“Delay tax changes or small businesses face a perfect storm”

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Small businesses and the self-employed face filing quarterly tax updates online by 2020

MPs today called on the Government to delay implementing new tax rules for small businesses, amid fears they could lead to a “perfect storm”.

SNP MP Hannah Bardell said business owners had revealed their fears to her over software glitches alongside a lack of support for company owners and sole traders.

She said they raised questions about the proposed new quarterly tax updates being implemented by 2020, at the same time as more than £700m in cuts are being planned for HMRC.

The Livingston MP said the service is facing staff cuts at a time when small businesses are due to implement a new system, and may need to call HMRC even more often.

Small firms and sole traders are also dreading the extra work quarterly updates will bring. She called it a “perfect storm”, and added: “One business owner told me ‘this is my worst nightmare come true’.”

A debate before the petitions committee was triggered by a 110,000-signature petition organised by small business owner Paul Johnson. The petition called for a re-think of the timescale for proposals announced in the Autumn Statement by Chancellor George Osborne – that small businesses and the self-employed should be filing quarterly tax updates online by 2020.

Ms Bardell said the number of signatures showed the strength of feeling among small business owners and the self-employed.

Oliver Dowden, the Conservative MP for Hertsmere, opened the debate on behalf of petitioners.

He said there is cross party backing for moves towards the digital overhaul of government systems, but there are serious concerns raised by small businesses and the self-employed about how the new quarterly reporting system would be implemented, what sanctions if any would be applied to those who failed to comply with the new system, and the extra cost and burden the system could end up placing on small businesses.

Some areas of the UK  – especially rural parts of the country – do not have adequate broadband infrastructure to cope with such a system, he said.

He stressed: “Small business is the backbone of our economy, employing thousands of people.”

The committee was told that ahead of today’s hearing, 565 separate contributors had sent 1,285 tweets to the committee raising concerns and fears.

MPs said constituents had raised questions about whether sanctions would be applied over failure to report quarterly, and how quickly after the deadline, and the potential for increased accountancy fees or loss of revenue from time spent doing their own accounts.

Hove’s Peter Kyle, who started and ran his own business before becoming a Labour MP, stressed the uncertainty self-employment brings.

“People who become self-employed make personal sacrifices in order to drive our economy,” he said, adding many had periods of low income.

“Growth is not linear,” he said, with uncertainty in income not just being confined to the start of a business. The legislation proposed would have a big effect on smaller, micro businesses who are already facing a disproportionate ‘hit’ with new corporation tax rules by comparison with big business.

Mr Kyle also referred to problems faced by those using HMRC services at the moment, and said some small businesses have faced a “lamentable” service.

“If a system is thoughtful, intuitive, and in the interests of business, small businesses usually flock to support it. Something has gone wrong here.”

Morecambe and Lunesdale MP David Morris, the Government’s self-employment ambassador, said he and other MPs would broadly welcome a move towards a digital future, but questioned how new rules would be introduced and implemented.

“We have got to get this right from the start. This must not turn into a Big Brother turnover predictor,” he said. “This must not become a stick with which to beat the self-employed.”

Incomes can fluctuate, particularly when the industry involved is seasonal, and cash flow can be unpredictable. He said HMRC rules must take that into account, and called for delays to the timescale to ensure small business concerns are addressed.

MP for High Peak, Andrew Bingham, said in rural areas, there are still major problems with accessing fast broadband, and some areas do not yet have access to 4G phone signals.

He added: “I worry about ‘regulation creep’ – that plans for quarterly updates could end up becoming quarterly tax returns or quarterly payments.

“Small businesses are the engine room of the economy. I fear we will seize up that engine room.”

East Antrim MP Sammy Wilson said he knows of a number of constituents such as plumbers, carpenters, and builders, who are small businesses and do not operate online. Online updating would be a major issue for them, he said.

“These processes never go smoothly,” the Democratic Unionist said. “For some businesses, it could be a case of whether they survive.”

There is also cynicism about the relative burdens on small and big businesses, he said.

“We must not be seen to impose more work on small businesses while there is seen to be less of a burden on big business,” he added.

The committee was told many MPs would have no issue with giving some small businesses a “nudge” towards operating digitially, but that has to go hand in hand with simplification of the process.

The hearing was told that for many businesses, filing tax returns digitially was less of an issue than the “seismic” change of updating HMRC every quarter, and the extra workload that would create.

