This Chancellor is Definitely For Turning!

By Amanda Vigar, Managing Partner, V&A Bell Brown LLP

Although some pundits have claimed that there were no shock announcements in the Autumn Statement, to me there were some quite unexpected and, from the Battle-Axe’s perspective, far from pleasing announcements.

The biggest headline grabber was undoubtedly the U-turn on tax credits.  Whilst most people seem to agree that the system needs to be completely overhauled to make it more attractive for people to work and strive to improve the quality of life of their family, we felt that what had been proposed harmed those who were trying to do just that.  Time for the Chancellor to re-do his homework!

For a long time, the Battle-Axe has been calling for a reform of the rates system.  So, the announcement of the abolition of the Uniform Business Rates and passing powers to local authorities is a step in the right direction.  However, the current proposals don’t go far enough because there is still the serious and outstanding issue of the movement in relative property values to be addressed.  So whilst Mr Osborne has rotated slightly on this he’s not turned enough for me.

One very welcome volte-face was over the proposals on travel expenses for contractors/freelancers.  

It seems that for now only the few that are caught by the draconian rules of IR35 will be affected.    I say “for now“ advisedly – HMRC and the Treasury are still muttering away about root and branch changes to the rules on the treatment of contractors. 

 Let’s hope that the potty proposals that were run up the mast recently implying that anyone on a contract lasting more than a month must be an employee have also been brushed right under the middle of the plush carpets of No 11.

Despite promising not to raise any of the existing taxes, Mr Osborne has managed to introduce another payroll tax – the apprentice levy.  

So businesses will be paying to train their staff and pay the levy – nice one George! 

Whilst it won’t (at least initially) hit smaller businesses you have to wonder how long it will be before the “allowance” that removes the new tax will disappear.

On a side note, the allowance against the apprentice levy was pretty much the only acknowledgement that there are small and medium sized entities driving the UK economy. 

The Battle-Axe’s team looked in vain for any really assistance to this massive section of the employing community.  Again, a missed opportunity to underpin a major driver of the UK’s economic growth disappointingly eclipsed by more grand political gesturing about the Northern Powerhouse and selling off of old prisons.

Oh, and don’t even get me on to the potential effect that the spending cuts will have on the already appalling quality of service we see from HMRC……right at the time when we’re all going to get our own digital tax accounts! 

Given that HMRC can’t currently match up the figures on their portal to the amounts they agree taxpayers owe or are owed goodness only knows what chaos the combination of personal digital tax accounts and spending cuts will have.

All in all, the Autumn Statement seems like an attempt to please various groups of highly vocal lobbyists and lacks focus on what is important to the wellbeing of the UK. 

We believe that this was a missed opportunity to help get people working to grow the economy.  Chances to make taking jobs really benefit people and to help employers to afford to expand their workforce and spend less time on red tape could (and for me should) have been in there.

Let’s just hope the Spring Budget is a bit more coherent.

It’s official – HMRC is not fit for purpose!

For fear of telling our beloved government, ‘I told you so,’ there are now official reports setting out just how horrendously badly HMRC is doing.

Maybe the House of Commons’ Public Accounts Committee could have just read the wise words of the Battle-Axe rather than spending money on a long report that concluded, ‘We are concerned that it has made little or no progress on a number of important issues that this Committee has raised before. The standard of customer service also remains unacceptable.’

Needless to say, I would put it somewhat stronger (and more succinctly) than that!

Sure, HMRC claims to be collecting more tax. However, this should be no surprise given that government figures say that the economy is gradually coming round.

Even then, I’m unconvinced this is the result of good management by HMRC rather than simply a sign that people are paying amounts that they don’t actually owe. We see, on a daily basis, taxpayers getting demands from HMRC, which simply aren’t right.

That’s no surprise as often one part of the HMRC system shows a radically different number to another part then, a few months later, we hear that HMRC has been issuing erroneous demands.

Strangely enough, the admission comes just long enough after the issue that a lot of people will have paid the penalty and, needless to say, refunds only appear if demanded by the taxpayer!

Possibly more shocking is the decline in customer service: only 50% of calls are being answered at all and only 39% are answered within five minutes. That’s against a target of 80%, which was seen to be ‘woefully inadequate and unambitious’, and significantly worse than last year. It is some achievement to miss the barn door by quite so many miles!

