Business advice from is4profit

Understanding starting a lottery business

The is4profit team — Mon, 06 Nov 2017 10:54:30 +0000

If you’re thinking of starting a Lottery business, be aware that the UK has strict laws regarding lotteries and the industry is heavily regulated by the Gambling Commission. Running an illegal lottery could result in a prison sentence and £5,000 fine, so it’s essential that you understand lottery business law as laid out in The Gambling Act 2005. Lottery definition Under the Gambling Act, a lottery is defined as something that players pay the same price to enter and has at least one prize that’s allocated through a process of pure chance. Examples of a lottery include a sweepstakes, raffle or tombola. Competitions that depend on skill, knowledge or judgement, such as requiring players to answer a question to enter a draw, are not classed as lotteries. Types of lotteries and licences There are different types of lotteries, some you need a licence to operate and others you don’t. Here are the five types of lottery that are exempt from licencing, in all these cases no rollovers are allowed Private society lotteries – these must raise funds to support the work of the society, a charity or good cause Work lotteries – are for colleagues who work on the same premises. They must be non-profit and raise money for a charity or good cause Residents’ lotteries – are only for residents living in a single set of premises. Again, the lottery must be non-profit and raise money for a good cause Customer lotteries – must be run by a business on its premises for its customers only. Prizes cannot have a value of over £50 Incidental lotteries – are held at events such as fetes and must not be for commercial gain, but to raise money for good causes. Tickets must be sold at the event and no more than £500 should be spent on prizes, £100 can be deducted for expenses You will need an operating licence from the Gambling Commission to run these types of lotteries: Local authority lotteries – these are run by a local authority that can use the net lottery profits to assist with their running costs. The maximum prize limit is £200,000 per lottery Large society lotteries – must generate a minimum of £20,000 in ticket sales per lottery, or £250,000 per year. These lotteries should be non-commercial and raise money for culture, sport or charitable causes. Again, the maximum prize per lottery must not exceed £200,000 Although you don’t need an operating licence, you do have to register with your local authority if you run: Small society lotteries – ticket sales for these lotteries must not exceed £20,000 per lottery, or £250,000 per year. In these lotteries, the maximum prize limit is £25,000 Lottery rules One of the most important stipulations in the Gambling Act is that all society and local authority lotteries must give at least 20% of their proceeds to fundraising. The remaining 80% can be used for expenses and prizes. For example, The Health Lottery gives at least 20p from every £1 ticket sale to health-related causes across Great Britain. If you run a society or local authority lottery, you must follow additional rules set out in the Gambling Act. These include making sure players are 16 or over and that tickets aren’t sold in the streets. Each ticket should list the following information: Name of the society/authority Ticket price Name and address of the organiser Date of the draw If the lottery can be played remotely, via the internet or telephone for example, then large society and local authority lotteries must also get a remote operating licence from the Gambling Commission. Lotteries can choose to employ an External Lottery Manager to run the lottery, but to do this they need a lottery manager’s operating licence. You can find out more about UK lottery regulations and the Gambling Act in this guide from the Gambling Commission.

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SEO Basics for Business: Optimising Your Website for Mobile

