Auto Enrolment – how to get ready and stay compliant
What is auto enrolment? Automatic enrolment requires virtually every UK small business to automatically enrol qualifying employees onto a suitable workplace pension scheme and make regular contributions to it on behalf of those employees. What must UK businesses do for auto enrolment? Know your staging date – businesses have been ‘staged’ into auto enrolment since 2012 and the process has now reached the micro-business level Create a plan – be sure your business is prepared – working with a specialist consultant, outsourcing your auto enrolment and/or using payroll software are all ways you can be auto enrolment compliant without headaches Remember to reassess – this has to be done every pay period. All your employees need to be assessed to ensure they qualify for the next period of auto enrolment: age, hours worked and payment received are all criteria that must be checked Inform all workers – this includes all new workers. Once you’ve entered the auto enrolment process you must remember to communicate with new employees and any who cease to be eligible Complete a declaration of compliance – records have to be maintained for six years and The Pension Regulator requires you to complete your declaration within five months of your staging date Maintain contributions to workers’ pensions – when the scheme began in 2012, contributions were 2% but phasing means they will reach 8% by October 2018. Which businesses must implement auto enrolment? At this point in the staging process it is SMEs who are being required to become auto enrolment compliant. So called ‘micro-businesses’ are dis-proportionally hard hit by auto enrolment because there is an...
Research & Development Tax Credits – Are you eligible?
Any new business needs all the tax relief it can get. Which is why it is all the more surprising that for many SMEs, the government’s Research & Development Tax Credits aren’t being more widely utilised. What activities qualify for Research & Development Tax Credits? HMRC has clear guidelines about qualifying criteria and they are much broader than you might expect: Expenditure on staff (salaries, employer’s NIC and pension contributions all count). Expenditure on subcontractors (including freelancers). Spending on materials and consumables (including heat, light and power that are necessary to, or used up by, the R&D process). Even some types of software expenditure. It’s important to note that your project doesn’t need to succeed to qualify for tax savings. You can reduce your tax by applying for Research & Development tax credits even if you’re not certain if the project is possible, scientifically or technologically. Or if it’s theoretically possible but you’re not sure if you can put it into practice. HMRC calls this ‘resolving uncertainties’ and this qualifies for Research & Development tax credits. In fact, so does enhancing an existing product, process or service. As long as that enhancement requires an Research & Development spend. Another surprising aspect of the tax relief process is that an SME that is undertaking work for a client, for example a software developer creating a bespoke programme or application, can apply for the Research & Development tax credits. Even if they themselves won’t be the final beneficiary of the research process. Research & Development tax savings Research & Development tax credits can be worth as much as 33 pence in every £...
Top tips for selling your business
Someone told me never get into a business venture unless you know how you are going to get out of it! For most entrepreneurs defining their exit strategy early on, is a critical part of achieving business success. Strategies will differ, but for all there will come a point where they want to exit the company. This normally means passing the business on to a successor, winding it up or selling your business. For many business owners, real value is only achieved when they sell their business. For entrepreneurs, this is their reward for the hard work and dedication put in to building a successful business. Selling your business – here are our tips on preparing: Timing of the sale Think about when you want to exit the business. You may plan to retire at, say, 60, so work backwards to set yourself a timeline from now to that exit point. Once you have a time line in mind consider carefully the industry you are in. Think about what trends will impact the industry both positively and negatively between now and your exit point. The big influences will be the financial climate and state of the overall economy. It is well known that mergers and acquisitions activity dips in times of recession. Also consider whether a potential buyer would want to keep you on as an employee or a consultant for a period of time. This is becoming more and more common as buyers know that by retaining you the odds of a successful integration are improved. Consider the timescales for the sale itself. Even with motivated buyers and sellers and good legal teams,...
Choosing The Right Accountant
Making sure you choose the right accountant is a critical business decision. In many ways it is similar to recruiting a key staff member – choose the right one and they will support you and drive your business, choose the wrong one and it can prove costly and set your business back. Traditional methods have tended to focus on simple criteria; for example location or, perhaps, a recommendation from a friend or colleague. But in today’s interconnected world you have the ability to cast the net much wider. However, there are thousands of accountants out there – the challenge is to find the perfect fit for your business. Here are some of the key criteria that business owners should arm themselves with when looking for a new accountant: The Business relationship Challenge your accountant on what they can bring to your business – ask them what their specialisms are and how these can help your business. Be wary if they claim to be a specialised in ‘everything’. Some accountants may be great at tax but poor at designing and implementing business strategy, so decide what is going to be important for you and your business. Another key criteria is to find an accountant who sees themselves as a ‘business partner’ to you and your company; somebody who is interested and wants to get involved in more than just doing the VAT and company accounts. Personal compatibility Do not underestimate the importance of getting on well with your accountant. Accountants may not have the greatest reputation for being the most social and likeable people in the world but make...Your Finance Team Ltd
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