New Premises for Office Assistants

We have recently moved into new, larger premises!

The modern offices, based in Rainham, Essex are centrally located and easily accessible with ample parking.

The move falls in line perfectly with our expansion. Our new offices at 82 Rainham Road are welcoming and make it much easier for clients to visit. With more space we can comfortably grow and continue to take on new staff to cope with our expanding client base.

An office warming-come networking event was held at the new premises on 2 December and was a great success. It was good to see all our clients and contacts at our offices enjoying some wine, cheese and good company. A big thank you to everyone who attended!


A second event is planned for spring 2010.

Any business in Essex or London looking to benefit from professional bookkeeping services can now contact us on 01708 524 800 or info@officeassistants.org.uk. For more information on our range of services, visit http://www.officeassistants.org.uk/.

Pre-Budget Report: What News for the Small Business?

As usual, there is both good and bad news for small businesses in the Chancellor's 2009 Pre-Budget Report.

The first bad news is that VAT goes back up to 17.5% on January 1st. The only concession because of the date is that any business that is still open at midnight on New Year’s Eve will be exempt from the change up to 6am, or until they close if it’s before then. But everyone will be liable to cough up 17.5% of relevant income to HRMC after that time. You’ll have to add 2.5% to prices or take a hit.

The bad news on National Insurance contributions doesn’t kick in until 2011, but you need to factor this in to your planning. An extra 1% on the wage bill each month from April 2011 may mean shelving planned projects and not taking on extra staff.

There are a few rays of sunshine, though. A feared excess of public spending cuts is not in the pipeline yet.

The small companies’ tax rate will remain at 21% for another year. And you can continue to arrange deferments of some tax payments under HMRC’s Business Payment Support Service. The continuation of this scheme seems to be open ended at the moment.

The relief from business rates for certain empty property will also continue for the next year. Any business in the low carbon market will have clear tax advantages.

Indirectly, the roll out of high-speed broadband, especially in the currently poorly provided areas, will also make it easier for many SMEs to do business.

So, good news or bad news for the small business? Or is it a case of balancing the very bad with the not so bad?

Making a Claim on your Insurance: Hidden Rule Warning

What do you think about when you are deciding whether to make a claim on your home contents insurance? How much you can get and whether you can claim more than the excess is probably about the extent of your thinking.

But there is something else you need to think about and it involves a hidden rule that could affect your ability to obtain insurance cover in the future.

Think: have you made any other home insurance claims in the last three years?

If you claim more than twice in three years, most insurers will consider you a high risk because your rate of claims is unusual. When you apply for a quote to a new insurer, if you divulge that you have made three or more claims in the last three years, most of them will decline to quote.

And when your current renewal comes around you will be horrified at the hike in your premium. If any of your claims were for small amounts, they could be completely negated by the price you now have to pay.

Suppose your house was burgled in year one and you made a claim. Then in year two a storm damaged your garden shed, which was also covered by your policy. Although it did not cost that much to repair, you decided to claim again. Then the burglars returned so you made another claim.

This could be expensive in more ways than one. Do remember this hidden rule and think before you make a smaller claim: you never know what might be round the corner.

The Tax Benefits of Working from Home

If you run your business from your home, you will not only save on overheads, there are also a few tax perks to be had. You do, of course, need to know the rules. HMRC is strict about what constitutes legitimate expenses that can be claimed and deducted from the taxable income of the business.

If you use a part of your home as an office, you can claim a percentage of your lighting and heating utilities as expenses. Likewise you can claim for business telephone calls and broadband internet use. When you use a car for work, you will not have dead mileage that you cannot claim for, as your work base is at your home. You can claim for the regular supplies you need just as you would in bespoke business premises.

If you employ people working from their homes, be sure that any expenses you pay them are completely work related, otherwise over and above a tax free amount of £3 a week, they cannot be claimed.

When you first set up an office at home, the fixed assets you need to purchase will go into your business accounts.

There are complex rules about what you can set against tax for these items, and how to depreciate them when your year end accounts are completed. You may need to get professional help so that you do not fall foul of HRMC rules, treating the fees for this as expenses of course.

Taking professional advice is vital to ensure you are maximising your taxable expenses as a business; it could mean the difference between breaking even, and making a profit.

