A summary of tax changes from April 2018

Changes to tax and NIC from April 2018


From the beginning of April 2018 the personal tax allowance will increase to £11,850 per year.   Tax rates will be:

England and Wales
Basic rate 20% On the next £34,500 above the personal tax allowance
Higher rate 40% On £34,501 to £150,000 (the personal allowance reduces once earnings reach £100,000)
Additional rate On earnings above £150,000


Scottish rates and bands

On the 20 February 2018 the Scottish Parliament set the following income tax rates and bands for 2018/19.

Bands Band name Rates (%)
Over £11,850*-£13,850 Starter Rate 19
Over £13,850-£24,000 Basic Rate 20
Over £24,000-£43,430 Intermediate Rate 21
Over £43,430-£150,000** Higher Rate 41
Above £150,000** Top Rate 46
Tax on Dividends

The dividend allowance of £5,000 at 0% personal income tax, will reduce to £2,000 per year from April 2018.  Shareholders will be worse off by £225, £975 or £1,143 a year depending on whether they pay tax at the basic rate, higher rate or the additional rate.   Dividend tax rates have not changed, and the rate of tax on dividends remains at 7.5% for basic rate taxpayers, 32.5% above the higher rate threshold and 38.1% for those in the additional rate band (ie. Earning over £150,000).    For many owner-directors, the dividend/salary split will still be the most tax efficient method of remuneration, but it may not suit all.

Corporation tax remains at 19%

National Insurance

Self-employed people will continue to pay Class 4 and Class 2 National Insurance Contributions (NIC).  The abolition of Class 2 NIC was scheduled for this April, but it has been delayed until April 2019.  Class 4 NIC will be 9% on profits over £8,424. Class 2 NIC will be £2.95 per week, to be added to your 2018/19 tax bill as one total for the tax year.

Other changes

The national living and minimum wage rates increase from 1st April 2018 to:

Category of worker Hourly rate
Aged 25 and above (national living wage rate) £7.83
Aged 21 to 24 inclusive £7.38
Aged 18 to 20 inclusive £5.90
Aged under 18 (but above compulsory school leaving age) £4.20
Apprentices aged under 19 £3.70
Apprentices aged 19 and over, but in the first year of their apprenticeship £3.70
Pension Contributions

Minimum auto-enrolment (workplace pension) contributions have been 1% from both the employee and employer.  From 1st April this changes to 3% contributions paid by the employee, and 2% paid by the employer.  This will change again in April 2019.


Something not directly related to tax and accountancy, but that will affect all businesses will be the introduction of the General Data Protection Regulation (GDPR).  This is a fairly significant upgrade from the Data Protection Act 1998, which just wasn’t sufficient for the online environment that we use now.  The GDPR comes into effect from 25th May 2018.  There is no exemption for small business, and fines for non-compliance will be from 4% of turnover.

Businesses complying with the DPA 1998 shouldn’t have too much trouble preparing for 25th May, but assessing the data you hold, documenting what you do with it, rewriting policies and communicating with data subjects (customers, suppliers, employees) can be time consuming.   The ICO website is a good place to start, if you’ve not already looked at this.

Making tax Digital (MTD)

Making tax digital (aka quarterly accounting), has been delayed for a couple of years.  It will start for VAT only from April 2019.  The new rules will encompass VAT registered businesses with a turnover above the VAT threshold (currently £85,000)  From 1st April 2019 records will need to be kept using ‘functional, compatible’ software. Compatible meaning it must be able to upload information direct to HMRC each quarter.

MTD for income tax, corporation tax etc. will follow after 2019.  It will mean 5 updates to HMRC being made each year, instead of the one annual tax return.  There will be an obligation to keep records electronically.  You’ll upload sales, expenses and profit figures each quarter, then a 5th report (if necessary) will be used to claim allowances and reliefs that are not included in normal day-to-day bookkeeping.

The well-known software companies are developing solutions, as well as some of the lesser known software houses. HMRC has said it will not be providing free software, as it currently does for both VAT and personal self-assessment tax returns.

This is a very brief summary, and there could be many other factors to consider in your own business. If you’d like any help with your tax, bookkeeping or accountancy, please get in touch.

