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One of the main reasons start-ups fail is because of cash flow issues. The focus is wrongly put upon making profit rather than managing cash-flow. If your company doesn’t have a steady stream of income you’re unlikely to be around within a years’ time.

A successful business needs to ensure there is a balance between money in and money out, with more focus upon the former. Having good cash-flow management will open your business for opportunities you may have thought not feasible.


Why cash-flow management is important

Individual businesses have different cash-flow needs. Achieving and managing the kind of cash-flow that is suited to your business is crucial to its long-term survival and its ability to evolve and grow. Creating and maintaining a system which allows you to see exactly what is coming in and out of your business will give you a clearer picture on how you can develop and expand.

Xero is a very useful cloud accounting tool which enables you to view your cash-flow at the click of a button. It is effective in that it allows you to see your financial position in real-time so you can make well-informed business decisions immediately.  Click here to read our blog post about the benefits of using Xero and how to get set-up.


Follow these useful steps for better management of money-in and money-out:

  1. Set cash-flow targets

The best way to manage your cash-flow is to forecast for the future, either 6 or 12 months in the future. This will help you identify any weak spots in your business’ finances which will assist in preparation for the future.

  1. Use technology to manage your cash-flow

Cash-flow forecasting may sound difficult but if you adopt a cash-flow management system such as Xero, it will perform all forecasting for you, in real-time. Using a system is one of the biggest time-savers in business and can help you keep better track of your business in less amount of time.

  1. Agreeing payment terms

“You are nothing without your customer”. That is why setting payment terms in writing, in advance is important to ensure a good working relationship. If you begin without clear payment terms, you will be unclear about when you will be getting paid. Also, by having a range of payment methods will encourage speed of payments, as you’ll be helping make it easier for your customers.

  1. Invoice correctly

An effective invoice contains all of the relevant information that a customer needs to know in a concise and easy to read format. There should be no surprises for a customer when an invoice is issued. Invoicing should be issued in a timely manner once the work is completed. Xero can handle all of your invoicing for you, it will even send out automatic invoice reminders to save you time and help you get paid on time.

  1. Cut costs

The most obvious, and potentially the easiest method of cash-flow management, is to cut costs. You could think about using contractors instead of employing staff, or move your IT systems to the cloud. However, when cutting costs, ensure you aren’t harming your business relationships.

If you are running into cash-flow issues and you aren’t sure why, Xero can assist in answering your questions. All your bills, invoices and day-to-day transactions can be viewed in real-time which will show you a rolling forecast and give you an accurate picture of where your business stands. This will provide a detailed starting point to make improvements to your cash-flow.

As always if you have any questions regarding your cash-flow or Xero get in touch on 0845 054 8560.

When you decided on becoming a business owner, whether the reason being you had an innovative business idea or just prefer being your own boss, did you ever think you would spend so much time doing administration? How many hours have you clocked chasing clients for late payment of invoices? You are well aware that late payments from clients is a hot topic of conversation between business owners, as it’s one of the most frustrating yet proverbial aspects.

However, there is light at the end of the tunnel. Things are moving forward, digital technology is making accounting processing easier and faster. Cloud accounting is the future, imagine such a thing as automated invoice reminders!

Cloud Accounting
With the introduction of Making Tax Digital coming April 2018, businesses that adopt digital accounting early will have all the processes in place and be well versed before the introduction. Other benefits include:

  • Ease of access, you can enter your records from anywhere so you can spend more time with new customers rather than chasing old ones for payments.
  • You have a clear overview of your current financial position, in real-time. Allowing quick and easy management of cash flow and budget planning.
  • Automatic updates mean you can spend more time doing what you love, as well as automatic backups so no loss of information.
  • You save a lot of time, by having access to all your business’s tax information in one single place.
  • Upfront business costs are reduced – version upgrades, maintenance, system administration costs and server failures are no longer issues. Instead, they are managed by the cloud service provider.

