News Archive - September 2013
Small businesses hindered by 'complex' tax system - 30.9.2013
Half of small businesses spend between two and eight hours each month trying to understand and calculate their taxes and complete their returns, a survey by the Federation of Small Businesses (FSB) has found.
The survey of 2,198 FSB members found that a further 11 per cent of respondents spend between two and six days per month working on their taxes.
The survey also found :
- 77 per cent spend up to £5,000 on professionals' fees and on software in order to keep up-to-date with their obligations
- two thirds estimate they spend £3,651 a year on tax obligations
- 30 per cent said cash flow problems had caused them to pay their taxes late
- 19 per cent said they'd made late payments because of difficulty understanding what was required or confusion over payment dates.
The FSB's national chairman, John Allan, said :
"Small firms are losing a serious amount of time completing these forms and it's tantamount to money down the drain as they could spend that time growing their business. The economy is just starting to pick-up and it is the UK's army of small firms that will drive the growth and create jobs.
"There have been long-running issues with complex tax statuses if you're a sole trader or running an incorporated business. Creating one new tax system, removing the choice will make it simpler. It will free up time for businesses, it will give them the time to grow and contribute further to the prosperity of UK-plc."
We can help you with ALL aspects of taxation, help file your tax returns and make payments on time. Contact us to find out how.
The survey of 2,198 FSB members found that a further 11 per cent of respondents spend between two and six days per month working on their taxes.
The survey also found :
- 77 per cent spend up to £5,000 on professionals' fees and on software in order to keep up-to-date with their obligations
- two thirds estimate they spend £3,651 a year on tax obligations
- 30 per cent said cash flow problems had caused them to pay their taxes late
- 19 per cent said they'd made late payments because of difficulty understanding what was required or confusion over payment dates.
The FSB's national chairman, John Allan, said :
"Small firms are losing a serious amount of time completing these forms and it's tantamount to money down the drain as they could spend that time growing their business. The economy is just starting to pick-up and it is the UK's army of small firms that will drive the growth and create jobs.
"There have been long-running issues with complex tax statuses if you're a sole trader or running an incorporated business. Creating one new tax system, removing the choice will make it simpler. It will free up time for businesses, it will give them the time to grow and contribute further to the prosperity of UK-plc."
We can help you with ALL aspects of taxation, help file your tax returns and make payments on time. Contact us to find out how.
Businesses at risk over key personnel loss - 25.9.2013
More than half of UK businesses (55 per cent) would cease trading if they lost one or more key employees to illness or death, research from Scottish Widows has found.
Despite this, only one in five companies has key person insurance protection in place to provide cover in such an emergency.
Other key findings from the Scottish Widows 2013 Business Protection Report include :
- 77 per cent of employers believe they have at least one employee whose absence due to long term incapacity, critical illness or death would 'seriously impact the profitability or survival of the business'
- The number of businesses with liabilities - business loans, mortgages and overdrafts - has risen from 34 per cent to 42 per cent in two years
- The number of businesses with liabilities but no financial plans in place for the loss of a key person has increased marginally from 32 per cent to 34 per cent in the same period
- Delivering commitments and promises to customers was a priority for 68 per cent of businesses; insuring a key person or employee was a priority for only three per cent
Small companies in particular would be adversely affected by the temporary or permanent loss of a key person. Almost three quarters of the report's respondents were the owner, founder, partner or all three of their company.
Katya MacLean, protection specialist at Scottish Widows, said :
"Businesses need to strike a balance with their priorities. They can survive without a photocopier, for example, for a short period but the majority would be in far greater difficulty in both the short- and long-term if they were to lose one or more of their key employees."
"Companies need to look carefully at succession planning and all the risks posed to a business regardless of how likely they are to happen to ensure they can continue to meet what they consider their key business priorities, whatever the eventuality."
Despite this, only one in five companies has key person insurance protection in place to provide cover in such an emergency.
