Are You Ready for the New EU Data Protection Laws?

Data Protection Laws Are Changing! The General Data Protection Regulation (GDPR) comes into effect on the 25 May 2018. It’s a single set of rules that is designed to protect the personal data of individuals in their private, professional or public life. The regulation will change the way your business can collect, use and transfer personal data. You will need to know where data is stored and you may even need to change the way data is collected and how you respond to requests about personal data you hold. For SME’S this means you will need to take some steps to demonstrate you’ve taken the GDPR seriously as there are significant sanctions and penalties for non- compliance, including fines of up to 4% of a business’s turnover. What do you need to do now to make sure you are compliant? A good start would be to look at your current approach to managing customer data and what and where it is held and document this. Then: Appoint someone in your business as the lead contact to manage the GDPR; Identify any areas where customer data is not adequately protected or managed; Review back up, disaster recovery and archiving processes for weaknesses; Make sure everyone in the business knows about the new rules and your procedures; Protect data on mobile devices in the same way as you would do in the business, and use encryption to prevent data if the device is lost or stolen; Ensure everyone knows their responsibilities to protect personal data; and Document and regularly review your new procedures. The new regulations apply to all businesses that hold personal data whatever the size. If you would like to know more and get a copy of our GDPR checklist for SME’s then please contact us.

Digital Tax is Coming!

Her Majesty’s Revenue and Customs (HMRC) has issued plans to make businesses file quarterly information with them. How individuals and businesses interact with HMRC is changing.

Keeping your financial records will become increasingly digital and most businesses, the self-employed and landlords will need to use software or apps to keep business records - the days of manual record keeping will be over!

There are exemptions, but for most businesses with turnover above £10,000 you will need to start planning for Digital Tax now.

So, what’s the good news?

We’ve teamed up with a major Cloud software company to provide our clients with the best possible fully compliant accounts package, and there are significant benefits to your business if you use our recommended package:

• It’s on the cloud so you can get a clear view of your finances any time any place;
• You will never need to do back- ups of your accounting software ever again;
• Run your business from work, home or on your mobile;
• It automatically grabs bank receipts and payments in real time;
• Use your mobile to photograph purchase invoices and expenses and upload these to the software; and
• Automatically generate and submit VAT returns and other reports with one click!

Just suppose you could see your results, who owes you money, who you owe and your business bank balance 24/7 from your smart phone!

Over the next few months we will be contacting all our clients to discuss the new HMRC rules and to demo how easy the new system is. In the mean- time, if you are “Good to go”, contact us and we will be delighted to help you comply with Digital tax and streamline take your business to a whole new level.

PJ | ☎ 020 89310165 | ☏ 07900537459 | ✉ info@apjaccountancy.com

How to Manage Business Mistakes?

No matter what type of business you run, mistakes will happen. All employees make mistakes. However, the key to resolving the situation when things don’t go to plan is to manage your team and the actions they take, effectively.

When things go wrong, stop and analyse the situation. How big is the mistake? Is it one that should not have been made but can be rectified? Or did it cost your company hundreds of thousands of pounds?

If a team member makes a mistake, hopefully they will own up to it. If not, you may have to raise the issue with them. The key at this point is to communicate clearly and in a professional manner. There is no point getting angry and shouting at people. Instead you should outline your expectations.

Discuss the mistake with your team member and ask them what they think they can do to rectify the situation. Outline that the most important thing right now is to come up with an effective remedy rather than pointing out whose fault it was.

If the mistake is a one-off occurrence, you should outline to your team member that the main thing is to learn from the experience in order to avoid it happening again. If the team member in question has made various mistakes in the past and it is becoming a regular issue, then perhaps it is time to consider getting HR involved. Maybe the individual is making regular mistakes because they aren’t properly qualified for their job or perhaps they just aren’t suited to their current role.

As a manager, you should think about what type of leader you are and what you want to accomplish. Do you want your team members to be scared of you or do you want to encourage them and support their actions? As a manager you can’t be their friend but you can be supportive. A supportive manager will use mistakes as a learning opportunity for the team.

If your firm's current culture for handling mistakes is not one that encourages learning or growth, it might be time to update your strategy. The best modern businesses use mistakes as an opportunity to step back, look at a process and find a better way of doing things. This type of approach helps to identify best practice, minimise the chances of similar mistakes happening again and may even create a better, more efficient way of managing parts of the business.

Become A More Effective Manager

In the current economic environment, businesses are demanding more and more of their managers. Here are some tips to help you to become a more effective manager.

The best managers are those that step back and let their team do their job without standing over the shoulders. You can’t do everything yourself. Instead, assign each member of your team personal objectives and empower them to succeed. Give them the opportunity to make decisions; set up regular weekly or bi-weekly catch up meetings, then step back and let them get on with it.