The Benefits of On-Line Banking for Small Businesses

If you haven’t switched to on-line banking yet, now is the time to give it some serious consideration. There are many benefits to gain from banking on-line and this article explores the main ones.

If you have set up direct debits for your business credit cards or any other regular payments, it is so easy to check your available cash and make sure nothing will take you into the red by doing so online. This is even more important if you are operating on an arranged overdraft as the penalties for exceeding it can be very severe.

Other benefits can include savings on charges. They can be lower than on ordinary accounts because on-line bank accounts require less staff time to maintain them and deal with customers. Some of them also offer higher interest rates.

It is also so convenient to be able to order statements and cheque books, move money around and make payments as you sit in front of the computer.

Many companies and individuals now make payments electronically, and some of the larger businesses are beginning to refuse cheque payments. Satisfactory credit control can make the difference between success and failure in a small business and on-line banking makes this much easier.

All you need to do is log in to your account and check who has paid you by the due date. Then set your normal procedures in place for any offenders. Chase them early, and recognise where problems might arise so you can make the right decisions at the right time.

VAT Increase on New Year’s Day

If your business is VAT registered don’t forget that the standard rate will change on 1 January 2010. It was reduced to 15% in December 2008 in an effort to boost consumer sales but will rise to 17.5% again as soon as the calendar turns to 2010.

The date of the change could mean headaches for businesses hoping to be busy with New Year sales. To avoid last-minute problems, ensure you are fully prepared for the change well in advance.

The basic rules are that you need to apply the 17.5% rate to your prices from 1st January, and if you issue VAT invoices, you must charge the new rate on all invoices raised on or after that date.

As with most tax rules, there are a number of exceptions for circumstances that do not fit neatly into the main guidelines. For example, owners of clubs and restaurants who are planning New Year’s Eve parties will be pleased to know there are special arrangements for businesses that will be trading before and after midnight on 31 December 2009.

If you are unsure about any aspect of the change contact HM Revenue & Customs or your bookkeeper as soon as possible.

How to Maximise Your Small Business Cash Flow

Profit is good, but there’s no point in making money on paper if there’s not enough in the bank to pay the creditors knocking on your door. If you want your small business to be successful you need to pay close attention to the Cash Flow.

Ideally, you should have more cash flowing into your business each month than flows out. In reality, things are usually more complicated. An expected payment is delayed, several large bills arrive early, and your thriving business is suddenly in trouble.

Prevention is always better than a cure, and one way of spotting potential problems is to use a detailed cash flow forecast. When the forecast figures are significantly different from the actual sums received or paid they will highlight areas of your business that need adjustment. A qualified bookkeeper can help you draw up a forecast and alert you to pitfalls you might not have noticed.

But even the best run business can encounter cash flow problems through no fault of its own, so it also makes sense to ask some ‘What if …?’ questions and know what to do in case of difficulty.

What if customers can’t or won’t pay?
This is probably the most common cash flow problem. Although you want to attract and retain plenty of customers, don’t let the promise of large or regular orders blind you to normal safeguards. If you offer credit terms, ask for and check credit references for new customers. Make sure your terms are clearly stated and stick to them. If you allow 30 days for payment and the invoice has not been paid by Day 31 you need to chase it.

If polite requests go unheeded, many businesses find a formal letter will do the trick. Don’t forget to point out that you are entitled to charge interest on overdue debts. If large amounts are involved you might have to consider taking legal action or calling in a Debt Collection Service.

Persistent late-payers sometimes cost more in time and effort than their custom is worth. Ask yourself if you really do need to trade with them.

What if other people have cashflow problems?
Economic downturns are bad news for everyone. When a big company fails or needs to make drastic cuts, it can affect dozens of smaller businesses along the supply chain. If a normally good customer tells you he can’t pay because he, too, is owed money try to find a new, mutually acceptable arrangement such as allowing him to pay in instalments. As well as helping to keep both of you in business, your understanding could be rewarded with his loyalty when circumstances improve.

At the same time, contact people you owe money to and let them know you might have a temporary problem with repayments. They are more likely to be lenient if you keep them informed.

