You did, of course, submit your self-assessment tax return before end of January. But even with the deadline extended to 2 February this year, the revenue’s coffers are to be boosted by around £85 million from the automatic penalties levied on the 850,000 people who didn’t. Even those registered as self-employed but with no tax payment due should have submitted a return, and will be fined £100 if they didn’t. Penalty notices are being sent out right now.
Reasonable Excuses
Of course some of them will have been unable to do so for acceptable reasons. They might have been incapacitated by a serious illness. They might have been unable to focus on business or admin because of the demise of a loved one, classed as a family bereavement. These will probably be accepted by HMRC as a legitimate excuse for not filing on time.
If someone had a serious problem with a computer or internet connection, that might also be accepted. Or if there was a failure of the HMRC system, it would be recognised as not the fault of the person trying to submit.
Excuses that are not acceptable include claiming an inability to deal with the complications of the HMRC system online, or that an agent who was supposed to do it proved unreliable. The responsibility for submission lies with the individual concerned and no one can pass the buck.
Advice for the Late Filers
If you know anyone in that position, do advise them not to delay any longer. If they haven’t yet filed their return on line, the longer they wait to do so, the worse the penalties can get. From May 4th, it will cost them an extra £10 a day. Even a reasonable excuse can only be temporary, unless an illness is terminal. Life goes on beyond grieving, and unfortunately, tax affairs still need sorting out.
Advice for Those with Penalty Notices
If they think they have a reasonable excuse, they need to appeal in writing in to HMRC, making sure it will get to them by March 31st. This is the cut-off point, after which appeals will not even be considered.
Some people will have deregistered as self-employed and/or received a notice saying they are not required to complete a self-assessment return. Hopefully they will have kept the correspondence, so they can contact the revenue with their proof.
Your advice might also include a recommendation to find some reputable bookkeepers, who would never have let this happen in the first place.
Sunday, 25 March 2012
Monday, 12 March 2012
SME Relief from Onerous Reporting Requirements
A recent EU directive allows countries to relieve smaller companies of their most exacting accounting and reporting regulations. Individual countries can make their own arrangements for this, and the UK’s Department for Business Innovation and Skills (BIS) has announced that changes will be implemented here as soon as possible. This has been interpreted as a possible topic for the chancellor’s budget of March 21st.
Who Might Benefit
BIS has indicated that around 1.5 million micro-companies in the UK might be included in this aspect of deregulation. These are companies that satisfy at least two of the following requirements: they employ no more than 10 people on average per year; turnover does not exceed £700,000; they have no more than £350 million on the balance sheet.
How the Regulations will Change
For these so-called micro-companies, all the accounts and reports that SMEs are currently required to deliver annually to Companies House will be simplified. For example, a cash based trading statement will replace the profit and loss account. A statement of position will be another requirement, replacing the balance sheet. And the annual return will be much simpler. The reporting burdens on the businesses involved will certainly be less onerous.
Concerns About the Changes
Business leaders are considering whether they are really helpful to small businesses. Some accountants are looking at how much work will be needed to transform records from an accrual to a cash basis, and the time and cost that will be involved. Others are wondering if the new style reports could hinder business growth if potential funders or partners want to undertake due diligence exercises to assess risk.
The management of small businesses is just as dependent on accurate information to inform their decisions as those in larger enterprises. To perform their day-to-day activities, they will still need to know about cash flow, actual and predicted, and to keep tabs on debtors and creditors. As the Institute of Chartered Accountants England and Wales has pointed out in its response to the BIS announcement, “the information requirements of management should be the primary driver of business record keeping”.
How helpful is a trading statement that shows turnover but doesn’t show the costs associated with that trading? Year on year comparisons will not be possible. How can you spot escalating costs and other trends that will need to be investigated? How can profit margins be assessed?
The records you keep will still need to be comprehensive, even if you are not required to make them all public. Talk to your outsourced bookkeepers for advice.
Who Might Benefit
BIS has indicated that around 1.5 million micro-companies in the UK might be included in this aspect of deregulation. These are companies that satisfy at least two of the following requirements: they employ no more than 10 people on average per year; turnover does not exceed £700,000; they have no more than £350 million on the balance sheet.
How the Regulations will Change
For these so-called micro-companies, all the accounts and reports that SMEs are currently required to deliver annually to Companies House will be simplified. For example, a cash based trading statement will replace the profit and loss account. A statement of position will be another requirement, replacing the balance sheet. And the annual return will be much simpler. The reporting burdens on the businesses involved will certainly be less onerous.
