Government cash boost for small business innovation

Innovative businesses in the UK could benefit from a cash boost of £125 million. From this total, £100 million is available in Government grants for research that is deemed pioneering. The remaining £25 million as loans for the commercial aspect of transforming ideas into reality.

Any size of UK businesses, including SMEs, can compete to win a slice of the £125 million. If successful, the money will go directly into transforming their ideas into reality in the form of world-leading products and services.

Small business innovation grants

The £100 million is available through the Innovate Smart grant initiative, and applications are now open. Past winners of the Innovate Smart award include Magic Pony Technology, which was sold to Twitter for a reported $150 million earlier this year.

Magic Pony Technology is a London-based start-up that develops machine learning techniques based on neural networks. These systems are designed to operate and think like human brains, and are used to enhance photos, videos and to develop graphics for augmented reality or virtual reality apps. Co-founders CEO Rob Bishop and Zehan Wang stayed on as part of the deal.

The third start-up focusing on machine learning that has recently been acquired by Twitter, Magic Pony Technology benefited from SMART funding, as well as from investors including Entrepreneur First and Octopus Ventures. It’s the perfect example of what can be achieved by smart start-ups with ideas and expertise.

How to apply for Smart funding

If you want to find out about how to apply for the next round of Innovate Smart funding, see the Government website. Applications opened on 25 July 2019, so now is a good time to get involved if you have the right business idea and backing.

Smart is the new name for the Open Grant Funding programme from Innovate UK. Applications can be from all kinds of technological backgrounds, including media, creative industries, arts and design, engineering or science, and can be applied to any part of the economy.

Any application has to include at least one SME, and the project must run between April 2020 and April 2023. Different rules apply to projects, depending on their projected length:

  • Projects scheduled to last between six and 18 months must have projected costs between £25,000 and £500,000.
  • Those scheduled to last between 19 months and 36 moths must have total project costs between £25,000 and £2 million and be collaborative.

Lead businesses within each consortium must be based in the UK and can be any size. They must also be carrying out the research and development (R&D) project within the UK.

Either be an SME if they want to go through the project independently or include at least one SME if a large company that wants to collaborate.

The project team that wishes to work with the lead business must be based in the UK, and be other a business, charity, public sector organisation, or academic organisation, and must also be conducting the R&D in the UK. Other stipulations include proof that it is intended to commercially use the results in the UK.

Further support grants

There is also a further £25 million allocated through Innovation Loans to go towards projects that are in much later stages and are near to going on the market. This scheme is focusing on businesses that need help to het over the final barriers to commercialisation.

In a press release, the Government’s Business Secretary, Greg Clark, says: “Through our modern Industrial Strategy, we are backing our homegrown businesses to boost productivity and create jobs, growth and opportunity in every part of the UK.”

Many businesses have already benefitted from funding provided by the Government to support innovation, including Digital Shadows. This online digital risk company has raised £20 million to fund its innovation that was developed using a Smart award.

James Turner, Managing Director of Turner Little Limited says: “Smart grants and other funding through Innovate UK are great ways for the Government to support innovation in either single businesses or collaborations between different sectors. With the deadline for the UK leaving the EU currently set at 31 October 2019, it’s important for small businesses to plan ahead.

“Applying for Government support is a way to ensure innovative ideas make it through to completion, therefore boosting jobs and the wider economy. The Government is increasingly recognising the importance of the SME sector to the economic stability of the country, which is encouraging. As we continue to move through uncertain times, it’s important that small businesses continue to push forward with innovative and disruptive products and services.”

 

About Turner Little
Founded in 1998 in Yorkshire, UK, Turner Little is a specialist UK and offshore company formation, banking and corporate services provider. Our services include company formation, UK and offshore banking, asset protection, credit correction, trademarking and trusts. Other services include Internet services, mail forwarding, wills and probate. Turner Little’s vision is to offer the best possible service, together with market leading products.

Equity crowdfunding – everything you need to know

If you’re in the business world, you will have heard of crowdfunding. An increasingly popular way of raising money for charity, crowdfunding moved into the mainstream a few years ago.

By 2011, equity crowdfunding became available for small businesses, start-ups and entrepreneurs to raise capital. Here’s everything you need to know about raising money for business through crowdfunding, and how to begin the process.

How does equity crowdfunding work?

In this context, we’re talking about equity crowdfunding. Start-up businesses can raise capital through equity crowdfunding by selling shares through a platform regulated by the Financial Conduct Authority (FCA). They give private investors at all levels the chance to invest and starting stakes can be as low as £10.

In the UK, there are three major crowdfunding platforms: Syndicate Room, Crowdcube and Seedrs. All of these platforms are regulated and offer similar services.

Equity crowdfunding has been in existence in the UK since 2011 and has grown so fast that many experts see it as a mainstream channel for fundraising. While some dispute this, there is no arguing with the figures. The total raised across crowdfunding platforms between 2011 and 2018 is estimated at between £600 million and £800 million.

Which platform works best?

If you’re deciding between platforms, there is no single site that is ‘better’ than the others. Crowdcube is bigger than Seedrs, and it has been running longer. However, Seedrs offers different packages and include relatively thorough due diligence.

Syndicate Room, on the other hand, is generally for more high-level investors and technology-based businesses. If this is your area, then it’s a good option. It requires a lead investor and is more formal in terms of structure and running your campaign.

You are charged by the platforms for successful campaigns only. The costs range from between 4% and 8% of the total money raised on the platform, and while you can spend more, the beauty of crowdfunding is that it’s a cheaper way for start-ups to gain capital. The biggest costs usually lie in the pitch and video, which costs around £5,000 on average.

There is also the time you need to put into creating the campaign and running it. This can be tricky for start-ups that need to focus on running their business. Some businesses choose to employ a specialist consultant to run the campaign and give it the best chance of success.

How do the equity crowdfunding platforms make money?

The crowdfunding platforms make money by taking commission on the amount raised from a successful campaign. Should the campaign fail to reach its target, then all investments are scrapped, and no funding reaches the company. It’s worth noting that a campaign that fails to secure more than 30% of its target during the first few weeks, rarely makes it to the finish line.

If you want to raise money for your business through crowdfunding, it’s important to clearly state why you want the funding. Investors expect to be told exactly where their money will go, and how this will push the company towards more profitability. Investors are interested in one thing – return on investment (ROI) – and you must be able to demonstrate how they will get this.

Create a thorough business plan, that includes details of where the money is going, and how this will elevate your business to the next level. You should include realistic, demonstrable projections. When you have completed this vital step, choose the right crowdfunding platform and apply.

Requirements and eligibility

Some crowdfunding platforms stipulate that you must have at least 20% already in your campaign, before they will launch it to the public. The campaign will therefore usually launch in a private mode. This allows you to gain enough funding to hit their threshold from existing contacts, and then hopefully collect the rest from the platform’s audience.

Your pitch deck and business plan video should be tailored to the platform of your choice. The pitch should be succinct, compelling, realistic and believable, and the video three minutes long. Remember that this kind of fundraising needs a different approach to angel investment and should be tailored accordingly.

Campaigns generally last between 30 and 60 days, depending on the platform. It can take up to eight weeks to prepare the pitch to the platform’s specifications and go through the requisite due diligence. It’s best to give yourself 12 weeks running up to launch.

How does equity crowdfunding work?

Equity crowdfunding is available as an option to any limited company. Having said that, it’s best suited to new businesses that are less than seven years old, or start-ups. It’s also only viable for businesses that plan for exit in order to ensure investors get their ROI.

It’s difficult to get exact figures of how many campaigns have been successful, but estimates show more than 1,200 funded companies. These numbers are increasing every year, as equity crowdfunding becomes more mainstream.

Each platform will usually have between 20 and 30 live campaigns going, and around two-thirds of these won’t make it. The most common reasons for crowdfunding to fail include poor quality presentations, a poor idea that can’t be scaled, overvaluation of the company, selecting the wrong platform and failing to secure the minimum threshold before launch.

While equity crowdfunding is regulated in this country by the FCA, there are high risks for investors. However, it does give them the opportunity to get involved with start-ups at the beginning of their journey. They choose to invest based on an educated estimate of the chances of getting ROI, but some also invest smaller amounts based on the rewards offered.

 

James Turner, Managing Director of Turner Little Limited says: “Smaller investors also get their money back through tax breaks and through the perks offered at different stages of investment. Good start-ups and businesses that are raising money this way will always include investors in the ongoing success and growth of the company.

“This is definitely a viable way to raise funds if you are a start-up owner looking for backing. However, you must have a watertight business plan, and evidence to show investors that they will get their ROI at some point. Any company that doesn’t plan ahead effectively before crowdfunding is likely to fail to reach their target. And as this does require some time and money invested upfront, it’s worthwhile taking advice from an expert in equity crowdfunding before you go down this route.”

 

About Turner Little
Founded in 1998 in Yorkshire, UK, Turner Little is a specialist UK and offshore company formation, banking and corporate services provider. Our services include company formation, UK and offshore banking, asset protection, credit correction, trademarking and trusts. Other services include Internet services, mail forwarding, wills and probate. Turner Little’s vision is to offer the best possible service, together with market leading products.

Survey shows 11% of businesses ‘unaware’ of Making Tax Digital requirements

Making Tax Digital (MTD) is a new initiative from the Government aimed at simplifying the tax process for businesses and individuals. And a new survey says that more than 10% of all businesses in the UK are totally unaware, and therefore unprepared, for this new tax requirement.

What is Making Tax Digital (MTD)?

Through MTD the Government says it will be “one of the most digitally advanced tax administrations in the world”. It will fundamentally alter the way the UK tax system works, to make it more efficient, effective and easier to use.

MTD for VAT is also now active, which means businesses that are eligible to pay VAT must now use specific software to keep online records and to submit returns. Government figures show that tax errors cos the Exchequer around £9 billion every year. By introducing MTD, the Government hopes to rectify these errors and save money.