Our experience is that you can wait nearly an hour on hold, so I suspect this view of HMRC’s customer service is over generous because it doesn’t take into account the number of people who have given up even trying to ring them as they’ve never had a call answered!

When challenged over this, HMRC couldn’t say how they will improve; only commenting that ‘they are still struggling’. That should be no surprise as its performance measures don’t cover delivering a consistent, let alone an improving, level of service. It claims that its service levels have dropped as calls are taking longer than anticipated. Maybe if it introduced the long awaited ‘one and done’ system and made sure taxpayers and their agents have access to reliable, and consistent, information, the calls would be far shorter and fewer in number.

I for one won’t be holding my breath over this and fear that it will get worse before it gets better. Does anyone know of a desert island, with suitable Triathlon facilities of course, that a Battle-Axe, with the marks of a phone handset almost permanently embossed on her ear, can move to? 

Politicians 'steal' ideas from Business Battleaxe

By Amanda Vigar, Managing Partner, V&A Bell Brown LLP

While some commentators have accused George Osborne of stealing ideas from the Labour Party, those of us in the know realise that actually, they’ve both just been reading the Battle-Axe’s recommendations!  In particular, my call for a major reform of the business rates system.

For a long time, I have been an exponent of locally-raised money being spent locally.  Why have two systems of raising taxes when the money goes into the same pot? In fact our multiplicity of intertwined tax streams goes way beyond this – but that’s something for another Battle-Axe barrage!

The Chancellor has announced that local authorities will have the ability to set level of business rates and retain them for spending locally.  For me, it’s the first part of this that is the most important because it enables local government to set business rates to attract businesses into their area and, most importantly, to stay there as they grow.  There are plenty of reliefs for smaller businesses and wonders such as centrally-determined exemption zones, which have led to some very odd corporate structures to manipulate the system. We’ve seen companies moving from plush establishments in rates free zones to less salubrious premises as soon as full-scale rates kick in.  This means revenue is actually being lost!

The change will also mean that where spending decisions are made will be right next to the heart of the business community.  So, there should be far more local engagement in what the money should be spent on – if not, then the councillors may rapidly find they lose their seats!  With the drive towards the Northern Powerhouse, this move makes sense - otherwise it might turn out to be yet another pointless bit of Government spin.  Local businesses remote from London know the challenges of being heard when they’re outside the immediate range of vision of the Mandarins in Whitehall.

I was, however, very disappointed that none of the major parties have seen fit to deem it time for a re-valuation exercise.  The property values on which rates are based are now so woefully out of date that they’re not even close to reflecting the way that the country has developed over the last few decades.   The saving grace is that the ability to set rates locally means that, although the valuations are outdated, at least the pence per rateable value figures can be adjusted to smooth some of this effect.  That said, what if one are of a town is out of sync with another area – e.g. a new prestigious business park against an old run down area of industrial units that are not as easily accessible?

George’s comment:  “We will give councils extra power and responsibilities for running their communities” makes it fairly clear that (as ever!) there are likely more than a few devils in the detail.  My concern is that the headline grabbing announcements may turn into the proverbial Paper Tiger – much as I fear the whole Northern Powerhouse concept may be doomed to do as well.

I’d also like to take this opportunity to thank everyone who supported and sponsored me as I took on the Last of the Summer Tri, my first ever triathlon.   So far I’ve raised in excess of £1,500 with more donations still coming in.  It was one of the toughest challenges I’ve ever faced, but I have to say I enjoyed every minute of it.  The thought I was raising money for two very important causes, Motor Neurone Disease Association and One Good Turn, was a real motivator and helped drive me on.  

Turn that competitive streak into a charitable one!

By Amanda Vigar, Managing Partner, V&A Bell Brown LLP

It seems to have become something of a corporate competition - business owners trying to outdo each other with how heavy a workload they and their company has.

Complaining about not having enough hours in the day, how they have to burn the midnight oil all the time and staff having to work flat out are seen as a status symbol and a sign of success.

I hear so many variations on the same theme -

·         “We have to focus on the core business, we can’t afford to take our eye off the ball with outside distractions.”

·         “It is just a waste of time getting involved in that sort of thing.”

