Making the switch easy
After being with the same Accountants for over 30 years it was always going to be tricky finding the right one. I needn’t have worried, Donovan and his team made the switch painless and their expertise and great value Accountancy services since have been fantastic.
Day-to-day Liaison
The team at Tax Agility provides support, knowledge, professional advice, and more importantly – customer friendly services. Our requirements are understood and met throughout the day to day liaison. We could not be more satisfied with their professionalism.
Modern & personal approach
If in doubt they will sort it out! They have a modern and personal approach, so much so that they feel like an extension of our company.
Expertise, accurate & reliable
I have been working with Donovan’s team for a few years for my company and for one of my large clients. Since the beginning, I have always been very satisfied with the level of their services.
Their expertise in financial management is accurate and reliable; the team has always been available when I needed them; finally, they have brought clarity in the day to day administration of my client’s accounts.
Tax Agility is a company that I am happy to recommend among my entrepreneur’s connections and friends.
Access to business acumen
Tax Agility in Putney has been instrumental in the financial management of our business through a period of exceptional growth. With the implementation of financial applications, the management of our tax affairs, and having access to their business acumen, it has removed the administrative burden from the operation and provided peace of mind, allowing us to concentrate on what we do best. It is much appreciated and valued. The service is awesome and we feel very well looked after!
Saved us of money
I cannot recommend Donovan and his team highly enough. Not only are they a fantastic team of friendly accountants – they have also saved our company a huge amount of money with their advice.
Friendly and easy to deal with
I went to Tax Agility feeling overwhelmed by all the taxes associated with a limited company; in a short space of time, Donovan and his team were able to clarify most of my concerns & queries and to put my mind at rest. They are extremely knowledgeable, friendly and easy to deal with, not only did they provide me with sound, expert Accountancy advice they also offered me the business support I need during Consultpedia’s growth. The fees are reasonable, clear and fair – there are no nasty surprises. I strongly recommend Tax Agility to anyone who is looking for an Accountant; I only wish I had contacted them before.
Late payments: A serious problem for small businesses
Late payments are a serious problem for small businesses in the UK. Given the many issues faced by small businesses in the current economic climate, delayed payments and chasing payments can seem like pushing a huge boulder uphill each month.
The average time it takes for small businesses in the UK to get paid is 64 days, which is 20 days longer than the Prompt Payment Code target of 30 days. This can have a significant impact on small businesses, leading to cash flow problems, increased costs, and even bankruptcy.
The government is taking a number of steps to help small businesses with late payments. These include reforming the Prompt Payment Code, introducing a statutory minimum payment period, and making it easier for small businesses to take legal action. However, there is still more that needs to be done.
In this article, we will discuss the problem of late payments for small businesses in the UK. We will explore the impact of late payments, the government’s response, and what small businesses can do to protect themselves.
So how big is the problem of late payments to small businesses?
The FSB’s latest survey found that the average outstanding amount due to late payments for small businesses in the UK is £8,500. This is an increase of 12% from the previous survey in 2021.
The average outstanding amount can vary depending on the industry. For example, the average outstanding amount for businesses in the construction industry is £12,000, while the average outstanding amount for businesses in the professional services industry is £6,000.
The cost of late payments can be even higher for businesses that are in the early stages of growth. This is because they are more likely to be cash-strapped and less able to afford to wait for late payments.
The FSB is calling on the government to take action to address the problem of late payments. The FSB is also calling on businesses to sign up to the Prompt Payment Code, a voluntary code of conduct that sets a target of paying 95% of invoices within 30 days.
Late payments hurt some businesses more than others
The cost of late payments can be even higher for businesses that are in the early stages of growth. This is because they are more likely to be cash-strapped and less able to afford to wait for late payments.
Late payments can have a significant impact on small businesses. They can lead to cash flow problems, increased costs, and even bankruptcy. For example, if a small business does not receive payment for a product or service it has delivered, it may not be able to pay its own bills. This can lead to a spiral of debt and ultimately bankruptcy.
There are a number of factors that can contribute to late payments. In some cases, it is simply a matter of poor cash flow management on the part of the customer. However, in other cases, late payments may be a deliberate attempt by the customer to avoid paying what they owe.
