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After the fizz of activity in January, when many sole traders and businesses hurry to get their books in order and submit tax returns, there is a deep sigh of relief. Unfortunately for those who are less organised, March soon comes around, and all of sudden it’s the 5 April and Year End. Savvy businesses will know what their 2018/19 accounts say and should have planned expenditure accordingly, but what can those people – who haven’t had the time or proclivity for detailed planning – do in the next few days to prepare for the end of the fiscal year?

What invoices might you want to delay going out until 6 April or after?

Understand the Position of your Business

Whether you have months of receipts rattling around in a box or your bookkeeper has everything in order, you need the information processed and assessed. You should be looking at your finances –balance sheet, cash flow, and profit and loss documents – to determine where your business is now. Without these basics you’ll be making decisions in the dark.

> Profit and Loss – this itemises your income and outgoings and shows if your business is profitable at any given time

> Cash Flow – at a glance you will be able to see where your money goes, that is the in and outflow from operating activities (such as revenues and expenses), investing activities (such as assets bought and sold) and financial activities (such as loan repayments)

> Balance Sheet – this should summarise your business assets, liabilities and equity

 

What About the Remaining Days Until 5 April?

Understanding where your business is today is not the end of the story for your fiscal year end. What purchases have you still to make, is there ongoing work you want to or can get a partial invoice for, what invoices might you want to delay going out until 6 April or after? If your accounts are ‘cash basis’ – where they are based on money actually received and payments made – then you should try to ascertain if any further income will be received. The key message here is be organised and influence the income and outgoings if beneficial.

Of course, larger, capital expenses provide a greater opportunity for tax savings through your capital allowance, but the same advice can be applied to any expenses

Should I Quickly Spend Some Money to Reduce my Tax Bill?

While having more expenses to reduce what you will owe to HMRC in January 2020 might sound like a fail-safe plan, you first need to ask yourself if you NEED to make those purchases. If you don’t really need a new laptop, you are likely to be better keeping the £1000 in the bank than trying to save a few quid going to the tax man. However, if you had planned to buy one in the next couple of months, then it makes sense to bring it forward and reap the benefits in the current tax year.

Of course, larger, capital expenses provide a greater opportunity for tax savings through your capital allowance, but the same advice can be applied to any expenses. Some common items that are often purchased in advance at this time include:

> Stationary – stock up on paper and ink

> Business cards and other marketing collateral – are you running low?

> Cleaning equipment – from toilet paper to handwash

> Travel tickets – if you know you’re taking a trip, book it

> Conference registration – reserve your space now if you want to attend

> Accountancy software – with Making Tax Digital for VAT coming in, pay an annual fee for a service

a ‘trivial benefit’, social function or party for an employee is tax and National Insurance exempt

 

Are There Other Ways to Reduce My Tax Bill Before Year End?

It is important to review your pension contributions and ensure they are paid in before the end of the tax year. Pension contributions are offset against limited companies’ corporation tax bills as an allowable business expenses. If you are self-employed and on the basic rate, any pension contributions are not included within your Self Assessment but personal pension contributions will get a 20 per cent relief at source – for a £1000 contribution, you will pay £800 – where the government provides the top up. Should you be on one of the higher rates of tax, you will be entitled to this and the amount of the contribution also pushes the ceiling of the lower tax rate up. For example, if your contribution was £3,000, the higher, 40 per cent rate of tax begins from £49,351 of earnings instead of £46,351.

You can also give your staff a gift or arrange an event for them; a ‘trivial benefit’, social function or party for an employee is tax and National Insurance exempt and HMRC doesn’t need to be notified. However, there are rules to follow. You don’t have to pay tax on an employee benefit if it cost £50 or less, it isn’t cash or a voucher that can be exchanged for cash, it isn’t a reward for work and it isn’t in the person’s contract. The cost of a social function or functions must be £150 per employee or less – if it’s even £1 over the whole amount will be taxable, as this isn’t an allowance, but rather a limit. The other rules to be followed are the event/s must be annual and open to all staff.

Our articles can’t replace a detailed discussion with an accountant, but if you have any questions and would like to arrange a new client consultation, please call on 01827 54944 or use our contact form.

Despite the end of March creeping closer (together with the lingering backdrop of economic uncertainty) the appeal of going it alone in the business world is still ever-present in the UK. According to the Office for National Statistics, the nation is now home to 5 million self-employed workers; this paired with the 2.5 million Brits keen to start their own business this year, and it would seem the country’s entrepreneurial spirit is yet to dwindle. So, what is it exactly that makes the transition to self-employment so appealing? We take a look at the advantages, along with some key considerations should you wish to pursue an exciting new venture this year.

 

We take a look at the advantages, along with some key considerations should you wish to pursue an exciting new venture this year.

The Benefits of Being your Own Boss

Work/life Balance

For many, striking the right balance between a busy work schedule and equally demanding home life can be a challenge at the best of times. While going self-employed certainly won’t be a walk in the park, it’ll give you the freedom to build your working day around your everyday commitments. Whether that’s making time for the gym in the morning or the late afternoon school pick-up, a better work/life balance can do wonders for your health both physically and mentally, and thus boost your productivity in the long-run.

