Facebook Live

With latest figures showing 1.79 billion monthly active users, Facebook is a social media platform that has immense potential for business users. However, as with any large target audience, getting your message right is key.

Facebook Live is a new video streaming service which enables users to livestream video broadcasts from their mobile phone or other device. While this idea in itself isn’t new, Facebook’s huge audience means many more people can potentially tap in to the videos that you post. In addition, Facebook Live offers features such as the ability to watch again (unlike platforms such as SnapChat).

Facebook Live is designed to be interactive and allows users to comment on videos and share them. For business users, there is great potential here - customers can ask direct questions about the products or services that you feature in your live video, and this allows you to resolve queries. It may also provide valuable insights into what your customers actually want.

The key benefit of Facebook Live is that it offers your business the chance to engage directly with users and offer interesting live footage. The live element means that you can now draw people in as your news is happening. For example, you could stream the live launch of a new product or service to your customers and potential customers around the world.

Using the service is very straightforward. Users go to their Facebook page and when they are ready to start filming simply tap on the live stream icon. As soon as this is done, followers will get a notification, which will immediately request them to engage with the content. You can also write a description of what you’re filming. An important point to remember is that all live videos are archived. This means that if a user misses the video, they can go back, view comments and watch it after you’ve stopped recording. This offers a further extension of the platform for users to share their experiences of your product / service and gives you additional (free) marketing opportunities.

Tax News UK - February 2017!

Making Tax Digital To Be Delayed?

The Treasury Select Committee has reviewed the proposals for the introduction of “Making tax digital” (MTD) and have agreed with the various professional bodies that if the new systems are introduced too quickly there could be a disaster. It would significantly increase burdens on small businesses. In their report they comment that the overall benefits of  mandating the digitising of record keeping and quarterly reporting, as is currently envisaged, have yet to be proven.

The Select Committee further note that the cost to business of introducing MTD, as well as the continuing costs of maintaining digital records and submitting quarterly updates are of further concern to the Committee, as is the availability and functionality of the free software that has been promised.

At the time of writing we are awaiting the Government response to  the November 2016 consultation and we will keep you updated about the implications for your business. Remembers that the proposals as they are currently drafted will apply to property rental businesses as well as trading businesses.

Do You Have Enough Shares To Qualify For CGT Entrepreneurs’ Relief?

Entrepreneurs' Relief reduces the rate of CGT to 10% on the first £10 million of gains on the disposal of qualifying business assets. This would include sole traders disposing of their business and partners disposing of their interest in a partnership carrying on a business. With many businesses operating as limited companies these days it is important to appreciate that not all shareholdings qualify for this generous relief.

Shareholdings qualify for Entrepreneurs' Relief provided the company is a trading company or the holding company of a trading group. There are additional conditions that the shareholder is an officer or employee of the company and holds 5% or more of the company's ordinary share capital and votes. All of these conditions must be satisfied throughout the twelve months up to the date of disposal.

A couple of recent tax tribunal cases have considered the 5% test and the HMRC view is that most shares except for certain preference shares need to be considered. Always contact us first if you are considering issuing additional shares in your company as it may have a detrimental effect on other shareholders' entitlement to CGT Entrepreneurs' Relief.

Shareholders Must Also Be Officers Or Employees

In order to qualify for CGT entrepreneurs' relief on the disposal of shares, the shareholder must have been an officer or employee of the trading company or group throughout the twelve months up to the date of disposal. Although there is no minimum  number of hours, it is important that there Is evidence that this condition is satisfied, so for example the employee/ director should not resign before the disposal of shares takes place.

HMRC are known to request such evidence and recent tax tribunal cases have resulted in Entrepreneurs' Relief being denied .

New Government Savings Scheme Starts In April 2017

From April 2017,adults under the age of 40 will be able to open a Lifetime ISA (LISA) and pay in up to £4,000 each tax year. They will be able to continue making contributions up to the age of 50. The government will add a 25% bonus to these contributions. This means that individuals who save the maximum will receive a £1,000 bonus each year from the Government.

