In Business Together

Are you a couple who own a business between you, or about to start up such a venture? Lots of successful businesses are operated this way. Others unfortunately have fallen by the wayside, the personal relationships of their owners being more of a hindrance than a help.

Secrets of Business Success

So what are the secrets of those who've made a success of it? Probably the most important aspect is that you both share the same vision for your company, and both are equally passionate about what you are doing. And you must have a strategy for making decisions if you find you don't agree about something. You could take advice from someone independent of the family, whose opinions you value.

Defining the Roles

If you have structured the organisation to make the most of each other's strengths, this shouldn't happen too often. Your start-up business plan should set out clearly the roles of each person and why they are best for them. Each of you will then be aware of your own and your partner's responsibilities, where the boundaries lie, and what decisions you should be making.

If your business plan doesn't include this, it's time to review it. And while you're at it, why not brainstorm all your strengths and weaknesses and how to make the most of the strengths and overcome the weaknesses?

The Work-Life Balance

Try to keep work time separate from your personal activities. Make some rules about when you talk about the business, and stick to them. Running a business is hard work and time-consuming. If the only time you have for discussing it together is over dinner, make sure the conversation doesn't overflow into the bedroom.

Using Your Outsourced Bookkeepers

Just like in any other business, large or small, you must keep a clear picture of the finances, check your profit and loss reports regularly, and of course, your cash flow forecasts. Your experienced outsourced bookkeepers will help with that. And if you are looking for that independent person, it could also be the one who does the books and knows almost as much about your business as you do.

Business Expenses to Claim Against Income Tax

The warnings that HMRC are going to do more record checking in small businesses means that it is even more crucial to get all your business expenses repayments and reporting correct. This can be so complicated that applying common sense is not enough. You really need to know the rules or get some expert advice.

What You Can Claim

When claiming expenses against income tax, the main criterion is that the expense is “wholly, exclusively and necessarily” for the benefit of the business. However, if you work wholly, or partly, from home for your small business, you may be able to claim against some personal bills. For example, you might charge a percentage of your landline phone bill, or the cost of business calls.

Getting this right is tricky, and you should take advice from your accountant or outsourced bookkeepers before making the claims. Other difficult areas include how you claim for using space in your home for business purposes. You need to be confident that what you claim is allowable, so get a professional opinion.

The Rules on Travel and Other Expenses

You can claim for travel with public transport receipts, or it's 40p a mile when using your own car, 24p with a motorbike, or 20p with a push-bike. You keep fuel and maintenance receipts for a company car, but what if you sometimes use it for personal reasons? If your business base is away from your home, you cannot claim for the journey to work, except when you need to work somewhere else temporarily, and there are rules defining that. Subsistence claims must be reasonable. What does that actually mean?

Other expenses will depend on what type of business you operate. A novelist writing about beauty salon owners and clients one year claimed for facials, mud baths and massages taken while doing research. You probably wouldn't get away with that.

Annual Expense Returns

If you have employees and directors, all the above applies to them as well. And you have to submit annual returns of expenses and benefits for them. The P11D is for directors and employees earning over £8,500 a year. P9D is for employees earning less. These forms must be submitted by July 6^th each year.

If you are in any doubt about expenses, hire the services of a bookkeeper or accountant.

Yet Another Bank Holiday

Will you and your staff be working on Friday April 29^th this year? This is the day that Prince William will marry Kate Middleton, and it has been officially declared an additional bank holiday. But not every worker will be entitled to it.

Holiday Entitlement in Contracts of Employment

According to the Working Time Regulations 1998, all full time workers must be given 5.6 weeks of paid leave per year, or 28 days, with a pro rata entitlement for part time workers. However, the regulations do not stipulate that paid leave for bank holidays should be in addition to this, or that all employers must give their staff time off for bank holidays. So for employees, it really depends on what their contract of employment states. Some contracts stipulate that bank holidays are in addition to their annual leave entitlement, others do not, in which case the employer can oblige staff to work regardless of whether the day is designated a bank holiday.

Keeping your Staff Happy

If you provide a service which is needed seven days a week all year round, your staff will be on rotas which they probably won't expect to be changed. You might however, decide to give some extra time in lieu of the day if that is possible, just to keep up morale. If you don't normally recognise bank holidays for any other reason, you might want to offer an extra days leave across the board, again to give personnel a boost and an incentive to work hard and keep up their productivity.

Proximity to Easter and the May Bank Holiday

Those workers who normally have bank holidays in addition to their annual leave entitlement may be tempted to try and book time off between Easter and the royal wedding. If they normally work Mondays to Fridays, by taking three days leave, they would finish work on Thursday, April 21^st and not return until Tuesday, May 3^rd. Employers need to be prepared for this and have a strategy for how to deal with such applications in a fair way with no detriment to the business.

And if you intend to close shop for those three days, don't forget to let your off-site bookkeepers know.