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
How much is my business really worth?
This is a question many business owners want answering. The truth is, it depends on a range of factors and any valuation is only useful as a guide for planning forward. The ultimate value of a business is the price a willing buyer is prepared to pay for it.
The prevailing economic climate and state of the business’ sector can affect company valuation for better or worse, as can your reasons for selling. If you need a fast sale due to ill health, for instance, the value may be lower than if a sale was taking place under more favourable circumstances.
Valuing a business is a complex process and we can support you throughout.
So, what are the most common methods of valuing a business?
Price to earnings ratio (P/E)
The price to earnings ratio uses multiples of profit, so may be an appropriate valuation method if you own a well-established business with a good track record of profits. ‘Price’ refers to the company’s current share price, and ‘earnings’ to the earnings per share (EPS). The P/E ratio indicates the business’s expected growth in earnings per share in the future.
Discounted cash flow
Discounted cash flow relies on estimating future cash flows for the company, and a residual business value, and may be suited to businesses with few assets.
Entry cost
Entry cost valuation involves calculating how much it would cost to build your business to the stage that it’s reached now, including start up and recruitment costs, marketing, and the value of assets. Any savings that could have been made should then be deducted to arrive at the valuation.
Asset valuation
The asset valuation method may be suitable if your business is well established and owns high levels of tangible assets. The Net Book Value (NBV) of assets is calculated, and then adjusted to take account of external factors such as depreciation and inflation.
Valuation based on industry
Some businesses are valued based on the industry in which they operate. The retail industry is one such example, where the number of outlets is an essential element for consideration. Industry ‘rules of thumb’ use factors specific to an industry and can provide a more accurate calculation in some cases.
Other considerations when valuing your business
Intangible assets are a key factor when valuing a business. Intellectual property, goodwill, business reputation, and even a premium business location, can all add considerable value in the eyes of potential purchasers.
Spotlighting these intangible assets also allows you to improve their value where appropriate – for example, registering ownership of a trademark or patent, building up their reputation even further, or improving the condition of premises.
Please talk to us about valuing your business as this can lead to a range of important considerations and actions.
Self-Assessment – less than 90 days to go!
There are less than 90 days to go until the deadline for filing your Self-Assessment return online.
You need to file your return by 31 January 2024. Filing your return early is an option and means you can find out how much you owe and help you budget and plan for your payment. If you are due a refund, you can claim it back sooner.
If we’ve already sent HMRC your return and you’ve paid, you don’t need to do anything else.
If you need assistance in completing your tax return please contact us ahead of the deadline and we will do our best to make sure it’s accurate and filed on time.
Tax-Free Childcare costs
HM Revenue and Customs (HMRC) is reminding working families to give their childcare budget a boost by opening a Tax-Free Childcare account.
Parents can use Tax-Free Childcare to help with childcare costs for school holiday clubs, breakfast or after school clubs, childminders or nurseries.
You can get up to £500 every 3 months (up to £2,000 a year) for each of your children to help with the costs of childcare. This goes up to £1,000 every 3 months if a child is disabled (up to £4,000 a year).
If you get Tax-Free Childcare, you will have to set up an online childcare account for your child. For every £8 you pay into this account, the government will pay in £2 to use to pay your provider.
You can get Tax-Free Childcare at the same time as 30 hours free childcare if you’re eligible for both.
You can use it to pay for approved childcare, for example:
- childminders, nurseries and nannies; and
- after school clubs and play schemes.
If your child is disabled
You can use the extra Tax-Free Childcare money you get to help pay for extra hours of childcare. You can also use it to help pay your childcare provider so they can get specialist equipment for your child, such as mobility aids. Talk to them about what equipment your child can get.
See: Save up to £2,000 a year on childcare costs for your little pumpkins - GOV.UK (www.gov.uk)
Funding for digital supply chain innovation
Up to £100,000 is available for tech solution providers to address critical supply chain challenges across textiles, farming, hydrogen, food and automotive sectors.
The Made Smarter Innovation | Digital Supply Chain Hub (DSCH) is inviting expressions of interest from businesses interested in developing and deploying digital technology solutions in the DSCH testbeds.
A supply chain testbed can be defined as an end-to-end supply chain environment, where technologies can be deployed and tested using real data but without risking business disruption.
Together with the testbed companies, the DSCH has identified seven potential challenge areas:
- standardised naming system for automotive spare parts;
- project finance and market modelling in the emerging hydrogen supply chain;
- digital product passport for the textile supply chain;
- connected life cycle assessment in the textile supply chain;
- logistics pricing engine in the textile supply chain;
- data driven best before date in the food supply chain; and
- a marketplace for investment in sustainable farming.
See: Unlock Funding for Digital Supply Chain Innovation - Expression of Interest - Made Smarter Digital Supply Chain Hub - Virtual Hub
How can digital marketing help your business?
