Latest Articles from Inglis Chartered Accountants

Tired of late payments? Here’s how to fix it

Mon, 27 Apr 2026 01:56:19 GMT

Late payments to UK small businesses are on the rise, putting pressure on cash flow and making it harder to cover day-to-day costs. If you’re regularly chasing invoices, you’ll know how quickly it starts to affect the business.

According to recent research, payments are delayed by more than a week on average.

And when your customers don’t pay on time, this late payment can cause a multitude of business problems. Not only does your cash flow take a dip, but working relationships can be damaged and hours of business time can be wasted chasing up these overdue payments.

So, here are five straightforward ways to improve your payment times.

Offer flexible payment options

The easier you make it for customers to pay, the better. Provide your customers with a variety of payment methods, including credit cards, debit cards, regular Direct Debit payments and payment gateways like PayPal or Stripe.

Send your invoices out on time

The customer can only pay once you raise an invoice. Make sure you send invoices out in a timely way, and that the details are accurate and clear. Break large invoices up into smaller payments that get sent out when specific milestones are reached in the project.

Offer discounts for early payment

Customers won’t pay before the invoice due date unless it’s in their interest to do so. But you can incentivise customers to pay their invoices early by offering discounts for fast payment. For example, if payment terms are usually 30 days, offer a 2% discount if the invoice is paid within 10 days.

Get proactive with your credit control

Check your aged debtor reports regularly and chase up invoices that are overdue. Politely reach out to the customer and remind them of the outstanding balance. Sending automated notifications from your accounting software can also help to provide some impetus for customers to settle their bills.

Consider invoice finance

In a worst-case scenario, where payments are well overdue and cash flow is suffering, it’s worth considering invoice finance. Selling your outstanding invoice to a financing provider gets you the cash you need now, while passing the debt to the provider and allowing the customer time to breathe.

Talk to us about reducing overdue payments

If late payments are becoming an issue, it’s important to take action fast! Talk to us by booking a call with Donald Inglis or call 01904 787 973 to find new ways to speed up payment times.

Key ways your accountant can assist you

Thu, 23 Apr 2026 02:22:24 GMT

With ongoing changes to Making Tax Digital, many business owners are having to adapt how they keep records and report to HMRC. At the same time, costs continue to rise. Wages, increases in employer National Insurance and energy are all putting pressure on margins.

This is where your accountant should be adding value. Here are some of the key ways we support our clients at Inglis Accountants.

Financial forecasting and planning

Cash flow issues rarely come out of nowhere, even if it feels that way at the time. Regular forecasting helps you see what’s coming over the next few months, not just what’s already happened. If there’s a shortfall ahead, you have time to deal with it.

We also look at different scenarios with clients. For example, if sales slow down or costs increase again, decisions can be based on numbers rather than simply guesswork.

Performance monitoring and analysis

Most owners will track certain business metrics, like income or expenses, but not always the ones that matter most. We help you focus on a handful of measures that reflect how your business is actually performing. That might be gross margin, overheads as a percentage of revenue, or cash conversion.

Reviewing these regularly makes it easier to spot trends and deal with issues early.

Strategic business reviews

While some accountants focus mainly on reporting the numbers, we work with clients to review their direction, sense-check decisions, and recommend adjustments where needed. This could involve pricing, cost control, staffing, or investment.

Staying ahead of tax changes

Tax rules change regularly, and recent updates to Making Tax Digital have added more reporting requirements for many businesses.

At Inglis, we keep you informed about what’s coming up and how it affects your business. This includes key deadlines, available tax reliefs, and new planning opportunities.

Need help?

If you are not getting the most from your accountant, we would be happy to have a brief introductory call to see where we can help. If you would like a no-obligation chat, call us on 01904 787 973 or book a call with our team .

How to keep fuel and energy costs under control

Wed, 15 Apr 2026 05:09:33 GMT

Fuel and energy costs have risen sharply since the war in Iran and subsequent near total closure of the Strait of Hormuz.

And the pressure this is already putting on business owners’ margins and cash flow can’t be overstated. From our experience of previous years when fuel costs have escalated quickly, the businesses that handle this best are the ones that make small, sensible adjustments early. So, what adjustments could you make?

Start by understanding where your money is going

Before making any changes, take a step back and look at your recent costs properly. Go through the last six to 12 months and track what you have actually spent on fuel and energy.

You may notice certain times of year where usage increases, or specific activities that drive higher costs. Once you have a clear picture of where and when your money is being spent, you can start to make changes that will have the biggest impact.

Focus on simple ways to reduce usage

You do not need to overhaul your entire business to see savings. In many cases, small changes across the business will have a noticeable impact over time.

Turn off equipment and lighting when not in use, especially outside working hours
Review heating and cooling settings and avoid setting them too high or too low
Switch to LED lighting if you have not already
Check for equipment running unnecessarily in the background

Individually, these changes may seem minor, but across a full month or year, they can add up very quickly.

Reduce travel costs

Fuel costs are often one of the biggest expenses, especially if your team commutes to the office each day.

Encouraging car sharing where practical can make an immediate difference. Even a few team members travelling together a couple of days a week can noticeably reduce overall fuel spend.

It is also worth considering whether some roles can work from home part of the week. Fewer people travelling into the office reduces fuel costs for your team and can also lower your office energy usage at the same time.

Be realistic about your pricing

Raising prices on your loyal customers can sometimes feel like you’re letting them down. However, if your costs have increased, unfortunately, your pricing may need to follow. Holding prices steady while your costs rise will eat into your margins.

However, a small, well-communicated increase is often far easier for clients to accept than a sudden, larger change later on.

Check what support is available

There may be support, reliefs, or allowances available depending on your situation, particularly if you are investing in more energy-efficient equipment or systems.

These schemes do change, so it is worth checking rather than assuming nothing applies based on previous research. Please let us know if you’d like our help with this.

Need help?

If rising costs are starting to put unwanted pressure on your business, we can help to see what you can do about it. Feel free to give us a call on 01904 787 973 or book a call with our team .

Thousands face surprise tax bills on savings interest

Tue, 07 Apr 2026 02:49:31 GMT

As the new tax year starts, you may find yourself among the thousands of savers contacted by HMRC about tax on savings interest.

As you likely know, you do not pay tax on the money you save, however you may need to pay tax on the interest it earns. And with interest rates still relatively high and tax thresholds unchanged, it is becoming easier to cross that line without realising.

In fact, recent estimates suggest around 2.79 million people could receive a letter.

Why this is happening

If you have noticed better returns on your savings over the past couple of years, you are certainly not alone. Higher interest rates mean your money is likely earning more than it used to.

At the same time, tax thresholds have remained frozen. That combination means you may now be exceeding your allowance, even if your savings habits have not changed.

In short, you may be earning more interest without actively doing anything differently, and that is what can trigger a tax charge.

How the personal savings allowance works

The amount of interest you can earn tax free depends on your income.

If you are a basic rate taxpayer, you can earn up to £1,000 in interest tax free. Anything above this is taxed at 20%.
If you are a higher rate taxpayer, your allowance drops to £500, with interest above that taxed at 40%.
If you are an additional rate taxpayer, there is no allowance, so all interest is taxed at 45%.

If your income is below the personal allowance, you may be able to earn more interest tax free, depending on your circumstances.

Why you could still be affected with modest savings

You might assume that only large savings balances are affected. In reality, it can happen sooner than expected. For example, if you are using a fixed rate savings account, interest is often paid at the end of the term. If that term runs over more than one tax year, all the interest can be counted in the year it becomes accessible.

That can push you over your allowance in one go. In some cases, even a relatively modest balance can be enough.

What to expect from HMRC

Your bank or building society reports the interest you earn directly to HMRC, so in most cases, you do not need to do anything yourself.

If tax is due, you will usually receive a P800 letter or a Simple Assessment. This will explain what you owe and how it will be collected. For many people, the amount is recovered through a change to your tax code, rather than a separate payment.

What you can do now

It is worth taking a few minutes to check how much interest your savings are generating, especially if you have money spread across different accounts.

You can review this through your bank statements or your Personal Tax Account on GOV.UK . This will give you a clearer idea of whether you are likely to exceed your allowance.

Need help?

If you think you may be close to the limit, it may be worth reviewing how your savings are structured. If you would like a second pair of eyes on your savings, or want to understand how the rules apply to you, call us on 01904 787 973 or book a call with our team .

Should you hire an apprentice?

Mon, 23 Mar 2026 15:38:50 GMT

For many business owners, hiring an apprentice can feel like more effort than it’s worth. So, despite the higher cost, they opt to bring in someone with more experience.

But with wage costs rising, driven by recent increases to the National Living Wage and higher employer National Insurance contributions, apprenticeships are becoming a much more practical option. In some cases, they can be a better long-term investment than hiring a fully trained employee.

So how do you decide what’s right for your business?

What an apprentice actually is

An apprentice is an employee who combines paid work with structured training. They work towards a recognised qualification while gaining hands-on experience in your business.

They are not short-term or unpaid help. They are on your team and have real responsibilities, but they are still learning. That difference is important because the value doesn't come right away; it comes over time.

The financial side

Many people think that apprenticeships are too expensive, but they are often more affordable than they think. While the apprentice is learning, their pay is usually lower, and in many cases, the training itself is paid for, either in full or in part. There are also incentives available.

Recent announcements include:

up to £2,000 for SMEs hiring apprentices aged 16–24
wider support aimed at encouraging youth employment

This can reduce the upfront cost compared to hiring an experienced employee.

The advantages

One of the biggest benefits is the ability to train someone your way. Rather than undoing habits from previous roles, you can build good practices from the start. Over time, this often results in a team member who is better aligned with your systems and expectations. Apprenticeships can also support long-term retention. People who develop within your business are often more likely to stay and progress with you.

There is also a practical benefit to hiring. Many businesses are having trouble finding experienced candidates, and so building your own pipeline can be more reliable than relying on the market.

The drawbacks

The main consideration is time. An apprentice will need support, particularly in the early stages, and that can slow things down before it starts to pay off.

You should also expect productivity to rise slowly over time instead of right away. Mistakes and supervision are part of the learning process. In short, an apprentice isn't a quick fix. If you need someone to step in and get things done right away, this is probably not the best option by itself.

Important note: Apprenticeship starts among young people have fallen significantly over the past decade, while close to one million young people are not currently in education, employment or training. As a result, there is increasing support for employers who are willing to invest in early talent. For businesses, this creates an opportunity to access funding while strengthening the team in a more sustainable way.

Should you hire an apprentice?

The answer is: maybe. An apprentice can be a great choice if you want to build a team that grows with your business, can train someone well, and are thinking long-term. If you need someone to make a difference right away and don't have much time to train, taking on an apprentice is probably not right for you.

How we can help

If you are considering taking on an apprentice, we can help you understand the true cost compared to hiring an employee and importantly, what support or incentives you may be eligible for. To get in touch, call us on 01904 787 973 or book a call with our team .

Simple ways to improve focus and productivity at work

Wed, 18 Mar 2026 12:55:59 GMT

Whether working from home, in an office, or on the move, most people overlook how much their environment affects their ability to focus.

Recently, our team has been trying a few small, practical adjustments to see whether they could improve energy levels, concentration and overall output.

The results have been encouraging, so it felt worth sharing what’s been working. The good news is that none of these require specialist equipment, and all can be put in place immediately.

1. Alternate between sitting and standing

There is no single “perfect” working position. Evidence suggests that alternating between sitting and standing is more effective than sticking to one or the other.

A practical approach is to work seated for 20 to 30 minutes, then switch to standing for a similar period. This helps reduce strain on the neck, shoulders and lower back, while also supporting sustained concentration.

There is no need to invest in expensive equipment. A simple raised surface using books or a sturdy box can work just as effectively.

Short breaks are equally important. Stepping away from the desk for five to ten minutes after around 45 minutes of work can help maintain focus throughout the day.

2. Align tasks with energy levels

Productivity is not constant throughout the day. Most people experience natural peaks and dips in alertness.

Earlier in the day tends to be better suited to analytical or demanding work, such as problem solving, financial analysis or technical tasks. As the day progresses, a more relaxed state often makes it easier to approach creative thinking, planning or broader strategy work.

Rather than forcing productivity at the wrong time, it is more effective to match the type of work to the level of mental energy available.

3. Be intentional with background sound

Some people work best in silence, while others benefit from background noise.

Low-level, consistent background noise can help maintain focus during shorter periods of work. However, it may become distracting over longer stretches.

In an office environment, this can be less practical, as any sound choice will affect those around you. In those settings, it is often best to be mindful of shared space or use headphones where appropriate. When working from home, there is far more flexibility to choose what works best on an individual level.

For tasks that require deep concentration, many find that minimal or no background noise is most effective. For more routine work, light background sound or music may help maintain momentum.

4. Position screens at the correct height

Posture plays a significant role in both comfort and concentration.

Working with a screen positioned too low encourages a downward gaze, which can lead to poor posture and reduced alertness. Raising the screen so that it sits at, or slightly above, eye level promotes a more upright position and helps maintain focus.

This simple adjustment can reduce physical strain while also supporting better engagement with the task at hand.

5. Use your environment to support the task

The physical space itself can influence how people think and work.

More open environments can encourage broader, more creative thinking, while smaller or more enclosed spaces tend to support detailed, focused work.

Of course, not everyone has the flexibility to change their surroundings, particularly in a fixed office setup. In those cases, the focus can shift to smaller adjustments, such as repositioning a desk, changing where certain tasks are done, or stepping into a different space when needed.

Where possible, it can still be useful to vary the working environment depending on the task. This might mean using different rooms, adjusting desk setups, or occasionally working in a different location altogether.

Final thoughts

There is no one-size-fits-all approach to productivity, and individual preferences will always play a role. What works well for one person may not suit someone else.

These are the approaches our team has been testing, and we hope you find some of them just as useful.

Are frozen auto enrolment thresholds affecting your pension?

Mon, 09 Mar 2026 15:27:02 GMT

Much attention has been given recently to the government’s continued freeze on personal tax thresholds. However, there are other frozen thresholds that are equally important but receive far less attention.

Automatic enrolment pension thresholds have also remained largely unchanged for several years. As wages have risen over time, this freeze is having a growing impact on how much people are saving into workplace pensions.

A major success for workplace pensions

Automatic enrolment is widely regarded as one of the most successful pension policy changes of the past decade.

Introduced in 2012, the system requires employers to automatically enrol eligible employees into a workplace pension scheme and make contributions alongside the employee.

The policy began under the previous Labour government and was implemented by the Conservative government that followed. Since then, participation in workplace pensions has increased significantly.

Government data shows that more than 22 million people are now saving into workplace pensions, an increase of over 10 million since automatic enrolment was first introduced.

How the automatic enrolment thresholds work

To be automatically enrolled into a workplace pension, workers must currently:

be aged between 22 and State Pension age
earn at least £10,000 per year from a single employer
work in the UK

Employees who earn less than £10,000 can still choose to opt in and receive employer contributions.

Once a worker meets the automatic enrolment threshold, pension contributions are calculated on a band of qualifying earnings rather than total salary.

For the 2025/26 and 2026/27 tax years, the qualifying earnings band remains:

£6,240 – lower limit
£50,270 – upper limit

The £10,000 earnings trigger has remained unchanged since 2014/15, while the lower and upper limits of the earnings band have also remained frozen in recent years.

Earnings have risen but thresholds have not

Since automatic enrolment was introduced in 2012, average weekly earnings in the UK have increased significantly. Data from the Office for National Statistics suggests that nominal average earnings have risen by roughly 60% over that period.

If automatic enrolment thresholds had increased in line with earnings growth, the entry threshold today might be closer to £13,000, with the qualifying earnings band stretching to somewhere in the region of £8,900 to £68,000.

Instead, the current thresholds mean that the range of earnings on which mandatory pension contributions are calculated has effectively shrunk in real terms.

What this means for higher earners

One consequence of the frozen thresholds is that a smaller proportion of higher salaries now falls within the qualifying earnings band used for automatic enrolment contributions.

When the scheme began in 2012, the upper earnings limit represented a much larger proportion of average earnings than it does today. As wages have grown but the limits have remained largely static, automatic enrolment contributions now cover a smaller share of higher incomes.

The government’s position has been that higher earners are more likely to make additional personal pension contributions outside the automatic enrolment system.

For many individuals, this means that relying solely on automatic enrolment contributions may not be enough to build the retirement savings they need.

Planning ahead for retirement

Automatic enrolment has significantly improved pension participation across the UK. However, the frozen thresholds mean that both employees and employers may need to think more carefully about long-term retirement planning.

For higher earners in particular, it may be worth reviewing whether additional pension contributions or other retirement savings strategies are appropriate.

Need advice on pensions or retirement planning?

Understanding how workplace pensions, tax relief and contribution limits interact can be difficult. At Inglis Accountancy, we help individuals and business owners understand their pension options and make informed decisions about long-term financial planning.

If you would like advice on workplace pensions, retirement planning or tax-efficient savings, get in touch on 01904 787 973 or book a call with our team .

EV charger grants increase – what it means for households and businesses

Tue, 03 Mar 2026 15:05:34 GMT

The UK government has announced an increase in grants available for installing electric vehicle (EV) charge points, with eligible households and businesses now able to receive up to £500 towards installation costs .

The support is aimed primarily at renters, flat owners, households without driveways and small businesses , helping make EV charging more accessible for people who cannot easily install a charger at home.

The increase represents around a 40% uplift in the maximum grant , with the scheme expected to run until March 2027. According to the government, the funding could cover close to half the cost of a typical charge point installation .

Lower charging costs for EV drivers

One of the main benefits of installing a home or workplace charger is access to cheaper electricity tariffs. Charging at home can significantly reduce running costs compared with petrol or diesel vehicles.

The government says some EV drivers may be able to power their vehicle for as little as 2p per mile when charging on cheaper domestic tariffs, particularly overnight EV rates.

While costs vary depending on electricity prices and the efficiency of the vehicle, official estimates suggest that drivers could save up to £1,400 a year in running costs compared with a similar petrol car when charging at home.

Addressing barriers to EV adoption

The changes form part of the government’s broader strategy to encourage more drivers to switch to electric vehicles.

Two of the most common concerns among drivers considering an EV are the upfront costs and access to reliable charging , particularly for people living in flats or homes without private driveways.

By increasing support for charge point installation, the government hopes to make EV ownership more practical for a wider range of households and businesses.

The move also sits alongside wider policies designed to support the transition to electric vehicles, including financial incentives to reduce the purchase cost of EVs and continued investment in the UK’s public charging network.

Thinking about installing an EV charger for your business?

If you run a business and are considering installing EV charging points for staff or company vehicles, it is worth understanding how grants and tax reliefs may apply.

At Inglis , we help business owners make sense of government incentives and ensure they are making the most of available tax reliefs and allowances.

If you would like advice on EV charging installations, capital allowances, or other ways to improve the efficiency of your business, call us on 01904 787 973 or book a call with our team .

What to do when customers do not pay on time

Wed, 25 Feb 2026 14:00:27 GMT

For many small businesses, chasing unpaid invoices is an uncomfortable but necessary part of trading. The challenge is maintaining positive relationships with customers while ensuring money arrives on time.

Late payments can quickly put pressure on cash flow. A clear process, consistent communication and the right tools can make the difference between a manageable issue and a serious financial strain.

Clear policy from the outset

A written credit control policy sets expectations for everyone involved. It should outline payment terms, when reminders will be issued and what happens if an invoice remains unpaid. Including these terms within contracts or engagement letters ensures customers understand the process before work begins.

Early communication often prevents problems escalating. A brief call before an invoice falls due can confirm it has been received and check for queries. If payment has not arrived shortly after the due date, a follow-up call should establish when it can be expected. At this stage, the tone should remain measured, but clear that payment terms are taken seriously.

Using financial reports to spot problems early

Regular review of key reports helps businesses stay in control.

An Aged Debt report shows which invoices are outstanding and for how long. It highlights patterns and identifies customers who are beginning to fall behind, allowing timely intervention.

Days Sales Outstanding, or DSO, measures the average number of days it takes to receive payment. A rising figure may indicate that credit control procedures need tightening. For small firms in particular, understanding these metrics supports better cash flow forecasting. Most accounting software generates these reports automatically, though an accountant can assist if needed.

Automated reminders reduce friction

Simple payment terms, such as 30 days from invoice date, allow reminders to be scheduled in advance. Automated emails sent shortly before and after the due date can prompt payment without the need for repeated manual follow-up. This keeps the message consistent and removes emotion from the process.

Making payment straightforward

Delays are sometimes caused by inconvenience rather than unwillingness to pay. Offering multiple payment options can remove barriers.

Direct debit services such as GoCardless allow payments to be collected automatically on the due date and can integrate with accounting software. Online payment platforms including PayPal and Stripe enable customers to pay by card, which can be particularly useful for international transactions.

For ongoing services, businesses may require customers to agree to automatic payment arrangements as part of their terms. This reduces the risk of oversight.

Escalation when necessary

If payment remains outstanding after reminders and calls, a formal letter should restate the original terms and provide a clear deadline. The language need not be aggressive, but it should confirm that further action may follow.

Some businesses choose to appoint a debt collection agency once an invoice reaches a certain age. If this forms part of the credit policy, customers should be made aware from the outset. Transparency helps avoid disputes later.

Setting expectations early

Ultimately, effective debt management begins before work starts. Clear payment terms, agreed in writing, reduce misunderstanding. For larger projects, requesting a deposit or staged payments can limit exposure.

While most customers intend to pay on time, consistent systems protect the business when they do not.

For small firms operating on tight margins, disciplined credit control is not simply administrative good practice. It is essential to financial stability.

If you would like to strengthen your credit control process and improve cash flow, we would be happy to help. Call us on 01904 787 973 or book a call with our team .

How to encourage referrals that lead to better clients

Thu, 19 Feb 2026 11:20:38 GMT

Referrals are often described as the lifeblood of a business. That may sound like a cliché, but for many firms it is the truth.

A referred customer often arrives with trust already in place. They are more likely to listen, more likely to buy and more likely to stay. Yet most businesses treat referrals as something that either happens or it doesn’t.

In reality, referrals are almost never accidental. From our experience, they are the result of clear positioning and consistent follow-up. So here are some practical steps you can take to make referrals a steady and reliable part of your growth.

Be clear about who you help

One of the biggest barriers to referrals is vagueness.

If someone asked your customer, “Who would you recommend?”, would they know exactly who to suggest?

Instead of describing your business in broad terms, be specific. For example:

“We design websites for independent cafés and restaurants.”
“We help tradespeople move from sole trader to limited company.”
“We work with e-commerce brands to help them sell more online.”

When people understand precisely who you are best suited to, it becomes easier for them to think of someone.

Ask at the right time

Timing makes a huge difference.

The most natural moment to ask for a referral is just after you have delivered something of value. Ideally, something that as really blown their metaphorical socks off! That might be when a project finishes successfully, when a customer gives positive feedback or when you solve their problem quickly.

A simple sentence is often enough, “If you know any other business owners like you who are struggling with this, I would really appreciate an introduction” or if you wanted to be even more direct, “Is there anyone you know who you think might benefit from our services as well?”

Stay visible

Referrals often come down to how often you cross someone’s mind. If clients only hear from you when you send an invoice, you are easy to forget.

Sharing a short client update email, commenting on their LinkedIn posts, sending a relevant article when you spot one, or arranging a brief catch-up call will keep you at the front of their mind. You are not asking for a referral every time, but you are reminding your clients what you do and that you do it well.

Top tip: Put a reminder in your diary to contact your best clients once a quarter, even if it is just to say hi or to see how they’re doing.

Avoid sounding overwhelmed

Many business owners answer, “How’s business?” with “We’re so busy.”

While that may be true, it can unfortunately discourage referrals. If people believe you do not have capacity, they are unlikely to introduce you to others. A better response might be that things are going well, and you are always keen to speak with the right type of client.

And remember, referrals work both ways. When you actively introduce your clients to useful contacts, they are far more inclined to return the favour. It is a simple principle, but one that is often overlooked.

Track where new work comes from

Finally, measure it.

Ask every new customer how they heard about you and keep a record. Over time, patterns appear. You may find that a handful of loyal customers account for a significant proportion of your introductions. Those relationships are worth nurturing.

When someone does refer you, acknowledge it properly. A handwritten thank you card, a small gift or even a personal message expressing genuine appreciation goes a long way. This extra effort reinforces the relationship and makes future referrals far more likely.

How we can help

We hope you have found this useful. If you have any questions about strengthening your business or would like to talk through your plans, we are always happy to help. To find out how we can work together, call us on 01904 787 973 or book a call with our team .

UK growth slows at the end of 2025 - what it means for you

Thu, 12 Feb 2026 09:22:44 GMT

The latest figures from the Office for National Statistics show the UK economy grew by 0.1 percent in the final quarter of 2025.

That leaves annual growth at 1.3 percent for the year as a whole, slightly higher than 2024 but below the Bank of England’s earlier forecast of 1.4 percent.

The detail behind the figures shows an uneven picture.

The services sector, which represents the largest part of the UK economy, recorded no growth in the final quarter for the first time in over two years. Within that, professional, scientific and technical activities declined by 1.1 percent.

Construction fell by 2.1 percent over the quarter, its weakest performance in four years, reflecting a drop in both repair and maintenance work and new projects starting on site.

Manufacturing provided the main support to growth, helped in part by Jaguar Land Rover restarting production following a cyber-attack earlier in the year. Travel agencies, tour operators and administrative support services also performed strongly.

Business conditions remain mixed

The Bank of England recently lowered its forecast for UK growth in 2026 to 0.9 percent and raised its expectation for unemployment. While some economists believe the latest data could support an interest rate cut in the coming months, others suggest policymakers may wait for clearer signs that inflation is slowing.

Business groups continue to report concerns about rising costs. Surveys from the British Chambers of Commerce indicate that taxation and inflation remain key issues for firms, with particular focus on increases in employer National Insurance contributions.

What this means for business owners

For many small and medium-sized businesses, the figures reinforce a familiar theme: growth is present, but limited.

In this environment, it is sensible to:

Keep cash flow forecasts up to date
Review pricing and margins carefully
Factor employer National Insurance changes into staffing decisions
Monitor borrowing costs in case of future interest rate movements

How we can help

If you would like to review how the current economic outlook could affect your business, we would be more than happy to talk. Call us on 01904 787 973 or book a call with our team .

Missed the self-assessment deadline? What happens next

Mon, 02 Feb 2026 10:11:50 GMT

The self-assessment deadline comes around at the same time every year, but thousands of people still miss it.

If you were required to submit a self-assessment tax return and did not file by 31 January, HM Revenue and Customs now treats the return as late. That does not mean the situation cannot be resolved, but it does mean penalties may already apply and further charges can build quickly if nothing is done.

Missing the self-assessment deadline does not mean the situation cannot be put right. But acting quickly can make a real difference to the penalties and stress involved.

The annual self-assessment filing deadline passed on 31 January. Anyone who was required to submit a tax return for the 2024 to 2025 tax year and has not yet done so will now be classed as late by HM Revenue and Customs.

An automatic penalty applies as soon as the deadline is missed, even if no tax is owed or the tax has already been paid.

What penalties apply now

The first penalty is a fixed £100 charge. This applies immediately once the deadline has passed and cannot usually be appealed unless there is a recognised reasonable excuse.

If the return remains outstanding for more than three months, further penalties can start to build up. These are charged at £10 per day, for up to 90 days, meaning an additional maximum penalty of £900.

If the return is still not filed after six months, HMRC may charge a further penalty. This is the higher of £300 or 5% of the tax due.

After 12 months, another penalty of the higher of £300 or 5% of the tax owed can be added.

Separate penalties apply if tax is paid late. These are charged at 5% of the unpaid tax after 30 days, six months and 12 months. Interest may also be added to any outstanding balance.

Even if you cannot pay in full, filing the return as soon as possible helps limit how far penalties can escalate.

Reasonable excuses and appeals

HMRC does allow penalties to be cancelled in limited circumstances where there is a reasonable excuse. These might include serious illness, a bereavement, or an unexpected event that genuinely prevented the return being submitted on time.

Being busy, forgetting the deadline, or not having all paperwork ready are not usually accepted as valid reasons.

Any appeal must be made after the return has been filed, not instead of filing it.

What to do if you cannot pay

If you have filed your return but cannot afford to pay the tax bill in full, you may be able to apply for a Time to Pay arrangement. This allows the tax owed to be spread over monthly instalments, subject to meeting HMRC’s criteria.

The option is usually available online for debts under £30,000, provided returns are up to date.

How we can help

If you have missed the deadline, the most important step is to deal with it promptly and correctly. We can help you file your outstanding return, check whether penalties are correct, and advise on whether an appeal is appropriate.

We can also liaise with HMRC on your behalf, help you apply for a Time to Pay arrangement, and ensure future deadlines are managed properly so this does not happen again.

If you would like support with a late return or ongoing self-assessment obligations, call us on 01904 787 973 or book a call with our team .

Pension planning changes you need to know about

Mon, 26 Jan 2026 13:20:07 GMT

Pensions remain one of the most tax efficient ways to save for the future, and thoughtful planning around contributions continues to be one of the most effective tax planning tools available.

However, recent changes announced in the Autumn Budget, alongside upcoming reforms to the Inheritance Tax treatment of unused pension funds, highlight the importance of reviewing retirement planning sooner rather than later.

Below, we outline the key changes and what they may mean for individuals and business owners.

Salary sacrifice changes

From 6 April 2029, full tax-free salary sacrifice for pension contributions is due to be restricted. A new £2,000 limit will apply to the amount employees can contribute through salary sacrifice without incurring Income Tax and National Insurance contributions (NICs). This change will affect pension schemes operated by UK employers.

Around eight million employees currently use salary sacrifice to fund pension contributions, with over three million sacrificing more than £2,000 of salary or bonuses each year. For many, this change could significantly alter the tax efficiency of their retirement savings strategy.

Why the government is making changes

The government has stated that it continues to support and incentivise pension saving, retaining Income Tax and NICs reliefs on pension contributions worth more than £70 billion annually.

Most other salary sacrifice arrangements were closed in 2017. Pension salary sacrifice remained in place, but its cost has risen sharply. Forgone NICs increased from £2.8 billion in 2016/17 to £5.8 billion in 2023/24, and without intervention this figure was forecast to rise to almost £8 billion by 2030/31.

Pension contribution rules explained

Individuals receive tax relief on pension contributions at their marginal rate. Relief is available in each tax year on contributions up to the higher of:

100% of net relevant earnings
£3,600 gross

However, there are limits on how much can be contributed tax efficiently.

The annual allowance caps the total amount of pension saving that can receive tax relief each year. For the 2025/26 tax year, the annual allowance remains at £60,000. Contributions above this level may trigger a tax charge.

Reduced allowance for higher earners

For higher earners, a tapered annual allowance may apply. This affects individuals with:

Threshold income above £200,000
Adjusted income above £260,000

Where adjusted income exceeds £260,000, the annual allowance is reduced by £1 for every £2 over this limit, down to a minimum of £10,000 once adjusted income reaches £360,000.

Using unused allowances from earlier years

Unused annual allowance can be carried forward for up to three tax years. This can be particularly helpful for individuals with fluctuating income, or owner-managed businesses where profits vary year to year.

For the 2025/26 tax year, unused allowances from 2022/23, 2023/24 and 2024/25 can be carried forward, provided the individual was a member of a registered pension scheme in those years. It is worth noting that the annual allowance for 2022/23 was £40,000, lower than the current limit.

Keeping track of pension savings

It is surprisingly common for people to lose track of their pension savings over time. Current estimates suggest there are around 3.3 million lost pension pots in the UK, holding a combined £31.1 billion. The average lost pot is largest among those aged 55 to 75, at approximately £13,500.

Many pension providers offer tracing and consolidation services, and the government’s Pension Tracing Service can also help individuals locate missing pensions. Looking ahead, the planned pensions dashboard aims to provide a secure, online view of all pension savings in one place. While there is no confirmed public launch date yet, it is expected to make managing pensions far simpler in future.

Talk to us

Pension rules can be complicated and changes often have a significant impact on your long-term tax position. Whether you are employed, self-employed or running your own business, getting the right advice can help ensure your pension strategy remains tax efficient.

If you would like to review your pension planning or understand how these changes may affect you, call us on 01904 787 973 or book a call with our team .

What slowing wage growth really means for UK businesses

Tue, 20 Jan 2026 09:55:27 GMT

Recent figures from the Office for National Statistics suggest that wage growth in the UK is beginning to ease.

Between September and November, average pay growth slowed to 4.5%, with private sector wage increases falling to their lowest rate in five years. At the same time, the number of people on company payrolls dropped by 135,000, with retail and hospitality seeing some of the sharpest declines.

On the surface, this might sound like dry economic data. But beneath the headlines, there are some very real implications for business owners.

A slowdown that feels counterintuitive

For many employers, particularly those who have struggled to recruit and retain staff over the past few years, the idea that slower wage growth could be “good news” feels odd.

After all, rising wages usually mean happier staff and lower turnover.

But from a wider economic perspective, slower wage growth reduces pressure on inflation. When wages rise quickly, people tend to spend more, pushing prices up. That is one of the reasons the Bank of England has kept interest rates high.

With wage growth easing and inflation falling slightly, economists believe this increases the likelihood of interest rate cuts later this year.

That matters for businesses because interest rates affect borrowing costs, cash flow, and confidence.

Why private sector businesses are feeling the pinch

The data also highlights a growing gap between public and private sector pay. Public sector wages rose by nearly 8%, while private sector pay grew at closer to 3.6%.

For private businesses, this reflects a tougher trading environment. Costs remain high, consumer spending is under pressure, and many businesses are being more cautious about hiring.

The fall in payroll numbers, even heading into the Christmas period when hiring is usually stronger, suggests businesses are choosing to do more with less.

This is not necessarily a sign of panic, but it does point to a period of consolidation rather than expansion.

What business owners should take from this

For business owners, this data is not something to worry about, but it is something to be aware of.

A few practical points to consider:

Wage planning needs to be realistic. Automatic annual pay rises may not be sustainable in the current climate. Any increases should be tied to affordability, productivity, and long-term plans.
Cash flow matters more than ever. Slower growth and higher borrowing costs mean keeping a close eye on forecasts, reserves, and commitments.
Hiring decisions deserve scrutiny. Bringing someone on board is a long-term cost, not just a monthly wage. It is sensible to review whether roles are essential now or can wait.
Interest rate changes could help later. While rates are expected to hold in the short term, the direction of travel may start to ease pressure on loans and finance later in the year.
Staff communication is key. If pay rises are smaller or delayed, being open and honest helps maintain trust and morale.

A reminder about context

Economic headlines rarely tell the full story on their own. Slowing wage growth does not mean wages are falling, nor does it mean businesses should stop investing in their teams.

What it does mean is that the post-pandemic surge in pay and demand is settling, and businesses are entering a more measured phase. Understanding that context helps owners make better decisions rather than reacting to headlines alone.

How we can help

At Inglis, we work with businesses to make sense of changes like these and understand what they mean in practice.

If you would like help reviewing your payroll costs, planning pay increases, or sense-checking decisions around hiring and cash flow, we are always happy to talk things through. You can call us on 01904 787 973 or book a call with our team .

What strawberries teach us about the risks of AI

Mon, 12 Jan 2026 15:54:58 GMT

Social media seems, once again, to be ablaze with the famous question: How many r’s are in strawberry? It is one of those prompts that reliably resurfaces every few months, usually accompanied by screenshots of ChatGPT confidently giving the wrong answer.

On the surface, it is a harmless curiosity. A bit of fun. But it also reveals something far more important about how AI works, and where its limitations still sit.

It often looks like modern AI can accomplish any task. Want a fun marketing image? Easy. Need a blog post written? Done. Want to use AI to create a romantic song for your wedding anniversary? You’ll have it in seconds.

Yet despite how magically the technology seems, AI still falls surprisingly flat when it comes to certain basic tasks. Tasks you would expect a seven-year-old to achieve with ease.

It is amusing, and slightly baffling, to see ChatGPT struggle with something as simple as counting letters in a word. But it is not just ChatGPT being glitchy or careless. There are structural reasons why large language models struggle with certain words more than others.

Take the question itself: how many r’s are there in the word strawberry?

For most people, the answer is immediate. You picture the word, scan it, and count. Three.

For ChatGPT, the process is completely different. It does not “see” words as letters in sequence. It predicts likely outputs based on patterns it has learned from enormous volumes of text.

When asked, what answer does it give? Just a clear and confident: “two.”

So, for all the billions in investment, the vast computing power, the pressure on global energy and water resources, and the near-mythical reputation AI now carries, it still cannot reliably answer how many r’s are in strawberry.

That should give anyone pause before using AI for things that really matter.

Why this matters for tax, finance, and professional advice

The strawberry example is trivial, but the underlying issue is not. AI systems are designed to produce plausible responses, not guaranteed correct ones. When they get things wrong, they often do so with complete confidence.

That is a dangerous combination in areas like tax, accounting, and compliance. With self-assessment deadlines approaching, it is tempting for business owners to ask AI questions such as:

Can I claim this expense?
Do I need to register for VAT?
How should I structure my income to be more tax-efficient?

AI can produce an answer quickly, and it will often sound reasonable. The problem is that it may be outdated, oversimplified, or simply incorrect for your specific circumstances. UK tax law is nuanced, highly contextual, and frequently updated. AI does not understand your full financial picture unless you give it every detail, and even then, it cannot apply professional judgement in the way a qualified adviser can.

The same risk applies when using AI for business communications or financial decisions. Using AI to draft explanations, summaries, or documents without proper review can introduce subtle errors. A missed exception, a misquoted threshold, or an outdated allowance can all undermine confidence and potentially create problems later.

Using AI safely and sensibly in practice

AI is not useless. Far from it. But it needs to be used with care and clear boundaries.

Here are a few practical guidelines help reduce risk:

Treat AI as a starting point, not a final answer. It can help you think, outline, or draft, but it should never be the last word on technical matters.
Always verify facts against authoritative sources, such as HMRC guidance, legislation, or professional manuals.
Do not rely on AI for personalised tax advice.
Review anything important before acting on it. If you would not be comfortable explaining it to HMRC, it should not be based on an unchecked AI response.
Be especially cautious with deadlines, thresholds, and eligibility criteria. These are areas where AI errors are common and costly.

AI can save time, spark ideas, and help with structure and clarity. What it cannot do, at least not yet, is replace professional judgement, accountability, or detailed technical understanding.

If it can confidently miscount the letters in strawberry, it can just as confidently misstate a tax rule. The difference is that one is a joke on social media, and the other can have real financial consequences.

How we can help

At Inglis, we support individuals and businesses with clear, practical accounting advice you can rely on. We understand that tools like AI can be useful, but when it comes to tax, compliance, and financial decisions, having a trusted adviser still matters.

If you would like a second opinion on a tax question, help making sense of your numbers, or reassurance that you are doing the right thing, we are always happy to talk things through. You can call us on 01904 787 973 or book a call with our team .

Setting business goals you can actually stick to

Wed, 07 Jan 2026 11:29:44 GMT

The new year is often when most of us step back and think about what we want the next 12 months to look like. Perhaps it's more profit, fewer late nights catching up on work, improved systems, or simply a business that feels easier to manage.

The real challenge, however, isn't usually a shortage of ideas. It's that many goals are structured in a way that makes them difficult to sustain when the everyday demands of work return. That's why we wanted to share our five-step approach to setting business goals, one that emphasises follow-through as much as it does the initial spark of ambition.

Step 1: Pick one goal that genuinely moves the business forward

Trying to fix everything at once usually leads to fixing nothing. We often see business owners commit to growth, cost control, new software, marketing and hiring all at the same time.

Instead, choose the one outcome that would make the biggest difference this year. That might be improving cash flow stability, increasing margins, or freeing up more of your own time.

This becomes the priority that decisions are tested against. Other improvements can sit behind it, but they do not compete for attention.

Step 2: Set a goal that stretches you, but still fits reality

A goal needs enough ambition to hold your focus beyond January. If it is too easy, it will be deprioritised. If it is unrealistic, it will be abandoned.

The best goals sit in the middle. Challenging, but grounded in the reality of your current numbers, capacity and market conditions. This is where clear financial information adds real value, rather than relying on instinct alone.

Step 3: Convert the goal into specific, scheduled actions

High-level goals only work when they are translated into what actually happens week to week.

Be clear on the actions that drive the outcome. For many businesses, this might mean reviewing pricing, assessing which customers or services are genuinely profitable, tightening processes, or stepping away from work that absorbs time without delivering a fair return.

These tasks require scheduling, not just a fleeting note jotted down on New Year's Day. Block out time in your calendar and treat it with the same seriousness as a client commitment. Progress often grinds to a halt when you simply wait for free time to appear.

Step 4: Use focus tools that work in real life

Motivation is not constant. The most productive business owners design their environment to support focus rather than relying on willpower.

A few tools that genuinely help:

Visual reminders can help, but only if they change. A note stuck on the mirror or desk might catch your attention for a few days, then it quickly becomes part of the background. If you use prompts, refresh them regularly and move them around. The aim is to create a nudge you actually notice, not something you automatically ignore.
When you're working, keep your phone out of reach or switch it to aeroplane mode. Both task-switching and procrastination can seriously cut into your productivity. Task-switching happens when you check your phone during work sessions, and procrastination is when you get distracted by your phone just before you begin a task.
Work in defined time blocks, then deliberately switch off afterwards. This helps maintain energy across the week. Tip: Relax your gaze and look off to the horizon when you finish working. This “turns off” the release of chemicals associated with alertness and will aid in relaxation.
If motivation dips, briefly remind yourself what not achieving the goal would mean for the business. Avoiding a negative outcome is often a stronger driver than chasing a positive one.

Step 5: Plan for the middle, not just the start and finish

Most goals fail in the middle phase. The initial excitement has passed, and the finish line feels distant. This is normal. The solution is to break the overall timeframe into smaller segments and acknowledge progress along the way. We find that random, occasional rewards often work better than constant ones. They keep the energy up without making things feel stale.

Equally, do not feel the need to broadcast goals too early. Early praise can replace the sense of achievement that should come from actual results.

How we can help

As accountants, we are naturally focused on numbers, but those numbers tell a story about where a business is being held back and where effort will have the biggest impact.

If you want a second opinion on your goals, help working out what is realistic financially, or just a chance to talk things through with someone who understands your business, we’re always happy to help. Feel free to give us a call 01904 787 973 or book a call with Donald Inglis .

Preparing for Making Tax Digital for Income Tax

Tue, 30 Dec 2025 13:58:05 GMT

The introduction of Making Tax Digital for Income Tax (MTD for IT) is approaching quickly. From April 2026, individuals with qualifying income over £50,000 will be required to comply with the new rules.

It is important to understand whether you are affected and what steps you should be taking now to prepare.

Qualifying income

For the first phase of MTD for IT, the mandated income sources are self-employment (for those not in a partnership) and property income, including income from overseas property.

Individuals will be legally required to use MTD for IT from the following dates:

April 2026 if qualifying income exceeds £50,000 in the 2024/25 tax year
April 2027 if qualifying income exceeds £30,000 in the 2025/26 tax year
April 2028 if qualifying income exceeds £20,000 in the 2026/27 tax year

How does MTD apply?

HMRC research indicates that many taxpayers remain unsure about how MTD applies to them in practice. The core requirement is to keep and preserve specific accounting records in a prescribed digital format and submit information to HMRC digitally.

MTD does not require receipts or invoices to be scanned and stored digitally, as was initially proposed. Instead, it focuses on how records are maintained and how information is submitted.

Taxpayers must use functionally compatible software to meet the record-keeping requirements. This software must be capable of linking directly with HMRC systems, which involves an authorisation process at the outset and a renewal every 18 months.

A key principle of MTD is the requirement for an uninterrupted digital journey. Information must flow from the accounting records through to submission to HMRC without manual re-entry.

Spreadsheets can still be used as part of the process, provided that the software used to consolidate or submit the data is fully digital and meets HMRC’s requirements.

The penalty regime

Taxpayers joining MTD for IT in April 2026 will not face penalties for late submission of quarterly updates during the initial transition period.

In the Autumn Budget 2025 documents, the government confirmed that no penalty points will be charged for missed quarterly updates during the 2026/27 tax year. As a result, those earning non-PAYE income over £50,000 will not be subject to the new MTD penalty regime until April 2027.

From 6 April 2027, the new penalty regime for late submission and late payment will apply to all income tax taxpayers within MTD.

This regime operates on a points-based system, targeting persistent non-compliance. Each missed annual submission will result in a penalty point. Once a taxpayer reaches the threshold of two points for late submission of their final declaration, a fixed financial penalty of £200 will be charged.

Need help preparing for MTD?

If you are unsure whether MTD for Income Tax applies to you, or you would like support in preparing your systems and records, we can help. Early planning can make the transition far smoother and help you avoid unnecessary issues once the rules come into force.

To discuss your situation or to get advice, please contact us on 01904 787 973 or book a call with Donald Inglis .

Do customers still want good, old-fashioned customer service?

Fri, 19 Dec 2025 06:00:02 GMT

Customer service has changed. We now have multiple options for automating our customer interactions or offering self-service options to our customer base.

Customers can talk directly to AI agents or sort out a query with an automated chatbot. It’s fast, efficient and (from your viewpoint as an employer) highly cost-effective.

But is automated customer service always the best option? In an environment where your customers are surrounded by digital interactions, wouldn’t it be nice to offer a more human and personalised level of customer service? And does that mean hiring more staff?

Fundamentally, customers are still seeking out the human element of customer service, amongst the sea of digital and online noise that we’re now surrounded by daily.

There are three core reasons why customers crave this more personal touch:

Trust and empathy: When dealing with complex or emotionally charged issues (like financial errors or faulty products), customers want to talk to a human agent who can demonstrate empathy and take ownership of the problem. Chatbots may be efficient, but they don’t deliver when it comes to customer empathy.
Context and recognition: Old-fashioned service means being recognised and having your history remembered. Customers expect the business to know their needs, history and preferences without forcing them to repeat this information. A human agent with access to a CRM system can deliver this recognition in a personalised and tailored way.
A need for exceptional service: A recent Australian survey found that 88% of consumers expressed satisfaction with customer service interactions that were managed mostly or fully by human agents. When customers have a good experience with a human agent, this increases their brand advocacy and can also generate positive word-of-mouth referrals (one of the best ways to attract new customers).

The impact of human-led customer service can be immense. AI agents and software automation can boost your overall efficiency for many simple tasks and customer interactions. But having the human touch drives customer loyalty, retention and your competitive advantage.

Hiring more customer service staff (and investing in their training) could be a way to find your own competitive advantage as a business.

If you want to talk through your people strategy, book a call with Donald Inglis .

Automation can ease your business workload

Fri, 12 Dec 2025 05:52:46 GMT

The average business owner needs an additional four hours in their working day to complete their admin, according to research by OnePoll.

If your people are spending 20 hours per week wading through tedious and unproductive admin, that’s bad for the business and for your efficiency. Fortunately, technology and software automation can go a long way towards automating these low-level admin tasks.

Better productivity through automation

Automation is an important way to ease your business workload, with a host of different business apps and cloud solutions offering ways to automate your admin.

With ‘smart business tools’ increasing in number and choice, software is utilising automation algorithms, AI, machine learning and cognitive solutions to help remove the mundane admin tasks from your workflows.

Core processes that will benefit from automation include:

Automated bookkeeping – Simply take a photo of your receipts, expenses and invoices and ‘optical character recognition’ technology will digitise the output and pull it through to your accounts software. No data entry, no human error and no lost receipts! We can do the rest to ensure your records are accurate.
Automated credit control – chasing up debts and late-paying customers takes time. Automated credit control apps track your debtor numbers and automatically sends out customised chaser emails as soon as an invoice is late. This reduces your credit control time, speeds up cash collection and cuts your aged debtor figure.
Automated payment collection – the easier it is to pay you, the faster your customers will pay. Automated card payments and cloud-based Direct Debit solutions allow you to automatically take payment from a customer as soon as an invoice is due. Some solutions will even automate the invoice matching and bank reconciliation process.
Automated reporting and forecasting – the better your reporting and business intelligence, the easier it is to make informed decisions about your company strategy. Accounting platforms and fintech tools now offer automatic, real-time reporting and forecasting, giving you access to the important numbers and metrics, fast.
Automated digital marketing – digital marketing is key to raising your brand’s profile. Marketing platforms offer important time-saving ways to create, schedule and post social media content, or email automations to send a pre-programmed cadence of emails to specific target audiences within your wider customer base.

Talk to us about embracing the power of automation

If your admin is holding you back, talk to us about how automation can pick up some of the heavy lifting as well as giving you the metrics you need for decision making. We can review your business processes and identify the automation opportunities, helping you choose the best apps to drive your business efficiently.

Christmas cash flow planning for small businesses

Mon, 08 Dec 2025 05:46:15 GMT

Are you heading away for a break from the business this year?

This time of year can be hard on small business. Your expenses continue and your cash flow can suffer when your debtors go on holiday.

Leading up to the Christmas period, is your business cash flow in good health to carry you through? With a bit of pre-planning and being proactive, you can set yourself up for a financially stress-free holiday.

Planning your cash-flow over Christmas

Invoice early – Send any invoices that you can, and in advance if possible. Perhaps consider whether you have any regular clients or customers that you could offer a retainer or similar deal to if they book services or make a purchase from you in advance.

Chase payment – Use this opportunity to chase up any outstanding payments. Strong communication and relationships matter, so talk to clients and chase invoices.

Talk to suppliers – A little honesty can go a long way. Perhaps they can extend a line of credit for your payments to them. In most cases, a good supplier would rather offer a little flexibility to keep an ongoing business relationship.

Review your costs – Make sure you have a clear picture of your payroll, and any other planned expenses that will need to be accounted for. It’s also a good idea to do a general review of expenses. Business costs can creep up, and it’s a great idea to make a time to check on your expenses regularly, no matter what your financial situation. Review all of your regular payments and subscriptions as well as upcoming costs. There may be travel, functions or purchases which you can decide on an alternative approach to.

Talk to the bank or tax department – If cash flow is tight, make sure you have conversations early so you have everything in place to see you through.

We understand the Christmas period can be a financial strain, and we're here to help you manage it. Our goal is to ease your cash flow concerns, allowing you to truly relax. When you’re planning for a break, arrange a meeting with Donald Inglis .

5 impacts of the rise in the National Living Wage

Wed, 03 Dec 2025 05:36:46 GMT

Budget 2025 announced a forthcoming rise to both the National Living Wage and the National Minimum Wage, with the aim of keeping wages in line with inflation.

But what does a rise in wage rates mean for employers like you?

1. Higher wages for those on the National Living Wage

The National Living Wage (NLW) will rise from 1 April 2026 by 4.1% to £12.71 per hour for eligible workers aged 21 and over. This will increase the gross annual earnings of a full-time worker on the NLW by £900, benefiting around 2.4m low-paid workers.

2. Increased pay for those on the National Minimum Wage

The National Minimum Wage rate for 18–20-year-olds will also increase by 8.5% to £10.85 per hour from 1 April 2026. This will mean an earnings increase of £1,500 p/a for a full-time worker. The NMW for 16–17-year-olds/apprentices will increase by 6% to £8 per hour.

3. Higher labour and operating costs for your business

Where you have workers on the NLW and NMW, this means your payroll costs are going to increase from April 2026. The wage rises will increase your gross payroll, automatically raising Employer National Insurance and workplace pension contributions. This has the potential to put additional pressure on your margins, cash position and net profit as a business.

4. Pressure to boost prices or drop staffing levels

The question is how you react to this increased pressure on your payroll costs. You could offset the higher costs by raising prices, but this risks alienating your existing customers. Or you could cut staff hours and reduce hiring to bring down the overall labour costs you’re incurring.

5. A need to invest in more labour-saving technology

The reality is that human labour costs money. By investing in artificial intelligence (AI), robotic process automation and smart production techniques, some of your basic tasks could be automated. This removes some of your dependency on expensive human labour, but you’ll need to balance the need for human skills and talent against the benefits of automation.

If you’re concerned about the impact of the increase in the NLW and NMW, please talk to our team or arrange a meeting with Donald Inglis . We can review your staffing, labour costs and profit margins to find a workable strategy for keeping your payroll and hiring costs under control.

Autumn Budget 2025 – What it means for you

Thu, 27 Nov 2025 11:58:24 GMT

The chancellor has delivered the Autumn Budget, confirming a wide range of tax and spending measures that will shape household finances and business planning over the coming years.

Much of the detail had been hinted at in advance (or leaked!), but the final statement provides a clearer picture of where costs will rise and how long-term tax policy is shifting. Here is a summary of the key announcements.

Wage increases from April 2026

The National Living Wage for over-21s will rise to £12.71 per hour in April 2026. Rates for 18 to 20-year-olds will increase to £10.85 .

Anyone employing staff at or near the minimum wage will see payroll costs rise, and individuals working on lower incomes will see an increase in take-home pay.

Tax thresholds frozen for longer

Income tax and National Insurance thresholds will remain frozen until 2031 . As earnings increase over time, more people will gradually move into higher tax bands, resulting in higher overall tax liabilities.

Employer National Insurance thresholds are also frozen until 2031, increasing employment costs as wages rise.

Changes to dividends, savings, and property income

Several tax increases were confirmed:

Dividend tax rates will increase by 2 percentage points from April 2026
Income tax on savings and rental income will rise by 2 percentage points from April 2027

Individuals receiving dividends, interest, or rental income should review how these changes affect their overall tax position.

Pension salary sacrifice capped

From April 2029 , the amount of salary that can be sacrificed into a pension free of National Insurance will be capped at £2,000 per year .

This affects both employees and employers who use salary sacrifice to reduce NI costs.

Cost changes for imported goods

From 2029, the current tax exemption for goods imported from overseas worth under £135 will be removed. Any imported low-value items, including online purchases shipped from outside the UK, will become subject to VAT and potentially other charges.

Changes to duties on alcohol, tobacco, and sugary drinks

Alcohol duty will rise in line with RPI from 1 February 2026
Tobacco duty will increase by 2% above RPI

From January 2028 , the sugar tax will be extended to pre-packaged milk-based drinks , including bottled milkshakes and lattes

These measures will increase the price of certain consumer products over time.

Fuel duty frozen until September 2026

The current fuel duty freeze, including the 5p cut, will remain in place until September 2026 . After that, rates are expected to rise gradually over a six-month period.

A new mileage-based tax for electric and plug-in hybrid vehicles will also be introduced from April 2028 .

Support for apprenticeships and training

Apprenticeship training for under-25s will be funded in full for small and medium-sized employers. The aim is to help more young people into work and support employers with training costs.

Household and personal finance measures

Several measures will influence everyday household budgets:

The state pension will rise by 4.8% under the triple lock
The cap restricting child-related benefits for a third or subsequent child will be removed from April
Green levies will be taken off energy bills, with the Treasury estimating a saving of around £88 a year
NHS prescription charges in England remain frozen at £9.90 for another year

These changes will affect disposable income, energy costs, and household spending power.

Housing and property tax updates

Homes in England valued above £2 million will face a new annual council tax surcharge of £2,500 to £7,500 , based on updated valuations.

Other property-related measures include:

Higher income tax on rental profits (from 2027)
Extended support for Help to Save accounts beyond 2027

Economic outlook from the OBR

The Office for Budget Responsibility projects:

UK growth of 1.5% in 2025
Average growth of 1.5% per year between 2026 and 2029
Inflation expected to fall to 2.5% next year and reach the 2% target in 2027

These forecasts form the backdrop for many of the Budget’s long-term policies.

What this means overall

The Autumn Budget sets out a clear direction: rising wage costs, higher taxes on income and investments, and increased duties across several consumer goods. Alongside this, there are pockets of support such as apprenticeship funding, a continued fuel duty freeze, and measures aimed at easing household bills.

Both individuals and businesses should take time to understand how these changes affect their financial planning from 2026 onwards.

How we can help

We give clear, useful advice to clients all over the UK on taxes, payroll, forecasts, and long-term planning. If you would like a personalised review of how the Autumn Budget affects you or your business, please arrange a meeting with Donald Inglis .

5 challenges for small business – and how to beat them!

Thu, 20 Nov 2025 07:14:26 GMT

Starting, building and growing your own small business is a hugely rewarding experience for many entrepreneurs. But the road ahead isn't always smooth.

There are common challenges that crop up and ongoing issues that need to be factored into your business plan, your strategy and your own personal thinking.

So, what can you do to beat these challenges and make the journey as frictionless as possible?

5 proactive ways to overcome your business challenges

We’d all love to know what lies around the corner when it comes to the future path of your business. The truth is that every business journey is unique. But there are common challenges that every owner-manager or CEO will be faced with – and being prepared for these hurdles is the best way to leap over them and take each challenge in your stride.

We’ve highlighted five common challenges and the simple ways to overcome them:

Uncertainty

No-one has a crystal ball to know exactly what's coming around the corner. But there are ways to be prepared for some unknown circumstances. You can't fully predict the main external threats like government policy, economic conditions or freak weather conditions. But you CAN use forecasting and scenario-planning tools to build up contingency plans so you have a Plan A, Plan B and even a Plan C. With forecasts of your business data, finances and industry trends, you can be ready to react, pivot and take positive action.

Competition

Small businesses often face stiff competition from larger, more established companies. To stay ahead of the curve, it's important to be nimble and agile. It's also vital to find your niche and to know precisely why your customers value your offering. By ploughing a unique furrow and keeping your customers happy, you can give yourself an edge over larger, slower-moving corporate-size competitors.

Access to capital

It can be a struggle to secure funding as a startup, particularly if you have limited financial resources or a poor credit history. Having a detailed funding strategy is a crucial way to overcome this problem. Keep your finances in order and make sure you have in-depth financial reports to show banks, lenders and investors. It's also helpful to focus on paying suppliers on time, keeping debt levels under control and ensuring your cash flow is in a positive position.

These are all excellent ways to improve your business credit rating and show you're a stable, risk-free prospect for lenders.

Hiring and retaining employees

Attracting and retaining talented employees is difficult, especially during the ongoing talent shortage. Offering competitive salaries or benefits packages can be one way to attract people. But it's also important to think about your brand reputation, your sustainability credentials and your CSR policy – all things that Millenial and Gen Z workers value alongside decent pay and benefits packages. Employees want to be proud of where they work, so make your company a progressive, satisfying and rewarding place to work.

Keeping up with technology

Business technology is evolving at a rapid pace. It can be daunting keeping up with all the available apps, tools and software solutions that are aimed at your business. The trick is to be informed but selective about the apps you use. Start with the operational and financial needs of the business and look for apps that can automate, improve efficiency or provide improved data and management information.

Talk to other business owners and your professional network to find out what the essential apps are in your industry. And do your research and homework before you choose any software solution to add to your app stack.

Talk to us about being an agile small business

Looking to the horizon for the upcoming pitfalls is essential as an ambitious and informed business owner. As your adviser, we can help you generate the most informative management information, to keep you agile and ready for what lies around the corner.

We’re also on hand to discuss your ongoing strategy, how to react to upcoming risks and the best ways to access capital and manage your company’s finances.

Arrange a meeting with Donald Inglis and let’s see what the future may bring for your business.

4 alternatives to borrowing from the Big Four banks

Mon, 10 Nov 2025 09:26:31 GMT

Traditionally, when your small business needed an injection of capital, the Big Four banks were the place to go. Barclays, HSBC, Lloyds and NatWest offered a wide range of business loans and there were limited alternative routes to business finance.

But today, the major high-street banks are increasingly reluctant to lend to small businesses.

Let’s look at why small businesses are finding it harder to access funding, and four alternative routes to finance that your business could explore.

High-street banks are pulling back from lending to small businesses

A recent survey from business lender, iwoca, found that 71% of SME finance brokers agree that mainstream banks are pulling back from small business lending.

The Big Four banks see small businesses as volatile, risky and less attractive as borrowers than larger, stable, corporate organisations.

This has led to ambitious UK small businesses finding it difficult to access funding. Without access to an injection of new capital, your business may find it difficult to fill the cashflow gaps, invest in growth or start new projects.

4 alternative routes to funding for your small business

Don’t worry, though, the news isn’t all bad. With the banks offering less funding, this has created an opportunity for alternative lenders and alternative routes to funding.

With high street banks no longer the obvious first port of call for funding, you’re free to consider the entire funding market and a range of brand new finance options.

Here are four potential routes to funding:

1. Non-banks and fintech lenders

In recent years, we’ve seen considerable growth in the non-bank lending market. Specialist online business lenders, like Funding Circle and iwoca, offer flexible, short-term loans without the lengthy and complex application processes you’d expect from the high-street banks.

Non-banks will generally focus more on your business performance and future revenue generation potential, rather than your business credit score. This is helpful for start-ups that have limited trading history, or businesses with poor credit scores.

2. Peer-to-peer lending

Peer-to-peer (P2P) lending platforms, like Folk2Folk, connect businesses seeking loans with a network of individual and institutional investors through online platforms. P2P is often a faster, more flexible alternative to banks, allowing you to quickly raise capital and to invest it back into your latest project or growth strategy. Unlike traditional equity funding through private investors, P2P doesn’t require you to give up any ownership stake in the business, so it’s a great way to raise money and stay in control of the business.

3. Invoice finance

Invoice financing through a provider like Kriya allows you to sell your unpaid invoices. This effectively gives you an advance on the money currently owed to you by your customers.The finance provider gives you a percentage of the invoice's value upfront, helping you to solve urgent cashflow issues caused by slow-paying customers. While you won’t be able to raise large sums of money this way, it’s an excellent solution for getting your cashflow under control.

4. Crowdfunding

Crowdfunding through a platform like Crowdcube or Kickstarter allows you to raise funds from a large number of people through an online platform. There are several types of crowdfunding, including:

Equity crowdfunding: selling shares in the company
Debt crowdfunding: raising a loan from many lenders
Rewards crowdfunding: offering products or perks in exchange for investment

Get your funding strategy sorted

Having a detailed funding strategy, and aligning it with your business plan, is fundamental to keeping your business well-capitalised and cash flow positive.

We’ll help you review your funding needs, create a funding strategy and compile the financial documentation needed to access your chosen route to funding.

4 reasons to avoid using AI for tax advice

Thu, 06 Nov 2025 08:13:04 GMT

We’re used to the idea that artificial intelligence (AI) has numerous ways to help us run a streamlined and efficient small business. AI can automate many of our low-level processes, help with customer service and give us amazing insights into our business data.

But there’s one key area where using AI is a no-no – tax advice!

A recent survey by Taxfix revealed that more than half (59%) of Brits admit that they’ll use AI to help with their tax return in the run-up to HMRC’s 31 January deadline.

Let’s look at why you should avoid using AI tools, like ChatGPT, to answer complex tax questions. And why your accountant, or tax adviser, is the person to talk to.

1. Tax is a complex and nuanced area

Understanding the full UK tax code and how it applies to your specific situation is complicated. Giving the right answer requires the AI to know a number of variables about your tax position that are unlikely to be included in your prompt to ChatGPT.

2. Tax rules are specific to your country and tax position

The tax rules that apply to you, as a UK taxpayer or UK business, are specific to the current tax legislation created by the UK parliament and upheld by HM Revenue & Customs (HMRC). ChatGPT can be America-centric in its responses, so it’s likely that you’ll get answers that reflect US tax law, unless you’re specific about being a UK taxpayer in your prompt.

3. AI often provides incorrect answers or ‘hallucinations’

Generative AI has a habit of giving you the answer it thinks you want, rather than an answer that is factually correct. These AI hallucinations can sound extremely convincing and plausible, so you won’t be aware that this is false information until your tax adviser points out the error.

4. Tax professionals give you informed, human advice

Tax advice isn’t just about knowing the current rules around tax. As experienced, human, professionals, your tax adviser can give you answers that are tied to your own specific tax position and financial situation. In short, a human tax adviser gives you tailored, bespoke advice, whereas an AI will always give you generic, non-specific advice.

The rules around tax are clear, immovable and non-negotiable. But a good tax adviser will help you to plan your tax efficiently, taking into account any available tax incentives and claiming back tax-deductible items that will help your cashflow.

Accountants and tax professionals know the huge benefits that AI can bring to your business as an operational tool. But, as an industry, we also know the risks of AI-generated tax advice.

Over the years, we’ve grown into one of the leading accountants in York, expanding our range of accounting services whilst staying true to our core values. If you’ve got a tax query, or want help with your upcoming tax return, book a discovery call with Donald Inglis .

Protecting you and your business: using trusts

Mon, 27 Oct 2025 07:58:11 GMT

Have you ever wondered about the best ways to protect you and your business?

In this series, we’ll look at the key ways to use trusts, insurance and risk-management techniques to protect both your personal assets and the future of the company.

In this article, we’ll look at how you can use a trust to shelter your assets.

What is a trust?

Before we go any further, let’s explain exactly what a trust is and how they can be used.

A trust is a legal arrangement where a person (the settlor) transfers ownership of certain assets to another person or entity (the trustee) to hold for the benefit of one or more third parties (the beneficiaries). These assets could be money, property or shares etc.

It's essentially a separation of legal ownership from beneficial ownership.

These are the three main parties involved in a trust

Settlor : The person who creates the trust and contributes the assets. In this instance, the settlor is likely to be you, the small business owner.

Trustee : The person or entity (this could be an individual or a company) who holds legal title to the assets and manages them according to the trust deed. They have a fiduciary duty to act in the best interests of the beneficiaries. Trustees are likely to be you and your family members, or anyone in the business who you decide to make a trustee.

Beneficiaries : The individuals or entities who are entitled to benefit from the assets held in the trust. This will usually be the family members or other interested parties that you wish to be beneficiaries of the assets held in the trust.

What’s a trust deed?

The rules for how the trust operates are set out in a legal document called a ‘trust deed’.

The trust deed is a legal document that formally establishes a trust. It outlines the trust's rules, names the settlor, trustees, and beneficiaries and defines the trustees’ powers and duties.

The deed also dictates how assets within the trust are to be managed and distributed to protect personal assets from business liabilities.

How can you use a trust to protect your personal assets?

Running a business comes with a certain amount of inherent risk. There’s potential for the business to go bust, for creditors to come after your assets, or for individuals and organisations to make legal claims against you and the business.

Setting up a family trust to shelter your personal assets allows you to separate your personal financial security from these inherent risks of running a business.

The trust creates a legal barrier between your individual wealth and any financial liabilities or claims arising from the business.

Here are the five key reasons why a trust is worth considering

1. Shield your personal assets from any business liabilities

If your business faces bankruptcy, lawsuits, or significant debt, your personal assets can become vulnerable. This is especially true for sole traders or partnerships, where you don’t have the protection of limited liability as an incorporated company.

By transferring your assets to a trust, these assets are legally owned by the trustee, not you personally. This makes them inaccessible to the owner's personal creditors, in most cases.

2. Mitigate the risk of being an entrepreneur

Being an entrepreneur involves taking on certain risks. Sales can plummet, businesses can fold and unexpected external conditions can scupper your well-laid plans as a business owner.

With your personal assets held in a trust, you can take calculated business risks knowing that your family home, savings and other personal investments are safeguarded. The family trust provides you with a crucial safety net to secure yours and your family’s future.

3. Enhance your estate and succession planning

Protecting your personal assets is the key function of the trust. But a well-managed family trust can also help with the orderly transfer of your assets to future generations.

Having the family trust set up prevents your hard-earned assets from being tied up in your estate upon death. This is great for estate planning and helps your immediate family achieve a smoother transition and protects these important assets from potential claims against the estate.

4. Balance control vs. ownership

As the business owner, once your assets are held in a trust you are no longer the legal owner. However, through a trustee or appointor role, you can still maintain a significant degree of control over how the assets in the trust are managed and distributed

Even though you no longer hold legal ownership of these assets, you can still balance a level of control over the assets, while also enjoying the benefits of reduced liability and risk.

5. Benefit from better tax planning, in some instances

Asset protection is the primary driver of a family trust. But having the trust in place can also make it easier to distribute income among beneficiaries in different tax brackets. As such, there may be an opportunity to enhance the overall tax position of the whole family.

Tax planning within a trust structure is a complex area and should always get professional advice from your tax adviser.

Helping you enjoy the protection of a family trust

Having worked so hard to create a profitable business, it’s vital to take every opportunity to protect your personal assets and the future prosperity of your family and loved ones.

Talk to our team about the key benefits of setting up a family trust, and the potential benefits you could achieve in your own specific business and family situation.

Why cash flow forecasting matters for your business

Tue, 21 Oct 2025 06:13:25 GMT

Projecting your cash flow is essential. By forecasting ahead, you gain a clear picture of your financial position in the coming months, which allows you to take the right steps to protect your cash reserves.

Detailed forecasts also make it possible to test different scenarios, identify savings, and develop strategies that keep the business secure.

Staying on top of changing conditions

Forecasting is not a one-off exercise. Your cash flow should be reviewed weekly or at least monthly, depending on the size and complexity of your business. This regular check gives you time to address problems before they become critical.

For example, if a customer payment looks likely to be late, you can tighten credit control, chase invoices earlier, or agree staged payments to protect your position.

Modern tools like Float, Fathom, or Futrli connect with your accounting system and can automatically update your forecast when new invoices or expenses are added. This saves time and ensures the data you are working with is always current.

Strengthening your financial position

A forecast is only useful if you act on what it shows. If your outgoings consistently outweigh your income, you need to address both sides of the equation. On the income side, consider whether your prices reflect the value you deliver. A modest increase, communicated well, can have a big impact. Look at new revenue streams, such as offering a premium version of an existing service or introducing subscription-style billing to smooth income.

On the cost side, carry out a quarterly expense review. Cancel unused software licences, renegotiate supplier contracts, and monitor stock levels to prevent tying up cash in slow-moving items. If staffing costs are a concern, explore flexible hours, cross-training staff to cover more roles, or outsourcing specific tasks that don’t need full-time employees. Small adjustments can add up to a significant improvement in your forecast.

Preparing for the future

One of the biggest strengths of forecasting is the ability to model “what if” scenarios. Adjust the assumptions in your forecast to see the impact of a 10% fall in sales, a delayed client payment, or an increase in energy bills. This allows you to put contingency plans in place before problems arise. If a scenario shows a cash shortfall, you can line up funding early, when you are in a stronger negotiating position with banks or investors.

Alongside scenarios, build a rolling 12-month forecast. Extending beyond the next few weeks or months helps you plan for seasonal peaks, tax payments, or larger one-off expenses. This longer view makes your strategy more resilient and gives you confidence when making investment decisions.

Talk to us

Cash flow forecasting is not just about avoiding problems; it gives you the insight to grow safely and take opportunities with less risk. Call us on 01904 787 973 if you’d like support setting up a forecast that works for your business and puts you firmly in control of your cash flow.

The art of delegation

Wed, 15 Oct 2025 06:43:32 GMT

How often do you get to the end of a working day and wonder where the time went?

Perhaps you never got to item three (or even item one!) on your to-do list. How can you solve this problem without working longer hours? The answer is very simple, but the art in the solution is where the gold is.

The answer to free up time is to delegate more, either to existing team members, new people you recruit, or externally to outside contractors. However, if delegation were that easy, everyone would be doing it now, right?

So, what is the art of delegation?

We say art, because delegation is not an exact science; different approaches are needed depending on who the ‘delegate’ is. Time and effort are required to effectively pass on tasks to others.

Often, the time the delegator needs to put in initially is greater than if they did the work themselves – that’s why so many people don’t delegate.

The view that ‘it’s quicker for you to do it yourself’ holds you trapped and unable to be more productive and effective yourself. It also stops others from developing better ways to do things than you already know, i.e. if you teach them your way, then they can master that AND add their own value, two minds being better than one.

Here are some essential principles to apply to help you to delegate (as opposed to abdicate!):

Delegation

Assess the task, issue to the right person and support, helps build trust and respect
Be specific and crystal clear for greater communication
Request they repeat back instructions, so you know you were understood, enabling higher productivity
Set a time frame and request clarification that the task has been achieved, ensuring jobs are completed on time and are profitable
Both parties to review, opens the door for future work

Abdication

Issue tasks to anyone and forget about it, shows distrust and a lack of respect
Giving unclear and little information results in poor communication
Don’t ask if you were understood, results in low productivity
Don’t set a time frame – it can mean jobs are delayed and over budget
Different expectations can result in disgruntled clients
No review results in no future work

Delegation is a skill to be learned; applying these principles consistently will ensure long-term success.

Action list

Which tasks am I currently doing that I could delegate to others?
What can I do with the time I free up?
Who are the best people for me to delegate these to? (Make sure they want to do these as part of their career development).
What is the best way to document what is expected and how it should be done?
What support and review process is needed to ensure success?

Get in touch

Delegation is one of the fastest ways to free up your time and focus on the parts of your business that really need your attention. At Inglis, we work with business owners every day who face the same challenge: too many tasks on their plate and not enough hours in the day. We can help you streamline your financial processes, take essential but time-consuming work off your shoulders, and give you the space to focus on growth.

If you’d like to spend less time buried in admin and more time leading your business, book a call with Donald Inglis .

How poor cybersecurity can endanger your small business

Tue, 07 Oct 2025 11:56:09 GMT

Digital systems and cloud technology have revolutionised the running of the average small business. But with software systems comes the ever present issue of cybersecurity.

And it’s not just the big league, like Boots and Marks & Spencers, that have to worry about getting hacked.

A recent BBC News article highlighted how one cracked password is all it took for a ransomware gang to destroy a 158-year-old transport company, putting 700 people out of work.

So, what can you do to increase your cybersecurity and keep your business, customer and finance information safe from hackers and malicious software?

Here are five ways to help protect your business

1. Use strong passwords and multi-factor authentication (MFA)

Make it mandatory for your team to use complex, unique passwords for all business accounts and devices. And make sure to enable multi-factor authentication (MFA) (sometimes called two-step authentication) so all software and system log-ins require a second form of verification, This makes it far more difficult for hackers to gain access to your systems.

2. Keep software and security patches updated

Regularly update all your operating systems, software, apps and security patches, so you’re always using the most up-to-date versions. Cybercriminals will exploit any known vulnerabilities in out-of-date software, so patching these gaps is a critical step in preventing attacks.

3. Train your staff to recognise phishing and poor security

Your employees are often the first line of defence. Provide regular training on how to spot suspicious emails, texts or calls. And make sure your team-members knows to avoid clicking on malicious links or downloading unverified attachments for example.

4. Secure and regularly back up your data

Make sure to back up your critical business data to a secure, separate location, like an encrypted cloud service or an external drive. With back-ups in place, you can be up and running quickly in the event of a ransomware attack or data breach.

5. Adopt the Cyber Essentials scheme

The Cyber Essentials initiative is a government-backed certification scheme that explains five ways to protect your business against the most common online threats. By completing the Cyber Essentials scheme, you demonstrate your commitment to cybersecurity and give the business increased protection against potentially harmful attacks.

Helping you keep on top of cybersecurity

Keeping your business and your data safe and secure is a core responsibility for every small business owner. And there’s plenty of advice available to boost your cybersecurity.

The National Cyber Security Centre has a mix of advice, schemes and training available for small and medium-sized UK businesses. And if you need 1-2-1 advice, our team will be happy to offer support and connect you with local cybersecurity experts.

Could your business survive without you?

Mon, 29 Sep 2025 07:30:08 GMT

Would your business still thrive, or would it suffer a catastrophic failure if you suddenly stepped away?

It’s tough to remove yourself from the day-to-day operations when you’re passionate and busy. However sudden accidents, illnesses, or family emergencies can – and will – happen and you need to be able to step back knowing your systems are robust enough to cope.

Build in resilience

For your business to work for you, you need to make yourself replaceable. Large corporations have plans in place to mitigate what’s known as 'Key Person Risk'. But when you run a small entrepreneurial venture, who is the backup?

The more you can train and empower your team to perform the business’s essential daily functions without micromanagement, the closer you'll be able to enjoy a lifestyle business.

Establish repeatable and scalable support infrastructure to run the daily operations and create a great team that you can lean on. Your staff need a common purpose, knowing why what they’re doing matters, as well as clear expectations around their roles.

By creating a suitable work environment, where employees both individually and as a team are more efficient and likely to enjoy what they do, you’ll breathe easier knowing they have your back (and your business) in an emergency.

Finally, it’s important to know what the business looks like without you. An exit strategy is often thought of as the way to end a business – which it can be – but in best practice, it’s a plan that moves a business toward long-term goals and allows a smooth transition to a new phase. That may involve re-imagining business direction or leadership, keeping financially sustainable, or pivoting for challenges.

A fully formed exit strategy takes all business stakeholders, finances and operations into account and details all actions necessary to sell or close. Strong plans recognise the true value of a business and provide a foundation for future goals and new directions.

Top Tips

No one is irreplaceable – Challenge yourself to step away for a week. Which systems fall over? Which procedures get left hanging? Which duties get ignored? Go cold turkey as a test case for the time you may have to leave your business in the hands of others.
Embrace innovation – Get systems that are simple, streamlined, effective and can be used by multiple key team members. Make sure anyone can log in and see exactly what’s needed for what reason at any time.
Recognise the value you’re creating – A business that doesn’t rely on its owner is worth a lot more when the time comes to sell or pass the reins to someone else.

Over the years, we’ve grown into one of the leading accountants in York, expanding our range of accounting services whilst staying true to our core values. If you would like to talk to our team about structuring your business to make it more reliable, then book a discovery call with Donald Inglis .

Measuring the health of your business with ratio measures

Thu, 25 Sep 2025 07:31:28 GMT

When you’re running a business, it’s easy to get caught up in the day-to-day activity and lose sight of the big picture. Taking stock of the health of your business is important. Knowing where you are allows for more effective planning, early warning about any issues, and the chance to better chart a course for success.

There are some quick ratios that will help you to gauge the health of your business. We can help you to assess your business health and show you how to calculate these vital checks.

Liquidity ratios

Liquidity ratios are about how quickly you can turn your business assets into cash - which helps you assess whether you’ll be able to pay the bills if cashflow gets tight.

High ratios are better, as this means you’ve got more assets than liabilities.

Current ratio

Current ratio = Total current assets / Total current liabilities

As a general guideline, 2:1 is a good current ratio, but this does depend on the kind of industry you’re in, and the nature of the assets and liabilities.

Quick ratio

Quick ratio = (Current assets – stock on hand) / Current liabilities

This measure excludes your existing stock, which you may not be able to quickly turn into cash, and is seen as a more realistic quick snapshot of your position.

Solvency ratios

Solvency ratios look at sources other than cash flow to see whether your business will be able to settle debts.

Leverage ratio

Leverage ratio = Total liabilities / Equity

This is a measure of whether your business is reliant on debt financing or equity to fund your assets. A higher ratio can make it harder to borrow money.

Debt to assets

Debt to assets = Total liabilities / Total assets

This tells you what percentage of assets is being financed by liabilities.

Profitability ratios

Profitability ratios will let you know how efficient your business operations are. Where possible, it’s good to measure your business against others in your industry.

Gross margin ratio

Gross margin ratio = Gross profit / Total sales

This ratio tells you whether you can cover the necessary business overheads from your sales.

Net margin ratio

Net margin ratio = Net profit / Total sales

This measure tells you the percentage of sales dollars left after you’ve settled your expenses, except for your income taxes.

Checking your business health is a great habit to get into

Using these ratios helps you to understand your current business health and allows you to plan. Talk to us about how to calculate the factors in these ratios in order to keep your business on the right track.

Keeping your tax and expenses in check when you are self-employed

Fri, 19 Sep 2025 11:02:14 GMT

Contracting or freelancing requires you to wear a lot of hats. Relationship-building, keeping track of your time, marketing your skills and actually doing the work.

But one of your priorities should also be establishing how you handle your money and setting the groundwork for good habits.

Understand your deductions

Before you start, it’s essential to understand what expenses you can and can’t claim. This means you’ll keep the right receipts and track the right expenses. Figuring out what’s what can be a little confusing as everyone has a different working set up and what you can claim for can vary between industries and occupations. Talk to us about your business expenses from the beginning. This will also help you plan for any bigger work-related purchases that you may need to make.

Get a system sorted

You’ll thank yourself later for setting up a good system now. Getting your expenses recorded and your invoices collated means you’ll be able to spend more time doing the important stuff in your business. It’s not just about saving time - keeping on top of your cash means you’re more likely to succeed. Do your research and choose a system that will work for you. Consider choosing a software platform which allows you to record your time spent on projects, it’ll make sending those invoices that much easier!

Stash that cash

When you’re running your own business or working for yourself, it’s important to always keep your tax obligations top of mind. Make sure you have money set aside in a separate account or consider entering into voluntary instalments.

One way to budget and keep on top of your business tax is to pay yourself a wage. Keeping your accounts separate also prevents you from thinking of all your business income as spending cash! Remember to also put aside a little extra to cover your holidays and any quiet periods.

How we can help

We can help make this process easier, so talk to us about setting up systems that take the headaches out of your finances. Give us a call on 01904 787 973 or book a call with Donald Inglis .

Five signs you’re undercharging

Tue, 16 Sep 2025 08:52:42 GMT

Are you undercharging for your services? It can be hard to tell, particularly if you’re in a niche industry or you’re a contractor. Costs have been rising, so it may be time to rethink your own pricing.

Here are five signs that you might be undercharging:

Nobody ever questions your quotes – Do all your new clients accept your quotes or charges without asking any questions, requesting a breakdown or wanting a discount? It’s possible they’re delighted to be getting such a great deal.
You run off your feet but you can’t afford to get help – When you’re working yourself to the bone, but there’s not enough money left over to employ someone to help you, your prices are too low – or something else needs to change.
Your prices have been the same for two years or more – In most industries, prices increase just slightly each year. Leave your prices flat for too long and you’re not keeping up with the market; make sure you review your fees annually.
You’re overbooked – When business is booming and there’s no room for new clients, it’s time to raise your prices.
Clients don’t treat you as well as they should – When clients think they’re paying peanuts, they’ll often take you for granted. They don’t see your time as valuable, so they feel free to mess you around.What should you be charging?

Finding your pricing sweet spot could take a little time. You’ll need to do some research, maybe ask around a little, and find out where your competitors are pitching their rates.

We can help too. If we have clients in similar industries we might be able to give you some indication of typical fees, so give us a call on 01904 787 973.

Could taxes go up in the Autumn Budget? How to be ready

Wed, 10 Sep 2025 14:27:48 GMT

At the last general election, the Labour party pledged to not raise taxes for ‘working people’, with assurances that there will be no changes to income tax, national insurance (NI) and VAT.

While this pledge may appeal to UK workers, it does limit what the Chancellor, Rachel Reeves, can do when it comes to raising taxes and reducing the UK’s current economic deficit.

With individual taxes protected, some commentators have argued that it’s UK businesses that will bear the brunt of any hikes in taxation.

But what tax changes are most likely? And could any changes impact you and your business?

Possible changes that could be announced in the Autumn Budget

Let’s take a look at some of the potential changes we could see being announced by Rachel Reeves on the 26th November.

Remember, these are speculative outcomes from the Budget and nothing has yet been confirmed by the Chancellor or the Labour party.

Here are the areas most likely to see amendments

Capital Gains Tax

Capital gains tax (CGT) is widely tipped for changes. The government may raise the rates of CGT or reduce the annual tax-free allowance, which has already been significantly cut in recent years. There’s also speculation about extending CGT to high-value homes as an easy way to raise more tax revenue when property owners sell more expensive properties.

Inheritance Tax (IHT)

Reforms to IHT are being considered. This could include lowering the current tax-free threshold of £325,000, which has been frozen since 2009, or tightening rules around gifting to prevent large estates from avoiding tax.

Income Tax Thresholds

While the government has pledged not to raise the rate of income tax, a common ‘stealth tax’ is to freeze tax thresholds. It’s possible the current freeze on income tax thresholds could be extended. This would pull more people into higher tax brackets as wages rise, generating more tax revenue for HMRC.

Pensions

Changes to pensions are possible, with a focus on areas like the tax-free lump sum that can be taken from a pension, or restricting the tax efficiency of salary sacrifice schemes.

VAT changes

It’s possible that widening the scope of VAT could raise significant tax revenue. There’s also speculation that the Chancellor may reduce the VAT registration threshold, currently set at £90,000 p.a. This would require many more businesses to register for VAT and charge the tax on goods and services.

