Category: Business Support

E-invoicing consultation

HMRC together with the Department for Business and Trade (DBT) have launched a new consultation on e-invoicing to encourage its broader adoption among UK businesses and government departments. The consultation will run for 12-weeks and aims to cut paperwork for businesses and help improve productivity.

This is the first time that UK businesses have been invited to have their say on the government’s electronic invoicing (e-invoicing) proposals.

E-invoicing is the digital exchange of invoice information directly between buyers and suppliers. It could help businesses get their tax right first time, reduce invoicing and data errors, improve the accuracy of VAT returns, help close the tax gap and save time and money. It usually results in faster business to business payments, leading to improved cash flow and less paperwork.

HMRC provided the following example of where e-invoicing has improved cash flow. A UK NHS trust where e-invoices are ready for processing within 24 hours, compared to 10 days under paper invoicing. Their e-invoices are typically paid almost twice as quickly than paper invoices, with supplier queries reduced by an average of 15%.

Topics that the government is interested in exploring as part of the consultation include:

• different models of e-invoicing;
• whether to take a mandated or voluntary approach to e-invoicing, and what scope of mandate might be most appropriate in the UK and for businesses; and
• whether e-invoicing should be complemented by real time digital reporting.

With potential benefits like faster payments and fewer errors, e-invoicing could help UK businesses save time and money. If you are interested in sharing your thoughts, the consultation is open until 7 May 2025.

Should you incorporate your business?

Deciding whether to incorporate your business in the UK involves evaluating several key factors:

Limited Liability Protection

Incorporating as a limited company creates a separate legal entity, safeguarding your personal assets from business debts and liabilities. This means your personal finances remain protected if the business faces financial difficulties.

Tax Implications

Operating as a limited company can offer tax advantages. Companies pay Corporation Tax on all trading profits at a maximum rate of 25%; for smaller companies, this rate can be as low as 19%. Additionally, dividends distributed to shareholders are not subject to National Insurance, potentially providing a more tax-efficient method of remuneration.

Administrative Responsibilities

Incorporation brings increased administrative duties, including:

• Regulatory Compliance: Registering with Companies House, filing annual accounts, and submitting confirmation statements are mandatory.
• Record Keeping: Maintaining detailed financial records is essential to meet legal obligations.
• Costs: Expenses include registration fees and potential professional services for compliance.

Professional Image and Credibility

A limited company structure can enhance your business's credibility, potentially attracting more clients and investors. This formal structure often instils greater confidence among stakeholders.

Business Growth and Investment

Incorporation facilitates business expansion by allowing:

• Equity Sharing: Issuing shares to raise capital from investors.
• Succession Planning: Simplifying ownership transfer, ensuring business continuity.

Conclusion

Incorporating your business offers benefits like limited liability and potential tax efficiencies but comes with added administrative responsibilities. It's crucial to assess your specific circumstances, financial goals, and the current economic environment. Please call if you need help considering your options.

How to Check the Creditworthiness of New Customers

Before extending credit to new customers, it’s essential to assess their financial reliability. Checking their creditworthiness helps protect your business from potential losses and late payments. Here’s how to do it:

• Start by requesting basic financial information from the customer, including company details, trading history, and references from suppliers. Established businesses should be able to provide trade references that confirm their payment behaviour.
• Conduct a credit check using a business credit reference agency such as Experian, Equifax, or Credit safe. These agencies provide credit scores and reports on a company’s financial health, outstanding debts, and payment history. For individual customers, you may need their consent to run a personal credit check.
• Review the customer’s filed accounts at Companies House if they are a UK-registered business. Financial statements, including balance sheets and profit and loss accounts, offer insight into their financial stability. A company with poor liquidity or persistent losses may pose a credit risk.
• Check for County Court Judgments (CCJs) or insolvency records. If a business or individual has a history of unpaid debts or legal action, this could indicate a higher risk of non-payment.
• Set appropriate credit limits and payment terms based on the information gathered. If necessary, request upfront payments or guarantees to minimise risks.

