How to be a more inclusive manager

Practical steps that managers can take to be more inclusive.

Inclusion doesn’t just happen. In order to be more inclusive, managers need to start with intention and regular practice. People are naturally inclined to be drawn to people that are like themselves. In order to break the bias managers must constantly disrupt their natural approach. They need to develop an awareness of who is being represented, who are the high performers, who are the people who are getting hired and who is not.

The culture of your business is a key ingredient in its success. Culture is often described as “how we do things around here”. In order to be more inclusive, managers can move beyond hiring people who “fit” with the culture and instead think about how others “add” to the overall culture of the business.

To successfully add to the culture of their business, managers should be intentional and honest about the skillsets, backgrounds and perspectives that are missing from the business. Look to represent a broader spectrum of gender, race, educational background, or country of origin.  When interviewing potential new joiners, try to seek out those candidates who add to the culture, rather than fit with what you already have.

Build on the existing foundations in your business and focus on developing more inclusive practices. Build trust among your people and encourage teamwork. If you trust your people, they will trust you back. Fostering trust in your business is going to make your employees feel safe and willing to contribute their thoughts, opinions, and suggestions. They will want to be included. Focus on including your team members more by involving them in decision making, creating sub-teams to work on projects and encouraging debate in order to come up with new ideas.

Inclusive managers empower their people. You hired your people because they are capable of fulfilling their responsibilities. Encourage them to go off and try new things, to test out new ideas and to come up with innovative suggestions. Empowered employees feel part of an organisation – they feel included. This will pay dividends in the long run as your people will reward you with loyalty, hard work and positive outcomes.

BUSINESS NEWS – 23rd May 2022

Welcome to our round up of the latest business news for our clients. Please contact us if you want to talk about how these updates affect your business. We are here to support you!

Writing a Business Plan for your future success!

A business plan is an essential tool, whether it is for raising finance or for putting your objectives into writing. In either event, a business plan will give you some form of direction and help you set goals, and most importantly, enable you to monitor your success!

Business plans should be as clear as possible, and since brevity aids clarity, they should also be as short as possible. A useful way of achieving this without losing any important points is to stratify the plan by confirming all details, where possible, to an appendix, leaving only the overall message in the body of the document. This will enable the reader to master the basic points of the proposal more quickly.

We have considerable experience in helping clients write plans, forecasting results and monitoring their success against goals. We would be delighted to help you and we also have access to a range of finance providers and can help your business succeed!

Don’t forget to claim the Employment Allowance

The Employment Allowance (EA) is a £5,000 allowance set against employers National Insurance Contributions (NICs) and has to be claimed each tax year if the employer qualifies. This allowance was introduced in 2014/15 and was increased to £5,000 from 2022/23. Employers make a claim for the Employment Allowance through their payroll software. They do this by completing and submitting a Real Time Information – Employer Payment Summary (EPS) to HMRC. The employer must enter “Yes” in the “Employment Allowance Indicator” field of the EPS confirming that they are eligible to claim the allowance.

Eligible employers can claim the Employment Allowance at any time during a tax year. Employers may also claim the Employment Allowance against closed tax years, provided they have not already claimed the allowance for those years. However, claims for closed tax years are limited to the four tax years falling before the current tax year.

The Employment Allowance can be claimed by most employers who pay secondary Class 1 NICs on their employees. This includes:

  • businesses (includes self- employed persons, companies and partnerships who have employees)
  • charities (includes private businesses that have charitable status such as schools, academies, further education colleges and universities)
  • Community Amateur Sports Clubs

If two or more companies are connected with one another, or two or more charities are connected with one another, then only one of those companies/charities may claim the Employment Allowance and they must decide which company/charity claims the allowance.

For recently updated guidance on connected businesses see: –

https://www.gov.uk/hmrc-internal-manuals/national-insurance-manual/nim06560

Other Employers Excluded from claiming the Employment Allowance

Employers are not eligible to claim the Employment Allowance where their employers’ Class 1 National Insurance liabilities in the previous tax year exceeded £100,000.

Another important exclusion from EA are single director companies where the director is the sole employee of the company.

Employment Allowance counts towards the total de minimis State Aid you’re allowed to get over a 3 year period. Employers that exceed the de minimis State Aid threshold for their sector (Agriculture products for example 20,000 euros) are also excluded from claiming EA.

Please contact us if you need help with your payroll.

Check if a letter you have received from HMRC is genuine

Check a list of recent letters from HMRC to help you decide if a letter you’ve received is a scam.

