Cost-saving will be key for many businesses struggling to get back up to speed after the pandemic.

Many small and medium-sized enterprises (SMEs) were hit hard and now face higher inflation, skills shortages and rising wages.

The Bank of England says the inflation figure could even hit four per cent by December. So, cutting costs can help get thousands of UK firms through these challenging times.

There are many options for businesses to cut costs, including:

Review your suppliers

Make sure you are getting the best value for money. Get a minimum of three quotes for your supplies, particularly in areas like communication, where there are often better deals to be had.

You should also give existing suppliers the chance to review their prices.

Your business is important to them, but don’t be afraid to walk away for a better deal.

Innovate

Sometimes you need to spend a little to save a lot. If you are operating on older systems or software, it may make sense to upgrade now so that you are more efficient as a business.

An example of this is digital invoicing and bill payments. These techniques could help to reduce administration costs and postage, while also helping you to avoid piles of paperwork – saving you time and money.

Many of the latest cloud accounting platforms allow you to digitise these processes, while also offering you many other benefits, including the option to go paperless.

Assess your workspaces

The requirements for your business premises may have changed during the last year, especially if many of your staff have moved to hybrid or remote working.

Assess whether your current commercial property still meets your needs or whether there could be cheaper alternatives elsewhere.

If you have moved entirely to remote working, you could do away with business premises altogether.

Go second-hand

Quite often refurbished equipment can perform just as well as new and allow for considerable savings. This does not just apply to office furniture.

Properly refurbished computer equipment can also result in big savings as can equipment like copiers.

Be aware, some capital allowance tax schemes won’t allow claims made on second-hand machinery or equipment.

Use an accountant

It may seem obvious, but using our expertise could help you cut your costs considerably.

We can look through your books and spot cost-saving opportunities that you may have missed and make a detailed analysis of the day-to-day running costs of your business.

We can also help you find reliefs and allowances that help you reduce the costs you already have by offsetting them against tax.

If you are struggling with a cost crisis, act now. Cash flow issues are one of the most common reasons for business failure.

Many small and medium-sized enterprises (SMEs) were hit hardest at the beginning of the pandemic.

They had access to support, like the Bounce Back Loan, which was easier to access and had lower interest rates, but those only helped during the short term.

Now a growing number of SMEs are struggling with debt. The latest Bank of England Credit Conditions Survey shows that the majority of banks (44 per cent) reported an increase in loan defaults by small companies in the third quarter of this year.

This is twice the levels seen during the height of the pandemic.

There are options for businesses that have got into a debt spiral, including:

Deal with priority debts first, including:

• Business rates
• Utility bills
• Mortgage and rent payments
• Outstanding tax payments
• Payments to strategic suppliers
• Bank loans
• Any form of borrowing with a personal guarantee

Consolidate or refinance loans

It may make sense to consolidate several loans into a single payment or refinance an existing loan.

With inflation increasing, businesses should take advantage of the historically low interest rates that currently exist.

You should seek independent advice before doing anything around consolidating or refinancing loans.

Tackle late-paying customers

Late payments are the bane of most small businesses. Despite Government efforts to tackle this issue, it continues to be a problem for many.

Challenging customers about their debts can be difficult. However, businesses should strengthen their credit control processes so they are paid on time.

Focus on cash flow

Cash flow is the lifeblood of your business and there are some simple measures you can put in place to help keep it healthy.

For example:

• Improve your process for chasing up debtors
• Agree on payment terms in advance
• Lease rather than buy equipment or vehicles
• Review and reduce business costs.

Boost your revenue

As well as cutting costs, you can also tackle a cash flow crisis and pay off your debts by improving your turnover.

This can be achieved by:

• Increasing leads to attract more customers
• Raising your prices
• Finding more ways to cross-sell or upsell your services or products
• Engage your staff and seek their input. They may well have ideas that are well worth putting into action.

Managing your income and cash flow can be challenging so seeking professional advice and insights could pay dividends.

Avoid debt in favour of other forms of finance

You could explore the following:

• Liquidating assets – Creditors may gain more than if a business is wound-up.
• Look for new investors – Can you generate income through the sale of shares? Have you considered the tax-efficient Enterprise Investment Scheme?
• Peer-to-peer lending or equity crowdfunding – These alternative forms of finance are great for businesses that can’t obtain traditional finance.
• Invoice financing – If you have a large number of late payments, you could finance the invoices and get paid sooner.
• Borrowing from friends or family – Beware, this can put a strain on relationships.

Make sure you’re getting fair treatment from lenders

You’re entitled to be treated fairly by your bank or building society.

The Lending Standards Board operates as an independent body (albeit one funded by its registered financial firms), with an independent board made up of non-executive directors.

Link: Small business loan defaults rise substantially

If you have to submit a Self-Assessment tax return to HM Revenue & Customs (HMRC), you only have a few weeks left to submit it online.

