GDPR Regulation Is Coming…25 May 2018, Are You Ready?
GDPR Regulation is coming – 25 May 2018
The implementation date for the EU Data Protection Regulation (GDPR) is 25 May. Despite Brexit, all UK businesses, including yours, will need to comply. In order to maintain business links with EU countries, the UK will need to create EU equivalent rules and regulations. GDPR regulation is an example of this, and you must comply with it, if you want to trade with the EU. You should know that GDPR regulations are more favourable to consumers than businesses.
Personal Information
As personal information becomes more regularly shared and you might well hold, as many businesses now do, huge volumes of customer data, there is a need for management and control over what you and other businesses can do with that information.
Fines and Penalties
GDPR gives regulators the ability to apply large fines of up to 20m Euros or 4% of global annual turnover – whichever is higher, for non-compliance. As such, you need to take these new regulations seriously and will need to implement changes to the way you operate, depending on the type of personal data you hold. This will include customer records, databases, CRM systems, etc.
Contracts, Policies and Procedures
In addition, you will need to ensure that you have appropriate policies and procedures in place, with regards to any personal data you hold or process. It’s also worth you reviewing supplier contracts to ensure they are GDPR regulation compliant. Finally, your recruitment, HR policies and procedures should be reviewed, to ensure personal data is managed in a way which is compliant with GDPR regulations.
GDPR Consultants
There isn’t much time left before GDPR regulation comes into force. If you haven’t yet prepared for GDPR regulations, your best approach is probably to consider hiring an external consultant to advise your firm on getting up to date as quickly as possible.
To get more insight into data protection and GDPR, please also refer to our previous post on GDPR and how this affects you and your business.
Lotuswise Chartered Accountants and Business Consultants can help support you and your business with the complexities of the new GDPR regulations. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.
Employee Health And Safety And Staff Coaching
Employee health and safety and staff coaching is your responsibility as an employer. Regardless of the type of business you manage, health and safety is a fact of life. And encouraging growth, confidence and ambition in your employees is important. But just how do you do that?
Employee Health And Safety – The Responsibility Of Every Employer
Regardless of the type of business you manage, health and safety is a fact of life. Apart from their devastating human cost, occupational accidents and ill-health could bear a significant cost to your business through higher insurance premiums and staff absence. You, staying up to date, when it comes to health and safety, is therefore, an essential part of running your business.
Employee Health And Safety – Keep it simple
Managing health and safety in your company doesn’t have to be complicated. If your firm takes reasonable steps to prevent workplace injuries or illness, you are unlikely to have any issues. The approach you take should be proportionate to the size of your business and nature of your business activity.
Employee Health And Safety – Written health and safety policy
Ideally you should have a written health and safety policy. If you are a small business, with less than five employees, you may not be obliged to write such a policy. But it is advisable to have one in place, regardless of the size of your firm.
Employee Health And Safety – Lead by example
Your staff would tend to follow the lead of more senior managers in a safety-critical situation (even if the decision is flawed). In these situations, it is vital to establish a culture that allows everyone to raise concerns and challenge decisions in a constructive manner.
Employee Health And Safety – Carry out a risk assessment
In order to do this, in a health and safety context, think about anything that could cause harm to your employees and ensure that you are taking reasonable steps to prevent that harm.
Employee Health And Safety – Don’t be afraid to ask for help
If you don’t have any expertise in-house, you could consider hiring some external expertise. These experts will ensure your business has someone with the necessary skills to manage health and safety properly.
Staff Coaching – A good coach is a good manager
In addition to ensuring the achievement of business objectives and health and safety, managers are also responsible for staff coaching, encouraging growth, confidence and ambition in employees.
Effective leadership techniques have evolved over the last few decades. And the way you, as a manager, should interface with your teams, has become more focused on getting the most out of people, through coaching. Compared to a more directive style, if you use a coaching style, you would tend to foster a better environment for collaboration and more open communication.
Staff Coaching – Build a confident team
Coaching helps to identify the strengths and weaknesses of your team members. As a coach, you could build on each team member’s strengths and weaknesses and help to create a more confident team. If your team members are confident, they are more likely to push harder and go above and beyond what is expected of them.
Staff Coaching – Employee Engagement
If your team members feel like they are working on repetitive, menial tasks, they will tend to feel less engaged. You should, therefore, coach your teams through new experiences, so they can learn. Your employees will tend to feel more engaged, if they are trusted with new projects, and will be more productive as a result.
Staff Coaching – Active listening
If you adopt a coaching style, you, as a manager, will tend to listen more actively. So, then try to understand things from the perspective of your team members. Your employees will tend to respond more positively to this and can become more motivated as a result.
Staff Coaching – Millennials
Millennials (around 18 to 35 years of age) have become a larger segment of the workforce and if you employ any, they tend to respond well to a coaching style of leadership. Millennials would tend to welcome your feedback and regular dialogue regarding learning and development. They want to be coached and developed rather than managed. So, remember this, as this approach can only be beneficial to both you and your millennials employees!
So, it is your responsibility to make employee health and safety and staff coaching a priority in your business. Making sure your employees are safe at all times and looked after. Coaching them and encouraging their growth and confidence can only be beneficial to both them and your business.
Lotuswise Chartered Accountants and Business Consultants can help you and your business succeed. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.
Business strategy – 3 steps to creating a great one
When many of us think about business strategy, academics and expensive business consultants tend to spring to mind. The good news is that creating a really great business strategy doesn’t have to be complex. Put simply, a business strategy is what you need to get your business from where it is today to where you want it to be in say, 5 years’ time. Here are three simple steps to creating an effective strategy for your business:
1. Business Strategy – Manage business risk
Business risk is a fact of life and there are risks you can mitigate and others you can’t. Of those you cannot mitigate, you need to ensure that the opportunity for your business outweighs the potential down side. Don’t try to sweep risk under the carpet. Instead, create a risk register and list all of the major risks to your business.
Beside each line on your risk register, describe what you are doing to mitigate each risk. For example, next to “Cyber Security Risk” you might note that you have put a firewall and internet security software in place on your systems. Creating and maintaining a risk register will ensure that you don’t miss anything and that where possible, you do something to minimise business risk.
2. Business Strategy – Understand your market
To develop a successful strategy you need to understand which market you operate in. How big is the market sector that you are targeting? Is it growing and if so, how fast? Who are your competitors and how do you intend to compete with them for market share? If you understand the key drivers in your market, you can spot new opportunities, harness the forces that are driving change and create a product or service offering that is competitive.
A good understanding of your market will allow you to calibrate your offering in order to create the right balance of supply and demand, pricing and service levels.
3. Business Strategy – Competitive advantage
Every business has strengths and weaknesses. Your business strategy should take this into account. Take time to analyse your main competitors and identify their weaknesses. Now consider how your product or service offering can exploit these weaknesses to give your business a competitive advantage. For example, if your competitors are expensive, perhaps you could gain a competitive advantage by offering a lower price alternative. Perhaps you can focus on a particular niche sector in order to create an offering that is differentiated. This could give you a competitive advantage with the potential to last a long time.
Lotuswise Chartered Accountants and Business Consultants can help you and your business succeed and help you with creating a great business strategy. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.
Tax and the Spring statement – No Major Tax Changes
As announced last year, we now know that the Chancellor’s Budget will, in future, take place in the Autumn each year, as opposed to the Spring. And, in his 13 March Spring statement, we saw the Chancellor choosing to focus on the state of the economy. As he hardly mentioned any tax changes and stated that there is “light at the end of the tunnel”. We can see that this contrasts with other recent Chancellors such as Gordon Brown and George Osborne, who used both the Spring Budget and Autumn Statement, to make tax changes announcements.
New Consultations – Should You Be Concerned?
Should you be concerned by the fact that the Chancellor announced a number of tax consultations into possible future changes? Well yes and no. Yes, if you are worried about the possible changes to the VAT registration threshold. And yes, if you are part of the businesses deliberately operating below the VAT threshold (currently £85,000), as that adds 20% to the price of the goods and services. If this is your case, you could be allowed to exceed the threshold by up to 50% for one year, without the need to register for VAT. HMRC is also seeking views on how they can engage with online platforms, such as eBay and Uber, to promote tax compliance among its users.
Cash And Digital Payments In The New Economy – Do you still use cash?
