Category Archives: In the News

Starting a new business or sole trader venture can be stressful, worrying and confusing, and then someone mentions being ready for year end, accounts or filing your tax return – these feeling are likely to multiply and questions flood into your brain about where to start. HMRC also requires some employed people to file a self-assessment too, as it is the system used to collect tax on all income. Often is it deducted from savings and pensions, as well as wages, but people who rent out properties and some who are in receipt of child benefit will need to declare this revenue and pay back the appropriate amount of benefit or tax.

Your first tax return can be stressful, so be organised in good time.

Accountancy fees are not tax deductible in certain circumstances and some people may not feel ready to utilise an accountant like Adams Moore in their first year of business. Therefore, we have written this advice to stand everybody in good stead for the 2017/18 financial year. As that year ended on 31 March, now is the time to organise your tax return. With five days to go before the deadline in January 2018, over 25% of people hadn’t sent it – don’t get caught out and prepare early.

First things first…

Do you need to file a self-assessment tax return? If you’re self-employed and are a sole trader, a partner in a business, a company director (unless it’s an unpaid position for a not-for-profit organisation) or are self-employed as well as hold an employed position you must send a self-assessment. As already mentioned above, self-employment includes income generated from property. If you aren’t sure, visit this page on the Government website to see the full list of those with an obligation.

The first job to do is to register with HMRC, and it can take up to 20 days to receive your activation code. The code must be used within 28 days or it will expire and you will have to re-apply for one. Another task that may take a little time is gathering information from third parties, which could include the interest gained from bank accounts, savings and investments. You should know how much you have contributed to pensions, income from property and all financial information relating to your sole trader earnings and outlay.

Register with HMRC and keep records of everything throughout the year on a weekly basis


Keep neat and tidy records of all financials

Good bookkeeping practice is essential, which simply means carefully recording all your business outgoings and income. If you have been piling receipts into a box, all isn’t lost, but we would suggest you choose a specific time to look after your finances each week, starting this week! Some people choose to employ a bookkeeper, but when starting out this can be an unwarranted expense. ‘Doing the books’ daily may sound like a sure fire way to keep things up to date, but for many it is less efficient than carving out a space in your weekly schedule where you can concentrate for a longer period of time. Keep a place where you can file any hard copy receipts during the week, use a similar system for digital invoices you receive and a have a log of any invoices that need to be raised. Stock taking and creating purchase orders go hand in hand with these tasks, so we suggest this is undertaken weekly, fortnightly or monthly on your ‘finance day’. Really, when you break it down, best practice comes with a routine so items don’t get forgotten, paperwork doesn’t get lost and books don’t get messy – you’ll soon regret the lack of habitual practice when it’s time to collate details for year end.


Great advice, but how do I record the details?

Whether you’re a spreadsheet aficionado or not, using a programme such as Windows Excel is all you need, and create the following column headings on one sheet to record purchases:

> Date, Company, Item, Category, Capital Expense (property, plant or equipment), Total Amount, VAT (if you are VAT registered), Amount Minus VAT.

On another sheet you should detail your income:

> Date, Company/individual, (some won’t have this information), Services/Products, Additional Service/Product Categories, Amount Minus VAT, VAT, Total Amount.

Sole traders must keep records safe for five years after the first 31 January deadline so it’s important to back up in case your computer breaks down.

Keep all information digitally if possible, for example, scan reciepts or use accountancy software


Should you be thinking digitally?

Yes! With the Government’s ‘Making Tax Digital’ initiative it is wise to scan receipts and hold all information digitally. This can be done by yourself or there are a wide number of choices when it comes to software, held locally or on the cloud. Adams Moore uses Xero accounting software, which you can read more about here; it allows you to keep on top of your books on the go and we can access all your records. The days of people making a trip to their accountant with a file full of paperwork and receipts are over.

When filing your tax return, you simply fill in sections that apply to you and the online system reacts to your answers meaning you only complete the necessary information. You can save as you go and send when you’re happy. Should you have got into financial difficulties and anticipate not being able to pay your tax bill by 31 January you should call the Business Payment Support Service and discuss the possible deferral options.

If you are considering hiring an accountant to assist with your bookkeeping and tax return, please contact us and book your free accountant consultation appointment to discuss your requirements.