Contents:

If your letter is not listed here check other letters sent by HMRC

Report suspicious phone calls, emails or texts to HMRC

The Recovery Loan Scheme is ending soon

The Recovery Loan Scheme supports access to finance for UK businesses as they grow and recover from the disruption of the COVID-19 pandemic. The Scheme is to help businesses of any size access loans and other kinds of finance so they can recover after the pandemic and transition period. The Recovery Loan Scheme will accept applications until 30 June 2022. Up to £10 million is available per business. The actual amount offered, and the terms, are at the discretion of participating lenders.

The government guarantees 80% of the finance to the lender. As the borrower, you are always 100% liable for the debt. Loans are available through a network of accredited lenders, listed on the British Business Bank’s website.

See: Recovery Loan Scheme: current accredited lenders – British Business Bank (british-business-bank.co.uk)

Smaller firms struggle to get finance

A recent study by the Federation for small businesses (FSB) shows lending to small businesses has hit an all-time low. New findings from the quarterly Small Business Index (SBI) show successful finance applications plummeting to lowest level on record.

The FSB warns that banks “pulling up the drawbridge” to small firms will further stifle economic growth. Fewer than one in ten (9%) small firms applied for finance in Q1 2022, the lowest proportion since SBI records began. The share that saw applications approved (43%) is also at a record low. Of the few firms that did manage to secure finance, four in ten (42%) plan to use credit to manage cashflow, considerably more than the numbers planning to use funds for equipment updates (21%), expansion (19%) or recruitment (4%).

Please talk to us if you need finance – we can help!

See: Lending to small businesses hits all-time low, new study finds, with six in ten impacted by late payment | FSB, The Federation of Small Businesses

Workplace Charging Scheme: guidance for charities and small accommodation businesses

The UK Government is now offering help to businesses with the upfront costs to install charge points.

The Workplace Charging Scheme (WCS) is a voucher-based scheme that provides eligible applicants with support towards the upfront costs of the purchase and installation of electric vehicle (EV) chargepoints.

The scheme is available for B&Bs, campsites, small hotels, charities and any other accommodation business with less than 250 employees.

See: Workplace Charging Scheme: guidance for charities and small accommodation businesses – GOV.UK (www.gov.uk

New internet phishing alert

New emails and letters appearing to be from employees of the Government Legal Department/Bona Vacantia Division are in circulation. Emails are being sent from bogus email addresses purporting to be from members of the Bona Vacantia Division. These emails are not from the @governmentlegal.gov.uk address and may ask for confirmation of personal information or provide false links or download attachments.

Do not give out private information (such as bank details or passwords), download attachments or click on any links in emails if you are not sure they are genuine.

See: New internet phishing alert – GOV.UK (www.gov.uk)

The Inaugural UK-EU Parliamentary Partnership Assembly

Earlier this month the Minister for the Cabinet Office, Michael Ellis, addressed the UK and EU Parliamentarians at the inaugural meeting of the UK-EU Parliamentary Partnership Assembly.

He commented that “This forum is an important part of the governance that supports the new UK-EU relationship, but it is also a link between democratic representatives and the people that we serve. I hope that the following couple of days will provide an opportunity for Parliamentarians across the English Channel to exchange ideas on how we can get the most out of our new relationship – to the benefit of course of our respective citizens and businesses.”

He also stated that the war in Ukraine has drawn the UK and EU together. That is welcome after the inevitable strains which the change in constitutional relationship brought since 2016.  The EU is an essential partner in a global alliance of shared values – and we want success for the Union, and we hope the EU wants that for the UK too.

See: Address to the Inaugural UK-EU Parliamentary Partnership Assembly – GOV.UK (www.gov.uk)

New Bill to set up UK Infrastructure Bank announced in Queen’s speech

The UK Infrastructure Bank was launched in interim form at its headquarters in Leeds in June last year. It was tasked with accelerating investment into ambitious infrastructure projects, cutting emissions and levelling up across the UK.

This Bill will complete the Bank’s set up as an operationally independent institution and give it the power to lend directly to local authorities and the Northern Ireland Executive. It will also support the Bank’s operational independence by setting out clear accountability for how it is to be run.

Since its launch, the Bank has completed five deals, including financing the UK’s largest solar farm in south Wales, investing £100 million to provide high-capacity broadband to around 500,000 properties in hard-to-reach UK premises and a further £50 million to improve digital connectivity for rural homes and businesses across Northern Ireland.

See: New Bill to set up UK Infrastructure Bank announced in Queen’s speech – GOV.UK (www.gov.uk)

Rollout of hundreds more zero-emission HGVs

The world’s largest fleet of zero emission HGVs will take to UK roads through plans to achieve cleaner air and greener jobs, while helping to keep costs down on consumer goods. £200 million of government funding will be injected into an extensive zero emission road freight demonstrator programme, at Logistics UK’s Future Logistics Conference earlier this month.

The 3-year comparative programme will begin later this year to help decarbonise the UK’s freight industry with initial competitions for battery, electric and hydrogen fuel cell technology launching shortly.

