A new year, a new resolution?
Happy New Year!!
Now, traditionally the start of a year is a time for new resolutions. These resolutions often cover things we have been struggling with in the previous year. However, the problem with such resolutions is that they are often unrealistic and by the end of January have gone by the wayside.
But the biggest problem is that just because it is the start of a new year, does not mean that it is the right time to commit to a change in behaviour. For example, losing weight is a great idea, but January and February, when the weather is cold and the days dark, is not a time to eat salads and light food.
From a business perspective I find I am most motivated when the weather improves and the days lengthen. I spend more time outdoors, which makes it easier to think problems through. This means that spring/summer is the best time for me to start something new or review business issues.
If, like me, the new year is most definitely NOT the time to commit to change, cut yourself some slack and delay making your resolutions until the Spring (perhaps an Easter resolution would be better). Then give yourself realistic targets designed to change behaviour in the long term and not just for a couple of months.
Fiona 🙂
Top 15 points in the Small Business Bill
The Small Business, Enterprise and Employment Bill is going through parliment now
The Bill will open up new opportunities for small businesses to:
- compete
- get finance to create jobs
- grow
- innovate
- export
Here are my top 15 key points:
- For every piece of legislative brought in two pieces will be removed
- Prompt Payment
- Changes to Childcare Early Years and Child Minder Registrations
- Cheque imaging from smart phones (Presentment of Cheques)
- Banks will share data on Small Businesses with other Lenders
- Invalidating restrictive terms in business contracts to increase access to Invoice Discounting
- Company Transparency – Register of People with Significant Control
- Accelerated Strike Off
- Company filing changes
- Directors Disqualification – tougher rules
- Schools, Colleges, Higher Education to track students into the labour force
- Penalties for employers who fail to pay an Employment Tribunal award
- Penalties for non compliance with National Minimum Wage increased to 100% or upto £20,000
- Improved access to alternative finance
- Streamlined Company Registration
These are major changes that will affect us all!
steve@bicknells.net
How far would you go to retain staff?
Apple and Facebook are now offering to pay for female employees to freeze their eggs!
The initiative is part of the so-called “perks arms race” as Silicon Valley firms battle to recruit top talent and it is hoped the perk will attract more women into a traditionally male-dominated sector. (Sky News)
Fertility specialist Philip Chenette is quoted as saying “providing egg-freezing coverage for employees can be viewed as a type of payback for women’s commitment in a male-dominated industry where technology firms are often competing to attract female talent” (NBC News)
https://www.pacificfertilitycenter.com/fertility-preservation/
The cost for egg freezing in the US is about $10,000 (£6,200) for every round, as well as $500 or more for storage each year.
Apple also offer assistance with adoption.
Will UK companies soon be offering this perk?
steve@bicknells.net
Companies House reports will be Free in 2015
Its time to review your subscription to company information databases!
Companies House is to make all of its digital data available free of charge. This will make the UK the first country to establish a truly open register of business information.
As a result, it will be easier for businesses and members of the public to research and scrutinise the activities and ownership of companies and connected individuals. Last year (2013/14), customers searching the Companies House website spent £8.7 million accessing company information on the register.
Until it becomes free in 2015, you will still have to pay
| Companies House WebCHeck | Charges |
|---|---|
| Company accounts | £1 |
| Annual return | £1 |
| Company record report | £1 |
| Current appointments report | FREE |
| Monitor Service (per company, per year) | FREE |
This change will come into effect from the second quarter of 2015 (April – June).
steve@bicknells.net
When will your company stop being small?
Back in June 2013 the EU passed a directive 2013/34/EU which changed the thresholds for small companies.
| Present | Proposed | |
| Turnover | £6,500,000 | £10,200,000 |
| Total assets | £3,260,000 | £5,100,000 |
| Average no. of employees | 50 | 50 |
As before its a 2 out of 3 test. The Audit thresholds are unchanged.
The UK was required to transpose this into UK Law no later than 20th July 2015.
The Dept for Business Innovation and Skills (BIS) concluded their consultation (24th October 2014) and the plan is currently to implement the change for financial years starting on or after 1st January 2016.
As pointed out by SWAT
This could mean that a company with a turnover between £6.5m and £10.2m will be required to prepare its accounts for year ended 31 December as follows:
2014 as a medium sized company under present UK GAAP;
2015 as a medium sized company under FRS 102;
2016 as a small company under the applicable accounting regime for small companies.
This might depend on whether the company could early adopt the new regulations for its 2015 accounts. The possibility of early adoption is one of the questions asked by BIS.