In July 2017, the Government announced a slow-down in the introduction of the MTD for VAT, as many businesses expressed concern about how quickly they were expected to transition. The Government said that MTD will not be a legal requirement for taxes other than VAT until April 2020.

A further announcement in March 2019, as part of the Spring Statement, promised Government support for businesses making the transition. Therefore, they say that MTD will not be mandated for any new businesses or taxes in 2020.

MTD now a legal requirement for VAT returns

The law came into force at the start of this tax year (5 April 2019), meaning more than one million companies with an annual taxable income of more than £85,000 must now file VAT returns online.

Despite the Government’s attempts to manage the transition to MTD, a survey of UK SMEs shows that 11% of businesses asked are not even aware that they need to change the way they do their business taxes.

The survey was co-ordinated by QuickBooks, and its results also show that there is a significant amount of confusion from businesses about whether they are compliant or not. Around half of respondents were discovered not to be fully compliant, when they thought they were. Around 25% of companies that are compliant express concern that they’re not properly set up to handle the changes.

HMRC says that penalties will be issued with a “light touch” for the first 12 months. From October 2019, various other entities, including local authorities, trusts, public corporations and not-for-profit groups will also have to move online to submit their taxes.

It will be necessary for all businesses to keep digital records from the start of each tax year, using MTD compliant software.

James Turner, Managing Director of Turner Little Limited says: “MTD may seem intimidating or confusing to businesses that are used to submitting VAT returns in a different way. However, it also represents a generational shift in how the business sector navigates digital taxes, which will lead to much smoother systems and a simpler tax system overall.”

“It’s encouraging that the Government acknowledges that there are issues with the communication surrounding MTD, with a significant number of businesses still unsure about their obligations. I would advise small and medium sized businesses to carry out some online research about MTD, and to work with a professional to ensure that they are using the correct software and understand the changes.”

“The study referenced in this blog says that becoming compliant with MTD is faster than expected for 42% of respondents. Only 13% say that they found the process takes longer than first expected. Shifting online will ultimately improve systems for businesses and take the sector into a new era of digitisation.”

 

About Turner Little
Founded in 1998 in Yorkshire, UK, Turner Little is a specialist UK and offshore company formation, banking and corporate services provider. Our services include company formation, UK and offshore banking, asset protection, credit correction, trademarking and trusts. Other services include Internet services, mail forwarding, wills and probate. Turner Little’s vision is to offer the best possible service, together with market leading products.

A comprehensive guide to small business taxes

Small business tax can seem complicated and is certainly not one of the most exciting aspects of launching a new business. However, it’s important to understand what you need to do to comply with your tax obligations.

We’ve collected details on the main small business taxes that apply in the UK. You’ll find links to official information and guidelines too.

The specific taxes you need to pay as a small business owner depends on a number of factors, including the structure of the company, the services and products on offer, and how it’s performing.

Small business taxes – Income Tax

Income Tax is payable on certain sources of your income, including:

  • Earnings from employment.
  • Profits from self-employment. This includes money made from any services sold through apps or websites.
  • Some state issued benefits.
  • Most pensions.
  • Any rental income you earn. This doesn’t apply if you are a live-in landlord and earn less than the limit set by the rent-a-room guidelines.
  • Benefits from your work.
  • Any income from trusts.
  • Interest on any savings you have if it exceeds your allowance.

There is some Income Tax relief on offer. For example, you don’t pay tax on the first £1,000 of the income you make if you’re self-employed. This is called the ‘trading allowance’. The Government’s page on Income Tax has all the relevant information on any allowances or tax relief.

You’ll generally pay through self-assessment, which means you must file a tax return with the HMRC every year. Make sure you’re claiming all possible expenses when you file your Self-Assessment tax return. The deadline for online tax returns is 31 January every year, and for paper tax returns it’s 31 October. The UK tax year runs from 6 April to 5 April the next year, and you’ll always be filing for the previous year.

The deadline for payment is 31 January, and 31 July for the second payment on account, which was introduced by the Government to help people spread the cost of their tax bills.

It’s always worth engaging a tax specialist to ensure you’re covering all bases and filling out your return correctly. Check out the official tax help page for more information.

Corporation Tax

Corporation Tax is levied on business profits from limited companies, foreign companies with a UK office or branch, and any co-operative, club or incorporated association.

There are no bills issued for this tax, so it’s up to you as the business owner to ensure you pay. Register on the gov.uk website as a first step. Then go to the relevant page titled ‘Pay Your Corporation Tax Bill’. This page is packed with information, and it also directs you to the Government Gateway page. This is where you log in and pay the Corporation Tax.

The deadline for your company tax return is 12 months after the end of your business accounting period. There is a separate payment deadline, which is nine months, 1 day after the end of the accounting period. Usually, a company accounting period adheres to the financial year, but you can have two accounting periods in the first year of business.

As you will receive no bill or prompt from the Government, it’s a good idea to appoint a professional to keep on top of your obligations.

How does VAT work for businesses?

If your company sells services and/or products, then you may have to charge customers value added tax (VAT). You are then liable to pay VAT due to Government and submit returns.

Standard VAT is 20%, but some services and products are reduced, with some exempt. A business can be registered for VAT at any time, but if you are turning over more than £85,000 and it’s VAT taxable, then you must register immediately.

You pay VAT online, and it’s your responsibility to make sure it gets to HMRC on time. If it doesn’t, you may incur a surcharge. In the majority of cases, the VAT return deadline and payment deadline are the same – that is one calendar month, seven days following the end of the accounting period.

Employees and PAYE

If your small business employs people, then you also need to ensure you’re up to date with PAYE, which can include Income Tax deductions for employees, Class 1 and 1B National Insurance, student loan repayments, Apprenticeship Levy payments and Construction Industry Scheme (CIS) deductions.

The deadline if you pay monthly is the 22nd of the following tax month, and if you pay quarterly it’s the 22nd after the end of the next quarter.

How does National Insurance work for different business types?

National Insurance Contributions (NICs) go towards certain Government benefits and a State Pension. NI responsibilities vary between business types, and whether you employ people or are self-employed.

Limited company directors must pay Class 1 NICs through PAYE, while sole traders pay Class 2 and Class 4 NICs through self-assessment. If you employ people, you pay NICs through their salaries.

Deadlines depend on your company structure, but sole traders pay through Self-Assessment, which means the deadline of 31 January applies.

How business rates work

If your business is housed in a non-domestic property, then you will be liable for business rates. Properties that are taxed under business rates include offices, pubs, shops, factories, warehouses and holiday rentals.

In England, you get a bill from your local council by March every year, which tells you what to pay for the upcoming tax year. Be aware that business rates are administered differently in Scotland and Northern Ireland. Deadlines will be specified on your bill.

James Turner, Managing Director of Turner Little Limited says: “As you can see, small businesses have a number of tax liabilities and obligations, some of which are not immediately obvious without external advice. While the Government website does have a lot of information, and this is the obvious place to start when working out your liabilities, I would also recommend working with a professional to ensure that you are covering all bases.”

“Taxes are something that can pile up unnoticed in the background, particularly when you’re busy launching a small business. Getting your business and personal tax affairs straight from the outset will ensure your business runs smoothly down the line. Remember that not all of your liabilities are prompted by the Government, and the responsibility lies with you as a small business owner to make sure everything is in place.”

 

About Turner Little
Founded in 1998 in Yorkshire, UK, Turner Little is a specialist UK and offshore company formation, banking and corporate services provider. Our services include company formation, UK and offshore banking, asset protection, credit correction, trademarking and trusts. Other services include Internet services, mail forwarding, wills and probate. Turner Little’s vision is to offer the best possible service, together with market leading products.

How to set up a share option scheme to incentivise employees

Retaining and incentivising key employees should be a priority for small and medium sized business owners. And one of the best ways to effectively do so is through a share option scheme.

Share options are tax efficient for both the employees who will benefit, and the company itself, making them a sensible option. However, it’s important to understand the ins and outs of share option schemes before committing, in order to achieve the best outcome. Here’s what you need to know.

How to get the most out of a share option scheme

The most commonly used share option scheme is the Enterprise Management Incentive (EMI). When a start-up is established, the owner will offer employees share options under the EMI scheme. Usually, employees can only use the share option when the company is sold on. This means they don’t have any other rights as shareholders other than to receive the value when it’s sold, thus incurring no direct cost to the business or its owners.

If the EMI scheme is implemented effectively, employees are able to pay capital tax (rather than income tax) on the money they make after the sale of the shares. They also might be able to claim entrepreneur tax relief, which will reduce the capital tax they owe.

The company itself is able to claim a deduction in corporation tax for the cost of this scheme, as well as the extra market value of the shares over the amount paid by its employees.

Does the EMI scheme work for all small businesses?

The EMI scheme only incentivises employees who buy into it. Therefore, a small business must also include other incentives for employees who don’t wish to do so. These could include other share option schemes, or types of bonuses.

If the key employees aren’t full time employees, and instead work as contractors, freelancers, work for less than 25 hours a week then they aren’t eligible to benefit from an EMI scheme.

Other schemes offering tax advantages include a company share option plan (CSOP), which is similar to EMI. Alternatively, the company could implement share incentive plan (SIP) or a Save As You Earn (SAYE) scheme, both of which have very different structures.

Rules and regulations for share options

Before a small business can implement a share option scheme, the shareholders’ agreement and any articles of association must be checked. If they don’t allow for the adoption of such a scheme, then they must be formally amended.

In addition, there are statutory requirements:

  • The company must have a turnover of less than £30 million.
  • It must have fewer than 250 employees (full-time).
  • It must be independent, which means it can’t be a subsidiary of another company or controlled by another company.
  • Any subsidiaries must be at least 51% owned.

The company also has to introduce clearly communicated rules so that everyone knows the ins and outs of the share options scheme. This should include the following:

  1. A clear explanation of when the share option can be exercised. For example, whether it is after a certain number of years, or only when the company is sold.
  2. The conditions that apply to exercising the option for employees.
  3. When the share option should lapse if the employee leaves the company.
  4. What happens should the company undergo a formal reorganisation.
  5. What the existing shareholder protections are.

