Dealing with probate

ProbateDealing with the administration of an individual’s estate can be a complex and time-consuming experience, which carries with it a number of legal obligations. At Berley, we are licensed by the Institute of Chartered Accountants in England and Wales to carry out non-contentious probate. Here, our team of probate specialists in London aim to outline some key elements of the process, as well as suggesting some tax-efficient measures for you to consider as part of your own estate planning strategy.

What does probate involve?

Probate is the process of dealing with a deceased individual’s estate in order to ensure that their property, money and possessions are distributed in accordance with their wishes. When executing a will, there is a number of requirements that need to be met and forms to be filled before an individual’s estate can be finalised and distributed to the relevant beneficiaries. As the probate process can be complex, you can engage a specialist probate accountant at Berley to assist you. Listed below are some key steps to probate:

  1. Check if the deceased has a valid will.
  2. Your accountant or solicitor will need to obtain a professional valuation of the estate and then report this valuation to HMRC. This step involves locating all of the assets, investments and liabilities relating to the estate, including any gifts made by the deceased during the last seven years.
  3. If the deceased’s assets are worth more than £5,000, they’re then able to apply for probate online (if you have the original will, the original death certificate and have reported the valuation of the estate to HMRC) or by post. There is an application fee of £215 if the application is made by an individual. If a probate specialist at Berley is making the application on behalf of you, the application fee is £155 plus a probate service fee. Typically, our probate service fee is cheaper than a solicitor. It’s worth noting that the government has been wanting to introduce a new fee system, supposedly starting on 1 April 2019 but it has been delayed at the moment.
  4. You must then pay any Inheritance tax that’s due. The standard rate for this tax is 40%, however, this is dependent on the value of the estate and whether it is classified as being under or over the threshold (£325,000). This is another tricky step as a range of reliefs, exceptions and exemptions can apply so check with our probate specialists first.
  5. Following this, the executor now has the legal authority to deal with the estate, including sending a copy of the grant to relevant organisations like banks in order for them to release the assets. Any outstanding household bills, debts or mortgages must be settled too.
  6. A record of the estate accounts needs to be kept, including how any property, money or possessions are to be split.
  7. Finally, the assets can be distributed and passed on to any beneficiaries named in the will.

For more information on each of the above-mentioned steps, you can read our detailed probate factsheet which provides a comprehensive breakdown of the requirements and rights of those involved in executing a family member’s will.

How should I be preparing my estate?

It’s never too early to begin planning for the future, and preparing your financial affairs by writing a tax-efficient will is good practice for anyone concerned about their family’s welfare in the event of their passing. Allocating your assets early on ensures that your wishes are carried out in the event that you do pass unexpectedly, and this enables you to exercise control over your property and personal belongings, as well as providing peace of mind for you and your loved ones.

Inheritance tax planning is another key consideration. At Berley, our tax specialists can help you to restructure your estate in the most tax-efficient way possible.

How Berley can help with probate

Formerly, probate was only able to be carried out by members of the legal profession, however in 2014 accountants were given the power to do so and at Berley, we have a team of probate specialists licensed by the Institute of Chartered Accountants in England and Wales helping clients across London. This effectively cuts out the middle man and in turn, saves time, money and stress.

Dealing with probate requires intricate knowledge of finance and is an overall heavily numerical matter. In order to acquire the relevant account information of the deceased, it’s best to go through a qualified, specialist accountant as they can swiftly and efficiently access the relevant accounting information that a solicitor isn’t typically privy to.

For more information on the processes and strategies for protecting your estate and ensuring that your wishes are exercised in the event of your death, our detailed probate factsheet provides a comprehensive insight into the considerations you should make. Alternatively, you can contact us directly on 020 7636 9094 or send us an email to arrange for an appointment with one of our specialists.

*This factsheet considers the probate process as it applies in England and Wales. Please note that the process is known as ‘confirmation’ in Scotland and ‘grant of probate’ in Northern Ireland and is dealt with separately in those countries.

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. 

Payroll, pension and Dynamic Tax Code changes April 2019

April 2019 is the start of another new payroll year with the following changes taking effect.

Payslip for all: All workers (anyone who has a contract to do work or services and receive money or a benefit in kind as a reward) are entitled to receive a payslip. The only exceptions are members of the armed forces and merchant seamen/ seawomen.

Payslip changes: Employers must provide the number of hours worked on each employee payslip beginning 6 April 2019. This is to make sure that employers pay accurately and employees understand the exact hours they are being paid for in each pay period.

Student loan changes: Thresholds for repayment of student loans are changing in 2019. Before April 2019, the repayment threshold was £18,330, meaning anyone with a salary over the threshold must repay 9% of earnings. From April 2019, the threshold is increased to £18,935 for Plan 1 and £25,725 for Plan 2.

Increased statutory family and sick pay rates: The weekly amount for statutory family pay rates is increased to £148.68 or 90% of the employee’s average weekly earnings (whoever is lower) from April 2019. This rate will apply to maternity pay, adoption pay, paternity pay, shared parental pay and maternity allowance. The weekly rate for statutory sick pay is increased to £94.25 from April 2019.