Concerns About the Changes
Business leaders are considering whether they are really helpful to small businesses. Some accountants are looking at how much work will be needed to transform records from an accrual to a cash basis, and the time and cost that will be involved. Others are wondering if the new style reports could hinder business growth if potential funders or partners want to undertake due diligence exercises to assess risk.
The management of small businesses is just as dependent on accurate information to inform their decisions as those in larger enterprises. To perform their day-to-day activities, they will still need to know about cash flow, actual and predicted, and to keep tabs on debtors and creditors. As the Institute of Chartered Accountants England and Wales has pointed out in its response to the BIS announcement, “the information requirements of management should be the primary driver of business record keeping”.
How helpful is a trading statement that shows turnover but doesn’t show the costs associated with that trading? Year on year comparisons will not be possible. How can you spot escalating costs and other trends that will need to be investigated? How can profit margins be assessed?
The records you keep will still need to be comprehensive, even if you are not required to make them all public. Talk to your outsourced bookkeepers for advice.
Saturday, 18 February 2012
Dealing with Weather Enforced Staff Absence
Some areas of the UK have already seen very harsh and disruptive weather conditions this year. London and the south east could well be in line for it before the end of winter. If the snow and ice arrive, or storms bring down trees and close roads, some or all of your staff may not be able to get to work. You may even have to close your premises for a while.
To mitigate your losses during harsh weather conditions, it’s a good idea to make some flexitime arrangements or prepare staff for home working.
Flexitime Working
Sometimes in bad weather staff can get to work later and might need to leave earlier in order to get home. This could be accommodated in a flexitime arrangement as long as you had a fail-safe method of recording the hours worked, and set up a policy for normal flexitime working.
For example, staff must normally work at least their contractual hours during each four week period. A maximum amount of hours worked over that specified in the contract can be carried forward to the next four week period. You might want also to allow a maximum number of debit hours to be carried forward as well. In harsh weather conditions, this ruling could be relaxed once these debit hours are reached.
Home Working
An employer’s responsibility for the health and welfare of staff applies equally to those working from home, so you and the staff member need to assess any risks and deal with them as part of your preparation for home working arrangements. Many people can use their own computers to work at home but some employers issue laptops. In addition to supplying any necessary equipment, you may want to loan a mobile phone to home workers. If you don’t normally have home working arrangements in place, you need to judge the value of setting it up just for a few days or weeks of bad weather.
Home produced work is judged by results rather than observed performance. To maintain some control, you may want to set a series of call-in times to get reports on progress.
Some people work better in solitude, without the distractions of their workmates around them. Home working can also be very cost effective for an employer. You could find you want to leave the home working option in place after the winter weather.
Don’t forget you can discuss all these options, and how to fund them, with your outsourced bookkeepers.
To mitigate your losses during harsh weather conditions, it’s a good idea to make some flexitime arrangements or prepare staff for home working.
Flexitime Working
Sometimes in bad weather staff can get to work later and might need to leave earlier in order to get home. This could be accommodated in a flexitime arrangement as long as you had a fail-safe method of recording the hours worked, and set up a policy for normal flexitime working.
For example, staff must normally work at least their contractual hours during each four week period. A maximum amount of hours worked over that specified in the contract can be carried forward to the next four week period. You might want also to allow a maximum number of debit hours to be carried forward as well. In harsh weather conditions, this ruling could be relaxed once these debit hours are reached.
Home Working
An employer’s responsibility for the health and welfare of staff applies equally to those working from home, so you and the staff member need to assess any risks and deal with them as part of your preparation for home working arrangements. Many people can use their own computers to work at home but some employers issue laptops. In addition to supplying any necessary equipment, you may want to loan a mobile phone to home workers. If you don’t normally have home working arrangements in place, you need to judge the value of setting it up just for a few days or weeks of bad weather.
Home produced work is judged by results rather than observed performance. To maintain some control, you may want to set a series of call-in times to get reports on progress.
Some people work better in solitude, without the distractions of their workmates around them. Home working can also be very cost effective for an employer. You could find you want to leave the home working option in place after the winter weather.
Don’t forget you can discuss all these options, and how to fund them, with your outsourced bookkeepers.
Friday, 10 February 2012
Royal Mail Survival Plan: a Threat to Small Businesses
What would happen to your business if your mailing and shipping costs rose by around 50%? That is what might happen this April if Royal Mail and Ofcom have their way. Their proposals are to put up 2nd class post possibly to as much as 55p, and to have no price limits set for various other services, such as:
· 1st class letters, large letters and packets
· 2nd class deliveries of large letter and packets
· Standard parcels
· Business mail in metered, franked or prepaid envelopes.
