Business Loans; What you should look out for

When you decide to apply for a business loan, the first thing you need to do before taking on new debt is to decide on the purpose of the loan, the amount you would like to borrow and how much you can afford to pay back over a period of time. You will also need to take into account any additional fees in relation to drawing down a loan.

When you have all of this information, it is time to start looking for your loan. You will need to look at all the loans available to ensure that you get the best deal for you and your business. You will find that there is a vast amount of choice available to you. This can leave it extremely confusing if you are not sure what type of loan is best suited to you. You can use internet comparison sites to look for a loan as they can compare loans and match them to your specific criteria.

Taking out a business loan is a big commitment. You will need to ensure that you are borrowing from a reputable lender. You can get a business loan from high street banks or online lenders. Make sure you do a background check on online lenders before considering taking your loan with them. You can typically find customer reviews online that should help inform your decision.

Applying for a loan can be a daunting process given the huge number of lenders offering finance at different rates. You need to ensure that you check the terms and conditions in detail to make sure you haven’t overlooked something. It is the responsibility of a loan provider to make sure the information you receive is clear and accessible. If you don’t understand something, ask.

There are different lending terms available from different lenders. Traditional loans are paid over a set period of time generally on a monthly basis. However, there are other options available that may be more tailored to suit your needs. If you are considering a fixed term loan, there are simple loan calculators online that you can use to find out how much your monthly repayments will be. All you will need is the amount of the loan, annual interest rate and length of time you wish to take the loan over.

Finally it is crucial to look out for hidden charges when deciding on your loan such as early repayment charges, late payment penalties or even processing fees. If you are not careful these can add to the cost of your loan repayments. All fees should be explained to you by your lender. If your lender does not explain all these fees to you, you can contact them and challenge the fees via the Consumer Rights Act. This legislation protects your rights and makes it easier to challenge hidden fees and charges. If this fails you can always seek redress with the Financial Ombudsman Service (FOS).

Kim Paskin

Open your Help to Buy ISA before the 30 November 2019 deadline

If you are planning to buy your first home, and you haven’t already set up a Help to Buy ISA, you only have until 30 November, as after this date the scheme will no longer be available to new savers. If you already have an ISA account or open an account before this date, you can keep savings in your account until 30 November 2029. After this date accounts will close to additional contributions and you must claim your bonus by 1 December 2030.

In order to be eligible for the government bonus, land for a self-build or the property you are buying must be in the UK, be the only house you will own, be the house you intend to live in, be purchased with a mortgage and have a purchase price up to £250,000 (or up to £450,000 in London). You cannot use a government bonus to fund the construction of a home on land you already own.

You can open a Help to Buy ISA with a range of banks and building societies. In order to qualify for a Help to Buy ISA, you must be 16 or over, have a National Insurance Number, be a UK resident, be a first time buyer and not own property anywhere in the world.

The government will boost the savings in your ISA by 25%. This means for every £200 you save, the government will give you a £50 bonus. The maximum bonus you can receive is £3,000 and to receive this amount you need to have £12,000 saved in your ISA account. Your government bonus will be calculated based on the amount of money you have in your account when you close it. This includes both the money you have saved, and any interest you have earned on that money. The minimum government bonus is £400, which means you need to save at least £1,600 before you can claim a bonus.

The maximum amount you can save every month is £200, but in the first month after opening the account you can save an additional £1,000. Please note you can withdraw money from your Help to Buy ISA account at any time. But you can’t put all the money you’ve withdrawn straight back into the account – you’re still only able to save up to £200 in every month.

If you are planning to buy your home with a partner, you can both open a Help to Buy ISA and you could receive a government bonus of up to £6,000.

When you are close to buying your first house, you will need to advise your solicitor or conveyancer, who will then apply for the government bonus on your behalf. Once they receive the government bonus, it will be added to the money you are putting towards your first house. The bonus must be included with the funds consolidated at the completion of the property transaction. The bonus cannot be used for the deposit due at the exchange of contracts, to pay for solicitor’s or estate agent’s fees or any other indirect costs associated with buying a home. Be aware that your solicitor or conveyancer cannot charge more than £50 plus VAT to process your bonus application.

Please be aware if you also have a lifetime ISA, you will only be able to use the bonus from one to buy a house.

Leanne Humphrey

Managing Your Cash Flow

Cash flow is the movement of cash and cash equivalents into and out of a business. The ability to generate a positive cash flow is vital to the survival and prosperity of a business. Here are some tips to help boost your business cash flow:

Monitor Your Cash Flow
Keeping up to date records of the cash coming in and going out of your business can help you manage cash flow and see where and when cash is required. A good way to do this is to avail of one of the many accounting software packages available. It will also allow you to generate different types of reports to show how your business is performing and allow you to plan accordingly for quiet periods during the year.