·         It’s not our responsibility to save the world.”

·         “Someone else can do all that touchy feely stuff.”

Come on - hands-up how many of you reading this Business Battle-axe column have been guilty of this?

Yes, business owners and their staff have to graft really hard to bring home the bacon. There is no getting away from that fact.

But I believe that every business owner has a social duty to make time in their hectic schedules for a bit of philanthropy. Being busy is simply no excuse.

Everyone can make time if they want to. And what could be better than finding a slot in the diary to do a bit of good for the local community or a worthy cause or charity?

There are great benefits in embracing corporate social responsibility.  You can help a cause close to your heart, it helps you take a well-earned break from the usual routine and grindstone, and then there is the feel good factor.

Why not get staff involved? – encouraging them to become volunteers or take part in charity events can enhance a firm’s personnel development strategy and help build teamwork. And not least give employees the chance to have a bit of fun.

Never let it be said that the Business Battle-axe does not practise what she preaches.

Having hit the age of 50, I have set myself the challenge of completing my first ever triathlon – the Last of the Summer Tri - in the name of charity.  Outside work most of my spare time is taken up training for this endurance test.

I am supporting the Motor Neurone Disease Association (MNDA) – a cause close to my heart as I lost my Dad to this horrible disease in 2013.  The other worthy cause is Huddersfield-based One Good Turn, which does great work improving the quality of life of individuals and families experiencing poverty and isolation.

For those who may be interested I have set up two mydonate pages:

MNDA - https://mydonate.bt.com/fundraisers/amandavigar1

One Good Turn - https://mydonate.bt.com/fundraisers/amandavigar2

So I am throwing down the gauntlet – or in my case a rolling pin!  How about turning that competitive streak into a charitable one?

My rallying cry is – come on all you business leaders across the Examiner’s circulation area I challenge you to follow my Business Battle-axe lead.

Find time to do something for a good cause. And don’t forget I won’t accept any excuse or take no for answer!

ENDS ­

Business Battle-axe Amanda Vigar is facing one of her toughest challenges ever – a triathlon in aid of two charities.

Amanda, who is Managing Partner at V&A Bell Brown, is taking part in the Last of the Summer Tri on October 4 to raise money for the Motor Neurone Disease Association and One Good Turn.

The endurance challenge will involve swimming 400 metres at Holmfirth Pool, riding a bicycle 24km around Holmfirth that has a total ascent of 320.14 m and a maximum elevation of 195.45m, and then running 5.6K on a similar route to the cycle.

Amanda, whose business is based in Holmfirth, said: “I like to exercise to wind down after a hard day’s work and I thought why not put this to good use by raising money for charity.  As I reached 50 this year, I told myself it was now or never!

“As the Business Battle-Axe, I am used to throwing down the gauntlet - or in my case brandishing my rolling pin – and taking on challenges both inside and outside of work. This is certainly going to be one of the toughest challenges I have taken on – but I am thoroughly enjoying it.

“I have chosen to support the Motor Neurone Disease Association as it is especially close to my heart as I lost my Dad to this horrible disease in 2013.  The other worthy cause is One Good Turn, which does great work improving the quality of life of individuals and families experiencing poverty and isolation.”

The MNDA is dedicated to improving care and support for people affected by MND, funding and promoting research, and campaigning and raising awareness so the needs of people with MND are addressed by society.

One Good Turn, based in Lockwood, Huddersfield, offers practical support, such as providing household essentials such as washers, cookers, fridge freezers, beds and other household furniture. It also offers a listening ear and signposts people to specialist services if further help is required.

Anyone who would like to support Amanda’s fundraising efforts can log onto to her mydonate pages:  

MNDA: https://mydonate.bt.com/fundraisers/amandavigar1    

One Good Turn: https://mydonate.bt.com/fundraisers/amandavigar2

Business battle-Axe recounts "painful" experiences dealing with HM Revenue & Customs

By Amanda Vigar, Managing Partner, V&A Bell Brown LLP

 

It is not often that the Battle-Axe’s rolling pin spins on its own without human input, but we have had three incidents this week alone, that have had it dancing a veritable tarantella – and, surprise, surprise, they all involve HMRC!