James Turner, Managing Director of Turner Little Limited says: “A share option scheme valuation should also be sought so that taxation on the exercising of the option can be clarified. EMI options also have an individual limit that can be held by a single employee. Therefore, it’s necessary to agree the market value of the share options with HMRC.

“We would always advise getting professional assistance when setting up an EMI share option, as there are various complexities that must be understood in order to implement the scheme effectively. Share option schemes like this can be essential for unleashing a company’s potential, and to give valuable employees a valuable exit option.

“However, not every company will benefit from an EMI scheme, and it is necessary to thoroughly analyse the company’s needs before selecting the appropriate share option scheme.”

About Turner Little
Founded in 1998 in Yorkshire, UK, Turner Little is a specialist UK and offshore company formation, banking and corporate services provider. Our services include company formation, UK and offshore banking, asset protection, credit correction, trademarking and trusts. Other services include Internet services, mail forwarding, wills and probate. Turner Little’s vision is to offer the best possible service, together with market leading products.

Amazon’s small business initiatives boost

While Amazon may not immediately spring to mind as champion of small businesses, the multinational behemoth has shifted focus over recent years. And this is in recognition of the growing gig economy.

As part of this drive to integrate small business owners into its overall business model, Amazon is teaming up with Enterprise Nation in the UK. The small business network and Amazon are launching ten pop-up shops across the country, called ‘Clicks and Mortar’.

What do Amazon’s small business initiatives involve?

The first Clicks and Mortar shop has opened in the centre of Manchester, with Wales, the Midlands, Yorkshire, Scotland and the South East following suit. The shops offer an opportunity for more than 100 small business online brands to interact with customers face-to-face. The idea is to boost both high street and online growth for small businesses.

This pilot programme will operate for 12 months around the country as an experiment to see whether online brands can reach high street consumers. The UK Government will analyse independent research about the scheme’s success. They will use the analysis to construct and inform the Future High Streets Fund strategy.

Government support for UK SMEs

The fund aims to support plans for local areas to improve town centres and high streets to future-proof small businesses against the rise of online sales. The Government says in the plan that they recognise changing consumer patterns and the need to adapt high streets to meet new demands.

An emphasis will be on the general experience levels of high streets, to offer something that can’t be found online. The current Government says it is committed to helping town centres adapt as part of its Our Plan for the High Street initiative, which carries funding of £675 million.

The Government also says it will cut business rates by a third for two years, offering this to selected retail properties. The Future High Streets Fund, which Amazon’s research will contribute towards, is part of the wider plan and will provide funding for transformative projects.

What is Amazon’s SME Apprenticeship Fund?

In addition, Amazon is also providing its new SME Apprenticeship Fund, which is worth £1 million. This is part of a package of new measures to practically help SMEs by training their workforce in digital and retail skills. It will create more than 150 roles that cover digital marketing, customer services and business administration.

The apprentices in these roles will work full time for SMEs that sell products on Amazon. The idea is for these apprenticeships to boost UK SME productivity by upskilling the workforce. The apprenticeships run for at least 12 months and offer online, at work and classroom training.

Any SME registered in England that owns a brand selling on Amazon can apply. To be eligible your business must have a turnover of less than £2 million.

Free training for UK small businesses

As well as the Apprenticeship Fund, Amazon is announcing its Amazon Academy 2019 programme. This brings a range of completely free training events across the country offering practical training to help UK small businesses. The training focuses particularly on helping small businesses boost their export sales and reach more people around the world.

Founder of Enterprise Nation, Emma Jones MBE, says that the intention behind teaming up with Amazon is to help small businesses by combining the best of high street and online retail. In Amazon’s blog she says: “This new concept will provide small businesses with the space, technology and support to experience physical retail for the first time while enabling customers to discover new brands on their local high streets.”

Adds James Turner, Managing Director of Turner Little Limited: “There is an increasing and welcome awareness from both the Government and multinationals of the importance of the small business community in the UK. For the UK’s economy to survive the impact of Brexit, and to thrive in a post-EU trading environment, it’s essential that small businesses are supported in every way possible”.

“These initiatives from Amazon and Enterprise Nation are welcomed by struggling high street retailers. There is a pressing need for the British High Street to adapt to the new expectations of consumers used to shopping in a digital online world. By finding a way to amalgamate physical bricks and mortar shops with online brands, a new era for High Streets can be formed.”

Small businesses are one of the most important sectors in the UK, and initiatives like this will provide a boost in skills, job creation and growth across the country. All of which will contribute to a stronger economy.”

 

About Turner Little
Founded in 1998 in Yorkshire, UK, Turner Little is a specialist UK and offshore company formation, banking and corporate services provider. Our services include company formation, UK and offshore banking, asset protection, credit correction, trademarking and trusts. Other services include Internet services, mail forwarding, wills and probate. Turner Little’s vision is to offer the best possible service, together with market leading products.

The importance of getting terms and conditions right

In the rush to cover everything needed to launch a small business, certain aspects can be neglected. For example, many underestimate the importance of terms and conditions for small businesses.

Ensuring terms and conditions are prominent, accessible, easily understood and legally correct is vital for small businesses to avoid potentially expensive legal action. Customers are legally entitled to information that shows exactly what they’re buying and what your business terms are. This is particularly important if your business operates online.

Terms and conditions for small businesses

Terms and conditions (T&Cs) for small businesses are those contract clauses that spell out the obligations, rights and legalities pertaining to both parties entering a contract. Businesses that hide their T&Cs or attempt to blur boundaries with wording or accessibility, are still liable.

A mistake some businesses make is believing that, if they hide pertinent T&Cs in the small print and a customer signs the contract, the customers is still bound by them. In the eyes of the law, this is not the case.

Legal precedent for T&Cs

In 1940, there was a landmark legal court case regarding a local authority’s T&Cs. It centred on whether the local authority could legally rely on a disclaimer against personal injury, which was on the reverse of a ticket given to a person who hired a deckchair from them.

The courts said that this kind of disclaimer must be clearly and obviously brought to the attention of the customer when the contract was being made. Therefore, the local authority should have spelled it out at the same time the customer bought the ticket. However, in this case, the customer received the ticket (with the information printed on the back) after he had paid the money to the local authority. Therefore, the court ruled the disclaimer was not valid as the customer had had no opportunity to refuse the contract based on the actuality of the terms.

Legally, the same applies to T&Cs. They must be clearly brought to the customer’s attention before contracts are signed. The only sure way to do this is to make sure that they are easily visible, clearly written and highlighted. Often, this is where the tick box comes in when you buy something online. The text accompanying the tick box says something along the lines of: “I the undersigned have read the terms and conditions and am happy to proceed.”

 Clarity is key for small business T&Cs

Small businesses should leave no room for ambiguity when it comes to T&Cs. If they are poorly drafted and rendered unclear, then customers might interpret them incorrectly. Ensure that there is absolutely no room for misunderstandings, by drafting succinct and exact T&Cs.

Simple terminology and an absence of legal jargon are best, as most people don’t have a thorough understanding of complex legal language. The more complex the wording used is, the less likely a customer is to read it. This could put them off the transaction. Some terms are more general. These include limiting liability, disclaimers and IP (intellectual property). In these cases, it’s acceptable to use pre-written clauses. More specific T&Cs for your business should be written from scratch.

If a client or customer says they were unaware of your terms and conditions but ticked the box complying with them, they do not have much recourse. Exceptions to this include if a term included in the T&Cs could be construed as ‘unreasonable’ or is legally unenforceable. If the customer wants to pursue the case despite this, the onus is on them to show clear evidence that the T&Cs are unenforceable. This is why small businesses should always include a tick box online before a customer signs a contract.

Every small business should include an easily accessible complaints procedure online. If a customer does pursue a complaint through this, it is always in the company’s best interest to try and resolve it immediately.

James Turner, Managing Director of Turner Little Limited says: “Small businesses should engage the services of a professional to ensure their T&Cs are working in their best interests. It’s not always clear whether a certain term is enforceable or legal, and specialist advice should be sought.”

“Every small business should have unambiguous, well-written, clear and accessible terms and conditions. They should be drafted to fit in with the specific needs of the business and should be considered legally enforceable and reasonable. This must be made clear to the customer before they sign a contract or buy a product or service. The rules are simple, but they are absolutely vital for small businesses who want to avoid possible legal headaches further down the line. T&Cs should also be periodically checked and redrafted if necessary, to comply with changing legislation or to better suit the company.”

 

About Turner Little
Founded in 1998 in Yorkshire, UK, Turner Little is a specialist UK and offshore company formation, banking and corporate services provider. Our services include company formation, UK and offshore banking, asset protection, credit correction, trademarking and trusts. Other services include Internet services, mail forwarding, wills and probate. Turner Little’s vision is to offer the best possible service, together with market leading products.

Choosing the best business finance for start-up growth

Small businesses have many options for business financing. But this, in itself, can be overwhelming, particularly for start-ups focusing on multiple strands of growth. Deciding which finance option is best for your small business is imperative for growth plans to succeed. Here’s a breakdown of some of the types of business finance for start-up companies.

Defining business finance

Business finance for start-up – what is this? It refers to any funding raised by start-ups to help them grow. There are two main types of business finance:

  1. Debt finance – where a business borrows money from a lender and agrees to pay back in full plus interest. The money can be paid back in a lump sum, or through a long-term payment plan. The business does not have to give up any control or shares to access funding in this way.
  2. Equity finance – when a business raises funding by effectively selling shares to investors or another business. The stake’s value depends on the success of the business selling, which means investors retain an interest in its profitability and growth. Often, investors also bring their experience, skills and networking to the deal, in order to help the business grow.

It is rare for a start-up to be able to fund itself independently, which means the vast majority must raise business finance of some kind.

Which business finance should a start-up choose?

Both debt and equity finance both have pros and cons for small businesses.

