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The issue of late payments has become a growing concern for small businesses.

Recent data from Xero Small Business Insights reveals that, on average, payments were made 7.3 days late between April and June 2024.

This is an increase of 1.8 days from the previous quarter.

This marks the largest quarterly increase in late payments since the onset of the pandemic – with the retail trade and hospitality sectors hit hardest

This has further strained the cash flow of businesses already grappling with rising inflation and uncertain economic conditions.

Strategies to manage and mitigate late payments

To manage and mitigate the impact of late payments, we suggest you adopt several strategies:

• Clear payment terms: Ensure that your payment terms are clearly stated in all contracts and invoices. Specify the due date, late payment penalties, and preferred payment methods. This clarity can help set expectations and encourage timely payments.

• Invoice promptly and accurately: Send invoices as soon as the goods or services are delivered. Ensure that the invoices are accurate and include all necessary details to avoid delays caused by disputes or misunderstandings.

• Automate invoicing and reminders: Use accounting software to automate invoicing and send payment reminders. Automated systems can help you keep track of due dates and follow up with customers who are late in making payments.

• Offer early payment discounts: Encourage early payments by offering a small discount for payments made before the due date. This can incentivise customers to pay promptly.

• Build strong relationships with customers: Maintain open communication with your customers. Building strong relationships can make it easier to discuss payment terms and address any issues that may arise.

• Assess creditworthiness: Before extending credit to new customers, assess their creditworthiness. This can help you identify potential late payers and mitigate the risk of late payments.

• Legal recourse: As a last resort, consider legal options for recovering overdue payments. While this can be a lengthy and costly process, it may be necessary for persistent late payers.

Managing late payments can be challenging, but you do not have to navigate it alone.

Speak with your accountant or tax adviser to discuss your specific situation and develop a tailored strategy to improve your cash flow.

An experienced professional can provide valuable insights and help you implement effective solutions to protect your business from the adverse effects of late payments.

Speak to a member of our team for more information or assistance. 

Recently, there has been a significant increase in company closures due to petitions from creditors, particularly HM Revenue & Customs (HMRC).

In 2023, forced closures rose by 63 per cent compared to 2022.

This spike is mainly due to high interest rates making Covid-era debts hard to manage, along with HMRC’s backlog of cases.

Many companies, called “zombie companies,” continue trading despite being unable to pay their bills.

Creditors, including suppliers, utility companies, banks, and HMRC, are pushing to liquidate these debtors to recover what they can.

As such, we believe businesses need to take proactive steps to manage their finances and deal with creditors effectively.

How businesses should handle themselves

To navigate the current challenges, we suggest you closely monitor your business’s financial health by regularly checking income and expenses.

You should also track all debts, especially those remaining from Covid, and prioritise paying off high-interest ones to reduce financial strain.

Maintain open communication with creditors, including HMRC. If you anticipate trouble paying bills, discuss extending payment deadlines or setting up easier repayment schedules.

Alternatively, you can contact HMRC to arrange a “time to pay” agreement for tax debts to manage repayments over an agreed period.

You may want to consider options like a Company Voluntary Agreement (CVA) to keep trading with creditors’ consent and look at other insolvency options, such as administration and voluntary liquidation, which might be better alternatives to a winding-up petition.

Paying debts on time helps you avoid becoming a zombie company and attracting HMRC’s attention.

Be aware of HMRC’s service delays and their impact on processing applications.

Keep detailed records of all communications to avoid misunderstandings and ensure a clear audit trail.

How an accountant can help

As accountants, we can offer expert advice on managing your finances, restructuring debt, and ensuring tax compliance.

We can also help set up “time to pay” arrangements with HMRC and negotiate with creditors, guide you on rescue tools like CVAs, and help you understand other insolvency options.

Given the economic situation and HMRC’s pressure, we are strongly suggesting that businesses work closely with their accountants on all aspects of their tax and finances.

To speak with a qualified and experienced accountant, please get in touch with our team. 

Recently, many pensioners received surprising news: a tax bill for the first time.

This stems from HM Revenue & Customs (HMRC) decision to send letters to over 140,000 pensioners, who have taxable income but are not filing Self-Assessment.