Over the last few months dealing with HMRC has become steadily more and more painful, but the events of the last seven days have left me horrified at the sort of service and behaviour that they clearly think is acceptable.

Case number 1 concerns a small employer. They took on a new employee part way through the 2014/15 tax year.  Because of the salary/bonus the employee had received from his previous employer, and the way the PAYE system works, in certain months of his old employment higher rate tax had been deducted from his salary. 

Now, across the year as a whole his package (including the new employer’s wages) was below the higher rate threshold.  So, the employee was rightfully entitled to a refund of the excess higher rate tax, which was paid back to him via payroll.

Now, if this had been a bigger employer the employee’s refund would probably just have reduced the amount of PAYE to be paid at the year end with no big issue. However, because the business was very small, the refund was actually more than the PAYE due to be paid.

But that’s no big hassle, HMRC just reimburse the employer right?

Well, that’s the concept and we would normally have expected this to happen within a couple of weeks of tax year end payroll returns going to HMRC – so, sometime in April or May.  We’re now in August and, despite our active chasing, still no refund.  This week we rang again (and after being on hold for 47 minutes) were informed that the repayment would be made in, wait for it, February 2016!  Errrr…that’s the employee’s money that the new employer has already repaid (as required) and which HMRC are not entitled to (and actually never have been) being held back for no reason.

This means our client is going to be waiting to get back money that was deducted in relation to a period when the employee was working for someone else for well in excess of 12 months.

In a similar vein, another client had what turns out to be the misfortune to have a key employee go on maternity leave.  That’s OK as the reimbursement of statutory maternity pay (SMP) is done by reducing the PAYE payable each month.  But again, the SMP was more than the PAYE due so the extra SMP payment needed to be reimbursed by HMRC.  Believe it or not, this time, the estimated payment date is March 2016.  So here, the employer has lost a key member of staff in a small business for at least nine months, putting added strain onto the business, and has to wait well over a year to be repaid the SMP that they have paid out on behalf of the Government. 

In both cases, the amounts involved would be enough to put some small employers into the bankruptcy courts!  Of which more in a little while. And remember, the Government is currently talking about pushing big businesses to play fair and pay small businesses more rapidly.  Pots and kettles comes to mind…..

Now the pièce de résistance: HMRC’s debt collection system!  We’ve long suspected that HMRC have a random number generator that they use to create documents to send to similarly randomly selected companies or individuals. Fortunately, we do monthly book keeping for the third client in this sorry list, so we know that they have paid everything that is due to HMRC.  Unsurprisingly therefore, this business owner was horrified to be asked to pay £1,700-plus of arrears.  HMRC has confirmed that the overall liability agrees with ours, and the debt collection team can’t explain why or how the claimed arrears have arisen.  Better still the online portal that we use to check HMRC balances gives a totally different figure to the amount they’re attempting to collect.  When pushed to explain this apparent discrepancy, an HMRC employee actually admitted that “this happens all the time, it would appear that our systems don’t work” – talk about stating the obvious!  But at least we now know what dear old ERNIE is doing in its spare time when not picking numbers for the Premium Bonds.

While I would like to think that my clients have just been unlucky, this pattern of HMRC errors (almost always seemingly going in HMRC’s favour if we didn’t pick them up) is growing all the time. Exercising my democratic right I have made my views very clear to the client’s local MPs and to David Gauke - the Minister responsible for HMRC. 

Sometimes that institution seems to forget that it is part of Government and therefore exists for the people of this country – not against us!

If you are having similar issues, I would urge you to contact your MP and let them know what has happened. Do feel free to copy the BattleAxe in as we want to monitor both the issues and HMRC’s overall performance. Maybe when they get sack loads of mail and their e-mail boxes are bursting at the seams, they might take things serious. 

Oh yes, to bring this sorry tale to and end and very sad to say, we also have seen cases where HMRC has actually petitioned for the winding up of a business based on blatantly wrong information from their systems!

To solve this ridiculous situation I don’t know what my weapon of choice should be –what’s your vote: my rolling pin or a magic wand?

ENDS

National Living – Wasted?

By Amanda Vigar, Managing Partner, V&A Bell Brown LLP


The number crunchers at Battle-Axe HQ have been running their slide-rules over Budget 2015 version 2.0 and the sound of tutting and sighing has been getting louder as each day has passed.