  1. What are the advantages of debt finance for small businesses?
  • Tax relief is available on interest payments.
  • It’s relatively simple to plan ahead to make repayments.
  • Terms can be tailored in the best interests of the business.
  1. What are the disadvantages of debt finance for small businesses?
  • Penalty charges apply if you default on payments.
  • Cashflow can fluctuate, which could affect the ability to pay.
  • Lenders will analyse business and personal credit history.
  1. What are the advantages of equity finance for small businesses?
  • Investors can provide further funding as the business grows.
  • Investors can bring invaluable skills, expertise and resources to the table.
  • Investors take on some of the risk as they own a share and want to help the business succeed.
  1. What are the disadvantages of equity finance for small businesses?
  • Businesses dilute ownership.
  • There are lots of legalities to cover.
  • Raising equity demands time away from the business.

Business financing is the lifeblood of a small business, and particularly start-ups. The most recent analysis from the Office of National Statistics (ONS) shows the business ‘death rate’ is continuing a steady rise (for a number of years). This is stark evidence of just how tough it can be out there for small businesses and start-ups that want to survive and grow.

Potential sources of business funding for small businesses

Following the financial crisis in 2008, some traditional forms of financing for businesses dried up. This opened the door for some alternative, or less traditional forms of funding, for example, crowdfunding. Here are some of the main sources of funding available for both categories, starting with debt finance.

  • Bank loans – work well for large, long-term investments.
  • Bank overdrafts – useful to fund shorter term business plans or finance day to day working capital.
  • P2P lending – peer-to-peer lending uses online platforms that match borrowers with potential lenders. Loans can be small amounts or go up to millions. The platform charges a fixed fee or lenders outbid each other with competitive interest rates.
  • Asset-based financing – this covers both asset-based lending and invoice financing.
  • Hire purchase and leasing – useful for physical assets like company cars and office equipment. The option to buy is generally available at the end of the agreement. Works well for businesses that need equipment but can’t afford to buy outright.
  • Export finance – this covers a number of financial banking products designed to make it easier for businesses to trade internationally. It reduces defaulting risks or delayed payments, and bridges payment gaps when necessary.
  • Trade finance – helps businesses buy goods from domestic and international sellers. This generally covers specific goods shipments over set periods of time.
  • Mezzanine and growth finance – both of these are tailored to the needs of a business, so that the repayment plan matches its revenue forecast. Usually used to fund the expansion of existing businesses.

Potential sources of equity financing

  • Angel investment – ‘angel’ investors are wealthy people who put money into businesses in return for equity. They either invest alone or through a syndicate.
  • Equity crowdfunding – uses online platforms to link angel investors with businesses needing funding.
  • Venture capital – venture capitalists seek out unique businesses they believe will deliver high returns. They invest in a number of businesses, knowing that a percentage will fail. Often invest in early stage start-ups.
  • Private equity investors – they aim to improve a business’ profitability and to do so invest in new services and products, or into plans for expansion. They introduce a corporate and management structure to the business. The investment goes on for around five to seven years, after which the investor sells its shares and lists the company publicly.

James Turner, Managing Director of Turner Little Limited says: “This is not an exhaustive list of all forms of business financing, but it is a useful basis for start-ups unsure how to proceed. All small businesses need to access some kind of funding, and while it can seem a distraction in terms of time invested in securing the right kind of funding, it is key to growth.”

“Small business and start-up owners should carefully consider which form of funding is right for their needs. It may be that as they grow and expand, the type of finance needed changes. It’s always a good idea to engage a professional for advice on the best kind of funding for your business, particularly if you’re starting out.”

About Turner Little
Founded in 1998 in Yorkshire, UK, Turner Little is a specialist UK and offshore company formation, banking and corporate services provider. Our services include company formation, UK and offshore banking, asset protection, credit correction, trademarking and trusts. Other services include Internet services, mail forwarding, wills and probate. Turner Little’s vision is to offer the best possible service, together with market leading products.

Turner Little on the financial support package for UK exporters

The Secretary of State for International Trade Dr Liam Fox has announced the Government’s plan to support UK businesses that export products, and the companies in their supply chains.

This financial support package is specifically aimed at small and medium sized enterprises (SMEs) in the UK and is being hailed as a ‘gamechanger’ by the Government.

Financial support for UK exporters

Dr Fox was speaking at a celebration of 100 years of the UK Export Finance (UKEF) on 5 June 2019 and its financial backing for international trade. This is the first Government support package that will be made available to SMEs exporting to emerging markets from the UK.

The financial package will include:

  • The General Export Facility – this covers costs for exporters in general, not limited to costs arising from a specific export deal.
  • The Small Deal Initiative – this will go towards the high number of exporting companies taking on small contracts that form the backbone of British trade.
  • The extension of financials support to companies in exporter businesses’ supply chains, in addition to the support the exporters themselves receive.

In announcing the package, Dr Fox says: “These… are potential gamechangers for our export industry and will help us to tap a fresh vein of potential from within our economy.”

 

The importance of UK business in global supply chains

The Small Deals Initiative is the part of the package will involve UKEF guaranteeing loans made to potential overseas buyers of UK goods. The idea is that this will make export bids from the UK more competitive and more popular.

The General Export Facility will mean the UKEF supports the overall needs of exporters, and not just for those needing support for a specific deal. On this Dr Fox says: “Recognising that it takes more than one business to deliver an export contract, UKEF has extended eligibility for its support to companies in exporters’ supply chains.”

The latest information available to the Government shows that more than 23% of UK exports that took place in 2015 were embedded within the supply chains of other nation’s exports. This shows how vital the UK is within the global supply chain. It’s hoped that the more flexible approach from UKEF will give SMEs more access to working capital and bonds.

 

UK SME exporters increasing year on year

Small businesses are showing growing confidence in their ability and willingness to export. In 2018, 5% of UK SMEs that weren’t exporting reported plans to do so in the future. This was an increase on 3% in 2017.

Around 400,000 businesses in the UK could export but choose not to, and the Government hopes that this financial incentive should help their productivity levels in the export space.

Since 2009, UKEF has provided more than £30 billion of support to UK exporters. More than 600 companies that export from the UK have been able to use this support to grow their businesses overseas. Just over three-quarters of the businesses assisted and supported by UKEF in the year 2017-2018 are SMEs, showing just how vital this sector is to the country’s performance in the global supply chain.

 

Where does the UKEF fit in?

The UKEF works alongside the Department of International Trade and is the export credit agency for the UK. It began in 1919 to encourage exports following the end of World War 1, and its mission remains to help any viable UK export succeed through financial assistance.

Latest information from the Office of National Statistics shows that the 2018/2019 financial year was the most successful for UK exports since records started. This means the UK is up to 36 consecutive months of growth in exports. Separate information shows that UK exports increased faster than Italy, Germany and France between 2016 and 2018.

James Turner, Managing Director of Turner Little Limited says: “This financial package is described as a ‘gamechanger’ by Dr Fox, and it is certainly very encouraging. Post Brexit the UK will rely more than ever on exports, and businesses need assistance in ensuring this sector continues to grow year on year.”

“The recent figures shown are also encouraging, and the help from the Department of International Trade is likely to strengthen UK exporters even more. The global economy is heading for a slowdown, and there is no doubt at all that the UK is experiencing a difficult time in the run up to Brexit. Building a global UK needs this kind of investment, and this investment strategy is welcome news for UK SMEs. It can be hoped that Britain will become an exporting superpower, with more influence on the world stage in the future. Investment like this will help the country to achieve investment overseas and remain strong into the future.”

About Turner Little
Founded in 1998 in Yorkshire, UK, Turner Little is a specialist UK and offshore company formation, banking and corporate services provider. Our services include company formation, UK and offshore banking, asset protection, credit correction, trademarking and trusts. Other services include Internet services, mail forwarding, wills and probate. Turner Little’s vision is to offer the best possible service, together with market leading products.

Turner Little advises small businesses on no-deal Brexit preparations

As the UK goes through a Tory leadership contest, it remains unclear how this will affect Brexit. Currently, Theresa May is acting Prime Minister until her successor is appointed. This means that the date set to leave the EU remains the 31 October 2019.

However, as this was an extension to the original date of 29 March 2019, it’s not yet possible to know whether the UK will leave with no deal on that date, or whether the new Prime Minister will alter the country’s trajectory somehow.

Could there be a no-deal Brexit?

While opinions remain divided both in the business and political sectors, as to when and how the UK should leave the EU, it’s business as usual for UK SMEs. The Institute of Directors (IoD) is now urging small businesses to return to preparing for the country leaving with no deal.

There are signs that Theresa May’s successor will pull the UK out of the EU regardless of a deal being finalised. At the moment Boris Johnson is leading the pack, and that is his stance. Should this happen, businesses must be as prepared as possible for its repercussions.

The IoD maintains that businesses must wait no longer for the Government and EU to formalise a final deal, but to step up their own preparations. Their figures show that less than 50% of businesses have firm plans in place.

Less than a quarter of UK businesses are planning for no-deal

The group surveyed one thousand companies and found that between January and April the percentage of those that had activated specific plans rose by only 5% (from 18% to 23%). They also found that just 4% say they will be using the time until October to speed up preparations.

The interim director of the IoD Edwin Morgan, in an interview with the Guardian, says that he believes it’s clear there is a possibility of a no deal Brexit, and that there is no absolute reassurance for businesses that an agreement will be reached.”

Furthermore, the group feels there hasn’t been enough support, particularly for SMEs for planning ahead for a no-deal Brexit.

What could a no deal Brexit mean for your business?

James Turner, Managing Director of Turner Little Limited says: “Obviously, we just don’t know the entire scope of a no-deal Brexit, but there are factors worth considering for businesses preparing for this possibility. No-deal Brexit doesn’t have one solution, just as it wouldn’t have a single outcome.”

“We do know that the Government will want to preserve some state of status quo so that businesses can continue to contribute to the UK’s economy. Over time, it’s likely that the Government would introduce specific solutions that will end up being positive for the economy. However, this is not as likely in the short term, due to the ongoing nature of negotiations.”