This could see hundreds more zero-emission HGVs rolled out across the nation and save the industry money, thanks to overall running costs of green vehicles being cheaper than petrol and diesel equivalents. More efficient deliveries will in turn enable haulage companies to keep the price of goods down and protect customers from rising costs.

The transition to zero-emission trucks will also help improve air quality, create greener jobs and deliver on COP26 pledges while reducing reliance on imports of foreign oil. Eliminating fossil fuels from road freight and improving the UK’s energy supply resilience will help to protect drivers and businesses from increasing global energy prices.

See: £200 million boost to rollout of hundreds more zero-emission HGVs – GOV.UK (www.gov.uk)

Innovation Loans Future Economy competition – round 3

UK registered businesses can apply for loans for innovative projects with strong commercial potential to significantly improve the UK economy.

Innovate UK is offering up to £25 million in loans to micro, small and medium – sized enterprises (SMEs). Loans are for highly innovative late stage research and development (R&D) projects with the best potential for the future. There should be a clear route to commercialisation and economic impact.

Your project must lead to new products, processes or services that are significantly ahead of others currently available or propose an innovative use of existing products, processes or services. It can also involve a new or innovative business model.

See: Competition overview – Innovation Loans Future Economy Competition – Round 3 – Innovation Funding Service (apply-for-innovation-funding.service.gov.uk)

Healthy, cost-effective travel for millions as walking and cycling projects get the green light

Millions of people across the country could benefit from cleaner air and cheaper ways to travel and keep active, thanks to £200 million of government funding for new walking and cycling schemes across England announced last week.

The government’s new executive agency Active Travel England, led by Chris Boardman, will oversee the delivery of 134 first-rate schemes, backed by £161 million, which include new footways, cycle lanes and pedestrian crossings across 46 local authorities outside London.

The projects will create new routes and improve existing ones, making it easier and cheaper for people to choose active and green ways of getting around while better connecting communities. These include new junctions and pedestrian crossings in Liverpool, new segregated cycle lanes across the north-east and a new “travel corridor” in Gloucestershire with reduced traffic and high-quality cycle routes.

In addition to the £161 million for the 134 local authorities schemes, 19 authorities – including in Nottinghamshire, Hull and Manchester – will also receive a share of £1.5 million for “mini-Holland” feasibility studies, to assess how the areas could be as pedestrian and cycle-friendly as their Dutch city equivalents.

See: Healthy, cost-effective travel for millions as walking and cycling projects get the green light – GOV.UK (www.gov.uk)

Career Mobility

Career mobility is a key priority for millennial and generation Z employees.

Career mobility (or job mobility) is the process of an employee moving in their career. It can refer to upward or downward movement, as well as movement across to another role within the same business but in a different capacity.

In the past, career mobility was generally associated with employees moving up through a hierarchical structure. More recently, it has evolved to refer to enabling employees to participate in work opportunities that benefit the business and the employee. Career mobility can also include changes to part time or remote working from a full-time role, etc.

Career mobility can be a useful retention tool for businesses. For example, rather than lose a good team member, they can be given the chance to transition to another role in a different part of the business. According to a recent survey by LinkedIn, a high percentage of millennial and generation Z employees would be willing to take a small pay cut in exchange for a role that offered them a better chance of career growth.

While cutting salaries, particularly in the current environment where businesses are competing to attract talented people, is not a good idea, being able to retain employees by offering them the chance to work in a different role at the same business, could be a good staff retention tool.

In addition, being known as a business that offers career mobility could help to enhance your “employer brand” and make your business more attractive to talented employees who, according to the above-mentioned survey, want to work for businesses that offer this.

Career mobility can also be used as a strategy to address challenges such as diversity and inclusion. As businesses step away from rigid career paths and old-fashioned approaches to employment, opportunities for employees have opened up and they can now create the career they want in a way that promotes a healthy work-life balance.

POSSIBLE CHANGES TO SDLT MULTIPLE DWELLINGS RELIEF

HMRC have been consulting on changes to the relief from stamp duty land tax (SDLT) when two or more properties are acquired at the same time. This indicates that a change in the rules is imminent, and purchasers should take advantage while the relief continues to apply.

Currently where at least two dwellings are purchased in a single transaction, or as part of a series of linked transactions between the same vendor and purchaser, the purchaser can choose to have the rate of SDLT determined by the average value of the dwellings purchased, rather than their combined value. Purchasers can therefore benefit from multiple nil-rate and lower percentage bandings, significantly reducing the amount of SDLT payable. Multiple dwellings relief doesn’t apply automatically; it must be claimed in a land transaction return and your solicitor may not be aware of this important relief.

