29th September 2023 – Hillmans Weekly Update

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!

Have a great weekend. 

Kind regards,
 
Steve
 
Steven Hillman BSc (Hons) FCA
Chartered Accountant
Tel: 01934 444100
https://www.hillmans.co.uk

Start-up loans for new businesses
Start Up Loans are personal loans designed to help new businesses begin trading. They were created to support would-be business owners who have struggled to secure finance from traditional lenders.

To date, over 100,000 small firms have received loans, designed to help scale up activities. Delivered through the state-owned British Business Bank, the Start Up Loan scheme was developed and launched by the government in 2012 to help new and early-stage UK businesses without sufficient personal funds or support from friends and family to access affordable finance and mentoring support.

Through this combined access to finance, more small businesses can develop and reach their potential, delivering economic growth and a boost to local communities.

Start Up Loans differ from small-business bank loans in that they are personal loans for business purposes. They are also unsecured, which means you don’t have to use your house or any other asset as security to receive the money.

Start Up Loans are provided by the Start Up Loans Company, which is funded by the UK Government. You can borrow between £500 and £25,000, payable over one to five years, at a fixed interest rate of 6% per annum.

When you apply, you’re paired with a dedicated business adviser, who supports you with completing your application form. If your application is successful, your loan comes with the option of 12 months of free mentoring.

To qualify for a Start Up Loan, you must meet the following criteria:

• You are aged 18 or over;
• You live in the UK;
• You are starting a new business, or your business is less than three years old;
• Your business is/will be based in the UK; and
• You have the right to work in the UK.

See: Start Up Loans - British Business Bank (british-business-bank.co.uk)

Creating value through innovation
Innovation has generally been recognised as essential for value creation, both for individual companies and for the UK economy as a whole. The development of new ideas, processes, and technologies and their flow across different sectors is a significant driver of economic growth and productivity.

Recently, innovation has also been identified as crucial to the transition of the economy away from fossil fuels and carbon-intensive business activities.

There are many factors that affect whether and how businesses innovate, for example the availability of skills and capital and government policy measures such as tax incentives.

However, none are more important that the company’s own culture, capabilities and internal systems – all of which are aspects of its governance. Unless companies are governed in a way that is conducive to innovation, they are unlikely to be in a position to take advantage of new opportunities.

Our most innovative clients share some key characteristics:

• They invest in activities with uncertain outcomes for which the likely commercial return is difficult to quantify and the risk of failure is higher than normal;
• They benefit from the availability of company-specific skills, which may be highly specialised;
• They have a culture which encourages flexibility, experimentation, and a high level of individual decision making; and
• They require a longer-term time investment horizon than many other kinds of business activity.

Research and Development (R & D) is the process of taking an idea and transforming it into a fully-fledged product or procedure. R & D tax credits are a government incentive designed to encourage innovation across multiple industries. This is an opportunity for you to reduce your corporation tax bill or receive a refund from HMRC based upon the number of working hours and relevant costs your business dedicates to Research & Development. Under the scheme, SME’s can claim back up to 33% of the costs associated with R & D.

If you are looking for long term finance to support innovation then you will need to ensure your management accounts are up to date, you make available current detailed lists of debtors and creditors, and you might need up to date projections before an expert will consider your application.

Please talk to us about R & D tax credits and long-term finance, our independent experts have many years of experience and success in advising business across a wide range of sectors.
 
UK Manufacturing Climbs to 8th in World Rankings
The UK’s manufacturing sector has climbed one place to eighth in the world rankings, overtaking France in the process, according to analysis of the latest official data published by Make UK.

The figures are contained in the latest annual ‘Manufacturing – The Facts’ which contains a wide variety of data about the contribution of manufacturing to the economy, including exports, sectoral breakdown, how the UK compares to other nations and salary levels.

The data shows that in 2021 (the latest year for which global comparisons are available), UK manufacturing output was worth some $272bn, compared to $262bn for France, but behind Italy ($314bn). To put this data in context, China is the largest manufacturing nation worth $4.9tn, followed by the United States $2.5tn and Japan $995bn. Germany, the fourth highest, remains the largest European manufacturing country at $803bn.

According to Make UK, while the climb up the rankings is encouraging, it is strongly cautioned that it is only the third time since 2002 that the UK has ranked above France and cannot be attributed to any post Brexit bounce or other specific factor.

Separate data for 2022 from the ONS places UK manufacturing output at £224bn and Make UK believes that, if the Government commits to its call for a manufacturing target of 15% of GDP, (which Make UK estimates would add £142bn to the UK economy) then the sector could aim to match seventh-ranked Italy. With many competitor nations having their own versions of an Industrial Strategy, Make UK has also repeated its calls for a long-term, modern, and robust Strategy which could help turn the 15% ambition into a reality.

The analysis by Make UK also shows that, contrary to popular opinion, manufacturing jobs are better paid than both services and the economy overall.

According to official data the average salary in manufacturing in 2022 was £36,488, which compares to £33,402 for the economy overall and £32,676 for services.

The North West remains the biggest manufacturing area of the UK, worth £28.2bn in output and employing 314,000 people. The sector accounts for almost 15% of North West economic output and 8% of regional employment.

See: UK-Manufacturing-The-Facts-2023 | Make UK
 
New fire safety legislation
From 1st October 2023 new fire safety legislation comes into effect. This will mean that many businesses and building owners need to check if and how this affects them to ensure they are complying with the regulations. The main changes are: 

• All businesses will need to record a fire risk assessment and fire safety arrangements in full – regardless of the number of employees, and size or type of business;
• There are increased requirements for cooperation and coordination between Responsible Persons in multi occupied buildings or those where the occupier and owner are not the same person; and
• In residential buildings with two or more domestic premises, residents must be provided with information on the risks from fire and the fire safety measures provided to keep them safe.

See: New fire safety guidance comes into force on 1 October 2023 - GOV.UK (www.gov.uk)

Small Business Saturday – “The Tour 2023”
The iconic Small Business Saturday UK Tour is back again this November.

The countdown to Small Business Saturday is officially on, as ‘The Tour’ returns to spotlight and supports small businesses all over the country.