A Welcome Delay for Making Tax Digital

The government today announced a welcome delay to Making Tax Digital (MTD).

Under the new timetable:
  • only businesses with a turnover above the VAT threshold (currently £85,000) will have to keep digital records and only for VAT purposes
  • they will only need to do so from 2019
  • businesses will not be asked to keep digital records, or to update HMRC quarterly, for other taxes until at least 2020

The original plan would have forced small businesses and landlords to report their finances to HMRC quarterly from April 2018.  Given that little information has been forthcoming as to what will be required, the timescale for that would have been difficult for many businesses to meet, and most likely caused problems for HMRC.

The Treasury document states that:

  • only businesses with a turnover above the VAT threshold (currently £85,000) will have to keep digital records and only for VAT purposes;
  • they will only need to do so from 2019; and
  • businesses will not be asked to keep digital records, or to update HMRC quarterly, for other taxes until at least 2020.

We still need to be prepared for digital record-keeping and quarterly reporting, and the full-blown MTD is expected to be in place by 2020.   For help with digital record-keeping, please get in touch.


Spring Budget 2017 – What you need to know

In yesterday’s Spring Budget 2017 the government announced that its aims are to:

  • help young people from ordinary working families across the country get the skills they need to do the high-paid, high-skilled jobs of the future, vital for a competitive workforce,
  • give more children the chance to go to a good or outstanding school that sets them up to succeed,
  • support the social care system with substantial additional funding, so people get the care they deserve as they grow older, and support both local NHS plans and improvements to Accident and Emergency with new capital investment,
  • invest in cutting-edge technology and innovation, so Britain continues to be at the forefront of the global technology revolution,
  • continue to bring down the deficit so the UK gets back to living within its means.

I think most of us will read that with cynicism, and we want to cut through the chancellor’s jibes and digs at the opposition and find out how we’ll be affected.   There was little in the way of surprises, or measures to help small businesses.   I’m not going to address every aspect of the budget, but here is a brief round up of the main headlines relevant to small businesses:

Income Tax

From April 2017 the personal tax allowance will be £11,500. The higher rate threshold increases to £45,000.

National Insurance

For self-employed people:  from April 2018 class 4 NIC increases from 9% to 10% on taxable profits above the lower profits limit.  The lower profits limit in 2017/18 will be £8,164.  Class 2 NIC will be abolished from April 2018.

Self-employed people earning a taxable profit of over £16,250 will pay more NIC from April 2018.

Making Tax Digital

From April 2018 small businesses must to report financial data to HM Revenue and Customs quarterly.  This won’t be implemented until April 2019 for those with a turnover below the VAT threshold.   Businesses with a turnover of £10,000 or less will not need to change to quarterly reporting.


The registration limit will increase to £85,000 from April 2017, and the de-registration limit will be £83,000

Business Rates

Increases will be capped at £50 for businesses coming out of Small Business Rate Relief.  There will be a £300 million discretionary fund for local authorities to help businesses affected by rates revaluation.

National Minimum and Living Wage

Increases will apply from April 2017

Spring Budget 2017: Living and minimum wage rates UK
Changes to the National Living and Minimum Wage

Consumer protection

Something to be aware of – a new green paper will be published on protecting consumer rights. Changes will include new protections against unfair clauses, unexpected fees when subscriptions renew or free periods end, and steps to simplify terms and conditions.

Spring Budget 2017: Limited Companies

Dividend Allowance

The dividend allowance will be reduced from £5,000 to £2,000 per year from April 2018.  Costing from £225 for owner/directors of small limited companies.

Corporation tax

A little good news for limited companies will be the fall in corporation tax rate to 19% from April 2017, and to 17% in April 2020.

R&D Tax credits

The government will make administrative changes to the Research and Development Expenditure Credit, to increase the certainty and simplicity around claims. They have also promised to take action to improve awareness of R&D tax credits among SMEs.


The Spring Budget 2017 was the last time a budget will be held in spring.  From 2018 there will be a Spring Statement and the budget will be held in autumn.