HMRC employs the equivalent of 56,000 full time workers and is responsible for income tax, corporation tax, capital taxes, National Insurance contributions and the climate change levy… to name but a few. While it is therefore understandable that the Government department changes its priorities and regulations, often it leave individuals and business frustrated. One advantage of using an accountancy and business advice firm like Adams Moore is that we can alert you when your personal or business affairs are affected, present the options and help modify processes or complete paperwork accordingly.

We have created a round-up of the most recent changes your business may not be aware of. Should you require any assistance on these HRMC updates, please get in touch and arrange a free consultation about your needs.

 

Brexit Forces Prioritisation Reshuffle

HMRC’s priorities have been influenced by Brexit, and on 30 April the Chief Executive, Jon Thomson, outlined the findings of a work programme review to a Public Accounts Committee. The reprioritisation has resulted in some parts of the Making Tax Digital (MTD) initiative being delayed; the deferrals may be troublesome for some, but savings for the department likely make financial sense while HMRC deals with the challenge of leaving the EU – and as accountants, we support intelligent financial decisions!

Some Making Tax Digital (MTD) plans have been deprioritised due to Brexit preparations.

Single Digital Accounts

An ultimate aim of HRMC, creating single digital accounts for businesses, now has a decelerated programme, but it will apparently not impact the delivery of MTD. The prioritisation shake-up has meant the convergence of business taxes from the current range of IT systems onto a single system will now happen at a gentler pace. This will therefore slow the creation of the single account for all business customers and it was announced no further MTD for Business changes will be directed for implementation before 2020.

MTD Services for Individuals

Most individuals should not need to deal with any changes in the near future as no additional requirements will be made on people, unless HMRC deems it will result in a reduction in phone or post contact, or ‘significant savings’. Along with this news, work on the simple assessment and real-time tax code changes is being frozen for the time being. Other delays concerning individuals are PAYE Settlement Agreements, Inheritance Tax payments and Tax Advantaged Venture Capital Schemes applications.

Making Tax Digital for VAT

The mandatory MTD for VAT, due to be introduced from April 2019 is one element that has not changed, but we thought it important to highlight. Small companies that are not currently VAT registered, but are continually growing, may not be aware of the turnover threshold of £85,000 which is the point when businesses must register for VAT. Forecasting is key so that payments can be planned and saved for. While we’ll return to digital VAT a little later in the year in more depth, businesses must be prepared to keep digital records (for VAT purposes only) and provide VAT returns through the MTD software from next April, and a pilot system is now live for simple returns.

Employees will not be taxed on the benefit of electricity for cars at workplace charging facilities.

Rewarding Green-thinking Employees – Have Your Say

In the autumn of last year, the budget summarised the implementation of a new tax exemption; for the benefit of electricity provided at a place of work, by the employer, to charge a car or van. Currently companies who offer charging points for electric or hybrid vehicles must tax individuals for the usage of this gainful facility, in the same way as a company car would be taxed. The technical consultation that closes on 5 July 2018 seeks comments on the provision of workplace charging facilities, which vehicles the exemption covers and the qualifying conditions of the exemption. It is expected legislation will be included in the Finance Bill later this year and its effect will be made retrospective to 6 April 2018.

VAT Scale Charges Change from May

It happens every year for businesses using the VAT scale charge, and 2018 is no different – the road fuel scale charges have been updated, and you can find them here. The scale is used to calculate the amount of VAT that is payable to HMRC on road fuel, without having to split mileage between business and private use; this method adds a fixed amount to account for the private usage, based on CO2 emissions, and therefore must be for each car, not a fleet of vehicles and vans are not eligible. Companies should apply the new scale from the first new accounting period after 1 May, but what are the alternatives?

If the private mileage is very low the scale may not be cost effective and instead the exact business mileage can be used within accounts. Otherwise, a mileage allowance can be paid by the business and VAT can be reclaimed on this, or in the event of business mileage being very low and private mileage is high, a business can choose not to reclaim VAT on fuel costs. Contact us if you would like to discuss the most beneficial option for your company’s cars and financials.

Deadline for P11D Form On 6 July 2018

Benefits and some expenses provided to employees and directors for the financial year ending 5 April 2018 must be reported using the form P11D, through self-assessment or via a PAYE coding notice adjustment, and the deadline for filing the 2017/18 P11D is 6 July 2018. Additionally, if the benefits are being reported via P11D or payroll the company employing the person must pay Class 1A National Insurance Contributions (13.8%) on the majority of the benefits. The P11D(b) form calculates the liability and this payment, which is due for 2017/18 on 19 July.

