Many people running their own business want to grow and become more profitable. Why should this be a problem you may ask? Surely everyone is in business to make a profit? Very true, however a business can grow too fast and actually fail as a result of this. Cash (or lack of it) is one of the key causes of business failure.
Growing a business may require new equipment or capital investment. Where does this cash come from? There are many funding options available that will help to ease the cash flow burden. Your accountant should be able to assist in obtaining the right funding for your business, along with helping to prepare any forecasts and projections needed to obtain it.
Securing some large contracts may seem like a really good business plan, but ……….reliance on a handful of large customers can have a negative effect on your cash flow. Larger customers can often extend the terms over which they pay, hindering your cash cycle. You will have paid your suppliers but may have to wait a further period of time to receive the income owed to you. Do you have a sufficient overdraft facility in place to cover this?
You may currently be below the VAT threshold, but growth may mean you must become VAT registered. How do you pass this cost on if you provide products or services to the general public or not another VAT registered business? Adding 20% onto you sales may result in you becoming less competitively priced. When your business starts to grow, you should speak to your accountant to help guide you through this.
Whilst it’s perfectly natural to want your business to grow and be as profitable as possible, be cautious and seek advice before leaping into the unknown.
The Budget announcement, and subsequent withdrawal, regarding the increase in NI contributions for the self-employed has been a debacle. Philip Hammond was supposed to be a safe pair of hands as Chancellor of the Exchequer, but any more gaffes like this and he will earn the nickname “Butterfingers”!
Simplifying the tax system is a noble aim, and the abolition of Class 2 NIC from 6th April 2018 is a good step along this road. It seems that the Chancellor was trying to claw back
some of this lost revenue by his Class 4 NIC hike, but this was politically unacceptable. Continue reading
With the new tax year looming, the payroll year end is at the top of the list of ‘to do’ for all of us processing payrolls. I thought it might helpful if I run through a few of the things that we need to keep in mind this month and into the next:
If you haven’t already ordered, and don’t want to waste ink, the Revenue are still providing blank P60 forms for free, just search for the online order form on HMRC.GOV.UK. Continue reading
I’m asked to interpret accounts a lot by clients. Either their own or somebody else’s, perhaps a competitor, customer, acquisition target or supplier. It doesn’t matter what the reason or how big or small they are, I always look at three aspects;
- Are they growing revenue?
- Are they profitable?, and
- Do they generate cash?
With the headline on the front page of the Sun this morning ‘Spite Van Man’ followed by a statement that Phillip Hammond has broken the Tory pledge to freeze NI, you could easily believe this to be a shock U-turn in government policy, but in reality there has been a stated intent to simplify National Insurance for quite some time. Continue reading
“The number of private sector businesses that are now incorporated is on the rise. So why do people choose to incorporate? There are certain benefits relating to legalities and limitation of liability, but what are the tax and financial benefits to this?
There is often a misconception that when you are the shareholder and director of a company that all the profits belong to you. You should beware not to fall into this trap. Once incorporated, all the profits belong to the company and tax planning becomes an essential tool to extract this profit for yourself in the most tax efficient manner. Continue reading
More than two-thirds of British adults have provided financial support to their families in some form, according to a September survey from OneFamily. Although one in five said it’s only the older generation who support the younger one, 13% stated that their family supports one another financially across generations and 33% revealed that everyone helps everyone out when needed. Mums are more generous than dads at offering financial support (55% compared to 46%). Sons have been the biggest recipients of help (28%), Continue reading