Do you still use cash? As we could shortly see the possible demise of the 1p, 2p coins and the £50 note, but for different reasons. It seems that more and more of us are paying for small transactions, such as our morning coffee, by using contactless payments. If you still pay in cash and where the cost is say £2.99, you would tend to put the penny change in the charity pot, and many are thrown away! Whereas, the £50 note has been linked to money laundering, and other illegal cash-based payments. But, we are forever increasing our contactless transactions. Which means that with a consequent reduction in the number of small coins in circulation, this will have a significant impact on the charity sector. As many charities are reliant on peoples’ small change being donated outside supermarkets and stations.
Cash And Tax Evasion
When considering the future of cash in the economy, you also have to think of the role of cash in tax evasion and illegal activities. If you are part of the vast majority of traders and businesses accepting payments in cash, you do so honestly. However, in some cases, the anonymous and untraceable nature of cash transactions, is perceived to facilitate tax evasion, hidden economy activity, or money laundering. This harms the honest majority of businesses, like yours, who find it harder to compete, and it means less money goes towards our vital public services. HMRC are aware that payments in cash can be a problem for tax compliance. In some cases, this is because taxpayers find it difficult to keep accurate records of all their transactions. HMRC have identified that cash is used by a small minority of people to hide or disguise their taxable income by not reporting, or under-reporting, what they owe. The increasing use of our digital payments and reduction in the use of our cash could have a positive impact on increasing tax compliance and decreasing money laundering. However, the increase in our digital payments may only have a limited impact, especially if the dishonest minority continue to use cash to hide or suppress their income.
Could the next step be to make it mandatory to pay your window cleaner or gardener electronically? Not just yet…
Charities Gift Aid Small Donations Scheme – Does it help support your charity?
Whilst we are on the subject of the reduction in cash transactions, we take this opportunity to remind you of the Gift Aid Small Donations Scheme (GASDC). Under this scheme, your dedicated charity or community amateur sports club (CASC) can claim top-up payments on small donations up to £20.
From 6 April 2017 your dedicated charities have also been able to claim tax back on donations made using contactless technology, such as a contactless credit or debit card. As opposed to before 6 April 2017, when your charities could only claim top-up payments on small cash donations. Cash donations could be in coins or notes that have been collected and banked in the UK. Your charity does not need to know the identity of its donors or collect Gift Aid declarations. GASDS claims are worked out in the same way as Gift Aid. If the basic rate of Income Tax is 20%, your charity can claim a GASDS top-up payment of £2,000 on up to £8,000 worth of small donations. This is limited to 10 times the amount that your charity receives in Gift Aid donations that tax year.
Scottish Income Tax Rates Due To Rise From 6 April 2018 – Are You Affected?
The Scotland Act 2016 provides the Scottish Parliament with the power to set all income tax rates and bands that will apply to Scottish taxpayers’ non-savings, non-dividend (NSND) income for tax year 2018/19. As of 6 April 2018, there are significant discrepancies between the Scottish rates of income tax and the rates paid by taxpayers in the rest of England, Wales and Northern Ireland. Will this result in some taxpayers moving south or supplying their services via limited companies to avoid this increase? From 2018/19, the Scottish higher income tax rate will be 41% on income between £43,430 and £150,000 where the top rate is 46%. Under the Scottish system, there is a 19% starting band on the first £2,000 of taxable income, and an intermediate rate of 21% for income between £24,000 and £43,430. The 20% rate applies to income between £13,850 and £24,000 (taxable income £2,001 to £12,150).
If you employ Scottish taxpayers, they have a special S PAYE code, so the payroll software collects tax correctly.
Tax Efficient Extraction Of Profit From Companies For 2018/19 – Does it apply to you?
Salary and Dividends
With this new tax year, if you are part of the many directors of family companies, you will certainly be considering the most tax efficient method to pay yourself. And for many years accountants and tax advisors have suggested that, as a director/shareholder, you should extract profit by paying yourself a low salary. And that you should then extract the remainder of your income in the form of dividends.
Although dividends are not deductible in arriving at the company’s taxable profits, they do not normally attract National Insurance Contributions (NICs). The starting point of NICs rises to £162 a week from 6 April 2018. This is now significantly lower than the £11,850 personal income tax allowance. A salary just below £162 a week, £8,424 a year, would mean no NIC would be due, but would be sufficient to count as a qualifying year for State Pension purposes (if above the £6,032 lower earnings limit).
Tax Allowance and Dividends
Remember that if you are an employer, other than a director as the only employee, you are entitled to a £3,000 employment allowance, that you can set against employer’s NICs. If you have not utilised this against NICs on staff wages, then consider increasing your directors’ salaries up to £11,850. As the additional salary would save corporation tax at 19% on the £3,426 extra salary, which equals £651, whereas the employees NIC would be £411.
As for the level of dividends, the rate of tax changes from 7.5% to 32.5% at £46,350, so ideally, the dividends should not exceed £34,500, if a salary of £11,850 is paid. The first £2,000 would be taxed at 0%, with £32,500 being taxed at 7.5%.
Don’t forget that this dividend tax will then be due on 31 January 2020.
Diary Of Main Tax Events
April/May 2018
Date |
What’s Due |
|
1/04 |
Corporation tax payment for year to 30/6/17 (unless quarterly instalments apply)
|
|
5/04 |
End of 2017/18 Tax Year. 2018/19 tax year starts 6 April 2018
|
|
19/4 |
PAYE & NIC deductions, and CIS return and tax, for month to 5/04/18 (due 22/04 if you pay electronically) |
|
01/05 |
Corporation tax payment for year to 31/07/17 (unless quarterly instalments apply)
|
|
19/5 |
PAYE & NIC deductions, and CIS return and tax, for month to 5/05/18 (due 22/05 if you pay electronically)
|
Lotuswise Chartered Accountants and Business Consultants can help support you and your business discussing the implications of the Spring statement, and other ways in which you can extract profits from your family company tax efficiently. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.
GDPR – What is it and how will it impact my business?
What is GDPR and how will it impact my business?
With the General Data Protection Regulation (GDPR) regime coming into force in the UK from 25 May 2018, key changes will be introduced to the way personal data is handled. The question is: are you and your business prepared for the forthcoming change? It is important first to understand the requirements of the Information Commissioners Office (ICO), now concerned about misinformation being shared in the media. The following outlines the change key features to help you prepare.
What is GDPR and why is it necessary?
The purpose of GDPR is to reflect the importance of safeguarding your clients and customers individual personal data in the digital age. Currently, for a data protection law breach, you could be fined up to a maximum of half a million, whereas, under GDPR, you could be looking at a maximum of £17 million or, if higher, 4% of worldwide annual turnover. You should also consider the negative public implications if you fail to protect personal data. With this in mind, you should look into the following:
- Those who are “controllers” and “processors” of data within your company
- The principles of data protection
- Accountability and governance
- New rights for data subjects
- Data security breaches
What is affected?
The definition of personal data is expanded under GDPR and includes a range of online identifiers, such as IP addresses, as well as sensitive personal data coming under special categories as genetic data and biometric data. Data relating to criminal convictions and offences is not included, although there are extra new safeguards relating to how the information is processed.
Who is affected?
GDPR will affect anyone handling personal data, from customer and employee records, through to manual data, regardless of where this information is stored – be it in a filing cabinet or digitally accessed via a laptop or computer – This applies to both “Controllers and Processors”. A controller is defined as someone who is in charge of how and why personal data is being processed. A processor acts on behalf of the controller to process the data. It may be that, in a business, this role is fulfilled by the one person. For the processor, this means that, in order to remain compliant with GDPR, they now need to keep records of how they process personal data and they can now be held legally responsible for breaches of security.
Principles of data protection
Your clients personal data must be:
- Processed lawfully, fairly, and transparently
- Collected for specified, explicit, and legitimate purposes
- Adequate, relevant, and limited to what is necessary for the purpose
- Kept in an identifiable format for no longer than is necessary
- Processed securely and protected from unauthorised or unlawful processing, accidental loss destruction or damage.