What if you need more cash?
Plan ahead as far as possible and explore all your options sooner rather than later. Borrowing might solve an immediate problem but it will also increase your debt. If you know you will need more finance to keep your business going through a difficult period, first try to reduce your outgoings. Take a good, close look at every aspect of your business. Are there more efficient ways of doing certain tasks? Is money being wasted? Cut any expenses that are not strictly necessary. Can you sell off surplus stock or equipment you no longer need?

If you have built up a good relationship with your suppliers, now is the time to ask about discounts or more favourable credit terms. If they are not willing to help there’s nothing to stop you researching other suppliers.

Increasing your cash flow reduces your headaches and those frantic robbing Peter to pay Paul moments. It also gives you a better understanding of your business and allows you to concentrate on growing it as a whole.

If you do decide you need a loan to fund expansion or modernisation, you can show a potential lender an efficient, smooth running business with no hidden nasty surprises. To further impress them, make sure your business plan – including cash flow projections – is accurate and up to date.

The Advantages and Disadvantages of Being a Sole Trader

One of the first decisions you need to make when setting up your own business is whether you want to run it as a sole trader, in partnership with someone else, or as a limited company. Each option has advantages and disadvantages, so it’s worthwhile taking some time to understand how each might affect your business and the way you run it.

Choosing to become a Sole Trader will give you these advantages:

Easy to start – and finish. This is the simplest way to start in business. All you need to do is register as self-employed, register for VAT if necessary, and make sure you comply with any special regulations covering your chosen trade. Closing your business is equally straightforward.

Your own business. A sole trader is completely responsible for the whole business. You make all your own decisions without having to ask anyone else’s opinion or permission.

All of the profits. What your business makes belongs to you.

Privacy. A limited company has to publish its accounts, which anyone can inspect, but as a sole trader you only have to divulge your financial details to the relevant authorities.

Lower taxes. Some tax rules, such as those for capital gains and offsetting losses, are different for sole traders and limited companies, with sole traders often getting the better deals.

Less paperwork. Sole traders must keep accounts and business records, but running a limited company involves far more administration and record keeping.

Easy to change. If you later decide to run your business as a limited company the change will be less complicated than if you begin as a company and want to change to a sole trader.

But you also need to aware of the following disadvantages:

Personal liability. You are responsible for all debts incurred by the business so, if the business fails, your personal assets are at risk. You could even find yourself facing bankruptcy. You can also be personally sued for any damages your business causes (for example, if you fail to fulfil a contract).

Financial difficulties. In today’s economy, even large, well-established companies are finding it difficult to get business finance. Banks will be happy to take your money, but most are extremely wary of lending to a sole trader. You might also find that suppliers are unwilling to offer you the same credit terms and discounts they would offer to a limited company.

Public perception. Although a sole trader can offer a more personal service to customers, some clients prefer to deal with a larger company and appreciate the protection it brings.

Competition. If your main competitors are also sole traders you can compete with them on an equal footing, but it’s much harder to survive if a larger company sets up in opposition to you.

Each business is different, so take a good look at your own circumstances and business plan before deciding which will be the most suitable: becoming a sole trader, setting up a partnership or forming a limited company. Whatever you do, take professional advice to ensure you get your business off to the best possible start.

Tax Saving Tips for Small Businesses

Most small business owners regard dealing with Tax Returns as a necessary evil; one of the disadvantages of being your own boss. All that time and effort, and all you get for your trouble is another bill to pay! But, unlike most charges on your business, you can legitimately reduce your tax bill if you familiarise yourself with the rules.

HM Revenue and Customs publish guides covering all aspects of the tax system, and they are helpful in answering individual questions, but they won’t point out that you’ve forgotten to claim certain expenses or suggest ways of using their rules to your advantage. You have to work those things out for yourself, or seek advice from a specialist.

Here are some of the things you need to keep in mind if you want to minimise your tax:

Don’t delay! In most cases, if you file your tax return online you don’t have to do it until the January after the end of the tax year it refers to, so you have almost ten months to deal with it. The temptation is to put it aside, promising that you’ll look at it later when you’re not busy. The danger is that you’ll leave it too late and incur a fine. Also, if you leave it until the last moment you are more likely to make a mistake.