Flexible Hours and Remote Working

With a more balanced routine in place, the flexibility to work the hours you choose comes naturally. For many small business owners and start-ups, remote working also forms a large part of the appeal. While some days you may choose to work at your home office or local coffee shop, you may at other times choose to hot-desk at a workspace designed for freelancers and collectives – or even your own separate premises should your business take off! So if it’s out with the 9-5 (and the dull commute) and in with a schedule to fit around you, this particular ‘perk’ has the power to transform your working day.

Boost your Earnings

Depending what industry you’re in (and your level of experience), you may have the potential to earn a far greater sum as a self-employed consultant. A typical day rate for a freelancer or consultant tends to be higher than a salaried role, plus you may often find yourself in a position to negotiate to your advantage. In addition, self-employment allows you to cut other financial outlays associated with a permanent job elsewhere, such as daily commuting costs, or even simple expenses such as lunch on the go (on the days you were less prepared) which have a habit of mounting up over time.

 

Self-employment allows you to cut other financial outlays associated with a permanent job elsewhere.

 

Follow your Passion

Not many people can say that they do what they love for a living. Though self-employment comes with its obvious obstacles, you’ll reap the rewards first-hand should you triumph in your business venture. The road will most likely be bumpy (with many lessons learnt along the way), but being your own boss allows you to truly explore your inner entrepreneur while channelling those valuable creative skills that may have gone overlooked in a previous job role. By its very nature, self-employment will only ever play to your strengths and allow you to realise your true potential – whatever that may look like.

 

Sounds Great, but is Self-employment Really Right for Me?

 As difficult as it may seem, you won’t know if self-employment is truly for you until you fully take the plunge – a risk not all budding entrepreneurs are willing to take. Armed with the facts however, you stand a better chance of succeeding should you dive in head-first. Before you make any such decision, it’s useful to ask yourself the following questions:

> Finances – do you have enough money saved (or access to funds) to help get your business off to a flying start? Additionally, self-employed workers should prepare for quieter times across the year with little to no income, and learn how to manage this up and down salary.

> Employee benefits – from a company pension to life insurance, how highly do you rate any current employee benefits? Consider the value of your existing package – plus holiday and sick pay – and how this may affect you in the long-term should you pursue self-employment.

 

Do you have enough money saved (or access to funds) to help get your business off to a flying start?

 

> Workspace – do you have access to a suitable workspace to get the job done? Whether this be a workshop or home office cut off from the rest of the household, it’s important to consider the practicalities of your work station, and any new equipment you may need.

> Admin duties – do you feel confident enough to manage your business across all areas? This might include tax returns, managing cash flow or paying an employee’s wages. Even if you enlist the professional services of an accountant like Adams Moore, plan how your company’s admin will be handled beforehand.

> Personal circumstances – could any current/upcoming events overshadow the growth of your business? If you’re prepping for a house move, for example, the chances are your mind will be focused elsewhere. Consider the impact this could have on the trajectory of your business; like with many things in life, timing is everything.

 

If you’re dreaming about becoming a sole trader or starting a limited company, our fixed-fee, business start-up package might be just what you need to help you succeed. We aim to arm you with the information needed to make informed decisions, guide you towards the most beneficial financials and take care of the paperwork so you can concentrate on running your new venture. Please contact us for a free new client consultation.

As a ‘nation of shopkeepers’, the UK knows a thing or two about the value of local businesses – and this goes beyond a Friday cappuccino at your friendly neighbourhood coffee shop. When it comes to streamlining the inner workings of your own business, the benefits of outsourcing to a smaller local firm over a larger national (or even global) corporation not only come down to competitive pricing, but also the quality and bespoke nature of a service – not always guaranteed within a bigger chain; let’s face it, nobody really wants to pay for those extra sprinkles.

Offering cloud-based bookkeeping to small and micro-businesses, KPMG’s recent decision to cease its Small Business Accounting service is just one example of how an uncertain economic landscape can suddenly leave unsuspecting, locally-based clients in the lurch, and without a consultant to turn to. Whether this might be you, or you’re re-addressing your current outsourcing to improve efficiency, you’ll want to think carefully about how future partnerships measure up to your standards. Whatever expertise your business requires – from website building and social media strategy to accountancy and making tax digital – check any prospective contenders against a pre-agreed criteria to ensure you’ve made the right match.

Whatever expertise your business requires, check any prospective contenders against a pre-agreed criteria to ensure you’ve made the right match.

Communication is King

In your endeavour to grow as a business (and focus your talents where they are truly needed), outsourcing to a third-party is a pivotal step for any SME. Naturally, you’ll want to know exactly how things are getting on, so a firm with exceptional communication skills is key. First impressions are a powerful gift, and you’ll soon be able to gauge how committed a consultant is to maintaining this level of transparency – from their manner as an individual and how clearly they deliver a pitch, to that all-important courtesy of a follow-up email. Ask how often you can expect to receive progress updates, and how they plan to keep in touch; the suggestion of occasional face-to-face meetings can also offer peace of mind. Having a good rapport with your consultant, and knowing your business is in safe, capable hands, is worth its weight in gold.

