Politicians 'steal' ideas from Business Battleaxe

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

While some commentators have accused George Osborne of stealing ideas from the Labour Party, those of us in the know realise that actually, they’ve both just been reading the Battle-Axe’s recommendations!  In particular, my call for a major reform of the business rates system.

For a long time, I have been an exponent of locally-raised money being spent locally.  Why have two systems of raising taxes when the money goes into the same pot? In fact our multiplicity of intertwined tax streams goes way beyond this – but that’s something for another Battle-Axe barrage!

The Chancellor has announced that local authorities will have the ability to set level of business rates and retain them for spending locally.  For me, it’s the first part of this that is the most important because it enables local government to set business rates to attract businesses into their area and, most importantly, to stay there as they grow.  There are plenty of reliefs for smaller businesses and wonders such as centrally-determined exemption zones, which have led to some very odd corporate structures to manipulate the system. We’ve seen companies moving from plush establishments in rates free zones to less salubrious premises as soon as full-scale rates kick in.  This means revenue is actually being lost!

The change will also mean that where spending decisions are made will be right next to the heart of the business community.  So, there should be far more local engagement in what the money should be spent on – if not, then the councillors may rapidly find they lose their seats!  With the drive towards the Northern Powerhouse, this move makes sense - otherwise it might turn out to be yet another pointless bit of Government spin.  Local businesses remote from London know the challenges of being heard when they’re outside the immediate range of vision of the Mandarins in Whitehall.

I was, however, very disappointed that none of the major parties have seen fit to deem it time for a re-valuation exercise.  The property values on which rates are based are now so woefully out of date that they’re not even close to reflecting the way that the country has developed over the last few decades.   The saving grace is that the ability to set rates locally means that, although the valuations are outdated, at least the pence per rateable value figures can be adjusted to smooth some of this effect.  That said, what if one are of a town is out of sync with another area – e.g. a new prestigious business park against an old run down area of industrial units that are not as easily accessible?

George’s comment:  “We will give councils extra power and responsibilities for running their communities” makes it fairly clear that (as ever!) there are likely more than a few devils in the detail.  My concern is that the headline grabbing announcements may turn into the proverbial Paper Tiger – much as I fear the whole Northern Powerhouse concept may be doomed to do as well.

I’d also like to take this opportunity to thank everyone who supported and sponsored me as I took on the Last of the Summer Tri, my first ever triathlon.   So far I’ve raised in excess of £1,500 with more donations still coming in.  It was one of the toughest challenges I’ve ever faced, but I have to say I enjoyed every minute of it.  The thought I was raising money for two very important causes, Motor Neurone Disease Association and One Good Turn, was a real motivator and helped drive me on.  

Turn that competitive streak into a charitable one!

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

It seems to have become something of a corporate competition - business owners trying to outdo each other with how heavy a workload they and their company has.

Complaining about not having enough hours in the day, how they have to burn the midnight oil all the time and staff having to work flat out are seen as a status symbol and a sign of success.

I hear so many variations on the same theme -

·         “We have to focus on the core business, we can’t afford to take our eye off the ball with outside distractions.”

·         “It is just a waste of time getting involved in that sort of thing.”

·         It’s not our responsibility to save the world.”

·         “Someone else can do all that touchy feely stuff.”

Come on - hands-up how many of you reading this Business Battle-axe column have been guilty of this?

Yes, business owners and their staff have to graft really hard to bring home the bacon. There is no getting away from that fact.

But I believe that every business owner has a social duty to make time in their hectic schedules for a bit of philanthropy. Being busy is simply no excuse.

Everyone can make time if they want to. And what could be better than finding a slot in the diary to do a bit of good for the local community or a worthy cause or charity?

There are great benefits in embracing corporate social responsibility.  You can help a cause close to your heart, it helps you take a well-earned break from the usual routine and grindstone, and then there is the feel good factor.

Why not get staff involved? – encouraging them to become volunteers or take part in charity events can enhance a firm’s personnel development strategy and help build teamwork. And not least give employees the chance to have a bit of fun.

Never let it be said that the Business Battle-axe does not practise what she preaches.

Having hit the age of 50, I have set myself the challenge of completing my first ever triathlon – the Last of the Summer Tri - in the name of charity.  Outside work most of my spare time is taken up training for this endurance test.

I am supporting the Motor Neurone Disease Association (MNDA) – a cause close to my heart as I lost my Dad to this horrible disease in 2013.  The other worthy cause is Huddersfield-based One Good Turn, which does great work improving the quality of life of individuals and families experiencing poverty and isolation.

