Autumn 2022 Mini Budget

September 24, 2022 in Small Business, Tax

At a top level, last week’s mini-budget, the government’s Growth Plan and announcements on energy caps are very good news for small businesses. Excuse the pun, but in many ways, the government has put its hand into its pocket to keep the lights on for small businesses this winter. It’s also changed decades of fiscal discipline and if you believe the media and political pundits, it is a very risky move. After all, the government still needs to pay back what it borrowed to support individuals and businesses during the worst of Covid-19.

At a glance, these are the changes that impact you and your small business

Income tax: Not including Scotland

  • The basic rate has been cut by 1p to 19p from April 2023.
  • From April 2023, the higher rate of Income Tax, 45%, has been scrapped.

Corporation tax:

  • The planned increase in corporation tax from 19% to 25% has been scrapped.
  • This means that from April 2023, the rate will remain at 19% for all firms.

National Insurance:

  • The 1.25% increase in National Insurance introduced in April 2022 has now been scrapped. I.e. from November 6th 2022.
  • The Health and Social Care Levy due to be introduced in April 2023 has been scrapped.
  • No change to the threshold that individuals pay National Insurance, i.e. £12,570
  • Eligible businesses still get up to £5000 in employment allowance to reduce their annual National Insurance Liability.

Dividend tax: The 1.25% increase to rates introduced in April 2022 has been reversed from April 2023

Annual investment allowance: The temporary increase from £200k to £1m has been made a permanent increase. This gives 100% tax relief to businesses on their plant and machinery investments up to £1m.

IR35 rules changed: The 2017 and 2021 changes to off-payroll working are to be repealed from April 2023. This means workers providing their services via an intermediary will once again be responsible for determining their employment status and paying the appropriate amount of tax and National Insurance contributions.

Company Share Option Plan: From April 2023 companies can now grant up to £60k (up from £30k) of share options to each eligible employee.

Seed enterprise investment scheme (SEIS):

  • The amount a company can raise under SEIS has been raised from £150k to £250k
  • The amount an individual can invest in SEIS shares has been doubled from £100k to £200k
  • The scheme has been extended to companies with gross assets under £350k

Energy price guarantee and Energy Bill Relief Scheme:

Businesses will pay no more than £211 per megawatt hour for electricity and £75 per megawatt hour for gas. This applies to all energy supply contracts entered into after 1st April. The energy companies will apply the discount. The energy bill relief scheme will operate until March 31st 2023 and potentially be extended after this date for businesses in certain sectors.

Under the energy price guarantee, the highest amount domestic households will have to pay is 34p per kWh of electricity and 10.3p per kWh of gas. The standing charge – the fee customers pay for being connected to the energy grid – will be 46p per day for electricity and 28p per day for gas. This energy price guarantee will last 2 years. A typical household can expect to pay about £2500 a year for their energy.

Investment zones: These new investment zones will benefit from tax incentives, planning liberalisation and wider support for the local economy.

VAT-free digital shopping scheme for visitors to the UK: Visitors to the UK will be able to claim back VAT on goods bought in the high street, airports and other departure points and exported from the UK in their personal baggage. The date for this scheme to go live is currently unknown.

What you need to do now?

If you run your own payroll, then you will need to check that your payroll software provider will be implementing the changes to National Insurance in time for November. If we run your payroll, we will ensure that the changes happen seamlessly.

Personal tax return
The changes to income tax rates and national insurance take effect for the 2022/2023 tax year. They will not impact your personal tax bill for the 2021/2022 tax year. With 2 rates of National Insurance, this will make your 2022/2023 personal tax return more complicated than normal. Please contact us if you would like us to do your personal tax return for the 2022/2023 tax year.

Do a new budget and reforecast your cashflow
The energy price guarantee and changes to employers’ national insurance rates mean that your business’s costs have materially changed for the year. Please contact us if you want help to see how this changes your business’s cost structure going forward.

Revisit your personal and business tax planning strategy
This was anything but a mini-budget. It is a massive change in fiscal policy and direction. This means you may need to rethink your personal and business tax planning strategy going forward. Changes, in particular to the SEIS scheme, may mean there are more tax planning options now open to you and your business. Once again get in touch with us if you have any questions or need help.

Update to Client Requests from Acumist – FAQ

August 28, 2022 in Accounting, Announcements, Privacy, Technology

Answers to your FAQs around Client Requests

When you introduce Client Requests to your clients, they may have some questions. Here are answers to some of the more common. You may wish to share these with them.

Why have I got a link to these tasks?

You have received a link to these tasks because the person who sent them to you uses Karbon to manage jobs in their company and they have some tasks they would like you complete.

What is Karbon?

Karbon is used by organizations and teams to manage their jobs, email, and collaborate with their clients. You can learn more here.

How do I complete these tasks?

When you have completed the tasks simply tick the box and it will be marked as completed. Before doing this, you can attach any files you’d like to send through this task.

Magic Link

What is a magic link and how does it work?

Karbon Client Portal is accessed through a magic link, which is a unique URL generated every time client tasks are sent and removes the need for a PIN, but more importantly, improves security.

When a client accesses the tasks sent to them, the link in the email is then associated with that device. This means that client tasks are only accessible from that device.

What if my client wants to access the client tasks from a different device?

Your client will be presented with a screen that has one call to action “Send Access Link”. This will send a newly generated magic link to the original email sent that will allow them to access the client tasks from the computer. The client tasks will now be associated with the new device. If they want to access it from another device, they will need to follow the same process.

What happens if the client opens the magic link on a phone and then wants to complete the client tasks on a computer?

