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Business Plans


Every new business should have a business plan. It is the key to success. If you need finance, no bank manager will lend money without a considered plan.


It is one of the most important aspects of starting a new business. Your plan should provide a thorough examination of the way in which the business will commence and develop. It should describe the business, product or service, market, mode of operation, capital requirements and projected financial results.


Why does a business need a plan?


Preparing a business plan will help you to set clear objectives for your business and clarify your thinking. It will also help to set targets for future performance and monitor finances and profitability. It should help to provide early warning for when you might need to reconsider the plan.

Always bear in mind that anyone reading the plan will need to understand the essentials of your business quickly and easily.

 

Contents

The business plan should cover the following areas.

 

Overview

An overview of your plans for the business and how you propose to put them into action. This is the section most likely to be read by people unfamiliar with your business so try to avoid technical jargon.

 

Description

A description of the business, your objectives for it and how you plan to achieve them. Include details of the background to your business for example how long you have been developing the business idea and the work you have carried out to date.

 

Personnel

Details of the key personnel including you and any external consultants. You should highlight the skills and expertise that these people have and outline how you intend to deal with any weaknesses.

 

Product

Details of your product or service and your Unique Selling Point. This is exactly what its name suggests, something that the competition does not offer. You should also outline your pricing policy.

 

Marketing

Details of your target markets and your marketing plan. This may form the basis for a separate, more detailed, plan. You should also include an overview of your competitors and your likely market share together with details of the potential for growth. This is usually a very important part of the plan as it gives a good indication of the likely chance of success.

 

Practices

You will need to include information on your proposed operating practices and production methods as well as premises and equipment requirements.

 

Financial forecasts

The plan should cover your projected financial performance and the assumptions made in your projections. This part of the plan converts what you have already said about the business into numbers. It will include a cash flow forecast which shows how much money you expect to flow in and out of the business as well as profit and loss predictions and a balance sheet. Detailed financial forecasts will normally be included as an appendix to the plan. As financial advisers we are particularly well placed to help with this part of the plan.

 

Financial requirements

The cash flow forecast referred to above will show how much finance your business needs. The plan should state how much finance you want and in what form. You should also say what the finance will be used for and show that you will have the resources to make the necessary repayments. You may also give details of any security you can offer.

 

The future

Putting together a business plan is often seen as a one-off exercise undertaken when a new business is starting up.
However the plan should be updated on a regular basis. It can then be used as a tool against which performance can be monitored and measured as part of the corporate planning process. There is much merit in this as used properly it keeps the business focused on objectives and inspires a discipline to achieve them.

 

How we can help

We can help you put together a detailed and accurate plan demonstrating your businesses growth plan for the future.

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Recent Posts

The Autumn Statement 2013 – Preview

| 22nd October 2018 | Blogging

The Autumn Statement 2013 – Preview The Government’s plans to secure the economic recovery are set to be revealed at the Autumn Statement 2013 on Thursday 5th December by Chancellor of the Exchequer, George Osborne. Whilst in Washington attending the International Monetary Fund’s annual meeting, Osborne told reporters: “I still sit round that table at the G-20 with one of the highest budget deficits. Britain continues to have some very serious public finance challenges that need to be addressed, and although we’ve brought the deficit down by a third it’s still too high. Where we’ve got resources available we’ve got to make sure we’re doing what we can to reduce the deficit.” The Office for Budget Responsibility’s forecasts in March this year, used as a basis of the plans, showed a prediction of 0.6% economy growth in 2013, prompting Osborne to say he will announce revised budget forecasts and details of new measures at the Autumn Statement. He also stated: “We have a clear economic plan; we’ve stuck to that plan. I’m very far from feeling the job is done. We’re still in the very early stages of the recovery.” Surveys suggest actual growth figures for 2013 were better than expected, seeing expansion of around 1.4% as opposed to the OBR’s prediction of 0.6%. Common preconceptions of what the Autumn Statement may reveal include further cuts to the annual pension allowance, a rise in personal allowance, a 5% drop in income tax for those earning over £150,000, an increase in National Insurance Contributions for the self-employed, and introducing the recognition of marriage within the tax system. What plans would you like to see revealed? Let us know on Facebook or Twitter!...