ATED RETURNS AND REVALUATIONS DUE

The Annual Tax on Enveloped Dwellings (ATED) was introduced in April 2012 and is charged where certain residential properties are owned within a corporate structure. This tax not only catches UK properties owned by wealthy oligarchs via offshore companies but also applies to UK resident companies. Originally the charge only applied where the value of the property exceeded £2 million but that threshold has been subsequently reduced to £500,000.

The charge for 2022/23 starts at £3,800 and rises to £244,750 where the property value is more than £20 million.

Properties need to be revalued every five years and the latest valuation date is 1 April 2022. With significant increases in property values in recent years this may mean that more companies may be required to complete an ATED return.

There are numerous exemptions and reliefs from ATED but companies still need to submit an ATED Relief Declaration Return.

MAIN ATED RELIEFS

The main situations where there is a relief from ATED are where the property is:-

  • let to a third party on a commercial basis
  • being developed for resale by a property developer
  • owned by a property trader as the stock of the business for the sole purpose of resale
  • a farmhouse occupied by a farm worker or a former long-serving farm worker

BUSINESS NEWS – 16th May 2022

Welcome to our round up of the latest business news for our clients. Please contact us if you want to talk about how these updates affect your business. We are here to support you!

Cash Flow management is key in a turbulent economy

Do you agree?  Most of our other clients do.  In this economy cash is king and managing your cash flow is more important than ever.

If you are concerned about the future of your business, then take some time to reflect on where you are and what could happen in the next few months. It is now vitally important for all businesses to plan ahead for a range of scenarios. Cash flow and business planning in these uncertain times may appear difficult but there are some practical steps you can take to minimise potential disruption to your business.

  • Review your Budgets and set realistic and achievable targets for the remainder of 2022.
  • Get your employees involved in a discussion of likely trading conditions and get their input on reducing costs and maintaining revenues. 
  • Review and flow chart the main processes in your business (e.g. Sales processing, order fulfilment, shipping etc.) and challenge the need for each step.
  • Put extra effort into making sure your relationships with your customers are solid.
  • Review your list of products and services and eliminate those that are unprofitable or not core products/services.
  • Pull everyone together and explain the business strategy and get their buy-in.

We specialise in helping our clients manage their cash flow.  We do this by preparing and updating detailed cash flow forecasts, using the latest and most powerful software.  We can also help you negotiate or renegotiate overdraft facilities and find specific funding to help you grow!

Please talk to us about cash flow planning for the next few months, we can help with a template so you can do this yourself or work together to produce estimates for a variety of scenarios.

Queen’s Speech 2022

Prince Charles, standing in for the Queen, delivered her speech to both Houses of Parliament last week.  The speech highlighted some of the 38 laws that ministers intend to pass in the coming year. This number includes some bills carried over from the previous session of Parliament, which ended last month.

Prince Charles outlined that it was the governments priority to grow and strengthen the economy and help ease the cost of living for families. Critics have argued the government is not doing enough to help struggling families as inflation soars.  

Some of the main business points include:

  • The Brexit Freedoms Bill which will give ministers the power to change current EU laws;
  • A Levelling up and Regeneration Bill to give councils new planning and redevelopment powers;
  • Changes to business rates;
  • The new UK Infrastructure Bank, a body designed to increase financing of infrastructure projects;
  • An online safety Bill to improve regulation of content appearing on the internet;
  • A Data Reform Bill to replace EU rules on data protection;
  • The Electronic Trade Documents Bill to enable more digitisation of trade-related paperwork;
  • An extension of 5G mobile coverage and new safety standards for digital devices;
  • A draft Digital Markets, Competition and Consumer Bill to tackle fake consumer reviews and boost competition;
  • An Economic Crime and Corporate Transparency Bill will strengthen the investigatory powers of Companies House and aim to increase corporate transparency;
  • A Financial Services and Markets Bill will aim to simplify EU rules governing the sector; and
  • The Procurement Bill will replace EU rules on how the government buys services from the private sector.

The new Financial Services and Markets Bill, announced in the Queen’s Speech, will support consumers by protecting access to cash. It will ensure the continued availability of withdrawal and deposit facilities across the UK, and that the country’s cash infrastructure is sustainable for the long term.

The Bill will also enable the Payment Systems Regulator to require banks to reimburse authorised push payment (APP) scam losses, totalling hundreds of millions of pounds each year. This will ensure victims are not left paying for fraud through no fault of their own.

We will keep you updated over the next few months of business-related developments and once legislation is passed we will ensure you get the information you need if these changes affect you.

See:   Queen’s Speech 2022 – GOV.UK (www.gov.uk)

Support for High Energy use Businesses extended

High energy usage businesses, such as steel and paper manufacturers, are set to receive further support for electricity costs as the UK government has confirmed details of the Energy Intensive Industries (EII) compensation scheme.