Business rates

Although not part of the Autumn Budget, changes to business rates could have a major impact for some businesses. Businesses are already facing new business rate burdens, but some commentators are warning of an ‘unavoidable double hit’ that could push UK business rates bills up by £2.5bn.

Business Asset Disposal Relief (BADR)

For business owners who plan to sell their company, changes to CGT on these sales have already been announced. The rate for BADR rose from 10% to 14% in April 2025, and there’s a further increase to 18% planned for April 2026. Changes to the rate, or the period of availability of BADR are additional possibilities.

We’ll be summarising the key points of the Autumn Budget once the Chancellor delivers her speech. To stay up to date, check our Resource Hub regularly, or keep an eye out for our Budget summary sent the day following the Budget.

Overcoming the UK's SME funding gap

Fri, 05 Sep 2025 14:02:08 GMT

In a world where evolving political events can change the market in an instant, and economic instability is still the norm, finding certainty in your business strategy is a rarity.

Access to funding, overdrafts and lines of credit is the lifeblood of growth for any small and medium-sized enterprise (SME). But new research by Allica Bank has shown that there's an SME funding gap of up to £65billion in the UK – potentially choking SME growth.

Allica’s research is a wake up call for UK small and medium businesses, making it clear that funding is more difficult to access for the average SME.

Major findings from the research show that

There’s a multi-generational shift in bank lending, with a gap of up to £65bn in SME lending emerging over the last 25 years. The shortfall is especially prominent in ‘productive credit’ that’s vital to boost investment, productivity and growth.
There has been a particular collapse in overdraft lending to small businesses, which dropped from £18bn in 2000 to just £2.7bn in 2024.
The UK has the lowest business investment rate in the G7, with small businesses investing at only a third of the level of corporate businesses and the lowest level of SME loan application rates recorded in the OECD.

The impact of a drop in available funding

A nationwide funding gap is cause for concern, not just for large corporate organisations and government think tanks. Simple, straightforward access to funding is what keeps your cash runway on track, and provides the capital to grow your small business.

If loans, overdrafts and business credit dry up, this could have a significant impact on your ability to fund the next stage of your business strategy.Four ways to overcome the funding gap

So, with the outlook for SME funding looking less than rosy, what can your small business do to improve the chances of accessing the funding you need?

Here are four ideas for finding the required capital

1. Improve your business credit score

Having a strong business credit score signals that you’re a viable business to lend to. Pay your suppliers on time, keep your credit utilisation ratio low and make sure you’re keeping accurate financial records. This can all help to strengthen your credit profile and access to funding.

2. Explore alternative lenders and fintech platforms

Don't rely solely on traditional banks. The non-bank lending sector, including specialist business finance providers and fintech companies, offers flexible and often quicker access to capital. Products like asset finance and [ invoice finance ] can be great routes to additional funding.

3. Check out government-backed funding

The government-backed Growth Guarantee Scheme allows eligible businesses to borrow up to £2m in loans. The scheme is open to smaller businesses with a turnover of up to £45m (on a group basis, where part of a group).

4. Enhance your business plan and financial projections

A clear, well-researched business plan is an excellent tool when approaching lenders. A detailed plan and in-depth financial forecasts help to show your viability as a business, and your ability to cover the repayments of any offered loan.

Talk to us about funding the future of your business

If you’re struggling to access routes to funding, don’t worry. We can help you to improve your credit profile and business credit score, making it easier to access additional capital.

Bringing cash flow processes into the digital age

Thu, 28 Aug 2025 13:06:29 GMT

In a world where evolving political events can change the market in an instant, and economic instability is still the norm, finding certainty in your business strategy is a rarity.

Keeping on top of your cash flow is even more important during tough economic times.

With global uncertainty, recent high inflation, energy prices soaring, supply chain challenges, cash is likely to be tight over the coming year. Cloud technology and fintech apps, can give your business the best possible control over its cash.

Why is cash flow so important?

To keep your business operating, you need enough money coming into the business to cover your outgoings – with enough surplus cash to deliver a profit.

In recessionary periods consumers have less disposable income to spend on your products and services. Business customers will be looking to reign in their spending on suppliers. As a net result, your business is likely to make fewer sales and will bring in smaller revenues.

This means:

Reduced income coming into the business.
Less cash in the business to cover your operational expenses.
Not enough money in the bank to pay suppliers, utility providers or payroll costs.
In the worst-case scenario, insufficient cashflow for you to continue trading.

What can you do to improve your cash flow situation?

The more informed you are about your cash position, the more you can do to prepare for any cashflow gaps. It’s this foresight that can make all the difference when you’re battling against tough external economic forces and a downturn in sales.

If you want to safeguard your cash flow, these are some sensible steps to take:

Switch to cloud accounting – accounting and finance technology has moved on in leaps and bounds in the past decade. The best cloud accounting platforms all offer a detailed reporting of your cash position. These software tools will generally offer real-time data, giving you up to date cash numbers.
Integrate with cash flow forecasting apps – cloud accounting platforms let you add third party apps to create a custom app stack of helpful business tools. There are plenty of cash flow forecasting apps to choose from, giving you the ability to predict your future cash flow position.
Plan ahead for the cash flow gaps – when your forecast shows a shortfall of cash coming up, that’s the time to take evasive action. If you can see that there’s a cash hole approaching next month, it’s time to look at ways of raising extra finance to fill that hole. That could mean extending your bank overdraft, taking out a small business loan or taking out an invoice finance facility with a lender.
Look for opportunities to cut your overheads – one way to even up your cash flow is to cut down on your expenditure. If you can cut back on overheads, expenses and unnecessary costs, this can help you re-balance your cash position, even when cash flow is getting tight. Look for cheaper suppliers, buy in smaller quantities and take every opportunity to cut costs and keep your spending more sensible.
Update your prices and your sales strategy – raising your prices is one way to bring in more cash, with the same volume of sales. But it's a balancing act. Putting your prices up can alienate existing customers and could see you losing customers, but if you can find the sweet spot for your pricing AND also drum up more sales, you can quickly increase revenue and give your cash inflows a healthy boost.
Review your cash flow reports regularly – it’s important to look at your cashflow numbers and reporting regularly, not just at period-end. This is particularly important when economic times are tough. With the most current cash information to hand, you can make informed business decisions and aim to keep the business operational.

Talk to us about updating your cash flow processes

With your business in a healthy cash flow position, you give yourself some solid financial foundations for riding out the global recession. No business is invulnerable in these conditions, but with liquid cash in the business, you have more flexibility and more capital to play with.

Book a meeting and let’s see how we can improve your cash flow processes.

Reducing the uncertainty: strategic business reviews

Mon, 18 Aug 2025 06:37:45 GMT

In a world where evolving political events can change the market in an instant, and economic instability is still the norm, finding certainty in your business strategy is a rarity.

Business plans and your overriding strategy are no longer written in stone. This means being flexible about your next steps and regularly reviewing your business strategy.

Let’s see how frequent strategic business reviews can help you reduce the uncertainty.

1. Get proactive with your financial forecasting

Review your financial position, metrics and reporting as regularly as possible.

Produce rolling cashflow forecasts to keep on top of your cash position and run scenario planning to look at the best, base and worst-case scenarios. This gives you the best possible visibility into the company’s financial health, and gives you enough time to spot the potential shortfalls, understand your cash runway and make adjustments to your spending.

2. Diversify your revenue streams to reduce risk

As part of your strategic review process, you should be looking for opportunities to diversify as a business, generating new and potentially profitable revenue streams.

Explore whether there are new products or services you might offer, and whether you could target new and, as yet, untested customer segments. Increasing your online presence to sell more through e-commerce channels is another option. If you can reduce your reliance on a single income source, this reduces the risk level and strengthens your resilience against sudden market shifts or economic downturns that might, potentially, affect one area.

3. Make your operations more agile and efficient

A key part of any strategic review is to focus on driving operational efficiency in the business.

Review your operational workflows on an ongoing basis and look for inefficiencies you could remove, or efficiencies you could add. Embrace flexible models, like outsourcing or adaptive supply chain strategies . This gives you the agility needed to adjust your production or service delivery in response to changing demand or disruptions.

4. Strengthen your customer and supplier relationships

Trusted relationships with your key stakeholders are a vital element of broadening your network, adding stability and making the company a stronger proposition.

As part of your strategic review, analyse your existing customer relationships and supplier relationships . Look for simple ways to strengthen and nurture these connections. Customers want to feel valued, and suppliers are always looking for ways to build greater trust. So, make sure you’re building bridges, communicating openly and nurturing these critical relationships.

5. Invest in technology and data analytics

Digital technology forms the foundations of any forward-thinking small business.

Collecting and analysing data gives you the foundational information needed to make informed decisions during your strategic review. Use the latest data analytics tools to review market trends, customer behaviour and your own internal performance as a business. These outputs will provide actionable insights, making it easier to define your strategy and change direction. Let’s review your business strategy

Doing business is unpredictable at the best of times. But taking the time to review your performance, strategy and business plan is a vital way to reduce this uncertainty.

Book in some time for a strategic review of your business and let’s work together to spot the inefficiencies and find the opportunities for diversification and increased efficiency.

Want loyal customers? Start by asking the right questions

Mon, 11 Aug 2025 08:39:32 GMT

Without your customers, you have no business. It’s their engagement, loyalty and sales that power your cashflow and drive the business to new heights.

But when was the last time you reviewed your customer service levels?

And how often are you talking to your customers to find out if they’re happy, satisfied and still true advocates for the business?

Let’s dive into the power of great customer service and asking for honest feedback.

Why is customer service so important?

We live in a hybrid world, where customer interactions are as likely to take place online as they are in person. Customers follow you on social media and advertising can help you target specific customer demographics with almost forensic levels of detail.

But people buy from people, and that’s why treating your customers in an open, honest and welcoming way is so vital to the success of your small business.

What do customers want from your business?

Customer needs drive your business strategy (and if they don’t, then it’s time to review your strategy!). But what does the average customer want from your business?

On the whole, customers want:

Reliability : Customers want your small business to consistently deliver on its promises, and to deliver your products/service on time, every time, without excuses.
Personalised service : Customers want to feel known and valued as individuals. They like tailored solutions and responsive communication that’s aimed specifically at their needs.
High quality : Customers expect your products and/or services to consistently meet or exceed their expected standards. They want their problem understood and solved, quickly.
Clear communication : Customers like your communication to be clear, transparent and as simple as possible. They want to contact you easily and get prompt responses to all enquiries.
Great value : Customers expect a good balance between price and quality. They want a product that adds value, but at a competitive price that they feel is fair.

Key ways to find out what your customers are thinking

Building relationships, understanding your customers and learning their basic needs sits at the heart of tailoring and updating your business strategy.

So, how do you find out what’s going on in your customers’ minds?

Here are a few ways to gather customer feedback and insights:

Post-interaction surveys

Once you’ve made a sale, send the customer a short, targeted survey. Use this as a chance to ask why they chose your product/service and how they rated the interaction. Keep it short and concise, but look for the service pain points and highlight any areas that could be improved.

Engage on social media

Actively monitor and engage with customer comments, mentions, and direct messages on your social media platforms. It’s a good idea to use polls or direct questions to gather opinions and collate more customer data. This shows customers their feedback is valued and acted on.

Direct feedback forms/buttons

Put easy-to-use feedback forms or feedback buttons on your website, app and e-commerce store. This gives customers a convenient, non-intrusive way to share their suggestions or report issues. It’s quick, simple and gives you instant direct feedback from your customer base.

Incentivised feedback programs

Offer small incentives (discount codes, loyalty points) for completing surveys or providing detailed feedback. This boosts your response rates and encourages customers to invest some of their time in offering constructive criticism.

Personalised follow-ups

For more complex services or larger projects, make sure you have post-project meetings or personalised email/phone follow-ups with the customer. This is a great forum for customers to give feedback and get the snags, frustrations, high points and wins off their chest.

You’ll get deeper qualitative insights and it demonstrates a commitment to open communication. Start talking with your valued customers

Get in touch

Your customer base is one of the most valuable assets in your business. So, make sure you’re using every channel possible to talk to your customers and meet their expectations.

If you’re looking for more advice on relationship building, please give our team a call on 01904 787 973. We’ll help you improve your customer strategy and nurture your relationships.

The startup edge no one talks about

Mon, 04 Aug 2025 07:23:28 GMT

Making good business decisions is easier to do when you have excellent information at your fingertips – and that’s the value of having great reporting at the heart of your startup.

Any cloud accounting software worth its salt will offer you straightforward ways to run your financial reports and track your important metrics. That’s standard in the new digital world. And this level of reporting gives you real, tangible data on which to base your decision-making. But good decision-making isn’t just about the numbers.

As well as having an effective understanding of your finances, you need a sense of what's good for the business, how decisions will impact on your growth and what your future path looks like.

Run management information at least once a month

Modern cloud accounting software makes it easier than ever to run detailed, up-to-date reporting on your financial position. With the click of a button, you can run numerous in-depth reports and statements that show your past and future position. Doing this regularly gives you a wealth of financial information on which to base your decision-making and strategic thinking.

At each stage in your startup’s growth, you’ll have to make important decisions about your next step – so, it’s important to think about the financial implications of any new projects, the amount of cash in the business and the availability of new sources of funding.

Use metrics and projections to inform your decision-making

Setting up a custom dashboard to monitor the most important metrics and key performance indicators (KPIs) is definitely a good idea. Most accounting apps will let you tailor your dashboard, so you can pick and choose from KPIs that are most relevant to your startup.

Set clear and democratic targets for all of your main KPIs and track them on a weekly basis, so you’re monitoring the financial heartbeat of the business. If cashflow is looking poor, look at freeing up some cash, or borrowing money to fill the gap. If sales revenues are dropping, put some renewed vigour into your sales activity, or get a new marketing campaign underway to raise awareness of your most profitable products and services.

Talk to your board and executive team when scenario-planning

You may be the sole founder of your startup, or you may be part of a bigger team of co-founders. But the reality is that no one person can make all the decisions in a busy startup. To get the best overview of a challenge, or to come up with an effective way to grab a potential opportunity, you need to talk to your team – that’s the only way to get an effective consensus.

Talk through the current threats and opportunities and run through as many different potential scenarios as possible. What’s the best-case scenario, and how can you achieve it? What’s the worst-case scenario, and how do you plan for it, if things don’t go according to plan?

Work closely with an experienced external adviser

When you’re working in the business 24/7, it’s hard to see the business in an objective way. Your judgement on some issues can be overly emotional and clouded by internal or political factors. Working with an experienced accountant, business adviser or business coach brings a fresh perspective to the business – both financially, strategically and emotionally.

Having a trusted external accountant on the team definitely helps you get your numbers straight. But they can also bring their knowledge and experience to bear on your strategic thinking, your decision-making and the impact of the business on your own mental health and wellbeing.

You can open up to them about your worries, share your aspirations for the business and bounce strategic ideas off them – taking some of the pressure off your shoulders.

Track how you’re measuring against your goals

To meet your goals and make good business decisions, it’s helpful to monitor and track your progress against these targets. If you refer back to your reporting and KPI metrics, you can easily measure your performance over time – and take action if progress is starting to slip.

Areas to keep an eye can include your:

Cashflow position – to make sure there’s enough cash in the business to keep your project moving forward and heading towards the agreed end goal.
Sales figures and revenue – so you can see how you’re tracking against your sales targets and if the intended revenue from the project is being achieved.
Budgets and expenses – to check that you’re not overspending on your project and that the team is being sensible with costs, expenses and essential overheads.
Gross margin percentage – so you can keep the business profitable and aim to meet your profit targets for the period, or year-end.
Growth against targets – to keep the business performing well and growing at the rate you predicted to meet your growth target for the period.

Making a few bad decisions along the way is all part of the learning process. But by monitoring your performance and talking to the best advisers, it’s easier to keep the business on track.

If you’re at the early stages of planning out your business idea, give us a call or book a call with Donald Inglis . We’ll help you set up the best possible management information, to help guide your decision-making.

Making Tax Digital for Income Tax: Are you exempt or eligible?

Mon, 28 Jul 2025 06:06:03 GMT

Making Tax Digital for Income Tax (MTD for IT) is being introduced from 6 April 2026.

If you’re a sole trader or landlord, this will mean complying with the new rules around keeping digital records and submitting quarterly digital updates to HM Revenue & Customs (HMRC).

However, there are potential exemptions to the new MTD for IT rules. So, it may be that you can, for the moment, escape the mandatory move to digital tax returns.

Let’s see who will have to use MTD for IT, and who won’t be required to sign up.

Who WILL need to use MTD for IT?

MTD for IT is being introduced in a number of phases, starting with sole traders and landlords from the start of the 2026/27 tax year.

It’s mandatory to use MTD for IT if all of the following apply:

You’re a sole trader or a landlord registered for Self Assessment
You get income from self-employment or property, or both
Your qualifying income is more than £20,000

There’s more info here on what qualifying income is included.

Who will NOT need to use Making Tax Digital for Income Tax?

Not all sole traders and landlords will need to use the new MTD digital system. You’ll be exempt from using MTD for IT if:

You meet certain conditions that make you automatically exempt from using the service
You have applied for an exemption and HMRC approves your application
Your qualifying income is £20,000 or less

When will you need to begin using MTD for IT, if eligible?

The qualifying income threshold for MTD for IT begins at £50,000 for the 2024/25 tax year, and will drop progressively over the next three tax years.

If your qualifying income is over:

£50,000 for the 2024 to 2025 tax year, you will need to use it from 6 April 2026
£30,000 for the 2025 to 2026 tax year, you will need to use it from 6 April 2027
£20,000 for the 2026 to 2027 tax year, where the Government has set out plans to introduce legislation to lower the qualifying income threshold.

Business partnerships will be required to use Making Tax Digital for Income Tax in the future. The timeline for this is yet to be announced by HMRC.

Talk to us about getting ready for MTD for IT

You’ll start using MTD for IT once you submit your first Self Assessment tax return. However you can choose to sign up to the MTD scheme early, if you want to. Call our team on 01904 787 973 if you want ot learn more about Making Tax Digital and how we can help you select the right accounting software, understand the MTD rules and get ready for the start of MTD for IT.

Bringing your cash flow processes into the digital age

Mon, 21 Jul 2025 14:17:00 GMT

Keeping on top of your cash flow is even more important during tough economic times.

With global uncertainty, recent high inflation, energy prices soaring, and supply chain challenges, cash is likely to be tight over the coming year. Cloud technology and fintech apps can give your business the best possible control over its cash.

Why is cash flow so important?

To keep your business operating, you need enough money coming into the business to cover your outgoings – with enough surplus cash to deliver a profit. In recessionary periods, consumers have less disposable income to spend on your products and services.

Business customers will be looking to rein in their spending on suppliers. As a net result, your business is likely to make fewer sales and will bring in smaller revenues.

This means:

Reduced income coming into the business
Less cash in the business to cover your operational expenses
Not enough money in the bank to pay suppliers, utility providers or payroll costs
In the worst-case scenario, insufficient cash flow for you to continue trading

What can you do to improve your cash flow situation?

The more informed you are about your cash position, the more you can do to prepare for any cash flow gaps. It’s this foresight that can make all the difference when you’re battling against tough external economic forces and a downturn in sales.

If you want to safeguard your cash flow, these are some sensible steps to take:

Switch to cloud accounting – accounting and finance technology has moved on in leaps and bounds in the past decade. The best cloud accounting platforms all offer a detailed reporting of your cash position. These software tools will generally offer real-time data, giving you up-to-date cash numbers.
Integrate with cash flow forecasting apps – cloud accounting platforms let you add third-party apps to create a custom app stack of helpful business tools. There are plenty of cash flow forecasting apps to choose from, giving you the ability to predict your future cash flow position.
Plan ahead for the cash flow gaps – when your forecast shows a shortfall of cash coming up, that’s the time to take evasive action. If you can see that there’s a cash hole approaching next month, it’s time to look at ways of raising extra finance to fill that hole. That could mean extending your bank overdraft, taking out a small business loan or taking out an invoice finance facility with a lender.
Look for opportunities to cut your overheads – one way to even up your cash flow is to cut down on your expenditure. If you can cut back on overheads, expenses and unnecessary costs, this can help you rebalance your cash position, even when cash flow is getting tight. Look for cheaper suppliers, buy in smaller quantities and take every opportunity to cut costs and keep your spending more sensible.
Update your prices and your sales strategy – raising your prices is one way to bring in more cash, with the same volume of sales. But it's a balancing act. Putting your prices up can alienate existing customers and could see you losing customers, but if you can find the sweet spot for your pricing AND also drum up more sales, you can quickly increase revenue and give your cash inflows a healthy boost.
Review your cash flow reports regularly – it’s important to look at your cash flow numbers and reporting regularly, not just at period-end. This is particularly important when economic times are tough. With the most current cash information to hand, you can make informed business decisions and aim to keep the business operational.

Talk to us about updating your cash flow processes

With your business in a healthy cash flow position, you give yourself some solid financial foundations for riding out the global recession. No business is invulnerable in these conditions, but with liquid cash in the business, you have more flexibility and more capital to play with. Book a meeting and let’s see how we can improve your cash flow processes .

Your business isn’t broken – the world has changed

Wed, 16 Jul 2025 09:40:13 GMT

It’s a tough time to be in business. And especially so if you’re a mature, established business that’s finding it hard to keep pace in the rapidly changing market.

As a mature owner, you have experience and knowledge on your side. But you’re also faced with the new realities of transformative AI technology and a global economy that’s increasingly unstable and unpredictable.

Why are these challenges so problematic? Let’s look at the potential impact.

A new business reality

When you started out, the business world was probably a more predictable beast to tame. Technology was here to assist us, not replace us. Markets were more stable and supply chains were reliable.

But that cosy existence has changed – and it’s making it much harder to do business.

That’s bad news if you’re aiming to:

Grow the business and increase sales revenue.
Sell the business and get a good return on your investment.
Hand the business to the next generation in good shape.

The challenges for mature businesses

Trading, when the world around you is changing, is difficult. It throws up some specific challenges that could have a major impact on the future of your business.

Staying competitive and efficient

Cloud tech, automation and now artificial intelligence (AI) have changed the technological landscape. If you aren’t abreast of this technology, you can quickly lose your competitive edge.

Planning your strategy

The business landscape is no longer stable. Global events can change the economic outlook and the validity of your strategy in a heartbeat, making it hard to plan ahead.

Three ways to optimise your business in 2025

To overcome some of the potentially negative impacts, it’s important to remain agile.

Let’s look at three ways you can help to embrace the new reality.

1. Champion AI, automation and digital technology

Get on board with AI and digital tech. AI can either be your worst enemy or your biggest asset. Fall behind the technology curve and your competitors will overtake you. Embrace the best elements of AI and it could transform your operations and productivity.

When used well, and with a proper strategy behind it, AI has the potential to make your business more efficient and make it cheaper to run.

2. Focus on human skills and talent

Technology is brilliant for speeding up the running of your operations. But it’s also vital to recognise the contributions of key human skills and the talent of your team and workforce.

Your people are the face of the company and a large element in defining your brand. They’re the creative centre, the ideas hub and the humanity that brings your business to life. Never underestimate the impact of real, genuine, human customer service.

3. Balance your use of AI and human skills

AI can help to run the business, but you also need a talented team driving the company.

The sweet spot is to balance these two different factors making sure you have human oversight over your AI. Maximise your use of AI, software automation and digital technologies, but also invest in people, raw talent and the capabilities that a human team brings to the table.

Talk to us about optimising your business

If you’re feeling like the business landscape is speeding past you, leaving you trailing in the wake of technological, environmental, political and economic change, you’re not alone!

Many experienced business owners are feeling the same way – and have the same concerns around how they’ll be able to sell their business, or pass it on to their successor.

Come and talk to the team and we’ll walk you through some simple, straightforward steps to help you change course, optimise your business and embrace the new reality. Call us on 01904 787 973 or book a discovery call with Donald Inglis .

How a business credit card helps your startup

Thu, 10 Jul 2025 07:03:55 GMT

At the early stages of your start-up journey, access to credit can be a lifesaver.

Cash flow is tight, customer revenue can fluctuate wildly and large-scale bank loans and external funding may be in short supply. In this situation it might seem counterproductive to apply for a business credit card – a move that adds to your debt level.

But, in fact, applying for a company credit card and using that credit facility responsibly can have a hugely positive effect on your ability to fund your growth and access lines of credit.

Let’s explore five ways that a business credit card can improve your funding

1. Builds up your business credit profile

When you use a business credit card responsibly, and pay off the repayments each month, this starts to build up a credit history for the company. This credit profile is directly linked to your business and is separate from your own personal credit.

Having this credit history (and the associated business credit score) is crucial when applying for business loans and accessing future, large credit lines.

2. Establishes you as a responsible borrower

Paying your credit card bill on time each month demonstrates your financial discipline and an ability to manage debt in a responsible way.

When applying for loans, bank overdrafts and trade credit, lenders want to know that you’re a low-risk business to lend to. Responsible payment behaviour acts as an indicator of trustworthiness for future borrowing and will increase your chances of successful funding.

3. Provides a flexible line of credit

Having a business credit card makes it easier to cover your expenses and overheads.

A credit card gives you flexible, accessible funds for your day-to-day operational needs. It’s also an excellent way to cover any unexpected expenses or cashflow gaps. Managing this line of credit also prepares you for larger, more formal, credit facilities.

4. Demonstrates a prudent use of credit

Your credit utilisation rate is a key metric that credit reporting agencies will be interested in. By not maxing out the available credit on your credit card, and keeping utilisation low, you can show that your business manages debt in a sensible way. This marks you out as a low-risk borrower – a key factor in accessing further credit, business finance and investment..

5. Acts as a gateway to more favourable terms

By being responsible with your credit use, you set the foundations for a business credit profile.

A solid track record with a business credit card may lead to pre-approved offers for larger credit lines, better interest rates and more flexible terms from banks. This is incredibly helpful as you scale the business and need additional funding to drive your growth journey. Talk to us about applying for credit and business finance

If your startup is in need of an increased cash runway and improved access to credit, applying for a business credit card is an excellent way to improve your financial flexibility.

Get in touch

Over the years, we’ve grown into one of the leading accountants in York, expanding our range of accounting services whilst staying true to our core values and our force for good ethos. If you would like to talk to the team about ways to embrace this kind of credit then book a discovery call with Donald Inglis .

Making your business work for you: investing in your passions

Fri, 04 Jul 2025 11:15:01 GMT

You’re passionate about your business. But what other areas of life are important to you?

Running a business can become all-consuming, if you let it. That’s why it’s crucial to focus on your work/life balance, reduce your stress levels and make time for other passions in life.

In this series, we’ll look at the core ways your business can be structured to deliver on your own personal, family, philanthropic and leisure goals, now and into retirement.

Managing your time to balance work and play

Four in five small business owners said they are experiencing poor mental health, according to a 2021 survey by iwoca and Mental Health UK .

Being the boss can be extremely stressful and can have a detrimental effect on your mental health, as a small business owner.

To combat this, it’s vital to spend some of your time away from the business, doing things that help you spark joy, relax and reduce those stress levels.

Let’s look at five tactics for boosting your work/life balance

Schedule dedicated time off in your diary

Scheduled time away from the business is just as important as scheduled meetings. Block out specific times in your week for family time, hobbies or exercise.

Treat these blocks of ‘no work time’ with the same commitment as your usual business obligations. Turn off work-related notifications on your phone and mentally disengage from work during these periods, so you can focus on the activities that help you relax.

Prioritise leisure and family during the working week

Don’t wait for the weekend to do what you love and spend time with your family and friends. Weave in shorter bursts of enjoyable activities throughout the week.

This could be a family dinner, a mid-week sporting activity, or dedicating a few hours to your favourite hobby after work. Make leisure a regular part of your routine, rather than an occasional treat that you dangle like a carrot while working long hours and heading closer to burnout.

Dedicate time to your hobbies and creative pursuits

Make time for activities that you genuinely enjoy outside of work. This could be reading a novel, painting, playing a musical instrument, gardening, or even writing your memoirs.

It’s hard to stay focused 100% of the time on the business. Hobbies provide mental stimulation, reduce stress and help you ‘turn off’ and remove the boss’s hat. Coming back to your desk feeling happy, relaxed and rested helps you become a better boss and leader.

Give something back with charity work

You may have a cause, charity or social enterprise that you truly believe in. Schedule time for volunteering and doing your bit for the local community.

Giving back to the community can provide a great sense of purpose beyond your business success. And working with charities and social enterprises also offers a valuable perspective shift, allowing you to view the world without putting it through the lens of a business owner.

Focus on wellbeing and mindfulness

It’s vitally important to be able to step out of ‘work mode’ and to relax.

Create a deliberate routine to help you transition from work mode to personal time. This could involve a short walk, listening to music or spending more time with family when you first get home. These rituals signal a mental shift away from work and help you be more present in your non-work activities – helping you to de-stress, relax and gain a deeper perspective on life.

Achieving a rewarding work/life balance

A relaxed and happy business owner is an asset to your business, and makes you a better person for friends and family to be around. Being able to balance out your work time with your leisure time is an intrinsic part of finding happiness as an entrepreneur.

Get in touch

Over the years, we’ve grown into one of the leading accountants in York, expanding our range of accounting services whilst staying true to our core values and our force for good ethos. If you would like to earn more, keep more of your hard-earned profits and enjoy the life you want then book a discovery call with Donald Inglis .

Strategic business partnerships: the benefits of working together

Mon, 23 Jun 2025 11:02:16 GMT

Your business may compete head-to-head with a number of other companies, but this doesn’t mean you have to treat ALL other businesses as if they are the competition. In fact, there are real benefits in creating strategic alliances with other like-minded organisations.

When you look at the wider marketplace, you’ll see that there are businesses out there that may well compliment your offering. And by working together (rather than against each other) it’s possible to become valued strategic partners, collaborating to serve your joint customers, improve brand awareness and, ultimately, expand your target market.

If this sounds like a positive strategy, now’s the time to do your homework and start hunting down the best strategic partners for your business.

Working to serve a shared customer base

Strategic partnerships are all about finding the common ground between you and your intended partner – and this means finding the best ways to combine your efforts. If you can share the same customer audience, and create a complimentary way of meeting their needs, that creates a broader, more connected way of growing both companies.

Finding a company that’s interested in forming a strategic alliance

1. Find partners in complementary sectors

If you’re an accounting firm, like us, it makes sense to partner with solicitors, lawyers and other professional services providers who can help your clients. If you're a maker of shoes it makes sense to partner with a clothing manufacturer that shares your same sense of style and purpose. The key here is to find a shared audience or customer need, and to create some real synergy between your two businesses.

2. Take part in business networking and events

To get a wider understanding of your local, or industry specific, business network, it’s worth taking part in plenty of online and offline business events. You’ll meet new people, hear about new brands and will find it easier to find your ideal strategic partner. The wider your business network, the more choices you have for an alliance.

3. Look at crossover between your target audiences

Once you’ve found a potential strategic partner, it’s important to take a detailed look at the crossover between your partner’s audience and your audience. Do they shop through the same channels? Do they fit a certain age group or social demographic? Are these customers local, or are they part of a national or global online customer base? How large is their database?

4. Cross-reference your customer databases

By sharing and comparing your client relationship management (CRM) data, you can cross-reference both sets of customer data and see where there’s overlap, or where you may already share some of the same customers. The better you understand each other’s customers, the more likely it is that you’ll find some common ground for shared marketing and promotion.

5. Run joint events and promotions

Presenting joint webinars with your strategic partner, or running joint promotions. By finding a common theme, you bring both audiences together and reinforce the alliance between your two brands. You also reduce the expenditure by sharing the costs and reach a wider audience.

6. Combine your R&D efforts

To move your alliance forward, you can also try combining your research and development (R&D) activity, to find new products, new services and new ways of keeping your joint customers happy. By sharing the time, costs and effort of developing new offerings, both companies will benefit – and you keep your businesses at the cutting edge of their respective sectors or specialisms.

7. Look for other opportunities

Can you link to each other on your websites, or as an upsell or cross sell when a customer is buying. Could you promote their product or service directly whether by email, social media marketing or at events and can they reciprocate? Don't think of it as a once and done, look for ways to continue the collaboration and grow both businesses moving forwards.

Closing thoughts

Building strategic partnerships is not just a smart move – it’s a way to future-proof your business and broaden your impact. By working alongside like-minded organisations, you can open the door to new markets, enhance your brand reputation, and provide greater value to your shared customer base. The key lies in nurturing genuine collaborations that go beyond one-off promotions and create lasting, mutually beneficial relationships. So, take the time to choose your partners wisely, invest in the connection, and watch as your businesses grow stronger together.

The importance of a good business credit score

Thu, 19 Jun 2025 10:22:46 GMT

Access to additional funds is what allows you to invest in your business and grow the company. But to be able to borrow from lenders it’s vital to have a good business credit score.

So, what is a business credit score and how is it calculated? And what proactive action can you take to improve your all-important credit profile

What’s a business credit score?

Your company’s business credit score is a measurement of your creditworthiness as a company. In other words, it gauges how risky you are to lend to, based on factors like your credit history, payment history, cashflow position and publicly available information like your accounts.

A low score means you’re classed as high risk. A high score means you’re low risk.

Who gives the scores and what do they mean?

Credit scores are calculated by the major credit reporting agencies (CRAs). These are agencies that collate financial data and information to make informed assessments of your risk rating.

Each CRA uses slightly different metrics and scoring scales, with some using a 0 to 100 scale, some a 0 to 1000 scale and some a 0 to 300 scale. But the Experian scale of 0-100 is one of the most commonly used.

Key ways to improve your credit score

If you fall into the high-risk category, you’ll find accessing finance – like bank overdrafts, business loans or asset finance – extremely difficult.

If you fall into the medium-to-low risk categories, access to finance will be much easier.

To increase your ability to borrow money and access credit, it’s important to be proactive about managing and improving your business credit score.

Five ways to boost your credit score

Pay your suppliers and bills on time

Make sure you always pay invoices from suppliers, utility companies and other creditors on or before their due date. This shows your financial management is reliable and responsible – a key factor in building a positive business credit history with the CRAs.

Keep your credit utilisation low

If your business has existing credit facilities, aim to use only a small portion of the available credit limit. High credit utilisation can have a negative impact on your score, and suggests a high state of ‘financial distress’ to potential lenders and credit providers.

Establish trade credit with your suppliers

Agree on trade credit terms with your suppliers and make sure you settle the bills on time. These payment histories are often reported to credit bureaus and can be a significant factor in building up a positive business credit profile, especially for newer enterprises.

Monitor your business credit report regularly

Obtain copies of your business credit report from relevant agencies (like Equifax or Illion in Australia) to check for inaccuracies or errors. Addressing any negative information promptly can prevent it from further harming your credit score.

Avoid defaults and public record filings

Minimize the risk of defaults on loans or other financial obligations, and be mindful of public record filings like court judgments or bankruptcies. These events can severely damage your business credit score and make future borrowing difficult.

Get in touch to talk about your business credit score

There are plenty of options for checking your business credit score and getting a solid overview of your credit profile as a business.

Talk to the team about signing up for regular credit reports and how we can help you monitor and manage your credit score. Give us a call on 01904 787 973, or book a call with Donald – we’re here to help.

Liberating you and your business: using AI agents

Tue, 10 Jun 2025 11:20:41 GMT

Artificial intelligence (AI) has surged in popularity among business users over the past few years, with many small businesses now making AI a central part of their systems.

But AI isn’t just about having some machine learning capabilities hidden away in the background. There are now full fledged ‘AI agents’ on the market.

But what is an AI agent ? And how can adding these digital workers to your workforce help you scale, boost efficiency and become a more effective business operation?

What is an AI agent?

An AI agent is a digital entity that can carry out tasks to achieve specific operational or business goals. Unlike basic AI, which follows predefined rules, AI agents can learn, adapt and make autonomous decisions, mimicking our own problem-solving skills.

Think of your AI agent as a digital member of the team. A worker that can be entrusted with a specific task – like answering your business phone, or completing your bookkeeping.

Let’s take a look at five areas where an AI agent could be helping your business

1. Procurement and cost management

AI agents can work in the background to automate selection of suppliers, negotiate contracts, and monitor inventory levels. This helps you optimise your pricing, find the best supplier contracts and reduce your overall procurement costs.

GEP's AI agents help with supplier relationship management, automate your key procurement tasks and improve logistics, making your whole procurement process more efficient.

2. Client service and reception

Customer service AI agents are available 24/7 to provide AI-driven support, handle routine enquiries and personalise the way you interact with your customers. They can manage appointment scheduling, greet virtual visitors and route calls to the most relevant person.

HubSpot's Breeze Customer Agent can resolve routine FAQs, provide instant support and integrate with your CRM system to make those interactions seamless and personalised.

3. Sales and marketing

Sales and marketing AI agents are designed to automate your lead generation and personalise the company’s marketing campaigns. They can even analyse customer data to spot likely sales opportunities, boost conversion rates and drive up your revenue.

Salesforce's Agentforce can streamline your marketing operations in a number of different ways. Agentforce crafts campaign briefs, breaks down target audience segments and even generates initial drafts of marketing emails.

4. Finance and accounting

Finance-focused AI agents can automate many of your basic bookkeeping tasks, including invoice processing, expense tracking and bank reconciliation. This is great for reducing human errors and giving time back to your finance team. They can also generate cash flow reports, assist with budgeting and improve your overall financial management.

AppZen’s agent can automate manual accounts payable processes, optimise your financial decision-making and predict potential cash flow issues. It integrates with your existing financial systems to give you a completely transparent view of your financial health.

5. HR and people management

AI agents can automate many of your basic human resources (HR) tasks. This can include onboarding new starters, training staff, processing payroll and benefits, and answering HR queries. This gives time back to your HR team to focus on higher value tasks.

Leena AI provides an AI-powered virtual assistant that’s a central point of contact for employees. It can quickly answer HR-related questions, reducing the burden on your HR team.

Talk to us about making AI agents part of your business

Want to make the most of AI, but don’t know where to start? In this series, we’ll run you through the basics of AI, the main terms and the AI tools and agents that can transform your business.

And if you’re hungry to know more, why not talk to our team about the AI agents and AI-driven apps that would be most appropriate for your industry, niche or business type. Give us a call on 01904 787 973, or book a call with Donald – we’re here to help.

How’s your work-life balance?

Tue, 03 Jun 2025 11:20:21 GMT

It’s great to be the boss – you can work any hours you like, right?

Unfortunately, for many business owners, that means long hours, plenty of stress, and very few breaks and holidays. Gallup reported that 39% of the owners they surveyed worked over 60 hours a week.

Owners often report they are unhappy with their work life balance, and after the challenges of the recent years you might find yourself thinking hard about your priorities.

Running a business and having a life

Can you run your business effectively and still have enough time left over to do the things you love? You’re the best judge of how much time your business needs, but don’t neglect your wellbeing. If you would like to take back some personal time, you could consider:

Delegating – don’t try to do everything yourself.
Saying no – not every project is worth taking on.
Investing in systems – to reduce time on admin or paperwork.
Taking all your leave – find ways to have breaks and holidays.
Maximising technology – making sure your systems are all integrated, and using AI where appropriate.

Working towards a balance

If you really can’t work less right now, try to build your business with a better balance in mind for the future. It’s important that you can step back at some point to take a holiday, travel, or spend time with family. Being tied to your business for more than 60 hours each week isn’t a sustainable way to take care of your health and higher profits aren’t worth that sacrifice.

Also, any business that doesn’t allow the owner to step away is very hard to sell and worth far less than one that can run independently!

We'd love to help

Whether you want to improve your work-life balance now, or build your business to achieve it in future, we have ideas. We’ve worked with plenty of clients who need to reclaim their time, and we know it can be done. Give us a call on 01904 787 973, or book a call with Donald – we’re here to help.

Why tech overload is killing your workflow

Tue, 27 May 2025 05:33:23 GMT

Founding, managing and growing a business is a BIG commitment. For most business owners, it will take years to build a customer following, turn a profit and create a truly scalable business.

We live in a golden age of business software. There’s an app for everything—task management, time tracking, team communication, invoicing, reporting, forecasting, and even apps to help you manage all your apps. It’s the digital equivalent of walking into a hardware store and buying every single tool, assuming that having them all will somehow make you a better carpenter. Spoiler: it won’t.

Instead of increasing efficiency, software overload is quietly killing your workflow. It’s called app fatigue, and it’s the modern workplace’s productivity killer.

The problem: too many tools, too little time

At first glance, adding new software seems like the logical solution to business challenges. Need better project management? Add an app. Struggling with communication? Get a new messaging tool. Want better analytics? More software!

The issue is that businesses often end up with a tangled mess of disconnected systems, each promising to be the magic bullet but ultimately creating more work, more confusion, and more logins (seriously, how many different passwords do you need?).

Here’s what app fatigue looks like in real life:

Constant context switching – You’re updating the CRM, checking Slack, answering emails, logging time, scheduling meetings, running reports... all before you’ve even started the work you’re actually paid to do.
Notification overload – Your laptop sounds like an arcade machine with the sheer number of pings, dings, and pop-ups.
Duplicate data entry – Entering the same information across five different platforms, all while wondering if you work for your software or if your software works for you.
Integration nightmares – Half your tools don’t talk to each other, leading to manual workarounds, broken workflows, and the slow death of your patience.

In short, more software ≠ more productivity. Often, it just means more complexity.

The hidden costs of app fatigue

Beyond frustration, there are real financial and operational costs to using too much software.

Wasted time – Constantly switching between apps eats into your workday more than you realise. Instead of focusing on meaningful tasks, employees spend too much time jumping between platforms, searching for information, and re-entering data. The more tools you use, the more time gets lost in the shuffle.
Higher costs – Many businesses subscribe to tools they don’t even use properly. SaaS subscriptions are easy to accumulate but hard to justify when no one knows what half of them do.
Decision paralysis – When everything requires a different tool, decision-making slows down. Instead of working, people spend time choosing where to work.
Employee burnout – Keeping up with multiple platforms is exhausting. When tech is meant to help but actually adds stress, employees disengage.

The solution: simplify, integrate, automate

The good news? You don’t have to scrap all your software – just be smarter about it. Here’s how:

Audit your tech stack – Take a critical look at all your software. What’s actually being used? What overlaps? What’s creating more work than it’s saving? Kill the dead weight.
Prioritise integration – If your software doesn’t talk to each other, you’re wasting time. Look for ecosystems that play well together (think the Xero add-on marketplace).
Automate repetitive tasks – Tools like Zapier can bridge gaps between software, eliminating duplicate data entry and manual admin work.
Choose multipurpose tools – Rather than five different apps for small tasks, try and opt for one platform that does more. Less jumping around means less lost time.
Educate and train – Your team can only be efficient if they actually know how to use the tools. Training is just as important as choosing the right software.

Less is more: focus on what works

Software should be a solution, not another problem. If your workflow is buried under a pile of apps, it’s time to step back and simplify. Choose wisely, integrate where possible, and remember: the best tech is the one that actually makes work easier – not more complicated.

Have you achieved your goal for the business?

Mon, 19 May 2025 07:31:24 GMT

Founding, managing and growing a business is a BIG commitment. For most business owners, it will take years to build a customer following, turn a profit and create a truly scalable business.

It's a journey that can sometimes be pressurised, stressful and risky. But when your plan really does come together, there is the chance of real success, a lasting legacy and a business that delivers on your initial dream.

So, how do you know when you've truly achieved your goals for the business?

Has the business met its growth targets and scaled up as intended?

You’ll have seen your business idea grow from being a fledgling startup, to an established business and on to become a scaled-up, ambitious enterprise with a solid customer base.

If you’ve met these growth targets, then you know you’re on pretty solid ground as a business. Your idea clearly has legs and you’re delivering a product and/or service that your customers see as valuable – and which they’re willing to part with their hard-earned cash to purchase.

Are you running a profitable enterprise that's in good financial shape?

Running a tight financial ship is crucial. You need solid revenues, positive cashflow and good liquidity to keep your business ticking over.

In the early days of being a startup, cash will have been tight. And your own personal income as a founder and director will probably have been scarce too. But as the business has become more established, you should have found that your business revenue became more stable and predictable – and that your own personal wealth also followed this same reliable pattern. If the business has a solid balance sheet, great cash flow and meets your intended profit targets, you’re onto a good thing – and can be sure that your financial position is in good shape.

Do you have a stable customer base who say good things about you?

Without customers, you don’t have a viable business. Finding your first customers as a startup was probably a significant turning point in your journey. A good customer base brings with it the bonus of new sales, fresh revenues and a business that can actually turn a profit.

When customers engage with you and buy your goods and services, that comfirms your original faith in your business idea. You’re providing something they value and want to purchase, and you’re also building a community of like-minded people who all think your brand is great.

Do you have a team who can operate the business without you?

In the early days, you’ll probably have become a jack (or jill) or all trades. You’ll have run the sales and marketing campaigns, taken care of all the main operational tasks and dealt with the many invoicing, accounting and bookkeeping tasks. Turn the clock forward, and you probably have a team of people around you to take care of these jobs – but could they function with you?

This is really the acid test of whether you’ve scaled and succeeded. If the business is still reliant on you, personally, you have a problem. To be a saleable proposition, a business needs to function effectively without the founder. If not, you’ll never be in a position to sell up. To make this possible, you need a team of engaged and talented people around you – people who share your vision and talents and who can keep the ship on an even course, even once the original captain has set sail on fresh, new adventures.

Do you feel you've achieved what you wanted to achieve?

In your formative years as a founder, you’ll have sat down to draw up a startup plan. In that plan you’ll have outlined a clear vision for what this business was going to achieve.

This vision might have been:

To scale up over five years, sell-up and retire
To deliver a new kind of technical widget and make it the global standard
To help your target audience improve their lives, helped by your product/service
To provide the income needed for you to live your desired lifestyle
To plough your profits back into the local community and be a force for good.

We all have different goals, and whether they are financial, personal or moral comes down to the individual. The important thing at this point is to assess whether you’ve actually met the vision that you set out to achieve. If your aim was to sell for a profit and then retire, are you ready to do this? If the goal was to become a household name and move your sector forward, do your customer engagement figures and market share stats reflect this?

Deep down, only you and your fellow founders know whether you’ve truly met your intended goal. But if the general consensus is that you aced it, then it’s time to think about the future.

What’s the next chapter in your business story?

If you can answer yes to all five of these questions, then congratulations! You've built a successful, stable and profitable business.

But what do you do now? Do you continue to plough this fertile furrow and live off the profits? Do you find a buyer for the existing business and start on your next business idea? Or do you sell up and look at retirement and enjoying the benefits of your money and lifestyle?

It's a good idea to talk to us before you make what is, essentially, a life-changing decision. If you’d like to talk through your options, book a call with us or call us on 01904 787 973.

Understanding your profit and loss statement

Mon, 12 May 2025 07:34:09 GMT

Your profit and loss statement (P&L) helps you understand your business performance and profitability over time. It’s sometimes called an Income statement and its main purpose is to list income and expenditure.

Whereas a balance sheet is a snapshot in time, the P&L shows transactions over a specific period of time. This can be a month, quarter, financial year or any other period, and it can be a stand-alone report or a comparative period report.

Together with the balance sheet, these two reports provide a comprehensive understanding of the financial position and performance of a business.

The profit and loss statement has two main sections: income and expenses

These may be further subdivided depending on the complexity of the business and reporting requirements.

Income or Revenue

Income primarily includes main business activities such as sale of goods or services. Other income such as interest received, capital gains or income from secondary business activities is also reported.

Expenses

Expenses are usually divided into two sections: direct costs, or cost of goods sold, and expenses. Cost of goods are those that are directly linked to the provision of services or sale of goods. For example, if you buy widgets from a wholesaler and sell them at a marked-up value, the cost of the widgets is a direct cost, not an overhead expense.

Other types of direct costs might be importing and freight costs, contractor costs or certain equipment. Some direct costs are fixed, that is, they are the same from month to month, or they could be a fixed percentage of sales; others vary in value but are still related to the income producing activities.

Overhead expenses are all the other expenses required to run the business, regardless of the level of income: for example, rent, utilities, bank fees, bookkeeping fees, professional development costs, vehicle costs and staff costs. Many of these costs form the basis of working out your break-even point, or how much it costs just to open the doors for business.

There are some expenses which may be reported as a direct cost in one business but an indirect cost in another type of business, for example, merchant fees or contractor costs.

The bottom line

Total income minus total expenses results in the net profit (or loss), is often called ‘the bottom line’. Often business owners are just interested in looking at the bottom line, but a true financial picture requires an understanding of several reports and an ability to see the big picture that the reports are illustrating.

The P&L is a vital tool to analyse for trends over time

What does your P&L tell you about relationships and ratios between sales and expenses, seasonal changes and annual trends?
Have all your direct costs been allocated correctly?
Have you recouped all billable expenses from customers?

Financial statements help you understand the big picture for your business. With deeper understanding of your business operations and performance you can make informed decisions about your business finances.

Book a call with our team to examine your financial reports with our experienced business advisors.

Making your business work for you: making enough to retire

Tue, 06 May 2025 10:34:06 GMT

You may love running your business. But in the back of every owner’s mind is the knowledge that one day you’ll need to sell the company and retire.

But with global markets in upheaval and the future less certain than ever before, how can you guarantee that your business will be worth enough on the open market for you to retire?

In this series, we’ll look at the core ways your business can be structured to deliver on your own personal, family, philanthropic and leisure goals, now and into retirement.

Creating a business that will fund your retirement plans

Your business has to be the nest egg that provides the equity for you to retire. But how do you secure that nest egg, the value of the business and your retirement plans?

We’ve highlighted five strategies that will add to the value of your business – so, when you come to sell, you’ll get the return on investment (ROI) needed to retire comfortably.

Build a business that can run without you

You may be the boss, but your business needs to function independently of you to hold its value at sale. One way to do this is to systematise your operations, so the day-to-day procedures exist outside your own head and are scalable as the company grows.

It’s vital to train up a strong management team that can keep the business trading when you’re no longer in the picture. This autonomy significantly boosts the value of the company, as potential buyers want businesses that won't collapse when the founder leaves.

Focus on recurring revenue streams

Recurring revenues give your business more stability. Think about focusing on subscription services and other predictable income sources to help build up value in the company.

Recurring revenue dramatically increases business valuation multiples (often 2-3 times higher than transaction-based models). By creating a stable, valuable business, you can sell the company for a premium price, providing the equity you’ll need to fund your retirement.

Invest in intellectual property and licensing

Having valuable assets in the business boosts the potential price of the company. Your intellectual property (IP) and brand equity are two intangible assets that can have a significant impact on the value and asking price when the company is put up for sale.

Think about developing products, processes or technologies that can be patented and then licensed to other third parties. This is a great way to use your IP effectively, boost your brand and create passive income – something that will appeal strongly to any potential buyers.

Keep detailed records and keep finances healthy

A viable business with a good financial health score is the holy grail for buyers. So keeping your financial health, company credit score and cashflow position under control is vital.

It’s important to have rigorous financial tracking in place and to keep a close eye on your key financial metrics. Clean books with 3-5 years of strong profitability make your business significantly more attractive to buyers and can justify higher valuations and better ROI.

Create a strategic exit plan well in advance of retirement

The key to a successful exit is having an exit plan in place as early as possible. Work with your advisors to add value to the business, identify ideal buyers and find the most tax-efficient exit structures that will deliver the funds you need on retirement.

Ideally, you should start this exit strategy at least 3-5 years before you intend to retire. This gives you time to think about succession planning, boosting the underlying value of the business and making sure you’ll have sufficient capital for your retirement needs.

Helping you secure your income and lifestyle

You deserve a restful and comfortable retirement after many years of leading and growing your business. But to do this, it’s important to start planning now and getting your exit strategy ready.

Come and have a chat about your retirement plans and exit strategy. We can also introduce you to independent financial advisers who can offer personalised wealth management advice. To get our help, call us on 01904 787 973 or book a call with Donald Inglis .

HMRC penalties for late payment updated for 2025

Thu, 01 May 2025 07:11:38 GMT

Did you know that if you don’t pay your taxes on time, HMRC can charge you interest on your late payment?

HMRC can use its powers to charge interest on late payments of tax and pay interest on overpayments you’ve made to them. And those rates changed from April 2025

How does interest on late payments work?

If you’re late paying your taxes, HMRC will charge interest from the original due date of the payment until the date payment is received.

So, the later you are paying your tax bill, the more you’ll end up paying overall.

What are the current interest rates?

From 6 April 2025, the rate on late payments increased to 8.5% p.a., an increase that’s in line with current rates of inflation and the Bank of England’s interest rate.

Interest is charged at the Bank of England (BoE) base rate plus 400 basis points, credited at BoE base rate, less 100 basis points, with a minimum of 0.5%.

If you overpay your tax bill, or pay early, HMRC will pay you interest on that overpayment. The rate HMRC will pay on refunds and overpayments of tax changed from 3.75% to 3.50% from 25 February 2025.

What happens if I can’t pay on time?

There may be times where you owe tax and simply can’t pay on time. As long as you agree a formal ‘time to pay’ arrangement with HMRC then the interest rate they charge is relatively low.

Simply not paying, without having any agreement in place, is a bad idea. HMRC may charge you a penalty, on top of charging interest on your late payment.

How can we help you manage these payments?

As your current tax agent, we’ll give you plenty of prior warning of the tax amount that’s due and the payment deadline, as a matter of course.

If we’re not already acting on your behalf, we can still help. You might be unsure of the deadlines for the taxes, or need help working out what you’ll need to pay. We’ll help you run projections to check if you have the funding to make these payments. We can also liaise with HMRC to put ‘time to pay’ arrangements in place.

When it comes to tax, it’s always best to talk to us sooner rather than later. To get our help, call us on 01904 787 973 or book a call with Donald Inglis .

HMRC closing corporation tax online filing service

Fri, 25 Apr 2025 07:20:37 GMT

If you’re a small business with straightforward accounts, you may well be using HM Revenue & Customs’ (HMRC) Corporation Tax online filing service .

It’s a straightforward way to file your corporation tax and company accounts and tick all those compliance boxes.

But HMRC has just announced that the service will close from March 2026.

So, what happens now when you need to file your return and accounts?

What is the Corporation Tax online filing service

At present, if you’re an unrepresented company with straightforward tax affairs, you can use the free HMRC online service to:

Send your Company Tax Return to HMRC.
Send your accounts and computations to HMRC in the correct iXBRL format.
File your accounts to Companies House.
send your Company Tax Return to HMRC and accounts to Companies House at the same time.

Using the online service streamlines so many of your compliance worries. So, why is HMRC shutting down the service?

Corporation Tax online filing service to close from March 2026

The Corporation Tax online filing service will close from 31 March 2026 .

At present, you can still use the online service to file and amend your Company Tax Return with HMRC, and your accounts with Companies House up to and including 31 March 2026.

But from 1 April 2026 onwards, you’ll need to use commercial software to file annual accounts and Company Tax returns with HMRC.

Why is the online service closing?

HMRC feels that the online service is no longer fit for purpose.

The service was originally introduced in 2011, and the system doesn’t meet modern digital standards, or recent changes to UK company law.

HMRC’s intention is that the small businesses that are currently using the free online survive will see the value in investing in third-party software that’s more in line with digital standards.

Helping you set up a new software-based tax filing system

There’s no immediate pressure to switch over to a new software tax and accounts filing system. But looking into the available software and doing your homework is a sensible move.

We can help you decide on the best software for the job and make sure your accounting and filing processes are up to the job, ready for March 2026. To get our help, call us on 01904 787 973 or book a call with Donald Inglis .

The fundamentals of a business budget

Mon, 21 Apr 2025 13:58:14 GMT

Whether it’s refilling your petrol tank or paying at the supermarket checkout, the higher cost of living is hitting every household hard.

A business budget is one of the essential tools in managing your business finances and actively building your business.

A budget shows what you plan to do with your cash over the next year.

For a complete picture of your business health, you need to review the profit and loss statement, the balance sheet, the cash flow forecast and the budget. Taken together, these reports allow you to make informed business decisions and monitor performance.

Why have a budget?

Forecast sales and expenses according to monthly or quarterly variations.
Evaluate performance over time, including changes or patterns.
Get really familiar with where your money goes and where it comes from.
Clarify targets and goals and use the budget to help you focus and achieve those goals.
Comparing actual figures to budgeted figures allows you to see potential problems early and plan for unexpected costs.
A budget will help you to see the big picture and stay motivated over the long term.

Where to start

A basic budget takes known income and expenses, then makes certain assumptions about the timing of income and planned expenditure. The basic budget is based on cash in and out of the business.

Over time, as you start to see the benefits of using a budget, your budget should evolve into a more sophisticated version that includes non-cash elements such as provisions and depreciation.

Most businesses will start with one budget but soon move to having three budgets:

Business as usual – the next year’s budget is based on current year income and expenses, with perhaps a small adjustment for consumer price index increases.
Worst case – budget is based on a pessimistic view of next year’s performance.
Best case – budget is based on an optimistic view of performance over the next year.

A budget is usually for a financial year, but you can also set up budgets for two to five years.

Once you have one budget (or more) set up, you can then run your current financial reports against the budget to see how you are tracking. This allows you to make rational business decisions in real time to adjust accordingly. Your can run your financial reports monthly and adjust your budget as needed.

What next?

Now is a great time to put a budget into place for the coming financial year. Book a time with us to help you create a meaningful budget in your accounting software so that you can use it as a proactive part of your business management, strategy and your success. Call us on 01904 787 973 or book a call with Donald Inglis .

Coping with the skyrocketing cost of living

Mon, 14 Apr 2025 07:44:03 GMT

Whether it’s refilling your petrol tank or paying at the supermarket checkout, the higher cost of living is hitting every household hard.

Across the whole world, everyday essentials have surged in price and for many, budgets are being stretched to their limits.

So, what can you do to keep up with rising costs and still stay financially secure? The good news is that there are steps you can take to ease the pressure. Here are our 12 top tips:

Look for ways to earn more

Boosting your income is one of the most powerful ways to offset inflation.

1. Grow your business’s profitability

If you run a business, look at ways to improve your profit margins. This might mean increasing your prices slightly, trimming unnecessary costs, automating tasks, or exploring more profitable services. Want tailored advice? Talk to us – we can help identify the most effective strategies for your business.

2. Rent out a spare room or take in a flatmate

Under the UK’s Rent a Room Scheme, you can earn up to £7,500 a year tax-free by renting out furnished accommodation in your home.

3. Sell unwanted items online

A clear-out could turn into extra cash. Use platforms like eBay, Vinted, Facebook Marketplace, or Gumtree to sell items you no longer need. It’s quick, easy, and surprisingly rewarding.

Cut back where you can

Small savings add up – and cutting down doesn’t always mean missing out.

4. Prepare more meals at home

Takeaways and restaurant meals can eat into your budget fast. Batch cooking, meal planning, and using leftovers wisely can save a fortune over time.

5. Create a realistic budget and track your spending

Budgeting apps like Money Dashboard, YNAB, or Emma can help you see exactly where your money is going – and where you can rein it in. Awareness is the first step to better control.

6. Reduce your meat consumption

Meat is often one of the most expensive items on a shopping list. Try a couple of vegetarian meals each week – they can be both budget-friendly and delicious.

7. Drive less where possible

Petrol prices are high, and even short journeys add up. Walk, cycle, carpool, or use public transport when it makes sense.

8. Cancel or pay down credit cards and buy now, pay later accounts

Interest charges can quickly spiral. If you’re struggling to pay off balances, look into 0% balance transfer cards or speak to a financial adviser for debt reduction strategies.

9. Review all your regular outgoings

Subscriptions, insurance, utility bills – these can often be trimmed or renegotiated. Use comparison sites to switch providers or call and ask for a better deal. You might be surprised how often they say yes!

Invest in your future

You can’t just save your way out of inflation – smart investing is key to long-term financial stability.

10. Invest in inflation-beating assets

Historically, property and the stock market have provided returns that outpace inflation over time. Start small if you’re new to investing – many platforms allow you to invest from as little as £25 a month. And always seek advice if you’re unsure.

11. Start something new

A side hustle – from freelance work to selling handmade goods or online teaching – can bring in extra income and even turn into a full-time business. Don’t underestimate your skills and passions.

12. Learn about personal finance

The more you know, the more control you’ll have. Free online courses, podcasts, YouTube channels, and books from your local library are great places to start. Understanding budgeting, investing, and money management empowers you to make the best decisions for your future.

A final thought

While inflation has slowed, it's still estimated to remain in the 2–3% range this year – on top of recent spikes. To truly stay ahead, aim to:

Increase your income by at least 4%
Save money wherever possible
Invest consistently for the future

These three pillars – earning, saving, and investing – create a buffer against inflation and help you build lasting financial resilience.

Worried about money? We're here to help

Financial stress can be overwhelming, but you're not alone. We’ve supported clients through many economic cycles – including periods of high inflation – and we're here to help you get through these challenges with confidence. Call us on 01904 787 973 or book a discovery call with Donald Inglis .

Making your business work for you: securing your lifestyle

Mon, 07 Apr 2025 09:23:42 GMT

Making your business a success story may be what drives you to get out of bed every morning. But your business also needs to deliver on your personal goals as well.

Profits, dividends and bonuses need to be stable enough to help you maintain your desired lifestyle, whether that’s two holidays a year, or paying the mortgage on a new family home.

In this series, we’ll look at the core ways your business can be structured to deliver on your own personal, family, philanthropic and leisure goals.

Delivering the income that fuels your chosen lifestyle

When you start a business, you make some fairly major decisions about your quality of life. Building a start-up could mean several months, or even years, of reduced income. But, ultimately, you’ll want an income from the business that helps you fund your chosen lifestyle.

Here are four key ways to make sure your business can secure your lifestyle:

Focus on high margins or high volume

Prioritise products/services that offer either high margins or high volumes of sales. Your key focus is to help the business provide stable, predictable revenue and profits. This will help you draw down the necessary income for your desired lifestyle.

Get strategic with your pricing

Adjust your pricing so you’re competitive but making some healthy margins. Value-based pricing and bundling helps to increase the value from each transaction. The more you do to boost the price of an average sale, the easier it will be to supply the income needed for your lifestyle.

Hang on to valued customers

You can quickly improve your customer loyalty stats by offering personalised services and programs. Retaining your existing customers is cheaper than acquiring new ones, so keep these customers sweet and enjoy consistent revenues that power your personal income.

Automate your most costly processes

Labour costs can quickly eat into your profits. Think about automating basic tasks and outsourcing non-core functions, so you’ve got more time for high-value revenue generation. Reducing your overheads can directly influence your own potential income as a director.

Creating a profitable, cash-rich enterprise is the dream. And if you can stabilise your sales, revenue and profitability, you increase your chances of a healthy income from the business.

Get in touch

Over the years, we’ve grown into one of the leading accountants in York, expanding our range of accounting services whilst staying true to our core values and our force for good ethos. If you would like to earn more, keep more of your hard-earned profits and enjoy the life you want then book a discovery call with Donald Inglis .

MTD for ITSA deadline is coming

Wed, 02 Apr 2025 14:42:20 GMT

You may find a brown letter from HM Revenue & Customs (HMRC) dropping onto your doormat soon, with details of the soon-to-be-mandatory MTD for ITSA.

But what is ‘MTD for ITSA’ and why do you need to know about it?

Your two-minute guide to MTD for ITSA

Making Tax Digital for Income Tax and Self Assessment (or MTD for ITSA) is part of HMRC’s ongoing initiative to convert the UK tax return process over to a digital system.

If you’re a sole trader or landlord, you’ll soon need to:

Keep digital records of all your income and expenses.
Use MTD-compatible software for your bookkeeping and accounting.
Submit regular quarterly digital reports to HMRC.
Send a full digital tax return at the end of the tax year.

Landlords and sole traders who fall into the following categories will soon find it’s mandatory to use the MTD for ITSA system.

from April 2026, for those with qualifying income over £50,000.
from April 2027, for those with qualifying income over £30,000.

A brown envelope with your MTD ITSA reminder

From April 2025, HMRC will be starting a campaign to raise awareness of the looming deadline to become compliant with the MTD for ITSA rules.

This will be kickstarted with an official HMRC brown envelope being sent to sole traders and landlords with a total self-employment and/or property income of over £50,000.

You’ll receive a letter if your 2023 to 2024 self assessment tax return shows your total income (turnover, not profit) as being either over, or close, to £50,000.

Don’t panic! We can help you get ready for MTD

An official letter from HMRC can sometimes be cause for concern. But there’s no need to worry unduly about MTD for ITSA. The mandatory deadline for compliance is still a year away, so there’s plenty of time to update your systems and get yourself compliant.

Call us on on 01904 787 973 and we’ll explain the implications of MTD for ITSA, the need for digital records and how to get compatible cloud accounting software up and running.

How your accountant supports business development

Mon, 24 Mar 2025 09:24:39 GMT

As your accountant, we won't just look after the financial side of your business, we can also advise you on the strategic side of your company, including the importance of business development as vital part of your growth plan.

Business development (BD) is what helps your company move from slow, organic growth to fast-paced, hypergrowth. And it’s only by putting the right drive and expertise behind your BD that you can turn your strategic ideas into real success stories.

So, how can we help you achieve this?

Talk to you about your strategic goals

The starting point for any kind of BD activity is to pin down your goals and aims as a business. When you know what you want to achieve over the coming months, it’s far easier to define a strategy for success. And that’s easier to do when you talk to an objective adviser, like us.

We can sit in on your board meetings, talk to your executive team and get a real handle on what makes the business tick. And, armed with this knowledge, we’ll work with you to drive the direction of your BD and find the best opportunities for you to focus on.

Help you create a clear BD strategy and plan

Having a defined set of BD goals is a good starting point. But to put this all into action in a productive way, you’re going to need a comprehensive plan for your BD projects.

Our years of experience advising business leaders and their teams really comes into play here. We know the best routes to take, the budgets that will be needed and the right tactics for bringing in more contracts, sales and partnerships. By putting these strategies into a clear plan, and linking this to agreed timescales, you have a BD route map to follow and action.

Introduce you to a broader network of business partners

We work with a wide range of businesses across many different sectors, industries and niches. By introducing you to our network of clients, we welcome you into a supportive community of like-minded business owners. And that’s excellent news when looking for new partnerships.

Whether it’s attending a local conference, an online webinar or one of our in-house client events, you’re going to meet new people, share new ideas and make the right connections. This is a great way to build alliances and work together with other local businesses. And when you’re well-connected, you set the very best foundations for your future BD activity.

Provide better routes to funding and investment

Whatever goals you’ve set for your BD projects, it’s likely that you’re going to need additional funding to finance this activity. Investing in your expansion, or new partnerships, is vital to getting a good return on your BD, so great access to finance is a definite bonus.

We’ll advise you on the most appropriate funding channels and how you can use these facilities to finance your BD plans. And we can also link you up with banks, lenders and business finance specialists – so you get the advice and finance you need to bring your BD to life.

Help you track and measure your BD performance

Meeting your BD targets takes time – and a whole lot of dedication. Measuring your BD performance over time, helps you stay on track and gives you a good indication of how well you’re tracking against your planned progress.

We’ll help you create the reporting and metrics you need, so you have clear data to track your progress over time. You can log your activity in your project management system, or your client relationship management (CRM) software, and keep clear notes on contacts made, relationships built and targets converted etc.

If you want to get more from your BD, please get in touch on 01904 787 973 or book a discovery call with Donald Inglis . We’ll partner with you to put some real drive, experience and impetus behind your BD strategies.

Liberating you and your business with AI

Fri, 21 Mar 2025 09:26:13 GMT

What’s the main thing that holds you and your business back? Chances are it’s the unavoidable manual tasks and low-level administrative responsibilities that eat into your time.

But in 2025, these are tasks that artificial intelligence (AI) is more than capable of taking on. With a growing number of AI agents and assistants out there in the market, the smart business owners are the ones investing in, and learning, the potential of AI.

Using AI to liberate you from the admin workload

AI has developed to a point where it’s now a standard part of a modern business software suite. AI can match your transactions in your accounting software. It can write you a marketing brochure. Or it can answer your business phone and answer FAQs.

For small businesses, there’s a reduced need to take on more staff. By getting your business up and running with the latest AI agents, you can quickly extend your capabilities and reduce costs.

In short, AI allows you to do more with less – and in business, that’s a significant bonus!

The benefits of putting AI at the heart of your business

AI agents and assistants are not something that’s the sole preserve of large corporate organisations. In fact, small businesses, with their simple structures and increased ability to change and flex, are ideal candidates for AI transformation.

Let’s look at a few key ways that AI benefits your business:

1. Increased efficiency in the business

AI agents can easily automate your repetitive tasks, freeing up you and your team for more strategic and creative work. Forget about data entry, scheduling and planning tasks etc.

2. A better customer experience

AI-powered chatbots and virtual assistants can provide 24/7 customer support, answer FAQs, and have personalised interactions with your customers – keeping your customers happy.

3. Informed and improved decision-making

AI-powered analytics tools can analyse your business and financial data to identify trends, predict future outcomes and provide valuable insights for better decision-making.

4. More productive operations

AI agents will automate your routine tasks, speed up your work rate and give better access to data insights. This gives a significant boost to your overall business productivity.

5. A clear competitive advantage

When the advantages of automation, efficiency and improved productivity kick in, this gives you a tangible competitive advantage in the market. The early AI adopters are the companies that will be leading the pack and setting more solid foundations for the future.

Talk to us about introducing AI into your business

If you don’t know your AI from your elbow, don’t worry! In this series, we’ll run you through the basics of AI, the main terms and the AI agents that can transform your business.

And if you’re hungry to know more, why not talk to our team about the AI agents and AI-driven apps that would be most appropriate for your industry, niche or business type. To find out more, call us on 01904 787 973 or book a discovery call with Donald Inglis .

Reducing the uncertainty: key ways your accountant can assist

Fri, 14 Mar 2025 10:54:01 GMT

Knowing what’s around the corner is hugely valuable as a business leader.

But we’re trading in a world where uncertainty waits around every corner – making it difficult to predict the future business landscape and what your next move should be.

You can’t change the evolving economic, political and business threats in the world. But in this series we’ll show you some key way to thrive and reduce the uncertainty.

Dialing down the uncertainty, to gain a competitive edge

Uncertainty affects your ability to trade. Not knowing if your costs will rise or fall, or if there’s a talent shortage or surplus, makes it difficult to make rock-solid decisions and plans.

Your goal in the current environment is not to remove these external threats. It’s to reduce some of the uncertainty through clear planning and inventive strategic thinking.

Let’s look at the five key areas we’ll cover in this series, and how they dial down the uncertainty.

Financial forecasting and planning

Carrying out regular cashflow forecasting and budgeting helps you anticipate any potential financial challenges. Good cashflow forecasting, coupled with scenario planning, helps you make informed decisions about your spending and where you may need additional funding.

Performance monitoring and analysis

Tracking important metrics and having a key performance indicator (KPI) dashboard helps you review your performance against targets and look for the areas of improvement. Monitoring those KPIs keeps you in control, even if external factors and threats are proving to be difficult.

Strategic business reviews

When was the last time you revisited your business plan? Updating your strategy and business plan helps you stay aligned with your goals, even if external factors and changing market conditions are making trading difficult. Remember, no business plan is written in stone!

Getting proactive with tax updates

As the business landscape changes, the government is likely to look for ways to inspire enterprise and boost the economy. Being aware of legislative changes, tax reliefs and allowances, and available government grants, helps you navigate the uncertainty. You can keep compliant, maximise any benefits and see the positive impact on your capital position.

Business diversification and growth strategies

Being able to flex and change your strategic direction gives you a huge competitive edge. Brainstorm ideas for ways you could diversify your offering and explore new opportunities. This could mean new products, new revenue streams and even partnering with other small businesses – both inside and outside your existing sector.

Making the path ahead clearer and easier to navigate

There’s no denying that we’re trading in difficult times. But getting proactive with your planning, forecasting and strategic thinking makes the road ahead clearer.

Come and talk to us about the key areas of uncertainty in your business – and find out how we can guide you through these uncertain times and out the other side. Call us on 01904 787 973 or book a discovery call with Donald Inglis .

Making your business work for you: work/life balance

Fri, 07 Mar 2025 08:44:16 GMT

You started your business to have the freedom of being in charge. But are you actually working harder than ever and drowning in admin, meetings and other demands on your time?

Don’t worry, there are ways to get your work/life balance back under control.

In this series, we’ll look at the core ways your business can be structured to deliver on your own personal, family, philanthropic and leisure goals.

A business that’s designed to balance work and downtime

Running a company can be all-consuming. You have a business idea you believe in and a team that’s working hard to bring your product or service to market. It’s easy to let the multiple tasks on your to-do list take over, so you end up working around the clock, with no downtime.

But, ultimately, working this hard is counter-productive. You burn out, have no energy to lead and start to make silly mistakes. So, dialling down the workload is a must.

Here are four key ways to get your work/life balance back on track:

Prioritise tasks and block out time

Schedule specific blocks of time for work tasks, personal appointments and downtime to relax and decompress. Be ruthless about prioritising tasks and focus on the 20% that yields 80% of the results. This prevents work from bleeding through into your leisure and family time.

Learn to delegate and outsource

Don't try to do everything yourself. Find the tasks that can be delegated to team members or outsourced to freelancers and other contractors. If data entry is your nemesis, hire a bookkeeper. This frees up your time for higher-value activities and reduces your workload.

Establish boundaries between work and leisure time

Set clear boundaries between your work and personal life. This might mean turning off work-related notifications after a certain time, or designating specific days or times for family and friends. If you work from home, think about having a home office that you can only use during these agreed working hours – so you create a separation between work and downtime.

Schedule regular breaks and downtime

Burnout is a real risk for entrepreneurs. Be sure to take regular breaks throughout the day, even short ones, to recharge. Schedule proper downtime – evenings, weekends and holidays – and stick to it as much as possible. This gives you time to breathe and keeps you fresh. Helping you set and track your personal goals

No company has ever prospered with a tired, burnt-out and frazzled CEO at the helm. If your business is taking over your time, now’s the time to take a new approach to your workload.

Come and have a chat about working smarter, not harder

Take back control of your time and design a business that works for you – not the other way around. If you’re ready to find a better balance, let’s talk. Get in touch today and start building a business that supports your goals, your wellbeing, and your future. Call us on 01904 787 973 or book a discovery call with Donald Inglis .

How lower interest rates could affect your finances

Tue, 04 Mar 2025 13:09:13 GMT

The Bank of England recently announced a drop in the UK base interest rate, with a drop from 4.75% to 4.5%. The final impact of this drop can be both positive and negative for your small business, so it’s worth understanding the effect that interest rate changes can have.

Let’s take a look at how a drop in interest rates may affect your finances.

Reduced cost of borrowing

Lower interest rates on loans : This directly translates to lower interest payments on your existing loans and potentially more favourable interest rates on any new loans you take out.

Increased access to credit : With lower borrowing costs, you may find it easier to secure financing for expansion, investment in new equipment, or to overcome and present challenges.

Improved cash flow

Reduced debt service : Having lower interest payments frees up cash flow. This can be used to reinvest in the business, used for marketing, or distributed to shareholders.

Increased consumer spending : Lower interest rates help to stimulate consumer spending. This can mean increased demand for goods and services, higher sales and boosted revenues.

Better opportunities for investment

Lower cost of capital : With cheaper borrowing costs, you can invest in growth, including research and development, technology upgrades or hiring new staff.

Increased confidence : Lower interest rates can boost investor confidence. This makes it easier for you to find investors and raise capital through equity financing.

Economic growth

Stimulate the economy : Lower interest rates can boost economic growth by encouraging borrowing, investment and consumer spending. This creates a more favorable environment for your businesses to thrive in. A stronger economy = a more stable future.

Get the funding to secure your business future

Investing in the future of your business is a vital step. With interest rates currently lower, now could be the time to think about borrowing and putting your 2025 strategy into action.

Talk to the team about your growth plans and how these interest rate changes may impact your business. We’re here to help you reinvest, grow and keep on evolving. Call us on 01904 787 973 or book a discovery call with Donald Inglis .

Are you suffering from business burnout?

Wed, 26 Feb 2025 06:21:21 GMT

Recent years have been demanding and exhausting for many business owners. Are you one of them?

The challenges have been relentless, and we know many small business owners have had to navigate unprecedented challenges first because of the pandemic and then from inflation and other market impacts.

Burnout results from long-term stress and can manifest in emotional and physical exhaustion, which may affect your enthusiasm for running the business you once loved.

What can you do about it?

We understand that as a business owner, you have many responsibilities, and often you do everything on your own. So we know how hard it can sometimes be to keep on top of all your legal obligations.

The most important step is to acknowledge you feel burned out and need a break.

Take a break as soon as you can. Plan ahead for time away from the business. However, while getting some rest in the short-term will help, long-term stress will take commitment to recover from.

Strategies to help recover from burnout

What can you do differently to avoid prolonging or retriggering the burnout?

Delegate – Look at the low-value tasks you spend time on and pay someone to do them for you. This will free up time and energy.
Re-energise – If you're struggling with a lack of enthusiasm or purpose, talk to colleagues or a business coach for support. If possible, connect with people in the same industry so you can share among others who may be facing similar challenges.
Stand back – Take an objective look at how much you are working and how effective you are. For example, is it time to streamline your work activities and put boundaries around working hours?
Reassess your goals – Do you have clear business goals for the short-term and long-term? Either set some realistic goals or revise them if they are too difficult right now.
Commit to some regular self-care actions – Think about what you love doing outside your business that is nourishing. Regular exercise? Time in nature? Going on a retreat? Learning something for fun? Improving your diet? Get an app on your phone that reminds you to take mini breaks throughout each day. Whether that is movement, mindfulness or music, use technology to help.
Celebrate milestones and achievements – When overwhelmed with stress or exhaustion, it's easy to forget the positives. Remind yourself of just how much you have done in the last year!

Need some support?

You’ll be better able to face challenges, run your business well and assist others if you are looking after yourself well.

We’d love to help support you back to passionate engagement with your business. If you’re feeling burned out and need help in managing systems, technology, payroll or other financial and administrative management, talk to us today, and we'll back your recovery. Call us on 01904 787 973 or book a discovery call with Donald Inglis .

Is your business in financial distress?

Fri, 21 Feb 2025 07:49:30 GMT

Being in financial distress is incredibly worrying for any business owner. When you’re facing County Court Judgements (CCJs), mounting debt and the possibility of insolvency, it can seem like there’s very little light at the end of the financial tunnel.

The latest report from insolvency experts at Begbies Traynor shows a record number of UK businesses finding themselves in financial distress. Numbers have increased by 50% from September to December 2024, with 46,583 businesses falling into the category.

But finding your finances in this perilous state doesn’t have to be the end. There are ways to mitigate the damage and get your business back on track.

What qualifies as ‘financial distress’?

Financial distress is defined as ‘being in significant difficulty in meeting your financial obligations’. In essence, it will usually mean that you no longer have the cash or liquid capital to pay your bills, cover payroll costs or repay your debts.

But what causes a company’s finances to get into such a dire state?

Insufficient cash flow

A lack of cash is a primary cause of financial distress for many affected businesses. Unexpected expenses, delayed payments from customers and rising costs can all contribute to this negative cash flow position.

Declining sales revenue

A drop in sales also means a drop in revenue. This can be due to increased competition, changing consumer preferences or economic downturns. With less money coming in, you lose the ability to meet your financial obligations.

Rising costs

Skyrocketing costs of raw materials, labour or energy can all have an impact. Higher costs and expenses eat into your profit margins, putting major strain on your cashflow and leaving you unable to cover your key outgoings.

Excessive debt

High levels of debt, particularly short-term debt, will lead to high interest payments. These increasing interest rates make it difficult to meet your financial obligations, and also make it unlikely that lenders will offer further funding.

Poor management decisions

Some of the causes of financial distress come from macro, external conditions. But poor strategic decisions, ineffective marketing and inadequate financial planning also play a significant part.

Talk to us about overcoming financial difficulties

If debt is mounting and your cash flow situation is looking dire, the time to take action is now ! The sooner you tackle the financial issues in the business, the sooner you can start to bring your debts under control, and your cash flow back to an acceptable level.

Come and talk to the team about your financial worries. We’re here to help you get back on track and to secure the future of your business as a viable enterprise. Call us on 01904 787 973 or book a discovery call with Donald Inglis .

How to optimise your business: diversify into new areas

Fri, 14 Feb 2025 06:27:08 GMT

Being able to evolve over time is vital if you want your business to last. The market doesn’t stand still, so it’s important to diversify and to keep your offering fresh.

You may well have a product range and a customer base that’s ticking over nicely. But customer and market needs can change very quickly. Blockbuster, for example, had a huge international business, but the invention of on-demand movies killed that business in just a few years.

If you want to bake longevity into your business, it’s crucial to keep moving and reexamining the value that you bring to your audience.

Here are five potential strategies for diversifying your business:

1. Introduce new products or services

Expand your offerings by developing complementary products and/or services. This could mean bundling existing offerings, or creating entirely new lines to cater to existing and new customer needs.

2. Diversify into new sectors

It’s easy to get comfortable in your existing market niche. But you’ll find more opportunities by entering new, related or unrelated markets. This cuts your reliance on a single market, cutting down the risk of putting all your eggs in one basket. It also introduces your brand to a whole new customer audience.

3. Deepen your market penetration

Going deeper into your existing target market can reveal a whole new audience. Think about what you can add to make your offering more attractive. Put cross-selling and upselling strategies in place to increase the sales potential from existing and new customers and listen hard to customer feedback.

4. Expand into new territories

Having a new market to sell into is a great way to boost your sales opportunities. Find an international market that has a relevant customer demographic and tailor your products and services to this new foreign audience. Bear in mind though the compliance, customs and tax requirements of going international.

5. Form strategic partnerships

Your reach and revenue potential is greater when you collaborate with other businesses. Entering into a partnership helps you offer joint products or services, leverage your partner’s customer base, or explore new distribution channels. This could be a partner in your existing market, or in a complementary market.

Talk to us about diversifying your business offering

If your aim is to optimise your business, diversification is a real must. It introduces you to new sectors and audiences, increases your sales opportunities and reduces risk. Talk to our team about ways to diversify your offering and add a new angle to your strategy. Call us on 01904 787 973 or book a discovery call with Donald Inglis .

How to optimise your business: look for strategic partnerships

Fri, 07 Feb 2025 08:49:54 GMT

It’s tough making a success of your business alone. So, why not partner with other businesses to help form a strategic partnership that benefits you both?

In this series, we’ll look at some key ways to optimise your business, exploring different avenues to evolve your enterprise and create a legacy you can be proud of.

Let’s take a look at some different options for exploring strategic partnerships.

5 ways to find your ideal strategic partner

Partnering with another company really helps you expand the reach and capabilities of your existing business. And by working with new people – and with a new audience – you also bring new ideas to the table and can begin to innovate in new spaces

Here are five ways a strategic partnership adds value:

Explore new markets

Partnering with complementary businesses gives you access to new industries, sectors and customer segments. It can be an amazing way to expand your market reach by working with a company that already has a profile in this space.

Boost your revenue streams

You can generate new revenue streams by offering joint products or services with your new business partner. You can also cross-sell to each other's customer base, or explore new distribution channels.

Reduce your costs

Working with a trusted partner means you share resources, such as marketing, logistics or technology. This makes it easier to run campaigns and reach a new audience, while also reducing costs and giving your margins a boost

Get more innovative

With a partner on board, you can collaborate on new ideas and develop truly innovative products. You may also be able to access their technology, infrastructure and expertise to enhance your research and development (R&D).

Improve your brand visibility

Partnering with well-established brands gets your name seen by a whole new audience. It’s a great way to enhance your brand's visibility and credibility, bringing in new customers and other potential partnerships with brands.

Talk to us about finding your perfect strategic partner

Creating a broad network of partners, supporters and new customers is an amazing way to optimise your business – and your potential to reach a whole new customer base.

Talk to our team about partnering with new strategic partners. We can introduce you to other companies in our network to find your perfect collaborators. Call us on 01904 787 973 or book a discovery call with Donald Inglis .

