With all the recent gloomy predictions for the UK’s economy, George Osborne today outlined a range of new measures intended to drive growth and support small and medium-sized businesses.

Key points included in the Chancellor’s Statement were:

A new National Loan Guarantee Scheme worth £20 billion will see the Government underwriting loans to small enterprises, enabling banks to offer lower rates.

The British Bankers’ Association (BBA) will work on a new system for referring firms whose loan applications have been refused to Community Development Finance Institutions.

To help medium-sized firms access finance through non-bank channels, the Government will launch a £1 billion Business Finance Partnership, co-funded through private sector investment.

A working group led by the Department for Business (BIS) will look at ways of helping small and medium-sized businesses access alternative sources of funding, including opportunities to sell bonds, and will report by next year’s Budget.

Business angels who invest up to £100,000 in new enterprises will benefit from a 50% income tax break under a new Seed Enterprise Investment Scheme. They will also escape capital gains tax on profits from 2012/13 that they reinvest through the Scheme.

The Enterprise Investment Scheme and Venture Capital Trusts will be simplified and refocused.

An additional £75 million will be made available for small and medium-sized technology businesses to develop, demonstrate and market new products and services.

The business rate holiday for small firms that was due to expire in October 2012 will be extended to April the following year.

The 3p rise in fuel duty expected in January 2012 will be postponed until August.

A £400 million Get Britain Building investment fund will be used to boost the construction industry through the building of new homes. A Government-backed indemnity scheme will make 100,000 new 95% mortgages available for new-build properties.

The Regional Growth Fund is to be increased by £1 billion.

The Lancashire and Humber Local Enterprise Partnerships (LEPs) have been given the go-ahead to form Enterprise Zones, the North East Zone will be expanded to include the Port of Blyth to encourage investment in renewable energy, and a new zone will be considered for Battersea.

A number of Enterprise Zones will benefit from 100% capital allowances. These Zones are: the Black Country, Humber, Liverpool, North Eastern, Sheffield, and Tees Valley.

More rural businesses will gain access to superfast broadband, while further measures will ease compliance burdens on agricultural businesses, and £25 million for rural tourism.

Six Rural Growth Networks will be piloted to see how local authorities and LEPs can use new planning rules and infrastructure investment to support local economic growth. In particular, £2 million will be spent over the next three years on supporting rural enterprises led by women.

The qualifying period for unfair dismissal claims will be increased from one year to two from April 2012, and claimants will have to pay a fee to take their employer to a tribunal.

The Government will consult on introducing compensated no-fault dismissal for firms with fewer than ten employees, and on reducing the length of the collective redundancy process for 100 or more staff from 90 days to 60, 45 or 30 days.

For our full summary of the main points please click here.

From 1 October 2011 the national minimum wage rates increased as follows:

For more information click here.

It must be some six years ago I first met (virtually) Emily Coltman who was at the time working for a regional firm of accountants.

Emily was not long qualified but she was very interested in new technology and how this could help the smaller business, so no wonder that Emily has ended up as chief accountant FreeAgent.

I guess Emily felt she had more to offer because she has now published her first e-book – Finance for Small Business: A straight-talking guide to finance and accounting.

I have actually read it, cover to cover, before I decided to say anything about it.

It is another book worth reading if you are starting out on your own path towards self employment/small business.

There are a great many of these books, at Holden Associates we have our own £FREE New Business Kit.

So is it worth £10 (or £8 on Kindle), well actually Yes it is, and I have actually read the book rather than the promotional literature!

For the e-book click here.

For Kindle edition click here.

Did you know that from 1 October 2011, agency workers who work in the same role with the same hirer for 12 continuous calendar weeks will be entitled to the same basic employment and working conditions as employees in comparable roles.

For more on this story go to the Business Link website by clicking here.

In the world of small and medium sized businesses change is an on-going feature of running a business. Some of the changes that occur are beyond the control of business owners. Frequently these changes emanate from statutory obligations to which the business must comply. For example changes that are instigated by Companies House or more commonly changes that come from Her Majesty’s Revenue and Customs (HMRC).

Different schools of thought

Even though HMRC have not confirmed it officially there is reason to believe that they are moving towards the closure the Time to pay taxation scheme. This is a scheme which allows small or medium sized businesses to delay or stagger payment of their taxes as long as they have prior agreement from HMRC.