Minimum wage and Living wage increase: Every April the minimum wage and living wage increase and the new rates from April 2019 are as follows:

Age 25 & over £8.21 per hour
Age 21 to 24 £7.70 per hour
Age 18 to 20 £6.15 per hour
Under 18 £4.35 per hour
Apprentice £3.90 per hour

Apprentices can be paid the apprentice rate if they are aged under 19 or if they are 19 and over and in the first year of their apprenticeship. An apprentice who is over 19 and has completed their first year of apprenticeship is entitled to the minimum wage rate for their age.

Pension auto-enrolment: From April 2019, the total pension contribution must be a minimum of 8% - out of which 3% must be contributed by the employer and 5% to be deducted from the employee’s salary.

Dynamic Tax Codes: HMRC dynamic tax codes continue to create challenges for employers. Using estimated pay to determine tax codes causes issues when bonuses are paid early or mid-year, increasing the estimated amount of tax owed by the employee. HMRC has implemented dynamic codes which allow for in-year adjustments, so corrections are made in the same year.

Dealing with payroll can be time-consuming and the related changes every year make it more challenging. At Berley, we provide a full spectrum of payroll services to companies large and small. Call us on 020 7636 9094 or get in touch with us via our contact us page.

A small business' options regarding accepting card payments

Accepting card payments, what are my options?

A small business' options regarding accepting card paymentsFor many small and medium-sized enterprises (SMEs), and most businesses in general, the card payment economy represents a substantial source of their overall revenue and income. The most recent statistics collated by UK Finance indicate that contactless payments eclipsed cash for the first time in 2017, accounting for 63% of transactions overall, a figure that has only grown in subsequent years. Despite this, it’s estimated that around half of SMEs are yet to install electronic point of sale terminals and are therefore missing out on a significant share of card-based business.

Further to this, according to a survey conducted by Barclaycard, around 1 in 3 UK adults would consider cancelling a purchase if the retailer did not accept card payments. In essence, if you’re not accepting contactless as part of your business’s operations, you’re essentially jeopardising the profitability of your venture and potentially stunting its growth. In this article, Berley, London’s chartered accountants for entrepreneurs and small businesses discuss the best ways to integrate card payments for your business and the options available to small and medium-sized enterprises.

How can I start accepting card payments?

If you’re yet to install an electronic point of sale for your business, there are a few considerations you will have to make before you start accepting card payments. First and foremost, you will need to gauge the number of card machines required for your business. It is generally considered good practice to have one machine per till on your premises, while some businesses will have an additional machine in an office for over-the-phone payments.

Next, you will need to understand the different types of card machines available to small and medium sized businesses. There are generally three types of electronic points of sale that can be implemented by small businesses and small business owners:

  • Countertop card machines: typically recommended for retailers such as high street stores and smaller goods and services providers. These are fixed terminals that make up part of a countertop till.
  • Portable card machines: The ideal solution for retailers in the hospitality industry such as bars, cafes and restaurants, this format allows you to take credit and debit card payments from anywhere in your premises.
  • Mobile card machines: Designed for businesses whose work involves a high volume of movement across the country, the mobile card machine utilises 3G connectivity and a handheld device to allow you to take payments wherever you have network reception. Intended for couriers, tradespeople and taxi drivers.

You should also consider whether you want to make contactless payments available to your customers, as well as Apple, Samsung and Android Pay. While it is not a requirement of these machines to be equipped with such capabilities, the increasing popularity of these payment methods means that this should certainly be a consideration if you are entering into the realm of digital payment.

Where can I get an EPOS machine?

There are various electronic point of sale merchants that are able to assist you with setting up your business’s card payment system. Before entering into a contract with one of these providers, however, you need to ensure that the machines they will be providing you with are compliant with Payment Card Industry Data Security Standards.

This essentially means that their machine stores, processes and transmits your customer’s credit card data securely, minimising fraud-related risks. When you’ve found a provider whose terms and fees you are satisfied with, you will enter into a contract with them that generally stipulates the service fees you will need to pay them at the end of each month. These vary between providers, so research and negotiation are important. Once this has been set up and your terminals are installed, you’re ready to start offering your customers the benefits of paying by card.

What are the benefits of paying by card?

Paying by card is an easy and efficient means of processing payment and a quick and simple way to pay for the customer. It also represents a great way for business owners to streamline their accounts and ledgers. With more and more businesses using digital cloud accounting software platforms to keep track of their finances, understanding your venture’s financial positioning can become much easier through the use of electronic points of sale.

Most cloud accounting platforms are compatible with digital banking systems, so integrating these and implementing them as part of your financial and fiscal operations can mean your business runs more smoothly. Settling cash accounts can be a menial and mind numbing task, particularly if you have other areas of your business that need attention. Linking your online banking, electronic payment terminals and digital accounting software can translate to less work for you and your business and a more accurate and informed financial operation.

Moreover, using PCI DSS (Payment Card Industry Data Security Standard) compliant card machines is an effective measure that businesses can take against potential defraudment, with customers’ credit card data being stored, processed and transmitted by secure hosting providers. This means that not only will your customers be better protected, but your business and its financial interests are also safeguarded when paying by card.

Is cash dying?

There has been a significant downturn in the number of cash-based transactions in recent years, with a large number of British institutions now going cashless in order to improve efficiency and hasten the transaction process. Transport for London is perhaps the most notable example of these, with cash on buses being phased out in 2014.