The scheme will be extended for a further 3 years and its budget will be more than doubled. 

The scheme provides businesses with relief for the costs of the UK Emissions Trading Scheme (ETS) and Carbon Price Support mechanism in their electricity bills, recognising that UK industrial electricity prices are higher than those of other countries. The scheme will now also provide support for companies that manufacture batteries for electric vehicles.

See: High energy usage businesses to benefit from further government support – GOV.UK (www.gov.uk)

Eurostars funding webinar and brokerage event

Eurostars is the largest international funding programme for small and medium-sized businesses wishing to collaborate on research and development (R&D) projects that create innovative products, processes or services for commercialisation.

The Enterprise Europe Network (EEN) in partnership with the Eureka National Project Coordinators (NPC) in Ireland, UK & Northern Ireland, Spain, Iceland, Denmark and Netherlands invite you to participate in an international online partnering event on Eurostars on Wednesday 8th June @ 09:00 Dublin Ireland time (10:00 CET time).

Businesses are offered an opportunity to register their interest in attending this free, two-hour long virtual event to:

  • discover what Eurostars is about
  • hear about the latest call for proposals closing on 15 September 2022
  • find out why they should apply
  • gain insights from the National Contact Points for Eurostars
  • get a chance to network and forge winning partnerships of the future

The programme will include presentations from the Eurostars Project Officers from each of the participating countries and a case study.

The brokerage event will allow you to extend your international network and create strategic partnerships through scheduled virtual one-to-one meetings. Participants will also have the opportunity to meet with representatives from their national Eurostars office and the Enterprise Europe Network.

See: Eurostars Funding Webinar & Brokerage Event – June 2022 – Home (b2match.io)

Treasury Starts Conversation to Reform UK Capital Allowance Regime

A publication aiming to kickstart a conversation with businesses about how to reform the UK’s capital allowances regime was published earlier this month.

The publication sets out how firms can work with the government on capital allowances to help foster a new culture of enterprise and growth in the UK, with responses requested by 1 July 2022.

The UK has a long-standing issue with productivity and one of the key underlying causes is a lack of capital investment.

According to OECD data, companies invest just 10% of GDP each year, compared with 14% in our competitor countries – our tax system doesn’t reward investment as much as other countries do.

The Spring Statement set out some illustrations of the types of changes government could make to the current capital allowances regime. This new guidance delves into those options in further detail, which includes:

  • increasing the permanent level of the Annual Investment Allowance
  • increasing the rates of Writing Down Allowances
  • introducing general First-Year Allowances (FYAs) for qualifying expenditure on plant and machinery
  • introducing an additional FYA
  • introducing permanent full expensing

While some business organisations have called for full expensing to be introduced following the super-deduction, this could cost over £11 billion a year. The government is keen to hear views as to whether that would be well targeted if funding is available, and if it isn’t available, how to best target their approach.

See:  Treasury Starts Conversation to Reform UK Capital Allowance Regime – GOV.UK (www.gov.uk)

Chancellor committed to encouraging capex spending

Here is a summary of the main tax breaks for capital expenditure that are currently available: –

  • 130% relief for investment by limited companies in new plant and machinery that would normally be dealt with in the general pool
  • 100% relief for investment in new and used plant and machinery by all businesses but limited to the first £1 million
  • 50% relief for investment by limited companies in new plant and machinery that would normally be dealt with in the special rate pool (typically fixtures in buildings and long-life assets)
  • 18% writing down allowance for plant and machinery in the general pool
  • 6% writing down allowance for plant and machinery in the special rate pool
  • 3% straight line write off for expenditure on the construction or refurbishment of commercial buildings.

Some of these generous tax breaks may continue beyond 31 March 2023. We await further announcements – probably in the Autumn Budget. Please talk to us about capital spending and planning ahead of the Budget.

Export package launched to promote UK seafood overseas

The UK Government has announced a £1 million package to boost seafood exports and promote the industry’s high-quality produce overseas.

The package will target growing overseas markets and provide new export opportunities for the UK fishing industry and seafood sector following the departure from the European Union.

Global exports of UK seafood amounted to over £1.6 billion in 2021, with salmon the UK’s fourth top food and drink product exported in 2021, totalling around £730 million.

See: Export package launched to promote world-class UK seafood overseas – GOV.UK (www.gov.uk)

UK Government sets out plans for how tech regulator will tackle dominance of major firms

Small businesses will be protected from predatory practices and consumers will get more choice and control over their online experiences as the government sets out its final vision for how the new digital markets regulator will boost competition to drive economic growth and innovation.

The majority of UK companies now rely on powerful tech firms to ensure customers find their business online. These firms control key online gateways for millions of internet users and give preference to their own apps and browsers. They are also able to set their own prices for the online services they provide businesses without challenge, which can be passed on to consumers.

