Stuart Adam, Thomas Coombs

Businesses should make strong cash flow their New Year’s resolution

Businesses need to prioritise cash flow in 2016 to ensure stability and help drive growth, according to Leeds based accountants Thomas Coombs.

Cash flow refers to the net amount of cash and cash-equivalents moving into and out of a business and having healthy cash flow is an important part of a business’s survivability.

Many small-to-medium businesses will face new cash flow issues in the New Year with the introduction of the National Living Wage (NLW), which will see the minimum wage rise to £7.20 per hour for employees over the age of 25 from April.

Some companies will also face the additional payroll costs associated with the on-going auto-enrolment scheme for workplace pensions, but businesses will benefit from new rules on benefits-in-kind.

Under the new rules employers will be exempt from paying income tax and national insurance contributions on benefits worth less than £50 that are provided to employees.

However, many businesses are likely to continue to struggle with late payments from customers, despite new rules from the Government that will enforce shorter and stricter payment periods.

Stuart Adam, Partner at Thomas Coombs, said: “All businesses should be aware of their current cash flow situation and should also have some idea of their future cash flow.

“Businesses are likely to see costs go up next year, especially with the introduction of the NLW, which could affect the health of a business’s cash flow.

Stuart Adam added that profitable and seemingly successful businesses had failed because cash flow had suffered and they weren’t able to pay outstanding bills on time.

“Speaking with an accountant could be extremely beneficial to businesses concerned about cash flow,” said Stuart Adam.

Most firms will be able to help you forecast future cash flow and manage current costs and payments to ensure your business’s cash reserve remains healthy.”

If you would like to know more about our range of cash flow and budgeting services, please Stuart Adam.

Christmas comes second to work for SME owners

Thomas Coombs has commented on news that, according to Zurich’s latest SME Risk Index, 49 per cent of the UK’s small business owners worked on Christmas Day last year.

The research indicated the challenges of achieving a work-life balance, with a further nine per cent having admitted to missing their child’s nativity play and 13 per cent having missed the Christmas party.

Furthermore, the research went on to show that 14 per cent of decision makers have not taken any annual leave this year, whilst 18 per cent have not had more than 10 days off this year.

Christopher Darwin, Partner at Leeds-based Thomas Coombs said: “Missing big events and not taking holiday days shows the pressure that many small firms are under.” Christopher Darwin went on to say that Thomas Coombs can assist SMEs with a number of tasks that they may be trying to undertake on their own.

“This is a very busy time of the year for everyone, especially SMEs. In gearing up for Christmas, there are so many things to deal with, such as payroll, the self-assessment tax return, and the implications of auto-enrolment,” said Christopher Darwin “I hope that everyone gets to enjoy the holidays and that’s why I’d like to remind SME owners that Thomas Coombs can help you with your backlog. We can pick up the pieces and help your business to run smoothly throughout the festive season and into 2016.

“At Thomas Coombs, we understand the pressures faced by SMEs and so we want to help business owners to achieve a healthy work-life balance and put Christmas back on the calendar,” concluded Christopher Darwin.

To find out what Thomas Coombs can do for you, please contact Christopher Darwin

Tax return should be top of people’s Christmas list, says Thomas Coombs

At this time of year most people’s focus will be on buying presents, putting up decorations and preparing the Christmas dinner, but Leeds based accountants Thomas Coombs says people need to remember the self-assessment tax return deadline.

Taxpayers who are required to complete self-assessment tax returns have until midnight on 31 January 2016 to submit them online to HM Revenue and Customs (HMRC).

Failure to send your tax return and pay any outstanding tax could lead to severe penalties, starting with a £100 automatic fine that will be applied to all online tax returns if they are late by just one day.

Any tax returns still outstanding three months after the deadline will be subject to a fine of £10 per day for each day the tax return is due, up to a maximum of 90 days.

Any return that is six months late will be subject to an automatic fine of £300 or five per cent of the tax due, whichever is the higher. For returns that are 12 months late, another £300 fine or five per cent of the tax due will be added.

Any tax outstanding during this period will also be subject to interest on the amount due; meaning that the longer a return is left the larger the final tax bill will be.

Andrew Cowe, Senior Tax Manager at Thomas Coombs, said: “Every year thousands of people fall foul of HMRC’s strict deadlines for self-assessment tax returns, but it doesn’t have to be like this.

“At Thomas Coombs we understand that people are busy at this time of year, so it pays to get a helping hand with your tax return. Contacting an accountant isn’t always costly and it could save you hundreds of pounds in penalties.”

Andrew Cowe added that while the deadline was short there was still time for individuals to conduct tax planning in order to minimise their liabilities.

“It is never too late to speak to a tax adviser about opportunities to reduce your tax bill. There are a number of HMRC-approved tax reliefs on offer that some people may not be aware of or believe that they are not entitled to,” said Andrew Cowe

“In most cases a quick discussion with a tax professional will give you a better idea of whether you are paying too much tax.”

If you would like assistance with your tax return or would like to see if you could minimise your liabilities, please contact Andrew Cowe.

Stuart Adam, Thomas Coombs

A welcome boost for SME funding

The government’s move to introduce flexibility for replacement capital within Enterprise Investment Scheme (EIS) and Venture Capital Trust (VCT) schemes, as revealed in the recent Autumn Statement, has been welcomed by Leeds based Thomas Coombs which claims it is a boost for small business funding.

Replacement capital is finance that has previously been provided to a business but has been returned to the funder. Until now, EIS funding has not been allowed to replace that capital. However, the news that replacement capital may now be allowed within EIS and VCT regulations, subject to state aid approval, brings the UK in line with the EU.

Stuart Adam, Partner at Thomas Coombs said: “Replacement capital was not allowed under the original UK scheme regulations, but it is allowed under the overarching Global Block Exemption Regulations that govern tax-advantaged venture capital schemes in the EU.

“This is an anomaly that looks like it will be rectified, although it’s likely to be next year when the details are finalised. When it is though, the UK will be on a level playing field with the rest of the EU, which is going to be beneficial for the economy and strengthen the finance that is available to businesses.”

The move is likely to allow 50 per cent of any investment to be in the form of replacement capital up to a maximum of £5 million, limited to half of this figure in any rolling 12 month period.

“I think that this news could result in a new source of funding for SMEs as well as giving private investors greater flexibility over the companies they invest in,” said Stuart Adam.

If you would like more information, please contact Stuart Adam.