Establishing Your Overseas Business in the UK: A Comprehensive Guide

The United Kingdom has long been a beacon for international businesses seeking to expand their horizons. With its thriving economy, diverse market sectors, and business-friendly environment, the UK offers a wealth of opportunities for overseas companies.

In this comprehensive guide, we’ll delve into the essential aspects of setting up your business in the UK, providing you with the insights, guidance, and practical tips you need to navigate this exciting market.

Why the UK? A Land of Opportunity

Thinking about setting up business in the UK?

The UK boasts a robust and dynamic economy, consistently ranking among the world’s top performers. Its GDP of £2.2 trillion and a population of over 66 million make it an attractive destination for businesses across various industries. The country’s diverse market sectors, ranging from financial services and technology to creative industries and manufacturing, provide ample opportunities for growth and innovation.

Did you know? The UK is home to over 1,100 multinational companies’ headquarters, showcasing its global appeal and connectivity.

But what sets the UK apart? Let’s explore three key advantages:

  1. Strategic Location: Situated at the crossroads of Europe and the Atlantic, the UK provides unparalleled access to key markets worldwide. Its well-developed transportation infrastructure, including major international airports and ports, facilitates efficient global connectivity.
  2. Innovative Environment: The UK’s world-class universities, research institutions, and thriving startup ecosystem foster a culture of innovation and entrepreneurship. The government actively supports research and development through various initiatives and tax incentives, creating an environment that nurtures cutting-edge technologies and talent.
  3. Emerging Opportunities: From fintech and green technology to the creative industries, the UK is at the forefront of emerging sectors, offering exciting prospects for growth. The country’s commitment to sustainability, digital transformation, and innovation presents unique opportunities for overseas businesses to tap into these dynamic markets.

Why the UK Remains a Top Choice for Startups in Europe

When considering establishing a new office or startup in Europe, many entrepreneurs and businesses find themselves weighing the options between the UK and other European cities. This decision has become even more complex in the wake of Brexit, which has raised questions about the UK’s future relationship with the European Union. However, despite these challenges, the UK remains a top contender for new startup enterprises, and not just in London, but in other UK cities as well.

Addressing Common Concerns

Let’s tackle some of the frequently asked questions and concerns about choosing the UK as a startup location:

  1. Will Brexit hinder access to European markets?While Brexit has indeed changed the UK’s relationship with the EU, it’s important to note that the UK has been proactively establishing new trade agreements and partnerships with countries around the world. Moreover, the UK’s strategic location and well-connected transportation infrastructure still make it an attractive gateway to European markets.
  2. Are other European cities more startup-friendly than London?London has long been recognized as a global startup hub, offering a vibrant ecosystem, access to talent, and a supportive business environment. However, other UK cities such as Manchester, Edinburgh, and Birmingham are also emerging as dynamic startup destinations, each with their unique strengths and opportunities.
  3. Will Brexit impact the availability of talent?The UK government has introduced new visa schemes, such as the Global Talent Visa and the Innovator Visa, to attract and retain international talent in the post-Brexit era. Additionally, the UK’s world-renowned universities continue to produce highly skilled graduates, ensuring a strong pipeline of local talent.

Compelling Reasons to Choose the UK

Now, let’s highlight some of the key advantages that make the UK a compelling choice for startups:

  • Supportive Business Environment: The UK offers a business-friendly regulatory framework, with initiatives such as the Enterprise Investment Scheme (EIS) and the Seed Enterprise Investment Scheme (SEIS) providing tax incentives for investors backing early-stage companies.
  • Access to Funding: The UK has a mature and diverse funding landscape, with a wide range of venture capital firms, angel investors, and government grants available to support startups at various stages of growth.
  • Thriving Ecosystem: The UK boasts a vibrant and collaborative startup ecosystem, with numerous accelerators, incubators, and co-working spaces fostering innovation and facilitating valuable connections.
  • Diverse Talent Pool: The UK’s multicultural society and world-class universities attract talent from around the globe, providing startups with access to a diverse and highly skilled workforce.

While Brexit has undoubtedly brought about changes and uncertainties, the UK’s fundamental strengths as a startup hub remain intact. By carefully navigating the challenges and leveraging the opportunities, startups can still thrive and succeed in the UK’s dynamic and supportive business environment.

Navigating the UK Business Landscape

Understanding Business Structures

Choosing the right business structure is crucial when setting up in the UK. Whether you opt for a Limited Company, Partnership, or Sole Trader status, each has its implications for liability, taxation, and reporting requirements.

  • Limited Company: A separate legal entity offering limited liability protection to its shareholders. Ideal for businesses with multiple shareholders and those seeking to limit personal liability.
  • Partnership: Involves two or more individuals sharing ownership and management responsibilities. Suitable for businesses with multiple owners who want to share profits and decision-making.
  • Sole Trader: Self-employed individuals running their own business. Appropriate for small-scale operations with low risk and minimal complexity.
Common Mistake: Failing to seek professional advice when selecting a business structure can lead to costly consequences down the line. It’s essential to consider factors such as liability, ownership structure, and long-term goals when making this decision.

Legal Considerations

Establishing your business in the UK involves navigating a range of legal aspects to ensure compliance and protect your interests. Some key considerations include:

  • Registration and Incorporation: Registering your business with the appropriate authorities, such as Companies House for Limited Companies and HMRC for tax purposes. Ensuring your company name complies with UK naming rules and doesn’t infringe on existing trademarks.
  • Employment Law: Familiarizing yourself with UK employment laws, including requirements for employment contracts, minimum wage, working hours, and employee rights. Ensuring compliance with visa requirements for non-UK residents and understanding the implications of hiring overseas staff.
  • Data Protection and Intellectual Property: Adhering to the UK’s strict data protection laws, including the General Data Protection Regulation (GDPR), when collecting, processing, and storing personal data. Protecting your intellectual property, such as trademarks, patents, and copyrights, by registering them with the relevant authorities.
Pro Tip: Engage the services of experienced legal professionals specializing in UK business law to ensure compliance, avoid potential pitfalls, and safeguard your business interests.

Taxation and Accounting

The UK’s tax system can be complex, with various obligations and deadlines to meet. Understanding the intricacies of corporate tax, VAT, and accounting standards is essential to avoid penalties and maintain compliance.

  • Corporate Tax: The UK has a competitive corporate tax rate of 19%, applicable to company profits. Ensuring timely filing of tax returns and understanding the tax implications of your business structure is crucial.
  • VAT Registration: If your business’s taxable turnover exceeds the VAT registration threshold (currently £85,000), you must register for VAT, charge it on your goods and services, and file regular VAT returns.
  • Accounting Standards: The UK follows the International Financial Reporting Standards (IFRS) for accounting purposes. Maintaining accurate financial records and preparing annual accounts in accordance with these standards is essential.
Common Mistake: Failing to keep accurate records and meet tax filing deadlines can result in significant penalties and reputational damage. Engaging the services of a qualified accountant familiar with UK tax laws can help ensure compliance and optimize your tax position.

Immigration Considerations for Overseas Staff

When establishing your business in the UK, it’s important to consider the immigration implications for your overseas staff. The UK has specific visa requirements for individuals coming to work or set up a business in the country.

  • Skilled Worker Visa: This visa category is for individuals who have been offered a skilled job in the UK by a licensed sponsor. It replaced the Tier 2 (General) work visa.
  • Intra-Company Transfer Visa: This visa allows multinational companies to transfer employees from their overseas branches to the UK for a temporary assignment.
  • Innovator Visa: Designed for experienced entrepreneurs seeking to establish a business in the UK. Applicants must have a viable, scalable, and innovative business idea.
  • Start-up Visa: Suitable for entrepreneurs looking to set up their first business in the UK. Applicants must have an innovative, viable, and scalable business idea.
Important: TaxAgility is not an immigration advisor. While we can provide general information about the available visa routes, it’s crucial to seek the advice of a qualified immigration lawyer to ensure compliance with UK immigration laws and to determine the most suitable visa category for your specific circumstances.