The tax-free funds, including the Government bonus, can be used to help buy a first home worth up to £450,000 at any time from 12 months after first saving into the account. The funds, including the Government bonus, can be withdrawn from the LISA from age 60 tax-free for any purpose. LISA holders will also be able to access their savings if they become terminally ill.

If savers make withdrawals before age 60 for other purposes a 25% charge will apply  to the amount of withdrawal. This returns the bonus element of the fund (including any interest or growth on that bonus) to the Government.

“Help to Save”, aimed at supporting people on low incomes to build up their savings will follow in 2018. That scheme will add a 50% Government bonus on savings up to £50 a month for up to four years. Help to Save will be available through NS&I to any adult who is receiving working tax credit or universal credit with minimum household earnings equivalent to 16 hours a week at the National Living Wage.

Don’t Forget Your 2016/17 ISA Allowance

The current ISA allowance is £15,240, rising to £20,000 for 2017/18. Remember that there is no longer a 50% restriction on the amount that you can invest in a cash ISA; the £15,240 annual limit covers all ISA investments which could be in shares, bonds, cash or certain other investments.

And Make Pension Payments Before 6 April

The current annual pension limit remains at £40,000. In addition, unused relief from the previous three tax years may be utilised once the current £40,000 limit has been used. However, the relief from 2013/14 will lapse on 6 April 2017.

If, for example, you have £10,000 unused allowance from 2013/14 you would need to make pension contributions of at least £50,000 by 5 April 2017 to avoid losing your 2013/14 relief. Remember also that pension savings continue to qualify for higher rate tax relief and may help to reduce your payments on account.

Property Sales – Trading Or Capital Gain?

In the December edition of this newsletter we flagged up that new anti-avoidance legislation in Finance Act 2016 will tax certain transactions in UK land as trading transactions instead of capital gains.

Just before Christmas, HMRC issued guidance to clarify the scope of the new rules. The legislation as enacted in Finance Act 2016 was drafted in such a way that it could be interpreted as catching certain disposals by buy to let landlords. The HMRC guidance states that the new rules do not apply to businesses which acquire and repair properties in order to generate rental income, even if those businesses also enjoy capital appreciation from those properties. So the average buy-to-let landlord should not be subject to income tax on the gains he makes when he sells properties which were acquired for letting.

The HMRC guidance also makes it clear that the new transactions in UK land rules are directed at businesses which conduct a trade consisting of property development or property dealing.

This is a complex area and you should contact us so that we can help you ensure that the sale is treated correctly for tax purposes.

Scottish Income Tax Rates And Thresholds

The Scottish Government has the devolved power to set certain tax rates, principally income tax and land transaction tax (equivalent to SDLT in England and Wales). Although it proposes to freeze the basic, higher and additional rates at 20%, 40% and 45% respectively, the thresholds will not be the same as the rest of the UK.

The higher rate income tax threshold will increase by inflation to £43,430 in 2017/18. Whereas the higher rate threshold for the rest of the UK will be £45,000.

Scottish income tax applies to Scottish taxpayers who are UK resident but who live for most of the year in Scotland. Where they work is irrelevant but workers who live in Scotland are liable to Scottish income tax on their non-savings income. If you employ staff who live in Scotland they should have a special PAYE code so that the correct tax is deducted. This will be particularly important when there is a lower, higher rate threshold in Scotland.

On the land and buildings transaction tax (LBTT), the equivalent of stamp duty land tax in the rest of the UK, rates have been kept on hold for 2017/18 at their current 2016/17 levels.

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

What to consider while scaling up your small business?

Increasing the scale of a business is easier said than done. If your business objective is to scale up, you need to consider the people aspects, strategy and financials.

People make the firm

People determine a company’s success, and hiring the right people is critical. Hiring a team of great people will help to solve most of the problems the business encounters as it increases in scale. As such, you should invest time and money into the hiring process to find the best professionals to take the company to the next level. Screen candidates not only for their skills and knowledge, but also for their personality and how well they fit the mission, values and culture of the firm.

Once you have hired the best team, you need to make sure that you keep them. You and your management team should communicate openly, recognise and reward their achievements, and give them the tools and training they need to succeed.

