Everyone here at WS Accountancy would like to wish all of our clients a very happy christmas and more importantly a very prosperous new year.
We would like to thank you all for your continued support during the last twelve months and we look forward to working with you all next year.
We will be back in the office on the fourth of January but if you have any urgent issues you know what to do.
We look forward to seeing you all in the New Year.
Thursday, 24 December 2009
WS Accountancy announces its new software partner!!!!!!!!!!
WS Accountancy are pleased to announce their new partnership with Thomson Reuters.
To read more please click here.
To read more please click here.
Changing back to the old rate of VAT
On 1 January 2010, the standard rate of VAT reverts to 17.5 per cent after a period of 13 months at 15 per cent.
HMRC will allow the basic tax point to apply to goods delivered or taken away before 1 January but paid for on or after that date. Consequently, the 15 per cent rate will still apply to such sales.
It will also be possible to take deposits or prepayments before the change relating to supplies, which take place after it. However, there are anti-avoidance provisions to prevent abuse.
The trade of certain types of business will span midnight on 31 December 2009 and HMRC has acknowledged it would be unfair to expect them to stop what they are doing on a busy New Year’s Eve and change their systems to cope with an extra 2.5 per cent VAT.
They will be allowed to continue applying the 15 per cent rate until their trading session ends that night, or until 6am, whichever is the earlier. The types of business affected are: pubs, clubs, restaurants and similar retail shops and telecommunications providers.
Exempt and partly exempt businesses (and those with non-business activities, notably charities) should particularly consider taking advantage of early deliveries of goods or deposits or prepayments as explained above, where supplies received will be used in full or in part other than for taxable purposes because, by so doing, they will minimise irrecoverable input tax.
Business owners should also note that where a supply of services spans the change, i.e. it starts before 1 January 2010 but does not finish until on or after that date, the supplier may choose split his invoice to show amounts due at the two rates. As that treatment is optional, recipients of such services, whose input tax is not fully recoverable, should encourage their suppliers to take up the option.
Other businesses affected by the changes include those using the cash accounting, who must clearly identify receipts before and after the change date, and those using the flat rate scheme as percentages will revert to their November 2008 levels. All should remember that the VAT fraction for determining the VAT amount from a VAT-inclusive figure reverts to 7/47, from 3/23, and apart from gross takings, this will also affect, for example, fuel scale charges.
Changes to the flat rate scheme
The scheme allows small businesses with an annual turnover up to £150,000 to pay HMRC a fixed percentage of their turnover rather than the usual payment of output tax and recovery of input tax on actual positive rated outputs and inputs. The percentages are based on the norm for particular business sectors based on statistics available to HMRC.
The percentages were revised downwards on 1 December 2008 when the standard rate was reduced to 15 per cent. However, the changes from 1 January 2010 will not only reflect the reversion to the 17.5 per cent standard rate, but also take into account business patterns across the various sectors over the last year.
Joining the scheme is optional and businesses are entitled to leave it any time. Leaving the scheme retrospectively is at HMRC's discretion. However, HMRC have stated that they will apply this sympathetically if businesses consider it is no longer helpful to them after the changes.
Since its introduction in 2002, the flat rate scheme has generally been helpful to small businesses, so the forthcoming changes afford an opportunity for all qualifying businesses to assess its relevance to them.
DAVID vs. GOLIATH: A NEW WAY TO THINK ABOUT BEING A SMALL BUSINESS
The tale of David and Goliath is a biblical tale with which most people are familiar. The story of David and Goliath centre’s on a shepherd boy confronting a giant named Goliath on a battle field armed with only a slingshot to defend himself. Against all odds and against adversity David manages to slay Goliath with a stone that is carefully targeted towards Goliath’s forehead and then finishes him of with a sword.
On Saturday 6th November 11, 2009 a modern day version of David and Goliath was replayed in a boxing ring. Londoner David Haye triumphed over Russian Nikolai Valuev to win the WBA heavyweight belt. A considerable difference in stature and boxing style set the two contenders apart – even so the significantly smaller Londoner emerged as the winner.
It is not uncommon for many small businesses to find themselves in David’s shoes. That is facing competitors that are more than twice their size. There is a constant battle to find ways to grow and develop against competitors that appear to be in a totally different league. Battling with larger competitors is a familiar everyday scenario for small business owners.
Many of the growth options that are available to larger businesses are neither practical nor appropriate for smaller businesses. Growth tactics and strategies therefore become vitally important for small business owners. Some of the objectives of a small business owner are to:
To increase market share
Increase profitability
Reduce costs
Create repeat business
Attract new business
Maintain quality
What Can Small Businesses Learn From The David & Goliath Story?
The other side of the coin reveals that not everyone ‘roots’ for the underdog. There are consumers who will naturally choose the larger more well known competitor. Many of the reasons are based on perceptions relating to quality, price and after sales service. It is therefore essential for small business owners to give customers a reason to use their services or buy their products.
The more successful your business becomes the more competition that your business will face. Each new contender will bring new challenges and a desire to exploit your weaknesses. Just as in the world of boxing, there will be competitors that analyse your business in order to acquire business intelligence that they may use against you. In other words David has now been transformed into the new Goliath. Maintaining and managing the position of Goliath brings with it its own challenges.
In the world of business David vs. Goliath is not always as dramatic or as well publicised as the recent boxing bout or as the original story. The story does however, offer encouragement and opportunities for small businesses to learn. The story has been retold many times in the business world. There are numerous examples of small businesses that have flourished and achieved considerable growth against all odds.
If you run a small business and are struggling to find a suitable accountant or business advisor to help why not consider calling WS Accountancy today.
On Saturday 6th November 11, 2009 a modern day version of David and Goliath was replayed in a boxing ring. Londoner David Haye triumphed over Russian Nikolai Valuev to win the WBA heavyweight belt. A considerable difference in stature and boxing style set the two contenders apart – even so the significantly smaller Londoner emerged as the winner.
It is not uncommon for many small businesses to find themselves in David’s shoes. That is facing competitors that are more than twice their size. There is a constant battle to find ways to grow and develop against competitors that appear to be in a totally different league. Battling with larger competitors is a familiar everyday scenario for small business owners.
Many of the growth options that are available to larger businesses are neither practical nor appropriate for smaller businesses. Growth tactics and strategies therefore become vitally important for small business owners. Some of the objectives of a small business owner are to:
To increase market share
Increase profitability
Reduce costs
Create repeat business
Attract new business
Maintain quality
What Can Small Businesses Learn From The David & Goliath Story?
The other side of the coin reveals that not everyone ‘roots’ for the underdog. There are consumers who will naturally choose the larger more well known competitor. Many of the reasons are based on perceptions relating to quality, price and after sales service. It is therefore essential for small business owners to give customers a reason to use their services or buy their products.
The more successful your business becomes the more competition that your business will face. Each new contender will bring new challenges and a desire to exploit your weaknesses. Just as in the world of boxing, there will be competitors that analyse your business in order to acquire business intelligence that they may use against you. In other words David has now been transformed into the new Goliath. Maintaining and managing the position of Goliath brings with it its own challenges.
In the world of business David vs. Goliath is not always as dramatic or as well publicised as the recent boxing bout or as the original story. The story does however, offer encouragement and opportunities for small businesses to learn. The story has been retold many times in the business world. There are numerous examples of small businesses that have flourished and achieved considerable growth against all odds.
If you run a small business and are struggling to find a suitable accountant or business advisor to help why not consider calling WS Accountancy today.
EXISTING BUSINESSES NEED PLANNING TOO!!!
Every business needs to plan
There is a common myth that associates planning with start-up businesses. This misconception often leads to existing businesses suffering from inertia, or fire fighting on a regular basis. There are a host of other reasons why existing businesses do not seek help. As a result they miss out on the opportunity to manage themselves better and to produce improved results.
As an owner or manager of a small or medium business, can you afford not to plan? Do you often plan on the back of a beer mat and let your business develop according to external events? Or do you plan for priorities, and manage your growth proactively. Like any other business activity planning takes time and may not be seen as a priority.
A strategic plan, annual plan, operational plan; it does not really matter what term you choose to use. What does matter is the implementation and the management of the plan.
Benefits
Guide your growth: the growth of your business will depend a lot of variable factors, including overall economic trends, location, market trends and other elements. Prior planning acts as satellite navigation system for your business. That is its purpose, is to guide and influence business growth, so that businesses can move proactively towards defined objectives rather than just reacting to external events.