The deadlines are on the horizon and ensuring the details are gathered and reported correctly may take time. If you require any assistance with this process, calculations or the form completion please get in touch.

As the UK quickly moves towards the enforcement date of the new General Data Protection Regulation (GDPR) later this month, it is likely some smaller businesses are still not one hundred per cent sure if they have fulfilled the requirements. The directive took four years to prepare, and aimed to standardise data protection across the EU, meaning it is the most significant update in this area for 20 years. It was approved in April 2016, meaning UK businesses have already had two years to prepare. However, we understand that when a new, seemingly complicated, law is introduced the day-to-day running of your business can get in the way and sometimes (just sometimes) we all bury our heads in the sand.

Below we have created a simplified list of requirements it so you can take a breath and feel confident about the changes that come in to effect on 25 May 2018. If you are conforming to the current Data Protection Directive 95/46/EC then much of your existing management of data will be valid but there are new elements that you must quickly abide by. Nevertheless, if you think your company may have some adjustments to still make to its processes and documentation, and require guidance, please contact us about meeting with of our business advisers.

Ensure your business is prepared for the changes to data protection in May 2018

Who in the Company is Responsible?

The GDPR applies to ‘controllers’ and ‘processors’. Processors work on behalf of the controllers to process personal data; these people are legally liable for contraventions and must maintain the records accurately. Controllers define the way in which personal data is processed and the purpose of that action; obligations on these people include ensuring contracts with processors comply with the GDPR. Someone in the business should take responsibility for data protection compliance, but a formally designated Data Protection Officer (DPO) is only required in some situations; more information can be found here.

Identify Vulnerable Areas and the Valid Lawful Basis for Processing Personal Data

The controllers and processors, and other key decision makers must quickly identify where any new issues in compliance might lie. If you have a risk register, this is good place to start, but with three weeks before the deadline you may now need to bring in an expert to help you understand and negate the impact rapidly. There are now six available lawful bases to choose from in order to comply, and although having a legitimate reason for holding data is not new, there are additional requirements on transparency and accountability.

> Ensure you can’t achieve the same purpose in a reasonable manner without processing

> The bases are: consent, contract, legal obligation, vital interests, public task and legitimate interests

> Choose the lawful basis wisely, before you begin processing, and document it, as you should only amend with good reason

> Include your lawful basis and the purposes of the processing in your privacy notice

There are currently not many practical implications in this area, but the rights of individuals will become effected under the GDPR, for example, when consent is the lawful basis, people have a stronger right to have data deleted.

Undertake Data Protection Impact Assessments Where Required

A privacy by design approach is required by the GDPR and in some cases, where processing is likely to result in a high risk to individuals, Data Protection Impact Assessments are mandatory. For example where a new technology is being deployed, where a profiling operation is likely to significantly affect individuals or where there is processing on a large scale of the special categories of data. The ICO’s Code of Practice for DPIAs can be found here, and if you cannot address the high risks, the ICO should be consulted.

Comply with Consent Measures - Seeking, Recording and Managing

The ICO has published detailed guidance and a checklist to help businesses review and refresh their consent practices; the key considerations are having opt-in consent, it must be freely given, it must be specific to the data, be clear and the person should feel informed in order to the decision. If you currently process data with consent, it is crucial it meets the new GDPR criteria. If it doesn’t you must get new compliant consent or utilise a new lawful basis; if you are unsure you may wish to seek advice from a business adviser to ensure it is “specific, granular, clear, prominent, opt-in, properly documented and easily withdrawn”.

Document Everything to Illustrate Compliance

What personal data do you hold, where did it come from and who is it shared with? An information audit may be required across different parts of the business, and policies and procedures may need to be updated. Records must be maintained, and if any inaccuracies are found, all parties involved must be given the information so evidences can be amended accordingly.

Be Prepared to Identify and Report Data Breaches

You will be legally required to notify the ICO of a data breach in the event of a risk to the rights and freedoms of individuals; if the risk is high, you will also have to notify the people concerned. Examples of rights and freedoms include, financial loss, loss of confidentiality or damage to reputation. When reviewing procedures to ensure detection, reporting and investigation can be undertaken lawfully, it may be worthwhile categorising data so that if a breach occurs you know without difficulty whether it is reportable to the ICO or individuals. Breaches and failures in reporting breaches can result in fines. If your company required assistance in developing policies and procedures for managing data breaches, Adams Moore can advise and assist.

