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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29/11/2011 by Geoff.

A blight on most British businesses is that it is difficult and expensive to secure loans.An alternative, but a well kept secret, is a loan from the European Investment Bank (EIB) which is distributed by Lloyd TSB, Barclays, Santander and the Royal Bank of Scotland. Typically the cost will be 0.7% less than a normal business loan. Loans from the EIB are not very well promoted so you have to ask. The other catch is that money may not always be available since banks have to apply for money in tranches. To be eligible for an EIB loan, firms must have fewer than 250 employees and use the loan to invest in growing the business e.g. buying plant, taking out a patent or investing in research and development.

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29/11/2011 by Geoff.

Slow payment or none payment are the scourge of small businesses. If you’re worried about your exposure there are four options:

·         Don’t trade

·         Advanced payment

·         Trade on different terms

·         Credit insurance

The latter option has improved recently but is still very sensitive to the state of the financial markets and insolvencies. Recently more user friendly policies have been introduced along with other features to help small firms. The major credit insurers are Atradius, Euler Hermes and Coface.

As with all things that affect cash flow firms should beware of complacency.

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21/11/2011 by Geoff.

With the reduction in the Annual Investment Allowance from £100,000 to £25,000 coming in to force with effect from 1 April 2012 for companies and 6 April 2012 for sole traders and partnerships, it is important to plan your capital expenditure to ensure maximum tax relief is received as soon as possible.

If you are planning on purchasing any large capital items, to ensure the full tax relief will be available take advice giving the expected date of purchase and the amount it will cost.

As always we would recommend you buy before the end of your accounting period to ensure that the tax relief can be claimed as early as possible but if you are buying in the accounts year that straddles the end of the tax year, a higher Annual Investment Allowance can be claimed if you purchase before the 31 March 2012.

Simone Greasley

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21/11/2011 by Geoff.

Many small companies concentrate on growth but forget to keep an eye on costs (overheads) where even small changes can be effective. Remember that a cost cutting exercise can produce fast results. Some guidelines to help are:

·         Create a cost conscious culture – celebrate successes

·         Develop in-depth knowledge of the markets where you buy

·         Check what rival suppliers are offering

·         Train staff in how to get the best prices in different situations and provide them with the right tools

·         Review accounts monthly (not once a year) and stay in control

If everybody is looking out for ways to save money then you avoid the us and them syndrome, and the view that all the penny-pinching is just for the Owner’s benefit.

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16/11/2011 by Geoff.

Where an older spouse is currently claiming a dependency increase in their state pension, and for a wife or husband who has not yet reached retirement age, they will be advised to review the claim when the younger spouse reaches retirement age.Issues to be considered include:

• The younger spouse’s own state pension, even if funded by the other spouse’s contributions (in which case it is known as a Category B pension), would create income for the younger spouse that may be covered by their personal allowance, so tax free.
• A continuing claim for the adult dependency allowance will likely be taxable when received by the older claimant, perhaps at higher rates.
• The present adult dependency allowance is £58.80 per week, the full Category B state pension that the younger spouse may be able to claim is now £61.20 per week.

Note: The adult dependency increase is not available for new pensions from April 2010 and will cease for existing claims by 5 April 2020 at the latest.

Simone Greasley

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16/11/2011 by Geoff.

Many self-employed traders have suffered losses in recent years as the effects of the banking crisis and recession have slowed economic activity. Some of these business people will have taken on other, perhaps unrelated, part-time jobs to supplement their income?

Sound familiar?

If you have found yourself in this position be aware that HMRC may challenge your ability to set off losses. For instance:

1. Losses will only be made available for sideways relief against other earnings when you can demonstrate that a trade is conducted on a commercial basis with a view to making profits.
2. HMRC can use present powers to restrict loss relief claims if the trader does not spend at least 10 hours a week working in the business – this restriction normally applies to losses in excess of £25,000.

Simone Greasley

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