Asset Management
Before buying any new assets, consider whether it is actually needed or if there are any cheaper alternatives. Furthermore, if you have any assets that are no longer in use, consider selling them to help generate some cash. Another option may be to lease equipment instead of buying it which will allow you to get the latest technology but without tying up a significant portion of cash in one purchase.

If you have available funds to purchase fixed assets outright, you need to consider cash flow over the coming months and if that would be the best use of the cash. Could you put the cash towards growing your business and in turn generating more profits? That might mean you may need to borrow the money for the fixed asset but in the long run you could still be better off.

Customer and Supplier Payments
If you are struggling with customers paying on time, try offering incentives, such as discount for early payments but making sure the loss for any early payment is worth receiving it in the long run. Consider asking for a deposit upfront, this allows you to generate cash to help pay for any expenses incurred such as buying materials.

In regards to your suppliers, unless there is a worthwhile reason to pay early, use the available credit terms but ensure not to incur late fees or interest and harming your relationship. This allows you to keep the cash in your own bank account should you need it in the interim.

Cutting Costs
Cutting costs can really help improve your cash flow. By keeping track of your expenses, you can see where you can save. This will allow you to see if there are any expenses that are unnecessary or could be reduced. This may include subscriptions that are no longer relevant or reducing the level of stock you keep and thus improve the amount of cash on hand.

If you or your business is experiencing cash flow problems, you should seek help sooner rather than later to help you regain control.

Gabriel McGrath

Is Your Business Brexit Ready?

While there is still no certainty around Brexit and how things will unfold, as things stand the UK is due to leave the EU in less than 30 days with or without a deal.

With the deadline fast approaching businesses must take steps now if they have not already done so to consider how they will be affected and to manage any risks identified. This will ensure your business is in the strongest position to adapt quickly and thrive post Brexit in any outcome.

With this in mind we have outlined some of the steps your business can take to prepare for Brexit;

People
If your business currently employs EU, EEA or Swiss citizens, they will need to apply for settled status to remain legally resident in the UK post Brexit.

Businesses should carry out a review of staff and work to support affected employees to help boost staff retention and motivation.

Even if your business does not currently employ any EU, EEA or Swiss employees you may wish to consider the impact on any UK workers you employ who may be required to temporarily work in the EU or how Brexit will impact the wider labour market going forward.

Cross Border Movement
If your business imports or exports goods to the EU you may need to take steps to minimise potential disruption to your business.

If you are moving goods to or from the EU post Brexit your business will require an EORI Number. It may be worthwhile taking the steps to secure this now to avoid any potential costly delays post Brexit. Businesses will not require an EORI number for the movement of goods between Northern Ireland & Ireland.

Businesses importing and exporting to the EU post Brexit may also have to comply with customs regulations. Consider how your business would cope with the additional burden of customs compliance and how potential tariffs could impact your business model. The Government have introduced training grants to help with the cost of training employees internally to complete customs declarations your business may be able to avail of.

Businesses should also review their current supply to assess the impact of Brexit. You may wish to speak to your current suppliers to discuss what steps they have taken to prepare for Brexit. Even if your business doesn’t have any EU based suppliers you could still be affected if your UK based suppliers are sourcing goods from the EU. With this in mind, businesses should consider the effect of potential delays at border crossings on supply timeframes and may want to consider stockpiling materials or goods in the short term to avoid the impact of potential delays.

Your business may benefit from reviewing existing supplier/customer contracts to assess whether they need to be renegotiated to address potential Brexit risks.

If your business model involves travel from Northern Ireland to EU countries you will also need to ensure drivers carry a green card for proof of insurance. To get a green card contact your insurance provider.

Finance
It is possible Sterling will depreciate further in value post Brexit, therefore your business may need to assess the impact of currency volatility if you are trading cross border and take steps to mitigate this.

While the above areas represent a useful basis for Brexit planning they should not be considered to deal exhaustively with all matters. We would advise businesses to carry out a detailed analysis of the impact of Brexit tailored to your business. If you are needing assistance to navigate through Brexit there are various funding bodies offering financial support and professional advice such as Intertrade Ireland.

Paul Fitzgerald

EORI number and what it means for your business

Brexit will mean a lot of changes for many businesses especially for those who import or export goods outside of the UK, these businesses may now be required to have an EORI number to deal with customs on these goods. The Economic Operator Registration and Identification (EORI) Scheme is an EU initiative that helps traders communicate with custom officials when they are importing and exporting goods and an EORI number is currently required when trading with countries outside the EU. Should the UK leave the EU with no deal, UK businesses that import or export physical goods with other EU countries will be required to have an EORI number to continue doing so. However, if your business is only involved in the movement of goods between Northern Ireland and Ireland then you will not be required to have an EORI number.

