Association of Chartered Certified Accountants

ACCA calls for Government to ‘Think small first’

The newly established Office of Tax Simplification will provide welcome respite for the financially challenged contingent of SMEs across the UK, says ACCA (the Association of Chartered Certified Accountants). However, the key is as much consistency as it is policy. Chas Roy-Chowdhury, ACCA Head of Taxation, said, “In recent years, the UK tax policy has changed as often as the people in charge of it. We applaud the Treasury’s decision to establish the Office of Tax Simplification, but to make this initiative truly of benefit to businesses of all sizes, it is vital that the work of the Office remains politically independent and that its recommendations do not fall by the wayside as the Coalition Government shifts its focus to other areas of the UK economic recovery.” Roy-Chowdhury also belie... »

Tax

Struggling firms receive help paying tax bills

More than 20,000 small firms have used HM Revenue & Customs’ (HMRC) Business Payment Support Service to defer their tax bills since it launched at the end of November 2008. Announced in the Pre–Budget Report, the service helps struggling firms by allowing them to set up an affordable tax payment timetable. Under the scheme, HMRC will not apply any late payment surcharges where a deferment has been made, although interest will continue to be charged on outstanding amounts. According to HMRC, more than £350 million of tax, including VAT, PAYE and National Insurance, has already been deferred. The Association of Chartered Certified Accountants head of global taxation Chas Roy–Chowdhury said the service was of real benefit to businesses struggling to meet their tax ... »

Carbon Trust

Firms prioritise business travel cutbacks

Reducing business travel costs is the top priority for small firms making cutbacks to survive the recession, according to electricity supplier Opus Energy. An Opus Energy survey of 500 small businesses found that 19% said cutting their travel costs was a priority, while only 18% listed cutbacks in advertising spend and 17% planned to reduce staff bonuses. The Association of Chartered Certified Accountants SME policy adviser Emmanouil Schizas said: “Businesses should review their travel costs and consider how much of their work could be done online and at home — which could save money on premises as well as on transport costs,” “They should also look at their advertising and calculate how much turnover they will need to make for their advertising spend to be worthwhi... »

Christmas parties less costly than firms think

According to the Association of Chartered Certified Accountants (ACCA), Businesses should not cancel their Christmas parties without working out the costs involved, as they can be cheaper than expected. Recent research from the Institute of Directors found that more than a quarter of businesses are cutting back on expenses this year, including paying for a Christmas party. However, ACCA head of taxation Chas Roy–Chowdhury said businesses can reduce the cost of parties by taking advantage of tax savings. He pointed out there will be no taxable benefit in kind for employees as long as costs are kept under £150 per head. “As long as parties are open to all staff, up to £150 can be spent on each employee that is tax deductible, with another £150 on each employee&r... »

Firms allowed to delay Tax Payments

HM Revenue & Customs (HMRC) has launched a business payment support service which allows struggling firms to defer their business tax bills. SMEs finding it difficult to pay income tax, VAT, corporation tax and National Insurance contributions can get in contact with HMRC to arrange an affordable payment timetable, allowing them to make payments over a longer period. Where a deferment has been made, HMRC will not apply any late payment surcharges, although interest will be charged on outstanding amounts. Because HMRC rates of interest are generally lower than rates offered by many high–street banks, tax experts are predicting that there will be a rush to defer payment from firms suffering cashflow problems. According to HMRC, £3 billion in tax could be deferred over the nex... »

Pound Coins

How to cope with the falling pound

Struggling SMEs are further being hit by the falling pound, research from foreign exchange broker World First shows. The Association of Chartered Certified Accountants (ACCA) says that there are several ways in which businesses can reduce the impact of these currency fluctuations and keep losses to a minimum. Dr Steve Priddy, ACCA’s director of technical policy and research, says: “SMEs are already feeling the strain in the current global economic downturn as they strive to maintain lines of credit and cope with a slowdown in consumer demand. Now research from World First shows that SMEs are losing nearly £900m a year from currency fluctuations which can turn otherwise profitable contracts into loss–making enterprises.” “Especially hard–hit are bus... »

Independant Financial Advisor

Firms fail to seek financial advice

More than a third of small businesses did not seek external financial advice in the 12 months to October this year, despite the economic downturn, according to the Forum of Private Business (FPB). The FPB survey highlighted that 36% of small firms have not sought advice from banks and accountancy firms. 10% of those firms had not done so because they received poor advice in the past, while 14% cited a lack of faith in the adviser’s knowledge. FPB spokesman Phil McCabe said: “Whoever they go to for advice, whether that’s a dedicated bank manager or an accountant, it is important to have a regular professional opinion on the best way to use their money,”. “The risk is that businesses will fold if they don’t get regular advice on how to control cashflow and... »

Inflation pushes SME costs up a quarter

Rising inflation has resulted in ten per cent of small businesses seeing their costs rise by more than a quarter in the last 12 months, according to credit rating firm Creditsafe. The research from Creditsafe also revealed that 26 per cent of small firms have seen their costs increase by at least ten per cent over the same period, and 60 per cent of small businesses have experienced some degree of cost increase in the last year. “Businesses are faced by rampant business inflation, as the costs of fuel and borrowing increase dramatically,” said Creditsafe managing director Simon Camilleri. “They are also faced with the prospect of employees demanding inflation–busting pay rises to cover the costs of increasing petrol and food costs. “If inflation continues to r... »