In the short-term it could be beneficial for some self-employed people to incorporate their business. Traders would gain a little control over their remuneration, splitting between salary and dividend payments. However, the trend over the last couple of years has been for the government to try to reduce the difference in taxation between different business vehicles.  It could be just a matter of time before we see an increase in tax on dividends, or the introduction of an NI charge on dividend income.

The government budget documents provide further information.

If you’re concerned about how any of the changes in the Spring Budget 2017, please get in touch.


Making Tax Digital

Making Tax Digital for Business (MTD)

Last minute. Every year. You make it through the festive season, get back to work, kids at school, New Year resolutions already forgotten. A pile of paperwork crammed into a box, shuffled off to the accountant just in time for the January deadline.

Then something worse happens. It’s not once a year any more. You’re going to have to report your finances every three months. Really?

Bookkeeping for MTD
HMRC said ‘just press a button’

Well, maybe. Maybe not.  Small businesses with sales of up to £10,000 per year will be exempt.  There have been calls for this threshold to be higher, and HMRC have said they’ll consider that.   We’ll have to wait and see.

So what does ‘Making Tax Digital’ mean?   Briefly, it’s a change from the annual tax return, to quarterly reporting with a final year-end check.   So business owners will need to tell HMRC their sales and expenses each quarter.  The requirement will be phased in from April 2018.

HMRC believe that everyone uses a computer, keeps everything perfectly up to date, consequently they think we will ‘just press a button’ to upload data.  We know differently. Your focus is on running your business and making sales while engaging with customers. Any energy left goes into running your life.  Quarterly reporting is going to happen, but it doesn’t need to be too painful.

Unfortunately we don’t yet know exactly what HMRC will be asking for. We don’t know what free software or apps will be available.  If you already use bookkeeping software, it should be updated in time.  If you use spreadsheets, or paper records, that’s fine.   A lot of the information we have on MTD is vague, but yes, really, businesses will need to update records every three months.

We help with bookkeeping, finding software, quarterly reporting and the year-end check of your tax liability.  Please get in touch if you’d like to discuss any of this.

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Tax after the EU referendum

EU_UK_FlagsFollowing the EU referendum on 23rd June, we have seen plenty of opinions, positive and negative, on how leaving the EU will affect us.  We are seeing changes in the political arena, but there will not be any immediate changes to the legal and regulatory environment.  The government will not be holding an emergency budget, although there could be one in or soon after October.

Taxation is largely a member state competence, and changes to taxation when the UK leaves the EU are likely to be less significant than other policy changes.  In terms of direct taxes (income tax, corporation tax) a number of EU directives have been incorporated into UK law, and they will continue in place. If we were to become members of the European Economic Area, of which Iceland, Liechtenstein and Norway are current members, then we would have similar sorts of tax obligations as we currently have as members of the European Union.    Indirect taxes are slightly different – especially VAT.  VAT falls under a substantive body of EU law which establishes common rules across all 28 member states.


Businesses selling and/or buying goods or services to/from other EU countries are likely to be the ones most affected by the UK leaving the EU.  We don’t yet know exactly what will happen when the UK leaves the EU, but the following changes are possible:

  • Abolition of Intrastat for movement of goods to and from the UK;
  • Abolition of EC Sales Lists for sales from the UK to the remaining EU countries;
  • Introduction of import and export rules for supplies between the UK and the remaining EU countries;
  • Increase in duty deferment facility to cover import VAT and possibly customs and excise duties relating to imports from EU countries;
  • The distance selling thresholds will no longer apply for small value of exports to remaining EU countries;
  • Changes to the Mini One Stop Shop – VAT will still need to be charged and accounted for in relation to affected supplies to customers in the remaining EU countries. This may mean registering for the non-Union Mini One Stop Shop scheme in a remaining EU country if HMRC is unable to continue operating a UK scheme;
  • Refunds of VAT incurred within the EU may become more difficult, having to rely upon the 13th Directive refund scheme;
  • EU VAT law and rulings of the CJEU will cease to have direct effect, with the UK law and courts becoming the ultimate;
  • In theory, VAT rates could change up or down, including items currently subject to VAT at 5% could becoming zero-rated, although such changes are not currently permitted under the UK VAT Lock legislation;
  • The tour operators’ margin scheme could be changed or abolished.

