Getting prepared early on is something we always advise clients to do, and this proactive approach helps you to manage your financial obligations well before the January rush.

Do you need to file a Self Assessment tax return?

If you’re unsure whether you need to file a return, checking as soon as possible is essential to ensure you are prepared for the filing deadline.

As outlined by HMRC, you must file a tax return for the 2023/24 tax year by 31 January 2025 if you met any of the following criteria:

• You earned more than £1,000 through being self-employed
• You were a partner in a business partnership
• Your taxable income was above £150,000
• Capital Gains Tax was due on the sale of an asset
• You paid the High Income Child Benefit Charge

There are other situations where you may need to file a tax return, such as if you are a landlord or earned any untaxed income during the tax year.

If you are required to submit a tax return for the first time, you must register for Self Assessment by 5 October 2024.

In the case you are filing a paper return, it’s important to note you must do this before 31 October 2024. You should prepare for the shift to Making Tax Digital for Income Tax Self Assessment (ITSA), which will be implemented from April 2026.

This forms part of the move to digitise the tax system, with sole traders and landlords earning above £50,000 being required to file their tax returns using MTD-compliant software from April 2026. This will extend to those earning above £30,000 from April 2027.

You may be able to voluntarily register for MTD for ITSA early – you can check if you are eligible here.

Why should you file early?

The first day of the tax year, 6 April, saw a substantial number of filings, with nearly 70,000 people submitting their returns.

Filing early offers numerous advantages. It allows more time to ensure your return is accurate and complete, potentially avoiding common errors associated with rushed submissions.

If you’d rather take the pressure off yourself, our tax team can prepare and file your tax return for you, providing the peace of mind that you are fulfilling your tax obligations on time.

Preparing your tax return early with the support of an accountant can also help with budgeting, by providing early insight into any tax owed or refunds due.

To aid in managing finances, HMRC offers the option to set up a budget payment plan, allowing taxpayers to make incremental payments towards their next tax bill through direct debits.

Refunds on overpaid tax are processed sooner for early filers, and the status of these can be checked using the HMRC app.

As the year progresses, taxpayers are encouraged to take advantage of these options, ensuring a smoother and more efficient tax filing experience.

If you would like assistance with filing your Self Assessments or require specific advice, please contact us today.

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Whilst busy periods can inspire both excitement and dread for many business owners, ensuring that you are prepared can help you cope with the rush.

Stay organised

One of the best things you can do for your seasonal business is to stay organised. This can help streamline your business and ensure that nothing is getting in the way of your workflow.

Staying on top of your tools, equipment, and workspace can not only ensure that work can be carried out more efficiently but also help to avoid employees getting injured.

You should also ensure that your staff are organised. This should include ensuring that all employees are fully trained and understand their responsibilities within the company. When this is done correctly, it will allow you to delegate tasks that can free your time for more pressing matters.

Prepare in advance

As part of staying organised, it is important to prepare in advance for your busy periods.

Leaving tasks to the last minute can jeopardise your business’s chance of success. Getting everything together with time to spare can ensure that you are ready to take on the rush.

Preparations should include:

• Purchasing stock
• Hiring seasonal staff
• Repairing tools and equipment in advance
• Refreshing anything that may be outdated
• Preparing marketing campaigns to draw in customers
• Updating your business plan

By doing this, you can ensure that your business is prepared to maximise profits when the rush comes.

Managing your cash flow

As your business heads into the busy season, it may be tempting to put your profits to good use immediately. However, when it comes to seasonal business, managing your cash flow is key.

For example, spending money on supplies should be done strategically for future increases in demand. Buying stock and supplies towards the end of the busy period could see your products and services going to waste, and profits being lost.

Hiring an accountant can help manage your cash flow more effectively. They will be able to provide insightful advice on your seasonal business, whilst providing guidance on your business plans and strategy.

If you would like further guidance on your seasonal business, get in touch with our team today.

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The updated regulations came into force on 5 April 2024 in the hopes of improved prompt payment practices for businesses across the country.

Background of the payment practices reporting regime

Introduced originally in 2017, the Payment Practices Reporting Regime was designed to enhance transparency in how large businesses handle their payments to suppliers, aiming to encourage a culture shift towards prompt payment.

The regime requires large companies and limited liability partnerships (LLPs) to report biannually on various aspects of their payment practices and performance, including average payment times and the percentage of invoices settled within agreed terms.