Whatever the reason, late payments are a serious problem for small businesses. They can have a devastating impact on a business’s ability to operate.
What can small businesses do to protect themselves?
There are a number of things that small businesses can do to protect themselves from the impact of late payments. These include:
- Setting clear payment terms.
When you agree to provide a product or service to a customer, make sure that you set clear payment terms. This should include the due date for payment and the consequences of late payment. - Using a payment processing system.
A payment processing system can help you to track payments and send reminders to customers who are late. - Being proactive in chasing payments.
If a payment is late, do not be afraid to contact the customer and ask for an update. - Joining a trade association.
Trade associations can provide support and advice to small businesses on late payments.
Tips on collecting payments
If a customer does not pay their bill on time, you may need to take steps to collect the payment. Here are some tips on how to collect payments:
- Send a reminder. The first step is to send a reminder to the customer. This should be a polite reminder that the payment is due. You can send the reminder by email, mail, or phone.
- Follow up. If the customer does not pay after the reminder, you should follow up. This could involve sending another reminder, calling the customer, or sending them a letter.
- Be polite and professional. Even if the customer is not paying their bill, it is important to be polite and professional. This will help to maintain a good relationship with the customer, even if they do not pay.
- Be persistent. Do not give up if the customer does not pay their bill the first time. Keep following up and taking steps to collect the payment.
Know your legal rights. It is important to know your legal rights before you take legal action. This will help you to protect your interests and ensure that you are not taken advantage of. - Take legal action. If the customer still does not pay, you may need to take legal action. This could involve sending them a letter before action, issuing a County Court Judgment (CCJ), or taking them to court.
What steps are small businesses entitled to take?
Small businesses are entitled to take legal action if a customer does not pay their bill. However, there are some restrictions on what they can do. For example, they cannot charge interest on late payments unless the customer has agreed to this in writing.
The amount of money that a small business can recover from a customer who does not pay their bill is limited to the amount of the invoice plus any interest that has been agreed to. In addition, the small business may be able to recover their legal costs.
Your rights and what you need to know about charging interest on late payments
In the UK, the law on charging interest on late payments is governed by the Late Payment of Commercial Debts (Interest) Act 1998. This Act allows businesses to charge interest on late payments if the customer has agreed to this in writing. The rate of interest that can be charged is the statutory rate of interest, which is currently 8% plus the Bank of England base rate.
The statutory rate of interest is reviewed every six months and can change. It is important to check the current rate of interest before you charge interest to a customer.
If a customer has not agreed to pay interest on late payments, you cannot charge them interest. However, you may be able to recover your legal costs if you take legal action to collect the debt.
Here are some additional things to keep in mind about charging interest on late payments:
- You must have a written agreement with the customer. The agreement must be in writing and it must specify the rate of interest that will be charged.
- The interest must be reasonable. The interest rate must be reasonable and it must not be excessive.
- The interest must be applied correctly. The interest must be applied correctly and it must be calculated correctly.
If you are unsure about the law on charging interest on late payments, you should seek legal advice.
What can the government do to help small businesses late payments?
The government can also play a role in helping to tackle the problem of late payments. This includes:
- Introducing a statutory minimum payment period. This would set a minimum time period within which businesses must pay their invoices.
- Making it easier for small businesses to take legal action against late payers. This would give small businesses more power to recover the money they are owed.
- Providing financial support to small businesses that are affected by late payments. This could include loans or grants to help businesses cover their costs.
- Reforming the Prompt Payment Code. The government is currently reforming the Prompt Payment Code, a voluntary code of conduct for businesses that sets a target of paying 95% of invoices within 30 days. The reforms aim to make the code more effective and to increase the number of businesses that sign up to it.
- Introducing a statutory minimum payment period. The government is considering introducing a statutory minimum payment period, which would set a minimum time period within which businesses must pay their invoices. This would help to protect small businesses from late payments and would give them more certainty about when they will be paid.
- Making it easier for small businesses to take legal action. The government is also considering making it easier for small businesses to take legal action against businesses that do not pay their invoices on time. This would help to ensure that small businesses can recover the money that they are owed.
- The government is also working with businesses to raise awareness of the problem of late payments and to encourage businesses to pay their invoices on time.