Other key findings from the Scottish Widows 2013 Business Protection Report include :
- 77 per cent of employers believe they have at least one employee whose absence due to long term incapacity, critical illness or death would 'seriously impact the profitability or survival of the business'
- The number of businesses with liabilities - business loans, mortgages and overdrafts - has risen from 34 per cent to 42 per cent in two years
- The number of businesses with liabilities but no financial plans in place for the loss of a key person has increased marginally from 32 per cent to 34 per cent in the same period
- Delivering commitments and promises to customers was a priority for 68 per cent of businesses; insuring a key person or employee was a priority for only three per cent
Small companies in particular would be adversely affected by the temporary or permanent loss of a key person. Almost three quarters of the report's respondents were the owner, founder, partner or all three of their company.
Katya MacLean, protection specialist at Scottish Widows, said :
"Businesses need to strike a balance with their priorities. They can survive without a photocopier, for example, for a short period but the majority would be in far greater difficulty in both the short- and long-term if they were to lose one or more of their key employees."
"Companies need to look carefully at succession planning and all the risks posed to a business regardless of how likely they are to happen to ensure they can continue to meet what they consider their key business priorities, whatever the eventuality."
Switching current accounts made easier - 16.9.2013
The process of switching bank accounts from one bank or building society to another has been made easier following the launch of the Current Account Switch Guarantee.
The Payments Council, which is responsible for delivering the free-to-use service, said it would allow the UK's 46 million current account holders to switch 'simply and reliably using a consistent service.'
Key benefits of the Current Account Switch Guarantee include :
- Being able to switch accounts on a set date agreed with the new bank
- A maximum seven-day period to switch accounts - the current process can take between 18-30 working days
- The automatic moving of all outgoing payments such as direct debits and standing orders and incoming payments including salaries
- A redirection service ensuring any payments sent to or debited from the old account will be redirected to the new account for a period of 13 months
- Any interest lost or charges incurred as a result of errors switching accounts will be reimbursed
The majority of the UK's high street banks and building societies have signed up to the agreement, including Barclays, HSBC, Lloyds Banking Group, RBS Group, Santander and The Co-operative Bank.
Individuals may be able to save up to £600 by switching current accounts, Mark Finder from the Money Advice Service told the BBC.
Caroline Rookes, CEO of the Money Advice Service, said: "Having the wrong current account can cost you money. To avoid losing hundreds of pounds through charges or lost interest it makes sense to check whether your account fits with how you use it and if not to switch as soon as possible. The new Current Account Switch Service is a real boost for the UK's 46 million current account holders, making it easier and faster to move from one provider to another."
The Payments Council, which is responsible for delivering the free-to-use service, said it would allow the UK's 46 million current account holders to switch 'simply and reliably using a consistent service.'
Key benefits of the Current Account Switch Guarantee include :
- Being able to switch accounts on a set date agreed with the new bank
- A maximum seven-day period to switch accounts - the current process can take between 18-30 working days
- The automatic moving of all outgoing payments such as direct debits and standing orders and incoming payments including salaries
- A redirection service ensuring any payments sent to or debited from the old account will be redirected to the new account for a period of 13 months
- Any interest lost or charges incurred as a result of errors switching accounts will be reimbursed
The majority of the UK's high street banks and building societies have signed up to the agreement, including Barclays, HSBC, Lloyds Banking Group, RBS Group, Santander and The Co-operative Bank.
Individuals may be able to save up to £600 by switching current accounts, Mark Finder from the Money Advice Service told the BBC.
Caroline Rookes, CEO of the Money Advice Service, said: "Having the wrong current account can cost you money. To avoid losing hundreds of pounds through charges or lost interest it makes sense to check whether your account fits with how you use it and if not to switch as soon as possible. The new Current Account Switch Service is a real boost for the UK's 46 million current account holders, making it easier and faster to move from one provider to another."
Government pledges extra financial support for entrepreneurs - 12.9.2013
UK entrepreneurs are to benefit from an additional £69 million of Government funding to help start-up and grow small businesses, Prime Minister David Cameron has announced.
The Government said the package will help create tens of thousands of new businesses.
It builds on a number of existing Government schemes which have helped create over 30,000 new businesses in the past two years.