Accountability and Governance
Your company must be able to demonstrate how your organisation is GDPR compliant and, implement the required technical and organisational measures. These include data protection policies such as:
- Internal audits of processing activities
- HR policies review
- Employee training and adherence to policies
- Conducting Data Protection impact assessments and, in some cases, appointing a Data Protection Officer (DPO). The DPO now becomes a legal requirement in public authorities and in organisations carrying out large scale data processing of special categories.
New Rights
New rights have been outlined for individuals / your customers / clients and cover the following points:
- The Right to be Informed – providing your clients with a privacy notice giving details of how their information is being processed and controlled.
- The Right of Access – providing your clients with the option to request details of how their information is being held, for which your company has a maximum of 30 days to deal with the request, under a £10 chargeable fee.
- The Right to Rectification – such that any of your inaccurate clients data will be corrected.
- The Right to Erasure – the right to be forgotten such that your client can request data to be deleted.
- The Right to Restrict Processing – such that your clients data can be stored but not processed.
- The Right to Data Portability – such as to obtain and reuse personal data across different services, allowing the movement, copy or transfer of clients personal data, provided that this is done in a structured format.
- The Right to Object – such that processing of personal data must stop immediately, unless there are compelling and legitimate grounds for processing.
- Rights in relation to automated decision-making and profiling – ensuring safeguards are in place to protect against damaging decisions taken without human intervention.
Lastly, if and when your company experiences data security breaches, you must inform the ICO within 72 hours, and your organisation should also have a clear plan on how to resolve / cope with the situation. Given that GDPR requirements are complex and do not exactly offer a quick fix, you and your company cannot run the risk of incurring significant penalties.
Lotuswise Chartered Accountants and Business Consultants can help support you and your business with the complexities of the new GDPR regulations. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.
Productivity Pointers: How do I do more with my time?
Productivity Pointers: The survey says
Microsoft survey on productivity
In a recent survey by Microsoft on productivity, 20,000 European workers were provided with a questionnaire in relation to work-communication tools. Employees indicated that a steady stream of emails, messages, and notifications impacted their levels of productivity and concentration. And that one expert had indicated that staff suffered elevated levels of technostress. The report, which sampled views from 21 European nations, including the UK, found that only 11.4% of European workers said they felt highly productive. This research outlines the challenges to concentration and productivity created by employees constantly exposed to an abundance of communication technology at their fingertips. Employees, who are also bombarded and distracted by endless amounts of notifications, updates, and alerts. The research also pointed to the dangers of being constantly connected, expecting each and every employee to respond to messages and requests at all hours of the day.
Social Media and productivity
Social media platforms have also taken this condition of distraction to the next level. Speaking at an industry event recently, early Facebook investor and founding president, Sean Parker, said that the massive social network is “exploiting a vulnerability in human psychology” in order to attract and retain users’ attention. And that “the thought process that went into building these applications, Facebook being the first of them, … was all about: ‘How do we consume as much of your time and conscious attention as possible?”
So, in light of this, how can you lower your technology stress levels and increase your productivity and that of your employees?
To improve your productivity, you could consider the following pointers:
1. Prioritise the important, not the urgent
When missing your deadlines is not an option, the Covey Time-Management Matrix can help you to manage your available time more efficiently. This allows you to package your tasks into one of four different quadrants in the Matrix. The key is for you to ensure that your time is balancing the short-term aspects of your role / your business with the long-term ones.
Let’s look at the Matrix quadrants
| Quadrant 1 | Quadrant 2 |
| Urgent and important activities | Not urgent but important |
| These are items that you could not have been foreseen, such as emergencies, problems, last-minute preparations, etc. | These are your tasks without a high urgency, but that can play a significant role in future, such as strategic planning, health, education, exercise, and career. |
| Quadrant 3 | Quadrant 4 |
| Urgent but not important | Not urgent and not important |
|
These are your items that appear to have a high urgency but that are not important but can impair your ability to deliver on your goals. Try to delegate or reschedule them. These types of tasks and requests can impact your productivity. Therefore, try to avoid being constantly interrupted. Allocate timeslots in which to address all issues at the same time so that your concentration does not end up suffering. Examples include interruptions, meetings, etc. |
This is the space filled with your usual time-wasters: nothing more than distractions, such as surfing the internet, Facebook, TV, trivia, etc. |
Quadrant 1 – Urgent and important activities. These are items that you could not have been foreseen, such as emergencies, problems, last-minute preparations, etc.
Quadrant 2 – Not urgent but important. These are your tasks without a high urgency, but that can play a significant role in future, such as strategic planning, health, education, exercise, and career.
Quadrant 3 – Urgent but not important. These are your items that appear to have a high urgency but that are not important but can impair your ability to deliver on your goals. Try to delegate or reschedule them. These types of tasks and requests can impact your productivity. Therefore, try to avoid being constantly interrupted. Allocate timeslots in which to address all issues at the same time so that your concentration does not end up suffering. Examples include interruptions, meetings, etc.
Quadrant 4 – Not urgent and not important. This is the space filled with your usual time-wasters: nothing more than distractions, such as surfing the internet, Facebook, TV, trivia, etc.
2. Give yourself dedicated time to work
To avoid distractions, you could give yourself the time to work on the most important, but not urgent activities (Quadrant 2). To do this, you want to make sure you allocate two slots of 45 minutes, with a 15-minute break at half-time. This length of time allows your brain to get in the zone, consequently accelerating your concentration and productivity levels. Make sure you switch off distractions completely, such as pop-up alerts from email and social media feeds.
3. Manage email communication
What do you do if your employees tend to start their working day using their inbox as their to-do list? This inevitably becomes a distraction and wastes time, with your employees trawling through every email, line-by-line. You could apply the following recommended approach by using the 4 D’s for email communication, in order of priority / preference:
1. Delete it.
If you can remove any email on an initial scan, all the better.
2. Delegate it.
If you have a team, or contacts, to whom you can delegate, consider this as your next option.
3. Diarise it.
To avoid distractions that impact on your concentration, identify a suitable calendar time to address the task at hand.
4. Do it.
If none of the above work, you may need to perform the requested task right there and then. This, however, should always be your last option.
4. Consider Email freedom
Lastly, consider complete freedom from email. You could, like some firms have done recently, introduce a ‘no email’ day policy once a week. You could also ban emails sent to people sharing the same building. As well as removing the ‘cc’ culture (covering one’s back). This ultimately forces you and your team to have face-to-face or phone call engagements with your other team members. This, in turn, can lead to improved productivity and team morale. Therefore, to be highly productive, the technology you use, needs to be handled with care. It needs to be a supportive solution to your business goals delivery, rather than a designed distraction, reducing your personal and business impact.
Lotuswise Chartered Accountants and Business Consultants can help you and your business become more efficient and raise your productivity levels. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.
Can you hire your workforce and manage the gig economy effectively?
The gig economy and your workforce
The so-called gig economy is starting to change the way we think about our workforce. In the light of a recent government review, and as the working world becomes more flexible, an increasing number of professionals are opting to become independent contractors, marketing their skills to businesses, for as long as required. This new type of employee can create a new set of challenges for your businesses to manage. These professionals tend to want more flexible working arrangements and a better work-life balance. They are agile and don’t want to be tied to the traditional 9-5 working day. As such, you, as an employer, need to change how you think about your HR policies.
Plan ahead
If you want to benefit from the gig economy and use contractors and flexible workers, you should create a plan on how you intend to allocate costs associated with them. In addition, you should agree a process by which you can set objectives, track deliverables and key milestones achievement.
Work with the right partners
If you are going to use a recruitment agency to help you employ gig economy contract workers, look for agencies that truly understand the flexible employment market. Do your due diligence and make sure they have extensive experience working with firms in your industry, as there have recently been bad press reports.
Cost drivers
Contract workers can help you lower your talent costs. As well as employment agencies, there are various online resources available to you, such as Freelancers and Upworkers, that allow independent contractors to pitch and compete for your firm’s projects. This can help you access some of the best talents around, but at a lower cost.
Utilise technology
Technology plays a key role in managing your flexible workforce and taking advantage of the gig economy. Contractors will need to access your systems and data. You will need to consider whether they need to use their own computer, or an allocated company-owned laptop / device, for the duration of their contract. You should also consider security, and ensure that company data held on any contract worker’s devices can be managed remotely, if required. The companies best able to tap into this growing talent pool can, in this way, access skills that may have previously been inaccessible to them. For example: some contractors may have broad multinational project-based experience, which can highly benefit your organisation.