Additionally, the following legislation is presently being considered:
- The Late Payment of Commercial Debts (Amendment) Bill. This bill would reform the Late Payment of Commercial Debts (Interest) Act 1998, which sets out the rules on charging interest on late payments. The bill would make it easier for businesses to charge interest on late payments and would increase the amount of interest that can be charged.
- The Small Business Payment Practices Bill. This bill would introduce a statutory minimum payment period for businesses that do not pay their invoices on time. The bill would also make it easier for small businesses to take legal action against businesses that do not pay their invoices on time.
What is the Prompt Payment Code?
The Prompt Payment Code is a voluntary code of conduct for businesses that sets a target of paying 95% of invoices within 30 days. The code was established in 2008 by the Office of the Small Business Commissioner (OSBC) on behalf of the Department for Business, Energy & Industrial Strategy (BEIS).
The Prompt Payment Code is designed to help small businesses by ensuring that they are paid on time. The code sets out a number of principles that businesses should follow, including:
- Paying invoices within 30 days.
- Giving clear guidance to suppliers on terms, dispute resolution, and prompt notification of late payment.
- Encouraging other businesses to adopt the Prompt Payment Code.
Businesses that sign up to the Prompt Payment Code are required to publish a statement on their website that they are a signatory to the code. They are also required to report their performance against the code to the OSBC each year.
The Prompt Payment Code is not legally binding, but businesses that do not comply with the code may be subject to reputational damage. The OSBC also has the power to issue warnings and guidance to businesses that do not comply with the code.
The Prompt Payment Code is a valuable tool for small businesses. By signing up to the code, businesses can demonstrate their commitment to paying their suppliers on time. This can help to improve relationships with suppliers and can help to protect businesses from the financial problems that can be caused by late payments.
Here are some of the benefits of signing up to the Prompt Payment Code:
- Improved relationships with suppliers.
- Reduced risk of late payments.
- Increased customer satisfaction.
- Improved reputation.
Reforming the Prompt Payment Code
The Prompt Payment Code is currently undergoing a reform process. The reforms aim to make the code more effective and to increase the number of businesses that sign up to it.
The reforms include:
- Strengthening the code’s enforcement mechanisms.
- Making it easier for small businesses to take legal action against businesses that do not pay their invoices on time.
- Requiring businesses to report their performance against the code more frequently.
The reforms are currently being consulted on, and it is expected that they will be implemented in 2023.
The Prompt Payment Code is a valuable tool for small businesses, and the reforms are designed to make it even more effective. By signing up to the code, businesses can demonstrate their commitment to paying their suppliers on time and can help to protect themselves from the financial problems that can be caused by late payments.
Here are some of the benefits of the reformed Prompt Payment Code:
- Stronger enforcement mechanisms. This will make it more likely that businesses that do not comply with the code will be held accountable.
- Easier for small businesses to take legal action. This will give small businesses more options if they are not paid on time.
- More frequent reporting. This will help to ensure that businesses are meeting the code’s requirements.
If you are a small business, we encourage you to consider signing up to the Prompt Payment Code. It is a simple way to help protect your business from the impact of late payments.
Final thoughts
Late payments are a serious problem for small businesses in the UK. They can have a devastating impact on a business’s ability to operate. There are a number of things that small businesses can do to protect themselves from the impact of late payments. However, the government also needs to play a role in tackling this problem. By introducing a statutory minimum payment period, making it easier for small businesses to take legal action, and providing financial support, the government can help to protect small businesses from the impact of late payments.
In addition to the above, here are some other things that small businesses can do to protect themselves from late payments:
- Do your research and due diligence on potential customers. Before you agree to provide a product or service to a customer, make sure that you do your due diligence and check their credit rating. This will help you to identify customers who are more likely to pay late.
- Use a credit card or payment processor that offers late payment protection. This will help to protect you from financial loss if a customer does not pay their bill.
- Be aware of your legal rights. If a customer does not pay their bill, you may be able to take legal action against them. However, it is important to be aware of your legal rights before you do this.
By taking these steps, you can help to protect your business from the impact of late payments.
