Monthly Archive April 30, 2021

New guide to “help tackle the toxic issue of late payments”

Major business bodies have this week launched a new supply chain guide in an attempt to address the worsening late payment crisis.

The Federation of Small Businesses (FSB) and British Services Association (BSA) said the guide will “highlight challenges faced by smaller firms” and “identify routes to collaborative working”.

Recent research revealed that small businesses were owed more than £23 billion in outstanding invoices in 2020, while late payments were directly attributed to the collapse of some 50,000 small businesses every year.

The BSA said the new guide, found here, will help the smallest and largest organisations come together to benefit from a “healthy and more diverse supply chain” through “partnership working”.

It also highlights the significance of the Prompt Payment Code, aligning objectives, social values, and building relationships.

“Everyone needs to contribute in full if the UK is to recover quickly, sustainably and equitably,” said Mark Fox, Chief Executive of the BSA.

“That means the public sector, and private sector and VCSE organisations large and small, together in harness, working towards the same common goals.

“This Statement sets out some examples of what has been achieved. But we are all on a journey, and we recognise that much more needs to be done. We hope this Statement will highlight examples which all larger businesses can learn from and adopt.”

Welcoming the guide, Small Business Minister Paul Scully added: “This welcome statement from the BSA highlights the importance of businesses working together and paying their partners on time, and builds on the government’s work with the Small Business Commissioner to tackle the toxic issue of late payments.”

Earlier this year, it was revealed that the Prompt Payment Code payment period would be slashed in half, from 60 to 30 days, to protect small businesses.

For help and advice with related matters, please get in touch with our expert team today.

Supporting hospitality clients post-pandemic

The coronavirus pandemic hit the hospitality industry particularly hard, with no remote or home-working options viable for these employees and many still on furlough.

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Furlough scheme – The latest guidance

HM Revenue & Customs (HMRC) has published a series of updates to its guidance on the Coronavirus Job Retention Scheme (CJRS), more commonly known as the ‘furlough scheme’.

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Could you be eligible for R&D tax credits?

R&D tax credits offer a fantastic opportunity for businesses to reclaim some of the costs involved in developing innovative new products, services or processes.

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SME leaders optimistic towards post-Covid recovery time

Small and medium-sized enterprise (SME) leaders are optimistic about post-Covid-19 recovery time, suggesting it will take an average of 12 months for their businesses to make up for the lost revenue.

Chirag Shah, CEO, Nucleus Commercial Finance, who commissioned this research, comments, “it’s encouraging to see such optimism among SMEs about their projected finances as they return to business as usual.”

With consumer demand accelerating after the easing of lockdown restrictions, over half a million SMEs suggest it will take between 10-12 months to make up for the loss caused by Covid-19.

Research indicates that medium-sized businesses are most confident about their recovery, with over a quarter believing it will take between seven to nine months to return to their pre-Covid-19 financial state. However, small-sized businesses believe it will take them between 10-12 months.

Whilst some of these predictions are hopeful for the future, several companies expect the lost revenue to have a long-lasting impact – with one in five sole traders concerned that they will never recover. 

Research reveals that 23 per cent of younger business owners, between the ages of 18-34, hope to see a recovery in the first four to six months, while 24 per cent of owners aged 55 plus don’t see their business recovering for at least one to two years. SMEs also expect to spend an average of £97,000 to help their businesses grow in 2021.

The route out of lockdown will not come without its challenges. Having experienced the effect that lockdown easing has had on business sales already, SMEs are showing a much more optimistic outlook than a few months ago. 

The research also found that London and the South East SMEs are the most optimistic about business recovery – almost a quarter of SME leaders in the South East predicting a 10–12-month recovery span and a quarter of those in London hoping between seven to nine months.

With 50 per cent of SME leaders within the North West and South West of England predicting a longer one to two year recovery time, it is clear that not all are feeling so confident. 

Shah highlights that “[the] Government and industry must collectively raise awareness of the varying support measures available to aid these businesses in their longer-term recovery, ultimately providing a much-needed boost to our economy.”

For help and advice with matters relating to post-Covid recovery, please get in touch with our expert team today.

UK tech sector continues to grow despite Covid-19 disruption, study reveals

The UK tech sector has continued to grow despite the impact of Covid-19 and lockdown restrictions, a major study has revealed.

The data – shared by Companies House this month – shows how the coronavirus pandemic has helped carve out a bigger slice of the economy for tech businesses.

According to the figures, some 14,301 technology-focused businesses incorporated in the UK in 2020 – representing a 13 per cent increase compared to the 12,696 start-ups registered in 2019.

It will come as no surprise that London was the number one destination for establishing a technology business, recording 7,480 incorporations over the 12-month period.

The South East of England followed, recording 1,520 new tech start-ups, while the North West placed third, recording 888 new incorporations.

Regionally, however, it was the West Midlands that recorded the largest percentage increase. According to the data, cities such as Birmingham, Coventry and Wolverhampton recorded 821 new incorporations – representing a 40 per cent year-on-year increase.

Scotland, Northern Ireland, the North East, the East Midlands, and the East of England all also saw annual growth in incorporations.

The figures come after the publication of the latest Tech Nation report, which revealed that the UK attracted over $15 billion (£10.8 billion) in investment in 2020 and placed third internationally for tech incubations ahead of all of Europe and behind only the US and China.

Commenting on the figures, Digital Secretary Oliver Dowden said: “With record levels of investment secured and UK listings gaining momentum, this report shows Britain’s tech sector continues to go from strength to strength, solidifying our position as one of the world’s top tech hubs.

“We want to bring about a golden age of UK tech through a raft of supportive measures and funding to help businesses thrive. This will help fuel a booming tech sector – creating jobs and improving services so that we can build back better from the pandemic.”

For help and advice with related matters, please get in touch with our expert company formation team today.

Make sure to make full use of the pension allowance this tax year

It is never too early in the tax year to start thinking about making pension contributions, especially given the potential tax savings on offer. 

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Small firms see strongest upturn in just over four years

Increasing customer demand and the easing of lockdown restriction produced a rebound in small business activity across nearly all parts of the UK in March, as COVID-19 restrictions eased at the end of the first quarter.

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The future of accountancy and bookkeeping – Powered by innovation, led by professionals

The events of the last 12 months have certainly led many businesses to focus on innovation and automation, as they look at new ways to help their business function regardless of the challenges posed by the various COVID-19 restrictions.

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Do you have taxable benefits? Start preparing now!

The last tax year has not long ended, but now is the time to think about how you report taxable benefits provided to your employees.

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