A common and most obvious opinion is that any such change may result in financial hardship for small businesses. Staggering or delaying payment can have a positive effect of improving cash flow. As such the business is able to benefit from the delay in paying taxes. Satisfying taxation bills can mean that a considerable sum of money has to be paid out in one go. Inevitably this has the knock on effect of reducing any monies available to spend on a daily basis and may mean financial hardship. The ability to stagger the bill inevitably gives the business more options and an increased ability to manage their cash flow thereby improving the chances of survival.

Recent data

When compared to historical data dating back to 2009 figures show that HMRC has steadfastly declined repeat applications. As such one third fewer applications have been granted. The reduction in the number of businesses being able to delay payment coupled with the recent uncertainty in the current economic climate brings with it increased concerns for business owners. Statistics show that 9.3% of businesses who applied for time to pay in the first quarter of 2011 were refused permission to do so. This is compared to 6% in 2010 and 2.9% in 2009.

Allowing businesses to delay payment is a bonus during normal economic conditions; it can be a god send during difficult or turbulent times. Once again HMRC has not confirmed that the time to pay scheme will be scrapped but the writing is on the wall. Never the less HMRC still continues to offer a listening ear to businesses that find themselves in difficulty. Their Business Support Service can discuss options for payment and ways forward for the business. It is important that any options discussed be shared with your accountant as they will be able to add increase understanding to the situation.

Keeping abreast of changes

As well as working in your business it is equally important to work on it by keeping abreast of any changes that may or may or affect your business. The continued viability of any business depends on that business being able to satisfy taxation demands as such it is important to know what HMRC are doing or thinking about.

Mileage rates from today, 6 April 2011, will be increased to 45p a mile for the first 10,000 miles. The rate for mileage over the first 10,000 miles will remain at 25p a mile.

Outsourcing the payroll processes of your business simply means that you transfer a traditionally in house function to external company. That is you will no longer be responsible for the completion and management of that particular task. All of the routine duties involved with payroll processing are shifted from within the company itself, allowing for staff time to be used more constructively.

Once a firm entrusts its payroll processing to a reliable company, you can be assured that not only will the entire payroll be taken care of, but expert advice will also be on hand. The costs associated with the setting up your own payroll systems, such as purchasing software, maintenance and upgrades are thus avoided.

Choosing to use to outsourced company for your payroll avoids many issues such as tax penalties, salary calculation, working out of student loan repayments and general payroll errors.

There are number payroll processes outsourcing firms to choose from. Whichever company you choose you will need to make sure that the company has the right experience, a good solid track record along with good references. Ideally you should shortlist about two or three companies from which make a choice from.

What to expect

In addition to processing your payroll, companies should provide the necessary accounting reports to enable the business to keep track of what is happening. The company responsible for your payroll should take the time to explain all the small detail. As the owner of the business you will need to understand anything that is completed on your behalf as there is a possibility that your payroll reports may be looked at if and when the business is audited. The last thing that any business owner would want is an audit trail that cannot be followed.

Outsourcing payroll services comes with added benefit of peace of mind that your accounting data and reports will be accurate. Your outsourcing company should also be able to provide help and assistance for employees when needed.

Benefits

There are many attractive benefits besides costs savings of outsourcing your payroll. Increased productivity, employee satisfaction avoidance of late taxes and penalties are just a few additional benefits that add to the attractiveness of outsourcing your payroll processing. Best of all, is the fact that it allows the business to focus on and concentrate on their core business. What better benefits could there be? If your competitors are outsourcing because of cost reasons, then the chances are that you should also be thinking seriously about outsourcing.

Last but not least

It is imperative that the provider of these services can provide the maximum amount of security to ensure that the data of clients is securely kept. Prospective clients should ask questions about the use of encryption technology, password protection, telephone and internet security.

Once all your questions are answered it should be a lot easier to decide whether or not outsourcing your payroll is right for your business.

The state of the economy is always an area of concern, the impending new legislation in April and an uncertain tax environment can make the decision to employ staff one of the hardest decisions that you may have to be make in the current year. Apart from concerns over the pace of economic growth, there is the rising cost of national insurance and pensions to think about. Even though there may be growth opportunities for the business it is understandable that there is a reluctance to commit to employment contracts in the current climate.

