Important tax considerations for 2014

This week we are taking a look at things you need to consider when planning your tax in 2014. The good news is that there isn’t a great deal that is of concern for small business owners in the early part of 2014. This means that you have got some time to start planning how you are going to handle your tax in much the same way as you have always done.

There is a great deal of discussion surrounding the controversial bedroom tax. For the most part, the government has simply dismissed these grumblings and the tax looks set to stay for the foreseeable future. This is coupled with concerns that the government is not doing enough to support housing in 2014. The Labour years have been good for people reliant upon the state, but the current government seems to be taking steps to put an end to this culture that has developed.

We asked accountax ltd, an accountants based in berkshire, for their opinion on the state of tax in 2014. On the whole they believed that tax wasn’t going to go through too many updates or adjustments for the coming year. All the usual rules still apply. You need to have everything prepared well in advance of the deadlines and to be receptive of any updates a long the way.

For most people it will be business as usual in 2014. We will be keeping a close eye on developments and changes throughout the year. Be sure to check back for updates.

Now that we have reached the end of 2013 are SMEs really in a better financial position than they were 12 months ago?

The past 12 months have been a very difficult year for SMEs and small businesses alike across the UK. Traditionally these sorts of businesses would have had access to bank funds to kick off their businesses. However, access to such things as loans have been highly restricted to entrepreneurs and almost impossible to achieve the small businesses. Because lending is at such a low point and has continued to fall over the past 12 months, it is been SMEs and smaller businesses that have suffered the most.

London Fireworks

Government Lending Initiatives

One positive is that there have been a number of initiatives rolled out by the government to try and resolve the business lending problem. Perhaps the most significant of these initiatives was the funding for lending scheme  which was launched back in July 2012. This initiative had the purpose of providing motivations for banks to lend to SMEs and small businesses. There has been some criticism of the scheme and it has not been without controversy. Perhaps the biggest criticism has fallen on the banks failing to meet their promises and a lack of lending.

British Business Bank

Another notable initiatives rolled out was the British Business Bank. Created by Vince cable, this particular initiative has been very contentious amongst many small business owners. When it was first launched it promised to give small business owners access to the funds that they so desperately needed. However, continual delays and unforeseen problems have severely hampered the initiative’s effectiveness. It’s not all bad news though, towards the end of last year especially the initiative started showing signs that it was kicking into gear. Most exciting of all small business owners, an estimated £50 million was lent out by the end of last year.

Alternative funding methods for small businesses

Despite this positivity, there is a distinct feeling that this is all a little bit too late. Many small business owners have sought alternative methods of funding over the past year. It could be argued that the government has missed the boat on this one. Non-bank lending to businesses is now at its highest point in five years.

It’s great that small businesses are exploring alternative funding methods, but it does not excuse the shortcomings of the government. It is my belief that the government now needs to take stock of the situation and address the problems. They need to see their initiatives through to completion and deliver upon their promises that they made. Only then will the economy reach its full potential.

What all SMEs and business owners are hoping to see in the Autumn statement

In the run-up to the Autumn statement there has been a lot of discussion around what small business owners and managers are hoping to see in the Autumn statement. This is off the back of an impressive performance in 2013 for the economy, well, all things considered. Because the economy is in a much better condition than in 2012 there are many calling for us to be much more realistic in this year’s budget.

Autumn Statement

There is a widely held belief that corporation tax of 20% is benefiting the economy and is generally considered fair. However, one thing that is proving to be a thorn in the side of many businesses are the high business rates. In particular, it is these high business rates that are hitting smaller businesses the hardest and penalising those that are just starting out. Because of the strength of the economy and the growth we are enjoying, if the government were to cut these rates it would propel this growth further at a faster rate.

Combine PAYE and National Insurance

One of the most blindingly obvious decisions that could be made in the Autumn statement is the merging of PAYE and National Insurance. Sorting both of these out is a bureaucratic nightmare. If they were combined it would alleviate the strain placed on the internal teams within businesses.

Success of Apprenticeships

One thing that has seen a lot of success in 2013 is the apprenticeship schemes. With the ever increasing cost of entry to university, and apprenticeship is now a viable option for school leavers at 16 and 18. One thing that has been suggested that the government do is is to further invest in the apprenticeship scheme and make it more appealing to businesses. In particular, small businesses, but in my opinion have the most to gain from the schemes.

Whatever happens with this upcoming Autumn statement I’m looking forward to seeing the results.

Business drop off in December

I must apologise, I was hoping to have this blog post out in time for December itself. However, I was having a lot of technical problems with the site and this was not possible. So I hope you’ll forgive me for being late and that the post makes up for it. At the very least, you’ll be well prepared for next December!

This blog post is going to take a look and examine the common problem that many B2B businesses face in December. The dreaded December drop off in productivity. Almost all B2C businesses have their most productive months in December. This is the month out of all of the months in the year that they are at their busiest. If only it was the same for B2B.

Slacking off in December

Many employees have subconsciously checked out by the time of December rolls around. The problem is compounded when the same thing is happening at all your suppliers and other partner businesses. Even customers are guilty of this!

One of the biggest problems especially to service led industries is the dreaded December suspension by clients. It is quite common in the PR industry for clients to actually request that their services are suspended for this month. Obviously the biggest problem that this causes businesses is the fact that they lose out on the entire month’s revenue from that client on the eve of the tax year.

What can I do about it as a business owner?

My advice to business owners is to stand firm on your clients not having December off. There’s plenty that you can do to help them in this month and besides you need to keep revenue up.

If you are really struggling to enforce this with your clients the easiest thing to do is to make sure that this is inserted as a clause in your contract.

Feet up on desk

Is it a good idea to pay your staff bonuses?

The concept of the bonus has been around for donkey’s years, but in 2014 is there a place for it in the modern workplace?

Money

Back in 2008 MIT conducted a study to assess the effectiveness of bonuses in the workplace, you can read it yourself here. What they found was quite surprising. For more blue-collar working industries, a bonus was very effective in increasing productivity. However, in more creative lead industries, the results weren’t quite as impressive. Whether this was most prevalent was actually in the creative lead industries. It was in the creative industries that the concept of the bonus was the least effective.

The biggest obstacle to doing away with the concept of the bonus is the fact that your staff may feel that they are missing out. It is therefore important to consider all of the options that you have. You may have to increase the baseline salaries to compensate.

Getting rid of a bonus structure may also help the morale of your staff. All too often what is required to is actually achieve a bonus is unrealistic. Employees therefore can get unmotivated from the actual impossibility of ever achieving their bonus.

What you will need to do is consider what is best for your business, rather than doing away with a bonus entirely. It might be best to simply readjust the criteria for achieving a bonus to optimise your workforce.