How to optimise your business: Nurture your team and employee experience

Mon, 03 Feb 2025 09:20:19 GMT

Your people are one of the most critical elements in your business. But are you doing everything possible to provide a caring, supportive workplace that also drives the success of your business?

In this series, we’ll look at some key ways to optimise your business, exploring different avenues to evolve your enterprise and create a legacy you can be proud of.

Let’s look at ways to improve your employee experience and your connection to the team.

5 to improve your employee relations as an employer

Studies show that happy workers are more productive. Offering your people a working environment where they can flourish is part of being a great employer. But what are the key ways to build these employee relationships and nurture your team?

Here are five ideas for creating the best possible workplace for your employees:

Invest in your employee development

Make sure you provide opportunities for professional growth. Offer your employees access to training programs, workshops, conferences and mentorship programs. It’s a chance to enhance their skills, boost morale and make them feel truly valued as team members.

Create a positive work environment

Cultivate a workplace that feels positive and supportive of your employees. Be open and transparent with your communication, listen to employee feedback and have a strong focus on employee wellbeing. This includes offering benefits, flexible work arrangements and other team perks.

Recognise and reward your employees

When an employee goes above and beyond, make sure it’s recognised and rewarded. You could do this through performance bonuses, employee-of-the-month programs or even extra time off in lieu. Being rewarded, and feeling truly valued, can be an amazing motivator.

Empower employees to do more

One of the best things you can do for your employees is give them autonomy. Being trusted to come up with their own solutions, processes and ideas is key to making people feel as if they own their role. Employees feel fully involved in your progress and will help you push things forward.

Put wellbeing at the heart of your culture

Work can be stressful. But by paying close attention to employee wellbeing you make sure no-one gets overwhelmed or left behind. Think about running free stress-management programs, offering mental health support and checking in with every team member on a regular basis.

Talk to us about your employee experience strategy

Making sure you’re a caring and supportive employer is vital to your business strategy. With a team who feel valued, nurtured and encouraged, you’ll all be happier and more productive. To talk to our team about strategies for improving your employee experience, call us on 01904 787 973 or book a discovery call with Donald Inglis .

How to optimise your business: get proactive with your finances

Tue, 28 Jan 2025 09:03:44 GMT

Keeping on top of your finances is a critical part of keeping your business on track. But are you doing everything you can to optimise your financial management?

In this series, we’ll look at some key ways to optimise your business, exploring different avenues to evolve your enterprise and create a legacy you can be proud of.

Let’s see how you can better control over your financial numbers.

Having the right numbers at your fingertips

One of the biggest causes of business failure with new startups is poor cashflow and a lack of capital. Having enough money to cover your expenses, pay your workforce and invest in growth is what separates the successful businesses and those that fall by the wayside.

But what can you do to improve your cash position and keep yourself in the driving seat when it comes to managing the financial side of the business?

Here are five simple things you can to get more proactive with your finances:

Embrace financial technology and cloud accounting

Make sure you’re using cloud-accounting solutions like Xero or QuickBooks, with integrated bank feeds, expense tracking, simple invoicing and a real-time view of your numbers. You can also use the advanced reporting features to get deep insights into financial performance.Use financial metrics and KPIs to monitor performance

Develop a framework of financial key performance indicators (KPIs) including gross profit margins, operating expenses, customer acquisition costs and revenue growth rates. By tracking these metrics, you can gauge your performance, spot any financial threats and make well-informed decisions about your financial management.

Forecast your cashflow position and potential challenges

Use the latest cashflow forecasting tool to track your expected cash inflows and outflows. These projections give you an overview of your cash position for the months ahead, allowing you to top up your cash as required. It’s also sensible to build up some meaningful cash reserves, so you have capital behind you when cashflow gets tight.

Work on your aged debt and debtor management

It’s important that customers pay on time and that your payment terms are clear. Use your accounting software to send out automated reminders and have structured follow-up procedures in place for overdue payments. It’s also a good idea to offer early payment incentives and to nurture strong customer relationships to minimise your aged debt and improve cashflow.

Get strategic with your working capital and access to finance

Having a viable level of working capital in the business is a must. Explore the various financing options for boosting your capital. This can include business lines of credit, invoice financing or term loans to, all of which help to increase funding and raise the company’s capital.

Talk to us about ways to improve your digital transformation

There have never been more tools to help you manage your finances. By embracing the best in financial and accounting tools, you give yourself (and your finance team) the superpowers to become cashflow positive, with capital behind you to drive your business to new heights.

If you’re looking to upgrade your financial management, come and talk to us. Our team will suggest the ideal accounting tech stack and the best ways to control your numbers. Call us on 01904 787 973 or book a discovery call with Donald Inglis .

Getting ready for MTD for income tax and self assessment

Fri, 17 Jan 2025 15:48:40 GMT

HM Revenue & Customs’ (HMRC) Making Tax Digital initiative has been gradually evolving for several years now.

But did you know that it will soon be mandatory for landlords and small businesses that pay tax through self-assessment to use HMRC’s digital tax system?

Making Tax Digital for Income Tax & Self Assessment (or MTD for ITSA, as it’s more commonly known) is likely to be a major change for some taxpayers.

So, are you ready for the upcoming MTD for ITSA rules?

What is MTD for ITSA?

Making Tax Digital (MTD) aims to bring tax into the digital age, moving from annual paper and online tax submissions to quarterly digital uploads of your tax information.

Having to keep detailed digital records sits at the heart of MTD. Taxpayers will need to record all incoming and outgoing transactions using compatible accounting software, and then share this information in an approved digital format with HMRC.

Who will be affected by the MTD for ITSA rules?

MTD for ITSA is already at the beta testing stage and some self-assessment taxpayers have opted in to the system already.

But if you’re a landlord or sole trader who falls into the following categories, MTD for ITSA will soon become a mandatory requirement:

From April 2026, for those with qualifying income over £50,000
From April 2027, for those with qualifying income over £30,000

How do you get ready for MTD for ITSA?

If you’re already using cloud accounting software to manage your finances, MTD for ITSA won’t be a major challenge. You’re already recording your numbers in a digital format and most of the popular accounting platforms will have MTD for ITSA templates you can fill out. But if you’ve not embraced the latest in accounting tech, it’s important to upgrade ASAP.

To stay compliant, you’ll need to:

Keep your records in a digital format
Provide digital quarterly updates to HMRC
Be able to provide your ITSA return information to HMRC through MTD-compatible software
Talk to us about preparing for MTD for ITSA

Contact us

If you’re concerned about how MTD for ITSA may affect your finances, call us on 01904 787 973 or book a discovery call with Donald Inglis . We’ll advise you on the best accounting software and give you guidance on upgrading and preparing your bookkeeping, accounting and tax procedures for MTD for ISA.

Using forecasting to help your decision-making

Tue, 14 Jan 2025 09:02:37 GMT

Producing regular management information is one way to help improve your business decision-making. But looking at historical numbers can only tell you so much.

In business, you want to know what the future holds. And to make truly informed decisions about your future strategy, it’s important to use forecasting tools to project your data forwards in time. By running projections, based on these historical numbers, and producing detailed forecasts, you can get the best possible view of the road ahead – that’s invaluable.

Run regular cash flow forecasts

Positive cash flow is vital to the short, medium and long-term success of your business. Without cash, you simply can’t operate the business efficiently. Running regular cash flow forecasts helps you overcome this challenge. With detailed projections of your future cash flow, you can spot the cash gaps that lie further down the road, and take action to fill these cash flow holes.

Income can often be unpredictable, especially in challenging economic times. If customers fail to pay an invoice, or suppliers increase their prices, this can all start to eat into your available cash. Using forecasting, you can extrapolate your numbers forward to which weeks, months or quarters are looking financially tight. And with enough prior warning, there’s plenty of time to look for short-term funding facilities, or to get proactive with reducing your spending.

Run sales and revenue forecasts

Keeping the business profitable is one of the key foundations of making a success of your enterprise. You want your sales to be stable and your revenues predictable if you’re going to generate enough capital to fund your growth plans. And you need to know how those revenues will pan out over the course of the coming financial period.

Revenue forecasts work much like a cashflow forecast. Instead of looking at your future cash position, a revenue forecast gives a projection of your sales and how much revenue is likely to be brought into the business in future weeks and months. With better revenue information, you’ll be more on top of your profit targets. You can manage your working capital in a more practical way. And you can improve your ability to invest in new projects, additional staff or funding of the long-term expansion of your business.

Run different scenario plans

What’s going to happen to your business in the future? None of us have a crystal ball to predict this future path exactly. But by looking at different possible scenarios, you can run projections to see what the potential outcomes and impacts may be.

These ‘What-if scenarios’ can be exceptionally useful tools when thinking about big business decisions. What if there’s an economic recession? What if our sales increased by 25%? What if we raised our prices by 10% next quarter? What if we lost a quarter of our customers? By plugging the relevant data into your forecasting engine, you can run these scenarios and see how each option pans out. That’s massively useful when the worst (or the best) does happen.

Update your strategy, based on your forecasts

By making the most of your forecasting tools, you give your board, your finance team and your advisers the most insightful data and projections to work with.

A good business plan is designed to flex and evolve to meet the needs of the changing market – and the changing needs of your own business strategy. By making use of your cash flow forecasts, revenue projections and what-if scenario planning, you give yourself the insights needed to update your strategy and your business plan. You can make solid, well-informed decisions and keep yourself one step ahead of your competitors. In the dog-eat-dog world of business, that’s a competitive edge that can make a huge difference.

If you want to delve deeper into the positive benefits of forecasting, please do get in touch. We can showcase the latest forecasting software and apps, and show you the value that’s delivered through well-executed forecasting and longer-term projections. Call us on 01904 787 973 or book a discovery call with Donald Inglis .

Five tech upgrades every business needs

Wed, 08 Jan 2025 09:14:51 GMT

Tech-savvy businesses are taking big strides in making software, AI and automation work for their enterprise. Going digital could be one of the smartest moves you make.

In this series, we’ll look at some key ways to optimise your business, exploring different avenues to evolve your enterprise and create a legacy you can be proud of.

Let’s explore how embracing the latest software tools helps you optimise your business.

Going digital and putting tech at the heart of your business

Cloud-based solutions and AI-driven tools are the foundation stones of a modern, digital-ready business. You might have legacy systems and operational processes that you know inside out, but if you’re not in touch with the latest tech this could be a major competitive disadvantage.

Why are digital solutions so important for a streamlined and productive business?

Let’s take a look at five important ways that tech can change the way you work:

Move your infrastructure to the cloud

Being able to connect to your business systems from anywhere with WiFi is a major advantage. Switching to Google Workspace or Microsoft 365 helps you collaborate remotely, share documents in real-time and centralise all your data storage and management. Cloud platforms are also cheaper to run, always run the latest software versions and scale with the business as you grow.

Automate your routine tasks with AI

Repetitive tasks are an important part of your operational processes, but they eat into your time and productivity. Automating these repetitive administrative tasks turns you into a more streamlined and efficient business. AI chatbots can manage first-level customer service tasks, ChatGPT can speed up your content marketing and tools like Zapier can be used to automate a multitude of different processes and operational tasks in the business.

Switch to SaaS for your financial management

Software-as-a-Service (SaaS) financial platforms, like Xero or QuickBooks, will transform the way you manage your finances and accounting. All your sales, transactions and expenses are managed in the cloud, giving you instant access to your numbers. You also have detailed reporting and automated metrics available to you. This is vital for making data-driven decisions.

Analyse your business data

Financial data isn’t the only data you should be analysing. Using platforms like Power BI, Google Analytics and specialist industry analytics software helps you understand your customers’ behavior, optimise your marketing strategies, predict the performance of your manufacturing processes or manage your inventory in smarter (and cheaper) ways.

Get your cybersecurity up to scratch

With so many systems now in the digital realm, watertight cybersecurity is a must. This means having strict encryption tech in place, training your people in good cybersecurity practices and making sure you have complete control of your various in-house and customer data sources.

Talk to us about ways to improve your digital transformation

Switching to digital systems and SaaS tools doesn’t happen overnight. This is a gradual process of bringing the latest tech on board and learning how to get the most value from the software.

If you’re wanting to embrace the newest automation and AI tools, now’s the time to talk to us. Our team will be happy to review your systems and suggest the next tech upgrades that will deliver the most improvements to your business. Call us on 01904 787 973 or book a discovery call with Donald Inglis .

Understanding your statement of cash flows

Thu, 02 Jan 2025 13:56:38 GMT

The statement of cash flows, (also known as the cash flow statement), shows how your business has generated and used cash (and cash equivalents) within a specific time period.

For each of the reporting categories, receipts and payments are listed (money in and money out), and this is reported as a net increase or decrease in cash held for that category.

The net change in all categories is added to the amount of cash on hand at the start of the reporting period to arrive at the current cash on hand figure at the end of the reporting period.

It is another important financial statement to understand in conjunction with the Profit and Loss statement and the Balance sheet. These three reports provide a good understanding of the financial position of your business.

How does it work?

The cash flow statement integrates the information provided by the profit and loss statement and the balance sheet into a current cash position. The cash flow statement is reported on a cash basis, while your other financial statements are usually reported on an accrual basis. Accrual income (from the profit and loss statement) is converted to cash by calculating the changes in the balances of asset and liability accounts.

Report categories

The statement of cash flows is organised into sections that report on different types of business activity.

Operating activities – all business income, expenses, assets and liabilities (except for those assets and liabilities reported in investing and financing activities).
Investing activities – the purchase and sale of long-term investments, property, plant and equipment as well as security deposits paid to suppliers or received from customers and dividends received.
Financing activities – the changes in balances of equity accounts, for example, issuing and repurchase of stocks and bonds and payment of company dividends if applicable. Loans are also included in financing activities.

Formal financial report packages usually include notes to the financial statements. The notes contain supplemental information that explain significant items or activities that did not involve cash transactions.

The notes may also include detailed reporting of categories that may have been reported as summary totals only in the profit and loss, balance sheet and statement of cash flows. Other items such as taxes, employee provisions, risk management or related party transactions may also be detailed in the notes.

Why is it useful?

The statement of cash flows gives you a valuable measure of cash flow in and out of the business over a given period. It shows the ability of the business to pay its bills and fund its operating activities. This gives you a picture of overall performance.

It also shows the relationships between assets, liabilities, equity and cash accounts. It shows changes and movements over time, whereas the balance sheet and profit and loss reports show account values at a single point in time.

The statement of cash flows gives you vital information on your business.

How strong is your cash position?
What is the long-term outlook for your business?
What activities generate the most cash flow?
What is the relationship between your net income and your operating activities?

If you’d like to understand your financial statements, cash position and future outlook in more depth, arrange a discovery call today . We’ll help you identify and appreciate the strengths of your business.

Christmas cash flow for your small business

Thu, 26 Dec 2024 11:20:51 GMT

Are you heading away for a break from the business this year?

But as we head into 2025, and the second half of the decade, what are the major threats, opportunities and challenges that your business should focus on?

This time of year can be hard on small business. Your expenses continue and your cash flow can suffer when your debtors go on holiday.

Leading up to the holiday period, is your business cash flow in good health to carry you through? With a bit of pre-planning and being proactive, you can set yourself up for a financially stress-free holiday.

Planning your cash flow over the Christmas period

Chase payment – Use this opportunity to chase up any outstanding payments. Strong communication and relationships matter - talk to clients and chase invoices.

Talk to the bank or tax department – If cash flow is tight, make sure you have conversations early so you have everything in place to see you through.

We can help you navigate the Christmas and New Year period and help you alleviate cash flow worries. Call us on 01904 787 973 or book a discovery call with Donald Inglis .

Five big business challenges for 2025

Thu, 19 Dec 2024 08:28:57 GMT

‘Uncertainty’ has been the defining phrase for the first half of the 2020s. The markets are unstable, supply chains have been wobbly and finding talent has been difficult.

But as we head into 2025, and the second half of the decade, what are the major threats, opportunities and challenges that your business should focus on?

We’ve highlighted five of the big business challenges.

Five big business challenges for 2025 (and beyond)

However well-organised you are, there are elements in the external environment that you just can’t control. These external factors can have a serious impact on your ability to trade, grow and turn a profit. So, are you on the ball and ready to tackle them in 2025?

Let’s look at five of the external factors you should be focused on:

1. AI and technological disruption

Artificial intelligence (AI) and automation have changed the game in a fantastically short timeframe. Finding the value in this tech is crucial, as well as understanding its limitations. Getting your digital transformation underway will be vitally important in 2025, as will exploring how AI and automation can kickstart your productivity, boost your customer service processes and create a real competitive advantage for the company as a whole.

2. Skills shortage and transforming your workforce

The ongoing skills shortage, combined with the reality of an aging workforce and changing employment expectations, is a major issue. To overcome the talent challenge, you’re going to need to rethink your recruitment policy, your training and what you do to retain your key people.Things like flexible working arrangements, continuous professional development (CPD) and a great company culture are all ways to attract and maintain your top talent.

3. Inflation and an unstable economy

The global and local economies are not out of the woods yet. Forecasts may be looking more positive but there’s still the ever-present threat of recession, rising inflation and high interest rates. Getting granular with your financial forecasting will help, as will exploring your options for additional revenue streams, better cashflow management and ready access to business finance.

4. Regulatory compliance and reporting

Regulatory environments are getting increasingly complex, as governments wrestle with the need for tighter structures. Regulations around your environmental reporting, workplace relations and digital privacy are all likely to get tighter over the coming years. This means allocating time and resources to understanding and implementing the relevant compliance requirements.

5. Climate change and sustainability

Environmental challenges are an important consideration for businesses today. Adopting a sustainability strategy can help you reduce costs, improve efficiency, and prepare for future regulations, while also minimising your environmental impact. By integrating green technologies and sustainable practices, businesses can contribute positively to global efforts to reduce environmental harm and promote a healthier planet.

Talk to us about overcoming the big challenges

There’s no magic wand that can change these macro environmental and economic factors. But awareness, detailed planning and good use of forecasting can be a major boost.

Come and talk to our team about your concerns for the year ahead. We’ll help you understand the major external factors and what you can do to make your business more resilient. Call us on 01904 787 973 or book a discovery call with Donald Inglis .

Six ways to optimise your business

Mon, 09 Dec 2024 09:42:58 GMT

We’re trading in uncertain times at present. But there’s still a pressing need to refine your business model, add value and look at the opportunities for growth.

In this series, we’ll look at some key ways to optimise your business, exploring different avenues to evolve your enterprise and create a legacy you can be proud of.

Six ways to optimise your business

Your game plan might have been to sell the business, achieve a great deal and retire on the profits. But in the current market, it’s possible you’ve had to press pause on this exit strategy.

However, instead of letting the business just tick over, why not get proactive about improving and enhancing your business model, so it’s a more profitable and viable business?

Here are six key areas you should be looking at:

1. Go digital and automate the business

Now’s the ideal time to embrace digital technologies. With the latest cloud tech, AI and automation solutions you can streamline your operations, improve your overall customer experience and boost sales. You can also explore e-commerce solutions, social media marketing and digital marketing.

2. Get proactive with your finances

Strong financial management sets the foundations for making the business profitable. Switching to the latest cloud accounting software helps you get a handle on your cashflow, a better overview of costs and a more informed view of your overall financial position. Many accounting platforms will also offer integrations with other helpful business tools, such as inventory, invoicing and point-of-sale (POS) tools.

3. Build on those customer relationships

Exceptional customer experience helps to build loyalty and drive repeat business. This means getting granular with your customers’ needs, providing excellent customer service and listening to (and acting on ) your customer feedback. It’s the best way to improve your customer service and brand.

4. Diversify into new areas

It’s easy to get stuck in a rut when it comes to your product range and industry focus. One way to shake things up is to diversify and explore new product ideas, new customer audiences and new niches. Diversification can reveal a whole new customer demographic, not to mention additional revenue streams.

5. Nurture your team and employee experience

Engaged employees are the foundation of a great business. Invest in training and development to improve your team’s skills and motivation and do everything you can to build a positive work culture. When hiring, look to create a diverse and inclusive team of people, so you have a real melting pot of talent, ideas, skills and experience in the business.

6. Look for strategic partnerships

Navigating the market is far more successful when you explore the benefits of business partnerships. Connecting with other businesses can extend your market reach, reduce costs and allow you to share resources. You also open up your brand to a whole new customer audience, boosting sales and growth.

Talk to us about optimising your business model.

There’s no single strategy for turning around the success of your business. But looking at new ideas, markets, products and business tools can certainly add considerable value.

If you’re looking to add some pizazz to your business model and operational effectiveness, call us on 01904 787 973 or book a discovery call with Donald Inglis .

Maximise your gains with business asset disposal relief

Tue, 03 Dec 2024 09:52:06 GMT

When you invest in the first faltering steps of a new venture or enterprise, you want to be pretty sure that you get a decent return on this entrepreneurial investment.

One way to do this is to make use of [Business Asset Disposal Relief] (https://www.gov.uk/business-asset-disposal-relief) – an important relief that allows you to lower the amount of capital gains tax you pay when disposing of certain assets.

Everything you need to know about Business Asset Disposal Relief

The UK Government has always been keen to promote and encourage entrepreneurialism. A long-standing way to do this was via Entrepreneurs’ Relief, a way to reduce the amount of capital gains tax business owners paid following the disposal of some business assets.

In 2020, Entrepreneurs Relief was rebranded as Business Asset Disposal Relief (BADR), continuing the use of this enterprise-focused relief for ambitious investors.

Here’s a quick overview of how BADR works:

A reduced rate of capital gains tax

BADR allows eligible taxpayers to pay a reduced capital gains tax (CGT) rate of 10% on qualifying gains. This compares favourably to the current 20% standard rate of CGT.

Your lifetime limit

There's a lifetime limit of £1 million on gains that are eligible for BADR relief. Once over the £1m threshold, you’ll pay CGT at the standard rate.

Who’s eligible for BADR?

To qualify for the relief, you must typically have owned and run the business for at least two years. The shares or assets you own must also be directly connected to the business.Which assets qualify?BADR can apply to shares in a trading company, business assets like machinery or property, and certain intellectual property rights.

How do you make a claim?

To claim BADR, you'll need to complete a tax return and provide supporting documentation regarding the assets and disposal to HMRC.

How is BADR changing for future tax years?

In the Budget 2024, the Chancellor, Rachel Reeves, announced that BADR would remain as a relief, but that the rate of CGT paid would increase over successive years.

In April 2025, the BADR tax rate will rise from 10% to 14%In April 2026, the BADR tax rate will rise from 14% to 18%

Talk to us about the best time to make a BADR claim

If you’re thinking of making a BADR claim, some careful planning will be needed to get the optimal benefit from the relief. Remember, you need to have owned your business for two years or more to be eligible, and that the lower 10% rate will only apply until March 2025.

Talk to our team and we’ll help you assess your eligibility for BADR and the most tax-efficient way for you to dispose of your business assets. To speak to our team, call 01904 787 973 or book a discovery call with Donald Inglis .

Selling your business: getting a good deal

Thu, 28 Nov 2024 14:29:00 GMT

You’ve spent years growing your business and adding value to the company. Now it’s time to sell up, get a good deal and liquidise the equity you’ve had locked up in the business.

In this series, we’ll give you all the advice you need to plan your exit, add value to the business, negotiate a great deal and define your new pathway once the business is sold.

Let’s look at some important ways to achieve the best possible deal for your business sale.

Selling your business is generally the end step in a much longer journey. If you’ve put together a detailed exit strategy, you’ll have been planning this sale for some time.

The important thing at this point is to make sure you get a great deal and realise the best possible sale price – giving you the return you deserve for all your hard work.

To put yourself in the optimum position when looking for a buyer, here are a few tips:

Know the value of your business

Make sure you’ve conducted a thorough valuation to understand the true market worth of your business. This gives you a strong negotiating position and helps you set a realistic asking price that’s attractive to buyers.

Research the market in your industry

Take a deep dive into current market trends and comparable sales to understand what a fair price is for a business in your industry. Armed with this info, you’re in a good position to negotiate a competitive price.

Highlight the strengths in your business

Use your sales materials to emphasise the unique selling points and competitive advantages of your business. This could include having a strong customer base, explaining the experience of your management team, or outlining the benefits of your proprietary technology and intellectual property etc.

Know the funds you need to realise

You’ll have plans for what happens after the sale, whether that’s a comfortable retirement, or the founding of a new enterprise. Make sure you know how much equity will be needed to fund this lifestyle, or startup plan. This number will drive your asking price for the business and your own profit from the sale.

Be prepared to negotiate

You may have a price in mind that your prospective buyer is unwilling to meet. Be prepared to negotiate on price, terms, and other aspects of the deal. Understand your bottom line, know the return you need to achieve and be willing to compromise in some areas, when necessary, to seal the deal.

Always seek professional advice

Mergers and acquisitions is a specialist area. Think about consulting with a business broker or legal adviser to guide you through the negotiation process. With the benefits of experienced, professional advice, you’re far more likely to get the best possible deal for the company.

Talk to us about planning the sale of your business

Finding the best buyer and securing a mutually beneficial deal is one of the most critical points in your exit strategy. Getting it right now is vital for your long-term plans and financial security

If you’re ready to sell and want some expert advice, come and talk to the team. We’ll help you work out the value of your assets, assess the current market and can link you up with brokers and M&A specialists to get the key advice you need. To speak to our team, call 01904 787 973 or book a discovery call with Donald Inglis .

Data-driven decision-making: sales, marketing and social media

Mon, 25 Nov 2024 13:18:26 GMT

In this series, we continue to look at how data-driven decisions sit at the heart of running a successful business in 2024.

Today, we’re shining a light on the huge pool of customer data you have sitting in your systems.

Are you aware of the impact that data analysis could have on your sales and marketing?

Understanding your customer, knowing their needs and predicting their habits is crucial as a small business. The more information you have regarding your customers, the easier it is to meet those customer needs and offer products and services that they value.

But how does customer and social data help with this goal?

Here are five ways that data can open up your customer interactions:

Targeted marketing campaigns

When you analyse your customers’ data, you can drill down into their preferences. This leads to highly targeted marketing campaigns that truly resonate with your customers and deliver on their specific needs as a buyer.

Improved customer segmentation

Data-driven customer segmentation makes it easier to identify distinct groups of customers with similar characteristics. This is incredibly helpful when tailoring your sales and marketing to specific audiences.

Optimised social media strategies

Looking at the stats for your socials helps you spot which social media platforms are popular with your target audience, and which campaigns have the best engagement and conversion rates. This is gold dust when planning your social media content and campaign to drive conversion.

Enhanced content creation

Analysis of the data from your website and blog help you tailor your content. By looking at customer engagement and bounce rates, you can tailor your content to drive traffic to your site, while also offering the most helpful advice, news, case studies and guides to your customers.

Improved customer experience

Data-driven decision-making gives you the numbers you need to personalise your customer experience. This helps to build stronger relationships, increase sales and customer loyalty and boost your revenues.

Talk to us about using data to improve your sales and marketing

Customer data is as vital to your decision-making and strategic thinking as your accounts data. Our team will be happy to run you through the key ways to record and analyse your customer data, and how this data forms the bedrock for making informed business decisions. Call us on 01904 787 973 or book a discovery call with Donald Inglis .

Data-driven decision-making: operations and inventory

Tue, 19 Nov 2024 09:39:30 GMT

Did you know that diving into the data could help your operations run a lot more smoothly?

In this series, we continue to look at how data-driven decisions sit at the heart of running a successful business.

With so much of your operational processes now being run and managed in software, there’s a massive opportunity to sift through this data to find the useful data insights and patterns.

Every business strives for better efficiency, productivity and cost-effectiveness, and this is where data analysis and making informed, data-based decisions can be a gamechanger.

Let’s take a look at how data can transform your operations:

Optimised inventory management

By getting to grips with your historical sales data and demand patterns, you can quickly optimise your inventory levels. This reduces the risk of running low on popular product lines, and stops you wasting precious cash on inventory that then sits gathering dust in the warehouse.

Improved supply chain management

Reviewing your supply chain data allows you to spot the potential shortfalls before they happen. By being better informed, you can identify potential disruptions in your supply chain, take proactive steps to find other available suppliers and even shop around for more cost-efficient options.

Enhanced production planning

Looking through your production data can be enlightening. Armed with the right data insights, you can optimise your production schedules, reduce waste and improve efficiency across the whole process, so you’re running an altogether more effective production and manufacturing process.

Predicting the need for maintenance

Analysing historic data for your hardware systems gives you a great overview of when repairs may be needed. Backed up with the right data foundations, you can predict equipment failures and schedule maintenance more proactively, reducing the negative impacts of downtime and repair costs.

Resource allocation

Reviewing your utilisation data helps you spot where your people could be used more effectively. Data reviews can help identify areas where your human resources are under-utilised or over-utilised, making it easier to allocate the right people on specific projects and to build teams that can truly help you grow.

Talk to us about using data to improve your operations and inventory

The more information you have about your business operations, the easier it becomes to spot the issues, spiralling costs or productivity black holes that are eating into your efficiency.

Our team would love to talk you through the positive impacts of data-driven decision-making, and how being better informed helps you take your business to the next level. Call our York office on 01904 787 973 or book a discovery call with Donald Inglis .

Data-driven decision-making: growth and strategy

Mon, 11 Nov 2024 09:08:00 GMT

Putting data at the heart of your growth strategy is a no-brainer. We’ve broken down five ways that data-based decision-making helps you grab the best opportunities and grow at pace.

In this series, we continue to look at how data-driven decisions sit at the heart of running a successful business.

With the best possible data insights, you can set the core foundations needed for growth

Without growth, your business is failing to live up to its potential. But planting the seeds of growth can be tricky when you don’t have enough detailed information at your fingertips.

The good news is that you likely already have all the data you need, sitting idle in your software systems. The trick is to consolidate this data, analyse it and to pull out the important patterns, trends and useful data insights.

Armed with this data, you have the best possible bedrock on which to base your next strategic move or the fundamentals of your growth plan.

Let’s take a look at how data can transform your growth:

Identify the growth opportunities

Start by looking at the trends in your own sales data and by reviewing the latest market trends. Where are the opportunities to diversify into new areas or improve your targeting of specific audiences? With a clearer overview of these opportunities, you can start to build a more solid growth strategy.

Allocate resources more effectively

Delving deeper into your operational data helps you understand how to invest in areas that will drive the most growth and profitability. Where could more staffing make a difference? Where do you need updated equipment? Which processes could be automated to free up resources for growth-based activity?

Set more realistic goals

Setting clear goals as a business is what drives the forward movement of the company. But with access to the most in-depth data insights, it’s easier to set realistic and achievable goals for your business. You want to challenge yourself and the team, but also put goals and measures in place that are actually attainable.

Measure performance and adjust your strategy

With a growth plan in place, you can track your progress against your agreed goals and milestones. Recording performance data and key performance indicators (KPIs) allows you to track your journey, understand the company’s performance and amend your strategy for the best results.

Support data-based decision-making

Instead of making big business decisions on a wing and prayer, you have the foundational insights from your business data to inform you. Instead of relying on bias, assumptions and guesswork, your growth strategy can focus on data-backed opportunities and rational, attainable growth goals.

Talk to us about using data to improve your operations and inventory

Leading from the front isn’t just about having good business ideas. It’s about having the data, the evidence and the historic information to back up your ideas. By switching to data-based decision-making, you put solid data insights at the heart of your growth strategy as a company.

Our team would be more than happy to explain the benefits of data-based insights. If you would like us to explain how to create the most insightful metrics and reporting for driving your growth journey, then book a discovery call with Donald Inglis .

Potential threats to your business value

Mon, 04 Nov 2024 03:35:52 GMT

Once you’ve built up a successful business, you’ll want to see a healthy return on this investment.

But in today’s turbulent business environment, a once stable and profitable company can quickly decline and fail to grow , losing the hard-won value you’ve built up.

If you’re a mature owner looking to retire in the near future, or an ambitious entrepreneur who’s planning to exit and start your next business idea, this loss of value is seriously bad news!

The key is to spot the potential threats to your business value , and to ensure you’re doing everything you can to keep your business viable, relevant and profitable.

Five potential threats that are damaging your business value

The value and equity that’s locked up in your successful business is your nest egg. It’s the asset that will power your future retirement, buy your family that new home, or the unrealised capital that will allow you to invest, begin new enterprises or fund your lifestyle.

So if the value in your business drops, this can fundamentally undermine your future plans and leave you without the capital to take these next steps.

Here are five key threats that may be decreasing the value of your business:

A reliance on the founder that limits growth potential

A modern business should be systemised and scalable . If you, as the founder, are still integral to your everyday operations, this blocks innovation and limits the potential growth of the business.

Outdated equipment or technology

If you’re using outdated equipment, technology or software , this can reduce your overall operational efficiency, increase your running costs and make your business less competitive in the marketplace.

Failure to keep pace with the market

Markets change quickly! The emergence of disruptive competitors, innovative new products or changes in customer behaviour can leave you lagging behind your competitors (and losing sales and revenue as a result).

Negative reputation or brand awareness

Poor customer satisfaction scores, or bad behaviour by your employees or top team, can quickly dent your reputation as a company . Negative reputation can damage your brand, deter customers from engaging with you and, subsequently, reduce the company’s value.

Poor financial health as a business

Potential buyers want to see that your business is financially viable . A high debt-to-equity ratio can make a business more vulnerable to economic downturns, and poor cashflow will hinder your ability to invest in growth, pay bills and meet your financial obligations (all red flags for investors and potential buyers).

Talk to us about stabilising the value of your company

The business value of your company isn’t static. For the business to maintain value, it needs to keep up with a changing market, adopt new technologies and make solid plans for growth. We can help you review your potential value and come up with a business strategy and tactical approach that keeps your company relevant and valuable well into the future.

Over the years, we’ve grown into one of the leading accountants in York, expanding our range of accounting services whilst staying true to our core values and our force for good ethos. If you would like to earn more, keep more of your hard-earned profits and enjoy the life you want then book a discovery call with Donald Inglis .

Budget 2024: Key points at a glance

Wed, 30 Oct 2024 14:43:20 GMT

Chancellor Rachel Reeves has introduced Labour’s first Budget in over a decade, with announcements ranging from tax, wages, and government spending.

If you run a small or medium-sized business, here’s a summary of key points to help you understand what these changes mean for you and your team.

Personal and business taxes

National Insurance Changes : From April, businesses will face increased National Insurance contributions on earnings over £5,000 (currently £9,100), with the rate rising from 13.8% to 15%. This adjustment could affect your payroll costs, so planning ahead for this added financial commitment may help mitigate the impact.
Employment Allowance Boost : The Employment Allowance, which allows businesses to offset some of their National Insurance liabilities, is set to increase from £5,000 to £10,500. This increase can help reduce costs for eligible employers, especially smaller businesses needing additional relief.
Capital Gains Tax Increase : Capital gains tax (CGT) rates on non-property sales are set to increase from 10% to 18% for basic-rate taxpayers and from 20% to 24% for higher-rate taxpayers. This measure may have an impact if your business relies on investment or property holdings, especially in portfolio assets or if you’re planning to sell off shares.
Corporation Tax Rate Steady : For businesses making profits over £250,000, the corporation tax rate will remain at 25% until the next election. This consistency can aid in planning, though businesses below this threshold will see tapered relief on lower profits.

Employee wages and benefits

Minimum Wage Increases : From April, the National Living Wage for employees aged 21 and over will rise from £11.44 to £12.21 per hour, and for those aged 18–20, the rate will go up from £8.60 to £10. This is part of a broader goal to establish a single adult rate, impacting payroll costs for businesses with lower-paid staff. While beneficial for employees, small businesses may need to evaluate budget impacts, particularly for entry-level or junior roles.
Increased Apprentice Rate : For those under 19 or in the first year of an apprenticeship, the minimum wage will increase from £6.40 to £7.55 per hour, which may also affect businesses with entry-level or apprenticeship programmes.
Employee Benefits and State Pensions : While state pensions and some benefits will see modest increases, employees on universal credit may benefit from higher allowances, which could lessen their need for additional wage support. For employees who are also carers, the allowance threshold has increased, meaning they can earn more before affecting their eligibility.

Transport and travel

Changes to Bus Fare Cap and Fuel Duty : Starting in January 2025, the cap on single bus fares across England will increase to £3. Additionally, the 5p reduction in fuel duty on petrol and diesel will remain in place for another year, which could help businesses reliant on road transport to contain travel costs.
Increase in Air Passenger Duty for Private Jets : If you’re part of an industry where private or business jet travel is frequent, note that the Air Passenger Duty will rise by 50%. This could impact any high-profile travel plans or events requiring private aviation, an increasingly scrutinised expense.

Housing and property

Stamp Duty Surcharge Increase : For those acquiring second properties, such as additional business premises or investment properties, the stamp duty surcharge in England and Northern Ireland will rise from 3% to 5%. This change may necessitate budget adjustments for future property investments.
Inheritance Tax and CGT Implications : Although inheritance tax (IHT) remains at 40%, pension savings inherited from April 2027 will be included in taxable estates, potentially increasing IHT liabilities. Business owners considering succession planning should keep this in mind, as it may alter financial planning around passing on business interests or assets.

Economic growth, inflation, and government spending

Growth and Inflation Forecasts : The Office for Budget Responsibility predicts modest growth of 1.1% this year, increasing to 2% next year, with inflation expected to average 2.5% this year. Knowing these projections can help you gauge pricing adjustments and long-term planning for product or service pricing as inflation pressures ease.
Education and Healthcare Funding : With £6.7bn allocated to education and £22.6bn to the NHS, this spending could impact sectors tied to public procurement or healthcare. If your business operates within these areas, you may see additional opportunities or increased demand.

This Budget introduces several measures aimed at balancing tax income with increased spending in public services and wage increases. The overall impact on small and medium-sized businesses will depend on your particular circumstances, including your workforce size, profit margins, and investment strategies.

How can we help?

If you’re unsure how these changes could impact your business or if you have a specific question in mind, feel free to reach out to our team on 01904 787 973 or book a call with Donald Inglis . The Autumn Budget also introduced adjustments to benefits, state pensions, taxes on tobacco and alcohol, and VAT on private school fees. If you think these issues directly affect your business then please get in touch.

Planning for seasonal dips in income

Mon, 28 Oct 2024 14:05:43 GMT

Seasonal dips in income can be highly challenging when you’re a small business. But there are proactive ways to predict, plan for and overcome these dips in revenue.

The key to dealing with seasonal dips is to know when they’re most likely to occur, and to have measures in place to spread your income and revenue pipeline over the course of the year.

Understanding seasonality in your sector

If your business is seasonal such as pool supplies, or a ski gear specialist, you’ll be used to the peaks and troughs, but many 'non-seasonal' businesses experience times during the financial year where sales and revenue peak – and, on the flipside, where sales and revenue experience a pronounced dip.

When income is low at certain times of the year, it makes for challenging times.

What are the key ways to plan for this kind of seasonality?

Forecast your seasonality

It’s vital to know when you’re most likely to experience any seasonal dips. Looking at benchmarking reports for your industry is one way to predict the seasonality in your niche or sector. But you can also use your own accounting data to great effect. Look back through your profit & loss reports and spot where the peaks and troughs have occurred over preceding years.

Charge a premium in peak time

One straightforward approach is to apply premium pricing for your products/services during the busy season. By increasing your pricing, you boost your overall revenue, giving you more working capital to see you through the leaner months when sales and income are at their lowest.

Offer additional peak-time services

Offering added extras and other additional service lines during peak time is another way to maximise the season. In the months where customers are most engaged, look to upsell these premium services and offer more value. Satisfied clients will be more inclined to pay for added extras, giving you an increased revenue stream from the same number of customers.

Target other markets

Exploring other related markets is another useful tactic. When you’re experiencing downtime, look for other ways to monetise your existing assets, products or services. For example, if you’re a hotel where sales peak in summertime, offer discounted conference space in the winter months to boost revenue.

Diversify your products/services

If one product/service has a known seasonal dip, look at adding an additional product or service to offset this downtime. For example, a ski resort could promote bike-riding or hiking breaks during the warmer summer months to keep revenue constant. Likewise a pool maintenance firm could establish an outdoor fireplace business for the colder months.

Have a regional e-commerce strategy

If you’re dependent on a small local market, broadening your marketing and e-commerce strategies can help to attract a wider customer base – and bolster sales. Paid advertising through Facebook, LinkedIn or X can easily target new geographical markets, bringing in new customers and giving your revenue a much-needed uplift during seasonal troughs.

Talk to us about planning for seasonality

If your business is struggling with seasonal dips, and the resulting impact on cash flow, book a discovery call with Donald Inglis . We’ll help you identify the timing of your seasonal downtime, and come up with a clear strategy for stabilising your income across the year.

Should your small business adopt AI tools?

Tue, 22 Oct 2024 08:42:27 GMT

We’re living through what the World Economic Forum has called ‘ The Fourth Industrial Revolution ', and artificial intelligence (AI) is one of the formative technologies of this revolution.

AI is no longer the stuff of science fiction. AI solutions and business tools are here right now, demonstrating new ways to operate, manage and staff your small business.

So why are only one in three UK small businesses using AI ?

And where could AI be lending a helping hand in your own business?

Keeping pace with the speed of technological change is a key responsibility for any business owner. If competitors are using AI to gain efficiencies and streamline their operations, it stands to reason that your business must match this innovation and find ways to embrace AI.

But, as with any technological or software investment, there has to be a fundamental role for the new AI tools you take on. ‘Going AI’ just to be seen to be at the cutting edge, is not the goal here. Your aim is for AI to have a function and to make your life easier.

Here are five areas where modern AI tools can help the average small business:

Answer customer calls and improve customer service

Fast responses to customer queries are essential for good customer service. AI-powered phone agents, like Lucy from Curious Thing , can have human-like conversations with customers, answer routine customer enquiries and free up your team to focus on high-value customer interactions.

Record and summarise meetings

Pulling out the key points from in-house and customer meetings can be time-consuming. A tool like Fireflies records your in-person and online meetings and then forwards you an AI summary of the meeting, with bullets of the key themes, a full transcript and clear action points for everyone to follow.

Speed up your marketing content creation

Generative AI tools, like ChatGPT and Google Gemini can revolutionise your marketing efforts. Ask AI to draft you an email campaign, sales deck or web page, based around your foundational knowledge of the product. But make sure to edit and personalise the output to make it your own.

Automate your social media posting

Being present on social media is vital for brand awareness and connecting with customers. A social media tool like Buffer helps you manage your social media accounts while also using the built-in AI tool to generate posts and repurpose existing posts, keeping your feeds fresh.

Manage HR and employee performance

Managing the [objectives and key results OKRs for your team can be a challenge. With an AI tool like Peoplebox , much of the goal-setting and performance management can be automated, helping you keep everyone on the team focused on the same goals, while you focus on the business.

Talk to us about areas where AI can add value for your business

The world of business-focused AI solutions is growing at a fantastic rate, so the suggestions above are just the tip of a very large AI iceberg. Over the years, we’ve grown into one of the leading accountants in York, expanding our range of accounting services whilst staying true to our core values and our force for good ethos. If you would like to find out about areas where AI can add value for your business then book a discovery call with Donald Inglis .

Key techniques for improving payment times

Thu, 17 Oct 2024 12:27:38 GMT

Late payments to UK small businesses are on the rise, putting additional pressure on your small business cash flow and ability to cover your expenses.

According to recent research by Xero , payments are delayed by more than a week on average – and that’s bad news when cash is tight and operating costs are on the rise

Here are five straightforward ways to improve your payment times:

How to get paid faster and boost your cash flow

When your customers don’t pay on time, this late payment can cause a multitude of business problems . Not only does your cash flow take a dip, but working relationships can be damaged and hours of business time can be wasted chasing up these overdue payments.

We’ve outlined five key techniques for cutting down payment times:

Offer flexible payment options

The easier you make it for customers to pay, the better. Provide your customers with a variety of payment methods , including credit cards, debit cards, regular Direct Debit payments and payment gateways like PayPal etc.

Send your invoices out on time

The customer can only pay once you raise an invoice. Make sure you send invoices out in a timely way , and that the details are accurate and clear. Break large invoices up into smaller payments that get sent out when specific milestones are reached in the project.

Offer discounts for early payment

Customers won’t pay before the invoice due date unless it’s in their interest to do so. But you can incentivise customers to pay their invoices early by offering discounts for fast payment . For example, if payment terms are usually 30 days, offer a 2% discount if the invoice is paid within 10 days.

Get proactive with your credit control

Check your aged debtor reports regularly and chase up invoices that are overdue . Politely reach out to the customer and remind them of the outstanding balance. Sending automated notifications from your accounting software can also help to provide some impetus for customers to settle their bills.

Consider invoice finance

Talk to us about reducing overdue payments

If late payments are becoming an issue, it’s important to take action fast! Talk to us by booking a call with Donald Inglis or call 01904 787 973 to find new ways to speed up payment times, get proactive with your credit control and provide faster, more reliable payment options for your customers.

What's happening with Making Tax Digital?

Wed, 09 Oct 2024 07:27:52 GMT

Keeping up to date with HMRC’s Making Tax Digital initiative is important, whatever size business you run and however you currently record, submit and pay your business taxes.

Let’s take a quick look at the goals of Making Tax Digital (MTD), which requirements are currently mandatory and which elements are likely to change in the near future.

What is Making Tax Digital?

The aims of MTD are to modernise the UK tax system by requiring businesses and individuals to keep digital records and file their tax returns using compatible software.

Key goals of MTD are to:

Improve accuracy by pushing businesses, and some individuals, to use accounting software to keep accurate digital records – moving away from paper-based records.
Increase efficiency by using digital filing and tax submissions to reduce the time and effort required for tax returns.
Enhance compliance, by moving to quarterly returns that make it easier for HMRC to monitor tax compliance and identify potential fraud.

Which parts of MTD are currently mandatory?

MTD has been in the works for a number of years, with several delays and setbacks to the original agenda. Some elements of MTD are now in use, and others are likely to be introduced in the near future. Here’s a breakdown of what’s currently expected of your business.

Current elements of MTD for businesses

MTD for VAT – under the MTD for VAT rules, all VAT-registered businesses must keep digital records and file quarterly VAT returns using compatible software. This has been mandatory since April 2019.

Upcoming elements of MTD for businesses

MTD for Income Tax Self Assessment – MTD for ITSA is currently being piloted. From April 2026, it will become mandatory for sole traders and landlords with annual income above the £30,000 p/a threshold. All qualifying individuals will need to keep digital records and submit quarterly updates.

MTD for Corporation Tax – the government has announced plans to introduce MTD for Corporation Tax (CT), and held a consultation on how MTD for CT might work. The exact timeline for introducing MTD for CT has not been confirmed, but, at present, it’s unlikely to happen before April 2026 .

Talk to us about getting MTD compliant

If you’re not yet registered for MTD for VAT and are worried about complying with the regulations, please contact our team by booking a call with Donald Inglis . Setting up accounting software and digital recordkeeping tools can be extremely straightforward, making your bookkeeping and tax management far more effective.

What key announcements could be in October's Autumn Statement?

Wed, 02 Oct 2024 07:37:34 GMT

It’s no secret this year’s Autumn Statement may well contain some sweeping changes to the UK tax code and fiscal legislation.

The new Chancellor of the Exchequer, Rachel Reeves, has made it clear that there are ‘difficult decisions to be made’, primarily due to the £22 billion deficit in the public finances that the Labour Government has inherited from the previous administration.

Savings must be made and government revenues must be improved if the Government is to get the UK economy back on track in the medium to long term.

Autumn Statement 2024: possible announcements

So, what announcements are we likely to hear from the Chancellor on 30 October 2024? Here’s a quick rundown of some of the rumours, announcements and possible changes:

Proposed cuts to winter fuel payments for some pensioners.

Cuts to the winter fuel allowance have already been passed in Parliament, with the possibility of further paring back of benefits across other welfare and social payments.

VAT on private school fees.

The Chancellor has also announced that all education services and vocational training supplied by a private school, or a connected person, for a charge will be subject to VAT at the standard rate of 20%, from 1 January 2025.

No rises in taxes for working people

Rachel Reeves has made it clear that she won’t target taxes for working people , like income tax, NI or VAT. Keeping consumers spending and businesses trading will be vital to any kind of economic recovery.

Corporation tax changes not impossible

Back in February, Labour pledged not to increase corporation rates if elected to government. However, there’s potential for the standard rate of 25% to be reduced to make the UK more competitive.

Rises in capital gains taxation

While working taxes won’t be increased, there may be changes to some taxes, such as capital gains tax and inheritance tax . This could be bad news for business owners and high-net-worth individuals.

No introduction of a wealth tax

The Chancellor made it clear in the run-up to the General Election that a wealth tax was off the table, so we’re unlikely to see any changes to the higher bands of income tax in this Autumn Statement.

Changes to pensions

The annual total of the state pension will rise by £460 from April 2025 , but key changes to private pensions legislation are also possible. This could involve restricting tax deductions on contributions to either the basic rate (20%), or possibly 30%. There could also be reductions in the amount that can be withdrawn tax-free from your pension, currently 25%, capped at £268,275.

More detail on changes to non-dom rule

Changes to the non-domiciled rules for UK business owners and high-net-worth individuals were previewed in July.

There could be more details around how the new Foreign Income & Gains (FIG) system will work and what the potential impact could be for owners with overseas assets.

Stay updated

Want a breakdown of all the big announcements from the forthcoming Autumn Statement? In the days following the Autumn Statement we will be publishing a breakdown of all the major annoucements on our Resource Hub - so stay tuned!

Understanding profit vs cash flow for business success

Mon, 23 Sep 2024 08:51:22 GMT

The purpose of a business is to make money, and that means you need to know the difference between profit and cash flow.

Net profit is what you have left after you deduct all your business expenses from all your revenue. You can improve net profit only by changing the things that affect revenue and expenses.

For example, if:

You renegotiate with your suppliers, you may get stock cheaper, or carry less inventory
Your staff engage with customers better, you can learn more about what they do and don’t like – and get more business
You can roster staff differently, you may be able to run your business more efficiently.

Cash flow comes from various sources. However, it also covers operating expenses, taxes, equipment purchases, repayments, distribution, and so on. Note that a profitable business does not always have good cash flow. And a business with good cash flow is not always profitable. For example, you can have good cash flow, and loss-making expenses.

To work out how fast you can grow your business, look at your projected cash flow. We can advise you on this.

Keeping cash crowned as king

Your business can’t survive without cash.

The following six takeaways are essential for business success:

Protect your cash position, by knowing what it is. Build a cash flow statement and always keep it up-to-date. If you foresee a shortfall, start at once to fix it.
Create a cash buffer as an insurance against unexpected difficulties.
Protect your cash position against revenue shocks, by maintaining a balance equivalent to at least two months of operating expenses.
Be realistic with revenue expectations. Take action now if it looks like sales are not going to get you to breakeven.
Credit checking up front will reduce the risk of customer non-payment. Make sure you follow up with clear payment terms agreed in writing. Communicate regularly with customers and automate where possible.
Every pound you spend reduces cash reserves. The best way to protect your cash is to create a budget for the spend you know you need, and stick to it.

Improve your cash flow

If you want us to evaluate your current financial strategy, identify key areas for growth, and provide actionable insights to help you improve your cash flow, then book a discovery call with Donald Inglis .

Understanding your revenue drivers

Thu, 19 Sep 2024 10:55:26 GMT

For your business to make money, you need to generate revenue.

You produce revenue through your usual business activity, by making sales, getting your invoices paid, or taking cash from paying customers. So, the better you are at selling your products/services and bringing money into the business, the higher your revenue levels will be.

But what actually drives these revenue levels? And how do you get in control of these drivers?

Knowing where your cash is coming from is more crucial than ever

As a trading company, you face the multiple challenges of a global recession, changed consumer buying and higher inflation, all this impacts trading, markets and buying expectations. The better you can understand the nature of your revenue and its drivers, the more you can flex, manage and control your ability to generate this income.

This helps your medium to long-term strategic thinking, and your decision-making, allowing you to be confident that you’re focusing on the business areas that deliver maximum revenue.

Import areas to consider will include:

Revenue channels – where does your revenue actually come from? Do you create income from online sales and ecommerce, through retail sales in bricks and mortar stores, or through wholesales to other businesses? You may focus on just one of these channels, or it could be that you use a mixture of two, three or more.
Revenue streams – your total revenue will be made up of a number of different ‘streams’ So, you might be a coffee shop, whose revenue streams include coffee sales, cake and pastry sales and lunch sales. Knowing which revenue streams you rely on, which are most productive and what return they are delivering allows you to make decisions. If 80% of your income comes from 20% of your products, perhaps you need to tighten up your product range and ditch some of the poor sellers. If you’re selling more services to one particular industry, perhaps you should focus more marketing in this specific niche, or downscale your sales activity in less profitable niches.
Product/service split – Do you know which products/services are the most profitable in the business? Which products/services have been resilient to market changes (giving you some revenue stability) and which have adapted well to change? The more you can dive into your metrics and find the most productive and adaptable products and services, the greater your ability is to provide constant and evolving revenue for the business.
Value vs volume – Is your revenue based on selling a high volume of products/services at low margin, or low volume at a high margin? Based on this, can you move your margin down to create a more attractive price point (and more value for customers)? Or are their ways to push volume up, shifting more units and boosting total revenue? By diversifying into new channels, new streams or new products/services you can aim to balance value and volume to create brand new sales – and higher revenue levels.

Talk to us about exploring your revenue drivers

If you want to boost revenue and increase your overall profitability, come and talk to us. Over the years, we’ve grown into one of the leading accountants in York, expanding our range of accounting services whilst staying true to our core values and our force for good ethos.

If you would like us to review the numbers in your business, help you to understand your revenue drivers and will give you proactive advice on enhancing your total revenue as a company then book a discovery call with Donald Inglis .

Key ways to overcome rising costs and expenses

Mon, 16 Sep 2024 13:43:29 GMT

A recent survey showed a 24% rise in the cost of the average expense transaction for UK businesses , compared to pre-pandemic levels. And rising costs can have a significant impact on your cashflow and bottom line.

So, what can you do to minimise the impact of sky-rocketing costs in your business?

7 ways to reduce your expenses and boost revenue

When costs are rising and profit margins are falling, that’s bad news for the financial health of your business. But there are ways to combat this scenario.

In short, you have two main tactics to kick into gear. You can either look at cost-cutting across all your operating expenses, or you can find ways to sympathetically boost your revenue .

Strategies for cost reduction

Streamline your operations

Look for any inefficiencies and find ways to streamline your processes and reduce the underlying costs. You can also use technology to automate key functions to add efficiency and reduce your underlying costs.

Negotiate with suppliers

Revisit your existing contracts with suppliers and negotiate better terms, while also being mindful of the suppliers own cashflow pressures. Looking for alternative suppliers or finding cost efficiencies by purchasing in bulk.

Reduce your energy consumption

Putting energy-saving measures in place, like LED lighting and energy-efficient equipment, is a move towards good sustainability, but can also help you save money. Considering renewable energy options can also help.

Manage inventory effectively

Keeping your inventory lean is a good way to optimise inventory levels and minimise your holding costs. Implementing a just-in-time inventory management cuts costs while keeping you ready to service customer needs.

Strategies for increasing revenue

Expand your customer base

A broader customer base helps to bring in more sales and revenue. Explore the potential for entering new markets or customer segments, and boost ecommerce and digital marketing to sell more online.

Raise your prices strategically

Think about the demand for your products/services in the market and revise your pricing to keep it competitive. Be sure to communicate any price increases sympathetically to customers, so you don’t damage customer loyalty.

Introduce new products or services

If your current products/services are not selling, it could be time to diversify your offering to meet changing customer needs. Make the most of your existing resources and expertise to bring new products to market.

Talk to us about cost-cutting and revenue generation strategies

There’s no magic wand that can make the current economic pressures disappear. But by being proactive about your cost-reduction and revenue-generation, you can do your best to protect your business from the worst elements of increasing costs and an uncertain market.

Over the years, we’ve grown into one of the leading accountants in York, expanding our range of accounting services whilst staying true to our core values and our force for good ethos. If you would like to earn more, keep more of your hard-earned profits and enjoy the life you want then book a discovery call with Donald Inglis .

The value of cash flow forecasting for your business

Tue, 10 Sep 2024 13:44:07 GMT

To be able to navigate the future path of your cash flow, you need to start forecasting – so you can map out your financial position over the coming months and can take the appropriate action to safeguard your cash position.

Plus, when you have access to detailed forecasts you can scenario-plan, search for cost-savings and look for strategies that will preserve your cash flow position.

Forecasting your future cash pipeline

Remaining in control of the cash coming into (and going out of) the business is the real focus, so you can accurately predict your financial position and can resolve any issues.

Key ways to get more from your forecasting

Run regular forecasts – The financial landscape is changing on a daily basis at present. A cash flow forecast is not a document that remains static. Variables and external drivers are literally changing each day, so it’s vital that you run frequent forecasts and react swiftly to any projected cash issues as they become apparent.
Use the latest cash flow forecasting apps – Cash flow forecasting apps, like Fluidly, Float, Futrli Predict or Fathom integrate with your accounting software. They give a drilled-down view of how your cash inflows and outflows will pan out over the coming months – information that will inform and justify the decisions you make during these extremely challenging times.
Explore the right revenue streams – Most sectors will have seen their sales change over the last 18 months. To overcome this, there’s a real imperative to explore revenue streams and new opportunities for income. This could be offering a new product or service, or working with a new partner. The idea is to find ways to increase the money that’s coming in the door and balance out your unavoidable expenses.
Get proactive with cost-cutting – If you can reduce cash outflows to a minimum, that will have a real impact on the health of your future cash flow. Pare back your operations and aim to reduce things like unnecessary software subscriptions, or over-ordering of basic supplies. Negotiating cheaper rates with suppliers, if possible, will also help.
Review your staffing needs – It's never great to make anyone redundant, but you can also look at ways to reduce the costs of staffing and resourcing without getting rid of staff completely. Reducing working hours or redeploying staff in different roles are all options that reduce payroll costs, while also looking after your staff.
Run a variety of scenarios – Changing the financial drivers in your forecast model allows you to scenario-plan different strategies and options. Many of these will be in a long-term plan once conditions improve. Scenario-planning lets you answer questions and will give you some hard evidence on which to base your decision-making and strategic outlook over the coming months.
Look at various ways to access funding – If forecasts show a giant cashflow hole coming up, you’re going to need additional funding to get through this crisis. We can assist your business to investigate funding opportunities from grants, banks, loan providers, alternative lenders and crowd-sourcing funders.

Talk to us about setting up cash flow forecasting

Forecasting is an important step to give you the business intelligence to support your decision making. Get in touch to improve your control over cash flow by giving us a call on 01904 787 973 or by booking a discovery call with Donald Inglis .

Three steps to ensuring data is meaningful for your business

Tue, 03 Sep 2024 09:04:31 GMT

Raw data describes the facts and figures that a business processes every day. Over time, every business hoards a certain amount of data and it only becomes meaningful to a business after it has been processed to add context, relevance and purpose.

For example, in a restaurant, every order will be recorded. However, a restaurant won't learn much by looking at each one in isolation. However, analysis of the orders will reveal trends and patterns, such as peak dining days or biggest-selling menu or bar items. Knowledge of the business comes from the relationship between the singular pieces of information. That restaurant owner may know to do their biggest stock order on a Wednesday by analysing their covers and establishing that sales increase by 38% on Thursdays.

The pace of business in today’s technological times requires businesses to be able to react quickly to changing demands from customers and environmental conditions. The ability to be able to compile, analyse and act on data is increasingly important. In some instances, a high volume of data may need to be accumulated and analysed before trends and patterns emerge.

When you aren’t compiling accurate business data, you can only rely on gut feel and assumptions about past performance to inform your future business decisions.

If your business is already using cloud software for accountancy, project management system or CRM, it’s likely that you’re sitting on a goldmine of data. If properly utilised, this data can greatly aid running a successful business. You'll have valuable insight into your sales, expenses, profit and staff efficiencies that can help you answer critical questions and drive smart business decisions.

Every business is unique, but here are three quick tips to help you drive data in your business.

1. Data is only powerful if there is context – can you stop to answer these questions?

What is your primary objective (business or personal)?
What is happening in the business?
What isn’t happening?
How can you influence what happens by analysing and responding to your data?

Figure out what you’re currently trying to achieve before anything else. It’s important to periodically go back and ask yourself these questions and what goals develop from the answers, as answers evolve over time. You may have started out with your primary objective as running the best restaurant in your area.

However as time has passed, your primary objective might now be to take time away from the business to spend more time with your children.

2. The only way your data can help you drive your business is if it’s accurate and organised appropriately – ask yourself:

Are your financials up-to-date?
Do you have any unreconciled transactions?
Are you tax compliant?
Are your staff trained on what systems and processes to use for different parts of your business?
Are your cloud systems being correctly utilised?
Are you using AI tools to analyse and respond to your data?

The worst thing you can do is to attempt to analyse incorrect data and attempt to make decisions for the business based on it! Tools like Spotlight Reporting can help you with the reports you need for business decisions.

3. Understand what the data necessities are and what the niceties are.

What would you most like to understand about your business?
What figures pinpoint success for you?
What are your objectives over the next six to twelve months, and two to five years?

Remember, to focus on what truly matters and build from there. If you want help with the process, we can accumulate, analyse, report and advise on your data; or show you which tools to use. Give us a call on 01904 787 973 or book a discovery call with Donald Inglis .

Selling your business? Key strategies to consider

Tue, 27 Aug 2024 07:12:01 GMT

Starting a business is no small feat – it takes courage and determination. But to truly succeed, you also need a solid strategy.

Business owners are well acquainted with taking risks and dealing with uncertainty. However, the recent economic climate has raised the stakes. Many are now in the uncomfortable position of having to rethink their carefully laid-out succession plans and exit strategies. Some may even be considering selling their business sooner than planned, potentially for less than it’s worth.

Is transitioning a better option?

Rob Young, Managing Director of Platform 1, specialises in helping business owners get the best return when it’s time to sell. His advice? Start by exploring all your options.

There are five main ways to sell a business:

Close it down and sell off the assets
Sell to a family member
Sell to an employee
A straightforward sale to an external buyer
A gradual buy-out – this is the Platform 1 model

The Platform 1 model offers a more gradual approach. It involves bringing a manager on board early, so they can take over smoothly when the time is right. Here’s how it works:

Identify the right person to lead the business.
Develop and train them.
Create a plan where they buy into the business gradually, over 3 to 6 years.

The goal is to transition the owner out of the day-to-day as quickly as possible, passing on key relationships and processes to the new leader. This way, the owner moves from managing the business to more of an investor role.

Getting ready for a sale: What matters most

Get organised: Make sure your systems and processes are robust, so the business can run smoothly without you.
Maximise profit: Focus on building profitability, rather than minimising taxes. A profitable business is far more attractive to potential buyers.

Don’t delay planning, even if you're not ready to sell yet

It’s smart to start thinking about succession well in advance, so you can maximise the value of your business and secure a better outcome. And remember, retiring doesn’t have to mean stepping away entirely. If your business can operate without your direct involvement, you might not need to sell 100% of it. Retaining some ownership can be a viable option.

Need help with your succession plan?

If you don’t have a plan in place yet, we’re here to help. Get in touch today, and we’ll make sure you’ve got the options you need when the time comes. Give us a call on 01904 787 973 or book a discovery call with Donald Inglis .

Should you buy or lease your business assets?

Tue, 20 Aug 2024 10:46:58 GMT

There are certain items of equipment, machinery and hardware that are essential to the operation of your business – whether it’s the delivery van you use to run your home-delivery food service, or the high-end digital printer to run your print business.

But when a critical business asset is required, should you buy this item outright, or should you lease the item and pay for it in handy monthly instalments?

To buy or to lease? That is the question

Buying new pieces of business equipment, plant, machinery or vehicles can be an expensive investment. So, depending on your financial situation, it’s important to weigh up the pros and cons of buying, or opting for a leasing option.

First of all, let’s look at why you might decide to buy the item…

Buying: the pros and cons

Pro: It’s a tangible asset – when you buy an item, you own the item outright and it will appear on your balance sheet as one your business assets. As such, by owning these assets outright you increase the perceived capital and value of your business. You can also claim the cost of the asset against your capital allowance for tax purposes.
Pro: It’s yours for the life of the asset – once you own the item, you have full use of the equipment for the duration of the life of the asset. Your use of the asset isn’t reliant on you being able to keep up regular lease payments, and if your financial circumstances change then you can sell the asset to free up the capital.
Con: It’s an expensive outlay – paying for the item up-front is a large outlay for the business and will require you having the cash to cover this cost. Spending a large lump sum in this way may take cash away from other areas of the business, so you need to be 100% sure that this purchase is the right decision and a sound investment.
Con: You may require extra funding – if you don’t have the liquid cash available to buy the item outright, you may need to take out a loan. Asset finance is available from funding providers, but does tie you into a loan agreement that will add to your liabilities as a business – reducing your worth on the balance sheet.

Leasing: the pros and cons

Pro: Leasing has a cheaper entry point – if the item you need to purchase has a large price tag, leasing allows you to make use of the asset without the cost of buying it in full. For start-ups and smaller businesses with minimal capital behind them, this can make leasing a very attractive option. You may not own the asset, but you can make use of it – and this may be the difference between the success or failure of your business.
Pro: You can spread the cost – there is still an associated cost of leasing, but you can spread the cost over a longer period, making it easier to find the necessary liquid cash to meet your lease payments. With this money saved, you can then invest in other areas of the business, helping you to expand, grow and bring in more customers and revenue.
Con: You don’t own the asset – there are different types of leasing agreement. Under a capital lease, you do own the asset (once you’ve paid if off). But if you opt for an operating lease, this is a more short-term lease and you won’t own the asset at the end of the contract. Ownership does have its advantages (including being able to sell off the asset if required) so it’s important to consider what kind of leasing agreement you’re entering into and what the advantages/disadvantages may be.
Con: You may pay more in the long run – most leasing agreements will attract additional costs and interest on your agreement, so you may well end up paying more than the market price for your asset in the long term. If you can cope with the higher cost, this is fine, but bear in mind that buying outright may have offered greater value.
Con: You may lose the use of the asset – if you can’t keep up your lease payments (due to poor cashflow for example) then the owner of the lease agreement may recall the asset. If this item is crucial to your business model, losing this key asset can have a profound impact on your ability to operate. In this respect, leasing is a more risky prospect, but also an easier option for businesses with less cash to splash.

Talk to us about whether buying or leasing is the best way forward

Whether you opt to buy or lease your equipment isn’t always a straightforward decision to make – so it’s a good idea to consult with your accountant early on in the decision-making process. If you'd like our help, please get in touch with us on 01904 787 973 or book a discovery call with Donald Inglis .

VAT on private school fees: what you need to know

Thu, 15 Aug 2024 10:04:48 GMT

If you have children that attend a UK private school, the recent announcement around VAT on school fees is likely to be a major concern.

We’ve summarised the main points of the announcement and what they mean for school fees.

20% VAT on private school fees from 2025

Bringing private schools within the VAT system is aimed at generating higher revenues for HMRC and providing more money to invest in state education.

There’s a debate to be had around whether charging VAT on school fees is a good or bad move. But the reality is that it’s happening and it’s best to be prepared.

Here are the main points to be aware of:

On 29 July 2024, the Chancellor of the Exchequer, Rachel Reeves, announced that all education services and vocational training supplied by a private school, or a connected person, for a charge will be subject to VAT at the standard rate of 20%.
Boarding services provided by a private school, or a connected person, will also be subject to VAT at 20%.
VAT on these fees will commence from 1 January 2025.
Any fees invoiced or paid on or after 29 July 2024 that relate to the school terms after 1 January 2025 will be subject to the standard rate of VAT at the beginning of that term.
School fees paid before 29 July 2024 will follow the VAT treatment in force at the time of the normal tax point for these supplies, where the fee rate for the relevant term has been set and was known at the time of payment.
Adding 20% to school fees is a significant additional cost and will mean you reevaluating your budget for schooling and considering the overall impact on your expenses.

If you’d like to talk to us about the VAT changes, we’d be happy to run you through the implications and to help you break down the impact on your spending. Feel free to get in touch with us on 01904 787 973 or book a discovery call with Donald Inglis .

Quick tips for chasing late payments

Wed, 07 Aug 2024 06:53:01 GMT

Chasing up invoice payments can feel daunting, especially during the tough economic times we're experiencing now.

Asking people for money – even if it's money they rightly owe you – is never a nice feeling. However, we've found that a blend of empathy, flexibility and clear communication can make a significant difference in turning unpaid invoices into cash in your bank account.

Here, we'll explore some effective strategies to help you manage and chase up invoice payments, ensuring your business remains financially healthy.

Communication is key

Effective communication is the cornerstone of successful invoice collection. Personalising your communication to each customer's situation rather than sending generic emails can show that you value their business and understand their challenges. This approach not only helps in building stronger relationships but also makes customers more likely to respond positively to your payment requests.

When contacting customers, address them by name and reference their specific situation or recent transactions. This personal touch shows that you’re attentive and considerate of their circumstances. Highlighting the importance of their business can foster goodwill and encourage payments.

Also, you don’t need to wait until an invoice is overdue to start the conversation. Reach out to customers before the payment due date as a friendly reminder. This proactive approach can help you stay on top of cash flow and alert you early to any potential issues. For example, sending a reminder a few days before the due date can prompt customers to prioritise your invoice.

Offer flexible payment options

Despite their best efforts, some customers may still struggle to pay their invoices in full. Offering flexible payment options can make it easier for them to settle their accounts, ensuring you receive at least partial payments regularly.

Therefore, consider breaking down invoices into multiple payments over a longer timeframe. This approach can make large invoices more manageable for customers and increase the likelihood of getting paid. Clearly outline the terms of the payment plan to avoid any confusion.

Setting up a credit card facility provides customers with an additional payment method, making it easier for them to pay you. If your accounting software doesn’t support this feature, we can help you set it up. The convenience of credit card payments can often speed up the payment process.

Offering a small discount for early payment can also incentivise customers to settle their invoices sooner. For example, a 2% discount for payments made within 10 days can be an attractive proposition for customers, helping you improve cash flow.

Monitor total outstanding balances

Keeping a close eye on how much your customers owe is essential. While it’s important to maintain positive customer relationships by extending credit, you also need to manage your risk effectively.

Regularly review your accounts receivable to identify customers who are consistently late with payments. This review can help you decide whether to adjust their payment terms or limit further credit until outstanding balances are settled. Importantly, ensure that your payment terms are clearly stated on every invoice. Highlighting the due date and any late fees can encourage prompt payment. If customers understand the consequences of late payments, they may be more motivated to pay on time.

Empathy and understanding

When customers are going through a difficult time, showing empathy and understanding toward them can go a long way. A considerate approach can help maintain strong relationships and encourage them to communicate honestly about their financial challenges. So encourage customers to reach out if they’re experiencing financial difficulties. By understanding their situation, you can work together to find a solution that benefits both of you. Your willingness to work with customers during tough times can build loyalty and lead to more timely payments in the future.

Seeking professional help

If managing invoice payments becomes overwhelming, consider seeking professional help. As accountants, we can provide valuable insights and assistance in streamlining your accounts receivable processes.

Modern accounting software can automate many aspects of invoice management, from sending reminders to tracking payments. Investing in the right tools can save you time and reduce the stress of manual tracking.

So, if you have any questions or would like assistance with implementing these strategies, feel free to get in touch with us on 01904 787 973 or book a discovery call with Donald Inglis .

Managing high employee costs in software development

Thu, 25 Jul 2024 11:07:13 GMT

At Inglis, we’ve partnered with software developers for over a decade, and recently, the challenge of attracting and retaining top talent has become more pronounced than ever.

With salaries climbing across all sectors due to unprecedented inflation, recruitment and employment costs have soared. Therefore, striking the right balance between offering competitive compensation and managing these expenses sustainably has never been more critical. To help, we've put together 10 strategies we’ve found effective in keeping employee costs in check while still appealing to the best talent.

1. Offer Flexible Work Arrangements

Flexible work arrangements are highly valued by many employees, especially after many of us became accustomed to remote working and flexible hours during the pandemic. By offering these options, businesses can attract talent without necessarily having to compete solely on salary. Remote work can also open a wider talent pool, allowing companies to hire skilled developers from regions with lower living costs, potentially reducing salary expenses.

2. Invest in Professional Development

Providing opportunities for professional growth and development can be a strong incentive for employees to stay with your company. Offering training programmes, certifications, and opportunities to work on projects they find interesting can enhance job satisfaction and loyalty.

3. Implement a Performance-Based Incentive Structure

Instead of offering high base salaries, consider implementing a performance-based incentive structure. Bonuses, profit-sharing, and stock options can be attractive to employees while aligning their success with the company’s performance. This approach not only controls fixed salary costs but also motivates employees to contribute to the company’s growth and success.

4. Focus on Company Culture

A positive company culture can be a significant draw for top talent. Create an environment that promotes collaboration, recognition, and a healthy work-life balance. Employees who feel valued and part of a supportive team are more likely to stay, reducing turnover and the associated costs of recruiting and training new staff.

5. Utilise Freelancers and Contract Workers

For certain projects or during peak periods, hiring freelancers or contract workers can be more cost-effective than maintaining a large full-time staff. This approach provides flexibility in scaling your workforce according to project demands without the financial commitments of full-time salaries and benefits.

6. Optimise Recruitment Processes

Streamline your recruitment processes to reduce the time and cost associated with hiring new employees. Utilise efficient recruiting tools, leverage social media, and engage in proactive talent scouting to find the right candidates quickly. A more efficient recruitment process can help you secure top talent before they are snapped up by competitors.

7. Leverage Employee Referrals

Employee referral programmes can be an effective way to find high-quality candidates. Employees are likely to refer individuals who they believe would be a good fit for the company culture and work ethic. Referral bonuses are typically less costly than traditional recruitment methods, and referred employees often have higher retention rates.

8. Outsource Non-Core Functions

Consider outsourcing non-core functions, such as administrative tasks, HR, and IT support, to specialised firms. This can free up resources and allow you to focus on retaining and compensating your core development team more effectively. Outsourcing can also provide cost savings by tapping into the expertise and efficiencies of external providers.

9. Utilise Technology and Automation

Investing in technology and automation can reduce the workload on your development team, allowing them to focus on higher-value tasks. Tools that automate repetitive processes, improve project management, and enhance collaboration can increase productivity without the need for additional hires.

10. Regularly Review Compensation Packages

Regularly review and adjust compensation packages to ensure they remain competitive and aligned with industry standards. Keeping on top of market trends and making incremental adjustments can prevent the need for sudden, large salary increases. Transparent communication about pay reviews can also build trust and loyalty among your team.

Get in touch

If you have any questions or would like assistance with implementing these strategies, feel free to get in touch with us on 01904 787 973 or book a discovery call with Donald Inglis . We have extensive experience working with software developers like Fusion eCare, Thumbmunkeys, and iConsentU. So if you are a software developer looking to partner with a specialist accountant who understands your unique challenges, we would love to hear from you.

How to use forecasts and scenario-planning

Mon, 22 Jul 2024 11:52:41 GMT

For centuries, accounting was all about reviewing historic information – but that only told you about the past, not what was going to happen in the future.

If you’re only looking back at past periods and historic numbers, this limits the insights you can achieve for your business. With a backward-looking ideology, it becomes difficult to plan, run through different scenarios or understand the path of the business going forwards.

Forecasting changes this. With the right data analysis and forecasting tools, you can project sales, cash, revenue and profits into the future – and get in control of your business.

A forward-looking view of your business journey

Forecasting switches the focus of your financial management. By moving to a forward-looking view of your business journey, you can see further down the road – and that helps to spot any opportunities and avoid common business pitfalls.

Forecasting adds value by:

Highlighting the data patterns – a forecasting tool takes your historic data and projects it forward in time. This helps you and your advisers spot patterns, trends, gaps and opportunities, revealing the true ‘story’ behind your business accounts. For example, forecasting may reveal a predicted seasonal slump in the next quarter, allowing you to plan ahead and proactively take action to minimise negative impacts.
Giving you a future view of your business – instinctively, business owners will look back at prior periods to assess performance. There’s value to reviewing your historic actuals, of course, but using forecasting helps you to look forward, rather than just backwards. Forecasting is the satnav, showing you the road ahead, rather than the rear-view mirror showing you the road you’ve already travelled.
Helping you scenario-plan – with a financial model of your key drivers, combined with accurate forecasting, you can quick answer your burning ‘What if…?’ questions. Forecasting lets you run different scenarios, with different drivers, to see how business decisions may pan out over time. If option B performs better than option A, that’s invaluable information when defining your next strategic move.
Making informed, evidence-based decisions – having ‘the full picture’ of combined historic numbers, forecasts and longer-term projections aides your business decision-making. Forecasting gives you solid evidence on which to base your strategy, and helps to red flag any threats that are looming on the horizon, giving you the best possible information to keep your executive team informed and on the ball.
A deeper relationship with your accountant – forecasting also helps us to get a far more granular view of your business. This helps to spot potential areas of performance improvement, and to give you the best possible strategic advice, all backed up by solid, empirical data and management information.

Talk to us about the benefits of forecasting

If you want to get in control of the destiny and results of your company, come and talk to us. Forecasting helps you highlight your future threats and opportunities – and create a proactive strategy to improve the performance of your business. Contact our team on 01904 787 973 or book a discovery call with Donald Inglis .

How to stay competitive in your industry

Tue, 16 Jul 2024 14:20:17 GMT

It’s difficult to make your business stand out from the crowd, especially in today's digital environment where businesses large and small are competing for the same customers.

Remaining competitive is vital for any business. If you stay ahead of your competitors and hang onto your customer base, your sales stay stable and your revenues remain predictable.

But how can you do that in today's increasingly challenging business environment?

Key ways to remain competitive in your market

No market sits still. And the competitiveness of your company’s brand will also fluctuate and evolve over time. But this doesn’t mean that you can just sit back and let your competitive edge fade away. The more proactive you are about your position in the market, the more you can do to preserve your advantage and keep your business ahead of your competitors.

Here are some helpful ways to boost your competitive edge:

Provide a personalised experience for your customers – customer experience is everything in the digital age. A happy customer will buy more, so you need your CX to deliver every time, no matter what. Try analysing your customer data and feedback, and then using that information to tailor the customer's experience with your company.
Carry out competitor intelligence activity on your main competitors – competitor intelligence is an important activity for any company. It involves gathering data about your competitors, including their strengths and weaknesses. You’ll need to identify the competition, find out what they're doing, and analyse the data you've collected.
Offer high-quality products or services at reasonable prices – you won’t sell high volumes if you don't have a quality product or service. And you also need to offer a price point that your customers see as good value. If you're not sure if your prices are competitive, take a look at what your competitors are charging. This will give you an idea of what people are willing to pay for the same products or services that you offer.
Develop new technologies that are not yet on the market – investing in new technologies is risky but can also be profitable. To help mitigate the risks of developing a new technology, it is important to research the market and make sure that there is a genuine customer need for your product. It's also important to ensure that your product will be affordable and has potential for growth in the future.

Talk to us about reviewing your business strategy

Keeping your business at the competitive edge of the market can be a challenge. But by analysing your customer and competitor information, you can do your best to remain competitive and keep your dominant position in your market or industry sector.

If you'd like to speak to an expert about reviewing your business strategy, contact our team on 01904 787 973 or book a discovery call with Donald Inglis .

Keeping your data safe as a remote worker

Thu, 11 Jul 2024 08:45:05 GMT

Using public WiFi in cafes, hotels and coffee shops is something we all do. It’s convenient and gives you the benefits of working online wherever you happen to be. But are you aware of the data security issues of working from a public network?

In an age where remote and hybrid working are now the norm for so many employees and self-employed people, it’s important to know the key ways to keep your data safe

Secure ways to work from a public network

Remote working is a flexible approach to work that’s increased in popularity hugely over the past few years. A recent study from Buffer found that 97% of people would like to continue working remotely, at least some of the time, for the rest of their career.

Working remotely is here to stay, it would seem. But what can you do to make sure you’re applying the best possible security protocols? And what are the key dangers to look out for?

We’ve highlighted the important elements of cyber safety to be aware of:

Unencrypted public networks and their flaws – a public network isn’t a safe environment when working. When you use your home network, only you and your family have access to the WiFi. If you log into a public network, literally anyone can join the network – and this can lead to all kinds of security issues and concerns.
Malware and other suspicious activity – hackers and those with malicious intent will see a public network as a potential backdoor to your data. Malware (malicious software), Trojan horses and other hostile programmes can be easily uploaded to your device, allowing hackers to access your programmes, hard drive and data.
Using a personal VPN to access the internet – if you’re using a public network to work, the chances are that you have access to confidential information and customer data via your device. To protect your device, it’s important to use a VPN (virtual private network). This creates a secure network for you, so you can safely share and access your important data, with fewer worries about hackers and malware etc.
Having proper security software on your device – it’s a good idea to also have cyber security software installed on your computer or smart device. Providers like Norton, McAfee and Kaspersky all offer complete internet security suites that include firewalls, regular scans of your drive and other tools to keep your data safe and sound.
Keeping up to date with the latest threats – no security system is 100% safe. But you can do a lot to improve your internet security by being aware of the current threats. Keep an eye out for news stories about cyber breaches and read the updates and social posts from your internet security provider. The more you’re in the loop about present dangers, the more you can do to update your security arrangements and keep your devices safe.

Conclusion

Don’t leave your data security to chance. Ensure you're protected while working remotely. Contact us for expert advice and support on maintaining robust accounting and security solutions by calling our team on 01904 787 973 or book a discovery call with Donald Inglis .

6 crucial reasons to watch your financial reports

Thu, 04 Jul 2024 08:29:54 GMT

Making time to look over your financial reports each month is an important task for any business owner. If you are not taking time to do this, either because you’re too busy, or perhaps you don’t really understand what you’re looking at and it doesn’t make sense to you, then here are 6 reasons we recommend you should start to.

But before we get our six reasons, let’s talk very quickly about which reports to look at. At a bare minimum, and depending on the complexity of your business, you should be looking at the following:

The Statement of Financial Performance – also known as the Profit and Loss report (P&L) or the Income Statement – tells you, as the name suggests, how your business is performing over a period of time, such as a month or a financial year. In broad terms it shows the revenue that your business has generated, less the expenses for that same period. In other words, it shows how profitable your business is.

The Statement of Financial Position – also known as the Balance Sheet shows the value of the business’s Assets, Liabilities and Equity.

Assets include things like money in bank accounts, Plant and Equipment, Accounts Receivable balances

Liabilities include things like Bank loans and credit cards, Accounts Payable, and Hire Purchase balances

Equity is the difference between your Assets and your Liabilities and includes Retained Earnings and Owner Funds Introduced

Accounts Receivable Ageing report (Aged Receivables) – this shows how much money is still owed to the business as at a certain date in time, and is usually segmented as to how overdue they are, or sometimes by how far past the invoice date they are. Generally, you will have Current, 30, 60 and 90 days columns.

Accounts Payable Ageing Report (Aged Payables) – this report shows who the business owes money to as at a certain date in time and, like the Accounts Receivable Ageing report, is usually segmented by overdue period.

So why bother?

Understand your business better - By looking at your Profit and Loss report monthly you will get a good picture of how your business is performing month by month and it gives you a better understanding of what makes up your profit. It can be helpful to compare periods, or to look at a month by month P&L, so you can clearly see on one page the revenue and expenses month by month. This also helps identify trends in your data and many also help to highlight anomalies in coding/categorising or unusual expenses or earnings.
Accurate information for lending purposes – If you are applying for a loan or an overdraft, the bank or financial institution will look closely at both your Profit and Loss report and the Balance Sheet as a lot can be learned about a business by looking at these reports together. If you are unsure what some of your balances are in your accounts, get in touch and we can explain them further.
Get paid quicker and reduce bad debts – By looking at your Accounts Receivable Aged Summary each month you can follow up with overdue accounts promptly which often results in getting paid quicker. The longer an overdue amount is left unpaid the higher the risk of it not being paid at all, so it is important to keep on top of this.
Better relationships with your suppliers – Assuming you are entering your supplier bills into your accounting software (recommended for most businesses to get an accurate profitability figure) your Aged Payables report will alert you to any unpaid or overdue amounts. Supplier relationships are an important aspect of your business and paying on time is crucial to maintaining those relationships.
Better cash flow – Having an accurate understanding of how much money the business is owed, and how much money the business owes, can help with cash flow planning to ensure that there is enough money when needed. Additionally, understanding the trends of your business, its profitability drivers, its expenses, etc., can help to plan sales and marketing campaigns so that the revenue keeps coming in.
Better business decision making – Your financial reports tell the story of your business and it’s important that you understand the story that they are telling you. The better you understand what’s going on in your business the stronger position you will be in to make better business decisions that affect the profitability of your business and its financial viability.

