Welcome to our round-up of the latest business and tax news for our clients. Please contact us if you want to talk about how these updates affect you. We are here to support you!
I hope you have a good weekend.Kind regards,
Steve
Steven Hillman BSc (Hons) ACA
Chartered Accountant
Tel: 01934 444100
https://www.hillmans.co.uk
Managing your cash flow is essential right now!
With ever increasing supplier prices, a recent rise in interest rates, and a looming recession, managing your business’s cash and understanding the flow are now vital tools in maintaining resilience and being able to adopt flexible strategies for success.
Cash flows reflect all the cash that is flowing in and out of a business. Owners can look at the direction of the cash flows for insights about the health of specific products or services and overall market patterns.
Some types of business are more likely to run into cash flow problems, while other types appear to be more resilient. If you are a business owner, you might be wondering which category your business falls into. No matter how inventive or simple your business model is, you can still have problems with cash flow. Here are our thoughts on managing the flow of cash in your business:
The first stage of understanding and predicting how funds flow is to perform a health check on your accounts. Look at your latest profit and loss statement and check that your income is sufficient to cover your expenses. If your profit is falling behind your expenses and cash flow is slowing down, you might need to take action. Prepare a cash flow statement so you know where the money goes.
Next create a yearly budget and look where cash could become tight and months where you can save to cover off the quieter times. Look at those quieter months and think about flexible work scheduling, new products or services, or other activities to tide you over.
Finally make sure you collect your money from those who owe you quickly. Reward customer loyalty by offering early bird discounts and set credit limits and payment terms to ensure customers follow the rules. If you take on new customers, make credit checks. Penalise late payers and request up front deposits or payment.
Please talk to us about preparing a cash flow statement and annual budget so that you can work on your business for maximum success!
Households, businesses, and organisations who are “off the gas grid” to receive energy bill support over the coming weeks
From Monday last week, households across Great Britain who don’t use mains gas for heating started to receive £200 towards their energy bills as the Alternative Fuel Payment (AFP) scheme launched. Most will get the £200 AFP automatically as a credit on their electricity bill, but some customers will need to apply for the support later this month.
Nearly 2 million households who use alternative energy sources such as heating oil, biomass, and liquefied petroleum gas (LPG) to warm their homes will receive the support.
The vast majority, including many homes in rural areas, will get it automatically through their electricity supplier as a credit on their bill throughout February. A small minority of customers, such as those living in park homes or on static houseboats with no direct energy supplier, will need to apply to receive the payment through an online portal that will launch later this month.
Meanwhile, energy suppliers are also able to start making payments to businesses and both public and voluntary sector organisations that use alternative fuels to heat their buildings. A credit of £150 will be provided to eligible customers across the UK through the Non-Domestic Alternative Fuel Payment scheme (ND-AFP). Suppliers will deliver this support up to 10 March, with most customers expected to receive it later this month. There is no need to contact your supplier.
See: Households, businesses and organisations off the gas grid to receive energy bill support over the coming weeks - GOV.UK (www.gov.uk)
New law gives employees and other workers more say over their working hours
The UK government has supported the recently introduced “Predictable Terms and Conditions” Bill, which will bring forward changes for tens of millions of workers across the UK.
The move, which would apply to all workers and employees including agency workers, comes after a review found many workers on zero hours contracts experience ‘one-sided flexibility’.
This means people across the country are currently left waiting, unable to get on with their lives in case of being called up at the last minute for a shift.
With a more predictable working pattern, workers will have a guarantee of when they are required to work, with hours that work for them.
If a worker’s existing working pattern lacks certainty in terms of the hours they work, the times they work or if it is a fixed term contract for less than 12 months, they will be able to make a formal application to change their working pattern to make it more predictable.
The move comes as part of a package of policies the UK government is supporting to further workers’ rights across the country, such as:
- supporting parents of babies who need neonatal additional care with paid neonatal care leave
- requiring employers to ensure that all tips, gratuities, and service charges received must be paid to workers in full
- offering pregnant women and new parents greater protection against redundancy
- entitling unpaid carers to a period of unpaid leave to support those most in need
- providing millions of employees with a day one right to request flexible working, and a greater say over when, where, and how they work.
See: New law gives tens of millions more say over their working hours - GOV.UK (www.gov.uk)
HMRC late payment interest rates to be revised after Bank of England increases base rate
The Bank of England Monetary Policy Committee announced on 2 February 2023 that it would increase the Bank of England base rate to 4% from 3.5%.
HMRC interest rates are linked to the Bank of England base rate.
As a consequence of the change in the base rate, HMRC interest rates for late payment and repayment will increase.
These changes will come into effect on:
- 13 February 2023 for quarterly instalment payments
- 21 February 2023 for non-quarterly instalment payments.
The differential between late payment interest and repayment interest is in line with the policy of other tax authorities worldwide and compares favourably with commercial practice for interest charged on loans or overdrafts and interest paid on deposits.
See: HMRC late payment interest rates to be revised after Bank of England increases base rate - GOV.UK (www.gov.uk)
Innovate UK Smart Grants
Innovate UK, part of UK Research and Innovation, is investing up to £25 million in the best game-changing and world-leading ideas.
Ideas need to be designed for swift, successful commercialisation and be genuinely new and novel, not just disruptive within their sector.
All proposals must be business-focused, with deliverable, realistic, adequately resourced plans to achieve return on investment, growth, and market share following project completion.
Applications can come from any area of technology and be applied to any part of the economy, such as, but not exclusively:
- net-zero
- the arts
- design and media.
