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Equity Insight

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We continue to live in volatile times and global equity markets are reflecting this.  We have seen geopolitical tensions rise as North Korea continues to ‘tease’ the Donald and the on-going drama of the Europeans and British negotiators speaking in foreign tongues making the perfect antidote for insomniacs.  Even mother nature is getting a little restless by sending a few ‘gusts’ around the world!

Given all of the above I thought it worthwhile to add another bit of useful information about shares and the rights of shareholders in the this link Equity Insight – Issue 656.  As always feel free to get in touch if there is anything that you might feel inclined to talk about.

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As many young people get ready to head off to uni, and the latest batch of graduates enter the job market, it’s worth taking a look at what the apprenticeship system can offer individuals and businesses.

We all know that having a well trained workforce is essential. Just over half (54%) of small firms say being unable to recruit the right person has hit them financially. Well, why not create the right person?

We are seeing the benefits of that ourselves at Altus. Chloe Handy joined us almost a year ago now. She has spent 1 day a week studying at Stourbridge College, while learning with us in the ‘real world’. She has recently gained an excellent 87% merit pass in her AAT Level 2.

The apprenticeship has worked for Chloe, giving her the opportunity to study for a qualification while gaining practical experience in a ‘proper job’. It has also worked for us because we have gained an employee that we can train from the ground up in the ethos and culture of the way we do things here at Altus. From a financial perspective we enjoy a ‘discount’ from the minimum wage in the early stages when the apprentice is learning the role and we got a small grant towards all this too.

Chloe is not our first apprentice. Amy also joined us as an apprentice and has developed into a highly valued member of the team having moved from administration to payroll and now bookkeeping. Christian also developed his skills through the apprenticeship route, although not with us here at Altus.

Of course, as with all recruitment, getting the right person is vital and apprenticeships should certainly not be seen as a short-cut to the recruitment process. The difference is that you are looking for potential not the completed package.

In May there was a change to the way the apprenticeship scheme is funded. This included a new concession for firms with less than 50 employees taking on apprentices aged 16-18. While large employers will have to contribute 10% of training costs, this will not apply to those small firms. Instead the Government will pay 100% of the training costs.

Because 16-18 year-olds can incur additional costs to support in the workforce – such as needing more supervision and pastoral care – employers will be given £1,000 towards this.

There’s also cash help for taking on apprentices from deprived areas, who were in care or have an Education and Health Care plan. A flat rate of £471 for training will also be given if the apprentice still needs to reach minimum standards in English and Maths.

The changes are underpinned by the new apprenticeship levy paid by employers with a pay bill of over £3 million. The plan is to double investment in apprenticeships by 2020.

Taking on an apprentice can have lots of benefits for a business, allowing you to grow your business by training up a workforce to meet your specific needs.

 

 

 

 

 

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Key changes to Making Tax Digital scheme announced

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HMRC has announced its revised plans for its Making Tax Digital scheme affecting businesses – and it seems to have listened to common sense.

MTD, as originally announced, came in for a barrage of criticism from accountants, tax experts, businesses, and politicians from all sides. It would have seen everyone turning over more than £10,000 forced to keep digital records and file quarterly returns, beginning next April.

The new announcement sees changes to which businesses are affected, when, and even which taxes it relates to. The key points of the revised scheme are:

  • MTD will only apply to VAT until at least 2020
  • Businesses below the VAT threshold (currently £85,000) will be able to opt-in if they want but it won’t be compulsory – yet

The scheme will begin in April 2019. From that date, businesses over the annual registration threshold will have to keep digital records for VAT purposes, providing their VAT information to HMRC through MTD software.

MTD for VAT will be piloted using small-scale private testing towards the end of this year, with a larger live pilot next spring.

The Treasury says businesses with a turnover below the VAT threshold can choose to use MTD, and opt in for other taxes, ‘benefitting from a streamlined, digital experience’. It is not clear when this will be from.

It also says it will not extend MTD to other taxes until the scheme has been shown to be working well, or April 2020 at the earliest.

In my previous blogs on MTD, while arguing against the timescale and requirements, I pointed out that having up-to-date information really benefits businesses and day-to-day decision making.

So while many business owners will be happy to have dodged a bullet for now under these revised MTD rollout plans, the Treasury remains committed to a digital tax future. As it says, millions of businesses are already banking, paying bills, and interacting online. Digitising routine business tasks such as record keeping is the next step and is one many businesses have already taken.

