Are You Eligible for Rate Relief?

Did you know that, if your business occupies a single location with a rateable value below £12,000, you could make claim under the Government's Small Business Rate Relief Scheme?

Designed as a tax incentive for the small business, the scheme has been extended for a year from its original cessation date in September this year. For the year starting on 1 October 2010, new, higher levels of relief start at 100% for premises with a rateable value of up to £6,000, tapering to 0% at £12,000, as announced in the Chancellor’s budget in March.

When you have More Than One Location

Businesses who have additional premises in other locations may also qualify if the rateable value of each of the other properties is less than £2,600, and if you add it all together, the rateable value of all your locations does not exceed £18.000 – or £25,000 if you operate from the Greater London area.

Don't Miss Out

But many small business owners have been quite unaware that they are eligible for this tax break and have not been making claims. They have been missing out on the previous levels of rate relief.

If you believe you qualify and have not claimed before, you should contact your local authority without delay to confirm your eligibility and ask how to make your claim. Meanwhile, make sure you don't default on your payments and pay your rates as normal. Talk to your outsourced bookkeepers if you are not sure whether you will be eligible.

If you already receive the relief, the new rules should be automatically applied and you can include the tax relief in your cash flow projections. It's good to have some positive news about your finances for a change.

Bank Loan Appeals

If you are looking for business funding from your bank, you need to gather all sorts of information to back up your application. Of course, your outsourced bookkeepers are the ones to advise you on putting the best possible case, and hopefully, you'll get what you want. But what happens if you don't?

Making an Appeal

The big 5 banks – Barclays, HSBC, RBS, Lloyds and Santander – recently agreed to set up an appeals process for businesses that have been turned down for a loan. If you have made a formal request that was declined, and you think the decision was unfair, you have the right to make an appeal and should ask how to proceed. On receipt of your appeal, the bank must have their decision reviewed by another member of their staff who was not a party to the decision-making process. You should receive the result of the review within 30 days.

This will only apply if you've gone through the formal application process, not if you've just had informal discussions and been informed that you haven't a chance with them. But in that case they should be giving you advice about other possible sources of funding, or how to go forward without it.

Responsibilities of the Bank

While there are no guarantees that the bank will agree to reverse the decision on appeal, you should get some similar benefits from the process. If you don't get the loan, the bank should offer you advice on where else to try for funding, or provide support in a different form. They might, for example, put you in touch with a business mentor who could help in some way.

This has come about because of the Better Business Finance Campaign spearheaded by the Business Finance Taskforce of the BBA, which calls itself ‘the leading trade association for the UK banking and financial services sector'. It remains to be seen how helpful the right to appeal will be for SMEs, but it has to be another step in the right direction following the banks' commitment to setting up a new £1.5 billion Business Growth Fund over the next few years.

Preparing for Pension Reform

If you are an employer, you need to be aware of the pension responsibilities that will fall on you in April 2012. This is when the requirements of the Pensions Act 2008 come into force, and for every employee aged between 22 and 65 on April 3^rd who earns above a specified amount – likely to be £7,475.00 – you will be obliged to automatically enrol them on a qualifying pension scheme. Your mandatory contributions are going to place an additional burden on your overheads, so it is important that you start making plans now, if you haven't already started. While you will have a 'staging' date for compliance which is later than April 3^rd, based on the number of people in your PAYE scheme, getting organised for it ahead of time will save you a last minute panic and possible repercussions for your business.

Registering With the Pensions Regulator

This is also mandatory and can be done on-line when the time comes. You will have to keep accurate records to prove you have complied with regulations in respect of all qualifying employees.

The Right Qualifying Pension Scheme

First you must decide on the pension scheme. You may already have a scheme in place, in which case you just need to be sure it qualifies. If you have no experience or knowledge in this area you would be wise to get some professional help. The first thing to do is discuss it with your outsourced bookkeepers, who will have their own experience as well as contacts with experts in the field.

Budgeting for the pension Scheme

You will have to work out how you can manage the extra cash burden, another area where your outsourced bookkeepers will be able to help. It should be added to your business plan and cash flow forecasts.

Informing Staff Affected

There will also be an impact on the personal finances of your staff members. Their contribution will start at 1% of salary, so they need to be able to plan for that too. While this is something that should be seen to be in their best interests, they should also be made aware of their option to opt out and get a refund of the first month's contributions. The regulations require you communicate the relevant information to each employee in writing.