In total, 560,000 pensioners will receive letters, covering the 2023/24 tax year.

Why is this happening?

The basic rate tax threshold has been frozen at £12,570 for three years, while state pensions have risen in line with inflation.

This means many pensioners now have incomes that cross this threshold, leading to tax liabilities.

If you are one of the 140,000 pensioners who have received a letter from HMRC, you are not alone.

However, this may be your first encounter with the ‘Simple Assessment’ system.

Simple Assessment is a way for HMRC to collect tax directly from those who do not file a Self-Assessment tax return.

The letter you received includes a Simple Assessment tax statement (form PA302), which details the tax you owe for income received between April 2023 and April 2024.

Payment must be made online or via the HMRC app, with deadlines usually set for 31 January 2025 or three months from the date of the statement.

How to manage this new tax bill

For our clients who have received this unexpected tax bill, we advise you:

• Don’t panic: Receiving a tax bill for the first time can be daunting, but it is manageable. Take a deep breath and read through the letter carefully.

• Check the details: Review the calculation provided by HMRC. Ensure all your income sources are correctly listed, including state pensions, savings, and any other income. Look out for any deductions you might be entitled to, such as charitable donations, pension contributions, or professional subscriptions.

• Seek help if needed: If you’re not comfortable using online services, ask a family member or friend to assist you. Alternatively, consider speaking to us.

• Make the payment: Follow the instructions in the letter to make your payment online or through the HMRC app. Ensure you do this by the deadline to avoid any penalties or interest charges.

• Stay informed: HMRC has provided an online guide for Simple Assessment. While there’s no phone helpline, the online resources can be quite helpful. Familiarise yourself with these guides to better understand the process.

Managing an unexpected tax bill doesn’t have to be stressful and by carefully reviewing your HMRC letter, seeking help when needed, and making your payment on time, you can stay on top of your tax obligations.

However, we recognise this process can be complex, and it is easy to overlook important details but speaking to an accountant can simplify and streamline everything for you.

We are here to help you understand your tax bill, ensure all calculations are correct, and guide you through the payment process.

Please reach out to our team for professional assistance – it can make all the difference in managing your finances smoothly.

In a bid to ease the regulatory burden on businesses, new thresholds for classifying company sizes have been announced.

This change, introduced by the previous Government, could allow around 132,000 businesses to skip mandatory audits.

Under the current plans, which may be subject to change, companies will be able to benefit from the threshold changes for financial years commencing on or after 1 October 2024.

How will this affect my business?

By increasing the audit thresholds, many SMEs will no longer require statutory audits.

With this change comes new challenges. Many stakeholders and investors rely on audits to provide them with accurate insights into the business’s financial health, so, the exemption could lead to reduced financial transparency and oversight.

It is essential for SMEs to carefully consider whether the savings from reduced audit costs outweigh the benefits of voluntary audits in ensuring strong financial health and maintaining investor confidence.

Although some companies may no longer be mandated to conduct statutory audits, they will still be under regulatory scrutiny.

This change promotes a risk-based approach to financial management, internal controls, and reporting, ensuring transparency and accountability without the need for a formal audit.

The new audit thresholds

For micro businesses, the turnover threshold has increased from £632,000 to £1 million and a gross asset threshold of £500,000 increased from £316,000.

For small businesses, the turnover threshold has increased from £10.2 million to £15 million and a gross asset threshold of £7.5 million increased from £5.1 million.

For medium businesses, the turnover threshold has increased from £36m million to £54 million and a gross asset threshold of £27 million increased from £18 million.

Any figure exceeding this would categorise the entity as a large company.

Currently, the employee numbers for micro, small and medium enterprises will stay the same at 10, 50 and 250 respectively, however, further consultation is expected on the threshold of medium-sized enterprise employees to increase it from 250 to 500 employees.

Additionally, consideration is being given to eliminating the requirement for medium-sized enterprises to prepare a strategic report.

To be eligible for the exemptions you need to meet two out of the three threshold criteria.

How should I prepare?