“All of this makes it difficult to plan ahead. UK SMEs should remain flexible, and ready for as many eventualities as possible. It could be that some businesses could face disruption in the short term, but in the medium and longer term, there could be opportunities for many. No country has previously left a trading bloc in the same way, so we don’t have a precedent to work from. This is why it is causing uncertainty for many sectors.”

How does ‘no deal’ stand for the EU’s position?

The EU issued Notices to Stakeholders, that cover all kinds of sectors and topics. These include the end of any existing relationships with member countries, and who is participating in Brexit committees.

For its part, the UK Government also issued documents, which highlight a high number of immediate ramifications from a no-deal Brexit. Third party countries are also waiting to see how long-term trade between the EU and UK will be affected before they begin any separate negotiations with the leaving country.

Adds Mr Turner: “When we have clarity on the leaving position of the UK, other countries will begin to open negotiations for bespoke trading deals. The EU has issued some information on interim measures that it would put in place, but these are going to be focused on limiting any problems for the EU, rather than the UK.”

Prepare now for a no-deal Brexit

While some, such as the IoD, are clear that a no-deal is the worst of the options available for the UK, others see it as a potentially positive move in the long-term. Either way, the IoD’s advice to small businesses in the UK is to begin preparations now.

Mr Turner says: “There is no doubt that preparing for Brexit in as many ways as possible is sound advice for small and medium sized businesses in the UK. The aim must be to minimise disruption, particularly in terms of exporting goods. Planning for manpower is also key, as it’s not yet clear the rights European citizens living in the UK will have after Brexit.”

“It’s a difficult and uncertain time for UK business in many ways, however, the frontrunner for Conservative leadership, and therefore as Prime Minister, believes that taking the UK out by 31 October 2019 is vital for public confidence in the Government. At the moment it’s a case of preparing for either eventuality, and carrying on as usual as much as possible.”

 

About Turner Little
Founded in 1998 in Yorkshire, UK, Turner Little is a specialist UK and offshore company formation, banking and corporate services provider. Our services include company formation, UK and offshore banking, asset protection, credit correction, trademarking and trusts. Other services include Internet services, mail forwarding, wills and probate. Turner Little’s vision is to offer the best possible service, together with market leading products.

Why market research is vital to small business success

When you’re starting or running a small business in today’s always-online world, it’s very easy to become distracted. While there are many demands on your time, the primary goal behind every small or medium sized business always comes back to sales revenue.

Sales are the backbone of your business, regardless of sector, product or service. And if this aspect of your business is struggling, then all other parts will inevitably follow. As with most factors of success in business, the answer lies in proper preparation and time spent on market research.

Market research shapes the future of small business success

One of the most important and powerful tools you always have access to lies in small business market research. Every business must have a plan for its future, and a clear roadmap for success. The best roadmap is one that generates the maximum number of sales possible.

Networking, talking to contacts, surveys and other forms of online and offline market research will give you insight into how to improve sales. Here’s why putting time into research can shape the future of your business:

  1. You will reach new customers and clients

You need to pull in new clients and customers. Whether this is physically through the door, to an ecommerce site, or any other platform, this is your number one priority. By conducting efficient market research, you will be able to monitor not only your own success in achieving this, but also that of your competitors.

By properly understanding how your direct competitors are faring, you will be able to adjust your strategy accordingly. Research is not something that should be carried out once for your initial business strategy, but constantly and often throughout the business year.

Making decisions regarding where to advertise, which online channels to use, and properly utilising the huge opportunities of social media, you can attract customers who are unhappy with your competitors. Adjust your offering to meet their needs, and you will gain new customers.

Tracking consumer responses to competitors will also show you where opportunities lie for partnerships with companies that could help you grow your business.

  1. You will increase customer spend and customer loyalty

A common mistake made by start-ups and SMEs is to only concentrate on winning new customers. Far more important in the long-term is cultivating and increasing a loyal, long-standing customer base. This is why thorough and consistent market research is key.

A key metric to include in research is Customer Lifetime Value (CLV). This concept hinges on understanding that your customers are assets that should be managed. Their value, therefore, should be measured and monitored. Proper assessment of CLVs are particularly important for small businesses creating services that are directly customer orientated. However, it’s also an important metric for other businesses that are offering secondary services.

CLV relates to the amount customers spend across every transaction. Research in this area allows small businesses to understand what consumers want and to adjust offerings accordingly. Market researchers can also ascertain why past customers have decided not to come back, and further adjust the direction of customer offerings to accommodate this.

  1. You will be able to set accurate and achievable goals

The most successful SMEs understand where they stand in their chosen market. They also have clear, realistic aspirations and goals. Market research that correctly combines qualitative and quantitative data helps business owners produce accurate long-term forecasts that they can realistically work towards.

If it is discovered that realistic predictions fail to match aspirations, then that’s the time to work out ways to improve. Research is a motivator, as well as an instigator of judicious change.

If the predictions fall short of your aspirations, this will be the perfect time to plan how to improve the situation.

James Turner, Managing Director of Turner Little Limited, says: “Starting a new business, and running an SME is an incredibly challenging job. There are many aspects that need to be in harmony for a company to fulfil its potential. In the UK, we rely on small and medium sized businesses to bolster the economy, and while innovative ideas are one part of launching a successful company, the ability to manage long-term success is just as important.”

“A market research strategy that goes beyond initial customer expectations of your product or service is a vital part of success. Organisation and thorough, in-depth analysis of the response to your business, and to that of your competitors, will push you past your competition. Market research will allow you to accurately predict future success and adjust your product or service accordingly. It should be part of your long-term business strategy from the start.”

About Turner Little
Founded in 1998 in Yorkshire, UK, Turner Little is a specialist UK and offshore company formation, banking and corporate services provider. Our services include company formation, UK and offshore banking, asset protection, credit correction, trademarking and trusts. Other services include Internet services, mail forwarding, wills and probate. Turner Little’s vision is to offer the best possible service, together with market leading products.

 

Turner Little lists important small business tax breaks

When it comes to starting a small business, it’s natural to focus most of your energies on the day-to-day organisation. It’s often an ‘all-hands-on-deck’ scenario, with everyone involved ensuring sales are being made, products are being developed and marketing is being carried out. All too often, things like finding out about business tax breaks get left behind.

However, it’s worth putting the effort in at the beginning of your venture to find out about the tax breaks you could be entitled to. If you don’t, you could be missing out on ways you can help your business be more competitive.

Business tax breaks for small and medium sized enterprises

There are various tax relief schemes on offer for small and medium sized enterprises (SMEs) in the UK. Some are specific to industries and others are potentially available for all small businesses.

If you meet the criteria set by HMRC then your small business could lower its tax bill significantly. Look at it as an easy way to boost efficiency and potentially profitability. And it just takes some research up front. Here’s a rundown of some of the tax breaks your business could be eligible for.

  1. Employment Allowance

If you employ people through PAYE, then employment allowance can give you up to £3,000 off your Class 1 National Insurance (NIC) bill every year. Until 5 April 2020, businesses can claim this reduction in NICs. However, the majority of contractors and freelancers who pay Class 2 and 4 NICs aren’t eligible.

Businesses that are eligible can use up to the £3,000 limit each tax year. For example, a business with one member of staff earning £22,000 can claim the full amount (1,873.49) of NIC as it’s within the allowance. It’s £3,000 per business, not per employee.

After 6 April 2020, the allowance will only be available for small businesses, and those with an Employer NIC bill in excess of £100,000 won’t be able to claim it.

  1. Annual Investment Allowance (AIA)

 

The AIA is a form of tax credit for the purchase of equipment needed for your business. It allows you to deduct the total amount of an item that qualifies for AIA from your company profits before tax. If you later sell the item in question, you may have to pay tax then.

 

It can be claimed on most machinery and plant assets and does include some fixtures and features of buildings. It can also apply to alterations you make in order to install machinery but can’t be claimed for repairs. You can’t claim it for cars or anything given to your business, nor on any items you owned before you started your business.

 

The AIA threshold has been increased to £1 million on a temporary basis since 1 January 2019. This will cease on 31 December 2020 and was introduced by the Government to try and stimulate investment in business. Before this temporary increase, the amount stood at £200,000.

 

  1. Small Business Rates Relief (SBR)

 

If the property you run your business from has a rateable value of £15,000 or less, you should claim Small Business Rates Relief. This is on a sliding scale and means that businesses with a rateable value of less than £12,000 pay zero business rates. Those with a rateable value of more than £15,000 are not entitled to business rate relief. This is only available to business owners who have one property, but if you buy a second you can keep the entitlement to this tax credit for 12 months.

 

  1. SME research and development (R&D) tax relief

 

R&D tax relief is for businesses that create or contribute to scientific and technological advances. These advances must impact the field the business works within in a wider sense than just on the business itself. HMRC’s criteria for eligibility is relatively strict, so bear this in mind when applying.

 

The SME R&D relief scheme is available for businesses that employ fewer than 500 people, turnover less than €100m, or have a balance sheet total of less than €86m. Companies eligible for this can deduct 130% of the qualifying costs from annual profit in addition to the usual 100% deduction.

 

For businesses that are loss-making, tax credit of up to 14.5% of the loss is available. Qualifying costs can include employee costs, software fees, consumable items and subcontractor costs, but not rent, rates or capital expenditure.

 

  1. SEIS – Seed Enterprise Investment Schemes (SEIS)

 

This isn’t a straight-forward tax break but is a potential benefit for small businesses. SEIS is a venture capital scheme that could help you get investment. If you’re eligible, you could get up to a £150,000 worth of investment. The scheme gives investors tax relief, and you must both meet criteria set by HMRC to qualify.

 

To be eligible, businesses must be no older than two years, employ 25 people full time and have gross assets of no more than £250,000.

James Turner, Managing Director of Turner Little Limited: “Not every small business or SME will be eligible to claim all of these tax breaks. However, if your business is eligible for any of them, they are very much worth applying for. They could make a significant impact on your company’s profitability.”

 

“Always do your research and check whether your business meets the criteria set for these tax breaks. While it may seem like more work at the outset of your business, the benefits could be extremely worthwhile. The SME sector is vast and very competitive, and any assistance to improve efficiency and profitability should be seized by business owners.”

