The Employment Tax laws are changing again, and they will take place from 6th April 2018. It is important that all employers are aware of these changes and consider how this will impact your company. You should also make any necessary communication with your staff.

Auto Enrolment

All employers will have to provide a workplace pension for all staff members that qualify by the April 2018 deadline and most already do.

Take a look at the table below to see the minimum contributions that must be met by both the employer and employee:
 

For more information on work place pension please visit the gov.uk website or click here

National Minimum Wage and Living Wage

There are different hourly rates of National Minimum Wage and this depends on the age of the members of your team. If staff are 25 years and over, then they will get the National Living Wage. As an employer you are legally obliged to pay the National Minimum and Living Wage.
 

Apprentices are entitled to the apprentice rate if they're either aged under 19, or, aged 19 or over and in first year of apprenticeship. Apprentices are entitled to the minimum wage for their age if they are both aged 19 or over and have completed the first year of their apprenticeship. More information can be found here or if you want to see previous years minimum hourly rates

If you would like to speak about these changes that are to come in to place or what steps you need to take, then please call us on 02920 653995

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.

I do get asked a lot of questions about going Limited and the timeframes that small companies should consider and the options available to them.

For Soletrader

• Your records are not public and your competition cannot see any financial information on you.
• The paperwork is fairly simple to upkeep and the Self Assessment online is straight forward, which is why a lot of soletraders do their own filing.
• Suits small companies with turnover of under £100,000 with not too many transactions and complications in their accounts.

Against Soletrader

• Your personal assets are at risk in the event of bankruptcy or liquidation.
• As your records are not public, your credit score is more likely to be lower than your Limited company counterparts.
• The fact that a lot of soletraders do their own filing, eventually costs them money, as they are not necessarily aware of the tax reliefs available to them.
• They may have a limited sales market, a lot of the larger firms will not deal with small companies under a certain size as they are more risky.
• More likely to pay a little more tax as you pay profit on everything you earn, whether the money has been spent by the soletrader or is sitting in the bank.

For Limited

I tend to start asking my soletrader clients to at least consider investigating into going Limited once they hit the £100,000 turnover threshold. They are probably VAT registered and have staff working for them so are already used to extra regulatory paperwork anyway.

• Increased credit score, as your records are now public record.
• Give the impression of a profession company of a certain size. Making you more desirable to gain larger sales contracts.
• Limited Liability, your personal assets are not at risk in a bankruptcy or liquidation, unless you have placed these assets as guarantees for the company.
• There are better tax reliefs available as the Directors/Shareholders are a separate entity to the Company.

Against Limited

• More regulatory paperwork, accounts need to be prepared in a certain statutory format to be accepted by Companies House. Including the preparation of a balance sheet, which a lot of soletraders do not have prepared for Self Assessment. The requirement of an annual return, corporation tax form along with the self assessment return still required for the individual director/directors.
• There can be an increased Accountants cost for the extra paperwork required.
• Your records public, which means anyone can see them competitors, customers and suppliers too. Small companies qualify for abbreviated accounts, which contains only limited information that is statutory, so you’re not giving away your trade secrets.
• There is a lot more financial jargon, contained within the wording required for statutory accounts, and you have increased risk of getting fined if you are late in submitting the accounts.

We keep a great diary system, which reminds clients, when their dates for particular submissions are due which has been greatly received.

I hope you find this blog helpful in deciding your future business focus for the company.

This blog is intended for information purposes only and is only advice from past experience, you may have other suggestions of your own. It is not intended to be used to make all of your business decisions but as a guide only.

Don’t be one of the £2 million people who leave the updating of their Self Assessment to the last minute, or worse miss the deadline altogether. Bite the bullet if you need help then pick up the phone to an experienced professional.

Many clients that come through our doors, still needing reminding of what information is required to complete their Self Assessment online without a hitch.