Manage priorities: Strategy is focus. Following a strategy will enable resources to be allocated to where they will provide the most leverage. It will also enable you to work towards your strengths and away from your weaknesses. Developing your company by doing the most important things, according to your long-term objectives will certainly lead to a sustainable business.
Assign responsibilities: Finding the right staff will very much depend on organisational priorities and the long term vision for the business.
Track progress: Alternatively you could think of a plan as a business positioning device. With a plan, you can track your progress towards goals, measure results, and manage the business. Without a plan, how do you know whether or not you are moving in the right direction? What do you measure against?
Plan for cash: Profits are not cash, and cash is not intuitive. You spend cash, you don’t spend profits. Many businesses do not plan well for cash, hence the difficulties encountered with cash flow. Whatever else, you do you will have to plan for cash.
Food for thought
Specific responsibilities, activities, deadlines, and budgets: Can be thought of as milestones. They are the bricks and mortar of a business. Your business will only grow if you are able to cement all the bricks together to build an identifiable structure.
Financial plan: One of the most important gains from an annual plan is the financial plan, which of course focuses on cash flow. A business needs to organise its priorities to ensure that they attain the right level of income in order to remain in business. Growth costs cash.
There is a common myth that associates planning with start-up businesses. This misconception often leads to existing businesses suffering from inertia, or fire fighting on a regular basis. There are a host of other reasons why existing businesses do not seek help. As a result they miss out on the opportunity to manage themselves better and to produce improved results.
As an owner or manager of a small or medium business, can you afford not to plan? Do you often plan on the back of a beer mat and let your business develop according to external events? Or do you plan for priorities, and manage your growth proactively. Like any other business activity planning takes time and may not be seen as a priority.
A strategic plan, annual plan, operational plan; it does not really matter what term you choose to use. What does matter is the implementation and the management of the plan.
Benefits
Guide your growth: the growth of your business will depend a lot of variable factors, including overall economic trends, location, market trends and other elements. Prior planning acts as satellite navigation system for your business. That is its purpose, is to guide and influence business growth, so that businesses can move proactively towards defined objectives rather than just reacting to external events.
Manage priorities: Strategy is focus. Following a strategy will enable resources to be allocated to where they will provide the most leverage. It will also enable you to work towards your strengths and away from your weaknesses. Developing your company by doing the most important things, according to your long-term objectives will certainly lead to a sustainable business.
Assign responsibilities: Finding the right staff will very much depend on organisational priorities and the long term vision for the business.
Track progress: Alternatively you could think of a plan as a business positioning device. With a plan, you can track your progress towards goals, measure results, and manage the business. Without a plan, how do you know whether or not you are moving in the right direction? What do you measure against?
Plan for cash: Profits are not cash, and cash is not intuitive. You spend cash, you don’t spend profits. Many businesses do not plan well for cash, hence the difficulties encountered with cash flow. Whatever else, you do you will have to plan for cash.
Food for thought
Specific responsibilities, activities, deadlines, and budgets: Can be thought of as milestones. They are the bricks and mortar of a business. Your business will only grow if you are able to cement all the bricks together to build an identifiable structure.
Financial plan: One of the most important gains from an annual plan is the financial plan, which of course focuses on cash flow. A business needs to organise its priorities to ensure that they attain the right level of income in order to remain in business. Growth costs cash.
Data Protection Act
The Data Protection Act requires all organisations which handle personal information to comply with a number of important principles regarding privacy and disclosure.
The Act states that anyone who processes personal information must comply with these eight principles:
It states that anyone who processes personal information must comply with eight principles, which make sure that personal information is:
Fairly and lawfully processed
Processed for limited purposes
Adequate, relevant and not excessive
Accurate and up to date
Not kept for longer than is necessary
Processed in line with your rights
Secure
Not transferred to other countries without adequate protection
The Act also allows people to find out what personal information is held about them by making a subject access request. This covers information held electronically and in some paper records, and includes credit reference details.
If members of the public think they're being prevented from seeing information they're entitled to, they can ask us the Information Commissioner's Office to help. The Information Commissioner's Office are responsible for looking after people's rights and making sure personal information isn't misused. Complaints are usually dealt with informally, but if this isn't possible, enforcement action can be taken.
All organisations must make sure that they comply with the Data Protection Act. They provide the following kinds of guidance to find out how to comply:
Good practice notes
Codes of practice
Technical guidance notes
The guidance on Determining what is personal data and Determining what information is ‘data’ for the purposes of the DPA explains and illustrates their view of what is data and what is personal data for the purposes of the Act. It is particularly designed to help data protection practitioners decide whether the information they hold is data and whether such data falls within the definition of personal data in circumstances where this is not obvious.
You can also find out more details about your legal obligations under the Act.
Sharing personal information
They have produced the document 'Sharing Personal Information - Our approach' to explain their general approach to information sharing.
This covers issues including choice, consent, transparency, security and public law. It should help public bodies, in particular, to understand the data protection standards that we expect those involved in information sharing to meet.
The Act states that anyone who processes personal information must comply with these eight principles:
It states that anyone who processes personal information must comply with eight principles, which make sure that personal information is:
Fairly and lawfully processed
Processed for limited purposes
Adequate, relevant and not excessive
Accurate and up to date
Not kept for longer than is necessary
Processed in line with your rights
Secure
Not transferred to other countries without adequate protection
The Act also allows people to find out what personal information is held about them by making a subject access request. This covers information held electronically and in some paper records, and includes credit reference details.
If members of the public think they're being prevented from seeing information they're entitled to, they can ask us the Information Commissioner's Office to help. The Information Commissioner's Office are responsible for looking after people's rights and making sure personal information isn't misused. Complaints are usually dealt with informally, but if this isn't possible, enforcement action can be taken.
All organisations must make sure that they comply with the Data Protection Act. They provide the following kinds of guidance to find out how to comply:
Good practice notes
Codes of practice
Technical guidance notes
The guidance on Determining what is personal data and Determining what information is ‘data’ for the purposes of the DPA explains and illustrates their view of what is data and what is personal data for the purposes of the Act. It is particularly designed to help data protection practitioners decide whether the information they hold is data and whether such data falls within the definition of personal data in circumstances where this is not obvious.
You can also find out more details about your legal obligations under the Act.
Sharing personal information
They have produced the document 'Sharing Personal Information - Our approach' to explain their general approach to information sharing.
This covers issues including choice, consent, transparency, security and public law. It should help public bodies, in particular, to understand the data protection standards that we expect those involved in information sharing to meet.
Changes to VAT
Background
EC legislation has provided for the filing of ESLs for a number of years in a limited number of circumstances. The domestic provisions applying in individual Member States vary slightly, but the general principle remains that for certain supplies of goods from one member state to another an ESL is required. In the United Kingdom ESLs have been required for a number of years for those businesses that are registered for VAT in the UK and making supplies in the following situations:
supplying goods to a VAT registered business in another EU country;
transferring its own goods from the UK to another EU country; or
acting as an intermediary in triangular transactions involving VAT-registered purchasers and sellers in other EC countries.
The ESLs are filed separately from VAT returns and are generally issued as a consequence of making a declaration in the VAT return that intra-EC sales of goods have been made. Generally ESLs have been required for calendar quarters, with filing being due within 42 days of the end of the period, although it has in certain circumstances been possible to file monthly or annual ESLs.
The changes – summary
The changes have been introduced in response to two key areas of concern. In part the changes were aimed at modernising and simplifying the current rules relating to cross border supplies of services and also as part of the EU Anti-Tax Fraud Strategy. The key changes that will take effect from 1 January 2010 are:
the filing frequency for ESLs for goods will change to monthly in certain cases;
ESLs will be required where services are supplied to EU VAT registered business customers who account for the VAT under the reverse charge provisions; and the filing dates for ESLs for both goods and services will be significantly shortened.
The changes – for those businesses supplying goods
The current ESL reporting period is currently, generally, calendar quarters. With effect from 1 January 2010 this will change to monthly for those businesses whose turnover of such supplies exceeds a specified threshold. The threshold for which quarterly reporting remains relevant is that the value of supplies of goods made must be less than £70,000 per quarter for the period to 31 December 2011 and then from 1 January 2012 the threshold reduces to £35,000 per quarter.
