How to create the perfect business plan in 10 steps

Follow these ten steps to create a clear plan you can share with your Accountant.

Every business needs a plan, and creating the right one can sometimes feel like a challenge. But the benefits are definitely worth it.

A business plan helps you get your ducks in a row and also lets us know how we can best advise you.

So, how do you create a good business plan?

These ten steps will help you get started:

1. Create an executive summary

2. Define your customers

3. Evaluate the target audience

4. Identify your opportunities

5. Understand the competition

6. Build a simple financial plan

7. Include an outline marketing plan

8. Plan your operations

9. Get the right people, advice from your Accountant and maybe getting a mentor would be great

10. Keep it simple, it doesn’t need to be over complicated

Remember, clarifying your ideas by writing them down gives them substance and structure. Feedback from others is also crucial in business planning, and advice from the right people is the key to success.

Read more on Xero’s ten steps to a perfect business plan and start planning your business around your strengths.

HMRC Insolvency Powers from April 2020

From 6th April 2020 new measures regarding insolvency will be introduced by the 2019-20 Finance Bill meaning HMRC will have increased powers.

It is proposed that Finance Bill 2019-20 will contain measures to ensure that from 6 April 2020 where a company becomes insolvent with unpaid tax liabilities which it holds in trust to pay to HMRC, these liabilities will take priority over other unsecured or floating charge creditors.  

Taxes that a company holds in trust for HMRC include VAT, PAYE Income Tax, Employee’s National Insurance Contributions and Construction Industry Scheme deductions.  Other company tax liabilities such as Corporation Tax and Employer’s National Insurance Contributions will not be affected by the measure.  HMRC will remain below preferential creditors.

Diane Dunion, Partner from Begbies Traynor Stoke has helped to expand on what exactly this means for businesses:

“The draft legislation proposes to amend The Insolvency Act 1986, giving HMRC priority in the recovery of VAT and certain other debts owed to HMRC in insolvency proceedings; by creating a new category of creditor for the purpose of the distribution of assets. 

When a business enters formal insolvency proceedings, the order in which assets are distributed is prescribed by law.  Currently, HMRC ranks as an unsecured creditor.  The introduction of the legislation will allow HMRC to rank as a “secondary preferential” creditor, which places them in a better position on the creditor hierarchy.

However, HMRC will remain an unsecured creditor, for taxes levied on businesses such as Corporation Tax and Employer NIC.

The Explanatory Note to the Legislation notes that “the Government does not believe it is fair that taxes paid by employees and customers should be diverted to other creditors, when these are only held temporarily by businesses whose role is to transfer these payments to the Government. The Government view is that this is a fair approach that balances the interests of creditors and the Exchequer, which relies on these taxes to fund public services.”  

Monies collected in respect of those taxes paid by employees and customers, are essentially held on trust for HMRC.  On that basis and in the event of formal insolvency proceedings, these funds will be paid over to HMRC – to “benefit the wider population by being utilised for their original purpose” (i.e. to fund public services).”

The new finance bill will also allow HMRC from 6 April 2020 to make directors and other persons involved in tax avoidance, evasion or phoenixism jointly and severally liable for company tax liabilities, where there is a risk that the company may deliberately enter insolvency. It is designed to prevent individuals benefitting from avoidance or evasion through the insolvency of their business when unable to pay its debts to HMRC.

The conditions for a joint liability notice are:

  • Insolvency is underway for the company or there is serious threat of insolvency
  • A company has entered into tax avoidance arrangements, or engaged in tax evasive conduct.
  • The person either was responsible for the company/LLP (perhaps as a director or shadow director), enabled the avoidance or evasion or benefited from it
  • A tax liability is expected to arise from the avoidance or evasion and there is a serious possibility that some or all of that tax will not be paid

The new rules will also allow HMRC to issue a joint liability notice to individuals whose companies have been involved with repeated insolvency or non-payment of tax with limited liability

There is a common misconception that directors/members will not be personally liable for anything, because their business has limited liability (either Limited Company or Limited Liability Partnership).  This is not always the case and more people may find themselves held accountable for their actions as a result of the changes.

Importance of cash flow

Keeping on top of your cash flow is extremely important.

