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SMEs seek accountants’ funding advice

Most business owners turn to accountants to provide advice on potential funding options, a study has found. 

Peer-to-peer finance firm MarketInvoice polled 3,874 businesses and found 56% went to their accountant for ways to boost their cashflow. 

A further 23% asked said accountants were twice as important as commercial finance brokers, while just 6% would speak to a bank.

Faced with a period of uncertainty, 38% of business owners said they were anticipating a cash squeeze over the next 6 months.

35% of those would turn to invoice financing, with overdrafts (30%) and credit cards (7%) other options for additional funding.

Businesses expressed some compromises would be made to manage the effects of negative cashflow, with 34% considering shelving plans for expansion.

A further 33% would hold off from launching new products and 20% would reduce their marketing spend.

Darvish Heshejin, head of partnerships at MarketInvoice, said:

“Accountants and commercial finance brokers are increasingly becoming the default go-to for advice on business finance, especially where funding is required quickly.

“It’s imperative these professionals are aware of the wider funding opportunities available to provide the best, most comprehensive advice to their clients and find the solution that fits.”

Contact us to discuss your business finance needs.

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Businesses in favour of Brexit transition period

Almost half (46%) of companies believe a transition period of 3 years for Brexit would be best for their business.

The British Chambers of Commerce (BCC) polled more than 2,400 businesses and found a further 22% of companies would like the transition process to exceed the 3-year period.

When asked about the key objectives for Brexit negotiations, just 34% of businesses said they would like to remain in the single market and customs union.

Furthermore, 28% said they would like a comprehensive free trade agreement and a customs agreement based on the government’s pre-election objectives.

Other findings:

  • 13% want to remain in the customs union only
  • 11% want access to single market only
  • 2% said to leave without a trade deal with the European Union.

Dr Adam Marshall, director general at the BCC, said:

“By more than 3 to 1, businesses want a transition period on the way to a final agreement with the European Union (EU). This is critical to prevent firms facing the prospect of repeated, costly adjustments to new trading conditions. 

“If companies have to change their business model once in 2019 [when the UK leaves the EU] and again several years thereafter, the competitiveness and investment potential of our firms will be undermined.

“Getting transition arrangements on the negotiations agenda as quickly as possible would give businesses – many of whom are considering big investment decisions now – the confidence to press ahead."

Contact us to discuss how Brexit could affect your business.

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Firms call to end business rates funding delay

The Federation of Small Businesses (FSB) has called on the government to speed up the funding process for small firms impacted by the rise of business rates.

The most recent business rates revaluation came into effect on 1 April 2017.

A business coming out of small rate relief will not face an increase of more than £600 on the previous tax year. 

A £300 million fund was allocated to local authorities to provide help to firms affected by the changes.

London authorities have been allocated £124 million out of the £300 million pot, with £72.5 million billed this year. 

Funding for authorities in London will drop to £35.2 million in 2018/19, £14.5 million in 2019/20 and £2 million in 2020/21.

However, out-of-date software, consulting with ratepayers and recalculating bills has delayed the implementation of the relief schemes.

74% of London businesses said business rates were their biggest concern.

Sue Terpilowski OBE, London policy chair at FSB, said:

“We are urging the secretary of state to write to all councils and for the mayor of London to put similar pressure on London councils to get this funding out of the door as many have seen punishing increases in their business rates bills this year.

“This shambolic delay means some small businesses are being left with no choice but to delay investment, avoid taking on staff or even close their doors, while they are waiting for this assistance.”

Contact us to discuss how these changes may affect your business.

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Response to late MTD payment sanctions

The Chartered Institute of Taxation (CIOT) is calling on HMRC to allow taxpayers a limited number of defaults before incurring a late payment penalty under Making Tax Digital (MTD).

Most businesses, self-employed people and landlords will be required to use digital accounting software to keep and file tax records on a quarterly basis from next year.

The new system is set to roll out from April 2018 for those with an annual turnover exceeding the VAT threshold (£85,000). 

Businesses with annual turnover below this threshold are exempt until April 2019, while those with a turnover of £10,000 or below are exempt from the changes.

In a consultation, HMRC set out 3 possible models to penalise late payments and submissions. It intends to implement 1 of the following models:

  • Model A – points-based system where the individual would incur a penalty when a certain points threshold is reached
  • Model B – automated review system looking over someone’s compliance with their submission obligations after a set period of time
  • Model C – suspension of penalties where someone can avoid having to pay a penalty by provide a late submission.

In response, the CIOT said Model C is a “proportionate response” to late filing and is more likely to penalise non-compliance.

Adrian Rudd, spokesperson at CIOT, said:

“The suspension model most closely complies with HMRC’s penalty principles, which include that penalty regimes should be designed from the taxpayers’ perspective, primarily to encourage compliance and prevent non-compliance, and that penalties are not to be applied or seen to apply with the aim of raising money.”

Contact us to discuss self-assessment.

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P11D and P11D (b) deadline reminder

The deadline to report your business' benefits and expenses for the 2016/17 tax year is 6 July 2017.

This is a mandatory procedure for employers and requires completing 2 forms - P11D and P11D (b).

If you haven't downloaded the forms, they can be accessed via the HMRC website.

Each employee given expenses or benefits must be provided with a P11D form for their tax records.

P11D (b) is a separate form and is used to report class 1A national insurance contributions (NICs) due on expenses and benefits.

Class 1A NICs needs to be paid no later than 19 July 2017.

When completing your P11D form, the following format is obligatory:

  •  use Arial font size 11 (if printed)
  •  sort by employee, not benefit type
  •  include your employer reference
  •  include employee's name and national insurance number
  •  put an employee's expenses and benefits on the same line
  •  include P11D letter codes next to each benefit.

If you have registered with HMRC before 6 April, you can deduct and pay tax on most expenses through your payroll - exempting you from completing a P11D.

However, a P11D (b) form is still required on any class 1A NICs you owe.

Talk to us about your reporting obligations.