If you would like to know which reports are relevant to your business, and you want to better understand what’s going on in your business, then get in touch so we can make a time to go through them with you. Call our team on 01904 787 973 or book a discovery call with Donald Inglis .

Your mid-year business performance review

Tue, 25 Jun 2024 12:06:47 GMT

As we approach the midpoint of the year, it is the perfect time for a half-yearly business check-up.

Taking stock of your business’s performance and planning for the months ahead can set the stage for a successful end to 2024. It is also essential to help you identify any issues early, allowing you to make any needed adjustments fast.

So, what are some of the key metrics you should review and what strategies can help you keep your business on track?

Key metrics to review

First and foremost, it is essential to review your financial performance. Compare your actual revenue and profit margins against your projections to determine if you are on track to meet your annual targets. Review your operating expenses to identify areas where you can reduce costs without compromising quality or service. Ensuring you have sufficient cash flow to cover upcoming expenses is crucial, so analysing your cash flow statements to identify patterns and potential issues is vital.

Next, evaluate your sales performance. Look at your total sales, sales by product or service, and sales by customer segment to identify any trends or changes. Assess the effectiveness of your marketing campaigns by analysing the return on investment (ROI) for each channel, and adjust your marketing strategy accordingly.

Customer metrics are equally important. Gather feedback from your customers to understand their satisfaction levels through surveys, reviews, and direct feedback. Analyse your customer retention rates to see if you are keeping your existing customers happy and engaged, and identify ways to improve loyalty and reduce churn.

Operational efficiency should also be reviewed. Measure the productivity of your team and processes to identify any bottlenecks or inefficiencies that need addressing. Check your inventory levels and turnover rates to ensure you have the right balance to meet demand without overstocking.

Planning for a successful second half

Based on your mid-year review, it is important to set new goals for the remainder of the year. These goals should be realistic, specific, measurable, attainable, relevant, and time-bound. Revising your budget to reflect your current financial situation and future projections will help allocate resources where they are needed most to support your goals.

Refining your marketing strategy using the insights from your marketing ROI analysis will allow you to focus on the most effective channels and tactics. Consider new opportunities such as digital marketing, social media campaigns, or community engagement.

Strengthening your relationships with existing customers through personalised communication, loyalty programmes, and exceptional customer service is crucial. Attracting new customers with targeted marketing and promotions will also be beneficial.

Enhancing your operational processes by identifying and implementing improvements is key. This could involve adopting new technologies, streamlining workflows, or investing in staff training and development.

How we can help

Conducting a thorough mid-year review can be time-consuming and complex, but you don't have to do it alone. At Inglis Accountancy, we offer comprehensive accounting and advisory services to help you analyse your business performance and plan for the future.

Our team can assist with detailed reviews of your financial statements, cash flow analysis, and profitability assessments. We can help set realistic goals and develop actionable plans to achieve them. Optimising your tax strategy to minimise liabilities and maximise savings is another area where we provide support. Our business advisory services offer insights and advice on improving operational efficiency and achieving sustainable growth.

If you would like to earn more, keep more of your hard-earned profits and enjoy the life you want then book a discovery call with Donald Inglis or call our team on 01904 787 973.

The pros and cons of allowing remote work

Fri, 21 Jun 2024 12:28:47 GMT

The shift towards remote work has been one of the most significant changes in business over the past few years.

However, with many companies now moving away from remote work, is this trend sustainable? While remote work offered flexibility during the pandemic, are you now wondering whether you should bring your team back to the office? If you're unsure what to do, here’s a balanced look at the pros and cons of allowing your team to work outside of the office.

Pros of remote work

Increased productivity
One of the most notable advantages of remote work is the potential for increased productivity. Many employees find that they can focus better without the typical office distractions. The flexibility to create a comfortable and personalised work environment can also contribute to higher efficiency and job satisfaction.

Cost savings
Remote work can lead to significant cost savings for businesses. With fewer employees in the office, businesses can reduce expenses related to office space, utilities, and supplies. These savings can be redirected towards other critical areas of the business, such as marketing or product development.

Access to a broader talent pool
When location is no longer a constraint, businesses can access a much broader talent pool. This is particularly beneficial for roles that require specialised skills, as it allows businesses to hire the best candidates regardless of their geographical location.

Improved employee retention
Offering remote work options can improve employee retention. Flexibility in work arrangements is highly valued by employees, and providing the option to work remotely can enhance job satisfaction and loyalty. This can result in lower turnover rates and reduced recruitment and training costs.

Cons of remote work

Communication challenges
Despite advances in communication technology, remote work can still present challenges in terms of effective communication and collaboration. The lack of face-to-face interaction can lead to misunderstandings and slower decision-making processes. Businesses need to invest in reliable communication tools and establish clear communication protocols to mitigate these issues.

Isolation and reduced team cohesion
Working remotely can lead to feelings of isolation for some employees, which can affect their mental well-being and productivity. Additionally, building and maintaining a cohesive team culture can be more difficult when employees are not physically present.

Security risks
Remote work can increase security risks, especially if employees use personal devices and networks that may not be as secure as the company’s infrastructure. Businesses may need to implement robust cybersecurity measures, such as VPNs, encrypted communications, and regular security training, to protect sensitive data.

Monitoring and accountability
Managing remote employees can be challenging in terms of monitoring performance and ensuring accountability. Without direct supervision, it can be harder to gauge whether employees are staying productive and meeting their goals. Implementing performance metrics and regular check-ins can help maintain accountability.

Conclusion

We believe that the key to successfully implementing remote work lies in balancing flexibility with robust management practices. By addressing the potential downsides and leveraging the benefits, businesses can create a productive and positive remote work environment. If you’re considering remote work for your business, our team is here to provide expert advice and support to help you navigate this transition smoothly. Call our team on 01904 787 973 or book a discovery call with Donald Inglis .

DIY accounting vs hiring an accountant

Mon, 17 Jun 2024 08:44:53 GMT

When you’re starting out as a small business owner, the temptation is to go DIY with your accounting. Hiring a professional accountant or tax adviser costs money and that’s an overhead that you can remove by doing all the financial management yourself, right?

But is DIY accounting the most sensible option for your business? And why might partnering with an experienced accountant be a valuable investment in your future?

The 5 big challenges of managing your own accounts

At the initial stages of founding your business, you might think that raising a few invoices, paying a few supplier bills and making sure there’s cash in the bank is well within your abilities.

However, as the business grows, and you take on more customers and employees, your finances are likely to get far more complicated – not to mention far more time-consuming. So, should you still be managing your accounts solo at this important stage of your growth?

Here are five of the common challenges of going down the DIY accounting route:

The knowledge gap – grasping the finer points of accounting principles and tax regulations is complex. If you try to navigate these financial complexities without the right knowledge and experience, you greatly increase the risk of errors, missed deductions, poor record-keeping and non-compliance with company tax law for your territory.
The drain on your time – Managing bookkeeping, payroll, day-to-day accounting and tax filings takes a lot of time out of your week. For example, recent stats show that Aussie business owners spend an average of 6 hours and 19 minutes per week on financial administration. If you’re spending a large chunk of your week working on finance admin, that’s time you’re NOT spending on growing the business. As an ambitious owner, you should be concentrating on business development and the other strategic tasks that will push your growth – not doing the books!
Staying up to date with the regulations – Company tax laws and accounting regulations change frequently. If you’re not on the ball with the latest regulatory changes, there’s every chance that you’ll fail to meet your compliance duties. And, you may also miss out on the latest government incentives and tax reliefs too – financial perks that could well be the key to funding the next stage in your business expansion plans.
Anxiety about a company audit – going through a company audit from an external auditor can be stressful. Depending on the status of your business, you may well have to comply with the rules for regular auditing. But with no accountant, your record-keeping may be haphazard, making the job more difficult, time-consuming and disruptive.
A lack of strategic insight – If you’ve never run a business before, it’s likely you’ll lack the awareness of how good financial management drives your strategic insight. The better your accounts, the higher the quality of your finance data, reporting and management information. And this data and reporting can be a goldmine of information when making big strategic decisions, setting budgets and forecasting cashflow etc.

How working with an accountant turns these challenges into business benefits

Having full responsibility for your own business finances is a major drain on your time as an owner and business leader. But the good news is that partnering with an accountant can very quickly lighten this load and get you back to focusing on your business.

By engaging an accountant to take on your financial management, you get:

The knowledge of an experienced finance professional – when you hire an accountant, you add a financial expert to your team. They'll help you navigate the complexity of accounting, will keep your records accurate and will make sure you comply with all relevant tax regulations. This minimises errors and maximises your deductions.
More time to focus on the business – by delegating your bookkeeping, payroll, accounting and tax filings to an accountant, you free up valuable time. This gives you more time in the day to talk to customers, develop growth strategies and build relationships with clients, partners, lenders and investors.
Stay ahead of the regulatory curve – a professional accountant knows exactly which legislative and regulatory changes are planned and will make sure you’re always ticking the right compliance boxes. They’ll also be aware of any new government tax deductions or funding incentives that may open up extra cash for your business plans.
Peace of mind when it comes to an audit – with an accountant managing your accounts, you can rest assured that you have the best possible record-keeping, reporting and financial compliance. This is a major bonus when you face an external audit process. Your accountant can even represent you during the audit process, cutting down the potential stress and keeping you focused on running the business.
Expert strategic guidance – accountants do way more than just crunching numbers. Your accountant will work with you to analyse your financial data, manage your cashflow, identify patterns and trends and provide the valuable insights you need to inform your decision-making. An accountant is a key part of your management and strategic team, helping you drive the success, efficiency and profitability of your business.

Talk to us about outsourcing your financial management

Hiring a great accountant is definitely a better investment in your business than opting for DIY accounting. Instead of getting bogged down in bookkeeping, or going red in the face with record-keeping, just hand over the financial management workload to the experts. We’re here to lighten the load, sort out your accounts and put you back in complete control of your finances and strategic decision-making.

Over the years, we’ve grown into one of the leading accountants in York, expanding our range of accounting services whilst staying true to our core values and our force for good ethos. If you would like to earn more, keep more of your hard-earned profits and enjoy the life you want then book a discovery call with Donald Inglis .

Keep your business running smoothly while you're on holiday

Mon, 10 Jun 2024 05:51:55 GMT

You may not be able to tell by looking out of the window, but summer is approaching, and many of us are eagerly planning our yearly getaways. As a small business owner though, taking a holiday can sometimes feel daunting.

If the idea of stepping away from your daily responsibilities makes you feel stressed to the point of needing a holiday, then this is for you. The truth is, with proper planning, your business can continue to run smoothly in your absence.

1. Plan ahead and communicate

The first step to a seamless holiday is planning. Make a list of all essential tasks and deadlines that will occur during your time away. Communicate with your team and clients well in advance. Inform them of your holiday dates and ensure they know who to contact in your absence. This transparency builds trust and helps avoid any potential misunderstandings.

2. Delegate responsibilities

Delegation is key. Identify reliable team members who can take over specific tasks while you're away. Assign roles and responsibilities clearly, and provide any necessary training or instructions beforehand. Trusting your team empowers them and ensures continuity in your operations.

3. Automate where possible

Take advantage of technology to automate routine tasks. Use scheduling tools for social media posts, email marketing campaigns, and even some accounting functions. Automation reduces the workload for your team and ensures that essential operations continue uninterrupted.

4. Establish a check-in system

While it's important to disconnect and relax, setting up a system for periodic check-ins can give you peace of mind. Decide on specific times to check your emails or receive updates from your team. This helps you stay informed about critical issues without getting overwhelmed.

5. Use cloud-based solutions

Cloud-based software can be a game-changer for managing your business remotely. Whether it's accounting software, project management tools, or communication platforms, ensure you have access to all necessary systems. This flexibility allows you to address urgent matters quickly if needed.

6. Secure your data

Cybersecurity should never be overlooked. Ensure your data is backed up and secure before you leave. Implement strong passwords, use two-factor authentication, and make sure your team is aware of the importance of data protection. This precaution prevents any potential crises from becoming full-blown disasters.

7. Prepare for financial management

Managing finances remotely can be challenging, but it’s crucial. Make sure your bills are paid, payroll is scheduled, and all financial obligations are met before you leave. Set up alerts for any irregular transactions to stay informed. If you work with us, we can handle any financial issues that may arise while you're away.

8. Keep your customers informed

Keep your customers in the loop. If there will be any changes in service or delays in response times, communicate this clearly. Most clients appreciate the honesty and will be understanding if they know in advance.

9. Trust your team

Your team is your greatest asset. Trust their abilities and judgement while you’re away. A well-prepared and informed team can handle most challenges that come their way. Encourage them to take initiative and make decisions within their scope of responsibility.

10. Relax and recharge

Finally, remember that the purpose of a holiday is to relax and recharge. Taking time off is essential for your well-being and even the health of your business. By planning ahead and implementing these strategies, you can enjoy your summer holiday knowing your business is in good hands.

At Inglis Accountancy, we’re here to support you with all your accounting needs, even while you’re on holiday. Our expertise ensures your financial matters are always in order, giving you one less thing to worry about. If you'd like to find out more about working with us, please book a discovery call with Donald Inglis.

Enhance your business credit score for better borrowing

Tue, 04 Jun 2024 08:59:11 GMT

Your company’s credit score is important. To be able to borrow from lenders, or negotiate trade credit with your suppliers, your business needs to prove that it’s a low-risk business to lend to.

The major credit agencies will give your business a score, based on its creditworthiness. This score takes into account things like your credit history, your debt profile and the industry you work in. The rate you’re given can have a significant impact on your ability to borrow money, so it's sensible to review your credit score and to take action to improve it.

What can you do to bump up that credit score?

1. Check your SIC code

Your Standard Industry Classification (SIC) code tells the relevant regulatory bodies what industry or sector you trade in. Certain sectors are higher risk than others, so if your SIC code is incorrect, you could inadvertently be bringing down your credit score.

Check the SIC code you’re registered with and make sure it properly reflects the sector you work in. It’s better to be as specific as possible. By narrowing down your industry classification, you give the credit agencies more information about your business and your risk level.

2. Improve your payment performance

Paying your creditors on time, and in full, creates a good payment history. The credit agencies will look at how long it takes you to pay your suppliers and main providers. If you’re consistently late in paying, that sets a bad precedent and will bump up your risk in the agencies’ eyes.

Run a tight accounts payable function and make sure you pay all bills on (or before) the invoice due date. Pay on time, keep your creditors happy and you’ll build up a payment history that sets you out as creditworthy.

3. Don’t apply for multiple credit facilities

When cash is in short supply, the temptation is to borrow as much money as you can. But if you apply to multiple lenders for credit facilities, this is bad news for your credit score.

Credit agencies won’t look favourably on your need to borrow from multiple sources. In a best case scenario, it shows that you don’t currently have enough liquid cash in the business. In a worst-case scenario, it demonstrates that you’re badly organised, poor with managing cashflow and have rising debt in the business.

Consolidate your debt needs into one finance facility, where possible, and deal with one lender. And try to keep your borrowing to a sensible and manageable level.

4. File the right accounts

In some circumstances, it’s possible to file filleted accounts. This meets the compliance requirement, but doesn’t give the agencies enough detail on your current financial position. And with little to no information to work with, your perceived risk level is likely to increase.

Make sure you're filing full accounts that give the agencies a complete overview of your finances. And ensure you file these accounts on time, so you don’t incur any late penalties and give an impression of sloppy financial management.

5. Avoid any red flags against the company or your directors

Credit agencies are looking for evidence that you’re creditworthy, low risk and that your people are ‘fit and proper’. Any history of insolvency will act as a red flag and will have a negative impact on the company’s credit rating.

If you or your fellow directors have had any previous insolvencies, or have things like County Court Judgements (CCJs) against you, this will affect your credit score. You can’t change the past, but you can make sure you build up a good credit profile and reputation to counteract any of these red flags.

For example:

Pay on time, every time
Manage your cash well
Don’t build up unsustainable debt in the business

Meeting these simple goals will have a positive impact on your credit score – and that’s good news for the financial future of your business and your growth plans.

Get in touch

Over the years, we’ve grown into one of the leading accountants in York, expanding our range of accounting services whilst staying true to our core values and our force for good ethos. If you want to get in control of your credit score, please do get in touch . We’ll help you review your credit position and look for possible ways to improve your ratings with the agencies.

4 ways to stay in control of your business budgeting

Thu, 30 May 2024 07:39:46 GMT

When you’re operating and managing a small business, you have a finite pot of cash to work with. Because of this, it’s incredibly important to manage your cash well and to have clear budgets and spending limits for every area of your business operations.

Let’s take a look at why budgeting is such a vital part of your financial management, and what you can do to keep your company on budget and in a positive cash flow position.

4 ways to stay in control of your business budgeting

It’s impossible to run a successful business without having a tight rein over your expenditure.

Sales may be bringing in healthy revenues, but the income and profits you’re generating can quickly be eaten up if you’re overspending on operational costs, marketing campaigns, staff payroll or investments in new hardware and software.

We’ve highlighted four ways to put good, solid budgeting at the heart of your financial process:

1. Embrace the power of budgeting

A well-crafted business budget gives you the foundations to become a financially healthy and successful business that’s in control of its spending.

You don’t have to use a complicated budgeting app; a simple breakdown of income and expenses in an Excel spreadsheet can be a great starting point.

To get started:

Track your projected sales , so you understand your future revenue numbers and have a solid projection for your income over the course of the year, or budget period.
Calculate your costs , including fixed costs like rent and utilities, and variable costs like inventory and marketing. This gives you an understanding of your total expenditure. Don't forget to factor in business taxes and contingency funds to cover emergencies.

Set clear budgets for the coming period’s spending , based on the total income you’ve predicted and the total fixed and variable costs you’ve estimated. Always leave some wriggle room to account for inflation and changing costs.

Regularly review your budget , so the document is always evolving. Reviewing and updating your budget helps you stay on track, identify areas for cost-cutting, and make informed decisions about resource allocation. Remember, a budget is a living document, so adapt it as your business evolves.

2. Track your budgets, income and spending

Setting the budget isn’t the end of the process. It’s important to track all income and expenses and to update your budget in line with the current health of your business finances.

Using the latest cloud accounting software can work wonders. These cloud tools help you record your incoming and outgoing transactions in real time, so you can work with the most up-to-date numbers and financial data when reviewing and reworking your budget.

To improve your tracking:

Use codes to categorise your expenses – the Chart of Accounts in your accounting software makes it easy to categorise each expense as it’s incurred. It’s then easy as ABC to review your financial reports and to analyse your spending patterns.
Review your spending – check your spending against each code and see where budgets are on track, or where there’s overspending that’s threatening your budget. Are there subscriptions you can cancel? Or could you renegotiate rates with your vendors?
Plan for seasonal trends and patterns – tracking your income and expenditure helps you to spot, predict and plan for the financial ups and down you’ll experience over the year. The more you understand your cashflow, the better equipped you are to stay on budget, make solid strategic financial decisions and avoid unexpected shortfalls.

3. Separate your personal and business finances

It’s tempting to think of the money in the business as ‘your money’. But it’s crucial to have a clear divide between the company’s money and your own money, as an owner and director.

Here’s why that separation is important:

Open a dedicated business bank account – all the cash you generate, supplier bills you pay and transactions you carry out will be logged through this account. This keeps your own cash and your business cash entirely separate.

Track your business expenses – by having separate business and personal bank accounts, you can easily track your business expenses and manage your budgets. There’s no confusion around personal expenses that could potentially muddy the water.
Consider getting a business debit card – a business card helps you to pay for business-related costs directly from your business bank account. This helps you to track your expenses and keep a closer eye on your budget.

4. Forecast for the future: don't just track the past

Basing your budget and financial strategy on historic data is a great foundation stone. But you can also use this data to project the data forwards in time and create useful forecasts .

For example, you can:

Get clear cash flow forecasts – based on your historical sales trends and projected expenses, you can quickly estimate your future cash flow. Having this view of your future cash position is extremely helpful when setting out your budget for the period.
Plan out your budgets and cash management – with forecasts at your fingertips, you can plan for seasonal fluctuations, identify potential funding needs and make informed decisions about the short, medium and long-term strategy of the business.
Be ahead of the curve – with solid budgets, forecasts and a great overview of your finances, you can be more in control as a business owner. Whatever the market throws at you, you’re better prepared, agile and ready to respond.

Talk to us about getting on top of your budgeting

Financial management can be overwhelming, especially if you’re new to running a business. But don't be afraid to seek help from a qualified accounting professional.

As your adviser, we can:

Streamline your record-keeping, bookkeeping and financial reporting.
Give guidance on budgeting, forecasting and financial management.
Ensure your cashflow and budgets are always looking positive and healthy.
Let’s sit down and talk about getting your budgets and financial management in order.

To talk about your business budgeting book a discovery call with Donald Inglis .

5 common accounting mistakes (and how to avoid them)

Tue, 21 May 2024 08:14:06 GMT

Starting a business can be a challenging experience, especially when it comes to managing your numbers and staying on top of your financial management.

Unless you’ve got some experience in finance, the bookkeeping and accounting requirements can be quite daunting. And even with today’s helpful cloud accounting platforms and fintech apps, there’s always the possibility of making a simple accounting mistake.

So, what are the most common accounting mistakes made by business owners? And what can you do to avoid these pitfalls and keep your finances looking healthy and shipshape?

The top five accounting mistakes to avoid

‘Doing the books’ is unlikely to be your favourite part of running a small business. But the better your accounting know-how and skills, the more oversight you have over the financial path (and future success) of your company. It really is that simple.

But there are plenty of traps that a newbie owner can fall into – and even a few hurdles that the more experienced business owner may trip over from time to time.

Let’s take a look at the five most common accounting mistakes:

1. Mixing your personal and business finances – when you don’t separate your personal and business transactions, this blurs the lines and makes it difficult to track your income and expenses accurately. It can also lead to personal spending being counted as business deductions, causing tax issues later on.

Solution: Open separate business and personal bank accounts and keep them entirely separate and distinct.

2. Skipping the record-keeping process – if you fail to keep receipts, log your invoices and keep proper records this can be a major problem further down the road. Detailed records are crucial for tax filing, budgeting and identifying spending trends.

Solution: keep digital copies of all receipts and be sure to keep your bookkeeping up to date and well-managed.

3. Miscategorising your expenses – throwing all your expenses under ‘miscellaneous’ makes it far harder to analyse your spending and cashflow. With every item of expenditure logged under a specific code from your Chart of Accounts, you can quickly run reports, review your spending and look at ways to improve budgets and cashflow.

Solution: Categorise your expenses properly (rent, marketing, supplies etc.) to understand where your money goes.

4. Winging it when filing your taxes – Taxation is complicated and it’s easy to make costly mistakes if you’re not prepared and organised. Don't wait until tax season to sort everything out and make sure you’re aware of all your business tax liabilities.

Solution: Set aside funds for taxes throughout the year, and consider consulting an accountant or tax adviser to ensure you're filing correctly and taking advantage of all potential government deductions and tax incentives.

5. Failing to get proper accounting advice – if managing your finances becomes overwhelming, don't be a hero. Cloud accounting software can automate some of the key tasks, and a bookkeeper can handle day-to-day record-keeping.

Solution: think about outsourcing and partnering with an experienced accounting firm to get real peace of mind and improved financial management.

Talk to us about outsourcing your key accounting tasks

You didn’t start your business to spend hours working on your bookkeeping and accounts. Why not outsource your key accounting tasks to us, and put those hours back into your business. At Inglis, we help you separate personal and business finances, set up efficient bookkeeping, recommend expense management tools, act as your tax agent, and provide reporting and advice for informed decision-making.

Get in touch to talk about outsourcing your finance tasks.

Will you be paying more tax on your savings income?

Mon, 13 May 2024 03:42:28 GMT

A few days ago, the Bank of England held interest rates at 5.25%, currently at its highest level for 16 years.

The interest rates affect mortgage and credit card payments for millions of people across the UK. But it also means that you’re more likely to be paying tax on the interest income you’ve accrued.

Let’s take a look at the impact of higher interest rates on your savings income and tax liabilities.

What is the personal savings allowance?

Most of us can earn up to £12,570 from any source without paying tax. Separate from (and in addition to) this income allowance is the personal savings allowance.

The personal savings allowance shields from tax interest income of £1,000 for basic rate taxpayers. This shielding is reduced to £500 for higher-rate taxpayers, and falls away altogether for additional-rate taxpayers.

How will rising interest rates affect my taxable income?

When interest rates were low, even people with quite sizeable savings didn’t need to consider paying tax on the interest earned. But as rates have increased, more taxpayers are going over the shielding threshold and are having to pay tax on their interest income.

This effect has been exacerbated by the freezing of tax thresholds, effectively pushing more people into the higher-rate and additional-rate tax brackets, where the personal savings allowance reduces or falls away.

What about if I have my savings in an ISA?

It’s worth noting that interest earned in cash ISAs (Individual Savings Accounts) is tax-free.

As a UK taxpayer, you can invest up to £20,000 per annum into an ISA. Although traditionally the rate of interest earned has been lower than that available elsewhere, the tax saving will affect the relative return. The funds are generally available to be withdrawn at any time.

Talk to us about mitigating the tax on your savings interest

Tax is only one of the considerations when looking at investment strategies. If you have surplus funds, simply putting them into the bank to earn interest may not be the best choice.

As an accounting firm, we cannot advise on investment strategies. But if you want to discuss your savings plans with an independent financial adviser (IFA), talk to us and we’ll arrange an introduction. IFAs will be able to give advice tailored around your specific circumstances and needs, and with the best possible outcomes when it comes to mitigating tax.

Unlock business success with real-time financial data

Tue, 07 May 2024 07:28:48 GMT

As a business owner, you want to make the best possible decisions for your business. The choices you make regarding strategy, spending, revenue generation and cash flow management can all have a major impact on the long-term future of the company.

So, how do you give yourself that competitive edge when it comes to decision-making?

The answer is to make the most of your financial data and to use the outputs from today’s cloud accounting tools and finance apps to inform and guide your choices as a leader.

Five major benefits of having financial real-time data

Cloud accounting has revolutionised the ways that small business owners manage their business accounts and broader financial management.

With the right tech stack and cloud accounting software, it’s possible to have genuine real-time information about your business finances. That instant access to your financial performance numbers is a game-changer, for a number of reasons.

Five ways that deep financial data can help to drive your business success

Real-time data gives you:

Informed decision-making – with access to the most up-to-date financial data, you’re no longer flying blind! Real-time data empowers you to make strategic decisions based on the most current business information. You can see how marketing budgets are performing, analyse your sales trends and identify areas for cost-cutting – with a dashboard that provides a real-time snapshot of your overall financial health. You’re informed, on the ball and can react like lightning to any pressing business opportunities, or unplanned threats to your funding and operating cash flow.
Improved cash flow management – cash is king, so it’s crucial that you have the best possible insights into your cash flow position, planning and management. Real-time cash data helps you plan for upcoming expenses, predict potential shortfalls and make informed decisions about borrowing or investment strategies. This real-time visibility ensures you always have sufficient funds to cover your operational costs, dodging the cashflow pitfalls that could otherwise hinder your business growth.
Enhanced budgeting and forecasting – you can ditch the static spreadsheets and embrace a more dynamic, real-time way to run your budgeting and forecasting. Track your progress towards financial goals, identify variances and deviations from key budgets, and adjust your plans and strategy accordingly. Accurate historic and real-time data also means more accurate forecasts, leading to better resource allocation and improved financial planning for the future.
Increased potential to turn a profit – with access to real-time data, finding the prime areas for cost reduction and revenue optimisation is made easy. You can quickly hone in on the products that are bringing in the biggest sales revenues, or the operational expenses that are costing you money but failing to deliver a healthy return on investment (ROI). If the majority of your sales income is coming from one product, by tracking key metrics like customer acquisition costs and conversion rates, you can identify and refine marketing strategies to maximise return on investment. Additionally, real-time sales data allows you to react quickly to customer trends and adjust pricing strategies to improve profitability.
Greater confidence in your business potential – modern accounting tech puts all this real-time data right at your fingertips, so you always feel in control of your finances. That’s a major boost to your confidence as a business owner, giving you the overview and insights you need to keep a tight grip on your financial health. Having this transparency makes it possible to share key metrics with your key stakeholders, like investors or partners. It also demonstrates your commitment to keeping good records and focusing on your financial management – a trait that investors, lenders and banks will see as a good sign of the viability of your business.

Talk to us about accessing your finance data goldmine

If you’re currently only tracking the most basic of finance metrics, now’s the time to dive deeper into your pool of valuable financial data. The more detailed and refined your finance dashboard becomes, the more you’re in control of the next steps of your business. We can help you set up a tailored business dashboard and management reporting tools to track all the most valuable finance metrics for your business.

If you would like to earn more and keep more of your hard-earned profits through smart, real-time accounting then book a discovery call with Donald Inglis .

HMRC crackdown on undeclared side hustle earnings

Fri, 26 Apr 2024 11:59:16 GMT

HM Revenue & Customs (HMRC) has an obligation to ensure we all pay the correct amount of tax. But with many UK taxpayers now earning money from various ‘side hustles’, like eBay, Etsy or Airbnb etc, there’s a growing need to widen the net and review all sources of income.

HMRC’s new initiative aims to weed out taxpayers who aren’t fully declaring their income sources , with detailed investigations to prosecute any wrongdoing.

So, what does HMRC see as a ‘source of additional income’, and what could the impact be on your tax bill if you fall within the scope of HMRC’s new initiative?

How does HMRC know what you’re earning?

If you’re making a bit of extra cash on the side, HMRC needs to do a bit of detective work to ascertain how much additional income you’re bringing in.

HMRC gathers information from a variety of sources to check whether or not taxpayers are declaring all their income. Although some enquiries and investigations are purely random, over 90% are triggered by a HMRC system called Connect .

Connect is a major part of HMRC’s crackdown on undeclared income. Over 3,000 people are employed on Connect, which is a data-matching and risk-analysis platform that enables the cross-referencing of masses of data from HMRC and external sources.

What does HMRC now see as an ‘undeclared source of income’?

From 2024, HMRC has made it a requirement for digital platforms to report how much income individuals are making through their site.

These platforms include eBay, Airbnb and Vinted. Although trading income from these sources has always been taxable, HMRC believes that significant profits are not being declared by some individuals.

Will you be affected by HMRC’s new initiative?

If you earn £1,000 p.a. or less in additional income, you won’t be affected – if you sell through eBay and similar platforms, HMRC are now much more likely to become aware of this income. If your total sales are below £1,000 per annum then that’s covered by the annual trading allowance , so it can be ignored and HMRC won’t bother you.

If you earn more than £1,000 in additional income, you should register as self-employed – if your income is more than £1,000, it’s sensible to register as self-employed. This will mean ensuring that you keep adequate records, so you’re able to report the results of your trading activities to HMRC in a tax return, if required.

Where does Connect draw its information on taxpayers?

Although HMRC has never revealed all the sources that Connect draws information from, it taps into over 30 databases, including tax returns, bank accounts, social media and even data from sites like Amazon, Google Street View, Zoopla and Rightmove.

It’s been quoted that Connect now holds 55 billion items of taxpayer data, so the chances of any undeclared income being tracked down are relatively high.

The information from external sources is compared against tax returns and other information. HMRC operatives look for discrepancies across various taxes such as income tax, VAT, and even areas like child benefit claims and can trigger investigations accordingly.

HMRC intends to integrate further artificial intelligence (AI) tools into Connect, further enhancing its ability to help close the estimated £30 billion plus tax gap.

How can you reduce the chances of a tax investigation?

If you want to minimise your chances of being subjected to a lengthy and costly investigation by HMRC, consider the following:

Maintain comprehensive records – Good record-keeping is essential, not just for tax purposes but for the health of your business.
Voluntary disclosures – if you have undeclared income, consider making a voluntary disclosure to minimise penalties. This will be looked on favourably by HMRC.

Talk to us about your income sources and tax planning

HMRC is in the process of opening more ‘intelligence led’ enquiries. Working closely with your accountant can help you ensure your records are in order and can even assist if you are selected for an investigation.

If you believe you have undeclared income sources, please do get in touch so we can talk through your specific circumstances and how to make a voluntary disclosure.

Outstanding invoices? Here’s how to get paid

Fri, 19 Apr 2024 07:02:34 GMT

Outstanding invoices are a frustrating fact of life for business owners – and they’re often left at the bottom of the to-do list. But getting paid is essential – and it’s not as difficult as it seems.

It’s all about being polite, but persistent.

Start simple

Often, an outstanding invoice can be solved with a simple payment request or by resending the invoice. Start there, and you might be surprised by how many long-neglected invoices are paid. Firmer follow-ups

If your payment requests are ignored, it’s time for firmer action. Although most people dread making a phone call to ask for payment, it’s actually one of the most effective ways to get an invoice paid. You can also charge a late fee – but this needs to be written into your terms of service before you do the work.

Last-ditch options

Of course, some clients won’t respond to polite requests. If you have spent months waiting for payment, it’s time to bring in the big guns. This could mean cutting off services until payment is made, or calling in professional debt collectors or lawyers. The bad news: these aggressive options will likely scuttle your relationship with the client. The good news? You might get paid.

One more option is doing a credit check before you do business with a client. This can help you reduce the risk of late payments and defaults, and even better, minimise the need for awkward or aggressive follow-ups.

Need help clarifying your terms of service, following up on late invoices or writing off unpaid debt? Get in touch with our team on 01904 787 973 for expert support and guidance. Over the years, we’ve grown into one of the leading accountants in York, expanding our range of accounting services whilst staying true to our core values and our force for good ethos.

Everything you need to know about PAYE codes

Tue, 16 Apr 2024 07:29:23 GMT

Pay As You Earn (PAYE) is an integral part of the UK income tax system. But what do the PAYE codes issued by HMRC to you and your employees actually mean?

Here’s our lowdown on PAYE codes and how they help you understand your tax allowance and the amount deducted in tax on your monthly salary and income.

PAYE codes and what they tell you about taxable pay

When individuals are paid in whole or in part through a payroll, income tax is deducted from each payment part and that tax then paid to HM Revenue & Customs (HMRC).

Generally, some of the income is tax free, and HMRC tells you (the employer) how much is tax-free by issuing a tax code. The tax code is in two parts:

A number which usually indicates the tax-free amount that can be paid – The numerical part indicates the individual’s personal allowance, and is one-tenth of the annual tax-free amount.

And an alphabetical suffix which provides further information – the most common code is 1257L where the 1257 is one-tenth of the normal annual tax-free personal allowance of £12,570. The ‘L’ simply means that it’s the standard allowance.

The £12,570 equals £1,047 per month for an employee. So, ignoring National Insurance (NI) and any other factors, this employee earning £2,500 would pay tax of (£2,500 - £1,047 @ 20% =) £290 per month.

Other alphabetical suffixes and what they mean

'0T' - A code of ‘0T’ means there is no tax-free amount to be taken into account. All earnings are subject to basic, higher and additional rate tax, depending on the total earned by the employee.

'BR' - A ‘BR’ code means that all earnings are taxed at the basic 20% rate.

'D0' - A ‘D0’ code means that all earnings are taxed at the 40% higher rate.

'D1' - A ‘D1’ code means that all earnings are taxed at the 45% additional rate.

'M' - 'M’ denotes that the employee is in receipt of the marriage allowance from their partner.

'N' - ‘N’ denotes that the employee has transferred the marriage allowance to their partner.

'NT' - ‘NT’ denotes that no tax is to be deducted.

'C' & 'S' - Suffixes beginning with ‘C’ are for employees who live in Wales, and ‘S’ for those who live in Scotland.

How does HMRC work out what tax is payable?

Generally, tax is calculated on a cumulative basis throughout the year.

For each pay period, the entire earnings and allowances for the year to date are used to calculate the total tax due. Then the tax that’s been deducted up to the previous pay period is subtracted to work out the amount to deduct in the current period.

A few other suffixes to be aware of:

Sometimes HMRC requires each period to be calculated in isolation, in which case an additional suffix of ‘W1’ or ‘M1’ will be added.
There are some occasions where tax on the payroll is calculated on a higher amount than the employee’s total pay, and in those cases a ‘K’ prefix is used in front of the numerical value.
‘T’ arises where there is unpaid tax from previous years or where the employee has other income which is not taxed at source.

Talk to us about your PAYE codes

It’s not just your employees’ tax codes that you must keep an eye on. If you’re paid a salary as a director through the business, then you will also have a PAYE tax code. If you receive a coding notice from HMRC, you should ask us to check if it’s correct. It’s always best practice to ensure you have the right code and that the right tax deductions will be made.

If there are any additional questions about PAYE codes, please do get in touch. We’d be happy to explain your codes, tax allowances and what any specific suffixes may mean.

Maximising R&D Tax Credits for Product Development Success

Mon, 08 Apr 2024 08:36:35 GMT

Have you ever tried solving a Rubik's Cube blindfolded? If you have, you have some idea how difficult it can feel trying to figure out the financial implications that come with of product development.

One of the most advantageous, yet often overlooked, financial incentives for businesses is Research & Development (R&D) tax credits. This article is designed to simplify the process of maximising these credits for your product development projects, no ability to solve a Rubik's Cube blindfolded required.

What are R&D tax credits?

Imagine the government handing out financial rewards for businesses doing interesting work, like experimenting with new recipes or tinkering with gadgets in a way that would make even MacGyver proud. That's R&D tax credits in a nutshell. They are designed to encourage innovation by allowing businesses to reclaim a portion of their R&D expenditure. And before you ask, no, it doesn’t require wearing white lab coats or holding test tubes against the backdrop of dramatic explosions.

Who can apply?

If your business is attempting to 'boldly go where no man has gone before', or more realistically, working on projects that seek to resolve scientific or technological uncertainties, you might be sitting on a potential goldmine. Whether you’re developing a groundbreaking piece of software, engineering a state-of-the-art kitchen gadget, or improving existing products, your project could qualify. The size of your business or the sector doesn’t matter; what counts is the work being carried out. Yes, even if you’re a startup making waves from a garage.

Maximising your claim: the not-so-secret formula

Document everything : Start by documenting your R&D activities like a meticulous detective. Keep detailed records of your experiments, prototypes, and even the failures (they’re just stepping stones, after all). These documents are crucial evidence for supporting your claim.
Know your expenses : You can claim a variety of costs, including staff wages, subcontractor fees, materials, and software, directly linked to R&D activities. Hosting a lavish party to celebrate a breakthrough, unfortunately, does not count.
Seek expert advice : While you might be tempted to DIY, consulting with specialists like Inglis Accountants can significantly boost your claim. We speak ‘tax language’ fluently and can navigate the complexities of the R&D tax relief system like a pro.
Don’t overlook anything : Often, businesses underclaim because they overlook activities or expenses that qualify. Did you know that even the cost of utilities used during R&D can be claimed? That’s right, every time you brewed a pot of coffee during those late-night brainstorming sessions, a portion of that cost might qualify.
Stay informed : R&D tax relief regulations evolve, and staying abreast of the changes ensures you’re always maximising your claim. Partnering with an accountancy firm specialising in product development sectors can keep you informed and ahead of the curve.

Common pitfalls to avoid

Underestimating your project : Don’t assume your project isn’t innovative enough. If there’s uncertainty and you’re working on resolving it, it’s worth exploring.
Missing deadlines : There’s a two-year window from the end of your accounting period to make your claim. Time flies when you’re innovating, so keep an eye on the calendar.
Overcomplicating things : While the process may seem daunting, it’s not about writing a thesis. Clear, concise, and accurate information is key.

To sum up, leveraging R&D tax credits can significantly benefit your product development. With expert guidance, this process can unlock essential funding. At Inglis Accountants, we aim to help our clients excel through innovation. Every penny saved on taxes can fuel further breakthroughs. Contact our team on 01904 787 973 if you'd like to learn more.

Are you hiring the best talent for your business culture?

Fri, 05 Apr 2024 07:19:33 GMT

Your people are a vital asset, so when you hire a new starter it’s critical that this new employee fits perfectly into your operations, your culture and your values as a company.

But how do you know if a potential hire is a ‘good fit’? Will they drive your business to bigger and better success, or could this new employee become a potential spanner in the works?

Be transparent about your company values

Your company values are central to your mission as a business. So making sure those values are clearly outlined and shared is essential for hiring the right talent. By clearly defining and sharing these fundamental values, you’ll attract candidates who share your ethics, values and core motivations – making them a great potential fit for your company culture.

To do this:

Identify your core values and what’s important to you as a business and an owner.
Communicate your core values to your employees and all new starters
Live your values. Reflect them in the way you do business and how you treat people

Communicate your values, mission and culture in your job advert

When you’re hiring, this process isn’t just about you choosing an employee – it’s also about a worker choosing your company and understanding what you stand for. Make sure your job advert gives the best possible indication of what the job entails, but also what you’re like as a workplace. This is a great way to appeal to like-minded people with the best skills.

When advertising and interviewing:

Describe your mission and ask candidates if they are on board with these goals
Talk about your culture and ask candidates why this might appeal to them
Paint the most honest and appealing picture of your workplace

Ask interview questions that reveal the real candidate

You obviously want to know that a prospective hire has the right mix of experience, knowledge and professional skills. That’s a given. But it’s also sensible to ask questions that reveal more about their underlying values, morality, work ethic and interpersonal skills. This will help you to assess whether the candidate is a good fit for your company culture.

Here are some examples of interview questions that did a little deeper:

What do you look for in an ideal employer? And how important are their core values?
Tell us about a time your faced conflict in the workplace, and how you resolved it
Our culture is front and centre. How do you see yourself fitting into our culture?
How do you see your career evolving as a valued team member in our business?

Ask your team for feedback on candidates

You may think a candidate is the bee’s knees, but what do the rest of your team think? Gauging the opinions of your management team and other team members is vitally important. These people will be working directly with this new hire, so they have to get a good vibe from them.

To encourage objective feedback, give your team members a chance to meet the candidate and take their feedback into account when making a hiring decision.

Monitor your new hire and have regular, ongoing performance reviews

Once you’ve made a hiring decision and have a new employee on the team, it’s vital to have regular and ongoing informal catch-ups and more formalised performance reviews. This helps you to measure how your new employee is settling in. It’s also an opportunity to gauge whether there are areas where they may need support from you and the wider team.

Don’t hold back. Be as open and transparent as possible:

Ask them how they’re feeling about their role, workload and their performance so far
Check their progress against set targets and objectives for their first three months.
Find out if they need help, support, further information or more onboarding support.
Check if they feel they are fitting into the team, and if they are feeling happy
Look out for potential issues that may be causing conflict in the team.

Having the very best talent in your team is central to achieving your goals for the business. So, making sure you hire the right people is actually a business-critical decision to make.

If you would like to earn more, keep more of your hard-earned profits and enjoy the life you want then book a discovery call with Donald Inglis .

What to do with surplus cash in the company

Mon, 25 Mar 2024 10:18:41 GMT

Do you have surplus cash sitting in your business bank account?

Your cash is ‘surplus’ when it exceeds the amount of money the company needs for its usual everyday operations. If you’re able to buy stock, fund your work in progress, pay your bills and buy replacement fixed assets and assets for expansion – and still have cash left over – this becomes surplus cash.

As a general rule of thumb, it’s good practice to have enough cash to cover any contingencies – generally, three months of outgoings. However, if your surplus cash is simply left in a bank account, this can be a missed opportunity.

Leaving cash sitting in the bank represents a wasted chance to invest that cash in building the business, or to extract it for your own use. It also threatens long-term tax reliefs such as Business Asset Disposal Relief (formerly ‘Entrepreneurs Relief’) or Business Property Relief.

So, what’s the best way to utilise and maximise this surplus cash?

Forecasting how much cash you need to run the business

If there’s surplus cash in the business, you need to decide what to do with it. The first thing is calculate how much cash the business should have available at any one time.

This will include:

Money to continue paying bills while waiting for customers to pay you,
Funds to increase stock and the value of work carried out that hasn’t been invoiced, and
Money set aside for the lumpy bills such as quarterly VAT or annual corporation tax payments.

One way to track that is by carrying out a three-way (profit and loss, balance sheet, cashflow) forecast. That’s something we can help you set up and monitor.

You can never be 100% sure what’s around the corner, so it’s also sensible to build up a reserve to cover any unexpected downturn in business or unexpected costs.

Key ways to maximise your surplus cash

You need a certain amount of funds to keep the business operating smoothly. This amount will go up and down as the business moves through its operating cycle. Having contingency funds is very sensible, but you shouldn’t worry about the cash balance getting down to zero. It may not feel comfortable, but that’s why a buffer is a good idea.

If you have excess cash there are a number of things you may want to consider doing with it:

Just leave it in the business – if there really is no better use for it, then why not? Make sure you get some returns on it, though. Think about using a savings platform, which not only helps spread the risk where the amount held is above the deposit protection limit, but can give you a higher interest rate by accessing more accounts than you could sensibly manage yourself.
Pay down your loans – where you have surplus funds, you should consider paying off any loans that the business has, taking into account the interest rate being charged and any early-redemption penalties.
Pay it back to your shareholders by buying back shares – buying back shares can be more tax-effective than paying dividends, but talk to us first – this is not a ‘DIY’ exercise.
Pay it to the shareholders as dividends – as long as there are retained earnings available, this can be a way of extracting cash, although you should consider the personal tax implications for you, as the owner. You, and other owners in the business, can also take steps to manage your tax exposure by using options such as the Enterprise Investment Scheme (EIS).
Make additional contributions into your pension fund – as the owner, topping up your director’s pension fund may be tax-deductible for the company, while also providing long-term benefits for you and your fellow directors/owners.
Expand the business – using your cash to expand the business can include investing in increased capacity for what the company already does, or diversifying into something completely different – for example, venturing into the property rental market.
Buy rather than rent – where the business is renting premises, think about buying suitable commercial property instead and putting your capital into bricks and mortar. Or , perhaps, on a smaller scale, purchase new plant and equipment to replace any items that you’re currently renting or leasing.
Make charitable donations – cash tied up in a bank doing nothing is also achieving nothing; donating surplus cash to charity can make a real difference to the charities you support. And as an added bonus, you may get tax relief on these contributions.

Talk to us about making use of your cash planning

If you believe you may have surplus funds, talk to us about the various options available to use it more effectively. Also, talk to us about preparing a three-way forecast to help decide whether or not this is something you should be concerned about.

Over the years, we’ve grown into one of the leading accountants in York, expanding our range of accounting services whilst staying true to our core values and our force for good ethos. If you would like to earn more, keep more of your hard-earned profits and enjoy the life you want then book a discovery call with Donald Inglis .

From chaos to control: the power of effective bookkeeping

Wed, 20 Mar 2024 09:31:46 GMT

In today's digital times, you're probably used to having unrivalled access to your financial numbers, key performance indicators (KPIs) and cashflow metrics. Without good bookkeeping, the speed and quality of your reporting can quickly fall down.

So, why is fast and accurate bookkeeping so important? And what are the main bookkeeping tasks that your business should be getting right?

The financial importance of good bookkeeping

Bookkeeping is a fundamental part of your financial process as a business. Without it, your accounting software has no financial data to work with, your FD doesn’t have the most current numbers, and your accountant can’t see the current financial health of the business.

Inputting your financial transaction into some form of record-keeping system is also a mandatory commitment if you’re a registered business and paying goods and services or value-added tax. Bookkeeping is what provides you with a historic breadcrumb trail of your finances – allowing you to track your cashflow, revenues and profits over a given period.

How to maximise your bookkeeping

So, bookkeeping is a vital part of your financial management. And the key to having your transactions recorded, available for reporting and accessible whenever you need them.

But how should the bookkeeping process work, in an ideal world? Let’s walk through the core bookkeeping steps and how you can get the most from this financial admin task.

To keep on top of your bookkeeping:

Scan all financial paperwork – the initial part of the bookkeeping process is to scan and record all receipts, invoices and remittances. This gives you a digital copy of the paperwork that relates to your income and expenses – important when you get around to filing tax returns and expense claims etc.
Record all transactions immediately – getting your transaction recorded and in the books ASAP is vital. This includes recording both your income and expenses, as soon as they occur, and matching them with the scanned paperwork. This not only helps you stay organised but also means your financial data is always up-to-date and can provide real-time reporting and numbers. This can be a huge help when running the business.
Categorise transactions accurately – when recording transactions, make sure you’re accurate and categorise each item correctly. Not only does this remove the potential for errors and miss-keying in your books, it also helps you track your spending and income more accurately, so your reports are an honest reflection of your financial health.
Reconcile your accounts regularly – reconciliation is the process of matching your transactions (both income and expenses) against your bank statement and other financial statements. It’s a key part of your bookkeeping and should be done regularly, to ensure that your balances are correct and that your records are totally up to date.
Use a cloud-based accounting system – bookkeeping doesn’t involve books (ledgers, in accounting-speak) anymore. In the digital world, you can use cloud-based accounting software, like Xero, to record your transactions and access your financial data in the cloud from anywhere, at any time. This makes it easier to keep on top of your numbers when out of the office (and Xero will even automate the reconciliation process too).
Outsource your bookkeeping to a professional – yes, you can do your own bookkeeping. But there’s a LOT of value to delegating all the hard work to a professional bookkeeper. If you don't have the time or expertise to manage your bookkeeping yourself, outsourcing is a smart move. A bookkeeper will make sure your books are always accurate and under control. Plus, they can produce cashflow statements, revenue forecasts and other reports to help your business decision-making.

Talk to us about outsourcing your bookkeeping

With today’s cloud accounting software, bookkeeping is a far less tedious task than it used to be. But it’s still a regular, time-consuming job that can take you away from running the business.

If you’re thinking about outsourcing your bookkeeping, and freeing up that admin time, we’d love to talk to you. Our outsourced bookkeeping service will take on your bookkeeping tasks, to streamline the whole process. We’ll also introduce you to automated data-entry tools like Dext Prepare, Auto Entry and Hubdoc, that make snapping receipts and scanning invoices a breeze. Get in touch to discuss our outsourced bookkeeping service.

Techniques for becoming a great networker

Thu, 14 Mar 2024 12:42:43 GMT

Leading a business can be hard work. But the good news is that you're not the only founder, owner-manager or CEO who's treading this path.

Networking with your peers is a great way to make connections with other entrepreneurs, while also looking for new business opportunities.

5 ways to improve your networking skills

Being part of a wide network of entrepreneurs and business leaders is about being part of the business community. It’s about giving to the community, as well as being supported by it – and knowing that you’re surrounded by other entrepreneurs who share very similar goals.

So, networking is a valuable thing to take part in, whether you’re a brand new founder, or a seasoned business owner who’s been around the track a few times. But how do you get GOOD at networking? There’s no simple answer to this, but we’ve highlighted five key things you can do to get more from your networking and to give more back to your community.

To become a better networker:

Be authentic and relational – if you’re going to make a success of networking, it naturally makes sense to appeal to people. Being genuine and interested in getting to know your peers will help a lot. Be yourself, be friendly and take the time to learn about the people you meet. Ask questions about their work, their interests, their goals and what generally makes them tick. This isn’t just about ‘doing business’, remember; it’s about getting to know people as people, and being part of this community.
Be a good listener and ask thoughtful questions – in networking, listening is just as important as talking. When you're talking to someone, listen intently, look people in the eye and pay real attention. Resist the temptation to interrupt or start thinking about what you're going to say next. Instead, focus on understanding their perspective and asking thoughtful questions. Ultimately, you want to make it clear that you’re interested in what this person has to say, and that you’ve found some common ground together.
Be helpful and offer your expertise – one of the best ways to build relationships is to be an asset to your industry community. Look for ways to use your experience and skills, and offer ideas, advice and help (if people are looking for assistance). This could mean sharing your industry knowledge, providing resources, or making introductions to other people in your network. When you help others, you help the community, underline that you’re a valuable resource and that you’re interested in building relationships.
Be an asset to your niche/sector/industry – share new ideas, drive innovation and be a voice that stands out in the network. If you want to make an impact, it’s important to stand out from the crowd. A good approach is to be someone who’s known for their expertise, creativity and thought leadership. Get involved in industry discussions, and write articles and blog posts about the big issues in your sector. The more you contribute to your niche/sector/industry, the faster your star will rise.
Follow up after networking events – getting the networking right is one thing, but it’s important to also get your follow-ups right too. Get people’s business cards, phone numbers or emails and get in touch after the event to touch base. A quick email or LinkedIn message could well be the start of a blossoming new business relationship or friendship. It’s also a good idea to connect on social media and to comment, share and repost your new contact’s posts.

What are the best places for networking?

Industry-specific events and conferences – industry events are great places to rub shoulders with other professionals in your field. You can get involved in discussions, learn about the latest trends and developments and even present your own sessions.
Social media platforms – you’re spoilt for choice when it comes to social media sites to help your industry networking. LinkedIn, X, Facebook, Threads and BlueSky all help you connect with the people you’ve met through your networking, and build on those relationships to share your insights and ideas more widely.
Local meetups and workshops – most cities and towns will have regular business meetups and workshops that you can dip into. Business breakfast events and evening get-togethers are a great way to meet local business owners and to find out what’s going on in your local community.

If you’re looking to raise your profile and improve your networking, we’d love to lend a helping hand. We’re connected to hundreds of different business owners and leaders – and we’re more than happy to introduce you. Our advice is to put yourself out there in your industry community, track down your local business peers and get busy with your content marketing and social media posts.

Spring Budget 2024

Thu, 07 Mar 2024 12:31:49 GMT

The Chancellor, Jeremy Hunt, delivered his second Spring Budget on 6 March 2024. This Budget aimed to appeal to the taxpaying masses, with cuts to National Insurance and a rise to the threshold for VAT registration. But was it too little, too late for the UK economy?

We’ve summarised the main points, so you can see how the Budget will impact on you as a taxpayer and a business owner.

Summary of the main Budget announcements

The Spring Budget is likely to be the last major fiscal event before the General Election, and there was significant pressure on the governing party to deliver tax cuts. Overall, it was intended to deliver economic growth, higher investment, lower taxes and improved public services.

Growth forecast

Compared to the previous forecast, by year 5, total UK gross domestic product (GDP) is virtually unchanged whilst GDP per capita is marginally down.In future years, real GDP growth is now expected to be:

2024: 0.8% (previously 0.7%)
2025: 1.9% (1.4%)
2026: 2.0% (2.0%)
2027: 1.8% (2.0%)
2028: 1.7% (1.7%)

Inflation (7.3% average for 2023) is predicted to average 2.2% (slightly above target) in 2024, then to decline to 1.5% in 2025, 1.6% in 2026, 1.9% in 2027 and 2.0% in 2028.

Main tax measures

Traditionally, most tax measures are covered in the Autumn Statement. But given that we are heading into election season, as expected, there were some significant (and some less significant) tax announcements delivered by the Chancellor.

Let’s look at the main tax takeaways:

Fuel duty will be frozen at current rates for a further 12 months, to April 2026.
Employee’s Class 1 National Insurance (income from £1,048 to £4,189 per month) is cut from 10% to 8%, and Class 4 (self-employed, annual profits £12,570 to £50,270) is cut from 8% to 6%. Employer rates remain unchanged and all bands remain frozen.
Alcohol duty is frozen at current rates until February 2025.
From April 2024, the Higher Income Child Benefit Charge now tapers away on income between £60,000 and £80,000, instead of between £50,000 and £60,000. Previously if someone in receipt of child benefit earned > £50K, 1% of it would be clawed back for every £100 earned over £60K. From April 2024, it will be clawed back at 1% for every £200 earned over £60K. From 2026, it is intended to change the base to household income, rather than ‘highest earner’.
The compulsory registration threshold for VATwill increase from £85,000 to £90,000, and the voluntary deregistration threshold from £83,000 to £88,000.
Various measures were announced which will benefit the creative arts, primarily visual effects, film studios, museums, theatres and orchestras.
The specific (and more-favourable) treatment for furnished holiday lets will fall away, and FHL will be treated the same as residential property letting.
The higher-rate capital gains tax charge of 28% on gains on residential property will be reduced to 24%.
Multiple dwellings relief is being abolished from June 2024. Previously, where someone purchased, for example, a block of five flats for £2 million, stamp duty was levied as if there were five purchases of £400K each. It will now be levied as a single £1 million purchase.
From April 2025 the current non-dom tax system will be replaced by a new relief. This will give new arrivals full relief from UK tax on foreign income and gains for four years, after which they will be fully liable for UK tax on all income, regardless of source.
A new tax will be levied on vaping products from October 2026, together with a one-off increase in tobacco duty to discourage switching from vaping to tobacco.

Other measures

There were some other targeted duty and tax measures of note, to consider:

The windfall tax on energy firms was extended for another year.
Air passenger duty on non-economy-class flights was increased.
Landfill tax was increased.
A new ISA with an annual savings limit of £5,000 on top of current allowances will be established to encourage investment in UK companies.
More funding will be given to HMRC to help them tackle tax evasion and close the tax gap.
£3.4 billion is being allocated to the NHS to invest in capital projects to enhance productivity, covering areas such as better use of AI, updated existing IT systems and reducing the admin burden on NHS staff.
The Household Support Fund, which allows councils to provide additional support for households suffering from the ongoing cost of living crisis, was extended for six months.
The repayment period for government emergency loans to recipients of universal credit has been extended from 12 to 24 months.

Talk to us about your concerns following the Spring Budget

This was a relatively sedate Budget, in comparison to Budgets and Autumn Statements in recent years. But the question still remains as to whether the Chancellor has done enough to push UK economic growth, while also appealing to the taxpaying public. If you have any worries or concerns following the Spring Budget, please do contact us to arrange a chat . We’ll be happy to talk you through the main business measures.

How to prepare your business for an audit

Tue, 05 Mar 2024 17:57:29 GMT

Getting ready for an audit is unlikely to be one of your favourite things to do as a business owner. But being prepared, organised and ready can take some of the pain out of an audit.

Planning for your audit helps your auditor get their job done more quickly, and also means there’s minimal disruption to your staff and business during the process.

Five key ways to be ready for an audit

Carrying out an audit of your business finances is a mandatory requirement for many companies. The rules and regulations will vary depending on the territory you trade in, but once you’re over a certain threshold for turnover or number of employees, an audit is likely to become a legal requirement. So, what can you do to make this process less of a hassle?

In advance of the audit date, be sure to:

Gather all the relevant documentation – this documentation will include financial statements, bank statements, expenses, management information and any other documentation that your auditor is likely to ask you for.
Organise your documentation in a logical way – the whole audit will be far easier to complete if your financial data and documentation is well-organised. Make it simple for the auditors to find what they need, and ensure there’s easy access to all information.
Identify any potential financial issues – the last thing you want is a giant problem coming up in the middle of your audit. So, it’s a good idea to check for any financial issues or irregularities that the auditor may flag up. Doing this well in advance gives you enough time to address any issues and resolve them before the audit begins.
Be prepared to answer questions – it’s likely your auditor will want to ask some probing questions about your business and financial records. Make sure you’re up to speed with your accounts and be prepared to answer these questions honestly.
Cooperate with your auditor – the auditor’s job is to ensure that your financial statements are accurate and that your business is in compliance with all applicable regulations. This will be much easier to do if you cooperate with them, answer their questions with good grace and quickly provide them with any information they need.

Talk to us about getting audit-ready

If you’re thinking that your company finances might not be quite ‘audit-ready’, you’re definitely not alone. Many businesses are not quite as organised with their financial management as they’d like to be. But don’t worry, help is at hand!

If you’d like some assistance with reviewing the health and organisation of your financial processes, we can help you get in control of your finances. Call our office on 01904 787973 or book a discovery call with Donald Inglis .

Hacking happiness: Practical work-life balance tips for developers

Thu, 22 Feb 2024 07:15:38 GMT

After years of working with software developers, we know how much of a challenge it can be for you to strike a healthy work-life balance. The pressure to meet deadlines, stay ahead of technological advancements, and contribute to team projects can often lead to long hours and a blurred line between personal and professional life.

This imbalance not only affects personal well-being but can also lead to burnout, decreased productivity, and ultimately, a negative impact on one's financial health. We've sadly seen these things first-hand. In this article, we'll explore the work-life balance challenge specific to software developers and propose solutions you can take right away.

Understanding the challenge

For many software developers, the nature of the job demands a high level of engagement and often extends beyond the typical 9-to-5 workday. Startups and tech companies, in particular, are known for their "crunch culture," where extended work hours are the norm during product launches or deadline crunches. Additionally, the global nature of the tech industry means collaborating with teams across different time zones, sometimes requiring availability outside of standard working hours.

This relentless pace can take a toll, not just on personal time and relationships, but also on physical and mental health. The irony is that while developers work to create technologies that improve efficiencies and enhance lives, their own quality of life may suffer due to work-induced stress and time constraints.

Solutions to enhance work-life balance

Set clear boundaries: One of the first steps to achieving a better work-life balance is setting clear boundaries between work and personal life. This could mean having designated work hours, even when working from home, and communicating these hours to colleagues and clients.
Prioritise tasks: Learn to prioritise tasks based on urgency and importance. Utilise tools and methodologies like Agile or Kanban to manage workload efficiently, ensuring that time is allocated effectively between high-priority projects and personal commitments.
Embrace 'No': It's essential to know your limits and feel comfortable declining additional responsibilities or projects when your plate is already full. Overcommitting can lead to stress and burnout.
Take regular breaks: Short, frequent breaks during the workday can boost productivity and creativity. Whether it's a walk outside or a few minutes of meditation, stepping away from the screen is crucial for mental and physical well-being.
Leverage technology: Automate repetitive tasks where possible. Use project management tools to streamline workflows and communication platforms to reduce unnecessary meetings, freeing up more time for focused work and personal activities.
Seek support and flexibility: If work demands are consistently encroaching on personal time, discuss flexible working arrangements with your employer. This could include remote work, flexible hours, or compressed workweeks.
Cultivate interests outside of work: Engage in hobbies and activities unrelated to software development. Having interests outside of work not only provides a healthy outlet for relaxation but also helps to define your identity beyond your profession.

Moving Forward

Achieving a healthy work-life balance is an ongoing process that requires constant adjustment and negotiation between personal needs and professional responsibilities. However, by adopting some of the strategies outlined above, you can create a more balanced and fulfilling life.

If you're a software developer struggling with work-life balance or an employer looking to support your team in finding better equilibrium, we're here to help. Get in touch with us to explore strategies and solutions tailored to your unique situation. Call our office on 01904 787973 or book a discovery call with Donald Inglis .

Meeting the environmental expectations of your customers

Mon, 19 Feb 2024 08:58:16 GMT

As environmental consciousness rises, small businesses in 2024 face increasing pressure to adopt sustainable practices and reduce their carbon footprint.

But going green means being able to balance your desire to run a sustainable, environmentally conscious business with the pressing need to remain economically and strategically viable.

Meeting the environmental expectations of your core customer base

Globally, 85% of consumers have become ‘greener’ in their purchasing in recent years, driving a green sea-change in how companies large and small run their business operations.

Most consumers want to buy sustainable products and packaging. It’s a change that will take a concerted effort and strategy, but the end results will be better for the planet and your customers.

To become more sustainable:

Carry out a company-wide environmental audit – do you know what your environmental impact is as a business? Carrying out an environmental audit helps you identify the areas where you can improve your energy consumption and waste reduction.
Look out for green partnerships – there will be plenty of other business owners wanting to become more green. So, why not collaborate with eco-friendly suppliers, vendors and partners to align your business with green, sustainable values.
Offer eco-friendly products/services – offering environmentally responsible products or services helps you attract environmentally conscious consumers. It’s good for your brand and drives a greener reputation for your company in the marketplace.
Be more transparent about your eco credentials – talking about sustainability and green values is important. By communicating your sustainability efforts, and being seen to drive change, you build trust and loyalty with environmentally aware customers.
Tie sustainable choices into cost-effective solutions – choosing to implement sustainable practices can also lead to cost savings, by reducing waste and operating in a more lean way. So, the planet wins, and so does the company’s cash flow. It’s a win-win scenario.

With climate change ever more visible, there’s a real imperative for businesses of all sizes to play their part and become better, greener and more sustainable enterprises.

We’ll help you review your operational practices to find the best opportunities for choosing green products, cutting back unnecessary waste and reducing your carbon footprint.

At Inglis Chartered Accountants, we’re delighted to have achieved the Net Zero Now Certification. Over the years, we’ve grown into one of the leading accountants in York, expanding our range of accounting services whilst staying true to our core values and our force for good ethos. If you would like to find out how we can help you with your green business strategy then book a discovery call with Donald Inglis .

Tax planning helps you do more with your money

Wed, 14 Feb 2024 08:49:35 GMT

Tax planning is a strategic approach to managing your business’ financial affairs, with the aim of legally minimising your tax liability. In other words, you plan ahead to make sure you pay the taxes you should be paying, but not a penny more.

Working with your tax adviser, you can look for deductions, credits, exemptions and tax-saving strategies that will help to optimise your company’s overall tax position.

How does tax planning affect your business?

The primary goal of tax planning is to reduce the amount of taxes your business owes. But it’s also about making sure you stay compliant with all the tax laws and regulations applicable to your business.

But what are the main advantages? Let’s take a look at five of the big benefits of careful, strategic tax planning.

By planning your tax across the year, you can:

Maximise your profits – strategic tax planning helps your company find the best available tax incentives, deductions and credits. This reduces your overall tax liability, cuts your annual tax costs and increases your overall profitability as a business.
Boost your cashflow – tax planning is a great way to open up more liquid cash and achieve a better cashflow position for the business. When you cut down the company’s tax payments, that frees up cash and helps you achieve a positive cashflow position.
Stay compliant and mitigate your risk – being proactive with your tax planning keeps the company compliant with the relevant tax laws and regulations. It’s a sensible way to tick the compliance boxes and reduce the risk of costly penalties and legal issues.
Drive your strategic growth – smart use of tax planning helps you reduce your tax costs and reassign those funds to your strategic business goals. It’s a golden opportunity to invest in areas that promote long-term growth and competitiveness.
Give your business a competitive edge – if managed well, efficient tax planning leads to lower operational costs for the business. This gives you a competitive edge when it comes to pricing, innovation, sales and revenue generation.

How can our firm help you with tax planning?

Getting strategic with your tax planning has many advantages for your financial stability as a business. But to maximise your planning, it’s important to work with an experienced adviser.

As your tax adviser, we’ll help you look ahead across the whole financial year, looking for the opportunities to reduce your tax liability and find the best tax deductions and incentives.

If you’d like to know more about the impact of tax planning, we’ll be happy to explain. Just call us on 01904 787 973 or book a call with Donald Inglis .

Navigating inventory and supply chain complexities: A guide for dental suppliers

Tue, 06 Feb 2024 14:39:13 GMT

In the dental industry, suppliers like you are facing ever more significant financial challenges, notably in managing inventory and in dealing with the intricacies of supply chain operations.

These challenges stem from a need to balance high inventory costs, the risk of obsolescence due to rapid technological advancements, the recent supply chain volatility, competitive pricing pressures, and the ever-present need for regulatory compliance. Each factor plays a critical role in shaping the financial health and operational efficiency of your business.

High inventory costs and obsolescence are particularly pressing issues. With substantial investments tied up in stock, suppliers risk having their capital locked in products that might soon become outdated. The dental field's technological pace means that today's cutting-edge equipment could be tomorrow's shelf warmer, leading to financial losses.

Supply chain volatility adds another layer of complexity. External factors, such as the recent geopolitical tensions, global health crises, or environmental disasters, can disrupt supply chains, affecting the availability of materials and finished products. This unpredictability can lead to stock shortages or overages, both of which are detrimental to maintaining a healthy cash flow.

Also, competition and pricing pressure further complicate the landscape. Suppliers must keep up with industry innovations while offering competitive prices to dental practices, balancing the investment in new products against the need to manage costs effectively.

Strategies for Improvement

Improving in these areas requires a multifaceted approach.

Efficient inventory management is foundational. Adopting just-in-time (JIT) practices can help suppliers minimise the costs associated with excessive inventory. Modern inventory management systems, powered by predictive analytics, can forecast demand more accurately, reducing the risks of overstocking and obsolescence.
Investing in technology is critical for enhancing supply chain efficiency. Advanced systems can streamline operations, from order processing to delivery, allowing suppliers to respond swiftly to market demands and reduce lead times. Automation and artificial intelligence offer powerful tools for optimising inventory levels and predicting market trends, ensuring that suppliers can adjust their strategies proactively.
Diversifying the supply chain is another key strategy. By establishing relationships with a broader range of manufacturers and maintaining a diversified supplier base, dental suppliers can mitigate the risks associated with supply chain disruptions. This approach enhances flexibility in sourcing and cost management, allowing suppliers to navigate external shocks more effectively.
Finally, adopting strategic pricing models enables suppliers to remain competitive while safeguarding margins . Flexible pricing that adjusts to market conditions, along with incentives like volume discounts or loyalty programs, can help strengthen relationships with dental practices.

Book a call to find out how we can help you

Inglis Chartered Accountants specialises in serving the dental supplies sector, leveraging years of experience and a proven track record with clients like Cfast and SmileFast to navigate the industry's complex financial landscapes.

Understanding the unique challenges of this sector, we are well placed to offer bespoke financial and accounting services tailored to your needs, including regulatory compliance, inventory, and cash flow management. Book a call with Donald Inglis if you would like to find out how we can help your dental supplier business in these difficult economic times.

Review your expenses – and save yourself money

Fri, 02 Feb 2024 12:52:16 GMT

Running a business will always mean incurring certain expenses, or ‘spend’.

Whether you’re a large family business or a small fledgling startup, there will be costs, overheads and supplier bills that mount up – and these expenses will gradually chip away at your cash position, making it more difficult to grow and make a profit.

So, what can you do to reduce your spend levels? And what impact will this have on your overall margins, profits and ability to fund the next stage in your business journey?

Getting proactive with your spend management

Spend management is all about getting in control of your expenses – and, where possible, aiming to reduce the level of costs and overheads that you incur as a company.

Why does this matter? Well, excessive spending eats into your cashflow, reduces your profit margins and stops you from achieving the profits that you’re capable of as a business. So if you can get proactive with your spend management, you can actually make your company a far more financially productive enterprise – and that’s great for your overall business health.

What can you do to reduce spend and slim down your company expenses?

Here are some key ways to reduce expenses:

Reduce your overheads – Your overheads are the unavoidable costs of running your business, producing your products or supplying your services. If you have bricks and mortar premises, these overheads will include rental payments, utility bills and even the cost of paying your staff. Drill down into the numbers and see where there are opportunities to reduce these overhead costs. That could mean moving to smaller premises, or reducing the size of your workforce, to reduce payroll expenditure.
Put limits on staff expenses – If your employees can claim expenses, or buy raw materials and equipment with the company’s money, these costs can soon start to rack up. It’s a good idea to put a spending limit in place, so each staff member can only spend up to an agreed amount. Having a clear expenses policy helps, as will training up your staff in good spend management techniques. Specialist expenses card software allows you to quickly set spend limits, track expenses and pull your expenses data through to your cloud accounting platform for processing.
Look for cheaper suppliers – If you can reduce your supplier costs, this will go a long way to bringing down your overall spend. If you’ve been with certain key suppliers for years, look around for new quotes, look at current market prices and see if you can negotiate better deals. And if your old suppliers aren’t flexible enough, try swapping to newer, more eager suppliers who will be willing to meet you in the middle on price.
Make your operations leaner – The bigger your operational costs are, the less margin you’ll make on your end products and services. One way to resolve this is to aim for a ‘lean approach’, paring back your staff, resources and operational complexity to the bare minimum. By making the business as lean as possible, whilst still delivering the same output, you keep your revenue stable, but reduce the spend level that’s eating into your cost of goods sold (COGS). The smaller your COGS, the more profit you make on each unit or sale – and that means better cashflow, more working capital and bigger profits.
Explore tax reliefs – Tax costs are an unavoidable expense when running your business, but it’s worth exploring which tax reliefs, grants or other business benefits you may benefit from. For example, R&D tax credits may be available to you to help cut your corporation tax expenses.

Talk to us about improving your spend management

If you’d like to get in control of your expenses, we’d love to chat. Please call our office on 01904 787 973 or book a call with Donald Inglis . We’ll review your current costs and will highlight the key areas where expenses can be cut. Then we’ll help you formulate a proactive spend management programme, to reduce your unnecessary spending.

Spreading your tax costs with the Time To Pay arrangement

Fri, 26 Jan 2024 06:45:10 GMT

HMRC expects you to pay your taxes on time. But if you’re finding it difficult to pay in full, HMRC can be approached to allow a Time to Pay arrangement.

A Time to Pay arrangement will allow you to pay your debt off in pre-agreed installments, reducing the impact of a large tax bill – and helping you manage your debt and cashflow.

How does Time to Pay work?

If you need to request a Time to Pay arrangement for self-assessment tax, Employer’s PAYE and VAT, these can often be made online using a ‘self-service’ system.

Where you owe other types of tax, or where the conditions for online applications are not met, you’ll need to contact HMRC to discuss your situation.

The easiest (although not always the quickest) way to discuss your Time to Pay request is by telephone to 0300 200 3835.
HMRC agents will want to know about all taxes you owe, not just the one(s) where you want to spread payment. They will also ask for details of your income and outgoings, and any savings or assets that may be able to be used to reduce the amount owed.
Presuming that you agree to a payment plan with HMRC during the call, they will usually want to set up a Direct Debit straight away.

Making use of the self-serve Time to Pay system

If you don’t have any existing payment plans or debts with HMRC, the ‘self-serve’ system may be more straightforward, provided that the applicable tax returns have already been filed. The conditions and amounts vary depending on the particular tax.

For example:

Self-Assessment : You must apply no more than 60 days after the payment deadline and owe no more than £30,000.
Employer’s PAYE : The amount due must be no more than 5 years old, total no more than £50,000 and all PAYE and CIS returns must be submitted. The maximum period over which the amount due can be spread is twelve months.
VAT : For VAT, you need to apply within 28 days of the due date and owe no more than £20,000. You can’t apply for a Time to Pay arrangement through the self-serve scheme if you use either the cash accounting or annual accounting schemes.

The self-serve option for Time to Pay does make the process easier, but remember that HMRC isn’t obliged to offer you the option of settling your taxes owed via installments.

If you fail to pay your taxes, HMRC can take recovery action in the County Court, and apply for the taxpayer to be put into liquidation or made bankrupt where appropriate.

Talk to us about making Time to Pay work for you

One of the best ways to avoid getting into difficulties with your tax liabilities is to work more closely with your accountant. As your tax adviser, we’ll produce regular forecasts so that any financial stresses can be foreseen well in advance.

Where unexpected circumstances do arise, putting a suitable payment plan in place with HMRC is the most sensible way to manage this situation. Ignoring your tax problems won’t make them go away and burying your head in the sand can lead to serious penalties and legal action. Please get in touch with out team on 01904 787973 if you would like to talk to us about the Time to Pay arrangement.

Should you buy a building for your business?

Mon, 22 Jan 2024 08:33:28 GMT

Tired of paying rent for your commercial premises and considering buying a premises for your business?

Owning a building works best if your business is well-established, you have money to invest, and you’re taking a long-term approach – it can take many years for this decision to pay for itself.

The advantages of owning a commercial property

You no longer need to worry about dealing with a landlord. You’re the landlord now, so your lease won’t end and you get to make all the decisions about how the premises is used. If you want to make changes to the fitout, it’s up to you.
You don’t have to worry about rising rent. Eventually, owning a premises will be cheaper than leasing. When you continue leasing, you can expect the rent to keep going up – sometimes the jump may be substantial.
If your business moves or closes, you still own the building. This can be a highly valuable long-term asset, depending on the type of building and the potential tenants.

The advantages of leasing your business premises

Leasing gives you more flexibility. You can move if your business gets too big for the space, or downsize if more people are working from home.
You don’t have to worry about paying building expenses like rates, warrants of fitness, and insurance.
Your rent is likely to be lower than the servicing costs for a commercial property loan, boosting cash flow so you have more to invest in the growth of the business.
The landlord will take care of repairs and maintenance on your building – when there’s a leak, for example, it’s not your problem.
Commercial buildings are typically expensive and financing is costly, so you’ll need to do plenty of research before you decide to make a purchase.

We can run a cost-benefit analysis

Could buying a building be the right choice for your business? We can work with you to analyse the costs and benefits of each option, to help you make an informed decision about which one will put you on track to achieve your goals.

Over the years, we have become one of the leading accountancy firms in York. Get in touch with our team if you have any questions about what you've read , we’d love to hear from you. Or book a call with us if you'd like a face-to-face chat over Zoom.

Five steps to better cash flow

Thu, 18 Jan 2024 07:56:12 GMT

Need a hand managing cash flow? You’re not alone. The key is getting your invoicing right, by invoicing customers as soon as possible and using tools like Xero’s invoice reminders to move payments along.

That said, there are a few other simple rules you can apply to manage your cash flow and get your invoices paid even faster:

Keep your books accurate and up to date – so you can see your financial state at a glance.
Don’t be too lenient with your customers – you can be direct and still polite. Keep a close watch on your accounts receivable turnover at all times and act sooner rather than later.
Keep your accounting simple – so you have a good handle on these business metrics. We can help with this.
Keep your business and your professional finances separate – this is essential to understanding your true cash flow position. Mixing your business and personal finances can leave you uncertain about business performance.
Build a cash reserve – so you are prepared for unexpected events and can take advantage of opportunities when they pop up.

First you want to get your invoicing right. Get into a habit of sending invoices quickly. Then follow the steps above to collect revenue and keep your finances organised. Get in touch by calling our office on 01904 787973 or booking a discovery call with our team for guidance on your invoicing and business cash flow.

How the increased minimum wage will affect your business costs

Thu, 11 Jan 2024 08:06:01 GMT

Although inflation is now on a downward trend, the sharp cost rises over the last 18 months are baked in. Energy prices are increasing again and the overall economic outlook isn’t very encouraging.

The good news is that by acting now to manage these increases you can stay on top of these costs. And with a proper financial plan, you can keep your business turning a profit.

A rise in the National Living Wage and Minimum Wage

The rise in the National Living Wage and the National Minimum Wage (NMW) recommended by the Low Pay Commission was accepted by the Governmentk in November 2023. This increase means that the NLW rises by 9.8% to £11.44 from 1 April 2024.

The size of your overall wage increase will depend on the age of your employees and whether they’re currently working as part of an apprenticeship scheme. However, the increase in your payroll costs is definitely something to factor into your financial planning for the year.

The new NLW and NMW rates from 1 April 2023 are:

Time to review your pricing?

Is it time to put your prices up? Ideally, your business should increase costs by a tiny amount each year, rather than by a big jump every five years, for instance. Small increases help prevent price shocks for customers, and keep your business in line with the rest of the market.

Can you also cut costs?

If you don’t think increasing your prices is an option, or you still need to make more of a change, you may need to cut back your spending. We look at your business line by line, so we can help you identify areas where you might be able to trim the fat.

Talk to us about managing your business costs

Keeping on top of rising business costs in 2024 will be a challenge. But with the right mindset, planning and forecasting, you can stay one step ahead of the curve. Talk to us about helping you prepare a financial forecast for the next year or two to help you take control in the current economic headwinds.

Setting goals for you and your business in 2024

Fri, 05 Jan 2024 11:41:03 GMT

The new year is a new beginning. If you are a business owner, this is often the time of year when you reflect on where you are at and think about your business goals for the year ahead.

Setting goals is an essential part of personal and professional growth. These could be lofty goals, or even setting out a plan to achieve some more mundane (but equally important) projects. Whether that is getting paid faster, reassessing expenses or bigger things like automation of processes and new markets. You may be looking to expand your business or create more time for yourself.

Having a clear vision and actionable goals can help you achieve your long-term plans. Here are some tips to get you started:

Envision your future

Reflect on what you truly want from your life and how your business can help you achieve those aspirations. Consider where you want your business to be in the next five or ten years. Having a clear endpoint in mind will make it easier to set goals that align with your vision.

Set measurable goals

Vague goals can be challenging to track and evaluate. Instead, focus on setting goals that are measurable. Think about the key metrics you already monitor in your business and how you would like to see them improve. For example, aim for a 3% increase in net profit year-on-year, a 2% reduction in expenses, or acquiring two new customers per month or grow your prospect database by 50%. If you set specific targets, you can easily track your progress and make adjustments as needed.

Develop a plan for each goal

Once you have identified your goals, it's crucial to create a plan of action to achieve them. This can be as simple as jotting down your ideas or engaging in a brainstorming session with your team or advisors. Having a well-defined plan in place will help you stay focused and motivated to follow through.

Monitor your progress regularly

It's essential to regularly check in on your progress towards your goals. Set reminders on your calendar or align your monitoring process with your invoicing cycle. By consistently evaluating your progress, you can identify any areas that need improvement or come up with fresh ideas to help you reach your targets.

Celebrate your achievements

Celebrating milestones along the way is crucial for maintaining motivation and momentum. Plan a reward for yourself when you achieve a significant goal. It could be treating the team to a morning tea, having a day out of the office together or planning an event for the end of the year. Choose something that brings you joy without breaking the bank.

Not sure how to get started?

We can help you with the strategy and identifing the information you’ll need to track, so you can monitor your progress. Call our office on 01904 787973 or book a discovery call with our team if you'd like to discuss your goals for 2024. Setting goals is just the first step. By implementing these tips and staying committed to your vision, you can turn your long-term plans into reality.

Writing a business plan? Read our guide

Fri, 22 Dec 2023 12:53:04 GMT

When was the last time you made a purchasing decision based on positive customer reviews?

Having that guidance can be a massive benefit to your success as a business. But what elements should you include, and what are the main considerations to think about?

A detailed business plan will generally include

A clear direction for the business – a well-crafted business plan gives you a defined path to follow, outlining the company’s purpose, goals and strategies. This helps everyone understand the business's mission, so you’re pulling in the same direction.
An overview of your financial strategy – your plan will include revenue projections, expense forecasts and funding requirements. This financial guidance gives you the foundations for mapping out your budgeting, cashflow and securing investments.
An overview of threats and opportunities – a robust plan will identify the potential challenges and risks faced by the business. This helps you develop contingency plans for overcoming these challenges, reducing your risk and keeping the company on track.
A summary of your sales and marketing strategy – outlining your sales and marketing strategy helps you target the right audience and differentiate your business in the market. This is vital for winning customers and driving your sales revenue.
Attract the right investors and lenders – a solid business plan enhances your credibility when you’re approaching investors or lenders. A good plan will demonstrate your commitment to the business, your understanding of the market and your ability to achieve long-term success. This is essential for securing investment and funding.

7 steps to creating a plan for your business

There’s no ‘one size fits all’ business plan. Your business plan should clearly outline your goals and how you intend to reach them. As a starting point, this should include how you intend to set up, finance, manage and run your business.

Use the following seven headings to kick-start your planning process. We can help you work through the numbers and strategic thinking to support your goals:

Describe your business idea – what’s the idea and how does it work? Try to have an ‘elevator pitch’ that quickly and simply describes the potential of your idea.
Set out your business goals – what are your objectives for the business? Set out your vision for the business and what your core mission will be.
Outline your ideal customer – do the research to provide an overview of your target market (the people or organisations you’ll sell to).
Do some competitive analysis – who are your competitors? Consider all the possibilities. They may not be in your precise sector but still compete for the same consumer dollar. What is your competitive advantage (the reason they pick you over your competition)?
Perform a business financial analysis – How will you fund your business and can you demonstrate the financial viability of the business idea?
Sketch out your sales and marketing plans – show how you’ll win customers and generate revenue. Consider the 4 Ps of marketing (Product, Price, Place, Promotion). Plan your budget and work out what your return on investment (ROI) will be.
Outline your business structure – give an overview of your organisational structure and your strategic and operational roles as directors.