Claim all your allowances. Check those grey areas where the question ‘Can I claim this as expenses?’ is usually answered with ‘It all depends ….’ Many people find the rules about working from home confusing. You can claim a proportion of your home’s running costs, but you also need to be careful that what you gain from Income Tax won’t be taken by Local Authority business rates. Some lateral thinking can often simplify a situation. For example, one solution to the problem of separating personal and business phone calls is to have a mobile phone in your business name.

Look after the pennies. Your business expenses can include anything you purchase for use in running your business. You’re not likely to forget large or regular payments, but how careful are you about keeping track of the petty cash? A book of stamps here, some cleaning materials there, might not seem worth bothering about. But all those little items could add up to a few hundred pounds to deduct from your yearly turnover. Get into the habit of asking for receipts and noting down every expense straight away.

Know what to do with losses. A healthy profit is the goal of all business owners, but making a loss – especially in the early days - is not all bad news. You can use losses to offset your taxes in several different ways, and sole traders have more options than limited companies. If you’re not sure what would be the best course of action, consulting a tax professional could help you make the most of a difficult time.

Think about VAT. You don’t have to register for VAT if your annual turnover is less than the required threshold (currently £68,000). However, if you do register you can claim back the VAT you pay to your suppliers. You need to decide if the time spent doing extra paperwork is worth the savings you’ll make. If it is, you’ll also have to choose which of several VAT accounting systems will best suit your business.

Keep up to date. Tax rules are constantly changing, but the changes are not always well publicised. To save the maximum amount of tax you often need to know what the rules will be next year as well as those currently in force. For example, if you know new capital allowances rules are going to be introduced simply changing the date on which you plan to invest in expensive new equipment can make a considerable difference to your tax liability.

To take advantage of such changes you need to do your research, which can be time-consuming. Or, you can use the services of a professional bookkeeper whose own business depends on him or her reading all the small print. Don’t forget that professional fees are tax deductible.

Cash flow management: vital to the success of your small business

With so much financial pressure on small businesses it is imperative that you have a cash flow management plan in place to help you through these troubled economic times.

Dealing with Late Payments
Late payments can be crippling in more ways than one. If the problem is not addressed by setting up a method of prevention in the first place, serious problems will ensue; problems that will affect the profitability of your business, because you will be spending valuable time and resources chasing money and losing interest. And more worryingly, these problems could lead to difficulties obtaining credit.

Set out Clear Payment Terms
Prevention is better than cure; make sure you have clear terms of business that set out your payment terms, and ensure you enforce those terms. Take action to collect any debts promptly so that customers realise they cannot take liberties.

Ensure invoices are sent out regularly; don’t delay in sending them as soon as an order or job is completed.

Keep track of invoices and payment times
Keep track of your invoicing and payments due: make sure you have a record of who to invoice and when and when their payment is due. Also, keep a record of how long individual customers take to pay so that next time you deal with them, you are ready to face any payment issues before problems arise.

No time to manage your cash flow?
And if you do not have the time to dedicate to managing a cash flow programme, outsource to a company that does. Office Assistants can help you put a plan in place and will even manage the whole process for you so that you can get on with running your business and concentrating on the work side of things, whilst we take care of getting the most out of your business’ profitability.

Reducing your Payment on Account

If you are due to make your second payment on account to HM Revenue & Customs come 31 July, but you feel this year’s earnings will be lower than last year’s, read on.

Payments on account are based on your tax liability for the previous year. You paid the equivalent of half last year’s liability on 31 January and the remaining half is due on 31 July.

If you expect your 2009-2010 income to be less than your total income for last year then you may be able to reduce your July payment. This is a worthwhile exercise if you know your earnings will be lower this year, but you need to be careful! Reduce it too much and you’ll be liable for interest on the difference, and a possible penalty.

If you are in doubt, contact us for advice before taking any action.

TAX CREDITS: A REMINDER

If you claim Tax Credits, don’t forget that you need to renew your claim and to do this you need to know your annual income. HMRC uses this information to check you received all the money you were entitled to in the previous year, and to make sure your payments for the year ahead are correct.

If you would like to quote your actual income for last year then you need to submit your figures and paperwork to your bookkeeper as soon as possible so that everything is ready for you by the 31 July deadline. Alternatively, you may quote an estimated income for the time being, but the actual amount must be quoted by 31 January.