VAT is an important source of revenue for the government, accounting for 17% of all government receipts, so we are unlikely to see significant changes to rates or reliefs.

Chancellor’s summary

In his statement the Chancellor said the following: “As I said before the referendum, [leaving the EU] will have an impact on the economy and the public finances – and there will need to be action to address that. Given the delay in triggering Article 50 and the Prime Minister’s decision to hand over to a successor, it is sensible that decisions on what that action should consist of should wait for the Office for Budget Responsibility (OBR) to assess the economy in the autumn, and for the new Prime Minister to be in place.”

Business Interests

A new business engagement inter-ministerial group, chaired by the Business Secretary, Sajid Javid and bringing together ministers from across government to co-ordinate engagement with the business community, was established on 30 June 2016.

The new group will provide an opportunity for ministers to discuss the views, thoughts and concerns from large businesses of all types and in all sectors across the UK and ensure their concerns are represented. It will feed into the new EU Referendum Unit established within the Cabinet Office.

Secretary of State for Business, Sajid Javid, said: “Now more than ever, businesses need certainty so it’s vital that the government maintains an open and continuous dialogue. We must work together to make sure the world knows that the UK is still open for business and remains an attractive place with which to trade and invest. Working with ministers across government, I will make sure businesses have the information they need and work with them to identify opportunities as they open up.”

Given the challenges ahead, the inter-ministerial group will provide an opportunity for ministers to come together and make sure they are providing businesses with the information they need and how they can limit the uncertainty in the transition period of the UK’s exit from the EU.

Small Business

The needs and concerns of small businesses, following the referendum, will be represented by several member organisations including:  the Federation of Small Businesses (FSB); The British Chambers of CommerceThe Confederation of Business IndustryThe Institute of Directors, and professional associations including the accountancy and tax professions.

Referendum conclusion

The conclusion is that, at present, there is no conclusion. The referendum has not triggered any immediate changes to regulations and legislation, so we carry on as normal.


PSC Registers and Confirmation Statements

PSC registers and confirmation statements affect all UK Companies registered with Companies House.   They are new measures contained in the Small Business, Enterprise and Employment Act.

PSC Register

From 6th April 2016 every company must keep a register of People with Significant Control (PSC) over the company.  For many companies, such as owner managed businesses where the shareholder (owner) is also the sole director, this will be straightforward. All you need is a document titled ‘PSC Register’, with the following details of the PSC(s):

  • name
  • service address
  • date of birth
  • nationality
  • country or state of normal residence
  • residential address (not to be disclosed when making the register available for inspection, or providing copies)
  • the date the person became a PSC (or 6th April 2016 if earlier)
  • which conditions for being a PSC are met, and
  • whether an application has been made to keep the individual’s information private.

More information and details of the conditions for being a PSC are explained here.

If your company is more complex than an owner managed firm with only one or two director/shareholders, you may need more comprehensive guidance and/or to seek professional assistance.   Please note, this is draft guidance, and could be amended in the future.

Guidance is also available for People with Significant Control.

Companies will be required to maintain the PSC Register from 6th April 2016, and file it at Companies House from 30th June 2016.

Confirmation Statement

From 30th June 2016, the annual return is being replaced.  Instead, companies will file a ‘confirmation statement’ at least once a year.  For many companies making a confirmation statement will be very similar to filing the annual return.  The company information held at Companies House needs to be ‘checked and confirmed’, and any changes notified.

Your first confirmation statement date will be 12 months from your last annual return date.  You’ll have 14 days to file it (this is a reduction from 28 days for the annual return). For most companies, this will be the first time they notify Companies House of their people with significant control (PSC).

The requirement for companies to update their record with certain changes still exists. Changes to PSC details are to be updated on a confirmation statement, so companies can make a confirmation statement many times as necessary.  Whenever a confirmation statement is made, you don’t need to file another for 12 months (if nothing changes).

Other changes for companies – applied from October 2015

Accelerated strike-off

The time it takes for a company to be struck off the Companies Register has been reduced from 3 months to 2 months.

