Friday, 23 December 2011

Don’t miss the 31 January deadline for completing your tax return online!

Written by Connect Yorkshire's Sponsor - Knowles Warwick

It is such a busy time of year, with Christmas around the corner, presents to give and receive and parties to organise and attend, but it is important to remember the mundane things that still need to be organised around the festivities – like your tax return.

As a business owner, you probably know that you need to complete a tax return and that the deadline for doing so and for paying any tax that you owe is midnight on 31 January 2012, otherwise you will be asked to pay a penalty. You’ve already missed the deadline for filing your return using a paper form, so you will need to submit your details using HM Revenue & Customs (HMRC)’s Online Services instead. Before you can do this you will need an activation code, which HMRC will send you when you register, but the deadline for registering is 21 January 2012 so you’ll have to be quick!

A fine of 5% of your tax bill will be charged if the payment is 30 days late, another 5% charge will apply if it is 6 months late and a further 5% charge will apply if the payment is 12 months late, plus any interest that has accumulated during this time. If you have registered for HMRC Online Services you can make sure that your bills are always paid on time by setting up a Direct Debit mandate. Another option would be to set up a payment plan that will help you to manage your money by breaking down the total amount that you owe into smaller chunks.

If you have an accountant, you can offload some of the stress by asking them to take care of everything for you, although it is still your responsibility to give them the information they need to complete it before the deadline. Here are some examples of the kinds of records that you (or your accountant) will need for filling in your tax return:

  • Business income and expenses
  • Purchases or sales of assets
  • Income from savings and investments, split by bank or building society
  • Details of any other income from sources such as property or employment

HMRC have up to 12 months to query your tax return, so you need to keep all your financial records for at least a year after you have submitted it, but if you complete your tax return late (i.e. after the 31 January deadline) you will need to keep your records for 15 months afterwards instead, otherwise HMRC may charge you a penalty.

Tuesday, 1 November 2011

Accessing finance - The importance of writing a business plan

Written by Connect Yorkshire’s Sponsor – Knowles Warwick

Everyone knows that real life can’t be planned down to the last detail, but achieving your dreams and ambitions can be very difficult without realising what those goals are and working out what steps you need to take to make them happen. As the well known proverb says, failing to plan is the same as planning to fail and this is particularly true in business, where a lack of preparation could even affect whether or not you are still operating a few months down the line.

Writing a business plan will make you think about what projects you need funding for, how much money you will need to make your dreams a reality and what an investor can expect in return for lending you their money. It will also show potential investors that you are serious about achieving your ambitions, which is more likely to encourage them to invest in you.

The main sections of a business plan are as follows:

· Executive summary: explain the key points of your plan as briefly as possible

· Information about your business:

  • What does your business do?

  • How many people work with/for you and what do they do?

  • Give details about your premises, production facilities, IT systems etc.

· Marketing strategy and plan: how are you going to let people know about your business?

· Financial forecasts: profit and loss, cashflow, balance sheets, how a loan would be paid back and the timescales involved

If your application for finance fails, it could be because you have not carried out enough research into what investors might be looking for, or some aspect of your business plan might be unrealistic or inaccurate. Investors will always want to minimise the risk of lending their money to you, so any mistakes that you make in your application could make them feel less confident about you and your ability to make things happen as planned.

You also need to show that you have confidence in your business, because if an investor thinks you don’t believe in yourself, they will wonder why. If you have invested any of your own money into the business, or if you have already been given some funding from other external investors, you should say so, because this will strengthen your case and make you look more trustworthy.

When writing your business plan, try to put yourself in the investor’s shoes and think about the type of information they would need to help them make a decision. Make sure that you sound confident and that your ideas are fully explained and backed up with evidence. Present your application as professionally as possible and consider asking a business advisor or accountant to help you. It is also a good idea to check that the funding you are applying for still exists and that you are eligible for it before you start!

Friday, 7 October 2011

Raising investment and accessing finance

Blog by Knowles Warwick

Most businesses will need to find sources of finance at some point whether for starting up in the first place, expanding when times are good, or being supported through difficult periods such as a recession. The most obvious solution to accessing finance used to be obtaining a loan, but the current climate has made banks more wary than ever of lending money, especially if the proposition is new or particularly ambitious. So if you need finance for your business, what should you do and how should you go about it?

The first stage in thinking about raising finance is to ensure that you have a business plan, which clearly states what you intend to do, how you aim to achieve it and how much it will cost. Large expenses such as buying or hiring premises and equipment will need to be included, in addition to any other bills and salaries if you employ staff (don’t forget to include a salary for yourself!) . A well-researched business plan will help you fine-tune your ideas and will also show any potential investors that you are serious about the business.

The next stage involves giving consideration to the most appropriate source of finance for your requirements. As part of the decision-making process, think about how quickly you need the money, because finance that is required urgently is usually more expensive to obtain. You also need to consider how risky your business proposition is, since you are less likely to gain finance for something that might not be profitable. If your proposition appears high-risk, you can help to reassure potential creditors by addressing this in your business plan and explain the measures you will put in place to help alleviate the issue.

There are several sources of finance that you can consider and most businesses use a combination of the following to obtain the money they need:

Personal savings

This can be the ideal solution if you have enough money, as you will not need to gain approval or justify your expenditure to anyone. However, it can be high risk, as it could leave you with nothing to fall back on.

Borrowing from banks, family, friends, investors

Think carefully about who to approach and use your business plan to back up your request. If you borrow from friends or family, explain the implications to them and make sure you pay them back when you agree to do so, to avoid resentment.

Grants and government support

There is often strong competition for grants and you must fulfil the criteria to be considered. The application process can take a long time and you may only be able to use the money for a specific activity.
Equity finance

This involves selling shares in your company, which can be an effective way of raising finance without having to repay the money or pay interest.

Raising finance can be a complex issue and it often helps to have an expert on your side to guide you through the process. Most good accountants will be able to help you with this and provide the information and support required.

Wednesday, 20 July 2011

The future’s bright

Despite the challenges over the last year, investment in high growth firms has held steady, and some experts are predicting greater interest in start-up funding thanks to falling property prices, hedge fund collapses and near zero interest rates on cash.

Our figures show that more than £5m has been invested in high growth firms that we have helped in the last 12 months.

Because of the economic climate, high growth businesses have been looking for support and the opportunity to meet potential funding providers.

Our investment forums (to find out more information click here) continue to attract a healthy number of investors and our programme helps companies that are looking for funding.

It’s now more important than ever to assist businesses with high growth potential and ambition to secure the finance that they need to grow. Over the ten years since Connect Yorkshire was born our events have helped 300 companies raise investment of over £44 million in equity and the intention is to help even more companies in Yorkshire and the Humber raise investment.

We want to promote the ability of companies working together to achieve their full potential and raise the profile of Yorkshire as a place to do business in the high growth sector.

It seems that for now - at least - Yorkshire's next generations of technology entrepreneurs have no shortage of good ideas and are in an ideal place to prosper when an economics upturn arrives. In the meantime the sector still needs a great deal of support to ensure these ideas mature into profitable businesses in the UK and beyond.