High banking charges hinder SME expansion

A  study of 3,000 small business owners has found that high banking charges are a bigger obstacle to international expansion than Brexit red tape. It is claimed that last year UK small businesses lost £2.8bn to hidden fees. This resulted in 69% of them being prevented from expanding further. Business owners said they struggle to compare the market. This was due to a “corporate opt out” that allows banks to hide their fees in the exchange rate.

Calls to end ‘Opt out’.

One of the international account providers, is calling on ministers to end ‘the opt out’. Also to ban hidden fees for businesses and consumers. Two-thirds of business leaders agree that ‘the opt out’ should be removed. They believe that regulation should require banks to be transparent about international payment costs. Research shows that, if the cost of international banking services were reduced, 34% of SMEs would enter new markets. Also 27% would hire more staff!

iBOSS Comment:  

Anything that can help to promote exports is to be encouraged. Banks should realise that they also would benefit from this in the future! Short-term pain for long-term Gain! Call us at iBOSS for business planning and advice on Home and Export markets. For help in raising finance click onto this link to our sister company BFS

#businessadvice #businessplanning #businessgrowth #export advice

Keeping company Tax records?

We must point out firstly that we, at iBOSS, are not accountants. Nevertheless we reproduce below information from TaxAssist Accountants that we think may be useful to SME owners/managers. It provides information on time-scales for keeping company tax records.

The implementation of digital software such as QuickBooks, Sage & Xero is helping to remove the requirement to keep company tax records . The implementation of MTD by the Government has also helped in this regard. Many SMEs, however, still have a lot of the paperwork used to support their accounts and tax. 

The question is – How long does the business need to keep this paperwork for?

In general terms, the answers are as follows:

Self-employed/partner in a partnership? 

Your tax records must be kept for at least five years after the 31st January self-assessment submission deadline. So, after 31st January 2024 you could dispose of your tax records up to the 2017/18 tax year).  

The records that you should keep for this time include business bank statements, sales and purchase invoices. Also all other documents supporting your accounts and tax records, such as petty cash records. If HMRC checks your tax return they may ask to see the documents. 

Beware, however -If you submitted your tax return late then the requirement to keep records may be longer. 

If the business is VAT registered? 

If your business is VAT registered, you’ll need to keep all VAT records for at least six years. 

Limited company? 

If your business is a Limited Company, you should keep all the tax and accounting records for six years from the end of the accounting period. If your year end is 31st March, from 1st April 2024 you can dispose of records for the 31st March 2018 year. 

Are you an Employer? 

If you’re an employer, you should keep PAYE records for three years from the end of the tax year. 

Paper or digital records? 

If your records are digital, there is no need to print and file these. Simply just keep the digital records safe and backed up. 

If you received the documents physically, then you can keep the records physically. Alternatively you can scan them in and record them with your other digital records. 

If you are uploading documents into your bookkeeping software, or storing them digitally, then you don’t need to keep the records elsewhere. You can dispose of the paperwork. 

Should I keep some records indefinitely? 

Some other records you may want to hang on to for longer. For example, if you’ve purchased a property, it’s important you keep the paperwork. This is in case you need to refer to it when you come to sell the property. Other paperwork relating to the purchase of assets may be needed for a capital gains tax calculation for example. 

It’s recommended that you keep a P60 for at least four years. Payslips, however, can be thrown away two years after the end of the tax year. 

Lost, missing or unreadable records? 

HMRC can charge you a penalty if your records are not accurate, complete or readable. 

If you are missing documents, then try to get replacement documents. Suppliers should be able to issue duplicate invoices. Banks can send copies of statements on request. While your employer or pension provider may not be able to provide you with a replacement P60, they can issue you with a statement of earnings. 

For more information on tax-related matters, follow this link to the TaxAssist web site.

UK manufacturing continues to struggle.

It is reported that UK manufacturing continues to struggle. This is due, in part, to continued supply chain difficulties. The S&P Global/CIPS UK manufacturing PMI survey shows a slight reduction in the rate of decline. The sector remains, however, below the contraction threshold. Manufacturers are adopting a cost-cautious approach. This is leading to cutbacks in purchasing and stock holdings.

Rob Dobson, director at S&P Global Market Intelligence, notes the widespread struggle across all UK manufacturing sub-industries. The 11th consecutive month of manufacturing production decline is attributed to weaker levels of new work and supply chain delays. As we all know, this is leading to disruption in the Red Sea route to the Suez Canal. The result has been to cause longer lead times. Inevitably, this has led to increased costs and slowed production rates, not just in the UK, but throughout Europe and beyond. This, in turn has been a contributory factor to recent inflation.

iBOSS Comment:

This is bad news for an economy that urgently needs to improve its overall economic performance and its trade balance in particular. If supply chain problems are limiting the growth of your business or, even worse, threatening its existence, then call Phil Jones on 07876 503 830. If your problem is finance/cashflow for the business , then call Peter Douglas on 07770 866955. We will be happy to provide a free consultation on your options.