Where a data breach effects the rights and freedoms of the individuals involved the ICO must be notified immediately.

Communicate Transparently with the People Whose Data is Processed

Currently certain information, such as your identity and how you intend to use any data, must be communicated to people, but the GDPR requires additional disclosures. This can be imparted via a privacy notice, and must include the lawful basis, the data retention period and that a complaint can be made if the person is not content with the way the data is processed. You can view the ICO’s privacy notices code of practice here, which reflect the new requirements.

Ensure the Rights of the Public are Covered in your GDPR Measures

Individuals’ rights now include the right of access, to rectification and to restrict processing, to name just three so you must detail how each right can be met, for example, how you would retrieve and provide data to an individual or company in a commonly used electronic format. Any requests cannot be charged for and must be handled within one month unless the bid is considered excessive so review your procedures and consider whether the logistics of requests will negatively impact your current methods. The ne right to data portability should also be focussed on; it applies when processing is based on the individual’s consent, for the performance of a contract, when personal data has been given to a controller and when processing is carried out by automated means.

Ensure Children’s Data and Verification is Compliant

The GDPR is facilitating special protection for children’s personal data, a new area that is particularly pertinent for commercial internet services or ‘information society services’, which includes social network sites. You will now need a parent or guardian’s consent for those 15 years of age and under if consent is relied on to collect and process information about the minor; this also means the person’s age must be proved and parental responsibility consent has to be verifiable to operate lawfully. It will also be important to ensure your privacy notice is written appropriately so that children will understand it.

Contact Adams Moore for advice about the way your business meets the new GDPR legislation by calling 01827 54944, or use our contact form.

 

Automatic enrolment? Phasing? Mid-payroll increment? These are just a few terms that might set your heart racing and your brow sweating; it can be a stressful process making sure your business has prepared correctly for the recent changes to workplace pension contributions. While there is a clearly a legal obligation to comply with the April 2018 modification and an ethical outlook in caring for your employees’ future, there is also a financial impact on your business and this also must be planned for.

Adams Moore accountants in Tamworth can advise any business on preparing for financial changes with workplace pension contributions

Companies previously paid 1% of a staff member’s qualifying earnings. This has risen to 2% as of 6 April 2018 and the employee will now pay 3%. In certain circumstances the Government will pay a portion through tax relief or the company can choose to pay all of the minimum contribution, but either way the contribution must total 5%. From the start of the next tax year, on 6 April 2019, the total is going to jump further to 8%, meaning a 3% minimum contribution will be the responsibility of firms.

Since the scheme began, to help ensure people will be better provided for when at a pensionable age, more than 9 million people who had not taken out a pension plan have elected to stay in the system. The 1% provision by both employee and employer has been seen as a very manageable amount and didn’t impact the bottom line or pay packets too much, but sadly even next year’s 8% contribution will not secure a comfortable retirement for many and it should be seen as a baseline upon which to add to. Will the next 12 to 18 month be a rollercoaster ride that’s too much for some people to stomach? We’ve been advising our clients to strap in and keep their eyes open to avoid feeling too queasy about the changes.

Forecasting will more crucial than ever and monthly or quarterly management accounts will flag up what bearings the contribution increase is having on your books. Of course the only way of reducing a business’ contribution is if their employees choose to opt out of the scheme, which is not in the hands of employers; the Government believes over 21% of total UK workers will be opting out in 2018 and 27.5% in 2019, which is a sizeable leap from 10%, recorded in 2017. Younger employees are going to be more likely to opt out of the scheme over the coming year as student debt, high rent, saving to get on the property ladder or even ‘living life’ could be higher on their spending priority lists. Staff in their 50s and 60s also may think there’s not much time left to contribute and therefore opt out, and it has been found that women are more likely to decline the scheme than men due to part-time and lower incomes. Therefore, looking over the make-up of your workforce may be an indicator of how many staff may opt out, and this can be used in the planning process.

While there has been much chatter like these opting out examples and expectations, nobody really knows how it will play out, especially with how the fast approaching Brexit will shape the economy. We suggest businesses completely review their income and expenditure, so that all eventualities can be considered, pension related or otherwise, and costs can be absorbed without danger to the feasibility of the company’s future. It has been reported widely that businesses could start to delay rises in wages as they offset pension contributions and meet with April’s increase of the minimum wage from £7.50 to £7.83. This might seem like a sensible strategy on the face of it, but combined with increasing inflation and interest rates this may leave firms vulnerable when it comes to staff retention; the cost of recruitment and the effect a mutable workforce can have on customers and clients could quickly act against the original approach, leaving the company even more out of pocket.