The key to navigating through erratic times is through the careful assessment of your payroll, planning and some flexibility. Your payroll needs to be given serious thought about the ongoing costs of staffing. Not paying enough attention to your payroll could lead to your competitors being in a better position when economic growth improves. It is a delicate equation between employing skilled staff that will facilitate future growth opposed to hiring entry level staff to keep the business ticking over.

Salaries

Salaries are the largest part of any businesses fixed costs; as such many businesses are taking great pains to control them. Consequently they will require accurate date about staffing costs and expenses on a month by month, quarter by quarter basis. Thinking about the revenue brought in per employee or benefit costs per employee is a good starting point.

The idea is to benchmark these measures against competitors and businesses that are similar to yours to see how you compare. The resulting figures would then need to be analysed in conjunction with other financial data from the business. The resulting information would be used to make a more realistic decision about the true cost of your payroll. There is a lot of data to analyse, there is no doubt that your accountant will help you analyse this data if you are unable to do so by yourself.

Making Adjustments

In order to take advantage of the current uncertainty you should be prepared to adjust salary budgets as and when the situation arises. Businesses should ideally plan to hire on a contingency basis. That is In the event of seeing 20 percent to 25 percent revenue growth, and if it continues, they can hire people. If it doesn’t, they may not choose to hire.

Follow the Money

As the year progresses, watch your revenue like a hawk, and begin to match up your staffing data with your best and worst-case scenarios. As trends begin to emerge, and if it looks like the best case might win out, you can commence thinking ahead to what kind of people you will need to hire. This will help you avoid hiring someone out of desperation. Common sense dictates that you should invest in revenue-producing areas first, such as sales and marketing, or in the areas that best match up with your strategy. What's required is clear understanding of where investments will pay off.

You need to be aware that the National Minimum Wage (NMW) rates increased from 1 October 2010, and the age bands those rates apply to will also alter as follows:

• Aged 21 and over (previously 22 and over) £5.93 (was £5.80)
• Aged 18-20 (previously 18-21) £4.92 (was £4.83)
• Aged 16 & 17 (previously under 18 but over school leaving age) £3.64 (was £3.57)
• Apprentice rate (new from 1 October 2010) £2.50

The apprentice rate applies to apprentices aged under 19, or those aged 19 or more in the first year of their apprenticeship.

As the age bands are changing employers need to know when their workers will fall into each band. Do they have proof of age of each young worker?

Employers must ensure the wages of their workers are in line with the NMW, from the first pay reference period (PRP) that begins on or after the worker's birthday that takes them into a higher age band. The PRP is the period for which the worker is paid, and under the NMW regulations it cannot be longer than a month.

HMRC can impose penalties of up to £5,000 on employers who do not pay the correct NMW rate, and the employer may even be tried in the Crown Court for non-compliance with the NMW rate regulations, leading to an unlimited fine. The employer must also pay any arrears of wages owed (for the previous 6 years), based on the current NMW rate, not the rate in force when the employee was underpaid.

Are you aware that the main provisions of the Equality Act 2010 will come into force on 1 October 2010?

On 1 October 2010 provisions coming into force include:

• The basic framework of protection against direct and indirect discrimination, harassment and victimisation in services and public functions; premises; work; education; associations, and transport.
• Changing the definition of gender reassignment, by removing the requirement for medical supervision.
• Levelling up protection for people discriminated against because they are perceived to have, or are associated with someone who has, a protected characteristic, so providing new protection for people like carers.
• Clearer protection for breastfeeding mothers;
• Applying the European definition of indirect discrimination to all protected characteristics.
• Extending protection from indirect discrimination to disability.
• Introducing a new concept of “discrimination arising from disability”, to replace protection under previous legislation lost as a result of a legal judgment.
• Applying the detriment model to victimisation protection (aligning with the approach in employment law).
• Harmonising the thresholds for the duty to make reasonable adjustments for disabled people.
• Extending protection from 3rd party harassment to all protected characteristics.
• Making it more difficult for disabled people to be unfairly screened out when applying for jobs, by restricting the circumstances in which employers can ask job applicants questions about disability or health.
• Allowing claims for direct gender pay discrimination where there is no actual comparator.
• Making pay secrecy clauses unenforceable.
• Extending protection in private clubs to sex, religion or belief, pregnancy and maternity, and gender reassignment.
• Introducing new powers for employment tribunals to make recommendations which benefit the wider workforce.
• Harmonising provisions allowing voluntary positive action.

The above is taken from the GEO website.