Follow a simple strategy

In the words of Albert Einstein, “Everything should be made as simple as possible - but not simpler.” Businesses need a strategy to succeed, but it shouldn’t be complicated. The very best strategic plans are 1 page of A4.

The strategy should include the strengths, weaknesses, opportunities and threats of the business, the company’s core values and mission. As the focus is to scale up and grown the firm, the strategy should include high-level goals for each quarter, and year. Once you have finalised the strategy, ensure that you communicate it effectively so that everyone in the firm understands what the objectives of the firm are and what they need to do to achieve the overall goal of growing the business.

Manage risk (and cashflow)

Like anything in life, businesses encounter unexpected storms from time to time. As such, the management team should manage risk effectively in order to ensure that the firm’s growth strategy isn’t derailed by unforeseen market forces.

Cashflow is very important when trying to increase the scale of a business. As such, unnecessary outlay should be avoided. Instead, the firm should focus on building up cash reserves which can be used from time to time to assist the business in achieving its growth strategy.

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

Hiring Multilingual Staff

Are businesses that employ multilingual staff getting ahead of their competitors?

Thanks to technology and globalisation in business, the world has become a much smaller place. Access to international markets is now easier than ever, thanks to ecommerce, the internet, etc.

Big multinational businesses recognise the importance of language skills. McKinsey counts more than 130 languages spoken across its staff, and offers a bursary scheme to those who wish to learn another language before joining the firm. Another example is Unilever, which estimates that up to 80 of their 100 most senior leaders speak at least two languages.

The obvious benefit of hiring multilingual staff is better communication with clients and contacts across the world. Although English has become the international business language, having employees who speak other languages can only be beneficial to an international business. Most people prefer speaking in their native language. If you are contacting other companies to work with, or customers in other jurisdictions, multilingual staff will be able to communicate in their native language, which makes the process easier and makes your firm come across as more professional and gives the impression that you are more of a “global business”.

A report from the European Commission a few years ago stated that “a significant amount of business” was sacrificed because of poor language skills across Europe. The report identified that as much as 11 per cent of small and medium-sized businesses had lost a contract as a result of their poor language skills.

So, if your firm is targeting international business, you should try to recruit employees who are multilingual. They will be able to help your firm to understand how complicated communication between two cultures can be, including knowing which areas require sensitivity and which areas call for being more direct. They will also be able to help your firm to adapt its business development efforts, website, marketing materials, etc. to the target market. These team members can also assist the firm as multilingual proof readers, in order to ensure quality and consistency of external communications in your target markets.

Wearable technology - What you need to know!

Wearable technology is one of the biggest trends in IT and tech at the moment. The consumer market has embraced wearables such as smart watches and virtual reality headsets. However most businesses are still developing their strategies for making the most of the wearable technology trend.

While attention to wearables is widespread, adoption is not. From Google to Fitbit, Jawbone and Apple, wearables are garnering plenty of interest. Some early adopters in businesses are using the Apple Watch or Samsung Gear to monitor emails or manage their calendar while on the go. Others are using it to remind them to move about or to walk around the office throughout the day in order to burn a few calories.

Wearables are far from ubiquitous in the workplace just yet though. While the technology has developed quickly, businesses remain hesitant to integrate the devices into their everyday operations.

One of the reasons for businesses to consider adopting wearable tech is its ability to streamline normal business operations and improve a company's productivity. Whether it's a pair of smart glasses that help to guide a warehouse employee along the most efficient route or sensors that help employees more quickly reference needed information to complete a task, wearables allow businesses to improve efficiency in task management.

On the health and wellness side of things, many companies are now offering employees fitness trackers, coupled with incentive programmes, to encourage healthier lifestyles both in and out of the workplace. Healthier employees are often more productive and less frequently absent, and can save their employers on health care costs. For example, Fitbit offers a corporate wellness program to partner with companies trying to promote employee well-being.

Wearable tech is also changing how consumers interact with businesses. Some firms are exploring wearables in the form of targeted advertising and simplified payment services through the use of "near-field communication" (NFC) chips. This encourages improved communication with customers and also makes consumer data easier for businesses to gather.