 

A software programme which works directly with Xero to pull out accurate cash flow data is – Fluidly. #Fluidly provides intuitive cash flow forecasting and management powered by AI. Fluidly is for modern businesses that want to know exactly what their financial future holds and how to optimise it.

 

Whether it’s hiring a new team member, investing in new equipment or simply paying a bill, Fluidly gives a clear picture of your cash position so you always know where you stand.

 

For further information on how Fluidly can help you – get in touch http://bit.ly/33ozuWq #Fluidly #CashFlow #Xero Cash flow is King!

The benefits of cloud accounting

If you want your business to work smarter and faster, cloud accounting software is a wise investment. Working in the cloud can give you a better overview of your finances and improve collaboration with your team.

With Xero, you can access the cloud anywhere. Online accounting means small business owners stay connected to their data and their accountants. The software can integrate with a whole ecosystem of add-ons. It’s scalable, cost-effective and easy to use.

Thinking of making the switch? Let us help you get set up.

I have a limited company, what accountancy services would I need?

We offer the following services for limited companies:

  • Statutory accounts preparation
  • Company secretarial services
  • Corporation tax return preparation
  • Payroll
  • PIID
  • CIS contractor returns
  • VAT return preparation
  • Help with HMRC enquiries
  • Tax investigations insurance
  • Research & development claims
  • Capital allowances claims on commercial building
  • Tax efficiency reviews
  • Business restructuring
  • IR35 contractor reviews

For more information, please click here to contact us.

Time to fight the late payment culture which harms UK business

New research has revealed 37% of small businesses owners have considered closing their company because of cash flow issues caused by late payments.

The findings highlight the scale of the late payments challenge facing British small businesses, who are owed an average of £23,360 in overdue invoices on any one day and have to wait on average 14 days after the due date to be paid.

The research, by accounting software Xero, showed that the amount owed to small businesses in late payments on any given day in February 2019, was up 17% from the year before, demonstrating the startling growth in tardy payment practices.

At Premier Tax Solutions, we are a Xero Gold partner and are fully behind the campaign to highlight slow payment for smaller businesses, said Director Vanessa Fuller.

“The impact of late payments has a damaging effect across the whole UK economy as, on average in any given month, 48% of invoices issued by small businesses are paid late, and as a result a quarter of small business owners struggle to pay their own suppliers on time.

“Clearly, this has a direct impact on a company’s viability and cash flow, but late payments also negatively impact small business owners’ lives outside work. The research shows that over the last 12 months, over half have used personal savings or borrowed from friends and family to keep their business alive, while a quarter said they would enjoy better physical health if late payments were no longer an issue.”

“Over two fifths said that late payments caused them sleepless nights and affected their mental health.”

Vanessa also welcomed a recent initiative in which  Xero has teamed up with PayPal to help make it easier for customers to pay invoices. By adding PayPal as a payment option to an invoice, customers can get paid up to 21 days faster using their PayPal account or credit card.

If you’d like help with getting paid faster we can help you to set up payment systems that link with Xero that can take payments for you and can even build credit control into the process. For more information call us on 01782 479699.

What is subsistence?

Subsistence is the accounting term used to describe food & drink and other incidental costs of travel such as accommodation. It is an allowable deduction when incurred by an employee or office holder in conjunction with a qualifying business journey such as business travel & overnight stays.

All claims must be backed up by receipts, unless you have agreed a scale rate system with HMRC.

From April 2019 there are some changes due in the area of subsistence for employees which we will take a look at along with some of the questions we most frequently get asked. Please note that the rule for employees are different than the self employed and so people can fall foul of this.

What is changing on 6th April 2019:

  • The employer will have to have a system in place to check the employee has undertaken a qualifying journey.
  • Employers will no longer need to check receipts where HMRC scale rates are used both in terms of UK and overseas scale rates

The Finance Act 2019 will put all of HMRC’s benchmark scale rates on a statutory footing.

Can I reimburse my employee for their lunch?

When they are travelling on business, entertaining customers, or when lunch is provided at a conference or meeting to ensure continuity of work it is ok to do so. For example if you have a training day and order pizza in for the staff then that would be deductible as it will ensure continuity of work.