Hiring contractors
When it comes to hiring workers or contractors, you will also need to be very clear as to what employment status they will effectively have. Please see our previous blog post on Contractors and Self Employment.
Lotuswise Chartered Accountants and Business Consultants can help you and your business make better use of the gig economy and contractors. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.
Sure Of Your Employment Status? Sure You’re Self Employed?
Regarding Employment Status: When is Self-Employment, Self-Employment?
Last year, the House of Commons Work and Pensions Committee published a report calling on the Government to close the loopholes that allow “bogus” self-employment practices. Practices, which burden the welfare state but reduce the tax contributions needed to sustain it. Most people working for organisations such as Uber, Amazon, Hermes and Deliveroo are not on any payroll, have limited workers’ rights and are paid for each delivery or “gig”. The Committee recommended a default assumption of “worker” status, rather than “self-employed”. The economist Matthew Taylor was also asked to produce a report on the status of such workers. It suggested that a new category of “dependent contractor” should be established. HMRC and the Treasury have now published a consultation into a thorough review of employment status.
Consultation on employment status
HMRC published this consultation on employment status on 7 February as a follow up to the Taylor Review of Modern Working Practices. You, as individual or employer, have to know which employment status applies to you or your employees. This is to ensure the right protections are applied – from the National Minimum Wage and holiday pay, to unfair dismissal protection and statutory redundancy pay. Employment status also affects the taxes an individual and their employer pay. It is therefore essential in maintaining a clear and effective tax base, with individuals and employers, knowing what tax rates and National Insurance contributions (NICs) are applicable to everyone in their organisation.
Legislation and Contract of Service
The existing legislation defining an employee for both tax and employment rights ultimately relies on whether a contract of service exists. No further definition or clarity is provided in the legislation. As a result, over time the courts have interpreted the legislation and developed tests to determine an individual’s employment status. These tests are contained in a number of key precedent cases, including a mixture of employment rights and tax judgments. A possible solution suggested is to legislate a more detailed definition of employment incorporating the irreducible minimum core tests established by case law:
- Mutuality of obligation
- Control over the individual
- Personal service
Caution as BBC Presenter Loses Landmark IR35 Case
The IR35 personal service company legislation has been on the statute book since 2000 and has never really worked as intended. The main reason for this is that the interpretation of the legislation is based on the same employment status tests referred to above. Which lack clarity and are open to interpretation by the courts. However, HMRC have recently won a key case on IR35, at the First Tier Tribunal, concerning BBC presenter Christa Ackroyd.
Ms Ackroyd had been supplying her services to the BBC through her personal service company Christa Ackroyd Media Services Ltd since 2006/07. The Tribunal agreed with HMRC, that the hypothetical contract between the BBC and Ms Ackroyd would have been a contract of service. The existence of a seven-year contract meant that Ms Ackroyd’s work at the BBC was pursuant to a highly stable, regular and continuous arrangement. It involved a high degree of continuity rather than a succession of short term engagements. That is a pointer towards an employment contract.
Another key factor considered by the court was that her fellow presenter on “Look North” was on the BBC payroll. Ms Ackroyd’s company was appealing against demands for some £419,151 from HMRC, relating to income tax and National Insurance contributions (NICs), for the tax years 2006/07 to 2012/13. It will be interesting to see if there is an appeal to a higher court. And whether this decision will be used by HMRC against other BBC presenters, and other personal service companies.
Lotuswise Chartered Accountants and Business Consultants can help you and your business make sense out of your employment status or your employees’ as well as IR35 rules, and whether or not they impact on your working arrangements. To get lots of general information and tax advice, check out our app on Google or Apple stores. To find out how we can help you, please contact us now.
5 Obsessions To Help Optimise Your Small Business Online
Optimise your small business online: It can be daunting if you are a small business starting out or looking to grow “online”. The general perception of how to increase your online presence may be the need for deep pockets – with which you can handle funding PPC (Pay Per Click), SEO (Search Engine Optimisation), SEM (Search Engine Management, SMM (Social Media Marketing) and marketing campaigns. However, it really needn’t be that scary. To help you, here are five obsessions to help optimise your small business online:
1. Optimise your small business online: The Customer
Whether you’re just getting started, or have been in business for a long time, in order to optimise your small business online, ensuring that your customers’ needs remain at the heart of all you do is the way to drive real success. Jeff Bezos, founder and CEO of Amazon states, “If you’re truly obsessed about your customers … it will cover a lot of your other mistakes.” Becoming customer-obsessed must come from your company’s culture and value proposition – for example, to truly improve your customer experience and loyalty. Appealing to your customers by delivering what they want, when they need it, should come as a priority.
2. Optimise your small business online: Service
As soon as your customer has made the decision to click to order your product or service online – regardless of your brand – the marketing activity and PR for your product should become your main focus. When it comes to delivering a high-quality service, it is essential to consider all aspects of the service, from the way the product is packaged and delivered to how any returns and complaints are handled. By being service obsessed, you can be sure to always exceed customers’ expectations.
3. Optimise your small business online: Quality
The most successful businesses don’t just drive by their levels of creativity, but they also create quality products, based on customer feedback. Beyond your product or service, you can internalise quality packaging, simple usability and prompt responses to customer queries.
4. Optimise your small business online: Content
To build your brand online, being obsessed with high-quality and compelling content on your company’s blog is key to increasing interest. This needs to be on-going, and consistently aligned with both your brand and/or culture and what you deliver to your customers. Compelling content can help improve your customer experience and can provide a source of amusement and entertainment that puts your brand at its heart. Writing compelling posts has nothing to do with your level of experience, or whether or not you’re a native English speaker. It’s about how you make readers feel. That’s why every writer of your content must be creative, imaginative and innovative.
5. Optimise your small business online: Innovation
Any business that stands still is likely to be out of business in the near term. Being obsessed with driving innovation is critical to your business’s growth. In Steve Jobs’ own words, the founder of Apple, “You can’t just ask customers what they want and then try to give that to them … by the time you get it built, they’ll want something new.” Innovation is the key to driving new ideas and products that will gain the most attention online. Your business will require a level of commitment to experiment and test new ideas. Jeff Bezos states, “If you double the number of experiments you do per year, you’re going to double your inventiveness.” Being obsessed with these five areas will help you increase your success. Your obsession then becomes such a driving factor that your work remains your passion – the highest level of drive to make any business succeed!
Lotuswise Chartered Accountants and Business Consultants can help you and your business succeed. To find out how, please contact us.
MTD For VAT – Does My Accounting System Comply?
Making Tax Digital for VAT – MTD for VAT
You may have heard that Making Tax Digital for VAT, or MTD for VAT, is scheduled to start in April 2019 which means that your VAT information needs to be submitted to HMRC digitally.
HMRC Legislation
On 18 December 2017, HMRC published draft legislation together with examples of how your business account records might link with the HMRC computer in order to comply with MTD for VAT. The legislation specifies that “functional compatible software” must be used to record and preserve prescribed VAT related data.
What are Digital records?
“Functional compatible software” must be used to calculate your VAT due, report your VAT figures (as per the current VAT return) to HMRC, and to receive information back from HMRC. VAT related data for each sale and purchase made by your business includes the time of the supply, the value and the rate of VAT charged, or in the case of purchases, the amount of input VAT allowed. There is no requirement in the draft regulations that the electronic recording of this data must be done at the time the supply is made, or when the purchase is received. As long as the data is recorded electronically by the earlier of the date that the VAT return must be submitted or is actually submitted.
Digital Links in the Trail
Your business can use more than one piece of software to keep its digital records, but those separate software programmes must be “digitally linked”. HMRC provides examples of what it means by digitally linked in the draft notice. One example of this, is a business which uses one piece of accounting software to record all sales and purchases, this software then calculates the return and submits it to HMRC. As well as the records in the accounting software, the business uses a spreadsheet to keep track of a fleet of cars and work out its road fuel scale charges. The draft guidance suggests that the business can type the adjustment into its accounting software.
HMRC Website
For more information, visit HRMC site on Making Tax Digital for Business and on MTD for VAT.