Once again supported by BT Skills for Tomorrow, ‘The Tour’ will call at twenty three different towns and cities across the UK throughout November, visiting small businesses and shining a light on their contribution to the UK economy and local communities.

It will also offer a jam-packed free daily programme of online events - including workshops, webinars, mentoring and inspiring entrepreneurial stories - open to all small businesses.

Kicking off on Monday 30th October, The Tour will travel across the UK for five weeks and make use of electric vehicles – including a state-of-the-art eco-friendly electric bike from Stirling Eco – to limit emissions and reflect the sustainable switches many small business owners are making as part of their vital role in the race to net zero.

See: Small Business Saturday UK | Another year making a Big Difference!
 
AI solutions to improve productivity in key sectors
Innovate UK, part of UK Research and Innovation, will invest up to £32 million in innovation projects to support the development and adoption of artificial intelligence (AI) and machine learning (ML) solutions in the priority sectors of:

• Transport,
• Construction,
• Agriculture, and
• creative industries.

Your project can focus on one or more of the following:

• data driven decision making,
• automation of administrative tasks,
• project management optimization,
• supply chain optimisation and forecast models,
• waste management,
• intellectual property (IP) management, and
• design.

The competition is split into two strands, offering support to:

• single entities, and
• collaborative R&D projects.

For both strands, Innovate UK will fund industrial research projects and experimental development projects, as defined in the guidance on categories of research.

In terms of project sizes, the total grant funding request for single entities must be up to £100,000. If you're applying for collaborative R&D funding, your project's total grant funding request must be between £700,000 and £1.2 million.

This competition opens on Wednesday 27 September. The deadline for applications to both strands is 11am on Wednesday 8 November 2023.

Potential applicants can join Innovate UK's briefing event on Friday 29 September 2023 to find out more about eligibility, the application process, and securing funding for impactful AI initiatives.

See: BridgeAI Briefing Event: Collaborative AI Solutions to improve productivity in key sectors - Innovate UK KTN (ktn-uk.org)
 
Student finance bill becomes law
New measures have been enshrined in law that will transform the student finance system, allowing colleges and universities to charge different fees for different courses for the first time and opening up opportunities for adults to study in a way that works for them.

The Lifelong Learning Entitlement (LLE) (formerly the Lifelong Loan Entitlement) will give all adults from 2025 access to loans, worth up to £37,000 in today’s fees, that they can use flexibly over their working lives to upskill or retrain.

The LLE will mean people will be able to take out a student loan to pay for full-time courses such as university degrees or Higher Technical Qualifications (HTQs), as well as for some individual modules of courses.

See: Transformative student finance bill becomes law - GOV.UK (www.gov.uk)

22nd September 2023 – Hillmans Weekly Update

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!

Have a great weekend. 

Kind regards,
 
Steve
 
Steven Hillman BSc (Hons) FCA
Chartered Accountant
Tel: 01934 444100
https://www.hillmans.co.uk

Children and Taxes
Today, we tackle a subject that's a bit different but increasingly relevant—children and their side hustles (small, independent income streams).

Gone are the days when a paper round was the only choice of work for children. In today's digital age, options range from setting up YouTube channels and streaming games to engaging in online e-commerce ventures and more. Therefore, understanding when or if your child needs to register and pay tax on these earnings has become a more common question among parents.

When Can Children Start Work?
In the UK, children can work part-time from 13 years old, although there are exceptions for certain industries like television and modelling. Full-time employment becomes an option after the child reaches the minimum school-leaving age of 16.

When Do Children Start Paying Taxes?
The UK tax system doesn't differentiate by age but rather by income. Therefore, a child who earns over £12,570 during the 2023/2024 tax year will be subject to income tax. Income from interest or dividends is usually attributed to the parents for tax purposes.

HMRC Registration: When and How
If your child's annual earnings from a side hustle business exceed £1,000 (this is sales income, not profit), you are required to register them for self-assessment with HMRC. Below this threshold, the £1,000 trading income allowance applies, making the earnings tax-free.

Registering a minor for self-assessment can be a bit tricky since HMRC typically asks for a National Insurance number, which your child will only get at 16. There is a workaround, so please feel free to reach out to our office for further guidance on this.

National Insurance Number: The 16-Year Milestone
Your child will automatically be assigned a National Insurance Number around their 16th birthday. From this point, they'll start paying National Insurance contributions if they earn above £12,570.

Don't Miss the Registration Deadline
You must register your child with HMRC by the 5th of October in their second tax year of working. For instance, if your child started working in January 2023, the registration deadline would be the 5th of October 2023.

Closing Thoughts
We hope this provides some clarity on a topic that's becoming more common in family households across the UK. If you have further questions or need personalised advice, we are always here to assist you.

The Autumn Statement is scheduled for 22 November 2023
The Chancellor of the Exchequer, Jeremy Hunt, has confirmed that the Autumn Statement will be on 22 November 2023. The Autumn Statement can affect tax policy, benefits, and much more. The Chancellor will make his announcement to Parliament, setting out the Government’s plans on all matters fiscal and economic. Interestingly, this could be the Chancellor’s last statement before the next General Election, depending on the time frame that the government chooses. 

Included in the announcement was the news that ‘The Office for Budget Responsibility (OBR) have been commissioned to prepare an economic and fiscal forecast to be presented to Parliament alongside his Autumn Statement.’

Rumours have already started about what the Chancellor will – and won't – announce, so what are some of the likely changes?

Mr Hunt is already playing down the prospect of income tax cuts and he insists inflation needs to come down further from its rate of 6.4%, he has recently stated that to put money into people’s pockets quickly, the fastest thing would be to deliver on the pledge to halve inflation. Indeed, some news outlets are predicting a tax rise in a number of other areas.

He has lately talked of a four-point growth plan focusing on enterprise, education, employment, and investment opportunities. 

We could see some promises around the cost of living, with energy bills still relatively high and winter approaching.

Pensions and benefits are always a big focus of any financial statement, though there are not many rumours about potential changes. We predict the ‘triple lock’ on pensions will stay in place for now and pensioners can expect around an 8% increase to their state pension. Rumours flourish that this may change after the next general election. There may be other changes to pensions reliefs and benefits, and we will keep you up to date as and when we hear any news.  