Businesses must contribute to their employees' pensions, and this rises to 3 per cent in 2019.

Making savings can be done in a wide number of ways, and speaking to your business adviser and accountant is the first step in breaking down the numbers to see what areas can be improved on. Adams Moore welcomes new clients to undertake business reviews and for ongoing support, but here are some ideas on areas that companies can focus on:

> Review working practices and processes to increase performance

> Improve productivity by making changes within department structures and individual roles

> Settle contracts up front to obtain an annual discount

> Negotiate unit prices on larger orders

> Outsourcing services that have traditionally remained in-house, such as payroll

> Offer new or updated services based on customer or client requirements

> Analyse marketing and PR efforts to ensure they are making the proper return on investment

Key Things to Remember about Workplace Pension Schemes

> Ensure changes were effected on 6 April 2018 – payroll must accommodate the update, even if it was mid-pay cycle, to avoid legal action and a fine from The Pensions Regulator

> If none of your employees are currently eligible, the individuals must be assessed each time they are paid, and put into a pension scheme if the automatic enrolment criteria is met – obligations can be found here

> Staff meet the criteria if they are 22 years old or over but are under State Pension age, they earn more than the £10,000 per annum or £768 per month and work in the UK

> Employers and employees can choose to pay more than the minimum contribution levels

> After three years, employees must be re-enrolled if they meet the criteria, even if they have previously opted out

Making Tax Digital could be an opportunity for businesses to embrace a more efficient way of accounting
With the planned roll out of HMRC’s Making Tax Digital in April 2019, initially just for businesses that are VAT registered, there is a big push by the government on bringing tax accounting into the 21st century and creating the online revolution in this area that has already occurred in sectors such as banking.

The system has been piloted with businesses on a small scale from the end of 2017, and this has been stepped up into 2018 to include a wider live pilot. While there are no plans as yet to mandate individuals and businesses into the online filing system – which is part of HMRC’s plan to make tax more manageable for businesses and individuals, and to make it more efficient and accurate – it is worth understanding what it is all about and how it might affect your business in the future.

Why is HMRC launching Making Tax Digital and who does it affect?

HMRC wants to close a tax gap that is costing the government dearly, and is largely due to inaccuracies in tax returns – not as a result of tax avoidance or fraud, but simply mistakes that are being made when filling out tax returns. The plan is to mandate businesses into the system that are VAT registered. These businesses already file VAT online quarterly, but HMRC is integrating digital record keeping. This means that if the business or their accountant uses accountancy software, the accounting records will also be sent along with the VAT return, to make the whole process seamless. For business that use spreadsheets, the data from these can be linked to HMRC’s system using an appropriate interface.

There is the opportunity for businesses to provide quarterly update for other tax obligations too, but they won’t have to do this. Small businesses and individuals won’t be mandated into the system at all in the near future, as the introduction of it in VAT is a trial and must be proven to work well before it is rolled out on a large scale. However, we expect that this should happen eventually as the digitisation of accounting and tax return filing evolves.

Embracing the opportunities that Making Tax Digital will bring

So, if you’re an individual who files a tax return, a sole trader or limited company with no VAT obligation, you can sit back and relax for the moment. But rather than see the Making Tax Digital initiative as a potential future headache that involves more frequent tax information updating, it should be embraced as an opportunity to negate the headache of end-of-year tax return filing and a chance to look at overhauling your book keeping for the new digital era.

Many small businesses will still be keeping paper records of accounts and expenses logs/receipts, or using spreadsheets to keep track of income and expenditure. This works well for many people, but is the equivalent of cheques and a paying in book at the bank! We all use online banking services these days and benefit from a higher level of convenience that this brings. Getting tax accounts into a simple software system that keeps all records electronically, safely in the cloud to avoid loss of important documents or security breaches, and easily accessible by both business and accountant, is the way forward.

Not only will you be glad when it comes to end of year filing that your accounts are up-to-date, in one place and available to your accountant, but your business will benefit from the foresight and planning capability that having real-time accounts brings. Having your expenditure and income figures to hand whenever you need them means you can easily review the status of your business and better plan for business growth plans such equipment investment. You will know your likely tax liability well in advance to plan your finances accordingly.