If you prefer not to fill in the forms provided in your pack, just call the Tax Credit Helpline on 0845 300 3900 and you can provide the information over the phone.

Don’t forget, if you don't renew by the deadline, whether you quote an actual or estimated income, your payments will stop.

If you have any queries about Tax Credits, bookkeeping or year end accounts, contact Office Assistants.

Subcontractor Tax Refunds: Get What's Due Without Delay!

If you are a subcontractor then don’t delay in submitting your figures to your bookkeeper for 2008-2009 so that your paperwork can be prepared.

Now the end of the tax year has passed it can be calculated whether HMRC owes you a tax refund, and the sooner it is done, the sooner you could have some extra money in your pocket to help you enjoy your summer holidays!

Don’t wait until the deadline to get your figures in; why wait to get what’s owed to you?

Any questions about CIS or subcontractor bookkeeping, please contact Office Assistants!

Your very own admin department for a fraction of the cost of hiring full time staff

Do you run a small business? How often could you have done with a ‘virtual’ office?

A virtual office is basically background support that makes it look like you have a team behind you answering your calls, dealing with enquiries, maintaining your files, producing letters, quotes and invoices, keeping your paperwork up to date and basically allowing you to portray the impression of a professionally run company.

What happens when you go on holiday? You can’t let your business stop running just because you have! With a virtual office, your calls will still be taken, e-mails and post dealt with and invoices sent. You can relax, safe in the knowledge that your business will still be going strong when you get back and if anything urgent did arise that couldn’t wait, you would be contacted.

My bookkeeping company expanded into offering admin services because our clients are sole traders and small businesses and they realised they couldn’t do everything. If you want to get on with your work and concentrate on bringing in the money, we can relieve the burden of admin tasks that often stop this happening.

The following is just a small selection of what we do for our clients:

· Take incoming telephone calls
· Handle sales enquiries by telephone or e-mail
· Produce letters, estimates, invoices and statements
· Prepare high quality presentations and proposals
· Manage the filing
· Deal with incoming post and e-mails
· Handle expense claims and payments
· Order stationery and other office sundries

If you run a small business in Essex or east London and feel you would benefit from professional assistance with your admin tasks, contact Office Assistants.

Do you know how your staff are spending your valuable time?

Surfing the net for personal use – an employee perk? Or a serious drain on an employers’ resources?

Research shows that whilst some companies are happy to allow their staff ‘tea-break time’ to browse non-work related websites, others see it as highly detrimental to their business and some have even sacked staff where usage has overstepped the mark.

Statistics show the average employee spends more than an hour and a half surfing the internet for personal use over the course of a week; that is ten days per year and is costing the economy some £10.6bn during that year.*

So what can be done to eliminate the problem? Restricting internet access and putting monitoring in place is not always an option; employers have to be careful where monitoring is concerned and employees generally need internet access to carry out their jobs, so taking it away could be counter-productive.

One way of ensuring those you employ to conduct important tasks within your business are concentrating on the job in hand is to outsource to external providers that are paid on a set fee per project or a time recorded hourly rate, which means they have to get the job done within a set timeframe.

In my opinion, bringing in outside help rather than employing accounts, payroll and admin staff will give companies access to a higher level of expertise as well as scrupulous time management.

The staff we supply to our clients would probably be out of their price range if employed on a full time or even part time basis, plus our clients are not likely to need assistance throughout the entire month or year, so they only pay for what they need. Additionally, they will usually pay a set fee or hourly rate for the work which means the person doing that work will concentrate on the task in hand and not stray off and surf the internet!

If your business is suffering because employees are not dedicating their full working day to their jobs, why not consider outsourcing? Buying in services as and when you need them will give you access to a higher level of expertise than you may be able to afford otherwise, and will also guarantee a much better use of your valuable time!

*Source: CBI.Org (June 2008)

Budget News for Small Businesses

Although the news on the budget front can’t really be considered all bad for businesses, it appears from internet reports that small business owners and business support groups, such as the Federation of Small Businesses, feel Alistair Darling could have done more to soften the blow of the economic crisis.

It was hoped that the Budget would prioritise addressing the short-term issues faced by businesses, so why was there no reduction in business rates?