Lotuswise Chartered Accountants and Business Consultants can of course work with you to make sure your accounting systems are in compliance with the new VAT rules before they start in 2019. You should note that MTD for VAT will not be mandatory where turnover is below the VAT registration limit, currently £85,000 per annum. To find out how we can help you and your business, please contact us now.
GDPR Regulation Is Coming…25 May 2018, Are You Ready?
GDPR Regulation is coming – 25 May 2018
The implementation date for the EU Data Protection Regulation (GDPR) is 25 May. Despite Brexit, all UK businesses, including yours, will need to comply. In order to maintain business links with EU countries, the UK will need to create EU equivalent rules and regulations. GDPR regulation is an example of this, and you must comply with it, if you want to trade with the EU. You should know that GDPR regulations are more favourable to consumers than businesses.
Personal Information
As personal information becomes more regularly shared and you might well hold, as many businesses now do, huge volumes of customer data, there is a need for management and control over what you and other businesses can do with that information.
Fines and Penalties
GDPR gives regulators the ability to apply large fines of up to 20m Euros or 4% of global annual turnover – whichever is higher, for non-compliance. As such, you need to take these new regulations seriously and will need to implement changes to the way you operate, depending on the type of personal data you hold. This will include customer records, databases, CRM systems, etc.
Contracts, Policies and Procedures
In addition, you will need to ensure that you have appropriate policies and procedures in place, with regards to any personal data you hold or process. It’s also worth you reviewing supplier contracts to ensure they are GDPR regulation compliant. Finally, your recruitment, HR policies and procedures should be reviewed, to ensure personal data is managed in a way which is compliant with GDPR regulations.
GDPR Consultants
There isn’t much time left before GDPR regulation comes into force. If you haven’t yet prepared for GDPR regulations, your best approach is probably to consider hiring an external consultant to advise your firm on getting up to date as quickly as possible.
To get more insight into data protection and GDPR, please also refer to our previous post on GDPR and how this affects you and your business.
Lotuswise Chartered Accountants and Business Consultants can help support you and your business with the complexities of the new GDPR regulations. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.
Employee Health And Safety And Staff Coaching
Employee health and safety and staff coaching is your responsibility as an employer. Regardless of the type of business you manage, health and safety is a fact of life. And encouraging growth, confidence and ambition in your employees is important. But just how do you do that?
Employee Health And Safety – The Responsibility Of Every Employer
Regardless of the type of business you manage, health and safety is a fact of life. Apart from their devastating human cost, occupational accidents and ill-health could bear a significant cost to your business through higher insurance premiums and staff absence. You, staying up to date, when it comes to health and safety, is therefore, an essential part of running your business.
Employee Health And Safety – Keep it simple
Managing health and safety in your company doesn’t have to be complicated. If your firm takes reasonable steps to prevent workplace injuries or illness, you are unlikely to have any issues. The approach you take should be proportionate to the size of your business and nature of your business activity.
Employee Health And Safety – Written health and safety policy
Ideally you should have a written health and safety policy. If you are a small business, with less than five employees, you may not be obliged to write such a policy. But it is advisable to have one in place, regardless of the size of your firm.
Employee Health And Safety – Lead by example
Your staff would tend to follow the lead of more senior managers in a safety-critical situation (even if the decision is flawed). In these situations, it is vital to establish a culture that allows everyone to raise concerns and challenge decisions in a constructive manner.
Employee Health And Safety – Carry out a risk assessment
In order to do this, in a health and safety context, think about anything that could cause harm to your employees and ensure that you are taking reasonable steps to prevent that harm.
Employee Health And Safety – Don’t be afraid to ask for help
If you don’t have any expertise in-house, you could consider hiring some external expertise. These experts will ensure your business has someone with the necessary skills to manage health and safety properly.
Staff Coaching – A good coach is a good manager
In addition to ensuring the achievement of business objectives and health and safety, managers are also responsible for staff coaching, encouraging growth, confidence and ambition in employees.
Effective leadership techniques have evolved over the last few decades. And the way you, as a manager, should interface with your teams, has become more focused on getting the most out of people, through coaching. Compared to a more directive style, if you use a coaching style, you would tend to foster a better environment for collaboration and more open communication.
Staff Coaching – Build a confident team
Coaching helps to identify the strengths and weaknesses of your team members. As a coach, you could build on each team member’s strengths and weaknesses and help to create a more confident team. If your team members are confident, they are more likely to push harder and go above and beyond what is expected of them.
Staff Coaching – Employee Engagement
If your team members feel like they are working on repetitive, menial tasks, they will tend to feel less engaged. You should, therefore, coach your teams through new experiences, so they can learn. Your employees will tend to feel more engaged, if they are trusted with new projects, and will be more productive as a result.
Staff Coaching – Active listening
If you adopt a coaching style, you, as a manager, will tend to listen more actively. So, then try to understand things from the perspective of your team members. Your employees will tend to respond more positively to this and can become more motivated as a result.
Staff Coaching – Millennials
Millennials (around 18 to 35 years of age) have become a larger segment of the workforce and if you employ any, they tend to respond well to a coaching style of leadership. Millennials would tend to welcome your feedback and regular dialogue regarding learning and development. They want to be coached and developed rather than managed. So, remember this, as this approach can only be beneficial to both you and your millennials employees!
So, it is your responsibility to make employee health and safety and staff coaching a priority in your business. Making sure your employees are safe at all times and looked after. Coaching them and encouraging their growth and confidence can only be beneficial to both them and your business.
Lotuswise Chartered Accountants and Business Consultants can help you and your business succeed. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.
Business strategy – 3 steps to creating a great one
When many of us think about business strategy, academics and expensive business consultants tend to spring to mind. The good news is that creating a really great business strategy doesn’t have to be complex. Put simply, a business strategy is what you need to get your business from where it is today to where you want it to be in say, 5 years’ time. Here are three simple steps to creating an effective strategy for your business:
1. Business Strategy – Manage business risk
Business risk is a fact of life and there are risks you can mitigate and others you can’t. Of those you cannot mitigate, you need to ensure that the opportunity for your business outweighs the potential down side. Don’t try to sweep risk under the carpet. Instead, create a risk register and list all of the major risks to your business.
Beside each line on your risk register, describe what you are doing to mitigate each risk. For example, next to “Cyber Security Risk” you might note that you have put a firewall and internet security software in place on your systems. Creating and maintaining a risk register will ensure that you don’t miss anything and that where possible, you do something to minimise business risk.
2. Business Strategy – Understand your market
To develop a successful strategy you need to understand which market you operate in. How big is the market sector that you are targeting? Is it growing and if so, how fast? Who are your competitors and how do you intend to compete with them for market share? If you understand the key drivers in your market, you can spot new opportunities, harness the forces that are driving change and create a product or service offering that is competitive.
A good understanding of your market will allow you to calibrate your offering in order to create the right balance of supply and demand, pricing and service levels.
3. Business Strategy – Competitive advantage
Every business has strengths and weaknesses. Your business strategy should take this into account. Take time to analyse your main competitors and identify their weaknesses. Now consider how your product or service offering can exploit these weaknesses to give your business a competitive advantage. For example, if your competitors are expensive, perhaps you could gain a competitive advantage by offering a lower price alternative. Perhaps you can focus on a particular niche sector in order to create an offering that is differentiated. This could give you a competitive advantage with the potential to last a long time.
Lotuswise Chartered Accountants and Business Consultants can help you and your business succeed and help you with creating a great business strategy. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.
Tax and the Spring statement – No Major Tax Changes
As announced last year, we now know that the Chancellor’s Budget will, in future, take place in the Autumn each year, as opposed to the Spring. And, in his 13 March Spring statement, we saw the Chancellor choosing to focus on the state of the economy. As he hardly mentioned any tax changes and stated that there is “light at the end of the tunnel”. We can see that this contrasts with other recent Chancellors such as Gordon Brown and George Osborne, who used both the Spring Budget and Autumn Statement, to make tax changes announcements.
New Consultations – Should You Be Concerned?
Should you be concerned by the fact that the Chancellor announced a number of tax consultations into possible future changes? Well yes and no. Yes, if you are worried about the possible changes to the VAT registration threshold. And yes, if you are part of the businesses deliberately operating below the VAT threshold (currently £85,000), as that adds 20% to the price of the goods and services. If this is your case, you could be allowed to exceed the threshold by up to 50% for one year, without the need to register for VAT. HMRC is also seeking views on how they can engage with online platforms, such as eBay and Uber, to promote tax compliance among its users.