HMRC are currently automatically issuing EORI numbers to VAT registered businesses, it will be 12 digits long and will contain the businesses UK VAT number, however micro businesses will still be required to register themselves. If your business needs to apply for an EORI number it is a straightforward process that can be completed by searching ‘apply for EORI’ at gov.uk, you will then require the following information:

– VAT number and effective date of VAT registration
– National Insurance Number – if you are a sole trader
– Unique Taxpayer Reference (UTR)
– Business start date and SIC code for registered companies
– Government Gateway user ID and password

Once you have completed the application process, HMRC will either issue you with your number straight away or within 5 working days if further checks are needed.

If your business already has an EORI number that starts with GB you will be able to continue to use this post Brexit.

Businesses that will be required to use their EORI number will use it in all dealings with custom officials of the EU country involved. The number will need to be included on all pre-arrival and pre-departure documents on goods that are entering or leaving the UK.

In the event of a no deal Brexit businesses that are trading goods between Northern Ireland and Ireland are currently not required to have an EORI number and will not need to pay Customs Duty or make customs declaration. These businesses will instead be required to account for import VAT on goods coming from Ireland into Northern Ireland, with the exception of goods that are already liable to Excise Duty such as alcohol, tobacco and certain oils. There will be no new requirements or checks on goods that will move between Northern Ireland and Great Britain and there will be no Customs Duty on goods that move from Ireland to Great Britain via Northern Ireland if they are for commercial reasons. HMRC have said that they will soon be publishing further guidance on the importing process that will need to be followed in this case.

For further information on Brexit and how it may affect the importing and exporting of goods to countries in the EU please visit gov.uk or nibusinessinfo.co.uk for the most up to date information.

Emma Boyle

Changes in the Construction Industry: VAT Reverse Charge

Do you currently supply or receive services that are reported under construction industry scheme? If so, from 1st October 2020 the way VAT is collected in the building and construction industry is majorly changing. Initially, the domestic reverse charge for construction services was set to begin on 1st October 2019, however the government announced it would be delaying this introduction for 12 months due to the increasing concerns that many construction sector businesses will not be ready to implement the changes with the original launch date for later this year.

From this date, the main contactor will be liable to account for VAT to HMRC in respect of purchases rather than the sub-contractor. This means VAT cash will no longer flow between businesses.

This will affect many sub-contractors, but it does not apply if the service is zero rated for VAT or if the customer is not registered for VAT in the UK. There are also several exemptions to the reverse charge rules including: architects, surveyors, interior and exterior decoration, landscape consultants and security system installation engineers.

The VAT liability does not change with the implementation of a reverse charge; however, it does change the way that VAT is accounted for. Under the reverse charge, a VAT registered business (sub-contractor) that supplies certain construction or building services to another VAT registered business (main contractor) for onward sale will be required to issue an invoice stating that the service is subject to the domestic reverse charge. The VAT registered main contractor will then need to account for VAT due on supply to the end customer via its VAT Return.

For many construction businesses, the change is likely to have extensive consequences. New procedures will need to be in place to ensure VAT accounting systems are compliant with the new requirements of the reverse charge. The rules require a range of verification checks, to ascertain VAT status of customers, CIS registration (in some circumstances), and end user or intermediary supplier status.

Due to the reverse charge changes, some businesses may find they are no longer paying VAT on their sales and are in a repayment position. These businesses may want to take advantage of this positive cash flow position to change to monthly VAT returns to accelerate payments due from HMRC. VAT scheme users should also note that the Flat Rate Scheme may no longer be of benefit, and that reverse charge transactions cannot be dealt with through the Cash Accounting Scheme.

On introduction to this new scheme, HMRC have stated they will operate a “light touch” penalty system for individuals and business who are trying to comply with the new legislation and have acted in good faith in the first six months of operation. This is to allow for initial implementation issues over interpretation of the new rules.

Overall, the change means that the construction sector is likely to be subject to considerable HMRC scrutiny in the foreseeable future. For this reason, we would recommend taking great care in complying with all HMRC changes surrounding CIS and VAT.

Alison Moore

Approved education for 16 year olds and your benefits

The month of August can be a very stressful time for young people waiting for exam results, and for their families. The results received will of course have an impact on the next steps taken in life, but it is important to remember that they will not determine the future prospects of any young person. At what can be a time of upheaval and emotion, there are certain practical steps parents and guardians should remember to ensure payment of certain benefits is not disrupted. It is important for parents and guardians to ensure that HMRC are notified of changes of circumstances that may affect their Child Benefit / Guardian’s Allowance and Child Tax Credit.