The fact that cash is untraceable means that its legitimacy can at times be questionable, whereas from a security standpoint, paying by card is fully traceable and secure, making it the preferred method of payment for Government institutions such as HMRC. According to statistics, the average UK adult carries less than £25 cash on them at any given time, with almost half stating they carry less than £5, meaning card and contactless payments are well-established as the number 1 method of payment for people in Britain.

Despite this, cash still holds a strong position as the second place majority for methods of payment, and many small business owners who believe that setting up electronic points of sale and card payment technologies are too expensive rely on cash for the bulk of their revenue and income. In any case, cash is still predicted to decline in the coming years, so investing in an electronic point of sale machine is something that all small businesses should be considering.

At Berley, London’s chartered accountants for entrepreneurs and small businesses, we have a proven track record of assisting SMEs and startups with growth strategies and improving the profitability of their venture. We know that having the ability to accept card payments is something that's worth considering for many of you the entrepreneurs out there, which is why we're writing this post and sharing the information. 

If you would like to know more about growing your business and boosting your company's operation,  please feel free to call us on 020 7788 8261 or alternatively, send us a message through our Contact Form.

For more small business advice, see the following:

Bookkeeping tips for small businesses

Top 5 bookkeeping tips for small businesses

Bookkeeping tips for small businesses

As a small business owner, the responsibility of managing all aspects of your operation can be challenging.

Whether you work in fashion retail or are a small marketing consultancy, running a small business offers owners and company directors unadulterated freedom and control when it comes to the logistics and coordination of their business – but as a result, also demands commitment, time and energy.

Balancing each and every aspect of your business is of the utmost importance, particularly when it comes to managing your finances. While it’s always good practice to have a dedicated bookkeeper employed, some business owners decide to do this themselves or outsource the activity to our bookkeeping team at Berley. Our bookkeeping service can be tailored to match your needs and we can also extend to a full accounting service including detailed monthly accounts and costing records. Payroll processing and VAT return preparations are also options that we can help with.

Bookkeeping tips for small businesses

Do little, often

It might be the simplest piece of advice you receive, but keeping on top of your finances is one of the best practices a business can have. Staying up-to-date with your business’s daily transactions, expenditures and income equates to a better understanding of your company’s operations and business dealings, as well as a less stressful overall accounting experience. In order to maintain the smooth operation of your business, a bookkeeper should perform the following tasks:

  • Log daily financials: this encompasses the recording of day-to-day transactions and a daily income/revenue report, which should be logged in the company’s ledger.
  • Handle the accounts, both payable and receivable: the bookkeeper is responsible for the sending of invoices, managing accounts receivable as well as making payments to suppliers and for expenses.
  • Oversee cash flow: one of the primary responsibilities of the bookkeeper should be to protect the balance of revenue to expenses - meaning your company doesn’t run out of day-to-day money.
  • Prepare the books for your accountant: essentially, it’s the job of the bookkeeper to maintain the accounts so that the accountant can complete the company’s tax returns – i.e. keeping them valid and up-to-date.

As well as this, reconciling your accounts each month is recommended in order to formulate a concrete understanding of the business’s performance. One of the simplest and most straightforward ways to ensure that you’re able to keep on top of your financial duties as a bookkeeper is through the use of a dedicated accounting software platform.

Use a cloud accounting software platform

Making Tax Digital represents a complete overhaul of the current tax structure under HMRC, with companies now required to lodge quarterly financial reports as well as an annual report – meaning there is less room for error and more likelihood that your business will receive the greatest return on its tax payments.

Using cloud accounting software is a highly effective way to manage your finances, as it makes updating and reconciling your finances a seamless affair. If your business chooses to use a platform with daily automatic bank feeds, whereby your bank statement lines feed into your accounting software, you’ll have an overview of the cash in the bank and ready to reconcile.

Not only does cloud accounting ensure that your finances are more easily manageable, but it’s also an effective mechanism for protecting your company’s data – with many platforms now using sophisticated encryption technology, you’re less likely to encounter fraud or cybercrime.

As a partner of Xero, our specialist team at Berley Chartered Accountants can assist you with migrating your business’s finances and setting up your cloud accounting software, as well as providing bespoke advice as to how you can make your bookkeeping as efficient as possible. You can read about Xero on this page ‘Get the most out of Xero with Berley’.

Keep your finances separate

It should go without saying that keeping your personal and business finances separate is good practice, however, many small businesses and start-ups encounter this problem in their formative stages without realising the possible ramifications, which can pose significant problems when lodging your personal and company tax return at the end of the financial year.

As soon as you’ve established your business, you should set up dedicated business accounts. This means banking and credit cards in the company name to avoid any confusion in the long run. Mixing expenses and income between owner and business can be incredibly problematic when it comes to reconciling your business’s financial situation – particularly when trying to manage and understand the business’s income when cross-referenced with your own personal expenses and vice versa.

Trying to gauge the standing of the company when these finances aren’t separate is also incredibly difficult, which is why it’s always advisable to make a clear distinction before you start operating. For assistance with setting up your small business’s accounts, Berley Chartered Accountants can provide advice regarding the best solution according to your business’s structure.

