Wednesday 26 April 2017

Strategy Vs. Culture!

“Culture eats strategy for breakfast.”



These words, often attributed to Peter Drucker, are frequently quoted by people who see culture at the heart of all great businesses.

Strategy is written down on paper whereas culture determines how things get done. Most people can come up with a strategy, but it’s much harder to build a winning culture. Moreover, a brilliant strategy without a great culture is ‘”all talk and no action”, while a company with a winning culture can succeed even if its strategy is mediocre. It is far easier to change strategy than culture.

Strategy ultimately consists of two aspects; which sectors should you be in and what is the value proposition that you will go to market with in each of those sectors?
A business’s cultural strengths are central to the first aspect of your strategy (sectors). For example, Ryanair has a culture of keeping costs down and offering cheap prices. As such, they would probably not succeed if they entered the premium, private jet sector where wealthy clients expect high-end service and the best of everything.

Maintaining cultural coherence across a company’s divisions should be an essential factor when determining a corporate strategy. No culture, however strong, can overcome poor choices when it comes to corporate strategy. The second aspect of your strategy is the value proposition. Customers consider more than concrete features and benefits when choosing between alternative providers. They also consider “the intangibles.” In fact, these often become the tiebreaker when tangible differences are difficult to discern. For example, Virgin Airlines tries to attract passengers who like its casual, fun and non-establishment attitude in how it operates.

The businesses with the best cultures have instilled norms of behaviour that are essential features of their winning value propositions. For example, in Virgin’s case, offering consistently fun service at a reasonable price. What these companies really demonstrate is how culture is an essential variable - much like your product offering, pricing policy, and distribution channels - that should be considered when choosing strategies for your business. This is especially so when the behaviour of your people, and particularly your frontline staff, can give you an edge with your customers.

Strategy must be rooted in the cultural strengths you have and the cultural needs of your businesses. If culture is hard to change, which it is, then strategy is too. Both take years to build; both take years to change. Don’t let culture eat strategy for breakfast. Have them feed each other.

Tuesday 25 April 2017

Workplace by Facebook

Workplace by Facebook is a new collaborative platform for businesses who want to harness social media technology within the office environment.



Workplace can be used to communicate via groups, to chat with colleagues and offers the features of Facebook but in a business focused package. Workplace is designed to be easy and familiar to use so it looks very much like regular Facebook.

Workplace can effectively replace a firm’s intranet. The familiarity of the platform provides instant benefits in terms of user experience. Most people already know how to use Facebook. Since most employees can use the platform, businesses won’t have to spend as much time and resources on training people.

Workplace is completely separate from personal Facebook accounts, meaning information shared between employees is only accessible within the Workplace platform. Workplace is designed to work in a similar way to a corporate email account. Employees are issued with an account when they join the company and should they leave the firm, they will lose their account.

From a privacy perspective, employers can not use a Workplace account to access information on an employee's private Facebook profile. Networks are isolated and only company-wide, which means only co-workers can see the information other employees post in Workplace.

On the security front, Workplace relies on Facebook's own infrastructure and tools for threat detection to safeguard data. The system also follows third-party industry security standards.

Workplace features a News Feed that displays articles, updates or comments relevant to certain teams or, perhaps, to the entire company. A version of the Facebook Live service can be used to broadcast corporate communications, such as a presentation by the managing director.

Teams can communicate in real time using a version of Messenger. It is also possible to create private groups for brainstorms or discussions where users can share files, photographs, etc.

Friday 21 April 2017

Budget 2017 - Tax & Rate Updates!

Corporate Tax Measures


The Chancellor announced that the Government is committed to continue to have the lowest corporate tax rate of the G20 major trading nations.  As already announced the corporation tax rate reduces to 19% from1 April 2017 and then to 17% from 1 April 2020.

The corporation tax rate for small and medium sized companies trading in Northern Ireland will be reduced so that such companies can compete with those in the Republic where the rate is 12.5%.

The Government is also keen to continue to encourage investment in research and development (R&D) and the Chancellor announced that the R&D tax credit claim procedure would be simplified.

Tax Free Childcare Scheme Starts 2017

The chancellor also announced that the new tax-free childcare scheme is due to start in 2017.