A Proven Track Record

It goes without saying that any consultant entrusted with the important task of servicing your business should meet your expectations. Do your research and enquire into their client roster, past and present, and – if not already displayed on their website – ask them to provide any recent case studies or success stories that further bolster their portfolio. Do they offer an award-winning service of any kind and, most importantly, how well do their client testimonials sing their praises? When it comes to the calibre of your chosen consultant, take the time to better understand their company ethos and values. How are they committed to supporting the local community and you as a business, and what is it that qualifies them to join your shortlist of candidates?

Take the time to better understand their company ethos and values.

Budget-friendly

Every business comes with a budget and all services come at a price. Your consultant, however, should always be willing to negotiate a bespoke package to best suit the needs of your business. Ultimately, this degree of flexibility is also what makes your chosen firm the most competitive, as opposed to an outdated, rigid pricing structure offered elsewhere. When presented with a contract, ask them to walk you through it and question any detail, no matter how small, that may seem unclear. If something appears to be missing, flag it at this early stage to avoid any unnecessary hidden costs further down the line (while over-analysing any small print). Payment-wise, enquire as to whether this is also flexible to avoid paying the full fee up-front. This can sometimes prove a costly sum that not all businesses can afford from the outset, but shouldn’t hinder the proceedings if a manageable approach is agreed.

The Futureproof Factor

No matter how long a business has been around, innovation is crucial should they wish to weather the storm of an uncertain economic climate. A firm that remains futureproof takes pride in promoting thought leadership within their industry and sharing their insight as experts – whether this be via networking events, a company blog, or their LinkedIn page. Companies with a strong digital presence will always remain one step ahead of those competitors who last posted content five years ago, and demonstrates an eagerness to always stay relevant. In this regard, a reactive strategy and ability to adapt to the ever-shifting demands of clients are what truly give these consultants staying power. Crucially, seek out that extra spark that helps your chosen firm retain its current clientele – from offering a free consultation to discounted packages further down the line, or a cup of tea and a friendly face when you really need it the most.

Valentine’s Day: you either love it or you loathe it. So instead, why not use mid-February as a time to take stock of the long (and often challenging) month of January, and approach the changing seasons with a spring in your step. While a large number of marketing campaigns may be bursting at the seams with hearts and flowers, SME owners should re-direct the aim of Cupid’s bow this Valentine’s Day by showing a little self-love. A healthy serving of TLC can go a long way, so here’s a few things you can do to reignite your passion for business this February.

 

Sharing is caring

You wouldn’t be where you are today without your customers – especially those who voluntarily recommend your goods and services to friends and family. But how do you help make their voice truly heard (and feel loved in return)? When asked for an opinion, consumers are generally happy to give it, so consider asking visitors for their honest feedback; a little incentive such as a freebie or entry into a monthly prize draw is also more likely to encourage audience participation. A survey of this nature, whether on paper or a simple Facebook Page follow request, will make them feel part of something bigger – and improve your performance in return. With an average of 170 million users per month, customer review websites like Yelp can also help further propel your business into the digital spotlight; TripAdvisor and Yell.com are equally useful tools in turning those sweet nothings into genuine glowing reviews.

Love thy neighbour

As the saying goes: ‘keep your friends close and your enemies closer’. While ‘competitor’ is perhaps a more suitable way to term your fellow SME, it’s important that you take the time to observe and learn from their activity via consistent analysis – both through the highs and the lows. Observe how well other players within your industry are marketing themselves and how active they are on social media. How competitively priced are they? How would you rate their customer service? Embark on a secret shopper mission, whether physically walking into a store or making an enquiry online to gauge their professionalism and responsiveness. Always remain one step ahead and constantly ask yourself: what spark does this business have that mine is lacking – and what can I do to find it?

 

There are a number of ways you can encourage your staff to look after their mental and physical health that don’t cost the earth

Wellness in the workplace

When it comes to taking good care of your hardworking employees (and yourself), ‘wellness’ is worth its weight in gold. There are a number of ways you can encourage your staff to look after their mental and physical health that don’t cost the earth – yet can make a whole world of difference. The cycle to work scheme is a sustainable, cost-efficient way to boost your employees’ fitness, or why not set the challenge of a team parkrun in your local area. An office book swap, charity bake sale, free breakfast sandwiches every first Friday of the month; each little act of kindness you can comfortably afford and continue to provide in the long-term will only improve staff wellbeing over time. Start by sprucing up your staff breakout area, and you’ll be dreaming up ideas in no time.

