Preparing for the New Tax Year - Practical Tips

Keep Clear Records
Keeping clear records is a tax essential. If your records are clear (and complete!) then there is more chance that your tax return will be accurate and include full claims for all legitimate expenses. Furthermore, knowing you have been keeping clear records means you can worry less about how difficult a tax enquiry could be.

Write down every expense
Self employed persons are often surprised at the types of expenses that can be claimed against their income for tax purposes. Generally speaking anything that is ‘Wholly and Exclusively’ incurred for your trade can be claimed, but if you incur expenses and you’re not sure if you can claim for these, then write them down and ask your advisor as you may find that a claim is possible. If you don’t write it down then you will never know!

Finish your tax return as soon as possible after the tax year ends
This year almost 10% of taxpayers filed their 2010/11tax returns late or not at all and thus will have incurred an automatic £100 late filing penalty. Finishing your tax return well before the deadline not only means you avoid the penalties associated with late filing but will also mean that you have more time to prepare for any January bill, or you will be able to reclaim any tax due to you sooner. You will also stand more chance of remembering what that illegible scribble in your books means.

Make sure your employer has given you everything
Employees are annually issued with a form P60 to show their taxable earnings and tax deducted for the tax year. This form is indispensable for any employee completing a tax return and must be given to the employee by 31 May following the end of the tax year. However many employees are unaware that another form is also essential if they want their tax returns to be correct and complete. For any employees receiving taxable benefits in kind (i.e. company cars or medical insurance) or expense payments where the employer does not hold a dispensation, a form P11d should be issued to them by 6 July following the end of the tax year. The Revenue receive these forms directly from the employers so if an employee misses this from their tax return, then more than likely they can expect HMRC to get interested.

Don’t forget your bank interest
Self Assessment is designed to collect information on all of a taxpayer’s income, not just income from business sources. Bank interest from all accounts (but not ISAs) must be shown on the tax return. Banks send HMRC your bank interest details each year and if there is a discrepancy then HMRC may raise an enquiry.

Be generous
Make sure you tell your advisor about any charitable giving you have been doing during the year. Higher rate tax payers can get up to 30% gross tax relief just because they have donated money to a registered charity. This could mean up to £30 of tax saved for an £80 donation. A gift aid declaration should be made when donating the money and a copy kept in your file.

Don’t forget tax credits
Tax credits aren’t just for people on very low salaries or necessarily just for those with young children. H M Revenue and Customs provide an easy to use calculator which takes only a couple of minutes to complete, asks no difficult questions and gives you an instant result as to whether or not you are entitled to make a claim. You can find this calculator at http://taxcredits.hmrc.gov.uk/Qualify/DIQHousehold.aspx.

Avoid paying a lump sum in January
Anyone receiving income from a PAYE source and completing their tax return by the 30 December is eligible to have any tax they owe ‘coded out’ provided that certain limits are fulfilled. This means that instead of demanding a lump sum payment at the end of January, HMRC will include the tax due in your next PAYE coding notice and collect it gradually via your pay in the next tax year. Your advisor will be able to help you determine whether this is a viable option for you.

Don’t panic if you receive an enquiry letter
HMRC can raise an enquiry where they believe information on your tax return is incorrect. They can also raise an enquiry randomly, so don’t just assume that they know something you don’t. Enquiries are often best dealt with the help of an advisor but you can lessen the stress by adhering to our tip on keeping clear records.

See an Independent Financial Advisor
Independent Financial Advisers are able to give tailored advice regarding all types of financial strategies and investments. Ward Williams Financial Services offer a free initial consultation and include in their considerations any tax savings you could make.  Pension contributions, ISAs, Premium Bonds, EIS investments, VCT investments can all potentially save you tax, and our advisers are able to help set up all of these.

For further information/advice on this topic please contact our Ward Williams Tax team on 01932 830664 (Weybridge) 01895 830664 (Uxbridge) or visit http://www.wardwilliams.co.uk/

A day in the life of a HR Director - by Sally Phillips, Ward Williams HR

Over coffee at home this morning I’m pondering over what is already on our agenda for this year and deadlines to adhere to. Today I will be working on Recruitment - preparing to deliver a Management Training Course and preparation for rolling out annual reviews; all for a variety of clients.

I was also going back over past employment where I used to wake up every morning thinking to myself – another day another dollar! They were the days when I just went to work and hadn’t really thought about what I really wanted to do. Well that’s all history now. I smile to myself when I get out of bed and get ready to go to the office. Don’t get me wrong I don’t like the cold dark mornings  - but  I don’t class my role as work or a job, it’s what I do and I love every minute of it. No day is the same and each day brings different challenges. 

Many people view positions in Human Resources as just administrative, but to be successful  you will have to have a good knowledge of your client’s business and be able to recruit the best possible candidates for the roles in line with business priorities. You will also be excellent at identifying training requirements for staff, ensure that diversity objectives are met and support line managers and heads of department.  It’s so important to work closely with our clients and form an open and honest commercially based relationship. This enables us to recommend what’s right for their business and deliver the right solution.

So my day starts with addressing all of the above. We pride ourselves on the ‘excellent’ quality services we provide. This is reflected in our client retention numbers and the positive feedback we receive from our clients.

Our HR department consists of Kate, Collette and I; together we ensure that our clients have the right people to achieve its business objectives and to keep it running successfully whilst ensuring compliance.

My next challenge is to prepare for our client’s management training course. They have recently restructured the group and have given heads of departments key responsibilities in the running of their departments. This has enabled their HR department to delegate a lot of their workload back to the managers. They will now be more hands on with the managing of their departments and we need to ensure that we deliver the correct training to further develop their people skills.