Finally, monitor ongoing customer creditworthiness. Even reliable customers can experience financial difficulties, so it’s important to review accounts periodically and adjust credit terms when necessary.

A Small Business Guide to Exporting and International Trade

Expanding into international markets can be a game-changer for UK small businesses, opening up new revenue streams and increasing business resilience. With the right knowledge and support, even small firms can successfully sell their products and services abroad. The UK government offers various resources to help businesses navigate the complexities of exporting.

Why Exporting Matters for Small Businesses

Exporting allows businesses to diversify their customer base, reduce dependency on the domestic market, and increase profitability. The UK has strong trade links with Europe, the United States, and emerging economies, providing numerous opportunities for businesses to grow.

However, international trade comes with challenges, including understanding customs regulations, dealing with fluctuating exchange rates, and adapting products to different markets. That’s where government support comes in.

Government Support for Exporting

The Department for Business and Trade (DBT) provides extensive resources to help small businesses start or expand their export operations, including:

• Export Academy – A free training programme designed to help businesses understand the basics of international trade.
• UK Export Finance (UKEF) – Provides financial support such as export insurance, loans, and guarantees to protect against non-payment risks.
• Market Research and Guidance – Access to information on demand for products in different countries, cultural considerations, and regulatory requirements.

Steps to Start Exporting

1. Identify Your Target Markets – Research countries where there is demand for your product or service.
2. Understand Customs and Compliance – Each country has its own regulations for imports, and businesses must comply with local laws.
3. Consider Logistics and Shipping – Work with freight forwarders or couriers who specialise in international shipping.
4. Adapt to Local Preferences – Modifying packaging, pricing, or marketing strategies to suit the target audience can enhance success.
5. Use Trade Shows and Networking – Attending international trade fairs can help you connect with potential buyers and distributors.

With the right support and careful planning, small businesses can leverage international markets to achieve long-term success.

Late Payment Support for Small Businesses – How to Protect Your Cash Flow

Cash flow is the backbone of any small business, yet late payments continue to be a major challenge for entrepreneurs across the UK. According to the Federation of Small Businesses (FSB), around 50,000 businesses close annually due to cash flow problems caused by overdue invoices. To help combat this issue, the UK government has set up the Small Business Commissioner (SBC) to support businesses in tackling late payment disputes and improving payment practices.

Why Late Payments Are a Problem

Late payments can cause severe disruptions to business operations, affecting your ability to pay employees, invest in growth, and maintain supplier relationships. Delays in receiving funds can lead to increased borrowing, higher interest payments, and unnecessary stress for business owners. Worse still, chasing unpaid invoices can be time-consuming and frustrating.

How the Small Business Commissioner Can Help

The SBC is an independent public body that provides free support and advice to small businesses dealing with late payment issues. Services include:

• Advisory Services – Guidance on how to prevent and manage late payments.
• Complaint Resolution – Assisting small businesses in resolving disputes with larger firms over unpaid invoices.
• Webinars and Educational Resources – Free workshops, webinars, and guidance on improving payment practices.

Practical Steps to Avoid Late Payments

To protect your business from cash flow disruptions caused by late payments, consider these strategies:

1. Set Clear Payment Terms – Ensure that all contracts specify payment deadlines, late payment penalties, and accepted payment methods.
2. Invoice Promptly – Send invoices as soon as work is completed, or goods are delivered and follow up promptly.
3. Use Digital Invoicing and Payment Tracking – Tools like QuickBooks, Xero, or Sage can automate reminders and track payments efficiently.
4. Charge Late Payment Interest – Under the Late Payment of Commercial Debts Act, businesses can charge interest on overdue payments.
5. Seek Mediation or Legal Action – If payment disputes escalate, consider mediation through the SBC or taking legal action.

By implementing proactive measures and utilising available support, small businesses can reduce the impact of late payments and maintain a stable financial position.

Investing in new equipment for your business?

Making a significant investment in new equipment can be a transformative step for a business, improving efficiency, productivity, and competitiveness. However, such a decision requires careful planning and analysis to ensure the investment aligns with the business's long-term goals.