The cloud accounting platform we use is Xero, as we believe this to be the best on the market for our clients. There are different packages available to suit a variety of businesses and their needs:

  • Starter £10 pm
  • Standard £25 pm
  • Premium £30 pm

Xero will allow us to share the same set of accounts and access financial data at the same time, enabling us to build a closer relationship with you and your business.

Take action now within the current 2017/2018 tax year, in order to get operational and familiar with working digitally, so when Making Tax Digital is introduced you are well accustomed to this way of operating.

Click here to try a 30-day free trial.

As agents we also have access to other platforms, and as always if you have any questions regarding moving to digital please contact on 0845 054 8560.

The UK tax system has a variety of specifications and guidelines that should be followed strictly as deviation can result in serious penalties. Reliefs and allowances are also offered as they encourage spending and investment; these should also be followed just as strictly as they can also result in penalties.

To ensure you avoid penalties we have generated a tax planning guide with tips to help you save on your personal taxes:


As long as you’re eligible, you can open an Individual Savings Account (ISA) to help save on income tax. ISA’s are tax free and you can receive a 25% bonus on your savings. ISA’s are particularly useful if you are a first time buyer, there is a help to buy ISA. The maximum investment into all ISAs is £20,000 per adult per year.

Distribution between family

Sharing income or gains around the family can reduce the marginal tax rates for the highest earners, and make use of the allowances available to those on lower incomes. To be most effective, the lowest earner must own the investment or bank account which produces the gain. If you have a family business, ensuring each family member is either employed by or has a share within the business can assist with income sharing and therefore tax savings.

Marriage allowances

Marriage has a whole host of benefits, including a variety tax benefits. Married couples or civil partners can generally transfer assets between them without charges. A spouse with a high income can transfer assets into joint names to save on tax.

Where both spouses or civil partners pay tax at no more than 20%, and one of them doesn’t use all their personal allowance, that person can transfer £1,150 of their personal allowance to their partner. This saves tax of £230 in 2017/18. This marriage allowance can also be claimed for 2015/16 and 2016/17.


If your household is claiming child benefit and the highest earner in the house has an income of £60,000 or more, the benefit will be clawed back as a tax charge. To avoid this you can either opt out of receiving child benefit or arrange income sources so neither parent earns over £50,000.

As long as you are eligible, it is important that you claim child benefit, even if you opt out of receiving the payment for a period. This is because the benefit claim provides national insurance credits for the non-earning parent, and in-turn helps towards building state pension entitlement.

Sundry income

Earning small of amounts of extra income can be tax free as long as they fit within the guidelines that follow:

  • £7,500 from letting a room in your own residential home
  • £1,000 from letting a property which doesn’t qualify for rent-a-room relief
  • £1,000 from providing services, hiring assets or selling goods

Employee benefits

You may be offered non-cash benefits by your employer, those that are NI and tax free are worth taking up. Take a look at our employee benefits blog post to see which benefits are tax free.

Arrangements such as salary sacrifice can be taxed as if they are salary, so we would always suggest gaining advice before going ahead with such an agreement as they can be very complex.

Employee pension schemes

Pension’s are probably one of the most tax-efficient savings methods. Your employer will receive tax relief on the full amount paid into a pension scheme as long as the contributions are reasonable for the work you do. The money contributed from both yourself and your employer will be built up inside a fund, tax-free.

The only time you will start to pay tax on a pension is if you go over the annual pension allowance, which is usually £40,000.

You should always take qualified independent financial advice before making a significant investment into a pension fund, or other savings scheme, and beware of pension scammers. John, our financial adviser would be happy to help with any pension advice

For any further information or advice, get in touch with your client manager or call us on 0845 054 8560.

Important changes to public sector contractors working under IR35 legislation have taken effect for 2017/18.

Individuals who work through intermediaries, such as personal service companies, are no longer subject to IR35 rules if they work in the public sector.