While many businesses will feel relief from these changes, they need to stay on top of their financial management and uphold strong governance and reporting standards.

By managing risks well and sticking to best practices, businesses can adapt to these changes smoothly and contribute to a healthy, resilient economy.

If you would like assistance with your audits or would like advice on whether your business requires one, please contact our team.

The first Budget of the new Labour Government has been announced to take place on 30 October 2024.

Ahead of the budget, Chancellor Rachel Reeves has announced that spending cuts worth £13.5 billion will be required over the next two years.

She explained that this was due to the scale of the previous Government’s overspending, which was unsustainable. The Chancellor said there is a £22 billion black hole in the public finances.

The immediate action Labour will take to deal with this issue includes cancellation and delays of major infrastructure projects.

Key takeaways on tax

According to Ms Reeves, the first Budget will require “difficult decisions” to be made to meet Labour’s fiscal rules, including major decisions on spending and tax.

In correlation with the Labour manifesto, she did rule out raising income tax, national insurance (NI) and VAT, however, a report to close tax loopholes and tax avoidance to recover public finances is intended to be published.

Additionally, changes to Capital Gains Tax (CGT) and Inheritance Tax (IHT) have not been ruled out.

Valuable reliefs, such as Business Asset Disposal Relief, could also be cut to bring in more tax, and this would affect anyone selling their business or a substantial number of shares.

Before the election, in the Spring Budget, the former Chancellor Jeremy Hunt announced the abolition of non-dom status in the UK and the eventual removal of the remittance basis, under a transitional process.

The new Government is set to double down on its plans announcing a “modern scheme” intended only to support people “genuinely in the country for a short period.”

The transitional arrangements due to be in place from April 2025, will not be retained under Labour’s plans and they have confirmed that they intend to end the use of offshore trusts to avoid Inheritance Tax.

This will, they say, ensure “that everyone who makes their home here in the UK pays their taxes here.”

Universal winter fuel payment

During her speech, Ms Reeves confirmed that she would be ending universal winter fuel payments, which are currently paid to all pensions.

She stated that starting this year, individuals who are not receiving pension credits or other means-tested benefits will no longer be eligible for these payments.

Pension tax relief

Rachel Reeves might consider lowering higher rate tax relief on pension contributions and introducing a flat rate scheme that applies to everyone, no matter their income.

There are also rumours that the 25 per cent tax-free lump sum people can currently take from their pension pots might be reduced in the future.

However, nothing has been revealed yet, but we should know once the Budget is delivered.

Office of Value for Money (OVM)

The Government will establish a new watchdog to ensure that all Government spending delivers value for money.

The Chancellor also confirmed to the Commons that a Covid anti-corruption probe will proceed, designed to recover money lost to Covid-related fraud.

If you have any questions following Rachel Reeves’s speech or would like advice ahead of the Budget, please get in touch.

King Charles delivered his speech to Parliament last month following the election, setting out the priorities of the new Labour Government for the months ahead.

The speech included 40 pieces of legislation that the Government plan to implement. To help you understand what the next five years may hold, here are the details of all the finance-focused announcements.

Budget Responsibility Bill

During their campaign, Labour pledged that their decisions would be made with sound money and economic stability at the forefront.

The Budget Responsibility Bill requires all significant and permanent tax and spending changes to be subject to independent assessment by the Office for Budget Responsibility (OBR).

The Bill aims to reinforce credibility and public trust by preventing large-scale unfunded commitments that have not undergone an OBR fiscal assessment.

Wage boost

The Government has committed to delivering a “genuine” living wage that reflects the issue of the high cost of living.

They also plan to remove the current minimum wage age bands to ensure that all adult workers benefit.

Draft Audit Reform and Corporate Governance Bill

Labour plans to introduce a revamped regulator to uphold standards and independent scrutiny of companies’ accounts and accountability for company directors.

A draft Bill will establish the Audit, Reporting, and Governance Authority, replacing the Financial Reporting Council.

This new regulator will have the necessary powers to address poor financial reporting and build public trust.

