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Minding your Ps and Qs

Jenny and Michael thumbs up

Running your own business can be the biggest thrill you will achieve in your working life, or the most stressful and demoralising experience you can imagine. On some days it is both!

However, I have come to realise from my own experience, from talking to business owners, and from gurus such as Ron Baker, Peter Thompson and Steven Covey, that running a successful business is all about minding your Ps and Qs.

Given the stresses involved in running your own business it is vital you are passionate about your product or service. Let’s face it, it is much easier to engage with potential customers if you can show passion for what you do.

Once you know what you want to do, you need to have a robust plan. We business owners are often knowledgeable about our product or service but avoid those business areas we struggle with – often marketing, sales or finance. The process of creating a business plan forces us to review ALL the areas of our business which are crucial to our future success.

We need to present ourselves to the market. If, like me you run a service lead business, one of the best ways to do this is to network. People buy from people they trust so you need to be out there meeting, and getting to know, local business owners.

Consulting professionals to help in areas you are not expert in is wise. Very few of us are instinctive business people and there will be one or two areas we struggle with. Interesting it is often more cost effective to get an expert in to do an efficient job than to try and do it ourselves.

To me a key element of a quality service is communication – this means listening and responding to clients’ concerns. Even if you sell a product there is a service element to what you do and this will be your contact with your customer.

Effective communication will allow you to qualify a potential client’s needs and what they particularly value. Having established value it should be fairly easy to give them a price.

To close, your business will not be measured by the outside world on what it is but on what people perceive it to be. So keep your ear to the ground and ensure peoples’ perception matches your reality.

Fiona 🙂

New Government Funding to help Women in Business

confident business

Last months ONS figures show more people are becoming self employed than ever before.

Budding female entrepreneurs are set to benefit from superfast broadband with a new £1m challenge fund, enabling them to work effectively, access new markets and grow their business online.

The fund will be part of the Government’s Superfast Broadband rollout and will help women take full advantage of all the opportunities superfast broadband can bring to business. There are 40 local broadband projects in England, already delivering the programme and they submitted bids to the £1m challenge fund in May 2014.

This forms part of help the Government is already providing to female entrepreneurs, which includes:

  • £1.6 million to support women’s enterprise in rural areas;
  • access to over 15,000 free business mentors; and
  • from next year, the introduction of Tax Free Childcare will mean that, for the first time, many self-employed parents will have access to support with childcare costs.

Are we doing enough to help women in business?

steve@bicknells.net

Free access to accounts filed at Companies House

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60% of the 3.5 million companies in the UK now file accounts electronically and you can access those accounts free of charge via http://companies.corefiling.com/search

 

Paul Driscoll is a Chartered Management Accountant, a director of Central Accounting Limited, Cura Business Consulting Limited, Hudman Limited, and AJ Tensile Fabrications Limited, and is a board level adviser to a variety of other businesses.

Top 5 reasons why Mums are starting businesses

Busy mother with her baby

Research by Direct Line shows that 65% of Mums with children under the age of 10 are considering starting their own business, why?

1. Allow me to spend more time with my children     20%
2. Cost of child care if I worked away from home      16%
3. Flexibility of being my own boss                            14%
4. Lifelong ambition to start my own business          12%
5. Don’t/didn’t like my current job                                1%

Reasons according to Financial Reporter

New figures suggested that full-time annual childcare costs for two children are now at £11,702, with almost half (49 per cent) of mothers surveyed believing they would be better off financially to start a business from home and save on childcare fees.

Here are 20 business you could start:

  1. Get a lodger – Under rent-a-room a taxpayer can be exempt from Income Tax on profits from furnished accommodation in their only or main home if the gross receipts they get (that is, before expenses) are £4,250 or less
  2. Ironing and Laundry Services – Always popular and you can start with friends and family
  3. E Bay Trading – as E Bay say… The first task is to sort through those bulging drawers and messy cupboards, finding stuff to flog. Get a big eBay box to stash your wares in, and systematically clear out wardrobes, DVD and CD piles, the loft and garage. Use the easy 12-month rule of thumb to help you decide what to offload: Haven’t used it for a year? Flog it.
  4. Blogging – Blogging has taken off and many businesses are looking for people to write blogs for them
  5. Candle Making – You can sell the candles on line and its easy to buy the wax and things you need to make the candles
  6. Car Boot Sale – As with E Bay but without going on line
  7. Cake Making – Make sure everything is labelled correctly and you comply with Health & Safety issues
  8. Data Entry – The internet makes it easy to enter data from where ever you are
  9. Social Media – Similar to blogging, businesses need help to manage Twitter, Facebook and Linked In
  10. Website Design – If you have the expertise, go for it
  11. Sales Parties –  Cosmetics to Ann Summers, there is a long list of opportunities
  12. Sewing and Clothes Alterations – Perfect before and after Christmas
  13. Jewellery – Making and selling jewellery is always popular and great for Christmas presents
  14. Car Repairs – Assuming you have the skills needed and comply with legal requirements
  15. Pet Care – Walking dogs or grooming is popular
  16. Virtual Assistant – Also personal organiser or personal shopper
  17. Wedding Planner – You could start by creating a blog about your expertise
  18. Direct Sales – For example http://www.direct-sales-opportunities.com/uk.htm
  19. Computer Repair – Great provided you have the skills
  20. Marketing – Telesales to leaflet design and freelance writing

If you’re thinking of starting a busines please ask us for help https://business-accountant.com/contact-us/

steve@bicknells.net

Limited Liability Partnerships

Cropped Leaves

Limited Liability Partnerships came under closer scrutiny in the Budget 2013.  The aim is to target LLPs which use the structure to hide the employment relationship of the partners and those with Corporate partners who divert business profits to the corporate partners in order to avoid tax.