The government is currently analysing responses to several tax consultations that closed in the summer. These include reform of the Construction Industry Scheme (CIS), expanding the cash basis for unincorporated businesses, and merging the two Research &Development (R&D) schemes for limited companies into one. It’s reasonable to expect the Chancellor to make announcements in these areas.

Alongside any announcements to tax policy, the Chancellor will be looking at budgets for schools, the police, hospitals, and the military. Expect to see some changes to these.

Whatever happens on the 22 November, we can be sure that tax rules and business regulations are progressively becoming more complicated. Getting expert help is essential.  Please contact us about planning for change. We can provide a full tax review which will help identify the marginal tax traps waiting for you – and help you to avoid them.
 
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!
 
UK rejoins Horizon Europe
UK scientists now have access to the world’s largest research collaboration programme, Horizon Europe, which was lost as a result of Brexit.  
From 7 September, UK researchers can apply for grants and bid to take part in projects under the Horizon programme, with certainty that the UK will be participating as a fully associated member for the remaining life of the programme to 2027.

Once adopted, the UK will also be able to join the governance of EU programmes – which the UK has been excluded from over the last three years – ensuring we can shape collaboration taking place next year. UK researchers will also be able to lead consortia in the next work programme of Horizon Europe projects.

The UK will also associate to Copernicus, the European Earth Observation programme. This will provide the UK’s earth observation sector with access to unique data – valuable to helping with early flood and fire warnings, for example – and with the ability to bid for contracts, which they haven’t been able to access for three years since Brexit.

See: UK joins Horizon Europe under a new bespoke deal - GOV.UK (www.gov.uk)
 
ICO consultation on the draft biometric data guidance
The Information Commissioner's Office (ICO) has produced guidance on biometric data and biometric technologies.

The draft guidance looks at the definition of biometric data under the UK General Data Protection Regulation (UK GDPR) and how data protection law applies when using biometric recognition systems.

Biometric recognition systems are tools used by businesses to verify customers' identity in the digital world. For example, facial recognition technology, voice recognition, fingerprint scanning, etc.

The ICO's draft guidance covers:

• what biometric data is;
• when it is considered special category data;
• its use in biometric recognition systems; and
• the data protection requirements you need to comply with.

This guidance is for organisations that use or are considering using biometric recognition systems. It is also for vendors of these systems. The aim of the guide is to help businesses and organisations understand the law and the ICO's recommendations for good practice.

See: Guidance on biometric data | ICO
 
National Manufacturing Day 2023
National Manufacturing Day is on Thursday 28 September 2023. Manufacturers throughout the UK will once again be opening their doors to members of the public who will be invited into factories and sites for a behind-the-scenes look at how Manufacturers' facilities work, as part of this UK-wide Open House.

Local communities will have the chance to see the potential careers and jobs on offer within the wonderfully diverse manufacturing sector, as employers engage with all age groups - from school leavers, graduates, people looking to reskill, and the local residents. 

For Make UK and Manufacturers, this is an opportunity to showcase the diversity of a truly fascinating sector, the range of highly skilled jobs on offer, and the amazing opportunities for reskilling and career development within manufacturing in the UK.

Join the ever-growing number of employers who have pledged to open their doors on National Manufacturing Day and help to grow the awareness of manufacturing and the fantastic careers which can be made for the next generation.

See: Home | NMD 2023 (nationalmanufacturingday.org)
 
AI Safety Summit 
The AI Safety Summit will take place on the 1st and 2nd November at Bletchley Park.

The summit will bring together key countries, as well as leading technology organisations, academia, and civil society to inform rapid national and international action at the frontier of Artificial Intelligence (AI) development.

The summit will focus on risks created or significantly exacerbated by the most powerful AI systems, particularly those associated with the potentially dangerous capabilities of these systems. For example, this would include the proliferation of access to information which could undermine biosecurity. The summit will also focus on how safe AI can be used for public good and to improve people’s lives – from lifesaving medical technology to safer transport.

The summit will draw on a range of perspectives both prior to and at the event itself to inform these discussions. The UK government has stated that it looks forward to working closely with global partners on these issues to make frontier AI safe, and to ensure nations and citizens globally can realise its benefits, now and in the future. As part of an iterative and consultative process, the UK is now sharing the five objectives which will be progressed. These build upon initial stakeholder consultation and evidence-gathering and will frame the discussion at the summit:

• a shared understanding of the risks posed by frontier AI and the need for action;
• a forward process for international collaboration on frontier AI safety, including how best to support national and international frameworks;
• appropriate measures which individual organisations should take to increase frontier AI safety;
• areas for potential collaboration on AI safety research, including evaluating model capabilities and the development of new standards to support governance; and
• showcase how ensuring the safe development of AI will enable AI to be used for good globally.

Accelerating AI investment, deployment and capabilities represents enormous opportunities for productivity and public good. The emergence of models with increasingly general capabilities, and step changes in accessibility and application, have created the prospect of up to $7 trillion in growth over the next 10 years and significantly faster drug discovery.

However, without appropriate guardrails, this technology also poses significant risks in ways that do not respect national boundaries. The need to address these risks, including at an international level, is increasingly urgent.

Individual countries, international organisations, businesses, academia, and civil society are already taking forward critical work and driving international collaboration on AI including at the UN, Organization for Economic Co-operation and Development (OECD), Global Partnership on Artificial Intelligence (GPAI), Council of Europe, G7, G20, and standard development organisations. The summit will build on these important initiatives by agreeing practical next steps to address risks from frontier AI. This will include further discussions on how to operationalise risk-mitigation measures at frontier AI organisations, assessment of the most important areas for international collaboration to support safe frontier AI, and a roadmap for longer-term action.

See: UK government sets out AI Safety Summit ambitions - GOV.UK (www.gov.uk)
 
New Hospitality Employment Programme
The pilot scheme, set to launch in Liverpool before being rolled out to other major cities over the coming months, will see benefit claimants gain an industry recognised accreditation, endorsed by industry leaders including Greene King, Marriot Hotels, and ACC Liverpool.

The Hospitality Sector-based Work Academy Programme (SWAP) combines a programme of learning launched by the Department for Work and Pensions (DWP) in collaboration with UKHospitality.