Step-by-Step: Setting Up Your UK Business

Setting up your business in the UK involves several key steps. Here’s a comprehensive guide to help you navigate the process:

  1. Choose your business structure based on factors such as liability, ownership, and long-term goals. Consider seeking professional advice to make an informed decision.
  2. Register your business with the appropriate authorities, including Companies House for Limited Companies and HMRC for tax purposes. Ensure your company name complies with UK naming rules and doesn’t infringe on existing trademarks.
  3. Set up your banking and finance, including opening a UK business bank account and exploring funding options such as business loans, grants, and investor funding. Research and compare different banking providers to find the most suitable one for your needs.
  4. Secure your premises, whether it’s a physical office or a virtual presence. Consider factors such as location, accessibility, and cost when choosing your business premises. Ensure compliance with health and safety regulations and provide a suitable working environment for your employees.
  5. Build your team, navigating UK employment laws and visa requirements for non-UK residents. Develop clear employment contracts, policies, and procedures to ensure a fair and compliant workplace.
  6. Establish your network, forging partnerships, joining industry associations, and attending networking events to gain valuable insights and contacts. Collaborate with local businesses, suppliers, and distributors to tap into their expertise and expand your reach.
  7. Comply with legal and regulatory requirements, including data protection (GDPR), intellectual property protection, and industry-specific regulations. Stay informed about updates and changes to maintain ongoing compliance.
  8. Implement effective accounting and bookkeeping practices, maintaining accurate financial records and preparing annual accounts in accordance with UK accounting standards. Consider hiring a qualified accountant to ensure compliance and optimize your tax position.
  9. Develop your marketing and sales strategies, tailoring your approach to the UK market. Understand your target audience, competitive landscape, and unique value proposition to effectively promote your products or services.
  10. Continuously review and adapt, monitoring your business performance, seeking feedback from customers and stakeholders, and making necessary adjustments to optimize your operations and growth strategies.
Timeline: The process of setting up a business in the UK typically takes between 2-4 months, depending on the complexity of your operations and the time required to secure necessary approvals and registrations. However, it’s important to allocate sufficient time for planning, research, and seeking professional advice to ensure a smooth and compliant setup process.

Tapping into UK Business Support

The UK government actively supports and encourages foreign investment, offering a range of initiatives and resources to help overseas businesses thrive. From grants and funding schemes to advisory services and accelerator programs, there are numerous avenues to explore.

Spotlight: The Department for International Trade (DIT) provides tailored support and advice to overseas businesses looking to establish a presence in the UK. They offer a range of services, including:

  • Market insights and sector-specific intelligence
  • Introductions to key contacts and potential partners
  • Assistance with site selection and property searches
  • Guidance on UK business regulations and compliance requirements
  • Access to funding and investment opportunities

Other notable resources and support networks include:

  • Chambers of Commerce: Provides local business support, networking opportunities, and access to international trade services.
  • Innovate UK: Supports businesses in developing innovative technologies and products through funding, expertise, and collaboration opportunities.
  • Local Enterprise Partnerships (LEPs): Regional partnerships between businesses and local authorities that provide support, funding, and strategic guidance for economic growth.

Final Thoughts: Unlocking Your UK Success Story

Establishing your overseas business in the UK is an exciting journey filled with opportunities and challenges. By understanding the market landscape, navigating legal and regulatory requirements, and tapping into the right support networks, you can position your business for success in this dynamic and rewarding market.

At TaxAgility, our team of experienced accountants and business advisors is here to guide you every step of the way. From choosing the right business structure to ensuring compliance and maximizing your potential, we provide tailored solutions to help you unlock your UK success story.

Take the first step today. Contact us for a free consultation and let us help you turn your UK business ambitions into reality. Our expert team will work closely with you to understand your unique needs, provide strategic guidance, and support you throughout your UK business journey.

Remember, success in the UK market requires careful planning, adaptability, and a willingness to learn. By staying informed, seeking professional advice, and leveraging the right resources, you can confidently navigate the challenges and seize the opportunities that the UK has to offer.

Start your UK success story today with TaxAgility by your side.

Tips to help you achieve success in a challenging 2023 business environment

We are already one quarter or the way through 2023. The UK economy continues to face a number of challenges this year. With the outlook unlikely to change much during the year, except possible interest rate changes and adjustments in inflation, businesses will need to be more agile and innovative than ever before in order to remain successful. We thought it might be useful to you, to share are a few tips on how to do just that as you progress through the year.

How Businesses Can Remain Successful in 2023

The economic environment in 2023 is uncertain. The UK economy is expected to grow at a slower pace than in 2022, and there are concerns about the impact of rising inflation and interest rates. Despite the uncertainty, there are a number of steps that businesses can take to remain successful in 2023 and set themselves up for success in 2024. Success tips for business in 2023These include:

Focusing on cash flow: In a challenging economic environment, it is important to focus on cash flow. This means ensuring that you have enough money coming in to cover your expenses. You may need to take steps to reduce your costs, such as negotiating better deals with suppliers or reducing your workforce.

Investing in innovation: Innovation can help you to stay ahead of the competition and create new opportunities. This could involve developing new products or services, or finding new ways to reach your customers.

Building relationships with customers and suppliers: Strong relationships with customers and suppliers can help you to weather difficult economic times. Make sure that you are communicating regularly with your customers and suppliers, and that you are working together to find solutions to any problems that may arise.

Being prepared to adapt: The economic environment is constantly changing, so it is important to be prepared to adapt. This could involve changing your business model, entering new markets, or developing new products or services.

Focus on cash flow

In a challenging economic environment, it is important to focus on cash flow. This means ensuring that you have enough money coming in to cover your expenses. You may need to take steps to reduce your costs, such as negotiating better deals with suppliers or reducing your workforce.

One way to focus on cash flow is to track your income and expenses closely. This will help you to identify areas where you may be able to cut costs. You can use a spreadsheet or a budgeting app to track your finances.

Another way to focus on cash flow is to set up a budget. A budget can help you to track your spending and make sure that you are not spending more money than you are bringing in. When creating a budget, be sure to include all of your income and expenses, both fixed and variable. You may also want to consider creating a separate budget for your business expenses.

Finally, it is important to pay your bills on time. This will help to avoid late fees and damage to your credit score. Late payments can also damage your relationships with your suppliers and customers. Make sure to set up automatic payments for your bills so that you never miss a payment.

Invest in innovation

Innovation can help you to stay ahead of the competition and create new opportunities. This could involve developing new products or services, or finding new ways to reach your customers.

Invest in innovation, such as leveraging AI. AI can be used to automate tasks, improve decision-making, and personalise the customer experience. For example, AI can be used to automate customer service tasks, such as answering frequently asked questions or processing orders. AI can also be used to analyse data and identify patterns that would be difficult for humans to spot. This information can then be used to make better decisions about things like pricing, marketing, and product development.

Don’t forget to continue your digital enablement journey. Automating processes and leveraging the growing base of digital tools can help transform the efficiency of your business.

Finally, AI can be used to personalise the customer experience by providing customers with the information and products they need when they need them.

Listen to your customer’s thoughts on innovation in their businesses. What are their needs and wants? What are they not getting from other businesses? By listening to your customers, you can identify opportunities to develop new products or services that meet their needs.

Consider partnering with other businesses. This can help you to access new technologies and markets. For example, you could partner with a company that specialises in AI to develop new products or services. You could also partner with a company that operates in a different market to expand your reach.

Another way to invest in innovation is to look for new opportunities. Are there new markets that you could enter? Are there new ways to reach your customers? Be sure to stay up-to-date on industry trends and developments so that you can identify new opportunities.

Create a culture of innovation within your business. This means encouraging employees to be creative and to come up with new ideas. You can do this by providing training on innovation, offering rewards for innovative ideas, and creating a space where employees can share their ideas.

Finally, it is important to be willing to take ‘manageable’ risks. Innovation often involves taking risks. Don’t be afraid to fail. Failure is a part of the learning process and can lead to success.

Build relationships with customers and suppliers

Strong relationships with customers and suppliers can help you to weather difficult economic times. Make sure that you are communicating regularly with your customers and suppliers, and that you are working together to find solutions to any problems that may arise.

One way to build relationships with customers is to communicate regularly. This could involve sending out newsletters, holding regular meetings, or simply being available to answer questions. Regular communication can help to build trust and rapport with your customers.

Another way to build relationships with customers is to be responsive to their needs. If they have a problem, be quick to resolve it. By being responsive to your customers’ needs, you can show them that you value their business and that you are committed to providing them with a good experience.

Finally, it is important to be reliable. Do what you say you will do, when you say you will do it. Reliability is essential for building trust with your customers. If you can’t be relied on to keep your promises, your customers will eventually stop doing business with you.

Be prepared to adapt

The economic environment is constantly changing, so it is important to be prepared to adapt. This could involve changing your business model, entering new markets, or developing new products or services.

One way to be prepared to adapt is to be flexible. Be willing to change your plans as needed. The ability to adapt is essential for surviving in a changing economy. If you are too rigid in your thinking, you will likely be left behind.

Another way to be prepared to adapt is to be open to new ideas. Don’t be afraid to try new things. The best way to find out if something will work is to try it. If it doesn’t work, you can always go back to your original plan.

Finally, it is important to be willing to take risks. Sometimes, you need to take risks in order to grow your business. Look out for trends you can seize upon.  If you never take any risks, you will never achieve anything great.

By taking these steps, businesses can increase their chances of remaining successful in 2023 and setting themselves up for success in 2024.