Monitor time sheets

One of the primary expenses a small business will incur is employment. Your employees are vital to the operation of your company, so getting the most out of them is of the utmost importance. If you are billing your customers on an hourly or per project basis, one way to manage time sheets is through the use of time tracking software that will log your employees’ hours.

There are a number of platforms that provide this software, with many of them cloud-based. Implementing this technology facilitates a more accurate log of your employees’ work hours, which represents a sound tool for tracking hours which have a direct impact on your profit and loss statement. In addition, they can also minimise your expenses with respect to casual and part-time employees.

Aside from the obvious benefits of getting a more precise insight into the hours being worked by your employees, these platforms also offer a simpler way to manage overtime, sick time and holiday time – providing a comprehensive platform for managing payroll and improving cost-efficiency.

Liaise with your accountant

For many businesses, an accountant is perceived as a superfluous expense with some business owners believing that they can perform this role themselves. While this might be true for someone with an educated knowledge of finance and tax, for those without, not hiring an accountant can be a significant oversight if you’re looking to maximise profits and efficiency.

An accountant can help you to manage tax returns in order to receive the greatest tax relief, they’re also able to analyse your company’s financial records in order to make astute business recommendations for growth and expansion. Many accountancy firms also offer bookkeeping services so that businesses can focus on strategy while the accounts are taken care of.

At Berley, we are London’s local chartered accountants for entrepreneurs, small businesses and start-ups and we can provide bespoke bookkeeping and accounting services for companies looking to gain an advantage in what is the most competitive business market in the world. As the start-up capital of Europe, London represents one of the most difficult places for a small business to succeed – which is why our services could be of value to you.

In addition, we also help small businesses on business finance solutions, funding options and restructuring. Give us a call on 020 7636 9094 today. We look forward to discussing business with you.

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Preparing your business for Making Tax Digital

man pressing a multimedia computer display

The deadline for Making Tax Digital (MTD) is fast approaching. If you are not ready for these changes, now is the time to get to grips with cloud accounting.

Will MTD affect my business?

Although the Making Tax Digital initiative aims to be completed by 2020, from April 2019 businesses with a turnover over the VAT threshold of £85,000 will be mandated to use a digital system to meet VAT obligations. This means they will have to keep their records digitally and provide the VAT return information to HMRC via a compatible software.

The VAT return is the first in a series of changes that aim to transform tax into an entirely digital system, updated in real-time, removing a considerable margin for error and eventually eliminating the need for tax returns at the end of the year. Later changes will involve having all tax information on a single online account, similar to online banking.

Even if the VAT obligations won’t affect you, eventually all businesses will be expected to use a digital system for their taxes. This is one of the many reasons why so many people are switching to using online accounting software like Xero now.

Why Xero?

Cloud accounting has long been a staple of tech-savvy businesses and contractors. The MTD initiative will eventually require all businesses to submit their taxes digitally using compatible software, so with the clock ticking there’s never been a better time to improve your business with cloud accounting. Xero is an HMRC-recognised VAT software provider, so the aims of Making Tax Digital already synergise with the features it offers. This award-winning software can also integrate external applications from various third-party vendors, all securely packaged in a straightforward user interface. When it comes to online accounting, Xero is one of the best – and Berley, with our team of Xero-certified advisors, we can help you set it up for your business. You can read about Xero on this page 'Get the most out of Xero with Berley'.

Make your life easier with Xero

With the VAT changes being at the forefront of the MTD initiative, submissions will need to be done quarterly. Instead of publishing your return and then submitting it to HMRC, you can compile it using Xero and file it directly from the software. Your audit report will then keep track of your VAT throughout the year, covering everything from bills to bank transactions. Certain information such as the time and value of supply, VAT registration number and any VAT accounting schemes that you use must be recorded and kept for 6 years. Xero stores all of your files and transactions in one place on the cloud, meaning you can access the information whenever you need them.

One of the biggest advantages of Xero is it is built for small business owners - you don't have to possess a certain amount of accounting knowledge to use it, and you also don't have to install the software and run updates. If you would like to know more about Xero, contact our team of Xero-certified advisors.

Don’t just take our word for it

Every year, Xero takes away top UK industry awards, including:

  • Software product of the year 2017, British Accountancy Awards
  • Accountancy software provider of the year 2017, British Small Business Awards
  • Payroll software of the year 2017, LUCA Awards by the Institute of Certified Bookkeepers

Berley is a Silver Champion Partner to Xero and we have years of experience helping our clients get to grips with cloud accounting. Even if your business is below the VAT threshold, you will need to start moving your tax and VAT accounts to a digital system – so why not use the best?

As specialist accountants for small businesses in London, Berley has the skills to help you with Xero and the MTD initiative. To find out more about how we can make your accounting easier, call us at 020 7636 9094 or use our Quick Online Form.

For more information about Xero, you can check out:


Xero cloud accounting software

How to create a robust business plan

Every business requires a plan. Whether you’re a fledgling start-up or an established conglomerate, a clear and concise outline of your business’s goals, operation strategies, future progress and potential problems is an important and necessary tool. Not only does the business plan represent a valuable insight into your company’s approach to growth, but it also acts as a contingency plan in the event of an emergency.