Surely BIS can see that not allowing early adoption will place an unnecessary reporting burden on Small Companies?
steve@bicknells.net
Debitoor find out more about the Assoc of UK Accountants…
Debitoor is pleased to announce the partnership with the Association of UK Accountants. This organisation works with 300 independent accounting practices accross the UK and all the accountants are Chartered Management Accountants. If you’re on a lookout for someone to handle your numbers, just head over to the dedicated Debitoor page and pick your local from the Accountant list.
Following this, we had a chat with Steve Bicknell – the Business Development Director for the Association of UK Accountants to find out what the business he represents is all about and to shine the light on the most common accounting mishaps.
What makes ‘the Association’ different from other accounting organisations?
Unlike others, our accountants all worked in business before going into practice and we are focused on helping clients to maximise profit using management information rather than just helping with tax compliance. All of our accountants work together as a team sharing knowledge and experience, supporting each other.
Who is your typical client?
In our December 2014 survey 39% of clients had a turnover below £100k
Our survey also showed that the top 4 business sectors we work with were construction, manufacturing, professional service and retail.
Start up businesses try to do everything themselves at the very start, that also includes accounting. When, in your opinion, is the right time to get accounting services, rather than keep up on your own?
Often business owners wait too long before they realise that they need help from an accountant.
Key reasons are:
– not understanding the difference between a book keeper and an accountant
– thinking that an accountant will just be an extra cost – the reality is that most accountants will save the business many times their cost
– thinking that accountants are just bean counters.
But if you choose a qualified and experienced accountant they can bring huge benefits: management tools to improve profitability, cost controls, tax savings, growth strategies, business planning, business strauctures and much more. So don’t wait too long – getting an accountant should be a priority for all businesses!
In your experience, what are the most common mistakes that entrepreneurs make when they start doing their own accounting?
First off – not having a separate bank accounts. Many start ups try mixing business and personal transactions in their personal bank accounts, its a total nightmare, don’t do it, get a business bank account. Mixing things up will almost certainly have tax implications.
Not registering for tax or filing returns is another one. Getting things right at the beginning is extremely important and a CIMA Accountant can make sure that you choose the right business structure and will help you register for VAT, PAYE, CIS and other taxes. Choosing the right VAT scheme will save you tax. Not registering and filing returns will have severe consequences and lead to fines and penalties.
Also – contract mistakes.Ask your Accountant to review you contracts, they will be able to give you lots of useful tips.
Running out of cash: draw up a Budget and Cashflow and forecast how much cash you will need to run the business, looking at your cash cycle and managing it will be vital. If you need funding ask your Accountant for help, they will be able to look at all the options and help you choose the option that’s best for your business.
Accounting – many start ups fail to keep control of their accounting, by working with an accountant and using Debitoor you can avoid this problem.
Why would you recommend Debitoor to the new businesses?
I use Debitoor myself, I do business consultancy work and wanted an easy way to raise invoices and keep track of payments, Debitoor was perfect for me.
Cash is king for new businesses and raising invoices quickly and tracking payments is vital, Debitoor lets you do this for free. You can then move to paid versions of Debitoor and use Debitoor for all your accounting needs. It’s really easy to use, its low cost and fantastic value.
What are the most common business problems you have to deal with during the day?
So here are my top 5 common accounting problems we deal with:
1. Not doing any accounts – the shoe box approach to business
This is the most common mistake, book keeping is best done as you go along, putting all the paperwork in a shoe box or carrier bag is a really bad idea as you have no idea how your business is performing.
2. Not keeping receipts. Often small business miss out on claiming all their expenses because they fail to keep receipts and lose track of their spending
3. Not reconciling. Reconciling your bank statements to your cash book is vital to make sure that all of your income and expenses have been recorded in your accounts.
4. Using the wrong accounting system. For some businesses a manual cash book and records are fine but for many accounting software such as Debitoor will be needed to keep track of debtors, creditors and VAT. Make sure you understand your accounting system and operate it correctly.
5. Mixing business and personal expenses. Some sole traders even mix up business and personal bank accounts and in extreme cases don’t even have a business bank account. This can cause errors and often means that a sole trader will either claim to many expenses or to few.
Improve your chances of business success, avoid the common problems listed above.
Stereotypically, accounting doesn’t come across as the most exciting field. What makes your job interesting to you and why do you think accounting is important?
One of the great joys of working as a ‘CIMA MiP’ (“Chartered Institute of Management Accountants, Member in Pratice”) is that we are generally dealing with ‘small’ and ‘micro’ client businesses (micro defined by EU regulations as firms with less than 10 employees/ £2m turnover; small defined as firms with less than 50 employees/ £10m turnover) and that we become involved in an enormous breadth and depth of subjects.
If you don’t have accounts, you will lose control of your business and fail to keep track of who owes you money.
What motivates you daily?
Helping businesses to succeed. We want to use our skills to help our clients to achieve their goals.
If there’s one most important thing you would suggest to a new business to consider in the New Year, what would that be?
