Promises, promises but not much help right now

economy Mar 24, 2022

Hard-pressed businesses already facing a perfect storm will hardly have been cheered by the 5% reduction in fuel duty announced in the Chancellor’s Spring Statement.

There will also be business rates discounts of 50% for eligible retail, hospitality, and leisure properties from April 2022.

These were the only measure to be introduced immediately and, as has been pointed out, the cut in fuel duty is unlikely to make much of a dent in fuel costs given the price rises already seen in recent weeks.

Apart from these, everything else was promises for the future.

Among them were future possible tax cuts on business investment, uprating the employment allowance, adjustments to the Apprenticeship Levy and extensions to R&D tax credits.

The director general of the BCC (British Chambers of Commerce) said the announcement “falls short of the action businesses needed to see” and one local county Chamber director said: “it’s almost as if they [business owners]...

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Being in business is a risky business

Businesses have been operating within a very uncertain climate ever since the beginning of the Covid-19 pandemic but now their stresses have been compounded by the war in Ukraine.

According to a report in CityAM the majority of investors managing around $1trn in assets are expecting an equity bear market this year and are slashing their exposure in response.

Risk management and building resilience:

Dr Gianluca Pescaroli is a global expert in risk management, and more specifically in how businesses and other organisations can best plan for, and cope with, the impact of a crisis.

He says: "You need to have a very, very clear idea of your critical processes and services. These are essential, independent of whether it is a pandemic, or Ukraine, or climate change. The better you prepare, the better you adapt and react."

The little things are important:

While pricing and supply issues need to be addressed you should also have a checklist of vulnerabilities for everything needed to keep...

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There's no place to hide!

debt debt collection hmrc Mar 03, 2022

Don’t ignore communications from the tax man

From the end of June last year, HMRC has resumed its pro-active approach to tax collection and enforcement.

Since then, it has collected more than £5.8bn and prevented a further £11.2bn in revenue being lost through its investigations activity, according to newly published research by Pinsent Masons.

This represents a total collected of £30.8bn, an increase from £28bn collected in 2020.

The research found “HMRC has been taking a “tougher stance” on tax errors and avoidance in the past year and ramping up compliance activity as it looks to make up for the shortfall.”

HMRC also has recently acquired greater powers to give joint and several liability notices to directors, shadow directors and certain other individuals connected to a company if it becomes insolvent. This means that people who do not appear on the director register can also be pursued.

HMRC has always been known to favour...

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Can your business handle a four-day week?

employees small business Feb 11, 2022

The UK is launching a four-day workweek trial from June to December 2022 (a six-month period where participating employees will see no loss of pay.

It has also been reported that 30 UK businesses had already started a trial of four-day weeks from January 2022.

But is it a practicable proposition for your business?

The results of the trials that have been carried out so far in other countries have shown that it improves workers’ quality of life, giving them more time for other priorities.

They have also, so far, shown that there was no loss of productivity and in some cases businesses have increased sales, reduced absences from illness and improved employee retention.

There is also an argument that the system could have environmental benefits from reduced commuting and traffic congestion.

However, it is questionable whether the four-day week can be applied in all businesses, not only because of the primary consideration of their customer’s needs but also because of the...

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Do you really need all your employees to return to the office?

cash flow employees Feb 04, 2022

The guidance to work from home was one of the restrictions that was recently lifted along with several others that had been introduced to try to control the spread of Covid 19 infections.

The signs are that many have resumed the road or rail commute to the office as traffic numbers are steadily rising.

Was this a knee-jerk reaction by businesses desperate to return to normal? Or was it actually necessary?

Did they ask themselves whether they really needed all their employees to return to work in their centralised office locations?

Given that the economy of the country, and by extension of many businesses, is facing severe pressures as they seek to recover from the damage of the pandemic it will be crucial for businesses to keep a tight control on costs.

There are two factors in particular that are important to assessing whether a return to office-based working is actually necessary.

They are levels of productivity and business expenditure.

The LSE (London School of Economics)...