Accounting & Tax
Any business that has exceeded the £70,000 threshold in any of the four quarters in 2009 will be obliged to file monthly ESLs from 1 January 2010. Similar provisions will apply ahead of the reduction in the threshold in 2012. If the threshold is exceeded during the course of a quarter, post 1 January 2010, the option to file quarterly ESLs will cease at the end of that month, such that monthly ESLs will then be required. So, if the threshold is exceeded during February a “quarterly” ESL will be required for January and February and then a monthly ESL for March.
Businesses currently have a period of 42 days after the period end in which to submit ESLs. With effect from 1 January 2010 this period will reduce to 14 days for paper returns and 21 days for electronic submissions.
The changes – for those businesses providing services
Currently there are no provisions for the filing of ESLs for those businesses providing services to other VAT registered businesses in other EU countries. With effect from 1 January 2010 this changes and any business providing services where the customer accounts for VAT under the reverse charge will be obliged to file an ESL. In the case of the UK and Isle of Man such ESLs will be due on a calendar quarter basis with the ESL being submitted in the same time frame as for goods, ie 14 or 21 days.
Those supplies not covered by the new provisions will include:
Supplies that are exempt from VAT according to the provisions in place in the customer’s Member State;
B2B supplies where the customer is not registered for VAT; and
B2C supplies.
The same form as for goods will be used to report intra-Community supplies of services and whilst the UK and Isle of Man permit the filing of quarterly ESLs businesses have an option of filing ESLs on a monthly basis, which may be beneficial perhaps where a business files an ESL for goods.
Those businesses that supply both goods and services to EU VAT registered businesses will be able to report both on the same form, but the indicator “3” will be used to identify the supply of services. No indicator is required for the supply of goods other than where the business is involved in triangular supplies where an indicator “2” is required.
Time of supply for services
Changes have also been announced to the date on which the VAT is accounted for under the reverse charge provisions for intra-Community supplies of services. This will also impact the time on which such supplies should be included on the ESLs.
Currently VAT is generally due under the reverse charge provisions on the date on which the service is paid for, but with effect from 1 January 2010 the date will change as follows:
the time of supply of such services will be the earlier of when the service is completed or when payment is made; butfor continuous supplies of services, the time of supply will be linked to the end of each billing or payment period, but where no invoice or other accounting document is issued or payment made during the year, the time of supply will be the end of each calendar year.
Accounting for VAT by reference to the completion of the service is already accepted practice in the UK, as VAT is generally due based on the date of completion of the service. Accounting for the reverse charged VAT and including the supply in an ESL based on the date of completion of the service is bound to create some uncertainties and inconsistencies. The UK VAT authority, HMRC, have now confirmed that there is no need for the supplier to confirm with the customer the date on which the supply is considered to have been completed.
Accounting & Tax
Penalties
HMRC have indicated that they expect businesses to take reasonable and appropriate steps to ensure the completeness and accuracy of ESLs. Furthermore they have accepted that there will be operational issues to contend with in the early stages of the adoption of these new policies. As such, provided necessary care has been taken HMRC will not seek to apply penalties in the early stages of the new ESL regime.
However, once the initial period of grace is past HMRC will seek to levy penalties at a rate of £5, £10 or £15 per day for each day an ESL is late, depending on the number of times a business has been late in submitting their ESLs.
In addition, where an ESL contains a material inaccuracy a penalty of £100 will be applied. Material inaccuracies will fall into three categories:
data missing from the ESL;
lines on the ESL are factually incorrect; or
an invalid VAT number is used.
VAT numbers have a preset format according to the Member State of the supplier or customer and will contain a country code prefix.These registrations can be checked by reference to the EC website, which can be located at http://ec.europa.eu/taxation_customs/vies/vieshome.do. Penalties will not be charged where a business has reasonable excuse, but providing an invalid VAT registration number is not considered “reasonable”.
Furthermore, “reasonable excuse” does not include reliance on a third party to complete and file the ESL. As such, whilst SMP Accounting & Tax may be agent for the completion and submission of VAT returns and ESLs the business remains legally responsible for the accurate and timely completion and submission of ESLs.
Our and your responsibilities and actions
Clearly, whilst it remains the responsibility of the business to ensure the accurate and timely submission of the ESL SMP Accounting & Tax will wish to ensure the ESLs are submitted correctly and on a timely basis. In order to do so we will require the necessary information to complete the filings within 14 days of the end of the period end. Should online submissions not be possible the information will be required within 7 days of the period end. Whilst we cannot guarantee submission of the ESLs where information is provided after that date we will endeavour to file by the due date.
Where we are responsible for the filing of ESLs we will contact you at or towards the end of the period advising that an ESL is due for filing. Unless we hear from you to the contrary we will file ESLs according to the greatest time period available, ie quarterly ESLs for services and for goods, until the threshold of £70,000 or £35,000 is exceeded. We will then require confirmation that there has been no activity during the period or, alternatively, details of any relevant sales made during the period, supported where possible by relevant sales invoices. The information that should be declared on the ESL will be:
customer’s country code;
customer’s VAT registration number; and
total value of the supplies to each customer in the period expressed in £sterling.
In order to speed up the process, given the deadlines for filing it is imperative that we have email access wherever possible to you so we can contact you quickly to obtain the necessary information and to deal with any queries.
Accounting & Tax
If you have any further queries on this matter at this time, or if we can be of any further assistance, please do not hesitate to contact one of the team.
EC legislation has provided for the filing of ESLs for a number of years in a limited number of circumstances. The domestic provisions applying in individual Member States vary slightly, but the general principle remains that for certain supplies of goods from one member state to another an ESL is required. In the United Kingdom ESLs have been required for a number of years for those businesses that are registered for VAT in the UK and making supplies in the following situations:
supplying goods to a VAT registered business in another EU country;
transferring its own goods from the UK to another EU country; or
acting as an intermediary in triangular transactions involving VAT-registered purchasers and sellers in other EC countries.
The ESLs are filed separately from VAT returns and are generally issued as a consequence of making a declaration in the VAT return that intra-EC sales of goods have been made. Generally ESLs have been required for calendar quarters, with filing being due within 42 days of the end of the period, although it has in certain circumstances been possible to file monthly or annual ESLs.
The changes – summary
The changes have been introduced in response to two key areas of concern. In part the changes were aimed at modernising and simplifying the current rules relating to cross border supplies of services and also as part of the EU Anti-Tax Fraud Strategy. The key changes that will take effect from 1 January 2010 are:
the filing frequency for ESLs for goods will change to monthly in certain cases;
ESLs will be required where services are supplied to EU VAT registered business customers who account for the VAT under the reverse charge provisions; and the filing dates for ESLs for both goods and services will be significantly shortened.
The changes – for those businesses supplying goods
The current ESL reporting period is currently, generally, calendar quarters. With effect from 1 January 2010 this will change to monthly for those businesses whose turnover of such supplies exceeds a specified threshold. The threshold for which quarterly reporting remains relevant is that the value of supplies of goods made must be less than £70,000 per quarter for the period to 31 December 2011 and then from 1 January 2012 the threshold reduces to £35,000 per quarter.
Accounting & Tax
Any business that has exceeded the £70,000 threshold in any of the four quarters in 2009 will be obliged to file monthly ESLs from 1 January 2010. Similar provisions will apply ahead of the reduction in the threshold in 2012. If the threshold is exceeded during the course of a quarter, post 1 January 2010, the option to file quarterly ESLs will cease at the end of that month, such that monthly ESLs will then be required. So, if the threshold is exceeded during February a “quarterly” ESL will be required for January and February and then a monthly ESL for March.
Businesses currently have a period of 42 days after the period end in which to submit ESLs. With effect from 1 January 2010 this period will reduce to 14 days for paper returns and 21 days for electronic submissions.
The changes – for those businesses providing services
Currently there are no provisions for the filing of ESLs for those businesses providing services to other VAT registered businesses in other EU countries. With effect from 1 January 2010 this changes and any business providing services where the customer accounts for VAT under the reverse charge will be obliged to file an ESL. In the case of the UK and Isle of Man such ESLs will be due on a calendar quarter basis with the ESL being submitted in the same time frame as for goods, ie 14 or 21 days.
Those supplies not covered by the new provisions will include:
Supplies that are exempt from VAT according to the provisions in place in the customer’s Member State;
B2B supplies where the customer is not registered for VAT; and
B2C supplies.