Please see my 6 point plan

Your UTR Number and National Insurance
To be able to submit a Self Assessment you first have to be registered with the Inland Revenue as Self Employed. They will then issue you with a 10 digit reference number call a UTR number. This can be done over the telephone 0845 900 0444

Or online, follow the link below.

https://online.hmrc.gov.uk/shortforms/form/CWF1ST?dept-name=CWF1&sub-dept

This takes about five to six weeks for the Inland Revenue to register you, you will then have to telephone them to get your 10 digit UTR number. This is not automatically sent to you.

The Government Gateway
To register for Self Assessment online which allows you to send your Self Assessment online, you are issued with a 12 digit reference number which is printed out, and a password gets sent to your nominated address. If you are using an Accountant they will give you an 64-8 form to sign so that they can act as your agent with the Inland Revenue. They will then be able to send off your Self Assessment online through their agency number.

Partnerships
There is mis-conception that Partnership accounts are as straight forward to submit as your normal Self Assessment. You can only send out a paper version if you do this yourself by the deadline 31 October. Or you can submit the form online provided you have professional software, your Accountant professional can assist you with this.

Do not leave these to the last minute or you may find a £100 fine per partner you weren’t expecting if you miss the deadline. This needs to be completed along with your normal Self Assessment as an individual.

Paperwork Required
Self Assessment covers ALL income you receive during the financial year, 6 April to
5 April for in the UK and the rest of the world. This is determined by your residency status, all UK residents are to disclose their whole income.

All records of purchases during the financial year including any equipment or capital expenditure.
VAT return’s if that’s applicable
Your full 12 months bank statements, personal and business including saving accounts.
If you have had other employment all P60’s or P45’s
Dividend and interest payments.
Benefit payments
Property income and foreign income
Selling of personal assets and stocks and shares

All other records of income not covered above.

What you get in return
We will provide you with a full record of your income for the year for your business, along with a tax computation recording all of your other income. This takes into account the relevant tax reliefs available. Ie

Your tax code, – your tax free allowance
Capital gains tax free allowance
Pension payments
Charity payments
EIS and venture capital schemes – Investments
Capital Allowances
Rent a room relief – Property income
Wear and Tear Allowance – Property income

Deducting any tax that you have already paid.

You may be liable for tax on your trade income, and national insurance.

This is not complicated if you give yourself plenty of time to get everything together. We take you through every step of the way.

Payment
You have to make payments on account if your turnover is over £70,000, these are taken at the 31 January deadline and 31 July. We will notify you of these deadlines as they approach.

Monthly you can set up a direct debit with the Inland Revenue

Bill Pay or cheque, any balances then can be settled through the online system Bill Pay, credit card charges apply or by cheque in the post, or through the Giro system at the Post Office.

Self Assessment can be submitted anytime after the 6th April, so if theres a refund due to you why wait until January to get the paperwork to your Accountant. You can do it anytime.

These records need to be kept for six years even if you returned to the PAYE system.

Give us a call today, and make it a stress free process. 02920653995 or email Nicola@crossaccountingservice.co.uk

This blog is intended for information purposes only and is only advice from past experience, you may have other suggestions of your own. It is not intended to be used to make all of your business decisions but as a guide only.

Budgeting Success

A lot of small businesses are missing the importance of budgeting ahead.

The reason why businesses budget, is to set long term goals for themselves and to track the progress to ensure they are achieving what they set out at the beginning of the year.

Use it for anything, ie build up the business to make a decent living for the shareholders, improve the balance sheet position, take over a global market, the choices are yours.  Plan for them.

Here are some simple ways of budgeting and forecasting the year ahead.

There are two ways, a long term fixed budget, set out at the beginning of the year and then track when the actual figures come through, or a rolling budget which means once the month is up you roll ahead to the next month, so you are always looking at least a year ahead.

Set yourself some goals you would like to achieve over the next couple of years, and set out how you are going to achieve them.  This could be in note form or a more detailed report.

Sales

Set yourself realistic goals to achieve for your sales turnover.   A top down approach.  Use last year as a guide plus a percentage for growth or inflation.

This method is a great way of keeping the costs under control.

A bottom up approach, is more loose in that you put in your costs, and set the targets of sales that you have to achieve to pay for everything. It can make targeting sales more difficult as costs are not as controlled.