Generally, a business plan is a prerequisite for companies looking to secure investment or funding from a bank, so if you’re not paying for the costs of your entire operation up front, chances are you’ll be required to have one drawn up. There are a number of different aspects that make up a business plan and preparing such a document can be an arduous task.

For small businesses across London who aim to grow with the right business finance solutions, a robust business plan is key. At Berley, our specialist small business accountants have been helping clients outlining the best practices when creating effective business plans and we are happy to share our experience with you. 

What should you include in a business plan?

There are a number of elements that contribute towards a comprehensive business plan, and all of them should be addressed when this document is being drawn up. The plan should provide an overview of your business’s aims for entering and operating in your desired industry/market; it should also provide extensive insights into the following:

  1. An executive summary: business, aims, financial summary

  • This should be a pitch to any potential investor that summarises the business plan, including the overall business, business aims and financial summary.
  1. Background of the business owner/proprietor

  • An overview of why you’re seeking investment in this business, why you want to start the company, your previous work experience and your qualifications and education background.
  1. The goods and services you will be trading

  • This section should detail what your business will be dealing in, a description of the goods or services you will provide, as well as any different varieties or types. If you are going to release a range of products incrementally, give specifics as to why this is.
  1. Market research

  • Here you should provide insight into who your customer base/target market is, a description of them, where they are located, why your product will appeal to them and whether you have already made sales to this audience/have got customers waiting for your product. It should also touch on other forms of market research including field research in the form of customer questionnaires.
  1. Competitor analysis

  • Analysis of the strengths and weaknesses of any businesses competing with you for a share of your target market, as well as an outline of who your competitors are, what they provide, what their price point is.
  1. Your marketing strategy

  • Provide an overview of your planned marketing strategy, including a specific breakdown of exactly what the strategy entails, why you’ve chosen this method and how much it’s going to cost.
  1. The logistics of your business operation

  • One of the most important aspects of the plan, the logistics of your business operation should account for the production, delivery and payment methods and terms of your operation. It should also discuss your supplier relationships, the items they supply you with, payment arrangements and the reasons for using them.
  • Moreover, you should include a description of your premises, as well as the equipment required for operations, any transport requirements, legal requirements, insurance requirements and a manifesto of management and staffing requirements.
  1. Detailed costs and pricing breakdown

  • Here, you should describe in minute detail all of the costs you stand to incur, the prices of your products and the profits you stand to make on the sale of said products. This should include a price breakdown for products in components, as well as cost per unit, price per unit, profit margin, markup and profit percentage.
  1. Financial forecasts, including a 5-Year Financial Plan Projection

  • Here you should outline all operational costs for the first five years of business, leaving nothing out. This should also include a realistic assessment of any profits you are making through sales and a projection of the business’s finances for this time period. The first three years should be broken down into months with years 4 and 5 detailed annually.
  • You should also include a personal budget, which details all of the estimated costs for the first 12 months of business, as well as your estimated income for this time period.
  • A cashflow forecast detailing the amount of money coming in from investments and funding against the amount of money being paid back to loan sources is also a requirement, as is a costs table.
  1. Contingency measures or a back-up plan

  • As is good practice, you should conclude your business plan with a short-term, long-term and an alternate plan.

For a more detailed breakdown of the requirements of a business plan, or for a template, which you can use as a guide, Government resources are the best port of call and can be accessed here.

How should you write a business plan?

The key to a successful business plan is concise, specific information that provides no room for interpretation. Your statistics and facts should be rock solid and you need to provide evidence for substantiation by the bank or another financial institution. In essence, it should provide an accurate and detailed account of your business’s plans for the operation, taking into account all financial and economic matters for the next five years.

The tone should be formal and professional, taking into consideration that this plan needs to be able to explain your business to other people. In terms of the business plan’s intentions, it should be easily digestible and the information should be discernible for both the layman and a financial professional. Any superfluous information should not be included, only what is relevant to the business and its dealings. If you have supplementary information that you want to include, this can be added in an appendix.

Do I only have to write one?

While the initial drawing up of a business plan is one of the cornerstones of an early-development business, revising this document is an on-going process and businesses are advised to update their business plan annually in order to remain relevant to the market and the future goals of the business.

Once your business becomes more established, it may be necessary to re-evaluate the targets and aims laid out in your initial business plan. If your forecasts weren’t ambitious enough, or in the unfortunate event that they weren’t realistic enough, you should come back to the original document and draw an updated business plan to better align yourself with the future of your business.

How can Berley help?

As specialist chartered accountants focused on helping small businesses across London, we understand that when it comes to growth, you need a robust business plan. This will put you in good stead for securing business financing, as well as providing a comprehensive outline for your business’s future – clarifying your goals and targets and how you can realistically achieve them. We have over 30 years of experience in promoting advice on business growth, and we have the insights you’re looking for to help you establish a solid foundation and strategy for growth this year and beyond.

Call us on 020 7636 9094 to talk with someone from the Berley team to discuss how we can assist you in growing your business.

What does Brexit mean for your small business?

As it stands, the imminence of the UK’s departure from the EU is causing a great deal of uncertainty and instability in the small business sector. For many proprietors, the implications of Brexit are still unclear, however, most people understand that their operations may be impacted in some capacity. The influence of Brexit on your small business will largely depend on what type of deal is struck with the EU, as well as on the type of small business that you own and operate.