Like the proverbial magician, the Chancellor kept his biggest rabbit until the end of the Budget speech – the National Living Wage or “NLW”. That has grabbed a lot of headlines but its implications, along with other elements of the Budget (announced or hidden away in the small print) tell a different and, for me slightly concerning story.

Firstly, the NLW is neither national in its impact nor is it the Living Wage. In November 2014, the Living Wage Foundation calculated the required hourly rate to be £7.85 outside of London. Setting aside the slightly dodgy maths in their calculation, that’s rather more than George’s NLW which, when introduced next year, will be set at £7.20. That’s clearly rather less - and significantly less than the Living Wage in London, which is currently £9.15 - a rate that the NLW won’t even reach by 2020.

Secondly, it will only apply to those over the age of 25. There’s a political prize to be won by getting down youth unemployment, but this is a problem waiting to happen! When staff hit around 24 year and 9 months old will their employers start looking to get rid of them to take on youngsters who will cost 21% less?

The affordability point is critical for smaller and medium sized businesses where there isn’t the extra margin, even taking into account the drop in Corporation Tax rates, to cover the extra cost.

Add to this, that the Chancellor has effectively put NICs onto their dividends reducing what they have to live on. Big business gets as tax cut but smaller businesses are, to all intents and purposes, getting a tax hike. That’s businesses that last year accounted for 25 million jobs – just under 50% of all UK employment!

No doubt the Government will point to things like the increase in the Annual Investment Allowance from £25,000 to £200,000. Great, but for most of those 5.2 million small businesses they can only dream of spending £25k a year on new kit. Even if they could find a bank willing to lend them the money!

No-one likes the idea of people living in poverty, but my team is concerned that the National Living Wage won’t have the effect that everyone hopes for. Increased costs will have to get passed on to the end consumer. So the cost of living for all (including those on NLW) will go up. In turn, that, of course, means we need a further hike in the NLW to make up for it which will push up prices….. You see where we’re heading here?

Even the Government accepts that the NLW will cost around 60,000 jobs. But we suspect that’s only existing jobs and doesn’t take any account of the roles that SMEs were looking to create, but now either won’t be able to (not all jobs can be done by youngsters!).

So, the National Living Wage needs more refinement, more consideration and more consultation on how to get it to really work. If not, the UK will end up missing a major opportunity to update, upgrade and accelerate both the whole country’s economy and the current recovery.

When all the best laid (succession) plans go wrong!

By Amanda Vigar, Managing Partner, V&A Bell Brown LLP

When Jeremy Clarkson was unceremoniously removed from Top Gear, who thought that Chris Evans would be leading a completely new team of presenters?

It will be interesting to see just what impact Chris has. having, apparently, only agreed to take it on if he is allow a free hand on forming its future. Mind you, is he just the first in through a rotating door trying to get things back on track (like the football managers that now seem to leave before they’ve even started) or will he become the saviour of Top Gear?

In recent years, in the business world, we’ve seen the likes of M&S struggle to find the right new leadership to pull their businesses round after they have lost their way. Each time, there was hope that it would all come good, the flame flickers for a while (think Stuart Rose and Per Una) and yet now M&S seems again to be a bit of a lost soul on the high street.On the other hand, when Apple lost Steve Jobs, the naysayers predicted the end of Apple and yet in the few short years since his untimely death the value of the company has more than doubled under his hand-picked management succession team.

Looking at all the business succession activities, there are no hard and fast rules on what will work. But one thing for sure is: if you don’t plan ahead for the future management of your business it is bound to fail especially if the exit of a key member of senior management is unplanned! That means having more than just a plan A too.

One of the first questions I ask both a business owner or someone looking to start-up is “what is your exit plan?” Most people just look at me blankly because they haven’t even thought about exit! Yet, without a plan they have no idea how to shape their business in the next 5, 10 or 25 years. People who do keep that end goal in sight at all times are much more likely to succeed.

Even better, make sure you can have more than one route through to that end – just in case your managing director decides to punch your key customer!

Business Battle-axe pledges to keep watch on the Government

By Amanda Vigar, Managing Partner, V&A Bell Brown LLP

Congratulations to Sajid Javid MP on his appointment as Secretary of State for Business, Innovation and Skills and to Damian Hinds MP as Exchequer Secretary.