Talk to TaxAgility

The business environment in 2023 is uncertain, but it is also full of opportunity. Businesses that are able to adapt and innovate will be well-positioned for success. AI can be a powerful tool for businesses that are able to use it effectively. Businesses that invest in AI now will be ahead of the curve in the years to come.

The future of business is uncertain, but it is also exciting. Businesses that are able to rise to the challenge will be rewarded. The world is changing rapidly, and businesses that are able to adapt will be the ones that succeed.

We encourage you to embrace the challenge of business in 2023. It is a time of great opportunity, and businesses that are able to seize it will be the ones that succeed.

At TaxAgility, we understand the challenges that businesses face in 2023. We are here to help you navigate the uncertain economic environment and grow your business. We offer a wide range of services, including accounting, tax planning, and business consulting. We can help you with everything from cash flow management to strategic planning.

We are committed to helping our clients succeed. We have a team of experienced and knowledgeable professionals who are dedicated to providing our clients with the best possible service. We are here to help you achieve your business goals.

Contact us today on 020 8108 0090 to learn more about how we can help you grow your business in 2023.

How to mitigate the impact of inflation on your business

Inflation is a major factor that entrepreneurs and small business owners must take into consideration when crafting their business plans and setting prices. With careful planning and adaptation, businesses of all sizes can weather the effects of rising prices and stay competitive in today’s economy. Inflation affects many areas of businesses, such as pricing strategies, supply chain costs and marketing. It is important to assess the effects of inflation on a regular basis in order to remain profitable and successful. With proper management and strategic decision-making, small business owners can successfully navigate through periods of rising prices. In this article, we take a look at how inflation affects businesses and what business owners and managers can do about it.

How to minimise impact of inflation on your business

What is inflation and how does it impact businesses?

Inflation is an economic phenomenon that results in a general increase in prices over a period of time. It can have a significant impact on businesses as it affects the cost of production and the revenue generated. When inflation increases, businesses must pay more for materials, labour, and other costs associated with producing goods and services. This can lead to higher prices for consumers, reduced profit margins, and even layoffs if companies are unable to pass those additional costs onto their customers. Additionally, rising inflation levels may also cause people to reduce spending due to decreased purchasing power caused by higher prices. This can further reduce demand for products and services leading to further financial losses for businesses.

What are the different types of inflation?

Inflation is typically divided into three main categories:

  • Demand-pull inflation
  • Cost-push inflation, and;
  • Built-in inflation.

Demand-pull inflation occurs when consumer demand for goods and services increases faster than the economy can produce them. This causes prices to rise as businesses try to keep up with consumer spending, leading to an overall increase in the general price level.

Cost-push inflation happens when the costs of production increase without a corresponding increase in consumer demand. Some examples include higher costs of labour, raw materials, or energy needed to produce goods and services. When these costs go up, businesses will often pass those added expenses onto customers by increasing their prices—which raises the general price level across the economy.

Built-in inflation is a type of inflation that tends to happen over time due to the natural expansion of an economy. This type of inflation is usually seen in developing countries, where economic growth has led to a surge in demand for goods and services, pushing up prices as the country’s ability to produce them struggles to keep up with demand.

Inflation can also be categorised based on its speed or rate at which it occurs. Hyperinflation is a type of rapid, out-of-control inflation that typically happens when too much money is printed without enough real resources or assets backing it. This leads to an increase in money supply, which causes prices for goods and services to skyrocket quickly. By contrast, mild or moderate inflation is a slower rate of inflation that does not cause dramatic fluctuations in the general price level.

Overall, different types of inflation can have a huge impact on an economy, so it’s important to understand each type and how they are related. By recognising the various causes of inflation, governments and businesses can be better prepared to respond appropriately and reduce its negative effects.

How can a business protect itself from the effects of inflation?

One way businesses can protect themselves from inflation is by budgeting for it in advance. By staying abreast of current financial trends, business owners can plan ahead for any increases in the cost of goods or services due to inflation. This requires an understanding of the current market conditions, so business owners should keep a close eye on economic indicators such as the Consumer Price Index (CPI).

Businesses can also adjust their pricing to account for inflation. This may mean increasing prices in order to remain profitable, or it could involve finding ways to cut costs without sacrificing quality or customer satisfaction. Business owners should also look into hedging techniques such as futures contracts, options trading, and other methods of protecting against currency fluctuations due to inflation.

Finally, businesses need to be aware that inflation can affect the value of their investments and should monitor their portfolios to ensure they are not exposed to excessive risks. By taking proactive steps to protect against inflation, businesses can remain financially secure despite economic uncertainty.

What are some strategies for reducing the impact of inflation on a business?

One strategy for reducing the impact of inflation on a business is to increase operational efficiency. This is an area TaxAgility can assist with. We can help businesses review their operating costs and identify areas where they can improve efficiency, reduce waste, and save money. Additionally, businesses should look for opportunities to diversify their operations or enter new markets that may be less sensitive to inflationary pressures.

Businesses should also consider hedging strategies when dealing with inflation. Hedging involves taking measures to limit losses due to price fluctuations in commodities or currency exchange rates by investing in derivatives or forward contracts. This allows businesses to protect themselves from spikes in prices due to inflation and ensure that their operations remain profitable even amid unpredictable economic conditions.

In addition, businesses should consider diversifying investments by investing in a variety of different asset classes such as stocks, bonds and commodities. Diversification helps protect businesses from the effects of market volatility and can help ensure the long-term financial stability of a business even amid periods of high inflation.

Finally, businesses should seek out financing sources that offer fixed rates of interest. This will allow them to protect their profits from the effects of inflation and reduce the overall cost of debt financing.

These are just a few strategies for reducing the impact of inflation on a business. Business owners and executives should work with their financial advisors to identify which tactics might be most beneficial for their particular operations. By taking proactive steps to manage inflation risk, businesses can protect themselves against unexpected changes in prices and ensure long-term profitability.

How can businesses stay ahead of the curve when it comes to inflation?

In short, planning, foresight and common sense. By taking a proactive approach to inflationary pressures, businesses can ensure that they are well-prepared for any possible changes in the economy. They should be prepared for various scenarios and have contingency plans in place to address them. This includes developing the strategies mentioned above for hedging currency fluctuations or investing in different asset classes that can provide some protection from inflationary pressures. Businesses should also consider ways to reduce their operational costs, such as utilising energy efficiency measures or outsourcing services that would otherwise be costly in house. Taking these steps can help businesses stay afloat during periods of economic volatility caused by inflation and remain competitive in the long run.

How TaxAgility can help your business fight inflation

At TaxAgility, we don’t just provide an accounting service, we’re an extension of your financial team. We are here to help you identify the ways best suited to your unique business to fight the impact of inflation. We can help you do this by ensuring you maintain proper up to date management accounting information which allows you day-by-day to track income and expenses and the impact of rising costs on profit margins and cash flow.

We’re here to assist and advise as problems and opportunities arise. Call us today to discuss how we can help you keep a lid on the inflation’s impact on your business. Call today on: 020 8108 0090.

Note: This article is not intended to provide financial advice or guidance, it is for interest only. 

Business growth concept

Managing your business finance for success

Every business exists to make money and grow, and one of the essential ways is through good financial management.

Getting your business finance in order through good budgeting, accurate cash flow analysis and effective use of management accounting all share a single objective, which is to improve your business efficiency.

When your business is efficient, it can convert all the available resources to maximise output with ease, thereby delivering better products and/or quality services, increasing sales, improving staff morale, enhancing customer experience, to name but a few. As a result, your business will be in a good financial position to meet its financial obligations and have strong cash surplus to put back into your business for growth.

In this article, our small business management consultants at TaxAgility discuss how we can assist small business owners in London, Richmond and Putney to better manage their business finances for success.

Understanding your business and objectives

A client once commented that he quit his 40-hour a week job to launch a business that required him to work 80-hour a week. Highly driven, he was managing most tasks by himself apart from business finances which he turned to our small business consultants. His reason was simple – the best way to unlock any business potential is to get assistance from experts who can provide honest advice based on financial statements.

Essentially, he was looking for a management consultant who can help him to create accurate budgets and forecasts, giving him data that he needed to make informed decisions. Today, his financial performance is strong, allowing him to have an office with a team of staff. Growth is stable and consistent, adding value to his company and achieving success.

The path to success often starts with a realisation that you may be too overwhelmed with day-to-day tasks and diversions to look at your business objectively. This is why engaging a small business consultant makes sense, though the key is to find one who can take time to understand your business and aspirations.

At TaxAgility, we often kick-start a no-obligation meeting by listening to you first. It is only through listening, understanding, and looking at your business through a clear lens that will allow us to create strategic plans that can meet your financial goals accordingly.