There are numerous benefits to businesses, enabling you to thrive in the digital age and stay ahead of the competition. Let's explore some of the ways digital marketing can help you.
Cost-Effective Marketing: Compared to traditional marketing methods, digital marketing is often more cost-effective. Online advertising, email, and content marketing campaigns can be tailored to fit various budgets, making it accessible for businesses of all sizes.
Content Marketing: Creating valuable content such as blog posts, eBooks, and webinars can establish you as the expert in your field.
Enhanced Online Visibility: Strategies such as search engine optimisation (SEO) and pay-per-click advertising (PPC) can improve your online visibility.
Targeted Marketing: You can target specific demographics and audiences. Through techniques like audience segmentation, you can tailor your marketing efforts to reach the most relevant prospects, ensuring your messages resonate with the right people.
Lead Generation: You may be able to create free content such as guides and landing pages. Email capture forms can help capture contact information from interested prospects.
Customer Engagement: Social media platforms and email marketing enable accounting firms to engage with existing clients and keep them informed about important updates, changes in tax laws, and new services.
Data Analytics: Viewing the data and results on any activity allows for continuous improvement and refinement of marketing strategies. Using tools such as Google Analytics can help you measure the effectiveness of marketing campaigns, track website traffic, and gather insights.
Competitive Advantage: If you embrace the digital landscape, you're more likely to stay relevant and attract tech-savvy clients (and staff).
Setting the right goals is crucial for success!
Goals should be specific, measurable, achievable, relevant, and time-bound (SMART). Consider objectives like increasing website traffic, generating a certain number of leads, or growing your social media following. Your goals should be aligned with your business’s overall objectives and customer needs.
Regularly track and analyse your progress using key performance indicators (KPIs) to make data-driven adjustments.
Our most profitable clients spend time on their marketing strategy. If you haven’t got a marketing plan, please ask us for a template!
Can you lower your energy bills this winter?
The UK Government have updated their ‘Help for Households‘ website for 2023.
Find out what actions you can take to get ready for winter and save money on your energy bills by reading their ‘It All Adds Up’ campaign.
The latest cost-of-living instalment of £300 is currently being paid to low-income households across the UK, without the need to make a claim.
Warm Home Discount Scheme
You could get £150 off your electricity bill for winter 2023 to 2024 under the Warm Home Discount Scheme. The money is not paid to you - it’s a one-off discount applied to your electricity bill between early October 2023 and 31 March 2024.
Find out if you’re eligible for Warm Home Discount Scheme: Overview - GOV.UK (www.gov.uk)
Global Entrepreneurship Week 2023
Global Entrepreneurship Week (GEW) is a collection of tens of thousands of events, activities and competitions each November that inspire millions to explore their potential as an entrepreneur while fostering connections with investors, researchers, policymakers and other startup champions.
This year’s takes place from 13 November to 19 November 2023.
See: Global Entrepreneurship Week | Global Entrepreneurship Network (genglobal.org)
Eureka GlobalStars Japan Round 2
UK registered businesses can apply for a share of up to £2 million to develop innovative proposals in partnership with Japan and other participating Eureka members. The competition closes on Wednesday 31 January 2024.
The EUREKA members confirmed as participating in this competition are:
- Canada,
- Czech Republic,
- France,
- Netherlands,
- Singapore, and
- Spain.
Your project must have high market potential and develop at least one of the following:
- innovative products,
- technology-based applications, and
- technology-based services.
UK participants must complete the UK application on the Innovation Funding Service (IFS) and provide all documents required by 11am UK time on the deadline stated.
See: Competition overview - Eureka GlobalStars Japan Round 2 - Innovation Funding Service (apply-for-innovation-funding.service.gov.uk)
New regulation to reform waste system
A new, simpler common-sense approach to recycling means people across England will be able to recycle the same materials, whether at home, work or school, putting an end to confusion over what can and can’t be recycled in different parts of the country.
Weekly collections of food waste will also be introduced for most households across England by 2026. The government is proposing new exemptions to make sure that waste collectors will be able to collect dry recyclables together, in the same bin or bag, and collect organic waste together, to reduce the number of bins required.
The government states that the new plans for simpler recycling will make sure that households will not need an excessive number of bins. The reforms will bring in a more convenient and practical system which prevents councils from being hit with extra complexity, while making sure all local authorities collect the required recyclable waste streams: glass, metal, plastic, paper and card, food waste, and garden waste.
This means manufacturers can design packaging and know it can be recycled across the nation, ensuring there is more recycled material in the products we buy and allowing the UK recycling industry to grow.
See: Simpler recycling collections and tougher regulation to reform waste system - GOV.UK (www.gov.uk)
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