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Keep your nerve and stay patient

cash flow growth Jan 28, 2022

As restrictions imposed to control the Covid pandemic are lifted it would be tempting for businesses to ramp up their activity in order to return to pre-pandemic normal.

But problems remain. Materials and components costs have been rising, and still are. The global supply chain is still broken. Recruitment difficulties and labour shortages are still an issue.

Getting all these components right and working smoothly is a bit of a jigsaw puzzle.

We have talked about this before but it seems to be relevant again now.

There is a danger in ramping up activity too quickly as the situation eases. Accountants call it over-trading.

This is when a business runs up a big rush of sales on credit without the cash to pay its suppliers and it can rapidly become insolvent.

It is easy to be misled by the figures on the balance sheet, which may paint an over-optimistic picture of the cash flow forecast, especially when some of this is predicated on fixed assets and on the prospect of new investment...

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Two heads are better than one

coronavirus covid-19 hmrc loan Jan 14, 2022

As the deadline approaches for the submission of annual tax returns it has emerged that some businesses are realising that they have claimed incorrectly for covid support.

Law firm Pinsent Masons has analysed data that showed around twenty-five professional services partnerships have admitted to overclaiming furlough, with the total amount wrongly claimed coming to £309,588.

It is not surprising given the various modifications that were made to the scheme during the height of the pandemic, they suggest. It is also likely that these numbers will increase as more returns are submitted.

According to HMRC there are over 1,200 staff currently investigating 23,000 cases of suspected fraudulent Covid claims.

It says “Work to recover fraud and error began almost as soon as the schemes launched. We recovered £500 million of overpayments in 2020 to 2021”.

Do you know whether your business has claimed legitimately for covid support?

At a time when businesses are facing...

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Happy New Year!

cash flow Jan 07, 2022

I hope you all enjoyed the festive break and were able to refresh, regroup and think ahead for your business in the year ahead.

Unfortunately, there will still be a lot of pressure as there has been over the last two years because the pandemic is not yet over.

Among these are:

Costs – from the impact of rising inflation which has led to the Bank of England increasing interest rates.

Costs – due to the current high price of energy supplies.

Costs – due to businesses having to start to replace loans granted in the earlier stages of the pandemic.

Costs – due to late payments by other businesses, something that the Federation of Small Businesses (FSB) has highlighted as a problem for 30% of the SMEs it surveyed recently.

Costs – due to impending increases from April in National Insurance contributions, the living wage and dividend taxation, something the FSB has also highlighted.

Can you see the recurring theme here?

Is it affecting your ability to put...

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How does your supply chain stack up?

Materials, parts, products; they have all been subject to delays and shortages over the last year thanks to a combination of factors from a shortage of lorry drivers to the effects of pandemic lockdowns.

It has all made running a business more stressful and expensive.

Is it time to rethink your supply chain?

Many businesses switched to buying from suppliers further afield because of the financial savings this brought them, but perhaps given the more recent difficulties it might be worth looking for sources closer to home.

It may end up costing a little more but if it improves your business’ continuity it may be worth it.

Reshoring is also becoming increasingly important for improving UK manufacturing resilience and ensuring that its manufacturing supply chains are fit for an uncertain future.

Perhaps you need a back-up plan?

It is also worth looking around for alternative suppliers and using more than one, again to ensure the continuity of your own business operations.

Giving...

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Is it time to rein in the Rentiers?

funding investment Dec 02, 2021

Businesses have now faced more than two years of uncertainty thanks to the constantly-changing environment caused by the Covid 19 Pandemic.

It is estimated by Begbies Traynor in its latest Red Flag analysis that in the third quarter of 2021 562,550 businesses were in “significant financial distress”, with a 17% rise in “more serious critical business distress”.

What businesses need, therefore, is some measure of calm and steady progress as far as any business can ever rely on these things.

Investors are among the most important in providing these conditions.

But for years now, many investors have been what are called “rentiers”, interested only in short term gains from the money they put into a business without being particularly invested in the future of that company.

Rentiers are deemed to be willing to shift their money elsewhere if they feel their rewards are not large enough or fast enough.

While no business would deny that it has obligations...

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