Month: October 2021

Autumn Budget 2021

The autumn 2021 budget

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Small business owners hopes for some crumbs of comfort from the chancellor in his budget and autumn statement were dashed. The triple hit on small businesses coming from April 2022 is still very much happening.
Watch Paul’s response in this video or keep reading below.

The triple hit?

Hit 1

Corporation tax from April 1 2023 to increase to 25% for companies with profits over £250,000. Companies with profits under £50,000 will be taxed at 19%. Companies with profits between £50,000 and £250,000 will be taxed between 19% and 25%.

tom and jerry hitting each other
hit in the face

Hit 2

The dividend tax rate for basic rate taxpayers will increase from 7.5% to 8.75% from April 2022. Higher rate and additional rate taxpayers will see their dividend tax rates increase by 1.25 percentage points.

Hit 3

In April 2022 all 3 rates of National Insurance Contributions (NIC) will increase by 1.25%. Then in April 2023, the 3 rates of NIC will reduce back down to their current levels and the new Health and Social Care Levy will come into place.
minion getting hit

As was leaked this week, small business owners have another hit to their finances….

Hit 4

The National Living Wage is increasing from £8.91 to £9.50 an hour from April 2022.What does this mean for your business? It means that your wage costs – both salary and National Insurance contributions – have increased significantly. We can help you understand what this means for your profits and how income you can safely take out from your business.

So what else was announced in the budget which is relevant for small business owners?

A reform of business rates

  • A new temporary business rates relief in England for eligible retail, hospitality and leisure properties for 2022-23. Over 90% of retail, hospitality and leisure businesses will receive at least 50% off their business rates bills in 2022-23.
  • The government is also freezing the business rates multiplier in 2022-23. This will support all ratepayers, large and small, meaning bills are 3% lower than without the freeze.
  • From 2023, a new business rates relief will support investment in property improvements so that no business will face higher business rates bills for 12 months after making qualifying improvements to a property they occupy.

A reform of R&D tax credits

  • The qualifying expenditure will now include data and cloud computing costs
  • R&D tax reliefs will at some point be only allowed to be claimed for activities taking place in the UK
  • Later on in 2021 the government will set out plans to tackle abuse of and improve compliance with the R&D tax reliefs later in the autumn

Other announcements relevant to small business owners:

  • The Annual investment allowance which was raised to £1m temporarily is now being extended to 31 March 2023. After this point, it will revert back to the £200,000 limit.
  • The Recovery Loan Scheme will also be extended until 30 June 2022 to ensure that lenders continue to have the confidence to lend to small and medium-sized businesses. Finance will be available up to a maximum of £2 million per business, supporting them to recover from the impact of the pandemic and to grow. The government guarantee will be reduced from 80% to 70% to encourage the lending market to move towards normality as the economy continues to recover.
  • Vehicle Exercise duty for HGVs has been frozen and the HGV road user levy has been suspended for another 12 months from August 2022.
  • Apprenticeships funding will increase to £2.7 billion by 2024-25 – the first increase since 2019-20. Part of this funding will include, by May 2022, a new enhanced recruitment service for small and medium-sized businesses to help them hire new apprentices. The £3000 apprentice hiring incentive for employers will be extended until 31 January 2022.
  • From 2023, the government will introduce exemptions for eligible plant and machinery used in onsite renewable energy generation and storage, and a new 100% relief for eligible heat networks, to support the decarbonisation of buildings.
  • Simplification of the Alcohol Duty System. Drinks will be taxed in proportion to their alcohol content.
  • Pubs serving draft beer and cider will have their duty rates on these drinks reduced by 5%
  • Fuel duty is frozen at 57.95 pence per litre UK-wide for 2022-23
  • The duty rates on beer, cider, wine and spirits will be frozen for another year

How do I make more money without spending a penny!

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If you’ve lost clients due to the Covid-19 pandemic, you are not the only one. Countless businesses have lost a substantial amount of revenue, some of which have been forced to declare bankruptcy or shut their doors for good.

When we lose clients, it can be tempting to jump back on the sales horse and concentrate on winning new business. Of course, this isn’t wrong, but there are better ways to initially generate new revenue than trying to win more leads.

In this blog, we outline 6 ways to generate more revenue from your existing client base without spending a penny!

1. Prioritise the money you are owed first

Talk to the clients who owe you money and negotiate how they will pay their debts. You have already provided this service, so chasing up and agreeing on payment dates is the first thing you need to do. Next, bill any work in progress or completed work that has been invoiced.

If you need help getting your invoices paid then read our blog 10 ways to make sure your invoices get paid.

2. Review and start charging for your ‘freebies’

We all like to go above and beyond for our clients, but sometimes this comes at a cost. Review what you are currently giving away above and beyond the service your clients are paying for and start charging for it. Usually, this is an area where significant amounts of extra revenue can be found.

3. Consider increasing your fees

You may be hesitant about raising fees during a recession, but ask yourself: when did you last do a fee increase, and how much more time are you having to spend with your clients to support them right now? If you’re doing a lot more for less, explain to your clients that you need to increase your fees to keep giving them the level of support that they need.

4. Analyse your current client portfolio

Look at your current client base and segment them into A, B, and C clients. A clients are your most valuable and tend to bring in the most business and/or they pay very well. B clients are good quality clients who usually make up the majority of your business. C clients are usually not in line with your business anymore or are low payers and/or are picky.

Using your analysis, identify which clients need more help from you and who could benefit from other services that you offer. Start increasing your communication with your A and B clients and ditch or convert your C clients.

5. Follow up with old leads

You can ring old prospects or existing clients to check in and see how they are doing. Due to the social restrictions during the pandemic, there isn’t going to be anybody that won’t appreciate you asking how they are. Make sure to catch up with your good referrers too!

6. Increase other marketing activities

What other marketing activities can you do that won’t cost a penny? One of the best tasks you can do for your business is to focus on increasing your online presence. Good ways to do this are to regularly post to social media and to start writing blogs. Read our blog about why you should be regularly publishing blogs for some tips.

This will enable you to stay in front of prospects and clients and it ensures that you are remembered when they are ready to buy your service.

7. Always focus on your existing clients first

Your clients already like you and trust you, so they will be a lot more willing to buy more from you. If you’re looking to increase your revenue during times of difficulty, always turn to your existing clients first. You may find that you don’t need to go out and find new business after all.