The clock is ticking on the 31 January 2022 online tax return deadline – miss it, and you could face fines.

The 2020/21 tax return covers earnings and payments during the pandemic, including any taxable grants or payments from COVID-19 support schemes up to 5 April 2021.

To help you get your return in on time, here is some advice:

Don’t leave it until the last minute

You’re more likely to make mistakes or miss out important information if you leave it too late.

Anecdotal evidence also suggests that tax returns submitted just before the deadline are more likely to be subject to HMRC enquiries and investigations.

Save time, be prepared

When the tax year ends on 5 April, you can start getting prepared for submitting your tax return right away. If you collect information throughout the year and stay on top of your bookkeeping, you’ll save valuable time when it comes to filling in your tax return. Plus, if you do need to get in touch with HMRC, you’ll avoid the last-minute rush in January.

Organisation is key

Make sure all of your paperwork and details are prepared ahead of time, including:

• Unique Taxpayer Reference (UTR) number (you need to register for one if you’ve not completed a Self-Assessment tax return before)
• National Insurance number
• Details of all your income; for example, if you also have rental income or have earned bank/building society interest, or have received dividend payments
• Records of relevant business expenses.

File online

If you are still using a paper return now is a great time to switch. Registering to file online makes it easier to upload all the information that HMRC needs from you. You don’t need to do it all in one go – simply save your form and fill it in when you have the time.

Keep track of income and expenses

Keep accurate records of income and what you’ve claimed as business expenses throughout the tax year so that you’re ready to go, including:

• Bank statements
• Chequebooks and paying-in slips
• Credit card statements
• Sales invoices/till rolls
• Job quotes or estimates
• Purchase invoices and expense receipts
• Payroll records
• VAT records.

This information will make completing your return much easier.

Sick of paper records? Have you considered cloud accounting?

Taking your record-keeping online could help to cut back on the paperwork you have to retain and automate many bookkeeping processes.

Budget in advance

Once you’ve submitted your return, you can manage any surprises within your tax bill by budgeting in advance and getting ahead if you need to make any payments on account.

Get help

If you don’t fancy going it alone, why not hand the hard work to us. Every year we produce hundreds of tax returns for clients.

If you need help, don’t delay. Get your Self-Assessment information over to us today.

UK businesses have had plenty to cope with over the last 20 months or so. Hammered by COVID-19, hit by a skills shortage and coping with sometimes patchy supply chains.

So, it’s even more important that they have robust measures in place to tackle fraud.

Fraud is simply the intent or the act of misrepresentation – scammers lying about themselves or their actions and services – to cause a gain or loss.

Due diligence, internet controls and risk management can often be overlooked and seem expensive or hard work.

However, according to the Metropolitan Police, this perception often leaves SMEs particularly vulnerable to fraud. With many owners and managers unaware of the risks their businesses face.

Fraud can come from anywhere, including:

• Staff members
• Customers
• Suppliers
• Third parties, unconnected to the business.

To assist businesses, here are some tips to prevent business fraud:

Be sceptical

If it sounds too good to be true, it probably is. Thoroughly question all deals, opportunities, documents, transactions and information.

Have a thorough understanding of your business, including:

• How it operates
• The staff you employ
• The products and services it provides
• Your target market and your business
• Your legal and regulatory obligations.

Know your customers and suppliers

When you understand who you do business with, you can spot any business requests or transactions that look fraudulent.

Conduct due diligence, such as checking the customer or supplier details you have on file, as well as online searches.

Identify your vulnerabilities

Imagine how a fraudster might target your business and test the systems you already use to reduce risk. Make sure you and your staff know those systems and regularly review them.

Train your team

Fraudsters will try to target your team, often trying to obtain information via email, phone calls or even in person.

You should train them to spot the signs of fraud and teach them to be cautious of unexpected emails or calls, especially those that purport to be from banks or public agencies, such as HMRC.

Develop a strategy and talk about fraud

Create a fraud prevention and detection strategy for your business. It should detail controls and procedures. Talk about fraud with your staff, suppliers and other contacts.

Take extra care against cyber attacks

With increasing threats from cybercrime, protect your business technology against attacks.

Make sure you back up your systems in case they go wrong or are attacked.

Invest in programmes and services that help to deter or prevent fraudsters from committing fraud.

Understand how money leaves your business, including:

• Methods of payment
• Who has the authority to make those payments?
• Who checks payments are legitimate?

Secure and protect your property

This includes laptops, computers, smartphones and intellectual property.

Factor in business insurance to cover these items if they’re compromised or stolen.

Develop an action plan

Consider when you might need professional or legal advice.

While prevention is better than cure, you and your business need to prepare for the worst. Having an action plan in place will help limit your losses to fraud.

Always report fraud and get help

Action Fraud is the UK’s national fraud and cybercrime reporting centre or you can also report fraud to the police.