The impact of weakened competition is stark – the Competition and Markets Authority estimates that Google and Facebook made excess UK profits of £2.4 billion in 2018 alone – harming consumers through higher prices.

In response to its consultation issued last year, the government has set out its plans to give statutory powers for the Digital Markets Unit (DMU) to allow it to enforce pro-competition rules and rebalance the relationship tech giants have with consumers and businesses, so they are better protected from unfair practices. The DMU is a new watchdog to make sure tech companies don’t abuse their market power.

The proposals aim to make it easier for people to switch between Apple iOS and Android phones or between social media accounts without losing their data and messages. Smartphone users could get more choice of which search engines they have access to, more choice of social media platforms as new entrants enter the market, and more control over how their data is used by companies.

It is hoped UK small and medium-size businesses will get a better deal from the big tech firms which they rely on to trade online. Tech firms could need to warn smaller firms about changes to their algorithms which drive traffic and revenues.

The measures will also make sure news publishers are able to monetise their online news content and be paid fairly for it, with the DMU given the power to step in to solve pricing disputes between news outlets and platforms. App developers would be able to sell their apps on fairer and more transparent terms.

The government will introduce legislation to put the Digital Markets Unit on a statutory footing in due course.

See: Government sets out plans for how tech regulator will tackle dominance of major firms – GOV.UK (www.gov.uk)

Live music and touring industry specialist hauliers to move more freely between countries

Hauliers serving music concerts, sports and cultural events will be able to move their vehicles freely between Great Britain and the EU thanks to new measures for the haulage sector announced earlier this month.

Designed in consultation with the live music, performing arts and sports sectors, the new dual registration measure is expected to come into force from late summer 2022. It will apply to specialist hauliers that transport equipment for cultural events, such as concert tours or sports events.

Dual registration will mean drivers with an established base in Great Britain and in another country outside of the UK will be able to transfer their vehicle between both operator licences without the need to change vehicles, have their journeys limited or pay Vehicle Excise Duty in Great Britain. 

See: Major boost for live music and touring industry specialist hauliers to move more freely between countries – GOV.UK (www.gov.uk)

Payments brought forward to help farmers with cashflow

The Government has announced further steps to support farmers with cost pressures caused by demand and instability seen across the globe. Under the latest plans, Direct Payments in England will be paid in two instalments each year for the remainder of the agricultural transition period, to help farmers with their cashflow.

The deadline for submitting Basic Payment Scheme 2022 applications is today, Monday 16 May 2022 and, under these plans, farmers with eligible applications will receive the first payment of 50% from the end of July and the second from December.

With agricultural commodities closely linked to global gas prices, farmers are facing rising costs for inputs including manufactured fertiliser, feed, fuel and energy. Due to heightened worldwide demand as the global economy reawakened following Covid, by February the price of gas had quadrupled on the previous year, and with the instability caused by Putin’s illegal war in Ukraine that price has risen further.

Output prices, particularly wheat, are also high and from analysis published by the Agriculture and Horticulture Development Board (AHDB) it is clear that farmers should continue to buy their inputs as usual. The steps government is taking to bring forward payments will allow them to do so.

See: Payments brought forward to help farmers with cashflow – GOV.UK (www.gov.uk)

REIMBURSE PRIVATE FUEL FOR YOUR COMPANY CAR?

Unless there is full reimbursement of fuel provided for the private use of a company car there is a benefit in kind charge based on a fixed figure of £24,600 which is multiplied by the CO2 emissions percentage that is used to calculate the company car benefit for that vehicle. For a high emission car that percentage can be as high as 37%, resulting in a benefit in kind charge of £9,102 and an income tax bill of £3,640.80 for a higher rate taxpayer. Even with current fuel prices, that would be an awful lot of private mileage, so the employee should consider reimbursing the employer using the HMRC approved mileage rates by 5 July 2022 for 2021/22.

EMPLOYERS NICS IN RELATION TO EX-MILITARY STAFF

Last year the Government announced a one-year exemption from paying employers national insurance contributions (NICs) where military veterans are recruited by civilian employers.

Employers can claim relief from employer NICs for the first 12 months of the veteran’s first civilian job after they leave the military.

For 2021/22 employers had to initially pay the employers NICs and can now claim back the amounts paid.

From 6 April 2022, a new zero NIC rate will apply in these circumstances, and employers should use NIC letter V.

BUSINESS NEWS – 9th May 2022

Welcome to our round up of the latest business news for our clients. Please contact us if you want to talk about how these updates affect your business. We are here to support you!

How much is my business worth?

This is a question many of our clients want answering! The truth is it depends on a range of factors and any valuation is only useful as a guide for planning forward. The ultimate value of a business is the price a willing buyer is prepared to pay for it.  

