Effective business planning

Starting a new business

Starting a new business venture is a risky proposition, whatever the economic climate. There are a number of factors to consider, including: the nature of the business; your target market and competitors; the potential for profit; how you will extract those profits; how fast the business will grow; how the business will impact on your life; the potential risks involved; and how you plan to exit the business.

Business plan: A comprehensive business plan is essential. This should include: your sources of funding; tax-efficient borrowings; whether the business needs a PAYE scheme or to be VAT registered; and, not least, the business structure that will best meet your needs (sole owner, partnership, limited liability partnership or limited company). We can help you through the decision-making process – and to make the appropriate registrations. A good cash flow forecast can help you spot potential times when cash will be short, and regular updates will help you to see how your business is performing.

Business structure: There are both advantages and disadvantages for each trading structure and each has implications for control, perception, support, and costs. For example, careful consideration is needed regarding whether or not to retain personal ownership of any freehold property on an incorporation of business.

Choosing a year end: It is also important to choose the right year end for your business. Is there a time of year when it will be more convenient to close off your accounting records, ready for us? What would be the best time of year for stock-taking? To what extent is your business seasonal? From a tax viewpoint, the choice of a year end early in the tax year for an unincorporated business usually means that an increase in profits is more slowly reflected in an increased tax bill and over time the delay between earning profits and paying the tax can create a source of working capital for the business. Conversely, a reduction in profits will more slowly result in a lower tax bill.

HMRC registration: Advising HMRC when you become self-employed, and probably liable to Class 2 national insurance contributions (NICs), may not be very high on your list of priorities in the first weeks and months of a new business – but failure to notify will attract a penalty if tax or NICs are unpaid as a result. You should register as soon as possible to begin paying NICs and notify HMRC of your new self-employed status.

Entrepreneurs advised to explore alternative funding options

Smaller entrepreneurs are being advised to explore the alternative funding options when setting up or growing a business.

With some entrepreneurs still struggling to access traditional forms of finance, John De Groot, chairman at Success Strategy, suggests that business owners consider turning to family and friends to help fund their venture.
He explained that securing a traditional loan is highly dependent on a number of factors, including: the basic viability of the idea; the amount of money required and of course how much the entrepreneur can contribute; the naivety or experience of the entrepreneur - including their peer group; the credit rating of the individual; and the ability of the entrepreneur to motivate the case.

'There is still money from specialised sources for the big ideas or the technology ideas. But, for smaller entrepreneurs, self-funding or money from friends and family are routes that should be sought,' he said.
However, if you are able to secure loans from personal sources such as friends and family, you should ensure that any arrangements are formally agreed and legally binding. You might want to consider the impact on familial relations as well.

Latest figures from the Bank of England suggest that lending to small and medium-sized firms fell to - 2% in February, despite the banks being told to make more money available.

We can help with a range of business planning and financial issues - please contact us for assistance on:
Tel:  0845 25814458 1445 

Figures reveal strongest ISA season in nine years

The 2010/11 ISA season was the strongest in nine years, with net sales of almost £1 billion, latest figures reveal.

Investments in stocks and shares ISAs were particularly high as people rushed to use up their tax-free annual ISA allowance before the end of the tax year.

According to the Investment Management Association (IMA), a total of £956 million was paid into UK-based unit trusts and Oeics (open-ended investment companies) between 1 March and 5 April - a period known as the ISA season.

Despite the last-minute rush, total ISA sales for 2010/2011 were slightly down on the previous year at £3.68 billion, compared with £3.99 billion.

Commenting, Jane Lowe, director of markets at the IMA, said: 'The last two tax years have together seen a big jump in ISA inflows to more than £7.5 billion.

'This coincides with two increases to the annual allowance in October 2009 and April 2010 and compares starkly to Isa outflows of over £5 billion over the preceding five years.'

On 6 April 2011 the annual ISA subscription limit for 2011/12 increased from £10,200 to £10,680, up to £5,340 of which can be invested in a cash-only ISA.

Annual Return Deadline

Employers reminded of annual return deadline

Employers are being urged to file their annual return (P35 and P14s) by the 19 May deadline or risk incurring a penalty.
HMRC has issued an urgent reminder ahead of the impending deadline warning that, unlike previous years, there will be no period of grace for late filers.
Last year no penalty was charged for employers with five or fewer employees, but these transitional arrangements have now ended.
From this year, employers will also be liable to a penalty if they file their annual return on paper (except in some very limited cases).
Under HMRC's penalty regime, employers who file their return after the 19 May deadline will be charged a penalty of £100 per 50 employees for each month or part month that the return is outstanding.
If the return remains outstanding for more than four months, individuals will receive a penalty notice shortly after 19 September and again the following January and May, if necessary.
Further help is available from HMRC via its Employers Helpline on 08457 143 143 or online at www.hmrc.gov.uk/paye.


For further information and assistance please contact us at Jolliffe's on 08452581445 or via our website: www.jolliffes-accounting.co.uk

Payroll dates for your attention

May 2011

2               Deadline to submit P46(car) notifying changes to car / fuel benefits during quarter ending 5 April  11    

19             PAYE / NIC and CIS deductions due for the month 5 May 2011

19             Deadline to file PAYE end of year returns P35 and P14 for 2010 / 11

31             Deadline to give employees P60 forms (year end summaries) for 2010 / 11

Who Are We?

I've often asked myself the same question.

Basically, we are a passionate team of Accountants and book-keepers, who no matter what size and budget your business has to spend, we can accommodate your needs in some way.