The same form as for goods will be used to report intra-Community supplies of services and whilst the UK and Isle of Man permit the filing of quarterly ESLs businesses have an option of filing ESLs on a monthly basis, which may be beneficial perhaps where a business files an ESL for goods.
Those businesses that supply both goods and services to EU VAT registered businesses will be able to report both on the same form, but the indicator “3” will be used to identify the supply of services. No indicator is required for the supply of goods other than where the business is involved in triangular supplies where an indicator “2” is required.
Time of supply for services
Changes have also been announced to the date on which the VAT is accounted for under the reverse charge provisions for intra-Community supplies of services. This will also impact the time on which such supplies should be included on the ESLs.
Currently VAT is generally due under the reverse charge provisions on the date on which the service is paid for, but with effect from 1 January 2010 the date will change as follows:
the time of supply of such services will be the earlier of when the service is completed or when payment is made; butfor continuous supplies of services, the time of supply will be linked to the end of each billing or payment period, but where no invoice or other accounting document is issued or payment made during the year, the time of supply will be the end of each calendar year.
Accounting for VAT by reference to the completion of the service is already accepted practice in the UK, as VAT is generally due based on the date of completion of the service. Accounting for the reverse charged VAT and including the supply in an ESL based on the date of completion of the service is bound to create some uncertainties and inconsistencies. The UK VAT authority, HMRC, have now confirmed that there is no need for the supplier to confirm with the customer the date on which the supply is considered to have been completed.
Accounting & Tax
Penalties
HMRC have indicated that they expect businesses to take reasonable and appropriate steps to ensure the completeness and accuracy of ESLs. Furthermore they have accepted that there will be operational issues to contend with in the early stages of the adoption of these new policies. As such, provided necessary care has been taken HMRC will not seek to apply penalties in the early stages of the new ESL regime.
However, once the initial period of grace is past HMRC will seek to levy penalties at a rate of £5, £10 or £15 per day for each day an ESL is late, depending on the number of times a business has been late in submitting their ESLs.
In addition, where an ESL contains a material inaccuracy a penalty of £100 will be applied. Material inaccuracies will fall into three categories:
data missing from the ESL;
lines on the ESL are factually incorrect; or
an invalid VAT number is used.
VAT numbers have a preset format according to the Member State of the supplier or customer and will contain a country code prefix.These registrations can be checked by reference to the EC website, which can be located at http://ec.europa.eu/taxation_customs/vies/vieshome.do. Penalties will not be charged where a business has reasonable excuse, but providing an invalid VAT registration number is not considered “reasonable”.
Furthermore, “reasonable excuse” does not include reliance on a third party to complete and file the ESL. As such, whilst SMP Accounting & Tax may be agent for the completion and submission of VAT returns and ESLs the business remains legally responsible for the accurate and timely completion and submission of ESLs.
Our and your responsibilities and actions
Clearly, whilst it remains the responsibility of the business to ensure the accurate and timely submission of the ESL SMP Accounting & Tax will wish to ensure the ESLs are submitted correctly and on a timely basis. In order to do so we will require the necessary information to complete the filings within 14 days of the end of the period end. Should online submissions not be possible the information will be required within 7 days of the period end. Whilst we cannot guarantee submission of the ESLs where information is provided after that date we will endeavour to file by the due date.
Where we are responsible for the filing of ESLs we will contact you at or towards the end of the period advising that an ESL is due for filing. Unless we hear from you to the contrary we will file ESLs according to the greatest time period available, ie quarterly ESLs for services and for goods, until the threshold of £70,000 or £35,000 is exceeded. We will then require confirmation that there has been no activity during the period or, alternatively, details of any relevant sales made during the period, supported where possible by relevant sales invoices. The information that should be declared on the ESL will be:
customer’s country code;
customer’s VAT registration number; and
total value of the supplies to each customer in the period expressed in £sterling.
In order to speed up the process, given the deadlines for filing it is imperative that we have email access wherever possible to you so we can contact you quickly to obtain the necessary information and to deal with any queries.
Accounting & Tax
If you have any further queries on this matter at this time, or if we can be of any further assistance, please do not hesitate to contact one of the team.
Do you know when will your business make a profit?
Managing business performance is always a balancing act. That is an act in which certain cost formulas must be balanced in order to achieve optimum output and maximise the profitability of the business.
A review of your company’s financial statements is not always the best way to acquire an accurate picture of how a business is performing. There are a number of useful analysis techniques that can be used to arrive at a more comprehensive understanding and picture of a company’s financial health. Finding a companies break-even point is one method that can be used to assess your company’s financial health.
To properly asses a company’s financial health, analysis techniques such as reviewing fixed costs, variable costs, the break-even point and the contribution margin can be used. These analytical tools are able to present a far more in depth picture of the financial health of your business. For example a break-even analysis is based on fixed costs, variable costs per unit of sales and revenue per unit of sales.
Fixed and Variable Costs
Fixed costs are those costs that are always present, regardless of how much or how little is sold. Some examples of fixed costs include rent, insurance and salaries. Variable costs are the costs that increase or decrease in proportion to sales. Some examples of variable costs are raw materials, delivery expenses and sales commissions.
The contribution margin is calculated as the total revenue from a product or service less the total variable cost. The key point in understanding contribution margin is to understand that as revenues increase from selling more products or services, variable expenses will increase at a proportionate rate. The contribution margin will also increase at a proportionate rate.
Using the contribution margin as an analysis tool will help gauge the impact of cost and sales volume changes on operating income. Understanding the contribution margin as well as fixed costs, variable costs and the break-even point, are important points as they lend much insight into income, costs and profits.
Being able to track fixed costs and variable costs is a necessary component of running a business. These are extremely important costs to track as they affect a company’s bottom line. There is not a singular ratio or analysis technique that will offer all the financial information relating to the running of a business.
In essence a successful business requires more than just basic bookkeeping formulas. Running a business often involves a far more complex financial knowledge than what the average lay person possesses. Ultimately the choice is yours as to how your business is run and the level of management information that you think is necessary. The recent ‘credit crunch’ has proven that getting the financial side of business right is more difficult than some people think. The continued growth of a business depends on the profits that are made.
A review of your company’s financial statements is not always the best way to acquire an accurate picture of how a business is performing. There are a number of useful analysis techniques that can be used to arrive at a more comprehensive understanding and picture of a company’s financial health. Finding a companies break-even point is one method that can be used to assess your company’s financial health.
To properly asses a company’s financial health, analysis techniques such as reviewing fixed costs, variable costs, the break-even point and the contribution margin can be used. These analytical tools are able to present a far more in depth picture of the financial health of your business. For example a break-even analysis is based on fixed costs, variable costs per unit of sales and revenue per unit of sales.
Fixed and Variable Costs
Fixed costs are those costs that are always present, regardless of how much or how little is sold. Some examples of fixed costs include rent, insurance and salaries. Variable costs are the costs that increase or decrease in proportion to sales. Some examples of variable costs are raw materials, delivery expenses and sales commissions.
The contribution margin is calculated as the total revenue from a product or service less the total variable cost. The key point in understanding contribution margin is to understand that as revenues increase from selling more products or services, variable expenses will increase at a proportionate rate. The contribution margin will also increase at a proportionate rate.
Using the contribution margin as an analysis tool will help gauge the impact of cost and sales volume changes on operating income. Understanding the contribution margin as well as fixed costs, variable costs and the break-even point, are important points as they lend much insight into income, costs and profits.
Being able to track fixed costs and variable costs is a necessary component of running a business. These are extremely important costs to track as they affect a company’s bottom line. There is not a singular ratio or analysis technique that will offer all the financial information relating to the running of a business.
In essence a successful business requires more than just basic bookkeeping formulas. Running a business often involves a far more complex financial knowledge than what the average lay person possesses. Ultimately the choice is yours as to how your business is run and the level of management information that you think is necessary. The recent ‘credit crunch’ has proven that getting the financial side of business right is more difficult than some people think. The continued growth of a business depends on the profits that are made.
Planning Strategically for Business Growth1:33pm - Oct 17, 2009
There are 100s of business books, articles, seminars and a large number of business gurus that all claim to have the secret of creating a multi million pound business. If only it were that easy – we would all be millionaires by now! At WS Accountancy we take a more hands on approach to helping a business to grow. We have noticed our most successful businesses have certain characteristics in common.