For those who may be interested I have set up two mydonate pages:

MNDA - https://mydonate.bt.com/fundraisers/amandavigar1

One Good Turn - https://mydonate.bt.com/fundraisers/amandavigar2

So I am throwing down the gauntlet – or in my case a rolling pin!  How about turning that competitive streak into a charitable one?

My rallying cry is – come on all you business leaders across the Examiner’s circulation area I challenge you to follow my Business Battle-axe lead.

Find time to do something for a good cause. And don’t forget I won’t accept any excuse or take no for answer!

ENDS ­

Business Battle-axe Amanda Vigar is facing one of her toughest challenges ever – a triathlon in aid of two charities.

Amanda, who is Managing Partner at V&A Bell Brown, is taking part in the Last of the Summer Tri on October 4 to raise money for the Motor Neurone Disease Association and One Good Turn.

The endurance challenge will involve swimming 400 metres at Holmfirth Pool, riding a bicycle 24km around Holmfirth that has a total ascent of 320.14 m and a maximum elevation of 195.45m, and then running 5.6K on a similar route to the cycle.

Amanda, whose business is based in Holmfirth, said: “I like to exercise to wind down after a hard day’s work and I thought why not put this to good use by raising money for charity.  As I reached 50 this year, I told myself it was now or never!

“As the Business Battle-Axe, I am used to throwing down the gauntlet - or in my case brandishing my rolling pin – and taking on challenges both inside and outside of work. This is certainly going to be one of the toughest challenges I have taken on – but I am thoroughly enjoying it.

“I have chosen to support the Motor Neurone Disease Association as it is especially close to my heart as I lost my Dad to this horrible disease in 2013.  The other worthy cause is One Good Turn, which does great work improving the quality of life of individuals and families experiencing poverty and isolation.”

The MNDA is dedicated to improving care and support for people affected by MND, funding and promoting research, and campaigning and raising awareness so the needs of people with MND are addressed by society.

One Good Turn, based in Lockwood, Huddersfield, offers practical support, such as providing household essentials such as washers, cookers, fridge freezers, beds and other household furniture. It also offers a listening ear and signposts people to specialist services if further help is required.

Anyone who would like to support Amanda’s fundraising efforts can log onto to her mydonate pages:  

MNDA: https://mydonate.bt.com/fundraisers/amandavigar1    

One Good Turn: https://mydonate.bt.com/fundraisers/amandavigar2

Business battle-Axe recounts "painful" experiences dealing with HM Revenue & Customs

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

 

It is not often that the Battle-Axe’s rolling pin spins on its own without human input, but we have had three incidents this week alone, that have had it dancing a veritable tarantella – and, surprise, surprise, they all involve HMRC!

Over the last few months dealing with HMRC has become steadily more and more painful, but the events of the last seven days have left me horrified at the sort of service and behaviour that they clearly think is acceptable.

Case number 1 concerns a small employer. They took on a new employee part way through the 2014/15 tax year.  Because of the salary/bonus the employee had received from his previous employer, and the way the PAYE system works, in certain months of his old employment higher rate tax had been deducted from his salary. 

Now, across the year as a whole his package (including the new employer’s wages) was below the higher rate threshold.  So, the employee was rightfully entitled to a refund of the excess higher rate tax, which was paid back to him via payroll.

Now, if this had been a bigger employer the employee’s refund would probably just have reduced the amount of PAYE to be paid at the year end with no big issue. However, because the business was very small, the refund was actually more than the PAYE due to be paid.

But that’s no big hassle, HMRC just reimburse the employer right?

Well, that’s the concept and we would normally have expected this to happen within a couple of weeks of tax year end payroll returns going to HMRC – so, sometime in April or May.  We’re now in August and, despite our active chasing, still no refund.  This week we rang again (and after being on hold for 47 minutes) were informed that the repayment would be made in, wait for it, February 2016!  Errrr…that’s the employee’s money that the new employer has already repaid (as required) and which HMRC are not entitled to (and actually never have been) being held back for no reason.

This means our client is going to be waiting to get back money that was deducted in relation to a period when the employee was working for someone else for well in excess of 12 months.

In a similar vein, another client had what turns out to be the misfortune to have a key employee go on maternity leave.  That’s OK as the reimbursement of statutory maternity pay (SMP) is done by reducing the PAYE payable each month.  But again, the SMP was more than the PAYE due so the extra SMP payment needed to be reimbursed by HMRC.  Believe it or not, this time, the estimated payment date is March 2016.  So here, the employer has lost a key member of staff in a small business for at least nine months, putting added strain onto the business, and has to wait well over a year to be repaid the SMP that they have paid out on behalf of the Government. 

