There are approximately 5.6 million businesses in the UK, of which 98% are considered small to medium sized businesses. So, we small businesses are crucial to the UK economy, there is no denying this.

Whether you are a start-up and excited for the times ahead, or an establishment renewing your challenges, we all want to be successful with our business. In our latest blog, we talk about tips we think are vital to any business.

We all have a vision in mind, of where we’d like to see our business in the future. This vision needs to be translated on paper as your business plan. A business plan is a must for all business owners. This can help outside investors get an insight of your business, for if ever you need funding to grow your business.

Business Plan

A business plan should consist of;

·    Summary – What is your purpose, what is your vision?

·    Target market – Who are you likely to sell to

·    Competitors – What is your rivals weakness? Why are you different?

·    Staff – Do you need people to help run your business. What level of skill and pay is required?

·    Suppliers – Who will be your main supplier?

·    Marketing Plan – How will you advertise yourself to the world

·    Operations – Which is the best way to run your business.

·    Finance – How much money do you need? Determine the profitability of the business.

Business Structure

As well as a business plan, you will need to have a business structure. Sole trader, partnerships and limited companies all have their own pros and cons. Deciding which structure to choose is not always straightforward. If an asset is owned outright, then you would need to consider retaining personal ownership on incorporation. If you’re not sure which structure model you should go for, then here at Cross Accounting we can give tailored advice to you.

Year End

We cannot stress enough the importance of doing your year end as early as possible. Once completed, this will give you peace of mind as you will not have to worry, until next year. It will also give you more time to budget for your tax bill. You will not be in a rush to find the money for the tax bill and not kill your cashflow. Keep all receipts for your expenses, these will all help lower the tax bill. If you buy equipment or tools, mobile phone bills, petrol, these are all deductible. HMRC can conduct random spot checks, so it’s important to keep paperwork, recommended for 6 years.

Budgeting

Having budgets in place for your business can help you predict the near future. This allows you to have a spending plan, so you can make sure you have money for the things you need and the things that are important to you. You can see what is eating up your cash and avoid spending on unnecessary fees. Below is an example of a very simple budget.

These tips will keep you motivated and more importantly give you an idea of where your finances lay, helping you to quickly identify if there are rainy days ahead.

If you need expert tailored advice, please do get in touch as we are always happy to help.

There is always new rates and thresholds that come in to place in the new financial year.

The National Minimum Wage rate has gone up, however, the personal threshold has stayed the same.

Personal Allowance

The personal allowance is the amount you can earn without having to pay any tax.

This financial year 2023-24 is £12,570

National Insurance Rates

As an employee, you will pay Class 1 NI rates. If you earn above the primary threshold, then you will play Class 1 NI. The primary threshold for 2023-24 are £242 a week, or, £1,048 a month, or, £12,570 a year.

You will pay an additional 2% if you are in the upper earning limit. The upper earning limit are £967 a week, or, £4,189 a month, or, £50,270 a year

As an employer, you will have to pay national insurance on your staff members. This includes if you are a sole director on payroll. The rate applies to earnings above the secondary threshold. The secondary threshold for 2023-24 are £175 a week, or, £758 a month, or, £9,100 a year.

Employment Allowance

Employment Allowance allows eligible employers to reduce their annual National Insurance liability by up to the annual allowance amount. For the year 2023-24 this is £5,000

National Minimum Wage

The National Minimum Wage is the minimum pay per hour all workers are entitled to by law. These rates apply from 1 April 2023

SSP Statutory Sick Pay

Employees are entitled to SSP if they are off work for 3+ days. The same weekly Statutory Sick Pay rate applies to all employees. However, the amount you must actually pay an employee for each day they’re off work due to illness (the daily rate) depends on the number of ‘qualifying days’ they work each week.

If you want to ensure you are not breaking the payroll rules with NMW and SSP, message us to see how we can help.

If you do not understand the personal allowance threshold give us a call on our Cardiff or Bridgend office where the team will be happy to help.