Improving business finance

Every business is unique and consequently, there isn’t a standard recipe which every small business owner should apply when it comes to improving one’s business finance. Areas that we may discuss with you include:

  • Ways to eliminate redundancies
  • Ways to reach your cost and revenue targets
  • Improving return on investment
  • Using historical financial data to do forecasts and budgets
  • How to analyse budgeted versus actual results
  • Reviewing of management accounting
  • Reviewing of credit control and cash flow
  • Analysis of key trends in your business
  • Analysis of risk management

Key benefits of improved business finance

Regardless your areas of focus, our small business consultants always strive to deliver three key benefits to your business and they are:

1. Financial control

Knowing how to make money doesn’t necessarily mean knowing how to best manage the money you earn. Managing money requires disciplines and conscious choices. Take cash flow for example, not many small business owners have time to monitor the amount of cash the business has in the bank or check which customers have paid you on time. Yet when you need to make a purchase, you may not think twice. In this instance, our small business consultants help to reign in control by providing cash flow forecasts that can guide your decisions.

2. Informed decisions will spur growth

A series of good decisions equate to success. If your decisions are data-centric, they will create a positive impact on your business finances quickly, which will further strengthen your financial position. Here is an example – many entrepreneurs believe that borrowing is good, but borrowing without knowing your ability to pay it back is far from good and will quickly ruin your business reputation. Borrowing to spur growth, for example, is only good if you have a repairmen plan in advance, as well as knowing where else you can cut expenses and save.

3. Set, measure, optimise

At TaxAgility, we believe in setting KPIs and measuring performances that help your business to achieve its goals. Financial numbers from every week, every month, every quarter, every year should be tracked and measured. It is worth bearing in mind that even the best plan may lead to occasional bumps along the way, which is why optimisation is essential. Having our small business management consultants on hand to guide you can make all the difference.

Optimising business processes

While not the specific domain of TaxAgility, it is an essential part of improving your business's financial standing and something we strive to help our clients understand. Business owners and operators should routinely review their operations to ensure they are working at peak efficiency. A key consideration is whether some processes may be better served if they were outsourced or handled in a different manner. Consider the following scenarios:

1. Company bookkeeping and accounts.

Many small firms start out doing their own bookkeeping and accounts as a way to save money, not surprisingly. However, many continue to do so even after they have grown substantially, employing several staff to handle the multiple aspects of a company's financial operations. While this may make sense to a large firm, it can be come an expensive proposition for an SME. With the advent of cloud based accounting and outsourced accounting, it can make more sense to off load these functions to an external accounting firm. These firms have optimised around offering dedicated accounting support to small businesses. Cloud accounting tools such as Xero, enable company management to keep a firm grasp on financial matters, as the tools give immediate access to the companies financial data 24 x 7.

2. Financial management

There's been a trend in recent times to not only outsource the accounting function, but also, to outsource the financial management and oversight of a company too. There comes a point in a company's growth when the firm should really consider the appointment of a financial director or a CFO. This can be a big step to take and, of course, such positions are not cheap to fill. This is a function that can make sense to outsource for some companies. Alternatively, they can appoint an interim CFO, one that doesn't work full-time and is not an actual employee. There are obvious cost efficiencies to doing this, also some risks to consider too.

3. Specialist staff.

It can obviously make sense to keep certain specialists you depend upon on your payroll full-time. After all, they may hold the keys to your success within the skills they bring and you'll ant to protect that. However, businesses in search of efficiency, will want to look closely at this. Many of the more advanced skills, particularly in the creative and manufacturing sectors could effectively be outsourced, so long as the right levels of security and IP protection are put in place. Also, diversification of your base source of the key skills you need will allow you to develop resilience to change, both in skills required and protecting the business against the whims of specific individuals. Being able to draw upon a greater source of skills could also increase your competitiveness.

4.Employee base.

Recent global turmoil has been forced businesses to reconsider the basis upon which the employ staff. In times before the pandemic of 2020, employers kept pretty much to a straight forward 37 hour 9 to 5 type of working arrangement, particularly where more office based staff are concerned. Post pandemic though, things are markedly different. Power has shifted and employees now demand greater freedom to work from home (or wherever they consider home to be). Such demands prior to the pandemic were often inconceivable to some employers. However, thought through wisely and putting long standing work practice prejudices aside, such flexibility could also work in favour of the employer. In a lot of instances, employers could see this as an opportunity to restructure how they employ people and they type of employment they need. for instance, not having people in the office regularly not only saves costs but also allows the potential to employe people on a freelance basis, offering greater cost saving opportunities through more optimised processes - i.e. only employing somebody when they are actually needed.

TaxAgility can help to improve your business finance

At TaxAgility, we understand that small business owners have limited resources. Our aim is to help you transform the limited resources available to you into success by focusing on your business finances.

We believe in growing together with our clients – when you grow, we grow too. This is why our dedicated small business management consultants work cohesively with you to help build your business and take it to the next level. We use financial numbers and data to recommend changes, mitigate risk and improve profitability.

Most important, we provide fast, quality management support to small business owners without any hidden charges. Give us a call on 020 8108 0090 today because your business deserves the best opportunity to succeed.

Payroll consideration

A growing business requires staff with skills that can help your business expand further and faster. Your staff can consist of short-term contractors or permanent employees. Contractors are often cheaper, more flexible, and they tend to be specialists in niche areas like database development and network security which you only require from time to time. On the other hand, permanent employees are focused and loyal to your business; they are the people you can rely on to grow your business.

Employing permanent staff requires PAYE, National Insurance, a pension scheme, as well as other benefits your company provides. These are time-consuming administrative work. Instead of hiring a full-time payroll employee, a cost-effective option for many small business owners is to outsource the payroll function. At TaxAgility, our payroll services for small business are here to assist payroll preparation and compliance for you.


VAT is a complex subject and when a business experiences strong growth, it tends to involve international suppliers and customers. Trading internationally, meaning importing goods from and exporting goods to other countries, often leads to more questions about VAT.

If expanding internationally is on the card, the general guidelines for VAT are:

  • If you are VAT-registered, the suppliers from an EU country do not charge you VAT for goods that they sell to you. However, you must account for the VAT yourself.
  • Suppliers from a non-EU country do not charge you VAT for goods that they sell to you, but you will pay import VAT before customs release the goods to you.
  • If you are selling goods to customers in EU countries and they are not VAT-registered, you will be charging them the UK VAT. But if your customers are VAT-registered, you can then zero-rate (ie not charging VAT) on the goods you sell to them.
  • If you are selling goods to customers outside of the EU, you do not normally charge VAT.

For solid VAT advice, sector-specific VAT issues, completion of VAT returns, and other VAT concerns, talk to one of our VAT service team for small business today by calling 020 8108 0090.


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This blog is a general summary. It should not replace professional advice tailored to your specific circumstance.

Accounting concept

How to find a good accountant in London

Vector image of money, receipt, calculator, pen and laptop screen

If you hadn’t noticed, the business landscape has fundamentally changed and the part your accountant plays in helping you cope is essential to this. Finding a London accountant that thinks about your business and how to improve it, as opposed to just crunching your numbers and filling VAT and tax  returns, should be a high priority for your business. After all, it’s another resource your obliged to pay for to meet regulatory demands, so why not get the best ‘bang-for-your-buck’ you can?

Recent time have seen significant changes in how businesses operate, driven by a pandemic and the need to adjust business models to suit new working practices and employee expectations. Also, supply chain uncertainties due to the pandemic have somewhat overshadowed the main protagonist that was expected to introduce business issues, i.e. Brexit. All in all, it’s been a pretty tough time for firms in the UK.

What should you be looking for in a good accountant?

Start by considering that it’s quite a competitive market in the finance and account space. It’s always been dominated by the larger accounting practices. However, these are not always suitable for small to medium sized businesses, as these benefit from a more personal touch.

Attitude is key. A truly great accountant is going to do two things when you begin to engage with them. The first is, they are going to initially access whether your business is a good fit for them and set out expectations on both sides. This is important, because some accountants may just take on your business, not really caring if they understand it or not. And that’s not good for you!

The second thing they will do, is to understand what is important to you. They will want to get to know your business - not a casual quick chat to try to reassure you, but arrange to sit down and dig a bit deeper.

By seeking to understand your business plan or even help you create a better one, is a sure sign that you’ve found a decent accounting firm. Central to this is being able to build a solid relationship with an accountant at the firm. However, like anything, the ‘proof of the pudding is in the eating’. Initial enthusiasm interest for your business should continue and not be a one off. You should arrange to have meetings on say a quarterly basis to help understand how your business is working and if there are efficiencies in your financial operations that can be made.

If you business is based in London or the greater London area, such as the outlying districts of Richmond, Putney, Wimbledon, Hammersmith, etc., you’ll likely benefit from finding a more personalised service from a local London accountant, like TaxAgility. They re also likely to be a bit cheaper that central London accountants, while still retaining a level of personalised service. TaxAgility are also well placed to assist businesses in Surrey too.