Financial secretary to the treasury David Gauke, whose brief includes small business taxation, said the Government is launching a full consultation in the Spring which is due to end in December, and which will include bodies like the Federation of Small Businesses. Many of the issues raised in the petition would be addressed then, he added.

Mr Gauke stressed that the plan would involve quarterly updates to HMRC, rather than quarterly full tax returns, but when asked if this could be the end of the traditional annual tax return, he said: “Yes.”

He said free software would be available for small businesses and the self-employed, and said any sanctions would be implemented only after a bedding-in period.

He said he did not expect the level of sanctions to match the current level for those who fail to file annual tax returns, for example.

Mr Gauke said 30,000 businesses have already downloaded apps for recording data, and he made no apologies for the Government’s wish to make HMRC the most technologically advanced tax collection system in the world.

Mistakes mean £6.5m in taxes goes uncollected annually, and the new system aims to reduce errors and reduce that figure.

He said the system would be “extensively tested” before it is rolled out, and that businesses would have until 2020 before it was fully implemented.

Read more about the petition here.

MARIA WILLIAMS IS A JOURNALIST, COPYWRITER, PROFESSIONAL BLOGGER, AND PR FOR SMALL BUSINESSES. Visit her website www.wordsyoucanuse.co.uk

 

MPs will debate 100,000-signature petition against quarterly tax plan

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MPs are set to debate a petition against a UK Government plan to make small businesses and the self-employed file quarterly tax updates – after more than 100,000 people signed up to oppose the move.

Chancellor George Osborne announced the plans in his Autumn Statement, saying: “HMRC is making savings of 18 per cent in its own budget through efficiencies – in the digital age, we don’t need taxpayers to pay for paper processing, or 170 separate tax offices around the country.

“We’re going to build one of the most digitally advanced tax administrations in the world. So that every individual and every small business will have their own digital tax account by the end of the decade, in order to manage their tax online.”

The plan is that instead of the current annual self-assessment system, the self-employed and small businesses will have to file quarterly updates via apps and the HMRC website from 2020.

The plan drew immediate criticism from some in the business sector, with one senior accountant claiming the system could end up being a “dog’s dinner”.

And John Longworth, director-general of the British Chambers of Commerce, told reporters after the Autumn Statement that digital tax accounts “would be great”. However, he said, the “history of Government IT projects is that they end up in chaos.”

He added: “It’s difficult enough for businesses to deal with HMRC as it is without removing any of their face-to-face or telephone contact. Having digital might end up being a complete mess. We’re going to have to watch it very carefully.”

The petition against the move says: “Each self-employed individual and small business will have the added burden of additional red tape, accountancy fees, and potential for fines.”

As I write this, the petition on the UK Government and Parliament website has attracted more than 108,000 signatures. A parliamentary debate can be triggered when the number of signatures on petitions on the site reaches 100,000.

The debate will be held on Monday January 25 at 4.30pm. Anyone wanting to share their views on the Government’s response (printed in full below), what they believe MPs should talk about in the debate, and questions they want the Government to answer can tweet using #HoCPetitions until 10am on Thursday January 21. You can follow the petitions committee on @HoCpetitions or watch the debate on parliamentlive.tv.

You can view the petition here https://petition.parliament.uk/petitions/115895.

 

The Government’s response to the petition:

“Making Tax Digital will not mean ‘four tax returns a year’. Quarterly updates will largely be a matter of checking data generated from record keeping software or apps and clicking ‘send’.
These reforms will not mean that businesses have to provide the equivalent of four tax returns every year. Updating HMRC through software or apps will deliver a light-touch process, much less burdensome and time-consuming than it is today.
At the March 2015 Budget the government committed to transform the tax system by introducing simple, secure and personalised digital tax accounts, removing the need for annual tax returns.
At the 2015 Spending Review the government announced it would invest £1.3bn in HMRC to make this vision a reality, transforming HMRC into one of the most digitally advanced tax administrations in the world.
One element of this vision will be asking most businesses, self-employed people and landlords to keep track of their tax affairs digitally and update HMRC at least quarterly via their digital tax account.
Many taxpayers have told HMRC that they want more certainty over their tax bill, and don’t want to wait until the end of the year, or even longer, before knowing where they stand with their taxes.
We also estimate that £6.5bn in tax goes unpaid every year because of mistakes made when filling in tax returns. These reforms will make it easier for taxpayers to maintain accurate and up-to-date tax affairs, reducing the scope for error.
With businesses keeping track of their tax affairs digitally, quarterly updates will be fundamentally different from filling out an annual tax return in a number of crucial respects:
•Quarterly updates will not involve all the complexity of a full tax return. The updates will be generated from existing digital business records. In most cases, little or no further entry of information will be needed. It will be much quicker to complete than the current tax return.
•As part of the process the business owner or individual will receive a developing in-year picture of their tax position, helping people have greater certainty about what they owe, allowing them to plan their finances more effectively. This differs from the current system where many taxpayers are caught out by their tax bill when it finally arrives.
•In-year updates will not be subject to the same sanctions for lateness or inaccuracies as apply now to the year-end position. HMRC will consult during 2016 on what sanctions might be appropriate for a more digital tax administration.
The government has already announced that these measures will not apply to individuals in employment or pensioners, unless they have secondary incomes of more than £10,000 per year from self-employment or property.
The reforms will rely on businesses, self-employed people and landlords using software or apps that can connect securely to their digital tax account. The government will ensure that free products are available. The Gov.UK service will signpost taxpayers to the right product, with clear HMRC guidance about how to choose software.
HMRC will ensure support is available for people to get online if they need it. We will also provide alternatives for those who genuinely cannot use digital tools, like telephone filing. This will build on our Needs Extra Support service, which has gone from strength to strength in helping more vulnerable customers.
We’re introducing these reforms gradually. We’ve been in discussion with stakeholders since March 2015 and will be consulting on the details of the proposals throughout 2016.
We will use volunteers to test the new tools and processes and give us feedback. Quarterly updates will be introduced for some from 2018, and will be phased in fully by 2020, giving taxpayers time to adapt.
We want to work with all stakeholders to ensure these changes work for them. For more information about the proposed reforms please search for ‘Making Tax Digital’ on Gov.UK or use the following link:
https://www.gov.uk/government/publications/making-tax-digital

Discover 9 ways your business could be picture perfect

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Saturday 8th August 2015. Dairy farmer Patrick Holden at his farm Bwlchwernen Farm near Lampeter in West Wales with his herd of Ayrshire dairy cows. Picture: Steve Phillips for Athena Agency

There have been seismic changes in the way news organisations operate over the past few years.

One of the key changes is how the media sources its images.

Few people will have been unaware of the boom in user generated content, and, in particular, the rise of the use of submitted images.

Busy news editors and reporters who have to fill websites and newspaper pages are now sourcing more and more images from social media, alongside emails from businesses and organisations.

Many weekly newspapers have no staff photographer at all, while daily news media organisations rely on a smattering of staff photographers, freelancers, agencies, and submitted pictures.

Most print editions are designed using page templates, and the choice of images to be used can often depend on the available page templates.

The reality is that if you want a photograph to appear in your local media outlet – online or in print – the method most likely to end in a good result for your business is to submit a photograph yourself. With resources spread so thinly, you can’t rely on media having the staff to attend a photocall. They are at the mercy of breaking news.

When virtually everyone has a smartphone with a camera, many of the submitted images the media receives are of a lower quality than would be necessary to have a good display in a newspaper, or on a media website.

The way your business can stand out is by providing good quality images. A good quality photograph could make the difference between your business’ story being a news in brief of 50 words, or a picture story with impact of up to 300 words.

The best way of ensuring your image is suitable for publication is to employ a freelance photographer.

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Thursday 3rd September 2015. Nev from The Call Centre at the exclusive VIP event to celebrate the re-opening of the Swansea Walkabout after a £700,000 refurbishment. Picture: Steve Phillips

If you think the cost would be prohibitive, think about how much it would cost to take out an advert in your local daily newspaper. A half page – often the size a good photograph is used in a tabloid – could cost hundreds of pounds in one edition.

If you have your own images taken, you could maximise the return on your investment by sending them out to dozens of media outlets and bloggers, should you wish. You could also share them on image-led social media sites such as Pinterest and Instagram, along with platforms like Facebook, Twitter, Whatsapp, and Google+.

I’ll take a look at some interesting and enlightening statistics about the impact of images on social media later on in this blog.

Don’t forget that if your image appears on news websites, it will also stay in the media organisation’s archive. This is an image which could continue to work for you for some time to come.

Treat finding a freelance photographer like any other job you’d like to outsource: get a number of quotes, take a look at photographers’ past work, and seek recommendations.

Many freelance photographers are former newspaper photographers. They have the knowledge and contacts to help your business make a splash in the media.