Rewarding loyalty

Just as you may reward your staff with career progression and improved employee benefits as the years go by, take a moment to think how you might acknowledge and encourage the support of your valued customers. If you haven’t already, a loyalty card scheme invites customers to join your brand’s VIP community. By offering regular perks and discounts after a given number of purchases, you’ll soon find your once-impulsive visitors coming back for more. If paper cards aren’t your thing however, consider trialling a digital loyalty system such as Loyalzoo. Apps like this will even do the work for you, segmenting your customers into ‘new’, ‘VIP’, and ‘slipping away’ – and thus target these groups with the most appealing promotions on your behalf. Simply sign your customers up at the till with an email address or phone number, and you’re already one stamp away.

Each and every business, no matter how great or small, is a labour of love – both for you as the owner and all those involved. From the team that grafted from day one to the loyal customers who will always choose to ‘shop local’, do away with the gimmicks this Valentine’s Day and celebrate what truly makes your offering one in a million.

Whether you’re a growing SME or just getting started, your employees play a big part in the successful business you once only dreamed of. Yet with the ever-shifting economic landscape a constant distraction, it would be easy to fall behind when attempting to meet the changing demands of the workplace today. From the expectations of new and existing employees to the smart technology designed to streamline your processes, we look at how business owners can continue to attract and retain the best talent – while also improving productivity.

Adams Moore can advise business owners on issues such as attracting and retaining the best talent while also improving productivity.

The ‘Boomerang Effect’

The boomerang movement – whereby past employees are choosing to return to their previous jobs some years later – has truly taken off. Having left for pastures new, time out for a young family, or travel overseas, many professionals are now migrating back to their original place of work, keen to get stuck in. With candidates of this ilk returning more experienced, well-rounded and able to hit the ground running, businesses are already maintaining open channels of communication with ex-employees so as to potentially welcome them back in the future. Though very much decided on a case-by-case basis, business owners who contemplate re-hiring past employees can benefit from a team member with valuable transferable skills, and someone who knows the company inside out. While it might seem unusual, bear in mind the benefits a familiar face could have for your business should they unexpectedly come knocking.

Enter the Freelancer

With 2 million freelancers in the UK as of August 2018 (and counting), it’s no surprise that industry professionals from all backgrounds would consider this flexible way of working at some stage during their careers. Where a ‘consultant’ can offer small businesses expert advice on a particular field as and when required (often in-house), those who consider themselves to be a ‘freelancer’ can help SMEs (often remotely) at short notice – minus the long-term commitment. Whether you’re looking for a graphic designer to re-imagine your brand identity or a copywriter to proof and edit a piece of marketing collateral, freelancers up and down the UK continue to offer the perfect solution by plugging the gap as and when needed. Whether it’s by recommendation or matching your job with a suitable profile via Upwork or PeoplePerHour, consider how a freelancer could save you both time and unnecessary hiring costs this year.

Freelancers in Birmingham continue to offer the perfect solution by plugging the gap as and when needed.

Learning to Love AI

Whether we realise it or not, artificial intelligence (AI) already makes a vast and valuable contribution to the way businesses are run across the globe – both great and small. For instance, the evolution of ‘voice assistance’ technology continues to spark curiosity among tech experts – from Amazon Echo’s Alexa to Apple’s Siri, and their inevitable successors. While business owners and their teams are harnessing this technology for improved productivity across the working week, customers are using it to search and even purchase a product or service from the comfort of their living rooms. Other examples of businesses enlisting the help of AI include the use of chatbots on a company website or Facebook Messenger bots, scheduling meetings and appointments with AI software like x.ai, and even conference call translation via Skype Translation. Arguably, you could say that it’s AI freeing up the precious commodity of time for businesses to focus on the ‘face-to-face’ matters that really count.

The Flexible Factor

From doing away with the traditional 9-5 to offering remote working options, flexibility is key when it comes to remaining an agile and futureproof employer. By choosing to respect and support the unique circumstances of your team members, it’s likely you’ll reap the rewards of a long-term relationship with employees who feel valued, and thus work harder. Take the time to speak with your workforce face to face and, rather than shy away from new ways of working, view it as an opportunity to grow. View flexible working as a two-way exchange, allowing employees to truly assert themselves within the parameters available – whether this means hours to suit the daily school run, remote working when dependants are unwell, or time off for a dentist appointment. While small businesses will struggle to compete with the comprehensive benefits packages of larger competitors, this flexible approach to working offers something more valuable to many people than a subsidised gym membership (that never gets used). Embrace change as part of your company culture and strive to evolve your business as a fully inclusive, full potential-seeking workplace that’s in it for the long haul.

With fizz and fireworks but a distant memory, it’s business as usual for SMEs up and down the nation as the UK settles into 2019. Yet with another clock already ticking (and March’s current Brexit date looming ever closer), business owners are buckling up for what promises to be an historic transition for the country’s economy. Regardless of what sceptics may argue however – elephant in the room aside – small business owners should look to set their own challenges this year, adapting to the changing landscape in order to both evolve their offering and thrive from within. We take a look at five resolutions for business owners to make and keep in 2019, despite the imminent sea change.