The new funding includes :
- Extending the New Enterprise Allowance (NEA) - a mentoring and funding support scheme for unemployed people looking to start up their own company. It will now run until the end of 2014, helping an additional 60,000 aspiring claimants - An extra £34 million for the Start-Up Loans scheme - a loans and mentoring scheme for 18-30 year olds looking to start their own business. Successful applicants can receive an average loan of around £4,500
Prime Minister David Cameron said: "My message is simple: if you have drive, determination and are prepared to work hard, we will back you."
Latest figures from Department for Business, Innovation and Skills (BIS) show that 6,000 entrepreneurs aged 50 or over have taken advantage of the NEA scheme so far, dispelling the myth that entrepreneurialism is a youthful attribute, the Government said.
Almost 4,500 disabled people have also taken advantage of the scheme.
We can help your business access Government funding and finance.
The Government said the package will help create tens of thousands of new businesses.
It builds on a number of existing Government schemes which have helped create over 30,000 new businesses in the past two years.
The new funding includes :
- Extending the New Enterprise Allowance (NEA) - a mentoring and funding support scheme for unemployed people looking to start up their own company. It will now run until the end of 2014, helping an additional 60,000 aspiring claimants - An extra £34 million for the Start-Up Loans scheme - a loans and mentoring scheme for 18-30 year olds looking to start their own business. Successful applicants can receive an average loan of around £4,500
Prime Minister David Cameron said: "My message is simple: if you have drive, determination and are prepared to work hard, we will back you."
Latest figures from Department for Business, Innovation and Skills (BIS) show that 6,000 entrepreneurs aged 50 or over have taken advantage of the NEA scheme so far, dispelling the myth that entrepreneurialism is a youthful attribute, the Government said.
Almost 4,500 disabled people have also taken advantage of the scheme.
We can help your business access Government funding and finance.
End of auto-rollover energy contracts for businesses - 11.9.2013
Small businesses will no longer be locked into 'automatic rollover' energy contracts after five of the UK's 'big six' energy companies agreed to end the practice.
British Gas, npower, SSE, EDF and E.ON have all agreed to abolish the practice of 'rolling over' energy contracts without the business's knowledge.
The Federation of Small Businesses (FSB) welcomed the move following a five-year campaign to bring about the change.
A quarter of the FSB's small business members have been locked into rollover contracts once their fixed-term deals expired. In many instances, this resulted in them being unknowingly signed-up to an additional 12-month contract with un-negotiated price increases.
Unlike domestic consumers, business customers are responsible for contacting their current or new supplier if they want to switch or negotiate a new contact.
Business energy contracts typically last between one and three-years, with many unaware of the window for negotiating, switching or ending contracts.
John Allan, national chairman for the FSB, said: "After campaigning on this issue for over five years it's great to see that four million small businesses will no longer risk being placed on unfair rollover contracts. These contracts often took small businesses by surprise and could lock them into un-negotiated higher prices for energy."
"The FSB is grateful for the support of the Prime Minister and Number 10's energy working group in making this happen. We are looking forward to further cooperation with Number 10 so small businesses can get a better deal at the hands of the big six."
British Gas, npower, SSE, EDF and E.ON have all agreed to abolish the practice of 'rolling over' energy contracts without the business's knowledge.
The Federation of Small Businesses (FSB) welcomed the move following a five-year campaign to bring about the change.
A quarter of the FSB's small business members have been locked into rollover contracts once their fixed-term deals expired. In many instances, this resulted in them being unknowingly signed-up to an additional 12-month contract with un-negotiated price increases.
Unlike domestic consumers, business customers are responsible for contacting their current or new supplier if they want to switch or negotiate a new contact.
Business energy contracts typically last between one and three-years, with many unaware of the window for negotiating, switching or ending contracts.
John Allan, national chairman for the FSB, said: "After campaigning on this issue for over five years it's great to see that four million small businesses will no longer risk being placed on unfair rollover contracts. These contracts often took small businesses by surprise and could lock them into un-negotiated higher prices for energy."