These reports are made publicly available on a Government-hosted website, providing valuable insights for small businesses and enhancing market transparency.

What’s new in the 2024 regulations?

The 2024 Regulations have not only extended the duration of these reporting requirements until 6 April 2031 but have also introduced several significant updates to the reporting process.

Businesses must now report on the proportion of invoices that are disputed and subsequently result in late payments beyond the agreed terms.

There is a new requirement to report the total value of payments made within a 30-day period, as well as the total value of payments not made within the payment period.

The amendments provide clarity on how to report payments when third-party supply chain finance providers are involved, ensuring that all aspects of payment processes are transparent.

Increased longevity and continued review

With the regime now extended to 2031, and a scheduled review by 2029, the Government has committed to ongoing evaluation and improvement of the payment practices landscape.

Why this matters

For small businesses, late payments can restrict cash flow, limit growth opportunities, and in severe cases, risk business viability.

By forcing larger businesses to maintain transparency about their payment practices, the regime aims to empower small businesses to make informed decisions about who they do business with based on these companies’ track records.

Implications for large businesses

Large organisations need to be vigilant in their compliance with these updated regulations. This involves not only following the detailed reporting requirements but also actively managing payment processes to avoid damage to reputation.

Ensuring accuracy in these reports is crucial, as discrepancies can lead to legal consequences and damage to business relationships.

Looking ahead

The Government is set to release updated guidance for businesses covered by these regulations, which will provide further details on complying with the new requirements.

Contact us today to discuss how we can support your business in adapting to these new regulatory requirements.

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According to HMRC, travel from an employee’s home to their main office is not eligible for tax relief.

As the adoption of hybrid working models increases among office-based employees, there has been a significant discourse around whether trips to the office should be considered as ‘journeys in the performance of the duties of employment’.

Typically, travel expenses that are necessary for performing one’s job are eligible for tax relief.

However, HMRC maintains that commuting to and from the workplace, unless it is a temporary place of work, does not qualify for tax relief.

The rationale provided is that choosing to live at a particular location is a personal decision, and thus the costs associated with commuting from home to work are deemed personal expenses, not essential job requirements.

Nevertheless, HMRC has specified that if an employee performs substantial duties from home, as often seen in predominantly remote contracts, they may be entitled to tax relief for travel costs to the office.

This applies if such travel is necessary for the performance of their duties or is stipulated by their contract.

For those eligible, tax relief can be claimed at the following rates:

• 45p for cars and vans for the first ten thousand miles in each tax year
• 25p for cars and vans for each mile over ten thousand miles
• 24p for motorcycles
• 20p for bicycles

HMRC also offers a convenient online tool to help determine if individuals can claim relief on expenses incurred while performing their duties.

For further guidance on claiming tax relief on work-related expenses and to check your eligibility, please consult our expert team today.

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They contain key financial information about a business to show its performance.

Whilst these are not mandatory, using Management Accounts can allow for better-informed decision-making and closer monitoring of progress towards goals and targets.

What should a Management Account include?

For many businesses, Management Accounts will include the same things. However, depending on the size and complexity of your company, they can be customised to include the information that you need.

In general, Management Accounts should include:

• Profit and loss report detailing your company’s revenue, costs, and profits
• Balance sheet showing your company’s assets, liabilities, and equity
• Cashflow statement and forecast showing your company’s cashflow throughout the accounting period
• Key performance indicators (KPIs) measuring your company’s performance, including sales growth, profitability, and feedback
• Budget comparison that highlights your company’s performance against its budget
• Analysis and commentary that sums up the above information and highlights any trends and issues that need addressing.

Who are Management Accounts for?

There are no specific recipients for your Management Accounts. They are designed to be seen by those who need financial information about your business, but this will vary depending on the size and structure of your business.

In short, Management Accounts can be seen by anyone who has a stake or interest in the finances of your business. This includes but is not limited to:

• Owners
• Shareholders
• Board members
• Senior management
• Accountants
• Tax advisors
• Investors

These people will then be able to make decisions based on the information that they are presented with.

Why are Management Accounts so important?

Regularly collating and analysing financial data in these reports is an excellent tool for ensuring the right decisions are being made for your business.

Without Management Accounts, issues and trends within your company may go unnoticed for long periods. This could lead to a lack of growth and poor decision-making.