When it comes to the sort of images a media outlet is seeking, there are few more qualified to give you some pointers than my former colleague, Steve Phillips.

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Steve Phillips

Steve is a freelance news, sport, PR, and wedding photographer. He worked in the regional press in South Wales for nearly 30 years and was chief photographer at the South Wales Argus for four years and group picture editor at the South Wales Evening Post for 11 years. He is also the chairman of the National Council for the Training of Journalists Photography Board. Find out more about his work on his website www.stevephillipsphotography.co.uk.

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Picture: Steve Phillips 07909 781278 steve@stevephillipsphotography.biz Friday 7th August 2015. The European Lifesaving Championships held at Aberavon Beach, South Wales, where the German team members were crowned champions

Here are his top tips for ensuring your images get a good show in the media:

  1. Always provide at least an upright (portrait) and a horizontal (landscape) photograph. Page designers or newspaper page templates are often limited to a certain shape of photograph on a page.
  2. Provide a choice of images…newspapers may want to use one picture on the front page which can give your story great coverage, and another or more inside to illustrate the story.
  3. When using a freelance photographer, ask if they have worked on a newspaper and ask for their website address. A freelance who has worked for newspapers will know the best type of pictures to take from any assignment that are likely to get published.
  4. Attach the photographs caption to the photograph using a programme like Photoshop – this saves work for the staff at the newspaper. Ask the photographer you use to caption their images – the best freelancers will automatically do this and will supply the images correctly captioned, attached to the images ready for use.
  5. If applicable, for example when sending out images of a half marathon, provide lots of images cropped ready for website use. Newspapers love to use lots of pictures from events on their websites to increase their page hit rates.
  6. Make sure the caption is accurate with names spelled correctly. If there are less than half a dozen people in a picture, provide full names left to right.
  7. Pictures should be well composed and in focus without too much wasted space. People’s faces should not be obscured.
  8. More creative pictures are more likely to be used. Supply creative images taken from different viewpoints or angles or through objects as well as a safe line-up image.
  9. Make sure you send the images in the correct format. Most newspapers will require jpeg files no more than 2mb in size when compressed. If you send raw or Tiff files they will have to be converted for use which takes time, and may result in your images not being used.

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Some weird and wonderful facts about images on social media

Colour – When it comes to Pinterest, red and orange-dominated images have twice as many pins as those dominated by blue, a Curalate analysis of 500,000 Pinterest images showed. Yet, over on Instagram, blue-dominated images perform better. A Curalate analysis of eight million Instagram images showed they received 24 per cent more likes than red-dominated images. Instagram users also like one dominant colour over the use of several colours in a picture – those with one colour gaining 17 per cent more likes. On Pinterest, more colours mean more pins. In fact, 3.25 times more than images with single colours.

Galleries – Facebook just loves image galleries, rather than single images. Analysis by Pagelever showed galleries had 12.9 times more likes than single pages.

Staying power – When it comes to an image post which works the longest for you, Pinterest is king. An image-led post on Pinterest gets half of its engagement three and a half months after initial posting, the 2015 Social Media Marketing Industry Report said. Compare that with 24 minutes for half of the engagement for Twitter posts, and 90 minutes for Facebook posts. Tumblr posts have a “half-life” of seven days.

Shape – It will come as no surprise to those who use Pinterest regularly that vertical (portrait) images do far better than those which are horizontal (landscape). However, those which are too tall and skinny will also suffer. The golden proportion for vertical to horizontal for Pinterest is between 2:3 and 4:5, Curalate’s analysis said. Those pictures receive 60 per cent more repins than those which are very tall and skinny.

We’re still not using images enough on Twitter – Analysis by Socialbakers showed in 2014 that 47 per cent of the top tweets for engagement of the million they sampled had photographs, but only 10 per cent of tweets in total used images.

All images in this blog were taken by Steve Phillips.

For content creation, blogging, and public relations for small businesses, email Maria Williams at maria@wordsyoucanuse.co.uk. Visit her website www.wordsyoucanuse.co.uk

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Discover a key trend for business in 2016

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A new year is the time when many of us make changes to our lifestyle.

Diets and vamped-up exercise routines to shake off the extra Christmas pounds, sprucing up the CV for new job applications, getting rid of clutter when we take down the Christmas decorations.

It’s the time of year when we realise just how much stuff we have, and many of us make resolutions to declutter our lives.