For help and advice on record keeping, and how to get the most out of your accounts, contact us here at Altus.

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3 golden rules for success in business

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Being in business is a struggle at times. Read the stories of any successful business man or woman, and none of them will have had a smooth ride to the top.

It is very easy to get caught up in the day-to-day battles. This is especially true in a sole trader/owner-manager business. You often have no-one to tell you whether something is good or bad, someone to add perspective to a situation.

In the early days of my business a very wise friend gave me some advice. He said that when you are working by yourself it is easy to have huge swings of emotion – one day it is great, the next you want to give up. Something very small can tip your mood; one small thing can turn a great day into a disaster.

Often you will then look to blame yourself and come up with all the reasons why you are not capable of running a business. In reality it is probably nothing to do with anything you have or have not done.

But you don’t have anyone to tell you that.

These are my three pieces of advice to help smooth your journey through the ups and downs of business:

  1. Never make a decision off the back of a ‘bad day’. If you are having a bad day, step back and make your decisions later with a clear head.
  2. Always watch the tide and not the waves. Business can be rough and the waves can push you up and down but it is not the wave which we need to look out for. The wave will be here one moment and then will go past us. It is the tide that we need to be aware of, washing us out of our depth or up on to dry land.
  3. Always try to make decisions from a position of strength. We often make bad decisions when we are under pressure or forced into a corner. Just because it seems like a way out of a problem does not mean that it is the right way.

At Altus, we support clients by providing that listening ear and sense of perspective. We are at the end of the telephone line for that quick ‘can I just run this past you?’ call, while our Freelance FD services provide a critical friend on a regular, on-going basis. Click here to find out more.

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What you need to know about Making Tax Digital

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Making Tax Digital (MTD) is the latest brainwave from the Treasury, and is going to impact pretty much every business in the UK.

We are finally beginning to get some detail fleshed out on the bones of this tax announcement, originally made in the 2015 Budget. We accountants have been pouring over the responses to the consultation process that has been taking place. So what is the digital tax revolution all about?

Making Tax Digital requirements

  • All businesses with sales of more than £10,000 will be required to maintain their accounting records in a digital format, so out the window with those manual records.
  • In what has been termed ‘the end of the tax return’, not only will there be a requirement to complete an annual return but also quarterly returns with varying levels of detail depending on the size of the business.
  • This means that not only will your records need to be in a digital format but they will need to be up to date, at least on a quarterly basis. They will have to be in sufficient detail and accuracy that you will be able ­- and perhaps more importantly be happy – to complete a return to HMRC.

Accurate bookkeeping

This truly sounds the end of bringing a box of receipts to your accountant at the year end. All businesses will need to either maintain those records themselves or ask their accountant or bookkeeper to keep those digital records up to date.

It is understood that spreadsheets will be an acceptable method, but of course they do need to be accurate enough to produce the necessary quarterly reporting. HMRC states that free software will be made available for the smallest of businesses with the simplest affairs but it is unclear at this stage how comprehensive that will be.

It is likely that this is going to force more small businesses to move over to cloud-based bookkeeping systems as they try to balance the additional cost of maintaining their records to the required standard (read more on cloud bookkeeping here)

Many businesses, whether they currently use digital methods of bookkeeping or not, will have to significantly change their current processes to comply. Especially those that are below the VAT threshold and have not had to deal with any form of quarterly reporting before.

Tax timetable

When is all this happening? Well, not as far away as you might think. The current plan is that Making Tax Digital will apply from April 2018 – yes, just 12 months away. In a concession HMRC has announced that businesses below the VAT threshold will have a further 12 months to comply (April 2019).

However, this change is starting with sole traders and limited companies will follow on afterwards.

Of course all businesses should have accurate and up-to-date accounting records already, to provide good information for business decision making. Unfortunately, it is still all too common for business owners to ‘learn to their surprise’ about the results for the year when they sit down with their accountant 6 months after the year end!

Perhaps MTD will have a positive impact on businesses. There is so much information for making better, more informed business decisions hidden away in the accounts systems of small businesses.

Too many business owners see the bookkeeping as just a cost necessary to keep the taxman happy. This new requirement may be the catalyst needed to push that information into the light. Perhaps it will get business owners to seek some value from the extra work that undoubtedly will be required.

If you are worried about getting compliant with new digital requirements, want assistance with your bookkeeping or need more information to make better business decisions then Altus is here to help. Contact us here

 

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