A well-structured business plan is an essential document, whether you’re a new founder that’s just starting out, or a seasoned business owner looking to grow and diversify.

Your business plan is never written in stone. It’s a dynamic and evolving document that changes as the business progresses. Revising your business plan on a regular basis helps you improve your goals, refine your strategy and adapt to meet changing circumstances and markets.

How can our firm help you with your business plan?

Having a solid business plan is what gives your company direction, structure and meaningful objectives as an enterprise. As your adviser, we’ll help you understand your business goals and vision, and will help you translate this into a watertight business plan. We’ll also help you track your performance against this plan, and will work with you to update the strategy as the business evolves.

If you’d like to know more about business planning, we’ll be happy to explain. Get in touch to discuss your business plan .

How to handle bad reviews about your business

Mon, 18 Dec 2023 07:11:30 GMT

When was the last time you made a purchasing decision based on positive customer reviews?

Most of us can remember when we decided NOT to buy something based on negative reviews. It works both ways.

Online reviews have become the new go-to on social and they have tremendous power when it comes to influencing decision-making behaviours. Research shows that over half of all consumers are likely to seek out additional information, and that online reviews matter most before buying products and services.

If your business reviews don’t currently have 5 stars and you’ve received a number of disappointing reviews, here are some tips.

For each negative review that has been posted, you should:

make sure you take the time to thank the reviewer for taking time to explain the situation.
reach out to them personally to apologise and understand what happened.
to ensure the person feels heard, list some actions that you will undertake to review the process so that their experience doesn’t happen to other customers.

Further research shows that 50 percent of buyers will forgive the actions that caused them to post the bad review if the situation is resolved properly.

It is possible to create a positive impact with a large portion of disgruntled buyers, making even bad reviews positive in the end.

In addition to being able to identify and correct what went wrong in the first place, bad customer reviews give you insight into the outside perception of the company. Negative reviews can be helpful to reveal what needs improving, whether employees are doing a good job, and how to strengthen a strained relationship.

So, paying attention to customer reviews and dealing with them in the correct way can help to improve the number of positive reviews in the end, as well as manage expectations. Never underestimate the power of turning a negative into a positive.

Can an AI assistant streamline your business?

Thu, 14 Dec 2023 09:55:11 GMT

A business AI assistant is an artificial intelligence-powered software tool that’s designed to support and enhance different areas of your business administration and management.

These AI assistants (sometimes known as virtual assistants or chatbots) use natural language processing (NLP), machine learning and automation to interact with you, your team and your customers. They can give answers to simple questions and FAQs, perform efficient automated tasks and carry out detailed reviews and analysis of your business data.

How do AI assistants affect your business?

In a busy business environment, having a helping hand to reduce your workload is a huge bonus. AI assistants help you extend your capabilities and productivity, without the need to expand your team. Assistants pick up your key admin, operational and customer service tasks, freeing up your time to focus on high-value customer and business development jobs.

Tailored AI assistants can help in various areas of your business, taking on the heavy lifting while you do what you do best – talking to customers and growing the business.

For example, AI can:

Provide AI customer support – voice AI assistants use NLP tech to talk to your customers. An assistant like Alex from Curious Thing can answer your business phone, offer customer service support, resolve customer queries and answer common FAQs.
Streamline your bookkeeping – tools like Xero and Dext use a mix of optical character recognition (OCR), AI and machine learning to automate the digitalisation of your receipts and the matching and reconciliation of your transactions and bank statements.
Automate your content writing – AI chatbots like ChatGPT and Google Bard help you write professional-sounding marketing and communications materials. With quality prompts, you can generate blogs, emails and advertising content.
Record and transcribe meetings – AI transcription assistants like Otter.ai listen to your business meetings and provide a transcript in an instant. The AI can pull out important action points, summarise the key points and provide a record of the conversation.
Manage your inventory – AI inventory optimisation tools like Remi can help you monitor your stock levels, track sales trends and forecast which products and times you should order in. This keeps your business well-stocked at all times, automatically.

We can help you review your business processes, software systems and productivity goals, to find the ideal places where AI automation could make a difference. Get in touch, we are here to help .

Holiday cash flow for your small business

Fri, 08 Dec 2023 09:36:27 GMT

Are you heading away for a break from the business this year?

This time of year can be hard on small business. Your expenses continue and your cash flow can suffer when your debtors go on holiday.

Leading up to the holiday period, is your business cash flow in good health to carry you through? With a bit of pre-planning and being proactive, you can set yourself up for a financially stress-free holiday.

Planning your cash-flow over the holiday period

Invoice early - Send any invoices that you can, and in advance if possible. Perhaps consider whether you have any regular clients or customers that you could offer a retainer or similar deal to if they book services or make a purchase from you in advance.

Chase payment - Use this opportunity to chase up any outstanding payments. Strong communication and relationships matter - talk to clients and chase invoices.

Talk to suppliers - A little honesty can go a long way. Perhaps they can extend a line of credit for your payments to them. In most cases, a good supplier would rather offer a little flexibility to keep an ongoing business relationship.

Review your costs - Make sure you have a clear picture of your payroll, and any other planned expenses that will need to be accounted for. It’s also a good idea to do a general review of expenses. Business costs can creep up, and it’s a great idea to make a time to check on your expenses regularly, no matter what your financial situation. Review all of your regular payments and subscriptions as well as upcoming costs. There may be travel, functions or purchases which you can decide on an alternative approach to.

Talk to the bank or tax department - If cash flow is tight, make sure you have conversations early so you have everything in place to see you through.

Contact us

At Inglis, we can help you navigate the holiday period and help you alleviate cash flow worries - so you get a well deserved break. When you’re planning for a break, book an appointment or contact our office on 01904 787 973.

How to get original with your marketing (without breaking the bank)

Fri, 01 Dec 2023 09:46:57 GMT

The success of your business depends greatly on the success of your marketing.

Getting your key messages, product features and brand identity out into your industry market helps to drive engagement and sales – but we don’t all have millions to invest in this marketing.

So, how do you come up with innovative marketing on a shoestring budget?

Do you need big bucks to deliver great marketing?

Big marketing budgets are usually the sole preserve of large corporations with deep pockets and large bank reserves. But it’s more than likely that your business doesn’t have huge budgets to spend on marketing. And this is why it’s more important to have good ideas than big budgets.

5 ways to be original with your marketing

Be 100% clear on your marketing goals – to create innovative and original marketing without a big budget, it’s important to be 100% clear what you want your marketing campaign to achieve. What are your goals? Do you want to increase brand awareness, generate leads or drive sales? Once you know your goals, make sure these objectives are specific, measurable, achievable and time-bound, to get the very best results.
Do something different to your competitors – knowing what your competitors are doing helps you pivot and come up with something measurably different. Pay attention to their social media, website, blog posts and above-the-line marketing. They may be helping educate your audience, can you do something that takes advantage of this but sets you apart?
Be innovative in your thinking – the best marketing campaigns are original and innovative. They stand out from the crowd and capture people's attention by following a new path, or trying a new idea. Don't be afraid to experiment and use your best creative minds to come up with a campaign idea or content marketing that really makes your brand stand out from the bland and vanilla marketing concepts in your sector.
Use social media to amplify your reach – social media is a great way to boost the reach of your marketing campaign, but without spending a fortune. Share your content, engage with your followers and interact with the most popular trends and memes in your sector. If you want people to start talking about your brand, social media platforms like Facebook, Instagram, LinkedIn, TikTok, X (formerly known as Twitter) or Threads can all be good places to get a conversation going. You never know, you might go viral!
Focus on good ideas that don't break the bank – just because you have a small budget doesn't mean that you can't create effective marketing campaigns. There are tonnes of low-cost and no-cost marketing tactics that you can use to promote your business. Original content marketing, smart use of social media, networking with other businesses, referral programmes and highly targeted digital marketing campaigns are all tools to include in your cost-effective marketing toolbox.

Talk to us about reviewing your marketing strategy and budget

Producing effective marketing on a smaller budget shouldn’t hold back your creativity. In fact, sometimes the budgetary limitations can actually drive you to come up with cost-effective ideas that are just as effective as those from a million dollar marketing budget. Book a call with us or contact our office on 01904 787 973 if you want to talk through your marketing budget.

The Autumn Statement 2023

Fri, 24 Nov 2023 14:26:12 GMT

The 2023 Autumn Statement was presented against a background of inflation falling from recent peaks.

Annual inflation for the last quarter of 2023 is now expected to be 4.8%, against a previously anticipated 2.9%. With recent large price increases now baked in, the government’s 2% target is now forecast to be hit in the first half of 2025, a year later than previously thought.

GDP growth is now forecast to be 0.6% for 2023, compared with the projection last March of a negative 0.2%. For the next four years, it is expected to average 1.6%, so about 0.5% less than previously thought. Cumulative real growth from 2023 to 2027 is now 2.4% lower than predicted in the March forecast.

The OBR expects living standards, as measured by real household disposable income, to be 3.5% lower than pre-pandemic in 2024/25.

Higher inflation, particularly in an environment of fixed tax thresholds, has resulted in a sharp increase in forecast tax receipts. Because departmental and other spending has been largely unchanged in cash terms despite the higher inflation, by 2027/28 that results in real spending cuts of over £19 billion.

The following tax-cutting measures were announced:

National Insurance

The Chancellor announced a reduction in national insurance rates for employed and self-employed people. Although the thresholds are unchanged, Class 1 primary (Employee) national insurance will be reduced from 12% to 10% from January 2024. That is charged on monthly income between £1,048 and £4,189. From April 2024, Class 4 (profit-related) national insurance for self-employed people has been cut from 9% to 8% on profits between £12,570 and £50,270 and the flat-rate weekly contribution of £3.45 is being scrapped in order to remove the complexity for these workers.

Full expensing for businesses

For companies, the main tax change will only be of real benefit to larger companies. The temporary ‘full expensing’ of capital expenditure was scheduled to end in March 2026. That has now become permanent and allows companies to claim a 100% deduction against taxable profits for the cost of ‘main rate’ fixed asset purchases.

Tax Benefits for Freeports and Investment Zones

Three new investment zones were announced to focus on advanced manufacturing in West Midlands, East Midlands and Greater Manchester. These are expected to unlock £3 billion of private sector investment and create 65,000 new jobs. The tax benefits for investment zones and freeports will be extended for a further five years. A further new investment zone was announced in Wales.

Tax cut for Hospitality, Retail and Leisure businesses

The 75% discount on business rates for businesses in the hospitality, leisure and retail sectors has been extended for another year.

Research and Development

The R&D expenditure credit (RDEC) and the small and medium-sized enterprise (SME) intensive schemes are being merged into one.

Other measures announced included

The main National Living Wage rate will be increased by 9.8% to £11.44 per hour from 1 April 2024 and the age threshold will be reduced by two years to 21.
Alcohol duty will be frozen for a further year, up to August 2024.
The state pension triple lock will be implemented in full, resulting in an increase in State Pensions of 8.5% from April, and despite rumours to the contrary, Universal Credit and other working-age benefits will rise by 6.7% in line with the September inflation rate. The local housing allowance cap will also be raised to the 30th percentile of local rent levels.
The Chancellor announced a set of pension reforms intended to enhance the benefits for those saving for retirement, encourage a more integrated pensions market, and allow pension funds greater flexibility to diversify their investment portfolios. Employees will be able to have contributions paid into a scheme of their own choice, rather than one selected by the employer.
Although there are plans to reduce the overall size of the civil service to below pre-pandemic levels, HMRC will be provided with resources to tackle the tax gap, expected to yield an additional £5 billion over the forecast period.
The processing of planning applications will be sped up, with local authority fees being refunded where deadlines are not met.
£50m in funding was announced for apprenticeship schemes, to boost skills in engineering and other key sectors.
Welfare reforms will come into force in the latter part of next year. Individuals who have been unable to secure employment for more than 18 months, but are deemed fit to work, will be required to engage in work experience placements. Benefit claimants who either turn down employment opportunities or fail to collaborate with job centre staff will be required to re-register for benefits, resulting in a temporary suspension of their benefit access. Furthermore, there will be significant changes to the existing guidelines for recipients of benefits based on health conditions that prevent them from working.
Other measures were announced to boost housebuilding, including funding for local schemes in Leeds, Coventry and London, and a scheme to mitigate pollution risks intended to unblock the building of 40,000 homes via funding to the Local Nutrient Mitigation Fund.

The Chancellor of the Exchequer labeled the Autumn statement “110 measures to help grow the British economy”. For the full detail on the economic and fiscal policies aimed at addressing the UK's current challenges click here .

We’ll be happy to explain more of the details and help you start planning a 2024 strategy to overcome your biggest business challenges, just book a call with us or contact our office on 01904 787 973.

Are employee parties tax-free?

Wed, 22 Nov 2023 08:08:33 GMT

If the rules around social functions are followed, staff events like your end-of-year party, or your summer barbecue are tax-deductible for you, as the employer, and tax-free for your staff.

This means you can claim back some of the expenses you incur when putting on a social event for your team, while also helping to build better team bonds.

Whether your party is taking place in the office, at a local restaurant or via Zoom for your remote-working teams, you can be confident that you can recoup some of these expenses by making the relevant claim - The HM Revenue & Customs (HMRC) rules apply equally to any online staff events and remote parties.

Meeting the rules for tax-exempt staff functions

The annual function exemption means that your company can deduct costs for tax when holding an eligible annual staff social event. It also means that your employees don't pay tax or national insurance contributions (NIC) on costs relating to these social events.

This all sounds like good news for the company bank balance, but how does the exemption actually work? And what are the specific rules that you need to know about?

How do I know if my event is eligible? – For your event to be eligible, it must be company-wide and meet the requirements of a structured social event; i.e. where food, drink and possibly entertainment are provided. As long as all staff are covered somewhere, there can be separate functions for branches, departments, or other office locations etc.
What records do I need to keep? – As a company, you’ll need to keep records of who was invited to the social event, and who actually attended. You’ll also need to record the costs of putting on the event, including all associated travel and accommodation.
What’s the expenses limit per person? – There’s a limit per attendee (including partners invited as guests) of £150 including VAT. This total can be split over multiple functions – e.g. over your Christmas party, plus an Easter party and a summer event. NOTE: this can’t be disguised client entertaining. Guests must be employees or their partners and not clients or suppliers etc. Although the £150 includes VAT, the VAT in respect of employees (but not invited partners) is deductible in the same way as any other input tax on business expenses.
What happens if this limit is exceeded? – If the total cost per person is exceeded, the costs are still deductible for the company. However, if the cost of one or more individuals exceeds the £150 p/person limit, this would be seen as a taxable benefit for the employee (including the amount for their guests.)
How does this work in practice? – If you hold three annual functions costing £70/£60/£40 per head, your choice may be to apply the exemption to the £70 and £60 functions (Total cost of £130 per head). The balance of £20 (from the £150 limit) is lost and the £40 is taxable and NI’able. Functions covered by the £150 exemption do not have to be reported on form P11Ds.

The annual exemption is a great benefit for your company and staff. And it’s worth noting that if you’re a one-person company, that you could equally apply the benefit to taking your spouse out for a social event.

Talk to us about claiming expenses for your staff events

If you’re looking to run a staff function in the near future, book a call with us or contact our office on 01904 787 973. As one of the leading accounting firms in York, we are well-suited to help guide your business future and help you achieve financial security. We can help you ascertain if your planned function meets the annual exemption requirements, and how you can claim back your party costs as a tax-exempt expense.

What home-office expenses are deductible for your business?

Thu, 16 Nov 2023 04:13:10 GMT

With greater use of home-working now the norm for many UK businesses, it’s important to think about the deductible expenses that you may be able to claim when working from a home office.

Working from home results in us using more power, more broadband and more heating than when working from an office space, or from a coworking space outside the home. But which elements of your home expenses can you claim back? And how does the process work?

Which of the four home-working categories applies for you?

To be able to claim back your home-working expenses, your home office must be your main place of business. If you generally work away from home and just use the dining-room table to complete the occasional bit of paperwork, that won’t count.

There are four groupings into which your business must fall when it comes to claiming back home-office expenses: Limited Company or Unincorporated, with each claiming at either a flat rate or a higher amount.

1. Limited Company & Flat Rate

A flat rate of £6 per week can be claimed against your home expenses.

2. Unincorporated & Flat Rate

This is intended for unincorporated businesses (sole traders etc.) who work from home, and is broken down into three scaled categories

If you work at home 25-50 hours/month, you can claim £10/month
If you work 51-100 hours/month, you can claim £18/month
If you work 101+ hours/month, you can claim £26/month

3. Limited Company & Higher Amount

If you want to claim more than the scale rate, it’s preferable to have a rental agreement between you and your company to avoid the charges being treated as salary. The rent should be market-related – which can be difficult to establish. Because of this, the rental price is often worked out as the share of mortgage interest or rent, council tax, utilities and buildings insurance. If there are six rooms in the house (ignore halls, kitchens and bathrooms) and one is used for the business, then you claim 1/6th of those costs. It would be unusual for more than one room to be used for business, but could be the case if, for example, you’re a photographer with a studio and a separate office in the house.

Repairs for your ‘home office’ room can be claimed back in full, and repairs for other rooms can’t be reclaimed at all. General repairs to the house (e.g. re-tiling the roof) can be claimed proportionally, so 1/6th in the example we’ve given.

4. Unincorporated & Higher Amount

An unincorporated business can’t charge rent as such, so no formal agreement is needed. But you can claim back an amount against tax, calculated in exactly the same way as for a limited company.

Important points to be aware of

The claimable expenses may sound reasonably simple to calculate, but there are some other important factors to take into consideration.

Capital gains tax on a property sale: The sale of a residential property isn’t normally subject to capital gains tax (CGT). But if you use one room exclusively for business, then the proceeds of the sale of that room are potentially liable for CGT. Simplistically, for example, if you have a home office that takes up 10% of the total area of the house, and the house is sold producing a capital gain of £100,000, 10% of that gain would be subject to CGT. However, if a spare bedroom with a desk is temporarily used as a workspace while the employer's office is not accessible, this would not give rise to any capital gains tax issues.
Use of the room: If possible, try not to use any room exclusively for business. Put an exercise bike in your office room for workouts, so it’s only available for the business 90% of the time! The ‘1/6th’ in the earlier section then gets reduced by 10% and the rental agreement specifies that the room isn’t available for business use between specified hours, or on specified days.
Phone and broadband expenses: Your home telephone expenses only cover the cost of itemised business calls, not the whole bill. Your internet provider costs are not allowable as dual usage (personal and business) unless you have a separate connection for your business. Your mobile phone bill is fully allowable (so personal use is ignored) but if you’re claiming as a limited company then the mobile contract MUST be in your company name.

Talk to us about claiming your home expenses

With more and more of us now working from home, it’s important to know what expenses you can claim for, and how much you can claim back against these home-working overheads.

Call us on 01904 787 973 and we’ll help you calculate what can (and can’t) be claimed, and what the impact will be on your annual tax bill.

Preparing your business for a sale

Fri, 10 Nov 2023 09:34:25 GMT

Selling your business is a big move for any owner. You’ve built this company up, scaled it and put years of hard work into making the business a success story. So, when the time comes to sell, you’ll want to know that you’re getting the best price, and the best future for your legacy.

We’ve outlined five ways to maximise the value of your business, with practical steps for making your company the most attractive prospect on the market.

5 steps to prepare you for a sale

The first thing to underline is that selling a business is rarely a fast process. Most owners will begin planning their sale years in advance, working to an exit strategy that sets out all the key milestones. Your aim is to leave the business in great shape, with stable finances, a solid team and a customer base that will continue to provide solid revenues for years to come.

So, how do you achieve these goals?

Assess your reasons for selling and your desired timeline – What’s the key motivation for selling your business? Are you retiring, looking to move on to other opportunities or hoping to unlock your equity? Once you know your reasons, you can decide on some core goals for the sale, and set a realistic timeline for the sale.
Get your financial house in order – ‘Doing your financial housekeeping’ will mean preparing financial statements, submitting outstanding tax returns and making sure you have access to any other documentation that potential buyers will want to see. You may also want to work with an M&A expert to discover the company’s true market value.
Make your business attractive to buyers – Any buyer wants to know they’re taking on an attractive business proposition. Making the business feel more attractive means improving your marketing and sales strategies, beefing up your operations and ensuring you have a positive cashflow position. You should also think about creating a transition plan for the buyer, so the handover is as smooth as possible.
Find the right buyer – It’s important to feel like you’re handing your legacy over to the right owner – and getting the price you need. This may involve working with a business broker or marketing your business yourself. Make sure you vet potential buyers carefully to ensure that they are a good fit for your business and your existing team.
Negotiate the sale terms – Achieving your desired price could involve a fair amount of negotiation. You’ll need to sit down with your buyer to discuss purchase price, payment terms and other conditions of the sale. Be prepared to compromise and be willing to walk away from a deal if the terms are not right for you.

Talk to us about getting your business ready for a sale

If you’re intending to sell your business in the next five years, it’s important to start planning now. Coming up with a sale plan and a robust exit strategy takes time, as does sorting out the business housekeeping and finding the best possible buyer for the company.

As experienced advisers in many business sales, we’ll help you:

Get organised, locate the relevant documents and improve your record-keeping
Clean up your business and address any legal or financial issues
Come up with a detailed sale plan and help you market the business
Expand your business network, to find the best buyer for the company

Following these steps will greatly increase the market value and price of your business. Get in touch to talk about your sale plan by calling our office on 01904 787973 or booking a discovery call with our team.

Can directors and employees receive gifts from the company tax free?

Fri, 03 Nov 2023 09:16:32 GMT

Giving gifts to your employees can be a great way to increase engagement and raise the overall morale of your team. But how much can you give before there are tax implications? And how do the rules differ if you’re giving gifts to your directors?

The good news is that you can give gifts that don’t exceed £50 in value to your employees without any tax or National Insurance (NI) charges arising – as long as you follow HMRC’s rules. The cost of this is also tax-deductible by the company.

Making use of the Trivial Benefits scheme

As part of HM Revenue & Customs’ (HMRC’s) Trivial Benefits scheme , you can give gifts to your employees to mark birthdays, weddings or just ‘because’, all without attracting any tax charges. Owners can also benefit from the same Trivial Benefits scheme.

Trivial benefits can be provided to employees without any adverse tax or NI implications, and with no need to report them on a P11D form – the HMRC form used to report any ‘benefits in kind’ that you’ve provided to an employee.
To qualify, gifts can’t be a reward for services, can’t be cash or a cash voucher, can’t be contractual, and the cost mustn’t exceed £50 per gift.
For directors of close companies, the total can’t exceed £300 in any year. Although not limited for other employees, if it was a regular gift then it’s likely to be treated as a reward for services – which would then have tax implications.
If over the course of a year, a director awarded themselves 6 x £50 gift cards (maxing out the £300 cap) as a higher-rate taxpayer they could save around £126 in tax and NI compared with a £300 salary. The company would also save about £41 in NI.
Gift cards are fine as long as they aren’t pre-loaded debit cards that can be used to withdraw cash – remember you can’t give cash as a gift.

Let’s look at an example of these rules in practice

If an employee is given a bottle of wine for hitting a sales target, that would be taxable. If they were given the wine because it’s their birthday, as long as it was below £50 it would be within the exemption. It could also be given just because you’re in a good mood and feeling generous – it just can’t be anything related to company or individual performance.

Talk to us about meeting the rules around employee gifts

It’s important that you stick to HMRC’s rules around employee gifts and don’t end up unintentionally creating a negative tax impact for people on your team, or for the business.

As your adviser, we’ll help you draw up clear, well-explained internal guidance to make sure any gifts don’t unintentionally fall outside of the rules. If you have any questions about anything we've discussed, please book a discovery call with our team.

10 key questions to ask yourself as a business owner

Fri, 27 Oct 2023 11:11:13 GMT

Running a busy and successful business means you often don’t have the time to step back and work on the business. This can be a challenge if your aim is to grow and scale the company.

As experienced professional business advisers, we know the value of taking the time to ask yourself some pertinent questions. Holding yourself and the business to account is something we can help with. And there's never a bad time to pose a few questions and gauge where you're at with your planning, strategy, financial management and personal goals as an entrepreneur.

We've pulled together 10 important questions to ask yourself as a business owner.

1. Can you explain why a customer should choose your brand over another?

Knowing your value to a customer is vital if you’re going to market your offering in the most effective way. Think about why your brand stands out in the marketplace, and what opportunities and threats exist. This is the fastest way to tailor your brand to meet customer expectations.

We can help you by running a SWOT-based analysis of your business.

2. How happy is your workforce?

Your people are such a vital asset, but they won’t work well if they’re dissatisfied and disengaged from your business values. Ask yourself, are your employees motivated and engaged by your mission? Is there anything you can do to boost this engagement?

We can review your people strategy and the staff benefits you offer to your employees.

3. Are you meeting your cash flow goals?

Are there specific costs or inefficiencies that are holding you back from achieving a positive cash flow position? Ask yourself if your financial management is up to scratch. Identify your failings and tighten up your cash process.

We can review your cash management and look for efficiencies and cost-saving opportunities.

4. What keeps you awake at night?

It’s a stressful role being the boss, and there’s likely to be a lot playing on your mind. Consider whether there are any recurring business issues that are holding you back, or unexpected pitfalls that have appeared along the course of the business journey.

We can offer you seasoned advice whatever the issue, with resolutions to ease your worries.

5. Are you embracing everything that tech and AI has to offer?

Technology is moving fast with AI solutions and digital systems now an integral part of many business models. But are you doing enough to bring your business into the digital age? Are there tasks could you automate, or processes you could streamline?

We can suggest a suite of apps, software tools and digital solutions to boost your business.

6. Is growth part of your business strategy?

Not all businesses are focused on growth, but outlining your key goals around growth is an essential part of your business strategy. Ask yourself whether you want to scale at speed, or grow organically. Or whether you’re happy to be a boutique business that keeps things small.

We’ll help you define your growth goals and build a strategy that aims for success.

7. Do you have the numbers you need at your fingertips?

So much of what you do as a business is driven by data. But are you getting the overview you need of your important business metrics and key financial numbers? Think about where you need detailed data and metrics, and how this could put you in better control of the company.

We can help you expand your reporting and management information, so you have a better eye on performance, spending, cashflow and sales targets etc.

8. Have you identified your ideal customer?

Identifying your ideal customer is something every startup and new business should do. But when was the last time you updated your ideal customer outline? Think about who you’re selling to, how this audience has evolved and whether they are still the right customer to target.

We can run detailed customer profiles to help you pinpoint the best customers to target.

9. Have you thought about where your business will be in five years?

When the business is busy, the temptation is to focus on the now and to put your energy into fighting the most pressing fires. But without a forward-looking focus, you can lack direction. Ask yourself where you want to be in five years and how you plan to achieve these goals.

We'll help you create a detailed five-year plan, to give your journey more impetus and direction.

10. Are you planning for your own financial future?

You obviously spend a lot of your time thinking about your business – but how much time have you spent considering your personal financial future? Think about your life goals and how you plan to fund them, and where this money is likely to come from.

We can advise you on wealth planning, tax planning and the advantages of good all-year-round financial management.

Talk to us about running a health check for your business

If these questions have got you thinking about your business efficiency and growth plans, that’s a good thing. If you’d like to take this process further, we’d advise running a detailed health check for your business and your personal finances.

Drop us a message or give us a call on 01904 787973 to talk through your goals, aspirations, challenges and strategy, so we can help you take the next step in your journey to entrepreneurial success. Or, feel free to book a call with Donald Inglis if you'd like to arrange an online meeting .

Your business guide to cloud accounting

Mon, 23 Oct 2023 07:17:06 GMT

Cloud accounting is the simple, online way to manage your business finances.

Instead of working from a local accounting application that’s installed on your computer, cloud accounting software lets you log in from your usual web browser, on your laptop or mobile device. It’s fast, efficient and safely backs up all your financial accounts and data in the cloud.

Cloud accounting software like Xero, QuickBooks, FreshBooks and Sage transform the way you work on your numbers (and brings some real digital efficiency to your finances)

You have one online hub for all your financial management, with cloud-based tools for the main bookkeeping, accounting and reporting tasks. Plus your accountant, advisers and finance director can all access your accounts online, making it far easier to collaborate.

How does cloud accounting affect your business?

Switching to cloud accounting is essential if you want to run a successful Most popular accounting platforms are designed to be the centre of your whole business system, with accounting, performance tracking, reporting and other app integrations a big part of the mix.

With a cloud accounting platform at the heart of your business, you can:

Easily automate your bookkeeping, record-keeping and bank reconciliation processes
Send out electronic invoices to your customers, and get paid faster
Track your operational spending and employee expenses
Run detailed financial reports and track your key performance indicators (KPIs)
Access your important financial information anytime, anywhere
Integrate with hundreds of other business tools and apps
Bring your tax returns into the digital age, ready for Making Tax Digital

How can our firm help you with cloud accounting?

If switching to the cloud sounds like the right move for your business, we’d love to lend a hand.

We’ll help you review the current marketplace for cloud accounting software, decide on the best platform for your business and port your finance data over to the new software. We can also highlight all the most useful app integrations to include in your tech stack.

Drop us a message or give us a call on 01904 787973 – we’d love to hear from you. Or, feel free to book a call with Donald Inglis if you'd like to arrange an online meeting .

5 ways to overcome economic uncertainty

Mon, 16 Oct 2023 11:55:08 GMT

Economic uncertainty is an ongoing worry for any business owner.

You can control your own financial management, but you don’t have any direct control over the wider macro-economy. And in the first few years of the 2020s, there have certainly been plenty of tricky ups and downs for your business to navigate.

Current economic uncertainty stems from a number of factors, including:

Fluctuating markets
Geopolitical tensions
Pandemic recovery
The impact of climate change.

This unpredictability poses significant challenges for sustained growth and stability – but there are simple steps you can take to react to these challenges.

Simple strategies for overcoming the challenges of economic uncertainty

Good financial management is the key to riding any period of economic uncertainty. When sales, revenues, supplier prices and operational costs are all highly dynamic, it’s good to know that your business has cash in the bank and a solid financial strategy to stick to.

But how do you get tighter control over your business finances? And what are the main areas to focus on, track and manage as a business owner or financial director?

Here are five straightforward ways to tackle economic uncertainty:

Manage your cash flow effectively. Cash flow management is the process of tracking your cash inflows and outflows, identifying potential problems and being proactive about taking action. It’s helped by running regular cash flow forecasts and sticking to budgets.

Carry out spend management. Spend management involves tracking your expenses and identifying areas where you can cut costs. You do this by switching to more cost effective suppliers, cutting back unnecessary expenses and having tighter approval processes.

Negotiate better terms and prices with suppliers. Negotiation can help you save money on your raw materials, labour and other important costs. You can also negotiate better payment and credit terms by building trusted relationships with your suppliers.

Embrace AI automation to cut costs. Artificial intelligence (AI) tools are a great way to automate tasks, such as customer service, billing and inventory management. This frees up time for strategic activities and saves you money on labour costs.

Diversify into new products or markets. Diversification helps you reduce your dependence on a single product or market, making your business more resilient to economic downturns. It’s important to choose products or markets that are complementary to your existing business, and that have good growth potential.

Talk to us about strengthening your financial management

With the world in such an unstable state, it’s always difficult to know exactly what lies around the corner for your business. But it’s safe to say that with a robust and agile financial strategy, you’re in a better position to flex your revenue streams and overcome any cash flow pitfalls.

As your adviser, we’ll help you get tighter control over your cash flow, budgeting and financial forecasting – just book a call with Donald Inglis or call us on 01904 787973.

How can small businesses compete with the big chains?

Tue, 10 Oct 2023 12:02:17 GMT

In tough economic times, small businesses can struggle. Big multinational chains often have the scale to undercut local competitors and survive even when times get tough.

What can small businesses do to retain and attract customers in a competitive market?

Identify your business’s advantages

Think about what your business can offer that a multinational operator cannot. For example, you might have the edge on:

Local knowledge
Close relationships with customers
Personalised service
Easier parking
Specific products and services
Immediate availability of products
An excellent loyalty scheme
Community support
Local events

If you’re not sure what your big selling points are, ask your customers.

Show off your advantages online

Leverage your business’s selling points through your online presence. While it might be prohibitively expensive to build a whole new office or store frontage, your online shop-front can be impressive at a fraction of the price. Step up your social media activity, paying particular attention to sites where local people are active. Invest in outstanding photography, too.

Invest in reviews

Can you find a way to nudge your best customers into providing online feedback? Positive reviews are a vital tool for small businesses to grow their customer base.

Make it easy for people to leave reviews – send them an email reminder with a link included.
Address negative reviews immediately and professionally.
Consider an incentive to provide a review, such as a free extra item immediately or a £5 discount code off their next order. Alternatively they could go in the draw to win a bigger prize. This may also encourage them to shop with you again.

Be boutique

Lean into being small. Customers are willing to pay more for businesses that employ great people, provide quality service and a high-end experience. Invest in providing a polished experience for all your customers.

Appeal to ethical customers

Many shoppers are happy to pay more for sustainable, ethical products and services. Have measurable sustainability credentials and show them off whenever you can.

Everything you need to know about VAT

Thu, 05 Oct 2023 08:30:53 GMT

Getting to grips with the basics of accounting, financial management and business strategy can be a challenge. To make things easier, we’re starting a new Plain English guide to business.

This time, we’ll be looking at Value Added Tax, or VAT as it’s generally known.

What is Value-Added Tax?

Value Added Tax is a consumption tax. VAT is imposed on the value added at each stage of the production and distribution of many goods and services. Registered businesses charge VAT on their sales and can reclaim VAT paid on their purchases.

The standard VAT rate in the UK is currently 20%, with different reduced rates for certain goods and services that fall outside the standard rate.

How does VAT affect your business?

You can choose to register for VAT at any point. But registration does become mandatory once you hit the relevant threshold (see below). As a VAT-registered business, you’ll add a few tasks to your to-do list but will also benefit from claiming back any VAT expenses.

Here are your main VAT responsibilities:

Become VAT-registered – it’s mandatory to register for VAT once your company’s taxable turnover exceeds the rolling 12-months threshold (currently £85,000 per year)
File your VAT return – your business must file a VAT return (normally quarterly) that shows all VAT you’ve collected from customers, and all VAT expenses you’ve incurred.
Pay the collected VAT to HMRC – also every quarter, you’ll pay the VAT funds you’ve collected from your customers to HM Revenue & Customs (HMRC) less any reclaimable VAT you've paid to your suppliers.
Claim back VAT expenses – If there's a refund – where the reclaimable VAT on your outgoings exceeds the VAT on your sales – you can claim that back from HMRC. This can be a helpful boost to your cashflow).

How can our firm help you with VAT?

Becoming a VAT-registered business brings a certain amount of professional kudos to your company – and it needn’t add too much to your financial workload.

As your adviser, we’ll let you know when you’re close to hitting the registration threshold and will be there to help you get VAT-registered. We’ll also make sure your VAT processes are as simple and streamlined as possible, and that you maximise your VAT expense claims. We can also help you decide whether one of the special VAT schemes might benefit you.

If you’d like to know more about registering for and managing VAT, we’ll be happy to explain - just book a call with Donald Inglis or call us on 01904 787973.

Everything you need to know about corporation tax

Tue, 26 Sep 2023 05:46:34 GMT

Getting to grips with the basics of accounting, financial management and business strategy can be a challenge.

To make things easier, here is our plain english guide to corporation tax, one of the key business taxes you’ll need to understand as a limited company.

What is corporation tax?

Corporation tax (CT) is a direct business tax that’s levied on your company’s profits. The CT you pay is based on the company's taxable profits. This will include revenue from your business activities, investments and capital gains.

As an owner/director, one of your key responsibilities is to make sure the company complies with all CT legislation that’s relevant for your business and pays any tax that’s due.

Here’s a quick overview of the current rates of CT in the UK:

For annual profits under £50,000, you’ll pay CT at the lower rate of 19%
For annual profits over £250,000, you’ll pay CT at the standard rate of 25%
For annual profits between £50,000 and £250,000, you’ll pay CT at the standard rate, but with Marginal Relief applied at the rate that’s relevant to your type of business. Where there are associated companies, these thresholds are shared equally between them.

How does corporation tax affect your business?

Paying CT is a key obligation for most incorporated businesses. But what are the key responsibilities to have on your CT to-do list?

As a company, you’ll need to:

Register with HM Revenue and Customs (HMRC) – your company must contact HMRC to register for CT within three months of starting trading as a business.
Keep accurate financial records – financial records are essential. You’ll need to keep records of all income, expenses and transactions related to your business activities.
Calculate your taxable profits – at year-end, you must calculate the company’s taxable profits by deducting any allowable expenses and reliefs from your total income.
Prepare and submit a CT return – every year, the company must prepare and submit a corporation tax return (CT600) to HMRC. This return gives details of the company’s financial activities and tax calculations for the tax year in question.
Pay corporation tax – most companies must pay the CT they owe to HMRC within nine months and one day after the end of the accounting period. Companies with an annual profit exceeding £1.5 million have a faster payment schedule, with quarterly payments starting 6 months and 13 days from the beginning of the accounting period.
File accounts with Companies House – your company must file its statutory annual accounts with Companies House . These accounts will include financial information related to CT and will be available as public records.
Comply with all relevant deadlines – your company must meet the filing and payment deadlines set by HMRC. If you don’t, this could lead to penalties and interest charges.
Seek professional advice – the best way to make sure you’re ticking all the correct CT compliance boxes is to work closely with a qualified accountant or tax adviser.

How can our firm help you with your corporation tax?

Keeping on top of your corporation tax responsibilities can be a challenge. As your adviser, we’ll work with you to manage your corporation tax and keep everything as tax efficient as possible. We’ll also help you keep accurate records, file your returns on time and claim all available reliefs. It’s the best way to minimise your tax bill and stay 100% compliant.

If you’d like to know more about the impact of corporation tax, we’ll be happy to explain. Call us on 01904 787973 or book a call with Donald Inglis .

Getting in control of your inventory to unlock efficiency and cash flow

Wed, 20 Sep 2023 07:49:45 GMT

As a manufacturing or product-based business, efficient stock management is a big part of running a smooth operation. But the way we manage stock and inventory has changed radically in the past decade, in no small part due to the evolution of inventory technology.

With cloud-based inventory management systems now available for even the smallest business, and direct integration with your accounting and finance systems, there's no excuse for not being in control of your inventory and stock purchasing.

But with the ups and downs of the global supply chain in 2023, what can you do to get more from your stock, your inventory systems and the capital locked up in these stock assets?

New ways to enhance your inventory management

With today’s inventory management solutions, it’s never been so easy to have complete oversight of your stock levels, popular products and restocking information. Data is king and the more information you have at your fingertips, the easier your stock management will be.

Let’s take a look at some important ways to get more from your inventory management:

Use the latest inventory management systems – when you use cloud-based inventory management software you get the benefits of real-time tracking, accurate forecasting and seamless inventory control. This gives your operational efficiency a boost, reduces errors and optimises your stock levels, all of which can make your business more efficient, productive and profitable.
Integrate your inventory app with your finance and business platforms – by integrating inventory management tools with your finance and business platforms, you streamline your workflows, automate key processes and synchronise your stock data. With all this info at your fingertips, you can make better business decisions, cut down the time-consuming manual tasks and enhance the performance of the business.
Keep your stock management lean and agile – embracing lean stock management means only producing or ordering in the stock you actually need. This helps you to optimise your inventory levels, reduce carrying costs, minimise wastage, avoid stockouts and align supply with genuine customer demand. This cuts unnecessary waste and spending and makes your stock operations far more effective and profitable as a result.
Sell off your surplus stock to free up cash – if you have stock sitting idle, why not sell this dead stock at a discount to turn these assets into cash? Your inventory management software can quickly identify surplus stock, allowing you to run targeted sales strategies such as discounts, marketing campaigns or customer events to liquidate excess stock. This is a fast way to generate additional revenue and boost your current cashflow.
Reevaluate how big your warehouse capabilities need to be – could you move to a smaller warehouse facility to save cash and be more effective? The data you get from your inventory management software gives you deep insights into your stock movement. This gives you the evidence you need to decide whether downsizing could reduce overhead costs, enhance your operational efficiency and improve profitability.

Talk to us about getting in control of your inventory

Being the master of your inventory and stock management is an incredibly valuable skill for any product-based business. If you want to get in complete control of your inventory, switching to a modern cloud-based inventory management solution is an investment you won’t regret.

At Inglis Chartered Accountants in York, we advise you on the best inventory software tools and how they integrate with your accounting and business platforms. We also share the best tips on how to improve your operational efficiency, stock management and overall revenue generation. Get in touch with our team on 01904 787973 to upgrade your inventory tools.

Our essential guide to cash flow

Tue, 12 Sep 2023 16:29:22 GMT

Why is cash flow so central to good financial management? Here's our essential guide.

What is cash flow?

Cash flow refers to the movement of money into and out of your business over a specific period.

In the most basic terms, cash flow is the process of cash moving out of the business (cash outflows), and cash coming into the business (cash inflows). The ideal scenario is to be in a ‘positive cash flow position’. This means that your inflows outweigh your outflows – i.e. that more cash is coming into the business than is going out.

When you’re cash flow positive, the main benefit is that you have the liquid cash available to fund your daily operations and debt payments etc.

On the flip side, if you’re in a negative cash flow position, this can be a red flag that the business is facing some financial challenges – and that some serious cost-cutting and/or revenue generation is needed.

How does cash flow affect your business?

Not having enough liquid cash is one of the biggest reasons for companies failing. So it’s absolutely vital that you keep on top of your company’s cash flow position.

Five key cash flow areas to focus on will include:

Monitoring your cash inflows and outflows – this means regularly tracking your cash inflows from sales, loans and investments, as well as managing your cash outflows from expenses, purchases and debt repayments.
Managing your account receivables and payables – efficiently managing your customer receipts and supplier payments helps smooth out your inflows and outflows – and delivers stable cash flow that’s easier to predict and manage.
Getting proactive with your budgeting and forecasting – creating realistic cashflow budgets and forecasts helps you predict your future cash position. By anticipating your future cash needs, you can actively plan for potential shortfalls or surpluses.
Being in control of your stock inventory – having excess stock in your warehouse ties up cash. So, it’s a good idea to optimise your inventory levels and to only manufacture/order the items you need on a day-to-day basis.
Investing in your cash reserves – with emergency cash reserves in the bank, you know you have the funds to handle unforeseen cash flow issues or sustain your operations during lean periods. This makes your whole cash flow position more stable.

How can our firm help you with cash flow management?

Positive cashflow is the beating heart of your business. Working with a good adviser helps you keep that cash flow healthy, stable and driving your key goals as a company.

We’ll help you keep accurate records, track your inflows and outflows and deliver the best possible cashflow position for the business. Book a call with Donald Inglis or call the team on 01904 787973 to chat about improving your cash flow.

Charging interest on a Directors' Loan Account

Tue, 05 Sep 2023 08:12:57 GMT

When you’re the director of a business, it’s likely that there will be occasions where you borrow money directly from your company, or inject your own capital into the business.

A Directors' Loan Account (DLA) keeps track of this money owed between the company and its directors. In many companies, the account is in credit – i.e. the company owes money to the director. This can be due to directors injecting startup capital into the company, not drawing dividends they are owed, or other expenses that have been subsidised by the director.

In these situations, it’s worth considering charging interest on the balance that’s due. But how do you do this? And what impact does charging interest have for the director and company?

Understanding interest on Directors' Loan Accounts

Let’s take a look at some of the rules around applying interest on DLAs, and the potential benefits this can bring to your company and tax planning.

Any interest paid re these DLAs will be deductible when calculating your company’s taxable profits. Because of this, it’s possible to achieve tax savings of up to 25%.
For the individual, a basic-rate taxpayer has a Personal Savings Allowance (PSA) of £1,000 and will pay 20% on the excess. So, paying interest is more tax-effective than declaring dividends. The PSA for a higher-rate taxpayer is £500.
The interest rate needs to be a commercial rate. In other words, the interest rate used must not exceed the rate you’d expect to see from a third-party lender.
Where interest is paid to an individual, basic rate tax needs to be deducted at source from any payment made to the director.
This tax is reportable to HM Revenue & Customs (HMRC) on a calendar-quarterly basis, with the amount deducted offset against tax due on the individual’s personal tax return. Where the company accounts are not drawn up to a calendar-quarter end, a fifth return is required up to the balance sheet date.
The company can take into account any interest due, but not paid, until up to twelve months later when calculating its own profits. However, the individual will only include as income any interest that’s actually been paid. Note though that 'paid' can include crediting to a DLA!. This can give a timing advantage.

Talk to us about maximising the tax benefits of your DLA

Any interest you receive is not subject to National Insurance Contributions (NICs) and is particularly tax effective when shielded by the Personal Savings Allowance (PSA) .

The reporting requirements for interest on DLAs are no walk in the park. Because of this, it’s a good idea to talk to us first, so we can make sure you have a workable system in place prior to making any payments. We can also give an opinion of the acceptability of the proposed rate of interest to pay, and how it measures up against current market rates. Get in touch to talk about interest on your DLA.

Are you pursuing a trade, or following a hobby?

Tue, 29 Aug 2023 08:26:17 GMT

Many of us have hobbies that are dear to our heart, whether it’s playing guitar, building a giant model train system or knitting copious numbers of jumpers for our family.

In many cases, it’s pretty clear whether these activities are being carried out in the course of a trade, or are nothing more than a personal hobby. But disputes with HM Revenue & Customs (HMRC) do arise. Are the profitable activities you carry out as part of your niche interest no more than a hobby? Or are the loss-making activities you carry out considered to be a trade, with the losses used to reduce your overall tax bill?

Let’s look at how you prove if this is simply a hobby, or a profit-making trade?

The nine ‘badges of trade’ and what they tell you

There’s not much meaningful guidance in the UK legal statute on what does and what does not constitute a trade or hobby. So, how do you make the differentiation?

One approach has been to consider the ‘ badges of trade ’. These badges can show the presence or absence of certain aspects that indicate whether a trade does or does not exist.

These nine badges are:

Profit-seeking motive : An intention to make a profit supports trading, but by itself is not conclusive.
Number of transactions : Systematic and repeated transactions will support ‘trade’.
The nature of any asset acquired : Is the asset of such a type or amount that it can only be turned to advantage by a sale? Or did it yield an income or give ‘pride of possession’, for example, a picture for personal enjoyment?
Existence of similar transactions : Transactions that are similar to those of an existing trade may themselves be trading.
Changes to the asset : Was the asset repaired, modified or improved to make it more easily saleable or saleable at a greater profit?
The way the sale was carried out : Was the asset sold in a way that was typical of trading organisations? Alternatively, did it have to be sold to raise cash for an emergency?
The source of finance : Was money borrowed to buy the asset? Could the funds only be repaid by selling the asset?
Interval of time between purchase and sale : Assets that are the subject of trade will normally, but not always, be sold quickly. Therefore, an intention to resell an asset shortly after purchase will support trading. However, an asset which is to be held indefinitely, is much less likely to be a subject of trade.
Method of acquisition : An asset that is acquired by inheritance, or as a gift, is less likely to be the subject of trade.

These badges are not an ‘all or nothing’ indicator. But when considered in the round, they may lead to an overall impression of whether or not a trade is being carried out.

Even if it is agreed that a trade exists, HMRC may argue that it’s not being carried out on a commercial basis. If so, this would deny any sideways loss relief (offsetting the losses of one activity against the profits of another for tax purposes).

Talk to us about checking the status of your hobby or trade

With the new trading allowance of £1,000 per annum , any activities you carry out which generate income below £1,000 won’t be required to be reported on your tax return. Because of this, there’s no danger of minor income from hobbies being targeted as trading activities.

The emerging problem is in areas such as crypto assets and day-trading of shares. Depending on the specific circumstances, these can be considered as trading, or generating capital gains and losses, or being outside of taxation altogether.

Where you carry out any activities outside of your mainstream business, talk to us so that we can advise you of any potential tax traps and tax benefits that may arise. Book a call with Donald Inglis to talk through your non-business activities.

Go walking: keep you and your business healthy

Fri, 25 Aug 2023 16:52:36 GMT

Being able to run a business from a laptop is an amazing thing. But it does mean that you spend a LOT of time sitting in front of a screen not being very active.

Research shows that office workers spend 75% of their waking hours sitting down – and that’s not great for your health.

A good walk may well be the answer to this issue, with walking being a great way to get yourself fit and to add some energy to your business thinking too.

Get active and become a more effective leader

Sitting down for long periods is not healthy. That’s the undeniable truth of being a sedentary entrepreneur that spends hours each day looking at a computer screen or mobile device. Sitting down slows your metabolism, burns no calories and leaves our muscles to waste.

To make your working day more healthy:

Go for a walk every day – whether it’s walking to your office space, or scheduling a lunchtime walk around the block, it’s important to be active. A 30-minute walk ups your step count, raises your heart rate and can burn off between 100 to 300 calories – all good things to include as part of a healthy lifestyle for the modern entrepreneur.
Arrange 'walking meetings' with staff and clients – meetings and 1-2-1s don’t have to happen sitting on a chair. Instead, take a stroll and chat with your clients, employees or suppliers as you walk. It helps keep the conversation flowing and gets you and your attendees breathing in some fresh air and interesting scenery.
Take time to walk and think – the best ideas can appear during a walk, without the pressures of a formal office setting. Sometimes a change of location can work wonders for your thought process, especially if you turn off your devices and don’t have the distractions of the office.
Walk between meetings – taking your car to meetings may be quicker, but why not walk between your client meetings and get yourself fitter. By walking, you're more sustainable, healthier and don't waste so much money on fuel or transport costs.

The benefits of being an active entrepreneur

Time spent walking isn’t wasted. It’s a way to keep active, to refresh your business ideas and to place a better focus on your health, wellbeing and stress levels.

If you fancy having a ‘walking meeting’ for your next catchup, we’d be delighted to stroll with you while we talk through your plans for the business. Fresh air and business advice could well be the best way to get the support and strategic tips you need.

Can ChatGPT replace your marketing team?

Mon, 21 Aug 2023 07:32:31 GMT

Unless you've been living under a rock, you'll have heard about the ascendant rise of Open AI's ChatGPT and GPT-4 (plus other similar tools).

These natural language processing tools have brought AI content writing to the masses – but does this mean that your content marketing team is now defunct?

The short is no. For a start, great marketing has always been much more than just promotion. The traditional 4 P’s include Promotion but also, Product, Price, and Place. When these three work together they provide value for the customer and for the company.

But the longer answer is that AI tools are very likely to play some kind of part in your customer communications, sales, and marketing going forward.

Here's our lowdown on what ChatGPT and GPT-4 can do for your marketing.

What do we mean by AI content writing?

ChatGPT and the new breed of large language models (LLMs) are artificial intelligence tools. They use a chatbot-style interface to answer your questions, provide you with information, or (in the use case we’re interested in) write simple or complex written content for you.

These LLMs have access to a giant data source of information, languages, and writing styles. By entering a suitable prompt into the chat window, you can ask your AI tool to write anything from a blog post to a business email. And you’ll get the results in seconds.

You quickly get access to well-written content and can produce more content, more quickly.

Does AI content writing replace your content marketing role/s?

In short, ChatGPT is a tool that enables content production but is not a replacement for an experienced, professional marketing writer. Yes, you will get decent quality content as an output, but the very nature of AI means that the content will be serviceable and generic, rather than exciting and on brand. What humans love about humans is personality, imperfection and uniqueness. Also, while the A.I. may give an appearance of understanding the topic, what it produces may be inaccurate, and contain biases.

If you want your content to really pop, the output from ChatGPT is going to need some tweaking and editing to make it stand out among the sea of content that washes past each day.

A good marketing writer will:

Review the ChatGPT output and look for opportunities to rewrite the content
Fact check any claims and add stats, quotes and factual links to more information
Bring the text in line with your own brand writing style and tone of voice
Add some human personality and make the content less ‘vanilla’.

ChatGPT won’t write your marketing content for you. It still requires you and your marketing team to come up with the themes and topics for your blogs, newsletters and customer-facing advertising. But AI content writing tools CAN be an extremely useful productivity tool.

For example, ChatGPT can:

Draft out blog outlines – ChatGPT will happily churn out detailed blog outlines, based on your chosen theme and prompt (the instruction you give to the AI). You’ll still need to edit and tailor this content to make it your own, but you’ll be able to produce a far greater number of blogs in much less time. It’s an easier way to keep that content rolling!
Sketch out sales emails – ChatGPT can also help with your sales emails. Ask the AI to write you a short, snappy 200-word email that summarises the main selling points for a particular audience and it will turn it around in the blink of an eye. The content will still need a little tweaking, but the main text is there in a second.
Write product summaries – If you point it to a link for your product/service pages, ChatGPT can summarise the key points and deliver a short, snappy summary of the key functions or customer benefits. This allows you to very quickly pull together product one-pagers and flyers for events or for you to send out to prospects.
Come up with web content – if your website needs an update, ChatGPT can turn your product summaries into eye-catching web copy. Tell the AI that you want a landing page, or a product page and it will generate well-crafted copy in no time. As always, you will need to review and edit the output, but it makes the process so much faster.
Write social content in different formats – when you want to promote your blogs and web content, ChatGPT is an expert at generating content for social media posts, tailored to the character counts or SEO requirements of platforms like Facebook, X and LinkedIn etc.

Combining AI and a content marketing expert will supercharge your content

If you want to create original, fresh content and engaging messaging, you 100% still need a person. AI content-writing software is a tool to be used to streamline the process and make things consistent. But good ideas still come from human brains, not from an algorithm.

And a final note - Chat GPT is not confidential and also may not delete specific prompts from your history, so don't share personal or sensitive information with Chat GPT.

5 questions to ask when you are buying a business

Mon, 14 Aug 2023 07:44:55 GMT

Purchasing an existing company is a great way to expand your business empire. You can buy out a close competitor, or dip a toe into a new industry and expand your reach as a business group. But whatever the reason for the acquisition, you need to ensure you’re not buying a lemon!

Doing your research is a crucial part of the purchase process. As is asking some probing and insightful questions to help you determine if this acquisition is a good (or bad) idea.

Questions to ask before you make an offer

Buying another company is a major business decision. It’s a large outlay of capital and a big responsibility to take on. If you’re going to take the leap, it’s important to make sure the company in question is stable, well-managed and has a good future ahead of it.

Here are five vital questions to ask before entering into a purchase:

Why is the business for sale? There are many reasons why an owner might want to offload a company, not all of them good. Their sales may be dropping, they may have rising debts, there may be internal problems with staff or the market for their product/services may be coming to an end. Find out why, so you don't buy a clanger.
Is this a good industry to step into? Do your research on the industry, competitors, and marketplace that the business currently trades in. It's important that you step into an industry sector that has potential for sales, growth, stable revenues and potential profits. With volatile markets post-pandemic, looking at predictions and forecasts for your chosen industry niche makes good sense and helps you make an informed decision.
Have you done your due diligence into the business? Do your due diligence to make sure there are no financial, legal or HR skeletons in the cupboard that may jump out to surprise you. Is there an unpaid tax bill? Are there loans that are being defaulted on? Are there any legal cases being brought against the company? Has the business filed all its returns and accounts? As the new owner, any of these issues become your responsibility, so you want to check out the company’s records and history in as much detail as possible. This will prevent some major headaches further down the line.
Does it have an existing business plan? You'll need a business plan that takes the company forwards and gives you a pathway for your next steps as the owner. Is there a business plan you can use? When was the plan last updated? How well are they tracking against the milestones in that original plan? No business plan is written in stone, so you’ll almost certainly need to review, update and refine this strategy post-acquisition.
Are your management team and staff up to scratch? When you buy the business, you'll usually also be inheriting the team behind that company. Do you have a management team with the skills, experience and motivation that's needed? Are your employees engaged and do you have a big enough team to meet your own goals for the business? This team will be vital to your future success, so you want the best possible people and talent behind you as you steer a new course for the company.

Talk to us if you’re considering buying a company

Purchasing a company can be a complex and protracted process, even once you’ve completed all your due diligence and background checks. If you’re in the market for a business acquisition, do come and talk to us, so we can help you sort the top deals from the big risks.

We’ll help you complete the relevant checks and will work with you to create a new business plan and strategy that’s designed to turn your new purchase into a business success. Over the years, we have become one of the leading accountancy firms in York. Get in touch with our team to talk through your acquisition plans.

When should I register my company for VAT?

Mon, 07 Aug 2023 05:59:50 GMT

Sorting out your tax registrations is one of the first things to tick off your to-do list as a new business owner. But knowing when (and how) to register for things like value-added tax (VAT) can be a confusing process for new entrepreneurs.

Here’s a straightforward breakdown of the VAT registration process.

Why does my business need to collect and pay VAT?

Value-added tax (VAT) is a consumption tax. It’s imposed on the value added at each stage of production and distribution of goods and services. By registering for VAT you become liable to collect the VAT charged on your invoices, and to then pay this tax to HMRC on a quarterly basis. You’ll also be able to claim back some of the VAT you’ve spent on eligible expenses.

What’s the threshold for VAT registration?

It’s not mandatory for every limited company or sole trader to register for VAT. Generally speaking, you will only register for VAT once your turnover reaches HMRC’s threshold, or if there’s a tax advantage of being VAT registered to claim certain operational expenses.

You must register for VAT if:

your total VAT taxable turnover for the last 12 months was over £85,000 (HMRC’s current VAT threshold).
you expect your turnover to go over £85,000 in the next 30 days.

Who else must register for VAT?

Regardless of whether you meet the threshold test, you must also register for VAT if all of the following condition are true for your business:

you’re based outside the UK
your business is based outside the UK
you supply any goods or services to the UK (or expect to in the next 30 days).

How to start the VAT registration process

To register for VAT with HMRC, you have two basic options:

Register your business online, via your Government Gateway account. This will create a VAT online account to manage your VAT payments and claims etc.
Ask your accountant to register you on your behalf. If we’re your tax agent, we can register your business for VAT and help you manage your VAT affairs.

Talk to us about getting registered for VAT

If you’re a new business that’s starting out, or an existing business that’s getting close to the £85k VAT threshold, please do contact us to talk through getting registered.

We’ll help you work out your turnover for the preceding 12 months and can advise you about the most tax-efficient reasons for making your business VAT-registered. Get in touch to talk about VAT registration.

5 vital things to set up before you pass away

Mon, 31 Jul 2023 07:30:36 GMT

No-one wants to spend too much time thinking about their own mortality. But the reality is that forward planning removes a lot of the uncertainty for your loved ones in the event of your death.

The following guidance may also be useful to help you guide others.

Passing on without any clear legal instructions regarding your finances, assets and estate can leave your nearest and dearest in a very difficult position. It’s far better to make plans well in advance and to have these documents safely stored away, should they be needed.

Here’s our five-point checklist of things to consider as part of your end-of-life planning.

Having a clear outline of your end-of-life wishes and planning

Yes, it may seem morbid to think about your own death. But with your affairs in order, and all the required legal documents in place, you can be confident that your end-of-life wishes will be carried out correctly and that your loved ones and dependents will be provided for.

Here are five vital elements to include in your end-of-life planning:

Make sure you have a last will and testament – it’s crucial to create a last will and testament. This legal document will state your wishes regarding the distribution of your finances and assets and will also appoint an executor. This executor will ensure your wishes are carried out accurately and efficiently and will manage your estate plan to deliver on your instructions re charitable donation, gifts and your legacy.
Set up power of attorney and health directives – you can choose to grant a trusted individual (or individuals) with the power of attorney (PoA). This PoA allows them to handle your financial matters and make decisions on your behalf. It’s also a good idea to establish health directives, such as a living will or medical power of attorney, to ensure your medical preferences are followed.
Create a funeral plan to cover these costs – funerals can be expensive and a financial burden for those you leave behind. You can ease this burden by arranging a funeral plan in advance, and setting up an insurance policy that sets funds aside to cover the costs. Preparing for funeral costs in advance alleviates the financial strain on your family and allows them to grieve without worrying about payment of the funeral.
Get your taxes in order – it’s important to organize your tax records and consult with a tax professional to make sure your tax affairs are in order. Setting aside funds to cover any potential tax liabilities is also sensible. This will prevent complications for your loved ones during the settlement of your estate and tax liabilities.
Think about digital legacy planning – in a world where so much of our life is lived online, it’s vital to have a digital legacy plan. This comprehensive plan will provide information and guidance regarding your digital assets, including compiling a list of online passwords and account information. It’s a good idea to name a digital executor in your will to manage and transfer your digital presence. This will help with social media accounts, but also software subscriptions or online accounts you hold.

Talk to us about getting your end-of-life planning in order

When it comes to end-of-life planning, there’s no time like the present. The future can often be uncertain, so it’s good practice to have your will, estate plan, powers of attorney and digital legacy plan set up and safely stored away, should they be required.

As your adviser, we can help you review your financial and tax planning considerations and can put you in touch with the relevant legal advisers to create a comprehensive end-of-life plan. Book a call with Donald Inglis if you'd like to talk about end-of-life planning.

Spreading your tax costs with Time To Pay

Wed, 26 Jul 2023 07:31:52 GMT

HM Revenue & Customs (HMRC) expects you to pay your taxes on time. But if you’re finding it difficult to pay in full, HMRC can be approached to allow a Time to Pay arrangement.

A Time to Pay arrangement will allow you to pay your debt off in pre-agreed installments, reducing the impact of a large tax bill – and helping you manage your debt and cash flow.

How does Time to Pay work?

If you need to request a Time to Pay arrangement for self-assessment tax, Employer’s PAYE and VAT, these can often be made online using a ‘self-service’ system .

Where you owe other types of tax, or where the conditions for online applications are not met, you’ll need to contact HMRC to discuss your situation.

The easiest (although not always the quickest) way to discuss your Time to Pay request is by telephone to 0300 200 3835.
HMRC agents will want to know about all taxes you owe, not just the one(s) where you want to spread payment. They will also ask for details of your income and outgoings, and any savings or assets that may be able to be used to reduce the amount owed.
Presuming that you agree to a payment plan with HMRC during the call, they will usually want to set up a Direct Debit straight away.

Making use of the self-serve Time to Pay system

If you don't have any existing payment plans or debts with HMRC, the ‘self-serve’ system may be more straightforward, provided that the applicable tax returns have already been filed. The conditions and amounts vary depending on the particular tax.

For example:

Self-Assessment : You must apply no more than 60 days after the payment deadline and owe no more than £30,000.
Employer’s PAYE : You must be within 35 days of the deadline, owe no more than £15,000 and have no outstanding penalties. The maximum period over which the amount due can be spread is six months.
VAT : For VAT, you need to apply within 28 days of the due date and owe no more than £20,000. You can’t apply for a Time to Pay arrangement through the self-serve scheme if you use either the cash accounting or annual accounting schemes.

The self-serve option for Time to Pay does make the process easier, but remember that HMRC isn’t obliged to offer you the option of settling your taxes owed via installments.

If you fail to pay your taxes, HMRC can take recovery action in the County Court, and apply for the taxpayer to be put into liquidation or made bankrupt where appropriate.

Talk to us about making Time to Pay work for you

Talk to Donald Inglis about Time to Pay if this is something you'd like to learn more about.

Long-service awards – how to reward your staff tax-efficiently

Fri, 21 Jul 2023 09:34:09 GMT

Rewarding your valued employees is a great way to keep them happy, engaged and motivated.

When a member of staff clocks up an employment milestone, you want to show your appreciation for all their hard work. Giving them extra benefits or rewards helps them feel valued and one of the tax-free benefits that’s often overlooked is long-service awards.

What is a long-service award?

A long-service award could be a cash sum, a non-financial reward or even share options in the company. But only non-cash awards can be given tax-free. If you give a cash amount or share options, you’ll have to report this to HMRC and the employee will be charged tax and National Insurance (NI) on the reward.

How do I give a tax-free long-service award?

Provided some simple rules are followed, awards to employees for long service can be made without any adverse personal tax consequences.

The gift must not be cash, or anything which can be easily exchanged for cash such as shares or precious metals.
The employee must have been employed for at least twenty years.
The employee must not have received a similar award from the same employer in the previous 10 years.

If the above apply, then an award with a value not exceeding £50 per year of service can be made without the need to deduct tax or national insurance contributions.

Where your employee has received an award in the previous ten years, regardless of the tax treatment of that previous award, subsequent ones are fully taxable and subject to National Insurance Contributions (NICs).

How does this work in practice?

Let’s look at an example and see how you would make a long-service award.

For a 20-year award:

The maximum tax-free value is £1,000 and will be tax-free provided no long service award was given in the previous 10 years.
A subsequent 25-year award would be taxable in full, as the previous one was given within 10 years.
A third award at 30 years would also be taxable in full, as its within 10 years of the 25-year award, even though that award was fully taxed. However, if there was no 25-year award – i.e. a break of 10 years had passed since the previous one – then a 30-year award would be tax-free up to a value of £1,500.

What happens if I give a cash award?

If you give a cash award to your employee, the full value must always be included in payrolled earnings and subject to PAYE and NI as normal.

Where a non-cash award exceeds the tax-free amount, it can be reported on a P11D form as a taxable benefit-in-kind, or the tax due can be included in a PAYE settlement agreement .

Talk to us about giving long-service awards

If you wish to recognise long service, you need to be aware of the associated tax rules. We’ll help you draw up the rules for any long-service award scheme and keep you informed of any future changes. Call us on 01904 787973 if you'd like to discuss this with us.

How humour can increase your bottom line

Fri, 14 Jul 2023 07:47:17 GMT

You want to be taken seriously as a business, right? But did you know that many customers and consumers actually want you to give them a laugh as well? 91% of people globally prefer brands to be funny, but 95% of business leaders fear using humour in consumer interactions.

So, how do you overcome the worry about using humour in your sales and marketing? And what are the benefits of a brand that uses humour in an effective way?

5 ways that humour improves your customer experience

Being funny in a business context might sound counterintuitive. But all the evidence points to customers wanting humorous, engaging ways for you to interact with them. Humour puts people at ease in a sales environment, and a good joke or funny meme in your marketing has the potential to win prospects over and make your customers enjoy your brand.

Using humour with your customers:

Enhances customer engagement – humour in your sales and marketing really helps you connect with your audience. Funny interactions and campaigns increase your customers’ attention span and encourage them to participate, comment and engage.
Builds emotional connection – when you incorporate humour, this creates positive associations for your customers. They’ll see your brand as more relatable and likeable, all of which leads to stronger connections and customer relationships.
Differentiates your brand – smart and subtle use of humour sets your business apart from the the stuffy and staid competitors in your market. Being able to raise a laugh makes your brand more memorable and attractive in a crowded market.
Increases message retention – humorous content can help to leave a lasting impact with consumers. This aids information recall and ensures your key messages, campaign taglines and promotional copy stay top of mind with your audience.
Boosts brand perception – a well-executed, humorous approach creates a positive brand image, showcasing your company's personality and approachability. As a ‘funny brand’, customers will feel good engaging with you and spending their money.

Talk to us about adding humour to your customer strategy

We’re accountants, so obviously we don’t have a sense of humour (we’re kidding, we like a joke as much as the next business person). But we can give you advice on how greater customer engagement and stronger relationships both lead to higher sales – and that’s great news for your targets and overall revenue.

For more on the use of humour in our workplaces and marketing, watch this short TED talk from Tom Fishburne from Marketoonist , explaining the power of humour.

Changes to your tax position following separation

Fri, 07 Jul 2023 11:02:31 GMT

When you separate from your partner, tax is probably the last thing on your mind. But, once the dust clears, it’s worth getting to grips with the changes to your tax position.

Recent changes to the post-separation window mean that you now have three years to move assets between you and your spouse. But what does this mean for your tax?

How the no-gain/no loss basis used to function

Generally, when you transfer assets between you and your spouse, this is treated as being on a no-gain/no-loss (NG/NL) basis . This basically means that you can transfer these assets without any capital gains issues or additional tax to pay.

However, this treatment was only available if you were married and living together in the tax year. The spousal benefit used to cease at the end of the tax year in which you were permanently separated. Transfers after that point were deemed to take place at market value, as you and your spouse remain ‘connected persons’ until the time of your divorce.

The departing spouse could continue to treat their absence from the former matrimonial home as if it was their only or main residence. But to do this, the property had to remain the principal residence of the other spouse, and the departing spouse had to be living somewhere that didn’t qualify for Private Residence Relief (PPR) (e.g. they were living in rented accommodation away from the matrimonial home).

What does the recent extension to the post-separation window mean?

That ‘post-separation window’ has now been extended to include up to three tax years following the end of the tax year in which the couple separate. The departing spouse can elect to treat the former matrimonial home as their principal residence even if another property is potentially eligible for that treatment.

The legislation is based on ‘disposals’, so only disposals made on or after 6 April 2023 (or in the year of separation) qualify for the NG/NL treatment. SO, what does this mean in real terms for your tax position and your ability to transfer assets to your ex?

If you separated before 6 April 2023 (say March 2021) then you and your spouse would have up to three years from the end of the tax year you separated (i.e. starting 6 April 2021) to make any NG/NL transfers. But these transfers must be made on or after 6 April 2023. The window would close on 5 April 2024.
The three-year window ends once the parties have entered into a ‘separation/divorce’ agreement . Only assets listed in that separation/divorce agreement can be transferred at no gain/no loss. However, there’s no time limit in which to transfer the assets listed in that agreement at no gain/no loss.
It may be that you and your ex have missed the three-year time frame . If this is the case, you can enter into a separation/divorce agreement at a later date, and the assets mentioned in that agreement can be transferred at no gain/no loss.

Talk to us about the tax aspects of moving assets between spouses after separation

Changes to the post-separation window had been mentioned originally in November 2021. But the new legislation was enacted without much lead-up in March 2023, giving very little time to arrange affairs and transfer assets – particularly if separation took place late in the tax year.

Although it shouldn’t be your main focus, talk to us about the tax and related consequences that can arise from the division of assets following separation.

5 challenges for small business - and how to beat them!

Fri, 30 Jun 2023 07:50:19 GMT

Founding, building and growing your own small business is a hugely rewarding experience for many entrepreneurs. But the road ahead isn't always smooth.

There are common challenges that crop up and ongoing issues that need to be factored into your business plan, your strategy and your own personal thinking.

So, what can you do to beat these challenges and make the journey as frictionless as possible?

5 proactive ways to overcome your business challenges

We’ve highlighted five common challenges and the simple ways to overcome them:

Uncertainty : No-one has a crystal ball to know exactly what's coming around the corner. But there are ways to be prepared for some unknown circumstances. You can't fully predict the main external threats like government policy, economic conditions or freak weather conditions. But you CAN use forecasting and scenario-planning tools to build up contingency plans so you have a Plan A, Plan B and even a Plan C. With forecasts of your business data, finances and industry trends, you can be ready to react, pivot and take positive action.
Competition : Small businesses often face stiff competition from larger, more established companies. To stay ahead of the curve, it's important to be nimble and agile. It's also vital to find your niche and to know precisely why your customers value your offering. By ploughing a unique furrow and keeping your customers happy, you can give yourself an edge over larger, slower-moving corporate-size competitors.
Access to capital : It can be a struggle to secure funding as a startup, particularly if you have limited financial resources or a poor credit history. Having a detailed funding strategy is a crucial way to overcome this problem. Keep your finances in order and make sure you have in-depth financial reports to show banks, lenders and investors. It's also helpful to focus on paying suppliers on time, keeping debt levels under control and ensuring your cashflow is in a positive position. These are all excellent ways to improve your business credit rating and show you're a stable, risk-free prospect for lenders.
Hiring and retaining employees : Attracting and retaining talented employees is difficult, especially during the ongoing talent shortage. Offering competitive salaries or benefits packages can be one way to attract people. But it's also important to think about your brand reputation, your sustainability credentials and your CSR policy – all things that Millenial and Gen Z workers value alongside decent pay and benefits packages. Employees want to be proud of where they work, so make your company a progressive, satisfying and rewarding place to work.
Keeping up with technology : Business technology is evolving at a rapid pace. It can be daunting keeping up with all the available apps, tools and software solutions that are aimed at your business. The trick is to be informed but selective about the apps you use. Start with the operational and financial needs of the business and look for apps that can automate, improve efficiency or provide improved data and management information. Talk to other business owners and your profressional network to find out what the essential apps are in your industry. And do your research and homework before you choose any software solution to add to your app stack.

Talk to us about being an agile small business

We’re also on hand to discuss your ongoing strategy, how to react to upcoming risks and the best ways to access capital and manage your company’s finances. Come and talk to us and let’s see what the future may bring for your business.

Are you in control of your staff expenses?

Mon, 26 Jun 2023 07:45:00 GMT

When your managers and employees have their own budgets to utilise and spend, it's important to keep in control of these staff expenses.

It used to be standard practice to have a firm-wide company credit card that staff could use to make ad-hoc and recurring payments. But a company card can easily be misused and doesn't help you keep your spending in check.

Today's expense management systems, like Soldo, Pleo or Weel, all give you far greater control over your staff spending – with additional benefits that streamline your expenses process

The benefits of a cloud-based expenses management system

The evolution of cloud accounting and fintech software has led to a significant leap forward in the control your business can have over its staff expenses.

Expense management solutions are now fully digital platforms. Your team has flexible ways to pay for expenses and operational costs, with a greater level of control over how much is spent, who spends it and how these costs track against the company’s main cashflow position.

With a modern expense management app, you can:

Use virtual debit cards to pay for expenses – team members can be issued with virtual cards that are quick to set up, use and cancel, if necessary. Having multiple virtual cards helps you keep track of specific spending and allows employees to make payments directly from their phone or tablet.
Align each card number to a specific budget or cost centre – each card number is linked to a defined budget, branch or cost centre. Instead of having one card that all staff spending is dumped onto, you have a defined card for each budget. This helps you track that person’s or department’s spending and produce drilled-down management information about their spending and outgoings.
Set card limits, so staff can't overspend – each card can be given an agreed spending limit, to reign in overspending and casual use of the card without prior approval. Managers can approve spending prior to a payment being made, with full transparency over where the money is going and the agreed amount that can be spent.
Integrate your expenses system with your cloud accounting platform – if your accounting software has a suitable API, you can connect your expense platform to your digital accounts. This automates the whole process of recording, tracking and reconciling your outgoing transactions, saving you hours of data entry and admin time.
Get deep reporting on all expenditure – tracking all your staff spending through the one platform means you have unprecedented access to data and reporting. This gives you the ability to track each department or branch and follow a clear breadcrumb trail for all outgoing costs and staff expenses.

Talk to Inglis Chartered Accountants about getting in control of your staff expenses

Spiralling staff expenses can have a profoundly negative impact on your cashflow. But with a cloud-based expenses management system in place, you’re in full control of every transaction, every cost and the overriding impact on your cash position.

Talk to Donald Inglis about which expense management platform is right for your business, and the best way to integrate your chosen app with your main finance system.

Take care of yourself, not just your business

Sat, 17 Jun 2023 08:15:27 GMT

Being a business owner can be stressful. When the buck stops with you, it can be easy to let the pressure mount up and to discount your own wellbeing.

But taking care of your own mental health is equally as important as taking care of the business – research from MYOB showed that 53% of business owners suffer from stress and anxiety relating to the running of their business So, what can you do to take care of your own mental health and work mindfullness into your usual life routines?

Ways to nurture your wellbeing as an entrepreneur

Looking after your mental health is as important as looking after your balance sheet. That’s the reality. So, having an improved focus on rest, wellbeing and talking about your struggles is a big part of moving towards becoming a better business leader.

For example:

Don't overwork yourself – it's tempting to work every hour that's available, in an attempt to meet your goals. But working yourself into the ground is, ultimately, a destructive thing to do. If you're tired and burnt out then you're in no position to lead the company. Try to stick to set working hours, and avoid working 60-hour weeks wherever possible. Sleep, rest and downtime are vital.
Schedule time for non-work-related activities – make sure you have time blocked out for things that aren't work. That might be a walk in the countryside, time with your kids, or a game of tennis. The aim is to take yourself away from the stresses of the business and to give yourself a broader life outside the company. It's a chance to have fun, to relax or to be someone who isn't just 'the boss'.
Take up an activity that promotes wellbeing – there are plenty of pastimes that can help you bring down your anxiety levels and bring you to a calmer place. Yoga is a good way to stay fit, but also an excellent form of relaxation. Equally, finding time for meditation helps you to empty your mind of business concerns and allow yourself to become more grounded and calm. Even something as traditional as a fishing trip could help you to chill out and relax, away from a screen.
Talk about your worries, concerns and anxiety – if business-related stress is building up, the worst thing you can do is keep it all bottled up. It's beneficial to open up and talk about this anxiety. This could be with a partner, a fellow entrepreneur, your accountant or even a professional counselor. Be transparent about your state of mind and you’ll find people are more than willing to listen, understand and offer some support.

Talk to us about your business worries

As your accountant and adviser, we’re in the perfect position to help you open up about your business worries. We know your business and your sector inside out, and we know the common threats, challenges and goals that will be on your mind.

Come and talk to us about your business worries and let us take some of the weight off your shoulders. A chat can be the start of a whole new way of thinking about your own wellbeing.

7 ways to get more from your personal finances

Mon, 12 Jun 2023 07:08:50 GMT

There’s plenty of advice available to help you manage your business finances. But what about the tips and hacks you need to get fully in control of your personal finances?

Managing your personal finances can be challenging, especially when it comes to making sound and sensible financial decisions. But with the right tips and strategies, you can make smart investments, grow your wealth and secure your financial future.

We’ve outlined seven essential tips for managing your personal finances and making the best of your investments and savings.

1. Create a budget and stick to it

Having a budget helps you keep track of your income, expenses and debts. It also ensures that you’re spending money in the right places. A sensible budget keeps your expenditure in check, but also gives you the cash you need for your day-to-day needs and purchases.

When creating a budget, think about all your regular outgoings and the major purchases you’ll need to make over the coming months. Be realistic about your expenses and make adjustments as needed. Remember to allocate money for savings and investments, too.

2. Pay off any debts and liabilities

Other than for major investments such as buying property, borrowing money should always be a short-term solution. High-interest debt, such as credit card debt, can eat away at your savings and hold you back from achieving your financial goals.

It’s a good idea to make paying off your debt a priority. Review your credit card debts, personal loans and overdrafts and focus on paying off the debt with the highest interest rate first. Consolidating all your legacy debts into one easily manageable debt can also make sense – lenders can help you consolidate these debts and bring down your overall repayment costs.

3. Save regularly and look for the best interest rates

We all know it’s good to have a ‘nest egg’ behind you for those times when cash gets tight. Building an emergency savings fund gives you a more solid financial foundation and protects you against unexpected expenses and unplanned purchases.

Whether it’s a sudden expensive car repair, or losing your job and salaried income, with savings in the bank you always have liquid cash available. Aim to save at least three to six months' worth of living expenses and make sure you shop around for the savings accounts with the best interest rates. It’s also sensible to set up a standing order from your main bank account, so you automatically pay a set amount into your savings account each month.

4. Invest in your future to build solid foundations

It’s all very well to have money in the bank today – but what about further down the road? Make sure you’re making provision for the major life events such as marriage, starting a family, buying a house and (eventually) retiring and stepping back from employment.

Investing in stocks, bonds or a pension plan can help you grow your wealth over time. Consider working with an independent financial advisor to achieve your investment goals and help you create a diversified investment portfolio that aligns with your goals. They’ll also help you achieve the best risk tolerance with your investments.

5. Keep an eye on your personal credit score

Your credit score is an important factor in determining your financial health. A personal credit score measures your risk to a potential lender – the lower your risk, the more likely it is that a provider will lend you money, safe in the knowledge that you’ll make the repayments.

Many of the big credit agencies now offer personal credit reports. Make sure to check your credit report regularly to ensure that the information is accurate and to gauge the impact this score is having on your ability to borrow money. Simple steps, such as paying your bills on time and reducing credit card balances, can help to improve your credit score.

6. Stay informed about taxes and reliefs

Taxes are a necessary part of paying our way in society, but tax costs can also have a significant impact on your personal finances. It’s important to stay informed about changes to tax laws, especially those around income tax and capital gains tax, and to understand how they affect you. Inheritance tax planning can also be crucial and, allied to that, the need for a properly-considered and professionally drafted will.

We can review your tax situation and suggest all the available tax reliefs and incentives that may be open to you.

7. Review your finances regularly

Keeping a close eye on your finances is the best way to keep things in check. Most banks now offer apps that make it much easier to review your income and expenditure, and to see exactly where you’re spending your money. With so much financial information available, there’s no excuse for letting your money management get into a mess

Regularly reviewing your finances helps you stay on track and make adjustments as needed. You can even use one of the many personal finance software platforms to help you stay organised in the cloud and make well-informed financial decisions.

Talk to Inglis about getting your personal finances in order

Managing your personal finances, investments and savings well requires discipline, knowledge, and a good understanding of your end goals. By following these seven top tips, you put yourself in the financial driving seat and set the foundations for a solid financial future.

Where you need a helping hand, we’re available to help you plan your personal wealth strategy, manage your taxes and introduce you to the best independant financial advisors.

What business taxes will your company need to pay?

Mon, 05 Jun 2023 08:00:01 GMT

Once you’ve registered your business as a limited company, you become liable for paying taxes on the profits you make. But what business taxes are there? And how do you know which of these taxes to pay?

To answer this, we’ve created a short ‘Back to Tax Basics’ email series, to give you the full lowdown on your tax responsibilities as a company director.

Understanding the main business taxes

Despite HMRC’s motto of ‘tax doesn’t have to be taxing’, the UK tax code can be a complex thing to get your head around.

If you’re not a trained accountant and have limited experience in financial management, understanding the rules around business taxes can be confusing. So, to start with, let’s look at the main business taxes you’re likely to register for.

Key business taxes include:

Corporation tax (CT) – corporation tax is a tax that’s levied on your profits as a limited company. At the end of your accounting period, you must submit a corporation tax return, and pay the CT that’s due. The rate from 1st April 2023 will be up to 25%, although companies with profits not exceeding £50,000 will pay 19%, with the full 25% rate applying to companies earning over £250,000.
Value-added tax (VAT) – VAT is a consumption tax that’s levied on goods that have had value added at each stage of the supply chain. When you buy these goods, you’ll pay VAT. And when you sell these goods, you will collect VAT. At the end of each quarter, the VAT funds that you’ve collected must be paid to HMRC. You can also claim back the VAT you’ve spent on certain qualifying goods and services too. The standard rate of VAT is 20%, the reduced rate is 5% and certain goods can also be zero-rated.
Pay-as-you-earn (PAYE) – PAYE is a way to collect income tax and National Insurance Contributions (NICs) from your employees. If you have employees and run a payroll, then you’ll need to collect the required amounts of income tax and NICs from your employees’ wages as part of your payroll process. Then you must report on these deductions and pay the tax and NICs to HMRC, either monthly or quarterly after the pay period, depending on the amount involved. In addition to the income tax and NICs you deduct from your employees, the company may also have to pay Employer's NICs as a business expense.

Learn more about the basics of business tax

So, there you have it. That’s the basics of the key business taxes you’ll need to think about as a new business owner. In the next part of this series, we’ll look at the taxes you’ll be liable for as a director, and how these personal taxes tie in with the profits you take out of your business. Please call our office on 01904 787973 if you have any questions about tax!

Do you need to improve the cash flow position for your business?

Tue, 30 May 2023 15:28:02 GMT

Keeping on top of the financial management of your business can be hard work. It's possible to have a profitable business that is struggling to find the cash flow to pay expenses and fund growth.

Likewise, you could have positive cash flow but are not turning a profit, particularly if you are scaling.

Turning a profit is at the heart of running any successful company But without an even and predictable flow of cash into the company, you can't cover your overheads, you can't pay your employees and you can't run your day-to-day operations – let alone think about expanding and growing the business.

In the end, you need both. But if you’re going to be in control of your financial destiny, it’s important to get your head around the important process of cash flow management.