The prevailing economic climate and state of the business’ sector can affect company valuation for better or worse, as can your reasons for selling. If you need a fast sale due to ill health, for instance, the value may be lower than if a sale was taking place under more favourable circumstances.

Valuing a business is a complex process and we are available to support you throughout.

So, what are the most common methods of valuing a business?

Price to earnings ratio (P/E)

The price to earnings ratio uses multiples of profit, so may be an appropriate valuation method if you own a well-established business with a good track record of profits. ‘Price’ refers to the company’s current share price, and ‘earnings’ to the earnings per share (EPS). The P/E ratio indicates the business’ expected growth in earnings per share in the future.

Discounted cash flow

Discounted cash flow relies on estimating future cash flows for the company, and a residual business value, and may be suited to businesses with few assets.

Entry cost

Entry cost valuation involves calculating how much it would cost to build your business to the stage that it’s reached now, including Start up and recruitment costs, marketing, and the value of assets. Any savings that could have been made should then be deducted to arrive at the valuation.

Asset valuation

The asset valuation method may be suitable if your business is well established and owns high levels of tangible assets. The Net Book Value (NBV) of assets is calculated, and then adjusted to take account of external factors such as depreciation and inflation.

Valuation based on industry

Some businesses are valued based on the industry in which they operate. The retail industry is one such example, where the number of outlets is an important element for consideration. Industry ‘rules of thumb’ use factors specific to an industry and can provide a more accurate calculation in some cases.

Other considerations when valuing your business

Intangible assets are a key factor when valuing a business. Intellectual property, goodwill, business reputation, and even a premium business location, can all add considerable value in the eyes of potential purchasers.

Spotlighting these intangible assets also allows you to improve their value where appropriate – for example, registering ownership of a trademark or patent, building up their reputation even further, or improving the condition of their premises.

Please talk to us about valuing your business as this can lead to a range of important considerations and actions.   

Off-payroll working rules (IR35)

It has been over one year since the off payroll working rules (IR35) changed in the private and voluntary sectors. 

Some organisations who engage contractors in those sectors who didn’t need to apply the rules for 2021-22 as they did not meet the size conditions — may now need to apply the rules.

Ensure you check the Employment Status Manual for whether the rules apply to your business every year.

This is particularly true if you have:

  • become a newly formed business
  • been bought by another organisation
  • grown in size over the last few years 

If you are new to the rules, you should find it helpful to read the steps needed to implement off-payroll working rules.

Please talk to us if you need help in this complicated area.

See: Agent Update: issue 95 – GOV.UK (www.gov.uk)

Do you know of anyone starting a business?

Then ask us about our comprehensive guide to the financial, tax and accounting considerations of starting a business, “The New Business Kit,” which we offer free to start ups or those who have recently made the jump into business ownership.

The guide helps start-ups think about:

  • Selecting a legal entity;
  • Registering with the tax authorities;
  • Accounting and bookkeeping;
  • Value Added Tax;
  • Payroll taxes and pensions;
  • Income and corporation tax;
  • Cash planning and forecasting;
  • Insurance;
  • Selecting professional advisers; and
  • Digital accounting systems.

In addition there is a section of useful names, addresses and telephone numbers.

Just ask – it is free!

Import controls delayed for this year

The remaining import controls on EU goods will no longer be introduced this year, instead, traders will continue to move their goods from the European Union to Great Britain as they do now.

Russia’s invasion of Ukraine, and the recent rise in global energy costs, have had a significant effect on supply chains that are still recovering from the pandemic.

The government has concluded that it would be wrong to impose new administrative requirements on businesses who may pass-on the associated costs to consumers already facing pressures on their finances.

There will now be a review how to implement the remaining controls in an improved way. The new Target Operating Model will be based on a better assessment of risk and will use data analytics and technology. It will be published in the Autumn and the new controls regime will come into force at the end of 2023.

This process will build on existing work already taking place as part of the 2025 Border Strategy, including on the UK Single Trade Window – a new digital platform that will help traders to move goods more easily. The goal is to create a seamless new ‘digital’ border, where technologies and real-time data will cut queues and smooth trade.

The controls introduced in January 2021 on the highest risk imports of animals, animal products, plants and plant products will continue to apply alongside the customs controls which have already been introduced.

See: New approach to import controls to help ease cost of living – GOV.UK (www.gov.uk)

The British Business SME Awards 2022

Now in their fifth year, the awards have recognised and celebrated the innovative and outstanding achievements of small and medium size British businesses across all industries. 

The British Business Awards offers you and your colleagues the opportunity to gain the industry and country-wide recognition you deserve. 

These awards are open to any businesses in the UK which fall within the traditional definition of an SME – namely up to 250 employees. Ideally the business should have been trading at least since January 2020, but the judges will consider younger businesses formed after this date. The awards are also open to those service providers and investors who help create the ‘eco-system’ which enabled SMEs to flourish and survive particularly over the last two years. 