This means that your company could be struck off more quickly if you fail to keep records up to date. It also means you have less time to object to a strike off.

Directors’ dates of birth

Directors’ dates of birth are now suppressed on the public record. Directors still need to provide their full date of birth to Companies House, but it won’t be shown in full on the public record, new filings and images.  Please note that historic documents cannot be changed, so past information may still show the full date of birth.

Consent to act as a officer

For newly appointed officers, Companies house has added a statement to the relevant appointment and incorporation forms (paper and electronic) that the person has consented to act in their relevant capacity.

Companies are required to agree to this statement. This replaced the previous consent to act procedure of providing a signature on paper forms and personal authentication on electronic filings.

As part of this, Companies House will write to all newly appointed directors to make them aware that their appointment has been filed on the public register and explain their general legal duties.

Directors already holding office can refresh their knowledge of their responsibilities here:



Tax changes from April 2016

Tax changes from April 2016 – what’s new?

There are many changes being implemented in UK taxation and accounting rules this year.  This is a very brief summary aimed at owners of small businesses, sole traders and sole directors.

Personal tax allowances and tax bands

  • The income tax personal allowance increases to £11,000 and the basic rate limit increases to £43,000.
  • Married couples’ can share part of their allowance, for low income families.
  • Income tax remains at 20% (basic rate) 40% (higher rate) and 45% (upper rate).
  • The capital gains tax (CGT) exempt amount is £11,100.
  • CGT rates remain at 18% (basic rate taxpayers) 28% (higher rate taxpayers).


  • There is a 0% savings tax band of £5,000 and a new 0% personal savings allowance of £1,000 for basic rate payers and £500 for higher rate payers.
  • There is a new range of ISAs savings including a right to buy ISA and it is anticipated a crowdfunding ISA will be launched.


  • A new tax regime for dividends begins from April 2016.
  • Dividends will be taxed at 0% for the first £5,000, then 7.5% (basic rate), 32.5% (higher rate) and 38.1% (upper rate).


  • The compulsory National Living Wage (NLW) is being introduced from 1 April 2016. It is the legally required minimum level of pay for workers aged 25 and over.  The penalty for failure to pay either the NLW or the NMW of these will also increase from 100% of the underpayment to 200% of the underpayment on 1 April 2016.
  • National Minimum Wage increases have been announced for October 2016.Age 25 and over: £7.20 – (This is the National Living Wage effective from April 2016 and so will not increase in October 2016)Age 21 – 24: from £6.70 to £6.95

    Age 18 – 20: from £5.30 to £5.55

    Age 16 – 17: from £3.87 to £4.00

    Apprentice rate: from £3.30 to £3.40

    Please note – from 2017 the date for all minimum wage increase will be changed from October to April each year. This is to bring National Minimum Wage increases in line with National Living Wage increases.


Trivial Benefits

There will be a new exemption from income tax and national insurance for trivial benefits up to £50, with an annual cap of £300 for office holders of close companies and their families or households.   The exemption is an ‘all or nothing’ exemption: if the value of the benefit is £60 then the full amount of £60 is taxable, not just the £10 excess.   Examples of trivial benefits include things like birthday/wedding/Christmas gifts and workplace refreshments (coffee, tea, biscuits).


Workplace Pensions

Auto-enrolment continues to be rolled out. This is a compulsory change for everyone paying workers, and there are strict deadlines and procedures to meet.  I have arranged for a cost-effective solution for my payroll clients, and will be speaking to everyone in due course. If you process your own payroll, make sure you check your staging date on the Pensions Regulator website, and start preparing in plenty of time.

RTI (real time information)

The temporary relaxation in RTI reporting for micro employers will end as planned on 5 April 2016. The concession allowing employers to submit returns up to three days late without being subject to late filing penalties is withdrawn.

National Insurance

From 6th April there will be no Employers’ NIC on wages paid to apprentices aged under 25 or employees under 21 earning up to the Upper Earnings Limit of £43,000.

The Employers’ NICs allowance increases to £3,000 but is no longer available for companies where the sole director is the only employee.



For more information on any of the above please get in touch.