UK small businesses record levels of digital adoption in 2023
A recent report by the Federation of Small Businesses (FSB) found that small businesses in the UK are adopting digital technology at a record pace. The report found that 87% of small businesses now have a website, and 70% use online marketing.
This is a significant increase from the previous year, when only 75% of small businesses had a website and 55% used online marketing. The report suggests that the pandemic has accelerated the digital transformation of small businesses, as they have been forced to find new ways to reach customers and sell their products and services online.
Interestingly, the report found that small businesses that have adopted digital technology are more likely to be profitable. 60% of small businesses that use digital marketing are profitable, compared to only 40% of small businesses that do not use digital marketing.
The findings suggest that digital adoption is essential for small businesses in the UK. Furthermore, one can conclude that small businesses that adopt digital technology are more likely to be successful, both in terms of profitability and growth.
There are, however, a number of barriers to digital adoption for small businesses. These barriers include lack of skills, lack of funding, and lack of awareness of the benefits of digital technology.
The FSB report recommended that the government and other organizations provide support to small businesses to help them adopt digital technology. The report also recommends that small businesses themselves make a commitment to digital adoption and invest in the skills and resources they need to succeed online.
The report’s findings suggest that digital adoption is a key factor for small businesses in the UK. By adopting digital technology, small businesses can improve their profitability, grow their businesses, and reach new customers. In summary:
- The most common digital technologies used by small businesses in the UK are websites, social media, and email marketing.
- Small businesses that use digital technology are more likely to be aware of the latest trends and to be able to adapt their businesses accordingly.
- The main barriers to digital adoption for small businesses are lack of skills, lack of funding, and lack of awareness of the benefits of digital technology.
- The government and other organisations provide support to small businesses to help them adopt digital technology.
Examples of small business digital adoption
Here are some examples of the types of digital adoption involved in the small business sector:
- Websites: Having a website is essential for any small business that wants to be found online. A website can be used to showcase products and services, provide information about the business, and connect with customers.
- Online marketing: Online marketing is a broad term that encompasses a variety of activities, such as search engine optimization (SEO), pay-per-click (PPC) advertising, and social media marketing.
- Online marketing can be used to reach new customers, generate leads, and drive sales.
- E-commerce: E-commerce refers to the sale of goods and services online. E-commerce platforms like Shopify and WooCommerce make it easy for small businesses to set up an online store and sell their products to customers around the world.
- Cloud computing: Cloud computing refers to the use of remote servers to store and process data. Cloud computing can help small businesses save money on IT costs and improve their flexibility and scalability. For instance, cloud-based accounting software allows businesses to access their accounting data from anywhere, at any time. This can save businesses time and money, as they no longer need to maintain their own accounting software on-premises.
- Mobile apps: Mobile apps are a great way to reach customers on their smartphones and tablets. Mobile apps can be used to provide information, offer discounts, and facilitate customer service.
- Online invoicing and payments: Online invoicing and payments allow businesses to send and receive invoices and payments electronically. This can save businesses time and money, as they no longer need to mail invoices or process payments manually.
- Receipt scanning and tracking: Receipt scanning and tracking tools allow businesses to scan and track receipts electronically. This can help businesses to automate their expense reporting process and improve their cash flow management.
- Accounting automation: Accounting automation tools can automate tasks such as data entry, reconciliation, and reporting. This can free up businesses’ time so that they can focus on other important tasks.
- Data analytics: Data analytics tools can help businesses to analyze their accounting data to identify trends and make informed decisions. This can help businesses to improve their financial performance.
How can small businesses effectively adopt digital technologies and become digitally enabled?
If you’re a small business owner and you’re thinking about adopting digital technologies and becoming a ‘digitally enabled business’. That’s great! Digital technologies can help you improve your efficiency, productivity, and customer service. They can also help you reach new markets and grow your business.
But before you start adopting digital technologies, it’s important to to create a firm foundation for what lies ahead so here are some tips for small businesses that are looking to adopt digital technology in their quest for digital enablement benefits:
Start with a clear goal in mind. What do you want to achieve by adopting digital technology? Do you want to reach new customers? Increase sales? Improve customer service? Once you know your goals, you can start to develop a plan to achieve them.
