up front relief!  After all, they actually keep people in jobs, so the money saved on benefits could be recycled to encourage investment.

Meanwhile Damian claims to have worked in the pub/hotel industry for 18 years so should be well used to the effect of excise duties on drinking behaviour. As a result, it will be interesting to see if the alcohol excise duty is frozen in the forthcoming budget helping to slow the rate of pub closures that we have seen in recent times – often the last community facility in the village.   

Whilst we know this is a Tory cabinet, it’s not just Mr Farage that likes a pint of the real stuff especially from some of Yorkshire’s fabulous local breweries and cider presses!

My policy demands for whoever forms the next government after May 7 2016

With only a matter of days to go to the general election, business owners across the nation will be praying that whoever is in office the morning after the public has spoken will remember they exist.

So, knowing that the various party leaders closely follow the sage pronouncements of the Battle-Axe, here are the key policy demands that my own think tank “The Rolling-Pin Brandishers” have drawn up after consulting those very same business leaders:

An urgent root and branch reworking of the business rates system so that small independent businesses can afford to be on the high street. A good start would be using valuations to reflect current rather than drastically out-dated property values

Introduce within a month a proper Service Level Agreement for HMRC – one with serious teeth so that businesses know when to expect responses and repayments of tax and HMRC has to pay (in cash) for their errors

Invest to bring HMRC systems into the 20th (never mind the 21st) century so that businesses can see their tax positions at any time and where cash has been allocated – with the ability to correct it when HMRC’s have randomly (mis)allocated the payments (yet again)

Removal of a significant amount of the ever-rising mountain of red tape that businesses have to deal with but which adds no real value to anyone and holds back start-ups, growth and employment. That’s without introducing more rules to achieve the reduction, of course

An emergency Budget raising the VAT threshold dramatically so that local plumbers/builders/electricians/carpenters aren’t forced to add 20% to their prices just because they use high value materials – and just think how much less cash-in-hand work there would be

If Government departments insist on online filing, a real push on rolling out high speed broadband to all business premises

A continuation and expansion of the access to funding initiatives we have seen in recent years such as the Regional Growth Funds that have invested almost £3bn pounds to grow British business since they started in 2010.

Whatever colour the Government is after the election, small and medium-sized businesses will continue to be the life blood of the British economy and, as so often in the past, the real root and fount of the innovation and entrepreneurial spirit that makes Britain Great!

MR PRIME MINISTER (SADLY IT WILL BE): IGNORE US AT YOUR PERIL!

PS – failing any of the above demands, we still concur with the Monster Raving Loony Party’s long-held desire for a Royal Commission into the Hokey Cokey – to see if it really is what it’s all about.

Originally published in the Huddersfield Examiner on April 28th 2015 

Our think tank has thunk!

With only a matter of days to go to the General Election, business owners across the nation will be praying that whoever is in office the morning after the public has spoken will remember they exist. 

So, knowing that the various party leaders closely follow the sage pronouncements of the Battle-Axe, here are the key policy demands that my own think tank “The Rolling-Pin Brandishers” have drawn up after consulting those very same business leaders:

• An urgent root and branch reworking of the business rates system so that small independent businesses can afford to be on the high street.  A good start would be using valuations to reflect current rather than drastically out-dated property values;
• Introduce within a month a proper Service Level Agreement for HMRC – one with serious teeth so that businesses know when to expect responses and repayments of tax and HMRC has to pay (in cash) for their errors;
• Invest to bring HMRC systems into the 20^th (never mind the 21^st) Century so that businesses can see their tax positions at any time and where cash has been allocated –  with the ability to correct it when HMRC’s have randomly (mis)allocated the payments (yet again);
• Removal of a significant amount of the ever-rising mountain of red tape that businesses have to deal with but which adds no real value to anyone and holds back start-ups, growth and employment.  That’s without introducing more rules to achieve the reduction of course;
• An emergency Budget raising the VAT threshold dramatically so that local plumbers / builders /electricians / carpenters aren’t forced to add 20% to their prices just because they use high value materials – and just think how much less cash-in-hand work there would be;
• If Government departments insist on online filing, a real push on rolling out high speed broad to all business premises; and
• A continuation and expansion of the access to funding initiatives we have seen in recent years such as the Regional Growth Funds that have invested almost £3 billion pounds to grow British business since they started in 2010.

Whatever colour the Government is after the Election, small and medium businesses will continue to be the life blood of the British economy and, as so often in the past, the real root and fount of the innovation and entrepreneurial spirit that makes Britain Great!

MR Prime minister (sadly it will be): Ignore us at your peril!

P.S. Failing any of the above demands we still concur with the Monster Raving Loony Party’s long-held desire for a Royal Commission into the Hokey Cokey – to see if it really is what it’s all about.

Budget to build on solid foundations

With just weeks before the General Election, none of us could be entirely sure what the Budget would hold. 

Would our Chancellor (known to those of us in the trade as “Gorgeous George”) be buying votes or would he try not to ruffle any feathers? 

All in all, it appears to be the latter, albeit with a few sweeteners to parents/grandparents of those in their 20s looking to get their offspring out of the family nest and those with savings that generate significant income.

His overall message: “steady as she goes”.  Growth has been steady over the last couple of years and there was certainly nothing in this Budget that will lead to an uncontrollable boom – it was more about building on solid foundations of growth leading to a reduction of the deficit.

My main disappointment is that, despite stressing that he was backing British business, there really wasn’t anything for small business owners to be throwing their hats in the air over. 