Tax update – Autumn Statement 2015


The Chancellor, George Osborne, delivered his Spending review and Autumn Statement Speech on 25 November 2015. This article outlines the changes relevant to small-business owners.  The few ‘headlines’ were

  • an extra 3% stamp duty land tax charge on the purchase of additional residential properties from 1 April 2016
  • a requirement to make a payment on account in respect of capital gains tax within 30 days of the disposal of residential properties from April 2019
  • the changes announced to tax credits in Summer Budget 2015 have been abandoned.

More information on the tax proposals scheduled for inclusion in Finance Bill 2016 will be published in the Government’s ‘Overview of Legislation in Draft’ on 9 December.

Making tax digital

As announced at Summer Budget 2015, the government wants to digitise the tax process. The aim is to modernise the tax system and provide a more real-time working basis of individual and business tax affairs, which one would expect, will lead to the advance of tax payments in many cases in due course. Key details so far are:

  • digital tax accounts are to be introduced for all small businesses and individuals by 2016/17
  • by 2020 most businesses, landlords and the self-employed will be required to update HMRC quarterly regarding their tax affairs. The details of how this will work in practice have not yet been decided
  • the intention to consult on ways to simplify tax payments with suggestions of tax payable as profits arise (as announced for capital gains tax arising on the disposal of residential property with payment due 30 days after completion from April 2019).

Employees and pensioners will not be required to update their digital tax accounts quarterly unless they have secondary incomes of more than £10,000 per year.

Simple assessment

The Government is to simplify the tax payment process for taxpayers within the Self-Assessment system where HMRC already holds all the data it needs to calculate the tax liability. Rather than requiring the taxpayer to file a return, instead HMRC will send a legally enforceable payment demand, which the taxpayer can challenge or appeal. This is expected to be introduced from 2016/17.

Residential property

An additional 3% on top of current SDLT rates from 1 April 2016 will be charged on the purchase of additional residential property (e.g. buy to lets and second properties over £40,000), though exclusions to certain corporates and funds are expected.

Dividends for company owners

There was no further commentary with respect to the Summer Budget 2015 announcement regarding the increase in dividend tax rates and the dividend allowance due to apply from April 2016, so the expectation is that these will be introduced in the Finance Bill 2016 as previously announced


Further to the announcement at Summer Budget 2015, the Government has now consulted on fundamental changes to pension tax relief. One of the options is that instead of receiving tax relief on the contribution, the savings would work more like an ISA, with a Government top-up and tax-free extraction on retirement.

The Government will provide an update on this at Budget 2016.

Self-Assessment time limits

Draft legislation is to be published ahead of Finance Bill 2016 to clarify that the time allowed for making a self-assessment is four years from the end of the tax year. No further information is included in Autumn Statement documentation but it is possible that this has been prompted by a recent case on tax administration.


There wasn’t a great deal in the Autumn Statement that we didn’t know about, or expect. This article is not a comprehensive review, but concentrated on the issues relevant to small-business owners. If you’d like to know more you can read the government’s documents here.  If you’re concerned that any of the changes mentioned may affect you please get in touch.

Leadership in Micro-businesses

Why, if your business has no or fewer than 10 employees, would leadership be the most important business skill you can have?

The Statistics Bit

A micro-business is defined, by the European Commission, as one with fewer than 10 employees, and a turnover (annual sales figure), or balance sheet value of less than 2 million euros. Micro- businesses are hugely important. In 2014 there were 5 million micro-businesses in the UK, employing 33% of the workforce, and generating 19% of turnover (annual sales figure).*

Sole-proprietorships and self-employment has increased over the last few years, with fewer businesses employing staff.*

So as the owner of a micro-business you are making an important contribution to the national economy. What can you do to keep it going, improve your prospects and grow?

The answer is that you need to lead your business forward. There are several steps you can take.

Have a clear vision

All businesses exist for a purpose. Most share a common goal to make money, but each individual business has its own reason for operating.

A business owner/manager needs to have a clear vision of their company’s place in the market, its products or services and its target customers. This vision can evolve and change, but many organisations start with one or just a few products or services and build from there. A narrow focus allows the development of expertise, which can be an asset to building a reputation and a niche.