It will include important changes such as:

• Removing unnecessary rules on smaller Public Interest Entities, which will be beneficial for small businesses that face disproportionate requirements.
• A regime to oversee the audit market to protect against conflicts of interest and help minimise the impacts of corporate failures.
• Powers to investigate and sanction company directors for serious failures in relation to their financial responsibilities.

Pension Schemes Bill

The Pension Schemes Bill seeks to assist over 15 million individuals, who save through private-sector pension schemes.

It will help them achieve better outcomes from their pension assets, aligning with the Government’s goal of fostering economic growth.

To do this, it will establish a system for consolidating pension pots from various employments, ensuring people do not lose track of their savings when they change jobs.

Additionally, this Bill aims to boost the savings for pension savers, potentially allowing an average earner, who saves throughout their lifetime in a defined contribution scheme, to have over £11,000 more in their pension pot.

The Bill will introduce a standardised test that requires trust-based defined contribution schemes to demonstrate they deliver value. This should remove the underperforming schemes leading to a more productive investment of funds.

They will also be amending the Special Rules for End of Life (Pension Protection Fund and Financial Assistance Scheme) by broadening the definition of ‘terminal illness,’ enabling eligible members to receive a lump sum payment sooner.

Economic growth and wealth creation

Business investment in the UK has been persistently low, holding back productivity and living standards.

The introduction of the National Wealth Fund (NWF) will be central to the Government’s mission to drive growth and create a greener economy.

With an additional £7.3 billion in funding, the NWF will make transformative investments nationwide, attracting billions of pounds in private sector investment.

The Labour Party will create new partnerships with businesses and workers to overcome cost of living challenges and prioritise wealth creation.

As local leaders typically know more about what their areas need, Labour will introduce a Bill to move power out of Westminster and back to local leaders, giving them the tools they need to drive growth in their communities.

The new laws will give more powers to metro mayors and combined authorities, helping support local plans that bring wealth to communities.

To kickstart investments right away, the NWF will work through the UK Infrastructure Bank, expanding its role.

This will help attract even more private investment, aiming to bring in £3 from the private sector for every £1 invested by the Fund.

The Fund will make it easier for businesses and investors by bringing together key institutions like the UK Infrastructure Bank and the British Business Bank.

By uniting these organisations under the NWF, there will be a clear, streamlined support system for businesses and a compelling opportunity for investors, to use public funds wisely to open up new investment opportunities.

VAT

Measures will be taken to remove the exemption from Value Added Tax (VAT) for private school fees, which will enable the funding of six and a half thousand new teachers.

European Union

The Labour Government will seek to reset the relationship with European partners and work to improve the United Kingdom’s trade and investment relationship with the European Union.

This aims to gain more favourable trade conditions and attract more European investment into the UK and vice versa, leading to increased funding opportunities for businesses, and facilitating growth and expansion.

What is next?

There are still many unknowns when it comes to Labour’s policies regarding personal and business financials, with very little mention of taxes and funding opportunities.

The Budget date has now been announced to take place on 30 October 2024 and is expected to make the Labour policies clearer.

We will keep you updated with any updates that happen between now and then, alongside a Budget summary following the event.

In the meantime, we encourage you to ask any questions you may have about these new policies and how they impact your business.

Please contact us if you have any questions about what the new Government means for your finances.

As the sun rose on Friday morning, Labour began its celebration of a significant victory, claiming a majority that fell short of its last landslide success in 1997.

With a manifesto focused on change, its proposals for the next five years of Parliament are far-reaching, but not revolutionary.

Now in power, it is important to review their plan in more detail to understand the impact their ideas, if delivered, could have on you and your business in the years to come.

Our experienced team have been busy dissecting and analysing Labour’s proposals, to explore their intentions and potential outcomes, so that you can plan effectively for the future.

While the manifesto is Labour’s plan for the country, it is important to remember that, even with a significant majority, it may not be possible to deliver on each promise and each proposal may be subject to change in the future.

The economy

Labour has undoubtedly inherited a struggling economy, with poor public finances, which it makes very clear in its manifesto.