The scheme is designed to provide tailored training for jobseekers from industry experts, allowing them to move into a career in hospitality, while boosting workforce participation in the sector and helping to grow the economy.

Benefit claimants will complete qualifications and accredited training in areas such as health and safety, food safety, licensing, and conflict resolution to add to their Hospitality Skills Passport – a digital pass which can be added to CVs to show employers jobseekers have the skillset required by the sector.

They will also receive training in confidence and assertiveness to build personal skills and strength.

The programme will culminate with a guaranteed job interview for all participants, helping jobseekers with an opportunity to apply their new skills and a pathway to apprenticeships.

See: Government joins forces with industry to create next generation of hospitality leaders - GOV.UK (www.gov.uk)

15th September 2023 – Hillmans Weekly Update

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!

Have a great weekend. 

Kind regards,

Steve

Steven Hillman BSc (Hons) FCA
Chartered Accountant
Tel: 01934 444100
https://www.hillmans.co.uk

Going digital – The need for speed!

The trend towards paperless office solutions is rapidly increasing, whether it is to improve business efficiency or realise environmental goals. Our most profitable clients have already streamlined their internal procedures and are getting the most out of their teams by going paperless, in a variety of areas.
 
Below are some ways you can become paperless in your business and examples of the benefits we have seen in our clients.   
Storing information using cloud storage
Customer information, contracts, and sensitive employee information are held by most businesses and, if on paper, the risk of data loss is much greater than an online secure portal. 

Using a conventional filing system means it can be difficult to limit access to those files to only those who need to know. Once the filing cabinet is unlocked, anyone can go the files, creating a risk of escaping information. 

The reality is that saving information on the cloud is the safest place to save sensitive data. Online storage has: 

• Constant security updates: Regular and automated updates are carried out by cloud storage providers to ensure their software is updated. Since this happens on the backend, you do not have to worry about updating the system yourself.
• Firewalls: Cloud software is inherently secure against cyberattacks and viruses through its firewalls, which are pre-installed applications that block malicious activity and prevent it from entering. 
• Data encryption: Cloud providers encrypt data which means they scramble it and make it unreadable to everybody apart from approved users. 
• Two factor authentication: Shutting information behind a two-factor authorisation mechanism, which forces the user to input two pieces of information to access the files, makes it much more difficult for hackers and data miners. 

Online payroll software
Eliminating paper payslips and switching to online payroll software can lower administration and give your finance team more time to focus on their critical tasks. An online payroll system can also ease the fear for employees of not being paid on time. 
Using a paperless payroll system will: 

• Increase security: Online payroll systems are encrypted and password protected.
• Be easier to manage: Modern payroll software automates the payroll process, eliminating the necessity to manually compute tax and national insurance as well as print payslips.
• Most employees notice only minor differences when switching to a paperless payroll system, such as receiving an email notification instead of a letter. Plus, your finance team will have a more secure and manageable system to work with. 

Digital receipts when claiming expenses
When claiming expenses, it is often a struggle to remember dates and amounts and keep safe all the paper receipts! You can make everything easier and reduce your paper trail by using digital receipts. 

For example, many of our clients use an App on their phone to take a picture of their receipts, which is then automatically processed by the software and posted directly into your accounting software, with a summary being produced for the employee to claim back the expense from the business.

Digital receipts are becoming ever more popular, and they are not only used for sundry expenses. Most retailers now provide eInvoices and, where you still receive paper invoices, you can also use software to scan and digitise them into your accounting software directly.  

Online accounting software
Paper always seems to gather and is easily lost, no matter how well organised your filing cabinets are!  Cloud-based accounting software can help reduce this problem. The software enables you to process sales, purchases, receipts, and payments without needing to invest in costly infrastructure and the dreaded annual license fee! Most cloud providers charge a reasonable monthly subscription and access to the software for bookkeeping is 24/7, 365.      

Just suppose you:

• Took a photo on your phone of a purchase invoice and it was posted automatically;
• Had a system where your bank fed your data directly into your accounts on a DAILY basis; and
• Could see your results, who owes you money, who you owe and your business bank balance 24/7, 365 from your smart phone.

We can help you put in a cloud accounting package and get you:

1. A clear picture of your current financial position, in real time.
2. Putting your books 100% online, so there’s no software to install and everything is backed up automatically; and
3. Eliminating upfront accounting software costs – upgrades, maintenance, system, and administration costs are no longer an issue.         

Please talk to us about the advantages of a cloud accounting package, you will be amazed what a difference knowing your results in real time makes to your business! 
 
Google AI training for start-ups and small businesses
Google have launched AI (Artificial Intelligence) focused online training for people and businesses to help capture the benefits of AI, whether it’s to save time, get a new job, or grow your business. 
 
The modules are packed with practical advice and tips focused on essential AI skills including:

Boost your productivity with AI
This session introduces learners to cutting-edge AI tools that are already available from Google and others, to show some of the smartest ways digital-age workers can use them to save time at work and on tasks. In this session you will learn:

• An introduction to generative AI and how it works;
• How to use AI-powered tools and techniques to save you time; and
• An overview to crafting effective prompts.

See: Boost your productivity with AI (rsvp.withgoogle.com)

Understanding machine learning
Aimed at small business leaders/owners or anyone looking to get a better understanding on the subject, this session covers:

• How different machine learning models work;
• The essentials for preparing data for a machine learning project; and
• Options for implementing machine learning for a business.

See: Understanding machine learning (rsvp.withgoogle.com)
 
Action Fraud warns of remote access scams
Action Fraud has received over 30 crime reports since June 2023 relating to remote access scams targeting businesses, with victims reporting losses totalling over £3.8 million.

Based on analysis of crime reports by the National Fraud Intelligence Bureau, Action Fraud advises that scammers will generally use the following tactic to target businesses:

• Contact the victim claiming to be a representative from their bank or from a financial services vendor used by the victim’s business.
• Convince the victim to install a piece of software that enables remote access to their computer, claiming that it is required to install an important software update.
• At some point during the call, the victim is instructed to login to their online banking account. Once the victim has done this, the remote access software is used to blur the victim’s screen whilst the scammer makes fraudulent transactions from the victim’s account without their knowledge.
• The victim is also asked to read out a series of numbers the scammer claims they have sent to the victim’s mobile. In reality, the numbers are a one-time verification code from the victim’s bank which, if shared with the scammer, will allow them to transfer money out of the victim’s bank account.