What services should a good accountant offer?

A well-rounded accountant offers services that can address the current and future needs of your business, which can include but not limited to:

  • Company secretary services
  • Corporate tax planning and advice
  • Accounting and bookkeeping
  • Payroll services
  • VAT
  • Cash flow forecast
  • Short and long-term strategies

Essentially, you are looking for someone to take over the administrative work (like bookkeeping and PAYE) as well as someone who can help review your numbers and make sound recommendations so that your business has the best chance to succeed.

Every business is unique too. Perhaps you have just launched a start-up which is in need of funding, a contractor who struggles with IR35, a small business owner whose business is experiencing consistent growth, or you may be looking for an exit strategy – this is why the accountants at TaxAgility are divided to teams that specialise in companies small businesses and individuals in Central and Greater London and also in Surrey. Having expert knowledge in your area means we can provide relevant accounting and tax advice that help you manage and grow your business.

How do I check a London accounting firm's qualifications?

While most people find their business accountant through word-of-mouth referrals, it is always worth checking if they are ICAEW (Institute of Accountants in England and Wales) accountants.

Guided by strict codes of conduct, ICAEW accountants uphold the highest standards of professional conduct and business ethics. At TaxAgility, we are ICAEW Accountants and we follow these principles:

  • Integrity
  • Objectivity
  • Professional competence and due care
  • Confidentiality
  • Professional behaviour

This means that as our client, you will receive honest answers from our knowledgeable accountants who keep abreast with the latest developments in practice, legislation and techniques. We also act diligently and respect confidentiality. With us working alongside you, you know you are in good hands.

Top key traits of a good accountant

  • Attitude. It's amazing what a good set of interpersonal skills can do for a relationship and this starts with the attitude expressed towards you and your business.
  • Knowledge and skills – A good accountant should be able to assist you in areas that you need.
  • Listen to you – Only by understanding your situation first, then your accountant can come up with ideas that will make an impact to your business.
  • Excellent communication skills – Having the ability to interpret data and convey the information in a meaningful way to you.
  • Adaptable – Your needs evolve and how a good accountant assists you should evolve too.
  • Honesty – A good accountant should provide honest answers, as well as excellent work without any hidden charges.
  • Efficient – A good accountant will make sure that your financial records are managed efficiently, so you can concentrate in other aspects of your business.
  • Transparency of fees.

At TaxAgility, our fees are transparent – most of our clients pay a fixed monthly fee with no hidden charges. In the event that you have additional projects that need our attention, we will discuss the work and cost with you upfront.

What can TaxAgility do?

At TaxAgility, our accountants specialise in companies, small businesses and individuals across London and Surrey.

Our standard accounting services include but not limited to:

  • Annual compliance with Companies House
  • Maintenance of statutory books
  • Bookkeeping
  • Management accounts
  • Accounts payable and receivable
  • Cash flow
  • Sales reporting
  • Tax returns
  • Tax planning
  • VAT returns
  • PAYE registration
  • PAYE administration
  • Pensions

We have offices in three locations – Putney, Cavendish Square (Central London) and Richmond. We are also well placed to assist businesses in the county of Surrey.

For more information on our services, talk to us on 020 8108 0090 today or use our enquiry form to get in touch.

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This post is intended to provide information of general interest about current business/ accounting issues. It should not replace professional advice tailored to your specific circumstances.

This post was updated on Jan 11 2022

Complacency is the real business killer

Is complacency the real reason why businesses fail?

You’re probably thinking, “Oh no, not another one of those ‘why businesses fail articles’”. This article is certainly about why businesses fail, but this one is looking at the issue from a slightly different point of view. You see, the pandemic, for all its downsides, affords us a view of business issues from an accelerated lifecycle perspective. As an accountancy practice in London, TaxAgility we’ve learnt a lot over the past year.

In just a short space of 12 months, businesses have been hammered by a range of common issues one might not expect to see all at once during the normal lifecycle of a small business. At least not in such a short space or time, or as a result of a cascade of other business related troubles.

Business turmoilFor instance; it’s common for a business to fail because it experiences cash flow issues, or the loss of a major client, or staff turnover, problems or supply chain issues, or reduced seasonal footfall, even the occasional export/import issues. In recent times though, some businesses have experienced all of these, all together, as a result of both pandemic issues and the fall-out from Brexit impacting European supply routes and trading partners.

In a normal business lifecycle, all these issues can surface from time to time, sometimes over many years, and many can be weathered if handled competently. However, the global pandemic and Brexit have effectively put many businesses in a lab test tube, exposing them to a variety of tests within a short space of time. Many business owners and entrepreneurs have struggled with this. Furthermore, many more mature businesses have found that their business models simply cannot weather this type of storm.

While it’s easy to simply blame the pandemic or even Brexit, for some, the reason the business failed is not just because of these two protagonists. It’s likely that the business was already weak due to several other non-visible issues. The pandemic and Brexit have acted as a catalyst and exposed an underlying complacency in the way business has been done up to now.

Check out our articles on:

Complacency in business is a killer

complacency kills businessesIt’s important to be clear here, there’s no suggestion that a business fails because the operator of the business is sat twiddling their fingers or just counting the cash coming in. That’s not what we mean by complacency. Complacency can be as simple as working hard to meet business goals, but without acknowledging that the markets are changing around them. It’s a case of being overly ‘self satisfied’. The root cause can often be attributed to fear – fear of change, fear of upsetting what appears to be working. Under such circumstances a business owner simply convinces themselves that all is okay, rather like looking in a mirror and only seeing what you want to see.

The problem could best be exemplified by what has happened to the High Street, particularly larger stores. Such stores rely extensively on foot traffic, so when this dried up during the pandemic, so did cash flow. Some did have an online element to their business model, but not enough to support the operational cash requirements of the business when regular footfall derived income fell away.

Competitive business models will erode your primary revenue sources

You might be thinking that it’s a little harsh to criticise stores for not foreseeing something like a pandemic. The reality though is that more and more business is being done online, the trend is clear and some businesses simply haven’t adopted this extensively enough or quickly enough. Of course, it’s harder for some product lines to adapt because of the need for consumers to interact directly with this products. But not for all though, especially consumer electronics, many leisure items, regular domestic consumables and many others. Even retail apparel, although harder to manage online, is destined to increase further.mail order catalogs

Buying without fist seeing a product is far from new. Mail order has been around since the 60’s – the 1860’s!  The first mail order business was formed in 1861 by Welshman Price Pryce-Jones.

Another famous clothing and fashion related mail order catalog, Grattan, started life in 1912 and became very popular in the days prior to the internet, along with Littlewoods, Kays, Freemans, Marshal Ward and Great Universal Stores. Much has happened to them since the internet revolution. Most have either been acquired or evolved, with a web front being a major part of their business model. Take Littlewoods for instance. After merging with Great Universal Stores to become Shop Direct in 2003, was launched in 2009. They pride themselves on consistent reinvention. Check out Very’s story here.

Retails stores have been popular because people like to go out and shop. Will this continue? Probably. However, the population has now had an experience like no other and along with other pressures, such as the parking ordeal many towns now represent for those driving, and Covid’s likely legacy, the attraction may wane. The point is, alternatives exist, business models evolve, consumer appetites are fickle and popularity can change in an instant.  If you don’t have a Plan B, then beware. In fact, if your Plan B was the internet, it probably now needs to be Plan A.

Innovation, make it part of your company’s culture

Innovation is central to a business being able to keep up with the fast pace change we see in today’s consumer markets. We believe that for a company to be truly successful, innovation must be part of its culture. Just like Very. If it isn’t, employees and key management are likely to get complacent, because they are on the same tread mill everyday, with little motivation to explore new ideas and way to better serve their needs innovation

Of course, we recognise that most companies have an eye on where their markets are going. More often though, the changes they foresee are not necessarily seismic in nature. Often they represent new product or service derivatives – more subtle shifts, as opposed to something that represents a completely different way of working. The latter represents more of an environmental response. Environmental pressure is the most likely catalysts behind evolution – not just in nature, but in business too. Nature is a great teacher.

Innovation should be a key focus area for a business’s management, not just product or service improvements, but also environmentally, in how markets and consumers are reached, engaged, and fulfilled in response to changing attitudes, technologies and needs.

It’s not just a case of, ‘lets get online’ either. That ship has sailed, so to speak, as every business should have an online aspect to their brand. Innovation online today requires thought around user experience, and how to create a better ‘experiential’ dimension to a user’s journey.

Complacency is behind many of the commonly associated reasons for business failure

The following represents a list of some of the most common reasons why a business fails.  There’s nothing new in terms of the reasons. However, if we look at these with a somewhat different eye, it’s not hard to see the part complacency plays.