Having up-to-date and correct information on hand can help promote the growth of your business. Good, data-driven decisions can help skyrocket your business above your competitors.

Preparing Management Accounts

When it comes to preparing Management Accounts, having an accountant on hand can help you to simplify the process.

They can help you to gather the relevant information and help you to prepare your:

• Balance sheet
• Profit and loss report
• A cashflow statement
• An analysis of financial data

From here, you can take your Management Accounts to the relevant parties and relay the information.

An accountant will also be able to offer practical business advice and support, identifying your market trends and influencing key decisions.

Get in touch today to find out how we can help you prepare Management Accounts.

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If you a business owner and are contemplating redundancies as a strategy for cost-cutting and restructuring, then you will need to understand the implications of these regulatory changes on your redundancy procedures.

What is the current legal framework?

Up until 5 April 2024, employees on maternity, adoption, or shared parental leave benefit from a ‘protected period’.

During this time, should they face redundancy, they have the right to receive offers of alternative employment ahead of other employees also at risk.

This alternative position must be suitable and must not be inferior in regards to their current role.

If you fail to offer such priority to your employees, the dismissal can be deemed automatically unfair.

You need to offer these priority positions even if you consider other candidates as more fitting for the role.

However, if the prioritised employee declines your offer, or if more than one vacancy exists, you may then extend the offer to other staff, provided you have reached an agreement with those in the priority group.

Are there any upcoming changes?

The extent of these regulations will widen from 6 April to include pregnant employees from the moment they inform their employer of their pregnancy.

Additionally, the protection period for individuals on maternity, shared parental, or adoption leave will extend to 18 months after the expected birth or adoption of the child.

It is important to note that this extended protection applies only if at least six weeks of the shared parental leave is taken.

How to implement redundancies under the new legislation

When you implement redundancies, it is crucial you prioritise those eligible for alternative positions correctly.

Redundancy consultation representatives must be aware of employees who have recently returned from maternity, shared parental, or adoption leave – this included the dates these leaves were taken, as well as any pregnant employees facing redundancy.

Once prioritised individuals have been considered for alternative roles, any remaining positions can be offered to other employees.

Is statutory redundancy pay changing?

You, as an employer, must ensure your employees who are not offered or refuse suitable alternative roles without just cause receive redundancy payments – this is provided they have been employed for a minimum of two years.

According to Government guidelines, redundancy payments should be calculated as follows:

• Half a week’s salary for each full year of service below 22 years of age
• A full week’s salary for each full year of service at 22 years of age or older
• One and a half week’s salary for each full year of service at 41 years of age or older, with a service cap of 20 years

Employees who decline these offered suitable positions, without a legitimate reason, forfeit their right to statutory redundancy pay.

If you would like guidance on business restructuring, reduction of cost, or the redundancy process, please get in touch with a member of our team today.

The post How will redundancy regulations for new parents change from 6 April? appeared first on Grunberg & Co.

It is important consider your pension contributions, salary sacrifices and Capital Gains Tax allowances for you to receive the right benefits for you.

There are range of tax-free allowances you should consider using before the end of the tax year on 5 April and this is detailed below.

Personal allowance and dividends

The first £12,570 of your income is covered by your personal allowance and is received tax-free unless your total income exceeds £100,000.

An additional £1,000 of dividend income is covered by dividend allowance (if not already covered by the personal allowance).

This means there is no tax to pay.

If you are a basic rate or higher rate taxpayer, you can also benefit from the personal savings allowance.

This means the first £1,000/£500 (respectively) of interest is free from tax.

Capital Gains Tax

It is important to consider and use the Capital Gains Tax (CGT) annual exempt amount.

This will mean you could receive up to £6,000 of capital gains completely tax-free.

You could potentially use this to further re-invest the gains.

You do need to know that, from April 2024, the amount will reduce to £3,000 per annum and, if you do not already do tax returns, you will need to if your gains exceed £3,000 in future years.

ISAs

Using an ISA would mean you automatically get zero interest on up to £20,000 worth of interest.

These are a great way of making investments as they allow you to make full use of the annual limits for contributions to your ISAs.

Any growth, income, and gains within these are again completely tax-free.

The annual maximum amount for an adult, that can be saved in ISAs, is £20,000 in a combination of ways through stocks, shares, innovative finance, or cash.

If you have children, they can have a junior ISA with a maximum of £9,000, up to the age of 18.