Let’s look at some of the key things to understand about your finances:

Profit is a by-product of a successful business – as the owner, you want to make profits, but profitability isn’t the only goal. A business can easily be profitable, but also be highly unstable in the longer term. What you want is stability and consistent revenues.
Cashflow keeps your business alive – good revenues (income) serve to bring cash into the business. Without cash to cover your operating expenses, you have no means to keep the lights on in the business. So cash really is king!
Know your cost base and overheads – the flipside of your cash flow position is your costs. In an ideal world, you want more cash inflows than cash outflows, so it’s important to know your expenses and costs and to manage them carefully.
Be proactive about spend management and easing expenditure – if you can take action that reduces your spending, that is hugely positive for your cash flow position. Choose cheaper suppliers, negotiate better deals and bring that cost base down.
Drive more revenue, through increased sales and marketing activity – if you can increase your revenues, you also boost your cash flow. So it’s important to be proactive about running targeted sales and marketing campaigns to increase your sales.
Keep the cash flowing and the profits take care of themselves – if you achieve the ideal cash flow position, the company sits on solid financial foundations, the cash is there for investment and the business can grow. It’s that simple.

Talk to us about improving your cash flow management

Whether you’re new to running a business, or a seasoned owner who needs some financial support, we can give you the cash flow advice you need. We’ll review your finances, delve down into your cash flow, and will come up with key ways for you to increase your cash income and reduce your cash expenses. It only takes a few small changes to achieve a far better cash flow position for your business – helping you maintain positive cash flow and generate profits.

Please book a discovery call with Donald Inglis if you'd like to talk to us about improving your cash flow management.

4 key areas to think about when purchasing a buy-to-let property

Tue, 23 May 2023 07:56:04 GMT

Purchasing a buy-to-let property is an increasingly popular way to invest in your future and to give you and your dependents some financial security. But starting a property portfolio and becoming a landlord is something that requires plenty of thought before you dive in.

We’ve highlighted four important areas to consider when purchasing a buy-to-let property.

1. What are the benefits of buying a rental property?

With property seen as a relatively low-risk investment, you may well have thought about dipping a toe into the buy-to-let market. There are certainly several advantages to becoming the owner of a rental property, making it an attractive investment opportunity. For example:

Rental income – your buy-to-let property will bring in regular rental income. This provides a passive income stream to pay off the mortgage and generate some money.
Capital appreciation – property values in the UK have historically increased over time, meaning it’s possible for your property to appreciate and deliver a capital gain.
A more diverse investment portfolio – investing in property provides diversification to your investment portfolio, which can help mitigate risk and protect your overall wealth.
Inflation hedge – property is often seen as an inflation hedge as rental income and property values can increase with inflation over time, protecting your purchasing power.
Tax benefits – you can claim tax deductions for expenses related to your property and can also receive a tax-credit, based on 20% of your mortgage interest payments.

2. Should you run your property through a limited company or as an individual?

When you first start building a buy-to-let property portfolio, the chances are that you’ll own your first property as a private individual, rather than through a limited company.

Owning the property as an individual gives you more control over the property and also keeps your costs lower, by removing the need for the admin and legal responsibilities of running a limited company. However, once you start building a portfolio of multiple properties, there are some distinct advantages of setting up a limited company for your property interests.

By owning your portfolio through a limited company:

You limit your liability and reduce the risk of any legal issues associated with the property
You pay corporation tax on your profits, rather than paying income tax at your personal rate of tax. With CT being paid at between 19-25%, this can be a big tax saving.
Interest on the mortgage is fully deductible for tax purposes.

3. How will you fund the purchase of your property?

You’ll need to think about how you’ll finance the purchase of your buy-to-let property. If you're planning to take out finance, it’s worth shopping around to look for the best deal. It’s also vital to calculate whether you can afford the monthly repayments against any money you borrow.

Here are some finance options to consider:

Buy-to-let mortgages are designed specifically for purchasing rental properties. Deposits are generally higher and interest rates higher than a regular mortgage.
Personal savings can be used to buy the property, if you have sufficient funds in the bank. With no mortgage in place, you remove the cost of high interest rates.
Equity release can be used to fund the purchase of a buy-to-let property. This can be done through a remortgage, or through an equity release mortgage.
Joint venture allows you to partner with another investor, or group of investors, to purchase a buy-to-let property together. This helps share the cost and risk.
Bridging loans can be used to purchase a buy-to-let property while waiting for other forms of finance to become available – although this can be an expensive option.

4. What are the tax and accounting implications of earning income from your property?

It’s important to think about the tax implications of owning a rental property. Any rental income you make will be subject to income tax, and you may also be liable for capital gains tax when you sell the property. It's sensible to seek professional tax advice to make sure you comply with all the relevant tax regulations. A tax adviser can also help you to minimise your tax liability.

As a landlord, you'll also need to keep accurate financial records, including income and expenses related to the rental property. This will help you keep track of your cashflow and calculate your profits and losses accurately.

Talk to us about planning your rental property purchase

Owning a buy-to-let property also comes with certain responsibilities and risks. These can include managing the property, dealing with tenant issues, and dealing with fluctuations in property values and rental demand.

If you want your buy-to-let property purchase to run smoothly, it’s important to talk to a professional accountant and tax adviser. We can help you assess your finance needs, work out a budget and set up the most tax-efficient way to purchase the property.

If you’re thinking of starting a rental property portfolio, please book a discovery call with our team.

10 ways to improve business performance

Wed, 17 May 2023 08:00:19 GMT

If you'd like to supercharge your business then you've come to the right place, we've got lots of ideas to improve your business performance.

Here are ten ways to make sure that you continue to drive through each business quarter with purpose, vision and the courage to supercharge your business.

1. Eliminate distractions

Time is the scarcest resource and biggest killer for most businesses. When we get busy we can also get distracted and focus too much time and energy on the wrong things. Be brave - slash standard meeting times, reduce unnecessary admin and delegate roles and responsibilities.

2. Say goodbye to bad customers

If possible in your business, get rid of ten time-wasters, bad payers, or customers who cause you pain. You will feel instant relief and spend your time better elsewhere.

3. Invest more

Having freed up time and headspace from deploying points one and two above, make sure you ring-fence time, key people, and money for some of the initiatives below. Redeploy with passion!

4. Get a plan

You don't go on a journey without a map or any idea of where you're headed - so why fly blind with your business? Have a planning process, create a kick-arse plan - and execute. We can help you get started.

5. Surround yourself with positivity

Make sure the people in your business understand and share your vision. Bring them onboard, listen to them and give them ownership. Don't let people who don't get it, or don't care, be a millstone around your neck. If they're not right, do them a favour and free up their futures.

6. Use technology

Technology can help you decrease admin, improve comms, improve reporting and accountability. Whether it's for team communication or cloud accounting, slash paper and automate where possible.

7. Keep on top of the numbers

Do you have enough information to monitor business cashflow and see emerging trends? We can help you identify the metrics to track on a regular basis, in order to run your business efficiently.

8. Be different

Break the mould and position yourself to attract ambitious, growing and engaged clients, and employees.

9. Deploy marketing

Create a simple marketing plan to increase reach and penetration. Set aside a budget to treat this seriously. Start by making sure you really understand your customers. Existing customers are prospects too, keeping them happy is your first step. The more you know about them, the easier it will be to attract more of the same.

10. Take a break

Don't underestimate the time you have away from your business. It can allow you to come back refreshed with new enthusiasm and inspiration for the way forward.

Get in touch

Over the years, we have become one of the leading accountancy practices in York. If you would like to talk to us about supercharging your business then book a discovery call with Donald Inglis.

3 cloud accounting tips to save your business time and money

Mon, 08 May 2023 07:10:13 GMT

Keeping on top of your accounts is a big part of running a successful and profitable business.

But you don’t want to spend ALL your time dealing with accounting tasks, especially when that time could be spent building customer relationships, or developing new products etc.

So, how do you keep your finances in check, while also spending less time on your accounts?

1. Bringing your accounting into the digital age

Switching to cloud accounting can be a revolutionary step for many business owners, especially when you look at the ways you can streamline and automate the basic accounting tasks. By using accounting platforms like Xero, QuickBooks, MYOB or Sage, you get all the basics of small business financial management, but with the benefits of smart automation.

With most modern cloud accounting software, you can:

Automate the scanning and digitisation of your expenses and receipts
Automatically reconcile your bank transactions with your invoices and bills
Connect your accounts to other time-saving apps for mileage claims or staff expenses.

2. Getting paid faster and with less admin

With a cloud accounting platform driving your business, you also make it easier to send out e-invoices and get paid faster and more effectively. Improving your payment times and cash collection can make a huge difference to your cashflow position, and also sets the right expectations with your customers – making it clear that you require to be made on time.

Using the invoicing function in your business software, you can:

Quickly send out electronic invoices as soon as a job is completed
Set up automated invoices to be sent out at pre-agreed points in a project
Include payment buttons on your invoice, so customers can pay via PayPal or card
Remove the barriers to payment and speed up payment times.

3. Getting a better overview of your important numbers

Using cloud accounting isn’t just about automating the time-consuming financial admin tasks. By recording and tracking all the financial and non-financial data flowing through your system, your accounting platform can actually provide you with a goldmine of useful real-time information.

With cloud accounting providing your reporting, you can

Access totally up-to-date real-time information, to improve your decision-making
Track your performance against targets to see how well the business is performing
Monitor spending and budgets to keep your cashflow under control
Understand your return on investment when it comes to sales and marketing activity
See how promotion has driven sales but reduced your profit, due to discounting.

Talk to us about setting up a more productive kind of accounting

If you want complete control of your finances and business decision-making, updating your accounting software and processes will be key to achieving that goal. Book a call with Donald if you would like us to help you decide which accounting software is most suited to your business, and how to maximise the benefits you get from automation and real-time data.

Why your accountant is the mentor you didn’t know you needed

Thu, 27 Apr 2023 08:02:45 GMT

A business mentor can provide guidance and support, so you make the right decisions and stay focused on the end goal as a business owner. They can also help you move forward in your career by providing advice and feedback on what steps to take to reach the pinnacle of success.

But have you ever thought of your accountant as a mentor?

Why your accountant is the ideal mentor

Having someone who understands your business journey is incredibly important. You might see an accountant as someone who files your tax returns. But, in fact, we’re experienced business owners, with access to a significant network of other business professionals.

An accountant can be the mentor you didn’t know you needed. No-one knows your business better than us, so we’re perfectly placed to offer you advice, guide your business journey and help you push your skills and capabilities as a business owner.

As a mentor, an accountant will:

Expand your knowledge as an entrepreneur – as business owners, we have the knowledge and experience to help you move your business forward. And we can work with you to expand your leadership skills, business thinking and entrepreneurial ideas.
Be a shoulder to lean on – we'll offer 1-2-1 mentoring sessions where we can listen to your unique worries and concerns as a business owner. Having someone on the same page to listen and empathise is vital for your business and your own mental health.
Guide the important elements of your business – we’ll help you manage and improve your business strategy, planning and decision-making skills. We’ll also provide the management information systems you need to guide your finances and planning.
Keep your finances on track – we'll show you how to maximise profits, reduce costs, and make better financial decisions. We’ll also help you plan your own personal wealth and tax strategies, so you can achieve your own entrepreneurial goals and lifestyle.
Introduce you to a broader business network – we work with hundreds of other business owners across a range of industries. This means we can link you up with other entrepreneurs and founders, so you have a network of other like-minded individuals to connect with. This can be vital when brainstorming and benchmarking, or if you need to talk to someone who understands the specific pain points you’re experiencing.

Having someone to guide your business journey can be invaluable. A business owner must grow and evolve along with their business, and having regular mentoring catch-ups is the ideal way to progress, offload your concerns and look for new inspiration.

Want to grow as an entrepreneur?

If you want to grow as an entrepreneur, please book a call with Donald and talk to us about our mentoring services. As one of the leading accounting firms in York, we are well-suited to help guide your business future and help you achieve financial security.

5 business expenses that you can claim back

Tue, 25 Apr 2023 07:18:24 GMT

Incurring expenses is an unavoidable fact of running a business. But there are ways to reduce the impact of these expenses, by claiming the relevant costs against your tax bill.

Here’s our lowdown of which common expenses are tax deductible, and the advantages of claiming these costs to cut down your operational and personal expenses.

1. Expenses for staff parties and social events

Staff events, like your end-of-year party or your summer barbecue, are tax-deductible for you, as the employer, and tax-free for your staff. This means you can claim back some of the expenses you incur when putting on a social event for your team, while also helping to build better team bonds.

How do I know if my event is eligible? – for your event to be eligible, it must be company-wide and meet the requirements of a structured social event. As long as all staff are covered somewhere, there can be separate functions for branches, departments, or other office locations etc.
What records do I need to keep? – as a company, you’ll need to keep records of who was invited to the social event, and who actually attended. You’ll also need to record the costs of putting on the event, including all associated travel and accommodation.
What’s the expenses limit per person? – there’s a limit per attendee (including partners invited as guests) of £150 including VAT. This total can be split over multiple functions. NOTE: this can’t be disguised client entertaining. Guests must be employees or their partners and not clients or suppliers etc.

2. Home-working expenses for your home office

If your home office is your main place of business, you can claim back some of your home-working expenses. There are four groupings which your business must fall into: Limited Company or Unincorporated, with each claiming at either a flat rate or a higher amount.

Limited Company & Flat Rate : a flat rate of £6 per week (£4 up to 5th April 2020) can be claimed against your home expenses.
Unincorporated & Flat Rate : this is intended for unincorporated businesses (sole traders etc.) who work from home, and is broken down into three scaled categories
If you work at home 25-50 hours/month, you can claim £10/month,
If you work 51-100 hours/month, you can claim £18/month,
If you work 101+ hours/month, you can claim £26/month.
Limited Company & Higher Amount : you can enter into a rental agreement with your company, with the rental price usually worked out as the share of mortgage interest or rent, council tax, utilities and buildings insurance. If there are six rooms in the house (ignore halls, kitchens and bathrooms) and one is used for the business, then you would base the rental on 1/6th of those costs.
Note re repairs: repairs for your ‘home office’ room can be claimed back in full, and repairs for other rooms can’t be reclaimed at all. General repairs to the house (e.g. re-tiling the roof) can be claimed proportionally, so 1/6th in the example we’ve given.
Unincorporated & Higher Amount : an unincorporated business can’t charge rent as such, so no formal agreement is needed. But you can claim back an amount against tax, calculated in exactly the same way as for a limited company. In order to ensure no capital gains tax issues arise, try to ensure that no room in the property is exclusively available as a home office.

In order to ensure no capital gains tax issues arise, try to ensure that no room is exclusively available for business use. For example, put an exercise bike into a room used as an office and have specific periods of time blocked out where the room is not available for business use.

3. Offsetting your pension contributions

If you want to cut your corporation tax expenses, one key area to think about is your director pension contributions. These contributions can be offset against your taxable profits.

Pension contributions for directors of up to £60K per annum can be deducted from your taxable profits. With a tax saving of 19%-25% of your pension contribution, this could potentially save you £15,000 per company director – a nice helping hand if you’re aiming to cut your tax costs.

4. Business mileage and travel costs

If you use your personal vehicle for business purposes, you may be able to claim a tax deduction for your travel costs. HM Revenue and Customs (HMRC) allows two methods for calculating business mileage expenses:

Actual expenses method : Under this method, you can claim the actual costs incurred for running your vehicle for business purposes, such as fuel, repairs, maintenance, insurance, and depreciation.
Mileage rate method : Under this method, you can claim a fixed amount per mile for the business mileage. The mileage rate varies depending on the type of vehicle and the number of miles driven. As of the 2023/24 tax year, the mileage rates are:
Cars and vans : 45p per mile for the first 10,000 miles and 25p per mile thereafter.
Motorcycles : 24p per mile.
Bicycles : 20p per mile.

5. Employers’ NICs (National Insurance Contributions)

Employment Allowance allows eligible employers to reduce their National Insurance Contributions (NICs) bill by a certain amount each year. As of the 2023/24 tax year, if you meet the eligibility criteria, you can reduce your employer NICs bill by up to £5,000 each year

To be eligible for the Employment Allowance, you must:

Have a business that pays Class 1 NICs on employees' or directors' earnings.
Have an employer NICs bill of less than £100,000 in the previous tax year.
Not be a domestic employer, such as a nanny or gardener.
Not have already claimed the allowance through a connected company or charity.

Talk to us about reducing your business expenses

This isn’t an exhaustive list of tax-deductible expenses. There will be various ways to claim your operational expenses against the relevant reliefs and incentives offered by HMRC. If you’re looking to cut back your costs and improve your tax efficiency, we can help.

Please book a call with Donald or call us on 01904 787973 and we’ll work with you to find the important reliefs, incentives and allowances that can be claimed.

5 ways to ensure you get paid on time

Tue, 18 Apr 2023 07:08:16 GMT

Worrying whether customers will pay you on time is a continual concern for business owners.

Late payment can lead to cashflow issues, unpaid supplier bills and the need to dip into your own pocket to cover your operational expenses. If you can improve the speed and likelihood of customers paying on time, that's good news for your accounts receivable targets and the company's overall liquidity and cashflow position.

Speeding up payment times

A sale is not a sale until the customer has actually paid you. Whether you’re an online business taking payment through your website, or a B2B company that sends out monthly invoices, you need the comfort of knowing that payment will be fast, smooth and frictionless.

Here are 5 tips for making sure that customers pay you as seamlessly as possible:

For eCommerce businesses, offer payment gateways to simplify payment – when a customer gets through to your checkout, it’s vital to make payment as easy as possible. Some customers may prefer to pay on a card. But offering a choice of payment gateways gives the customer more options. Instead of forcing customers down one route include payment gateways like PayPal, Stripe, Apple Pay or Google Pay.
For companies using e-invoicing, put payment buttons on your electronic invoices – if you send out e-invoices to your customers, including payment buttons makes settling your bill as easy as clicking that button. A payment button that’s linked directly to Paypal or Stripe removes several steps from the payment process. It’s straightforward and quick, getting you your cash without the hassle of BACs payments or transfers.
For businesses offering subscription services, automate those customer payments – when you’re offering a recurring, monthly service, you don’t want the hassle of sending out those invoices and getting involved in cash collection. Think about automating the creation of recurring invoices in your accounting software, and get your customers to sign up to a Direct Debit platform, like GoCardless. Money is taken automatically on a pre-agreed date and the transaction matched in your accounts.
For retail companies, use card readers that sync with your accounting software – if you’re running a busy cafe or retail space, your customers just want to tap their card and go. Integrating your card reader with your cloud accounting software removes all the tedious data entry and adding up of receipts. With a direct API between your POS card reader and your accounting platform, all the data is shared automatically.
For all B2B businesses, send your invoices out as early as possible – the sooner you issue an invoice, the sooner the due date will come around. If you’re working on a project basis, split the fee up into chunks and invoice out at key milestones throughout the project. It’s also a good idea to make your payment terms clear and enforceable on every invoice. Payment within 14 to 30 days from the invoice date is a good standard to aim for (though 60 days, or even 90 days, is possible in some industries).

Talk to us about speeding up your payment times

Fast payments improve your cashflow position and remove the need for time-consuming and stressful debtor chasing. By following these five tips, your customers have the smoothest route to paying you, and you get the cash that’s owed to your ASAP.

Please book a call with Donald or call us on 01904 787973 if you would like us to help you review your payment process and cash collection to look for the main areas where you can make improvements.

The top tax-effective benefits to offer employees

Thu, 13 Apr 2023 07:28:13 GMT

Offering benefits-in-kind to your staff is a great way to make your business an attractive place to work. And these benefits add even more value if they’re also either tax-effective or tax-free.

You can offer certain concessions that make benefits provided to your employees (including directors) either low-tax or no tax. To be clear, we’re talking here about general employee benefits, not higher-value items such as company cars or share options etc.

Under certain circumstances, these general benefits-in-kind (BiK) become taxable if they’re provided as part of a flexible salary sacrifice system. But let’s look at the kinds of benefits you can offer – and the advantages they have for your employees.

The top tax-effective benefits to offer your team

If you want to offer employee benefits, but don’t want these BiK to end up attracting significant tax penalties for the employee, there are several useful benefits to consider.

For example:

Gifts of £50 or under – gifts not exceeding £50 can be given to employees without any tax or National Insurance charges arising. The cost is tax-deductible by the company. The gift must not be related to any work achievements, must not be money, must not be a contractual entitlement and, for directors, the total must not exceed £300 per annum.
Annual staff functions – annual functions, such as the yearly Christmas party or team summer barbecue, can be given to employees, provided the total cost per person during the year doesn’t exceed £150 per guest, including VAT.
Work mobile phones – a single mobile telephone can be provided to each employee together with the associated line rental and call charges, with no personal tax charge for any private use.
Free staff meals – free meals can be provided on company premises or in a staff canteen, provided that it’s on a reasonable scale.
Employer pension scheme contributions – as an employer, you can contribute (sometimes, have to contribute) to employee pension funds, within certain annual and lifetime limits. Topping up your employee’s contributions helps to increase the overall benefit of the mandatory work pension scheme .
Life insurance cover - Death in Service cover can be provided for your employees, and will normally be tax free, both the insurance premiums paid and any claims paid.
Health and medical check-ups – one health-screening assessment and one medical checkup per annum can be provided to each employee. This doesn’t cover full medical insurance, and also doesn’t generally cover medical treatment.
Eye tests and glasses – eye tests and glasses/spectacles can be provided tax-free, as long as they’re required as a result of using a screen or visual display unit for work.
Welfare counselling – counselling can be provided to your employees free of tax, but this doesn’t cover medical treatment, legal, tax or financial advice. However, debt counselling is covered.
Business mileage – where your employee uses their own car for business travel, that business mileage can be reimbursed at a rate of £0.45/mile for the first 10,000 miles in a tax year and £0.25/mile thereafter.
Home-working allowance – you can pay an allowance of £6/week (£26/month) to employees who are required to work from home.
Private gyms – gym facilities can be provided to your employees and their family members, as long as the gym premises are not available to the general public.
Staff suggestions – rewards for making innovative business suggestions can be paid free of tax, as long as the amount doesn’t exceed £25. If an employee’s suggestion is implemented, a further award, linked to a proportion of the financial benefit to the company, can be made, subject to a cap of £5,000.
Long-service awards – you can offer a long-service award to a member of staff after a minimum of 20 years’ service. There must be at least ten years between awards that are made and the award has to be articles rather than cash. The overall cost can’t exceed £50 per year of service.

You can find out more details on the many available employee benefits-in-kind on the Expenses and benefits: A-Z page on the HMRC site .

If you provide a range of attractive tax-effective benefits to your employees, this goes a long way to creating a more satisfied, happy and productive workforce.

Many of the rules around employee benefits are complex and difficult to calculate, so it’s well worth talking to us about your benefits plans and where we can offer advice. We can walk you through the available options and show you the tax implications for your team.

Talk to us about reviewing your employee benefits.

If you have any questions at all about employee benefits please book a call with Donald or call us on 01904 787973.

Getting your bookkeeping ready for a digital future

Thu, 06 Apr 2023 07:33:41 GMT

Keeping up-to-date records of your business transactions isn't the most glamorous part of being an entrepreneur, that’s for sure.

But, in reality, having accurate and up-to-date bookkeeping is actually one of the core ways to keep your finances (and your business) under control.

Digital bookkeeping is the future of your finance

The digital age has revolutionised the way many business owners carry out their bookkeeping. From digital accounting to real-time data, the modern bookkeeper is now equipped with the tools and resources to make the job easier, more efficient and (crucially) less time-consuming.

When your bookkeeping goes digital, that means:

Your data entry process gets automated – receipts, invoices and other supporting documents can all be scanned using OCR software. This gives you a digital copy of the paperwork, but also digitises the data and pulls it into your online ledgers. There’s no need for tedious manual data entry, and you also reduce the chances of human error.
Your digital records are available 24/7 in the cloud – instead of searching through messy hard drives or dusty filing cabinets, all your financial documentation is available at the press of a button. You can pull up the documents you need at any time of day, from any location with internet access. And everything is safely encrypted and backed up.
Your tax returns can be filed digitally – with all your bookkeeping data saved and accessed via your cloud bookkeeping/accounting software, your tax returns become a lot more straightforward. Whether it’s quarterly GST/VAT returns or annual corporation tax returns, you have all the data the tax office needs, ready to send in a digital format.
Your finance data goes real-time – scanning and digitising your receipts at the time you make the transaction doesn’t just keep your records up to date. It also gives you real-time data on all your income, expenditure and operational costs. Instead of working with management information that’s months out of date, you have informative real-time data on which to base all your big business decisions.
You’re 100% in control of your finances – by embracing the benefits of digital bookkeeping, you kick your finances into shape. You and your finance team have accurate real-time records of all income and outgoings, and can stay in complete control of the financial management of the business. Your accounts are in tip-top shape and you're ready to file your tax returns at every significant period throughout the year.

Talk to us about switching to digital bookkeeping

If you want to transform your bookkeeping, now’s the ideal time to go digital. Book a call with Donald and find out what bookkeeping or accounting software is right for your business. Once you see the efficiency, accuracy and long-term benefits of digital bookkeeping, you’ll understand why going digital is a no-brainer, whatever type of business you run.

Which is more important: cashflow or profit?

Thu, 30 Mar 2023 15:56:59 GMT

Cashflow and profit are two of the most important financial metrics for any business. But while they’re both related to the financial performance of a company, they measure different things.

Knowing the difference – and how cash and profit contribute to your success story – is a vital skill if you want your business to have the best possible financial health.

The difference between cashflow and profit

Understanding the technicalities of financial reporting can be daunting as a new entrepreneur. And even seasoned business owners can find it hard work resonating with the various financial reports that today’s cloud accounting software can produce.

But getting your head around the differences between cashflow and profit can be a gamechanger – especially when it comes to managing your working capital.

So, let’s look at the differences:

Profit refers to the amount of money your business has left after subtracting all expenses from your revenue. It’s a measure of your company's financial success over a given period, whether that’s a month, quarter or a full 12-months.
Cashflow is a process that measures the inflow and outflow of cash in your business. This includes both your operating and investment activities. Maintaining a ‘positive cashflow position’ is vital for meeting your financial obligations.

Why is it important to make a profit?

Profit is a measure of the financial success of your business. It’s also a key factor in your growth as an organisation. Healthy profits mean you have the surplus cash needed to reinvest in the business, and to pay yourself and your fellow shareholders healthy dividends.

However, you can only make a profit if you have enough liquid cash to keep operating – and this is where the importance of cashflow becomes paramount.

Why is positive cashflow so essential?

Poor cashflow is one of the biggest factors in most business failures. As the lifeblood of the company, cash is an essential ingredient in the financial mix. To operate effectively, you need more cash inflows than cash outflows. If not, you don’t have the cash to purchase raw materials, pay your workforce or buy the services that keep you operating.

Positive cashflow is all about ensuring that there’s more cash coming in than expenses going out. In this harmonious place of being in a ‘positive cashflow position’ you have liquid cash available exactly when you need it – and that’s vital for keeping the lights on in the business.

Talk to us about getting in control of your cashflow

Profit is an excellent measure of your financial success. But positive cashflow is the electricity that powers your business and keeps the wheels turning day in, day out.

Positive cashflow helps you:

Stay operational, with enough cash in the kitty
Meet your financial obligations as a company
Invest in your expansion, growth and scale-up strategy
Sustain your long-term success as an ambitious business.

Even a profitable business can face liquidity issues, so getting in control of your cashflow really should be top of your financial to-do list this year.

Get in touch

Over the years, we have become one of the leading chartered accountants in York. If you would like to talk to us about your cashflow position then book a discovery call with Donald Inglis.

How to get the best from AI content writing tools like Chat GPT

Mon, 27 Mar 2023 07:39:33 GMT

The chances are that you've heard ChatGPT being mentioned heavily in your social feeds and in business articles in recent months. But what exactly is ChatGPT?

In essence, it’s an artificial intelligence (AI) tool that promises to automate a lot of tasks, including write your content for you.

But do these AI content-writing tools live up to the hype? And what's the best way to balance using a solution like ChatGPT with the core skills of good human-powered writing?

What does ChatGPT do?

ChatGPT is an AI chatbot model from OpenAI that can produce complex, well-written responses to any prompt you give it. It uses a huge database of sources to provide you with complete blog posts, articles, email - in fact, it will write whatever you ask it to.

Is AI content writing the answer to your business prayers?

If you believe what technologists and business leaders are saying, these AI tools have the potential to replace a lot of the human work involved in writing. This could mean writing your blog posts, sales emails, or even looking after your internal comms. (There will be a lot of other functions the tools will be applied to, but we are focussing on writing here)

But does a solution like ChatGPT live up to this promise? Yes and no. Here are a couple of things that you’ll want to bear in mind when you use these tools.

Creating content that stands out

ChatGPT can certainly provide you with business content – but it can be quite generic and bland. This generic nature of AI content may be a problem. You want your brand content to stand out and be unique – but this is more difficult when using the same AI tools as every other small business. As Tom Fishburne puts it, the issue is that ‘much of what is created is already a sea of sameness, written more to appease Google’s search algorithms than actual people.'

A human, like you and me, has opinions, personality and can deliver unique insights. AI cannot do this. It’s limited to the source data and models it's been provided with. So, if you want your business content to stand out, you need an experienced human writer who writes for humans not just the bots.

Content writing is as much about having good ideas as it is about writing well. So, what you input as your prompt to the AI is just as important as the text that the software spits out.

Content accuracy

When Chat GPT’s rival, Bard was first launched it wrongly attributed the discovery of an exoplanet to a telescope that didn’t exist at the time of the discovery. The problem is that the internet has become increasingly cluttered with fake news, spam links and content that's designed purely for SEO. So it’s no wonder that the AI will sometimes provide you with content that is inaccurate.

As a business owner you’ll want to make sure that a human is involved - to create a unique and original brief and then to review the output for accuracy and relevance for your brand and your audience.

What's the best balance between AI and human writing?

AI tools are useful. But, at present, you still need a human in the equation. Someone to come up with the ideas, write intelligent prompts for the AI and edit the output so it sounds more human and personalised.

Working with both AI tools and a content professional is the best way to ensure you’re getting the eye-catching content you deserve.

Get in touch

Over the years, we have become one of the leading accountancy firms in York. If you would like to earn more, keep more of your hard-earned profits and enjoy the life you want then book a discovery call with Donald Inglis.

New UK corporation tax rates from April 2023

Fri, 17 Mar 2023 11:33:02 GMT

Did you know that the UK corporation tax rates are changed from April 2023?

From 1 April 2023, the rate of corporation tax changes from 19% to a variable rate between 19% to 25% , depending on the profits made by your business. This could mean a change to what you will owe in tax for the 2023/24 tax year.

What are the main changes to corporation tax?

Prior to the change, corporation tax (CT) is charged at 19% for most companies. The only exceptions are companies in specific sectors like banking, oil, gas and life insurance.

From 1st April 2023 the rate of tax changes:

The rate remains at 19% for companies with profits below a lower threshold.
The rate increases to 25% for companies with profits above an upper threshold.
A tapered rate for profits in between is introduced.

The thresholds will work as follows:

The lower threshold is £50,000 divided by the number of companies that are deemed to be associated with each other.
The upper threshold is £250,000 divided by the number of associates.
Below the lower threshold, the tax rate is simply calculated at 19%. Above that, it’s calculated at 25%.
But if the upper threshold is not breached, then marginal relief is applied, which has the effect of increasing the average rate from 19% up to 25%, as your profits increase.
The bands are also reduced if the accounting period is less than 12 months

How will this actually work in practice?

So, what does this mean for your CT bill? If you have no associated companies, then where your profits are below £50,000, your tax will continue to be paid at 19%. If your profits exceed £250,000, your tax rate will be 25% – meaning a significant jump in what you lose to tax.

In between these two points, tax will be calculated at 25%, then marginal relief calculated by using the formula (U-A) x N/A x F where:

U is the applicable upper threshold
A is augmented profits
N is total taxable profits, and
F is a standard fraction of 3/200

Presuming A = N = £100,000 then the initial tax calculation at 25% gives a maximum tax charge of £25,000.

The marginal relief is (250,000 – 100,000) x 1 x 3/200 = £2,250, and the tax actually payable is £25,000 - £2,250 = £22,750.

Remember this assumes a full 12 months accounting period and no associated companies. If there was an associated company (therefore two in total) then U would be £125,000 and the marginal relief would be £375, leaving tax due at £24,625.

It’s worth noting that ‘augmented profits’ is your taxable profits plus any exempt dividends received from non-group companies.

Talk to us about planning for these CT changes

Any change to your CT liabilities can have a significant effect on your financial position. It’s sensible to talk to your advisers as soon as possible to work through your planning options.

There are two key areas where we can help:

Firstly, we’ll help you establish the number of associated companies to be taken into consideration. Also, in due course, we’ll calculate the tax due after any marginal relief.
Secondly, we’ll talk through the options if you have associated companies with very different profit profiles. It’s worth considering merging some of them to reduce the overall tax charge.

Get in touch

Over the years, we’re have become one of the leading accountancy firms in York. If you would like to earn more, keep more of your hard-earned profits and enjoy the life you want then book a discovery call with Donald Inglis.

32 ways to get the maximum value out of your business

Fri, 10 Mar 2023 10:20:05 GMT

A question I get asked all the time is: ‘What can I take out of my business?’ and ‘how do I save more tax?’

Well, the quick answer is, ‘there’s up to 32 ways to get value out of your business, tax efficiently.’ Yep, that’s a lot of ways.

But the truth is, not all these 32 ways will be relevant to you and your business, and it’s likely that you’ll already be doing a few of them. But how do you know if you’re maximising every opportunity you could be, to improve your life, your families and your employees?

Value Extracting Tax Diagnostic Review

Well, we have a tax diagnostic review service that will do exactly that for you.

In our Value Extracting Tax Diagnostic review we will analyse your business and personal circumstances against the 32 ways, to identify all the ways you can tax efficiently put things through the business, or take value out of the business, benefiting you, your family and even your employees.

Every business owner can extract loads of value from their business, you just need to know what is relevant for you.

Let’s have a chat

If you’d like to review how much value you’re getting from your business, we’d love to speak to you, book in a call and let’s have a chat. Or download our free eBook, 32 Ways To Extract Maximum Value From Your Business .

Could outsourcing help you grow your business?

Mon, 06 Mar 2023 08:04:54 GMT

When you run a small business, the amount of work can ebb and flow. Unexpectedly busy periods can create too much work and stress for a small team or one-person business. But if a surge is seasonal or unreliable, you don’t necessarily want to commit to taking on another employee.

One solution is to use outsourcing to give you some flexibility during busy periods.

What could you outsource?

There are several types of jobs that can be ideal for outsourcing:

Tasks you dread, usually procrastinate or that cause you massive stress
Tasks where you or your business have low expertise
Those tasks which don’t require the contractor or freelancer to access your systems or deal with your clients.

For example, if you aren’t managing your digital marketing, outsourcing your social media management could work well. Or it might be branding, HR or customer service. And if you need help with your payroll or accounts, we’re only a phone call away.

If you can take stressful tasks off your plate, or reduce your workload at peak times, you can increase your revenue and productivity without overcommitting to payroll.

Who could do the work for you?

We’re here to support you with your accounting and payroll requirements. For other types of work, you could consider a local or an offshore provider. There are plenty of platforms and organisations that will help you, but do shop around as the quality varies enormously.

The advantages of a local provider are that they’ll be in the same time zone, with no language barrier and operating under the same regulations. International providers, on the other hand, can be considerably cheaper.

Need help getting started?

Considering outsourcing and wondering how much to spend or where to start – or you need help with accounts and payroll? Get in touch or book a call with Donald , we’d love to help.

Grow your business with a Virtual Finance Director

Mon, 27 Feb 2023 11:37:44 GMT

Congratulations! You have established a business that provides you with income, employment to others, a valuable service to your customers and a sense of achievement and optimism for your future.

It’s not easy and hopefully you are proud of what you have achieved (and rightly so).

The question is though… are you happy?

Do you get to choose where you work? When you work? How you work? Do you have the time to do the things you enjoy outside of work and spend time with your loved ones? Are you able to do these things without worrying about having enough money to do them in the first place?

Your background probably isn’t in finance but somehow you are expected to be on top of the all important figures that will ensure your business is profitable and sustainable.

Here’s the problem…

Businesses that reach a certain size and who can afford to will employ a finance director. This is a vital role that should provide financial stability to a business. Every large business will employ a finance director or CFO that will sit on the board of Directors of their business.

For small businesses though this is not possible as a full or even a part time FD would just cost too much. Did you know that the average base salary for an FD in the UK is £80,000 without even considering the added expense of any bonuses, benefits, pensions etc? That’s a massive financial commitment and is unattainable for most small businesses.

Unfortunately though small businesses are the ones most in need of this kind of assistance with their finances. The good news is, this is where we can help.

Here’s the solution – a Virtual Finance Director

Very often we can provide small businesses with a Virtual FD that is bespoke to them at less than the amount they would pay a junior member of staff.

Now we know the word “virtual” can be very off putting for some. It’s just a term and let us reassure you that our service is very much based on the human touch. You will have access to our team who are experienced in many aspects of finance and are already carrying out the finance functions for businesses just like yours.

What are the benefits of a Virtual FD?

One of the most important benefits is having someone else take over the managing of your finance function, leaving you to concentrate on the day-to-day running of your business.

Your Virtual FD will act as someone you can bounce ideas off, as well as acting as your business coach and being someone who will work alongside you to ensure you meet your business goals.

Other benefits include:

Making sure your financial data is in sync with your business objectives so that the management information you receive is useful and helps you in your decision making
Supplying you with real time management information that includes detailed analysis when you need it most
Input into your financial situation that will help you grow and succeed
Access to state of the art technology that will ensure your finance system runs smoothly and accurately
Sourcing and helping you obtain the relevant finance that you need to grow and expand
Supporting you so that you can build your business in a way that it is profitable and sustainable

Wherever you are at in your business life, we will have a Virtual FD package that will suit you.

If you'd like to find out more about our Virtual Finance Director service, visit this page on our website , or download our VFD brochure .

Budgets are boring – 5 ways to spend less without budgeting

Fri, 24 Feb 2023 12:41:49 GMT

If you hate budgets and budgeting, how can you easily cut your spending?

Here are five ways to save without tracking every transaction:

Review your subscriptions – Your fixed outgoings are the easiest way to cut back: big outgoings like your insurance, power, phone and entertainment subscriptions. If you can reduce or eliminate even a few of these, you’ll make an immediate difference to your spending.
Embrace low-cost social activities – A night of drinking and dining out is fantastic fun, but it’s also costly, so try to make it an occasional treat. Instead, check out the free and cheap activities in your area and swap an expensive night out for a more cost-effective option .
Have a zero spend day – Pick one day a week, or one day each fortnight, and try to spend nothing. Make your own food and coffee, stay away from the shops and don’t add anything to your cart.
Plan your meals – Groceries have shot up in price over recent years. Planning your meals for the week and shopping accordingly means you can spend less and buy fewer takeaways.
Pay yourself first, then live off what’s left – Pay a realistic amount into your investments, savings or debt reduction first, advises the author of Automatic Millionaire . Then pay your commitments, like the utilities. Whatever is left over, live off that. If you’re not sure how much to pay yourself, we can help.

Confession time: we love budgets!

We actually love budgets, even though they have a boring reputation. They’re part of the spreadsheet family, and you know that spreadsheets are close to our hearts.

While you can save money without a budget, if you embrace one it can turbocharge your success. There are apps to make it easier and support your saving goals. So whether you want help with saving, or a budget for your personal life or your business, we can definitely give you a hand. Get in touch or book a call with Donald , we’d love to help.

5 signs you’re undercharging

Mon, 13 Feb 2023 10:30:43 GMT

Are you undercharging for your services? It can be hard to tell, particularly if you’re in a niche industry or you’re a contractor. Costs have been rising, so it may be time to rethink your own pricing.

Here are five signs that you might be undercharging:

Nobody ever questions your quotes - Do all your new clients accept your quotes or charges without asking any questions, requesting a breakdown or wanting a discount? It’s possible they’re delighted to be getting such a great deal.
You run off your feet but you can’t afford to get help - When you’re working yourself to the bone, but there’s not enough money left over to employ someone to help you, your prices are too low – or something else needs to change.
Your prices have been the same for two years or more - In most industries, prices increase just slightly each year. Leave your prices flat for too long and you’re not keeping up with the market; make sure you review your fees annually.
You’re overbooked - When business is booming and there’s no room for new clients, it’s time to raise your prices.
Clients don’t treat you as well as they should - When clients think they’re paying peanuts, they’ll often take you for granted. They don’t see your time as valuable, so they feel free to mess you around.

What should you be charging?

Finding your pricing sweet spot could take a little time. You’ll need to do some research, maybe ask around a little, and find out where your competitors are pitching their rates.

We can help too – if we have clients in similar industries we might be able to give you some indication of typical fees, so give us a call or book a call with Donald . We’d love to hear from you.

The four-day week is gaining momentum – could it boost your business?

Wed, 08 Feb 2023 10:31:11 GMT

The four-day work week is a winner – or at least that’s the result from a major pilot program conducted at 33 international businesses.

With employees working only four days, the companies involved saw a 38% increase in revenue year-on-year, despite no reduction in pay for employees. Every single business involved in the trial is sticking with the four-day week, and employees loved their day off so much that most said they’d need a significant pay rise to go back to working five days.

Maybe it’s time to think about whether it could work at your business; let’s take a look at the pros and cons of working 80% of the time for 100% of the pay.

The advantages of the four-day week:

It improves staff morale, wellbeing and retention.
It can cut overheads by up to 20%.
Productivity is likely to remain at 100%; some studies show an increase.
It’s easier to recruit new team members.
Emissions created by commuting will reduce.

The disadvantages of the four-day week:

Your total revenue may suffer.
It simply won’t work for many businesses, particularly those focused on customer service.
You’ll have to decide whether to limit your operating hours or try to manage workers’ schedules and workloads to allow a four-day work week to succeed.
We don’t have long-term studies of the positive effects on staff morale – there are some indications that it may fall back to the baseline over time.
Squeezing more into four days of work could prove stressful for you and your team.

We can help you run the numbers

If you’re considering a four-day week or another flexible arrangement, we can help, just book a discovery call with Donald Inglis . It’s useful to identify your least profitable days, for instance, if you plan to simply shut up shop for one weekday. Or we can help you figure out optimal staffing requirements based on revenue streams.

Our team can work with you to do a cost-benefit analysis of what a four-day work week might look like for your business, discuss how you can change the way your business operates – and help you reap the rewards.

5 ways to get in control of your business finances

Wed, 01 Feb 2023 11:35:19 GMT

Having proper control of your business finances is a big advantage. It helps you make well-informed business decisions and keeps your organisation profitable.

With so many digital tools for managing your bookkeeping, accounting and management reporting, it's never been easier to manage, track and forecast your financial position.

But what are the main tools you need? And how do you set up your financial systems, apps, processes and reporting to put yourself back in the finance driving seat?

1. Bring your bookkeeping into the digital age

Digital bookkeeping apps are a great way to digitise your receipts, records and source documents. This not only saves a lot of time at year-end, it also makes it much easier for you to keep track of your company’s finances and accounting. Keeping your receipts in a box to manually enter at period-end is no longer enough. Take the next step and digitise your receipts at source, so you have up-to-date digital records and copies of source documents.

Optical character recognition (OCR) software, like Dext Prepare or Auto Entry, scans the receipt, converts it into a digital format and stores it in the cloud.

2. Do your accounting in the cloud

Cloud accounting is a software-as-a-service (SaaS) solution that helps you carry out all your main accounting and financial management online, without having to install any software.

Cloud accounting providers, like Xero, QuickBooks, MYOB or Sage, design their accounting platforms to take the pain and hassle of business accounting. You get all the tools and features you need to work on your accounting tasks. And your platform provider will also take care of all the data storage, backups and security of your data.

A good cloud accounting platform does more than just save your hard drive space. It also provides you with tools and dashboards that improve your access to management information, financial reporting, forecasting and projections, performance tracking and more.

3. Use the latest in expense management tools

Expense management can be a time-consuming and tedious job. But it’s also a vital task that helps you ensure you’re spending company money wisely and not overspending. If employees start going over their budget limits, this can be a costly mistake for the company and your cashflow.

Expense management tools, such as Soldo, Weel or Pleo, help you manage staff spending by giving employees virtual cards that are linked to a specific budget, account and code. This helps you track their expenses easily and make sure they’re staying within their budgeted limits. These platforms also give you detailed reporting and analytics, so you can see where money is being spent, and where savings can be made.

4. Make it easy to accept digital payments

The problem of slow payment is one of the most frustrating things for small businesses. If your customers don’t pay on time, this can result in a loss of revenue, poor cashflow and an inability to cover your basic costs and overheads. To resolve this issue, many companies have begun to switch to digital payment platforms that make it simpler, faster and easier to collect payment.

Payment platforms, like PayPal, Square or Stripe offer faster payment times and more control over the customer experience. Some platforms even integrate with your cloud accounting, so you get automatic bank reconciliations.

5. Embrace the latest in digital reporting and forecasting

With digital accounting changing so rapidly in recent years, there's never been a better time to embrace the benefits of the latest in digital reporting and forecasting.

Economic conditions are hard to predict. So it's crucial to be able to quickly analyse data, check your performance and make predictions about how your company will fare in the coming months. When you use cloud solutions for financial reporting and key metrics, you'll be able to monitor trends in real-time while having access to the data anytime, anywhere.

Having this information at your fingertips helps you make informed decisions faster than ever before – and that translates that into more sales, increased business growth and bigger profits.

Talk to us about updating your financial systems

If you’re looking to give your finances a touch of digital magic, please book a discovery call with Donald Inglis . We can walk you through the best cloud platforms, fintech apps and business tools to add to your app stack – so you’re ready to make the most of a digital approach to your finances.

10 things you didn’t know about York

Tue, 24 Jan 2023 19:31:31 GMT

While you may be familiar with York’s Roman origins, there are some unusual facts you may not realise that make the city where we work quite unique!

So, here are the the most amazing facts we could find about the city of York. If you know of any more, please come visit us at our offices and tell us in person. We might add yours to our list!

1) York has a dark past

York has history of ghosts, torture, and gore. In fact, York has been declared the most haunted city in Europe. It has hundreds of hauntings, and its bloody history includes violent conquests by the Normans and Vikings.

2) A pub for every day of the year

York prides itself on having over 365 pubs – so you can visit a different one every day of the year! Not that we recommend you do this, mind. If you do though, you'll be sure bump into our Managing Director Donald Inglis at some point, so say hi.

3) The home of Guy Fawkes

Guy Fawkes, who is famous for trying to blow up the Houses of Parliament, was born in York in 1605. Just metres from York Minster is The Guy Fawkes Inn and the birth place of the man who gave us Bonfire Night.

4) Miles of city walls

York has more miles of intact wall than any other city in England. At 2.1 miles long, it should take you around two hours to walk the whole way around. They offer the best way to explore the city by foot, so be sure to wear your comfy shoes next time you visit.

5) Bond... James Bond

Our connection to famous figures does not stop at Guy Fawkes. Dame Judi Dench was also born in York. She is loved so much that there is even a stretch of path by the river named after her – Dame Judi Dench Walk.

6) Diagon Alley

Believe it or not, York has connections to Harry Potter. Diagon Alley is based on a beautiful-cobbled street, The Shambles, which houses a shop named “The Shop That Can’t be Named.” Harry Potter and the Philosopher's Stone was actually filmed on location at the Steam Railway in North Yorkshire.

7) A castle with a famous builder

York Castle was built in 1068 by William the Conqueror to control northern England. By the end of the 14th century, York Castle was primarily used as a prison, holding up to 310 prisoners in its towers at any given time.

8) A city of cats

Statues of cats have been placed on buildings in York for around two centuries, although some statues are thought to date from medieval times. The original cat statues were placed on buildings to frighten away rats and mice which carried deadly plagues and illness.

9) York is a Viking city

Dominated by Norse warriors, York was known as Jórvík, and now houses the Jorvik Viking Centre, which shows visitors what it was like here in the year 960.

10) Home to the Yorkshire Pudding

The first recorded Yorkshire pudding recipe appeared in a book called The Whole Duty of a Woman in 1737 and was listed as "A Dripping Pudding." The “Yorkshire” prefix was first used in the 1747 publication, The Art of Cookery Made Plain and Simple, by Hannah Glasse. So come to this city on a Sunday, and enjoy a roast with a double helping of Yorkshire pudding!

So, there you have it - 10 facts about the city of York! How many of these did you already know?

Change of Tax Basis Period for unincorporated businesses: are you ready?

Mon, 23 Jan 2023 10:25:49 GMT

Are you self-employed? Or are you a partner in a trading partnership? If you are, you should be aware of the proposed changes to the tax basis period for unincorporated businesses.

HM Revenue & Customs (HMRC) is proposing to change the way that unincorporated businesses are taxed , moving from a ‘current year’ basis to a ‘tax year’ basis. For affected businesses (those that don’t have a year-end between 31 March and 5 April), this could mean a much larger tax bill for the 2023/24 tax year.

So, when are these changes coming in? And what will the potential impact be for sole traders and partners?

What does a change in the base period mean?

Self-employed people and partners in trading partnerships generally prepare accounts to the same fixed date each year. This is known as the ‘basis period’. For tax purposes, profits are currently taxed in the tax year in which the basis period ends.

For example, if your business has a 30 June period end, profits for the year to 30/06/2022 would be taxed in the 2022/23 tax year ending 5 April 2023. The tax would then be payable by January 2024.
From the 2024/25 tax year, all business will be taxed on a tax-year basis (with 31 March to 5 April being treated as coterminous with the tax year-end). This means that they will pay tax for the 2024/25 year on profits earned in that year.
Why is that important? In effect, it means that all self-employed businesses and partners with any other year-end will be required to pay tax earlier than they would previously have done. And this could have a serious impact on tax planning and cashflow!
The 2023/24 tax year is a transitional year in which all affected businesses will be taxed on the profits for their basis period as now, PLUS the tax on their profits from the end of that basis period up to 31 March/5 April 2024.
Let’s take a 30th June business as an example. In the 2023/24 tax year you will be taxed on profits from 01/07/2022 to 31/03/2024. So, effectively, you’ll be taxed for 21 months instead of 12. The extra tax charged can be spread, but the change in base period will result in taxes being paid earlier than they are now.
Some of these businesses will have overlap profits carried forward in their tax returns. This will represent profits which were considered to have been taxed twice in their earlier years. That overlap profit can be deducted from the combined amounts being taxed in 2023/24. Any further additional taxable profits may be spread over up to five years, to reduce the impact.
The change to the base period will simplify reporting requirements as the Making Tax Digital for Income Tax Self-Assessment (MTD ITSA) changes are rolled out. This change to the base period brings all other forms of income for individuals into account on a tax-year basis, making the whole process easier to administer.

Talk to us about the proposed changes to your accounting period-end

If the year-end for your business is not currently between 31 March and 5 April, you will potentially be taxed on more than a year’s profits in 2023/24.

Even with a facility to spread the excess, your tax bill will be higher and you could be forced into a higher marginal rate of tax – with all the negative impacts on your tax liabilities. This could be a very serious outcome if you’re not prepared for the changes.

For affected businesses, we can help you prepare forecasts of the likely impact, and consider ways to ease the transition. The earlier you begin planning, the smoother the transition will be. If you would like to talk to us about the impact of the base period changes schedule, then book a discovery call with Donald Inglis .

HMRC’s new penalty regime starting now

Mon, 16 Jan 2023 08:50:06 GMT

HMRC’s new penalty regime begins in January 2023 for VAT-registered businesses. Are you ready for the points-based scheme?

HMRC’s new penalty regime aims to rationalise the system for VAT and income tax, with the aim of improving consistency and targeting persistent offenders who deliver late returns. But what’s the impact likely to be for you and your business?

When does the new penalty regime begin?

The new penalty regime will have a staggered start, with the system coming into effect across three stages, based on the type of tax being paid.

Starting dates will be:

1 January 2023 for VAT taxpayers
6 April 2024 for MTD for Income Tax Self Assessment ( MTD for ITSA ) taxpayers
6 April 2025 for all other Income Tax Self-Assessment taxpayers.

If you’re VAT-registered, this means that the new points-based penalty system will kick in from January next year. So, it makes good sense to get up to date with the new rules.

How does the new penalty regime work?

The new penalty regime works around a points-based system for late submissions. Each late submission will earn you a penalty point and when a cumulative number of points are given, a fixed £200 penalty will be issued. The idea is to streamline the process, with instant penalties if taxpayers accrue the required tally of penalty points.

The thresholds are:

Annual returns: 2 points
Quarterly returns: 4 points
Monthly returns: 5 points

All points expire 24 months after being given, provided that no penalties were triggered. If penalties were triggered, then they expire after a set period of compliance:

Annually: 24 months
Quarterly: 12 months
Monthly: 6 months

Getting ready for the HMRC penalty regime

No-one wants to be landed with a £200 fine for hitting the points threshold. Getting up to speed with the new points-based system will help you avoid any hefty penalty fines and should also encourage a more proactive and timely approach to submitting returns and tax payments.

Other points to note include:

VAT and Income Tax points will be treated separately.
There will also be two late-payment penalties where any tax is overdue and no ‘time to pay’ (TTP) arrangement has been entered into.
The first penalty will be 2% of the tax due where it’s either paid or a TTP arrangement is agreed between 16 and 30 days after the due date. If payment isn’t made and no TTP agreement is made by the 30th day, the penalty is 4% of the tax due.
The second penalty accrues daily at a rate of 4% per annum on any tax unpaid after day 30 where no TTP is in place, and continues until the tax is paid or a TTP is agreed.
If there are mitigating circumstances for your late submission, penalties can be appealed against. You should, however, maintain a schedule of all returns due.
If you anticipate having difficulty paying tax as it becomes due, you should attempt to make a TTP arrangement as soon as you know the amount payable.

Helping you keep submissions on time

Where we submit your returns to HMRC, we’ll make sure you don’t miss any deadlines – and you’ll obviously avoid getting hit by any unexpected penalty points.

You’ll still need to pay any taxes due on time, of course. If you’re worried about paying the more unpredictable taxes – such as VAT, corporation tax and personal tax – talk to us about preparing a forecast so there are no surprise late-payment penalties.

Get in touch

Over the years, we’ve grown into one of the leading accountants in York, expanding our range of accounting services whilst staying true to our core values and our force for good ethos. If you would like to talk to us about your tax submission schedule then book a discovery call with Donald Inglis .

Making Tax Digital for Income Tax Self Assessment - pushed to 2026

Tue, 10 Jan 2023 09:02:48 GMT

Running a self-employed business? Receiving property income as a landlord? You’ve got a little more time to get up to speed with the Making Tax Digital for Income Tax Self Assessment rules.

You might be aware of Making Tax Digital already. It’s the UK Government’s initiative for digitising and streamlining the tax return process. VAT-registered businesses are already submitting quarterly VAT returns digitally to HM Revenue & Customs (HMRC).

The good news is that HMRC has pushed back the start date of the next stage of MTD – the introduction of Making Tax Digital for Income Tax Self Assessment ( MTD for ITSA )

MTD for ITSA won’t now become mandatory until 2026 – but the switch to digital records is still needed and is likely to be a BIG change to your record-keeping and your tax return process.

So, what do you need to know about MTD for ITSA and digital record-keeping?

What were the key changes made to MTD for ITSA in December 2022?

MTD for ITSA was due to become mandatory for certain self-assessment taxpayers in April 2024. But on 19 December 2022, HMRC announced some key changes to the next stage of the MTD initiative, including a postponement of the start date.

From 2026, if you’re a self-employed business or a landlord with combined annual business and/or property income above £50,000, you’ll need to follow the rules for MTD for ITSA.

These are the main changes that HMRC has made:

The minimum relevant (self-employed and rental) income reporting level was increased to £50,000. Those with income of less than £50,000, but more than £30,000, are now mandated to join the MTD for ITSA scheme in 2027.
The situation for landlords and sole traders earning less than £30,000 will be reviewed to see if MTD ITSA can be shaped to meet the needs of smaller businesses.
Partnerships will not be brought into MTD for ITSA, as previously planned, in 2025.
The points-based penalty system will be extended to MTD for ITSA filers when they join.

What does MTD for ITSA mean for affected self-assessment taxpayers?

Once MTD for ITSA begins, this will mean that you, or your nominated tax agent, will need to:

Keep digital records of all business transactions – HMRC is making it mandatory for self-employed businesses and landlords to keep digital records of all income and expenditure. This means either pulling the data from your business bank account, or scanning and digitising the source documents for all your transactions.
Submit quarterly updates to HMRC – you’ll need to categorise all your transactional data to fit HMRC’s basic category codes. This digital data must be collected together every three months and submitted as a quarterly update to HMRC’s digital portal.
Submit an annual end-of-period statement – at the end of each tax year, all your transactional data from the year must be summarised in an end-of-period statement (EOPS). At this point, you (or us as your tax adviser) can then make any final adjustments to your income and expenditure, ready to submit your tax return.
Finalise your tax return for the year – once all data is submitted and all adjustments have been made, a final tax return can be submitted to HMRC. Your tax liability for the tax year will then be calculated and HMRC will advise you what you owe.
Pay any tax due to HMRC – once you know your tax liability for the tax year, you’ll then need to pay any tax due by 31st January of the following year – and make any payments on account at the same time, with a further payment by 31st July, depending on your ongoing tax liabilities.

When does MTD for ITSA go live?

At present, MTD for ITSA is now scheduled to come into effect from April 2026. That may sound like a long way off, but there’s a lot to prepare, plan for and organise before the 2026 deadline hits. And failing to meet the new rules could end with you facing an HMRC penalty.

Getting your systems and processes ready for this big shift in taxation will take time. So, we advise starting the planning process soon, so you’re ahead of the curve and ready to go digital when the MTD for ITSA rules kick in for self-assessment taxpayers.

NOTE: From 2026/27 onwards, your profits will always be taxed on a tax-year basis. Where your business year doesn’t end between 31 March 2026 and 5 April 2026, the 2025/26 tax year will be a transitional year, bringing into account all profits up to the end of that year.

Talk to us about MTD for ITSA

If you’re concerned about the impact of MTD for ITSA, please do get in touch with us. We’ll help you understand the true impact of the legislation and the steps you’ll need to take.

Once you’re up and running with digital quarterly returns, there will be plenty of benefits to moving your record-keeping and accounting into the digital space.

You’ll have:

Better visibility of your income and expenditure
Improved control over your business numbers
A clearer idea of your tax liabilities for the year

Get in touch

Over the years, we’ve grown into one of the leading accountants in York, expanding our range of accounting services whilst staying true to our core values and our force for good ethos. If you would like help getting ready for Making Tax Digital then book a discovery call with Donald Inglis .

Trading while insolvent: what are the rules?

Thu, 22 Dec 2022 10:21:37 GMT

Your company is insolvent when it can’t pay the amounts it owes. If you’re struggling financially, get in touch with us sooner, rather than later, to help prevent your company from slipping into insolvency.

Your company is insolvent when it can’t pay the amounts it owes. This can mean that the liabilities (things you owe) on your business balance sheet exceed the assets (things you own), or that you can’t pay your supplier bills when they’re due.

If this happens, it could mean that you and your fellow directors become personally liable for debts incurred by the company – removing some of the benefit of your limited liability.

What should you do if your company becomes insolvent?

One of your responsibilities as a director is to stop the business trading when the company becomes insolvent. It’s right and proper to cease trading if you know the company is not in a position to pay its bills or settle its debts.

But there are rules around how you do this:

It may be that you and your fellow directors believe that you can turn the situation around – but you can’t just do this blindly. If you want to carry on trading, it’s imperative that you record the decision to do so in writing, setting out your reason for continuing to trade. This provides some protection in the event that the initiative fails, and the company is placed into liquidation.
Continuing to trade if you and your directors know (or ought to have known) that there’s no reasonable prospect of the company avoiding insolvent liquidation is a civil offence. This is known as ‘wrongful trading’. If proven, you may be personally liable to cover any losses. This liability would kick in from the point at which you knew (or ought to have known) that the company was insolvent, up to the point it ceased trading.
Signs of potential insolvency to look out for can include:
Difficulty paying your company’s bills on time
Breaching your bank’s overdraft limits to pay overdue bills
Growing overdue amounts owing to HMRC
Increased reliance on business loans from banks and other lenders
Other signs of financial strain or a lack of cashflow.
Ignoring the signs, or deliberately not looking for them, is no protection. As a director you’re presumed to be familiar with all aspects of your business.
You need to avoid giving undue preference and, by doing so, unfairly benefiting some creditors at the expense of others. An obvious example is to pay amounts due to your directors or connected companies before paying HMRC, or suppliers with longer-outstanding debts. It can be more subtle, for example, favouring suppliers you may wish to deal with in a future business over those you won’t need. This can relate to payments made up to two years before formal insolvency proceedings are started.

How can insolvency affect your long-term business plans?

What happens if your company does become insolvent? And how does this affect your long-term plans and strategy for the affected business?

It could be that you don’t believe you can turn the company around by trading out of a short-term difficulty. If this is the case, you need to consider either putting the company into liquidation, or entering into a company voluntary arrangement.

Although wrongful trading is a civil offence, if there is intent to deceive and defraud creditors and customers, this can be considered to be fraudulent trading – this is a criminal offence.

Talk to us about how we can help you avoid or deal with insolvent trading

Having monthly or quarterly management accounts prepared helps you spot the early warning signs of potential insolvency. If you rely solely on your annual accounts, this can be a case of ‘too little, too late’. We’ll help you produce regular accounts to monitor your financial health.

If you’re seeing signs of financial strain in your company, talk to us about ways we may be able to help you deal with the situation. And get in touch sooner rather than later.

If necessary, we can put you in touch with an insolvency practitioner, who can implement other actions such as:

Putting the company into administration
Setting up a company voluntary arrangement
Managing the liquidation of the company.

Get in touch

Protecting business relationships in a time of crisis

Tue, 20 Dec 2022 21:39:04 GMT

Strong relationships with clients, customers, suppliers and staff are a key part of business success. But in a crisis, it’s easy to focus on your own issues and neglect those important connections.

Here’s how to stay connected during difficult times – because you won’t get through without strong relationships and ongoing support.

Communication and contact

Transparency goes a long way in a crisis, so keep the lines of communication open.

Let customers know about delays, changes to opening hours or any other issues as soon as possible.
Make sure your staff are updated about any changes or concerns before they hear about it in the media.
Stay active on social media or through email, so your customers know you’re still around.
Talk to suppliers as soon as possible if you are unable to make a payment.

Flexibility and understanding

Relax payment policies for customers struggling to pay bills – think about accepting payments in instalments or via credit card
Be understanding if staff are struggling as well– loosen dress code rules, let staff work from home, and push back deadlines where possible.
Move your business online, offer at-home services or delivery, and offer discount codes or vouchers to spend when the crisis is over.

Help and support

Reach out to the wider business community to find ways to help others.
Ask staff how they’re dealing with the crisis and give them space to talk about it.
Support your community with donations or time if you can.

Get in touch

Struggling to maintain connections and keep your business moving during the current crisis? Over the last decade, we’re proud to have grown into one of the leading accountants in York, expanding our range of professional services whilst staying true to our ethos of doing good for our local community.

Get in touch for expert support and practical advice from our accounting team.

Quick Tips: What counts as a ‘trivial gift’?

Tue, 20 Dec 2022 12:39:53 GMT

Giving occasional gifts to your staff is a great way to keep them engaged and motivated. But how much can you give before these gifts become taxable?

Certain lower-value gifts can be given to employees (including directors) tax free. These have to be classed as ‘trivial gifts’ to qualify. But what counts as ‘trivial’ in these circumstances?

What is a trivial gift?

To be treated as ‘trivial’, the cost of each gift mustn’t exceed £50. If the cost is higher, the whole value is taxable, not just the excess. The limit is per gift but, in addition, for directors and their (employed) family members, there’s an annual cap of £300 in total.

Are there any other restrictions?

The award can’t be part of a salary sacrifice agreement, or a reward for work that one of your employees has performed. Any gifts you give should be for things like weddings, anniversaries and Christmas, or as general goodwill gestures.

How do I report it to HMRC?

You don’t. As long as the gift meets the criteria, eligible gifts can be awarded free of National Insurance and income tax, without any need to notify HM Revenue & Customs (HMRC).

What records should I keep?

There’s nothing specifically mandated when it comes to recordkeeping. But, as a minimum, you should keep a record of each gift, with the date, description, cost, who it was given to and why. That will ensure you’re prepared in the event of any queries being raised.

Talk to us about gifts and rewards

Trivial gifts and employee rewards are two very different and distinct things. As we’ve highlighted, you can give gifts up to a value of £50 to your employees without any tax consequences. But if you’re looking to give out rewards, bonuses or perks for specific good work then you’ll need to consider the tax implications of these plans. As one of the leading accountants in York, we can help you in this area.

Have a chat with us to discuss your gifting and reward plans and the potential tax outcomes you could come up against.

Inglis certified as ‘On the Road’ to becoming a Net Zero Business

Fri, 16 Dec 2022 15:43:37 GMT

We are pleased to announce that today we have reached the first level of certification to becoming a Net Zero business, working with climate action platform, Net Zero Now.

At Inglis Chartered Accountants, we have calculated our Greenhouse Gas emissions for a full year of operations, created a reduction plan to cut emissions and compensate for any unavoidable emissions and set a target date for implementation. Upon hitting our reduction targets in 2023, we will reach the second stage of certification and become fully ‘Net Zero’.

With the world in climate crisis, the global scientific community agrees that reaching Net Zero is the best chance we have of keeping global warming to manageable levels. The UK government has set a target for our economy to be Net Zero by 2050, and while many firms want to act, they often lack the necessary knowledge and tools to get to Net Zero. The Net Zero Now platform allows small businesses to measure and reduce their carbon emissions using an industry-backed platform that has been created to reflect the needs and requirements of businesses on a sector-by-sector basis.

On the Road to Net Zero

According to the UN, a business will have reached Net Zero when it has cut its greenhouse gas emissions to as close to zero as possible, with any remaining emissions re-absorbed from the atmosphere, by oceans and forests for example. The ‘One the Road’ certification is the first milestone of the journey towards Net Zero. The registered certification mark “On the Road to Net Zero” recognises that a business has calculated emissions in accordance with global best practice and set ambitious yet achievable goals in line with the industry standard.

The Net Zero Now Certification is the final step in a process to assess each business’ progress to Net Zero and provide a recognised and trusted way to communicate that progress to their customers, employees, investors and other stakeholders. To retain the “On the Road to Net Zero” Certification, businesses must complete and publish a validated carbon footprint and demonstrate continual progress towards reaching their reduction targets each year.

Donald Inglis, Managing Director of Inglis Chartered Accountants says:

“We’re delighted to have reached this important milestone on the way to becoming a Net Zero business. We know our staff and customers want to see us take action on climate change and understanding the sources of our emissions is the first step. We’re determined to reduce our emissions and build a more sustainable future for our business, our customers and ultimately our planet.”

Simon Heppner, Executive Director of Net Zero Now says:

“We’re on a mission to help every small and medium sized business in the UK get to Net Zero - given that SMEs are responsible for almost half of business-related emissions. It’s an absolute pleasure to have Inglis Chartered Accountants join us on the journey to becoming a Net Zero business. Every firm across the UK should have the tools to take action on the climate crisis and we’re proud to offer our platform and certification to companies like Inglis. I encourage more firms to get on board.”

Get in touch

Over the years, we’ve grown into one of the leading accountants in York, expanding our range of accounting services whilst staying true to our core values and our force for good ethos. If you would like to earn more, keep more of your hard-earned profits and enjoy the life you want then book a discovery call with Donald Inglis .

Tackling the cost-of-living crisis with tax advice and reliefs

Thu, 15 Dec 2022 14:59:01 GMT

As the cost-of-living continues to rise, small businesses are feeling the impact deeply, hitting both their personal and business budgets, as well as their employees.

With soaring energy prices, rising inflation, good shortages and supply chain issues businesses have been hit hard. And all this is coupled with the very real concern that trade could drop off if people are forced to cut back their spending.

Hunt’s first Autumn Budget

Over the last few months, we have seen many tax changes announced and mostly all of them repealed under the new PM’s leadership.

In the Autumn Statement on 17 ^th November 2022, we saw the government announce several tax changes. Here’s a roundup of the latest changes:

Changes affecting business owner and employees

Freezing of income tax and national insurance rates/ thresholds until April 2028.
Reducing the threshold for when you pay 45% tax (from £150,000 to £125,140) from April 2023.
Reduction in the tax-free dividend allowance from April 2023 (£2,000 to £1,000).
Reduction in NIC paid by 1.25% from 6 ^th November 2022 – saving money on salary and benefits.
Increase in SDLT thresholds for buyers and first-time buyers from 23 ^rd September 2022. These rates will continue until 31 ^st March 2025.

Changes affecting the business

Reduction in tax relief for SME’s claiming for qualifying R&D projects – from 130% to 86% and reducing the loss surrenderable tax credit from 14.5% to 10%.
Reduction in staff costs by 1.25% (NIC) from 6 November 2022 – saving money on employing staff.
Increase in corporation tax from 19% to 25% in April 2023. Companies with profits between £50-250k will pay 19-25%, whist companies with profits over £250k will pay 25%.
Freeze on employer NIC rates and the employment allowance.
Confirmation that the Annual Investment Allowance for Capital Allowances will continue to remain at £1m post April 2023 when the 130% super deduction ends.
Increase in SEIS investor funding limits from April 2023 from £100k to £200k – allowing eligible businesses to raise more cash which gives investors favourable tax relief.
Increase in limit on Company Share Option Plans from £30k to £60k from April 2023.

Only a small number of these measures guarantee lower tax costs for businesses compared what we originally expected when we had the Mini Budget in September.

But what else can businesses do?

Tax advice and tax reliefs is an area often overlooked when businesses are experiencing financial hardship. But tax is a very real cost to businesses and any opportunities to save it should be explored. Not to mention the many ways businesses can look to support employees’ tax efficiently without resorting to increasing wages.

There are many tax efficient ways business owners can look to get more cash back into their business and ease the cost-of-living burden personally and for their employees.

Innovation tax reliefs

Claim back up to £33 (up to £21.50 after April 2023) for every £100 spent via R&D Tax Relief / claim back up to £90 for every £100 spent via Creative Tax Relief / save 10% in corporation tax on patent box relief claim.

Funding

Up to £50k back on SEIS funding for investors / up to £300k back on EIS funding for investors / receive up to £1k in interest on business owner loan without paying income tax.

VAT

VAT registration – save 20% in VAT on purchases or VAT deregistration – save your customers 20% on VAT on their purchases.

Investments

Receive an extra 30% for investments that are eligible under the capital allowances super deduction until 31 ^st March 2023.

Losses

Limited companies that have made trading losses can carry them back over the last three years and get a refund for 19% (or up to 25% for profits over £250k from April 2023) corporation tax already paid.

Pensions

Pension contributions are tax-deductible so result in a 19% (or up to 25% for profits over £250k from April 2023) corporation tax saving. Pay up to £40k per year into pension saving c.£16.8k for a 40% taxpayer.

Employee incentives & expenses

There are numerous tax efficient benefits and business expenses personally paid for to explore to help boost personal funds from trivial benefits to points reward cards.

Employee loan

If a business has available cashflow, it can be a good way to incentivise the business owner and employees by offering up to £10k loans, interest free.

If you are a business owner, valuable tax savings could help with the steep increase in costs your business is experiencing right now, along with many tax reliefs and incentives that could ease the cost-of-living burden for you and your employees.

Download our free guide

We have created a guide that outlines the many tax efficient areas you can explore to get more cash back into your business. Download the guide, Tackling The Cost Of Living Crisis With Tax Advice And Reliefs, by clicking this link .

Don’t ignore the opportunity

Inglis Chartered Accountants are one of the leading accountants in York, offering a wide range of accounting services to help you earn more, keep more of your hard-earned profits and enjoy the life you want. If there is even the smallest chance something might be relevant, get in touch and let’s talk through how we could help.

Business Expenses Paid for Personally — Part 2 — Save Tax and Extract Maximum Value From Your Business

Thu, 15 Dec 2022 12:04:24 GMT

Expenses of the business that have been paid for personally may either be reimbursed by the company or, if not reimbursed, may be deductible for the individual against other income.

Subsistence & entertaining

Subsistence

If you are carrying out your director duties such as attending a client meeting or traveling for business, you can claim your meals and drinks back via expenses tax free provided receipts are retained.

Say you are attending a client meeting; you could claim back your lunch whilst in the city centre or claim back a coffee on your way to a supplier meeting. Another example is you might buy your evening meal at a service station on your way back from a client meeting as it will be too late to eat when you arrive home.

Incidental overnight expenditure

If you are travelling on business and are required to stay overnight, you can claim £5 in the UK or £10 overseas per night for incidental travel costs without any receipts.

As an example, this may be a newspaper, refreshments from the mini bar, laundry, home phone calls, tip for a taxi driver or porter.

The limits must include VAT paid. If you exceed this limit per night, the whole amount becomes taxable as employment income rather than the excess over £5 or £10.

Entertaining

When you are entertaining a client, your business can cover the cost of entertaining provided it is reasonable and for business purposes. This may include lunch or dinner, drinks including alcoholic or attendance of a sporting event such as a football or tennis match.

This may be to thank them for their business, to discuss a new deal or to promote a better working relationship.

You can also use this as a way of extract value personally from the business. You could take a customer to a restaurant you have always wanted to try or a sporting event for your favourite football team.

Unfortunately, the company is unable to claim client entertaining as an expense against their profits and no VAT can be reclaimed for these costs.

You may be considering paying for a corporate box at a football stadium or the like. The treatment of them is different depending on how you use them and who uses them.

If you take a client to the corporate box, the normal rules apply so the cost cannot be deducted from your business profits and no VAT can be recoverable. However, it wouldn’t be a taxable benefit for you as a director as you are entertaining a client as part of your duties.

You could also consider taking a group of employees to the box to entertain a group of clients as this would be tax free provided it is required as part of their employment duties.

If you used the box to entertain your staff or you went to the box with a group of friends, it would be a taxable benefit on you and your employees. Income tax and National Insurance would be payable on the benefit.

Music, audio books & Amazon Prime subscriptions

If you are currently paying for a music, audio book or Amazon Prime subscription, you should consider putting the cost of these subscriptions through the business.

HMRC will only allow the business to claim a Corporation Tax deduction for these costs if they are only used for business purposes. It would also be tax free for you and your employees.

A key point to note is that you will be required to register for a Music Licence if you are playing music in your office even if it is on headphones.

Examples

You have a subscription to Audible which you use only to listen to books about your industry and books which cover business strategy, planning and other related content. You could claim this cost from the business.

You have a Spotify licence which you use to play music in the office and when staff are working from home.

Your team have put together playlists which reflect the business values. They listen to them at home and in the office to remind them of the business values and create unity.

You could also claim this cost from the business. You have an Amazon Prime account which you use to buy items for the business such as computer equipment, stationary etc. You could also claim this cost from the business.

Points rewards cards

If you or an employee has a personal card that you use for business expenses, any points received from the reward card are not taxable on you. A good example of this is air miles cards where significant airmiles can be accumulated leading to big discounts on flights.

Similarly, a company card that receives points (such as airmiles) can be used by the business owner to accumulate points and pay for flights without any tax or NIC on the individual.

For an example see: www.americanexpress.com/uk/business/corporate-cards

School & universities fees planning

You may pay substantial amounts in education costs, in terms of school or university fees for your family. In the correct circumstances, this can represent an area where forward planning can help create significant tax savings.

When funding private education, you will expend significant amounts of income for the benefit of another individual, after it has been taxed on you. Where the income is instead taxable on those in education, the arrangement can be much more efficient. Substantial tax savings can arise, due to the personal allowance and basic rate band, which are typically unused by children in education.

However, where the beneficiaries are minors the gift must not be made by the parents, as it would be rendered ineffective for tax purposes under the “parental settlement rules”. Instead the settlement should be made by grandparents/other family members.

Tax planning

Suitable relatives will not always own income producing assets themselves. However, if they have sufficient wealth they could acquire suitable assets, such as property or shares.

Structuring the acquisition as an “income only” entitlement, for example, in another family member’s business or investment portfolio, can be an effective way to reduce the cost.

Although gifts can often be made to the children outright, it is usually preferable to gift assets into a trust for educational purposes. This route would allow you to retain control as trustee (or via a letter of wishes), while the income tax advantages would still be available in the correct circumstances.

32 Ways To Save Tax and Extract Maximum Value From Your Business

These tips are from our eBook, 32 Ways To Save Tax and Extract Maximum Value From Your Business. This guide explores 32 ways to ensure you’re maximising every opportunity you could be, to improve your life, your families and your employees.

Download 32 Ways To Save Tax and Extract Maximum Value From Your Business eBook .

Is Donald Inglis starring as Peter Pan?

Thu, 15 Dec 2022 12:02:47 GMT

The 2022 pantomime at the York Royal Theatre is the magical All New Adventures of Peter Pan, co-produced with Evolution Productions. But is Donald Inglis starring?

Sadly, no. However, as part of our efforts to support the local arts, Inglis Chartered Accountants is proud to announce that we are a stage partner for York Theatre Royal and one of the main sponsors of this year's pantomime.

The performance runs until 2 January 2023 and tickets for The All New Adventures of Peter Pan are available now at www.yorktheatreroyal.co.uk/show/all-new-adventures-of-peter-pan .

Inglis Chartered Accountants is proud to support the Millie Wright Children's Charity

Wed, 14 Dec 2022 09:49:42 GMT

We are pleased to help The Millie Wright Children's Charity as we support their Saturday Supper initiative.

On Saturday, 10 December, The Millie Wright Children's Charity delivered 26 pizzas to grateful families at Leeds Children’s Hospital, happily provided by the team at Inglis.

Some may not realise but when a child is seriously ill in hospital, parents are not provided with food during their stay. For a lot of our families, the stay can be months and the cost can be debilitating. Not only that, parents do not want to leave their child whilst they go off the ward to find food. Similarly, children are often extremely too anxious to be left by their parent. Having access to food is essential as families often miss meals.

How they make a difference

The Millie Wright Children's Charity provide practical, financial and emotional support to patients and their wider families as they recognise the huge strain and uncertainty arising from having a sick child. By working with ward staff they can help alleviate some of the challenges of being, or supporting, a long stay in-patient.

How you can make a difference

The Millie Wright Children's Charity rely 100% on the kindness and generosity of others - individuals, groups and organisations. There are many ways in which you can support their charity and get a sense of real satisfaction from supporting families facing challenging times. Whether you want to fundraise, donate or support initiatives like their 'Saturday Suppers', please get in contact at www.millieschildrenscharity.org .

Happy Christmas

Tue, 13 Dec 2022 17:04:39 GMT

Happy Christmas to our valued clients. We wish you health, happiness, and new beginnings for the year ahead.

We wish you a very happy Christmas and well deserved end-of-year break from your partners at Inglis Chartered Accountants.

It has been another challenging year for our clients. We hope you will be able to take some time at Christmas to connect with family and friends to recharge and relax.

We are grateful for the opportunity to work with you and be a part of your continued prosperity.

Our office will be closing at 5pm on the 23 ^rd of December 2022 and reopening at 9am on the 3 ^rd of January 2023.

Business Expenses Paid for Personally — Part 1 — Save Tax and Extract Maximum Value From Your Business

Tue, 13 Dec 2022 17:03:07 GMT

Expenses of the business that have been paid for personally may either be reimbursed by the company or, if not reimbursed, may be deductible for the individual against other income.

You can put any cost through your business, but it doesn’t mean that it is tax free. The rules can be complex with grey areas, so care needs to be taken to ensure you claim properly.

Where you incur expenses in the course of their employment:

For the company, any cost incurred in reimbursing expenses will be deductible against Corporation Tax.
For you or an employee, the position is often more complex, as explained below.

Non taxable

Where you incur expenses “wholly, exclusively and necessarily” for the purpose of your employment, amounts received will be free from tax or NICs. Similarly, if the expense is not reimbursed, a tax and NIC refund can often be claimed (usually via self-assessment).

The rules on relief can be restrictive. In particular, where expenses are partly for another job, or for personal reasons, relief may not be available. Whilst there may be grey areas, there are certain types of personal expenditure – such uniforms, protective clothing or business mileage – that can almost always be successfully claimed.

Taxable

If the expense is not wholly, exclusively and necessarily for the purpose of your employment, any reimbursement will give rise to income tax and NIC implications, as an employment benefit.

The specific tax implications will depend on a variety of
factors, including, whether the expense relates to travel and subsistence (including mileage allowance), home working expenses, whether the expense is reimbursed or a bill is instead paid on your behalf, to name a few.

These costs could be added to your director’s loan account to stop the benefit being taxable. However, you would need to repay this balance within 9 months of the company’s accounting period to avoid a 32.5% tax charge (albeit reimbursable if you put the money back into the company later).

Home working expenses

You and your employee may work regularly from home these days. This increases the cost of some home bills (e.g. heating, light, faster internet) and so HMRC allow an amount to be reimbursed to you that reflects the additional cost of working from home.

As a simple measure, paying yourself and employees, who regularly work from home under a formal arrangement, £6 a week or £26 a month requires no record keeping and the amount paid to you is tax free. If the cost of working from home is greater than £6 a week (£26 a month), then records need to be kept to prove the additional cost. Where this is done, again there should be no income tax or NICs on the additional payments. From April 2022, this can only be paid if you don’t have an office, there are no appropriate facilities available for the employee to perform their job on their employer’s premises or the employee’s job requires them to live far away from the office.

Mileage claims

Where you use your own car for business (excluding commuting to and from work), you can claim 45p for each business mile travelled up to 10,000 miles and 25p per mile thereafter, without income tax consequences.

An additional optional 5p per mile can be paid where you have “car pooled” with a fellow employee or director. Similarly, for motorcycles 24p per mile can be paid, and for bicycles 20p per mile can be paid, tax free.

The company can also claim a tax deduction for mileage payments paid to employees.

Congestion charge – company car

If you incur the congestion charge whilst travelling to London using your company car, you can put the cost of the charge through the business.

Business travel

Travelling to and from “the office”

Ordinarily, you are unable to put the costs of commuting to and from the office through the business. This applies to the cost of petrol or public transport, as well as claiming back 45p per mile as detailed above.

So, can I claim for the costs of going to the office if I usually work from home or only go to the office on an infrequent basis?

Your business address is deemed to be your “office”. It is your main place of business that you regularly or usually attend even if it is infrequently. If you choose to work at home and do not go into the office very often, this doesn’t change the fact that you are commuting to your workplace when you do go into the office (provided that is the place you usually attend for all of your employment). There are some exceptions to this that you should be aware of:

Late night working costs

If you need to get a taxi home from the office as you have been working late (until at least 9pm), you can get the business to pay for the taxi to get home without any tax implications. This must be irregular; you are required to work late for a business reason and where the public transport has stopped or unreasonable to use it. This can be used up to 60 journeys per year and has no maximum amount per journey.

Failed car share arrangement

This also applies if car sharing arrangements fail after you have arrived at work due to unforeseen circumstances.

For example. if your lift home with another director or employee isn’t possible as they have had to go home due to illness, this would also apply.

Public travel costs

You can claim for the cost of public transport costs if travelling for business such as client meetings or to attend an industry conference.

Private travel versus public transport

As outlined above, you can claim for the private usage of your personal car if you travel for business.

It is a commercial decision as to whether you travel in your car or take public transport. Usually this will be considered based on cost, location, travel time, equipment taken and time of day.

As an example, it may be cheaper to take the train to Birmingham but it is necessary to take the car instead as you are required to take some equipment with you and the combined cost of public transport and courier costs are more than the cost of claiming mileage back.

Another example may be that the location of the business meeting is in the middle of the countryside so public transport will be ruled out.

First class travel versus standard class travel

Generally, the cost of the business travel will not normally have any bearing on whether or not tax relief can be claimed.

