Welcome to our round-up of the latest business news for our clients. Please contact us if you want to talk about how these updates affect your business. We are here to support you!
Where Does the Money Go?
With ever increasing supplier prices, managing your businesses cash and understanding the flow are now vital tools in maintaining resilience and being able to adopt flexible strategies for success.
Fund flows are a reflection of all the cash that is flowing in and out of a business. Owners can look at the direction of the cash flows for insights about the health of specific products or services and overall market patterns.
Some types of business are more likely to run into cash flow problems, while other types appear to be more resilient. If you are a business owner, you might be wondering which category your business falls into. No matter how inventive or simple your business model is, you can still have problems with cash flow. Here are our thoughts on managing the flow of cash in your business:
The first stage of understanding and predicting how funds flow is to perform a health check on your accounts. Look at your latest profit and loss statement and check that your income is sufficient to cover your expenses. If your profit is falling behind your expenses and cash flow is slowing down you might need to take action. Prepare a funds flow statement so you know where the money goes.
Next create a yearly budget and look where cash could become tight and months where you can save to cover off the quieter times. Look at those quieter months and think about flexible work scheduling, new products or services or other activities to tide you over.
Finally make sure you collect your money from those who owe you quickly. Reward customer loyalty by offering early bird discounts, set credit limits and payment terms to ensure customers follow the rules. If you take on new customers make credit checks. Penalise late payers and request up front deposits or payment.
Talk to us about preparing a funds flow statement and annual budget so that you can work on your business for maximum success!
Ransomware Attacks on Businesses Growing
UK, US and Australian cyber security authorities are warning of a growing wave of increasingly sophisticated ransomware attacks which could have significant consequences for businesses and organisations across the world.
In their joint advisory, they reveal that the tactics of ransomware groups evolved last year. Trends observed in 2021 include:
- targeting organisations on public holidays and weekends
- attacking industrial processes and the software supply chain
- targeting cloud services
- disrupting work and shutting down services
- holding organisations to ransom until demands have been paid
- increased use of cybercriminal ‘services-for-hire’
- sharing of victim information between different groups of cyber criminals
- diversifying approaches to extorting money
Businesses and organisations are encouraged to familiarise themselves with the risks and ensure their IT teams are taking the correct actions to bolster resilience.
The advisory suggests ways to mitigate risk of compromise by ransomware by implementing a requirement for multi-factor authentication, Zero Trust architecture, and a user training programme with phishing exercises.
The advisory follows the NCSC’s recently launched Ransomware Hub, which is a one-stop shop for advice on how ransomware works, on whether a ransom should be paid, and how to prevent a successful attack.
UK organisations which fall victim to a cyber-attack should report the incident to the NCSC’s 24/7 Incident Management team.
Average Weekly Earnings in Great Britain: February 2022
Recent figures from the Office for National Statistics (ONS) show Growth in average total pay (including bonuses) was 4.3% and growth in regular pay (excluding bonuses) was 3.7% among employees in October to December 2021. This means UK wage growth continues to lag behind the rising cost of living.
In real terms (adjusted for inflation), in October to December 2021, total and regular pay fell on the year at negative 0.1% for total pay and negative 0.8% for regular pay.
Single-month growth in real average total weekly earnings for December 2021 increased 0.1% on the year because of an increase in bonus payments compared with December 2020; whereas the single-month growth in real average regular weekly earnings fell on the year in both November 2021 and December 2021, at negative 1.0% and negative 1.2% respectively.
Average total pay growth for the private sector was 4.6% in October to December 2021, while for the public sector, it was 2.6%; all industry sectors saw growth, with the finance and business services sector seeing the largest growth rate at 8.1% following an increase in bonus payments compared with December 2020.
Changes To Accounting for VAT On Imports for Users of Flat Rate Scheme
There are important changes from 1 June 2022 for small businesses using the Flat Rate Scheme who are importing goods and using postponed VAT accounting.
Those businesses using the Flat Rate Scheme must currently add the value of imported goods to the total of all their supplies before they carry out the scheme calculation.
For VAT return periods starting on or after 1 June 2022, they should no longer include import VAT accounted for using postponed VAT accounting in their flat rate turnover. The VAT due on any imports should be added to box 1 of the return after completing the Flat Rate Scheme calculation.
HMRC have issued the following updated guidance:
Importers Not Using the VAT Flat Rate Scheme
HMRC have also updated their guidance for VAT registered importers not using the Flat Rate Scheme:-
These traders must account for postponed import VAT on their VAT returns for the accounting period which covers the date they imported the goods. The normal rules apply for what VAT can be reclaimed as input tax and the trader’s monthly statement will contain the information to support their claim.