Pensions

There is sometimes confusion surrounding the rules of pensions but, when properly understood, they can be another way to reduce your tax liability.

You can use up your personal allowance for pension contributions – the amount you put in which largely depend on the amount of your income for the year, what the income is, and what unused allowances you have from the three prior tax years.

At a minimum, you can make pension contributions of up to £3,600 (gross) in the year and an annual allowance of up to £60,000.

Contributions to your personal pension will also reduce your adjusted net income thus there might be benefits if your income is between £100,000 and £125,140.

This applies where the personal allowance is reduced or for those with income between £50,000 and £60,000 who are subject to the High Income Child Benefit Charge (HICBC).

Always remember to take care with your pension contributions so as not to exceed the annual allowance.

It is crucial to maximise your tax allowances whilst they are still around.

If you would like to make the most of your tax-free allowances before 5 April, get in touch with a member of our team today.

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Business loans are a common and accessible form of funding but with interest rates set to remain at 5.25 per cent, repayments have become more difficult.

You must take steps to manage your debts early before they become a bigger issue for your business.

Prioritise your debts

The first step to managing your business debts is to put your debts in order of priority.

Your priority will depend on the severity and extent of your debts, but we recommend that you prioritise:

• Business rates
• Utility bills
• Mortgage or rental payments
• Tax bills
• Payments to important suppliers
• Bank loans
• Any borrowing with a personal guarantee.

By ordering your debts as the first point of call, you have started a strategy for how to deal with your debts.

Communicate with your creditors

You must keep open communication with the people you owe money to.

This allows you to explain your situation and potentially negotiate more favourable terms, such as a new payment plan with extended time to repay or more affordable repayments.

They may also be able to provide you with advice on repayments.

Involve the team

If your business operates with multiple directors or higher management, it is beneficial to get them involved in your finances.

Not only does this allow you to pull together, but other team members can bring knowledge and expertise that you might not necessarily have to the table. This will allow you to identify potential strategies you may not have considered.

Improve your cashflow

Improving your cash flow will allow you to have a better chance of repaying your debts.

To do this, you should:

• Cut unnecessary costs and expenses
• Ensure your clients and customers pay on time
• Carry less stock to fit your demand

By doing this, you can potentially free up some money that you can use to directly pay off your debts.

Raising funds

There are ways you can raise money to help with your debts.

Of course, finding investment when you are in debt will be tough, as investors are unlikely to support a business that is in financial difficulty.

If it is only a rough patch, you may be able to source a cornerstone investor. However, they will likely request a substantial equity stake in your business, which could impact your finances and business decisions further down the line.

There are alternatives to traditional investment that you should consider:

• Borrowing from family and friends – but make sure you have written agreements in place for repayments
• Liquidate your assets
• Crowdfunding

Whilst these can all work to raise money, it is best to talk to an expert about the options available to you.

Get expert advice

If you are struggling with your business finances, it may seem counterintuitive to spend money on an accountant. However, working with an accountant can help you to find solutions to your debts and improve your cash flow.

An accountant can help you prioritise your debts, improve your cash flow, and identify areas where you may be able to cut costs.

They can also help you restructure your business plan to make minimizing your debts and increasing your profits a top priority.

Get in touch with our team today for further help and advice.

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As well as the added administrative duties to ensure you are paying the correct wage, the significant rises in the rates of pay are likely to impact your cash flow position.

Balancing the need for compliance and protecting your business from increased costs requires careful consideration.

We recommend seeking our advice to effectively evaluate your current business systems to identify the most-effective ways to manage an increase in costs.

What are the changes?

From 1 April, the National Living Wage (NLW) will expand to include those who are 21 years old.

Any employees affected by this change will need to be moved onto the NLW when necessary.

Here is a reminder of the new rates:

As well as an increase in the minimum wage, there will also be an increase in Statutory Sick Pay – the pay will rise from 6 April, increasing from £109.40 to £116.75.

The increase in these rates could also affect your payroll so you need to know what to do to avoid these risks.

The new rates of pay will take effect from 1 April for NLW and NMW, and 6 April for SSP – it is important you know how to protect your business before these dates.

For example, an inefficient payroll might lead to the underpayment of staff which could lead to reduced productivity and a loss in staff overall.