Cost of Sales

If you have been running your business a little while you might have these figures to hand as a percentage of turnover.   If not then a costing exercise can be done to work this out.

Overheads.

Put everything in to this and spread it over the next year. Ie rent, wages, advertising, heating, office costs, travel.  It all goes in here. Split it out by category so that you know what you’re spending on what.  

If you are doing a yearly one, spread these costs over the 12 months. 

If you are aware of seasonality fluctuations make sure they are apparent in your budget.

Starting off with the profit and loss budget is a good way to start, if you are feeling confident then set up a balance sheet forecast and a cashflow one too.   If they are all connected together, you will always know ahead of time what your financial position is going to be.  There is some great software in the market that can help you with this.

Now use this template to put in your long term goals.  If you are looking to purchase equipment, or taking on new staff for a project, a new sales contract.

You may have to increase sales to achieve these goals, but set targets.  You may have to increase your advertising spend, or take on more staff, take this into account.

Once your budget is done, then as the months pass and you know your actual income and costs.  Put them into the spreadsheet.

If you are not quite making the targets, look into the cause of the fluctuations, to get yourself back on track.

Happy budgeting. 

This blog is intended for information purposes only and is only advice from past experience, you may have other suggestions of your own.  It is not intended to be used to make all of your business decisions but as a guide only.

How to beat the recession blues

Planning your business through tough commercial times will be more of a necessity than ever, sales may be not as productive as before, cashflow may be tight. See my 6 point tips that will see you through. These methods work time and time again, so give them a try.

Look at your product or service

If sales are not converting as quickly as they were before look at what added value you can offer as part of that service to make it more appealing to your target market.

What is your Unique Selling Point?

What is your client retention? Its cheaper and easier to have a customer returning to you time after time, than them coming once, then never returning. This could be a project in itself.

First you need to know who are you are targeting.

Look at your demographics, ie

Selling direct to the general public
Age groups
Location is the product or service local or national, global
Gender
Business to business
Small businesses
Large business
Specific industry’s

The Competition

How is your product different, what are the added features
Separate yourself from everyone else
Are you cheaper
Are you local
Can you incorporate postage costs within your price
Take a look at the large corporations, they would have seen plenty of tough times, how do they get through the recession. Learn from the experts.

In times of recession price sensitivity and quality are always a priority for your customers.

Pricing Structure

How do you cost your product or service.
For example use the BCG Share Growth Model as below. This will help you assess which products are making you profit, which are not.

Split your costs and services into 4 categories, see the picture example.

Stars
Products that are high volume and high margin. These may be products that have always been good sellers, and a favourite with your customer.

Question Marks
Products that are low volume and high margin. These might be a niche market product that only appeals to a certain audience.

Cash Cows
High volume products, low margin. Low value products, but you sell a lot of them.

Dogs
Low volume and low margin. Products that don’t really have market, obsolete stock etc.




Costs
The cost of sale

Who do you buy your materials from

If you deal with a retailer, maybe its time to negotiate.

Look at your high volume products, can you buy direct from the wholesaler, you will save at least 30% doing just this. Look at your stock levels, even holding stock for three months. Look at the possibility of the savings versus cash outflow in holding stock. It might work out a better option.

Overheads
Assess every cost you have from the every overhead from rent, heating, electricity, the phone bill. Even the stationery bill. Get your negotiating skills at the ready. If your struggling, they may be too. They need your business.

Look at local businesses and see what they can offer, you’ll be helping your community and possibly reduce your logistics costs too.

The wages bill, it is a high cost for a business, make sure you get the maximum out of your investment. Don’t see your staff as just employees, they are an investment in your future. Look at training, how can they add value to your product or service.

Look at your car and fuel costs, don’t make unnecessary travelling journeys.

Don’t spend on unnecessary costs, keep the frills for the better times.

Cashflow
Look at all ways of protecting your cashflow. Plan ahead put together cashflow plans, even a simple one will show you ahead of time when you are going to need to fill the gap. Is your business seasonal. If you see a drop in cash, start saving for it now. Don’t leave it to the deadline date as you wont have given yourself enough time to build up your cash reserves.