How to Avoid More Heavy Royal Mail Losses
In the last year, Royal Mail delivered 16 billion letters to around 28 million addresses, yet still lost £120 million. This is attributed to a decline in the use of postal services as people communicate in different ways using new technology. In 2010, the Hooper Report on the postal sector concluded that the volume of post will continue to lower and by 2015 Royal Mail could lose up to 40% of its business.
Ofcom, which took over the regulation of Royal Mail from Postcomm last October, has been conducting a public consultation on how to give more commercial freedom to the UK’s postal service while safeguarding the universal postal service for consumers. The results will shortly be published, after which Royal Mail will publish its stamp prices from April 2012.
Ofcom is charged with policing the Universal Service Obligation placed on Royal Mail to collect and deliver letters six days a week an packets five days a week, at affordable rate to every UK address. The regulator also monitors the performance standards of 93% of 1st class mail arriving the next day and 98.5% of 2nd class mail being delivered by the third day following posting.
Clearly Royal Mail cannot continue to sustain the losses while maintaining the performance required without some drastic changes.
The Effect on Small Businesses
Royal Mail is also currently required to offer its competitors – the likes of UK Mail, TNT, DHL – access to its delivery network, at a price which is subject to rules set and monitored by Ofcom. If Royal Mail prices rise, they will probably have to follow suit.
For businesses that rely on the post to deliver goods, their costs will rise exorbitantly, as will those of sending out invoices and promotional material. The Forum of Private Business is campaigning against the price rises which will add yet another burden to businesses in these difficult times.
You would be wise to consider how this will affect your business. As your outsourced bookkeepers, we would be happy to help you work out alternative cash flow projections for the eventuality, so that you can consider where you can make changes to accommodate the additional costs.
· 1st class letters, large letters and packets
· 2nd class deliveries of large letter and packets
· Standard parcels
· Business mail in metered, franked or prepaid envelopes.
How to Avoid More Heavy Royal Mail Losses
In the last year, Royal Mail delivered 16 billion letters to around 28 million addresses, yet still lost £120 million. This is attributed to a decline in the use of postal services as people communicate in different ways using new technology. In 2010, the Hooper Report on the postal sector concluded that the volume of post will continue to lower and by 2015 Royal Mail could lose up to 40% of its business.
Ofcom, which took over the regulation of Royal Mail from Postcomm last October, has been conducting a public consultation on how to give more commercial freedom to the UK’s postal service while safeguarding the universal postal service for consumers. The results will shortly be published, after which Royal Mail will publish its stamp prices from April 2012.
Ofcom is charged with policing the Universal Service Obligation placed on Royal Mail to collect and deliver letters six days a week an packets five days a week, at affordable rate to every UK address. The regulator also monitors the performance standards of 93% of 1st class mail arriving the next day and 98.5% of 2nd class mail being delivered by the third day following posting.
Clearly Royal Mail cannot continue to sustain the losses while maintaining the performance required without some drastic changes.
The Effect on Small Businesses
Royal Mail is also currently required to offer its competitors – the likes of UK Mail, TNT, DHL – access to its delivery network, at a price which is subject to rules set and monitored by Ofcom. If Royal Mail prices rise, they will probably have to follow suit.
For businesses that rely on the post to deliver goods, their costs will rise exorbitantly, as will those of sending out invoices and promotional material. The Forum of Private Business is campaigning against the price rises which will add yet another burden to businesses in these difficult times.
You would be wise to consider how this will affect your business. As your outsourced bookkeepers, we would be happy to help you work out alternative cash flow projections for the eventuality, so that you can consider where you can make changes to accommodate the additional costs.
Thursday, 2 February 2012
New Pension Regulation Dates Postponed
Small business managers have had one onerous burden reduced by the government, which has now decided to revise the dates by which the auto-enrolment pension process for all staff must be commenced and completed. If you haven’t yet managed to start planning for these pension reforms, you’ll be relieved to hear that you may have up to two extra years to prepare and complete the enrolment of your eligible staff.
Higher Contributions to be Phased in
The original announcement that employers’ initial minimum contributions of 1% would quickly rise to 2% and then 3% caused some consternation, to which the government has also responded. The hike to 2% is to be delayed by one year, from October 2016 to 2017, and the further rise to a minimum of 3% will not be enforced until October 2018. The percentage applies to qualifying earnings of between £5,035 and £33,540.