It is just a matter of time before digitalised book keeping becomes a mandatory requirement, so while there is no need to panic just yet, why not get ahead of the curve and start now for plain-sailing transition.

Adams Moore offers Xero accountancy software. For further details on this, get in touch on 01827 54944.

Over the last decade, Adams Moore has concentrated heavily on developing business solutions to meet the evolving demands and requirements of our clients, and making investment in customer service processes and communication channels – not least of all our website. Providing a quality service is important to us. However, there is one area we thought was due for a major overhaul – and that was our office frontage.

After making several internal improvements to make the office environment nicer for staff and clients, such as new windows to the rear, we thought it was high time we addressed the face of our tired looking building to make it more inviting, and frankly, less shabby!

So, after an investment of almost £10,000 involving a complete new skim to the outside walls and a mighty decent paint job to walls and windowsills, we must say we’re rather pleased with the facelift. In fact, it’s such a transformation that we’ve almost not recognised our offices and walked straight past. We hope our clients don’t do the same!

Perhaps you are thinking of renovating your business premises in some way, or investing in equipment for your business? With the end of the tax year approaching, there’s not much time, but it is a good opportunity to make the investment. For further advice, get in touch with us on 01827 54944.

And just to prove just how much our frontage has been improved, here are some before and after photos to illustrate.

 

 

 

Short-cutting the red tape in business can be a costly mistake. Investment in compliance will reap business benefits.Don’t ignore the red tape when setting up in business

There are many important business duties and rules that all business owners should be aware of, from tax and employment rules to pensions and required industry regulations. Understanding what these are, which ones you might need to implement and how it could affect your business if you don’t is crucial for small businesses. Growing a business can also result in increased regulation, so it’s important to know how this might affect you.

Meeting tax duties

One of the key red tape aspects of business has to be tax duties. Getting it right from the start will save you a huge headache later on:

  • Choose the right business structure – get advice on which business structure will suit your business goals both now and in the future. Having the right structure will mean your business can operate in the most tax efficient way from the start, so it’s always best to seek professional advice on this
  • Establish an adequate book keeping system – whether you do this manually or using accountancy software systems such as Xero, it is absolutely vital to keep accurate business accounts both for ease of tax return filing at year end, and to meet HMRC requirements
  • Be in-the-know on available tax relief – there may be available tax relief that could apply to your business and is worth exploring. A good accountant will be able to advise on this. It’s advisable to use an accountancy firm that can give you guidance on all tax matters, as tax is an evolving landscape with rules and rates changing on a regular basis
  • Get to grips with deadlines – not meeting tax payment deadlines can result in surcharges and needless interest costs. Knowledge of deadlines is key, and being sensible when it comes to allowing enough time for the payments to reach HMRC i.e. ensure if a payment is due over a weekend, make the payment early enough to clear in time.

Employment rules

There is a plethora of red tape around employment, and when thinking about employing staff, you should consider:

  • Legal advice – there is much legality around the recruitment of staff, the contracts they are employed on, and other aspects such as holidays they are entitled to. Getting legal advice is a must to help ensure you carry out the necessary steps and due diligence in this area, to avoid costly problems later on. The cost of employing professional advice here will be money well spent
  • Accountancy advice – you can fulfil employee payroll duties yourself, but dependent on how much time you have and how many employees you have, you might feel it is more efficient to outsource this to your accountancy firm. The compliance around payroll can be complex with RTI report submission and various rules being updated all the time, so it’s worth outsourcing to an accountant that offers the latest in payroll processing and is fully compliant with HMRC rules
  • Pension auto-enrolment – this has been rolled out over the last five years or so, whereby businesses have had to auto-enroll employees into a pension scheme at their designated staging date. Most new companies will now have to auto-enroll straight away, as there is no longer a roll-out time. There are fines for non-compliance, so it’s worth exploring the options and getting a pensions provider in place if you are looking to bring staff on board.

Data protection rules

When thinking about marketing to your customers, you may want to consider electronic delivery of promotional materials such as e-newsletters and email shots – which are incredibly cost effective to produce and execute. But there is red tape around this area too. Do consider:

  • General Data Protection Regulation (GDPR) – it’s important to ensure that you are not sending any communications to customers or potential customers who have not opted in to your marketing. The General Data Protection Regulation (GDPR) coming into effect from 25th May 2018 will require you to check with your customers that they are happy to continue to receive communications from you, and if you don’t and they aren’t, you could be liable for a large fine. You will need to remove anyone from the list who has unsubscribed, in order to be compliant.