Public sector organisations or agencies paying off-payroll workers are now responsible for deciding whether the work falls within IR35. They must deduct income tax and national insurance (NI) if they deem the worker an employee within IR35.

Under previous rules, intermediaries were responsible for calculating and paying the contractor’s income tax and NI owed to HMRC.

The new rules apply to any payments made on or after 6 April 2017, including payments made for contracts entered into before this date.

These changes apply to the following:

  • public authorities hiring off-payroll contractors
  • public sector managers – tax, payroll, human resources and procurement
  • agencies who supply contractors to the public sector
  • contractors providing services to a public authority through an intermediary.

Impact on contractors

Contractors working with any of the following public sector organisations will no longer have their IR35 status determined by their intermediary:

  • government departments
  • the NHS
  • police and fire authorities
  • local authorities
  • educational institutions including universities
  • the BBC and Channel 4.

As always if you have any questions regarding employee benefits contact Richard, Jason or your client manager on 0845 054 8560.

Most employees are offered a range benefits from their employers. There is a huge variety of employee benefits, all with different tax and national insurance (NI) implications. So, as your local accountants, we have created a simple guide to make you aware of any tax conditions as not all employee benefits may be what they seem.

Benefits can be very complicated to understand, as some benefits, such as cars, are provided over a number of years, you need to know how the associated tax bill may change in the future.


Tax-free benefits

The table below lists the most common benefits used which are all tax and NI free if all the conditions are met.

Benefit provided Principle conditions applying per employee
Mobile phone 1 phone, employer must retain ownership contract with telecoms provider
Bicycle and safety gear Employer must retain ownership
Parking At or near workplace
Meals and refreshments Made available to all employees in staff canteen
Eye test and spectacles or lenses Required for working with computer screens
Medical treatment Up to £500 per tax year as part of a return to work plan
Health screening 1 per tax year
Trivial benefits Non-cash, worth up to £50 per gift, capped at £300 per year for directors of the employing company
Pension contributions Within annual allowance limits
Relocation expenses Up to £8,000 per move, if connected to change of job
Works bus Used only or mainly to transport employees

Pension contributions

If your employer has staged in for auto-enrolment and your annual salary is above £10,000 you should automatically be enrolled into a pension scheme.

Your employer’s contributions into that scheme are free of tax and NI, if the total pension contributions paid in don’t exceed your pension annual allowance. The allowance is set at £40,000, but if you are over 55 and have flexi-accessed your pension fund the amount you and your employer can contribute is £4,000 per year.

If your total income is £150,000 or more your contributions is tapered to £10,000 per year, therefore you will need to monitor all contributions into any pensions held in your name.

Salary Sacrifice

A salary sacrifice is a benefit arrangement where you give up some of your salary in return for benefit. Such arrangements can save you and your employees money, if the benefit provided is one which is tax or NI free from the table above.

The government is changing the rules so the tax and NI savings disappear in many salary sacrifice arrangements. The new rules will apply to new salary sacrifice arrangements entered into from 6 April 2017 onwards.

All salary sacrifice arrangements involving cars, vans, fuel, accommodation and school fees will come under the new rules from 6 April 2021. Other benefits, such as car parking near work, will fall under the new salary sacrifice rules from 6 April 2018.

Some benefits won’t be affected at all, and these include pension contributions, subsidised meals and medical treatments.

Company cars

The taxable benefit of a company car is based on the list price of the vehicle when new, multiplied by a percentage derived from its CO2 emissions rating.

The lower the CO2 emissions, the lower the percentage, which means a smaller taxable benefit. However, the list price percentage will generally increase each year, meaning you pay more tax each year on the same car.

From 2020 hybrid and electric cars will be taxed at lower levels, if the electric engine sustains a longer range. A hybrid with a range of 130 miles or more will be taxed as if it was a purely electric car.

As always if you have any questions regarding employee benefits contact Richard, Jason or your client manager on 0845 054 8560.