"The FSB is grateful for the support of the Prime Minister and Number 10's energy working group in making this happen. We are looking forward to further cooperation with Number 10 so small businesses can get a better deal at the hands of the big six."
Universal Credit criticised by spending watchdog - 10.9.2013
The Government's welfare reform programme - Universal Credit (UC) - has suffered from 'ambitious timescales' and 'weak management', according to a report by the National Audit Office (NAO).
The UC will merge a number of existing benefits into a single payment in order to reduce the costs and fraud associated with the current multi-benefit system.
The Department for Work and Pensions (DWP), responsible for the programme, was criticised by the NAO for:
- overspending
- taking risks in trying to meet short timescales
- using a management approach inefficient for a project of this scale and complexity
The DWP has been forced to delay the start of a national rollout of UC, originally planned for October 2013, due to IT glitches.
According to the report, more than 70 per cent of the £425 million spent on the programme to date has been on new IT systems. However, £34 million worth of these new systems has already been written off as it is unclear whether it will be able to support a national rollout.
Amyas Morse, head of the NAO, said: "Universal Credit could well go on to achieve considerable benefits if the Department learns from these early setbacks and puts realistic plans and strong discipline in place for its future roll-out."
Work and Pensions Secretary Iain Duncan Smith admitted there had been 'missteps' with the project.
"We can't underestimate the scale of the challenge," he said. "This is a fundamental transformation of the welfare system."
The DWP is to review its delivery, spending and IT plans. It will now extend pilot schemes to six more areas of the UK, with these sites taking on simple welfare claims.
The UC will merge a number of existing benefits into a single payment in order to reduce the costs and fraud associated with the current multi-benefit system.
The Department for Work and Pensions (DWP), responsible for the programme, was criticised by the NAO for:
- overspending
- taking risks in trying to meet short timescales
- using a management approach inefficient for a project of this scale and complexity
The DWP has been forced to delay the start of a national rollout of UC, originally planned for October 2013, due to IT glitches.
According to the report, more than 70 per cent of the £425 million spent on the programme to date has been on new IT systems. However, £34 million worth of these new systems has already been written off as it is unclear whether it will be able to support a national rollout.
Amyas Morse, head of the NAO, said: "Universal Credit could well go on to achieve considerable benefits if the Department learns from these early setbacks and puts realistic plans and strong discipline in place for its future roll-out."
Work and Pensions Secretary Iain Duncan Smith admitted there had been 'missteps' with the project.
"We can't underestimate the scale of the challenge," he said. "This is a fundamental transformation of the welfare system."
The DWP is to review its delivery, spending and IT plans. It will now extend pilot schemes to six more areas of the UK, with these sites taking on simple welfare claims.
Tips for businesses to secure bank loans - 6.9.2013
New guidance for businesses on securing bank finance has been released by two leading membership organisations from the business and banking sectors.
The Federation of Small Businesses (FSB) and the British Bankers' Association (BBA) have joined forces as part of Small Business Advice Week.
Their top tips for giving your business's loan application the best chance of approval are:
1. Develop a robust business plan
This should include projections for growth and should be periodically updated as growth is achieved or market and financial factors change.
2. Build financial understanding
You must be able to demonstrate that you understand your key numbers - e.g. turnover, profits and existing debts - as well as being able to show how the debt will be repaid.
3. Check your track record
Banks will look at the credit history of you and your business in order to see how you've managed previous borrowing. Check your history and address any concerns.
4. Be honest
Be clear about how much money you need and why you need it. Underestimating what you need or overestimating your projections may affect the lender's confidence in your ability to repay.
5. Keep talking
If you get a 'no', ask the lender for feedback. They should be able to give you advice about the changes needed to make a 'yes'
more likely in the future.
An independent appeals process for businesses whose loan applications are refused has been agreed by the main high street banks. The FSB and the BBA urged more businesses to consider the appeals process.
John Allan, national chairman of the FSB, said :
"The bank will base their decision on the information supplied to them, so making sure that it is robust is vital. We know that banks turn an application down because they don't think the business will be able to repay it or because the business hasn't properly demonstrated how they can repay it. These tips should give small firms the best possible chance to get finance so they can grow and help sustain the economic recovery."