Mon, 14 Aug 2017 14:51:53 +0000

In August 2015 the impending mobile takeover took place. Mobile overtook desktop as the primary device used to browse the internet for the first time according to Ofcom. Mobile optimisation is happening fast, which is why any business that is left behind risks losing potential customers and sales leads as a result of low ranking on mobile search engines. Businesses need to consider mobile presence and having a ‘mobile first’ search engine optimisation (SEO) strategy in order to secure the most traffic, improve the user experience and usability of a website. Ensure your website is mobile user-friendly Google prioritises mobile-friendly websites, expecting businesses to optimise their web pages to suit mobile first and foremost, it even offers a free testing to see if a site is mobile-friendly or not. The new Google mobile-friendly algorithm, first introduced in May 2016, is supposed to give an additional ranking boost for useable, mobile-friendly websites in the mobile search results. The first step would be to design a mobile-friendly business web page that is also friendly to the user and meets their needs to ensure a positive user experience. This means considering the little things, such as a simple layout which is easy to navigate and includes larger thumbnails and links that are not as close together. Google even has its own guidebook for businesses offering a step by step guide to assure a successful mobile optimised web page. Creating a web page that is optimised for both mobile and desktop would be the first step towards going mobile and achieving a higher ranking, which, for a business, is likely to result in an increase in traffic and potential sales. There are different SEO strategies to optimise a mobile website which can help make a business rank higher within mobile search engine results page (SERPs), however, could do the opposite to desktop SERPs. Developing a mobile-friendly website is one thing, but ensuring the site is serving mobile friendly content is another. Creating content that is consistent with both desktop and mobile versions of the website will benefit the user experience, providing the same quality of content across the two digital platforms. This will also prepare your business for the forthcoming mobile first index. Consider how mobile search is used Surprisingly, over a third of web pages shown in Google mobile search are different to those carried out on a desktop. With users searching for businesses around locations, which are usually close by, mobile searches are far more localised and specific, needing more keywords than a desktop search. This is why the second step is to consider these factors in a business’s mobile SEO due to the impact they can make to the ranking of the business in the SERPs. When potential customers are browsing on their mobile, they are looking for fast, actionable answers. This is why mobile search is so important for a growing business. Without providing a quick response that is relevant to the need of the consumer, customers will begin looking elsewhere which could be detrimental to a business’ ability to funnel conversions. Consumer habits differ between mobile and desktop. This is mainly because of the voice search functionality that is available on mobile devices. This is why businesses need to understand their audience members to incorporate mobile savvy language onto their web page. Words that relate to the needs and contexts of the target audience will make the search far more engaging and personal. Localise landing page Localising landing pages would be the third step to improving a business website’s mobile presence. Most queries on mobile search are for the purpose of finding a local source. For example, a user looking for a coffee shop on mobile would likely make their search a lot more specific and action-based. Instead of simply searching “coffee shop in London”, they would search “coffee shop in Brixton”. Alternatively search engines may deem the generic query ‘coffee shop’ to have local intent and surface localised results. Including relevant geographical keywords can help to improve a businesses localised search rankings. For example, a business that incorporates their name, address and place into both mobile and desktop websites and includes labelled images and correct working hours will make it stand out on both relevant searches and help boost its position in the SERPs. This will result in making a business seem more attractive to the user as well as make their lives that much easier Businesses failing to optimise their SEO strategies to meet mobile requirements is a constant reason for why we are seeing more and more businesses struggle to make it into the mobile SERPs at all. Business websites will have to alter their mindsets from being just mobile-compatible to being mobile-optimised and build a better mobile presence that suits the constant stream of mobile-friendly updates Google and other search engines use to rank web pages. Simon Schnieders is the founder of Blue Array. Read his Business Owner profile here.

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Businesses Urged To Offer Benefits As Financial Pressure Among Staff Rises

Thu, 22 Jun 2017 09:29:37 +0000

UK small business owners have been urged to consider what benefits they can possible offer their employees, as financial pressures rise. According to the Employee Benefits Trends Study 2017 by MetLife UK, 55% of UK workers say they highly value the benefits they receive at work – a 25% increase from the same survey in 2015. Encouragingly, 52% of business owners now understand the personal financial pressures on their employees – and this is prompting them into action. Not just for current subordinates, business owners are also utilizing benefits packages in the recruitment process with 73% promoting their additional bonuses while hiring – compared to just 61% in 2015. Its suggested business owners should consider what financial perks they can offer their employees, as just 39% of workers currently believe they are paid fairly for their job. For those already offering various wellness and monetary incentives, it appears to be paying off, with 38% of employers saying they are “very satisfied” with the impact of said programmes compared with 21% in 2015. Similarly, around 87% that have taken part in such programmes say they have had a positive impact on their health. Jo Elphick, head of marketing at MetLife UK, said: “The increasing value that employees place on their benefits creates a real opportunity for businesses to align their benefits strategy with their business strategy. In times of uncertainty employees are looking beyond salary and a well-designed benefits programme can help employers build stronger businesses and succeed in the growing war for talent. “Nearly three in four employers are using benefits to attract and retain staff as they worry about the potential risk to their business from a shortage of talent over the next 12 months. “Efforts to tackle physical wellbeing through benefits are bearing fruit for employers but uncertainty over personal finances is emerging as a key challenge. A key goal for employers is to help their staff feel energised and focused at work and addressing employees’ financial concerns through benefits can help.”