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Construction Industry Scheme

| 22nd October 2018 | Blogging

Construction Industry Scheme The Construction Industry Scheme (CIS) sets out special rules for tax and national insurance (NI) for those working in the construction industry. For those contractors and subcontractors it is important to understand and comply with the regulations set out by the HMRC. The deadline for submission is 14 days after the end of the tax month. A key reminder for contractors: even if no subcontractors have been paid during a month, they still have to make a nil return. Employed or self-employed? Contractors must make a monthly declaration showing they have considered whether an employee is employed or self-employed. It is vital as the HMRC can be strict and impose a penalty of up to £3000, if they consider that negligent or incorrect information has been provided. It can be hard to declare which option title is correct, as many factors and stipulations apply, so please contact us for specialist advice: http://www.kingandtaylor.co.uk/contact-us/ Verifying with the HMRC The contractor has to contact HMRC to check whether to pay a subcontractor gross or net, not every subcontractor will need verifying. HMRC will give the contractor a verification number for the subcontractors which will be matched with HMRC’s own records. These numbers are a fundamental part of the system and it is important there is a fool proof system in place for obtaining and retaining them. Payslips Contractors have to provide a monthly payslip to all subcontractors paid, showing the total amount of the payments and how much tax, if any, has been deducted from those payments. It is a necessary requirement that the contractors include certain specific information on the payslip, for more details on this and any other details regarding CIS please follow this link to see the full document:http://www.kingandtaylor.co.uk/wpcontent/uploads/2012/01/Construction_Industry.pdf or alternatively contact us via our website for expert advice....

VAT Annual Accounting Scheme

| 22nd October 2018 | Blogging

VAT Annual Accounting Scheme Over the years HMRC has introduced a number of VAT schemes helping small businesses reduce the burden of administrative duties. The annual accounting scheme means companies are only producing one VAT return a year, in comparison to the usual four. Instalments still need to be paid throughout the year based on the businesses annual liability. Application to join the scheme must be made on form 600(AA) which can be found at the back of VAT Notice 732. Eligibility for the scheme must be considered because certain stipulations apply. Firstly, a company cannot apply if their taxable supplies will exceed £1,350,000 within the next 12 months. Following this, businesses current VAT returns must be kept up to date and it is not possible to register as a group of companies. For further help with the term and conditions, please contact us for specialist advice. The amount required for the instalments needed to be paid will be advised by the HMRC but there are several payment options. Businesses that have been registered for 12 months or more will pay their VAT in nine monthly instalments of 10%, of their previous year’s liability. An alternative choice would be to pay their VAT in three quarterly instalments of 25% of their previous year’s liability, falling due at the end of months 4, 7 and 10. Get in touch so we can help you make the appropriate selection for your business. The scheme can help your business with budgeting and cash flow, and reduce the amount of paperwork, although, a possible disadvantage is interim payments being higher than needed because they are based on your previous year. For further information on the annual accounting scheme please follow this link: http://www.kingandtaylor.co.uk/wp-content/uploads/2012/01/VAT_Annual_Accounting.pdf. Also please contact us via are website, so we can help you plan your VAT administration and help you decide whether the annual accounting scheme would be beneficial for your business...


The Basic's of VAT


VAT

VAT registered businesses act as unpaid tax collectors and are required to account both promptly and accurately for all the tax revenue collected by them.


The VAT system is policed by HMRC with heavy penalties for breaches of the legislation. Ignorance is not an acceptable excuse for not complying with the rules.


We highlight below some of the areas that you need to consider. It is however important for you to seek specific professional advice appropriate to your circumstances.


What is VAT?

 

Scope

A transaction is within the scope of VAT if:


•  there is a supply of goods or services
•  made in the UK
•  by a taxable person
•  in the course or furtherance of business.


Inputs and outputs

Businesses charge VAT on their sales. This is known as output VAT and the sales are referred to as outputs. Similarly VAT is charged on most goods and services purchased by the business. This is known as input VAT.

The output VAT is being collected from the customer by the business on behalf of HMRC and must be regularly paid over to them.

However the input VAT suffered on the goods and services purchased can be deducted from the amount of output tax owed. Please note that certain categories of input tax can never be reclaimed, such as that in respect of third party UK business entertainment and for most business cars.


Points to consider


Supplies


Taxable supplies are mainly either standard rated (20%) or zero rated (0%). The standard rate was 17.5% prior to 4 January 2011.

There is in addition a reduced rate of 5% which applies to a small number of certain specific taxable supplies.

There are certain supplies that are not taxable and these are known as exempt supplies.

There is an important distinction between exempt and zero rated supplies.


•  If your business is making only exempt supplies you cannot register for VAT and therefore cannot recover any input tax.
•  If your business is making zero rated supplies you should register for VAT as your supplies are taxable (but at 0%) and recovery of input tax is allowed.

 

Registration - is it necessary?