Businesses that remain responsive and ahead of the curve will stand the best chance of survival through Brexit.

Get no-deal savvy

The top of the list, and with good reason. Whether the term Brexit gives you the ‘heebeegeebees’ or not, the very real chance of a no-deal departure now has business owners upping their game plans in the face of a worst-case scenario. Nobody knows what the future may hold, yet understanding the broader consequences of a no-deal Brexit can help SMEs plan their next move – whether this happens in March or not. But what can small businesses really do in the face of such uncertainty? From importing and exporting goods to VAT and employment rules, business owners should ready themselves ahead of any new legislation by reviewing their current processes – and how these could be affected by Brexit. Most importantly, a business that remains responsive and ahead of the curve will stand the best chance of survival.

Know your employees better

From dealings with the Continent to keeping it closer to home, business owners should re-assess the relationship they have with their employees as a priority. This goes beyond the annual out-of-office pilgrimage and team building exercise. Instead, take the time to sit down with your staff on a face-to-face basis, hear their opinions and recognise their ambitions. Offering time offsite for voluntary work, extra-curricular activities and wellbeing opportunities will also give you a more well-rounded view of a team working not below you, but alongside you. When it comes to workforce retention, specialist training and career development will only encourage employees to commit in the long term. A valued team is a happy team, and one that stays focused through the good times and the bad.

From Making Tax Digital (MTD) to measuring performance and increasing productivity, the only way is up with easy-to-use digital tools available to SMEs.

Embrace digital

From Making Tax Digital (MTD) to measuring performance and increasing productivity, the only way is up with easy-to-use digital tools available to SMEs. It’s never too late to get tech-savvy, with digital solutions improving efficiency and transparency within the workplace; for smaller businesses, cutting out the admin (and that extra paperwork you just don’t have time for) can help you focus on the bigger picture. When it comes to choosing the right tools for your business, the possibilities are endless: help teams get organised with a streamlined communication system such as Slack; measure chargeable hours digitally with TimeCamp; track receipts, invoice and more with Xero business accounting software. With many apps available for free or offering a free trial period, there’s no time like the present where productivity is concerned.

Refine your social presence

While your social channel icons may display in a proud banner across your website, if you’re not actively posting via these networks, you may want to re-consider your strategy. For customers wishing to ask a question or simply learn more about your business within the social space, there’s nothing more frustrating than an inactive account. Instead, ask yourself which networks are best suited to your current offering (which might well have changed since you first joined Facebook). A florist for example may choose to post their seasonal creations and how-to tips on Instagram, while a tech company owner will strive to position themselves as thought leader by sharing insight with industry professionals via LinkedIn. Whether you choose to remain active across a number of channels or just one – consistency is key to nurturing your social presence.

By upskilling an existing workforce and looking for ways to build your own expertise, doors will continue to open this new year.

Stay unconventional

Despite the ever-shifting landscape of the country’s economy, adaptability is fundamental for SMEs wishing to succeed in 2019 and beyond. As part of the UK’s micro business community, responding to change in a positive way and remaining agile will ensure your offering remains competitive; equally, it may be that some SMEs are able to avoid any immediate impact of new legislation felt by larger corporations in the coming future.

Together with improved efficiency and a happier, healthier work environment, small business owners should continue to think outside the box and push themselves beyond their comfort zone in order to evolve. By upskilling an existing workforce and looking for ways to build your own expertise, doors will continue to open this new year (perhaps where you least expect them).

Making Tax Digital’s (MTD) new mandatory requirements come in to effect from 1 April 2019, and business must comply with the new regime for VAT, or Making Tax Digital for VAT (MTDfV). This means that companies that are VAT registered must keep some record digitally and VAT Returns must be submitted to HMRC digitally via an Application Programming Interface (API). There are a number of ways in which your records and returns can be transferred, but legislation (VAT Notice 700/22: Making Tax Digital for VAT) states they must be entirely digital.

Below we’ve put together an overview of the information we think you will find valuable, and help you understand what you need to do to comply with the legal obligations for Making Tax Digital for VAT.

We can help you understand what you need to do to comply with the legal obligations for Making Tax Digital for VAT.

Who Does MTDfV Affect? The Key Facts

> You will be entering MTDfV if the company has taxable turnover of above the £85,000 VAT registration threshold on 1 April 2019, regardless of company structure.

> There is a deferral of MTDfV for ‘more complex businesses’ until 1 October 2019. These are, trusts, not for profits that aren’t set up as companies, VAT divisions, VAT groups, public sector entities, local authorities, public corporations, traders based overseas, those making payment on account, annual accounting scheme users.

> You will have 30 days to digitally comply for MTDfV if your business exceeds the taxable turnover threshold (the time you must register for VAT) at any time after 1 April 2019.

> Any business in MTDfV must stay in the scheme even subsequent turnover falls under the threshold.

> A business must de-register for VAT to be able to withdraw from MTDfV.

> Any business that has voluntarily VAT registered can choose whether it joins MTDfV.