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Businesses Warned They’ll Need to Adhere to GDPR Regardless of Brexit

Wed, 21 Jun 2017 14:34:55 +0000

UK businesses are being warned they still need to adhere to the new General Data Protection Regulation (GDPR), despite the fact the UK is set to leave the European Union. According to a survey by Webroot, there is a strong level of misunderstanding among small business owners as to whether the EU-wide legislation, which covers how large businesses hold and store consumer data, will hold any weight in a post-Brexit Britain. Indeed, 43% of businesses admitted they were uncertain whether or not they would have to remain compliant to GDPR after Brexit – with 6% adamant they wouldn’t. Coming into effect on 25 May 2018, the new legislation will, among other things, require firms with more than 250 staff members to hire a data protection officer. However, firms that hold the data of EU citizens will still be expected to comply, with offending businesses facing fines of fines up to €20m or 4% of global annual turnover. To compound the uncertainty, it appears that even if businesses are well-informed – they aren’t well prepared, as 20% of companies haven’t started the compliance process with a further 71% yet to properly budget for the extra resources needed. One year on from the EU referendum, a degree of cynicism regarding the legislation also appears to exist with 70% of enterprise owners believing the new EU-backed regulation won’t make consumer data any safer. Adam Nash, business sales leader for EMEA, said Webroot: “GDPR compliance should be a crucial part of every organization’s security strategy. In particular, it’s clear that small businesses urgently need to focus their attention on both GDPR compliance and their wider cybersecurity posture. We recommend that all businesses adopt a multi-layered security approach to meet GDPR; one that includes network security, antivirus protection, and thorough data protection measures.” Worried about General Data Protection Regulation? Click here and read our guide on how to prepare.

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Apprenticeships: Why Should Small Businesses Consider Taking Them On?

Fri, 16 Jun 2017 11:08:09 +0000

Amidst the ongoing Brexit discussions and a recent general election campaign, small business owners would be forgiven if they hadn’t noticed that a revolution of sorts has been taking place in the world of apprenticeships. Schemes enabling individuals to gain a route into the workplace through apprenticeships have been a part of the employment landscape for several decades. But during 2017, two significant changes are taking place aimed at making apprenticeships better quality and more valuable for the employee; as well as a more attractive proposition for the end employer. At the end of May, all UK businesses with paid a bill of more than £3m – having made their first payment towards the new apprenticeship levy. While these outgoings won’t affect the UK’s 5.5 million small businesses, the monies raised may do, as much of this will be redistributed towards companies of all shapes and sizes through a new online apprenticeship service, set to go live for companies that are not paying the levy during 2018. In addition, apprenticeship schemes across a variety of industries are being updated by groups of employers working in the respective sectors, creating new trailblazer apprenticeship standards which hope to improve the effectiveness of training and assessments. The standards will include end-point assessments, carried out by independent examining bodies, to ensure a streamlined and consistent approach has been undertaken for every apprentice within that industry. Both the levy and the new standards have been adapted in response to the government’s stated commitment to achieve three million apprenticeship starts by 2020. But if more people are to enter – and hopefully complete – apprenticeships, then small businesses are going to be vital in helping them to achieve it. But why exactly should a business in its early or growth phase hire one or more apprentices? Here’s three immediate areas which come to mind: 1. Cost-effectiveness One of the great advantages of an apprenticeship is the cost advantage available both to employer and apprentice. For the business, apprentices typically represent highly motivated individuals, with just over half of recruitment experts informing our research that apprentices taken on in the past five years had performed better than those with a degree (compared to just five per cent who believed the opposite). Yet they can represent better value for money than simply hiring skilled staff who will come at a price. For school leavers, who make up a large chunk of apprentices, they can find a route into employment that doesn’t rack up a potential bill of many thousands of pounds or a student debt that could take decades to pay off. One in five 16-18 year olds based in the UK recently told AAT that their strongest consideration for an apprenticeship over a degree would be the ability to avoid heavy university debt, and indeed one in two of them are currently seriously considering apprenticeships as their route into employment. 2. Highly skilled employees While an apprentice who is also a school leaver may come to your office as a novice in the workplace, the high quality of training they are being given, coupled with the on-the-job opportunities they are receiving, means that they can become highly-skilled in a relatively short space of time. The work experience that they are receiving while at your firm is also often something that is missing from a graduate’s CV. Apprenticeships are by no means restricted to school leavers, however. There are a growing number of apprentices who are choosing that pathway later in their working lives, perhaps to enter a different career that they’ve always wanted to be a part of or to try something new. The advantage here for your business is that these individuals can be learning, and implementing the teachings from their apprenticeship course, while maintaining the skills from the areas they have focused on earlier in their career. In addition, your existing employees might be well positioned to benefit from apprenticeships, in order to upskill or fill a void in a particular business area. This can be particularly useful for employee retention, as workers are more likely to remain with your business if they feel they are continuing to learn new skills. 3. Funding opportunities Even though as a start-up firm you will not be responsible for paying the new levy, funding should nonetheless still be available to your business, and you’ll be able to control how this funding is spent with regards to apprenticeship training. For 16-18 year olds, the Government will provide 100% of their apprenticeship funding, meaning that, at no cost to your business, school leavers could complete their training and assessment requirements. Your only responsibility will therefore be to provide their pay (at least the minimum wage for an apprentice) and support for the actual jobs they carry out! For apprentices aged 19 and over, 90% of the contribution towards their training will be made by the Government. Your business will be asked to contribute the remaining 10%. In addition, if your business employs less than 50 people and your apprentice is aged 16-24, you may qualify for a £1,500 grant through the National Apprenticeship Service. This grant can be used for up to five apprentices, should you meet the application criteria. There may be funding available if you’re covering the formal qualification training as well. Apprenticeships – accelerating ambitions for the nation’s workforce The new levy and trailblazer standards aim to address chronic underinvestment in skills, simplify funding opportunities for business, and ensure a greater focus on training for the nation’s workers. 2017 is the year of the apprentice – and all small businesses should be encouraged into creating, or improving upon, an apprenticeship scheme that can lead to an excellent long-term investment for your business. Steven Drew is AAT’s head of markets and products. To find out more about the new apprenticeship reforms, head to train.aat.org.uk/