The standard structure of a small business is one person, perhaps with employees or subcontractors fulfilling operating activities.

Can you describe what your business does in one or two sentences? Is it interesting and does it engage you? Examples of company’s visions (sometimes called mission statements ) are:

‘to make natural, delicious, healthy drinks that make people live well and die old’ Innocent Ltd

‘we’re a leading UK charity enabling people to travel by foot, bike or public transport for more of the journeys we make every day’  Sustrans

‘to bring inspiration and innovation to every athlete in the world’ Nike

You can see that each one is concise, specific in nature, but vague enough to allow for room to grow, and introduce complementary products/services.  The vision is a starting point for what you are or will be striving to achieve.

Effective planning

It’s time to flesh out your ideas, be more specific about your goal(s), and come up with a method to make it happen. Planning occurs in a cycle:

  1. Identify your requirements & define the scope of your activity
  2. Document your plan – note your assumptions, costs, timescales, resources, potential pitfalls. It doesn’t have to be a text book, nobody else needs to see it, so use your own method.
  3. Implement – put your plan into action, keep checking you’re on target, tweak, nudge, adjust whatever you need to do.
  4. Monitor your progress – is your business operating efficiently? Are you spending less than is coming in? Are you getting closer to achieving your objectives? Do your activities focus on your objective, or do you get side-tracked?
  5. Review – what is going well, what needs improvement, do you need to sell more, or cut costs?

Planning is not a one-off activity. When you reach the review stage, start again with a fresh look at your objectives and go back to stage 1. You’ll find that you make different decisions, with the knowledge that you’ve gained and documented.


Effective communication is the cornerstone of a successful venture. You may be a sole trader, but you don’t operate entirely without other people. Open and engaging relationships with suppliers, customers and employees will encourage loyalty and increase your chance of referrals. Always aim to be clear, consistent and approachable.

If you employee people, give each one a clear job description. Be clear about their remuneration, your expectations, and consider their aspirations too. Set objectives, and if feasible, get them involved in the planning process. People who ‘own’ their jobs derive more job satisfaction, and are more likely to remain loyal and valuable workers.

Motivation and ideas

We often assume that ‘motivation’ is something to bestow on others. Managers need to motivate their employees, dog trainers motivate their dogs, and coaches motivate athletes. If you have your own business, what motivates you?

Nobody else will do it for you. Find ways to keep your interest in your business. Do you have new ideas? Did you have ideas that you’ve not tried out? What are your competitors doing? Can you do it better, or differently?

*source: House of Commons Library, Briefing paper No. 06152

Further reading:

Businessballs – a huge online business manager’s resource library



Summer Budget 2015 – Small business essentials

The Summer Budget 2015 will have an impact on all UK businesses, and many individuals.  Changes are being introduced from April 2016.  What follows is a summary, with extracts, from the Summer Budget 2015 Policy Paper, published 8th July 2015.

Income Tax and Individual Taxpayers

The personal allowance will increase to £11,000 in 2016-17 (it is currently £10,600). The higher rate threshold will increase from £42,385 to £43,000.

The effective inheritance tax threshold will be £1 million, where a main residence is passed to descendants. This will be paid for by the introduction of a taper to the annual allowance for pensions tax relief for people whose total income is above £150,000 per annum.

Insurance premium tax will increase from 6% to 9.5%


Corporation tax will be cut from the current 20% to 19% in 2017, and 18% in 2020.

The Annual Investment Allowance will be £200,000 from January 2016. This allowance means businesses can claim capital allowances on tangible fixed assets of up to £200,000 in the year of purchase, rather than spreading the tax relief over several years.

From April 2016, companies where the director is the sole employee will no longer be able to claim the Employment Allowance (the £2,000 reduction in employer’s national insurance contributions).

In the March Budget 2015, the government announced it would transform tax administration for individuals and small businesses over this Parliament, leading to the end of the tax return. Small businesses will be able to manage their tax through a digital account linked to business software. HMRC will begin discussions with businesses and software providers about how best to integrate tax reporting and payment with everyday business activity, to inform a roadmap the government will publish by the end of 2015 setting out the policy and administrative changes needed.