One of these characteristics being that they all have a strategic plan that they are working to. I hear you say ‘but we have a business plan’. Whilst a strategic and a business plan should complement each other they remain very different in essence.
A strategic plan determines the direction in which you would like your business to evolve and grow. In other words it is the big vision that your business is aspiring to. Conversely a business plan focuses on the day-to-day operations of the business.
Some of the items that a strategic plan should take into consideration are:
Exit strategy for the owner – It is doubtful that anyone would want to continue working beyond a certain age. It is therefore important to consider carefully the need to have an exit strategy plan in place.
Geographical location of the business – whilst it is great to work from home, or near to home it may not always be the best profitability strategy. Being accessible to an increased number of customers or accessible to future employees will go a long way towards increased sales.
Ownership structure – the right business structure not only facilitates growth but also brings additional tax advantage. One of the easiest ways to grow a business is through giving a percentage share of the business in return for a financial investment. It is unlikely that investors would be interested in investing a business that is run by a sole proprietor.
Do I need a strategic plan to grow my business?
Whilst a small business can generate a good turnover, it is unlikely to be able generate the same income as a larger business. Employing more staff or having a larger site necessitates a move away from hands on management to strategic management. This in turn has implications for quality and risk management to name a few areas.
As your business becomes larger and more complex, so strategy formulation will need to become more sophisticated, both to sustain growth and to help you muster the leadership and resources you need to keep your business developing.
To do this, you will also need to start collecting and analysing a wider range of business intelligence about your business and the external world in which it operates. Whilst it is good to have a plan, it is far more important to implement it – not just file it away.
One of these characteristics being that they all have a strategic plan that they are working to. I hear you say ‘but we have a business plan’. Whilst a strategic and a business plan should complement each other they remain very different in essence.
A strategic plan determines the direction in which you would like your business to evolve and grow. In other words it is the big vision that your business is aspiring to. Conversely a business plan focuses on the day-to-day operations of the business.
Some of the items that a strategic plan should take into consideration are:
Exit strategy for the owner – It is doubtful that anyone would want to continue working beyond a certain age. It is therefore important to consider carefully the need to have an exit strategy plan in place.
Geographical location of the business – whilst it is great to work from home, or near to home it may not always be the best profitability strategy. Being accessible to an increased number of customers or accessible to future employees will go a long way towards increased sales.
Ownership structure – the right business structure not only facilitates growth but also brings additional tax advantage. One of the easiest ways to grow a business is through giving a percentage share of the business in return for a financial investment. It is unlikely that investors would be interested in investing a business that is run by a sole proprietor.
Do I need a strategic plan to grow my business?
Whilst a small business can generate a good turnover, it is unlikely to be able generate the same income as a larger business. Employing more staff or having a larger site necessitates a move away from hands on management to strategic management. This in turn has implications for quality and risk management to name a few areas.
As your business becomes larger and more complex, so strategy formulation will need to become more sophisticated, both to sustain growth and to help you muster the leadership and resources you need to keep your business developing.
To do this, you will also need to start collecting and analysing a wider range of business intelligence about your business and the external world in which it operates. Whilst it is good to have a plan, it is far more important to implement it – not just file it away.
Business Rates - Make Sure Your Paying The Right Amount
This October , all business will receive their new business rates valuation, together with a breakdown of how it has been calculated.
It's important that you look through this and inform the Valuations Office Agency if there are any errors as it will form the basis of your business rates bill for the next five years!!!!!!
You will need to inform the VOA by the 30th November 2009 if you find any inaccuracies, please call us for more details or go to www.voa.gov.uk/2010
It's important that you look through this and inform the Valuations Office Agency if there are any errors as it will form the basis of your business rates bill for the next five years!!!!!!
You will need to inform the VOA by the 30th November 2009 if you find any inaccuracies, please call us for more details or go to www.voa.gov.uk/2010
New graduate internship programme for small businesses
The government is to establish a special internship scheme aimed at helping smaller firms recruit graduates.
Graduates who take part in the scheme will receive a weekly payment from the government of £100 which will contribute to their wages. Employers will then top up the balance.
The new scheme, combined with the Backing Young Britain programme, is expected to create about 10,000 small business internships. University careers offices will help match graduates to the places available.
The measure was announced by the Prime Minister. Mr Brown said: “To add to the 100,000 new young people’s jobs we are already creating, we can offer, in partnership with the Federation of Small Businesses, 10,000 skilled internships so that, even in the midst of tough economic times, we are encouraging a whole new generation of young Britons to embrace ambition and British enterprise.”
John Wright, the national chairman of the Federation of Small Businesses (FSB), applauded the move.
Mr Wright said: “Over the past few months, the FSB has been calling for the government to recognise the importance of small businesses in creating jobs for skilled young people graduating from college and university. Small firms are the country’s job creators – central to our economic recovery – and more than half have said they would employ more staff if they were given the right support.”
He described the internship scheme as a “victory for small businesses across the country”.
Mr Wright argued that not only will graduates gain real work experience and develop real skills, small firms will also benefit from the talents of a graduate workforce.
The FSB added that it would be promoting the scheme among its membership and encouraging all small businesses to link up with university careers services in order to offer vacancies and create placements
Graduates who take part in the scheme will receive a weekly payment from the government of £100 which will contribute to their wages. Employers will then top up the balance.
The new scheme, combined with the Backing Young Britain programme, is expected to create about 10,000 small business internships. University careers offices will help match graduates to the places available.
The measure was announced by the Prime Minister. Mr Brown said: “To add to the 100,000 new young people’s jobs we are already creating, we can offer, in partnership with the Federation of Small Businesses, 10,000 skilled internships so that, even in the midst of tough economic times, we are encouraging a whole new generation of young Britons to embrace ambition and British enterprise.”
John Wright, the national chairman of the Federation of Small Businesses (FSB), applauded the move.
Mr Wright said: “Over the past few months, the FSB has been calling for the government to recognise the importance of small businesses in creating jobs for skilled young people graduating from college and university. Small firms are the country’s job creators – central to our economic recovery – and more than half have said they would employ more staff if they were given the right support.”
He described the internship scheme as a “victory for small businesses across the country”.
Mr Wright argued that not only will graduates gain real work experience and develop real skills, small firms will also benefit from the talents of a graduate workforce.
The FSB added that it would be promoting the scheme among its membership and encouraging all small businesses to link up with university careers services in order to offer vacancies and create placements
Business Networking Online
The British Chambers of Commerce has launched Business Network Online – a networking and trading portal that operates via local chambers of commerce.
Businesses can receive tendering alerts, advertise online and meet new suppliers.
Although chamber members have free access, non-members can have a three-month trial of the network.
If you are a small business looking for extra opportunities register today for a £FREE three month trial and see what new business this portal can bring.
Businesses can receive tendering alerts, advertise online and meet new suppliers.
Although chamber members have free access, non-members can have a three-month trial of the network.
If you are a small business looking for extra opportunities register today for a £FREE three month trial and see what new business this portal can bring.
Suffering From Falling Sales - What To Do About It
Falling sales, declining sales, reduced sales, slumped sales or decreasing sales. No matter which term you prefer to use the understanding remains the same. That is your business needs to sell more of its services or products in order to improve turnover and profitability. Without sales most business would cease to exist. The ongoing priority of every business should be to increase sales no matter what the economic climate is.
Many people start out in business with a passion to bringing a concept, idea, a service or a product to market. It then dawns on them that the only way to do this is by selling whatever it is they are offering. No matter how good they are their business will only succeed if they are able to sell their concept, product or services to others.
At Accountants, Business & Tax Consultants – Holden Associates, we firmly believe “that selling should benefit the buyer more than the seller”. The first step in increasing sales should therefore be a change in perception about the sales process. Changing your perception of the selling process will go a long way towards building up a loyal clientele. A good starting point is to view your business from the customer’s perception.
It is also important to take the time to understand the market segment which you are operating in. Simply saying “you are selling to everyone”, will not provide you with sufficient business intelligence to improve your sales.
Here are some simple tips to get you started on the road towards improving your sales:-
· There should be a match between whatever it is you are selling and your customer. An ill fitting match will not result in repeated sales.
· Find out what are the needs or constraints in your customers mind when they are buying.
· What is it that motivates customers to buy from you?
· Use insightful questions to help the customer decide.