Until such times as the EU leave has been effected, the full extent of Brexit’s influence on businesses in the UK is merely speculative. There are, however, some impacts that businesses have even prior to the beginning to Brexit being implemented. In this post, we at Berley, London’s small business accountants aim to share some considerations regarding Brexit and how they may impact your enterprise.

Less EU workers

Current statistics indicate that following the announcement of Brexit, the net migration level of EU workers coming into the UK has dropped, with the last count placing this number at 74,000. One theory attributes this to uncertainty pertaining to workers’ rights. Most workers’ rights today are determined by EU law, which the UK will not be subject to once Brexit is enacted. If your business currently relies on EU workers, retaining your staff should be a priority.

It is highly unlikely that many of the current workers’ rights will change, however, engaging with any EU workers you employ about their legal status will help to reinforce their understanding of their entitlements following Brexit. One thing you can do right now to ensure the security of your EU workforce is encouraging them to apply for “settled status” with the Home Office. This will need to be done by June 2021, but doing it sooner represents an effective way to consolidate confidence and allay any fears they have about their legal rights in the workplace. Your employees’ trust is paramount, so make sure you earn this trust and treat them fairly. Giving them a solid future will make them less likely to look for job prospects elsewhere.

Attract foreign investment

The pound has dropped in value following the Brexit referendum, sitting at around 1.14 Euros at the time of writing. Many experts predict the value will drop further if the UK leaves without an agreement, however, like all things that will be impacted by Brexit this is unclear. A weaker pound has its own challenges and advantages, but one clear advantage is the likelihood of an influx of foreign investment into UK businesses. With plenty of overseas companies looking to get a foothold in the UK, especially if the pound drops further, Brexit has the potential to put UK-based small businesses in the perfect position to forge some profitable connections and partnerships. To make your business look attractive to foreign investors, having a solid business plan with strong growth statistics is key.

Depending on what sort of deal is struck, the UK may be able to hold onto its current free trade status within the EU, however, this is uncertain until such times as Brexit is actually implemented. Free trade is obviously beneficial to businesses that rely on imported goods to sustain their business and operations, so small business enterprises should be mindful of what eventuates with respect to trade and any tariffs they may have to consider.

UK supply chains may be cheaper

Brexit could potentially force the introduction of new laws, which may include legislation pertaining to customs and excise duty being paid on anything imported from the EU, thereby increasing the price of anything shipped in. A full list of the tax implications of Brexit can be found on the government’s website, but the upshot is that it will cost more to import goods into the UK from EU countries if a free trade deal isn’t struck. You can prepare this now by factoring the increased cost and adjusting your business plans.

If this legislation is enacted and makes trade with the EU a more costly exercise, small businesses will have the opportunity to find new or existing suppliers within the UK, which is positive for the economy, or alternatives outside the EU (look at emerging markets from Africa or South Asia as they tend to be cheaper). If your cost is going to be less than your competitors with established EU suppliers, you know you will have a massive competitive advantage.

The best practice for minimising the potential damages that a non-free trade agreement will have is to draw up and quantify the increased costs and delay in movement of any goods that your business depends on from the EU. Likewise, you should review all contract material from EU distributors, and potentially consider putting contingency contracts into place with alternative suppliers to reduce the impact of Brexit if such an agreement does come into place.

Consider a new sales and marketing plan

With the impacts that Brexit is likely to have on your business, a revision of your business’s sales and marketing strategy may be required. If your business is forced to alter its suppliers, this will likely have a quantifiable impact on the way your product is received by your clientele. You should consider whether tariffs introduced under Brexit’s EU trade agreement are likely to impact sales, how your clients will potentially react to an increase in cost, as well as how this will influence the profitability of your business.

You should also be mindful of the ways in which a change of supplier might impact your target market and established clientele, particularly if the location and source of your product is a brand marketing or selling point. If you are planning on sourcing from inside the UK, a ‘Buy British’ marketing switch will be necessary, so too will any change to an alternative overseas supplier result in a change to your marketing tactics.

Brexit and financial planning

With experts suggesting that the small business industry will see the greatest impacts of Brexit, adapting to any changes in the post-Brexit climate is essential business practice. Regardless of which sector your business operates in, you’re likely to experience some sort of ripple effect following the leave. One aspect of this comes in the form of financial planning.

For many UK businesses that deal with clients in the EU, they invoice their clients in Euros, but their operational costs are in pounds. With the predicted changes to the economy set to see a rise in the Euro and a drop in the pound, this may be good news for some but bad news to others.

Taking into account this volatility of the economy, as well as the possibility of import tariffs, small businesses will need to be prepared for a revised financial strategy. Drawing up forward-looking cash flow forecasts is a good way to prepare yourself for the increased business costs of a worst case, no-deal Brexit, and doing so should be a valuable insight into where cash deficits may arise, and how best to manage these.

Financial planning can be a daunting and confusing task, so it is always advisable to seek professional advice in financial matters where you aren’t completely sure. At Berley, we are the small business specialist accountants in London and we understand that Brexit will have considerable impacts on small UK businesses, and this can be a difficult time for small enterprises. With over 30 years of experience in dealing with small business advice, we have the insights that can help consolidate your business’s foundations in the post-Brexit climate and beyond.