It’s the same process as above.

Does the Magic Link Expire?

Yes. The magic link is valid for 30 days. If your client attempts to access the link after 30 days, they will need to generate a new magic link. The 30 days will recommence.

What happens to client tasks already sent?

There is no change for client tasks that were sent before the new Client Portal was enabled for you. If your clients open client tasks that have already been sent, they will need to use their PIN to log in from the email or they can log in via the Client Portal screen.

What happens if I resend my client tasks?

Resent client tasks will now be accessed through the magic link and be hosted on the new Client Portal. Your client will no longer require a PIN to access the client tasks.

Logging in to the Karbon Client Portal

What can my client see when they log in?

Karbon’s Client Portal provides clients with a full view and history of their requests, documents and communication. They will see up to 100 work items that have open requests for them to complete as well as view the last 100 completed work items they had Client Requests on.

What if my client needs to make changes to a completed work item/request?

They can see the requests, comments, and files which they can download. They cannot comment or change the status of the Client Request (completed > uncompleted). If you want your clients to make changes, you’ll need to change the status from completed to another status.

What if my client doesn’t want a Login?

They can continue to use the magic link and complete individual requests if they don’t want to create a login, however, the login provides greater flexibility for you and your client. The login enables your client to access everything sent to them including completed requests, as well as copies of documents and files uploaded—so they can keep track and easily find what’s been sent.

How can my client Login?

From the magic link by clicking log in on the left-hand side, or, you can share the URL provided in Settings. Clients can bookmark that link or if you’d prefer, you can add it to your website for frictionless access.

Can anyone make a Login for my account?

No. Only clients who are a contact in your Karbon account will be able to create a log in.

What if I delete a contact?

Their account will be deactivated and they will no longer be able to log in. However, if restored, they will be able to log in again.

Is your business struggling to make a decent profit?

January 11, 2022 in Accounting, App Stack, digital marketing

Is your business struggling to make a decent profit?

Here are six little known profit holes:

With the economy gearing up, inflationary pressure on prices and supply issues pushing up the cost of materials, there has never been a more essential time to take a good look at your overheads and cost of sales. Then, add into the mix the rising cost of labour and transport costs and this exercise to examine your cost base may be the difference between your business having a good year or going under in the next. This article will look at the 6 most common profit holes that many businesses may have.

Pricing: Has it kept up with your costs?

It’s been a difficult year, I hear you say. Are you in your head thinking that your customers and clients can’t swallow an increase? Well, think again – this is often the small voice of doubt in our minds. If Starbucks and Costa Coffee can afford to still charge eye-watering amounts for a slice of cake and a coffee throughout the pandemic, then you can look at your pricing.

Often, the biggest profit hole we see with our clients is around a poor pricing strategy. Such as:

  • Are your sales team discounting too much in order to make the sale? Particularly for wholesale or bulk orders?
  • Have you kept your prices static whilst your costs have increased?
  • Are your prices in line with your cost base now, rather than when you were a smaller business. For example, if your prices have not changed since you ran your business from the kitchen table, then it’s time to relook at your pricing. (And yes, we can help you with this, if needed.)

Do you have a revolving door of employees?

Hiring new staff members is expensive; recruitment agency costs, training costs and senior management time spent hiring and training. Losing good employees is even more expensive – both in terms of opportunity cost and also the hit on morale when a good person leaves. If you do have an employee turnover problem, it’s time to take a good look at how to increase the levels of employee engagement in your business. Being very blunt here, you might like to look into the mirror to see how you may be part of the problem.

Software costs: Have you had a good look to see what you’re really using?

Those £15 a month, per user type subscriptions really do add up over time. How many user licences are you still paying for but don’t actually need? How many of those pieces of software that you decided to try out are you actually using? If you used all the features of your core software, how many other licences or subscriptions could you ditch? You may find that a good look at your software stack could yield a large amount of ‘money down the back of the sofa’ each month.

Suppliers: Are they taking the proverbial?

We’ve seen this in our business too. It is where we’ve worked with a supplier for years. Both we and they have got comfortable and complacency sets in. This cosiness was hiding the fact that we were not getting the service we required. Even worse, the prices we were paying were now out of step with the marketplace. Inertia and a desire to avoid conflict were stopping us from having a ‘state of the nation type’ conversation with the supplier.

In our experience, the first place to look is what you’re spending with marketing suppliers. Then your telephone and internet suppliers. What are they really delivering? Do they need a shakeup? Our advice to you is: if this resonates with you, have that conversation!

Not using automation (particularly in your financial processes)

The cloud revolution, which we keep harping on about, has been a game-changer for not just accountants. The digital tools out there will help your business cut out so much physical paperwork and manual entry. For example, if you are a small cafe or pub you can now get great phone apps that will allow customers to place their orders from the table. Thus, improving the efficiency of your operation and waiting staff.

Using bank rules, email rules and other types of automation in conjunction with software such as Dext (the new name for Receipt Bank) can reduce the time it takes to do your books or manage staff expenses. Why not have a chat with us to see where using apps and cloud-based software can take the grind out of your financial processes and systems? 

Doing it yourself

How long does it take you to do stuff which should be outsourced or done by others in your business? This ‘doing it yourself’, particularly when it comes to things like bookkeeping or VAT returns, is often a false economy. Your time is much more valuable delighting customers and clients and running your business than puzzling over whether you can or can not claim VAT on your company car expenditure or that coffee with a client.

Using the right people and suppliers to free you up to do what you’re best at is often a great way to generate more profit. It goes without saying that we are always happy to talk about whether we are a good home for your bookkeeping and other financial processes.