Cash And Digital Payments In The New Economy – Do you still use cash?
Do you still use cash? As we could shortly see the possible demise of the 1p, 2p coins and the £50 note, but for different reasons. It seems that more and more of us are paying for small transactions, such as our morning coffee, by using contactless payments. If you still pay in cash and where the cost is say £2.99, you would tend to put the penny change in the charity pot, and many are thrown away! Whereas, the £50 note has been linked to money laundering, and other illegal cash-based payments. But, we are forever increasing our contactless transactions. Which means that with a consequent reduction in the number of small coins in circulation, this will have a significant impact on the charity sector. As many charities are reliant on peoples’ small change being donated outside supermarkets and stations.
Cash And Tax Evasion
When considering the future of cash in the economy, you also have to think of the role of cash in tax evasion and illegal activities. If you are part of the vast majority of traders and businesses accepting payments in cash, you do so honestly. However, in some cases, the anonymous and untraceable nature of cash transactions, is perceived to facilitate tax evasion, hidden economy activity, or money laundering. This harms the honest majority of businesses, like yours, who find it harder to compete, and it means less money goes towards our vital public services. HMRC are aware that payments in cash can be a problem for tax compliance. In some cases, this is because taxpayers find it difficult to keep accurate records of all their transactions. HMRC have identified that cash is used by a small minority of people to hide or disguise their taxable income by not reporting, or under-reporting, what they owe. The increasing use of our digital payments and reduction in the use of our cash could have a positive impact on increasing tax compliance and decreasing money laundering. However, the increase in our digital payments may only have a limited impact, especially if the dishonest minority continue to use cash to hide or suppress their income.
Could the next step be to make it mandatory to pay your window cleaner or gardener electronically? Not just yet…
Charities Gift Aid Small Donations Scheme – Does it help support your charity?
Whilst we are on the subject of the reduction in cash transactions, we take this opportunity to remind you of the Gift Aid Small Donations Scheme (GASDC). Under this scheme, your dedicated charity or community amateur sports club (CASC) can claim top-up payments on small donations up to £20.
From 6 April 2017 your dedicated charities have also been able to claim tax back on donations made using contactless technology, such as a contactless credit or debit card. As opposed to before 6 April 2017, when your charities could only claim top-up payments on small cash donations. Cash donations could be in coins or notes that have been collected and banked in the UK. Your charity does not need to know the identity of its donors or collect Gift Aid declarations. GASDS claims are worked out in the same way as Gift Aid. If the basic rate of Income Tax is 20%, your charity can claim a GASDS top-up payment of £2,000 on up to £8,000 worth of small donations. This is limited to 10 times the amount that your charity receives in Gift Aid donations that tax year.
Scottish Income Tax Rates Due To Rise From 6 April 2018 – Are You Affected?
The Scotland Act 2016 provides the Scottish Parliament with the power to set all income tax rates and bands that will apply to Scottish taxpayers’ non-savings, non-dividend (NSND) income for tax year 2018/19. As of 6 April 2018, there are significant discrepancies between the Scottish rates of income tax and the rates paid by taxpayers in the rest of England, Wales and Northern Ireland. Will this result in some taxpayers moving south or supplying their services via limited companies to avoid this increase? From 2018/19, the Scottish higher income tax rate will be 41% on income between £43,430 and £150,000 where the top rate is 46%. Under the Scottish system, there is a 19% starting band on the first £2,000 of taxable income, and an intermediate rate of 21% for income between £24,000 and £43,430. The 20% rate applies to income between £13,850 and £24,000 (taxable income £2,001 to £12,150).
If you employ Scottish taxpayers, they have a special S PAYE code, so the payroll software collects tax correctly.
Tax Efficient Extraction Of Profit From Companies For 2018/19 – Does it apply to you?
Salary and Dividends
With this new tax year, if you are part of the many directors of family companies, you will certainly be considering the most tax efficient method to pay yourself. And for many years accountants and tax advisors have suggested that, as a director/shareholder, you should extract profit by paying yourself a low salary. And that you should then extract the remainder of your income in the form of dividends.
Although dividends are not deductible in arriving at the company’s taxable profits, they do not normally attract National Insurance Contributions (NICs). The starting point of NICs rises to £162 a week from 6 April 2018. This is now significantly lower than the £11,850 personal income tax allowance. A salary just below £162 a week, £8,424 a year, would mean no NIC would be due, but would be sufficient to count as a qualifying year for State Pension purposes (if above the £6,032 lower earnings limit).
Tax Allowance and Dividends
Remember that if you are an employer, other than a director as the only employee, you are entitled to a £3,000 employment allowance, that you can set against employer’s NICs. If you have not utilised this against NICs on staff wages, then consider increasing your directors’ salaries up to £11,850. As the additional salary would save corporation tax at 19% on the £3,426 extra salary, which equals £651, whereas the employees NIC would be £411.
As for the level of dividends, the rate of tax changes from 7.5% to 32.5% at £46,350, so ideally, the dividends should not exceed £34,500, if a salary of £11,850 is paid. The first £2,000 would be taxed at 0%, with £32,500 being taxed at 7.5%.
Don’t forget that this dividend tax will then be due on 31 January 2020.
Diary Of Main Tax Events
April/May 2018
Date |
What’s Due |
|
1/04 |
Corporation tax payment for year to 30/6/17 (unless quarterly instalments apply)
|
|
5/04 |
End of 2017/18 Tax Year. 2018/19 tax year starts 6 April 2018
|
|
19/4 |
PAYE & NIC deductions, and CIS return and tax, for month to 5/04/18 (due 22/04 if you pay electronically) |
|
01/05 |
Corporation tax payment for year to 31/07/17 (unless quarterly instalments apply)
|
|
19/5 |
PAYE & NIC deductions, and CIS return and tax, for month to 5/05/18 (due 22/05 if you pay electronically)
|
Lotuswise Chartered Accountants and Business Consultants can help support you and your business discussing the implications of the Spring statement, and other ways in which you can extract profits from your family company tax efficiently. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.
GDPR – What is it and how will it impact my business?
What is GDPR and how will it impact my business?
With the General Data Protection Regulation (GDPR) regime coming into force in the UK from 25 May 2018, key changes will be introduced to the way personal data is handled. The question is: are you and your business prepared for the forthcoming change? It is important first to understand the requirements of the Information Commissioners Office (ICO), now concerned about misinformation being shared in the media. The following outlines the change key features to help you prepare.
What is GDPR and why is it necessary?
The purpose of GDPR is to reflect the importance of safeguarding your clients and customers individual personal data in the digital age. Currently, for a data protection law breach, you could be fined up to a maximum of half a million, whereas, under GDPR, you could be looking at a maximum of £17 million or, if higher, 4% of worldwide annual turnover. You should also consider the negative public implications if you fail to protect personal data. With this in mind, you should look into the following:
- Those who are “controllers” and “processors” of data within your company
- The principles of data protection
- Accountability and governance
- New rights for data subjects
- Data security breaches
What is affected?
The definition of personal data is expanded under GDPR and includes a range of online identifiers, such as IP addresses, as well as sensitive personal data coming under special categories as genetic data and biometric data. Data relating to criminal convictions and offences is not included, although there are extra new safeguards relating to how the information is processed.
Who is affected?
GDPR will affect anyone handling personal data, from customer and employee records, through to manual data, regardless of where this information is stored – be it in a filing cabinet or digitally accessed via a laptop or computer – This applies to both “Controllers and Processors”. A controller is defined as someone who is in charge of how and why personal data is being processed. A processor acts on behalf of the controller to process the data. It may be that, in a business, this role is fulfilled by the one person. For the processor, this means that, in order to remain compliant with GDPR, they now need to keep records of how they process personal data and they can now be held legally responsible for breaches of security.
Principles of data protection
Your clients personal data must be:
- Processed lawfully, fairly, and transparently
- Collected for specified, explicit, and legitimate purposes
- Adequate, relevant, and limited to what is necessary for the purpose
- Kept in an identifiable format for no longer than is necessary
- Processed securely and protected from unauthorised or unlawful processing, accidental loss destruction or damage.