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To Rent or Buy Your Property? What Small Businesses Should Consider

Fri, 16 Jun 2017 10:34:31 +0000

Successful businesses are often faced with the challenge of outgrowing their current premises, and needing to relocate to a larger space. One of the fundamental decisions to be made at this juncture is whether to rent or buy. Securing a property which suits the structure of the business is crucial to its future success. The nature of the business’ requirements and the local market are both factors to give regard to when deciding whether to rent or to buy. However, there are many additional issues to consider. Choosing to rent Many businesses choose to rent their commercial premises due to the fact that there are generally a far greater number of rental opportunities in the market place and a significantly lower amount of upfront capital is required. When a business rents premises, they usually enter into a lease with the landlord. Consideration should be given to the proposed terms of any letting, such as the length of the lease, whether rent can be increased, if the company is responsible for any repairs, whether the layout of the premises can be changed and if there is an additional charge for buying the lease. Businesses should consult a reputable commercial solicitor to go through the lease with them and to point out any pitfalls or issues of note. They would also benefit from consulting a Chartered Surveyor, who may be able to negotiate favourable lease terms. This could include incentives such as a rent-free period, or capping liabilities such as rent, insurance and service charges for a period of time, to give greater certainty over budgets. Renting, particularly in the case of a short-term lease/licence or a letting with regular break options, provides a business with greater flexibility to move again, which could be particularly important if the company is in a fast-growing industry with the potential to expand rapidly over a short period of time. Buying your premises The fundamental consideration when deciding whether to buy or rent is whether the business has the capital available to buy, either via its own funds or a commercial funding arrangement. In addition to the monies needed to purchase a property, additional capital is often needed in order to cover potential commercial mortgage set up costs, repairs, solicitors’ fees, building surveys and stamp duty. If you do have the capital available, there are some obvious advantages to purchasing rather than renting. In a strong market the value of the asset is likely to appreciate. Furthermore you will have control over the property (how long you remain there, what work you do to the property) without being answerable to a landlord. Should you find a property that the business can grow into over time and on the assumption funds are available, it may also prove viable/profitable to purchase premises and rent out any surplus space on short term lets. This generates an initial investment and provides flexibility should you require additional space in the future. Conversely it is worth weighing up whether the use of capital to purchase commercial premises is in the best interest of the business or if the money would be better spent on growing the business and driving it forward? As previously alluded to, consideration should also be given to how long the business is likely to remain at the premises. If the company is growing quickly it may be preferable to sign up to a shorter term lease and remain fluid as to future growth, rather than acquire a property and commit capital when a further move may be required in the short/medium term. The perfect fit Ultimately, there is no one size fits all approach and the individual requirements of a business need assessing before a prudent decision can be made. It is advisable to consult with experts who can recommend the best strategy tailored to your specific needs. Simon Maddox is a commercial real estate specialist from Manchester law firm Slater Heelis LLP

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Tax Planning: What to Consider When You’re Thinking Of Selling Your Business

