Posts tagged ‘Contact’

Drowning under a mountain of paperWith 2011 more that half way through, how is your business performing?

 

Here are twelve tips to act an aid-memoire when trying to stay in control of your business:

  1. If you are not producing regular management accounts, consider what financial information can be easily extracted from your accounting system to help you monitor the business. You can only extract meaningful information if your records are up to date and accurate.
  2. If you are selling a product, make sure you know your break even sales volume – this could be higher than you realise, particularly with pressure on prices.  What level of waste are you experiencing?  Are you carrying too much stock?
  3. If selling a service, check how many hours of time you are invoicing out a month – how much of it is resulting in billable income?   Are you charging at the right levels?  Are you competitive without being cheap?
  4. Project Management PlanRevisit your business forecasts and cash flow projections for the coming 12 months on a regular basis – are they still realistic in the current climate?  What costs can be trimmed back?
  5. If cutting costs, make sure you know which of your costs are fixed and which are variable.
  6. What can you delegate/outsource so that you can devote more of your time to looking after key clients and driving the busimess?
  7. A big, bad debt can be disastrous for business, so make sure you monitor your debtors carefully.  Keep in regular contact, resolve disputes quickly and discuss options at an early stage if they are having difficulties.  A debtor making round sum payments on account is often a warning sign.  Consider credit checking businesses that do not have any history with you.
  8. Look after your purchase ledger with as much care as your sales ledger.  Good suppliers are key to you being able to deliver to your customers, keeping prices down and an essential source of credit when managing cash flow.
  9. Make sure you have up to date information to hand when requesting a renewal or increase in your banking facilities and keep your bank manager informed of changes to the business and its performance.
  10. Check that the financial structure of your business is correct.  If you are relying on short term finance for long term projects then you need to get the balance right.  What assets do you have to secure more cost effective commercial finance?
  11. Income taxGet your tax affairs up to date and make sure you have provided for payments due in January and July as well as Corporation Tax due nine months after the accounting period if trading through a Company.  This is just as important if profitability has declined as you may be able to reduce any payments on account that fall due.
  12. Check you are using the most effective VAT scheme.  If you have a large sales ledger, cash accounting may be more appropriate.  Have you calculated whether the flat rate scheme results in less VAT being paid over to HMRC?

 

The information provided in this blog illustrates my opinions and experiences, it does not constitute advice and I do not accept responsibility for any actions taken or refrained from as a result of reading this post.

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PAYE notices of coding are notorious for being erroneous, but HMRC have surpassed themselves with this computer generated nightmare that not only leads to extra work and a lot of confusion but may even leave you paying too much tax.

Multiple Notices

In the last few months you may have received several Notices of Coding all showing different codes for the tax year 2010/11. There have been a number of instances where taxpayers have been receiving one tax code one day followed by a different one the next or even more than one code in one day. This has left many people bewildered and uncertain about exactly what tax code will be operated against their income and many of the codes issued are wrong anyway.

New HMRC  system

The problems have occurred as a result of HM Revenue & Customs recently introducing a new system for issuing coding notices called the National Insurance and PAYE Service (NPS). The new service has brought to light various discrepancies in their records and so they have been trying to rectify the errors, hence so many codes being issued all at once. They expect to complete their review by mid April 2010 which will hopefully bring an end to all the confusion.

Resolution?

Any problems occurring as a result of an incorrect code will ultimately be resolved at the end of the tax year once a taxpayer submits their 2010/11 Tax Return to HMRC. However if serious problems are not dealt with near the beginning of the tax year it could result in a large underpayment arising for some people which it may not be possible to collect via a later year’s tax code.  If you are not required to file a Tax Return, over or underpayments may go undetected for quite some time.

A careful review is necessary

In view of the problems which have occurred it is important that any codes received for 2010/11 are reviewed fully. If you believe that your code is incorrect you should either contact your advisor if you have one or HMRC as soon as possible.

Need help?

As agents we receive a copy of the majority of PAYE Coding Notices issued to our clients and therefore we are able solve many of the matters arising before problems begin to appear. We have discovered various reasons for an incorrect code but the problems particularly appear to have affected those with multiple employments. Close scrutiny of your code is therefore important.


Disclaimer: This article is for general guidance only.  All taxation planning should only be undertaken after appropriate professional advice.  George Hay Chartered Accountants are registered to carry on audit work and regulated for a range of investment business activities by the Institute of Chartered Accountants in England and Wales.

The information provided in this blog illustrates my opinions and experiences, it does not constitute advice and I do not accept responsibility for any actions taken or refrained from as a result of reading this post.