Call us on 020 7636 9094 to talk with someone from the Berley team to discuss how we can assist you in growing your business.

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.

Business growth in 2019: Expert advice for small businesses

According to business statistics prepared by the House of Commons Library, small businesses comprised over 99% of all businesses in the UK last year, with 96% being made up of fewer than 10 employees.

Since the turn of the century, the number of small businesses in the UK has increased steadily; however, 2018 saw a decrease of 0.5% when compared with 2017. This can be explained by the incredibly competitive nature of the small business market. So in this article, we look at the challenges and opportunities faced by small business owners in 2019.

Staying up to date with the current political landscape

For all UK small businesses, the imminent impact of Brexit is both confusing and concerning. While it will no doubt have an impact on your business operations in some capacity, just how much of an impact it will have is still largely unknown. Until Brexit has taken place, the total extent of Brexit’s influence on businesses in the UK is merely speculative. There are, however, still some considerations that you can account for when it comes to the UK’s impending departure from the EU, and using these to make an educated guess as to how they will impact your business may prepare you better for what’s to come.

The pros and cons of a weaker pound

A weaker pound is set to attract non-EU investment into UK businesses with foreign companies looking to get a foothold in the UK market, but export-oriented firms or business operating in high-tech and service-related industries may see a decrease in capital investment according to a study by the University of St Andrews. This is mainly due to uncertainty surrounding the ramifications of the UK’s departure from the EU.

Supply chain disruption

If you operate in food retail, logistics or fashion, the primary concern for your business will be the disruption to your supply chain, as well as fluctuations in the exchange rate, which may see an increase in the cost of supplies and a decrease in the value of existing assets. Those providing services such as construction will also be affected, with economic uncertainty resulting in reduced buyer confidence – which in turn will impact the demand and therefore the pricing of building and construction services.

Making Tax Digital

As of 1 April 2019, the Government’s Making Tax Digital for Business will come into effect. Essentially, this legislation makes it mandatory for all businesses paying VAT over the threshold of £85,000 to migrate their finances and accounts to an online, cloud accounting platform. Making tax digital is set to become ubiquitous for all businesses, and is being implemented as a means of providing more accurate, efficient and effective taxation – with less likelihood of errors, which can cost a business money.

Not only is cloud accounting a simpler way to organise and reconcile your finances, but it is also a valuable tool for protecting your business’s financial data. Many of the intuitive and intelligent cloud accounting software platforms available encrypt your information when stored and transferred, which also means your business is safeguarded against potential fraud – the most commonly occurring crime experienced by Britons in 2018.

For businesses looking to grow, using a cloud-based system like Xero provides a fantastic opportunity to gain a better understanding of your enterprise’s costs and revenue breakdown, with reports required quarterly rather than annually. With a better grasp of your company’s finances, you’re better equipped to analyse areas for improvement and streamlining – which could prove crucial when looking to expand. At Berley, our team of Xero-certified advisors can help you get the most out of the accounting software.

Protect yourself against fraud

Last year fraud was responsible for more than 30% of crime in England and Wales, with an estimated 3.5 million occurrences. Many small businesses have been victims of fraud; this is why businesses looking to grow need to take the necessary measures to protect themselves from any unwanted risk. For more information, check out this article ‘Protect yourself against fraud’ we published last week.

Get online because eCommerce will continue to grow

Staying in tune with market trends is a key consideration for businesses wanting to promote growth both internally and externally. For small businesses, one of the most important aspects of the current climate is the insurmountable rise and popularity of eCommerce. According to statistics from eMarketer, the number of digital buyers is set to steadily increase in 2019 (7.2% on 2018) and into the future, with similar figures likely in 2020 (6.6% on 2019). In essence, if you want your retail business to grow, you need an online platform. In the digital age, an online presence is essential business practice, and small businesses without this are at risk of falling by the wayside.

For those not yet online, drawing up a cohesive and comprehensive online marketing strategy is of the utmost importance and will facilitate greater awareness of and interaction with your brand. For retail industries alone, eCommerce sales figures are predicted to increase by 13% in 2019 as opposed to the previous year, and without the proper measures in place, you could be losing out on a significant portion of the market share.

Business growth strategy

As a business owner, being conscious of your business’s limitations is a key factor in determining its success and potential for growth. While having a positive attitude is essential – and gives you the push you need to pursue growth and expansion – you also need to be mindful of setting realistic, achievable targets. Without these, you put your business and its future prospects at risk. In order to circumvent this dilemma, having a solid business growth strategy is of paramount importance. A robust growth plan should highlight the business objectives for the year and list the ways your business will achieve them, as well as identifying any potential risks and measuring your progress.

At Berley, our small business growth specialists have been sharing practical strategies with small businesses across London and getting them on the path to success. We can help with:

  • Identifying a growth strategy that’s right for your business
  • Discovering opportunities for organic growth
  • Identifying potential problems and prepare strategies to tackle them
  • Identifying a tax structure that works for you
  • Setting realistic goals and targets for growth
  • Evaluating your progress as you grow
  • Providing advice on acquisitions and mergers

Berley, small business growth specialists

As specialist chartered accountants focused on supporting small businesses, we understand that when it comes to growth, there is a lot to consider. We have over 30 years of experience and the insights you’re looking for to help you establish a solid foundation and strategy for growth in 2019 and beyond.