 Industry regulations

Dependent on what industry you’re in there could be a variety of regulations governing your profession or sector, so it’s important to be knowledgeable about these to ensure your business operates within the rules. Get in touch with industry bodies and organisations to find out what these might be and how you can comply.

For many businesses, regardless of sector, it’s worth looking into:

  • Public liability insurance – it’s there to protect you and the public in the event your work caused damage or injury to anyone. The amount of cover you’ll need and the cost of the cover will vary depending on what type of business you’re in, but the cost of not having it could be astronomical if an accident were to occur and blame could be attributed to your business, as claims could be anything from thousands to millions, dependent on the incident
  • Professional indemnity insurance – for those in professional services, professional indemnity insurance covers legal costs and expenses associated with a case that might be brought against you as a result of you providing inadequate advice, services or designs, that could cause your client to lose money. Again, legal fees could run very high in such cases.

Whilst the thought of employing professional advice to help you wade through the red tape and comply with regulations might be scary and deemed unaffordable for small businesses, the cost of not getting advice on such important matters can be far higher. Unexpected costs associated with not being compliant can really rack up, so investment in getting it right is wise.

Technology in accountancy won't negate need for guidance and advice from tech-savvy accountants, but will benefit businessesAccountancy services have changed dramatically over the last decade. Once maybe viewed as a necessary evil and nothing more than a tax return or payroll services facilitator, accountancy was an expense for businesses simply to help them meet statutory duties. However, the last decade has seen forward-thinking accountants look for ways to add value to businesses, particularly in a changing economic climate spurred by the recession.

Many accountancy firms have looked to up their game and add fixed-fee options to their offering. Services providing a higher level of support with strategic planning, management accounts and regular health checks – alongside business protection services helping with issues such as financial checks – have emerged and benefitted businesses infinitely. But as technology evolves and permeates every sector (and indeed every aspect of life), how will this bear on accountancy services?

Technology in accountancy gathering pace

The main technologies that have affected the accountancy arena are sophisticated software packages such as Xero. Offering a cloud-based system to digitise everything from receipts filing and mileage logging to invoice generation and recurrence, it has transformed the way businesses handle their book keeping. This move to app-based software will continue to evolve and gather pace, and more and more businesses will adopt this technology as they favour a way to do business ‘on-the-go’, making life simpler. It has also made it significantly easier for accountants to do their job – with all the necessary ‘paperwork’ in one place.

Many businesses have thus far been using Sage – a popular accountancy software – and Sage has responded to the emergence of software competitors with the launch of Sage 24. At Adams Moore, we offer both Xero and Sage 24, to provide clients with the best systems available. Both of these allow us to log into the software and access all accounts at the end of the year, making tax return filing stress-free.

Additionally, Making Tax Digital, HMRC’s plan to make it easier for businesses and individuals to manage their tax efficiently and accurately – effectively spelling the end of the tax return – is currently being piloted and could be live by 2019. This would see all businesses having access to their own personalised digital tax account, making use of real-time technologies and allowing HMRC to interact digitally with businesses.

How accountants will continue to add value

You might think accountants could be quaking in their boots with the thought of technology in accountancy potentially doing them out of a job. However, there will be a variety of ways that accountants can still add lots of value for businesses. Whilst software will just keep growing and impacting the sector, and digitisation continues to emerge, businesses will increasingly need advice and assistance. Business owners will need to ensure their accountant is tech savvy and can use the new technology – as well as have the capability to keep abreast of the roll-out of HMRC’s Making Tax Digital. These two developments alone will see some of the ‘old school’ accountants fall by the wayside, as historically accountants generally aren’t keen on engaging in new practices!

Using a technologically enabled accountant means businesses will benefit from better tax planning as a result of available data (through accountancy software), allowing more effective identification of cost savings to be made. Another huge benefit of using accountancy software will be that accounts will be done earlier and more efficiently, and the business will be aware of its tax liability earlier and can plan better. We never fail to be surprised by the number of businesses who still leave accounts filing to the last minute and are then surprised by what they need to pay. Earlier accounts filing through efficient software = more time to plan for tax bills and negates a real headache.

