We are well in to 2018 and the financial year is coming close to its end. You should have an indication of how you want to take your business going forward. In our previous blog we talked about goals and achieving them with your strengths and opportunities. This time around we talk about the best ways to expanding your business.

We are finding this is the time of year a lot of our clients are needing budgets and cashflows. A detailed cashflow can inform you when cash is available to spend or if cash is running low ahead of time. Knowing this ahead of time can avert any crisis and indicate to you when action is needed so you are well prepared.

Knowing your cashflow needs at least a year in advance will give you a more accurate picture of your finances. Regular maintenance of this important as you don’t want to rely on old figures in this ever changing environment.

Budgets are equally as important as a cashflow. If you have expansion plans in mind, then you need to master your budget. Are you looking to get a second office? Or are you looking to get a bigger office?, do you need new equipment.   Having an up to date budget can give you clarification on which may be the best way to expand your business. Budgeting is also a great way to indicate where overheads may need to be cut down. You may be over spending on some things but then neglecting the investment in other departments of your business. This is where a budget will help balance your business.

With any expansion plans you may have, you’ll need the cash to back it up. There are many ways to obtain the finance, but the most conventional way is to get a bank loan. With your cashflow and budgets shiny and polished will keep the bank manager sweet. You can then enforce your plans to expand and grow!

Our busiest season has passed with the self-assessment deadline and now it’s the season of love. With love in the air, its time to make your business your valentine. Take the time to make a plan of action for your business. What do you want to achieve in the next 12-18 months?

Are you looking to expand your business and grow a larger list of customers? or are you trying to cut back on the amount of expenses your business pays out ? These are all goals that should be in the clear to you. Write down your plan of action, top tip, something that is written down will be more likely to be achieved than something that you have stored in your mind.

Having it written down and somewhere in sight will give you the reminder and motivation to try and achieve this. Think of the strengths and weaknesses of your business. Refresh and re-train on yourself in terms of, what are your strengths, work on weaknesses to learn and help achieve your goals.

Loving your business will give you opportunities to take it to the next level. However, with opportunities you also must weigh up the risks. This is where you need a forecast for your business, a cashflow can help make the deciding factor whether its time to hold back and watch the spending, or if there is spare cash around to invest back in the business.

We are at the start of 2018.   Make it a good one.

Happy New Year to you all, we hope you’ve had a lovely Christmas. It’s the New Year but some things remain the same, and that’s the deadline of 31^st January for Self-Assessment returns.

Self-Assessment is a system HMRC uses to collect tax. For people who are self-employed, with their own business or others who make additional income. 

The dates for Self-Assessment is 

1^st April 2016 to the 31^st March 2017. With online returns needed to be submitted by

31^st January 2018 and paper returns to have already been submitted by 31^st October 2017.

The best way to keep the tax bill down is to have your paperwork organised. You will need the actual receipts to claim as expenses. Collate your receipts and keep together as HMRC can ask to see evidence at any time. Another great way is to utilise the ISA savings as any interest received is tax-free. You’ll keep your savings on a tax-free basis for as long as you keep the money in your ISA accounts.

Higher rate tax payers benefit from additional tax savings when they contribute in to pension schemes and give to charity.

An example of a list of records you will need are;

•          Business and personal bank statements
•          Records of income
•          Records of purchases
•          P60/P45
•          Rental Income
•          Interest Income
•          Child Benefit and Income Support

You need many other records to keep, here at Cross Accounting we give our clients a more in detail list of records which we require from them to complete their tax return. This also includes a reminder of approaching deadlines to ensure not to be penalised. HMRC fine £100 for anyone who misses the 31^st January deadline.

HMRC have revealed a record number of people are filing for self-assessment this year as the numbers are north of eleven million. If you’re a couple of years behind, then do not worry as you’re not alone, we have taken on a number of clients in this situation, and have supported them and brought them up to date. If you’re not sure if you need to submit a self-assessment or you need to complete a return, you can call us on 02920 653 995 or visit our website on www.crossaccountingservice.co.uk to see how we can assist you. 

Welcome to our latest blog. Christmas is around the corner and it’s our favourite time of the year here at Cross Accounting. It’s the time of giving and is there any other way to give your business a boost a grant to get your finance in place.

A business or an individual will be given a sum of money for a specific project or purpose. A grant usually covers only partial costs involved. Grants are given depending on your business activity, the amount of jobs that will be created due to this investment or if you are in a specific industry sector. Sometimes grants are linked to geographic areas. Such as those areas in need of an economic transformation.

