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.

How an Effective To-do List can Make all the Difference in Business

In a small business, everyone has to perform more than one role. If you are a sole trader, you are responsible for everything. Whatever you are doing now, you're probably aware that you are neglecting something else. To allay anxieties about this, you need a strategy that makes you comfortable that you have all the important aspects covered.

The All-important To-do List

You have to be aware of what needs to be done by when, so it's important to have them in some kind of list. You need to find out the best way for you to do this. Some people like to have this on their computer or mobile phone, others just like to keep a handwritten list in a notebook they carry with them everywhere Don't keep more than one list unless you have a master that you update daily.

When you've got a list, you have to make sure you consult it every day. It may seem obvious, but you'd be surprised how many deadlines are missed, or birthday cards sent late, even though they were on the infamous to do list.

Using a Bring Forward File

Some people swear by a BF file. This could be a couple of concertina files, one for the months of the year, and one with three sections at the back for the later weeks of the month, with earlier sections for the days of the week. Items are filed according to when they need your attention and moved into appropriate sections as needed. Again this must be checked daily, or it won't work.

Prioritise and Get Help

When it's not possible to do everything in your list, you have to prioritise. Get on with the important strategic things that will have the most impact on your business. If other things can't wait, you need to get help. If necessary, book a temp. If you only need assistance every now and then, this is much more economical than having permanent staff.

Outsourcing your bookkeeping is an obvious answer. If you already do this, ask what other services they offer that might take another load off you. The answers could surprise you.

New Grant Scheme for Research & Development

The government's Technology Strategy Board (TSB) has just launched a new grant scheme for small businesses' research and development (R&D) projects. The scheme will pay up to £250K to enterprises developing new prototypes and products, or pursuing market research for their ideas. Businesses with fewer than 250 staff can apply, even those in London which were previously excluded. However, the sums of money available will not be as large as before, and there will be stiff competition for them.

Earlier Schemes

Previous schemes were administered by the regional development agencies (RDAs), now being phased out. Many companies have run into difficulties since a government directive to the RDAs to cease many payments on the schemes last summer, and not take on new applicants. So the new scheme is seen as a life saver for lots of development projects.

Gaining credibility

While the application process will be more straightforward, the selection process will be just as rigorous. Those selected for grants will have solid business plans that prove their innovative ideas have been well worked out. If you do receive an R&D grant, your integrity will be proven and your projects seen as credible, so you will have a much better chance of attracting other investors.

A Word of Warning

Arrangements are in hand to transfer currently running grants from the RDAs. The TSB procedures will need to be able to manage the volume of applicants without too many delays. Because of the embargo from last summer, there is bound to be a backlog of applicants to be dealt with.

Nevertheless this is good news. If you have an innovative project to fund, you could be one of the lucky ones. Why not discuss it with your outsourced bookkeepers, and see if they can assist?

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.