You are required to register for VAT if the value of your taxable supplies exceeds a set annual figure (£82,000 from 1 April 2015).
If you are making taxable supplies below the limit you can apply for voluntary registration. This would allow you to reclaim input VAT, which could result in a repayment of VAT if your business was principally making zero rated supplies.
If you have not yet started to make taxable supplies but intend to do so, you can apply for registration. In this way input tax on start up expenses can be recovered.


Taxable person


A taxable person is anyone who makes or intends to make taxable supplies and is required to be registered. For the purpose of VAT registration a person includes:

•  individuals
•  partnerships
•  companies, clubs and associations
•  charities.

If any individual carries on two or more businesses all the supplies made in those businesses will be added together in determining whether or not the individual is required to register for VAT.


Administration


Once registered you must make a quarterly return to HMRC showing amounts of output tax to be accounted for and of deductible input tax together with other statistical information. All businesses have to file their returns online.
Returns must be completed within one month of the end of the period it covers, although generally an extra seven calendar days are allowed for online forms.

Electronic payment is also compulsory for all businesses.

Businesses who make zero rated supplies and who receive repayments of VAT may find it beneficial to submit monthly returns.

Businesses with expected annual taxable supplies not exceeding £1,350,000 may apply to join the annual accounting scheme whereby they will make monthly or quarterly payments of VAT but will only have to complete one VAT return at the end of the year.


Record keeping


It is important that a VAT registered business maintains complete and up to date records. This includes details of all supplies, purchases and expenses.

In addition a VAT account should be maintained. This is a summary of output tax payable and input tax recoverable by the business. These records should be kept for six years.


Inspection of records


The maintenance of records and calculation of the liability is the responsibility of the registered person but HMRC will need to be able to check that the correct amount of VAT is being paid over. From time to time therefore a VAT officer may come and inspect the business records. This is known as a control visit.

The VAT officer will want to ensure that VAT is applied correctly and that the returns and other VAT records are properly written up.

However, you should not assume that in the absence of any errors being discovered, your business has been given a clean bill of health.


Offences and penalties

HMRC have wide powers to penalise businesses who ignore or incorrectly apply the VAT regulations. Penalties can be levied in respect of the following:

•  late returns/payments
•  late registration
•  errors in returns.

 

Cash accounting scheme

If your annual turnover does not exceed £1,350,000 you can account for VAT on the basis of the cash you pay and receive rather than on the basis of invoice dates.


Retail schemes


There are special schemes for retailers as it is impractical for most retailers to maintain all the records required of a registered trader.


Flat Rate scheme


This is a scheme allowing smaller businesses to pay VAT as a percentage of their total business income. Therefore no specific claims to recover input tax need to be made. The aim of the scheme is to simplify the way small businesses account for VAT, but for some businesses it can also result in a reduction in the amount of VAT that is payable.


How we can help


Ensuring that you comply with all the VAT regulations is essential. We can assist you in a number of ways including the following:


•  tailoring your systems to bring together the VAT information accurately and quickly
•  ensuring that your business is VAT efficient and that adequate finance is available to meet your VAT liability on time
•  providing assistance with the completion of VAT returns
•  negotiating with HMRC if disagreements arise and in reaching settlement
•  advising as to whether any of the available schemes may be appropriate for you.


If you would like to discuss any of the points mentioned above please click here to contact us.

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Recent Posts

The Autumn Statement 2013 – Preview

| 22nd October 2018 | Blogging

The Autumn Statement 2013 – Preview The Government’s plans to secure the economic recovery are set to be revealed at the Autumn Statement 2013 on Thursday 5th December by Chancellor of the Exchequer, George Osborne. Whilst in Washington attending the International Monetary Fund’s annual meeting, Osborne told reporters: “I still sit round that table at the G-20 with one of the highest budget deficits. Britain continues to have some very serious public finance challenges that need to be addressed, and although we’ve brought the deficit down by a third it’s still too high. Where we’ve got resources available we’ve got to make sure we’re doing what we can to reduce the deficit.” The Office for Budget Responsibility’s forecasts in March this year, used as a basis of the plans, showed a prediction of 0.6% economy growth in 2013, prompting Osborne to say he will announce revised budget forecasts and details of new measures at the Autumn Statement. He also stated: “We have a clear economic plan; we’ve stuck to that plan. I’m very far from feeling the job is done. We’re still in the very early stages of the recovery.” Surveys suggest actual growth figures for 2013 were better than expected, seeing expansion of around 1.4% as opposed to the OBR’s prediction of 0.6%. Common preconceptions of what the Autumn Statement may reveal include further cuts to the annual pension allowance, a rise in personal allowance, a 5% drop in income tax for those earning over £150,000, an increase in National Insurance Contributions for the self-employed, and introducing the recognition of marriage within the tax system. What plans would you like to see revealed? Let us know on Facebook or Twitter!...