Fri, 16 Jun 2017 10:20:11 +0000

One of the key issues for business owners planning to retire or sell a business centres on how best they plan their tax liability. To maximise the best outcome business owners should plan well in advance. In our experience, it is never too early to consider financial planning and whilst ‘younger’ businesses may not place this at the top of the agenda right now, the reality is that planning at an early stage can be structured to help with current tax liabilities as well as those on retirement or sale. Capital Gains Tax Both Capital Gains Tax (CGT) and Inheritance Tax (IHT) need to be considered carefully as part of the planning exercise and examined in close detail – without appropriate planning for these two very real scenarios business owners might find themselves or their ‘estate’, handing a blank cheque to the tax man! CGT is payable when you sell an asset, for example, a property or a business and there has been an increase in the value of the asset. Currently, CGT rates on most gains reduced from 18% to 10% for basic rate tax payers and from 28% to 20% for higher rate tax payers from April last year. However there are exceptions, gains from the sale of a residential property that does not qualify for full principal private residence relief continue to be taxed at 18%/28%. Don’t leave it too late to consider your CGT liabilities, especially if you are planning to sell investments made many years ago. It can be quite a shock to realise how large the CGT liability can be. CGT liabilities can be reduced by utilising the tax allowances to which you are entitled and by careful planning of your CGT position throughout your life. You can, of course, ensure you offset capital gains on successful investments with losses from investments that haven’t worked out so well. Losses can also be carried forward to offset gains in future tax years and equally important is the use of your Annual Exempt Amount (AEA). Currently capital gains of £11,300 or less for individuals are exempt from CGT. AEA for most trustees has increased to £5,650. Moreover, a priority for any business owner should be the setting up a will as the first step in any estate-planning exercise, not only to make certain that matters are dealt with in a tax-efficient way, but to ensure that your exact wishes are carried out. Having a will means you avoid relying on the intestacy rules that come into play where there is no will. Effectively the law decides what happens to the estate, – remember the point above about writing a blank cheque to the tax man! This can lead to financial anxiety for the surviving spouse/family along with a possible immediate charge to IHT. Inheritance Tax If you don’t want to give directly, you could consider a trust. With a little planning, you can transfer asset(s) into a trust with minimal CGT or IHT consequences and it can also reduce your taxable estate. There are, however, some additional tax charges and costs related to trusts that may be applicable. If you are interested in setting up a trust, you should have a conversation with your accountant/lawyer first to ensure that setting up a trust will meet your requirements. Everyone has an inheritance tax (IHT) Nil Rate Band of £325,000 and this will remain frozen until 2020/21. In addition to the main nil-rate band, the Residence Nil Rate (RNRB) came into force in April 2017. The maximum RNRB allowance this tax year will be £100,000 rising by £25,000 in each of the next three tax years. This will effectively raise the IHT free allowance to £500,000 per person. Where married couples jointly own a family home and wish to leave this to their children, the total IHT exemption will rise to £1m by 2020/21. Business Property Relief Business Property Relief can, with careful planning, potentially remove the full value of a business – sole trader, partnership, or shares in private company from being subject to an IHT charge, either via lifetime gifts or on death. You can gift as much cash as you like during your lifetime, in what is referred to as a ‘potentially exempt transfer’. Gifting income producing assets to your children, such as shares in the family business or an investment property, is also a good way of reducing the overall family income tax bill whilst at the same time conducting succession planning. Do take care to ensure there are no CGT or IHT liabilities that crystallise on the gift/transfer. Think also about testamentary gifts out of your estate to a charity or leaving part or your entire estate to a charity. This act of benevolence can reduce the amount of IHT payable on your estate, whilst benefiting your charity of choice. You can also cut the Inheritance Tax rate payable on the rest of your estate from 40% to 36% if you leave a minimum of 10% of your net estate to your preferred charity. These areas can be daunting, but with a bit of careful planning it is possible to mitigate your exposure to unwanted CGT/IHT liabilities. The word is always to seek professional advice. Tricia Halliday, director of personal and corporate tax, Martin Aitken & Co. Limited

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Does Your Business Have Unused Laptops Lying Around? You Could Be Violating Data Law