Better news though for loss-making companies which can claim back taxes paid on profits from the last three years in a programme predicted to wipe out the losses of some 100,000 businesses. It runs until November 2010 so if you qualify, take advice from your bookkeeper ASAP to get your claim started.

There is also a new credit insurance scheme to help protect your business against crippling late payments. If your private insurer reduces or withdraws cover, which is unfortunately common practice of late, the scheme will provide you with cover for six months.

Radical change comes where tax avoidance is concerned with HMRC set to make public the names of any businesses that purposely understate their taxes. Care will of course be taken not to humiliate those who have simply been confused by the complex tax system. Taking professional tax and accounting advice has never been so vital.

Here are some useful budget resources:

HM Treasury: Budget 2009
http://www.hm-treasury.gov.uk/bud_bud09_index.htm

Direct Gov: Newsroom - Budget 2009
http://www.direct.gov.uk/en/Nl1/Newsroom/Budget2009/index.htm

BBC News: Budget Documents
http://news.bbc.co.uk/1/hi/business/8012222.stm

Bookkeepers are going the extra mile to help small businesses through the economic climate

All small businesses have a task list the length of an arm but rarely have the time or qualified personnel to make a dent in it. As a bookkeeper dealing with smaller businesses, it seems a natural progression to put together a range of additional services to help them run more efficiently.

I have put together a selection of services that my clients can add to their bookkeeping: Cash Flow Management; Admin Services; Sole Trader Bookkeeping; Online Presence; Payroll; VAT Returns and CIS.

For each service, my marketing department has created a free Service Guide, enabling clients to learn what is on offer in more detail before asking for further information. We offer clients hard copies, or they can download them in PDF format from our website: http://www.officeassistants.org/service-guides.php.

I think in this ‘climate’ we need to find ways of helping our clients build their businesses by making it easier to run them efficiently.

Do any other bookkeepers have a view?

Self Cert Mortgage Cull means regular bookkeeping is imperative for the self employed

Self certification mortgages look like they are about to fizzle out as anxious lenders decide borrowers without a robust proof of income are not worth the risk.A self certification mortgage involves borrowers vouching for themselves that they can afford the repayments, sidestepping the need to prove their earnings a popular option amongst the self employed where their income may be unreliable or irregular.

Now however, it seems that self employed workers must have proper sets of accounts in readiness if they want to get a mortgage which means regular bookkeeping will become vital.
Because previous borrowers inflated their income so that they could secure larger loans, lenders are now nervous that the self certification customers will struggle to meet their repayments in this poor economic climate, mainly because their income projections were based on normal business conditions, and these conditions are obviously now far from normal.

To add to the predicament faced by self employed business owners, the Financial Times has claimed that the majority of lenders are now basing their calculations on the lowest total of three years’ accounts where previously they would work on the highest total.

The answer? As well as being able to support any credit or mortgage applications, the benefit of regular bookkeeping and having proper accounts prepared will help business owners monitor trends including things like changes in turnover, time taken by customers to pay and rising costs of materials. Armed with this sort of information, the self employed business owner will be better able to predict the ease at which they can pay off the mortgage or loan, and will be able to decide whether it is worth the risk in the first place.

Increased late filing penalties for annual company accounts

The penalties for the late filing of annual company accounts rose as of 1 February 2009.

The Companies Act 2006 provides that all companies must deliver annual accounts to the Registrar of Companies by the due date and that a late filing penalty will be payable if the accounts are delivered late. These penalties were originally introduced in 1992 to encourage directors of limited companies to file their accounts on time as this statutory information is required for the public record.

The February 2009 changes include an increase in penalties generally, a faster rate of increase in the level of the penalty for companies filing more than one month late and a doubling of the penalty for anyone filing late two years in a row. Penalties now run to:

· £150 for filing up to a month late;
· £375 for 1-3 months;
· £750 for 3-6 months and
· £1500 for more than 6 months late.

Flat management and dormant companies should note that these penalties apply to them as well as trading companies.

It is vital that you make sure you allow enough time for your accounts to be filed within the period stated in the Companies Act, so ensure your records are given to your bookkeeper or accountant to prepare in plenty of time, bearing in mind their busy periods. You should also be aware that penalties will not be waived for papers that are delayed in the post, so allow ample time and do not leave it until the last minute to send your paperwork off.