> Voluntarily VAT registered businesses not electing to go digital at this time should be acutely aware of their turnover as reaching £85,000 threshold will immediately switch them to MTDfV.

Don’t Panic – the Shift to Digital is Simple

While the remainder of this page goes into more legislative details, we thought it was important to explain how simple the switch could be for you in the first year. If you use a spreadsheet to collate your digital records, you can continue to do this as long as you pass them to us via email, on a disc or on a USB stick. Adams Moore will then digitally import that data into software that can connect to HMRC’s systems, we will make the calculations and complete the VAT Return on your behalf.

However, please also look at our page all about Xero online accountancy software, which allows you become digitally compliant in a more simple and cost effective way. With this method, Adams Moore can access your data when VAT Returns or Year End Accounts are due, so you have even less to worry about.

With cloud software, Adams Moore can access your data when VAT Returns or Year End Accounts are due

Mandatory Use of Software

Under MTD, specified records will have to be kept digitally using ‘functional compatible software’ and is important that data must only be also inputted manually once; copying and pasting from one place to another is considered manual transfer. Thereafter, the spreadsheet or software must be able to connect to any required compatible programmes and/or HMRC’s systems. For those businesses who cannot yet ensure data is transferred digitally after it has been inputted initially, there is a soft landing penalty period ending 31 March 2020 – we advise you to look at cloud software options, such as Xero, and HMRC has published a list of compatible software.

The software programme or set of programmes must be capable of:

> keeping specified records in digital form as required by the new rules

> preserving digital records in digital form for up to six years

> creating a VAT return from the digital records held in compatible software and submitting this data to HMRC digitally

> providing HMRC with VAT data on a voluntary basis

> receiving information from HMRC via the API platform

Records to be kept digitally are specified in the VAT Notice, and include:

> ‘Designatory data’ – name and place of business, etc.

> The VAT account linking primary records

> VAT return

> Information about supplies made and received – sales and purchases

VAT Return submissions can be from:

> An API enabled spreadsheet

> Software

> Bridging software

It is no secret that the requirements on businesses will be potentially more extensive under MTD, but smart use of accountancy software, online or otherwise, and having a digitally minded accountant will reduce, if not, remove any extra burden. For example, in relation to supplies made you will be required to record the different rates of VAT applicable, and for supplies received the amount of input tax to be claimed is must be detailed. If you would like further advice on the resource required and to determine if outsourcing some of your accounting compliance tasks to Adams Moore, please contact us for a free consultation.

Exemptions and Adjustments

> Hard copy invoices and receipts – while the recording of purchases and sales must be kept digitally, currently is accepted to keep paper copies of receipts and invoices when a digital version has not been supplied.

> When it’s not reasonably practicable – people can apply to HMRC to become exempt of MTD for reasons of age, disability, remoteness of location or other reason that does not make it reasonably practicable for the business to use digital tools to keep records or submit returns. Adams Moore has clients who fall under this category and we are helping them communicate with HMRC – contact us if you require help with MTD exemptions.

> Existing insolvency procedures – businesses subject to a bankruptcy course of action are exempt from satisfying MTD regulation.

> Religious beliefs – businesses run by practising members of a religious society or order with beliefs incompatible with regulation requirements can be deemed exempt from MTD compliance.

> VAT Online Filing Exemption – exemption for MTD may still apply even if the person or business is not currently exempt from online filing.

> Calculating adjustments outside digital records – at present, adjustments are often needed before VAT Returns are submitted, for example for the capital goods scheme, the fuel charge and partial exemption calculations. Under MTD, it is just the totals that need to be recorded digitally.

> Provisions for special cases – provisions have been made for complex businesses and circumstances, for example, retail scheme users will be only required to record daily gross takings digitally, rather than details of each transaction. Other conditions are regarding employee expenses, intra-group supplies for a VAT group, recording mixed rate supplies with a single price, invoices for multiple supplies, reverse charge supplies, supplies made by third party agents – please contact us if you would like to discuss any of these special cases in detail.

People can apply to HMRC to become exempt of MTD if it is not reasonably practicable for the business to use digital tools to keep records or submit returns.

While 1 April may seem like a long way into 2019, we are advising all of our existing and prospective clients to carefully consider the MTDfV impact on their business now. If you submit VAT Returns yourself via spreadsheets, you may need to purchase bridging software or update the data to be API-enabled. If you use a combination of different software systems and spreadsheets, investigate how you will eradicate all manual links before 2020. We are on hand to guide you through the Making Tax Digital requirements – whether you’re an existing client or are considering changing accountants, please contact us with your queries.

Making Tax Digital will not be mandated for taxes other than VAT until at least April 2020. However, some businesses and agents are already keeping digital records as part of a live pilot to test and develop the Making Tax Digital service for Income Tax. If you are a self-employed business or landlord you can voluntarily use software to keep business records digitally and send Income Tax updates to HMRC instead of filing a Self Assessment tax return.