Highest Consumer confidence for 2 years

The Times reports improved optimism in household finances over the next 12 months. This has led to an increase in the overall index of consumer confidence. The personal finance expectations index on which this report was based, was flat in January. This was the first time in two years that it has not been negative. GfK, who generated the Index, said “consumer confidence has started the year well. Despite the cost-of-living crisis still affecting many households across the UK, consumers appear to be encouraged by the positive news about falling inflation.”

iBoss Comment:  Good news for our economy which needs whatever boosts it can get! If you this news encourages you to grow your business and you need some new ideas, then call Phil on 07876 503830 for a free consultation.

FSB calls for VAT threshold change

The report by FSB is calling for the Government to consider raising the VAT threshold from £85,000 to £100,000. The argument is that this will remove a barrier to growth. Since the present freeze was introduced in 2017, more companies are being brought into the VAT system due to inflation.

It is estimated that around 26,000 businesses are limiting their growth to avoid crossing the threshold. So, the arguement goes,raising the threshold would increase productivity, capital, and employment in the economy. The report suggests allowing companies with sales between £100,000 and £120,000 to apply for a rebate on VAT. This would reduce gradually as turnover grows. The present VAT freeze will bring in an additional £1.4bn a year by 2027-28. The counterargument, however,  is that a lower threshold will bring more traders into the system thereby increasing Government revenues.

iBOSS Comment:  

Whilst the imposition of VAT puts an  additional burden on the ‘admin’ function, is this outweighed by the ability to reclaim VAT on purchases? Alternatively, does the absence of VAT on sales offer the options of being able to offer more competitive prices or have greater margins? Would raising the threshold really benefit SMEs? Must say the ‘rebate’ idea sounds a bit complicated too!

Helping our client to buy a retail business.

Alistair and Jonathan at the handover

The Background

iBOSS was approached, by a legal advisor contact of ours, to help his client Alistair Savage. Alistair was considering purchasing a well-established retail business that trades under the name of Cambridge Interiors. This was a ‘retirement sale’ of a company involved in selling curtains, carpets and other flooring materials. It has been in existence for some 30 years with a solid customer base.

We agreed to help him to produce a business plan for the acquisition and development of the business.

The negotiation

Initially a request was made for historical financial information from the seller (sent under an NDA). iBoss reviewed the information provided. Financial analysis quickly identified that the asking price was significantly too high based on the historical financial performance. Furthermore, the seller also wanted ALL the consideration paid ‘up front’.

As a result, IBOSS advised the client that on this basis they would not recommend the client acquire the business. He was determined he wanted to buy the business, however. The result was that there followed a period of several weeks of negotiations between our client, his lawyer and the seller. A deal was agreed on the following basis:

  • An asset purchase agreement not a share purchase.
  • The final agreed purchase price was significantly below the original advertised asking price.
  • On completion the initial payment was based on the value of the assets acquired. The remainder of the consideration ‘Goodwill’ was structured on a deferred basis against agreed performance targets.

This resulted in the buyer having no requirement to borrow any money. With the reduced price and deferred terms, he had sufficient resources to buy the business and provide the initial cash flow injection required.

Other matters to be resolved

It was also noted, however, that there were a number of other problems to overcome. Specifically:

  • Whilst our new client had a sales and marketing background, it was not in retail. The Directors of iBOSS, on the other hand, do have this experience. We were comfortable therefore in advising on this type of business.
  • One particular problem was the trading name of the current business. This had not been registered originally and subsequently (some years later) someone else had registered the name. Thus our client was obliged to register his business under a different name (Studio DeVere Ltd.). This raised promotional problems in carrying over the existing ‘goodwill’.
  • The current owner (Jonathan) was well known and respected in the local area. He was not, however, up to date either in terms of IT as related to business data, or the promotional benefits social media. Luckily our client is.
  • Our client had many ideas, both in terms of promotion and expansion of the product range. He needed our expertise, however, in developing this into a proper, logical plan. Exactly what iBOSS is about!
  • There were a number of ‘legal’ matters, but these were comprehensively covered by his legal advisor (Euan Temple Consultants), who we are very comfortable working with.

The outcome

The end result was that terms were agreed with the owner and the various members of staff. The purchase has now been completed and our client has taken over the business. He is delighted with the outcome and now can focus on implementing the changes he needs to achieve his growth plans. This includes upgrading the business into a supplier of high-quality interior design, fittings and furnishings for both industry and domestic use. iBOSS will, of course, be on-hand to provide further help and advice as and when needed. . If he needs further funds to support future growth these can be arranged through our associate company Business Finance Services (www.bufinserv.co.uk).