Business Wales can support in finance, take a look at their finance locator to see if grants and other finance your business may be eligible for at https://businesswales.gov.wales/zones/business-finance/funding-search-tool-form

You should ensure that you meet the requirements of the scheme before applying for grants and finance. You’ll have to ensure you are ready to put up some of your own money as grants only cover partial costs. You’ll also need to have a detailed description of your project or purpose and a work plan with full costings. We can assist with a budget and full detailed cashflow to secure the finance you need.

The application process for grants can sometimes be time consuming and there usually is a lot of competition but on the plus side, most grants don’t have to be paid repaid giving your business that extra boost.

If you’re looking for that push to reach some New Years goals, the Development Bank of Wales can support to get the finance your business needs to succeed. Visit https://developmentbank.wales/ to get you ready for the New Year.

You will need to have a polished business plan at the ready.  If you would like us to look at your business plan, then you can book in for a free one-hour consultation where we can discuss how to start the New Year strong. Visit our website on www.crossaccountingservice.co.uk or call us on 02920 653 995. We wish you all a Merry Christmas and a prosperous New Year.

There has been a change in the VAT Flat Rate Scheme since April 2017. The government are concerned that some businesses are using the scheme to pay less VAT than appropriate. Read our blog to be reminded of the rules and regulations.

The Flat Rate Scheme is designed to simplify your records of sales and purchases. It allows you to apply a fixed flat-rate percentage to your gross turnover to arrive at the VAT due.

The scheme is for businesses with a turnover no more than £150,000 a year, excluding VAT. The Flat Rate Scheme is a simpler method of working out the VAT you have to pay to HMRC. The flat rate percentage you use depends on your business sector. The correct sector is the one that most likely describes what your business will be doing in the coming year. Click here to find out your sector percentage https://www.gov.uk/vat-flat-rate-scheme/how-much-you-pay

From 1 April 2017 the flat rate changes if you’re a limited cost business. The flat rate percentage will be 16.5% regardless of your sector if you are a limited cost business. You’re a limited cost business if the amount you spend on relevant goods including VAT is either, less than 2% of your VAT flat rate turnover or greater than 2% of your VAT flat rate turnover but less than £1000 per year.

You will also get a 1% discount if it is your first year as a VAT registered business. If you’re unsure about your VAT and would like to discuss, then please don’t hesitate to contact us.

As the clock ticks towards 01 April 2024, businesses across the nation are bracing themselves for the significant minimum wage increase set to come into effect. With no accompanying support from governments in these challenging times, the burden falls on the shoulders of businesses to adapt and plan effectively.

The Rise of Minimum Wage

As with every year, April 1st marks a pivotal moment as the minimum wage sees a substantial increase. Workers aged 21 and over will be entitled to the National Living Wage where currently it was workers aged 23 and over. While the intention behind such adjustments is to uplift low-wage workers and tackle income inequality, the reality for businesses is starkly different. For many, this hike presents a formidable challenge, with limited government assistance.

Financial stability is crucial to any business. It is extremely important that you protect and enhance it. Cashflow of your business is vital. You need to be aware of how much money is coming in and how much money is going out of the business. You will need to have a plan in place to cover any shortfalls.

Governments are having their own challenges and not always there to help us in a crisis, we have to stand on our own two feet, to see ourselves through these challenging trading times.

To stay on top of cashflow, it is best to speak to your accountant about cashflow projections. We have also got examples of how to get the best of cashflow on our website, click here to find out more.

We have examples of cashflow and budgeting here.

So, what can be causes of cashflow issues?

The number one issue we see is when a supplier has increased their prices significantly. This is when you need to decide if there is something you can scale back on or is it time to start shopping around. Talking to your suppliers if you notice increases, we’ve all been facing this over the past 18 months.

Track and monitor your costs, by carrying out management accounts, comparing this year with last year, you can see instantly what has changed for you and your business.

Late payments from customers can lead to cashflow issues too. This can sometimes cause tension as you do not want to ruin relations. The following tips can help tackle these issues;

·        Ensuring your invoices are accurate and on time can help avoid late payments.

·        Giving gentle reminders as it approaches credit term limits.

·        Providing easy payment solutions such as bank transfer or a direct debit system

·        Check your customers credit score, giving too much credit without looking into your customer bill paying activities can lead to bad debts.

·        Discounts for early payment to improve the timing of when the cash will be paid in can help too.