Businesses should also bear in mind how other developments will drive a higher need for accountancy advice. With the changes to dividends being taxed, and tax relief on rental properties, the knock-on effect on businesses is still happening. There is also auto-enrolment to consider – something which is affecting many business right now and will be compulsory for start-ups in the near future.

When looking for an accountant, businesses should look for a good mix of new technology offering and a demonstrable ability in using them, value-added services and a proven track record in staple accountancy functions and business advice. Embracing new technology in accountancy whilst having firm roots in traditional services is what any successful accountant of the future should aspire to.

 

Pay in 3 Days is a pledge by the business community to support prompt payment. This helps negate cashflow problems that can significantly affect a business
With late payments reportedly costing SMEs more than £2bn a year, it’s a real issue that needs addressing. Consequences of late payment range from having to rely on overdraft facilities, paying staff late or stunting business growth because of lack of funds to invest.

At the worst end of the scale, bankruptcy is unfortunately a common result of late payment. One in five small businesses say they face the potential of bankruptcy if they are owed between £20,000 and £50,000. according to a survey by Bacs Payments Schemes Limited. The same research highlighted that seven per cent of UK business feel they are already in the danger zone.

So, whilst there are ways that businesses can limit the exposure to late payment, the business community also needs to come together to support the cause of getting paid on time. The Greater Birmingham Chambers of Commerce is backing a scheme called Pay in 30 Days. Companies are being called upon to sign up to the scheme to pledge their support and stand strong in the face of late payment.

Benefits of supporting payment in 30 days are boosting the local economy and growing your business as a result of having cash flow to invest in staff or equipment. For the government, growing businesses means more tax and VAT for the pot.

Adams Moore supports the Pay in 30 Days scheme and is urging clients and local businesses to do the same. A simple online sign up makes the process quick and easy, and will make a significant difference in getting the word out there that late payment is simply not acceptable.

Business interested in learning more about ways they can help avoid late payment through better invoicing processes and good knowledge of customer payment procedures can access advice here.

 

 

 

 

It may be time to change your accountancy company if you're looking for a breath of fresh air for your business

Many established businesses may have been using their accountancy company since start-up, but should assess whether the firm is still offering the services that suit the needs of the business as it evolves. Instructing an accountant is usually one of the first things a business owner will do to ensure they can fulfil their obligatory duties to HMRC, and often just look for end of year accounts and tax return filing services.

However, as the business develops, so might the accountancy requirements, so it’s worth exploring additional services from either your existing accountancy company or another firm. End of year accounts, payroll, statutory compliance for tax and VAT and management accounts are just some of the staple services most accountants will offer – but it’s worth checking out what else is out there.

Help with business growth

For businesses looking to grow, a firm that can help them with advice on funding sources and getting accounts in order to aid a successful finance application, is a must. Effective forecasting and planning will be needed to ensure business growth is underpinned with robust plans – so finding an accountancy company that has a strong track record in this area is advisable. If you already have an accountant, ask them about their business advice and growth services and how they can support you. Money spent on advice to get it right first time will reap rewards.

Guidance on avoiding pitfalls

There are a variety of pitfalls you’ll want to avoid as a business owner such as cash flow issues, late paying customers and not properly assessing the market for a new product or service. A good accountancy company can help with all of this – ensuring you have an arsenal of tactics to ensure cash flow runs smoothly and customers pay on time. Knowledge of how to submit the invoice in accordance with the customer’s processes, adequate follow-up and gentle reminders when invoice due dates are approaching, will all help greatly and will be something your accountant can advise on. Cash flow is the biggest business killer so help to avoid issues in this area will help your business no end.

Opening your eyes to the bigger picture

As well as identifying and avoiding pitfalls, there may often be business opportunities that slip by because you’re either too focused on the day-to-day to see them or just don’t have the experience or knowledge to capitalise on them. An accountant that offers additional support services can be instrumental in catapulting your business into a different league. Having a thorough health check of the business, with recommendations and strategic planning support, could be the new lease of life your business has been waiting for. Many forward-thinking accountants offered unlimited support on a fixed-fee basis – so you don’t have to worry about escalating costs but have the security of ongoing, high-level support.

So, if you’re stuck in a business rut and need a breath of fresh air for your business, ask your accountant what else they can do for you, or explore what’s out there!

Anyone interested in additional services offered by Adams Moore such as Board Support, Business Protect and Business Review, get in touch for a no obligation chat on 01827 54944