How much can I reimburse for subsistence?

There is no upper limit however an employer can only reimburse expenses if there are actual expenses incurred. It can reimburse round sum amounts using scale rate payments

Can I claim VAT back on subsistence?

Yes provided the employee gives you a VAT receipt

If you are unsure about subsistence payments and would like more advice please call us on 01782 479699.

How can I get paid quicker?

Healthy cash flow helps your business survive and Xero can help make it happen.

Getting paid on time and maintaining a healthy cash flow is how a business survives. After all, it takes money to keep the doors open, employees paid and the lights on. So the faster you can get your customers to pay you, the better it is for your business.

One simple way to make that happen is adding payment services directly to your Xero online invoices. Xero data shows that invoices with a “pay now” button to take credit card payment with Stripe or via Paypal can get paid up to twice as fast as invoices without a payment option and they are cost effective too as they have little fees. Most people will click and pay as they have their card in their purse or wallet rather than having to go online with a card reader to transfer money. Your customers like things to be made as easy as possible for them.

See how easy it is to set up Xero’s payment services and get your cash flow flowing.

If you would like any help with this call us on 01782 479699.

Client Spotlight On Chloe’s Beauty

On Saturday 18th November one of our directors Vanessa visited Chloe’s salon to join in the celebrations for its first birthday. Chloe joined Premier Tax Solutions as a client when she was renting a chair before taking the leap to fulfil her dream of opening her own salon in Talke Pitts. The salon offers a range of services including nails, HD brows, waxing and anti wrinkle treatments.

Chloe used Xero from day one and tells us in the video how it has made a big difference to her. The bank transactions are pulled through into Xero automatically and forms part of the book keeping process. Because Chloe is on Xero it enabled us to book a 6 month review when she was ready to go through how the business was performing and how the figures compared to the same period the year before when Chloe was renting a chair. Within minutes we were able to have a wealth of information at our fingertips to share with Chloe and after going through the figures in an easy to understand way Chloe left our office feeling very positive about how well her salon is doing.

See what Chloe has to say about her experience with us as a start up business on Xero:

Alongside having real time figures and interim meetings with us Chloe has been able to fall back on us as her trusted advisers for many areas. As a start up business it can be very scary and we understand that those businesses need all the help they can get. We were able to put her in touch with a graphic designer and also help with strategies to help her business grow.

If you are a start up business and want hands on support or are thinking of starting a business get in touch with us for a free initial consultation to see how we can help you, like we did Chloe. Our phone number is 01782 479699.

Do I Need A Tax Adviser?

11Quite often people think they need an Accountant & may not have heard of a Tax Adviser. Premier Tax Solutions is a Firm of Chartered Tax Advisers registered with the Chartered Institute of Taxation based in Stoke-on-Trent. Tax Advisers are trained in accounts & tax and pass rigorous exams over a number of years specifically designed around the tax legislation.

Tax Advisers are experts in Tax and keep up to date with the changing tax laws. We use our knowledge & experience to provide advisory & consultancy services to clients; ensuring they are as tax efficient as possible. We ensure they claim all allowances available & any qualifying expenditure which will save them tax.

There are 2 main areas of tax:

  • Corporate – Working with limited companies
  • Personal – Working with private individuals, the self employed & also partnerships

Here at Premier Tax Solutions we are all fully qualified tax professionals. Have a look at our video to see who we are & what we can do for you:

From the small one man band to a larger limited company or LLP we can make sure you are as tax efficient as possible. We prepare your accounts from a tax efficiency point of view, rather than ticking boxes in a compliance exercise. We actively look for ways to save you tax year after year. We offer a fixed fee service to all clients and hold meetings with you so that we can get to know you & your business and be able to advise you during the year, not just after year end. With competitive pricing & expert tax knowledge your accounts & tax affairs will be in very safe hands.

If it is that you need a tax consultant we have years of experience dealing with specialist areas of tax such as HMRC enquiries, trusts & estates, capital gains tax, inheritance tax, capital allowance claims and R&D claims to name a few.

Get in touch with us to see how we can save you tax & protect your assets on 01782 479699.

Special thanks goes to Craig at Magic Shirt Limited for producing our video!