· Try to meet the wider needs of the customers – customers do not usually know what it is they would like to purchase straight away.
· Customers will always need help to evaluate and make a final decision. Be seen as an expert in your industry.
· Find out who, when and how a final decision to purchase will be made.
· If an appointment needs to be made. Make sure it is made with the person that is the decision maker.
Finally let your personality shine through, be a genuine, professional and enthusiastic sales person. Show your customers that you are interested in helping them. If you do not offer whatever it is they are looking for do not be afraid to say so. Do not be afraid to refer them on to someone who can meet their requirements. The chances are – that customer will always remember you. It is also more than likely that they will tell other people about you. There is no better way to receive free advertising. Successful selling goes beyond receiving payment. Strive to become an enabler of good outcomes – customers will always return to buy from you.
Many people start out in business with a passion to bringing a concept, idea, a service or a product to market. It then dawns on them that the only way to do this is by selling whatever it is they are offering. No matter how good they are their business will only succeed if they are able to sell their concept, product or services to others.
At Accountants, Business & Tax Consultants – Holden Associates, we firmly believe “that selling should benefit the buyer more than the seller”. The first step in increasing sales should therefore be a change in perception about the sales process. Changing your perception of the selling process will go a long way towards building up a loyal clientele. A good starting point is to view your business from the customer’s perception.
It is also important to take the time to understand the market segment which you are operating in. Simply saying “you are selling to everyone”, will not provide you with sufficient business intelligence to improve your sales.
Here are some simple tips to get you started on the road towards improving your sales:-
· There should be a match between whatever it is you are selling and your customer. An ill fitting match will not result in repeated sales.
· Find out what are the needs or constraints in your customers mind when they are buying.
· What is it that motivates customers to buy from you?
· Use insightful questions to help the customer decide.
· Try to meet the wider needs of the customers – customers do not usually know what it is they would like to purchase straight away.
· Customers will always need help to evaluate and make a final decision. Be seen as an expert in your industry.
· Find out who, when and how a final decision to purchase will be made.
· If an appointment needs to be made. Make sure it is made with the person that is the decision maker.
Finally let your personality shine through, be a genuine, professional and enthusiastic sales person. Show your customers that you are interested in helping them. If you do not offer whatever it is they are looking for do not be afraid to say so. Do not be afraid to refer them on to someone who can meet their requirements. The chances are – that customer will always remember you. It is also more than likely that they will tell other people about you. There is no better way to receive free advertising. Successful selling goes beyond receiving payment. Strive to become an enabler of good outcomes – customers will always return to buy from you.
Time is Money!!!!!!12:49pm - Oct 7, 2009
Both time and money can be spent. Likewise both time and money can be saved. Usually we spend money in order to save time or conversely we spend time doing odd jobs or DIY tasks ourselves in order to save money.
Our decision on what to spend time and save money on depends on individual circumstances and what our priorities are. Some peoples may prefer to save some money and spend time preparing their monthly management reports. Other people would prefer to save time and spend the money employing an accountant to prepare their management report for them.
We make choices about time and money all the time. Often there is no objective yardstick to measure how effective our choices have been. That is unless our choices are so extreme that we are either financially strapped for cash or are totally overloaded with commitments.
Trying to keep a balance between spending and saving time and money within business brings with it an awareness of strengths and weaknesses. Do you try and be a ‘jack of all trades and master of none’? Or is a strategic decision made to focus on what your strengthens are? Choosing not to complete all business tasks your self can help to improve your work life balance.
This is particularly true of self-employed people starting or growing a business. It can be tempting to try and keep all costs as low as possible and do everything yourself. But this can be counter-productive when you realise just how much is involved in starting and building up a business.
Some elements of running a business are intricately intertwined with bureaucracy. There are a number of tasks which must comply with. Is it better to do all your accounts, payroll and finance tasks yourself or would easier and quicker to outsource them? Outsourcing different elements of business is now common practice.
It is no longer necessary to directly employ staff with the expertise that your business requires. The practice of outsourcing enables your business to access an experienced team of staff at a fraction of the price that it would cost to employ them. Outsourcing the financial side of your business could not only save you time but also save you money?
Doing certain tasks yourself may not be cost effective; on a long term basis it may even stunt the growth of your business. Remember, you may not have the time to become an expert in the required field of knowledge. Making the right decision now can bring added value, expertise and opportunities to your business.
Our decision on what to spend time and save money on depends on individual circumstances and what our priorities are. Some peoples may prefer to save some money and spend time preparing their monthly management reports. Other people would prefer to save time and spend the money employing an accountant to prepare their management report for them.
We make choices about time and money all the time. Often there is no objective yardstick to measure how effective our choices have been. That is unless our choices are so extreme that we are either financially strapped for cash or are totally overloaded with commitments.
Trying to keep a balance between spending and saving time and money within business brings with it an awareness of strengths and weaknesses. Do you try and be a ‘jack of all trades and master of none’? Or is a strategic decision made to focus on what your strengthens are? Choosing not to complete all business tasks your self can help to improve your work life balance.
This is particularly true of self-employed people starting or growing a business. It can be tempting to try and keep all costs as low as possible and do everything yourself. But this can be counter-productive when you realise just how much is involved in starting and building up a business.
Some elements of running a business are intricately intertwined with bureaucracy. There are a number of tasks which must comply with. Is it better to do all your accounts, payroll and finance tasks yourself or would easier and quicker to outsource them? Outsourcing different elements of business is now common practice.
It is no longer necessary to directly employ staff with the expertise that your business requires. The practice of outsourcing enables your business to access an experienced team of staff at a fraction of the price that it would cost to employ them. Outsourcing the financial side of your business could not only save you time but also save you money?
Doing certain tasks yourself may not be cost effective; on a long term basis it may even stunt the growth of your business. Remember, you may not have the time to become an expert in the required field of knowledge. Making the right decision now can bring added value, expertise and opportunities to your business.
Planning the Future of Your Business Strategically
At WS Accountancy we place a great deal of emphasis on planning the growth and development of your businesses. That is because we understand and know that it can be tempting to steam ahead in business without any real idea of what your next steps will be. ‘Playing it by ear’ is not a good business strategy if you are trying to run a successful business. In such circumstances it is not unusual to apply quick fix remedies at the expense of a long term growth and stability.
There are always challenges to face in business. Just when you think you have found the right remedy one part of your business equation will change. Having a strategic plan will help to keep your business on track. Naturally as an accountancy practice that incorporates business advisers we would advocate the inclusion of strategic planning into your business. There is no substitute for long term strategic planning. Attempting to run a business without strategic plans is similar to driving in a car that has blacked out windows and trusting in faith that you will end up at the right destination.
Given that the economy is currently in a transitional and unpredictable phase it would be wise not to rely on a singular plan. Instead it may be more expedient to have several scenarios to one situation. It is more than likely that you will have some good ideas about how to achieve your strategic goals. Having an alternative options can save time and could possibly prevent a crisis. Thinking of several scenarios will definitely add strength to your preferred plan as it gives you to an opportunity to think in terms of contingency planning.
Things to keep in mind when formulating a strategic plan are:
What key business relationships are vital to the success of your business?
Are the assumptions and plans that you made about your business last month still sound and applicable to your business?
Can you anticipate new opportunities arising in your business sector in the future?
Are you able to exploit newly emerging business opportunities?
Is your business reliant on a few major clients; are you aware how their business is doing?
Do you take the time to obtain regular credit reports on your clients or references from other traders?
Do you take the time to consider opportunities that may arise out of a global market?
Does your long term planning quip you to trade in European markets?
What would you need to compete in European or global market?
There may be financial assistance available from the government especially if you are exploring the possibility of trading in overseas markets. Knowing how best to access this funding is an area where you may need professional assistance. Seeking professional assistance from a professional firm such as WS Accountancy to support your business can help your business to achieve growth and profitability. Spending too much time focussing on where you are now and how turbulent the current market is can be detrimental for your business. Strategic planning is an essential ingredient for every business. There is a wealth of support available to you, and as such there is no need to go it alone.
There are always challenges to face in business. Just when you think you have found the right remedy one part of your business equation will change. Having a strategic plan will help to keep your business on track. Naturally as an accountancy practice that incorporates business advisers we would advocate the inclusion of strategic planning into your business. There is no substitute for long term strategic planning. Attempting to run a business without strategic plans is similar to driving in a car that has blacked out windows and trusting in faith that you will end up at the right destination.