Seminar in September

| 22nd October 2018 | Blogging

Seminar in September On the 10th September 2013, we will be holding our biannual seminar, this time focusing on Cost Conscious Growth. The event will be held in Gravesend, Kent – featuring a welcome breakfast on arrival, key speakers and the opportunity to network with other industry professionals over drinks. A morning and evening session are available with the three professional speakers presenting at both. The speakers bring a wealth of experience from their different backgrounds: Finance, Marketing and IT. First to take the mic will be Simon Fenech, Sales Manager of Codestone, covering The Benefits of Moving to the Cloud. Then, Dean Spencer, Director of Grapevine Marketing, will show you how to prevail with Zero Cost Marketing. Last but not least, Joanna Trinder from King and Taylor will demonstrate how to keep your finances in order with Online Book Keeping. Increasing revenue is not the only route to profit margins! We want to help our clients reduce their outgoings on necessary business services.  At King and Taylor, we want you to learn from industry experts who can teach you about certain aspects that could be vital to the success of your business. There are many accountants to choose from, so we recognise the need to help our clients on more than just financial matters by interacting with them. This event is held twice a year and features a specific theme every time, if you would like details on the next seminar then contact us here. It’s not too late to attend the upcoming seminar! To view the event details and register your attendance, please follow this link....

Construction Industry Scheme

| 22nd October 2018 | Blogging

Construction Industry Scheme The Construction Industry Scheme (CIS) sets out special rules for tax and national insurance (NI) for those working in the construction industry. For those contractors and subcontractors it is important to understand and comply with the regulations set out by the HMRC. The deadline for submission is 14 days after the end of the tax month. A key reminder for contractors: even if no subcontractors have been paid during a month, they still have to make a nil return. Employed or self-employed? Contractors must make a monthly declaration showing they have considered whether an employee is employed or self-employed. It is vital as the HMRC can be strict and impose a penalty of up to £3000, if they consider that negligent or incorrect information has been provided. It can be hard to declare which option title is correct, as many factors and stipulations apply, so please contact us for specialist advice: http://www.kingandtaylor.co.uk/contact-us/ Verifying with the HMRC The contractor has to contact HMRC to check whether to pay a subcontractor gross or net, not every subcontractor will need verifying. HMRC will give the contractor a verification number for the subcontractors which will be matched with HMRC’s own records. These numbers are a fundamental part of the system and it is important there is a fool proof system in place for obtaining and retaining them. Payslips Contractors have to provide a monthly payslip to all subcontractors paid, showing the total amount of the payments and how much tax, if any, has been deducted from those payments. It is a necessary requirement that the contractors include certain specific information on the payslip, for more details on this and any other details regarding CIS please follow this link to see the full document:http://www.kingandtaylor.co.uk/wpcontent/uploads/2012/01/Construction_Industry.pdf or alternatively contact us via our website for expert advice....

VAT Annual Accounting Scheme

| 22nd October 2018 | Blogging

VAT Annual Accounting Scheme Over the years HMRC has introduced a number of VAT schemes helping small businesses reduce the burden of administrative duties. The annual accounting scheme means companies are only producing one VAT return a year, in comparison to the usual four. Instalments still need to be paid throughout the year based on the businesses annual liability. Application to join the scheme must be made on form 600(AA) which can be found at the back of VAT Notice 732. Eligibility for the scheme must be considered because certain stipulations apply. Firstly, a company cannot apply if their taxable supplies will exceed £1,350,000 within the next 12 months. Following this, businesses current VAT returns must be kept up to date and it is not possible to register as a group of companies. For further help with the term and conditions, please contact us for specialist advice. The amount required for the instalments needed to be paid will be advised by the HMRC but there are several payment options. Businesses that have been registered for 12 months or more will pay their VAT in nine monthly instalments of 10%, of their previous year’s liability. An alternative choice would be to pay their VAT in three quarterly instalments of 25% of their previous year’s liability, falling due at the end of months 4, 7 and 10. Get in touch so we can help you make the appropriate selection for your business. The scheme can help your business with budgeting and cash flow, and reduce the amount of paperwork, although, a possible disadvantage is interim payments being higher than needed because they are based on your previous year. For further information on the annual accounting scheme please follow this link: http://www.kingandtaylor.co.uk/wp-content/uploads/2012/01/VAT_Annual_Accounting.pdf. Also please contact us via are website, so we can help you plan your VAT administration and help you decide whether the annual accounting scheme would be beneficial for your business...