Both are new to their jobs, so let’s get them started on the right tracks and remind them that the Battle-axe will be watching every move they make. 

Of course, she will also be letting them know (directly) what she thinks of their performance!  One wonders if the rolling pin will get through security at the House of Commons?

Sajid has started by making the right noises.  One of his first pronouncements was to recognise small business (the Government’s beloved SMEs) as the "engine room" of British industry, vowing to get "heavy-handed" regulators off their backs.  

A welcome sentiment, but the proof of the pudding will be in how much he can achieve in the next five years with the dark satanic red-tape mills of the EU still working overtime!  

Sajid needs to be telling Mr Cameron to take a hard line in Europe on the mountains of regulations they produce every year.  Up and down the UK entrepreneurs are swamped with unpaid admin work they do for the government (and Brussels) – you may remember the article about it a few months ago where it was estimated that an average small business spends 22 days a year on it. 

If anything is going to put off people from setting up in business or employing people it's the pain and non-value added admin that goes with it.

As a former banker Sajid should know how the banking system works. I will be expecting him to look at why the banks are still making big noises in public about lending to SMEs then forcing them to jump through so many hoops that they are put off applying for the finance needed to develop their businesses. 

Maybe we should just give up on the banks and ask him to expand the Growth Fund programme that has seen critical expansion money being lent to the life blood of the UK economy. 

How about using the cash from the sale of the taxpayers shares in Lloyds and maybe one day RBS to top up the fund?

Or better still why not give more enhanced reliefs for entrepreneurs investing into the future of their business – not just on exit but up front relief!  After all, they actually keep people in jobs, so the money saved on benefits could be recycled to encourage investment.

Meanwhile Damian claims to have worked in the pub/hotel industry for 18 years so should be well used to the effect of excise duties on drinking behaviour. As a result, it will be interesting to see if the alcohol excise duty is frozen in the forthcoming budget helping to slow the rate of pub closures that we have seen in recent times – often the last community facility in the village.   

Whilst we know this is a Tory cabinet, it’s not just Mr Farage that likes a pint of the real stuff especially from some of Yorkshire’s fabulous local breweries and cider presses!

My policy demands for whoever forms the next government after May 7 2016

With only a matter of days to go to the general election, business owners across the nation will be praying that whoever is in office the morning after the public has spoken will remember they exist.

So, knowing that the various party leaders closely follow the sage pronouncements of the Battle-Axe, here are the key policy demands that my own think tank “The Rolling-Pin Brandishers” have drawn up after consulting those very same business leaders:

An urgent root and branch reworking of the business rates system so that small independent businesses can afford to be on the high street. A good start would be using valuations to reflect current rather than drastically out-dated property values

Introduce within a month a proper Service Level Agreement for HMRC – one with serious teeth so that businesses know when to expect responses and repayments of tax and HMRC has to pay (in cash) for their errors

Invest to bring HMRC systems into the 20th (never mind the 21st) century so that businesses can see their tax positions at any time and where cash has been allocated – with the ability to correct it when HMRC’s have randomly (mis)allocated the payments (yet again)

Removal of a significant amount of the ever-rising mountain of red tape that businesses have to deal with but which adds no real value to anyone and holds back start-ups, growth and employment. That’s without introducing more rules to achieve the reduction, of course

An emergency Budget raising the VAT threshold dramatically so that local plumbers/builders/electricians/carpenters aren’t forced to add 20% to their prices just because they use high value materials – and just think how much less cash-in-hand work there would be

If Government departments insist on online filing, a real push on rolling out high speed broadband to all business premises

A continuation and expansion of the access to funding initiatives we have seen in recent years such as the Regional Growth Funds that have invested almost £3bn pounds to grow British business since they started in 2010.

Whatever colour the Government is after the election, small and medium-sized businesses will continue to be the life blood of the British economy and, as so often in the past, the real root and fount of the innovation and entrepreneurial spirit that makes Britain Great!

MR PRIME MINISTER (SADLY IT WILL BE): IGNORE US AT YOUR PERIL!

