A report produced by the government on late payments and how they affect SMEs shows that the number of average days a business has to wait to get paid is getting longer. 

Many SMEs, especially when dealing with single large businesses, find it difficult to influence the terms of contracts with customers or challenge them over payments.

Bacs Payment Schemes Limited put the total figure owed to SMEs at £14 billion, while the Zurich Risk Index estimated that SMEs were owed £45 billion by larger companies alone, having previously reported that SMEs were owed a total of £225 billion in late payments. The UK performs worse than other countries both in terms of the proportion of invoices that are late, and the total amount of late payments and amount of late payments written off as bad debt.

There is also a wider cumulative effect, where late payments prevent whole industries and sectors becoming more productive and makes them less able to invest in infrastructure and skills. The report found that SMEs write off up to 7.5% of late payments as bad debt. In the worst-case scenario, small businesses can go bankrupt because of the cash flow problems caused by late payments. It has been estimated that each year as many as 50,000 small business go bankrupt with loss of up to 350,000 jobs.

The Federation of Small Businesses (FSB) in June 2018 found that more than a third of small suppliers had had their payment terms increased over the previous 2 years, indicating what it characterises as “supply chain bullying”. SMEs can also face other unfavourable terms. The FSB reported that 12% of SMEs it surveyed had been asked for a discount for prompt payment, 7% for retrospective discounting, 6% for a fee to remain on a suppliers list and 3% had experienced a discount being applied after goods and services had been supplied.

Businesses can consider Factoring invoicing to ease the pressure on cashflow. We specialise in this type of finance so contact us for more information.

Businesses can often feel the pinch at this time of year as bills escalate and cashflow is erratic due to the slowdown of the Christmas period. Add to that quarterly VAT bills and many businesses can find themselves in a difficult situation.

HMRC has escalated business winding-up orders and liquidations and does not grant extra time to pay easily. So, it is paramount that working capital is available for when tax bills are due. All businesses are aware of their duty to HMRC but sometimes it can be difficult to predict a shortfall. We can help you fund all tax bills including VAT and Corporation Tax plus Payroll and other Working Capital finance.

We have a range of finance options to fund cashflow from Invoice Discounting to unsecured loans. If you need help funding a tax bill, a specialist VAT funding loan is a viable option. This short-term lending option has a maximum term of 6 months and low interest rates so you can manage the short term cashflow requirement without it costing a fortune.

Contact us for more information.

We regularly have assets and vehicles for sale which can be purchased on finance.  Check out some vehicles we having coming into stock soon here

The Annual Investment Allowance (AIA) is to be increased from £200,000 to £1million from 1 January 2019.  The announcement should provide a welcome boost to business investment during the Brexit transition period and will return to the £200,000 limit in January 2021. Businesses can claim 100% capital expenditure incurred on most items of plant and machinery of up to £1million a year.

In addition, a new allowance was announced – the ‘structures and buildings allowance’ (SBA) which will give tax relief on eligible construction costs on non-residential buildings and structures from 29 October 2018. The relief will be given at 2% a year on a straight-line basis over a 50 year period.

Under the current system, buildings and structures do not qualify for capital allowances, but allowances are available for plant and machinery inside a building.  Structures and buildings qualifying for the new allowance will include offices, retail and wholesale premises, walls, bridges, tunnels, factories and warehouses. Capital expenditure on renovations or conversions of existing commercial structures or buildings will also qualify. The new allowance will not apply to dwellings or to expenditure on the land itself.

Other announcements in the budget affecting business include:

• The personal Income Tax allowance for 2019-20 will be increased to £12,500
• Basic rate band increased to £37,500
• Higher rate band £37,501 to £150,000
• There is no change to the rate of Corporation Tax, which stays at 19% for the financial year beginning 1 April 2019.
• Two significant changes to Entrepreneurs’ Relief were announced:  Claimants must have a 5% interest in the distributable profits and the net assets of the company to qualify, and separately that the minimum period, during which certain conditions must be met to qualify for the relief, is being increased from one to two years.
• From 1 April 2020, the amount of payable tax credit that can be claimed under the R&D SME tax relief scheme will be limited to three times the company’s total PAYE and NIC payments for the period. Any loss that cannot be surrendered can be carried forward and used against future profits.
• The changes recently made to IR35 arrangements in the public sector are to be rolled out to the private sector. The widening of the off-payroll working rules will take effect from April 2020 for medium and large organisations. Small firms will be exempt.  These changes could see thousands of contractors and consultants paying more in NI contributions and income tax.
• Smaller retailers in England, occupying shop premises with rateable values under £51,000, should benefit from a cut of 1/3 in their business rates bills for 2 years from April 2019.
• The present VAT registration limit (£85,000) and deregistration limit (£83,000) will continue to apply for a further two years; until 31 March 2022.
• The special rate of writing down allowance is being reduced from 8% to 6% from April 2019.
• From 6 April 2020, the government will change the insolvency rules so that taxes collected on behalf of employees and customers, primarily employees PAYE and NIC and customers VAT, will be treated as a preferential creditor on winding up rather than distributed to other creditors.

Our Newsletter this month includes information about a new product providing up to £3million in flexible funding.

Click here to read our October Newsletter

50,000 miles
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Jaguar 2008 XK Coupe 4.2 v8
Automatic
78k miles
Full service history
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Dec 2012 Audi Q7 Special Edition 245 Quatro S line Plus Black Edition
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Full service history
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We all need a bit of motivation at times in business, especially when things aren’t going quite as planned. Here are some of our favourite quotes:

• A business has to be involving, it has to be fun, and it has to exercise your creative instincts. ~ Richard Branson
• You were born to win, but to be a winner, you must plan to win, prepare to win, and expect to win. ~ Zig Ziglar
• To be successful, you have to have your heart in your business, and your business in your heart. ~ Thomas Watson, Sr.
• Success is walking from failure to failure with no loss of enthusiasm. ~ Winston Churchill
• Things work out best for those who make the best of how things work out. ~ John Wooden
• It does not matter how slowly you go, so long as you do not stop. ~ Confucius
• You have to trust in something – your gut, destiny, life, karma, whatever. This approach has never let me down, and it has made all the difference in my life. ~ Steve Jobs
• Quality means doing it right when no one is looking. ~Henry Ford
• The essential question is not, “How busy are you?” but “What are you busy at?” ~ Oprah Winfrey
• Take up one idea. Make that one idea your life – think of it, dream of it, live on that idea. Let the brain, muscles, nerves, every part of your body, be full of that idea, and just leave every other idea alone. This is the way to success. ~ Swami Vivekananda
• The only place where success comes before work is in the dictionary. ~ Vidal Sassoon
• The important thing is not being afraid to take a chance. Remember, the greatest failure is to not try. Once you find something you love to do, be the best at doing it. ~ Debbi Fields
• Have a very good reason for everything you do. ~ Laurence Olivier
• Capital isn’t scarce; vision is. ~ Sam Walton