1. Cost and Financing

The upfront cost of new equipment can be substantial, so businesses must assess their budgetary constraints. Consider whether the purchase will be financed through cash reserves, loans, or leasing arrangements. Compare interest rates and tax implications of each option and ensure the business can comfortably manage the repayment terms if borrowing is required.

2. Return on Investment (ROI)

Evaluate how the new equipment will impact productivity and profitability. Will it enable cost savings through greater efficiency, reduce downtime, or enhance product quality? A detailed ROI analysis should include all associated costs, such as installation, training, and maintenance.

3. Suitability and Scalability

The equipment must meet current operational needs and be flexible enough to adapt to future requirements. Consider whether the investment aligns with projected business growth and whether it can integrate with existing systems and processes.

4. Technology and Innovation

With technology evolving rapidly, it's important to choose equipment that won’t quickly become obsolete. Assess whether the purchase includes future-proof features, software updates, or warranties that extend its useful life.

5. Compliance and Environmental Impact

Ensure the equipment complies with industry regulations and health and safety standards. Additionally, businesses should evaluate its environmental impact, as eco-friendly investments can lead to cost savings and improve corporate responsibility.

6. Training and Maintenance

Factor in the time and resources needed to train staff to use the equipment effectively. Ongoing maintenance and repair costs should also be included in the financial analysis.

By thoroughly considering these factors, businesses can make informed decisions that maximise the benefits of their investment while minimising risks.

Why Protecting Intellectual Property is Important

Intellectual property (IP) refers to creations of the mind, such as inventions, literary works, designs, brand names, and artistic outputs. Whether you are a business owner, inventor, writer, or entrepreneur, protecting your intellectual property is essential for several compelling reasons.

Encourages Innovation and Creativity
Protecting IP incentivises individuals and businesses to invest in creating something new. Without IP protection, others could freely copy or reproduce a creator's hard work without consent, undermining the effort and resources invested. By offering legal rights such as patents, trademarks, and copyrights, innovators can enjoy a competitive edge, encouraging further investment in research and development.

Safeguards Revenue Streams
IP often becomes a valuable asset that can generate income. Businesses can licence their IP to others, sell their rights, or directly benefit from exclusive use. For example, an author can earn royalties from book sales, while a tech company can monetise patents for its software. Without protection, competitors could undercut pricing by copying the product, stripping away potential revenue.

Builds Brand Identity and Consumer Trust
Trademarks, logos, and brand names play a huge role in distinguishing businesses from one another. When customers see a trusted brand's logo, they associate it with quality and reliability. Protecting trademarks ensures no one else can use similar branding to mislead customers. Without this protection, businesses risk losing their reputation and consumer trust.

Provides Legal Recourse
Registering your IP grants you legal rights to act against anyone using your work without permission. Whether it’s unauthorised copying of a design or misuse of a trademark, IP protection allows you to seek remedies, such as damages or an injunction to stop further infringement.

Adds Business Value
IP contributes to the overall value of a business, often representing a significant share of its assets. Strong IP rights can make a business more attractive to investors or buyers because they provide a competitive advantage and predictable revenue. Startups, for example, frequently leverage IP as a selling point when securing funding.

Promotes Economic Growth
On a larger scale, protecting IP fuels economic growth by encouraging innovation and job creation. Industries such as technology, pharmaceuticals, and entertainment rely heavily on IP rights to thrive. By protecting ideas, society benefits from a continuous flow of new inventions, products, and creative works.

In summary, protecting intellectual property is vital for fostering innovation, safeguarding financial interests, and building strong businesses. It provides creators with the recognition, reward, and rights they deserve, benefiting both individuals and the wider economy.

Government Unlocks Success for Small Businesses

Small businesses across the UK can now access streamlined support and advice through the newly launched Business Growth Service, designed to simplify and enhance the way SMEs engage with government resources.

