Pension Auto Enrolment and the Micro Business

If you are a company that operates a PAYE scheme you will by now probably have received your 12-month ‘notice’ letter from The Pensions Regulator (TPR) confirming your staging date and providing key information and advice on preparing to enrol your staff.

These letters go out to every company that runs a PAYE scheme, regardless of its size or set up. This goes for micro businesses as well as companies that have no actual ‘workers’ or ‘employees’, say for example where the only people on the payroll are the business owners themselves. The payroll entries are in place to make sure they can draw funds regularly and protect their state retirement pension, but this is where the extent of the payroll ends.

Are you a ‘Close Company’?

Where there are up to five owners of this type the business is referred to as a ‘close company’. Representative bodies have been asking TPR for clarification on the position of close companies. There was a recent announcement that any business with no workers or employees in the normal sense is except from auto enrolment, but what these businesses have to do in advance of their given staging date is still not clear enough.

Letters are sent to all businesses with no differentiation for those who are exempt, so there could be a great deal of confusion for anyone who does not realise they don’t fall under the regulations.

What to do when you receive your advice notice

TPR says that when a business receives its 12 month advice notice it should write back stating it has no ‘workers’ and is therefore fully exempt from the auto enrolment process. Apparently there is an opportunity to do this online, but we’ve had a look and unfortunately it does not appear to be a straightforward system.

If you are in the dark about what you should be doing concerning auto enrolment, and are worried about your position as a ‘close company’ – a business with only you or up to five other directors or owners on the payroll – then seek the advice of your bookkeepers who will be able to tell you what you need to do and were you stand with the regulations.

Home Business Owners Must Check Their Insurance

If you are one of the UK’s fast growing number of home business owners, and share the view of 145,000 others who mistakenly believe that their home contents insurance will cover their business, it’s time for a wake-up call.

Recent research by Direct Line for Business and Enterprise Nation has revealed that as many as two in five home-run business owners aren’t insured at all, and 29% don’t bother with business insurance because they think it’s only for big companies or they believe their commercial activities are covered by their home contents insurance because the business is based at home.

Beware flawed beliefs

However, there are numerous flaws in these beliefs. Firstly, if you run a business from home and haven’t told your home insurer, you need to do so immediately. Otherwise you could find yourself with a rejection if you try to make a claim.

Secondly, you need to realise that home contents insurance is unlikely to cover certain business needs, like damage to or theft of stock, public liability or loss of earnings due to business interruption.

If you have clients visit you at home, it’s imperative you have public liability insurance. Otherwise, if they injure themselves, or cause damage to property, you are quite simply not going to be covered. This is a significant financial risk to put yourself under considering the sums often awarded for personal injury claims.

When it comes to business equipment, it is sometimes possible to insure things like computers on a home contents policy. However, fail to list such items individually and declare their use and you could find your cover invalid. Other equipment that is more specialist is definitely not going to be covered without a specialist policy.

How long could you survive without your income?

As a home business owner you need to give some serious thought to how long you could go on should something happen to interrupt your business operation. If there was a flood or a fire that damaged your stock or rendered your production equipment unusable, how long would it take to get back on track? What would you do for income during this time?

Businesses need business insurance

Businesses need business insurance: it’s as simple as that. You need cover that protects against loss or damage to stock and equipment. Your building needs to be insured for commercial use. And there are other types of insurance you should think about too. Business interruption insurance will cover any financial losses you make should you be forced to stop trading. Product liability will cover any claims that arise from injury or loss due to product flaws. Public liability is an absolute must if you receive customers or business contacts at your home. And employer’s liability cover is a legal requirement if you employ staff, unless the staff are close family members.

Running a business from home? Pay some attention to getting your insurance cover right. It could prove extremely costly if you don’t. If you don’t have an insurance broker then talk to your bookkeepers who will point you in the right direction.

Preparing for the Unexpected with a Disaster Recovery Plan

Whatever size business you run, wherever you run it from, it is imperative you have a Disaster Recovery Plan. ‘Disasters’ don’t just mean catastrophes like floods or fires. Anything that can bring business to a halt can be classed as a disaster.

Things like adverse weather conditions that hold staff back from getting into work, public transport strikes that do the same, police incidents or terrorist alerts that block access to your premises, power cuts and telephone or broadband outage. All of these can prove disastrous because they will stop you serving and communicating with your customers.

How long could you continue without your data, systems or telephones?

Imagine not being able to access your operating systems, data, files or telephone lines. How long do you think it would be before you starting losing customers?

Precisely why you need to put together a Disaster Recovery plan. The plan will include contingencies for every critical element of your business. It will make you think about back-up plans for everything from accessing your data to keeping your lines of communication open and providing somewhere for your staff to work from.

Making good use of the cloud 

When it comes to methods of continuing to run ‘business as usual’, lots of companies are getting set up to work remotely. If staff can work from home then everything can continue even if they’re unable to get into work. Cloud based technologies will allow you to provide staff with remote means of accessing your company network. They’ll be able to login to their own familiar desktop and access all their files and software just as if they were at work.

Another cloud based technology that proves incredibly effective as a back-up plan is a hosted telephone system. Also known as VoIP, this is basically a telephone system that works over an internet connection. So it’s not affected by outage at the local exchange, and can be operated from anywhere. In fact with just a flick of a switch it can transfer to a back-up plan whereby your calls are re-routed to another number. Callers won’t know any different so there’s no losing face – or business.

Some companies are signing up to a secondary internet connection too to cover them in the event of losing their main broadband. This secondary connection comes via a wireless source, so is not dependent on any exchange and therefore makes an excellent back-up plan.

Make today the day you put together a Disaster Recovery plan 

If your business hasn’t yet put together a Disaster Recovery plan or you are yet to think about how you would react in a situation that could potentially stop you operating as normal, make today the day you take action.

If you’d like some help in getting started, your bookkeepers can prove a useful resource.