It’s no coincidence that author James Wallman’s book Stuffocation has been in the news over the past few days.

Wallman, whose job is to predict social trends, rightly points out how our lives are stuffed to the gills with things, and for some, that can increase stress and anxiety.

Take a look in your garage, spare room, basement, or attic.

One of the book’s main ideas is the growing desire to replace all this stuff with experiences – those which you can buy, and those which you can’t.

For small businesses looking to tap into future trends, a key movement in the next few years is bound to be that replacement of buying stuff with building memories for ourselves and our families.

The “experience economy” is set to grow, and many small and medium enterprises have services or products which fit that trend. The key now is to recognise that, and modify the way you interact with your customers to speak to this desire.

Here’s how you can do that:

Define who your customers are, and what experiences they are seeking

You need to know your customers, what they like and dislike, where you find them on social media, their problems, and how you can solve them.

That knowledge will enable you to look at the language you’re using when you speak to them, the images you choose, and where you post on social media, for example.

If you’re looking to give an eco-friendly experience to people in their twenties, you may well want to use platforms like Snapchat and What’s App, and video broadcast platforms like Periscope. If you’re looking to provide a family-friendly experience, you’re more likely to reach potential customers on mainstream platforms like Facebook, Twitter, and Instagram.

Use your Google and Twitter analytics to help define your dream customers. Build a clear picture of them in your mind. When writing copy to appeal to them, use that picture to critique your words and images. What experiences appeal to them? Are they thrill-seekers, or those who crave comfort and nostalgia? What is it about your products or services which fits the bill for them? That should be the focus when you communicate with them.

Use case studies to tell your potential customers what a great experience you can provide

Food, tourism, and leisure businesses are ideally placed to tap into this trend, and sharing the stories of people who have built great memories from your products or services is an effective way of doing that.

A special page for good stories from your customers with their images and video would be a great asset to your business. The best recommendations come from people who are willing to be named and pictured. Dot smaller recommendations from customers throughout your website.

Ask those who have had a great time if they would be willing to be featured on your blog. Their stories, well told and using good images, are effective tools for your small business marketing.

Do you have customers who come back year after year? Ask them why – use their quotes well when you share your blogs on social media.

Make yourself part of existing marketing campaigns which fit the trend

2016 is the “Wales Year of Adventure”. Tourist body Visit Wales is highlighting the country’s attractions which build memories and experiences for visitors, from the culinary delights of Michelin-starred restaurants in Monmouthshire, and street food in Cardiff, to high octane adventure attractions like zip slides over former slate quarries in north Wales, surfing, white water rafting, mountain biking, walking, and bushcraft.

Experiences also include visiting the country’s rich literary heritage sites, spa breaks, and historic attractions like World Heritage site Blaenavon, stunning castles and museums. Visit Wales says adventure “begins when we step outside our normal lives and do something amazing”. Find out more about the campaign here http://www.visitwales.com/

Visit Wales has various ways SMEs can become involved with its campaign – from ensuring their details are posted on the relevant Visit Wales search sites, to copying @visitwales in on tweets and using the hashtag #visitwales, and writing specialist articles for the tourist body.

It has set up a way of working on Flickr which will allow businesses to share images with Visit Wales followers. For more details on the ways businesses can benefit from this campaign click here http://www.visitwales.com/working-with-us

The Visit Wales campaign is just one example – tourist bodies across the UK are an excellent resource when it comes to getting the message out for “experience economy” businesses. Tag them in tweets and on Facebook, share Instagram, Pinterest and Facebook images with them, and most will re-post good images and case studies from your customers. Good reputation for your business builds a good reputation for the area. It’s the kind of virtuous circle which ensures benefits all round.

If there’s nothing suitable in your area, why not start a Twitter hashtag campaign with like-minded local businesses? Perhaps you, as a group of businesses, could also set up your own Instagram, Pinterest, or Facebook pages so that you can all share your images and good case studies.

Customer service is key

Nothing sours customer experiences faster than bad service. No amount of blogging or social media posting will cover that up. Selling the dream requires excellent service at source, and good customer relationship management afterwards.

If a customer does have a complaint and posts it on social media, for example, take it seriously, respond to it quickly and politely, and take the discussion off-line as quickly as you can. Don’t enter into arguments online, whatever the pros and cons of their complaint.

On the other hand, if someone compliments you on your customer service, don’t be afraid to share it!

Have a happy, and experience-packed, 2016.

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