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.
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!
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 email@example.com for a free consultation on how we can provide the services you need.
The team at iBoss have increasingly become involved in projects that extend beyond their planning and advisory services. One recent example of this arose when we were approached by a Partner in charge of a specialist division within a prominent Law Firm. His employers offered him the opportunity to hive out his division, which was achieving annual billings of circa £4m, as it was decided that the service offering was one that the Law Firm, for strategic reasons, wanted to exit.
The Partner was keen to explore the opportunity but first wanted to ensure that this was a viable business opportunity. He also wanted to understand what terms could be agreed and what funding would be required for the new proposed Legal Firm. In order to be able to do this he engaged iBoss to prepare a Business Plan and Financial Forecasts. Once prepared, he discussed with two of the directors of iBoss how best to negotiate and structure a deal that would be acceptable to both parties. Fortunately with a willing buyer and willing seller the focus on the deal was not purely based on financial considerations but how a smooth transition of live client cases could be handled.
Once the Heads of Terms had been agreed the biggest challenge the Partner faced was how to set up the new business at the same time as he continued to run the existing division. In this respect the iBoss directors experience was such that they were able to become actively involved in setting up the new business, whilst the Partner continued his commitments to his existing firm.
Setting up a new solicitor’s practice has many challenges, not least of which is obtaining an offer of Professional Indemnity Insurance [PII], which is a pre-requirement, of applying for Solicitors Regulatory Authority [SRA] and SRA approval, which in turn is a pre-requirement of opening a bank account for a new solicitors practice. Both parties were keen to conclude a deal as quickly as possible, whilst the ‘regulatory’ matters were being dealt with and a plan was agreed to start the process of putting in the new place the infrastructure that would be required to ensure a smooth transition of clients cases.
Whilst one iBoss director focused on the ‘PII, SRA and funding requirements, the other iBoss director project managed the move to new office premises, IT software and hardware requirements, existing employee transfers, new staff recruitment and contractual requirements etc.
Consequently, once the PII, SRA approval and bank account where opened a successful completion of the ‘hive out’ was achieved very shortly afterwards. The practice was able now to ensure that no client was impacted by the agreement and a smooth transition was achieved to the delight of the both exiting Partner and the Law Firm.
This was an unusual project in so far as it required a number of component parts being put together but not necessarily in what would be regarded as the normal order. The focus was to make the opportunity work for the exiting Partner who was very excited about running his own business and he was very pleased with the outcome.
If you have a project whether straightforward or one that may require a more ‘out of the box’ approach, then the team at iBoss would be happy to have an initial discussion on a no fee/no obligation basis.
For more details of this project, contact Phil Jones on 07876 503830 or e-mail him at firstname.lastname@example.org . For information on the full range of services that we offer visit our web site at www.theiboss.co.uk or give us a call on 0800 093 5240.
Small business success report shows ‘it’s good to talk’
iBOSS loves to give free business advice to all our clients. This is our advice today!
A report in Business and Money highlighted that Allica Bank had commissioned a new study, the SME Guide to Success, revealing that SMEs’ prospects of success depend to a large extent on engagement and interaction with external institutions and resources. Chris Weller, chief commercial officer at the business lender, remarked: “In the UK there is a wealth of external advice and support for small businesses and we urge every company out there to tap into the external resources around them.”
iBOSS free business advice Comment:
There is no doubt that business networking groups like The Business Community and Collaborate as an example in the East Midlands region, are a rich source of information. These Groups help to promote business whilst also giving tremendous support to each other. These groups often have professional business advisors who can also provide direct help to new business start-ups or established companies that in these difficult times may very well need a fresh approach or are even considering remodelling of their business. Although business owners may have excelled in their given industry, they still in these unprecedented times may need a business review on how to maintain or better still, increase business profit.
Contact us today if you would like to join the next meeting or get a FREE business advice consultation from us!
A recent article in the Daily Telegraph shows that a survey conducted by AllBright a women-only members club found that 25% of women have felt moved to establish their own business as a result of the coronavirus pandemic. It went further on to say that overall, 74% of women are keen to start their own company after the crisis. In response to the latest findings, AllBright is launching the ‘Making it Work’ campaign, which will include online training, content, and in-club programming to help members build confidence, resilience and return to the workplace.
There has been a recent surge in all new start-up businesses. 21 Thousand new companies Registered with Companies House in the first week of August!
New start up business advice
Now more than ever, new potential businesses need new start up business advice from a professional The initial excitement and euphoria of starting a new business can quickly dissipate if the business model isn’t thought through thoroughly. Money from redundancy, savings or a family loan can soon run out.
Getting the right professional advice is essential. The right professional advisor will not tell you how to run your business. Instead, they will guide you through potential pitfalls which they may have already learned themselves. They will help you to create that all-important Business Plan. They can advise you with financial projections, sales and marketing, staff recruitment and a whole host of other business support. Spending a little money on the right business advice may very well be your best initial expenditure!
If you want any advice about your new business, contact us