Ensure HMRC does not stop your payments in error

Child Benefit stops on 31 August on or after your child’s 16th birthday if they leave approved education or training. Therefore, if you do not notify HMRC to the contrary, Child Benefit payments for this child will stop. To avoid this disruption to your payments, you should notify HMRC as soon as possible. Changes in circumstances may mean you may have to pay the Child Benefit tax charge. The charge affects you if your income (or your partner’s) is £50,000 or more.

You must still report changes even if you’ve stopped getting Child Benefit because of the Child Benefit tax charge – this will help avoid HMRC clawing back Child Benefit paid to you in error.

Tell the Child Benefit Office if your child:
* stays in education or training
* later leaves education or training

If you are in receipt of Tax Credits, you should have submitted your annual declaration for the 2018/19 year by 31 July 2019. Within 8 weeks of this date, you will receive confirmation of your Tax Credits entitlement. It is advisable to carefully check the personal circumstances section of this notice for you, your partner, and your children and qualifying young people to ensure you are receiving the correct amount of Tax Credits.

You should also notify Tax Credits as well as the Child Benefit Office of your child’s current education status. Child Tax Credit usually stops on 31 August after your child turns 16 but can continue for children under 20 in approved education, training or registered with a careers service. If you get Child Tax Credit and you tell HMRC that your 16 year old is continuing in full-time non-advanced education or approved training, you can ask HMRC to update both your Child Benefit and Child Tax Credit claims at the same time. You must also tell HMRC if your child:
* turns 18 and stays in approved education or training
* turns 19 and stays in approved education or training

Approved education must be full-time (more than an average of 12 hours a week) and can include:
* A levels or similar, for example Pre-U, International Baccalaureate
* NVQs and other vocational qualifications up to level 3
* home education – if started before your child turned 16

The quickest and easiest way to report any changes in your circumstances is online through your personal tax account. This is a situation where it will benefit you to be proactive in keeping HMRC informed of your family’s circumstances, and to help prevent errors which could result in underpayment or overpayment of benefits.

Eoin McAteer

“What a mistake-a to make-a?”

The quote is from Alberto Bertorelli, a character in the not so politically correct comedy “Allo Allo” but if Alberto was to appear on your shoulder like a parrot each time that quote would apply in life, well I think we could all be very familiar with him by now, personally, I feel intimately acquainted.

Although we are all different it doesn’t stop us making similar mistakes and lately I heard a statement that is not uncommon to hear when helping people build their business. The statement takes different forms but it runs along the line of how those working for them are not able to do what they did or that it is a different generation and we are never going to be able to build this business as people just don’t do things the way we did them. Cue Alberto!

Are these different people the problem or is the problem learning how you deal with people who are different? Or is it learning how to run a business, which is much more than doing the work of the trade and the profession? People are always going to be different and have different skills, those starting a business usually do so because they believe they are better at their trade or profession than someone else so it must therefore make sense when they employ someone that this employee may not have the same skills in that trade or profession. Likewise the different generations definitely are different, but this does not mean one generation is better than another just that they are different, it will always be easier to relate to those that are similar to you but a business full of the one generation is going to have shortfalls over a business with new generations coming through and likewise the new business can gain from having a more mature generation involved. A good team will have a diversity of skills.

I thought it interesting to read an article lately on managing the mighty millennial from Accountancy Ireland, where it stated, “It is not millennial’s we need to change; it’s the mindset of the people who guide, mentor and manage them”. This article made me have a look at the various different generations and I came across a list of those you could be involved with in your business and their different skill sets which I summarise as follows:-
The Mature Generation were born between 1927 and 1945:- this generation grew up during times of lots of rules and being told to conform, they generally kept a job for life and are disciplined, self-sacrificing and cautious.

The Baby Boomers were born between 1946 and 1964 and can fall into the work hard party hard category, or we need to all work together to save the world and change things category, they can be more positive about authority and optimism.

Generation X were born between 1965 and 1980 and were the generation that were more likely to come home from school to an empty house, this tends to make them more individualistic and entrepreneurial, but also less impressed with authority.

Millenniums (or Generation Y) are born between 1981 and 1996 and were generally well nurtured and supported by parents, so they respect authority, do like to work in teams but also expect support. They do not live to work, but rather work to live. They normally have a strong academic background and grew up around computers so they like to communicate digitally, like to schedule everything and want fast and immediate processing.