A claim for business class travel over standard class wouldn’t be denied if it was necessary for the journey.

Here are some examples where first/business class travel is necessary:

You were travelling with a client who is booked on first/business class travel.
You are travelling on a long journey, so you need more space for comfort – say to sleep whilst on the journey ahead of a meeting when you arrive at your destination.
You require privacy and space to carry out your work whilst using public transport – say you require a desk for your laptop and place for your files whilst working which is only possible in first class.

However, you are unable to claim where the arrangements are unusually lavish or to reward an employee as there is a question as to whether the expenditure is genuine business travel.

Airport lounges

Following the above points, an airport lounge could be claimed as a business expense if required for commercial purposes. An example could be that you need space and privacy to carry out your work whilst waiting for your flight.

Taxi versus public transport

You could also claim for the cost of a taxi if you were unable to take public transport. This may be due to speed, time of the day, location or equipment taken.

There must be a commercial reason for claiming the taxi over public transport to claim the cost back.

For example, you couldn’t claim the cost of taking a taxi for a 10-mile journey during the day which you could easily take a train instead and had no reason to take the taxi apart from the fact you prefer not to use a train.
However, you could claim a taxi to your hotel when arriving in London if you had a large suitcase containing clothing for a week of business meetings as it would be unsafe and impractical to use the tube.

Personal element

If your travel involves any personal element, it is still eligible if the purpose of the travel is for business and does not involve a detour.

For example, you travel to London for the day for a work conference and meet a friend for a coffee before you head home. You can still claim the cost of the train travel provided the reason to travel to London is for business.

Another example could be that you travel to London for a work conference on a Friday and decide to stay in London over the weekend as a holiday. You book your train ticket back home for the Sunday evening when your break ends.

This would be possible to claim the cost of travel as business provided the main reason for going to London was for the work conference. You wouldn’t be able to claim any expenses for food or accommodation after the event finished.

Travel to a temporary workplace

You are unable to claim back the costs of commuting to your office. However, you can claim for travel to a workplace which you don’t do go to regularly or for short periods of time.

An example may be that you are required to work at head office for occasional meetings or you need to work at another new office for a set period of time to get the office up and running.

If you are responsible for an area over which you perform duties, then the travel expenses for covering that area are allowable such as a regional director travelling to different business premises. The travel to various sites does not constitute ordinary commuting as none of the locations would be considered permanent places of work.

32 Ways To Save Tax and Extract Maximum Value From Your Business

Download 32 Ways To Save Tax and Extract Maximum Value From Your Business eBook .

Tax Efficient Benefits — Save Tax and Extract Maximum Value From Your Business

Thu, 08 Dec 2022 11:59:00 GMT

Outside of the ‘tax free’ benefits posted previously, other benefits that can be provided by a company to you and your employees in a tax efficient way are detailed in the following blog posts.

Lunches & snacks

Provided all staff are offered the option, providing lunches to staff at the business premises is tax free for the employees, and the business can claim Corporation Tax relief and recover VAT (where relevant) on the costs.

The conditions to qualify are that the lunches must be available to all employees, be ‘reasonable’, and provided at the business premises (e.g. canteen or kitchen area).

Childcare support

There are three potential ways to help fund childcare in a tax efficient way:

Tax free childcare is a scheme that allows you to save up to 20% on childcare costs. The government will contribute up to £2,000 per year for each child in childcare. So in effect this gives a 20% discount on childcare costs up to £2,000 per child per year.

Childcare vouchers – these are now only available if you signed up to a scheme (which is still operated by the company) before 4 October 2018.

The scheme was more tax efficient than the new tax free childcare, so if you are eligible this should be considered too. This scheme is operated via ‘salary sacrifice’ and so provides an equivalent benefit to the ‘tax free’ benefits listed above.

Workplace creches, whilst not practical for most businesses, a workplace creche can be provided to you and your employees with no tax or National Insurance liability. So, if applicable, it is worth considering further.

Bicycles & equipment cycle to work

Bicycles and equipment can be purchased under a ‘salary sacrifice’ scheme so that the cost of the bike and equipment comes out of pay before being taxed i.e. it offers equivalent savings to the ‘tax free’ benefits listed above. This has a tax and National Insurance saving for the individual (up to 47% for the highest rate taxpayers) and also gives a National Insurance saving to the company. This saving can also be passed on to you to make it even cheaper to get the bike (and equipment).

The amount that can be spent is now uncapped (compared to the previous £1,000 which applied to most businesses). So a top quality bike and equipment (helmet, gear, lights, etc.) can be bought with significant savings available.

The way the schemes work in practice is that there is an initial rental period (usually 12 – 24 months) after which you can hand the bike back, buy it at its current value, or continue to rent it from the cycle scheme provider at low cost. Choosing the last option is usually the most cost effective, meaning you can own the bike outright after 4 or so years.

An example of a cycle scheme provider and videos on how it works can be found here: www.cyclescheme.co.uk

Onsite gyms & sporting facilities

As a way to promote the health and wellbeing of you and your staff, you can offer access to sports or recreational facilities, or non-cash vouchers which can only be used to access those facilities as a benefit.

There is an exemption from tax if:

the facilities are available to all employees
it is not open to members of the general public
the facilities are used wholly or mainly by employees, former employees or family members of those groups

If multiple businesses use one set of facilities, this does not trigger a benefit. This would apply to office gyms, shared gyms in communal office space and recreational facilities.

Taxable benefits still worth considering

It is also worth considering other benefits that can be offered to you and your employees. Whilst not ‘tax free’ or available as a ‘salary sacrifice’ scheme, they can have other benefits, such as:

1. You may get better rates or premiums for bulk buying for a number of individuals.

Specific examples of the types of products worth considering are:

Medical cover. This definitely meets all the benefits listed above.
Many policies have discounted gym memberships, offers and promotions for mental and physical wellbeing.
Some policies allow members to reclaim dentistry and optician costs. This can be hugely beneficial for you and your employees and in some cases may outweigh the tax cost of having the benefit.
It is worth noting that medical insurance policies which cover only injuries or diseases that result from your work are tax free.

If your medical insurance doesn’t cover this, your business can pay for your medical treatment when you are working overseas.

2. Increased wellbeing and productivity of staff.

3. Better quality products and rewards that employees would otherwise get if they had their own policy or didn’t have a policy at all.

4. It’s just a good employee perk!

Policies can give quicker and no cost access to care in the event of illness or injury. Again this can be very valuable in giving you and your employees top quality support in times of need.
Shareholder protection insurance. This type of policy will allow things like remaining shareholders to buy out the family of a deceased shareholder
Critical illness cover or income protection insurance.

Company cars

In recent years, the tax on company cars has increased to the level where it is now not usually financially viable for the company or the user of the car. However, there is one main exception – electric cars.

Where company cars are provided for specific individuals, a taxable benefit will arise on you or your employees. This is based on a percentage of the list price of the vehicle, determined by its carbon dioxide emissions. The use of lower emissions vehicles can generate significant tax savings.

Since 6th April 2020, the benefit in kind (“BIK”) has been based on new higher C02 figures determined under the Worldwide Harmonised Light Vehicle Test Procedure (“WLTP”).

Care must be taken when calculating the BIK for the current tax year as cars which used to be under one band may have changed due to the WLTP, this can result in a higher cost to the employee and employer.

Fuel costs provided by the company will be subject to an additional benefit in kind charge unless the cost of fuel is in relation to journeys that are part of the employee’s business duties, e.g. a service engineer travelling to an appointment.

Electric cars

An electric car can mean a “pure-electric” car or a hybrid (part petrol/diesel and part electric). There are two key tax advantages available if the car meets the relevant conditions:

Low tax on the individual user.
If the business buys the car, 100% Corporation Tax relief is available in the year of purchase. To avoid a clawback of the Corporation Tax relief you have to keep it for a minimum of 4 years.

Charging electric vehicles

The cost of charging electric vehicles at the place of employment is exempt from tax and NICs. It makes no difference who owns the car.

It is also possible for you to receive a tax-free benefit if a charging point is installed at your home provided you have a company car. It would be taxable if you had a charging point installed at home to charge your personal car which you used for business purposes.

Running costs for company owned car

With the exception of fuel (which will result in an additional benefit in kind charge for non-business use), the benefit in kind charge covers all motor running costs, including costs such as servicing and insurance.

Where a vehicle is currently provided, but insurance is not, the company should consider providing insurance too – the increased cost will be deductible for Corporation Tax purposes, but no additional tax charge will arise on you.

Additional items for company owned cars

Ordinarily, car accessories are included in the value of the vehicle when calculating the company car tax charge.

However, there are two company car accessories you could purchase via your business which are completely tax free.

Personalised number plates.
Hand free kits and equipment – if you need a cradle for your mobile phone or a cable to charge your phone, it is possible to purchase them via your business.

32 Ways To Save Tax and Extract Maximum Value From Your Business

Download 32 Ways To Save Tax and Extract Maximum Value From Your Business eBook .

Employee Benefits — Save Tax and Extract Maximum Value From Your Business

Wed, 07 Dec 2022 09:31:13 GMT

Normally, if a benefit is provided to you, it will be taxed in the same way as a salary. However, there are some exceptions to this rule – detailed below – which can result in significant cost savings, in the form of Corporation Tax, VAT, income tax and NIC.

For example, if a cost can be incurred by the business, the equivalent saving (ignoring VAT savings) on the monthly cost could be around:

25% if you take dividends and are a basic rate taxpayer
45% if you take dividends and are a higher rate taxpayer
40% if you are salaried and are a basic rate payer
49% if you are salaried and are a higher rate taxpayer

Given the savings, consideration should be given to the following costs and whether they can be incurred by the business rather than personally.

Life insurance

Relevant life assurance is very similar to a typical life insurance policy. Policies usually pay out a sum to beneficiaries in the event the insured person (e.g. the business owner) dies.

Alongside the monthly tax cost savings, policies can also be written ‘into trust’ so that they are outside the scope of inheritance tax.

Obtaining cover for the wider workforce can also be a great way to retain employees.

Pension advice

If you need to seek pensions advice, it is tax free up to £500 in value if it is paid for by the business.

Mobile phones

One mobile phone can be given to every employee in the business – including you and any family members that are employed – and there is no tax or NIC regardless of whether the phone is used for personal calls, messaging, etc.

It may also be attractive to employees to have a phone that is better than one they would otherwise have if they bought a phone personally.

It is also possible for the company to offer a second mobile phone to you and certain employees provided the phone has insignificant personal usage. In other words, the main reason for providing the second phone to you is for business purposes. This would allow employees who want separation of home and work matters to have two mobile phones.

A tablet which allows you access to make calls via Skype or FaceTime isn’t deemed to be a mobile phone – it is treated as an employee use of a business asset.

Anything except cash that costs less than £50

This is subject to specific restrictions detailed below, but in short you could buy anything via the business as a way to extract value, e.g. your favourite bottle of perfume/aftershave, an Amazon gift card to buy something for your house or take your family for a meal whilst on holiday, provided it costs less than £50. This is an effective way to extract value from your business.

For you as a director, the total amount that can be spent per year on items like this is £300. For other employees, the amount is uncapped.You can be given up to £300 in “gifts” annually, provided certain conditions are met:

Each gift value must not exceed £50
Each gift must not be cash or something that can be turned into cash. This means things like Amazon vouchers or supermarket vouchers are fine, provided they can’t be traded in for cash.
It must not be part of their contract or salary.
It must not be in recognition of services (i.e. performance related).

They are also known as “Trivial Benefits”.

If family members are employed by the company, they can also be given up to £300 in gifts in the same way. If family members who are not employed are given gifts, this counts towards the £300 cap. For other employees, the gift amount is uncapped. Giving benefits like this to staff can be massively rewarding for them, helping to achieve motivated staff and high retention levels.

Staff functions

Provided the cost per attendee is less than £150, an event for staff – for example at Christmas – is not taxable on you or your employees.

As an example, a business with 5 employees could each take a guest to an event. Provided the total cost is less than £1,500 it falls within the exemption detailed above. This exemption can be aggregated over the year, so for example you could have 2 events costing £75 per head, and it would still be tax free.

Employee car parking

Paying for a car parking space for yourself or an employee can be very beneficial for city centre businesses where the cost of parking can be high. The car park space must be at or near to your office to be tax free.

VAT registered businesses can also reclaim the VAT element of the cost, giving a further saving.

This can also be a very efficient way to reward employees who need to drive into a place of work and have to park in an expensive car park.

Training

Work training can cover a wide range of areas that are wholly for business purposes, such as professional development and health and safety. Instead of incurring the cost personally, the business can pay for your training as a tax-free benefit.

32 Ways To Save Tax and Extract Maximum Value From Your Business

Download 32 Ways To Save Tax and Extract Maximum Value From Your Business eBook .

The impact of the Autumn Statement for self-assessment taxpayers

Tue, 06 Dec 2022 11:15:38 GMT

How did the Autumn Statement affect your personal tax planning for 2023? We’ve pinpointed the main points and the potential impact on your wealth.

This year’s Autumn Statement was highly anticipated – particularly given the financial chaos that followed the disastrous ‘mini budget back in October 2022. The current Chancellor, Jeremy Hunt, announced a new fiscal strategy that aims to deliver stability, growth and public services.

But with a cost-of-living crisis already affecting many people, and the announcement of a two-year-long UK economic recession, the year ahead is looking challenging. So, what have the main Autumn Statement measures done to relieve these financial pressures? And what will the impact be for your personal wealth and tax liabilities?

We’ve pulled out the key personal tax announcements for you.

The key personal tax measures from the Autumn Statement

These are the main personal tax and planning measures that we think you should be aware of:

Income tax – Kwasi Kwarteng’s controversial removal of the top rate of income tax has already been reversed, keeping the basic rate (20%), higher rate (40%) and additional rate (45%) as the standard three-tier structure for income tax.
Lower threshold for additional rate income tax – the big news was the lowering of the threshold for the additional rate of income tax. The 45% rate will now kick in for annual income in excess of £125,140 (currently it’s £150,000) bringing far more taxpayers into that top income tax bracket. The 40% higher rate now applies between £50271 and £125,140 and the basic rate is charged on income between £12,571 and £50,270.
Stealth tax on personal income – the tax-free personal allowance remains at £12,570 and the income tax bands have been frozen until April 2028. At first glance, this sounds like good news. But the reality is that freezing the bands will result in many taxpayerspaying more in the longer term. An increasing proportion of your income may be taxed over time, and potentially in higher tax bands, due to wage inflation.
Inheritance Tax threshold – the inheritance tax (IHT) threshold will be frozen at current levels for a further two years to 2028. The tax-free threshold is £325,000 and residence nil rate band is £175,000.
Capital Gains Tax thresholds – at present, your first £12,300 of gains are free of capital gains tax (CGT). This CGT-free allowance will now drop to £6,000 from April 2023 and £3,000 from April 2024 – meaning increasing amounts of CGT will be due on any gains you make from 2023 onwards.
Dividends Tax threshold s – currently, your first £2,000 of dividend income is free of tax. This tax-free allowance will drop to £1,000 from April 2023 and £500 from April 2024, making it less tax-efficient to be paid dividends from your eligible company profits.
National Insurance (NI) – the Class 2 rate of NI (flat rate for self-employed people) will increase from £3.15 to £3.45 per week from April 2023. The Class 3 (voluntary contributions) rate will increase at the same time to £17.45 from £15.85. These increases are in line with inflation, but will still add to your overall tax and NI costs at a time where cash is increasingly tight for many self-employed people.
State Pensions – the State Pension will be increased by 10.1%, in line with inflation. This will restore the triple lock on pensions, giving some much-needed security to pensioners and those nearing retirement age.
Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) – MTD for ITSA wasn’t mentioned in the Autumn Statement, but it’s likely that MTD for ITSA will stick to the planned timescales. From April 2024, self-assessment taxpayers earning over £10,000 p/a will need to sign up for MTD for ITSA. This means keeping digital records of all your income and expenditure, and submitting quarterly and annual digital returns to HMRC’s digital portal.

Talk to us about the impact of the Autumn Statement

If you think your personal wealth and tax planning will be affected by the Autumn Statement, please do come and chat to us. We can help you walk through the implications of the various tax measures and how planning could make you more tax efficient for 2023.

If you think you’ll be affected by MTD for ITSA, we’ll help you understand the implications. We’ll also introduce you to the right software to keep you compliant and in control of your numbers.

Get in touch to talk through your tax planning .

Business Assets — Save Tax and Extract Maximum Value From Your Business

Tue, 06 Dec 2022 11:13:52 GMT

Business owners who allow their company to use personal assets should consider charging rent for the use. This is another effective way to extract funds from a business tax free. Certain business owned assets can be used by a business owner without any tax implications provided private use is minimal.

Rent – company use of personal assets

The company may be using assets that are owned by you or you are considering acquiring a property to be rented to the company. This can be commercially attractive in some circumstances, examples of which are:

Asset protection – keeping the building and fixtures and fittings out of company ownership
Your pension is maxed out either annually or lifetime allowance
You don’t want to commit to large pension contributions in the short term
You are looking to buy a property personally and then rent to the company, and due to other factors (e.g. sharehold ing structure or lack of funds available in the company) it makes sense to buy the property personally
Assets already in ownership (e.g. commercial building or other assets, and don’t want to transfer them to the company for commercial or tax reasons.)

It can also be tax efficient to hold the asset personally and rent it to the company.

Example in the scenario where dividends are not possible

Consider someone with a £50,000 salary, who owns a property personally that is used by the company. The market value rent for the property is around £22,800.

If the company paid £20,000 as a salary or a bonus, it would cost £22,760 (£20,000 plus employers’ NIC) with a tax and NIC cost of £11,160 (1).

If £22,760 was paid as rent, the tax cost would be £9,104 (2).

In this example, the saving in comparison to salary is £2,056.

Notes

Income tax and NICs – based on NIC rates from 6 November 2023
Income tax but no NICs

If you sell the asset alongside the shares in the business at a future date, you would usually be able to claim Business Asset Disposal Relief to reduce the tax you pay to 10% of the gain.

Unfortunately, the payment of rent by the company can restrict the relief available when you sell the asset.

The relief is restricted by the percentage of market rent paid by the company. So, if the business pays full market rent, no relief is available.

Furthermore, Business Property Relief can be restricted, increasing potential exposure to inheritance tax. As the asset is owned by you, it will be in your estate when you pass away. Business assets owned by you personally only receive 50% relief, so the remainder is taxed at 40% if your estate exceeds the nil rate band (currently £325,000).

For both reliefs, specialist advice should be taken to ensure relief is maximised.

Personal use of company assets

If you are considering purchasing an asset that will have a business use, you should consider if you can pay for it via the company as an effective way to maximise the value you take out of your business.

Where appropriate the savings could include income tax, NIC, Corporation Tax and VAT.

Whilst a tablet/iPad has the capability to make video and voice calls, it cannot be treated as a mobile phone and fall into the mobile phone exemption.

The asset must be bought and used primarily for business purposes. It will be taxable on you if there is significant personal use, little or no requirement for you to have an asset for your work or it is a reward for your employment.

In some cases, the personal use of the asset may be exempt despite the personal use exceeding the business use. This would only apply if the private use is secondary to the use for work purposes.

Example

If your role requires you to use a laptop for most of the day, it will not be taxable if you use the laptop for personal use in the evenings or weekend. Clearly your personal use would be insignificant to the business use.

Compare this to an individual who works in a trade like manufacturing and only needs a laptop for invoicing and timesheets but has some personal use of the laptop.

HMRC will allow personal use of the laptop provided you need the laptop to carry out the duties of the employment even if the amount of time spent on private use exceeds the business use. The laptop must be sufficient to carry out the invoicing and time sheets. You wouldn’t be able to buy an expensive laptop which you want to use for your film editing hobby and claim it was for business purposes as you wouldn’t need that spec of laptop to carry out your business duties.

32 Ways To Save Tax and Extract Maximum Value From Your Business

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Loans — Save Tax and Extract Maximum Value From Your Business

Thu, 01 Dec 2022 10:31:33 GMT

There are various scenarios to consider when it comes to loans – from money already lent to the company to having money available to loan to the company. Making loans to the company can be a tax efficient investment where a commercial rate of interest can be paid to the business owner. Whilst employee loans under £10k can be an effective way to motivate and retain key members of the team.

Loaning money to the business & employee loans

You may have historically lent money to the company or have funds available to lend to the company. Or alternatively the company may have money it can lend to you or the employees. Each of these scenarios is considered below.

SCENARIO 1: You have already lent money to the company

In this instance, generally the company should be paying you interest because:

It makes commercial and legal sense to protect your investment
The income will be ‘savings income’ which, if you haven’t used your savings allowance, you can receive up to £1k tax free per year

In many instances, business owners have lent money to the company in years gone by and don’t realise that the loan can be taken back out of the company tax free at a future point. This is important to remember, as it can form part of your value extraction strategy once funds are available in the company to repay your loan with no tax consequences.

SCENARIO 2: You have funds available to lend to the company

Before deciding whether to lend to the company, you need to also consider the commercial risk factors and seek independent financial advice, e.g. if you make an unsecured loan, the funds are available to the company and could be used to pay other creditors in the event of trading difficulties.

Generally speaking, if you have savings as cash, it will be earning very little interest. So it can make sense to instead lend some money to the company because:

The company will benefit from the additional cashflow.

The interest you receive will be tax free up to your ‘savings allowance’ of up to £1k. In a lot of circumstances, the tax saving made will exceed the total amount of interest you would have earned by investing the money elsewhere.

The specific tax savings depend on your overall position, but at worst it represents the ability to get an additional amount from the company tax free.

Other considerations and planning points

Where payments of interest represent ‘yearly interest’ there is a requirement for the company to withhold 20% of each interest payment and pay it to HMRC (via a quarterly CT61 return). This can increase the administrative burden. If interest payments are not ‘yearly interest’ then generally withholding tax does not apply. An example of loan interest that is not ‘yearly interest’ is where the loan term does not exceed 12 months.

The rate of interest charged has to be commercially justifiable (for example by reference to an unsecured loan from a third party) and generally can be anywhere between 5% and 15%.

It is very important to properly document the arrangement to reduce risk of any future dispute, whether with the company or HMRC. Provided the terms are legally documented, this often represents a low risk method of extracting funds from the company tax efficiently.

SCENARIO 3: The company has funds to lend to you or your employees

If the company has spare cashflow, it can be a good way to incentivise you and your employees by offering up to £10k loans, interest free. This provides a good benefit as the employee can invest the funds or help them with cashflow to purchase something. It can also act as a good retention tool as employees will have to repay the loan if they leave.

32 Ways To Save Tax and Extract Maximum Value From Your Business

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Pensions — Save Tax and Extract Maximum Value From Your Business

Wed, 30 Nov 2022 09:26:14 GMT

Making company contributions to the business owner’s private or company pension scheme can be a tax efficient way to extract further value from a business. However, certain annual limits apply to cap contribution levels.

Registered pension schemes

It’s important to consider the lifestyle that you want when you stop running your business. What level of comfort do you require? What value of assets do you need to accumulate and what level of income do you want?

These are important questions that deserve consideration as part of an overall strategy. Carrying out a full individual and corporate tax diagnostic is essential to ensure these issues are considered as a collective, e.g. building the value of your business, building your personal wealth, structuring all your affairs with long term goals in mind.

Here we are only focusing on pensions through the lens of maximising value that you can extract from your business.

Once you have established the amount you can extract from the business using the methods detailed above, you should then identify a surplus that can be used towards retirement provision.

Pensions can be a very tax efficient way to put money aside as you pay no income tax or National Insurance when the money is paid in (subject to the limits detailed below). You also get a Corporation Tax deduction on the money paid in.

Income or capital gains generated from funds or assets within the pension are not taxed.

The fund can be accessed tax efficiently from age 55.

On withdrawal, a lump sum of up to 25% of the fund can be accessed tax free. Withdrawal of the remainder is taxed but can be spread across multiple tax years, making the most of the personal allowances and tax rates.

How much can be paid in?

The maximum annual amount that can be contributed – with no income tax or National Insurance, but a full Corporation Tax deduction – is £40,000. The annual allowance applies across all pension schemes – it is not a ‘per scheme’ allowance.

If you earn over £240,000, you are likely to have a restricted annual allowance. The allowance is reduced by £1 for every £2 in annual earnings above this figure, with the minimum allowance set at £4,000. However, if you earn over £312,000, no annual allowance is available. You will be charged at your rate of tax for these pension contributions.

Where this maximum is unused in a particular tax year, the balance may be carried forward by up to three years and added to the annual allowance for the relevant year.

As an example, if you have not previously contributed, the business could put up to £160,000 as a one off contribution, receiving a full Corporation Tax deduction and with no income tax or National Insurance.

The amount you can pay in is not limited to what you earn – for example even if your salary is £8,840, the business could put £40,000 into your pension, or up to £160k if the ‘carry forward’ option is available. This is provided you were a member of a registered pension scheme in those previous years. If you contribute to your pension personally from your gross pay, your tax relief is limited to how much you earnt that particular year.

If you contribute in excess of your annual allowance or accumulated annual allowances if you are carrying them forward, you will trigger a tax charge called the annual allowance charge. It is added to your taxable income and taxed at your rate of tax (20, 40 or 45%). It is effectively reclaiming the tax benefit incurred on the excess contribution. If the charge is over £2k, you can speak to your pension provider to see if the pension can pay the charge from the fund. The company on the other hand is not subject to any penalties and can still claim a Corporation Tax deduction on the full amount.

32 Ways To Save Tax and Extract Maximum Value From Your Business

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Salary & Dividends — Save Tax and Extract Maximum Value From Your Business

Tue, 29 Nov 2022 09:43:11 GMT

Salary and dividends are the traditional way for a business owner to extract value from their business. Due to the tax cost, it is important to carefully consider this to ensure the optimum level of salary and dividends are taken. Employing and giving shares to family can be alternative ways to extract value from a business.

Salary

Generally, a salary should always be taken but kept to a low level.

A minimal salary – above £533 per month (£6,396 per year) – is important to retain access to state benefits such as the State Pension.

Note: From April 2023, the basic rate of income tax will be reduced from 20% to 19%.

There are 2 scenarios:

A salary of £823 per month (£9,880 per year) is usually the norm where there are multiple employees and there is enough of the £5,000 employers’ National Insurance “employment allowance” available. There should be no National Insurance contributions payable in this scenario. This amount will increase to £1,047 per month and £12,570 per year from July 2022.
If there is only one employee of the company or if the employers’ National Insurance “employment allowance” is already used or not available, the norm is usually £758 per month (£9,100 per year), again to ensure no National Insurance is payable.

There are lots of exceptions to the norm that can make taking a higher salary more suitable, such as:

Where you can’t take dividends or have an agreed or fixed amount of value to take out of the business (e.g. directors in investor backed businesses).
If you are heavily involved in “Research and Development” your salary can qualify for enhanced relief against Corporation Tax, which makes it more efficient to pay a higher salary (as opposed to dividends).
The “Employment Allowance” (a £5,000 allowance against employers’ National Insurance, provided the total secondary class 1 NIC liabilities are below £100k in the previous tax year) can mean a higher salary can be paid without incurring employers’ National Insurance contributions. This could for example make it worthwhile to have a salary of £12,570 – here the only cost would be the employee National Insurance.
An employee who is over state pension age will not pay National Insurance contributions. So for example a 68 year old could have a £12,570 salary with no tax or NIC (if the employment allowance is available).
If you are looking for a mortgage or to re-mortgage (or other personal loan), some lenders will base their credit scoring on employment income (rather than dividends).

Employing spouse/civil partner, or family member

If they have a lower overall income than you, consider employing a spouse/civil partner or family member so that the company can benefit from the additional resource, the individual can use their personal allowances and/or lower level tax bands, and the company can make a National Insurance saving.

It is important that their pay can be justified in terms of actual activities on behalf of the company.

For a single employee company, employing an additional employee may also make the Employment Allowance available.

Dividends

After salary, the most commonly used method to take the remaining amount of desired cash from the company is via dividends. The first £2,000 of dividends are tax free, so where possible this amount should be taken as a dividend annually.

Above this level, up to £50,270 of total income, the tax rate on dividends is relatively low at 7.5% (8.75% from April 2022, but above £50,270 the methods of taking value becomes much more important. When your total income goes above £50,270 you pay a higher rate of tax, e.g. 32.5% (33.75% from April 2022) on dividends. You could also lose entitlement to certain benefits and allowances, e.g. child benefit, tax free savings allowance is reduced from £1,000 to £500.

Sometimes you may want to take a large amount out of the business, for example for a large purchase. One option could be to vote a dividend. The highest tax rate on dividends is 38.1% (39.35% from April 2022 once total income exceeds £150,000), which whilst lower than the tax rate on a salary or bonus, is still relatively high.

So, before voting a dividend, alternative tax planning options, of which there are many, should be considered with a tax specialist. For example, if a business owner wants to extract funds to invest in property, buy a car, give money to family or start a new business venture, there may be better ways to structure it from a goal, commercial and tax perspective.

Examples of options in this regard are (1) larger pension contributions (e.g. to fund a commercial property acquisition), and (2) family investment companies where the income and gains from the investments can be spread among family members. From April 2023, the rate of dividend tax will be reduced to 7.5% and 32.5% respectively with no additional rate of dividend tax.

Giving shares to family members

If you receive dividends from the company, you should consider giving some shares to your spouse/civil partner if they pay tax at a lower rate than you. This means they will be able to use the £2,000 tax free allowance, and any other lower rate bands than yours.

Away from your spouse, you could also give shares to children (over 18) or other family members, but the capital gains tax position would need to be considered before doing this.

32 Ways To Save Tax and Extract Maximum Value From Your Business

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Are you sat on secret R&D?

Thu, 24 Nov 2022 09:46:31 GMT

Even though you already claim R&D Tax Credits, there’s every possibility your company could be sat on ‘secret’ R&D. But what do we mean by ‘secret’ R&D?

Well, we often come across clients that have developed or built a product, process or service specifically for themselves without recognising that what they are doing is research and development. They are so focused on just ‘doing’ the work they do, they don’t recognise the steps they are taking. It’s only when you start thinking in a certain way that you begin to recognise that you are sat on products, service and processes that you could claim R&D Tax Relief for.

With that in mind, we want to share some examples, to give you an idea of the types of activity and situations in which secret R&D occurs.

Are you sat on secret R&D?

Secret R&D can manifest in many different ways, through things like:

Investing in technology and bespoke integration to improve efficiency
Developing specialist software to resolve inefficiencies in business processes
Developing new products to improve service delivery
Developing an existing service to improve customer experience
Developing new systems to improve business processes

Here’s five real life examples of businesses that had been sat on secret R&D…

Business: SAAS Technology solutions
Secret R&D: Business as Usual
R&D Tax Refund: £7.5K

Working with clients to deliver bespoke technology business solutions for a wide range of industries and business scenarios, this company delivers R&D qualifying projects pretty much every day. The business was so involved in the day-to-day, they didn’t recognise that they were delivering research and development, daily. The company had also invested significant resource into the development of their own technology solution, just seeing it as an internal project needed to improve their efficiency.

Working with a client they recently developed one of the UK's most advanced smart metering platforms leading to just over £7.5K of R&D tax credits.

Business: E-commerce
Secret R&D: Resolving Inefficiency
R&D Tax Refund: £6K

An ecommerce business specialising in sports accessories, developed a specialist shipping integration software to improve inefficiencies in their business processes. Working with a subcontractor, they modified a program to make it more efficient for use within their business. Significant improvements were made to the software program to integrate the software into their systems, and the internal R&D project generated a claim worth £6k over a two year period.

Although the business set out to resolve inefficiencies in their business process, they were too involved in the project to recognise their own work to be innovative.

Business: Scaffolding contractors
Secret R&D: Save Time & Money
R&D Tax Refund: £22K

These guys are experts in scaffolding, specialising in the provision of scaffolding installations to a wide range of industries. They had invested in the development of a free-standing scaffolding structure to be used for internal scaffolding, primarily to save their time and cost when setting up jobs.

The company was clueless that what they had set out to do was an R&D project. They just wanted to save themselves time and money! However, in the process they developed a new innovative scaffolding product applicable industry wide and acquired a corporation tax repayment of over £22K for a two year period.

Business: Gastropub & Hotel
Secret R&D: Improve customer experience
R&D Tax Refund: £7K

A Gastropub and Hotel based in the North of England, wanted to provide a menu that catered for all tastes and needs, as they wanted everyone to find something really good on the menu. They knew it didn’t make economic sense to have a dozen different menus, so they worked on a new menu to cater for all dietary requirements.

The gastropub developed an innovative menu that could be produced to cater for vegan and gluten free diets, without compromising on the customer experience.

The owner was convinced there wouldn’t be a claim because it’s just ‘what they do’ but when he reflected on all the hard work that goes into crafting their menus he was able to see the numerous research and development steps in their work.

This work realised an R&D Tax claim of £7k for the gastropub.

Business: Fashion & Apparel
Secret R&D: Sales tool
R&D Tax Refund: £15K

A women’s clothing manufacturer and retailer, developed a unique sports clothing range for pregnant women which they understood would qualify for an R&D claim. However, alongside this they delivered a complex website project which included the development of a global directory of maternity fitness instructors.

Developed as a sales tool, the business was completely unaware that they had built something completely new and innovative.

Altogether the R&D projects equalled a total benefit of just over £15K.

Ensuring you identify all the R&D in your business requires a mindset change, and cultural shift to make it work business wide. You have to change the way you think about what you are doing day-to-day. Encourage your employees to constantly challenge the way they - and others - do things, to make suggestions for improvements and bring forward new ideas.

You could be sat on secret R&D gold.

Think you might be eligible to claim?

If you think you might be eligible for R&D Tax Relief, and you’d like to find out more about how we can help you make your R&D claim, please book a call here .

Can I claim R&D Tax Credits & Patent Box Relief?

Wed, 23 Nov 2022 10:44:45 GMT

If you are claiming R&D Tax Relief and you have invested in patents or other equivalent Intellectual Property, you might be eligible for another cheeky tax relief known as Patent Box Tax Relief. Like R&D Tax Relief, Patent Box Relief is an incentive designed to drive UK companies to innovate, but with the specific intention of retaining Intellectual Property in the UK.

Read on to find out more about Patent Box Relief and how it interacts with your R&D Tax Relief claim.

What is patent box tax relief?

You may be able to make a Patent Box Relief claim if you own:

patents that are making your business a profit, or,
profitable, unpatented intellectual property which you could patent.

If you are doing one of the above activities, you may be able to make a Patent Box Tax Relief claim that could reduce your business corporation tax to 10%.

Am I eligible to claim patent box?

To be eligible to claim, you must:

be a UK Limited company paying UK corporation tax, and,
have developed an innovative product or process, filed a patent application, and made profits that are related to the patent.

When you hear patent, you might automatically think of groundbreaking inventions but it’s doesn’t have to be this complex. Patented inventions can be as a result of a relatively small technical improvement to a product or process.

If you are put off by the prospect of a difficult, expensive process to apply for a patent, well the Patent Box Relief should provide the silver lining. For it’s not just UK profits that qualify for the relief. An amazing 100% of the company’s worldwide profits resulted from that patented product or process, could qualify for a reduction to 10% corporation tax. From 1 ^st April 2023 that’s up to a 15% saving!

Similar to R&D Tax Relief, Patent Box claims must be made before two years AFTER the end of the accounting year in which the relevant profits and income were made.

Can you use both R&D tax relief & patent box schemes?

The short answer is yes. You might have thought that because the activity is all focused on innovation that there might be exemptions around being able to claim both. Wrong. The two schemes are separate but they can be combined, which is great news!

Companies can benefit from 10% corporation tax for profits related to the patented product or process, whilst claiming up to £25 for every £100 spent on Research and Development. But the savings do interact with each other. R&D tax relief reduces your profits subject to corporation tax, whilst patent box applies a 10% tax rate on profits after applying R&D tax relief and the patent box calculations.

If you’re actively involved in patents, alongside your R&D activity you need to make sure you are maximizing both schemes.

Let’s take a look at an example..

A cosmetic dentistry business made £800k profit for the accounting period ending 31 ^st July 2021. They expect to pay £152k in corporation tax.

They own a patent for cosmetic dentistry which was granted for the UK in September 2020. They made £100k profit from the patent.

The business also undertook Research and Development (R&D) in respect of prototyping the product which cost them £100k in this accounting period.

Firstly, they can claim an additional £130k deduction from their profits due to the R&D activities which reduces their profits subject to tax, down to £670k. This saves them £24,700.

Secondly with a patent box election, the £100k patent profits are taxed at 10% instead of 19%. This saves them £9k.

By making these claims, it means the company will now pay £118,300 in tax, resulting in a total saving of £33,700.

Eligible for R&D & Patent Box Relief?

If you think you might qualify for Patent Box Relief, get in touch and we will help make sure you maximise your claims across both schemes.

Book a discovery call here to discuss your claims .

The benefits of splitting your property income

Thu, 17 Nov 2022 11:39:49 GMT

If your property is jointly owned by two or more people, there can be tax advantages in splitting any profits you make between you and your co-owner/s.

Splitting the profits helps you distribute the profits in a way that favours any co-owners with a lower marginal tax rate – whether that be your wife, husband, civil partner or business partner.

The rules around splitting your property profits

One of the most common forms of co-ownership is between married couples or people in a civil partnership, where you and your partner have jointly bought the property.

For a married couple, or a couple in a civil partnership, it’s initially presumed that the profit from your jointly-owned property will be split equally. But this 50/50 split may not always be ideal, particularly where one person has a lower tax rate than the other.

So, what happens if a 50/50 split isn’t right for your situation?

If the legal ownership is different, you can make an application to HM Revenue & Customs (HMRC) using ‘Form 17’ . This form is used to request that any profits are taxed in the same proportion as ownership of the property.
Although there are other considerations besides tax, ownership of the property can be varied by one party transferring a share of ownership to the other without any capital gains considerations.
The 50/50 split does not apply where the couple are operating a UK property business which consists of the commercial letting of furnished holiday accommodation. Here the profit can be split as agreed by the parties.
If the property is jointly owned by people who aren't married or in a civil partnership (siblings or friends, for example), the default is to split the income for tax purposes in the same proportion as ownership of the property.
If you want to split the profits in any other way, you’re free to do so – there are no restrictions to stop this. But, if you do, it would be wise to have a written contract or agreement recording the desired split. Make sure to also split the profits in the same proportion that you declare to HMRC.
Another way to vary any profit split is to operate through a partnership. The partnership profit can be split in any proportion that the partners agree, and does not have to be related to capital contributions or anything else.
However, for this approach to work, there must be a genuine business being carried on. Just owning a property and receiving rental income wouldn't be enough – there have to be significant additional services being provided for payment.

Talk to us about how to split your profits

As with any business profits, there can be an overall tax saving from arranging for profits to be allocated in a beneficial way. But there are restrictions in the way that the income is split.

As one of the leading accountants in York, we’ll be able to guide you through the various options available to you when splitting profits from any property rentals. We’ll also advise you on any capital gains issues that could arise that need to be thought through and planned for. Book a discovery call with Donald Inglis if you'd like to talk to an expert.

How to claim repair expenses on your rental property

Tue, 15 Nov 2022 09:53:56 GMT

Keeping your rental properties spick and span means carrying out regular maintenance and repairs. But what are the rules around claiming these repair expenses against tax?

People often get confused by the HM Revenue & Customs rules around deduction of expenses for repairs and maintenance of a rental property. The good news is that we’ve got a simple summary to help you understand (and stick to) the correct rules.

Understanding your expenditure on a rental property

The money you spend (expenditure) on a rental property can be either ‘capital’ or ‘revenue’ in nature. So what does that difference mean?

Capital expenditure is added to the purchase price of the property, and taken into account when calculating capital gains when the property is disposed of. This could include the costs of building the property, making structural improvements to the building or adding a conservatory or garage etc.
Revenue expenditure is normally deductible from ongoing profits and, as a result, will reduce your income tax liability. These costs could include replacing faulty lead pipes with plastic pipes or replacing damaged single-glazed windows with double-glazed ones.

Expenditure on enhancements will generally be capital in nature, and any improvements that purely involve a change in materials would be revenue expenditure. That’s your basic rule of thumb when working out whether repairs fall under capital or revenue expenditure.

How does a repair qualify as tax-deductible revenue expenditure?

If you purchase a property, any expenditure needed to make it fit for occupation is likely to be capital. So, if you buy a property with a badly-leaking roof, which impacts on the purchase price, then replacing the roof will be a capital expense. On the other hand, if the roof was damaged in a storm after the property was purchased, the replacement would be a revenue expense.

Broadly speaking, for costs in connection with a newly-acquired property to be treated as revenue expenditure, the expenditure would need to meet three tests:

It must be a genuine repair that would be deductible if it was incurred in an existing rental property
It was not necessary to render the property inhabitable
The price paid for the property must not have been deflated because of the work to be carried out.

Sometimes, it may be necessary to split costs between capital and revenue elements. In these cases, any split must be fair and reasonable. It’s usually helpful to retain any documentary evidence that supports the allocation and your reasoning behind the split.

Where domestic items such as ovens or dishwashers are replaced, the cost is treated as revenue expenditure as long as it is on a like-for-like basis. Minor improvements – e.g. replacing a faulty 6-settings dishwasher with an 8-settings one – can be ignored. But replacing a £1,200 gas stove with a £12,000 AGA range would definitely be treated as a capital expense.

Talk to us about claiming the right rental expenses

It’s essential to use the correct treatment for expenditure on your rental properties. If costs can be treated as revenue then any tax relief can be claimed immediately. But capital expenditure is a slower process and can only be taken into account when the property is disposed of.

We’ll help you get the correct tax treatment of costs you incur, whether it’s costs on a recently-acquired property, or ongoing costs from your existing rental properties.

Christmas gifts for your customers and team

Thu, 10 Nov 2022 12:38:24 GMT

Christmas is nearly here, and it’s a great time to let your customers and team members know how much you appreciate them.

But after another unsettled year – it’s not easy to know how much to spend or whether to throw a party.

Gifts, cards and donations

The traditional professional Christmas gift tends to be food-related: hams; hampers; bottles of wine or spirits. Those can be ordered online and sent out, although it’s best to avoid anything that will spoil considering current delivery delays and people who may not be working in the office.

For customers or clients who you know really well, something tailored to their personal interests can show you’ve been paying attention. And for both customers and staff, a handwritten card is a lovely touch and costs very little.

Another option is a donation on behalf. Many people really appreciate an email or card that lets them know you’ve donated money to a charity on their behalf, particularly if you can include details like, “The local foodbank will use this donation to feed families on Christmas Day.”

A coffee or lunch for higher value clients is an excellent way to build stronger relationships as well as making the most of the Christmas season. You might spend more this way, but for your best clients this can be far more memorable than a gift.

For your team, a hamper is probably a less popular choice. A Christmas bonus might be appreciated, but do run the numbers first. A supermarket voucher retains its full value, while a cash bonus must be taxed. Talk to your team – they may prefer a paid day off rather than any gift.

How much should you spend?

You might like to create categories based on how much your clients spend with you and how valuable they are to you. The top customers might all receive a larger gift, while the smaller customers might get a something more modest.

Christmas budgeting

Wondering how much each client or customer has spent? Not sure what you can afford to budget for Christmas gifts? We can help.

Get in touch and we’ll run the numbers to give you the insights you need.

Corporation tax: carry forward or carry back your losses?

Tue, 08 Nov 2022 11:05:10 GMT

Did you know you can claim for losses made by your company? We’ve got the lowdown on carrying forward or carrying back your losses so you can claim corporation tax relief.

If your business makes a loss for tax purposes, that might sound like bad news. But the reality is that you can turn this loss to your advantage, with the right tax planning.

In many circumstances, your loss can be offset against other taxable income . This means you can reduce your payable tax, or even get a refund on the tax you’ve already paid. Not a bad outcome – and something that could be a significant financial boost for your company. So, what can you do to offset this loss?

What are the main types of losses?

A company’s sources of income and expenses are treated differently depending on a number of factors. But for many companies, the main area to consider is the company’s trading losses.

What exactly are trading losses?

Your business might carry out an activity with a reasonable expectation of profit, but incur a loss in some years. You thought you’d make a profit trading in this way, but the actual outcome was a loss. This is your trading loss

Separate from trading losses, there are other types of loss that you may incur:

Your business may incur losses in a property income business. Broadly speaking, this usually comes from property rentals.
Losses from overseas activities are considered separately.
Miscellaneous income is a ‘sweep up’ provision to cover most transactions which would not be caught under the normal tax provisions. It still leaves out some items such as gambling and voluntary gifts.
The last ‘bucket’ is for the cost of charitable donations.

How are these losses treated for tax?

Losses you incur from different areas will be treated in different ways. Knowing the various tax treatments helps you and your advisers to maximise the potential end benefits of claiming these losses with HM Revenue & Customs (HMRC)

UK trading losses

Any UK trading losses you’ve incurred must be offset against profits from any other sources in the same year. So, for example, if there was a trading loss and a property income profit, then the trading loss should be offset as much as possible against that profit.

Where this ‘sideways relief’ is not available or is exhausted, remaining losses can either be:

Carried back against the previous year’s total profits (three years for losses made in years ending between 1 April 2020 and 31 March 2022) or,
Carried forward to offset against total profits, provided that the trading business existed/continues to exist.

UK property income losses

Where possible, any UK property income losses you incur should be offset against profits from other sources in the same year. Any surplus can be carried forward and will be available for offset against any profits, so long as the property business continues.

NOTE: losses from furnished holiday letting can only be carried forward, and can only be offset against future profits of the same business.

Overseas trading

Losses from overseas trades can only be carried forward, and can only be relieved against future profits from those overseas trades.

Miscellaneous items

Losses from miscellaneous items can be offset against profits from other miscellaneous items in the same year. Otherwise, they can be carried forward to offset against any future such profits.

Charitable donations

It could be that your charitable donations are more than the company’s pre-donation profit. The maximum deduction in the year is capped at an amount which will reduce overall profits to zero. Any excess donations will not be available to carry forward or backwards.

Terminal Loss Relief

The final way in which losses can be relieved is Terminal Loss Relief . If your business ceases trading completely, you can claim for losses incurred in this final period. Losses in the twelve months to cessation can be carried back to accounting periods ending within three years preceding the accounting period in which the loss is incurred.

Talk to us about utilising your tax losses

If your business incurs a tax loss, it’s important to deal with this loss in the correct way – so you can claim the appropriate corporation tax relief. The rules are complex and our summary doesn’t capture every specific circumstance that could apply.

We can help you with the various claims that need to be made. We can also advise you on circumstances where it may be better to carry forward losses rather than getting earlier relief.

Talk to us about the best way to handle any losses your company has incurred.

What’s an associated company? And how can it affect your tax?

Thu, 03 Nov 2022 09:30:30 GMT

Knowing how many ‘associated companies’ you have is about to become a lot more important. We explain what an associated company is and how these associates can affect your tax.

Knowing what constitutes an ‘ associated company ’ is about to become an important piece of information for business owners to know.

From 1 April 2023, the rules to decide whether or not you need to pay tax in instalments are changing. Whether you pay in instalments will soon be determined by the number of companies considered to be associated with each other.

From that date, the tax rate you pay will depend on your business’s taxable profits and the number of companies considered to be associated with each other.

What makes a company ‘associated’?

A company is associated with another company if one is under the control of the other. A company is also associated if both companies are under the control of the same person or persons, including linked parties.

Control is usually defined by reference to ownership of share capital, or voting power.

There are some exceptions to this:

Dormant companies are excluded completely.
Passive holding companies, who do nothing other than receive dividends and pay dividends, with no other activities are excluded.
Businesses controlled by linked parties where there’s no substantial commercial interdependence will not be considered to be associated for these purposes.
Factors to take into account concerning interdependence include common customers, shared premises and shared resources.
Linked parties include a variety of different people associated with you as the owner. This includes:
Your business partners in a partnership.
Trustees in a trust you’re involved in.
Certain relatives: notably your husband, wife, or civil partner, your parents and more remote forebears, children and their more remote offspring, and your siblings.
For siblings, they’re only included if there is some blood-relationship, so a half-sister would be included, but not a step-sister.
Separated spouses are considered to be associated with each other, but not divorced former spouses.

Talk to us about calculating your associated companies

Calculating the number of associated companies prior to April 2023 should be a key part of your tax planning. Failing to do so could result in incorrect tax calculations and other errors.

We’ll help you clarify the number of companies to be treated as associates, and (in some cases) will advise where reducing the number can save you tax.

Get in touch to calculate your associates.

How to get the most out of your pension strategy

Tue, 01 Nov 2022 12:40:54 GMT

Have you thought about planning for your retirement? We’ve got some top tips for creating a pension strategy as a director, partner or sole trader.

How much thought have you put into planning out your retirement years?

Your employees will automatically be enrolled into a workplace pension scheme. But for directors, partners and sole traders, there’s no mandatory requirement for you to set up your own pension scheme. When it comes to planning your pension, the buck stops with you.

Let’s take a look at some of the main questions you’re likely to have about your retirement planning, with some straightforward answers to get you moving in the right direction.

Why do you need a good personal pension strategy?

In the current economic climate, it’s important to make sure that you have a good pension scheme in place. With a pension behind you, you’ll be able to retire and live out your plans for later life, without having any unnecessary worries about your finances.

So, how should your pension work?

You’ll make regular monthly contributions into your plan. This money will then be invested over time to (hopefully) create a bigger pot of money for retirement.
When you reach retirement age, you’ll have a lump sum of money in your pension. It’s your decision what you then do with this money. You can:
Take all or some of it as cash. The first 25% is tax-free.
Buy a product that gives you a guaranteed income (sometimes known as an ‘annuity’) for the rest of your life
Invest the money in a fund to get a regular, adjustable income (sometimes known as ‘flexi-access drawdown’).

Should you choose a workplace pension or a personal pension plan?

If you don’t have any automatic pension provision, you have two main choices:

Workplace pension – with a workplace pension, you don't have to worry about choosing the right investment plan or making regular contributions. You just enrol in the company scheme and that side is all taken care of for you.
Personal pension – with a personal pension plan, you can choose the type of investments that best suit your needs and goals. You also have the option of withdrawing from the scheme at any time without incurring any penalties.

What should you consider when choosing a pension plan?

Choosing the personal pension scheme route does give you more options. But there are a few key questions you need to think about before making any decisions on a provider.

For example:

How big will your contributions need to be? Your pension pot needs to supply enough money to help you maintain your desired lifestyle in retirement. That means making monthly contributions that are big enough to generate a suitable lump sum – a sum that will then provide you with the income you need for the rest of your life.
What are the rules about withdrawing your money? Most pension schemes won’t let you draw on your funds until you’ve reached a certain age – usually 55 years old. Make sure you’ve read the small print and know when you can (and can’t) access your money.
How are your investments managed? Pension providers will usually provide regular updates on your investment performance. But make sure you know how your funds are being managed, and what areas your money is being invested in. You may want to avoid certain investment areas that don’t align with your own personal values.

Could your pension be part of your tax planning?

Putting cash into your pension plan makes good financial sense at any point. But pension contributions are also a useful tool when it comes to your tax planning too.

Any money you pay into your personal pension scheme will be liable for tax relief. Because of this, you get the double whammy of saving for your future, while also cutting your overall tax liability for personal income tax.

Do you need an independent financial adviser?

If you need advice to help you choose the right pension scheme, provider and investments, you should speak to an independent financial adviser (IFA).

An accountant can help with your tax planning questions, but only an IFA or a certified pensions specialist can give you professional advice on your pension choice.

Talk to us about finding the best pensions advice

As your accountant, we can help you look at the tax implications of contributing to a pensions scheme.

We can also introduce you to the best IFAs and pensions advisers, so you have solid independent advice on which to base your decisions.

9 R&D record keeping habits your business needs

Thu, 27 Oct 2022 08:36:46 GMT

Surprisingly HMRC doesn’t set out any specific record-keeping requirements when it comes to R&D tax claims. It recognises that every business operates differently and the way they keep their records will reflect this. HMRC also understands that first time claimers won’t have fully audited records.

However, if you’re not first time claimers it is good practice to establish a reliable record-keeping system as early as possible. This will only improve the success, and possibly enhance the value of your claim refund. More funds means more projects and less chance of HMRC questioning your costs for eligibility.

With that in mind we want to share some good practice habits to establish in your business when it comes to record-keeping.

But first, why is it important to keep records?

Well, the records you keep for the time and money invested on research and development are the audit trail for your R&D Tax Relief claim. To make a claim, you need to be able to realistically prove to HMRC your expenditure. The records you keep will need to: demonstrate a systematic approach to R&D activity, evidence all qualifying spend and validate any innovations made were not ‘by chance’

1. Keep a list of projects

The simplest and most effective thing you can do, is setup a list of all the R&D projects your business has worked on over the last 12 months, including any new ones. If you’re unsure whether a project is R&D, stick it on the list and start recording. It’s better to have the information recorded when it comes to crunch and then it can be ruled it in or out.

What information should I record?

Here’s an overview of the key information you should be recording for each R&D project:

2. Direct people costs

Keep a record of time spent by directors, employees, and any other qualified staff working on R&D projects. These records will be used to apportion the salary and any other costs that can be allocated to the claim. First you’ll need to identify the projects each employee worked on during the year. Then for each project the qualifying R&D activity delivered by the employee and the time taken.

Records include:

Salary (pension, NIC, Bonuses)
Reimbursed Expenses (any travel, accommodation, subsistence costs related to R&D project and reimbursed via an expense claim)
Time sheets if applicable (we will talk timesheets later!)

3. Subcontractor costs

Keep a record of all subcontractors (connected and unconnected) working on any R&D projects. Connected subcontractors, are those where two companies are controlled by the same person or are part of the same group. A record should be kept for all ‘paid for’ subcontractor invoices. We’d always recommend splitting up the two categories to record connected subcontractor costs and unconnected subcontractor costs separately.

Records include:

Invoices relating to all these costs
Contracts
Time sheets if applicable

4. Materials & consumables

Keep a record of costs for all materials and resources consumed as part of your R&D project, this includes materials, water, light and heat.

Records include:

Invoices relating to all material costs
Invoices relating to water, light and heat costs

5. Software costs

Keep a record of all software licences used, specifically on the R&D project. If the software was bought for use in the R&D project only, you can claim 100% of its price. However, if the software will only be used partly in your R&D project you will need to apportion the costs.

Records include invoices relating to all these costs, and what they were used for.

6. Related prototype costs

Keep a record of all costs linked to the design and production of a prototype needed to test the R&D project. We often see this one slip through the net!

Records include invoices relating to all these costs.

Setting up record-keeping systems

The best place to start is with the systems or processes you already have in place for record- keeping and identifying how they can be modified or enhanced to be even more accurate. Here’s some ideas for different levels of record-keeping systems you can introduce into your business processes, starting with people time.

7. People time

Cloud-based timesheets

Timesheets are perfect for recording employee time spent on R&D projects and provide a great audit trail for your R&D claim. There are loads of systems such as Meistertask, Trello, Asana and Basecamp, which you can use to record and track all project related activity, including people time.

However, these systems do require commitment and rely on timesheets becoming an integral part of your culture. Employees will need to log all the activity, and the number of hours spent against a specific project. If it can be adopted, it is a really effective way to report on employees contribution to projects. We can recommend a free app called Clockify. You can report on individual employees, or teams & R&D projects and export reports.

Spreadsheets

You don’t have to go all out and integrate a cloud based timekeeping system. Spreadsheets can do the trick. You might find it easier to get started with a spreadsheet and trial whether timesheets is something that could work for your business. The same logic applies; log projects, tasks and time spent at the end of each day. Review this weekly or monthly to ensure you have recorded all time spent.

Email calendars

If your business uses Outlook or Gmail calendars to log ALL meetings and tasks, a sensible way to trial out timesheets, is by using the categories feature. Set up a colour code system for your R&D projects and when scheduling your time apply the correct colour. At the end of each week you can very quickly estimate the time spent across different projects in the business.

Project meetings

It might be that a timesheet system isn’t right for your business, but that’s okay. If that’s the case, you could use meetings as an opportunity to take minutes and record the input from employees involved in R&D projects. You could set up a weekly projects meeting, or include an R&D slot in an existing team meeting. No one likes a meeting for meetings sake.

8. Other R&D costs: materials, consumables, subcontractors

For all other costs, your accounting system will become your best friend. You can easily set up R&D codes for each project within your nominal ledger. Codes can be allocated to expenses from expenditure on, materials, sub-contractors, consumables, software licenses. However, you need to make sure that the code system is clearly communicated to everyone that will be expected to use it. We have had cases where clients have taken this a little too literally and started to record EVERYTHING under the new codes! Oops! That’s one way to get an HMRC enquiry…..

9. Subcontractor projects

Where you are using subcontractors that also work on projects outside of the scope of R&D, it’s all about communication. Agree how you would like them to identify R&D project work and ensure they stick to it. Little tips like this just make it easier to add the invoices to your system accurately using the correct code.

Think you might be eligible to claim?

If you think you might be eligible for R&D Tax Relief, and you’d like to find out more about how we can help you make your R&D claim, please book a call here .

How will external funding affect my R&D claim?

Tue, 25 Oct 2022 08:26:41 GMT

Companies often think they can only make an R&D claim if they have funded the entire R&D project out of their own pocket. There are some nuances of course but is unlikely that external funding would void a claim. Companies can receive grant funding and R&D Tax Credits for the same R&D project.

Let’s take a look at the five most common types of funding and how they could impact your R&D Tax Relief claim:

Private funding (e.g. Share equity or private loans)

There are no restrictions on making an R&D claim if the project is funded by a private funder with equity shares or loans.

For example:

£100k equity or debt funded into SME by director or private investor / investors.

£80k spent on developing app e.g. salaries, software licences, outsourced developers (this is restricted to 65%).

£80k uplifted to get additional £104k R&D tax relief deduction.

£184k can be sacrificed for an R&D tax credit of £26.7k.

Large corporate (e.g. equity)

If your R&D project is funded by a large corporate that takes a significant portion of equity, you may only be able to claim via the RDEC scheme. This might be restricted even further if the R&D work was outsourced, or if the company has no PAYE bill.

For example:

£6m equity into SME from large corporation, taking 60% of the company.

£1m spent on developing a prototype of a new product, invested in staff costs, materials and consumables.

Up to £105,300 could be claimed as R&D tax credits under the RDEC Scheme.

Grants

Many companies believe that if you receive a grant, you cannot claim R&D Tax Credits for the same R&D work. This is often not the case. However, a grant will impact your R&D Tax Credits claim, and the amount you can claim.

How it affects the claim depends on whether the grant is classified as notified state aid or non-state aid, and whether it is project specific or non-project specific.

Here is a breakdown of four key scenarios:

Notified state aid: Non-project-specific grant

If a grant is classified as notified state aid and is non-project specific, R&D projects you spend this funding on will not be eligible for SME relief but you can claim via the RDEC scheme. An example of such a grant is the Coronavirus Business Interruption Loan scheme (CBILS).

For example:

A £500k CBILS loan is received. The funds are not segregated by the business on receipt. £1m is then spent on 3 separate projects using the £500k CBILS and £500k of company reserves. Sadly, the projects only qualify for the RDEC Scheme in this case, meaning a maximum cash refund of £105,300.

Notified state aid: Project-specific grant

This relates to grants classified as notified state aid but they are project specific i.e. the grant is to provided funding for a specific project. Any grant funds invested in the project that are eligible for R&D Tax Relief should be claimed via the RDEC scheme. However, any other funds privately invested in other R&D projects that are eligible, can be claimed under the more generous SME scheme.

Here’s an example:

An innovate UK grant to develop a prototype machine is awarded, where 50% is covered by the grant and 50% is matched by the company using its own funds. The project cost is £1m. The £500k funded by the grant is eligible for up to 10.53% cashback (under RDEC) as is the £500k self-funded element. The company also spends £100k on a separate project, which could be eligible for the R&D SME scheme at up to 33.35% cashback.

De Minimis state aid grant

If a company has received less than €200,000 over three years, this grant may qualify as de minimis aid under the De Minimis Regulations. This type of grant doesn’t have to be reported to the European Commission, and is not counted as state aid. Any of the funding invested in qualifying R&D projects must be claimed via the RDEC scheme. However any private funds invested in R&D projects that are eligible, can be claimed via the R&D SME scheme.

Non-state-aid grant

As with de minimis state aid grants, any of the non-state-aid grant invested in qualifying R&D projects must be claimed via the RDEC scheme. But any other privately invested funds can be claimed under the R&D SME scheme.

COVID-19 funding

Since the launch of various emergency grants to help businesses through the Coronavirus pandemic, there has been some uncertainty about how these funds will impact R&D Tax Relief Claims. We can confirm these initiatives have been classified as notified state aid, and R&D projects you spend this funding on will not be eligible for SME relief but you can claim via the RDEC scheme.

We’d recommend ringfencing these funds, so there is a clear audit trail of how the funds were invested.

This is especially important with CBILS given the potential for it to bring all costs for all projects within the RDEC scheme, where the self-funded element might have otherwise been eligible for the R&D SME scheme

SEIS, EIS & Venture Capital Trusts

If you have raised funds for your small business through an Enterprise Investment Scheme (EIS / SEIS) or Venture Capital Trust (VCT), you’ll need to know how these funds impact your R&D Tax Relief Claim. The good news is R&D Tax Relief can be claimed in conjunction with these funds, and there are no limitations on how those funds can be used, or the qualifying R&D expenditure.

Think you might be eligible to claim?

If you think you might be eligible for R&D Tax Relief, and you’d like to find out more about how we can help you make your R&D claim, please book a call with us .

4 ways to bring forward your R&D Tax Credit

Thu, 20 Oct 2022 09:57:25 GMT

With the backlash of Covid-19 and the relentless lockdowns, businesses have been hit hard. It’s hardly surprising cashflow is on every business owners mind right now.

This is just one of many reasons, you might be looking to fast forward your R&D tax claim. If successful, bringing forward your R&D tax refund could be a huge helping hand for your business.

4 ways to bring forward your R&D tax credit

So how can a company fast forward their R&D Tax Credit? Well, there are four routes we’re going to share with you, that are realistic options and easy to implement.

These are:

Shortening your year-end
Shortening your year-end…..again
Applying for advance funding
Getting your account filed on time

Before we look at the first option, let’s start with a quick recap on the timeframes. The hard and fast deadline for making a claim is two years after the end of the accounting year in which you incurred the costs. If you don’t claim within that two year window, you have missed out and there is no way to claw it back.

R&D tax claims are made via the company’s tax return which cover the same period as the company’s accounting year. You can only prepare and submit your accounts and tax return after the end of your accounting year. So in theory the earliest you can make your R&D Tax Credit claim is the day after the end of your accounting year.

Shortening your company year end

Companies House automatically sets your company year-end based on the last day of the month the business was incorporated. But you can change your accounting year-end.

If you are experiencing cashflow issues, shortening your company year-end to bring the R&D Tax credit forward could be a way to get money back into your business faster. If money is tight, you should seriously consider shortening your current accounting period end, so you can make the claim as soon as feasibly possible.

Here’s an example:

A Software Company with a June year end has R&D costs of £100k and total losses of £100k up to 31 March 2021. However, they have forecasted their spend to be significantly less up to June.

As a result they decide to shorten the year-end by nine months, bringing it forward to 31 ^st March 2021. By doing this they can now submit an R&D Tax Credit claim of £33,350 to HMRC, three months earlier.

Shortening your company year-end… again

There’s actually no limit on how often you can shorten your accounting period year end. If you are expecting a fairly sizable credit, you could bring your year-end - and claim - forward by 6 months, say from September 2021 to April 2021, getting the cash back into your business by the June. You could then bring it forward again to the September and get even more cash into your business. The only thing to be mindful of is the fees associated with shortening your accounting period but these are likely to be minimal in comparison to the benefit of the cash to your business.

There’s more….advance funding

There are lending companies that may lend you up to 50% of your tax credits up to six months before the end of your accounting year. The lender would need to perform a due diligence and eligibility assessment, to determine just how much they could lend you. If they agree to provide the funding the money is transferred to you, and when HMRC pays your R&D claim, you use the credit to repay the debt.

Here’s an example:

A manufacturing company has been claiming R&D Tax Relief for three years and each year they get approximately £100k back from HMRC.

They have a June year-end, but their accounts and tax usually take nine months to finalise. Advance funding is available in January 2021 for the June 2021 year-end, which would otherwise only have been received in around May 2022. This effectively brings the cashflow forward by 16 months, with only the financing cost to the client.

Get your accounts filed promptly

The earlier you get can get all the necessary company information to your accountant, the quicker they can process your R&D Tax Relief claim. You can’t do one without the other. We don’t want to be waiting to submit our clients R&D Tax Claims because we haven’t got expense receipts! It’s valuable funds waiting to come back into your business.

Need money now?

If you’d like to explore bringing forward your R&D tax claim, we can help you, please book a call with Donald .

Can I claim tax relief for failed R&D projects?

Wed, 19 Oct 2022 08:42:06 GMT

Failure is a reality of life, and the same applies in business. Failure comes hand in hand with innovation; it’s a by-product of learning and development. So to innovate, is to take a risk.

When you start an R&D project, you have no guarantee that the project is going to be a success. You know that. That’s why R&D tax credits exist, to incentivise businesses to take that risk.

Failed R&D is still R&D

R&D tax relief is not solely aimed at rewarding successful projects, it is intended to incentivise certain behaviour in businesses. The Government Guidelines on the meaning of research and development for tax purposes, clearly state:

"Even if the advance in science or technology sought by a project is not achieved or not fully realised, R&D still takes place.” (Paragraph 10)

Here’s four points you should consider if an R&D project you are working on fails:

Not all projects achieve the advance in science or technology they are seeking:

As long as the projects seeks to achieve an advance in science or technology and completes work to attempt to resolve the scientific or technological uncertainty, R&D applies.

Projects that fail can often be the most fruitful, from a learning perspective:

The information from these projects is invaluable. The more you fail, the more you learn and get closer to your goal of success.

If a project fails, keep a record of why:

If it’s a technical reason make sure you raise this with us, and that we consider this when you claim.

If a project fails for business, commercial or legal reasons, it’s not a failed R&D project:

You still have to look at the advances sought, and technical difficulties and challenges faced. Provided the project meets these criteria, you can claim, whether or not you achieved the intended outcome.

Failed projects that claimed R&D

Software

Attempted integration of several systems for a bespoke enterprise resource planning system, where APIs were either not set up or of limited use. Significant time and effort went into trying to find a workable solution, but technical difficulties lead the project to be put on hold whilst other solutions were considered. The investment of staff time and external subcontractors had run to £120k and lead to an R&D tax refund of £25k in total.

Engineering

Development of an adjusted process to reduce waste in the manufacturing process. The company manufactures car parts and was trying to find ways to reduce the waste materials produced in the production process. After trialling three different methods and testing new materials, no significant reductions in waste were available. The project was abandoned due to other business areas becoming prioritised when the market changed due to Covid. The in-house team’s time and some materials and tooling costs were incurred, which resulted in a tax credit refund of £55k.

Failed R&D for funding

An R&D Tax claim can be a very welcome friend, following the financial hit of a failed project, it takes the edge off the risk and enables further investment into innovation. It’s a great way to fund R&D projects and claw back the losses from the failed work, so you can go again. If successful, R&D tax credits can provide businesses with the funding to kickstart further projects and enable a continuous flow of funded innovation. And innovation promotes more innovation.

Think you might be eligible to claim?

If you think you might be eligible for R&D Tax Relief, and you’d like to find out more about how we can help you make your R&D claim, please book a call here .

What software expenses can I claim for?

Thu, 13 Oct 2022 08:31:13 GMT

Almost every R&D Tax Relief claim that we process includes some form of software costs. But it’s hardly surprising, as every business today has software costs. We use software in just about every business process we do! It’s also the one R&D cost that most businesses feel comfortable with, when they come to make their R&D claim.

But what you might not know, is that there is one big grey area, meaning certain software costs cannot be claimed.

Let’s find out the fundamental rules when it comes to software costs, and what exactly this mysterious grey area is.

Software costs: the fundamental rules

The rules around software costs would appear to be straightforward:

If the software has been purchased only to be used in an R&D project, then you can include 100% of the cost in the R&D tax claim.

If you use the software for other business activities that sit outside of the R&D project, then you need to calculate an appropriate proportion of the software's cost to be included in your claim.

Simples, right?

Software costs: the grey area

With software, there are often ‘other costs’, that are incurred alongside the software when it is leased from external parties. It’s these costs where the grey areas start to creep in. These costs fall under the banner of ‘cloud computing’ and charges could be for a whole range of activities, including use of software, storage rental, and support.

Cloud computing & hosting

Cloud computing and hosting is particularly relevant for businesses that are involved in R&D projects related to the development of software. It’s these ‘cloud computing’ costs that unfortunately do not meet the requirements of any of the qualifying criteria to make an R&D claim. It’s quite common for businesses to purchase packages which are used to support activity across their business operations as well as R&D activity.

Therefore, it’s key to track the costs dedicated specifically to hosting the testing and development environment, when using the services.

The likelihood is you’ll be using software somewhere in your business, and it could impact your R&D claim. Like a lot of R&D categories, software has its grey areas, but that’s what we are here for, we will work with you to ensure you submit an accurate R&D claim.

As we speak new changes are on the horizon from April 2023 to include all cloud costs associated with R&D, but stick with us and we’ll make sure you’re up-to-date as the changes come in.

Think you might be eligible to claim?

If you think you might be eligible for R&D Tax Relief, and you’d like to find out more about how we can help you make your R&D claim, please book a call here .

14 quick wins to get even more money back in your next R&D claim

Thu, 13 Oct 2022 08:28:41 GMT

Remember that feeling when your first R&D tax refund hit money hit your bank account? Well, we want you to feel this every time you make a claim! How? By making sure you are prepared and maximising every R&D claim.

To help we have complied 14 quick wins to optimise your R&D claim. From missed expenses, to record-keeping, to choosing the right R&D scheme; even the way you are paid!

We’re confident there will be something new to consider, starting with expenses….

7 most common overlooked expenses

Here’s seven examples of costs that are commonly missed in R&D claims:

1. Expenses paid on a personal card

We see this time and time again. Here’s an example: A business spends £15k on travel to meet R&D sub-contractors; paid for on a company card. If the travel had been paid on a personal card and reimbursed by the company, they could have claimed back £5k!

2. Expenses when acting as a subcontractor

Easily overlooked and often misunderstood. Subcontractors working as a third party in R&D for a large company can claim expenses under the RDEC Scheme.

3. Expenses delivering work for a customer

Similar concept to number 2. If you are delivering a lot of R&D work for third parties; don’t assume the work doesn’t qualify because it is for another company – keep a record of all R&D projects the business is involved in internally and for third parties.

4. Rent bundled into a package

You might not be aware that rent cannot be included in your R&D claim…unless it is bundled into a package with say your utilities. If your circumstances change, make us aware, as this could make part of your rent claimable.

5. Expenses for non-technical support staff

The best advice for staff costs is to keep a record of all staff involved in R&D projects (technical or not). They might not all qualify but if there are supporting roles involved you may be able to claim money back for your business.

6. The Planning Stage

Many businesses fail to include the planning stages for R&D projects, thinking it only begins when the materials costs kick in for example. But an R&D project doesn’t just start. There is always an element of time invested into preparatory work. Include it.

7. Pre-trading expenses in a first R&D tax credit claim

For newly formed companies, you can include qualifying pre-trading expenses in an R&D claim. This isn’t relevant for existing claims but for customers who have setup new companies that could qualify for R&D. Substantial research and development can often take place prior to a company beginning to trade and can be included in your R&D claim. In fact an R&D cash credit can even be claimed before a business starts to trade.

Importance of quality record-keeping

It’s vital to get a grip of good record-keeping for R&D projects, as it can really improve your R&D Tax Relief claim, leading to more money back and a robust audit trail.

8. Review existing systems for record-keeping

A quick win for record-keeping is to follow these three steps to see what you are doing at the moment and where there could be improvements or modifications:

STEP 1 - Identify the records you can be confident in

STEP 2 - Then determine where you are estimating

STEP 3 - Tweak your systems to give greater confidence

9. Keep a list of R&D Projects

Keep a list of all the R&D projects that you’re working on, to make sure no projects are missed. Even if they turn out not to be eligible – there could be entire projects you are missing out altogether.

TIP: An additional good practice tip to include here, is to keep a record of the advances sought and the uncertainties present before you kick-off an R&D project.

10. Tracking Consumable Materials

Issuing an in-house purchase order is a great way to track costs of any consumable materials you use for your R&D projects.

11. Tracking Staff Costs

Staff costs are one of the key expenses to claim, and so it’s critical to evidence the time of those involved in R&D Projects, if you are looking to maximise your claim to the fullest. We recommend incorporating real-time systems for timekeeping, such as Clockify.

12. Subcontractor contracts

Now these are important and worth exploring for future R&D claims. Your R&D claims could be improved by agreeing in subcontracting relationships, who can claim the R&D. Only one party in the relationship will be eligible for the tax relief, as you can't both claim for the same project. We recommend putting a contract in place which details who has rights to the claim.

Your company structure

To claim R&D you need to be a limited company, within the scope of corporation tax (but note you don’t actually have to be paying it i.e. loss making companies can claim). There are then a few things you should consider towards ensuring your claim is maximised.

13. Revisit your Salary & Dividends

Salaries can be included in your R&D claim, BUT dividends cannot. If you are a Director - heavily involved in R&D projects - taking a small salary and much higher dividends, it’s critical to revisit how you are paid to maximise your position personally and for the R&D claim.

14. Part of a larger group?

Companies face several pitfalls if they do not plan correctly.

For businesses that are global, you can only claim for UK-based company R&D expenditure. Bearing this in mind, you need to think about where the R&D takes place within the group – who leads the R&D? Who employs the staff involved in R&D? There are some exceptions where you can recharge costs, but not all roles will qualify.

If you are a small company operating within a large group, you should consider the benefits of accessing the higher rate of relief from the SME R&D Tax Relief Scheme.

Looking to maximise your next claim?

If you’re looking ahead to your next R&D claim, book in a scoping call and let’s make sure you are ready to take your claim to the max.

Subcontractor or contractor – what R&D can I claim?

Thu, 06 Oct 2022 12:03:19 GMT

Subcontractors. Maybe you use them, maybe you are one, maybe you are acting as one for a one off project. Whatever the circumstances, when it comes to R&D Tax Relief, subcontractors should be considered carefully when claiming R&D Tax Relief. On too many occasions now, we have seen companies miss out on money that should have been back in their business, and we don’t want that to be you.

In this article, we look at eight rules to determine when subcontractors, and contractors can claim, and which scheme you can claim via.

Key terms & definitions

Let’s start with some key terms and definitions, as it might get a little technical in here…

The Contractor is the company that has ownership of the R&D project, and hires the Subcontractor.

The Subcontractor is the person or company hired to deliver work that contributes to the R&D project.

There are two different Subcontractor types:

A Connected Subcontractor is a company or individual controlled (meaning owned more than 50%) by the same shareholder(s) as the contractor.

An Unconnected Subcontractor is any subcontractor that is not a connected subcontractor.

Finally, here is a very quick description of the two R&D schemes available to claim via:

The RDEC scheme allows a company to claim up to 13% cash back of qualifying costs incurred.

The SME scheme allows a company to claim up to 33% of cash back of qualifying costs incurred.

Subcontractors: when can I claim & which scheme should I use?

As a subcontractor there are two main scenarios with specific rules around when and what R&D you can claim for.

SCENARIO 1 - When acting as a subcontractor to a large company, the subcontractor can claim but only via the “RDEC” scheme.

Example. A small company who specialises in testing products to satisfy a certain legal regulation. If a large multinational company was making a new product and contracted the small company to do some tests, the small company can potentially claim under RDEC.

Note that in this case the large company cannot claim for the costs paid to the small company, so there is no risk of a ‘double claim’ occurring.

SCENARIO 2 - When acting as a subcontractor to anyone, but you are doing your own separate R&D project alongside that work, you can claim via the SME scheme.

Example. The small company above is improving an internal process for the testing of products that will lead to efficiencies in the delivery of its services to all customers. Staff within the team spend time specifically trying to develop the process. This could count as a separate project, claimable under the SME scheme.

Subcontactors can’t claim when… acting as an SME subcontractor to another SME for their R&D project.

Example. The testing company above is doing work as a subcontractor to another SME. The SME contractor may be able to claim (under the SME scheme) for the payments to the testing company, and so to avoid a ‘double claim’, the testing company cannot make a claim itself for work on this project.

Contractors: when can I claim & which scheme should I use?

As a contractor there are four main scenarios with specific rules around when and what R&D you can claim, for payments to subcontractors:

SCENARIO 1: When a large company subcontracts to individuals, partnerships or qualifying bodies (excluding limited companies), it can claim via the RDEC scheme.

Example. A large multinational contracts some research from a university on its project.

SCENARIO 2: When an SME company is grant funded / subsidised and subcontracts to individuals, partnerships, qualifying bodies (excluding limited companies), it can claim via the RDEC scheme.

Example. A small company wins a grant to develop proprietary software for an online portal that will have significant economic and environmental impact if adopted by the target market. Some of the software development is contracted to a freelancer who is an individual. These subcontracted costs could be claimable under the RDEC scheme.

SCENARIO 3: When an SME company subcontracts a specific part of an R&D project to an unconnected party, it can claim for 65% of the costs as qualifying expenditure via the SME scheme.

Example. The same company as above is developing a similar piece of software to test commercial application in a different industry. A third party company is used for the some of the development work costing £30,000. A claim may be available for this cost, under the SME scheme, for up to £6.5k as a cash credit.

SCENARIO 4: When subcontracting R&D work to a connected subcontractor, you can usually claim via the SME or RDEC scheme, however the rules for what you can claim for may be more or less restricted based on the circumstances.

Contactors can’t claim when… subcontracting to Limited companies under the RDEC Scheme.

Example. The company above, who won a grant to develop proprietary software, outsourced some of the software development to individual freelancers, and some to a limited company agency. Only the costs paid to the individuals is within scope to claim. The amounts paid to the limited company cannot be claimed.

HMRC PAYE Cap

Please note from 1 April 2021, HMRC brought in a limit on the payable tax credit a business can receive from a claim via the SME R&D Tax Credit Scheme. Businesses can now only claim R&D Tax Relief up to the value of 300% of their combined PAYE and NIC liability. The first £20,000 is exempt, but any amount above this threshold will be capped.

The cap specifically applies to businesses that are unprofitable, and businesses that end up with an ‘artificial loss’, which they could then surrender for a cash injection, because of the enhancement mechanism of the R&D Scheme. In these circumstances, subcontractor fees from businesses that are unconnected may be restricted from being eligible for R&D tax credits, as might salaries for overseas workers. However, you should still be allowed to include a fraction of the PAYE & NIC liability of a connected business that is delivering R&D activities for you.

There is however an exemption to be aware of, for which you need to pass a two test criteria. For the first test a business’s employees must be “creating, preparing to create, or actively managing intellectual property” – otherwise known as Patent Box Relief.

The second test is based on a calculation of fees paid to subcontractors and externally provided workers of connected businesses. This total amount must be no more than 15% of a company’s R&D expenditure.

If you pass both tests, you will be exempt from the cap.

Overseas contractors

Finally, it’s also worth noting that contractors do not have to be based in the UK, and the R&D work they deliver for you, does not to have to be undertaken in the UK.

Think you might be eligible to claim?

If you think you might be eligible for R&D Tax Relief, and you’d like to find out more about how we can help you navigate your R&D claim, please book a call here .

Should I outsource my R&D activity or keep it in-house?

Thu, 06 Oct 2022 12:03:00 GMT

If you’re considering whether to bring some or all of your R&D project work inhouse versus outsourcing it, you’ll want to feel confident that you are making the right decision for your business operationally, but also to maximise your R&D claim.

Perhaps you’re about to kickstart a new R&D project, or you’re thinking about outsourcing as you don’t want to take on a new employee. Either way, we want to equip you with all the info you need to determine the best way to incur your R&D development costs: in-house or outsourced.

In the world of R&D you’ll often see outsourcing referred to as ‘subcontracting’. Let’s start with some definitions and explanations of what we mean when we say ‘subcontracting’.

Subcontracted work in R&D projects

When it comes to R&D, subcontracted work is defined as when you contract and pay someone else to carry out R&D project activity on your behalf.

There are two scenarios to be aware of when it comes to subcontracted work in R&D projects:

SCENARIO 1: A business subcontracts work to yo u

If a business subcontracts R&D work to your business, you might not be able to claim R&D tax relief, or only a limited claim is available to you under the RDEC scheme – reducing your claim to 10.53% of the qualifying expenditure.

SCENARIO 2: Your business subcontracts work to a third party

If your business subcontracts R&D work to a third party (unconnected to your company) – you can still claim for qualifying costs but the relief available is only 65% of those costs.

Only 65% of costs can be claimed…

As you can see, before you make any decisions, there are some key points to consider, to determine the best way to incur your R&D development costs: in-house or outsourced.

As outlined above, if you are a business undertaking an R&D project for your own business, and you have sub-contracted part of the R&D project to a third party, you can only claim for 65% of the costs - and the R&D work must be for a specific part of the project.

Here’s an example of what this might look like for a business:

A UK company has an R&D project and they are considering whether to subcontract the design stage of the project, or use an in-house employee. The design stage is expected to take 6 months.

The annual salary of an adequately skilled employee is estimated at £60K.

Employee

6-month salary: £30,000
Estimated additional fringe costs (pension, NIC, etc): £5,000
Payment for project work to outsourcer: £0
Initial cash cost to company: £35,000
R&D allocation: 90%
Subcontractor restriction: Nil
R&D expenditure claimable : £31,500

Outsourced

6-month salary: £0
Estimated additional fringe costs (pension, NIC, etc): £0
Payment for project work to outsourcer: £35,000
Initial cash cost to company: £35,000
R&D allocation*: 100%
Subcontractor restriction: 65%
R&D expenditure claimable : £22,750

*You’ll notice the allocation of R&D time is slightly higher for the outsourcer, as employees are likely to have other responsibilities.

Let’s take a look at how the potential benefit breaks down for the Company:

A) For a Profitable Company

Corporation tax saving due to R&D

Employee: £7,780.50

Outsourced: £5,619.25

Difference: £2,161.25

B) For a Loss-Making Company

Tax credit claim

Employee: £10,505.25

Outsourced: £7,587.125

Difference: £2,918.125

If the business is the subcontractor, they may not be able to claim under the SME R&D Scheme, but if they qualified under the RDEC scheme at 10.53% of qualifying expenditure :

Cash refund

Employee: £3,316.95

Outsourced: £0

Difference: ££3,316.95

So when it comes to the numbers, it’s clear to see that the tax saving is more attractive if you go down the in-house route.

However, taking on a new employee is a big call to make, as it comes with its own challenges. There’s the cost and time involved in finding the right person, with the right skillset that will fit into the business. Then there is the ongoing time of managing that person. It’s a significant commitment to make

Not convinced in-house is the right way?

If you’re on the fence when it comes to keeping your R&D in-house, here are some important pros and cons to consider if you’re considering the possibility of outsourcing your R&D…

Pros

No in-house expertise: Sometimes you just don’t have a choice! For example you may be looking to develop a new app but with no expertise, subcontracting to a company with the expertise is the only option.

Access to more talent: By subcontracting, you have access to a greater pool of talent, global even!

Cheaper & faster: When it comes to R&D projects that are completely different to anything that you have done in the past, it can be much cheaper and faster to look at subcontracting rather than setting everything up in-house from scratch.

Systems & processes: A quality subcontractor will already have the robust systems and processes in place to ensure the R&D work is tracked and expectations are managed – potentially a huge weight lifted.

Stay focused: Outsourcing to a subcontractor helps to keep your business and its resources focused on what it is already doing.

Cons

They don’t know your business: It can be difficult for sub-contractors to have the same level of understanding of your business as your employees. However, this doesn’t always have to be a negative, sometimes a different perspective is what is needed for innovation.

Conflict in expectations: It’s important expectations are managed, as differences of opinion can arise when it comes to the brief, the objectives or the quality of the work. This is particularly tricky if the requirements of the R&D work change after the project has started.