 I list out the topics that I will be covering and start preparing the workshop. Workshops work well as they encourage everyone to move out of their comfort zone. For some people moving into a management role can be uncomfortable so I focus on subjects such as ‘developing yourself and others’, ‘communicating effectively’ and ‘how to continue to motivate yourself and your team’. This year the department heads will also be responsible for conducting their teams annual reviews, so again training in this area will be carried out prior to the reviews being rolled out.

Our priority is to fully support the employer with up-to-date templates covering all aspects of HR, along with indemnified advice and telephone support. We also want to ensure their staff remain motivated in their roles, and by getting their internal HR right relays a positive and professional message to the people within their organisation. Having WWHR on board is a solid investment into the success of their organisation and the development of their staff. So the saying ‘another day another dollar’ is quite apt with investing time and training staff.

Are you ready for the Olympics?

The 2012 Olympics are fast approaching along with requests from employees to take leave either as a spectator, a volunteer or for flexible working arrangements. As an employer it is important to understand and to work with your employees to try and find a balance between the requests made by your employees, and how these can be managed to avoid affecting the needs of your business.

Your employees may be divided into the following groups according to their level of involvement:

Employees requesting time off as spectators:

Many employees will know by now which events they plan to attend so it will be worth taking some time to discuss options.

Employees requesting time off as volunteers:

Employees should receive notification by early 2012 if they have been selected to participate as a volunteer – it’s worth noting some of these requests can be as much as 10 days leave with an additional 3 days training.

Employees remaining at work requesting flexible working arrangements:

Some employees may not be attending the games but may request some flexible working arrangements in terms of watching some of the events.

Employees that choose to have no involvement:

Others may have no interest at all but it will be important to avoid perceived favouritism towards those that would like to be involved.

For more information on keeping the balance right, introducing a policy or on any other issues to avoid as the 2012 Olympic Games approaches then please contact Sally Phillips at Ward Williams HR on 01932 834712 or email sally@wardwilliams.co.uk

The Final Countdown - is your business ready for the London Olympic Games?

As the Olympic Games approach touching distance can your business afford to be under prepared?

For almost 7 years, businesses have had time to prepare themselves for the extra potential business coming through the country in the next 6 months.  However according to a recent survey only 2/3rds of companies expect there to be any extra business activity during the games with a further 36% of businesses surveyed believing that they are behind in their preparations.

History tells us that businesses in other host cities such as Sydney, Beijing and Vancouver have found that they themselves were under prepared for the influx of trade and in doing so have missed a huge potential to make more money. With a time span of 29 days spanning 6 weeks, the games are not just a flash in the pan.

We at Ward Williams would encourage businesses that it is not too late to start creating plans to be able to properly assess the likely changes in demand, and start putting plans into action to account for this. With an estimated 10.8 million people - and certainly not all English speaking - likely to be flooding into the country, it is essential for businesses to think of creative customer interaction and marketing.  The Games also represent a fantastic opportunity to all businesses with overseas customers.

Another factor for businesses to consider is the potential for extra staff and transport issues for those in and around Olympic venues, especially if it has the potential to disrupt the flow of supplies.  40% of surveyed businesses estimated that staff unavailability would cause disruption with a further 18% believing that there will be a disruption to the supply line.

With so much potential for businesses in the upcoming months ahead, this once in a lifetime event should not be seen as a potential hazard to any business, but as an amazing opportunity to be creative internally and externally to push the business forward.

The key to all this is preparation. Please click here to see how Ward Williams can assist with the related HR issues.

Managing Cash Flow - tips for keeping on top!

From the start:

Before doing business with someone for the first time always credit check them, the same goes for existing customers wishing to increase their credit limit.  If in doubt insist on payment up front; if their credit rating is poor they will understand and not be surprised by this.

If you are doing bespoke work or working on a project or product that cannot be sold to anyone other than that specific customer then ask for a deposit to cover basic costs.  Make a point of discussing your Terms and Conditions.  Ensure they are clearly stated and send them out with all confirmations and invoices.

We will always need to make a commercial judgement about whether to work with a customer and this is in an environment where circumstances will not necessarily be ideal, but the more you do upfront the better placed you will be if things don’t go according to plan.  

General management:

Keep a running cash flow forecast, so you can identify bottlenecks early on and plan what you are going to do before they become major issues.  Produce regular management accounts at least monthly, and if required, weekly.  If you don’t have anything like this and don’t know where to start please speak to us.  We are able to offer a number of different cost-effective solutions to help you run your business.

Encourage staff to suggest efficiencies – and reward them for their input.  Look at using IT to save you money such as online meetings were possible, rather than travel to them.  Look into invoice finance to make the cash locked-up in your invoices available from Day 1.  The money freed up in this way can be used for any business purpose.  While it is not for everyone and comes at a cost it can provide funds for a growing business.

Avoid tying up cash by holding too much stock, however tempting the discounts.  Plan ahead and be aware of customers’ buying patterns.  This is about getting the balance right and remembering the importance of cash flow to the business.

Managing customers:

If you can, offer your customers an early payment discount.  For those customers with strong cash flow, taking the discounts is an effective use of their resources.  Don’t give your customers a reason to delay payment; check invoices before you send them out. Issue invoices promptly, addressed to a named individual if possible.

Don’t be afraid to send a reminder as the payment date draws near and start chasing payment as soon as it is overdue.  No one should object to a polite reminder as it is simply good business practice.

Managing suppliers:

Always try to negotiate better payment terms with your suppliers, they may say no, but if you don’t ask you don’t get.  If you are struggling with cash flow and you have to make some late payments then keep the supplier informed. The relationship will be damaged if you simply don’t pay and ignore phone calls and or letters. Far better to pick up the phone and explain the payment will be X days late this month.

For further information/advice on this topic please contact Ward Williams (http://www.wardwilliams.co.uk)