 

About Turner Little
Founded in 1998 in Yorkshire, UK, Turner Little is a specialist UK and offshore company formation, banking and corporate services provider. Our services include company formation, UK and offshore banking, asset protection, credit correction, trademarking and trusts. Other services include Internet services, mail forwarding, wills and probate. Turner Little’s vision is to offer the best possible service, together with market leading products.

Research shows small business sentiment is more optimistic

Getting a true picture of small business sentiment can be tricky, particularly as the business world waits to find out how Brexit will affect them. But Business Tracker, a tool created by Impact Social for the Daily Telegraph uses social media to analyse general sentiment.

And the latest analysis shows a distinct shift, this time towards optimism.

New analysis shows optimistic small business sentiment

The tracker analyses posts on Twitter from 25,000 UK entrepreneurs, small business owners and enterprises. Recent data examined 32,500 Tweets posted between 23 April and 27 May 2019.

During this period, 14% of the Tweets were positive about small business prospects, while just one in nine (11%) were negative. The tool eliminates all posts that could be considered neutral opinions, including marketing and advertising, leaving accurate opinions, which give an indication of the general trend towards more optimistic business prospects.

The analysis shows that 56% of small businesses are positive about their future, with 44% less sure. While this may not seem like much of a difference, it represents a change in sentiment. The previous three trackers were on a downward path, and between 31 January and 22 April, almost two-thirds of posts were negative. So, this latest data shows a real shift towards positive business sentiment.

Industry awards boosting mood

Businesses are celebrating winning industry and specialist awards, with 18% of the positive Tweets celebrating various trophies. In April 2019, the Queen’s Awards for Enterprise awarded the efforts and achievements of more than 100 SMEs, recognising their huge contribution towards innovation and international trade. A month later, the Federation of Small Businesses (FSB) held its annual awards, and EY also released the UK finalists for its international Entrepreneur of the Year competition.

While awards were the most popular positive commentary on Twitter, 14% also expressed public relief at the extension of Article 50. With Brexit now delayed until 31 October 2019, it seems that some small businesses are feeling more positive.

Other small businesses shared tweets about Brexit that show frustration at the delay (41%). Some say that the delay makes it more difficult to plan ahead. For example, Phil Cookson heads a recruitment agency called Creative Resource, and says on Twitter: “Should we invest in growing the firm or should we save rainy day cash in case of a no-deal?”

Around 15% expressed negative sentiments about Prime Minister Theresa May’s decision to resign on 7 June. Concerns expressed include the worry that the Tory leadership battle will distract the Government from Brexit, potentially wasting the opportunity the extension has offered.

Moving away from Brexit, other success stories from small businesses include successful investment (16%), more sales (12%). Around 10% of the positive growth stories come from regions outside of London.

James Turner, Managing Director of Turner Little Limited, says: “Despite the ongoing frustrations and delays over Brexit, and the announcement of the Tory leadership battle, it is encouraging to see many signs of optimism in the small business community”.

“Small business, entrepreneurs, sole traders and microbusinesses are the driving force behind the UK’s economy. During tough economic times, or periods of political instability, it is vital that the sector continues to move forward with growth plans. We may not yet know how the change of Prime Minister will affect plans for the UK to leave the EU in October, but it’s clear that compromise and consensus is needed for the country to move forward. Despite the challenges facing the business sector, it’s encouraging to see that optimism is growing among small businesses.”

About Turner Little
Founded in 1998 in Yorkshire, UK, Turner Little is a specialist UK and offshore company formation, banking and corporate services provider. Our services include company formation, UK and offshore banking, asset protection, credit correction, trademarking and trusts. Other services include Internet services, mail forwarding, wills and probate. Turner Little’s vision is to offer the best possible service, together with market leading products.

Will Open Banking help small businesses grow?

Open Banking is here, and it is potentially the most seismic change for financial services in a generation. Since reforms were introduced in January 2018 regarding financial data sharing, Open Banking has transformed the financial services market. Access to innovative, disruptive, easy-access financial services will profoundly change the way banks and their customers work together.

For small businesses, it means that for the first time more options are available to them to manage their finances. Instead of being restricted to a select few services provided by high street banks, small businesses can use tailor-made, specifically honed financial assistance in the form of apps, products, alternative lending and new tech platforms.

How will Open Banking affect small businesses?

We’re currently seeing the transition from traditional business banking to Open Banking. And while it is still early days, it will deliver a profound sea-change in financial management, on a personal and business level.

Most UK small businesses are yet to grasp the opportunity available to them, but research from PricewaterhouseCoopers (PWC) indicates a steadily increasing willingness to use Open Banking. At the moment, 40% of small business owners are happy to share their financial data for Open Banking purposes. By 2022, this will increase to 72% as SME owners grow their understanding of the benefits available to them. This means that by 2022, 4.8 million small businesses and 32.7 million consumers will be utilising Open Banking to manage their finances.

The propositions that will be created and offered by Open Banking to small businesses include:

  1. Bespoke, tailored lending based on an analysis of the SME’s account data.
  2. Improved cash flow management.
  3. Integrated tax and accounting services.

Transformative financial management

Open Banking is the term used for a set of reforms implemented in January 2018, following calls for reform from the Competition and Markets Authority (CMA). It essentially forces UK regulated banks to allow customers to share financial data with other providers that offer apps or banking.

This is subject to the provider being authorised, and the consumer or small business giving permission. It’s hoped that this will end the monopoly of the traditional banking sector and improve financial management services for both consumers and businesses. The authorised parties are regulated by the Financial Conduct Authority (FCA) and are on the FCA Register or the Open Banking Directory.

Opening up the market will improve small business finances

In 2018, there were 5.4 million small businesses registered in the UK, making up 96% of the total businesses in the country. This is a huge number of small businesses forming the very backbone of the UK economy.

Challenges faced by microbusinesses and SMEs include access to financial management, services and products. With few staff and fewer resources, often time is just not available for financial analysis. This can lead to small businesses missing out on assistance, loans, information and general financial help that could be critical for survival.

Statistics show that almost half of small businesses that failed to secure the full amount they wanted from a business loan simply gave up, cancelled growth plans or put their business on hold. More than two-thirds are willing to give up growth plans rather than borrow money.

James Turner, Managing Director of Turner Little Limited, says: “The general reluctance to access financial management assistance is one of the reasons behind the introduction of Open Banking. Small businesses will benefit from more competitive products and services within the financial sector. Open Banking is becoming a very exciting opportunity that could help to boost the country’s position on the world stage”.

“However, it can seem low priority for small business owners who are dealing with the day to day immediacy of running a business. They will begin to see more products and services opening up, even if they are not aware of the changes in the background. This can help small businesses in many ways, from speeding up access to cash, funding and loans, to assisting with realistic plans for growth. From expenses tracking to tax assistance, there are already loads of apps and services available that small businesses and sole traders should be aware of. These innovations are specifically designed to help real-life problems faced by small businesses and are provided by Fintech innovators”.

“Fintech and Open Banking have the power to give small business owners full control of their financial future. We are in the early days of this transformative time within the financial sector, but through adoption of innovative solutions, small businesses will be able to further support the country’s economy and thrive.”

 

About Turner Little
Founded in 1998 in Yorkshire, UK, Turner Little is a specialist UK and offshore company formation, banking and corporate services provider. Our services include company formation, UK and offshore banking, asset protection, credit correction, trademarking and trusts. Other services include Internet services, mail forwarding, wills and probate. Turner Little’s vision is to offer the best possible service, together with market leading products.

How small business owners can recoup late payments

One of the biggest problems start-ups and small businesses face are late payments. The costs to small business owners adds up to £6.7 billion per year just to chase outstanding invoices.

Clearly this is a major problem for small businesses with limited resources, and tight cashflow, as we highlighted earlier this year. In this blog we’re looking at what you can do as a small business owner to recoup late payments.

Late payments cause problems for small businesses

The threat of late payments is an ongoing problem for small businesses in the UK. The Chancellor of the Exchequer, Phillip Hammond, included plans to “tackle the scourge of late payments” in his Spring statement. This includes a requirement that big companies report how they are fulfilling their payment obligations to small businesses.

According to statistics from the Federation of Small Businesses, about 80% of small businesses have experienced late payments. The bank transfer service, Bacs, calculates that the UK’s small businesses spent £6.7 billion in 2018 collecting money and chasing invoices.

The same data shows that more than 25% of small business owners have had to pay their own suppliers later than the agreed deadline, as a knock-on effect. Just over 28% say they have slashed their own salaries to keep their business going while they wait for payment from large corporations.

Government measures on hiatus

The Federation of Small Businesses (FSB) states that late payments lead directly to more than 50,000 small businesses closing every year. This costs the UK economy around £2.5 million. The Government’s measures are welcome, but, as yet, there is no date set for consultation and implementation. Small businesses are still in the same position regarding late payments, until further clarification comes from the Government.

Tracking payments, chasing invoices and ensuring payment is made is an important part of managing the cashflow of a business. However, it is not always simple, particularly for small businesses and start-ups, which are forced to direct energy, time and money into customer service, business development and content marketing. Chasing payments can take up a large part of a small business owner’s day and keep them from equally essential tasks. If this sounds familiar, here are some tips on recouping payments.

How to recoup late payments from clients

The majority of small businesses are already using accounting software and processing invoices online. If you’re not, this should be your first step. Sending invoices via email means faster processing and fool-proof record keeping.

While a simple spreadsheet can be enough in the early start-up stages, dedicated invoicing software is recommended. This will allow your company to grow and seamlessly deal with invoicing. Plenty of software vendors offer a limited, free platform, so try some out before you decide which works best for you.

Keep invoices simple and professional

This may sound simplistic, but your invoices should be clear and professional, and properly reflect your brand. By ensuring clarity on your invoices, including all company and financial information relevant to both parties, you are simplifying the process of payment collection. Make your invoices so clear that there can be no misunderstanding on either side.