Simplifying Support for SMEs

Navigating government support has often been a challenge for small and medium-sized enterprises (SMEs). In 2023, only 26% of UK SME employers sought external advice, reflecting the complexity of available resources. The Business Growth Service aims to address this by consolidating support into a single, user-friendly platform.

Launching in 2025, the service will offer:

• Revamped Web Interface: A modern, intuitive website for easy navigation.
• Collaborative Development: Built in partnership with businesses and local governments.
• Localised Delivery: Tailored support to meet regional business needs.

Inspired by successful international business models, this service is part of the government’s broader strategy to boost SMEs' growth, productivity, and economic impact.

Reducing Administrative Burdens

Small business owners spend over 33 hours each month on admin tasks. The new service seeks to cut through bureaucracy, freeing up time for entrepreneurs to focus on growth and innovation.

Government Commitment to SMEs

The Business and Trade Secretary reaffirmed the government's dedication to SMEs stating that:

"This government’s Plan for Change will deliver economic growth, and for that to succeed we need SMEs right across the country to be exporting, hiring, and expanding."

Additional Measures Supporting Small Businesses

The Business Growth Service complements other initiatives, including:

• Financial Support: Programmes like Start Up Loans and Enterprise Finance Guarantee continue to offer capital access.
• Late Payment Crackdown: Strengthened measures ensure prompt payments to small businesses, improving cash flow.
• Regulatory Simplification: Reducing red tape to create a more business-friendly environment.

Looking Ahead

The Business Growth Service is a step-change in SME support, promising a centralized, accessible resource hub to help businesses navigate challenges and seize opportunities.

As the launch approaches, SMEs are encouraged to engage with the service’s development to ensure it meets their needs and supports their ambitions.

Launch Your Dream Business: 10 Must-Know Steps

Starting your own business is exciting but can be overwhelming if you’re not prepared. To help you navigate the journey, we’ve compiled a list of 10 key considerations that will set you up for success. Whether you’re launching a small business or a full-fledged enterprise, these steps will guide you toward building a solid foundation for your business dreams.

1. Define Your Business Idea

Before diving in, ensure your idea is viable. Ask yourself: What problem does my business solve? Who are my customers? Conduct market research to refine your offering and identify your unique selling point (USP).

2. Create a Business Plan

A solid business plan outlines your goals, target audience, financial projections, and operational strategies. This document not only serves as a roadmap but is also essential if you need to secure funding or investors.

3. Choose the Right Business Structure

Your legal structure—sole trader, partnership, or limited company—affects your tax obligations, personal liability, and regulatory requirements. Research which option aligns best with your vision.

4. Register Your Business

Ensure your business name is unique and not already registered. In the UK, you’ll need to register with HMRC or Companies House, depending on your chosen structure.

5. Understand Your Tax Obligations

Get familiar with taxes like Income Tax, Corporation Tax, and VAT. Keep accurate records and consider using accounting software or hiring an accountant to stay on top of deadlines and compliance.

6. Set a Realistic Budget

Financial planning is critical. Calculate your start-up costs, ongoing expenses, and expected revenue. Create a budget to ensure you’re financially prepared for the first 12 months of operation.

7. Open a Business Bank Account

Separate your personal and business finances. A dedicated business account simplifies accounting, helps with tax filing, and presents a more professional image to clients.

8. Build an Online Presence

In today’s digital age, having a strong online presence is non-negotiable. Create a professional website and set up social media profiles to showcase your products or services and engage with your audience.

9. Protect Your Business

Consider business insurance to protect against unexpected losses. Types include public liability, professional indemnity, and employer’s liability insurance if you plan to hire staff.

10. Comply with Legal and Regulatory Requirements

Depending on your industry, you may need specific licenses or permits. Also, ensure you adhere to health and safety regulations, data protection laws, and employment laws.

Conclusion: Set Yourself Up for Success

Starting a business can feel like a monumental task but breaking it down into these 10 key steps makes the process manageable. With careful planning and attention to detail, you can turn your entrepreneurial vision into a thriving reality.

Ready to take the first step? Give us a call, we can share the knowledge we have gained in supporting numerous businesses through the set-up process.