Generation Z are born after 1996 and have never known a world without computers and cell phones, they want to be connected and will consider things more globally, being bombarded with information means they will get bored quicker but more of them want to change the world.

These are only snapshot guidelines but managers, marketeers and those into self-development use these profiles and you may recognise a part of yourself or someone else in there. I’ll leave you with that as I am pretty sure Alberto is moving in with us shortly and we really do need to get the room ready.

Julian McKeown

Directors and filing obligations with Companies House

Not only is a director required to manage the day to day running of the company and make management decisions but they are also legally responsible to file information with Companies House in a timely manner. We will look briefly at some of the types of information that Companies House requires;

Annual Accounts
The Company’s Accounts must be filed with Companies House each year and the deadline for filing these is 9 months after the Company’s year-end. For example if a company prepared their accounts up to 31st December then they would have until the 30th September of the following year to file these with Companies House.

All statutory accounts includes a Balance Sheet, a Profit and Loss account, notes to support the balance sheet and profit and loss account, and a director’s report.

But when filing the accounts with Companies House small companies have the option to remove the director’s report and/or the profit and loss account and any notes that accompany the profit and loss account.

Confirmation Statement
A confirmation statement must be filed at least once a year (this date is normally one year after the date of incorporation) and you have 14 days to file this statement. This document confirms that the information held by Companies House is correct at that point in time. Such information includes the registered office address, details of the director(s), details of the company secretary, SIC Code, share capital and shareholders.

Register of People with Significant Control (PSC)
A company is required to keep a register of the people who control the company. The information held in this register is confirmed with Companies House on an annual basis as part of the Confirmation Statement.

However, if the information held in this register changes throughout the year then Companies House should be notified of the updated information within 28 days of the change. The company itself has 14 days to update it’s own register of any changes.

Changes in Directors and Company Secretaries
Companies House must be notified if a new director is appointed (by submitting a Form AP01) and also when an existing director is removed from their role (by submitting a Form TM01). The forms for appointing and/or ceasing a company secretary are different, Form AP03 for appointments and Form TM02 to cease a company secretary.

Companies House should also be notified when the personal details of either a director or company secretary changes. The most common change being a change in their residential address.

Companies House must be notified of any changes within 14 days.

Change in the Company’s Registered Office Address
When you are changing the company’s registered office address then Companies House should be notified immediately as this change only takes effect when the notification (Form AD01) is registered with Companies House.

All of the above information can be filed online with Companies House. The benefit of filing online is that Companies House will receive the information immediately and you will receive an email confirming that the information has been received.

Kerry Donaghy

Second Payment on Account due 31 July – Do You Need to Pay it?

If you are in the self assessment tax system then you may be due to pay your second payment on account for the 2018/19 tax year by 31 July 2019. However many people are not aware that you may not need to pay it all or indeed, any of it.

Firstly, what is a payment on account? Payments on account are advance payments towards the following year’s tax bill. The system is intended to split your tax bill over two payments, one in January and the second in July, which for some may be easier than making a single large payment once a year. You have to make two payments on account every year unless your last Self-Assessment tax bill was less than £1,000 or you’ve already paid more than 80% of all the tax you owe, for example through your PAYE tax code.

As self employed incomes are not fixed, it’s possible that this year’s profits could be lower than last year’s, this is particularly likely if you have invested in new equipment for your business during the year. If you believe this year’s taxable profits will be lower than last year, you can apply to reduce your payments on account. In order to do so you need to know your 2019/20 taxable profits and tax amount due or have a reasonable estimate.
You must tell HMRC if you want to reduce your payments on account. If you simply pay a lower amount to HMRC, their systems will show that there is still an amount outstanding and they will contact you for payment.

Any reduction made now will be applied to both payments, which could mean you have paid too much in January. Any over-payment can be offset against your July payment, reducing it even further, or it may be refunded to you.

But be warned, you should only reduce your payments on account if you’re sure your tax will be lower than last year. If you reduce them too much, you will face interest charges and end up paying more to HMRC. The best way to ensure this doesn’t happen is to be certain of your figures and future tax liabilities by having your accounts prepared as close to your financial year end as possible. If you reduce your payments on account by too much, HMRC could also issue you with a penalty if HMRC believe your claim was fraudulent or negligent. Therefore you should not reduce your payments on account for the sole reason of not being able to afford to pay. If you are having difficulty paying your tax bill, you should discuss this with us or contact HMRC as soon as possible to discuss a time to pay arrangement.

Payments on account can be made via HMRCs online system and you will need your Unique Tax Reference number to make your payment. Please note that HMRC no longer accept payment from personal credit cards. You should contact us if you need assistance or advice.

Vicki Platt