The BBA's Irene Graham said :
"If you run a business with a good business plan and want funding, our message is go and talk to your bank. There should be no doubt that now is a good time for businesses to go and see their bank if they want to borrow."
The Federation of Small Businesses (FSB) and the British Bankers' Association (BBA) have joined forces as part of Small Business Advice Week.
Their top tips for giving your business's loan application the best chance of approval are:
1. Develop a robust business plan
This should include projections for growth and should be periodically updated as growth is achieved or market and financial factors change.
2. Build financial understanding
You must be able to demonstrate that you understand your key numbers - e.g. turnover, profits and existing debts - as well as being able to show how the debt will be repaid.
3. Check your track record
Banks will look at the credit history of you and your business in order to see how you've managed previous borrowing. Check your history and address any concerns.
4. Be honest
Be clear about how much money you need and why you need it. Underestimating what you need or overestimating your projections may affect the lender's confidence in your ability to repay.
5. Keep talking
If you get a 'no', ask the lender for feedback. They should be able to give you advice about the changes needed to make a 'yes'
more likely in the future.
An independent appeals process for businesses whose loan applications are refused has been agreed by the main high street banks. The FSB and the BBA urged more businesses to consider the appeals process.
John Allan, national chairman of the FSB, said :
"The bank will base their decision on the information supplied to them, so making sure that it is robust is vital. We know that banks turn an application down because they don't think the business will be able to repay it or because the business hasn't properly demonstrated how they can repay it. These tips should give small firms the best possible chance to get finance so they can grow and help sustain the economic recovery."
The BBA's Irene Graham said :
"If you run a business with a good business plan and want funding, our message is go and talk to your bank. There should be no doubt that now is a good time for businesses to go and see their bank if they want to borrow."
Employee 'shares for rights' scheme comes into force - 2.9.2013
A new employment status that allows workers to waive certain rights - such as the ability to claim for unfair dismissal - in exchange for shares has come into effect.
The introduction of 'employee shareholder' contracts on 1 September follows the 2012 Nuttall review, which found employee-owned companies enjoyed higher job creation rates, greater financial resilience and increased staff commitment.
Under the scheme - also referred to as 'shares for rights' - employees must hold a minimum of £2,000 worth of shares in their employer's company and give up rights including:
- Most unfair dismissal rights
- Statutory redundancy pay
- Flexible working rights - except for in the two week period after a return from parental leave
- Certain statutory rights to request time off to train
Employee shareholders still have the right to claim sick pay, maternity leave, time off for emergencies and paid annual leave.
Certain tax reliefs are available on the sale of shares received as an employee shareholder to encourage take-up of the scheme.
Anyone can apply for an employee shareholder position although workers cannot be forced to accept the status if they do not want to.
Chancellor George Osborne first announced plans for employee shareholders status in the March 2013 Budget, saying it would 'help create an enterprise culture.'
Get in touch to discuss using employee shareholder contracts in your business.
The introduction of 'employee shareholder' contracts on 1 September follows the 2012 Nuttall review, which found employee-owned companies enjoyed higher job creation rates, greater financial resilience and increased staff commitment.
Under the scheme - also referred to as 'shares for rights' - employees must hold a minimum of £2,000 worth of shares in their employer's company and give up rights including:
- Most unfair dismissal rights
- Statutory redundancy pay
- Flexible working rights - except for in the two week period after a return from parental leave
- Certain statutory rights to request time off to train
Employee shareholders still have the right to claim sick pay, maternity leave, time off for emergencies and paid annual leave.
Certain tax reliefs are available on the sale of shares received as an employee shareholder to encourage take-up of the scheme.
Anyone can apply for an employee shareholder position although workers cannot be forced to accept the status if they do not want to.
Chancellor George Osborne first announced plans for employee shareholders status in the March 2013 Budget, saying it would 'help create an enterprise culture.'
Get in touch to discuss using employee shareholder contracts in your business.