Some victims reported a slightly different account of how the scam was perpetrated. However, the goal of the scammers usually remains the same – to convince victims to login to their online banking account whilst the scammer has remote access to their computer.

To protect against remote access scams, conduct your business in line with the following advice:

• Never install any remote access software on your device as a result of an unsolicited call, browser pop up, or text message. Your bank will never ask you to grant them remote access to your computer or smartphone.
• Do not share with anyone, not even bank employees, the one-time verification codes sent to you by your bank to authorise transactions on your account.
• If you believe your laptop, PC, tablet or phone has been infected with a virus or some other type of malware, follow the National Cyber Security Centre’s guidance on recovering an infected device.
• If you receive a suspicious call from someone claiming to be from your bank, hang up, wait a few minutes, then call your bank using the contact number on the back of your debit card, or use the contact information on their official website or app.
• If your business has fallen victim to fraud or cyber-crime, report it to Action Fraud online or by calling 0300 123 2040. If you are a business, charity or other organisation which is currently suffering a live cyber-attack (in progress), please call 0300 123 2040 immediately.

See: Action Fraud
 
Find a grant service
Find a grant is a UK government service that allows businesses to search all UK government-funded grants. Businesses can use the website to browse or search for available grants, check if they are eligible, and find out how to apply for each grant.

Anyone can use the UK government Find a grant service to find and apply for grant funding. Each funding opportunity has its own eligibility criteria and scope. There is no cost to use this service. 

You can also sign up to get updates about new grants.

See: Home - Find a grant (find-government-grants.service.gov.uk)
 
HMRC Overlap relief form – Unincorporated businesses
Businesses that are sole traders, partners of trading partnerships, and members of LLPs who pay income tax on the profits of their businesses are subject to the new basis period method of taxation.
 
For tax year 2024/25, business owners will be subject to a tax year basis of taxation. This means that they will be taxed on profits arising in the tax year concerned, regardless of their accounting date.

Special rules apply for the 2023/24 tax year to help transition non-tax year end businesses from the existing accounting year end method of taxation to a tax year basis. This means that all overlap relief that the business has been carrying forward must be offset against profits in the 2023/24 tax year.

There is a new online form to request overlap information that allows unincorporated businesses to request the information HMRC holds on the available overlap relief that needs to be claimed for the 2023/24 transition year. This form was launched on the 11 September and, given the recent delays experienced by taxpayers trying to call HMRC or get a timely response to 

Please contact us if you need assistance with changing your accounting year end or understanding the new system as we have expertise in performing the new calculations and advising business owners in this complicated area.
 
National Work Life Week 2023
National Work Life Week 2023 is taking place from 2 October to 6 October.

The week is an opportunity for both employers and employees to focus on well-being at work and work-life balance.

Employers can use the week to provide activities for staff, and to showcase their flexible working policies and practices.

See: National Work Life Week - Working Families 

8th September 2023 – Hillmans Weekly Update

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!

Have a great weekend. 

Kind regards,
 
Steve
 
Steven Hillman BSc (Hons) FCA
Chartered Accountant
Tel: 01934 444100
https://www.hillmans.co.uk

Is your business attracting new talent?
Recruiting new employees is tough just now so be different! For example, some employers are now offering “Wellbeing leave” in addition to the usual holiday package. If you want to recruit more, you have to get serious about the process and be on it 24/7, 365!

There are a number of actions you can take to make your business attractive to new staff. In addition to reviewing your pay and conditions to be as competitive as possible, these include:

• Tasking recruitment as a permanent process; 
• Regularly asking existing staff, customers, and suppliers for introductions;
• Offering incentives for referrals;
• Make sure you are running constant online social media and local advertisements;
• Embracing flexibility in hours and location in your business;
• Introducing a “Golden Hello” and loyalty bonusses for length of service (typically one to three years);
• Advertising testimonials from existing staff;
• Using government initiatives for apprentices (if available in your area);
• Make your company and the job sound as attractive as possible by outlining the position to sound prestigious and challenging. These two factors are big incentives for bright potential candidates;
• Knowing that job satisfaction comes from feeling respected and having the opportunity to learn new things and excel in the face of obstacles when advertising the role; and
• Convey your business’s personality so potential employees get a feel for what it would be like to work for you;

Useful guidance on the procedures for recruitment can be seen in the ACAS guide “Recruiting staff” which can be seen here: Recruiting staff (acas.org.uk)
 
Post-Brexit import checks delayed for fifth time
The UK government has announced a fifth delay to post-Brexit checks on EU imports amid concerns the new system would fuel food inflation. The first stage of the new border controls, which have already been delayed four times, was due to be rolled out this October but now won't be implemented until January 2024. The UK government says this the timetable is being revised to give businesses more time to prepare for the changes, which include more health and safety checks on food and animal products entering the country.

In April 2023, the UK government published a draft ‘Border Target Operating Model’, applicable to imports from all countries into Great Britain, including the EU. In it, they outlined how their proposals sought to balance the need for effective border controls with the need to support businesses with import processes that are as simple as possible.

After feedback from stakeholders and attendees at workshops and seminars, businesses and the border industry highlighted where further detail was needed to prepare for the model and set out a range of challenges that implementation of the new model would present. These were focussed both on new complexity and costs that would be introduced into the supply chain, as well as the timing of the introduction of new controls. In particular, businesses highlighted that their supply-chains would need time to adapt to new controls. This was particularly important in relation to the requirement for health certification which will require action from EU suppliers.

In response to this feedback, the UK government has decided to push back some of the implementation milestones for the Border Target Operating Model in order to give businesses more time to prepare. They say they will implement the Border Target Operating Model from January 2024 onwards, beginning with the introduction of health certification on relevant EU goods. This will bring the launch of the Border Target Operating Model closer to the upcoming simplification of border requirements through the new UK Single Trade Window. They say they have also sought to respond to stakeholder feedback to improve the wider model and provide further detail on its implementation.