Call us on 020 7636 9094 to talk with someone from the Berley team to discuss how we can assist you in growing your business.

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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. 

Protect yourself against fraud

If you live in the UK, chances are you know someone who has experienced or been a victim of fraud.

It can seemingly happen to anyone, all it takes is an innocent click on the wrong email or an unsuspecting phone call from ‘the bank’ and you’re at risk. With an estimated 3.5 million fraud related incidents in 2018, we now have to be more vigilant than ever when it comes to protecting our data, our money and ourselves.

According to a report released by the Crime Survey for England and Wales (CSEW) in January 2019, fraud accounts for more than 30% of crimes nationwide. Of the 20.6% of individuals surveyed who said they had been victims of crime, 6.3% of them had experienced fraud. This is evidence of the changing criminal landscape in the UK, with fraud outscoring every other offence type by almost 15% of the total share.

As a society, we typically picture theft, damage and violence as the most commonly occurring criminal offences, however, this is no longer the case. CSEW’s year-on-year reports tell us that fraud has been the most consistently encountered crime in the UK for the last two years, and as such, we need to consider better protecting ourselves and our business from potential fraud.

Types of fraud affecting small businesses

Common types include but not limited to:

  • Bank account fraud
  • Cyber fraud
  • Data theft
  • Embezzlement
  • Fake suppliers
  • Inventory theft
  • Payment fraud
  • Procurement fraud

The statistics tell us that we need to do more than just be aware of possible fraud and potential scams. With the migration of so much information to digital platforms and the cloud, we need to re-evaluate our approach to online safety and data protection and stay vigilant when it comes to the threat of phishing and cyber fraud.

At Berley Chartered Accountants, London specialists for entrepreneurial businesses, we understand the importance of protecting your business from fraud, which is why we want to share tips on how to safeguard your company and its data.

Protect your data, use the cloud

With the imminent introduction of HMRC’s Making Tax Digital Scheme, migrating to digital, cloud accounting is on the horizon for all UK businesses. This transition comes into effect on 1 April 2019 for the approaching 2019/20 financial year, so there should be no excuse as to why you aren’t migrating now. Cloud accounting represents one of the most effective and efficient means of protecting your data and financial information and is a fantastic measure that your business can take to safeguard itself from fraud.

Not only does cloud accounting software facilitate seamless communication between business and accountant, but many providers also use sophisticated encryption technology to protect your data both when it is stored and when it is being transferred. This means that any attack or attempt at defrauding you is rendered moot. At Berley, we do the utmost to protect client data and have been using Xero the cloud accounting software, which encrypts your personal and financial data using industry-standard Transport Layer Security, for years.

Encrypt the important stuff

If your business manages sensitive information or holds a high volume of personal client data, then consider using a localised encryption software to protect yourself against fraud or a cyber-attack.

With a variety of intuitive and intelligent encryption software on the market, protecting your company’s sensitive data should be a straightforward and simple affair. This technology allows you to create encrypted storage on your computer, as well as encrypting files, folders and sometimes text. Moreover, there are platforms with public and private password decryption and some with two-factor authentication for added protection.

Keep a back-up

Not only is it good practice to back up your data to the cloud in the event that you need to restore previous versions of files, but a stored copy of your system should also be kept on a hard drive in case of emergency. An external back up hard drive will mitigate the potential damage of ransomware as you can load the existing files from the external source once the virus has been extracted and reboot without the fear of losing your data.

Don’t surrender to pressure

Fraudsters like to apply pressure on their victims, imposing time constraints and threatening some dire consequences if you don’t act right away (like if you don’t download a piece of software right away or transfer the money straight away). Tell them instead that you want to check out if the process is genuine. If they continue to pressure you, discontinue the discussion because a genuine company is not likely to behave that way.

Report it

In 2018, only 1 in 8 people who were victims of fraud reported this to authorities. That means that roughly 13% were reported overall, leaving 87% to go without investigation and potentially leaving the perpetrator to repeat their offence.

If you are unlucky enough to fall victim to fraud, report it ActionFraud. Many are reluctant to report because police only get involved if they believe the fraudsters are from an organised network who have stolen a large sum of money from multiple victims. 

Trust your accountant

Keeping a close eye on your books is one of the most effective ways to prevent fraud within a business, and outsourcing your business’s financial accounting to a qualified, trusted accounting firm is the best way to do this. Our team of chartered accountants specialises in small business and start-up operations, and have been serving entrepreneurs across London for years. Please give us a call to discuss how we can help your business reach its full potential and profitability.

Perform background checks

Embezzlement or other types of fraud committed by employees can cause significant damage to your small business. Use background checks to see if you can uncover any ‘red flag’. Beware that due to GDPR, you need to tell the applicants and/or your existing employees what data are being collected, why and how they are being used.

Berley Chartered Accountants

Founded by entrepreneurs, at Berley Chartered Accountants, our mission is to serve entrepreneurs and start-ups across London on matters pertaining to:

In addition, we also help small businesses on business finance solutions, funding options and restructuring. Give us a call on 020 7636 9094 today. We look forward to discussing business with you.