Thu, 15 Jun 2017 12:30:57 +0000

UK small businesses that store unused devices such as mobile phones, tablets and laptops could unknowingly be violating corporate governance and data protection laws – according to a report by CORETX. The survey of 100 IT managers revealed that 47% of all small firms have up to 50 devices containing sensitive information that is not stored securely – with 23% admitting they are unable to accurately predict how many neglected pieces of tech they currently possess. While this might not seem too much of a problem on first glance, when analysing the type of information being stored – it suggests businesses aren’t doing enough to protect important information while also misusing company equipment. 83% of those surveyed have found concerning, personal data on devices, followed by personal emails (68%) sensitive personal information (40%), adult content (37%), gambling (25%) and profanity (24%) – with a further fifth claiming to have uncovered evidence of an employee’s other business interests. Peter Low, director of field and lifecycle services at CORETX, said: “The average employee now uses three IT devices each day. It’s becoming ever more difficult for organisations to keep track of business devices, let along manage them efficiently. CORETX research shows that many are struggling to manage a multitude of potentially very serious issues related to the devices deployed within their businesses. “Keeping devices working and secure through their lifecycle is difficult. Nevertheless, it’s concerning that many companies can’t keep on top of the basics. Our survey found 21% of employers couldn’t say for sure where their devices are and which employees are using them. “Not surprisingly, they’re unable to retrieve them from leavers in order to redeploy them to new employees to gain the full value from their investment. Or indeed ensure they’re wiped of company sensitive information.” General Data Protection Regulation: How to Prepare

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New Government Urged To Help Stagnant Services Sector

Mon, 12 Jun 2017 10:04:34 +0000

Calls are being made for the incoming government to address the stagnant services sector which is “grinding the economy to a hault” – according to a report by BDO LLP. Its latest Business Trends Report, which projects firms’ order expectations over the next three months, has revealed the BDO Index has fallen to 95.0 in May from 95.3 in April, the lowest level since June 2013. Small businesses within the services industry have reported that growth in their order books has stopped – with the slowdown nearing recessionary conditions. While there has been an overall downward trend since August 2015, it has become more pronounced since the EU referendum last year – with a significant drop in the value of the pound and in consumer spending. In contrast, however, manufacturing output is increasing – with its BDO Index increasing from 0.6 from April to May, and now sitting at 97.7. The sector’s Optimism Index – which indicates how firms expect their order books to develop in the coming six months – is also at a three-year high of 116.4. It’s suggested that the drop in value of the pound has made UK products cheaper, and thus, attracted more international buyers. With regards a new government, following Thursday’s general election which resulted in a hung parliament, formal negotiations between the Conservatives and the DUP about forming a minority government are ongoing – though there remains uncertainty over whether a deal will be agreed. Peter Hemington, partner at BDO LLP, said: “Business activity in the UK’s services sector is definitely slowing down, with many blaming this on the snap election. But the downward trend is clearly much more deeply rooted than this. Surprisingly, UK businesses remain optimistic about the future, but an immediate recovery seems unlikely. “The new government should be quick to announce immediate pro-business measures to ensure we aren’t left disappointed with an increasingly stagnant economy as we go through the rest of the year.”

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A Quarter Of Businesses Put A Hold On Any Promotions In Order To Afford National Living Wage

Wed, 07 Jun 2017 10:50:54 +0000

A quarter of UK small businesses have put a hold on any employee promotions or pay rises because they can’t afford the national living wage – according to a report by XpertHR. The survey of 212 businesses and 541,340 employees has revealed that 30% of firms had to increase pay for at last some workers in April 2016 – when the minimum wage officially rose from £6.70 to £7.20. At the time of its introduction, workers eligible for the national living wage (who were previously on the national minimum wage for workers aged 21 and over) would have seen their pay increase from £6.70 to £7.20 an hour, an increase of approximately 7.5%. It’s suggested that many businesses failed to plan adequately, or even expect, the rise – and it now appears business owners are taking their financial frustrations out on their workers’ pay packets. 59% of small firms admitted that such pay differentials had been squeezed, though 33% did maintain their differentials. Indeed, a majority of employers (54%) extended the national living wage to all employees – regardless of age – with just 23% limiting it to employees aged 25 and over. Sheila Attwood, managing editor of pay and HR practice at XpertHR, said: “It’s clear some employers are underestimating the impact the national living wage will have on their pay budgets over the next three years. They need to be doing much more work including forecasting and modelling the effect of this on their paybill and profitability, and look at ways the business can cope with the increase. “However, just planning the funding to cover increases in the national living wage is unlikely to be the end of the story. Seeing how differentials will be affected is something all organisations will also need to take into account.” Click here for a guide on the national minimum wage.

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