The new Government has promised to “turn the page on this economic chaos” by implementing two key fiscal rules:

• The current budget moves into balance so that day-to-day costs are met by revenues
• Debt must be falling as a share of the economy by the fifth year of the parliament

Both objectives will be hard to meet, especially as Labour has said it does not intend to “return to austerity.”

Instead, its economic plan is focused on prioritising investment for the future balanced with the need to rebuild public finances.

Personal finances

With the cost-of-living crisis affecting the finances of many people across the UK and driving poor economic growth due to individuals cutting back, Labour has said it will act, by:

• Bringing down the cost of energy, in part through the launch of its own publicly owned green energy investment company – Great British Energy – which will receive an £8.3 billion investment
• Reduce food prices by removing barriers and costs to businesses
• Expand access to childcare to help people be more productive, including the introduction of free breakfast clubs in every primary school
• Increase the availability of more affordable housing

Labour also wants to help people with their mortgages, by bringing down inflation, but plans in this area are less clear at the moment, apart from their continued support of an independent Bank of England.

Personal tax allowances

Labour has pledged to keep “taxes on working people” as “low as possible,” as such it will not increase National Insurance, the basic, higher, or additional rates of Income Tax, or VAT.

However, they have also confirmed that they will not change the current freeze of tax rates, which is due to remain in place until 2028.

This effectively means, with the impact of inflation, that many people will be taxed more as their wages and income increase.

That means that taxpayers will still need to address this issue with careful tax planning to make sure they make the most of the allowances and reliefs available to them.

Non-domicile status

Before the election, in the Spring Budget, the former Chancellor Jeremy Hunt announced the abolition of non-dom status in the UK and the eventual removal of the remittance basis, under a transitional process.

At the time, Labour was up in arms about the policy as it mirrored its pledges at the time.

However, in response, the new Government is to double down on its plans announcing a “modern scheme” intended only to support people “genuinely in the country for a short period.”

The transitional arrangements due to be in place from April 2025, will not be retained under Labour’s plans and they have confirmed that they intend to end the use of offshore trusts to avoid Inheritance Tax.

This will, they say, ensure “that everyone who makes their home here in the UK pays their taxes here.”

Non-doms who are concerned about the changes that Labour might introduce and how they might affect them, should watch this space carefully and seek professional advice at the earliest opportunity.

Tax compliance

Labour has been quite critical about HM Revenue & Customs’ (HMRC’s) performance in relation to tax avoidance.

They have pledged to invest in the tax authority to help it modernise. As part of this, it will increase report and registration rules, make a significant investment in technology and enhance HMRC’s powers.

Labour hasn’t been shy in outlining where these efforts will be focused, saying that it wants HMRC to have a “renewed focus on tax avoidance by large businesses and the wealthy.”

This is part of the promise to eliminate unfairness in the UK’s tax system, by closing gaps and making sure that “everyone pays their fair share.”

Given the party’s discussion around the tax system and rules, it is likely that we will see further legislation introduced and a tougher approach by HMRC, which may mean a rise in the number of investigations it launches.

This stands to highlight the importance of tax compliance in the years to come and the value of robust and reliable accountancy services.

Business taxation

Labour has said that it wants to provide certainty to businesses following 14 years where the Corporation Tax rules have changed 26 times.

As such, the party has pledged to cap the current top rate of tax at 25 per cent for the entire life of the Parliament – although they will act if the rate makes the UK less competitive internationally.

The Full Expensing scheme and Annual Investment Allowance introduced by the last Government will be permanently retained but could be subject to further change.

For those uncertain of their eligibility for these reliefs, the Government will provide “greater clarity on what qualifies for allowances to improve business investment decisions.”

Finally, in England, Labour will replace the current business rates system to “level the playing field between the high street and online giants.”

Further details on this policy are vague, but Labour says it hopes to support entrepreneurs, revitalise high streets and improve the environment for investment.

Some of the areas of business taxation outlined by Labour remain unclear, but we are likely to learn more about their plans in the weeks and months to come.

Small business support

Labour’s specific plans for small businesses and sole traders aren’t significant, although its tax and economic policies, will support SMEs.