Similarly, displaying clear and accessible payment information will help when sorting VAT and a clear and concise delivery note can be proof of clear communication should there be a dispute. Make your invoices easy to read, with a clear and accessible layout. Your aim should be to make it as simple as possible for the client to pay your invoice. Anything that could be misinterpreted or misconstrued should be omitted.

Give your clients payment options

While some small businesses still collect payments by cheque or bank transfer, be aware that some of your clients may prefer to pay by debit or credit card. In short, don’t assume you know their payment preference, and offer alternative options where possible.

By setting up electronic invoices that allow clients to pay with one click or just a couple of steps, your software should be able to reconcile your accounts automatically. This frees up time that would have been spent manually going through records to ensure reconciliation. In turn, this saves you money.

James Turner, Managing Director of Turner Little Limited, says: “Unfortunately, the reality is that large corporations generally pay their suppliers late. As small businesses are often the suppliers, they are the hardest hit. However, late payments don’t just damage individual companies, but also cause harm to the wider economy.

“This is why the Government are promising to act in favour of small businesses by making larger companies accountable for their payments. The Chancellor is proposing to tackle late payments, but as this is not yet in place, small businesses must take the initiative themselves.

“Small business owners can take steps to improve payment times, by following this advice. Consider how you can ensure the entire payments and invoicing process is as easy as possible for your clients. By using clear, accurate and detailed documentation, you will minimise complications and queries. These can slow down payments even further, so by taking pre-emptive measures, you can cut down on waiting times for invoice payments. These are steps which every small business can implement immediately to help manage cashflow.”

About Turner Little
Founded in 1998 in Yorkshire, UK, Turner Little is a specialist UK and offshore company formation, banking and corporate services provider. Our services include consultation, company formation, UK and offshore banking, asset protection, credit correction, trademarking and trusts. Other services include Internet services, mail forwarding, wills and probate. Turner Little’s vision is to offer the best possible service, together with market leading products.

 

Image Credit: tirachardz / freepik.com

What are angel investors looking for from small businesses?

Securing funding is a priority for all start-ups, entrepreneurs and small businesses. Without cashflow, it doesn’t matter how promising a business idea is. And one channel many entrepreneurs pursue for funding are angel investors.

How do angel investors work?

An angel investor is someone who uses their own personal money to invest in a small business, one that they personally consider worthwhile. They will choose businesses that have growth potential. Usually, they provide that business with equity finance and receive shares of the business in return – think a ‘Dragon’s Den’ style transaction.

Angel investors use their own experience, skills and knowledge to decide who to work with. They don’t rely on an external agent or advisor, it’s about them making gut decisions based on face-to-face meetings, or via online platforms.

A key differentiator between receiving funding from a bank and an angel investor is that you will also benefit from the angel investors contacts, experience and knowledge. Angel investors bring a lot more to the table that just funding, they can bring all kinds of networking opportunities to help the small business grow and succeed. Some choose to act passively as part of a group of investors or be the lead investor on a deal.

How can small businesses find an angel investor?

Networking is key here. The most productive way to approach an angel investor is through an introduction, either from a contact, client, other entrepreneur or even a friend. Angel investors are approached by many people with a lot of different pitches, so it can be difficult to get an ‘in’.

Events are also a possible avenue, with groups such as the UK Business Angels Association (UKBAA) regularly hosting investor forums. These can present opportunities to meet with business leaders, other entrepreneurs and potential investors. They also host regional hubs offering higher visibility of investors to entrepreneurs.

What interests an angel investor?

Investors want to understand how you are solving a problem or challenge present in society or a specific market. They will want to see market research that proves your start-up or project meets an actual need. It also must bring something disruptive or tangibly new to the market.

They also what to know that your business can be scaled, how you plan to grow, how you expect to make money and whether you’ve tested prototypes on customers. You must be able to prove there is real interest in your project. It’s not enough to turn up with an idea and expect funding, rather a strong business case must be crafted.

As well as short-term scalability, angel investors want to know about international possibilities. How will your start-up eventually fit in on a global stage?

Is there a limit on how much they can invest?

While some angel investors choose to do so alone, it’s more common to invest alongside others through syndication. The average angel investment from an individual is about £25,000. Syndicates provide approximately £190,000 on average.

Bigger SMEs on the cusp of international expansion naturally require more investment than a start-up. Investors tailor support to fit the project, something that is usually not possible from traditional lenders. Investors and the start-ups involved benefit from this flexibility.

Investing in this way usually doesn’t see a return or a possible exit for at least eight years. How long angel investors choose to remain part of the business again depends on individual circumstances. They rely on guidance from people who have long-term experience in building businesses to make decisions, as well as their own in-depth knowledge of the sector.

Start-up investment is increasing in the UK

Start-up investment is more popular and accessible in the UK than ever before. There are enough successful start-ups (for example, ASOS, JustEat and Zoopla) providing a clear framework for investors to make a decision. In addition, there are increasing policies and legislative changes implemented by various Governments to support this sector.

The biggest impact has come from the Enterprise Investment Scheme (EIS) in the late 1990s, and the Seed Enterprise Investment Scheme (SEIS), implemented in 2012. Both reward investors with generous tax breaks. For example, under SEIS, it’s possible to gain up to 72.5% of the investment as tax relief.

James Turner, Managing Director of Turner Little Limited, says: “These kinds of tax relief schemes have been exceptionally popular with private and angel investors. Each year. They invest more than £1.5 billion into high-growth opportunities using EIS and SEIS. This is why we are seeing more angel investors wanting to become involved at the early stages of start-ups.

“Angel networks are excellent tools for investors as they present various opportunities through online platforms and pitching events. Tech start-ups in particular are seeing results from angel investors, and it offers a financing opportunity that is more flexible than traditional banks.

About Turner Little

Founded in 1998 in Yorkshire, UK, Turner Little is a specialist UK and offshore company formation, banking and corporate services provider. Our services include company formation, UK and offshore banking, asset protection, credit correction, trademarking and trusts. Other services include Internet services, mail forwarding, wills and probate. Turner Little’s vision is to offer the best possible service, together with market leading products.

How small business owners can become recognised as industry experts

Becoming a visible industry expert, thought leader and authority in your chosen sector helps you to build credibility and attract and retain customers. For small business owners, implementing a communications and reputation building plan will ensure that you can make your mark in a crowded field.

People will always want to listen to authority figures. Experts in their field are invaluable, encouraging customers to follow advice, engage with them, buy into products and services and remain loyal to a small business. This is the power that industry expert/authority marketing has.

Small business industry expert/authority strategy

Small businesses should capitalise on their industry expert knowledge, and combine it with a planned, strategic branding exercise. The idea is to become recognised in your particular field as the authority worth listening to.

Becoming an authority in your field isn’t quick, and it isn’t always easy. But it is important. Here’s how to maximise the potential of your small business using four industry expert/authority marketing techniques. The idea is to clearly demonstrate authority, knowledge and expertise in an accessible way, so that customers know to trust your business when they see its name.

Maximise your presence online

Every small business should have a web presence. Statistics from the Federation of Small businesses (FSB) show that, at the end of 2018 there were 5.7 million small and medium enterprises (SMEs) in the UK. This accounts for more than 99% of all businesses in the country.

A substantial proportion (roughly 29%) have no web presence at all, and just under a third are not using social media channels in their marketing. An online presence is vital for running and growing a successful small business in the UK, and an integral part of building an authoritative marketing plan.

Your website is where the majority of customers will head. It’s design and UX (user-interface) is extremely important, particularly while you are working on building brand awareness. With the correct high-quality, relevant and search engine optimised (SEO) content on it, your website is the hub of your online authority.

As well as information on your business, products, services and e-commerce channels if applicable, include a specific page to showcase the company’s authority. This can either focus on the team, or you as the business owner, and should be high-quality, well written information. A dedicated page will give you the space to explain your knowledge of the industry, your company’s place within it and what you can offer.

Blog with authority and intent

High-quality blogs can go a long way in expanding your industry authority. Not only can they establish you as an industry leader, they can rank your business for relevant keywords and expand your audience and influence.

Your strategy should include regular, well-written, professional blogs. Use them to answer specific questions, to provide expert commentary on new stories involving your sector, to explain new products and services and demonstrate your overall knowledge.

If the blogs you produce are well-written, include relevant keywords and answer specific questions in an accessible way, they may well help your business to rank in Google’s search results. Many small business owners may find they don’t have the time to write high-quality content, in which case it is beneficial to outsource to a specialist content marketing agency.

Use social media to engage your audiences

Site content and blogs can be shared on your social media channels to further spread your messages and authority and involve people in your conversations. You should have a presence on social media, particularly on LinkedIn

Cultivate positive yet credible reviews

The impact of online reviews is massive. Around 93% of people say they use online reviews to make decisions when considering a product, service or business. Further data shows that 84% trust online reviews in the same way they trust recommendations from their friends.

These statistics show the power that customers have. Keeping people engaged and happy with your products, brand and services is crucial. This is particularly the case with small businesses, as you may only have a few online reviews. This makes even one negative review appearing quite damaging.

Satisfied customers show that your business is good at what it does. And if your small business does receive a negative or less than stellar online review, respond in a manner that can change it to a positive. This means listening, responding and actively working with the customer to improve their experience.

Create your own special niche

No-one can be an authority on everything, and anyone who attempts to present themselves as such will lose credibility. Customers looking for specific products or specialised information will go to a business demonstrating knowledge in that area.

To become an authority, it’s vital to be specific and demonstrate thorough and wide-ranging knowledge in your field. One way to do this is to develop and grow a business based on a relatively narrow focus. This way you can keep authority marketing, content strategy and website information focused.

 

James Turner, Managing Director of Turner Little Limited, says: “It’s no longer enough to be have a great product or service and years of experience. For small businesses to stand out from the crowd, it’s important they find their voice in their specific sector. This can seem a daunting task, but by including it in your business strategy from the start, your business voice will grow with your company.