From Black Friday sales to the last-minute Christmas dash, this winter sees Britain’s high streets gearing up for the most wonderful time of the year. Yet with 2019 but a clink of glasses away, how should businesses really prepare for what could prove turbulent times ahead? From digital accounting to the new face of marketing, we look at the key watch-outs for 2019, and what they could mean for the small businesses of Britain.

Adams Moore can help businesses of all sizes to prepare for 2019.

 

Tax Goes Digital

More ‘effective, efficient and easy’, HMRC’s transformation of the UK’s tax system will come into play from April 1st 2019, with beta testing now in progress. Affecting SMEs with a turnover of £85K or more, Making Tax Digital will mean businesses are required to keep digital records relating to VAT – submitting these returns using the appropriate software.  While not compulsory for those companies below the current threshold, it could provide a good opportunity for smaller businesses to make the switch; VAT-registered businesses with more complex needs are also exempt at this stage. With income tax and corporation tax changes on hold for now (set to follow suit in 2020), business owners and their bookmakers should prioritise this initial development by seeking the relevant cloud accounting software. A helpful overview along with HMRC’s approved list of vendors can be found here, or read about Xero online software here, which is the product we recommend at Adams Moore.

 

Getting to Know Blockchain

If you haven’t been acquainted already, Blockchain is here to stay and is set to transform the way companies operate in 2019 and beyond. Providing efficiency and security, this complex database of independently-verified information allows businesses to share data, such as a financial contract, using an intelligent decentralised system that is both seamless and safe. Thanks to a unique encrypted signature attached to each and every transaction of data, the chain of ‘nodes’ is near impossible to hack, so you can rest assured your records are sealed tight. SMEs thinking of adopting this technology might consider blockchain-based apps to assist with the smoother running of their business, such as the formation of smarter contracts, making international payments, tracking shipments, and cloud storage. With so many options out there, be sure to consult dependable tech reviews or a consultant before investing.

Companies should consider their omni-channel strategies to provide a dynamic, integrated brand experience. 

The Omni-channel Experience

Omni-channel marketing may be nothing new, but businesses can no longer rest on their laurels when it comes to the new generation of customer. Having grown up with ‘always-on’ access to the world around them, Generation Z (currently aged 6 to 23) are the new breed of connected consumer – some even more so than millennials. While doing the research to find the best product or service to suit their needs, this demographic demands a new kind of customer experience: one that flows seamlessly from channel to channel. By leveraging these platforms effectively, businesses can create a more cohesive user journey from wherever their customers choose to join – whether from a homepage, via social media, or within a physical store. With marketing and sales teams in full collaboration, a more dynamic and integrated brand experience can ultimately help drive that final purchase.

 

An Ethical Mission

Brands that take time to promote their ethical mission as a core component of their company ethos can tick a box with the Generation Z demographic, and a fast growing cluster of eco-conscious people of all ages. No matter how small, the endorsement of a business’s moral stance could mean the difference between gaining a new follower on Facebook or a simple scroll down. While numerous household brands are already doing their bit to operate in an ethical manner – think M&S donating to charity when Sparks loyalty card holders make a purchase – these decisions can form part of that all-important brand story. SMEs need only take small steps to make a big difference in 2019 – from independent stores wrapping goods in brown paper to local bars losing plastic straws for good. So whether it’s a physical adjustment or a charitable endeavour, all brands can play their part by making these changes, and shouting about them.Businesses who have eco-conscious ethics should evaluate if these positive messages are reaching audiences.

 

Restoring Trust

From brand ethics to operating transparently, honesty is of the highest value when it comes to customer retention (and finding new ones), particularly in light of recent events. With Cambridge Analytica exposed for harvesting data on Facebook and the rigid changes to GDPR in May this year, authenticity is key. Not only should small businesses think and act discreetly when handling customers’ personal information, but also how they conduct their customer service. A down-to-earth, personalised approach is now the expectation of many consumers, and brands that strive to go the extra mile will only score extra brownie points from a customer’s perspective – whether that means a faster response turnaround on Facebook Messenger or a fully personalised email marketing campaign. With such uncertain months (and even years) ahead, a brand that remains trustworthy is one that will go far in 2019.

 

If you’re looking for a business adviser to help you plan for a successful future, contact Adams Moore to arrange a free consultation, where we can discuss strategies for core efficiencies, market opportunities and customer experience.

This morning’s news headlines were as stark as yesterday with regards to deals, bad deals and no deals, tension in Ukraine, shares dropping and the inclement weather has already abetted the cancelling of some trains. Just another day in the life of the UK. Whatever the origin of a company’s misfortunes, hearing negative news stories day in day out can really affect business and consumer confidence, so it’s crucial to continue focussing on your firm, the marketplace it operates in and sparking positivity at any opportunity.

We’ve chosen two recent global, rather downbeat, stories about profit loss and uncovered the positive opportunities that are hiding, in order to inspire you to keep up that good old Dunkirk spirit our nation is so well known for.