One of the most common complaints from employees is that their managers simply don't talk to them. They communicate when they hand down projects or tasks, but they’re often unreachable day to day. A great manager will always be available when one of their team members has a question or concern, and they will always make an effort to reach out and ensure employees have everything they need to get the job done.

Stop and think before reacting. Act based upon sound principles, not emotion (which could be heated at the time). Avoid getting sucked into the emotion of the moment. Try to proactively manage difficult situations so that you address problems before they become bigger issues.

Try to understand things from the point of view of others. Listen more than you speak and try to avoid jumping to conclusions. Take notes – this helps you to listen actively. Note questions as you go along and keep them for the end of the meeting. You may find that your questions are answered by others as the meeting progresses.

Communication is key. Providing feedback helps your team to continually improve. Hold regular meetings with team members to assess projects and check-in with them. Seek mutual benefits in every interaction. Negotiate so that the result offers a win for both or all parties. Seek a cooperative arena, not a competitive one. Win-win situations are mutually beneficial and satisfying.

Make time to sharpen your axe. Take care of yourself and consider your physical, social, emotional, mental and spiritual needs. Making time to rest, recover and refresh will make you more effective and less stressed in the office.

How to Embrace Innovation for your Business?

It seems there is a new way of doing business being created every week. Disruptive, technology driven, new business models are constantly being developed by the likes of Uber, Skype, Amazon and Air BnB.

Your business might hold an established position in the market today but that doesn’t mean that you and your management team can be complacent.

Disruption and commoditisation have impacted most industries and we are now seeing new players coming into traditional markets and establishing a disruptive model and capturing significant market share. This trend is only going to continue.

So what can you do, as the leader of your business, to minimise the impact of a potential disruptive new player entering your market?

It is difficult to constantly create new products or services. However, perhaps you could consider how best to commoditise some of your firm’s existing product or service offerings in order to increase profit margin and efficiency. This could also help you to improve customer experience – by making your services faster, easier to access and so forth.

When it comes to innovation, you don’t have to constantly re-invent the wheel. While creativity is usually associated with thinking outside the box, the fact is that few ideas are 100 percent original. The most brilliant (and often most profitable) business ideas are usually variations of an already existing theme rather than completely new concepts.

Netflix didn’t create a new industry. They just took the business model that had been so successful for Blockbuster Video and created a new way for customers to rent films - online instead of through a video shop. As Steve Jobs once said, “Creativity is just connecting things.” What sets creative people apart is that “they are able to connect experiences they’ve had and synthesize new things.”

If you want to embrace innovation in your business, you need to develop an environment that encourages creativity. Your staff should be empowered to explore new ways of delivering products or services.

Experimentation should be encouraged and your office should have collaborative workspaces in order to allow people to sit down together, work as a team, solve problems collectively and create new solutions.  In addition to this, your business should celebrate innovation through recognising those team members who find new ways of doing things. Whether that is a bonus for implementing a new innovation or perhaps celebrating the delivery of new innovations with a team night out. The key is to encourage your team to be creative, find new and better ways of doing things and keep innovating.

Skype Translator

Skype Translator allows users to talk to people anywhere in the world with real time translation.

Skype has designed the system in order to break down language barriers between friends, family and colleagues.

Recently, Skype has expanded the availability of its real-time translation feature, integrating the tool with calls made to mobile phones and landlines.

Previously, the translation feature, which began rolling out to users back in 2014, only worked for Skype-to-Skype calls.

Skype Translator supports over 50 languages. The system works best with headphones and a microphone and it helps if users speak as clearly as possible. As you or your contact speaks, it will be translated in your headphones and the translations will also appear on your screen.

In order to use Skype Translator, users will need some (paid for) Skype credits. To enable the translation functionality, users must select a contact then select the translator icon and turn translator on.

Finally, it is necessary to select the language for translation using the drop down next to your contact’s name, while in a call or instant messaging / chat.

When the person on the other side answers a call that is using Skype Translator, they’ll be played a message telling them the call is being recorded and translated. The rest of the call will take place with short delays while waiting for the conversation to be translated.

The system is good but it is not perfect. Skype uses automatic translation powered by deep learning systems, which are designed to improve over time.

As the technology develops, the errors will gradually reduce but in the meantime, it is a good compromise and it’s certainly better than not having any conversation at all.

New Tax Rules Starting April 2017!

New Rules For IR35 Workers In The Public Sector Start  6 April 2017

There are significant changes that commence on 6 April 2017 for workers in the public sector supplying their services via their own personal service companies or other intermediaries.

From 6 April 2017 the public sector employer or agency that engages the worker will have to review the employment status of the worker and decide whether or not to deduct tax and national insurance from payments to the worker even though he or she invoices for the services through their own company.