In both cases, the amounts involved would be enough to put some small employers into the bankruptcy courts!  Of which more in a little while. And remember, the Government is currently talking about pushing big businesses to play fair and pay small businesses more rapidly.  Pots and kettles comes to mind…..

Now the pièce de résistance: HMRC’s debt collection system!  We’ve long suspected that HMRC have a random number generator that they use to create documents to send to similarly randomly selected companies or individuals. Fortunately, we do monthly book keeping for the third client in this sorry list, so we know that they have paid everything that is due to HMRC.  Unsurprisingly therefore, this business owner was horrified to be asked to pay £1,700-plus of arrears.  HMRC has confirmed that the overall liability agrees with ours, and the debt collection team can’t explain why or how the claimed arrears have arisen.  Better still the online portal that we use to check HMRC balances gives a totally different figure to the amount they’re attempting to collect.  When pushed to explain this apparent discrepancy, an HMRC employee actually admitted that “this happens all the time, it would appear that our systems don’t work” – talk about stating the obvious!  But at least we now know what dear old ERNIE is doing in its spare time when not picking numbers for the Premium Bonds.

While I would like to think that my clients have just been unlucky, this pattern of HMRC errors (almost always seemingly going in HMRC’s favour if we didn’t pick them up) is growing all the time. Exercising my democratic right I have made my views very clear to the client’s local MPs and to David Gauke - the Minister responsible for HMRC. 

Sometimes that institution seems to forget that it is part of Government and therefore exists for the people of this country – not against us!

If you are having similar issues, I would urge you to contact your MP and let them know what has happened. Do feel free to copy the BattleAxe in as we want to monitor both the issues and HMRC’s overall performance. Maybe when they get sack loads of mail and their e-mail boxes are bursting at the seams, they might take things serious. 

Oh yes, to bring this sorry tale to and end and very sad to say, we also have seen cases where HMRC has actually petitioned for the winding up of a business based on blatantly wrong information from their systems!

To solve this ridiculous situation I don’t know what my weapon of choice should be –what’s your vote: my rolling pin or a magic wand?

ENDS

National Living – Wasted?

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


The number crunchers at Battle-Axe HQ have been running their slide-rules over Budget 2015 version 2.0 and the sound of tutting and sighing has been getting louder as each day has passed.

Like the proverbial magician, the Chancellor kept his biggest rabbit until the end of the Budget speech – the National Living Wage or “NLW”. That has grabbed a lot of headlines but its implications, along with other elements of the Budget (announced or hidden away in the small print) tell a different and, for me slightly concerning story.

Firstly, the NLW is neither national in its impact nor is it the Living Wage. In November 2014, the Living Wage Foundation calculated the required hourly rate to be £7.85 outside of London. Setting aside the slightly dodgy maths in their calculation, that’s rather more than George’s NLW which, when introduced next year, will be set at £7.20. That’s clearly rather less - and significantly less than the Living Wage in London, which is currently £9.15 - a rate that the NLW won’t even reach by 2020.

Secondly, it will only apply to those over the age of 25. There’s a political prize to be won by getting down youth unemployment, but this is a problem waiting to happen! When staff hit around 24 year and 9 months old will their employers start looking to get rid of them to take on youngsters who will cost 21% less?

The affordability point is critical for smaller and medium sized businesses where there isn’t the extra margin, even taking into account the drop in Corporation Tax rates, to cover the extra cost.

Add to this, that the Chancellor has effectively put NICs onto their dividends reducing what they have to live on. Big business gets as tax cut but smaller businesses are, to all intents and purposes, getting a tax hike. That’s businesses that last year accounted for 25 million jobs – just under 50% of all UK employment!

No doubt the Government will point to things like the increase in the Annual Investment Allowance from £25,000 to £200,000. Great, but for most of those 5.2 million small businesses they can only dream of spending £25k a year on new kit. Even if they could find a bank willing to lend them the money!

No-one likes the idea of people living in poverty, but my team is concerned that the National Living Wage won’t have the effect that everyone hopes for. Increased costs will have to get passed on to the end consumer. So the cost of living for all (including those on NLW) will go up. In turn, that, of course, means we need a further hike in the NLW to make up for it which will push up prices….. You see where we’re heading here?

Even the Government accepts that the NLW will cost around 60,000 jobs. But we suspect that’s only existing jobs and doesn’t take any account of the roles that SMEs were looking to create, but now either won’t be able to (not all jobs can be done by youngsters!).

So, the National Living Wage needs more refinement, more consideration and more consultation on how to get it to really work. If not, the UK will end up missing a major opportunity to update, upgrade and accelerate both the whole country’s economy and the current recovery.

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!