Fuel costs or weather cannot be fully accounted for, so start with looking for ways to elevate the ‘experience’ you’re selling

Air Travel

Thomas Cook, one of the UK’s favourite holiday tour companies, confirmed a £53 million loss and this has been attributed to the summer’s heatwave and last winter’s Beast from the East. In the last three months, Cyprus’ Cobalt Air, Denmark’s Primera Air and British carrier Monarch have all gone bust, with Flybe and Norwegian also on the cusp of disaster. While Brexit and the weak pound have certainly impacted the situation (certainly for Cobalt, with 30% of Cypriot air traffic usually coming from the UK), rising fuel costs are the root of many problems. Airlines capitalised on the plunging oil prices from three years ago, but they’re now paying top whack again, and it seems many committed to new aircraft, which has resulted in having more seats than passengers. This highly competitive market faces a future of flux and airlines Ryanair and Wizz Air have even added clauses to their conditions to disclaim liability for any flights grounded due to Brexit after 29 March.

What can SMEs Learn?

> Despite Thomas Cook’s woes it has announced that it will build 20 new hotels and build on its partnership with Expedia – an own-brand offering is risky in some ways, especially to keep its low costs, but profit margins will be higher and a robust affiliation could bring many more opportunities. Look for efficient partners and investigate ways to bring elements of your business in house.

> Identifying areas where you can make a real difference to your customers or clients could spark the loyalty your business badly needs – fuel costs or weather cannot be fully accounted for, so start with looking for ways to elevate the ‘experience’ you’re selling.

> Be wary of big purchases or leases, even when your books have never looked better. Forecasting and planning for the worst is important to ensure you have a sustainable future during turbulent times.

It’s surprising how many SMEs don’t put the correct thought and capital towards future-proofing their digital sales platforms,

Retail

Everybody’s favourite Swedish store, Ikea, which has an outlet not far from Adams Moore, in Wednesbury, has suffered a 26% year-on-year drop in operating profits – a drop from 3.03 billion Euros to 2.25 billion – and 7,500 jobs (circa 350 in the UK) will be lost. However, we’ve chosen this story, as an example to look a little closer into bad news; here there is much more to tell, and it’s a plot that hasn’t yet played out to the finale. Ikea’s turnover in fact increased marginally by 2.1%, retail sales rose 4.7% and that included a 45 per cent jump in online trade. So what’s going on? The retailer has entered into a three year business transformation period that will focus on ecommerce and a city strategy, which has seen a Planning Studio open on London’s Tottenham Court Road. The upfront costs facilitating the brand’s evolution and store revamps has been responsible for the negative figures and 11,500 new jobs will be created, making a total of 4,000 additional roles, and no losses.

What can SMEs Learn?

> Ikea might appear to be moving forwards with an ‘all eggs in one basket’ approach, but it is carrying out tests in the market from an informed standpoint. Without cars, many city-folk can’t make out of town trips so accessible high street outlets will allow Ikea to grow its customer base – adapting and accommodating to changes in living habits, consumer desires and shopping conventions is fundamental to any retailer’s strategy, but undertake research and trials.

> Investing in online resources and technology is a positive move for the majority of businesses – online shopping seem to have been around forever, but it’s surprising how many SMEs don’t put the correct thought and capital towards future-proofing this area. Aim to add value and convenience through digital platforms and channels, but remember this is likely to affect distribution.

> Adding a different type of store in cities and pushing for more online sales puts a spotlight on broader channels of customer services. Businesses must be fully committed to their staff if they want to provide a great service, from initial awareness of products or services, at point of sale, and beyond. Empower employees to be your advocates as they are your business.

If you’re concerned about your businesses profits or what 2019 may bring for your company, please contact us for a free consultation where we can find out more.

Adams Moore are members of the Lichfield and Tamworth Chanber of CommerceAs some of you may know, Adams Moore Partner, Neil Lancaster, was previously President of the Lichfield and Tamworth Chamber of Commerce, which is just one arm of the Greater Birmingham Chambers of Commerce. We continue to be members of this valuable organisation and like to support local where we can.

Therefore we wanted to highlight the up and coming awards and dinner for businesses in Sutton Coldfield, Lichfield and Tamworth, and it’s not too late to submit an entry. The awards are a fantastic opportunity to shine a light on the positive year your business has had, potentially be nominated and gain great exposure from the recognition.

The deadline for award entries is next Friday, 23 November at 5pm. The application form can be downloaded here and entries should be emailed to 2019awards@birmingham-chamber.com.

The third annual Sutton Coldfield, Lichfield and Tamworth Chambers of Commerce dinner and awards will take place at the Belfry Hotel on 25 January 2019.

Companies should nominate themselves for one of the following four categories:

  • Sutton Coldfield Large Business of the Year
  • Sutton Coldfield Small Business of the Year
  • Lichfield and Tamworth Large Business of the Year
  • Lichfield and Tamworth Small Business of the Year

Award sponsorship packages and tickets for the awards dinner are also still available. Find out more information from c.brewerton@birmingham-chamber.com.