An online tool called “The Employment Status Service” is expected to be made available by the end of February 2017 and can help them make that decision. The tool can be used if the worker uses either an employment agency, or other third-party to get work.

These changes come on top of the restrictions on the tax deductibility of travelling expenses for IR35 workers that came into effect on 6 April 2016.

Please contact us if you want to discuss whether or not these rules affect you or your organisation.

Making Tax Digital To Start In April 2018 

Legislation to introduce Making Tax Digital (MTD) will be included in the Finance Bill 2017 and despite many objections that it was too soon, the new system of quarterly reporting will commence in April 2018 for the self-employed and property landlords.

There were 1200 responses to the consultation documents issued in summer 2016 and a number of changes have been made to the original proposals.

Much of the detail will be introduced by secondary legislation and there will be further consultation on a number of measures but the key proposals are:

Businesses will be allowed to use spreadsheets to keep their accounting records.

Businesses eligible for three line accounts will be able to submit a quarterly update with only three lines of data (income, expenses and profit).

Free software will be available to businesses with more straightforward affairs.

Businesses will not have to make and store invoices and receipts digitally.

There will be no late filing penalties in the  first year of the new system.

The deadline for finalising taxable profit for a period will be the earlier of:

• 10 months after the last day of the period of account, or
• 31 January following the year of assessment in which the profits for that period of account are chargeable

Businesses and property landlords with a turnover up to £150,000 will be able to prepare accounts on a cash basis

Digital quarterly reporting for companies and larger partnerships will not be introduced until April 2020. These changes will have a significant impact on how you keep your business accounts and communicate with HMRC. Please contact us to discuss the impact of these changes on the way that you keep your accounts.

New Company Loss Relief Rules Start On 1 April 2017

New rules that will allow greater flexibility in the way that companies obtain relief for losses will apply to losses incurred from 1 April 2017 onwards.

These rules have been introduced to encourage  companies to diversify as the losses may be available to offset against profits of another activity in a future period and even those of a company in the same group.

The proposed new rules were consulted on last summer and are included in the latest Finance Bill.

Although there will be greater flexibility for “new” losses arising after 1 April 2017, “old” trading losses incurred prior to that date  will continue to be restricted and will only be available to be offset against future profits from that same trade. The new rules are very complicated and we will of course work with you to ensure that your company obtains relief for  losses in the most advantageous way.

Buying A Company With Losses 

The new flexible loss relief rules coming into effect from 1 April 2017, will make the purchase of a loss-making company attractive. For many years there has been anti-avoidance to block the use of such losses and it is proposed that these rules will continue to apply.

The draft clauses in Finance Bill 2017 will continue to block such losses where within a five year period there is both a change in the ownership of the company and a major change in the nature or  conduct of the trade carried on by the acquired company.

Don’t Lose Your Personal Allowance!

For every £2 that your adjusted net income exceeds £100,000, the £11,000 personal allowance is reduced by £1. Pension contributions and Gift Aid can help to reduce adjusted net income and save tax at an effective rate of 60%.

The restriction applies between £100,000 and £122,000 adjusted net income. Another way that you could avoid this trap would be to agree with your employer to sacrifice some of your salary in exchange for a tax free benefit in kind. These rules are changing from 6 April 2017 but employer pension contributions and childcare vouchers will continue to be effective.

Preparing for Tax Season UK 2017?

Tax season is to start. Be prepared in advance to save money on Tax using these tips below:

Have You Used Your 2016/17 ISA Allowance?

Your maximum annual investment in ISAs for 2016/17is  £15,240.  Your investment needs to be made before 6 April 2017.  In addition, have you thought about investing for your children or grandchildren by setting up a Junior ISA? In the 2016/17 tax year, you can invest £4,080 into a Junior ISA for any child under 18.

Consider Other Tax Efficient Investments

If you are looking for investment opportunities, have you considered the Enterprise Investment Scheme (EIS)? These investments in certain qualifying companies allow you to set off 30% of the amount invested against your tax bill as well as capital gains tax (CGT) deferral.  An even more generous tax break is available for investment in a qualifying Seed EIS company where income tax relief at 50 per cent is available. In addition, it is possible to obtain relief against your 2016/17 capital gains. Both EIS and Seed EIS also provide a CGT exemption when the shares themselves are sold after 3 years.  Note however that qualifying  EIS and Seed EIS companies tend to be risky investments so professional advice should be taken. A 30% income tax break is also available by investing in a Venture Capital Trust.

Year End Capital Tax Planning

Have you used your 2016/17 £11,100 annual capital gains exemption?  Consider selling shares where the gain is less than £11,100 before 6 April 2017. Also, if you have any worthless shares, consider a negligible value claim to establish a capital loss. You may even be able to set off that capital loss against your income under certain circumstances.

