During National Payroll Week, we are highlighting the importance of accurately running payroll. Here we outline the business benefits of outsourcing this key administrative function.
The rate of taxable benefit in kind for cars provided to employees seems to change almost as fast as the British weather, as does government policy towards encouraging us to use electric vehicles.
As a chartered accountant and business adviser specialising in owner-managed businesses, I consider myself fortunate to work with a diverse range of start up businesses. Over the last 25 years I have gained a number of insights into the difficult decisions start up business owners have to make, just to keep going.
We should not lose sight of how important small businesses are to our economy. According to the Federation of Small Businesses (FSB), they account for around 99% of all private sector businesses, providing 60% of private sector employment.
For those starting a business, however, there are undoubtedly challenges. Perhaps this is why more than 50% don’t survive for more than five years.
I have advised start up businesses across sectors, with different ideas, ambitions and values. However, three challenges come up time and time again.
1. Lack of cash
In business there is the old adage that ‘cash is king’. Running out of cash is the single biggest reason why start up and early stage businesses fail. Your business may be profitable, but if a major customer doesn’t pay their bill, or you don’t budget to pay your corporation tax, then you have a problem. Sadly, many businesses go under simply as a result of cash flow problems.
As accountants, we can work with the business owner to prepare realistic cash flow forecasts that can identify possible pinch points. For the newest businesses, raising finance is often the first hurdle. This might include looking at specific grants or allowances that may be available, for example R&D Tax Credit. We can also help with this, through our network of connections. You might be surprised by what you can claim for your business.
An important, but often over-looked, issue for new business owners is how business and personal finances interact. For instance, many business owners have not considered how their new venture might impact on their child benefit or tax credits. In addition, a number of our clients have started a business on a part-time basis alongside their current employment, so we can advise how you proceed if you are in that position.
With so much uncertainty looming around the impact of the UK’s exit from the EU, there is a real need for SMEs to take a close look at their cash position and cash management approach.
Discussing end of life matters with your loved ones can seem a bit of a taboo subject but taking control of your affairs now can save heartache and stress further down the line.
The inheritance tax regime has been relatively stable for some years but one wonders how long this will continue to be the case. In its recent report, the Office of Tax Simplification has called for the system to be overhauled. The proposed changes include cutting the “seven-year rule” on lifetime gifts to five years and scrapping taper relief, which taxes gifts made between three and seven years before death on a sliding scale.
The second round of the Countryside Productivity Small Grant scheme is now open for applications but only for a limited time. The scheme aims to support investment in agricultural equipment and boost productivity by providing funding for farmers to purchase specialised equipment.
Thomas Westcott was, once again, one of the headline sponsors for a charity challenge that aims to raise money for a great local cause.
From 1 October 2019, HM Revenue and Customs will introduce a VAT reverse charge on certain building and construction services. This measure will mean that the customers will be liable to account for the VAT in respect of those purchases, rather than the supplier.