February 2009 Newsletter

FOREWORD

WELCOME TO PRIME CHARTERED ACCOUNTANTS FEBRUARY E-NEWS.

When times are good, businesses can coast along making money. The fact that they could have made more doesn’t always seem to matter. In a recession, however, it does matter, as it can be the difference between survival and disaster.

We are currently advising many of our clients to look carefully at the systems they already have in place and to evaluate whether they provide the necessary information they need to fully understand their business.

For example, being able to identify opportunities to sell more to existing customers could potentially boost your cash flow, particularly if incentives to purchase more slow moving stock, that is taking up expensive storage space, can be included. Similarly, spending time calling all those prospects that have recently requested a quotation, but have yet to commit, may result in some additional business.

Marketing may be one of the areas you are looking to cut back on, at present, but we would strongly urge you to reconsider. Improved efficiencies in working practices and the use of systems could actually be the answer – we can advise on cost-effective systems that will help you do that.

We, of course, want to ensure your business is a success and are on hand to help with cash flow forecasting and looking for ways of providing you with improved efficiencies across your whole business.

One example is outsourcing your payroll, for which we have included an article on how we can save you time and money, to allow you to focus on making your business a success.

Similarly, we’ve included an article on paying HMRC by direct debit, cutting down on the amount of administration required.

Laurence Moore, Chairman, Prime Group

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PAYE tax codes about to be issued

HMRC have advised that they are about to issue PAYE tax codes to employees for the 2009/10 tax year.

If you receive a coding notice it is worthwhile letting us have a copy for checking. This will enable us to ensure that you are paying the correct amount of tax on your pay and benefits and that any underpayments of tax, which are being collected through a coding notice deduction, are being correctly dealt with.

HMRC’s guidance on PAYE tax codes includes some frequently asked questions and can be found using the second link below.

Internet links: HMRC news and HMRC FAQs

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Who’s handling your payroll?

For those of you currently not using our payroll service, as we approach the end of the tax year why not get a quote to see how much time and money we could save you?

From as little as just over £6 per week*, Prime Paysolve is able to offer a complete payroll solution which can be tailored to your specific needs.

Why outsource?

With all of us having additional pressures placed upon us in the current economic climate we can:-

• Guarantee the availability of our staff to run your payroll and pay your staff by BACS on the prescribed day
• Remove the need for technically competent payroll staff within your business
• Ensure accurate and timely payments are made to HMRC
• Calculate complex pay and associated contributions on your behalf
• Provide pay advice statements to your staff – confidential downloaded payslips if required
• Ensure complete confidentiality across the whole payroll
• Keep accurate payroll records to meet your statutory and regulatory requirements

To take advantage of a FREE quotation, simply call Sarah Hartland on 024 7655 4314.

* Based on up to 5 employees, with payment straight into their bank accounts by BACS, and confidential payslips provided with PAYE / NI paid to HMRC automatically each month.

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Pay HMRC by Direct Debit

HMRC have announced that they are now able to offer more customers the option of paying by Direct Debit. If taxpayers are registered to use Self Assessment Online, PAYE Online for employers or Corporation Tax Online they can now set up Direct Debit payments online. Taxpayers can also make tax credit repayments by Direct Debit.

In addition, HMRC have also introduced the option of online credit card payments.

VAT returns and payments can be made online, gaining an extra 7 days credit. This method can be accessed by using the VAT Online link from the 'do it online' menu on the HMRC homepage.

Internet links: HMRC direct debit payment and HMRC credit card payment

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Reduction in the standard rate of VAT

The standard rate of VAT was reduced from 1 December 2008 from 17.5% to 15%. HMRC have published some further frequently asked questions which clarify the correct treatment in several situations.

Internet link: HMRC VAT rate guidance

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Enterprise Finance Guarantee

The Enterprise Finance Guarantee (EFG) replaces the Small Firms Loan Guarantee (SFLG) from January 2009. It will provide the same support as SFLG and much more.

The EFG is a Government guarantee available to business customers with a viable business proposal but insufficient security for banks’ normal criteria.

The key changes from SFLG are:-

• Much wider availability to larger businesses
• Ability to take a level of security (with limitation on some personal security, specifically the proprietor's personal home)
• Ability to offer new loans and also to convert existing overdraft facilities into term loans to provide further working capital, providing an appropriate level of overdraft remains in place based on need
• More working capital is available to the business in total
• Serviceability is expected to be achievable.

Importantly, it cannot currently be used to refinance any existing loans. If you want to discuss this in more detail, please contact us.

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Top tips from small firm owners who worked through the last recession

With many small business owners having never experienced a recession before, a survey identifying the top ten ways to survive a recession by small firm owners who have been through one before is vital reading.

1. Get the basics right
2. Cut costs
3. Careful cash flow management
4. Spend on marketing
5. Determination
6. Hold onto existing customers
7. Diversify your product and customer base
8. Delivering excellent customer service
9. Credit check customers
10. Invest in the right technology

If you want help with these or to discuss these areas in general, get in touch.

And another recession guide!

A new eight-point guide by the Institute of Chartered Accountants in England and Wales offers new firms survival tips.

1. Manage risk and uncertainty
2. Think cash
3. Secure your funding
4. Review your structure and cost base
5. Seek advice and support early
6. Manage your year end
7. Recognise the value of your employees
8. Plan ahead

For more information, and to download the eight point survival plan visit, ICAEW.

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Pensions - Getting what's rightfully yours

Seeking advice and making well informed decisions that could determine the value of your pension benefits, when you decide the time is right to draw them, is essential. But, are you truly aware of the full range of options available to you, instead of simply buying an annuity with your existing pension provider and potentially losing as much as 30% per annum for the rest of your life? If you are reaching retirement age, this could well apply to you!

It’s a shocking fact that 60% of people do exactly so. Our sister company, Prime Financial Advisers Ltd, is able to offer as much or as little advice as you require including:

• Whether you should purchase an annuity or start making withdrawals from your pension fund
• If you choose an annuity, what type of annuity to select?
• What the effect would be of gradually phasing in pension benefits, as you reduce your working hours and remuneration
• How to preserve as much of your pension fund as possible, for your spouse and/or dependents, in the event of your early death.

We will be holding a FREE seminar on pensions and how to ensure that, when you come to access your pension benefits, you’ll actually receive what is rightfully yours, on 18 March 2009 at our offices in Coventry and would like to invite you to attend.

To book your place, call 024 7655 4314, or email Sarah Hartland.

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Staff news

Congratulations to Chris Holywell and Tejal Patel for passing their final exams and becoming fully qualified with The Association of Chartered Certified Accountants (ACCA).

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Disclaimer
This newsletter is published for the information of clients and other recipients of our email newsletters. It provides only an overview of the regulations in force at the date of publication, and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this newsletter can be accepted by the firm.