Here’s how you can maintain a successful payroll amongst rising rates of pay:

• Conduct an audit – it is important to conduct a full audit as it will assess your current process and identify opportunities where you can implement more effective procedures.
• Improve communication – catch-up with your payroll staff to ensure they are completing tasks on time and accurately or if they need more support.
• Check your data – sometimes these errors can occur due to incorrect employee onboarding information; make sure your employees regularly update their details in case their circumstances affect payroll.
• Train your employees – if you have an in-house payroll team, make sure they are full trained and are updated annually with any changes to legislation. You might choose to outsource your payroll instead which can help to free up valuable time, reduce ongoing costs and provide you with the knowledge your payroll will be accurate and timely – get in touch with our payroll experts for more
• Invest in payroll software – human errors are unavoidable so using payroll software will help to both prevent and identify errors. The software will make your payroll process more efficient and compliant whilst also reducing human input and overall increasing accuracy.

An efficient payroll allows you to pay your employees correctly and on time, all the time – seeking the advice of our experts will help to combat these potential challenges.

How can I protect my business against the changes?

The rising rates of payment for workers might present you with the challenge of balancing compliance with your tax obligations and profitability for your business.

Before the new rates come into effect from April, you should manage and minimise your costs through strategic planning.

Strategies you might consider include:

• Optimising staffing efficiency – you should analyse your peak and off-peak times to adjust your staffing levels accordingly. This will ensure you have sufficient workers to cope with any busy periods you encounter whilst not underpaying your staff during slow periods.
• Upskilling your employees – invest in your current team as this will enhance productivity and retain employees whilst increasing your employees’ capability. This will further increase the satisfaction of your customers and reduce recruitment costs – you need to implement technology to automate your mundane tasks (like processing orders or managing your inventory) as this will reduce manual labour costs and increase efficiency.
• Strategically adjusting your prices – any and all price increases must be clearly communicated and justified to customers to avoid deterring them.

It is important you comply with the new NMW rates as you risk financial penalties as well making possible back payments to your employees.

The changes made to these rates of pay might affect your employees – it is crucial you know how the changes will affect your business and what you can do to implement them before they come into effect.

Our experts can offer you tailored advice on how to adjust to the changes and minimise your costs to ensure compliance.

If you would like to know more about how the new rates of minimum wage and sick pay with affect you, please contact us today.

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Having an accountant on hand offers more than just someone to manage your taxes.

By having an expert on board to plan and monitor your finances, your start-up’s chance of success increases dramatically.

Expert advice

No matter how much research you have conducted before starting your business, there will always be holes in your planning.

An accountant can offer a critical eye to identify any pitfalls in your business plans.

You will also receive guidance on investment and growth decisions, such as where you can source funding and resource management.

Budgeting

Whilst it may sound simple, budgeting for your start-up takes careful consideration.

You must consider all your expenses. Depending on your business, these could include:

• Employing staff
• Marketing
• Materials
• Purchasing or upgrading equipment
• Rent and utilities

An accountant can help you identify which expenses are essential, and allocate a weekly, monthly, or quarterly budget.

Budgets can be difficult to stick to, particularly if you have set your own. However, when you have the aid of an accountant, you can rely on them to keep track of your business accounts and identify areas in which you could be reducing spending.

Saving you time

Time is precious, especially if you run a business.

Tasks such as managing your accounts, following your tax obligations, and managing your bookkeeping can be longwinded, time-consuming, and tedious.

Outsourcing these tasks to an accountant can buy you valuable time to invest back into your business.

Moreover, your accountant can ensure that everything is done correctly from the beginning, so you don’t have to waste time changing how you run your business.

Improved cash flow management

Cash flow management is a top priority for many business owners.

Even if your business is successful overall, with poor cash flow management you could find yourself in a financial predicament.

An accountant can analyse your business to help predict patterns of increased expenses and decreased profits. With this data, they will be able to ensure that your business always has enough money to cover all its expenses.

Ensured compliance

Being compliant is a vital aspect of a successful business.

Staying on top of your tax obligations, payroll, and expenses can be tough.

An accountant can help manage these for you. From keeping your accounts and financial data updated to staying on top of deadlines, your accountant can ensure that your business has nothing to worry about.

Hiring an accountant

It is best to get in contact with an accountant as soon as you set out on your business venture.

However, an accountant can come on board at any point in your start-up journey to provide advice and help with compliance.

If you would like to find out how an accountant can help your start-up, get in touch with our team today.

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