“Consider how you can harness the potential of your small business or start up to position it as an authority in your field. Even if your chosen sector is a crowded one, judicious use of social media, high-quality content and a defined strategy can ensure your voice shouts louder than the competition.”

About Turner Little
Founded in 1998 in Yorkshire, UK, Turner Little is a specialist UK and offshore company formation, banking and corporate services provider. Our services include company formation, UK and offshore banking, asset protection, credit correction, trademarking and trusts. Other services include Internet services, mail forwarding, wills and probate. Turner Little’s vision is to offer the best possible service, together with market leading products.

Should small businesses focus on people or technology?

What’s more important for your small business? Is it your people or the technology you invest in? As the business sector transitions into a totally digital world, some entrepreneurs and small business owners are focusing more on tech than people.

New research from Yorkshire Bank’s Expect More report, shows that nearly half of UK SME owners believe technology is more important to their business than people.

Why is technology important to small businesses?

Expect More covers 2,000 small business owners, SME entrepreneurs and start-up owners from ten major UK cities.

More than 46% of small business owners say they think tech is more important to their business than people, with the highest number in London (56%). And it seems these tech-loving SME owners may be on the right track.

Successful, high-growth businesses are more likely to be driven by technology. The report shows that almost three-quarters of entrepreneurs find tech is the key reason for business growth. Interestingly, these high-growth businesses driven by tech are more aware of the environmental impact of their work. Almost 60% say their environmental impact is extremely important, compared with an average 44%.

The link between technology and funding

Tech also secures more funding for SMEs. More than 35% of small businesses led by technology find it relatively easy to land growth funding. This is significant when compared with those outside of the tech field, with just 19% of other businesses reporting the same.

This is partly due to the fact that tech-led SMEs are making more attempts to secure more funding than businesses in other sectors. The study finds that 90% tech orientated businesses attempted to access funding, compared to an average of 80%. Whether this is because there are more opportunities available, or whether tech businesses are being more proactive remains unclear.

James Turner, Managing Director of Turner Little Limited, says: “Technology is the biggest disruptor to our daily lives and to businesses across every sector. Advances in tech are revolutionising the way we live and work. This is opening up new markets to UK SMEs.

“E-commerce has allowed access to a sector that wasn’t previously available to small businesses, and many start-ups are tech driven for this reason. There are opportunities for tech-based start-ups that simply don’t exist for more traditional small businesses, particularly as the face of retail is changing so much. As e-commerce and traditional retail continue to adapt to each other, UK SMEs are taking advantage of this new channel of opportunity.

“It’s unsurprising, therefore, that tech-based small businesses are securing more funding and reporting higher growth levels. The SME sector has adopted a massive range of tech, ranging from social media and digital marketing to automation and artificial intelligence (AI). The introduction of 5G will continue to push tech boundaries and open up more connections, fuelling development in this area.

“However, people remain vital to the success of small businesses, and this shouldn’t be forgotten in the drive to adopt new technology. The personal element is the differentiator between businesses and can be the difference between success and failure. The importance of effective communication between business and client or customer should not be taken for granted. UK SMEs must strike a balance between people and technology as their focus.”

About Turner Little

Founded in 1998 in Yorkshire, UK, Turner Little is a specialist UK and offshore company formation, banking and corporate services provider. Our services include company formation, UK and offshore banking, asset protection, credit correction, trademarking and trusts. Other services include Internet services, mail forwarding, wills and probate. Turner Little’s vision is to offer the best possible service, together with market leading products.

Why small businesses should be cautious with AI

Artificial Intelligence (AI) is more than just a tech buzzword. Along with automation, AI is very much here to stay, and is currently revolutionising the way we live and work. But when, and how, should small businesses jump on the AI bandwagon?

For small business owners, the question shouldn’t be whether to get involved with AI, but rather when to take the leap.

AI in small businesses inevitable

AI strategist Daniel Faggella says that it is inevitable that AI will be implemented across every business sector. However, in an Emerj article, he warns against proceeding without caution. And small businesses, in particular, should be wary of investing in this area too soon.

Small businesses typically have limited cashflow, resources and, often, data science knowledge. While AI is becoming more common, it is still highly complex, and there is little direct evidence of return on investment (ROI) yet.

AI is not yet diverse or flexible enough to easily solve problems for small businesses. The talent pool of people able to understand, build and follow up on an automated or AI application is still small. It takes time, talent and money to develop and implement. Many small businesses do not have any of these in the amount necessary to take the leap into AI development.

AI not yet necessary for profitability

AI tech also needs a tech infrastructure and data management system that is simply beyond what most small businesses are happy to invest in. Faggella says that no business should move into AI without a very clear objective and aim. He says in his article for Emerj, titled Is Artificial Intelligence for Small Businesses? Factors to Consider for Technology Adoption: “99.9% of small businesses don’t actually need AI right now to become profitable.”

As this field becomes cheaper, easier to use and has improved businesses uses, we will see AI move into the small business sector. It’s not that it should be ruled out completely, rather that right now it is costly, risky and not necessary. However, Faggella does recommend looking for applications and tech that use AI, so that small businesses can incorporate it in user-friendly formats. It’s possible to buy ready-made ‘off the shelf’ AI products for use in small businesses.

Caution is the watchword for small businesses

While it is possible to invest in AI products, or even to employ data science employees to develop in-house products, caution is the watchword. AI should never be considered anything other than a new way to solve a problem. In other words, it shouldn’t be implemented just because it’s a new, fashionable tech.

It’s important not to be swept into using AI applications simply because of what they are, rather than considering what they are doing to the company’s bottom line. AI is not guaranteed to solve any business problems, and needs an enormous amount of resources, money and high-levels skills to build from the ground-up.

Any technology should be chosen by small business owners based on what they can deliver to the business, and not because they use automation or AI.

James Turner, Managing Director of Turner Little Limited, says: “The business world is currently on the cusp of widespread adoption of AI applications, technology and automated products. There will undoubtedly come a time, in the not too distant future, when small businesses will use AI every day.

“It is likely that AI will become as user-friendly, widely accepted and easily installed as any other software. Until utilising AI makes a positive difference to your bottom line, and gives a guaranteed ROI, it’s just not yet necessary for small businesses to use. However, you should be focusing on ensuring all customer data is properly stored, which is already necessary, both to comply with guidelines but also to enable you to prepare for AI.

“As a small business owner you should ensure that you’re managing, governing and storing data in the most effective way to help you prepare for the advent of mainstream AI applications. That time may not be right now, but it’s unlikely to be too far into the future.”

About Turner Little
Founded in 1998 in Yorkshire, UK, Turner Little is a specialist UK and offshore company formation, banking and corporate services provider. Our services include company formation, UK and offshore banking, asset protection, credit correction, trademarking and trusts. Other services include Internet services, mail forwarding, wills and probate. Turner Little’s vision is to offer the best possible service, together with market leading products.

Small businesses in the UK demand more tax support from HMRC

Many businesses across the UK think the tax system in this country is fundamentally unfair, according to new research from the British Chambers of Commerce (BCC). A report released in April 2019 from the BCC indicates that not only do businesses report its intrinsic unfairness, but they also want more support to ensure compliance.

The BCC survey talked to more than 1,000 businesses across the UK, 96% of which are SMEs (small and medium sized enterprises with fewer than 250 employees). Almost 60% of respondents say the tax system is weighted against them and is unfair to their type of business.

More than two-thirds of businesses say that HMRC applies tax rules unfairly across every size of business. The report shows a lack of trust from a sample of small businesses in HMRC’s practices in general.

Stats from the report show that microbusinesses are more likely to have this opinion than larger businesses. However, the latter comes in at more than 55%. Almost two-thirds of UK businesses do not think that the HMRC fairly applies tax rules across different domiciles (small businesses 67%, larger businesses 59%).

Small businesses would like more support

Around half of businesses feel inadequately supported by HMRC in ensuring tax compliance. Slightly more than 50% of micro-businesses and 42% of larger businesses report wanting more support directly from HMRC.

A large percentage of businesses perceive that HMRC underestimates the time and financial burden imposed on SMEs to comply with changing regulations – and they are frustrated by it. Changes to business rates, and the expense of being forced to comply with the ‘Making Tax Digital’ initiative has increased pressure on UK SMEs. The cost of the changes made to auto-enrolment is also affecting small businesses and fuelling worries over the entire UK tax regime.

Chamber calls for improvements

The sense of unfairness from a proportion of the business community regarding the UK tax system has prompted the BCC to ask for improvements in the way HMRC manages business taxes.

The BCC is also reiterating a previous request that the Government promises to stop introducing new taxes and implementing significant new costs on businesses for the rest of the current term of parliament.

James Turner, Managing Director of Turner Little Limited, says: “The results from the BCC’s survey clearly show a level of concern regarding how the UK’s tax system works, how it is implemented and whether all businesses are treated fairly. Whatever the reality of the situation, there is a very strong impression from a sizeable percentage of businesses that the tax regime in this country is simply not fair, particularly to small companies.

“It is apparent that many small and medium sized businesses in the UK feel under constant threat of being penalised for non-compliance due to errors made in a continually changing system. There is a strong feeling of disappointment around the rising upfront tax costs of running a business in this country, against the backdrop of SMEs fighting to remain compliant and maintaining cashflow in a system that keeps taking more.

“If HMRC reduces the burden of compliance on small businesses and concentrates efforts on those who repeatedly fail to comply, it would be helpful. The Government could match the investment made into dealing with non-compliance with practical tax help for SMEs. More assistance up front would reduce the number of businesses failing to comply because they don’t understand the new rules. It would be great to see the Government curtail the escalating upfront costs expected so that SMEs can continue to concentrate on expansion and growth of their businesses which will ultimately result in greater tax receipts for the government as well.”

 

About Turner Little
Founded in 1998 in Yorkshire, UK, Turner Little is a specialist UK and offshore company formation, banking and corporate services provider. Our services include company formation, UK and offshore banking, asset protection, credit correction, trademarking and trusts. Other services include Internet services, mail forwarding, wills and probate. Turner Little’s vision is to offer the best possible service, together with market leading products.