The directors of iBoss believe the lower end of the business sale market is not well served by the Business for Sale websites. We advise caution in trying to buy a business without getting professional advice from an accountant, solicitor, corporate finance firm or, dare we say, iBOSS!

If you are looking at acquiring a small business and would like to know how iBoss may be able to help in this process, contact Phil Jones on 07876 435133 e-mail him at phil@theiboss.co.uk  and take advantage of our offer of a free consultation.

HMRC Employer Bulletin

The HMRC has published its latest issue of bi-monthly ‘The HMRC Employer Bulletin’. This is a publication that provides information on the latest matters relating to company payroll. The December issue has information on a range of topics, including:

  • National minimum wage. Geographical compliance approach – support for employers.
  • Payrolling expenses and benefits for the 2024/25 tax year.
  • Off-payroll working rules (IR35) – opportunities to pause settlement.
  • Help to check whether work qualifies for R&D Tax relief.
  • Making sure you stay on top of your workplace pension duties.
  • Childcare choices – helping families to juggle work and life priorities.

For more detailed information follow this link.

BFS Comment:  

The HMRC Employer Bulletin is a publication, with payroll-related information. Every SME owner/manager or at least their accountants, should be aware of it (and read it)! If you do not have access to the necessary advice on how to interpret the HMRC advice then contact us at iBOSS and we will introduce you to someone who can help. Simply call Phil on 07876 503830 or e-mail him at phil@theiboss.co.uk. Alternatively visit our web site www.theiboss.co.uk and complete the enquiry form. We look forward to hearing from you.

#HMRCadvice #payrollupdates #HMRCbulletin

Helping a children’s nursery to grow

‘Outstanding’ but still looking to improve!

We, at iBOSS, were recently approached by the owner of a children’s Nursery. She was looking for assistance in developing her business, which operates as a Ltd Company. The Nursery itself performs very well in regard to the educational and care aspects of the business. It is currently operating on a firm financial basis and has recently gained an ‘Outstanding’ rating from OFSTED.  What the owner was looking for was help and guidance in terms of commercialisation and growth of the business.

The Nursery is located in a Northamptonshire village and, as such, takes children from the surrounding area. It acts as a ‘feeder’ to a number of Primary Schools,  Following initial discussions, it was agreed that iBOSS (Director Phil Jones in particular) would take on the role of business advisors, based on a monthly retainer.

How we help

This arrangement has now been working successfully for a number of months with the following results:

  • One area of concern involved the difficulties of raising the Nursery’s profile and associated fund raising. We advised on the setting up a ‘Friends of …’ Group. This has now been done with a significant number of Parents joining in enthusiastically. Phil also sits in on some of the meetings to provide help and guidance.
  • We have been able to provide advice in other areas such as employment and dealing with external matters such as suppliers and legal matters etc.
  • As a result of our involvement, some of the operational strain has been taken off the owner, leaving her more time to concentrate on the educational/care aspects of the business.

Plans are now being worked on for future development of the business and any additional fundraising activities needed to support that development. iBOSS continues to be involved in an advisory role.

If you would like to know more about the advisory services we provide call Phil Jones on 07876 503830 or e-mail him at phil@theiboss.co.uk. Alternatively visit our web site www.theiboss.co.uk and complete the enquiry form. We look forward to hearing from you.

Setting up a ‘Smart-tech business?

The Scotsman reports that a new partnership has been established between the UK Government, Glasgow City Council and the Smart Things Accelerator Centre (STAC). The  aim is to transform Glasgow into Europe’s largest smart tech innovation hub. It involves a £2.5m investment into a state-of-the-art facility called “the beyond” at SkyPark, Finnieston. The plan is to create an innovation leader in smart technologies. This will focus on industrial, lifestyle, health and sustainability technologies. Industry executives from major organisations such as Dyson, Plexus, Meta, Blackberry, Motorola and Volvo Cars are supporting the plans. The partnership projects that as many as 100 companies will be up and running by the end of 2024. A representative of Glasgow council said: “We will empower Glasgow’s start-ups to hone their technologies here and then compete internationally – bringing a great number of new jobs and careers in this sector.”

iBOSS Comment:  iBOSS works with clients throughout the UK. If you are considering setting up a hi-tech/smart-tech business in Glasgow, or elsewhere, and need help with the logistics and/or funding of such an operation then give Phil a call on 07876 503830. Or you can e-mail him at phil@theiboss.co.uk for a free consultation on how we can provide the services you need.

Advice on Cyber security from Keba Computers

As we are all aware cyber security protection for our IT systems is increasingly becoming a problem. This is true for all businesses and individuals. We have worked with Keba Computers for many years and have always valued their advice. Indeed we are happy to recommend their IT services to any SMEs. So, for this reason we are happy to provide this link to their latest publication which has advice on cyber security. We would strongly advise all to read it and take note of this advice. Thanks Neil and the Team at Keba.