Changes in Staging Dates
Your staging date is the date by which you should have your pension scheme in place and be able to start the auto-enrolment process. As long as you have fewer than 50 people in your PAYE scheme on 1 April 2012, your staging date will not be before June 2015. Then you will have until April 2017 to complete the process for all eligible staff members. If you set up a new business after April, you will have until April 2018 to get everyone enrolled.
Dates are also changed for employers with between 50 and 249 people on their payroll. Larger payroll companies already have dates between 1 October 2012 and 1 February 2014, which are not affected by the changes. As with the smaller companies, the dates are allocated according to the numbers on the payroll at April 1st.
You should be informed of your staging date by the DWP. If you want to check it ahead of that, you may be able to look it up on tables on the Pensions Regulator website, once they have all been updated, but in case of changes to your staff complement, you might as well wait until April, otherwise you might have to check it again.
The Learning Curve for Businesses
According to Steve Weeks, the Minister for Pensions, the government has now done all it can to ease the burden of pension reform on the business world. There is, however, pressure for a campaign to educate businesses on what they have to do when. If you are or will be an employer, you will have to select an appropriate pension scheme and do some financial planning. Your outsourced bookkeepers should be able to advise and help you.
Higher Contributions to be Phased in
The original announcement that employers’ initial minimum contributions of 1% would quickly rise to 2% and then 3% caused some consternation, to which the government has also responded. The hike to 2% is to be delayed by one year, from October 2016 to 2017, and the further rise to a minimum of 3% will not be enforced until October 2018. The percentage applies to qualifying earnings of between £5,035 and £33,540.
Changes in Staging Dates
Your staging date is the date by which you should have your pension scheme in place and be able to start the auto-enrolment process. As long as you have fewer than 50 people in your PAYE scheme on 1 April 2012, your staging date will not be before June 2015. Then you will have until April 2017 to complete the process for all eligible staff members. If you set up a new business after April, you will have until April 2018 to get everyone enrolled.
Dates are also changed for employers with between 50 and 249 people on their payroll. Larger payroll companies already have dates between 1 October 2012 and 1 February 2014, which are not affected by the changes. As with the smaller companies, the dates are allocated according to the numbers on the payroll at April 1st.
You should be informed of your staging date by the DWP. If you want to check it ahead of that, you may be able to look it up on tables on the Pensions Regulator website, once they have all been updated, but in case of changes to your staff complement, you might as well wait until April, otherwise you might have to check it again.
The Learning Curve for Businesses
According to Steve Weeks, the Minister for Pensions, the government has now done all it can to ease the burden of pension reform on the business world. There is, however, pressure for a campaign to educate businesses on what they have to do when. If you are or will be an employer, you will have to select an appropriate pension scheme and do some financial planning. Your outsourced bookkeepers should be able to advise and help you.
Saturday, 21 January 2012
Join the British Library for Free Business Advice
Ever thought of going to the British Library to do some market research? Since 2006, when it launched its Business and IP Centre, it has been an ideal venue for business information for entrepreneurs with easy access to London. The centre was set up to support and assist them right through from the spark of an idea, to setting up a business and developing it through successful growth.
Free to Access
All you need to do is turn up with documented proof of your address and your signature and request a reader pass which gives you access to all the library services, including the Business and IP Centre. You don’t even need this to book and attend a workshop, but you would need it to access the research and other facilities.
The Registration Office, where you can get your reader pass, is on the upper ground floor of the building, and the Business and IP Centre can be found on the first floor.
Services Available
For your research, the centre holds a vast collection of databases and publications that give comprehensive coverage of topics that might be needed. Staff members are at hand to help you through the maze of information to find what you seek as quickly as possible.
Networking events can be used to meet like-minded people and develop business opportunities. You can even hold follow up and other meetings in the library.
You can also arrange one-to-one sessions with successful business people who can offer advice gleaned from their own experience.
The centre’s regular programme of workshops and seminars is free unless a small fee is required for a partner organisation to come in and run it.
The Web in Feb Programme
Free to Access
All you need to do is turn up with documented proof of your address and your signature and request a reader pass which gives you access to all the library services, including the Business and IP Centre. You don’t even need this to book and attend a workshop, but you would need it to access the research and other facilities.
The Registration Office, where you can get your reader pass, is on the upper ground floor of the building, and the Business and IP Centre can be found on the first floor.
Services Available
For your research, the centre holds a vast collection of databases and publications that give comprehensive coverage of topics that might be needed. Staff members are at hand to help you through the maze of information to find what you seek as quickly as possible.