Accountability and Governance
Your company must be able to demonstrate how your organisation is GDPR compliant and, implement the required technical and organisational measures. These include data protection policies such as:
- Internal audits of processing activities
- HR policies review
- Employee training and adherence to policies
- Conducting Data Protection impact assessments and, in some cases, appointing a Data Protection Officer (DPO). The DPO now becomes a legal requirement in public authorities and in organisations carrying out large scale data processing of special categories.
New Rights
New rights have been outlined for individuals / your customers / clients and cover the following points:
- The Right to be Informed – providing your clients with a privacy notice giving details of how their information is being processed and controlled.
- The Right of Access – providing your clients with the option to request details of how their information is being held, for which your company has a maximum of 30 days to deal with the request, under a £10 chargeable fee.
- The Right to Rectification – such that any of your inaccurate clients data will be corrected.
- The Right to Erasure – the right to be forgotten such that your client can request data to be deleted.
- The Right to Restrict Processing – such that your clients data can be stored but not processed.
- The Right to Data Portability – such as to obtain and reuse personal data across different services, allowing the movement, copy or transfer of clients personal data, provided that this is done in a structured format.
- The Right to Object – such that processing of personal data must stop immediately, unless there are compelling and legitimate grounds for processing.
- Rights in relation to automated decision-making and profiling – ensuring safeguards are in place to protect against damaging decisions taken without human intervention.
Lastly, if and when your company experiences data security breaches, you must inform the ICO within 72 hours, and your organisation should also have a clear plan on how to resolve / cope with the situation. Given that GDPR requirements are complex and do not exactly offer a quick fix, you and your company cannot run the risk of incurring significant penalties.
Lotuswise Chartered Accountants and Business Consultants can help support you and your business with the complexities of the new GDPR regulations. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.
Productivity Pointers: How do I do more with my time?
Productivity Pointers: The survey says
Microsoft survey on productivity
In a recent survey by Microsoft on productivity, 20,000 European workers were provided with a questionnaire in relation to work-communication tools. Employees indicated that a steady stream of emails, messages, and notifications impacted their levels of productivity and concentration. And that one expert had indicated that staff suffered elevated levels of technostress. The report, which sampled views from 21 European nations, including the UK, found that only 11.4% of European workers said they felt highly productive. This research outlines the challenges to concentration and productivity created by employees constantly exposed to an abundance of communication technology at their fingertips. Employees, who are also bombarded and distracted by endless amounts of notifications, updates, and alerts. The research also pointed to the dangers of being constantly connected, expecting each and every employee to respond to messages and requests at all hours of the day.
Social Media and productivity
Social media platforms have also taken this condition of distraction to the next level. Speaking at an industry event recently, early Facebook investor and founding president, Sean Parker, said that the massive social network is “exploiting a vulnerability in human psychology” in order to attract and retain users’ attention. And that “the thought process that went into building these applications, Facebook being the first of them, … was all about: ‘How do we consume as much of your time and conscious attention as possible?”
So, in light of this, how can you lower your technology stress levels and increase your productivity and that of your employees?
To improve your productivity, you could consider the following pointers:
1. Prioritise the important, not the urgent
When missing your deadlines is not an option, the Covey Time-Management Matrix can help you to manage your available time more efficiently. This allows you to package your tasks into one of four different quadrants in the Matrix. The key is for you to ensure that your time is balancing the short-term aspects of your role / your business with the long-term ones.
Let’s look at the Matrix quadrants
| Quadrant 1 | Quadrant 2 |
| Urgent and important activities | Not urgent but important |
| These are items that you could not have been foreseen, such as emergencies, problems, last-minute preparations, etc. | These are your tasks without a high urgency, but that can play a significant role in future, such as strategic planning, health, education, exercise, and career. |
| Quadrant 3 | Quadrant 4 |
| Urgent but not important | Not urgent and not important |
|
These are your items that appear to have a high urgency but that are not important but can impair your ability to deliver on your goals. Try to delegate or reschedule them. These types of tasks and requests can impact your productivity. Therefore, try to avoid being constantly interrupted. Allocate timeslots in which to address all issues at the same time so that your concentration does not end up suffering. Examples include interruptions, meetings, etc. |
This is the space filled with your usual time-wasters: nothing more than distractions, such as surfing the internet, Facebook, TV, trivia, etc. |
Quadrant 1 – Urgent and important activities. These are items that you could not have been foreseen, such as emergencies, problems, last-minute preparations, etc.
Quadrant 2 – Not urgent but important. These are your tasks without a high urgency, but that can play a significant role in future, such as strategic planning, health, education, exercise, and career.
Quadrant 3 – Urgent but not important. These are your items that appear to have a high urgency but that are not important but can impair your ability to deliver on your goals. Try to delegate or reschedule them. These types of tasks and requests can impact your productivity. Therefore, try to avoid being constantly interrupted. Allocate timeslots in which to address all issues at the same time so that your concentration does not end up suffering. Examples include interruptions, meetings, etc.
Quadrant 4 – Not urgent and not important. This is the space filled with your usual time-wasters: nothing more than distractions, such as surfing the internet, Facebook, TV, trivia, etc.
2. Give yourself dedicated time to work
To avoid distractions, you could give yourself the time to work on the most important, but not urgent activities (Quadrant 2). To do this, you want to make sure you allocate two slots of 45 minutes, with a 15-minute break at half-time. This length of time allows your brain to get in the zone, consequently accelerating your concentration and productivity levels. Make sure you switch off distractions completely, such as pop-up alerts from email and social media feeds.
3. Manage email communication
What do you do if your employees tend to start their working day using their inbox as their to-do list? This inevitably becomes a distraction and wastes time, with your employees trawling through every email, line-by-line. You could apply the following recommended approach by using the 4 D’s for email communication, in order of priority / preference:
1. Delete it.
If you can remove any email on an initial scan, all the better.
2. Delegate it.
If you have a team, or contacts, to whom you can delegate, consider this as your next option.
3. Diarise it.
To avoid distractions that impact on your concentration, identify a suitable calendar time to address the task at hand.
4. Do it.
If none of the above work, you may need to perform the requested task right there and then. This, however, should always be your last option.
4. Consider Email freedom
Lastly, consider complete freedom from email. You could, like some firms have done recently, introduce a ‘no email’ day policy once a week. You could also ban emails sent to people sharing the same building. As well as removing the ‘cc’ culture (covering one’s back). This ultimately forces you and your team to have face-to-face or phone call engagements with your other team members. This, in turn, can lead to improved productivity and team morale. Therefore, to be highly productive, the technology you use, needs to be handled with care. It needs to be a supportive solution to your business goals delivery, rather than a designed distraction, reducing your personal and business impact.
Lotuswise Chartered Accountants and Business Consultants can help you and your business become more efficient and raise your productivity levels. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.
Can you hire your workforce and manage the gig economy effectively?
The gig economy and your workforce
The so-called gig economy is starting to change the way we think about our workforce. In the light of a recent government review, and as the working world becomes more flexible, an increasing number of professionals are opting to become independent contractors, marketing their skills to businesses, for as long as required. This new type of employee can create a new set of challenges for your businesses to manage. These professionals tend to want more flexible working arrangements and a better work-life balance. They are agile and don’t want to be tied to the traditional 9-5 working day. As such, you, as an employer, need to change how you think about your HR policies.
Plan ahead
If you want to benefit from the gig economy and use contractors and flexible workers, you should create a plan on how you intend to allocate costs associated with them. In addition, you should agree a process by which you can set objectives, track deliverables and key milestones achievement.
Work with the right partners
If you are going to use a recruitment agency to help you employ gig economy contract workers, look for agencies that truly understand the flexible employment market. Do your due diligence and make sure they have extensive experience working with firms in your industry, as there have recently been bad press reports.
Cost drivers
Contract workers can help you lower your talent costs. As well as employment agencies, there are various online resources available to you, such as Freelancers and Upworkers, that allow independent contractors to pitch and compete for your firm’s projects. This can help you access some of the best talents around, but at a lower cost.
Utilise technology
Technology plays a key role in managing your flexible workforce and taking advantage of the gig economy. Contractors will need to access your systems and data. You will need to consider whether they need to use their own computer, or an allocated company-owned laptop / device, for the duration of their contract. You should also consider security, and ensure that company data held on any contract worker’s devices can be managed remotely, if required. The companies best able to tap into this growing talent pool can, in this way, access skills that may have previously been inaccessible to them. For example: some contractors may have broad multinational project-based experience, which can highly benefit your organisation.