1. No viable business or marketing plan

No viable business planThe business has been set up, undoubtedly with good intentions and a vision, but without any form of business planning – basically, on a ‘wing and a prayer’, because the person behind it believed totally in what they were doing, perhaps even disregarding what others were saying or what the market indicators suggested.

A business plan is meant to take a good look at the realistic requirements for a business to achieve success, the resources required, and timescales. It should also look carefully at contingencies given associated risks with the target market. For instance, what would happen if first sales don’t come within the planning timeframes? How much cash would the company need to cover the deficit and how long could it survive before sales revenues begin to appear?

Excited entrepreneurs can often cast risk to the wind, believing firmly in themselves and ignoring sage advice or overly satisfied with early encouragement from prospects. How often have you heard a potential prospect, lavish praise on a new product you are trying to sell, provide endless encouragement, but then not buy.  The danger is that a business owner can believe the hype over reality and become overly self-satisfied in the strength of the product and market acceptance. In other words, complacent belief in success, despite other possible waning signs.

As a small business accountancy firm, we are always surprised how often we find businesses that run in to problem for the simple reason that they either don’t have a business plan (or marketing plan). Don’t make this simple mistake, it’s business 101.

2. Lack of a strong value proposition

no value propositionSimilar in nature to lack of a business plan, not having a strong value proposition clearly articulated and tested, can stem from over confidence gained from an early interest in a product or service from friends and family eager to boost egos. Ultimately, only your target audience really matters and early affirmation of product viability through market research should replace friendly encouragement as the basis of the business. Put simply, does the market actually need your product and do they buy into the value it professes to offer?

3. Lack of cash

A fundamental mistake many new small businesses make is to run out of cash. They just get the numbers wrong. Again, it’s usually due to over confidence, over estimating revenues, underestimating timescales and underestimating flow issues

Few plans ever go to exactly to plan, there are always hiccups and unforeseen problems. How well you have built contingencies to cover the costs of these ‘problems’, will determine how likely you will survive if a problem becomes extended and starts eating into cash. A common cause is simply due to revenues not arriving to plan. This is almost entirely out of the hands of the business, unless it’s secured early orders, but once they have been fulfilled, ongoing revenues need to happen quickly.

As we saw with the pandemic, it’s likely the vast majority of small businesses would not have survived unless they were given cash lifelines – either loans or help to pay salaries. However, few could have foreseen the extent of the crisis and there’s still an uncertain future, as many business still don’t know if their markets will return to a level that will support their operational cash flow needs.

As accountants working with a variety of small business types, our tip is to at the very least spreadsheet your cash flow workings, be realistic and brutally honest with yourself – look at worst case scenarios and build up from that. Do this regularly too, especially if circumstances change.

4. Over reliance on a few large customers

Over reliance on a few large clientsIt’s a nice feeling, having a couple of really great clients feeding your cash flow each month. For some business owners, such reliance would make them feel distinctly nervous. However, for others, especially those who have a great working relationship with their clients, perhaps are even friends, complacency can set in.

TaxAgility Accountants also works with its clients as business advisers, and businesses with a heavy reliance on a few major clients is an all too familiar pattern, especially with smaller or niche clients.

The problem is that you may never know there’s a problem with a client until it’s too late. When a business gets into trouble, it can be tough for a business owner to admit this to themselves and take action early. Also, because pride and ego play a part, a troubled business owner may not let his clients or suppliers know. Ultimately, the troubled business stops paying its bills, leaving your business looking at a write-off. As time ticks on, complacent business owners realise that they may not be able to fill the revenue gap quickly enough, as new business development can take a lot of time, especially for specialist or niche products and services. If this isn’t reconciled quickly, cash flow problems arise and that company’s ability to pay its debts leads to insolvency.

The answer here is to always have more clients that you actually need to make a comfortable profit margin. Don’t let a few large clients dominate your cash flow security.

5. Taxation oversight

Tax and VAT oversightTax is a complex discipline, made worse where issues such as overseas VAT is concerned. Always get specialist advice, especially now we are post-Brexit and the situation with the EU is far from clear.

Don’t make the mistake of simply assuming you don’t have to pay taxes.  Or indeed, that the country you are doing business with won’t demand tax is deducted until you can prove where your company is domiciled, can be simpler said than done. There’s a heavy focus by governments at present on taxation as applied to digital products and services.

Having a chunk of change removed from your expected invoice payments, because a clients obliged to hold back tax payments, can cause serious cash flow issues.

Tax advice and tax planning are key services TaxAgility provide. It is a complex issue, so take good tax advice if you are in any doubt

6. Dependency on key staff

key staff and trust issuesHaving people you can trust in key positions within your business is a great help and a boost to confidence, in that you believe somebody ‘has your back’ and is working with your’s as well as their own interests at heart.

However, one can get complacent and start ignoring the warning signs that all may not be well with your ‘partners in business’, or indeed people you rely onto get fundamental aspects of the job done. Circumstances might arise where a key person becomes incapacitated or unreachable on holiday. Business may become severely affected. Worse still is the prospect of effectively being held to ransom by a key skill bearer who suddenly decided that they are unhappy.

People are naturally defensive where sharing aspects of their work is concerned. For some, the thought that they could be replaced is unbearable. At some point the “you couldn’t do this without me” syndrome becomes a clear and present danger to the business, especially if the individual concerned is a key member of the team.

Always ensure other people can cover the roles required and, make sure this attitude is part of the company culture and embraced by all.

The other concern with dependence on key staff is the potential for fraud. It’s a subject of its own. We have an article on small business fraud here.

When people believe they have your complete trust, some may take advantage of this, or find themselves pressured in exploiting your trust because of negative personal circumstances. Don’t get complacent, review your relationships and levels of trust within the business regularly, so you can spot the warning signs.

Final thoughts

When it comes to the main reasons why businesses fail, there’s nothing new under the sun, as the saying goes. However, what recent events have taught us is that the catalysts for failure can be different to what we might normally be used to.

Is what we experienced recently just a ‘one-off’? An extraordinary event? Possibly. But, consider the pace of change we have seen in other areas of business over the past few years, such as new technologies, significant growth in internet enabled businesses, and the need to adapt to fast moving consumer / client trends as they adopt different buying or working practices. Such changes point to a future requiring businesses to be far more innovative and adaptable, not taking their client base for granted and definitely not being complacent in their day-to-day operations and outlook.

If you are concerned about the issues your business is facing, act today. TaxAgility accountants provide specialist accounting services for small businesses. We’re based in Richmond and Putney, but serve clients throughout London and the south east. Contact us here.

Why not check out our series on building a better business here.

R&D Tax Relief Scheme Changes 2021

Changes to the SME R&D tax relief

Changes announced late last year concerning the R&D tax relief scheme come into force on April 1 this year, are you ready?

R&D Tax Relief Scheme Changes 2021Aiming to put UK at the forefront of R&D and help companies compete on the world stage, the government has introduced various R&D tax reliefs, including R&D for small or medium-sized enterprise (SME), universities and charities, as well as R&D Expenditure Credit for large companies.

From 1 April 2021, the new SME R&D tax credit scheme will take effect, with the introduction of a cap on the amount of credits that could be claimed.

An overview of the SME R&D tax relief scheme

When the SME R&D tax credit schemed was first introduced in 2000, it had a cap on the amount of credits that a company could claim. In 2012, the cap was removed, thereby allowing eligible companies to deduct an extra 130% of their qualifying costs from their yearly profit, as well as the normal 100% deduction, making it a total of 230% deduction. Even when a company was making losses, it could still claim a tax credit worth up to 14.5% of the surrendarable losses.

The system was subject to abuse and fraud – HMRC announced that they had detected and prevented fraudulent claims amounting to over £300m in recent times. Many deceptions included people setting up a UK-based entity just to claim tax credit despite no R&D work was actually performed in the UK.

Consequently, from 1 April 2021, the government will introduce a cap, limiting the payable R&D tax credit to three times the total PAYE and NIC liability of the company for the year, plus £20,000. This also means that the first £20,000 of repayable tax credit claim will be exempt from the cap, thereby protecting smaller SMEs with few employees.

For a genuine SME that employs people to carry out R&D work in the UK, the new changes will have little or no impact. However, for a company that doesn’t have any real UK-based activities, or one that doesn’t employ people but relies on subcontractors, the new rule will discourage them from making an R&D tax credit claim.


The new changes will not apply to companies that:

  • Have employees creating, preparing to create, or managing Intellectual Property (IP), and;
  • Do not spend more than 15% of its qualifying R&D expenditure on subcontracting R&D to, or the provision of externally provided workers (EPWs) by, connected persons.

R&D and IP creation

Ideally, R&D work would lead to IP creation, and if this is the case, your company could also take advantage of the Patent Box – a scheme that allows companies to apply a lower rate of Corporate Tax to profits earned from its patented inventions.

