20/12/2011 by Geoff.

As you may be aware HMRC introduced penalties for late-paid PAYE and related liabilities back in April 2010 but due to the way that the penalties are calculated the penalties have only started to be levied now.

Unfortunately it is not yet clear how this penalty regime will be applied and this may remain the case until the Real Time Information system is implemented. This is because HMRC’s system does not flag up that a penalty situation has occurred until after the last payment has been made and the year end reports have been filed.

It is only at this point that HMRC will be able to calculate if a penalty is due and the rate at which that penalty should be levied. The penalties will be levied as follows:

·    First default – attracts no penalty if it is the only late payment in the year

·    2, 3 or 4 defaults in the year – the penalty levied will be 1% of the total amount defaulted (including the first default)

·    5, 6 or 7 defaults in the year – the penalty levied will be 2% of the total defaults (again including the first one)

·    8, 9 or 10 defaults in the year – the penalty levied will be 3% of the total defaults (including the first one)

·    11 or more defaults – the penalty levied will be 4% of the total defaults (including the first one)

On top of this any amounts that remain unpaid after more than 6 months after the penalty date will be liable to a further 5% penalty with a further 5% penalty applying after 12 months.

As you can see the late payment of PAYE and related liabilities could very quickly become an expensive problem, but is one that can easily be avoided if payments are made on time.

Simone Greasley

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20/12/2011 by Geoff.

Many entrepreneurs first venture fails. Rather than stop you trying again see it as an opportunity to learn. This can lead to finding a more efficient way of doing things and hence early failure can often breed later success. In the States entrepreneurs that have failed are seen to have a badge of honour!

You’ll have your own lessons to learn but common reasons for failure are:

·         Poor marketing – do your market research and know who the players are

·         Poor brand strategy – make everything you do attractive

·         Weak cash flow – know when you’re going to get paid – strong cash flow is a priority

·         Uncontrolled growth – know the balance between revenue and costs

Should you still fail it pays to wind up a business legally treating staff and investors with respect.

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13/12/2011 by Geoff.

Whilst companies are trying to reduce costs in the gloom there aim is helped by a growing market for flexible support services.

It might be a specific project or just that they can’t afford to take anyone on fulltime. The opportunity is to tap in to experience that’s out there and don’t be worried about geography - technology now allows people to supply their services to anywhere in the World.

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13/12/2011 by Geoff.

Whilst the selling of large companies is severely affected by the financial markets, sale of smaller businesses are not.

The owner driver, entrepreneur, may have children but they’re probably reluctant to take the reins of the business. This leaves the owner with a potential millstone round his or her neck. Normally their desire is not to make lots of money more they just want to make enough money every year to pay themselves a decent salary.

Selling is an option but like a lot of things it’s a numbers game, it’s all about letting people know about the business. Some entrepreneurs don’t realise how good their businesses are. If you are considering selling your business then we would recommend using an agent. Let them know about your business the accounts don’t tell the full story.

Don’t forget buying an established business is usually easier than starting one from scratch.

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08/12/2011 by Geoff.

Tax returns for the year to 5 April 2011 filed late will create a penalty even if the correct amount of tax is paid on time or indeed there is no more tax to pay.

Arguably that was a move which could have been expected before now, and at least the basic penalty stays at £100. What may not be so apparent to those of you who tend not to supply the papers needed until close to or even after the deadline (31 January 2012 for the tax return for the year to 5 April 2011) is how quickly penalties can now stack up.

The new penalties for late filing of Self Assessment returns result in, for example, an overall penalty after 3 months delay of £10 per day up to a maximum of £900.

Simone Greasley

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08/12/2011 by Geoff.

Many small businesses baulk at the challenge of recruiting but at times the only alternative is to do all the tasks yourself – you never know you might be a good juggler.

Taking on that first employee not only involves finding the right person but registering for tax, drawing up a contract of employment and complying with employment regulations. It is a legal requirement  to register as an employer with HMR&C if you expect to pay above the NI lower earnings limit of £102 per week (£5,304 pa) or the PAYE tax threshold of £144 a week (£7,475 pa).

Cost and paperwork are common disincentives for small businesses but the question to ask is “do you really want to grow your business?” If the answer is yes then there is probably no alternative to recruiting. As an added benefit your new recruit may bring something new to your business.

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