Hiring contractors
When it comes to hiring workers or contractors, you will also need to be very clear as to what employment status they will effectively have. Please see our previous blog post on Contractors and Self Employment.
Lotuswise Chartered Accountants and Business Consultants can help you and your business make better use of the gig economy and contractors. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.
Sure Of Your Employment Status? Sure You’re Self Employed?
Regarding Employment Status: When is Self-Employment, Self-Employment?
Last year, the House of Commons Work and Pensions Committee published a report calling on the Government to close the loopholes that allow “bogus” self-employment practices. Practices, which burden the welfare state but reduce the tax contributions needed to sustain it. Most people working for organisations such as Uber, Amazon, Hermes and Deliveroo are not on any payroll, have limited workers’ rights and are paid for each delivery or “gig”. The Committee recommended a default assumption of “worker” status, rather than “self-employed”. The economist Matthew Taylor was also asked to produce a report on the status of such workers. It suggested that a new category of “dependent contractor” should be established. HMRC and the Treasury have now published a consultation into a thorough review of employment status.
Consultation on employment status
HMRC published this consultation on employment status on 7 February as a follow up to the Taylor Review of Modern Working Practices. You, as individual or employer, have to know which employment status applies to you or your employees. This is to ensure the right protections are applied – from the National Minimum Wage and holiday pay, to unfair dismissal protection and statutory redundancy pay. Employment status also affects the taxes an individual and their employer pay. It is therefore essential in maintaining a clear and effective tax base, with individuals and employers, knowing what tax rates and National Insurance contributions (NICs) are applicable to everyone in their organisation.
Legislation and Contract of Service
The existing legislation defining an employee for both tax and employment rights ultimately relies on whether a contract of service exists. No further definition or clarity is provided in the legislation. As a result, over time the courts have interpreted the legislation and developed tests to determine an individual’s employment status. These tests are contained in a number of key precedent cases, including a mixture of employment rights and tax judgments. A possible solution suggested is to legislate a more detailed definition of employment incorporating the irreducible minimum core tests established by case law:
- Mutuality of obligation
- Control over the individual
- Personal service
Caution as BBC Presenter Loses Landmark IR35 Case
The IR35 personal service company legislation has been on the statute book since 2000 and has never really worked as intended. The main reason for this is that the interpretation of the legislation is based on the same employment status tests referred to above. Which lack clarity and are open to interpretation by the courts. However, HMRC have recently won a key case on IR35, at the First Tier Tribunal, concerning BBC presenter Christa Ackroyd.
Ms Ackroyd had been supplying her services to the BBC through her personal service company Christa Ackroyd Media Services Ltd since 2006/07. The Tribunal agreed with HMRC, that the hypothetical contract between the BBC and Ms Ackroyd would have been a contract of service. The existence of a seven-year contract meant that Ms Ackroyd’s work at the BBC was pursuant to a highly stable, regular and continuous arrangement. It involved a high degree of continuity rather than a succession of short term engagements. That is a pointer towards an employment contract.
Another key factor considered by the court was that her fellow presenter on “Look North” was on the BBC payroll. Ms Ackroyd’s company was appealing against demands for some £419,151 from HMRC, relating to income tax and National Insurance contributions (NICs), for the tax years 2006/07 to 2012/13. It will be interesting to see if there is an appeal to a higher court. And whether this decision will be used by HMRC against other BBC presenters, and other personal service companies.
Lotuswise Chartered Accountants and Business Consultants can help you and your business make sense out of your employment status or your employees’ as well as IR35 rules, and whether or not they impact on your working arrangements. To get lots of general information and tax advice, check out our app on Google or Apple stores. To find out how we can help you, please contact us now.
5 Obsessions To Help Optimise Your Small Business Online
Optimise your small business online: It can be daunting if you are a small business starting out or looking to grow “online”. The general perception of how to increase your online presence may be the need for deep pockets – with which you can handle funding PPC (Pay Per Click), SEO (Search Engine Optimisation), SEM (Search Engine Management, SMM (Social Media Marketing) and marketing campaigns. However, it really needn’t be that scary. To help you, here are five obsessions to help optimise your small business online:
1. Optimise your small business online: The Customer
Whether you’re just getting started, or have been in business for a long time, in order to optimise your small business online, ensuring that your customers’ needs remain at the heart of all you do is the way to drive real success. Jeff Bezos, founder and CEO of Amazon states, “If you’re truly obsessed about your customers … it will cover a lot of your other mistakes.” Becoming customer-obsessed must come from your company’s culture and value proposition – for example, to truly improve your customer experience and loyalty. Appealing to your customers by delivering what they want, when they need it, should come as a priority.
2. Optimise your small business online: Service
As soon as your customer has made the decision to click to order your product or service online – regardless of your brand – the marketing activity and PR for your product should become your main focus. When it comes to delivering a high-quality service, it is essential to consider all aspects of the service, from the way the product is packaged and delivered to how any returns and complaints are handled. By being service obsessed, you can be sure to always exceed customers’ expectations.
3. Optimise your small business online: Quality
The most successful businesses don’t just drive by their levels of creativity, but they also create quality products, based on customer feedback. Beyond your product or service, you can internalise quality packaging, simple usability and prompt responses to customer queries.
4. Optimise your small business online: Content
To build your brand online, being obsessed with high-quality and compelling content on your company’s blog is key to increasing interest. This needs to be on-going, and consistently aligned with both your brand and/or culture and what you deliver to your customers. Compelling content can help improve your customer experience and can provide a source of amusement and entertainment that puts your brand at its heart. Writing compelling posts has nothing to do with your level of experience, or whether or not you’re a native English speaker. It’s about how you make readers feel. That’s why every writer of your content must be creative, imaginative and innovative.
5. Optimise your small business online: Innovation
Any business that stands still is likely to be out of business in the near term. Being obsessed with driving innovation is critical to your business’s growth. In Steve Jobs’ own words, the founder of Apple, “You can’t just ask customers what they want and then try to give that to them … by the time you get it built, they’ll want something new.” Innovation is the key to driving new ideas and products that will gain the most attention online. Your business will require a level of commitment to experiment and test new ideas. Jeff Bezos states, “If you double the number of experiments you do per year, you’re going to double your inventiveness.” Being obsessed with these five areas will help you increase your success. Your obsession then becomes such a driving factor that your work remains your passion – the highest level of drive to make any business succeed!
Lotuswise Chartered Accountants and Business Consultants can help you and your business succeed. To find out how, please contact us.
MTD For VAT – Does My Accounting System Comply?
Making Tax Digital for VAT – MTD for VAT
You may have heard that Making Tax Digital for VAT, or MTD for VAT, is scheduled to start in April 2019 which means that your VAT information needs to be submitted to HMRC digitally.
HMRC Legislation
On 18 December 2017, HMRC published draft legislation together with examples of how your business account records might link with the HMRC computer in order to comply with MTD for VAT. The legislation specifies that “functional compatible software” must be used to record and preserve prescribed VAT related data.
What are Digital records?
“Functional compatible software” must be used to calculate your VAT due, report your VAT figures (as per the current VAT return) to HMRC, and to receive information back from HMRC. VAT related data for each sale and purchase made by your business includes the time of the supply, the value and the rate of VAT charged, or in the case of purchases, the amount of input VAT allowed. There is no requirement in the draft regulations that the electronic recording of this data must be done at the time the supply is made, or when the purchase is received. As long as the data is recorded electronically by the earlier of the date that the VAT return must be submitted or is actually submitted.
Digital Links in the Trail
Your business can use more than one piece of software to keep its digital records, but those separate software programmes must be “digitally linked”. HMRC provides examples of what it means by digitally linked in the draft notice. One example of this, is a business which uses one piece of accounting software to record all sales and purchases, this software then calculates the return and submits it to HMRC. As well as the records in the accounting software, the business uses a spreadsheet to keep track of a fleet of cars and work out its road fuel scale charges. The draft guidance suggests that the business can type the adjustment into its accounting software.
HMRC Website
For more information, visit HRMC site on Making Tax Digital for Business and on MTD for VAT.