However, they have promised to assist with:

• Late payments: Labour plans to implement measures to ensure that small businesses and the self-employed receive timely payments. This initiative could significantly improve cash flow and reduce financial pressures related to delayed payments if delivered well.
• Exporting: The party has committed to enhancing guidance and simplifying the process for small businesses looking to export. This could open new markets for products and services and is a great opportunity to expand business reach internationally.
• British Business Bank reform: Labour proposes to reform the British Business Bank to provide more robust support for growth across all regions. This reform aims to make it easier for SMEs to access the capital needed for expansion and innovation.

Investment

Labour plans to establish a £7.3 billion National Wealth Fund, which will look to encourage private investment by pledging public money to a number of important projects, including:

• £1.8 billion to upgrade ports and build supply chains across the UK
• £1.5 billion to new gigafactories so our automotive industry leads the world
• £2.5 billion to rebuild our steel industry
• £1 billion to accelerate the deployment of carbon capture
• £500 million to support the manufacturing of green hydrogen.

A new 10-year infrastructure strategy will also be implemented to end short-termism and a new public body, the National Infrastructure and Service Transformation Authority, will be introduced to bring together the expertise from a wide range of existing agencies.

To support businesses and investment, Labour also plans to reform the current planning laws to make it easier for projects to get underway.

Businesses may benefit from these investments in several ways, including improved productivity and connectivity as a by-product, or directly through the supply chains that will be required to deliver this ambitious plan.

Fiscal events

As part of its bid to improve financial certainty, Labour has said it aims to only hold one fiscal event each year, where possible.

For some time, the Government has relied on both a Budget and Statement to outline its plans for the economy, but this may no longer be the case under the new Government.

This should provide some stability to the ever-changing tax rules if Labour’s plans are achieved.

Labour will also reform the Office for Budget Responsibility (OBR) so that every change to taxation or spending will be subject to an independent OBR forecast.

This change should help businesses and individuals to plan more effectively each year and remain compliant with changes as they are introduced at a slower pace.

Employment law and pay

Within the next 100 days, Labour plans to launch its “Plan to Make Work Pay: Delivering a New Deal for Working People”.

This will:

• Implement a real living wage that is adequate for living costs, altering the Low Pay Commission’s remit to include the cost of living alongside median wages and economic conditions
• Remove age-based wage differences under the National Minimum Wage scheme to benefit all adult workers
• Empower the Single Enforcement Body and HMRC with the necessary tools to enforce wage compliance, including penalties for non-compliance
• Promote flexible working arrangements as the default from day one.
• Abolish zero-hour contracts
• Guarantee contracts reflect actual hours worked based on a 12-week reference period, ensuring fair employment practices
• End fire and rehire practices.

Change is also on the slate for workplace pensions, with Labour adopting reforms that ensure that schemes utilise consolidation and scale, to deliver better returns.

Where will tax rise?

Despite their ambitious plans, Labour has tried to avoid discussions around tax rises, but taxes will have to rise in certain areas to meet the funding requirements of the manifesto.

Here are the key areas in which tax is slated to increase:

• VAT and business rates to apply to private school fees
• Carried interest tax loophole to be closed for private equity-related performance pay
• An increase in Stamp Duty of 1 per cent for non-UK residents purchasing residential properties
• A further windfall tax on oil and gas giants.

Of course, its decision to increase HMRC’s powers to crack down on tax avoidance, if successful, will also reduce the current tax gap.

What’s next

Like many of us, you are still trying to digest the events of the election and the implications of the new Labour Government.

We aren’t likely to see many of these initial proposals fleshed out in more detail for the next few weeks.

Parliament will soon enter its summer break and Sir Keir Starmer is currently assembling his cabinet.

It is early days, but we are more than likely to see a Budget of some form in the autumn so that the Government can enact its reforms.

We will continue to bring you updates in the months ahead as and when new policies and proposals are announced.

However, in the meantime, if you have any questions, please feel free to contact us.

When developing your business exit and succession strategy, you must consider all possible avenues, including those which might not seem so obvious.

A management buyout (MBO) is one such approach that has gained traction for its flexibility and the ability to leave your business knowing that an experienced team is in place to run it.