PS – failing any of the above demands, we still concur with the Monster Raving Loony Party’s long-held desire for a Royal Commission into the Hokey Cokey – to see if it really is what it’s all about.

Originally published in the Huddersfield Examiner on April 28th 2015 

Our think tank has thunk!

With only a matter of days to go to the General Election, business owners across the nation will be praying that whoever is in office the morning after the public has spoken will remember they exist. 

So, knowing that the various party leaders closely follow the sage pronouncements of the Battle-Axe, here are the key policy demands that my own think tank “The Rolling-Pin Brandishers” have drawn up after consulting those very same business leaders:

• An urgent root and branch reworking of the business rates system so that small independent businesses can afford to be on the high street.  A good start would be using valuations to reflect current rather than drastically out-dated property values;
• Introduce within a month a proper Service Level Agreement for HMRC – one with serious teeth so that businesses know when to expect responses and repayments of tax and HMRC has to pay (in cash) for their errors;
• Invest to bring HMRC systems into the 20^th (never mind the 21^st) Century so that businesses can see their tax positions at any time and where cash has been allocated –  with the ability to correct it when HMRC’s have randomly (mis)allocated the payments (yet again);
• Removal of a significant amount of the ever-rising mountain of red tape that businesses have to deal with but which adds no real value to anyone and holds back start-ups, growth and employment.  That’s without introducing more rules to achieve the reduction of course;
• An emergency Budget raising the VAT threshold dramatically so that local plumbers / builders /electricians / carpenters aren’t forced to add 20% to their prices just because they use high value materials – and just think how much less cash-in-hand work there would be;
• If Government departments insist on online filing, a real push on rolling out high speed broad to all business premises; and
• A continuation and expansion of the access to funding initiatives we have seen in recent years such as the Regional Growth Funds that have invested almost £3 billion pounds to grow British business since they started in 2010.

Whatever colour the Government is after the Election, small and medium businesses will continue to be the life blood of the British economy and, as so often in the past, the real root and fount of the innovation and entrepreneurial spirit that makes Britain Great!

MR Prime minister (sadly it will be): Ignore us at your peril!

P.S. Failing any of the above demands we still concur with the Monster Raving Loony Party’s long-held desire for a Royal Commission into the Hokey Cokey – to see if it really is what it’s all about.

Budget to build on solid foundations

With just weeks before the General Election, none of us could be entirely sure what the Budget would hold. 

Would our Chancellor (known to those of us in the trade as “Gorgeous George”) be buying votes or would he try not to ruffle any feathers? 

All in all, it appears to be the latter, albeit with a few sweeteners to parents/grandparents of those in their 20s looking to get their offspring out of the family nest and those with savings that generate significant income.

His overall message: “steady as she goes”.  Growth has been steady over the last couple of years and there was certainly nothing in this Budget that will lead to an uncontrollable boom – it was more about building on solid foundations of growth leading to a reduction of the deficit.

My main disappointment is that, despite stressing that he was backing British business, there really wasn’t anything for small business owners to be throwing their hats in the air over. 

The reform of the business rates system has been long rumoured and, whilst I welcome it with open arms, reading between the lines its impact is likely to be limited and definitely not the radical reform that this outdated and fundamentally unbalanced system needs.

My other big concern is that reports of the death of the tax return were, in the words of Mark Twain, greatly exaggerated. 

Whilst I can see that the change will be of benefit to those with relatively simple affairs – say just a salary and savings income that is taxed at source – even they will still need to check the figures carefully to ensure that everything is actually included and is accurate. 

Given the way HMRC’s systems struggle to cope with RTI on payroll, my heart sinks at the mere thought of the errors and omissions we are going to see when they try to deal with the pre-population of tax records from multiple sources. 

For those who are self-employed or have complex tax affairs, my concern is that HMRC will see this as being like PAYE and take a guilty-until-proven-innocent approach with the accompanying administrative burden increasing yet again for those of us running small businesses. 

What price a delay (or six) from the target 2020 launch date?

"Contact us now"!

The statement is there on the advert and so the customer rings and leaves messages, sends e-mails to the address on the website…. waits…..waits…... and hears absolutely nothing!

What exactly does that say to the potential customer about the business?