Control & timing: Letting go of control, and the day-to-day running of the project work can be difficult. But the best way to address this is to discuss your requirements and agree milestones or check points to ensure the timely delivery of the project. The subcontractor should have processes in place ready to tackle this.

IP & confidentiality: Management of intellectual property, and the potential leaking of information is a risk when you take your R&D activity outside of your business. It’s easier to manage, and less likely to happen when all of your R&D activity stays in-house.

The verdict?

So, there you have it. Unfortunately, there isn’t a black and white answer. We’re sorry! Whether you outsource aspects of your R&D project has to be right for your business. Our advice? First, start with the calculations. Can you afford to lose 35% of your R&D claim money coming back into your business? Then, it is a case of being honest and looking at the business case of bringing in a new employee – how do the pros and cons stack up?

Think you might be eligible to claim?

If you think you might be eligible to claim R&D Tax Relief, and you’d like to find out more about how we can help you make your claim, please book a call here .

How to better forecast your R&D tax claim

Thu, 06 Oct 2022 12:01:16 GMT

When R&D tax relief first fell onto your radar, you were no doubt blown away by the generous benefit, of up to £33 back for every £100 you invest in R&D. But the truth is – as you may have already experienced - for R&D projects, the amount you can claim ranges anywhere from 0 to 33%, depending on several factors.

As a business that is investing in research and development activity, and making R&D tax relief claims, it’s important for you to have as much certainty over your R&D claim, as early as possible, even as early as the planning phase. But why?

Well, an R&D claim only gets you money back for costs you have already incurred. This means you’re not going to get any benefit from the investment until at least a year or so down the line, or if you’ve really got your act together, several months.

Getting a better understanding of what will qualify before the project, allows for a more accurate estimate of the true cost of the investment, at the outset. At the front of the project this enables more accurate budgeting for the time and resource invested. At the back of the project when the claim comes to realisation, this enables more accurate cashflow forecasting so you can plan for any potential future investment.

So, what is the true cost of my R&D?

To get a better understanding of the true cost of your R&D investment, there are three big questions you need to be able to answer BEFORE you kickstart your next R&D project:

Is it even an R&D project?
What qualifying activity can I claim for?
What R&D rate should be applied to the qualifying activity?

Let’s take a look at each of these questions in a little more detail….

Is it even an R&D project?

You’ve got to get past this hurdle first and believe us when we say, we still work with businesses that misidentify R&D projects all the time. To err on the side of caution it’s best to keep a record of all projects that you think will qualify and check it out with your R&D adviser if you are unsure.

So, how do you know if your project is eligible?

Well, to be eligible, an R&D Project must be:

Making a considerable improvement to existing technology. This doesn’t always mean it needs to be ground-breaking work. If you are working to overcome technical uncertainties in order make your products, services or processes, faster, less expensive, or better in some way, the project may be eligible for R&D tax relief.

AND

Overcoming technological challenges, where the solution is not readily apparent to a qualified or experienced professional in their field of technology.

If it’s an R&D project, then it goes on the list, and you need to determine what costs you’ll be able to claim.

What qualifying activity can I claim costs for?

To qualify, R&D activity must fall into one of the below categories:

Staff costs
You can include the salaries, pensions and NIC of staff who are directly involved in the R&D project.

Reimbursed expenses paid to employees or directors on R&D travel
You can include reimbursed expenses claimed by employees or directors on travel related to the R&D project.

Outsourced subcontractors or freelancers
You can include 65% of the costs paid for "unconnected" subcontractors (under the SME R&D scheme).

Materials for prototype builds
You can include the cost of the materials required for designing and constructing a prototype which will not be sold.

Ancillaries - utilities, software licences
You can include an appropriate proportion of utilities and software costs used in your R&D projects.

Unfortunately it’s not always black and white, and knowing whether the activity ACTUALLY fits into a qualifying category can throw up some tricky red herrings.

Here’s a couple to keep an eye out for:

Software and Hosting….

Now this one’s a little cheeky. Although software licences can be claimed, hosting costs on their own do not fit into a qualifying category of R&D. This can be frustrating as businesses often incur large hosting costs used purely for R&D, so feel they should be included…but currently they aren’t.

Having said that, hosting can often include a lot of services, and depending on how the company uses them, there is the possibility they could be eligible under the software licence header. As you can see, this area is complex and your R&D provider would need to look into this for you, to help apportion the amount linked to a qualifying category.

Storage, telecom and data costs are just out of the game, they do not qualify.

Staff time…
Time allocation for employees involved in R&D projects will often be one of your biggest costs, and so it is vital to apportion everyone’s time as accurately as possible to get better certainty over your R&D claim. Record time spent by those directors, employees, qualified staff working on the R&D project.

It’s also important to make sure you are including staff costs for all indirect qualifying activity. This includes roles of support staff where they are engaged in activities such as finance and HR, that indirectly support an R&D project.

What R&D rate should be applied to the qualifying activity?

So now we know the project is eligible, and the different qualifying categories the activity must slot into (including the nuances), we want to know the R&D rate that can be applied to the activities.

There are three main factors that could impact the amount of the costs incurred that you can actually claim back:

R&D SME Scheme vs. RDEC Scheme

Depending on which scheme you are claiming under, this can significantly impact the rate you can claim.

RDEC SCHEME: Following the 2021 Budget, RDEC increased to a 13% tax credit for expenditure incurred on or after 1 April 2020. As RDEC is subject to corporation tax, the net of cash benefit is currently 10.53%

SME SCHEME: The SME R&D Scheme is currently an additional 130% tax deduction for qualifying expenditure. So this equates to a 24.7% cash benefit for profitable companies, and up to 33.35% cash benefit for loss making companies that can claim the SME “tax credit”. Also note that following the 2021 Budget, SME tax credit claims are now subject to an annual cap of £20k plus 300% of the company’s PAYE and National Insurance Contributions liability.

The other major difference with the RDEC scheme is that you cannot claim for costs paid to limited company subcontractors.

Subcontracting vs. Inhouse

If your business sub-contracts R&D work to a third party subcontractor (unconnected to your company) – you will still be able to claim for some qualifying costs but the relief may only be 65% of those costs.

NOTE: If you have taken on subcontracted R&D work to your business, you might not be able to claim R&D tax relief at all, or the only route available to you is under the RDEC scheme – reducing your claim to 10.53% of the qualifying expenditure.

Profit Position vs. Loss Position

The upfront cashflow benefit is actually greater for loss-making SMEs. Here’s a look at the how this affects the rates:

Loss: If you’re going to be in a loss position, then HMRC will make a cash payment to you of up to 33.35p for every £1 spent on R&D activities.

Profit: If you’re going to be in a profit position then HMRC will make a cash payment to you (or offset against your corporation bill) of up to 24.7p for every £1 spent on R&D activities.

Then timings come into play….

Loss: If your company is going to make a loss, you can make the claim as soon as your accounts are prepared and ready for filing.

Profit: If your company is likely to be profitable, it’s a little different. The biggest benefit will come by reducing the tax bill which is due nine months after your year end.

R&D for Financial Forecasting

As you can see there’s actually a lot to consider when it comes to forecasting your R&D claim. Any steps taken towards getting a more accurate idea of your R&D claim in advance of the project are worthwhile.

If you are a business that is already claiming R&D tax relief, you should be able to retrospectively use the information from your previous claims to help you navigate some of the more challenging nuances of R&D tax relief.

Think you might be eligible to claim?

If you think you might be eligible to claim R&D Tax Relief, or you’d like to discuss your R&D claim with us, please book a call here .

The Solid Plan: My Tax Diagnostic Review

Wed, 05 Oct 2022 10:59:05 GMT

I feel proud and fortunate to have business with such a great team, that continues to grow despite the truly difficult times we have experienced this year. But like any other business owner, I know how important it is to have a solid plan for the future.

One of the ways I do this, is by completing a tax diagnostic review on myself and the business. A tax diagnostic review is an enhanced tax consultancy service that identifies all the tax advice areas relevant for you and your business. It considers where you are now, and where you want to be in the future, leaving you with that solid plan.

The Growth Tax Diagnostic Review

Here’s my experience of completing the Growth Tax Diagnostic Review for myself and Inglis Chartered Accountants. This is one of 6 levels of enhanced tax consultancy service

The review specifically focused on the different ways for me to extract value from the business, as well as maximising any future investment. The review identified lots of areas to consider, but I’ve selected 3 areas important to me right now. These are:

Employee benefits: Not so trivial
Pension Planning: Suits you
Commercial Property Planning

Employee benefits: not so trivial

All business owners will agree, recruiting and retaining good people is one of the most important parts of running a business, and it’s also one of the hardest.

That's why I it’s important to me I ensure I maximise all the employee benefits available for my team. The last 6 months have been incredibly hard for everyone, and my team have worked really very hard under such difficult circumstances. This bumps this right to the top of my priorities.

In particular I’m going to look at trivial benefits for my team (which aren’t so trivial in my opinion) as a £50 gift voucher, is a great way to treat and boost your team’s spirits

Pension Planning: suits you

Planning for retirement has always been a high priority for me but over the next lifecycle of my busines, I know I want to invest more, to build a secure future for myself and my family.

So the way I’ve approached this is by first of all mapping out the lifestyle I know I want for the future. I know I’m not one of those people who desperately want to retire early. In fact, I know I’ll be working long into the future. Therefore, for me it’s more about arriving at a number that will provide for the lifestyle I want when I do eventually come to retire.

I actually already have this figure worked (I am an accountant after all) which means I feel 100% confident and have complete clarity over what we need to achieve as a business to facilitate that future.

Commercial Property Planning

This one is a bit more tax technical. The trading company Inglis Chartered Accountants owns a commercial property. This is the property from which we operate, and trade from. I’d like to investigate - in a more detail than I have already - the more tax efficient way to extract the property from the business.

To the future…

As I’ve touched on already, I have a great core team around me. As I look to the future, I have plans to focus on some new higher value services for our clients. To do this I want to make sure I retain that great core team around me.

I’ll be looking at trivial benefits, as I expressed earlier but I want to something deeper that will incentivise the team to help drive the foundation areas of the business in the same way I do. This is through Company Share Option Plans.

We’re not there just yet but I am going to take the next action and obtain an advisory report on what would work best for us. I want to know exactly how it will work, so I can move quickly when the time is right.

Schemes like this are great, as those key employees can benefit tax efficiently from the company's growth. But at the same time, the company is protected from risk if the company of we don’t perform as expected.

It’s win, win.

Get a solid plan with a Tax Diagnostic Review

With a Tax Diagnostic Review, you’ll know all the tax advice areas relevant for you and your business – leaving you with a solid plan of prioritised actions ready to take forward.

Book a Tax Diagnostic Review today .

My Own…Maximising Extracting Value Tax Diagnostic

Wed, 05 Oct 2022 10:58:13 GMT

For a number of years now I’ve been operating across a range of businesses. Therefore when I look at the 32 ways I’m looking at it in that context.

For me, money management is not about the money you earn, but the money you keep. That’s why I love tax consultancy so much. It focuses on this mantra.

Household Income

It’s important to me that we maximise our household income in a tax efficient manner. The way we do that seems to have changed so much over the years as we’ve gone from care free pre-kids to responsible parents (ish) post-kids! Currently, this involves my Mrs being employed by the business, she’s an financial chartered accountant so we might as well use her! This suits the business as we have an important function covered.

It suits my wife who wound down slightly from her career after we had kids. It also suits our household income because we are taxed across the two of us, not just me. This means we benefit from maximised personal allowances, lower level tax bands and the company can make a national insurance saving.

I needed a dividend for extra expenditure

Not the norm for me, but the current year was a bit of a spending year – ouch! Thankfully, they only seem to happen once every ten years as I’m such a tight arse! But this year we had some extensive work done our home…which seemed to go on forever!

Plus, we had a few lovely holidays as me and the Mrs had been married for ten years. We took the family to Disneyland Florida over Xmas and New Year which is something I’d always wanted to do. Me and the Mrs went to Paris on our own, which we’d not done since before Oscar was born…now 8 long years ago! To do this, I took out a dividend, the £2K tax free amount, plus a little more to keep the clan in a happy home and enjoying our ten years married celebrations!

Building retirement investments

My years of frugality in extracting money from the company paid dividends a few years back when I set up a SSAS which bought the office premises. Nice little arrangement which ensures the guaranteed rent is paid back into my pension tax free! Purchase of commercial property No 1 has wetted my appetite for more, so I’ll always invest as much as I’m able into this arrangement with a view to eventually planning the next investment.

I’m a bit of a nerd so these kind of things excite me! I think it’s because I feel in control with it…firstly it’s a very tax efficient way to put money aside as you pay no income tax or national insurance when the money is paid in (subject to the limits). You also get a corporation tax deduction on the money paid in. Plus I get to dream…plan a future commercial property empire…long way off but hey, dream big!

When I retire, which is probably never as I’ll get bored…so when I reach retirement age…I’ll take 25% tax free with the remainder being taxed but spread across multiple tax years, making the most of the personal allowances and tax rates. I want to live a highly active but extremely comfortable work / life retirement…I just can’t see myself retiring…but let’s see!

I’m not that into cars, but…

I’m not massively into cars. I’ll be honest enough to say, I want something that looks decent, but not too flashy. One of the businesses had done really well so it was a bit of a no brainer to go for an electric vehicle when the time came around last year. Reason being we got 100% corporation tax relief against profits in that year, plus there is no BIK on me.

It’s all the extra running cost aspects I was able to put through the business and take advantage of as well like installing a charging point at home, charging tax free at the office, car insurance and servicing which all normally add up to a pretty penny. I did have my eye on also putting a personalised number plate (GWIL-I-AM TAX) through the business (which is allowable) but Mrs D said she would divorce me! Quite right as well!

Company Loans

Way back when I lent money into the companies to get some started and the company paid me a commercial rate of interest back on that money which allowed me to take out £1K from the business tax free. However, the circumstances have changed, that money has now all been repaid to me and a few years back I instead took out a £10K tax free loan from the business. I didn’t need it, I just took it because the company had spare cashflow and you can take the loan of £10K tax free. My thinking here was to simply invest this and make more back, it’s a strategy that’s worked and I’ve made a fair amount on investing that £10K well.

Maximising business expenses paid for personally

Running a business takes grit, it’s hard to switch off and you are always working because it’s your passion. That’s why for me, it’s vital to maximise business expenses wherever possible. That means ensuring claiming travel expenses on trains/flights, mileage allowances, when travelling for business. Also subsistence expenses when eating & drinking when on travelling on business as well.

I also ensure I double bubble the benefits by spending in a points reward card. My favoured card is Amex as they have a points rewards system connected to Airmiles. In the last year doing this I’ve built up enough points to travel to Paris 1 ^st Class for £2. Then to Florida family of 4, 2 free tickets and upgraded to 1 ^st class there and back. All because of the points I built which enabled me to do this!

Employee Benefits

The tight arse in me ensures I maximise the hell out these with all the following being put through the busines at every opportunity:

Life Insurance, it’s personally really important to me that my family is secure if anything were to happen to me
My annual pension advice tends to be mostly covered by the £500 allowance
Mobiles – four in total for me and the Mrs – personal and business
Trivial benefits – albeit in £50 amounts the £300 from me and £300 amount for my wife ensures all Christmas and Birthday presents are covered in our household
£150 per head slap up dinner for the Xmas Do where we also have a good dance
Parking costs when visiting the office

New bicycle & weight loss

It’s something that I’ve been aware of for a while, but never got round to doing. I used ‘Salary Sacrifice – Cycle to Work Scheme’ to purchase an expensive road bike, pre-tax, and in instalments. This reduced my tax liability on income & NI, plus it gets me a dream bike, without a surprise mammoth expense. Most importantly, it’s gets me exercising. Sexy bike. Sexy body. Tax is sexy!

Future intention

I would like at the right point to start exploring a family investment company. For me this is about retention of earnings for me, my family and the business.

Book a Tax Diagnostic Review

To make sure you’re getting all the benefit from the tax saving opportunities available to you and your business, book a tax diagnostic review with us . Get peace of mind you’re aware of all the tax advice relevant to you.

Tax Advice: What Is It and How Do You Know What You Need?

Wed, 05 Oct 2022 10:50:53 GMT

Something we can be guilty of as professional advisors, is assuming how much our clients know about the services we offer. This is particularly true with tax services. Tax is incredibly vast and complicated. It interconnects into so many different aspects of business and life.

What you might not know is that Chartered Tax Advisers have a completely separate qualification to accountants. The subject is that extensive, it is a specialist area in its own right, and accountants will range from general tax knowledge, to niche in areas of tax, through to Chartered Tax Advisor.

However, most – if not all – accountants provide tax compliance services. These are the services you need to ensure you pay the right amount of tax your business owes. It’s the bare minimum of tax services that you will need. But what about tax advice?

What exactly is tax advice?

Advice generally falls into one of two categories: corporate (for businesses) or individual (for personal). But put simply, tax advice is the delivery of some work or planning to help improve a client’s tax position; to make a future saving or get cash back into their business.

You’ll often see accountants specialising in certain areas that are more likely to be relevant to their customers, e.g., VAT, R&D Tax Relief, or International Tax.

Our areas of tax advice

We can handle your specialist tax advice needs and issues, no matter the subject or complexity. Here’s a quick look at the top level of categories of tax advice we provide:

Capital Investments
Director and Employee Incentives
Business Structure
Business Sale, Cessation and Shareholder Exit
VAT
Income Tax
Fundraising
Succession and Retirement Planning
HMRC, Tax Disputes and Investigations
Business Activities
Investments
Inheritance Tax
Trading Activities and Taxable Profits
Capital Disposals
International Tax
Pensions

Getting the tax advice you need

When it comes to getting the tax advice you need, this is where it starts to get complicated. You may have a good idea of what you are looking for, and feel confident simply telling us the area of tax you need support with.

To find an appropriate solution, we’ll need to go through at least one, or potentially all four of the above steps. Which route we take will depend on:

How the issue was identified
The complexity of the planning needed
Timescales
And many other variables

It’s rare for us to jump straight to a specific piece of single tax advice. We always start by undertaking a thorough piece of diagnosis and review, to determine exactly what is required. For us, we believe this is vital to ensure you arrive at the correct course of action.

It’s important to us you feel empowered to make the right decision, for such an important and complex topic – and diagnostic consultancy is the only way to achieve this.

It’s a bit like seeking private medical help. The consultant may need to carry out a series of diagnostics and scans prior to clearly setting out three remedial courses of action for the patient to consider, recommending the alternative merits of each. The consultant may then reach a conclusion because of other motives.

Different levels of tax advice complexity

When you approach us with a tax issue or goal, we have developed a system for categorising the complexity of the case. This helps to set expectations, giving you an idea of the timescales in play and the next steps.

Each complexity level varies when it comes to the fact finding, diagnosis and recommendation of appropriate tax planning to address a client problem or scenario.

Expert tax advice when you need it

There’s no getting away from the complexity of tax, but it can be managed. We’ve launched a new service to handle our client specialist tax advisory needs and issues, no matter how complex. Our alternative approach to Tax Advice and Consultancy, means we can accurately identify the advice you need, giving you the results you wanted.

You can find out more about our Tax Advice & Consultancy service here .

Need tax advice?

If you think you might need tax advice, get in touch by booking a call with Donald.

Tax on gifts to employees and directors

Wed, 05 Oct 2022 10:49:16 GMT

Giving gifts to your employees can be a great way to increase engagement and raise the overall morale of your team. But how much can you give before there are tax implications? And how do the rules differ if you’re giving gifts to your directors?

Making use of the Trivial Benefits scheme

Trivial benefits can be provided to employees without any adverse tax or NI implications, and with no need to report them on a P11D form – the HMRC form used to report any ‘benefits in kind’ that you’ve provided to an employee.
To qualify, gifts can’t be a reward for services, can’t be cash or a cash voucher, can’t be contractual, and the cost mustn’t exceed £50 per gift.
For directors of close companies, the total can’t exceed £300 in any year. Although not limited for other employees, if it was a regular gift then it’s likely to be treated as a reward for services – which would then have tax implications.
If over the course of a year, a director awarded themselves 6 x £50 gift cards (maxing out the £300 cap) as a higher-rate taxpayer they could save around £130 in tax and NI compared with a £300 salary. The company would also save about £45 in NI.
Gift cards are fine as long as they aren’t pre-loaded debit cards that can be used to withdraw cash – remember you can’t give cash as a gift.

Let’s look at an example of these rules in practice

Talk to us about meeting the rules around employee gifts

It’s important that you stick to HMRC’s rules around employee gifts and don’t end up unintentionally creating a negative tax impact for people on your team, or for the business.

As your adviser, we’ll help you draw up clear, well-explained internal guidance to make sure any gifts don’t unintentionally fall outside of the rules.

Keeping your business cash liquid – the difference between cashflow and profit

Wed, 05 Oct 2022 10:47:49 GMT

The foundational goal of any business is to make a profit. As a business owner, that’s one of your key financial aims – to make enough sales, at a big enough margin, to generate profit from your enterprise.

But how does profit differ from cashflow? And why is cash king?

How do profit and cashflow differ?

To really understand the difference between generating profit and managing cashflow, we need to look at what both these terms mean. You might think that delving into the accounts is a job for your adviser, but being in control of your profit and cashflow is an invaluable business skill.

Let’s take a look at the differences:

What is profit? Profit is the surplus that’s left from your income once you’ve paid your expenses, supplier bills and tax etc. It's driven by creating a profit margin and generating value from your products and/or services.
What is cashflow? Cashflow is the ongoing process of ensuring that the business has the available cash (or ‘liquid’ cash) needed to operate. This provides the money needed to trade, to pay suppliers, to cover wages or to buy raw materials etc.

Why is positive cashflow so important?

‘Cash is king!’ may be a cliche these days, but it’s a maxim which underpins any successful business model. Yes, it’s great to make a profit at year-end, but if you don’t look after your cashflow then the business may not survive as long as the end of the year.

What’s needed is good cashflow management to enhance your financial health. And without a careful eye on your cash numbers, things can quickly go awry.

A business can generate high revenues and big profits, but still be cashflow poor. In other words, it can have profits at the end of the period, but have very little liquid cash to fund it's day-to-day operations over the course of the period.

Talk to us about improving your cashflow management

Good cashflow management is all about being in control of your cash inflows (income you’re generating) and your cash outflows (what you’re spending). To achieve ‘positive cashflow’ you need to proactively work to keep your inflows higher than your outflows.

As your adviser, we’ll help you set up detailed cashflow reporting and forecasting, so you can keep the business in that ideal positive cashflow position. And we’ll also look at key steps for keeping your revenues high, margins profitable and meeting your financial targets.

Get in touch to talk through your cashflow management.

When it comes to R&D, timings are key!

Tue, 04 Oct 2022 08:42:45 GMT

One of the most important aspects when making an R&D Tax Relief claim is timeframes. Not only are there strict deadlines, but depending on your business circumstances there is an optimum time to make your claim. The last thing you want is to miss out on maximising your R&D Claim, or even worse lose out on claiming altogether!

Let’s find out those all important dates, and make sure you never miss out on money that belongs back in your business.

What is the deadline for making an R&D claim?

The hard and fast deadline for making a claim is two years AFTER the end of the accounting year in which you incurred the costs. Pass this date and it’s game over….the money has gone.

But let’s take a look at the exceptions to the rule, as these could come in handy for you one day. Although with us, you shouldn’t need them…

What are the R&D claim deadline exceptions?

1. Extended your year end?

If your company has an extended year end, then the filing date changes to the end of the extended accounting period. e.g. A September 2019 year end is extended to March 2020, extending the period to 18 months.

The deadline for claiming the costs incurred in the 18 month period from September 2019 to March 2020, is March 2022.

2. Oops filed late?

If your tax return was filed late, the hard deadline is not automatically extended, but HMRC can use their discretion. e.g. A September 2019 return is filed late in March 2021.

HMRC have the discretion to allow an amendment beyond September 2021. You can’t rely on this, but it’s worth being aware of for negotiating purposes if it ever happens.

3. Got an enquiry with HMRC?

If HMRC has an enquiry open with you, an amendment to the tax return would have to be made as part of the HMRC enquiry. In theory the deadline is extended when an enquiry is open. However, again this is up to HMRC’s discretion, so the safest course is to always put the claim in before the normal deadline i.e. within one year of the original filing date to ensure HMRC do not refuse the claim. Why risk it?

Now we have the deadlines down, it’s time to look at the optimum time to make your R&D claim, to ensure you are making it work in the best way for your business.

When should I make my R&D claim?

Knowing when to make your R&D claim depends on the bottom line; ultimately whether you made a profit or not.

My company made a loss…

If your company made a loss and you want to get some cash back into the business asap, the answer is simple, make your claim as soon as possible, which is when your accounts and tax return are prepared and ready for filing. You’ll probably want to make the tax credit claim and get the money back and working for your business. Get it done ASAP.

Side note: If you are in the fortunate position of not needing the cash, and if you forecast making profits in the future, then another option is to hold onto the R&D losses so you can offset them against your future tax bills. This could happen for example if you had a loss making year due to Covid, but are now back on track to make profits in the current year.

My company made a profit...

Now if your company has made a profit, it’s a little different. The benefit will come by reducing the tax bill which is due 9 months and 1 day after your year end. Let’s explore that a little….

Company A has a 31 ^st March 2021 year end.

They have taxable profit of £100,000, and are expecting a corporation tax bill of £19,000, due on 1 ^st January 2022. However, Company A spent £50,000 on R&D.

The R&D relief they are due is calculated as follows: £50,000 x 130% = £65,000

Company A can now subtract £65,000 from the taxable profits, to reduce the corporation tax bill.

The corporation tax due is calculated as follows: (£100,000 – £65,000) = £35,000 x 19% = £6,650

Company A makes a saving of £12,350! Pretty cool huh?

The real benefit for Company A comes down to the timings and the impact on their cashflow:

Scenario 1 – claim before tax return

Company A completes the R&D claim prior to the tax return before 1 ^st January 2022 (when the tax bill is due). As a result they pay £12,350 less on 1 ^st January 2022, keeping the cash in the business.

Scenario 2 – claim after tax return

Company A completes the R&D claim after the tax return, but before the deadline of 31 ^st March 2023. As a result they can claim a refund of £12,350 from HMRC, plus a tiny bit of interest.

You see, with R&D, it’s all about the timings!

We can help you…

At Inglis Chartered Accountants we work with you to ensure you are doing everything reasonably possible to maximise your R&D Tax Claim, including making your claim at the right time for your business.

If you think you might be eligible to claim, or your business circumstances have changed and you’d like to discuss your R&D claim, please get in touch .

Farm accounting: 10 points to consider

Thu, 29 Sep 2022 08:37:40 GMT

Farming is unique. There are few other types of business that rely on living produce, whether it's crops or livestock. That makes farm accounting more complex than other businesses when it comes to assets, liabilities, costs and revenue.

Depending on the country you’re in, farming can be quite a regulated and subsidised industry. Then there's the weather, of course, which can have a dramatic effect on profit and loss.

Accounting for all these factors is far from straightforward. But with a little thought and planning it's possible to get into a routine of managing the finances for every aspect of your farm's operation. Here are ten important points to bear in mind about farm accounting.

1. Your land is an asset

Properly managed agricultural land shouldn't depreciate – it might even go up in value. But mismanaged land can take many years of careful nurturing to return to productivity, especially if it's become highly acidic or drained of nutrients due to over-farming in the past.

The cost of maintaining your land should always be accounted for.

Fertiliser: This is an unavoidable expense if you want to keep your fields productive
Irrigation: Nothing grows without water, and irrigation is a major cost in dry countries
Drainage: Soil that doesn't drain well will rot crops and harm livestock, and improving drainage is a costly process
Soil pH management: Different plants require different pH levels and careful analysis is required in order to add the correct nutrients to maintain soil pH at the appropriate level
Weed removal: Whether it's manual extraction or spraying, weed removal is an ongoing expense
Pest control: If you're growing crops you'll need to manage pests and this can be a continuous fight with natural selection as pests develop resistance

If looked after well, good quality land should remain productive year after year. So whatever it costs to keep your land in good condition it is likely to be money well spent. Make sure you account for all these expenses.

2. Stay up to date with government subsidy schemes

Farming is a critical industry. If a country doesn't have the resources to feed itself, it will have to rely on imports to keep its population alive. For that reason, most governments provide subsidies to farmers to help them out during the lean years, to make particular types of farming more appealing, and to ensure that the country never runs out of food.

These subsidies are different in each country and they often change. One year you might find there's a big subsidy on cheese production, another year it might be beef that's subsidised. Quite often governments get it wrong, leading to surpluses that drive down prices too far. The so-called 'butter mountains' and 'wine lakes' in Europe towards the end of last century were partly a result of poorly-managed subsidies.

Today subsidies are managed more efficiently, but that can mean they change more often too. So make sure you keep track of subsidies and account for them, especially if they're made as direct payments. The more knowledge you have about subsidies, the more you can plan your farming strategy to make the most of them.

3. Adjust your farm accounting calendar to suit the government's

When is a lamb not a lamb? When the government decides it's a hogget. Farmers know that nature doesn't follow strict timetables. For example, if lambs are born early, late or out of season, they might not fit into the government's rigid definition of age. This can cause long-term headaches if you're trying to keep a tally of the animals on your farm.

Resolving this can be a problem, particularly when farming breeds of animal that reproduce all year round or outside the usual seasons. Usually the simplest solution is to go with the government's definition of significant dates and livestock ages when doing your accounts. It may not always be factually correct, but it'll save you going through more complex calculations in the future.

4. Record changes in land use

As economies change, so does the type of farming that's carried out on the land. For example:

Pasture to crop production: A shift towards a more vegetarian society can lead to pasture being given over to cereal, fruit or vegetable production
Arable to native bush and plants: Some governments may pay farmers to return farmed land to its 'native' state by planting indigenous species and letting them grow wild
Carbon capture schemes: These pay farmers to change land use to forestry, as a way of 'locking up' carbon in new tree growth
Forest to livestock: In some parts of the world forests are cleared to make way for meat production, mainly beef for sale to burger chains

If your use of land changes, even if it's just a few fields, be sure to record it in your accounts. Make sure the land value (the asset) is adjusted if necessary and that you account for the sale of any stock that was on the land before. Or, if moving to a livestock farming model, be sure to record the cost of buying stock.

If you record these changes as they happen, it will make it much easier to keep your business accounts up to date.

5. Know your stock

Most farmers will know how many animals they have, of what type, breed and age, to within a small margin.

But animals breed and die, so the number will not remain static. And the old saying – where there is livestock, there is also deadstock – still applies, especially during cold winters and lambing or calving season.

So your stock numbers will change over time and it's important to record these changes in your accounting software. Every head has a value, and that value should be recorded.

6. Understand depreciation

In most countries, the cost of new equipment can be offset against tax. And its value will depreciate over time as it becomes older, wears out or is made obsolete by newer technology. Make sure you understand the rules for depreciation in your country, because the value of your equipment will affect your tax bill.

Tractors, trucks, harvesting equipment and other farm machinery: Built to last, but undergo heavy use and wear and tear in all weathers. Good quality equipment may hold its value but new technology is moving fast in this area, making older machinery less valuable.
Computer equipment: Increasingly essential for managing a farm efficiently, computers depreciate faster than almost any other type of equipment.
Hand tools, machine tools and repair equipment: Often long-lasting with a long depreciation tail, though low-quality items can fail sooner and be a poor investment.

Keep track of what you buy and account for its depreciation each year.

7. Account for loss

Farming is dependent on the weather, and sometimes the weather wreaks havoc. A hot, dry summer might be great for wine growers but it can be catastrophic for dairy farmers. Unseasonal storms can destroy an entire wheat crop and unexpected rain can leave hay rotting in the fields.

It's important to record any losses in your accounts, because that will reduce your overall tax bill. You won't want to be taxed on something that's been destroyed, or on a profit that you haven't made.

8. Keep track of your profitability

Farm profitability can be difficult to measure. There have been various attempts to do so, including:

Economic Farm Surplus or similar schemes: Favoured by accountants, this uses various farm accounting metrics to give an overall performance rating
Month-to-month profit: A useful quick guide to how your farm's performing right now, but no help in predicting future cash flow or profits
Working costs to milk solids: A popular one for dairy farm calculations, though be sure to keep your figures up to date and based on current milk solid prices
Revenue or profit per unit area: A measure of how much revenue or profit is generated for each unit area of farmland, for example dollars per hectare. While this gives a good idea of current farm performance, it doesn't always take underlying costs into account. Almost any farm can appear temporarily profitable if it's had enough recent investment

The only way to truly understand farm profitability over time is to use good quality farm accounting software. The additional benefit of doing this, is that you can use it to make forecasts and predictions based on past trends.

9. Use the internet and the cloud

Most farmers have some form of internet connection these days. It's not always fast – rural life has its downsides – but it's usually enough for the basics. Some uses for the internet in general and the cloud in particular include:

Checking stock prices and trends: Keeping up to date with these numbers can help farmers decide how best to utilise their land
Accessing kill sheets, tracking milk solid prices, etc: Usually faster and easier than getting this information by mail or word-of-mouth
Long-range and short-range weather forecasting: Vital, required knowledge for just about every type of farm
Using cloud apps: These new tools offer much faster access to information, accounting tools, resources and bank accounts

With the internet, and especially cloud computing , farmers can take advantage of the latest farming software. Good farm accounting software will have direct feeds in place for banks and farm suppliers. This means you can manage all your resources, suppliers and partners from one place.

10. Consider hiring an accountant

It is possible to manage the accounts of a small or even medium-sized farm on your own, but the time and complexity involved mean it will be hard work. If you're running a family farm then you may be able to designate one member of the family to handle the accounts while another looks after the day-to-day running of the farm. However, there will still be a steep learning curve.

A good accountant can take most of the fiddly detail work off your hands, leaving you free to run your business the way you want to.

Although the expense might seem high, good accountants will be able to save you money in the long run. With their understanding of tax legislation they may be able to reduce your tax bill, perhaps enough to cancel out the cost of your accountant's bill.

Account for every aspect of your farm

As we've seen, farm accounting is a big topic. Every farm is different and we've only scratched the surface in this guide.

Luckily, for farmers who want to go it alone there's now a range of good quality software, most of it cloud-based, to help simplify the accounting process.

Even if you do hire an accountant, you'll still need to keep some important financial information at your fingertips. When you and your accountant work together in the cloud so you can both access the figures, it'll help your farming business run much more efficiently.

Back to tax basics: How does PAYE work?

Tue, 27 Sep 2022 08:55:06 GMT

Once you become an employer, you’ll need to set up a pay-as-you-earn (PAYE) scheme.

All businesses that employ people earning above the National Insurance (NI) lower earnings limit (£123 per week) must register with HM Revenue & Customs (HMRC) as an employer and operate their own PAYE scheme. This applies even if you’re a company owner taking a salary.

But what does ‘pay-as-you-earn’ actually mean?

Putting PAYE into action

In simple terms, PAYE is the process of deducting income tax from your employees earnings at source, and then paying the deducted income tax to HMRC.

Once you have employees, you’ll need to operate PAYE and run a regular payroll. This allows you to calculate your employees’ wages, make all the necessary deductions, pay their salaries and send the appropriate reporting and income tax to HMRC.

To run your payroll you can either use free HMRC-approved software, specialist paid third-party payroll software (which can often be included with your cloud accounting platform) or you can outsource your payroll to a third party, such as us, your accountant.
Each employee is allowed to earn a certain amount tax-free. This generally accrues over each pay period, and earnings above that are subject to PAYE. There is also an amount of earnings per pay period above which NI contributions become payable.
Software will help calculate deductions from wages and salaries paid, which include PAYE, NI and student loan repayments. HMRC needs to be notified of details of earnings and deductions before each payment is made.
When employees are off work, you can also make claims to HMRC in respect of certain amounts such as Statutory Maternity Pay and other parental leave. Note that Statutory Sick Pay is not claimable.
Other in-year reporting includes notifying HMRC of any starters and leavers, and when anyone on payroll is either appointed as a director or stops being a director.
Pay cycles are normally either weekly or monthly, but some businesses do pay fortnightly and four-weekly. What you choose is likely to be based on what’s usual in your industry or sector.
If your employees receive fringe benefits – things like a company vehicle or medical insurance etc – these perks can often be included in the payroll calculations so that the tax is collected each pay period.
As well as PAYE and NI deducted from employees, there may also be employers’ NI . Depending on circumstances, many businesses can get an employers’ allowance which waives the first £4,000 of employers’ NI.
PAYE and NI should be paid to HMRC on a monthly basis, but can be paid quarterly if the amount due is normally less than £1,500 per month.
In addition to the regular in-year reporting, at the end of the tax year, the final Full Payroll Submission (FPS) needs to be marked as being the last one for the year. Additional reports must be submitted to HMRC detailing employees expenses and benefits. There may be additional employer NI contributions due on any benefits provided.
Employees need to be given earnings certificates (P60s) by 31 May and a report of expenses and benefits (P11D) by 6 July.
When you take on employees as a business, you’ll also have to provide a workplace pension scheme as soon as any eligible employee is taken on. Often, the workplace pension scheme is administered in conjunction with payroll processing.

Talk to us about setting up your payroll and PAYE

You may think that you can take on ‘casual’ employees without putting them through a formal payroll – but this is a misapprehension. If you employ anyone over a rate of £123 per week, all your employees must be processed through a payroll system.

Running your own payroll may sound straightforward, but it can become more complex than it first appears. PAYE and NI rules change over time, calculations need amending and workplace pensions requirements add to the workload.

To remove the payroll and PAYE workload, it’s a good idea to outsource your payroll and get that extra helping hand. As an experienced accounting firm and payroll specialist, we can help you set up your payroll system and get your PAYE up and running.

Get in touch to talk about your payroll requirements.

Are loans to directors and employees tax free?

Thu, 22 Sep 2022 11:49:45 GMT

If you’re a director then taking out a director's loan against the cash in your limited company might seem like a sensible thing to do. But the reality is that overdrawn loans to directors can lead to unintended tax consequences if they’re not properly managed.

There are three main impacts:

The loan may result in a taxable benefit-in-kind, if it’s interest-free and greater than £10k – affecting your tax code.
The company may suffer a Section 455 charge if the loan isn’t cleared within 9 months and a day of the year-end.
There’s an income tax (and potentially National Insurance) liability if the loan is written off.

In addition to this, if a company goes into liquidation with a director’s loan due to the company, the liquidators can take action against the director to get the loan repaid. This can include taking bankruptcy proceedings against the director concerned.

So, how do you ensure you’re on safe, tax-effective ground when taking out a director’s loan?

The lowdown on director’s loans

What do we mean by a director’s loan account (DLA)? In essence, this loan can be seen as any payment made to you as a director other than payments in respect of:

Business expenses
Salary
Dividends
Repayment of amounts owed by the company to the director.

It also includes similar payments to close family members.

If you owe the company more than £10,000 at any time during the year, even if it’s only for one day, then a taxable benefit arises. However, if you’ve paid interest on all amounts owed at any time, regardless of amount, and have done so at at least the HMRC minimum rate (currently 2.50% p.a.) then this taxable benefit won’t arise. It’s normally better for the company to charge interest of at least that minimum rate to prevent the benefit-in-kind charge arising.

The DLA ideally should not be overdrawn by any amount on the last day of the company’s accounting period. If it is overdrawn, unless it’s cleared within 9 months and 1 day a Section 455 charge of 33.75% of the uncleared amount is payable. If the amount is cleared at a later date, the Section 455 charge is repayable by HMRC 9 months and 1 day after the end of the accounting period in which it’s cleared.

Paying back the loan

As you can see, this all gets relatively complex to manage. So, why not pay the loan back just before the period-end and then take out a fresh advance from the company just after?

Two rules restrict that:A. The £5,000 rule – if a repayment of £5k or more is made AND within 30 days of this further advances are taken, the repayment is then offset against the later advance, not the original loan.B. The £15,000 rule – where the amount outstanding is £15,000 or more, and at the time of repayment there was an intention to draw down further sums, the repayment is applied against the subsequent drawdown – this applies even if this takes place more than 30 days ahead.

Exception to A and B: If the repayment is from a source that’s subject to tax (generally a dividend or bonus) then it can be offset against the older debt. So, it’s common to declare a dividend within 9 months and a day after year-end to clear the opening DLA balance and avoid a Section 455 charge, even if other advances had been made.

There are other considerations to think about too:

If instead of being repaid, the loan is written off, that will be taxed in the recipient’s hands as dividend income. But it will be subject to employee and employer National Insurance as if it was payrolled.
Writing off the loan will only be sensible when there aren’t profits available to pay a dividend, or not all shareholders have loans being written off.
In some limited circumstances National Insurance may not apply.
Where a loan exceeds £10,000 it requires prior shareholder approval.

Talk to us about managing your director’s loans

Managing your director’s loans in the most tax effective way is a challenge. As your adviser, we can advise you on the timing of dividend payments to help you eliminate or reduce Section 455 charges. We’ll also help make sure that your record-keeping for advances to directors is comprehensive enough to withstand HMRC scrutiny – always good practice when entering into a loan of any kind.

If you withdraw money from your company other than for salaries or declared dividends, please do come and talk to us .

A New Approach To Tax Advice

Tue, 20 Sep 2022 11:53:20 GMT

If you approached us to ask about our bookkeeping services; by simply asking a couple of questions we would be able to determine very quickly the services you need. This is because bookkeeping is a service that has been industry defined, making it very easy to find the service you need.

But what about when it comes to tax advice? Tax is an incredibly complex subject that is intertwined into so many different aspects of business and life. It can be extremely difficult to explain what it is you need help with and equally hard to determine the right course of action. You’re not a tax expert, so how do you know what you are looking for? And the truth is most accountants aren’t tax specialists either, as specialist tax advice is an entirely separate field to accountancy.

This can cause big problems both for you as a client and us as your advisor.

You run the risk of:

an inaccurate quote, that takes longer to obtain,
the goal posts changing once engaged,
being asked for additional information in bits, leading to delays,
additional costs once the work begins.

With biggest risk being you don’t actually get the tax advice you wanted – which we would never want happen.

Access expert tax advice when you need it

To ensure this doesn’t happen and to make it easier for you to access, we’ve launched a new service to manage your specialist tax advisory needs and issues, no matter how complex.

We’ve learnt from experience that separating the consultancy steps is vital to ensure you receive the best service possible. Our alternative approach to Tax Advice and Consultancy, means we can accurately identify the advice you need, giving you the results you wanted.

Visit our Tax Advice & Consultancy service page to see a step-by-step of what to expect when you reach out to us with a tax advice enquiry.

Why is this approach so much better?

It’s only by asking the right questions, and ensuring the process is carefully documented that your needs can be diagnosed accurately.

You see, by asking a specific set of consultative questions, bespoke to your circumstances, we can collate the facts and motives needed for a Tax Specialist to be able to give advice, for your specific tax enquiry.

This means an accurate proposal can be prepared clearly explaining the financial and non-financial benefits to you. It's vital to us that you understand the proposed work and feel equipped to make an informed decision about whether you choose to take the advice forwards.

Need help with a tax issue?

If you’ve been sitting on a tax issue or a complex situation for some time, we can help you access the expert advice you need; find out more about our Tax Advice & Consultancy service .

Book a call with Donald so we can get you and your business the tax advice you need.

Should I move my rental properties into a limited company?

Thu, 15 Sep 2022 15:13:33 GMT

It’s not unusual for business owners to have existing residential property investments, or to want to invest in this area. But if you’re thinking of dipping a toe into the property investment ocean, what’s the most effective and tax-efficient way to do this?

One possible approach is to put your residential properties into a limited company, creating a company structure that can be used to manage your property income.

We’ve highlighted the main steps to setting up a limited company and the key tax implications.

Thinking through the structural options

Putting your rental properties into a limited company is a move that requires plenty of thought – both around the structural options and the associated taxation issues.

Structurally, you have four main options to consider:

Housing the rental properties in a stand-alone company
A linked investment company alongside an existing trading company
A holding company above your trading company
A subsidiary company below your trading company.

Each of these four options has its own pros and cons.

For example:

When you’re looking for finance, lenders may be averse to the use of a subsidiary company as it could be threatened by poor performance of the trading operations.
A holding company or linked investment company structure allows you to pass dividends from the trading company to the property company, tax-free.
A stand-alone company completely ring-fences all your different business interests. But this means that where income from the trading company is needed for property purchases, this will be via dividends taxed in the business owner’s hands. The net amount remaining is then lent on to the property company, which is a complex way to access the necessary capital.

Knowing the tax implications of your property investment

Knowing how each structural option will impact on your finances is extremely important at the planning stage. And whichever structure is selected, you also have to factor in the various taxes that will impact on your property and investment plans.

These are the main taxes to be aware of:

Stamp Duty Land Tax – residential properties purchased by a limited company are subject to Stamp Duty Land Tax (SDLT) at a level of 3 percentage points above the normal rate. In addition, under most circumstances, SDLT will be chargeable on the value of any properties transferred into the property company (PropCo).
Capital Gains Tax – as an individual, capital gains tax (CGT) can be as high as 28% on any capital gains, whereas a PropCo would pay at the normal corporation tax rate – currently 19%. As an individual, there is an annual tax-free band of £12,300. Again though, take into account that CGT may arise on the gains when you transfer existing properties you own into a PropCo.
Annual Tax on Enveloped Properties – Annual Tax on Enveloped Properties (ATED) is charged on residential properties valued above £500,000 that are held in a limited company. An exemption can be applied for, provided that the property is commercially let and has not been occupied by any connected person such as a director of the PropCo.
Corporation Tax – for an individual, tax is payable at up to 45%. In a PropCo, the Corporation Tax (CT) rate is currently 19%, saving you a considerable amount in tax over paying as an individual. In addition, interest costs are fully deductible by a PropCo, whereas relief is limited to the basic tax rate for an individual. Remember, though, that if the PropCo pays dividends to an individual, those dividends will be taxable.
Business Property Relief – Business Property Relief (BPR) reduces the value of a business or its assets when working out how much inheritance tax has to be paid. But a PropCo (other than for furnished holiday lettings) will not be considered to be a ‘trading’ company, so BPR will not apply.

Talk to us about your property tax planning

Using a PropCo to manage your residential property portfolio has pros and cons. If you transfer your residential property into a PropCo, and/or use a PropCo to acquire additional properties, plenty of thought needs to be put into the structural and tax planning side of this move.

Each case should be examined differently, taking into account things such as:

Your personal tax and income requirements
The financing requirements for purchasing the properties,
the ownership and unrealised gains of any existing properties
Any other specific factors that could impact on your compliance and tax liabilities.

Putting your property portfolio into a PropCo is a specialist area and something where you should get bespoke advice from a property expert.

Get in touch to talk about tax planning for your property investments.

Are you unknowingly making illegal dividend payments?

Thu, 08 Sep 2022 10:10:43 GMT

We all know that dividend payments are a key way to pay yourself and your fellow company shareholders when your business makes a profit. But are you following the right rules when taking out dividends from your company?

Dividends can only be declared out of your company’s available undistributed profits, and the correct administrative procedures need to be followed if your dividend payments are going to be legal. If you unknowingly make illegal dividend payments, there can be significant tax and other consequences – even if you were unaware that they were not valid at the time.

So, what rules do you need to stick to? And how do you keep your dividends legal?

Key things to consider when planning a dividend

First, let’s look at the basic underlying principles behind these payments, and also the key considerations to keep an eye on when planning to initiate a dividend payout. If you stick to the right procedures, and keep the right records, there shouldn’t be any issues.

Here are some key considerations when planning a dividend payment:

Dividends can only be declared out of after-tax profits that are available for distribution to shareholders. Payments made from any other source don’t meet the regulations.
It’s possible for some profits to arise in the accounts but these not to be available for dividends. Usually, this is because they are ‘paper’ profits, such as those arising on a revaluation upwards of assets. Until the gain is realised, i.e. the asset is sold, the profit can’t be used to support dividends.
Another complication arises because ‘cash’ and ‘reserves’ are measuring different things. It’s quite possible to have more cash in the bank than there are distributable profits – and to therefore pay out a dividend that doesn’t meet the rules.
Often, an exact after-tax profit figure will only be calculated at the end of the financial year, but that’s insufficient for declaring dividends during the year. Even if there were reserves at the end of the last year, it doesn’t follow that they haven’t been reduced by subsequent losses in the current year.
Ideally, management accounts should be drawn up on a regular (monthly or quarterly) basis during the year. Provided that they’re properly prepared, and allow for relevant accounting adjustments and tax charges, they can form the basis for ensuring that the dividends you’ve declared comply with the letter of the law.
To declare dividend legally and properly, you should:
Have up-to-date management reports that show your financial position
Hold a board meeting to declare the interim dividends that are required
Ensure that both the board minutes and dividend certificates are prepared in a timely manner.
If dividends are declared illegally (which includes both due to insufficient profits and not following procedures) they can be reversed. This could result in an unexpected overdrawn loan account, with tax consequences for the company.
If the company goes into liquidation, any illegal dividends paid will be required to be refunded to the company.

Talk to us about dividends and setting up regular management reporting

Keeping on top of your accounting and management reporting is one important way to ensure that your dividends are legal and being made correctly.

We can help prepare management accounts on a regular basis, throughout the year. This helps you to meet your obligations when making dividend payments, but also gives you an enhanced financial overview to help with managing your company and making more informed decisions.

Get in touch to discuss your dividend plans.

You’re Not Getting The Tax Advice You Need

Tue, 06 Sep 2022 08:43:43 GMT

There’s an unspoken truth when it comes to tax advice: for business owners, there’s a complete lack of transparency from advisors over what tax advice actually is.

This means as a business owner:

…..you don’t know what to expect from your accountant

…..you don’t know if you are getting all the advice you need

But isn’t ‘really’ anyone’s fault.

Tax advice is an incredibly complex area that hasn’t been set out as a universally defined and priced service before. Like say, bookkeeping. If you need bookkeeping, your accountant will ask you several questions about your business and give you a price based on the requirements of delivery.

Tax advice shouldn’t be any different but currently it is. Well it was until now….

Three types of Tax Service

We’ve devised a way to define our tax services to make them completely transparent and clear for our customers, and us too!

Our Tax Services are broken down into three areas:

Tax compliance

Helping you pay the right amount of tax that’s due; your year-end accounts and tax return.

Tax advice

Delivery of specific work or planning to improve your tax position, to make a future saving, or get cash back into your business e.g. making an R&D Tax Claim.

Tax consultancy

Reviewing your overall affairs & motives and applying tax legislation to their situation, to see where you may benefit from advice in the future.

Most accountants will have a tax compliance service that is priced or built into their accountancy package services; with tax advice delivered and charged for as and when a situation arises.

Tax consultancy though? This is a bit of an unknown. But it’s where the most value sits for you as a business owner. Find out more about our tax consultancy services below.

Our Tax Services

At Inglis, we aim to be completely transparent with our pricing and recognise that as with accountancy services, the individual tax requirements of a business are very different.

At each stage of a business’ lifecycle, there are different tax service options to consider, to make sure you are paying the most efficient amount of tax.

Like what you see?

If you’d like to have a chat with us about our tax services and find more about what you could be doing, book a call with us at a time that suits you.

How much is our work taxed in the UK compared to other countries?

Wed, 31 Aug 2022 11:35:32 GMT

The OECD recently released its latest Taxing Wages 2022 report, and it’s interesting to see where the UK falls compared to other developed nations when it comes to tax.

One of the purposes of this particular paper was to look at the impact of Covid-19 on how workers were taxed across 38 different nations – and it makes for interesting reading!

The UK’s ‘tax wedge’ falls just below the OECD average

The ‘tax wedge’ is the gap between what the employer pays for labour and what the worker takes home, and there’s an enormous range between nations. In Belgium, workers lose 52.6% of their income to taxes, while in Colombia it’s zero.

Here in the UK, the tax wedge in 2021 was 31.3%, only marginally lower than the OECD average of 34.6%. The tax wedge figures for other European nations are generally higher, with countries like France and Germany both promoting a ‘high taxation and high public spending’ approach to providing state welfare.

In the UK, however, the current Conservative government has habitually aimed for a ‘low tax, high growth’ maxim. Good news for business investment and personal wealth management – not so great when it comes to finding the funds to get the UK out of austerity.

Interestingly, our Commonwealth partners, Australia and New Zealand, both have much smaller tax wedges. Australia’s main tax wedge was 27.1% and Kiwis only paid 19.4%!

Here are a few other countries’ tax wedge numbers, to put things in perspective.

2021 tax wedge by country

Belgium - 52.6%
France - 47%
Netherlands - 35.3%
OECD average - 34.6%
United Kingdom - 31.3%
United States - 28.4%
Australia - 27.1%
New Zealand - 19.4%
Colombia - 0%

You can see the full table here .

Starting a family cuts your tax – but not by much in the UK

Across all 38 nations analysed, families with children pay a lower tax wedge than single earners without children. The average was 24.6% for single-earner families with children, compared to 28.8% for double-earner families with children and 34.6% for individuals without children.

In the UK, there was less of a pronounced gap. The single-earner family tax wedge was 27%, while the double-earner family was 27.2% and the single person tax wedge was 31.3%.

Are you paying the right amount of tax?

If you think that you may not be paying the right amount of tax, give us a call or send us an email. We can talk to you about how you structure your business and personal assets, and ways to help you only pay the tax you need to pay.

Get in touch , we’d love to hear from you.

Our ambitious journey to become a Net Zero Accountancy Practice

Thu, 25 Aug 2022 13:40:48 GMT

We are delighted to announce that we have signed up to the Net Zero Accountancy Initiative and begun the journey to become a Net Zero accountancy practice.

Inglis Chartered Accountants, based in York which employs eight staff, will work with climate action platform Net Zero Now to calculate its Greenhouse Gas emissions as the first step on this journey. It will then create a reduction plan to cut emissions and compensate for any unavoidable emissions before setting a target date to become Net Zero.

The global scientific community agrees that reaching Net Zero is the best chance we have of keeping global warming to manageable levels and the UK government has set a target of reducing greenhouse gas emissions to net zero by 2050.

Net Zero Now estimates that accountancy practices in the UK are responsible for nearly half a million tonnes of greenhouse gas emissions every year, equivalent to the emissions of over 100,000 cars being driven for a year. While big firms can afford specialist sustainability advice, 80% of all accountants in practice work for a small or medium-sized firm and the process of going Net Zero is seen by most SMEs as being expensive, time-consuming and complex.

The Net Zero Accountancy Initiative, developed in partnership with Sage, ICAEW, ACCA, AAT and the Good Business Charter, helps businesses achieve Net Zero simply and cost effectively by using sector-specific protocols that set the industry standard. The Net Zero Accountancy protocols provide guidelines for any business in the sector to get to Net Zero. They have been peer reviewed by organisations representing the sector and sustainability and climate experts and are freely available at www.netzeronow.org .

Donald Inglis, Director, Inglis Chartered Accountants says:

“We’re delighted to begin our journey to becoming a Net Zero business. We know our staff, customers and the local community want to see us take action on climate change and understanding the sources of our emissions is the first step. We’re determined to reduce our emissions and build a more sustainable future for our business, the local community and ultimately our planet.”

Neil Ross Russell, Managing Director of Net Zero Now says:

“It’s an absolute pleasure to have Inglis Chartered Accountants join us on the journey to becoming a Net Zero business. Every accountancy practice across the UK now has the tools to take action on the climate crisis. The accountancy profession has an enormous role to play in the transition of our economy to net zero, both through reducing its own emissions and in its influence on other businesses. I encourage more accountancy practices to get on board.”

How we just saved a client £90k in tax reliefs

Tue, 23 Aug 2022 10:26:20 GMT

Much needed tax advice and consultancy can produce staggering tax savings for small businesses. Not only that it gives business owners the awareness, certainty, and peace of mind that they are accessing all the available reliefs.

Here’s how we recently saved a client £90K in patent and R&D Tax Reliefs.

The tax problem

The client was profit-making up to the year ending 31st July 2021. As of 31st May 2021, they had £712,245 net profit for this period and were due to pay £135k+ in corporation tax.

The client started making sales in respect of cosmetic dentistry from 15th May 2021.

They own a patent for cosmetic dentistry which was granted for the UK in May 2021. It is a divisional patent so it will further evolve and develop over time. They have an exclusive licence to this patent. The acquisition/licence costs were c.£25,000. They had applied for a patent in Europe, Australia, and America.

The client also undertook Research and Development (R&D) in respect of prototyping the product which they had previously made a claim for with HMRC. The client anticipated expenditure of £70k plus salaries this year.

The client wanted to consider if there were tax reliefs available to reduce profits made in respect of the patents and whether there was a potential claim in the current accounting period for R&D.

The advice

We recommended that a tax specialist is engaged to undertake the following work:

Undertake an initial review of the company R&D activities and the intellectual property held by the company to establish the ability to make R&D and patent box claims and the likely values for the accounting periods ending 31st July 2021;
Preparation of the claim calculations and report suitable to submit to HMRC in the relevant accounting periods; and,
Make recommendations for claiming the tax relief in the future such as recordkeeping, to facilitate an easier claim process in the future.

The benefits

The benefits for the client were significant:

Savings of £90K in patent and R&D tax relief combined!
Certainty on the interaction between R&D and Patent claims, whether the company met the conditions to allow the claims, the period(s) in which claims could be made, and the full financial benefit.
Awareness of any future potential R&D and patent claims, and the financial benefit of doing so.
Peace of mind due to the concern about the amount of tax due to be paid and the uncertainty, as to whether any reliefs would be relevant.

Need help with a tax issue?

If you’ve been sitting on a tax issue or a complex situation for some time, we can help you access the expert advice you need. Get in touch with us or book a call with Donald and we'll get you the tax advice you need.

Back to tax basics: How does VAT work?

Thu, 18 Aug 2022 13:53:08 GMT

Value-added tax (VAT) is a consumption tax that’s levied on goods that have had value added at each stage of the supply chain.

Most businesses with annual sales of £85,000 or more have to register for VAT. And even if your sales are below that level, you can register on a voluntary basis. VAT can be confusing, though, with different rates, options and, in some cases, quite complex rules to consider.

So, is your business likely to be required to pay and collect VAT? And why do we have VAT in the first place?

1. The key requirements for a VAT-registered business

In essence, VAT should be a simple form of taxation. As a VAT-registered business, you must:

Charge VAT to your customers
Deduct VAT you have been charged by your suppliers
Pay the difference over to HMRC (or claim it back if there’s a refund).

In basic terms, your business is acting as an unpaid tax-collector, and the actual burden of the tax is on unregistered businesses and individuals who are charged VAT but can’t claim it back.

2. A short history of VAT

When VAT was first introduced in 1973 there was a single rate of 10% which applied to most goods and services. This kept things simple and straightforward across the board.

The first indication that the basic simplicity wouldn’t last came in July the following year, when a rate of 12.5% was introduced on petrol and luxury goods, and that ‘luxury’ rate was then doubled to 25% four months later. The luxury rate was abolished in 1979.

A reduced rate of 8% was introduced in April 1994 and applied to domestic fuel and power, which was previously 0%. The reduced rate now stands at 5%.

Without covering all aspects of the tax, here are some common queries.

3. When do I have to register?

As we’ve mentioned, it’s not mandatory to register for VAT until you reach the current VAT threshold of £85,000. But what should you do when this looks imminent?

If you believe your VAT taxable turnover will exceed £85,000 during the next 30 days, you need to register by the end of that 30 day period, and start charging from the date you first realised that you needed to register.

Where you have a VAT taxable turnover of over £85,000 in the immediately preceding 12 months, you have to register by the end of the next month – and start charging by the 1st day of the second month after you went over the limit. This is a rolling 12-month period, not a calendar, tax or business year, so if you think you may be close to that point you should check each month.

4. When should I consider registering on a voluntary basis?

Even if you’re below the threshold for compulsory registration, you may want to register on a voluntary basis.

There are two main reasons that businesses do this:

Sometimes people believe that, cosmetically speaking, they appear bigger or more successful if they’re VAT registered, and that alone is enough to persuade some people.
Secondly, if most of your customers are themselves VAT-registered, then the VAT you charge isn’t a real cost to them, and you can benefit from reclaiming VAT incurred on your own purchases. Because of this, you can make more profit as a VAT-registered business that otherwise would be lost to tax.

5. What’s the difference between the invoice basis and the cash basis?

VAT is accounted for on either a quarterly or (less common) monthly basis. There are two different ways that you can account for the VAT:

On an invoice basis, you include VAT on sales based on your invoice dates, and deduct VAT charged by your suppliers based on their invoice dates.
On the cash basis, the relevant dates are when your customer pays you, and when you pay your supplier.
If your customers pay immediately, but you purchase on credit, then the invoice basis would suit you well. From a timing viewpoint, you would be reclaiming VAT on your purchases earlier.
If, on the other hand, your customers typically take a while to pay, while you settle your supplier invoices quickly, then the cash basis may be better.

6. What rates should I charge?

There are currently 3 VAT rates to choose from:

The standard rate of 20% applies to most goods and services.
The reduced rate of 5% applies to domestic gas and electricity, and to some supplies in the construction industry, such as certain building renovations and alterations. It also applies to some energy-saving materials installed in residential properties, to child car seats and some mobility aids.
Zero-rate (0%) applies mainly to everyday items, like basic foods, children’s clothing, books and newspapers etc.
There is another category, which is called ‘exempt’. This is where no VAT is charged, but the business supplying it cannot reclaim any VAT they incur in respect of such supplies. This includes items such as postal services and health services.

7. What VAT can I reclaim?

Presuming that you don’t make exempt supplies, then you can reclaim all VAT you incur in respect of your purchases.

This includes:

Goods, services and materials to be incorporated into things you sell
Expenses such as stationery and telephone charges
Most capital purchases, such as computer equipment and commercial vehicles.

The main exception is if you buy company cars, where the VAT is not reclaimable, or items with mixed business and personal use where part or all of the VAT may be blocked.

8. What are these VAT schemes I’ve read about?

There are a number of VAT schemes which are available to businesses.

Some, such as the second-hand margin schemes , apply to specific industries such as used motor vehicles, art and antiques. Others, such as the flat-rate scheme and the annual accounting scheme , aim to simplify the workings of the VAT system.

9. What impact will VAT have on your business?

Where you register for VAT, apart from handling the administration, there is normally no net VAT ‘cost’.

When paying the quarterly VAT bill, it's usually just the tax you’ve added on to your charges to your customers, less any amounts in respect of VAT you’ve paid to your suppliers.
Where VAT can have a significant financial cost, though, is where you don’t follow what are increasingly complicated rules. So, for example, being prevented from claiming back costs on your purchases because you didn’t check that your suppliers’ invoices are valid, or charging the wrong rate – or not charging at all – to your customers.

Talk to us about giving your VAT the once-over

This overview is a basic primer to VAT but there are lots of detailed industry-specific rules that apply in various circumstances. So getting professional advice is always a good idea.

As tax specialists, we can help you:

Decide whether or not you should register voluntarily
Run a ‘health-check’ of your systems if you’re already VAT-registered
Make sure you’ve considered any of the applicable special VAT schemes.

Get in touch to talk about your VAT needs.

Do You Know Your Real-Life Number?

Tue, 16 Aug 2022 11:10:52 GMT

What is your real-life number?

Every business owner has a real-life number. It is everything behind the scenes, that you are working towards in your real life, things like your next house, next big investment, or your pension pot. This real-life number can and should be linked with everything that the business is working towards. It is the key to achieving the life you really want, both now and in the future.

But many business owners can find themselves controlled by their business. They become wrapped up in running the business and unable to focus on improving their lifestyle.

You see, for many business owners there can become a disconnect between the work that is being done in the business and the impact it can have on their lives. But the only way to achieve your real life number, is by looking inside the business and getting serious. One of the ways you can do this is by understanding how tax advice and consultancy can help you achieve your real-life number tax efficiency.

This is where we come in.

To help you reap the rewards of you real-life number, we’ll work with you to:

Identify your real-life number

To start we’ll look at your current position and what your business can pay you right now. We’ll then look at what you need to achieve, to get you to the real life number that you want.

Impact of business performance

We’ll then review how your business performance is impacting your ability to achieve your real-life number.

Identify ways to make tax-efficiency savings

Using our expertise and knowledge, we will help identify tax saving opportunities, meaning you can take extra money out of the business for you and your family right now.

We’ll also make plans to take an extra sum out of the business during the next five to 10 years.

What information will we need to help you achieve your real life number?

If we’re to help you achieve your real-life number, we really to get know you. This means getting know things like…..

Family

Are you married? Do you have children; if so, how old are they? Are your parents still around; if so, how old are they? Who is bringing in income; what is their job and how much do they earn?

Big life investments

What big life investments do you have planned? For example, do you intend to buy a bigger house, new cars, holiday home etc. How much money will your planned investments cost?

Family investments

What do you want for your kids? Nothing? School funded? University funded? First home? What amounts do these come to?

Protection Investments

How are your protecting yourself now and into the future? Things like insurance policies such as Medical, Life, Critical Illness, Income Protection, Key Person Insurance, Death in Service Insurance and so on.

Pension Investments

What are your plans pension wise? Are you planning to use a company pension, standard pensions, SIPP or SSAS? Do you want to generate more in order to take out more and fund a pension? How much would you like to fund each year?

Lifetime Investments

Outside of pension investments do you have a set amount you want to create – a disposable income wise to invest each year? What is that amount?

Lifestyle expenditure

What is your lifestyle generally like? Are you spending all the money you extract via salaries and dividends from the company on life expenses?

It looks likes like a lot of information but if you’re serious about achieving your real-life number and taking more value out of your business, this is what it takes.

Value Extracting Tax Diagnostic Review

We have launched a tax diagnostic review service that will analyse your business and personal circumstances, to identify all the ways you can tax efficiently put things through the business, or take value out of the business, benefitting you, your family and even your employees.

Find out more about the Value Extracting Tax Diagnostic Review .

Do you know your real-life number?

If you want to get a better understanding of the tax position of your business, get your real-life number down, and get a plan in place, we can help you get you there.

Let us help build your future. Book a discovery call and start your journey with us today.

Understanding your balance sheet

Thu, 11 Aug 2022 14:39:50 GMT

To understand the financial position of a business at a specific point of time, look at the balance sheet. The balance sheet may also be called the statement of financial position. Together with the Profit and Loss Statement, and possibly other reports such as the Statement of Cash-flow, these reports provide a complete understanding of the financial position and business performance.

So what’s involved? The balance sheet has three sections: assets, liabilities and equity.

What are Assets?

Assets are things and resources that a company owns. They have current and/or future value and can be measured in currency.

Assets may be subdivided on the balance sheet into bank accounts, current assets, (receivable within one year), fixed assets, inventory, non-current (or long term) assets, intangible assets and prepayments.

These include banks and other financial accounts held, accounts receivable (trade debtors), supplier deposits or bonds, stock on hand, property, equipment, vehicles, investments and intellectual property. All of these can be translated into monetary value.

What are Liabilities?

Liabilities are amounts owed to suppliers and other creditors for goods or services already received. Liabilities may also include amounts received in advance for future services yet to be provided by the business.

Liabilities are generally subdivided into current, (payable within one year), and non-current liabilities.

These include accounts payable (trade creditors), payroll obligations (salaries, taxes, superannuation), interest, customer deposits received, warranties and loans.

What is Equity?

Equity includes owner funds contributed, drawings, retained earnings and stocks. The value of the equity equals assets minus liabilities.

Transactions that affect profit and loss accounts also affect balance sheet accounts. For example, providing a service increases the accounts receivable balance, which therefore increases the equity.

The Balance Sheet Equation

The balance sheet must always balance! Asset value = liabilities + equity.

For example, if you buy a new vehicle for the business at say $50,000, having paid a $10,000 deposit and taking out a $40,000 loan, the value of fixed assets increases by $50k, but the bank asset value decreases by the $10k deposit paid. The value of liabilities increases by $40k loan, thus leaving the balance sheet balanced on both sides of the equation.

The balance sheet equation shows you how much money you would have left over if you paid all your bills and debts and sold all your assets at a given date. This amount is the Owner’s Equity.

Note that the balance sheet equity total is not necessarily how much the business is worth at market value. Assets are listed on the balance sheet at their transaction value, which may be very different from the market value. Some assets may be worth more, and others may depreciate in value. Business value is calculated not just on the balance sheet figures but many other factors.

Need more information?

Talk to us. Get the complete picture of your business performance and financial position, regardless of what stage of business you are at.

Should I get an electric car?

Tue, 09 Aug 2022 09:18:35 GMT

Having a company car used to be seen as a considerable perk. But in recent years it's become less clear whether having a conventionally powered company car as part of your income mix is a good idea – both from a tax perspective and from a sustainability angle.

The good news is that electric vehicles (EVs) are now more readily available. And choosing an EV as a company car may well be a great idea from both an eco and tax perspective.

A greener choice of car?

Having an EV as your company is a more eco-friendly choice in many ways. An EV has zero tailpipe emissions, produces less noise pollution and can be cheaper to run.

There are arguments over the green credentials of EVs , as lithium batteries will eventually need replacing and electrical power to charge the batteries currently still relies heavily on carbon-based power stations. But as technology, battery recycling and the use of renewable energy increases, having an EV as a company car will certainly help you do your bit for lowering carbon emissions.

Taxing a company car

When you tax a company car, there are two tax areas to consider:

The tax deduction for the company when acquiring the vehicle
The personal tax benefit in kind (BIK) value on which the driver is taxed.

Both of these are tipped in your favour when comparing the rules for EVs compared with conventionally powered internal combustion engine vehicles (ICEVs).

Tax allowances for EVs

For the company, 100% first-year allowances can be claimed on the purchase of an EV, provided that it’s new and unused. Any charging point you install at the business for your EV will also qualify for the super-deduction of 130% of the cost, which is certainly a good incentive.

Compare this to the company buying an ICEV. No first-year allowances are available but annual writing down allowances of 6% (18% if emissions < 50g/km) can be claimed instead.

As the driver of the vehicle, your benefit in kind (BIK) is calculated at 2% of the vehicle’s list price for the current tax year. ICEV rates are far higher, ranging up to 37%, depending on emissions. In the most common band the BIK is around 28%. If your fuel is provided, as an EV driver, you pay no additional tax, whereas an ICEV driver pays tax on an additional amount calculated by multiplying the vehicle BIK rate by £25,300.

Is now the time to switch to an EV?

If you’ve previously dismissed the idea of a company car because of the complex and expensive tax regime, now may be the time for a rethink.

Opting for an EV is currently a tax-efficient option and there are still incentives for both companies and individuals to explore the EV route. Going electric is a more sustainable option than a petrol-guzzling ICEV and you may well save on running costs as well.

Talk to us about the tax implications of an EV

If you’re thinking about getting an EV as a company car, come and talk to us. We’ll help you calculate the tax impact for both the company and driver, and can explain the relevant capital allowances that can be claimed when purchasing an EV for the company.

Business tips: Making it easier to get paid

Thu, 14 Jul 2022 14:48:15 GMT

Making sure you get paid on time is crucial to your success. The process of making sales and generating revenue lies at the heart of any business model. But you can't manage your cashflow effectively or raise any profits if customers don't actually pay their invoices.

The easier you can make it for customers to pay you, the faster you'll see cash coming into the business. That’s good news for your financial position, your ability to cover your operational costs and your capacity to fund the growth and expansion of your business.

So, how do you speed up those payments and make sure you get paid on time?

Set out clear payment terms

Your payment terms are the starting point for healthy payment times. These terms set out when you expect to be paid and form a legally binding contract with the customer. You may expect immediate payment on receipt of the invoice. Or you might set out a specific number of days that the customer has to pay the invoice (generally 30, 60, 90 or 120 days, depending on your industry). This is sometimes called ‘trade credit’ and allows your customers to pay for goods and services at a later, pre-agreed date – helping them to spread the cost.

Your payment terms should also include details of any late payment penalties. If the customer doesn’t meet your agreed payment times, most businesses will add a 1% to 1.5% monthly late payment fee to the outstanding bill. This acts as a great incentive for the customer to pay the bill, before the penalty fees start mounting up.

Invoice customers as soon as you can

In a business-to-consumer (B2C) environment, your customers will generally pay for their goods and services immediately. But when you’re working in the business-to-business (B2B) world, you’ll need to send your customer an invoice, asking for the money to be paid.

A customer can’t settle their bill until you send them an invoice. So, it’s vital to send out the invoice as quickly as possible, so you can minimise the gap between doing the work and being paid for the work. In some industries, the project will be broken down into multiple invoices, paid across a period of time. This makes it easier for the customer to pay, and means you (as the supplier) don’t have to complete the project before receiving the money you’re owed.

Ideally, you want your invoices to go out as early as possible. This allows your payment terms to kick in and makes it easier to predict when cash will be coming into the business.

Be organised about your payment admin

Getting paid is a process – and the more organised you make the process, the quicker the payment will be received. When you send out the invoice, make sure you send it to all the relevant people in the payment chain. This will usually be:

Your main contact at the client – the person who you usually deal with
The person who will approve the bill – the person who will green-light the payment
The finance team – the person (or people) who will actually action the payment.

It’s also a good idea to quote any relevant purchase order (PO) numbers that the customer has raised, and to give a very clear description of the work done, or the goods purchased.

Embrace the available payment technology

Invoices used to be hard-copy printed bills, but in the digital age the vast majority of companies will send out e-invoices. Electronic invoices are easy to raise (usually from your accounting software or project management app) and can be emailed out instantly. Doing everything in the digital realm also makes it easier to keep records and keep track of payments.

Many e-invoice systems will also let you add a variety of different payment options for the customer. You could just include your bank details and wait for the customer to make a direct payment to your account. But you can also include payment buttons in the e-invoice that give customers the option to pay via digital payment gateways, like PayPal or GoCardless etc.

Offering more ways to pay makes the whole process more convenient for your customers – and will generally result in faster payment times as a result.

If you want to speed up your payment times and boost your cashflow, please do get in touch. We can help you streamline your payment processes and embrace the latest in payment tech.

Business tips: Have you achieved your goal for the business?

Wed, 13 Jul 2022 14:49:33 GMT

Founding, managing and growing a business is a BIG commitment. For most business owners, it will take years to build a customer following, turn a profit and create a truly scalable business.

It's a journey that can sometimes be pressurised, stressful and risky. – But when your plan really does come together, there is the chance of real success, a lasting legacy and a business that delivers on your initial dream.

So, how do you know when you've truly achieved your goals for the business?

Has the business met its growth targets and scaled up as intended?

You’ll have seen your business idea grow from being a fledgling startup, to an established business and on to become a scaled-up, ambitious enterprise with a solid customer base.

Are you running a profitable enterprise that's in good financial shape?

Running a tight financial ship is crucial. You need solid revenues, positive cashflow and good liquidity to keep your business ticking over.

In the early days of being a startup, cash will have been tight. And your own personal income as a founder and director will probably have been scarce too. But as the business has become more established, you should have found that your business revenue became more stable and predictable – and that your own personal wealth also followed this same reliable pattern. If the business has a solid balance sheet, great cashflow and meets your intended profit targets, you’re onto a good thing – and can be sure that your financial position is in good shape.

Do you have a stable customer base who say good things about you?

Do you have a team who can operate the business without you?

Do you feel you've achieved what you wanted to achieve?

In your formative years as a founder, you’ll have sat down to draw up a startup plan. In that plan you’ll have outlined a clear vision for what this business was going to achieve.

This vision might have been:

To scale up over five years, sell-up and retire
To deliver a new kind of technical widget and make it the global standard
To help your target audience improve their lives, helped by your product/service
To provide the income needed for you to live your desired lifestyle
To plough your profits back into the local community and be a force for good.

Deep down, only you and your fellow founders know whether you’ve truly met your intended goal. But if the general consensus is that you aced it, then it’s time to think about the future.

What’s the next chapter in your business story?

If you can answer yes to all five of these questions, then congratulations! You've built a successful, stable and profitable business.

It's a good idea to talk to us before you make what is, essentially, a life-changing decision. If you’d like to talk through your options, do get in touch.

Paying dividends the tax-efficient way

Thu, 07 Jul 2022 14:42:31 GMT

When your limited company makes a profit, you can choose to pay a percentage of that profit to your shareholders. This is known as a dividend payment and is one of the most common ways for directors and shareholders to extract cash from a successful business.

But did you know that the dividends you receive are taxed separately from other sources of income? Or that dividends have their own tax rate, and that this rate recently increased?

We’ll explain how dividends are paid and taxed – and how to do this tax-efficiently.

How do dividends work?

Dividends are the payments you receive on shares you hold in a company. This could be shares in your own company or shares you hold in a publicly listed one.

The company pays corporation tax (CT) on its profits and the amount left after that is potentially available for it to pay out to its shareholders. As a shareholder, this means you’ll receive a dividend payment, with the amount you’re paid decided by the company.

How will your dividend payments be taxed?

Although the company has already paid CT on its business profits, as a shareholder you must still pay tax on the personal income you’ve received in the form of dividend payments.

The process of taxing your dividends works like this:

Dividends are taxed after other income has been dealt with. So, things like salaries, self-employment income and property rental income are taken into account first.
Every individual has a tax-free allowance. For most people this will be £12,570 for the current tax year. Above that threshold:
The next £37,700 is the basic rate band (BRB)
This is followed by £112,300 of higher rate band (HRB)
And all further income falls into the additional rate band (ARB).
The rate of tax on your dividends depends on which band your income falls into, after the other types of income have been taken into account:
Dividend income in the BRB is taxed at 8.75%
In the HRB it’s taxed at 33.75%
And in the ARB, the rate of tax is 39.35%.
Other kinds of personal income are taxed at 20%, 40% and 45% respectively, so you can see the need to manage your dividend tax planning carefully.
No tax is charged on the first £2,000 of dividend income regardless of which band it falls into. Also, dividends held in a Stocks and Shares ISA are not taxable.

Talk to us about dividend tax planning

To make sure you don’t lose out when receiving a dividend payment, it’s important to think about dividend tax planning as part of your ongoing tax strategy.

We’ll help you find the best mix of dividends and salary payments to extract funds from your company. This meets your compliance needs and also minimises the tax charged by HMRC.

Let’s sit down to run through your planned dividend income and check that you’re taking money out of the company in the most tax-effective manner.

Get in touch to talk about dividend tax planning.

Remuneration strategy - Salary vs Dividends

Tue, 05 Jul 2022 15:15:34 GMT

As an owner-manager, your chief concern will be making your business profitable and building up cash reserves in the company. But you’ll also want to be able to extract funds from the business too – whether this is via a regular monthly salary, or ad-hoc dividend payments.

Salary vs dividends is the most common split, but there are a number of different ways of extracting funds from your business, all of which can have different tax and capital impacts – both for you personally and for the company as a whole.

Because of this, it’s important to have a clear and workable remuneration strategy – which clearly sets out how and when you will be able to take funds out of the company.

Building a tax-efficient remuneration strategy

Once your business is financially stable, you’ll no doubt have thought about how to take income from the company, particularly how to split income between salary and dividends.

So, what are the main considerations when creating a remuneration strategy?

Your first choice is generally to ask ‘How much should I take as a salary?’. Presuming that you don’t have a contract of employment with your company (most owner-managers don’t) then the National Minimum Wage legislation doesn’t apply.
To build up credits (contribution years) for the state pension, your salary has to be paid at a rate that’s equivalent to at least the Lower Earnings Limit (LEL) of £533/month. Generally, therefore, a salary of at least that amount should be taken.
Individuals currently pay National Insurance (NI) contributions at a rate of 13.25% on salary between £1,048 and £4,189, and at 3.25% on salary in excess of that level. Although the total percentage won’t change, from April 2023, 1.25% will be taken off the National Insurance contribution rate, and charged separately as a new Health & Social Care Levy.
The company will have to pay Class 1a and 1b employer NI contributions at a rate of 15.05% for all salary above £758 per month. But these contributions may be partly or fully covered in some circumstances by the NI employment allowance.
There’s a ‘sweet spot’ between £533 and £758/£1,048 where no NI is payable by either party, which can be a big factor in the amount of salary you pay out. This sweet spot doesn’t exceed your income tax threshold as an individual – you’re actually considered to be a contributor to earn state pension benefits and the salary is deductible against the company’s profits for corporation tax purposes.
Above this sweet-spot level, it’s sensible to consider whether or not to take dividends. Bear in mind that dividends can only be paid out of after-tax company profit, so your business does need to have delivered this profit before you can extract any cash as a dividend payment.
The first £2,000 of dividends are tax-free for the recipient, but above that the rate depends on which tax band the dividends fall into. If you have any unused personal allowances then dividends that fill that gap are tax-free.
Dividends in the basic-rate band (generally total income between £12,570 and £50,270) are taxed at 8.75%. Dividends in the higher-rate band are taxed at 33.75% and anything above that is taxed at 39.35%.
Other ways in which funds can be extracted from the company include paying off amounts due on any director’s loan account, making a loan to you as a director (which can have other consequences), making contributions to your director’s pension fund and providing benefits in kind.
As with all of these things, the driver behind your remuneration strategy needs to be the needs of the business, not the short-term, positive tax implications for you personally. There will always be specific considerations to factor in for each scenario and each individual – so it’s good practice to talk to your accountant in advance of extracting any funds from the business.

Talk to us about your remuneration strategy

In most cases, there’s no shortcut to crunching the numbers when it comes to creating a robust remuneration strategy. It requires an excellent understanding of both company and personal tax, and a good knowledge of the complex (and sometimes opposing) effects that company and personal taxes can have on each other.

We’ll help you to review your business and private wealth situations and generate a remuneration strategy that’s tax-efficient, straightforward and well-suited to your cash needs.

Get in touch to talk through your remuneration plans.

Your Q3 2022 deadlines for the diary

Wed, 29 Jun 2022 10:22:53 GMT

We’re always here to keep you up to date with the latest accounting, tax and compliance deadlines. Here are the forthcoming deadlines and cut-off points for Q3 of 2022 to add to your diary.

Requirement to register for Making Tax Digital for VAT (MTD for VAT)

Previously, businesses with annual turnover (sales) below £85,000 could opt out of signing up for MTD for VAT.
For all periods that start on or after 1 April 2022, your business must sign up for MTD for VAT and submit returns using software that’s MTD-compatible. This will apply to monthly returns from April 2022 onwards and quarterly returns from June 2022 onwards.
From April 2022 onwards, you must submit your VAT returns using MTD-compliant software.

NOTE : If your company’s accounting period is longer than 12 months, the first tax payment deadline is normally 21 months and 1 day after your accounting period started, and the second one is 9 months and 1 day after your accounting period ends.

For example, a company with an accounting period running from 01/09/2020 to 31/12/2021 will pay the first tranche of corporation tax by 01/06/2022 and the balance by 01/10/2022.

If your profits are more than £1.5 million, then tax is payable quarterly with two payments before the end of your accounting period and two after. The first payment is normally six months and 13 days after the start of the period, with the others three-monthly from that point.

Some general deadlines to plan for:

Employment related securities (ERS) schemes need to be registered (for the previous tax year): 6 July 2022
ERS Annual Return (for previous tax year) must be submitted: 6 July 2022
Enterprise Management Incentives (EMI) schemes ‘notice of options granted’ to be submitted: within 92 days of grant .
Submit your P11D, P11D(b) and P9D returns (for 2021/22 tax year): 6 July 2022
Pay Class 1A National Insurance contributions to HMRC (for 2021/22 tax year): 19 July 2022
Make your second payment on account for 2021/22 personal tax: 31 July 2022
Make Capital Gains Tax payment for gains on residential property: 60 days after completion
PAYE and National Insurance payments due: 19th calendar day of the month after end of month or quarter as applicable (22nd for electronic payments)

Talk to us about hitting your deadlines

If we’re looking after your payroll and tax returns, we’ll be monitoring these dates and deadlines automatically – but don’t forget that you remain legally responsible for meeting all deadlines.

Keep an eye on all the upcoming deadlines and check the upcoming dates for all relevant activities. Pay particular attention to those where we don't carry out the task for you.

Missing a compliance deadline can result in fines and penalties, so it’s good practice to keep everything well-organised and on time.