The scheme will provide up to £2,000 a year in childcare support for each child under 12 where the parents save in a special account. If they save £8,000 the government will top up the account with 20% to a total of £10,000 which can then be used to pay for childcare costs.

Business Rates Relief For Small Businesses

There has been much lobbying from the small business sector to reduce business rates. The Chancellor stated that 600,000 small businesses currently benefit from small business rates relief.

He also announced that no small business that is coming out of small business rates relief will pay more than £600 more in business rates this year than they did in 2016/17.

In order to support the licenced trade from April 2017, pubs with a rateable value up to £100,000 will be able to claim a £1,000 business rates discount for one year.

Advisory Fuel Rate For Company Cars


These are the suggested reimbursement rates for employees' private mileage using their company car from 1 March 2017.

Engine Size
Petrol
Diesel
LPG
1400cc or less

11p


7p
1600cc or less


9p

1401cc to 2000cc

14p

9p
1601 to 2000cc


11p


Over 2000cc

22p
(21p)
13p
14p
(13p)

Where there has been a change, the previous rate is shown in brackets.

You can continue to use the previous rates for up to 1 month from the date the new rates apply.

New Vat Limits


As mentioned earlier, the VAT registration limit increases by £2,000 to £85,000 from 1 April 2017. At the same time the de-registration limit increases to £83,000.

Contact us if you need more information or business help:
APJ Accountancy | ☎ 020 89310165 | ☏ 07900537459 | ✉ info@apjaccountancy.com

Delay The Start Of Digital Reporting!



Changing Your Accounting Date Can Also Delay The Start Of Digital Reporting.

Another way of delaying the start of Making Tax Digital (MTD) would be to change the year end of your business. The legislation in the latest Finance Bill specifies that MTD will apply to accounting periods commencing on or after 6 April 2018.

This means that if you currently prepare accounts to 30 April then the first quarterly update to be submitted to HMRC will be for the period to 31 July 2018. However, if you changed the accounting date of your business to 31 March then the first quarterly update would be for the period from 1 April to 30 June 2019.

Contact us to discuss the full tax implications of such an action.

Attack On Self-Employed In Budget 2017!

In his first Budget on 8th March, the new Chancellor Phillip Hammond announced that he would  level the playing field between employees and the self-employed by increasing Class 4 National Insurance Contributions (NICs) from 9% to 10% from 6 April 2018 and then to 11% from 6 April 2019. His justification is that the self-employed are now entitled to more generous state benefits than in the past and thus NIC rate should be increased towards the 12% Class 1 NIC employee rate.
Note that the flat rate Class 2 NIC contributions, currently £2.80 a week, cease on 5 April 2018.



The chancellor stated that only the self-employed with profits in excess of £16,250 will pay more national insurance.

Tax Free Dividend Allowance To Be Reduced To £2,000


The Chancellor also announced measures to limit the rise in tax-driven incorporation. The £5,000 tax free dividend allowance introduced by George Osborne will be reduced to just £2,000 from 6 April 2018. Mr Hammond claimed that many smaller owner-managed businesses have incorporated as limited companies mainly for tax reasons. Typically the director/shareholders of such businesses have paid themselves in dividends and paid less tax than similar unincorporated businesses.

Currently, once the dividend allowance has been used the remaining dividends are taxed at 7.5%, 32.5% and then 38.1% depending upon whether the dividends fall into the basic rate band, higher rate band or the additional rate. There are rumours that these dividend rates may also be increased in future years.

Although the cut in the tax-free dividend allowance is clearly aimed at owner managed companies, it will also impact on those with substantial share portfolios. Mr Hammond reminded us in his speech that the annual ISA investment limit increases to £20,000 from 6 April 2017 and that dividends on shares held within an ISA continue to be tax free.

Start Of Digital Reporting Delayed For Smaller Businesses


The Government is committed to the "Making Tax Digital" (MTD) project which is scheduled to start in April 2018 with the first quarterly updates being submitted by the self-employed and property landlords in July 2018.

Many business owners, professional advisors and the Treasury select committee had

expressed concerns about the timescale for the introduction of MTD. The Chancellor announced that there will be a one year deferral in the start date to 2019 for self-employed businesses and property landlords with gross income below the VAT registration limit.

Contact us if you need more information or business help:
APJ Accountancy | ☎ 020 89310165 | ☏ 07900537459 | ✉ info@apjaccountancy.com