The best advice for all new businesses is to not put off doing your accounts, don’t take the shoe box approach, use Debitoor!
Reblogged from https://debitoor.com/blog/conversation-steve-bicknell-association-uk-accountants
Is your ‘flood’ plan in place?
Many homes and businesses were flooded in the winter of 2013-4, and even with the dredging which took place in the summer, others may be flooded in future winters.
It is a sad fact that at least half of those businesses devastated by flooding will never recover, and those that do, may take a long time to get back on track.
Before they can repair and rebuild there is often the initial wrangling with the insurance company about how much they should pay out, but there are far wider implications to a business than just putting right the premises.
The problem is not just the flooding itself but the downtime the business experiences whilst the damage is repaired, and the consequences of that downtime.
Do you continue to pay your staff even when they are not able to work and if you do so, how do you afford a wages bill when you have no income coming in? Once even loyal customers have gone elsewhere, how do you persuade them back when you are up and running again?
These are the type of issues many businesses do not consider until forced to do so.
Flooding is one type of business catastrophe but there are many others all businesses should consider and plan for. The scale of the catastrophe will be linked to the importance of the occurrence to the business.
For example, if your business server fails how big an impact would that have on your business? If all your staff need to access information on that server 24/7 it could cost you dearly and clearly in that situation it is vital that you have a backup plan to cover just that type of emergency.
Alternatively, if you are heavily reliant on one employee what would you do if that employee goes off sick for an extended period of time?
Every business has its own ‘flood’ scenario and it is hugely important that you have a disaster recovery plan to mitigate against the worst effects of a catastrophic event. You need to build your flood defenses – first identify the scenarios which could do the worst damage, plan for how you would deal with those scenarios in the most effective way, and ensure you have the ‘backups’ in place.
Of course we hope never to use our backup plans, but at least if we have one in place, we are as prepared as we can be if the worst happens.
Fiona 🙂
10 ways save tax on your Self Assessment Tax Return
It’s Self Assessment season, most people who are required to do self assessment will submit their returns in December and January.
You must always send a tax return if you’re:
- a self-employed sole trader
- a partner in a business partnership
- a company director (unless it’s for a non-profit organisation, eg a charity, and you don’t get any pay or benefits, like travel expenses or a company car)
- Don’t miss the deadline of 31st January or you will get penalties and interest
- If you are new to Self Assessment makesure you get your HMRC log in details early and know your NI and UTR numbers otherwise you won’t be able to file online which could lead to penalties
- Claim all your expenses for example a self employed worker will claim for travel , protective clothing (PPE), home office expenses
- Don’t forget Pension Contributions if the tax hasn’t been claimed by your pension provider or you are a higher rate tax payer
- Don’t forget Donations to Charity if you are a higher rate tax payer
- Have you included out of pocket expenses for example parking
- If you are employee could you claim a tax allowance for clothing?
- Does your company pay mileage below the HMRC rates, you could claim a tax allowance on the difference
- Check you have all your motoring expenses included
- Makesure you have claimed all your costs on Buy to Let
steve@bicknells.net
What is the Foster Care Allowance?
All Foster Carers are classed as Self Employed and can choose whether to be taxed using one of two methods – the Simplified or Profit methods.
Simplified Method
This is the most common method.
Your ‘qualifying amount’ for a tax year consists of two parts:
- Your Annual Fixed Amount per household of £10,000
- Plus your Weekly/Part Week Amount of £200 (under 11 years old) or £250 (over 11 years old)
If your income exceeds this level under the Simplified Method your are taxed on the difference.
Profit Method
This method works best if you have high expenses, to use this method you need to keep detailed records of all your expenses including capital expenditure.
Using the Profit Method you don’t use the allowances but prepare detailed accounts on which you are taxed.
National Insurance
Foster Carers are subject to Class 2 and Class 4 National Insurance.
Further details are in HMRC Helpsheet 236
steve@bicknells.net
Is your act theatrical enough to have tax deductible agents fees?
Actors, singers, musicians, dancers and theatrical artists are permitted to make a deduction for agents fees under ITEPA 2003 S352.
But its more complicated than you might think based on recent cases…
Richard Madeley and Judy Finnegan (2006) SpC 547 it was only on appeal that the Special Commissioner agreed that their chat show was considered theatrical.
The Special Commissioners also thought that Bruce Forsyth and Ant and Dec qualified.
But that Quiz shows were borderline, for example they felt Jeremy Paxman (University Challenge) and John Humphry (Mastermind) didn’t qualify, but Anne Robinson (The Weakest Link) did qualify and Chris Tarrant (Who wants to be a Millionaire) was borderline.
So do you think the special commissioners would see your act as Theatrical?
steve@bicknells.net
Business Accountant 