- a game-changing, innovative, and disruptive idea that will lead to new products, processes or services
- an idea that is significantly ahead of others in the field, set for rapid commercialisation
- clear potential to positively impact the UK's position, productivity, and competitiveness within the global economy.
‘Here to help’: Commission launches new push on trustee guides as sector faces challenging year
The Charity Commission is launching the next stage of its campaign to raise awareness of core trustee duties and guidance available as the sector faces challenges ahead.
The Commission has developed a collection of short guidance on issues ranging from safeguarding people to managing conflicts of interest. Dubbed the ‘5-Minute Guides’, the collection serves as a basic toolkit for trustees who are managing the many demands of running a charity.
The latest phase of the campaign, running to 16th March, aims to raise awareness of, and boost use of, the 5-minute guides. The regulator hopes this will increase knowledge and understanding of essential trustee duties. This comes as charities face additional challenges due to cost-of-living pressures.
The Commission’s latest research shows that around 98% of trustees feel ‘very’ or ‘somewhat’ confident in managing or governing their charity but, when questioned on basic role requirements, on average, trustees answered just 7 out of 10 questions correctly - demonstrating a knowledge gap that could lead to unintentional governance failings.
The core suite of 5-minute guides covers the following subject areas:
- Delivering purpose – advice on how to use your charity’s governing document, how to deliver on your charity’s purposes and the law.
- Managing finances – advice on how to ensure your charity’s money is safe, properly used and accounted for.
- Conflicts of interest – advice on how to identify and deal with conflicts of interest in your charity.
- Making decisions – advice on how to make valid trustee decisions that are in your charity’s best interests.
- Reporting information – advice on how and what you need to report to the Commission.
- Safeguarding people – advice on your responsibilities to keep everyone who comes into contact with your charity safe from harm.
- Political activity & campaigning – advice for charities that want to support, or oppose, a change in government policy or the law.
What is inclusive leadership?
There have been numerous studies into the relationship between diversity and inclusion and company performance, and many of them have come to the same conclusion - diversity and inclusion is good for business.
The biggest advantage of inclusive leadership is that inclusive leaders know how to unleash individual potential and create an environment where all talent can thrive and grow. The more people feel included, the more they speak up, go the extra mile, and collaborate — all of which ultimately lifts organisational performance.
Inclusive leadership is emerging as a unique and critical capability helping organisations adapt to diverse customers, markets, ideas, and talent.
The workshop will include:
- What inclusion means
- What makes an inclusive leader
- How to make that happen
- How an organisation can create inclusive leadership.
See: What is inclusive leadership? Tickets, Mon 13 Mar 2023 at 13:30 | Eventbrite
The digital pound consultation
HM Treasury and the Bank of England are consulting on a potential digital pound, or central bank digital currency (CBDC).
If introduced, a digital pound would be issued by the Bank of England and could be used by households and businesses for everyday payments in-store and online. It would also be interchangeable with cash and bank deposits, complementing cash.
No decision has been taken at this stage to introduce a digital currency.
See: The digital pound: A new form of money for households and businesses? - GOV.UK (www.gov.uk)
Free practical forestry training courses made available
Government-funded courses are now available, teaching skills such as chainsaw maintenance, coppicing, woodland management, and marketing and selling timber.
The Forestry Training Fund is for people considering a change of career or those who are seeking to build and diversify their skills in forestry. The UK forestry and primary wood processing sectors support 32,000 jobs and contribute £2 billion to the economy every year, whilst secondary wood processing businesses support a further 60,000 jobs.
The government has committed to increasing tree-planting across the UK to 30,000 hectares a year by the end of the Parliament to reach net zero emissions by 2050.
The short, practical training courses will be paid for by a £700,000 allocation from the £750m Nature for Climate Fund and will help grow the forestry sector so that we have enough people with the right skills to plan, plant and manage new woodlands.
Examples of courses which are covered by the fund include:
- coppicing
- chainsaw maintenance and cross-cutting
- managing your woodland
- planning and planting a new woodland
- marketing and selling timber
- fence and hedge laying.
See: To view a list of training providers and apply for funding visit GOV.UK
Countryside Stewardship Higher Tier application window opens for 2024 agreements
From 7 February farmers and land managers can submit new applications for the Countryside Stewardship Higher Tier, rewarding them for their actions to protect and improve their natural environment.
Countryside Stewardship Higher Tier offers multi-year agreements and one-off grants for over 250 different actions farmers can take to enhance the environment alongside their farming business, from planting and maintaining new hedgerows or woodland through to restoring peatland and moorlands.
The start of the application window comes after Defra announced an average increase of 10% for Countryside Stewardship revenue payment rates – covering ongoing activity such as habitat management. Capital payment rates, which cover one-off projects such as hedgerow creation, were also increased by an average of 48%.
To support farmers and land managers with applications and to help encourage them to take action on their land, changes have been made to the application process. These include:
- For the first time, a new Higher Tier capital-only offer has been introduced, awarding grants to help support the most environmentally significant sites and woodlands, including preparatory works for the creation and restoration of priority habitats and priority species. Successful applicants will now have three years to complete their activity and submit claims;
- An annual claim declaration, which means that agreement holders will not have to complete a burdensome annual claim form. Instead, they will be able to declare online that they are fulfilling the obligations of their agreement, reducing the administrative burden on farmers and landowners and making the claim for payment process quicker and more straightforward.
- Where farmers or land managers are already in Higher Level Stewardship (HLS) agreements, they can also apply for a Countryside Stewardship Higher Tier agreement to start from 1 January 2024, as long as they are undertaking actions that are different to and do not conflict with their Higher Level Stewardship agreement.
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