Although the following measures come in to play from 6th April this year, the anti-avoidance measures make it effective from 5th December 2013.  This is to prevent partnerships changing their arrangements in order to avoid the new rules.

The two main areas of focus are salaried or fixed profit share partners which is referred to as disguised employment, and profit and loss sharing arrangements within mixed partnerships.

LLP partners with fixed profit share

HMRC believe that many members of an LLP should be taxed as employees, because they don’t see them is true partners.

A new test has been brought in which has three conditions.  Where the member tested meets all three conditions then he or she must be treated as an employed salaried member and be brought within the PAYE system with tax and class I NIC applied to any earnings,  which had previously been Taxed as profit share.

This also means that if a vehicle is provided for the members use by the partnership this will be taxed as a benefit in kind.  As such the member will have to pay tax and NIC and the LLP will have to pay Class 1a NIC on the benefit.

HMRC does actually accept that employment tax rules are imposed on the individual but that in fact the individual has no employment rights. This is because he is not actually an employee for employment law purposes.

The test is as follows. The provision is triggered when all conditions A to C are met:

Condition A: The Member is performing services for the LLP in his capacity as a member of the partnership and it’s reasonable to expect as a result of these arrangements that any amounts paid to him in respect of his services will be wholly or substantially wholly a disguised salary. In other words if his reward package is comparable to that received by an employee, either a fixed salary or a variable bonus based on performance rather than profit share.

Condition B: The Member doesn’t have significant influence over the affairs of the partnership.

Condition C: The Member’s capital contribution to the LLP is less than 25% of the total amount of his disguised salary which would be expected to be paid in the relevant tax year by the LLP in respect of the members performance of services as a member. Normally the relevant time would be the beginning of the new tax year.

These tests must be reviewed each tax year.

Corporate LLP Members

This applies to partnerships who have members which are not subject to UK income tax for example this might be a limited company. The problem here is that HMRC believes these structures are used to avoid tax on a very large scale.   Where for example an individual member introduces his Ltd company as a corporate member, and which then receives a profit share that would otherwise have been paid to the individual member.   If the Member then has the power to enjoy the fund which had been paid to his company then:

  • The individual member will be treated as a salaried member.
  • The amount paid to the company will be treated as employment income paid to the individual member.

There are anti-avoidance rules are in place to catch anyone trying to put measures in place to counteract these new rules.

fiona@grant-jonesaccountancy.com

http://www.grant-jonesaccountancy.com

Should you start your own business?

Economy in recovery

It now looks like the UK economy is in recovery.  Even if this isn’t the case, when people think that times will get better they start to spend money again.  With interest rates at historic low rates there is little incentive to stockpile cash in the bank for consumers and for entrepreneurs debt is relatively cheap to finance a new venture.

No Change for Currency

No Change for Currency (Photo credit: Wikipedia)

What’s your plan?

If you are starting a new business, it is important to work out what you will be selling, but to survive the early days of a start-up you will need good projections of your cash flow.  As you grow you may need investment from banks or other third parties.  Without good quality management accounts is it more difficult to persuade a potential investor to part with their cash.

Ask for help!

You can’t do everything on your own.  Work out what your core activities are and how much time you need to do them.  If you have time left over for ancillary activities then you are better completing these yourself too.  The cost of hiring specialist help, whether it be an accountant, web designer or lawyer can seem to be too much for a nascent company to bear.  However if you are spending so much time working out your accounts that you don’t have time for your customers you will cost yourself more in the long-term.

Business booming in Scotland

According to this article from the BBC  more Scots are starting up their own business.  Records from Companies House show that more than 340,000 companies were formed in Scotland last year.  Glasgow and Edinburgh are at the forefront of the economic recovery in Scotland.  If you have a good business idea, now could be the time to let that idea take form, especially if you have a service that supports other new businesses.

Give yourself a break

To give your business the best start, make sure you understand your finances.  Don’t forget that if you registered a company you are obliged to file accounts with Companies House as well as HMRC.  For more information on company formation see my blog here.

For support and advice on the finances of your business contact Alterledger or visit the website alterledger.com.

 

HMRC’s Start-up Saturday event

Entrepreneur startup business model

Business start-ups can take part in four free live tax webinars run by HM Revenue and Customs (HMRC) on 15 February

HMRC Start-up Saturday webinar programme, between 10am and 5pm, is aimed at new and prospective businesses. Each live webinar lasts an hour and gives the opportunity for questions.

The HMRC webinars are:

Self-Employment and HMRC – What You Need to Know

10am to 11am Saturday 15 February

This session concentrates on the information sole traders or partnerships need when they start. It covers registration, National Insurance, Self Assessment and record keeping.

Register for Self-Employment webinar external link

Company Directors – Your Responsibilities to HMRC

12pm to 1pm Saturday 15 February

This webinar is aimed at businesses considering setting up as limited companies. It provides the basics on incorporation and registration with Companies House and HMRC. It also looks at when companies become an employer, and the timetable for paying Corporation Tax online.

Register for Company Directors webinar   external link

Business Expenses for the Self-Employed

2pm to 4pm Saturday 15 February

Sole traders or partnerships need to know which day-to-day expenses they are able to claim for tax relief. They also need to start keeping records of these as soon as the business starts. This webinar provides an overview of the most common expenses, including motoring costs.

Register for Business Expenses webinar external link

What is VAT?

4pm to 5pm Saturday 15 February

New businesses are often worried about VAT, what it is and when they need to register. This webinar answers these questions and explains in simple terms how VAT works.

Register for ‘What is VAT’ webinar external link

re-blogged from https://business.wales.gov.uk/news-events/news/hmrc%E2%80%99s-start-saturday-event

steve@bicknells.net

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