Tips For Small Business Owners

For many sole traders or small businesses it can be difficult to find the time to maintain all paperwork on a regular basis, meaning a large amount of admin is left until it is absolutely necessary to sort out.

If this sounds like you, then you will need to make some changes to the way you work because the Inland Revenue  is set to investigate two million small businesses – slapping many with big fines if records have not been kept in order. Here are 5 tips to help your business in 2012…

Receipt
Receipt (Photo credit: BreakfastPirate)

1) Get organised, get in a routine and get sorted

Under the HM Revenue and Customs initiative ‘Business Records Checks’, small businesses and sole traders will be subject to inspection to ensure all paperwork and bookkeeping is up-to-date and correct. If they find that your business isn’t hitting their standards, you’ll be fined £3,000. And as the HMRC have been given a target of £600 million to hit over the next four years, you can be sure they won’t be taking a lenient approach when it comes to handing out fines.

Getting organised seems like an obvious first step, but if you’ve set your admin duties to one side for quite some time, you’ll have your work cut out! Admin is part of your business, so set some time aside either at the start or end of the week (or whenever your quiet period is) and focus on your paperwork and bookkeeping.

Consistency and routine are key to ensuring you stay on top of this task.

2) Keep all receipts

It is essential you keep all receipts so that you can back up business expenses. You could get 12 envelopes and write the name of each month on them and store your receipts according to when you purchased goods / paid bills. Alternatively, you could separate receipts according to source, for example ‘rent’, ‘tools and supplies’ ‘stationery’ ‘miscellaneous’.

This also applies to documentation for purchases you want to claim the VAT back on.

3) Bank and building society documentation

It’s easy to see a letter or statement from a bank or building society and think ‘I know what that is, I’ll open it later’ and before you know it, you have a stack of unopened letters to sort through. This is a habit you need to break – open the letter, check payment transactions are correct and file it away. It only takes a few minutes at the most and means you’ll save yourself a great deal of time and effort later on.

4) File your tax return on time

If you’ve kept paperwork up-to-date as outlined in the points above, you’ll find that filing your tax return will be much more straightforward to complete on time – helping you to avoid fines for being late.

5) Don’t throw anything away!

We’re not suggesting that you become a compulsive hoarder and never throw anything away; we simply mean that at the end of every tax year, you box away important financial documents like receipts, invoices and bank statements, and keep them safe in case you need them in the future. You should keep documentation of this sort for at least six years.

Riots Put Strain On The Finances of UK Cities

August was a time of civil unrest in cities including Manchester, Salford, Liverpool, Nottingham and Birmingham, with shops being looted and set ablaze. Victims of the riots sadly face a tough financial crisis as they try to restore the damage to their businesses and properties while at the same time trying to recover loss of earnings and stock.

The Head of Media at British Retail Consortium had expressed concern that all the damages to shops and homes caused by the rioting and looting could hit the £1 million mark. It’s feared that many will no longer want to trade again as they know the police will not be able to protect them because of the lack of control they had over the hoodlums.

The British government may have to leverage £100 million on UK taxpayers in the coming years to help restore London. At the same time London Metropolitan Police will also shoulder the insurance to people who were affected by the mayhem. The Riots (Damages) Act of 1886 specifically dictates that if the nature of the destruction is caused by riots sparked by the peoples’ resentment against the government, then the police will have to compensate the affected ones.

Local City Councils are providing the following help to those who were affected:

Local Business Support
If you operate a business in the affected area of the rioting and it sustained damages, you could be eligible to seek help from your local council. Assistance includes loans for repairs / refurbishments; this will help to shoulder expenses that may be beyond your means. Expert advice will also be available.

Rebuild Your Home Support
If your home sustained extensive damaged as a result of the riots and you do not have the funds to repair the damage, then you could be eligible for government assistance. You could receive up to £5,000; however this depends on your personal circumstances.

Riot (Damages) Act
According to The Riots (Damages) Act of 1886, you could be eligible to claim from your local police department if you do not have sufficient insurance to cover your losses.

Riot Victim Support
If you’ve sustained physical injuries or have been emotionally shaken by the disturbance, there are a number of government-funded charities that are providing emotional support and advice on taking legal action against assailants.

The Valuation Office Agency (VOA)
The Valuation Office Agency (VOA) is a counter checking agency that is visiting affected areas and making assessments on whether or not certain properties should be exempt of taxes, or at the very least, reduce the tax that has been previously imposed.

Tax Adjustments
Should the Local Council deem you worthy, they could give you tax discounts to provide support while you’re recovering from the effects of the riots.

Sharron Ellis writes about debt and offers information on debt management and bankruptcy.