‘Related party PAYE’

In calculating PAYE and NIC liabilities, claimants may include related third parties, i.e. those companies performing R&D activities on the claimants behalf, as long as the work is directly attributable to the development activity.

Talk to TaxAgility

The first step is to seek professional guidance on this issue if you aren’t sure how it is going to impact your business.

Small Business: 5 ways to get new customers

For many small business owners, the top priority is always this: how do I get more customers?

Every small business owner knows that it is risky to rely on a regular base of clients, particularly when customers today tend to change their product or service providers often. The most desired outcome is to have a continuous stream of new customers, with some of them becoming loyal customers and thereby allowing the company to grow and expand organically.

Yet the task of finding new clients is easier said than done.

Traditional approaches to finding new customers – such as cold-calling and door-to-door marketing – require excellent communication and people skills, which not everyone possesses. On the other hand, modern marketing techniques can also be challenging for small business owners who struggle to keep up with the rapid evolution of technology, not to mention that some techniques like email marketing are also restricted by GDPR regulations. With this in mind, our small business accountants aim to discuss and explore a few tips which can hopefully help entrepreneurs like you gain new customers and generate new sales.

1. Finding new customers online

If you are running an eCommerce business, chances are, you have explored many online opportunities and now reap the benefits from your website, social media, online reviews, plus other eCommerce platforms and content tools at your disposal.

But if you run a traditional business, one that doesn’t sell online or has a small digital footprint, can you still gain new customers online? The answer is yes. Technology has indeed created a level playing field for companies big and small. Take a client of ours for example – this is a dedicated transport provider who relies on local business and has a simple website, yet thanks to the internet, he can now identify other local groups and associations that match the profile of his target customers. In addition, he also runs an online pay-per-click campaign targeting people in his immediate vicinity. As a result, he is able to get new clients and can keep building his customer base.

2. Finding new customers through networking

There are thousands of networking groups across the UK, many of which are eager to help business owners build relationships and explore new opportunities among their members.

Networking, at its core, is about building relationships that could produce mutually-beneficial opportunities, including quality leads. As one of our clients put it, “Effective networking is like having a good sales team but without carrying the overhead.” This is so well-said because when you make a new contact, you can potentially reach out to all the friends and business associates whom the individual has made.

Despite its benefits, you must also be prepared to reciprocate, meaning you must be willing to introduce your contacts to people in your network and help them to grow their business, just as they would help you to expand yours.

Recently, there has been a move from traditional greet-and-meet to ‘video-centric’ networking, where members meet and discuss opportunities via video conference calls. Some small business owners find this less stressful than meeting in person and if this suits you better, do give it a go.

3. Finding new customers through engagements

Raising your profile through a series of speaking engagements or getting featured in the news is fast becoming a popular option among small business owners.

Undoubtedly, speaking at a conference or an event – ideally one that is attended by your target audience – is likely to boost your credibility and help to reinforce your position as an expert in your industry. When your prospects see you as an expert, they are more likely to do business with you and become your clients. However, beware that most speaking engagements do not allow you to do the hard sell. Rather, you are expected to share your expert knowledge with the audience, preferably in a fun and engaging way.

Getting featured in the news (which can be newspapers, magazines, on radio or TV) is another way to raise your profile and build influence. While you can certainly contact journalists directly, there are also many PR sites that allow journalists to reach out to the small business owners and get their story across to a wider group of audience.

In addition to sharing serious business insights, you are welcome to pitch light-hearted stories. For example, a client of ours once helped to direct traffic and rescue a swan that was trapped on a central reservation a short distance away from his store – his story was featured in the local news and in the weeks that followed, he had more visitors to his store than ever before.

4. Partnering for success

Teaming up with another business that offers complementary services is a proven strategy that can help you and the partner to broaden product awareness, increase brand recognition and expand customer base, while saving costs for both parties.

The trick, however, is to find a partner who is on the same wavelength as you – having similar work ethics, believing in fairness, respecting and accepting each other’s shortcomings and sharing same goals, which are just some essential elements of a powerful partnership. Before any collaboration, it also pays to conduct due diligence on the other partner, and establish clear agreements and boundaries.

5. Give (some) stuff for free

Everyone loves a good bargain, which is why many of us look for discounts, sign up for a free trial, love a free sample, and shop with companies that provide free shipping, to name but a few. The objective of this is to encourage the prospects (who have received some free stuff), to take up your main services or purchase your products.

At TaxAgility, we also give a free introductory consultation session to new customers who are considering our accounting and bookkeeping service, as well as offering free quotes to customers needing tax or payroll management services. What we do is not unlike an optician giving you a free eye test or a car salesperson allowing you to take the car out for a test drive.

It is widely believed that your prospects respond more positively (albeit unconsciously) when they get something for nothing. For instance, they may believe that you are very generous and they are more inclined to reciprocate your generosity by becoming your customers.

TaxAgility is here for small business owners

At TaxAgility, our small business accountants work in tandem with entrepreneurs across London, Putney and Richmond. Our aim is to help entrepreneurs like you get the business account in order, so you can use the financial data to make informed decisions and grow from strength to strength.

Our services include:

  • Accounting & Bookkeeping: leave your day-to-day finances to us. We will also provide monthly management accounts, prepare statements and help you set-up cloud accounting.
  • Tax: if you are tax-efficient, you will have more money to invest, expand and create jobs in your community. Let us help you with tax planning, tax computation and tax returns.
  • VAT: from VAT returns to manging VAT on import and export goods, we take care of them so you don’t have to.
  • Payroll: As your team grows, outsource your payroll administration to us so that you and your team can continue to enjoy accurate and on-time payslips every month.
  • Management consultancy: take your business forward with practical advice based on financial data and benchmark analysis.

Call our small business accountants today on 020 8108 0090.

Alternatively, you can use the contact us form to get in touch.

You may also like:

This blog is a general summary. It should not replace professional advice tailored to your specific circumstance.

A concept image of starting a business

Starting a part-time business

Not ready to take the leap, consider a business on the side while keeping your main employment.

A concept image of starting a business

Having a full-time job is, for many people, the path to job security and financial security. While employment is a more comfortable choice when compared to setting up, owning and running one’s own business, the pace of technology growth and a less than stable economy in recent times have threatened this supposed ‘safe-haven’.

Many working adults have come to realise that relying on full-time employment as their only source of income is potentially risky, as jobs can be outsourced or replaced, plus changes in business fortunes can leave them facing the stark reality of unemployment. Accordingly, more and more working people are considering starting a business on the side and seeking additional income streams. If you’re facing a similar situation, this post may make a great read.

Benefits of starting a business on the side

Starting your own business on the side while working full-time can seem quite a hill to climb, but the benefits often far outlay the early pains soon. For instance, after getting a business going and experiencing your first success, a side-line business could soon:

  • Provide a second income that supports the payment of your rent or mortgage, or ideally, help to pay down the mortgage more quickly than your main job could do on its own.
  • Lessens the impact of losing your job. In many cases, people who have started their own businesses on the side often quit their jobs to focus on the business full time later. This comes once they are confident that the business has overcome any initial teething problems and can continue to support their dreams.
  • The second income, or additional disposable income, could also help to afford a few extra luxuries in life.
  • Running your own business often brings you into contact with people in a similar situation. These interactions will broaden your circle of acquaintances, leading perhaps to greater opportunities.

While there are many benefits, it pays to be clear about what you want to achieve before setting up a part-time business though. Do you want it to be just a part-time or seasonal thing, or do you see it as a potential replacement for your main job? Setting realistic expectations is critical, and can help you to be better prepared too.

Things to prepare before starting your part-time business

While there are few businesses that just followed an idea and been successful right out of the gate, in reality most entrepreneurs spend a fair amount of time on planning and preparation. The main reason is that even the best and most innovative ideas may not turn into great business concepts, unless there is a nurturing environment to help them flourish.

Write a business plan

The first advice most seasoned business people give to budding entrepreneurs is to write a business plan. While there are no rules on what you should include in your business plan, standard items like stating your goals, highlighting market research, operation plan and financial strategy will help you see your business more thoroughly.

A concept image of resaerchConduct research

At the very least, you should know:

  • The needs and preferences of your target market
  • How are you going to find your customers?
  • Your competitors
  • Their price points versus your pricing strategy
  • Do they have any gaps in their product or service you can exploit?
  • What makes you different from them?

Know your responsibilities

If this is your first attempt at starting a business, you may not be familiar with all the responsibilities and duties of running a business. For example, if you are selling toys, your products need to comply with the provisions of the Toys Regulations 2011, meaning they must bear the CE mark, satisfy the ‘essential safety requirements’ in the regulations, be properly marked to ensure traceability, and be accompanied by instructions for use, along with warnings where necessary.