HMRC is aware of the problems some importers are having when trying to access their monthly VAT statements. If you cannot access your statement or you’re having problems when viewing your statement, you should follow the guidance on how to complete a VAT Return if you’re having problems with your monthly statements.
As long as you take reasonable care to follow the guidance, there will be no penalty for errors.
Payrolling Benefits in Kind
HMRC are encouraging more employers to payroll employee benefits in kind rather than declaring benefits on the end of year P11D. They have included guidance on registering to use the scheme in their latest employer bulletin.
If employers haven’t already done so they should register online now or before 5 April 2022 to payroll employee benefits for the 2022/23 tax year.
The advantages of payrolling benefits in kind are:
- employers no longer need to submit P11D and P46(Car) forms to HMRC
- simpler PAYE codes mean HR teams receive fewer queries from employees regarding tax
- tax deductions in monthly payroll will be more accurate
- tax codes for individuals should change less frequently
- fewer forms for employers to complete at year-end
If you are not yet in a position to move to payrolling you can still move away from legacy paper P11D forms by submitting them online. You can submit them in one click without worrying about posting them to HMRC. It is also a useful first step towards payrolling of benefits in kind and bringing your payrolling processes into the digital age.
Upcoming HMRC Webinars
Plastic Packaging Tax – admin and technical aspects – 22 February
In this webinar you’ll find more detail about the administrative and technical aspects of the new Plastic Packaging Tax.
Making Tax Digital for VAT – 22 February
This webinar will provide some of the basics of Making Tax Digital for VAT. This will include what’s changing, using software and keeping digital records, plus an introduction to penalty reform.
From April 2022, these requirements will apply to all VAT-registered businesses, to include those that have a turnover below the VAT threshold.
Introduction to Plastic Packaging Tax – 25 February
Find out about the new Plastic Packaging Tax being introduced in April 2022 and what you need to do now if you produce or import plastic packaging.
Employers – what’s new for 2022 to 2023 – 14 March
Join this live webinar for an overview of the new rates for:
- National Insurance
- National Living Wage/National Minimum Wage
- Statutory Payments
HMRC will discuss any changes to expenses and benefits, Student Loan deductions, freeports, employer National Insurance contributions relief, and the new Health and Social Care Levy.
Fairtrade Fortnight 2022 – Choose the World You Want!
In 2022, the online Choose the World you Want Festival will return from 21 February to 6 March. Last year’s festival saw campaigners, shoppers, students and businesses come together in a show of support for the farmers behind our food on the front line of the climate crisis. From online panels to bake-offs and coffee mornings over 50 virtual events took place as part of a virtual festival, with supporters sharing the power of Fairtrade and what needs to happen next to ensure farmers and workers are put front and centre of conversations on how to tackle the climate crisis. The COVID-19 pandemic has shown us more than ever how interconnected we are globally. This interconnection is at the very heart of the Fairtrade message and is where your role begins. You are part of the Fairtrade movement, and you have the power to drive long-term change, not only with your shopping choices but with your support in spreading the message.
Food Waste Action Week 2022
Around a third of the food produced globally is lost or wasted and it’s having a real impact on climate change, contributing 8–10% of total man-made greenhouse gas (GHG) emissions.
That is why Love Food Hate Waste dedicate a whole week of action to raising awareness of the environmental consequences of wasting food and promoting activities that help to reduce the amount of food we waste.
The aim of Food Waste Action Week is to create lasting change that helps to deliver the UN Sustainable Development Goal of halving global food waste by 2030.
After an incredible response to the first-ever Week in 2021, plans are already taking shape for Food Waste Action Week 2022 (7-13 March 2022) and this time we will be taking it global.
Digital Security by Design: Technology Access Programme
Applications remain open until 6 March 2022.
Digital Security by Design (DSbD) challenge and Digital Catapult have launched a new programme for developers and organisations to experiment with DSbD technologies.
The Technology Access Programme has been developed to build a pipeline and community of developers and technology companies to trial and experiment with the new DSbD technologies, to addresses the cyber security challenges faced by embedded product and software companies.
What is available?
To support a six-month experimentation period with the DSbD technologies within their own organisations, programme participants will have access to:
- the Morello Board and CHERI prototype architecture and hardware
- technical guidance
- £15,000 in funding
- collaboration and mentoring opportunities
- industry and technical advisors
Businesses will also get an opportunity to access Digital Catapult’s Future Networks Lab with state-of-the art IoT and 5G networks testing facilities, allowing them to test the impact of DSbD technologies on other areas of their products and services.
There will be four open call opportunities during the overall timeframe of the Technology Access Programme for organisations to apply.