Do your research. There are a lot of different digital technologies out there, so it’s important to do your research and find the ones that are right for your business. Talk to other small businesses, read online reviews, and attend industry events to learn more about the latest trends.
Start small and scale up. There’s no need to invest in a lot of expensive technology upfront. Start with a few small projects and see how they go. If they’re successful, you can then scale up your digital adoption efforts.
Get help from experts. If you’re not sure where to start, or if you need help implementing a digital technology solution, there are a number of experts who can help you. There are also a number of government and non-profit organisations that offer free or low-cost support to small businesses.
Adopting digital technology can be a daunting task, but it’s worth it in the long run. By adopting digital technology, small businesses can improve their profitability, grow their businesses, and reach new customers.
What are some of the benefits that digital adoption can bring?
There’s a lot of time and effort that goes into becoming a digital enabled company, not least in the planning and choice of technologies that match your businesses level of service and technological experience. Just the time alone, in training staff and managing customer expectations, mean that the benefits must be significant to justify the level of investment. So here are a few of the main benefits your business and customers can expect:
Increased efficiency: Small businesses are able to automate tasks and streamline their operations. This can free up time and resources so that businesses can focus on other important activities.
Reduced costs: Small businesses can save money on things like printing, postage, and travel. For example, businesses can use online tools to manage their finances, communicate with customers, and track inventory.
Improved customer service: Your business can provide better customer service. For example, businesses can use live chat and online support to answer customer questions and resolve issues quickly.
Increased visibility: In today’s business landscape, online visibility is critical and so the adoption of the right web enabling technologies is essential. This can lead to more customers and more sales.
New opportunities: An example of how visibility through digital technology can open up new opportunities. For example, businesses can use digital marketing to reach new customers around the world.
The importance of security: When adopting digital technology, it is important to take steps to protect your business from cyberattacks. This includes using strong passwords, keeping your software up to date, and being aware of the latest threats.
The need for training: Adopting digital technology can be a complex process, so it is important to provide your employees with training on how to use the new technology. This will help them to get the most out of the technology and to avoid making mistakes.
The importance of measuring results: It is important to track the results of your digital adoption efforts so that you can see what is working and what is not. This will help you to make adjustments to your strategy as needed.
Recent updates to the government initiatives and industry responses
Since the Help to Grow: Digital scheme closed in February 2023 there have been no further updates from the government. However, it is possible that the government will announce a new scheme in the future, but there is no guarantee of this.
The Federation of Small Businesses (FSB) has expressed disappointment at the closure of the Help to Grow: Digital scheme, stating that it was “a missed opportunity to help small businesses invest in digital technologies.”
The British Chambers of Commerce (BCC) has also expressed disappointment, stating that the scheme “was a valuable tool for helping small businesses to improve their digital capabilities.”
The government has said that it is “considering options for how to support small businesses with digital adoption in the future.”
Overall, there is a consensus that digital adoption is essential for small businesses to succeed in the modern economy. The government and other organizations must take steps to support digital adoption by small businesses, and it is likely that this trend will continue in the years to come.
Final thoughts
Digital adoption is essential for small businesses, and at TaxAgility, it’s a subject we discuss often with our client base, especially in relation to the array of cloud accounting tools available to them in the quest for digital enablement.
By adopting digital technologies and following an ongoing path of digital enablement, small businesses can improve their profitability, grow their businesses, and reach new customers. However, it is important to do your research and find the right digital technologies for your business. You should also start small and scale up as you become more comfortable with the technology.
What is the Register of Overseas Entities (ROE) and how does it affect me as an overseas investor in UK property
The new Register of Overseas Entities (ROE) is a public register of beneficial ownership information for overseas entities that own land or property in the UK. The ROE was created under the Economic Crime (Transparency and Enforcement) Act 2022, which was passed in response to the Russian invasion of Ukraine. The ROE is intended to make it more difficult for criminals to launder money through UK property by making it easier for law enforcement to identify the true owners of overseas entities.
The ROE came into force on 1 August 2022. All overseas entities that own land or property in the UK must register with the ROE. The information that must be registered includes the name and address of the beneficial owner of the entity, as well as the date on which the entity acquired the property.