If you receive suspicious communications from HMRC or other public agencies make sure you report them as well. HMRC has a dedicated fraud service found here.

The Help to Grow campaign was first announced in the Spring Budget earlier this year but received yet another mention in the Autumn Budget as the Government ramps up support for smaller businesses.

It has been designed to help more than 100,000 SMEs access management training and advice on innovations that are focused on boosting productivity.

Within the latest Budget, the Chancellor committed an extra £196 million in 2024/25 for the Help to Grow Schemes.

What is Help to Grow: Management?

This part of the initiative has already been launched in more than 20 business schools across the UK. It is offering thousands of businesses the opportunity to access an industry-led curriculum, one-to-one mentoring, and alumni network backed by Government funding. Its goal is to provide better training to business owners and their management teams.

What is Help to Grow: Digital?

This will provide SMEs with impartial, high-quality advice on how to use productivity-enhancing software that can benefit their business.

From December, SMEs will be able to access support through the online platform and vouchers to help them with the costs of adopting new software, including cloud accounting systems and support.

What other support is being offered alongside these programmes?

The Help to Grow Scheme is part of a larger campaign that included the launch of the British Business Bank (BBB).

The BBB has already had £484 million invested into it by the Government and the Autumn Budget confirmed a further £1.4 billion of investment in future.

The BBB’s primary goal is to help “businesses thrive and address regional finance gaps”, it wants to make sure that small and medium-sized enterprises (SMEs) can access the finance they need to thrive.

Funding initiatives from the BBB include the Start-Up Loans Scheme, the Regional Angels Programme and the expanding Regional Funds.

How can businesses access the support on offer?

If businesses are interested in using either the BBB’s loans or the Help to Grow Schemes, they should speak with their advisers first to make sure that the funding and support meet their goals.

They can also visit the following sites for more information.

• Help to Grow
• British Business Bank

Link: Autumn Budget 2021

For years businesses on the British high street have been calling for reforms to the business rates system.

The Chancellor has finally announced new measures in the Autumn Budget that he claims will reduce the burden of business rates in England by over £7 billion over the next five years.

The reforms are intended to make the business rates system “fairer, more responsive and more supportive of investment.”

Based on the conclusions of the Government’s review of business rates, which was published alongside the Budget, the reforms include six measures that seek to minimise the costs of business rates.

Here are the key points:

Temporary retail, hospitality and leisure discount – A new temporary business rates relief will be made available to eligible retail, hospitality and leisure properties for 2022/23. Eligible properties will receive 50 per cent relief, up to a £110,000 per business cap. Critics have pointed out that the cap may limit the effectiveness of this relief for businesses with multiple sites.

The business rates multiplier – This will remain frozen for a second year, from 1 April 2022 until 31 March 2023. This means that the small business multiplier will be 49.9p (for businesses with a rateable value below £51,000) and the standard multiplier 51.2p (for businesses with a rateable value of £51,000 or more). Multiply your rateable value by your multiplier to show how much you will have to pay in business rates (before any relief is deducted).

Improvement relief – This will offer 12 months of relief from higher bills for occupiers where eligible improvements to an existing property increase the rateable value. The Government has said it will launch a consultation on this relief with it coming into effect in 2023.

Targeted business rate exemptions – Introduced from 1 April 2023 until 31 March 2035, these will support eligible plant and machinery used in onsite renewable energy generation and storage and offer a 100 per cent relief for eligible ‘heat networks’, as part of plans to decarbonise non-domestic buildings.

Revaluations – One of the key criticisms of the business rates system is the infrequency of revaluations. From 2023, the Government will increase the frequency of business rates revaluations so that they take place every three years instead of every five. This should ensure rateable values are more accurate and reflect the market better. The Government will provide additional funding to the Valuation Office Agency to support the delivery of the new revaluation cycle.

Transitional relief for small and medium-sized businesses and small business scheme extension – These schemes will be extended for another year and will restrict bill increases to 15 per cent for small properties (up to a rateable value of £20,000 or £28,000 in Greater London) and 25 per cent for medium properties (up to a rateable value of £100,000), subject to subsidy control limits.

What about the online sales tax (OST)?

Part of the earlier review looked at ways of implementing an OST to make the retail business space more competitive. At the moment the likes of Amazon benefit from selling the same goods as high street retailers but with lower business rates due to where their warehouses are located.

The OST proposals would look to address this imbalance by taxing goods sold online. In its report alongside the Autumn Budget, the Government said it will continue to explore the arguments for and against a UK-wide OST and will publish a consultation shortly.

If such a measure were introduced, the revenue generated from it would be used to reduce business rates for physical retailers in England.

If you are unsure how these reforms will affect your business costs you should speak with your accountant, as it may be possible to plan investments around the reliefs and exemptions that are introduced.

Link: Autumn Budget 2021