Given that the economy is currently in a transitional and unpredictable phase it would be wise not to rely on a singular plan. Instead it may be more expedient to have several scenarios to one situation. It is more than likely that you will have some good ideas about how to achieve your strategic goals. Having an alternative options can save time and could possibly prevent a crisis. Thinking of several scenarios will definitely add strength to your preferred plan as it gives you to an opportunity to think in terms of contingency planning.
Things to keep in mind when formulating a strategic plan are:
What key business relationships are vital to the success of your business?
Are the assumptions and plans that you made about your business last month still sound and applicable to your business?
Can you anticipate new opportunities arising in your business sector in the future?
Are you able to exploit newly emerging business opportunities?
Is your business reliant on a few major clients; are you aware how their business is doing?
Do you take the time to obtain regular credit reports on your clients or references from other traders?
Do you take the time to consider opportunities that may arise out of a global market?
Does your long term planning quip you to trade in European markets?
What would you need to compete in European or global market?
There may be financial assistance available from the government especially if you are exploring the possibility of trading in overseas markets. Knowing how best to access this funding is an area where you may need professional assistance. Seeking professional assistance from a professional firm such as WS Accountancy to support your business can help your business to achieve growth and profitability. Spending too much time focussing on where you are now and how turbulent the current market is can be detrimental for your business. Strategic planning is an essential ingredient for every business. There is a wealth of support available to you, and as such there is no need to go it alone.
NEW PENALTY REGIME FROM HMRC
Not long ago (April 2009) HMRC introduced a whole new penalty regime for tax payers. It is very important that tax payers understand these penalties and how it affects them and whether they should consider using the services of a professionally qualified and competent individual for those who currently have no representation.
HMRC have provided a useful e-learning series on this. I would recommend everyone, whether represented or not, go have a look.
HMRC have provided a useful e-learning series on this. I would recommend everyone, whether represented or not, go have a look.
Let business fuel the recovery, government told
Businesses must be given the freedom to create jobs and to drive the economy, a leading business group has said.
The British Chambers of Commerce (BCC) has set out its plans for economic recovery in a manifesto aimed at the political party conference season.
The BCC manifesto, which details a series of business policies for the next Parliament, argues that the next government faces three fundamental economic challenges: tackling the legacy of the deepest recession in decades, reining in public spending, and identifying future sources of economic growth and jobs.
To meet the challenge, the BCC has called on the government to avoid more tax and regulatory obstacles. The manifesto says that any new employment legislation will distract firms from their main task of creating wealth for the economy and proposes a moratorium on new employment law. The planned 2011 rise in National Insurance increase should also be scrapped, with the BCC declaring it a tax on jobs.
The BCC also wants to see a rebuilding of the UK’s infrastructure. Although public finances are under severe pressure at the moment, the BCC is backing new spending on essential infrastructure projects. The government, the manifesto proposes, cannot just look at ring-fencing health spending, when it is investment in transport, IT and energy that will drive productivity and recovery.
A third core plank of the BCC manifesto involves a rebalancing of the economy. Rather than relying on financial services and the public sector to fuel the recovery, there must be a stronger focus on international trade and enterprise in both manufacturing and services. According to a recent BCC survey, just 31 per cent of companies exported last year, a proportion the business group described as too low.
David Frost, the BCC’s director general, said: “The UK’s 4.5 million private businesses, not the public sector, will lead this country’s economic recovery.
“To make this happen, future governments – from whatever party – must focus on rebuilding our infrastructure, simplifying and reducing the red tape burden, and promoting overseas trade. The BCC will work with government to achieve these aims – and to deliver the economic growth we all want to see.”
The British Chambers of Commerce (BCC) has set out its plans for economic recovery in a manifesto aimed at the political party conference season.
The BCC manifesto, which details a series of business policies for the next Parliament, argues that the next government faces three fundamental economic challenges: tackling the legacy of the deepest recession in decades, reining in public spending, and identifying future sources of economic growth and jobs.
To meet the challenge, the BCC has called on the government to avoid more tax and regulatory obstacles. The manifesto says that any new employment legislation will distract firms from their main task of creating wealth for the economy and proposes a moratorium on new employment law. The planned 2011 rise in National Insurance increase should also be scrapped, with the BCC declaring it a tax on jobs.
The BCC also wants to see a rebuilding of the UK’s infrastructure. Although public finances are under severe pressure at the moment, the BCC is backing new spending on essential infrastructure projects. The government, the manifesto proposes, cannot just look at ring-fencing health spending, when it is investment in transport, IT and energy that will drive productivity and recovery.
A third core plank of the BCC manifesto involves a rebalancing of the economy. Rather than relying on financial services and the public sector to fuel the recovery, there must be a stronger focus on international trade and enterprise in both manufacturing and services. According to a recent BCC survey, just 31 per cent of companies exported last year, a proportion the business group described as too low.
David Frost, the BCC’s director general, said: “The UK’s 4.5 million private businesses, not the public sector, will lead this country’s economic recovery.
“To make this happen, future governments – from whatever party – must focus on rebuilding our infrastructure, simplifying and reducing the red tape burden, and promoting overseas trade. The BCC will work with government to achieve these aims – and to deliver the economic growth we all want to see.”
4 Reasons Your Business Should Use a Bookkeeper
Should I or shouldn’t I use a bookkeeper? From the perspective of us it really looks like a no brainer. Even so we speak to a number of businesses who do not see why it is important for businesses to have a bookkeeper or the importance of sound financial record keeping systems.
First and foremost the reason to implement a bookkeeping process into your business is to help you to manage your business tasks more effectively. It is difficult to have an accurate financial picture of your business without bookkeeping records. In essence financial records answer questions such as: Is my business making money? Are my sales increasing? How does business expenditure compare to sales?
REASON 1: MAKING DECSIONS
Evaluating the financial consequences of all your business decisions should always be part of your decision making process. Without the aid of accurate records and financial information forecasting the results of any given course of action will be difficult. Presumably you are in business to make money. Hence forecasting the profitability of sales will give you an indication of whether or not you will need to hire or fire staff; sell more of one product or to stop selling another.
REASON 2: APPLYING FOR FINANCE
Making the decision to apply for finance for your business is fairly straight forward. However it is not so simple to prepare the supporting documentation if you do not already have it. Both banks and financial institutions will want to see proof of income, balance sheets, tax statements and projected returns before they make a decision about whether or not to loan you money. Preparing such information when it is required is never a good idea. Ideally this information should all be at your finger tips.
REASON 3: SEEKING INVESTORS
Once your business has developed to a stage where you would like to attract investors or a partner you will require financial information to demonstrate that you business is still a ‘going concern’. The source of this information usually emanates from day-to-day bookkeeping. It is possible that suppliers and creditors may want to see this information before permitting your business to have credit.
REASON 4: PREPARING A BUDGET
All businesses should use budgets for planning purposes. Budgets enable businesses to remain on track by forecasting cash needs and controlling expenditures. When reviewing what your business does and what it will be doing in the future it is always good practice to have a budget to prevent overspending and to control costs.
In short bookkeeping is an integral part of every healthy business.
First and foremost the reason to implement a bookkeeping process into your business is to help you to manage your business tasks more effectively. It is difficult to have an accurate financial picture of your business without bookkeeping records. In essence financial records answer questions such as: Is my business making money? Are my sales increasing? How does business expenditure compare to sales?
REASON 1: MAKING DECSIONS
Evaluating the financial consequences of all your business decisions should always be part of your decision making process. Without the aid of accurate records and financial information forecasting the results of any given course of action will be difficult. Presumably you are in business to make money. Hence forecasting the profitability of sales will give you an indication of whether or not you will need to hire or fire staff; sell more of one product or to stop selling another.
REASON 2: APPLYING FOR FINANCE
Making the decision to apply for finance for your business is fairly straight forward. However it is not so simple to prepare the supporting documentation if you do not already have it. Both banks and financial institutions will want to see proof of income, balance sheets, tax statements and projected returns before they make a decision about whether or not to loan you money. Preparing such information when it is required is never a good idea. Ideally this information should all be at your finger tips.
REASON 3: SEEKING INVESTORS
Once your business has developed to a stage where you would like to attract investors or a partner you will require financial information to demonstrate that you business is still a ‘going concern’. The source of this information usually emanates from day-to-day bookkeeping. It is possible that suppliers and creditors may want to see this information before permitting your business to have credit.