See: The Border Target Operating Model: August 2023 - GOV.UK (www.gov.uk)
 
One-stop-shop to help businesses save money and go green
British businesses will be able to access advice and support to reduce their energy bills while cutting their carbon emissions.

The UK Business Climate Hub, launched in August, includes a free carbon calculator and a suite of new tools to help businesses measure, track, and report on their emissions and save money by using less energy. It offers detailed advice on everything from sourcing products from green suppliers and reducing emissions from freight and logistics to the most cost-effective ways of installing solar panels and electric vehicle (EV) charging points.

Research shows that such measures can save companies on their overheads. For example:

• switching to EVs can not only cut running costs but also lower servicing and maintenance costs by around 40% compared to petrol or diesel cars;
• with up to half of companies’ overall electricity bill coming from lighting, making changes such as switching to LED bulbs can help shave up to 40% off bills; and
• giving drivers fuel efficiency training can help save companies an average of 15% on fuel use and carbon emissions in transporting goods.

The new support is aimed particularly at 5.5 million small and medium sized businesses (SMEs) in the UK, with business and industry accounting for around 25% of emissions. Research shows that 90% of SMEs are keen to tackle climate change but find it difficult to know how or where to start to find the right solutions to reduce their carbon footprint.

Studies also show 85% of consumers are more likely to buy from a business with a reputation for sustainability, meaning going green can help grow the economy.

See: One-stop-shop to help businesses save money and go green - GOV.UK (www.gov.uk)
 
Dementia-friendly businesses
Dementia is one of the greatest challenges we face in society today. All businesses can contribute to tackling the social and economic impact of dementia.
Statistics show that less than half (47%) of people living with dementia feel a part of their community (Alzheimer’s Society, 2013), and 28% said they have
given up even getting out of the house.

Businesses and organisations can make a big difference for people with dementia and their carers by making a commitment to become more dementia-friendly. Becoming a dementia-friendly business is not only a socially responsible step but can also bring economic benefits.

Find out how your business can become more dementia-friendly and get our free guide. From retail to housing, utilities to entertainment, finance to transport, all sectors have a part to play.

See: Dementia-friendly businesses | Alzheimer's Society (alzheimers.org.uk)
 
EU Settlement Scheme: information for employers - Update
The EU Settlement Scheme (EUSS) was established to enable EU, EEA and Swiss citizens resident in the UK by 31 December 2020, and their family members, to get the immigration status they need to continue to live, work, study, and access benefits and services, such as healthcare, in the UK after 30 June 2021. For those citizens resident in the UK by 31 December 2020, the deadline for applications was 30 June 2021.

The UK government have recently updated their EU Settlement Scheme guidance and in conducting right to work checks when recruiting EU, EEA and Swiss citizens from 1 July 2021 onwards. Support is available for employers on the website below.

See: EU Settlement Scheme: information for employers - GOV.UK (www.gov.uk)
 
The Information Commissioner’s Office (ICO)
The ICO upholds information rights in the public interest, promoting openness by public bodies and data privacy for individuals. ICO is an executive non-departmental public body, sponsored by the Department for Science, Innovation and Technology.

If you are looking for some answers to data protection issues, then the ICO website is worth a visit. They give advice on all areas of data protection, including:

• UK General data protection regulation;
• Direct marketing;
• Data protection and the EU;
• Network and information systems;
• Freedom of information and access to information requests;
• Law enforcement;
• Electronic identification and trust services; and
• Intelligence services.  

See: For organisations | ICO
 
Innovation in Professional and Financial Services competition
Innovate UK, part of UK Research and Innovation, is investing up to £5 million to support digital innovation within Professional and Financial Services.

This competition aims to advance the Professional and Financial Services sectors by supporting them in the creation and adoption of digital approaches and new digitally supported services.

To be eligible, projects must:

• have a total grant funding request between £50,000 and £200,000;
• start by 1 April 2024;
• last between 6 and 18 months;
• carry out all of the project work in the UK; and
• intend to exploit the results from or in the UK.

Your proposal must show how you will help these sectors:

• to deliver better products and services;
• increase access to these services; and
• make these services more effective for their customers.

This competition is split into two strands and will close for applications on Wednesday 27 September 2023.

See: Innovation in Professional and Financial Services – single applicants
See: Innovation in Professional and Financial Services – collaboration
 
Environmental taxes, reliefs and schemes for businesses
The government states that environmental taxes “encourage your business to operate in a more environmentally friendly way”. There are taxes and schemes for different types and size of business.

You may get reliefs or be exempt from some taxes, for example if:

• you use a lot of energy because of the nature of your business;
• you’re a small business that does not use much energy; or
• you buy energy-efficient technology for your business.

You can pay less tax by applying for schemes to help you demonstrate that you’re operating more efficiently and producing waste that’s less damaging.
See: Environmental taxes, reliefs and schemes for businesses: Overview - GOV.UK (www.gov.uk)
 
Location data can help build the EV chargepoint network of tomorrow
A new report seeks to support local authority decisions about electric vehicle (EV) chargepoint rollout. The transition to EVs will be enabled by a dependable public charging network and local authorities are ideally placed to identify their local charging needs.

By 2030, the sale of new petrol and diesel cars will be phased out and by 2035 all new cars and vans will be zero emission. The transition to EVs will be enabled by a dependable, well located public charging network that local authorities are ideally placed to help deliver.

Location data can arm local authorities with evidence to rollout a public charging network that gives current and prospective EV owners the confidence to make their journeys, whether in a densely populated city or the countryside. Drivers need to have the same confidence that they can charge their EV as they have that they can refuel their current petrol or diesel vehicle, so they can go about their business unimpeded.

See: Charging Ahead: Using location data to boost local EV chargepoint rollout - GOV.UK (www.gov.uk)
 
Deadline for Countryside Stewardship applications extended
The application window for 2024 Countryside Stewardship Mid-Tier agreements has been extended until Friday 15th September to allow more time for people to submit their applications online, following direct feedback from farmers.

Countryside Stewardship plays a significant role in the Government’s efforts to make food production more resilient whilst contributing towards the UK’s environmental goals, such as biodiversity and water quality. By extending the application window, farmers can apply and be paid for environmental work alongside sustainable food production, from restoring wildlife habitats and managing woodlands, to mitigating flood risks.