Networking events can be used to meet like-minded people and develop business opportunities. You can even hold follow up and other meetings in the library.
You can also arrange one-to-one sessions with successful business people who can offer advice gleaned from their own experience.
The centre’s regular programme of workshops and seminars is free unless a small fee is required for a partner organisation to come in and run it.
The Web in Feb Programme
Through February 2012, a series of events has been planned with a focus on getting the most from a web presence with e-marketing and on-line trading. The Web in Feb programme includes workshops on search engine optimisation for the small business, effective business blogging, managing a web-based business, and using social media effectively. Costs vary from free events to the most expensive at £49.
The centre has also arranged for a patent lawyer to be available through the month for confidential one-to-one sessions about developing the necessary technology.
Whatever stage you are at with your business, it would be likely to benefit if you can make time for regular or occasional visits to the British Library.
Saturday, 14 January 2012
Is your Business Prepared for Bad Weather?
In 2010, the serious snow and icy weather came before Christmas and many businesses were adversely affected. So far this winter we’ve had some bad storms but only a few areas have seen snow and ice. But it could still be on the way.
If it does arrive during the latter part of January or in February, will you and your staff be able to get to work? Will roads be passable? Will schools close so that parents need to be at home for their children? Will anyone suffer injuries in falls and have to take sick leave? How would you feel if that happened because of slippery conditions on or just outside your premises? Could your business survive having to close down for a period if power was cut or no-one could get there?
How can you prepare for all or any of those eventualities? And what is it all going to cost you?
Contracts, Policies and Regulations
What it will cost depends partly on the expenses of getting prepared, partly on how much business you lose, and partly on what you must pay your staff in a period of inactivity.
If you already have HR policies in place to deal with adverse weather conditions, you may just need to remind personnel about them via a notice board, your intranet or face to face meetings. They need to know who to contact if they can’t come in and how to get in contact if your landline isn’t working. Some staff may be able to work at home, or come in for fewer hours than normal. You should also have arrangements in place to contact all of them if you have to close down.
Preparation costs may include supplying equipment for home work, which will require funds and should be carefully considered to see if it will reduce the loss of business enough to be worthwhile. Other funds might be needed for stocking up on rock salt and paying people to make car parking and pathways safe and avoid nasty falls on your premises.
Unless contracts of employment state otherwise, regulations require you to pay staff members who are available for work while the reasons for non-attendance are outside their control. Anyone who must care for dependants at home is entitled to unpaid leave, and it is up to you whether you are prepared to pay them anything. They may be able to make up time over the next weeks, in which case you wouldn’t be out of pocket eventually and it could be a good gesture where morale and loyalty is concerned.
Checking Cashflow and Budgeting
Clearly you need to check your cashflow projections and prepare a budget for all this. Your outsourced bookkeepers are the ideal people to help you with that side of the preparation.
If it does arrive during the latter part of January or in February, will you and your staff be able to get to work? Will roads be passable? Will schools close so that parents need to be at home for their children? Will anyone suffer injuries in falls and have to take sick leave? How would you feel if that happened because of slippery conditions on or just outside your premises? Could your business survive having to close down for a period if power was cut or no-one could get there?
How can you prepare for all or any of those eventualities? And what is it all going to cost you?
Contracts, Policies and Regulations
What it will cost depends partly on the expenses of getting prepared, partly on how much business you lose, and partly on what you must pay your staff in a period of inactivity.
If you already have HR policies in place to deal with adverse weather conditions, you may just need to remind personnel about them via a notice board, your intranet or face to face meetings. They need to know who to contact if they can’t come in and how to get in contact if your landline isn’t working. Some staff may be able to work at home, or come in for fewer hours than normal. You should also have arrangements in place to contact all of them if you have to close down.
Preparation costs may include supplying equipment for home work, which will require funds and should be carefully considered to see if it will reduce the loss of business enough to be worthwhile. Other funds might be needed for stocking up on rock salt and paying people to make car parking and pathways safe and avoid nasty falls on your premises.
Unless contracts of employment state otherwise, regulations require you to pay staff members who are available for work while the reasons for non-attendance are outside their control. Anyone who must care for dependants at home is entitled to unpaid leave, and it is up to you whether you are prepared to pay them anything. They may be able to make up time over the next weeks, in which case you wouldn’t be out of pocket eventually and it could be a good gesture where morale and loyalty is concerned.
Checking Cashflow and Budgeting
Clearly you need to check your cashflow projections and prepare a budget for all this. Your outsourced bookkeepers are the ideal people to help you with that side of the preparation.
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