REASON 4: PREPARING A BUDGET
All businesses should use budgets for planning purposes. Budgets enable businesses to remain on track by forecasting cash needs and controlling expenditures. When reviewing what your business does and what it will be doing in the future it is always good practice to have a budget to prevent overspending and to control costs.
In short bookkeeping is an integral part of every healthy business.
Managing Risks
There are a variety of risks associated to running a business. Some are out of our control such as acts of God. Others are closer to home and come in the guise of new customers placing large orders. On one hand a new order may well bring the prospect of much needed cash injection. On the other hand a new customer also brings associated financial risks of none payment. It is a catch 22 situation that many medium to small enterprises face.
Should you ask new customers for references, should you conduct a credit check, should you look at their accounts at Companies House or should you check out individual directors – the answer is most definitely yes to all of them. No – you are not being suspicious; you are simply taking steps to protect your business from bad debt,
On a positive note the recession has made business owners aware of the risks associated to receiving large orders from firms which then go out of business for one reason or another. Being left with a bespoke order that cannot be sold or has little use to anyone else is very much a real risk that faces small to medium size enterprises. Additionally unwittingly being part of a chain of bad debt is another risk that many businesses face.
So What Can Be Done?
First and foremost all new customers should be credit checked.
Intermittently the financial status of existing customers should be checked (they too could be having difficulty collecting payments).
Ask for at least three references.
Set an upper credit limit for all customers.
Strategies to reduce trading risks
Do not be shy about asking for cash on delivery or an advance payment. The benefits of having a strategy in place far outweighs the option of leaving payment to chance. Having sound terms and conditions that are legally enforceable will offer your business a variety of choices in the event of a business closing down. Do not forget to include a clause pertaining to the retention of goods in the event of a business going bust.
Preventing Financial Mishaps
The only way to prevent financial mishaps is to have accurate financial information. Computerised accounts and online banking services have made it much easier to keep track a firm’s financial position in real time rather than months in arrears. It is good practice to keep track of the detail relating to individual products, projects or customers. In so doing you will be able to measure the return from a specific job or customer and be able to track whether or not a particular transaction is making a net profit or a loss. In times of scarcity there is a danger of reducing costs just to retain business. As such the business coming in does not yield sufficient profits to sustain the business.
It is fundamental to have a good risk management strategy in place. Taking the time to think about all the risks that face your business and then ways to mitigate them will place your business on a stronger footing.
As previously observed, the most serious threats to a business may be closer than you think
Should you ask new customers for references, should you conduct a credit check, should you look at their accounts at Companies House or should you check out individual directors – the answer is most definitely yes to all of them. No – you are not being suspicious; you are simply taking steps to protect your business from bad debt,
On a positive note the recession has made business owners aware of the risks associated to receiving large orders from firms which then go out of business for one reason or another. Being left with a bespoke order that cannot be sold or has little use to anyone else is very much a real risk that faces small to medium size enterprises. Additionally unwittingly being part of a chain of bad debt is another risk that many businesses face.
So What Can Be Done?
First and foremost all new customers should be credit checked.
Intermittently the financial status of existing customers should be checked (they too could be having difficulty collecting payments).
Ask for at least three references.
Set an upper credit limit for all customers.
Strategies to reduce trading risks
Do not be shy about asking for cash on delivery or an advance payment. The benefits of having a strategy in place far outweighs the option of leaving payment to chance. Having sound terms and conditions that are legally enforceable will offer your business a variety of choices in the event of a business closing down. Do not forget to include a clause pertaining to the retention of goods in the event of a business going bust.
Preventing Financial Mishaps
The only way to prevent financial mishaps is to have accurate financial information. Computerised accounts and online banking services have made it much easier to keep track a firm’s financial position in real time rather than months in arrears. It is good practice to keep track of the detail relating to individual products, projects or customers. In so doing you will be able to measure the return from a specific job or customer and be able to track whether or not a particular transaction is making a net profit or a loss. In times of scarcity there is a danger of reducing costs just to retain business. As such the business coming in does not yield sufficient profits to sustain the business.
It is fundamental to have a good risk management strategy in place. Taking the time to think about all the risks that face your business and then ways to mitigate them will place your business on a stronger footing.
As previously observed, the most serious threats to a business may be closer than you think
How to Improve Your Cashflow
The old adage that ‘cash is king’ certainly does ring true in the world of business. Maintaining the cash flow of your business is always an ongoing priority. To put it simply it enables you to remain in business. The absence of cash may lead to your business being in debt. Being in debt is only worrying if those debts cannot be serviced because of poor cash flow.
The following are ideas which can help to improve your business cash flow. On an individual basis they may have a minimal impact. However, cumulatively they can add significantly to your cash flow.
Increase your credit lines. Taking a little longer to settle with your suppliers, will ensure that money remains in your business longer. Reviewing your creditors and the payment schedule that they are on will give you a better idea of how your payments can be spread out. Extending your credit terms with suppliers by two weeks will make a significant difference to your cash flow.
Request a payment confirmation date. Knowing when your customers will be paying you will enable you to accelerate and predict future payments. Customers are more likely to pay promptly if they have a payment date in mind. Equally less time will have to be spent chasing outstanding sales invoices.
Use a credit card. Most credit cards will not incur interest payments providing that the balance is cleared at the end of each month. Using a credit card for purchases can effectively give your business a month’s credit to ease your cash flow.
Do a stock inventory. More than likely there are many stationery items, office equipment or raw materials hiding in cupboards that have been forgotten about. Using these items can potentially reduce the cost of reordering and the duplication of stock. Ordering when required has now become a standard policy in many businesses to avoid wastage.
Set 5-10% cost-saving targets. This methodology can be applied to any aspect of purchases you make within your business. Simply set a target to reduce a particular aspect of your expenditure by 5-10% and then look for ways to achieve that saving. For example, you may be able to save on the cost of your purchases by being more prescriptive about the items that staff are allowed to order. Save money on your telephone costs by discouraging calls to mobile phones where possible. It is also possible to save money by reducing the number of business related journeys that are made.
Shop around for utilities. Seeking alternative suppliers of utilities will save money on your ongoing costs. There are many companies that offer discounts depending on the number of services you receive from one provider.
If you institute just a few cost saving ideas, you will make considerable savings on your outgoings. Saving money improves cash flow and increases the profit margins of your business. Implementing cost saving methods will ensure that your business operates at maximum efficiency.
The following are ideas which can help to improve your business cash flow. On an individual basis they may have a minimal impact. However, cumulatively they can add significantly to your cash flow.
Increase your credit lines. Taking a little longer to settle with your suppliers, will ensure that money remains in your business longer. Reviewing your creditors and the payment schedule that they are on will give you a better idea of how your payments can be spread out. Extending your credit terms with suppliers by two weeks will make a significant difference to your cash flow.
Request a payment confirmation date. Knowing when your customers will be paying you will enable you to accelerate and predict future payments. Customers are more likely to pay promptly if they have a payment date in mind. Equally less time will have to be spent chasing outstanding sales invoices.
Use a credit card. Most credit cards will not incur interest payments providing that the balance is cleared at the end of each month. Using a credit card for purchases can effectively give your business a month’s credit to ease your cash flow.
Do a stock inventory. More than likely there are many stationery items, office equipment or raw materials hiding in cupboards that have been forgotten about. Using these items can potentially reduce the cost of reordering and the duplication of stock. Ordering when required has now become a standard policy in many businesses to avoid wastage.
Set 5-10% cost-saving targets. This methodology can be applied to any aspect of purchases you make within your business. Simply set a target to reduce a particular aspect of your expenditure by 5-10% and then look for ways to achieve that saving. For example, you may be able to save on the cost of your purchases by being more prescriptive about the items that staff are allowed to order. Save money on your telephone costs by discouraging calls to mobile phones where possible. It is also possible to save money by reducing the number of business related journeys that are made.
Shop around for utilities. Seeking alternative suppliers of utilities will save money on your ongoing costs. There are many companies that offer discounts depending on the number of services you receive from one provider.
If you institute just a few cost saving ideas, you will make considerable savings on your outgoings. Saving money improves cash flow and increases the profit margins of your business. Implementing cost saving methods will ensure that your business operates at maximum efficiency.
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