The ROE is a valuable tool for law enforcement and other agencies that are working to combat economic crime. By making it easier to identify the true owners of overseas entities, the ROE can help to deter criminals from using UK property to launder money.
In this article we will cover the following:
- The extent of crime related to property investment in the UK
- A brief overview of the ROE
- An explanation of why the ROE was created
- A description of the information that must be registered on the ROE
- A discussion of the benefits of the ROE
So how big is the problem?
To highlight how big of an issue money laundering through property is in the UK, here are some statistics for 2022 on money laundering related to UK property investment by overseas individuals:
- Total value of UK property investment by overseas individuals: £6.7 billion
- Value of UK property investment by Russians accused of corruption or links to the Kremlin: £1.5 billion
- Percentage of UK property investment by Russians accused of corruption or links to the Kremlin in the City of Westminster: 28.3%
- Percentage of UK property investment by Russians accused of corruption or links to the Kremlin in Kensington and Chelsea: 18.8%
Such statistics highlight the extent of money laundering related to UK property investment by overseas individuals. The UK has long been a target for money launderers, and the property market is a particularly attractive option as it is relatively easy to hide the source of funds. The recent sanctions against Russia have increased the focus on money laundering in the UK, and it is likely that these statistics will only increase in the coming years.
How do criminals achieve their goals? Here are some of the ways that money launderers use UK property investment to launder their money:
Buying property in cash: This is the most common way to launder money through property investment. Criminals can simply buy property in cash, without having to provide any evidence of where the money came from.
Using shell companies: Criminals can set up shell companies to buy property on their behalf. This makes it difficult to trace the ownership of the property, and therefore the source of the funds.
Using trusts: Criminals can set up trusts to own property. This can also make it difficult to trace the ownership of the property, and therefore the source of the funds
This is why the UK government has taken steps to combat money laundering in the property market. These include introducing new regulations for property transactions, increasing the powers of law enforcement agencies to investigate suspected money laundering and recently, the introduction of the ROE.
The creation of the ROE
The ROE is a public register that lists the beneficial owners of overseas entities that own land or property in the UK. The register was created as part of the Economic Crime (Transparency and Enforcement) Act 2022, which was passed in response to the Russian invasion of Ukraine. The aim of the ROE is to increase transparency and make it more difficult for criminals to launder money through UK property. The ROE has been welcomed by anti-corruption campaigners, who believe that it will make it more difficult for criminals to hide their assets. However, some critics have argued that the ROE is too complex and that it will be difficult to enforce.
Are you looking to invest in UK property, or perhaps you already own property here?
If you are an overseas investor who owns property in the UK, or if you are considering buying property in the UK, you will need to be aware of the ROE. The following are some of the key things you need to know:
Who is required to register?
The ROE applies to all overseas entities that own land or property in the UK. An overseas entity is any entity that is not incorporated or registered in the UK. This includes companies, trusts, partnerships, and individuals.
What information must be registered?
- The ROE requires overseas entities to register the following information about their beneficial owners:
- Name
- Date of birth
- Nationality
- Residential address
- Occupation
How do I register?
You can register your beneficial ownership information on the ROE website. The registration process is free.
What are the penalties for non-compliance?
If you fail to register your beneficial ownership information on the ROE, you could face a fine of up to £2,500.
Benefits of registering on the ROE
There are a number of benefits to registering on the ROE, including:
Increased transparency: The ROE makes it easier for law enforcement agencies to track down criminals who use UK property to launder money.
Reduced risk of fraud: The ROE makes it more difficult for criminals to steal your identity and take control of your property.
Improved market reputation: By registering on the ROE, you are demonstrating that you are a responsible investor and that you are committed to compliance with the law.
The ROE system may seem like a lot of additional paperwork, but it is important to remember that it is designed to protect you and your investment. By registering your beneficial ownership information on the ROE, you are helping to make the UK property market a more transparent and secure place.
Final thoughts
The ROE is a new initiative that is designed to increase transparency and reduce the risk of financial crime in the UK property market. If you are an overseas investor who owns property in the UK, or if you are considering buying property in the UK, we strongly suggest that you register your beneficial ownership information on the ROE. By doing so, you are helping to make the UK property market a safer and more secure place for everyone.