Crunch some numbers

The first number-crunching exercise you do should be about cost, revenue and profitability – because everyone wants to run a profitable business. Be sensible in how you plan your costs – especially marketing costs, as they are essential to get your products or services to the right people. Equally, be realistic about how much you can make over a period of time. Create a pricing strategy and calculate your break-even point. Find out about the risks you are exposed to and ways to mitigate them.

The second part of finance relates to funding. In essence, your plan to get the funds needed to launch and support the business until it turns a profit. There are a few types of funding – self-funding, funding through debt (borrowing money to start your business), equity (trading away ownership of your company to receive funding), and mezzanine (a combination of debt and equity). Most part-time businesses are either self-funded or through borrowing from friends and family members. Both approaches are helpful, albeit risky, so it is wise to have a back-up plan and know when to source for additional funding later. If you’d like to know more, follow the link to the article The complete guide to business funding.

Choose a company structure

Choosing to start your business as a sole proprietorship or as a limited company can impact how much tax you pay, how far you want to protect your personal liability, how much you want to pay to maintain the company, and how much administrative work you want to do it yourself. At TaxAgility, we help entrepreneurs to set-up a structure that works for them. If you’d like to talk to us about setting up a company, call us on 020 8108 0090 today.

Beware of pitfalls

Working fulltime can be exhausting, and by the end of a long work week, you probably do not have the time and energy to work on your part-time business. Add to that family obligations, and you may quickly find yourself defeated. One way to overcome this is to outsource the work you aren’t good at, if you have the initial investment funds ready. For instance, if you need a website, hire a good web company. If you need advice on company structure, talk to a qualified accountant like us.

Also, beware that those around you may not be as enthusiastic as you are. It goes without saying that to start and run your own business, you need to believe firmly in yourself and know what you want to achieve. Having a clear set of goals and milestones is critical. And, don’t forget to reward yourself a little along the way too.

Once your business takes off, you will soon find yourself spending more time with your clients. The challenge of juggling your time with the new venture may start affecting your day job, leading to undesirable consequences like making mistakes on your job and losing your job before you’re ready to quit.

Popular part-time businesses

Here are a few ideas to help you get started.

  • Selling products on an e-Commerce platform
  • Creating creative products – videos, pictures, jewellery etc
  • Providing handyman services
  • Becoming virtual assistants
  • Becoming a freelance designer
  • Writing for websites

TaxAgility is here to help small business owners

As leading small business accountants in London, Putney and Richmond, we have gladly worked with many entrepreneurs who started small and grew organically over the years. In the process, we become their trusted go-to accountants as well as business advisors.

Our services include:

  • Accounting & Bookkeeping: leave your day-to-day finances to us. We will also provide monthly management accounts, prepare statements and help you set-up cloud accounting.
  • Tax: if you are tax-efficient, you will have more money to invest, expand and create jobs in your community. Let us help you with tax planning, tax computation and tax returns.
  • VAT: from VAT returns to manging VAT on import and export goods, we take care of them so you don’t have to.
  • Payroll: as your team grows, outsource your payroll administration to us so that you and your team can continue to enjoy accurate and on-time payslips every month.
  • Management consultancy: take your business forward with practical advice based on financial data and benchmark analysis.

The beauty of working with us is that you have the freedom to choose the level of engagement you want from us – for instance, you may need us to manage bookkeeping for now, give you tax advice when you need money to invest, add payroll when your team expands, and use our management consultancy service when you are ready to grow. All of our services are competitively priced with no hidden charges, and our small business accountants are always here to assist.

Call us today on 020 8108 0090. Alternatively, you can use the contact us form to get in touch.

You may also like:

This blog is a general summary. It should not replace professional advice tailored to your specific circumstance.

Social media icons concept

Small Business: Adapting to changes in social media

Many small businesses view social media as an important component in the marketing mix, but have you kept up with the changes?

Social media icons concept

Many social media services that we are familiar with today are well over a decade old, with some approaching 20 years soon. Yet many of them don’t remain still – they continue to evolve and adapt, pushing out new features that aim to make communication easier. In view of this, small business owners like you and I are wondering what does it all mean? Do we have to continue using social media as part of our marketing mix? And if so, how do we adapt? Questions like these deserve honest answers, so we think it is time to create a post that can help us – and also our clients – to understand social media better.

Before we start, it must be said that we are not social media experts – our expertise lies in accounting & bookkeeping, tax, payroll and management consultancy for small businesses across London. We work with clients and help them become efficient, meet regulatory compliance, and confidently rely on accurate financial data to make informed decisions. When our clients grow, we grow too, which is why we are always keen to share ideas that can benefit small business owners, including how all of us can harness the power of social media better.

Social media for small businesses

Social media refers to internet services and mobile applications that allow users, including individuals and companies, to share content and interact with others. As these services are free and easy to use, they can attract millions of users in a short space of time, and with that many people congregating on any one of the platforms, companies big and small soon realise the potential of social media.

Nowadays, most companies spend time crafting social media posts and share them on popular platforms such as Facebook, Twitter and Instagram. Those with a bigger budget also create videos and post them on YouTube and TikTok. Essentially, they all hope that their content is viewed and shared rapidly, thereby broadening their reach.

But social media isn’t all rosy and full of promise. It has given unhappy customers, jealous competitors, disgruntled ex-employees and even trolls a platform to complain, provoke, with some choose to hurt your brand on purpose simply because they can.

Big companies respond to these negativities by hiring a team to investigate, monitor and talk to customers directly. But small business owners tend not to have such luxury, leaving many question the benefits of social media. With this in mind, let’s look at a few areas which can help small businesses.

Take another look at your social media strategy

If your small business has been posting on social media for a while, chances are, you will continue to do the same without giving it much thought.

A good place to start is to take another look at your social media strategy and ask what social media can do for your business. To get the answer, you need to look at your customers, your competitors, and also your financial data. In other words, you are examining several key factors, including but not limited to:

  • What is the purpose of your social media strategy?
  • Where does your target audience congregate online?
  • What information is relevant to your target audience?
  • What are your competitors doing on social media?
  • What social media inspiration can you draw from industry leaders?
  • How much do you intend to spend?
  • How do you evaluate the process?
  • How do you measure success?

Once you have reviewed your social media strategy, the next step is to understand the risks of social media so you can actively avoid them. Some common risks include:

There may not be any tangible return

While social media can help to amplify your brand, often it may not contribute to tangible return. For example, a person seeing a short video clip of your service may not call you and become your client. Sometimes, it can be hard to measure the return on investment too.

Undesired information may go out of control

You may make a mistake in one of your social media posts, a troll may decide to inflict hurt, or a customer’s complaint may have gone viral, when this happens, it is hard to control the spread of undesired information.

Making a situation worse

When a small business owner responds in anger, or when a company’s social media team cannot adequately handle customer complaints, things can go out of hand quickly and the domino effect can undo a company’s years of hard work in just a few hours (or less).

Legal issues

Every content you use online must adhere to the appropriate policies like copyright law and privacy legislation. Otherwise, you are putting yourself and your business at risk.

A few tips

Every business uses social media somewhat differently, depending on their strategy, however, there are a few common tips that we believe can benefit small businesses.

Local versus international

It is said that there are now 3.5 billion social media users worldwide, but if you are a brick and mortar company relying on local footfall, this astronomical number probably doesn’t mean much to you. Instead, you may choose to advertise locally (through local targeting or using selected hash-tags).

Show personality with care

Everything you post on social media is a reflection of your company – this is why sticking to the script is safe. You can, of course, show some personality by using emojis to inject some fun. At TaxAgility, we choose to share an inspiration quote once a week to encourage fellow small business owners.

Don’t respond when you’re angry

Social media gives many unhappy people (customers, competitors and trolls) a platform to vent, but it doesn’t mean that you need to act when you’re angry. Stay calm and remain professional. Also, don’t confuse angry customers with trolls who simply want to provoke and hurt.

Plan your posts

Many popular social media posts today are carefully crafted, accompanied by an appropriate picture or a video. So it is worth planning out your posts and making sure they are suitable for your audience.

TaxAgility is here for small businesses in London

Like many small businesses, we are still working on how to better engage our target audience – and also our customers – on social media. While we may not be able to assist your day-to-day management of social media, we certainly can help small business owners rest easy, knowing that their accounting & bookkeeping, tax, as well as payroll management are in our capable hands.

Our approach is flexible and entirely depends on your business needs. You can hire our bookkeeping and tax services now, add payroll when your team grows, then use our management consultancy service when you are ready to take your business to new heights.

All of our services are competitively priced with no hidden charges. Call us today on 020 8108 0090, or use the contact us form to get in touch.


You may also like:

This blog is a general summary. It should not replace professional advice tailored to your specific circumstance.