We all dislike to pay tax, but it is a part of life. Tax planning helps to keep your business financially healthy. We must ensure we have the funds to cover the tax payments. This is why it is crucial to work with your accountant so that you know well ahead of time how much your tax bill is. Not paying the tax bill in full and on time can add to the cost. Penalties and interest will incur and can make this less manageable.

There are allowances and reliefs out there to bring the tax bill down. Getting this done correctly will ensure that you pay the lowest but accurate amount over to HMRC.

Set up a savings account, and slowly build up the cash towards any tax bill, you don’t get surprises when its time to pay the bill then. Any surplus in that account, could pay for something you want.

Businesses that plan ahead, traditionally do better than those that don’t plan and work in the dark.

There are approximately 5.6 million businesses in the UK, of which 98% are considered small to medium sized businesses. So, we small businesses are crucial to the UK economy, there is no denying this.

Whether you are a start-up and excited for the times ahead, or an establishment renewing your challenges, we all want to be successful with our business. In our latest blog, we talk about tips we think are vital to any business.

We all have a vision in mind, of where we’d like to see our business in the future. This vision needs to be translated on paper as your business plan. A business plan is a must for all business owners. This can help outside investors get an insight of your business, for if ever you need funding to grow your business.

Business Plan

A business plan should consist of;

·    Summary – What is your purpose, what is your vision?

·    Target market – Who are you likely to sell to

·    Competitors – What is your rivals weakness? Why are you different?

·    Staff – Do you need people to help run your business. What level of skill and pay is required?

·    Suppliers – Who will be your main supplier?

·    Marketing Plan – How will you advertise yourself to the world

·    Operations – Which is the best way to run your business.

·    Finance – How much money do you need? Determine the profitability of the business.

Business Structure

As well as a business plan, you will need to have a business structure. Sole trader, partnerships and limited companies all have their own pros and cons. Deciding which structure to choose is not always straightforward. If an asset is owned outright, then you would need to consider retaining personal ownership on incorporation. If you’re not sure which structure model you should go for, then here at Cross Accounting we can give tailored advice to you.

Year End

We cannot stress enough the importance of doing your year end as early as possible. Once completed, this will give you peace of mind as you will not have to worry, until next year. It will also give you more time to budget for your tax bill. You will not be in a rush to find the money for the tax bill and not kill your cashflow. Keep all receipts for your expenses, these will all help lower the tax bill. If you buy equipment or tools, mobile phone bills, petrol, these are all deductible. HMRC can conduct random spot checks, so it’s important to keep paperwork, recommended for 6 years.

Budgeting

Having budgets in place for your business can help you predict the near future. This allows you to have a spending plan, so you can make sure you have money for the things you need and the things that are important to you. You can see what is eating up your cash and avoid spending on unnecessary fees. Below is an example of a very simple budget.

These tips will keep you motivated and more importantly give you an idea of where your finances lay, helping you to quickly identify if there are rainy days ahead.

If you need expert tailored advice, please do get in touch as we are always happy to help.

There is always new rates and thresholds that come in to place in the new financial year.

The National Minimum Wage rate has gone up, however, the personal threshold has stayed the same.

Personal Allowance

The personal allowance is the amount you can earn without having to pay any tax.

This financial year 2023-24 is £12,570

National Insurance Rates

As an employee, you will pay Class 1 NI rates. If you earn above the primary threshold, then you will play Class 1 NI. The primary threshold for 2023-24 are £242 a week, or, £1,048 a month, or, £12,570 a year.

You will pay an additional 2% if you are in the upper earning limit. The upper earning limit are £967 a week, or, £4,189 a month, or, £50,270 a year

As an employer, you will have to pay national insurance on your staff members. This includes if you are a sole director on payroll. The rate applies to earnings above the secondary threshold. The secondary threshold for 2023-24 are £175 a week, or, £758 a month, or, £9,100 a year.

Employment Allowance

Employment Allowance allows eligible employers to reduce their annual National Insurance liability by up to the annual allowance amount. For the year 2023-24 this is £5,000

National Minimum Wage

The National Minimum Wage is the minimum pay per hour all workers are entitled to by law. These rates apply from 1 April 2023

SSP Statutory Sick Pay

Employees are entitled to SSP if they are off work for 3+ days. The same weekly Statutory Sick Pay rate applies to all employees. However, the amount you must actually pay an employee for each day they’re off work due to illness (the daily rate) depends on the number of ‘qualifying days’ they work each week.

If you want to ensure you are not breaking the payroll rules with NMW and SSP, message us to see how we can help.

If you do not understand the personal allowance threshold give us a call on our Cardiff or Bridgend office where the team will be happy to help.