What the Queen’s Diamond Jubilee Means for Business

Last year it was the royal wedding. This year it is the diamond jubilee. Yet another royal event marked by an extra Bank Holiday.

Nearly three quarters of the respondents to a poll by business services firm, ELAS, felt that the practice of adding a bank holiday to celebrate national events such as these, is wrong because it causes hardship to small businesses. At a time when many of them are struggling to develop, or in some cases to survive, they feel they can’t afford to lose another day of trading.

Personal Benefits

Because the Queen’s Diamond Jubilee immediately follows the Spring Bank Holiday on June 4^th this year, many employees are also applying for another three days leave, giving them the benefit of a full week off. This happened last year as well when the Easter and May Bank Holidays, plus the Royal Wedding Bank Holiday allowed people to be away from their workplace for 11 consecutive days (including two weekends) by taking just 2 days of annual leave.

Benefits to the Wider Economy

Of course the diamond jubilee will bring more national and international visitors to London who will need food and lodging. The travel, hospitality, entertainment and retail sectors should reap benefits from this. Tourists may also take the opportunity to see more of the country so those sectors in other areas might also find it an advantage.

Can you Ignore the Extra Bank Holiday?

Over 60% of those who completed the ELAS poll are planning either to stay open on June 5^th or make staff use a day of their annual leave entitlement to take it off. But not every business is legally entitled to do that. It depends on the wording of their contracts of employment.

UK employees have no automatic statutory right to time off for public holidays, or to extra pay if they work them. However, if their job contracts specify a number of days annual leave, PLUS bank holidays, employers have no option but to allow the extra day off or treat it as they would any other bank holiday as per their terms and conditions.

If this applies to your business and you normally pay extra for time worked on bank holidays, if some of your staff are required to work on the jubilee day, it will have implications for your payroll. You need to be sure that your outsourced bookkeepers are aware of it.

Remember to License your Olympics Viewing

Some business owners think that installing a viewing screen in public areas during the Olympics might bring them more business. Many pubs, hotels and restaurants already have facilities for their customers to view sporting events while they eat or drink. Now others have decided to jump on this bandwagon.

Also, to keep staff on their premises during the Olympics this summer, some entrepreneurs are making arrangements for them to be able to watch the events at work. This means either allowing them to watch online, or setting aside an area for viewing on a TV or large screen. No doubt some of the employers will be joining them.

The TV Licence Laws

Whatever your reason for accessing live coverage, and however you choose to do it, you must have a licence to view. You may think that watching streamed coverage on the internet via a computer or a mobile phone lets you off that hook, but that is not the case. Only none-live broadcasts can be seen without a licence. All live viewing on any media has to be licensed.

A licence costs £145.50, but if you are prosecuted for not having one, it could result in a fine of up to £1000.00. TV Licensing promises that their Enquiry Officers will be checking out premises that don’t have licences all through the summer.

Don’t Let your Business Suffer

Once you have your viewing media and your licence, you will need to schedule the viewing so that your business doesn’t suffer from work inactivity. Even staff who are not really interested in the sporting events may be tempted to take as much viewing time as everyone else. That’s only fair. So you need to ensure you proper and fair arrangements for all eventualities.

The best way to do this is probably to introduce flexible working arrangements, in which you specify a minimum amount of time must be spent on work each day or each week. That way you can ensure that essential tasks will be covered, although it may be necessary to extend the time your premises are manned each day so that personnel can start earlier and/or leave later.

Allowing staff to watch some of the Olympic and Paralympic events while at work may motivate them not to take sickies but to make their best efforts to get there even through possible traffic congestion. Just make sure that you have a TV licence that will cover all the live viewing that takes place on your premises.

Is Late Payment Affecting Your Business?

Research on Payment Culture is the April 2012 report on a survey conducted by Graydon, a prominent credit management firm, and the Forum of Private Businesses. The research drew on a number of sources, including a recent e-survey of small businesses, which received 498 usable responses.

A Significant Problem for Many Small Businesses

The report deduces that, out of the 1.2 million SMEs in the UK, around 266,000 find that late payment is a major problem: 124,100 nearly went bust; 209,000 have watched their profits plummet; and many have not been able to recruit more staff and make investments in growth.

Late payments by customers lead to late payments to suppliers and the spiral continues. A massive number of 244,000 businesses have been unable to pay their creditors on time because they haven’t been paid on time by their own customers.

The Worst Offenders

Subcontractors reported that later payments from contractors frequently coincided with the dates when VAT and PAYE payments were due, so while these were given priority by the contractors, it became more and more difficult for those down the pecking line to meet their own tax obligations. Construction seems to be the hardest hit sector, but no one is exempt. Those in most difficulty seem to be companies with between 10 and 49 employees.

Many of the late payers are the major companies for which cashflow is not such an extreme problem as it often is for their small business suppliers. While most offenders are from the private sector, some of them are public sector organisations.

Ongoing Issue for the Government

The findings have been passed to government with various recommendations, one of which is that contractors for government contracts should be obliged to sign up to the Prompt Payment Code of the Institute of Credit Management. This difficult issue is not new to Parliament, as a debate on the subject was instituted by MP, Debbie Abrahams, in September 2011, when she realised how many of the small businesses in her constituency were suffering or actually going to the wall.

In response to the publication of Research on Payment Culture, Business Minister Mark Prisk said, “We need practical, business-focused solutions to help SMEs in particular and make sure they are paid promptly. Legislation alone cannot do enough to enforce prompt payment of suppliers…” 

Are you Affected?

If your cashflow is suffering from late payments, there may be actions you can take to get people to pay more quickly and avoid the problem cropping up so much in the future. Talk to your outsourced bookkeepers to see what they recommend.