The reform of the business rates system has been long rumoured and, whilst I welcome it with open arms, reading between the lines its impact is likely to be limited and definitely not the radical reform that this outdated and fundamentally unbalanced system needs.

My other big concern is that reports of the death of the tax return were, in the words of Mark Twain, greatly exaggerated. 

Whilst I can see that the change will be of benefit to those with relatively simple affairs – say just a salary and savings income that is taxed at source – even they will still need to check the figures carefully to ensure that everything is actually included and is accurate. 

Given the way HMRC’s systems struggle to cope with RTI on payroll, my heart sinks at the mere thought of the errors and omissions we are going to see when they try to deal with the pre-population of tax records from multiple sources. 

For those who are self-employed or have complex tax affairs, my concern is that HMRC will see this as being like PAYE and take a guilty-until-proven-innocent approach with the accompanying administrative burden increasing yet again for those of us running small businesses. 

What price a delay (or six) from the target 2020 launch date?

"Contact us now"!

The statement is there on the advert and so the customer rings and leaves messages, sends e-mails to the address on the website…. waits…..waits…... and hears absolutely nothing!

What exactly does that say to the potential customer about the business?

Recently, we had cause to call out an electrician because of a major power outage at one of our offices.  We rang five that claimed to offer 24 /7 emergency call outs.   One answerphone told us “we’re away for the holidays” – but didn’t say when they were back! Another just rang out and didn’t even have the facility to leave a message.  In the end only one replied – 48 hours later!

In these tight economic times, a lot of businesses are investing good money in having and building websites, paying for top listing on Yell and the like, or advertising in local papers or magazines in the hope that it will bring them work.  They might as well set fire to all that cash if they don’t monitor the e-mails and voicemails that their promotional activity produces.  Nowadays, with smart phones enabling everyone to be able to pick up emails wherever they are in the world, there is just no excuse for not responding.

Mind you, even when they’ve made contact, will they actually turn up to look at the work that’s on offer?  Sadly many won’t!  A client told us recently of some flooring work they’d needed doing.  Nine emails generated only four responses.  Eventually two bothered to turn up to look at the floor (one more set a date but never arrived leaving the client waiting around) but only one of them provided the pricing information they’d promised.  That’s not much better than a 10% hit rate just to get a price!

Personally, I’d much rather be told someone can’t take the business on at the moment than just be ignored.  To me a non-response is just downright rude.  And it’s so short sighted – I can tell you that a non-response means I’ll never consider that business again!  Worse still, I’m likely to actively tell people not to bother even trying them.

So, the next time you hear a tradesman complaining that they’re struggling for money, ask them how many people they didn’t reply to in the last year.  They’ll probably look baffled, but push them and I suspect you’ll find that they are one of the many that don’t seem to be able to plan a work pipeline.  They do the job in hand and just hope that something comes up for next week. 

By contrast, as we see with loads of our clients, basic courteous communication and a bit of forward planning, combined with some thought about the customer (and potential customer!) generates really positive recommendations to friends, family and colleagues and, as a result, a much more steady income.  A virtuous and profitable circle that starts with a simple response.

HMRC End of Year report: "Must try harder"

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

It was heartening to read that I’m not the only one that feels that the HMRC’s service falls well below what hard-pressed taxpayers (and their advisors) should be able to expect from it. 

At the end of 2014, the Institute of Chartered Accountants surveyed a large number of its tax practitioner members.  Over a third of us felt that HMRC’s performance had declined and over 50% felt it hadn’t changed. The handful that felt it had improved either don’t deal with HMRC very often or have even worse experiences in the past than we have!

The biggest frustration reported is, surprise, surprise: HMRC’s inability to get things right first time.  How many apologies have we heard that they’ve sent out batches of thousands of incorrect or inaccurate letters?  And isn’t it strange that the “errors” always seem to work in HMRC’s favour? I’ve lost track of how often they allocate payments to wrong years or have wrong information about clients – for example counting the same income in two different years or sending out demands for payment in relation to periods before a company was even formed.  Sorting out these issues costs us and HMRC time and, therefore, taxpayers’ (read clients’) money to do this – and it’s simply not necessary!

You can add the costs of: the time we spend on hold on the phone waiting for a response only to be told to ring back another time; the cost of faxing/posting documents because HMRC in the main doesn’t accept or send emails; and the lack of certainty about a taxpayer’s position because of the sheer length of time HMRC can take to respond to correspondence (if in deed they do at all).

The ICAEW tax faculty are of the opinion that HMRC is being starved of resources. Our view is that penny pinching coupled with a dogmatic belief that every taxpayer is trying to “pull a fast one” are costing HMRC dear now and in the long run.  The public needs to have confidence that they get the right answers and they get them when they need them.

As this is election year, I will be looking kindly on whichever party puts forward a commitment to an HMRC Service Covenant – one which puts experienced staff back on the front line who can actually answer queries and which has real teeth when HMRC fail.  That covenant would also make HMRC accountable for the extra administrative costs they inflict on taxpayers.  

It would drag the organisation into the 20^th (and no, that’s not a typo) century in terms of communicating with the people they are supposed to be there to serve – and even, maybe, us accountants.

Alternatively, how about a party (beyond our friends in the Monster Raving Loonies) being brave enough to suggest we should put our tax collection system out to tender or introducing some of the consumer choice and competition that they talk about so enthusiastically elsewhere in our society?