The scheme is popular in the sector and has continually evolved following farmer feedback, with 32,000 agreements already successfully in place across England for 2023. This represents a 94% increase in uptake since 2020 – including nearly 26,000 Mid-Tier agreements – and additional investment has been put into online systems to increase capacity. This has supported a further high level of interest this year.

There have been some technical issues which have been experienced by a small number of some applicants when submitting their applications. These have now been resolved. The Rural Payment Agency has been working closely with affected applicants and agents to support applications, with actions taken to resolve issues as quickly as possible and systems put in place to assist farmers through the process.

Further improvements to the online system are already in train, including greater flexibility over when farmers can apply and how they manage their agreements.

See: Deadline for Countryside Stewardship applications extended - GOV.UK (www.gov.uk)
 
Application dates for Sustainable Farming Incentive 2023
Farmers can sign up for the Sustainable Farming Incentive (SFI) from 18 September and are invited to register their interest now, the Rural Payments Agency, Defra has announced.

The dates provide certainty and pre-registration will ensure farmers are supported to have all necessary information in place, including online maps and land use/cover details, so they are ready for when the scheme starts to accept applications from 18 September.

The SFI pays farmers for taking actions that support food production, farm productivity and resilience, whilst protecting and enhancing environment.

There are 23 actions on offer under the new and improved 2023 scheme, including on soil health, moorland, hedgerows, integrated pest management, farmland wildlife, buffer strips, and low input grassland.

See: Government announces application dates for Sustainable Farming Incentive 2023 - GOV.UK (www.gov.uk)
  
New steps will speed up Sizewell C preparations
Steps to further speed up preparations to make the site at Sizewell C in Suffolk shovel-ready were announced last week, as part of a drive to create a new generation of nuclear power stations in the UK.

Ministers today made available a further £341 million of previously allocated funding for development work on the project. The extra money will help prepare the site for construction, procuring key components from the project’s supply chain, and expanding its workforce.

It would see activity ramp up at the Suffolk site, supporting continued preparation works, such as constructing onsite training facilities for 1500 apprenticeships, further development of the plant’s engineering design, and direct investments in the local community ahead of work starting. The funding would build on the government’s existing £870 million stake and help drive progress towards the long-standing objective of reaching a Final Investment
Decision on a new large-scale nuclear project this Parliament.

Sizewell C could provide reliable, low-carbon power to the equivalent of 6 million homes over 60 years – saving the UK as many as 9 million tonnes of CO2 emissions each year. At the peak of construction work, it could support 10,000 jobs nationwide, with 70% of the value of construction contracts in the supply chain going to UK businesses.

See: New steps will speed up Sizewell C preparations - GOV.UK (www.gov.uk)

1st September 2023 – Hillmans Weekly Update

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!

Have a great weekend. 

Kind regards,
 
Steve
 
Steven Hillman BSc (Hons) FCA
Chartered Accountant
Tel: 01934 444100
https://www.hillmans.co.uk

The importance of a shareholders agreement   
For limited companies, when it comes to making decisions, Company Law states shareholders who own more than 50% can pass a motion at a company meeting regardless of the views of other shareholders and if a shareholder(s) owns 75% or more of the shares they, control the company outright and can veto the decisions of all other shareholders. 
 
This may not suit all business situations, especially where you have two or more founders holding equal share capital or a group of owners with varying amounts of capital, some of whom are directors and some who are not, but who are all working together for the company’s success.

A shareholders’ agreement is entered into between all or some of the shareholders in a company. It regulates the relationship between the shareholders, the management of the company, ownership of the shares and the protection of the shareholders. They also govern the way in which the company is run.

The agreement can help define how a business makes decisions to the benefit of all owners and is recommended where:

• A small number of owners want to reach collective and fair decisions for the benefit of all;
• Some owners may want to be able to influence decisions that are particularly relevant to them;
• Some shareholders may not be directors and cannot influence operations on a day-to-day basis;

Typically, it is seeking to deal with the three “D’s” of death, disability and disagreement. It may also cover a variety of other significant areas for example, retirement and buy back of shares. 

Key areas for any shareholder agreement
This is not a comprehensive list, as each situation is different, but it may help you collect the thoughts of all shareholders before you draw up an agreement.

1. Company details including structure, directors, and officers
2. Purpose and aims of the company
3. Equity split of shareholders
4. Parties to the agreement
5. Shareholders rights, obligations and commitments
6. Decision making processes on major issues, required voting majorities and day to day operating decisions
7. Restrictions on the sale of shares
8. Rights of first refusal and pre-emptive rights to acquire shares on leaving, retirement, death, or disability
9. Death, disability, and other retirement compensation payments
10. Management contracts, director approval, and remuneration amounts
11. Insurance and other protective requirements
12. Professional advisers and change of professional advisers
13. Dispute resolution
14. Changes to and termination of the agreement
15. Buy out provisions for leaving shareholders
16. Valuation of shares on changes and valuations of the business

Our view is that a shareholders agreement is an essential document for any limited company and an equitably drafted agreement should provide comfort to all involved parties.

Please talk to us if you need help in planning for an agreement, especially where there are several shareholders, a new company is being formed, a shareholder wants to sell their shares or pass them to their children, someone is nearing retirement, or the company has borrowed money from a shareholder. We can help with share and company valuations and putting the shareholders wishes into an agreement with a local solicitor.
 
Do you want to grow your business?
Then ask us for a copy of our guide called “57 Ways to Grow Your Business”!

Our publication is packed full of bright Ideas for the Serious Entrepreneur and starts with the four basics of growth. All the ideas in this guide ultimately revolve around four basic insights about growing a business. You can:

1. Increase the number of customers;
2. Increase the number of times each one does business with you;
3. Increase the average value of each transaction; and
4. Increase your own effectiveness and efficiency.

Here are some other business principles that we explore in the guide:

• What you can measure, you can manage;
• Build in unique core differentiators and focus on them constantly;
• it’s more important to be different than it is to be better;
• Cutting the price is always an option but there is usually a better way – increasing value;
• Break compromises and lower the barriers to people doing business with you;
• Systemise every aspect of your business;
• Empower your team to make it right for every customer; and
• Create a clear and detailed action plan.