As far as inheritance tax (IHT) planning is concerned, all individuals have a £3,000 annual allowance which means that gifts up to that amount each year are exempt from IHT. If you haven’t used your £3,000 allowance from 2015/16 you can make gifts of up to £6,000 without the gift being liable to IHT.

Also, consider making regular gifts out of your income to minimise the growth of your estate that will be liable to IHT. Gifts out of your surplus income are not subject to IHT if properly structured.

Buy New Equipment Before 6 April?

If you are running a business and making up accounts to 5 April, consider buying plant and machinery to take advantage of the Annual Investment Allowance (AIA) of £200,000.  The AIA provides a 100% tax write off for equipment used in your business. This tax relief extends to fixtures and fittings within business premises such as electrical, water and heating systems. There is also 100% tax relief if you buy a new car that emits no more than 95g CO2 per kilometre and an increasing number of cars now fall below that limit.

Contact us if you have any questions or need business help:
PJ | ☎ 020 89310165 | ☏ 07900537459 | ✉ info@apjaccountancy.com

New Tax Rules Starting April 2017!

New Rules For IR35 Workers In The Public Sector Start  6 April 2017

There are significant changes that commence on 6 April 2017 for workers in the public sector supplying their services via their own personal service companies or other intermediaries.

From 6 April 2017 the public sector employer or agency that engages the worker will have to review the employment status of the worker and decide whether or not to deduct tax and national insurance from payments to the worker even though he or she invoices for the services through their own company.

An online tool called “The Employment Status Service” is expected to be made available by the end of February 2017 and can help them make that decision. The tool can be used if the worker uses either an employment agency, or other third-party to get work.

These changes come on top of the restrictions on the tax deductibility of travelling expenses for IR35 workers that came into effect on 6 April 2016.

Please contact us if you want to discuss whether or not these rules affect you or your organisation.

Making Tax Digital To Start In April 2018 

Legislation to introduce Making Tax Digital (MTD) will be included in the Finance Bill 2017 and despite many objections that it was too soon, the new system of quarterly reporting will commence in April 2018 for the self-employed and property landlords.

There were 1200 responses to the consultation documents issued in summer 2016 and a number of changes have been made to the original proposals.

Much of the detail will be introduced by secondary legislation and there will be further consultation on a number of measures but the key proposals are:

Businesses will be allowed to use spreadsheets to keep their accounting records.

Businesses eligible for three line accounts will be able to submit a quarterly update with only three lines of data (income, expenses and profit).

Free software will be available to businesses with more straightforward affairs.

Businesses will not have to make and store invoices and receipts digitally.

There will be no late filing penalties in the  first year of the new system.

The deadline for finalising taxable profit for a period will be the earlier of:

• 10 months after the last day of the period of account, or
• 31 January following the year of assessment in which the profits for that period of account are chargeable

Businesses and property landlords with a turnover up to £150,000 will be able to prepare accounts on a cash basis

Digital quarterly reporting for companies and larger partnerships will not be introduced until April 2020. These changes will have a significant impact on how you keep your business accounts and communicate with HMRC. Please contact us to discuss the impact of these changes on the way that you keep your accounts.

New Company Loss Relief Rules Start On 1 April 2017

New rules that will allow greater flexibility in the way that companies obtain relief for losses will apply to losses incurred from 1 April 2017 onwards.

These rules have been introduced to encourage  companies to diversify as the losses may be available to offset against profits of another activity in a future period and even those of a company in the same group.

The proposed new rules were consulted on last summer and are included in the latest Finance Bill.

Although there will be greater flexibility for “new” losses arising after 1 April 2017, “old” trading losses incurred prior to that date  will continue to be restricted and will only be available to be offset against future profits from that same trade. The new rules are very complicated and we will of course work with you to ensure that your company obtains relief for  losses in the most advantageous way.

Buying A Company With Losses 

The new flexible loss relief rules coming into effect from 1 April 2017, will make the purchase of a loss-making company attractive. For many years there has been anti-avoidance to block the use of such losses and it is proposed that these rules will continue to apply.

The draft clauses in Finance Bill 2017 will continue to block such losses where within a five year period there is both a change in the ownership of the company and a major change in the nature or  conduct of the trade carried on by the acquired company.

Don’t Lose Your Personal Allowance!

For every £2 that your adjusted net income exceeds £100,000, the £11,000 personal allowance is reduced by £1. Pension contributions and Gift Aid can help to reduce adjusted net income and save tax at an effective rate of 60%.

The restriction applies between £100,000 and £122,000 adjusted net income. Another way that you could avoid this trap would be to agree with your employer to sacrifice some of your salary in exchange for a tax free benefit in kind. These rules are changing from 6 April 2017 but employer pension contributions and childcare vouchers will continue to be effective.