Investment in capital expenditure, or taking on staff, assess a long term plan the viability of this, before you spend. Growth is lovely, but staying open is more important.

Look at ways to ease the cashflow burden. Look at your weekly, monthly overhead costs. Ie Ask yourself this question “What do I need to sell to cover my overheads.”

Gain credit from your suppliers.
Look at an overdraft facility with the bank, yes they charge, but you never know when you might need the cushion.

Look into leasing your fixed assets, this will also help with the cashflow.
Pay your VAT, PAYE monthly, at least it will reduce large amounts of cash going out of the bank at three monthly intervals. Ie spread the cost.

Look at your long term, possibly obsolete stock, sell to a scrap merchant, hold a sale. It costs money to sit in your warehouse.

Diversify
If you are not hitting the right note with your customer, maybe think about other sources of income. Look at the market place, what market isn’t saturated yet.

What services are connected with your products, its all about adding value to what you do already.

If your business is seasonal, what can you do with that time to keep the cash coming in. If its routine every year, make this year different.

This blog is intended for information purposes only and is only advice from past experience, you may have other suggestions of your own. It is not intended to be used to make all of your business decisions but as a guide only.

The Business Plan

9 April 2014

This blog is intended to explain the full potential of your business plan.

We have just updated our Business Plan and wanted to share some insights as to why these are important for the growth and success of your business.

You may have put one together when you started your business and it is now collecting dust in the drawer, next to the filing cabinet.

How about if we told you it can be adapted to be used as a positive tool to be developed as your business develops.

You maybe three years into your business, you have changed both as a person, and as a business in that timeframe. What was important three years ago, may not be so important, you may have other ideas, now you’ve dipped your toes into the world of entrepreneurship.

Why Do This In The First Place?

To focus on specific goals you wish to achieve, have something to aim for.

To take on a planned approach to your daily routine. The successful companies plan everything.

To know your customer better 

To know your competitors better 

To work on your threats and weaknesses . Stand out from the crowd.

Lets break it down.

Your Mission Statement

What do you want to be?

What do you want your business to be?

What is your Unique Selling Point, what is your business goal all about?

Why are you doing what you are doing?

Update the business plan with these new inspirational ideas.

SWOT Analysis

You have now been in business for while. You now have experience with what you are doing. You may have made some mistakes along the way, but have learnt from them using that knowledge to better use.

The SWOT analysis is all about where you are today, and how you compare with your expectations and more importantly against the competition.

Strengths - you have first-hand experience of running a business. What have you gained from your time doing it.

Weaknesses – you listed these in your first business plan, did you manage to eliminate some. Have you gained new ones?

Opportunities – No matter how big or small your business is there are always opportunities to promote and sell your product. Use your contacts you have now built up. They may be able to put some work your way. Give you access to that contract you’ve been chasing. Its not necessarily what you know, its who you know.

Threats – Whether you own the local shop down the road, or run a large corporation.

Three main threats to your business survival. The economic environment, cashflow and the competition. Embrace and learn all you can about them, be one step ahead.

The Products Or Services You Offer

What services or products do you offer ?

What is your Unique Selling Point ?

How saturated is the market place ?

How big is your market, what is your potential piece of the pie?

Is it local area or a global market ?

Can you make a profit from what you are doing?

The Marketing Strategy

How am I visible to the market place 

Website development 

Online presence 

Advertising in the local press 

The Directories 

Word of mouth 

Business contacts 

Referrals 

Looking at the competition and your customer base, the target market. This should be taking up the main part of your business plan Your strengths and weaknesses against the competition Your target market

How your marketing campaign has been working so far, track what works and what doesn’t. Some Number Work Set yourself a detailed budget and compare to actual figures Put together a cashflow statement.

Whatever youre doing always keep an eye on the cash and profitability.

Check and triple check your costings.

Nicola Cross 9 April 2014

This blog is intended for information purposes only and is only advice from past experience, you may have other suggestions of your own. It is not intended to be used to make all of your business decisions but as a guide only.