Ask us for a copy – you never know there may be a gem or two in there for you to help you grow faster!
 
Managing drug and alcohol misuse in the workplace
Employers have a legal duty to protect employees’ health, safety, and welfare and understanding the signs of drug and alcohol misuse (or abuse) will help you manage health and safety risk in your workplace.

The HSE website has step-by-step guidance to help you manage drug and alcohol misuse at work.

This includes advice on how to develop a drugs and alcohol policy and what you can do to support your employees.

See: Managing drug and alcohol misuse at work - Overview - HSE
 
Employers should prepare for a warmer future
The Health and Safety Executive (HSE) is advising businesses to think how they need to adapt to warmer working conditions for their staff.

After this year’s record-breaking temperatures and with more hot weather this month, HSE is asking employers to ensure extreme heat becomes part of their long-term planning.

Adapting to climate change is something all businesses will need to consider as warmer weather becomes more frequent.

Employers have a legal obligation under the Management of Health and Safety at Work Regulations to assess risks to the health and safety of workers. They must review the risk controls they have in place and update them if needed. This includes risks from more frequent extreme weather such as heatwaves.

While there is no maximum temperature for workplaces, all workers are entitled to an environment where risks to their health and safety are properly controlled. Heat is classed as a hazard and comes with legal obligations like any other hazard. The Workplace (Health, Safety and Welfare) Regulations require employers to provide a reasonable temperature in the workplace.

See: Temperature at work

Young people at work
The Health and Safety Executive have a dedicated webpage for employers reminding them of the need to be extra cautious with the safety of young people. 

When you employ young people under the age of 18, you have the same responsibilities for their health, safety and welfare as you do for other workers.

This applies whether they are:

• a worker,
• on work experience, or
• an apprentice.

Young people are likely to be new to the workplace and so are at more risk of injury in the first six months of a job, as they may be less aware of risks.

They will often be vulnerable, as they may:

• lack experience or maturity;
• not have reached physical maturity and lack strength;
• be eager to impress or please people they work with; or
• be unaware of how to raise concerns.

Young people need clear and sufficient instruction, training, and supervision so they understand the importance of health and safety and can work without putting themselves and other people at risk. They may need more supervision than adults.

Work experience and work-based learning will be the first time most young people experience the work environment.

Good preparation and organisation of placements is essential if these opportunities are to be helpful and safe introductions to work.

If your workplace has health and safety representatives, they can play a valuable role early on by:

• introducing the young person to the workplace;
• helping with their ongoing training; and
• giving employers feedback about particular concerns.

See: Young people at work - Overview - HSE
 
What is Working Capital Finance?
Working capital finance solutions offer businesses the opportunity to improve cash flow. The world of commercial finance and asset-based lending (ABL) is complex and expansive with products, terminology and contractual interpretation varying from lender-to-lender.

The Benefits of arranging Working Capital are:

• Up to 90% of outstanding invoice value can be advanced within 24 hours;
• Flexible lending - funding increases in line with your growth (UK and Export);
• Confidentiality - lenders can offer a completely confidential service – your customers need not know you have a facility in place;
• Lenders allow you to manage your funding at all times;
• Sector-specific finance is often available;
• Structured ABL - funding for management buy-outs/management buy-ins; and
• Trade Finance & Supply Chain Finance Solutions.

Specialists in this area can advise on:

• Invoice Finance - an effective way of quickly accessing a proportion of the value (up to 90%) of your invoices. Effectively, a business ‘sells’ its invoices to the lender in return for accessing cash at the point products and services are sold. Specific sector-based offerings are available, as is the ability to arrange finance for selected invoices only.
• Structured ABL - generate a higher level of funding by unlocking the maximum value tied up in the combined assets within your business, including Debtors, Inventory, Plant & Machinery and Property. Additional forms of funding can be structured in addition to this, such as top up loans in order to drive growth.
•  Trade Finance - supply chain finance with various options, enabling the purchasing of goods from overseas where you are otherwise unable to obtain credit from suppliers.

Typically, you will need to ensure your management accounts are up to date, you make available current detailed lists of debtors and creditors, and you might need up to date projections before an expert will consider your application.
 
The Ideas Marketplace
The Ideas Marketplace is an online collaboration platform offering opportunities for innovative defence and security organisations to network and collaborate with UK government stakeholders, end-users, innovators, industry, and academia. The platform can be used to forge new relationships and foster collaboration between dynamic organisations of all shapes and sizes.

The platform has been designed to enable collaboration with other innovators across the UK and to help organisations gain expertise and specialist support to develop their technologies to make them successful.

See: Home | Ideas Marketplace (mod.uk)
 
Start date for major overhaul of Plymouth flood defence barrier
Work is set to start in September 2023 on a major £3m repair and maintenance project for Plymouth’s lock gates. They form a key part of the city’s coastal defences, protecting hundreds of homes and businesses from flooding, and providing access to the marina and fish quays in the Sutton Harbour and Barbican area of the city.

The project is being managed by the Environment Agency, with funding from the UK Government, and will see the replacement of worn lock gate sills and other key maintenance items. Work will be carried out by leading UK construction and infrastructure services specialists Kier.

See: Start date for major overhaul of Plymouth flood defence barrier - GOV.UK (www.gov.uk)
 
Unlocking agricultural innovation
More than £14 million is to be made available to unlock innovation and develop solutions in the farming sector in two new research and feasibility competitions under the Farming Innovation Programme, Defra announced earlier this month.

It is part of the government’s delivery of its commitment to invest £600 million in innovation and productivity in the sector over three years and adds further support to the development and take-up of innovative practices on farms to boost productivity and sustainability whilst meeting net zero targets.

The competitions are open to farmers, growers, foresters, research organisations and businesses involved in agriculture to collaborate on novel ideas and solutions.

Previous rounds have led to investment in automations to improve soft fruit yield; a ‘herd’ of lightweight, battery-operated, asparagus-harvesting robots; and the use of ultraviolet as a disinfectant in the dairy and poultry sectors.

See: £14 million to unlock agricultural innovation - GOV.UK (www.gov.uk)