Recently, we had cause to call out an electrician because of a major power outage at one of our offices.  We rang five that claimed to offer 24 /7 emergency call outs.   One answerphone told us “we’re away for the holidays” – but didn’t say when they were back! Another just rang out and didn’t even have the facility to leave a message.  In the end only one replied – 48 hours later!

In these tight economic times, a lot of businesses are investing good money in having and building websites, paying for top listing on Yell and the like, or advertising in local papers or magazines in the hope that it will bring them work.  They might as well set fire to all that cash if they don’t monitor the e-mails and voicemails that their promotional activity produces.  Nowadays, with smart phones enabling everyone to be able to pick up emails wherever they are in the world, there is just no excuse for not responding.

Mind you, even when they’ve made contact, will they actually turn up to look at the work that’s on offer?  Sadly many won’t!  A client told us recently of some flooring work they’d needed doing.  Nine emails generated only four responses.  Eventually two bothered to turn up to look at the floor (one more set a date but never arrived leaving the client waiting around) but only one of them provided the pricing information they’d promised.  That’s not much better than a 10% hit rate just to get a price!

Personally, I’d much rather be told someone can’t take the business on at the moment than just be ignored.  To me a non-response is just downright rude.  And it’s so short sighted – I can tell you that a non-response means I’ll never consider that business again!  Worse still, I’m likely to actively tell people not to bother even trying them.

So, the next time you hear a tradesman complaining that they’re struggling for money, ask them how many people they didn’t reply to in the last year.  They’ll probably look baffled, but push them and I suspect you’ll find that they are one of the many that don’t seem to be able to plan a work pipeline.  They do the job in hand and just hope that something comes up for next week. 

By contrast, as we see with loads of our clients, basic courteous communication and a bit of forward planning, combined with some thought about the customer (and potential customer!) generates really positive recommendations to friends, family and colleagues and, as a result, a much more steady income.  A virtuous and profitable circle that starts with a simple response.

HMRC End of Year report: "Must try harder"

By Amanda Vigar, Managing Partner, V&A Bell Brown LLP

It was heartening to read that I’m not the only one that feels that the HMRC’s service falls well below what hard-pressed taxpayers (and their advisors) should be able to expect from it. 

At the end of 2014, the Institute of Chartered Accountants surveyed a large number of its tax practitioner members.  Over a third of us felt that HMRC’s performance had declined and over 50% felt it hadn’t changed. The handful that felt it had improved either don’t deal with HMRC very often or have even worse experiences in the past than we have!

The biggest frustration reported is, surprise, surprise: HMRC’s inability to get things right first time.  How many apologies have we heard that they’ve sent out batches of thousands of incorrect or inaccurate letters?  And isn’t it strange that the “errors” always seem to work in HMRC’s favour? I’ve lost track of how often they allocate payments to wrong years or have wrong information about clients – for example counting the same income in two different years or sending out demands for payment in relation to periods before a company was even formed.  Sorting out these issues costs us and HMRC time and, therefore, taxpayers’ (read clients’) money to do this – and it’s simply not necessary!

You can add the costs of: the time we spend on hold on the phone waiting for a response only to be told to ring back another time; the cost of faxing/posting documents because HMRC in the main doesn’t accept or send emails; and the lack of certainty about a taxpayer’s position because of the sheer length of time HMRC can take to respond to correspondence (if in deed they do at all).

The ICAEW tax faculty are of the opinion that HMRC is being starved of resources. Our view is that penny pinching coupled with a dogmatic belief that every taxpayer is trying to “pull a fast one” are costing HMRC dear now and in the long run.  The public needs to have confidence that they get the right answers and they get them when they need them.

As this is election year, I will be looking kindly on whichever party puts forward a commitment to an HMRC Service Covenant – one which puts experienced staff back on the front line who can actually answer queries and which has real teeth when HMRC fail.  That covenant would also make HMRC accountable for the extra administrative costs they inflict on taxpayers.  

It would drag the organisation into the 20^th (and no, that’s not a typo) century in terms of communicating with the people they are supposed to be there to serve – and even, maybe, us accountants.

Alternatively, how about a party (beyond our friends in the Monster Raving Loonies) being brave enough to suggest we should put our tax collection system out to tender or introducing some of the consumer choice and competition that they talk about so enthusiastically elsewhere in our society?