Sunday trading – The government will consult on devolving powers on Sunday trading to city mayors and Local Authorities. This will look at allowing mayors or councils to extend Sunday trading for additional hours within parameters that they would determine.

Enterprise Zones – The government will hold a bidding round for a new programme of Enterprise Zones for this Parliament.

Tax lock – The government will legislate to set a ceiling for the main rates of income tax, the standard and reduced rates of VAT, and employer and employee (Class 1) NICs rates, ensuring that they cannot rise above their current (2015-16) levels. The tax lock will also ensure that the NICs Upper Earnings Limit cannot rise above the income tax higher rate threshold; and will prevent the relevant statutory provisions being used to remove any items from the zero rate of VAT and reduced rate of VAT for the duration of this Parliament. (Summer Finance Bill 2015)

Business tax roadmap – The government will publish a Business tax roadmap by April 2016, setting out its plans for business taxes over the rest of the Parliament.

Self-employed National Insurance contributions – The government will consult in autumn 2015 on abolishing Class 2 National Insurance contributions (NICs) and reforming Class 4 NICs for the self-employed

Simplified expenses: legislative amendments – The government will amend the simplified expenses regime introduced in Finance Act 2013 to ensure that partnerships can fully access the provisions in respect of the use of a home and where business premises are also a home. (Finance Bill 2016)

Business skills, infrastructure and regional development

To support innovation throughout the country, the government will invest £23m in 6 Next Generation Digital Economy Centres over 6 sites (London, Swansea, Newcastle, Nottingham, York and Bath), leveraging £22 million of additional funding, and partnering with LEPs, regional councils, and local SMEs. These centres will exploit opportunities across sectors of the digital economy including the creative industries, finance, healthcare and education.

The so-called Northern Powerhouse seems to fail to recognise that the UK doesn’t end at Leeds. Although there is mention of upgrading the final stretch of the M1/A1 route between Newcastle and London to motorway. The government will look into the case for renaming the A1(M) north of Leeds as the M1. The A1 will be dualled north of Newcastle as far as Ellingham,


The Employment Allowance will rise from £2,000 per year to £3,000 from April 2016. This reduces the cost of Employer’s National Insurance contributions. Most small businesses will be eligible, but as mentioned above, the allowance will no longer be available to companies where the sole director is the only employee.

A National Living Wage is being introduced for workers aged 25 and over. National Living Wage – The government will introduce a new premium for those aged 25 and over starting at 50 pence leading to a new National Living Wage (NLW) of £7.20 in April 2016. The target is £9.00 per hour by 2020.

National Minimum Wage – The combined 50 pence premium with the 20 pence minimum wage increase on the current rate will benefit 1.7 million workers and means that a current NMW worker working 35 hours a week will see their annual salary increase by over £1,200 from April 2016.

Taxation of employee benefits and expenses – As announced at Autumn Statement 2014, from April 2016 the government will simplify the tax system by introducing a statutory exemption for trivial benefits in kind costing less than £50. (Finance Bill 2016)

Apprenticeships levy – The government will introduce a levy on large UK employers to increase the number of apprenticeship starts. In England, employers will be able to access this funding for apprenticeship training. Details including rates and implementation will be set out in the Spending Review.


Dividend tax credits will be replaced with a tax-free Dividend Tax Allowance of £5,000, and new dividend tax rates. The tax rates will be 7.5% for basic rate taxpayers, 32.5% for higher rate taxpayers, and 38.1% for additional rate taxpayers.


Tax relief on mortgage interest for individual landlords will be restricted to the basic rate of income tax.

Individuals renting out a room in their main residence will benefit from an increase in Rent-a-room tax relief to £7,500 from April 2016 (currently £4,250).

Reform of the Wear and Tear Allowance – From April 2016, the government will replace the Wear and Tear Allowance with a new relief that allows all residential landlords to deduct the actual costs of replacing furnishings. Capital allowances will continue to apply for landlords of furnished holiday lets. The government will publish a technical consultation before the summer. (Finance Bill 2016)

Further information

The full Summer Budget can be found here

If you are concerned about how any of these changes could affect you please contact us.