Nominations will close on 27 May 2022.

See: Advice and Ideas for UK Small Businesses and SMEs

SBRI Competition Rail Demonstrations

Organisations can apply for a share of up to £7.6 million (inclusive of VAT) to develop demonstrators that enable lower emissions and a greener railway, innovations in rail freight, and cost efficiencies and performance priorities for a reliable railway.

This competition aims to demonstrate innovations to stakeholders and railway customers in a representative railway environment. This is a Small Business Research Initiative (SBRI) competition funded by the Department for Transport (DfT).

This competition is part of a wider ‘First of a Kind’ demonstrator initiative, on behalf of the DfT, to accelerate innovation in the UK rail sector and enable technologies to be readily and efficiently integrated into the railway system. 

See: SBRI: the Small Business Research Initiative – GOV.UK (www.gov.uk)

Net Zero Hydrogen Fund Competitions

The Department for Business, Energy and Industrial Strategy (BEIS) has launched The Net Zero Hydrogen Fund (NZHF), worth up to £240 million.

The NZHF will provide capital and development expenditure to support the commercial deployment of new low carbon hydrogen production projects. The aim is to ensure the UK has a diverse and secure decarbonised energy system to meet the Government’s ambitions of reaching net zero by 2050 and 10 gigawatts of low carbon hydrogen production by 2030.

Strand 1 – Development Expenditure (DEVEX)

This competition will support DEVEX costs for front end engineering design (FEED) and post-FEED studies, aiming to build the pipeline of hydrogen production projects and measurably move them closer to deployment. The competition supports multiple hydrogen production pathways. Industrial research projects will be funded to support preparation for deployment.

Strand 1 applications will stay open until 11:00 on Wednesday 22 June 2022.

See: Competition overview – Net Zero Hydrogen Fund – Strand 1 Development Expenditure (DEVEX) – Innovation Funding Service (apply-for-innovation-funding.service.gov.uk)

Strand 2 – Capital Expenditure (CAPEX)

This competition will provide CAPEX to support low carbon projects to take a Final Investment Decision (FID). Projects must not require support from a hydrogen business model. The competition supports multiple hydrogen production pathways. Capital projects which do not require support from a Hydrogen Business Model will be funded. Projects must address low carbon hydrogen production opportunities and must focus on construction of new low carbon hydrogen production facilities.

Strand 2 applications will stay open until 11:00 on Wednesday 6 July 2022.

See: Competition overview – Net Zero Hydrogen Fund – Strand 2 – Capital expenditure (CAPEX) – Innovation Funding Service (apply-for-innovation-funding.service.gov.uk)

Automotive Transformation Fund Scale up Readiness Validation

The Automotive Transformation Fund is delivered by the Advanced Propulsion Centre (APC) and partners, Innovate UK, the Department for Business, Energy and Industrial Strategy (BEIS) and Department for International Trade (DIT). It supports the industrialisation at scale of a high-value electrified automotive supply chain in the UK.

APC is seeking proposals from single organisations or consortiums with R&D projects validating readiness for scale up through pilot production, with a maximum grant request of £2 million.

These projects must produce physical production samples, of a quantity and quality which supports the case for the commercial viability of scale up in the UK. It may include samples to validate technical qualification.

The resulting projects must support the UK automotive industry in:

  • increasing business confidence in making large scale manufacturing investments
  • building electrified vehicle supply chains

The competition closes 25 May 2022.

See: Competition overview – Automotive Transformation Fund Scale up Readiness Validation (SuRV) – Innovation Funding Service (apply-for-innovation-funding.service.gov.uk)

The Queen’s Awards for Enterprise open for 2022

The Queen’s Awards for Enterprise recognise and encourage the outstanding achievements of UK businesses in the fields of:

  • innovation
  • international trade
  • sustainable development
  • promoting opportunity (through social mobility)

Businesses of all sizes and from all sectors can apply. The awards are free to enter, and you can apply for more than one award.

See: The Queen’s Awards for Enterprise: About the awards – GOV.UK (www.gov.uk)

CHANGES TO VAT RATES FROM 1 APRIL 2022

Many in the hospitality sector were hoping that the Chancellor would extend the 12.5% reduced rate that has applied since 1 October 2021 but, as scheduled, the rate has reverted to 20% from 1 April 2022.

The increase applies to hospitality, visitor attractions, catering services including restaurants and takeaways.

This has a consequential effect on the VAT Flat Rate Scheme percentages from 1 April 2022 onwards as set out below:

Type of BusinessFrom 1 April 2022
Catering services including restaurants and takeaways12.5%
Hotel or accommodation10.5%
Pubs6.5%