With support from professionals, MBOs could be a smart planning move that leaves your business in a position to grow.

Is an MBO right for your business?

An MBO involves the existing management team of your business, whether that be a single director or the entire team, buying the business from you and continuing to run it.

This follows a period of negotiation and valuation of the business when you and your team decide on how much of the business they will buy, what assets are included and the terms of your exit.

This form of buyout provides a smooth transition with minimal disruption to business operations but may also allow the new owners to apply their vision to the business.

MBOs may be particularly suitable for companies with:

• Strong market potential but poor performance
• A cohesive existing leadership team
• A long-term goal of growth or sale to a group
• No family interest in taking over the business

The funding for this purchase usually involves a combination of personal equity from the managers themselves, along with external financing.

MBOs as an exit strategy

MBOs provide a seamless leadership transition, preserving the existing corporate culture and operational continuity.

This offers assurance to the owner that the business will continue in safe hands and that a growth plan is in place.

Additionally, they assure employees that the interests of the existing business align with those of the new owners, reducing the risk of clashes and low staff retention.

When the time comes for you to retire or move on, consider approaching your management team to discuss the possibility of an MBO, including any questions or concerns from your staff.

In all, MBOs are a compelling exit strategy for founders and business owners wanting to leave their businesses in safe hands.

For advice on MBOs and how to proceed with an exit strategy, please contact our team today.

Whether the hot weather lasts or not, summer is here to stay, bringing with it seasonal challenges and opportunities for business owners.

You may think summer is business as usual, but many companies face disruption and delays due to:

• More people taking holiday than at other times
• The heat disrupting transport or the supply chain
• Increased trade requiring additional staff

How deeply these issues or others impact your business depends on a number of factors, including:

• The size and location of your business
• Your sector
• Your ability to manage delays or meet additional costs
• The sectors and functions of other companies in the supply chain

Tackling challenges head-on

Effectively managing summer disruptions starts long before those first glorious weeks – it should be built into your business strategy.

You may need to:

• Address staffing issues – have sufficient staff to avoid delays and ensure consistency of service.
• Manage cash flow – If you need additional cash to cover delays or busier periods, make sure to factor that in throughout the year.
• Advertise in advance – Leave enough time to recruit good, reliable staff to avoid further costs or losses during busy periods.

Seizing the opportunity

Summer also provides plenty of opportunities for diversification and internal review. By taking advantage of these, you can mitigate any negative impact caused by the summer months and help your business to thrive.

Potential summer opportunities include:

• New markets – If your location and sector provide you with access to tourist markets, you may seek to expand into these markets temporarily, and you may discover a new revenue stream.
• Reviewing your operations – Periods of quiet when clients or suppliers are away may give you the opportunity to review your processes and make improvements.
• Enhancing hiring processes – If you need to take on seasonal staff, this is a great opportunity to streamline your onboarding and recruitment workflows.

If you need additional support in managing your business through the summer and making the most of your business processes, contact our team for advice.

HM Treasury has taken £77.2 billion in Income Tax and National Insurance (NI) since April 2024 – signalling the effect of the freeze in the Personal Allowance and Income Tax bands and thresholds.

Taxpayers have seen two landmark cuts to employee NI payments, falling from 12 per cent to 10 per cent after the 2023 Autumn Statement, before decreasing again to eight per cent following the Spring Budget.

As a result, the amount of NI taken by the Treasury in the period between April and July 2024 has decreased by £1.3 billion compared to the same period last year.

Rising wages

The rise in total personal tax take has therefore arisen due to rising wages, both as a response to the cost-of-living crisis in 2023 and a result of a rise in the National Living Wage (NLW) – increasing to £11.44 per hour and extended to 21- and 22-year-olds for the first time.

More Income Tax is being paid as those in the lowest band, earning between £12,571 and £50,270, earn more with a higher NLW.

Part-time workers have also been pulled into the band by exceeding their Personal Allowance of £12,570.

Staying prepared

The coming years are likely to illustrate the importance of tax planning, particularly within the realms of tax reliefs and allowable expenses for the self-employed.

Contact our team for further advice on managing tax liabilities and changes in tax legislation.