Info Article

Protecting your business from fraud

Steps to shield your firm from threats.

Fraud costs the UK around £190 billion a year, with businesses bearing almost three quarters – £140bn – of those losses.

This worrying picture is backed up by the 2019 Fraudscape report compiled by anti-fraud body Cifas, which provides statistics for fraud committed by employees. The report read:

“Dishonest action by staff to obtain a benefit by theft or deception was the most common type of internal fraud in 2018, accounting for 46%. The most prevalent form of dishonest action during the year was theft of cash from the employer.

“The second most common fraud type was theft of cash from a customer, which rose to 22% in 2018 compared to 17% in 2017.”

Fraud can be characterised as rule-bending, but for businesses struggling to manage cashflow it can have catastrophic effects. More…

Employers need help to absorb the planned national living wage hike

Business groups want more support to help employers meet the Chancellor’s pledge to raise the national living wage to £10.50 an hour by 2024.

Chancellor Sajid Javid announced his intention to implement the hike alongside lowering the age threshold for those who qualify for the living wage from 25 to 21.

The national living wage hourly rate for over-25s in 2019/20 stands at £8.21 – but more than 6,000 UK employers currently             go further than the legal minimum.

The British Chambers of Commerce (BCC) welcomed the Chancellor’s announcement, albeit with caution.

Adam Marshall, director-general of the BCC, said:

“Companies already face significant cumulative employment costs, including auto-enrolment, the immigration skills charge and the apprenticeship levy.

“Action must be taken to alleviate the heavy cost-burden facing firms, or risk denting productivity and competitiveness.” More…

Stamp duty revenue down for HMRC

The Treasury’s take from stamp duty land tax fell by the largest amount since the start of 2008/09, government figures show.

In England and Northern Ireland, HMRC collected £11.94 billion in stamp duty receipts on completed property or land purchases in 2018/19 – a 7% decline on the previous tax year.

That represents the biggest drop since the peak of the recession in 2008/09, and was largely fuelled by a 10% fall in residential stamp duty receipts.

The Revenue puts that down to the introduction of a stamp duty holiday for first-time buyers and devolution of the property tax to Wales, which has been setting its own rates since 1 April 2018. More…

Are you saving into your pension plan?

A government-backed pension provider is trialling emotive messages to nudge sole traders to start retirement saving.

The messages from NEST aim to persuade the self-employed to sign up for pensions through payment or accountancy platforms or trade and industry bodies.

Four messages are being tested to encourage savings behaviour, including ‘could you save £2.50 a day?’.

‘Flexible pension options for the self-employed’ attempts to emphasise they can pay what they can, when they can.

Loss-avoidance messages, such as ‘a tax-free way to save for retirement’ and ‘don’t miss out on pension returns’, are the other messages being trialled. More…

Small employers risk losing the employment allowance in 2020

Plans to remove the employment allowance for large employers from April 2020 could impact on smaller firms.

This allowance provides employers with a reduction to their national insurance contributions (NICs) bill of up to £3,000.

Employers that claim the allowance can carry it forward from one tax year to the next, but that will stop from April 2020.

From that point, employers will only be eligible for the allowance if their total secondary class 1 NICs liability for the previous year is less than £100,000, while the allowance has also been reclassified as state aid.

Smaller employers may face issues due to the maximum amount of de minimis state aid they can receive in any three-year period. More…

IR35 in the private sector

Key considerations for contractors before April 2020.

Large and medium-sized organisations have just six months left to prepare for changes to off-payroll working rules, which are due to extend to the private sector next spring. 

From 6 April 2020, firms that engage private-sector contractors will be responsible for deciding if the rules should apply and deducting income tax and national insurance.

At present, contractors who operate through their own personal service company (PSC) have these responsibilities, but the extension of the off-payroll working rules will soon make it the responsibility of the organisation engaging them. More…

Javid ‘to broaden the apprenticeship levy into a wider skills levy’

Further tweaks to the apprenticeship levy look certain to be made in the autumn, when new chancellor Savid Javid is expected to deliver his first Budget.

In his final Budget speech in October 2018, former chancellor Philip Hammond halved the amount small firms taking on apprentices had to pay from 10% to 5%.

But Javid revealed his intention “to broaden the apprenticeship levy into a wider skills levy” when writing in the Financial Times shortly after his appointment.

“This would give employers the flexibility they need to train their workforce, while ensuring they continue to back apprenticeships”, Hammond’s successor said.

The levy was introduced in April 2017 and requires employers with annual pay bills of more than £3 million to allocate a sum equal to 0.5% of their wage bill. More…

Retailers unite in call for business rates solution

Some of the UK’s biggest retailers have come together to demand action is taken to revamp the business rates system.

Business leaders from more than 50 companies wrote to chancellor Sajid Javid to ask for four changes.

These include reforming transitional relief, which limits how much a bill can change following revalution.

The letter also called for a freeze in the business rate multiplier, the introduction of a new improvement relief, and for the Valuation Office Agency to be adequately funded.

It said that these four recommendations “could be undertaken quickly, would reduce regional disparities, remove barriers to the proper working of market forces, incentivise economic investment, and cut away at bureaucracy”. More…

Identifying inefficiencies in a business

Avoiding waste, maximising profit.

Accountants, as a breed, are fans of efficiency. We tend to appreciate optimised systems and abhor waste, whether it’s time, effort or resources being frittered away.

The concept of efficiency as we know it today is a product of the industrial revolution. That’s when engineers and manufacturers became obsessed with squeezing out maximum profit by the smart use of new machinery and the automation of processes.

Without a doubt, the cult of efficiency figurehead was Henry Ford – founder of the Ford Motor Company.

In the run-up to World War I, Ford built a factory that applied every idea of efficiency, most famously, the production line.

This production line had factory workers performing the same task over and over again, at the same workstation.

Another of Ford’s innovations was to restrict customer choice: “Any customer can have a car painted any colour that he wants so long as it is black,” he said in 1909. More…

The scourge of late payments

Outstanding invoices compromise your business’s cashflow.

When you supply goods and services, you expect to be paid, and promptly, but Britain has a deeply embedded culture of late payments. Indeed, for some businesses, delaying payment is an essential part of the business model.

Outstanding payments are problematic for various reasons. First, there’s the basic problem of cashflow within the supplying business – electricity bills, rent and other regular outgoings need to be paid regardless.

Then there’s the time spent chasing late payments and the stress it can cause if the conversation becomes bad-tempered, or when you start to worry that the job might be a write-off.

You might even find yourself incurring lawyers or bailiffs fees, or being forced to sell the debt on to a collection agency at a discount. More…

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