Tag: limitedcompany

How accountants can make you look good

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When you as a business owner think of an accountant, you think of taxes, financial reporting, or loan applications. While this is all correct, it is just the beginning!

Accountants may be the frontrunners when it comes to your finances, but we can offer so much more than that. One of our most valuable offerings is making you look good!

Here are some ways that accountants can help you with your image:

1) They help you look professional 

Accountants can help you manage your accounts, budget smartly, and fix your cash flow, all of which are the foundations of a successful business. They can also help you to automate your business and work more efficiently.

For example, automating your invoicing system so you no longer need to chase unpaid invoices or reconcile payments manually. Not only does this save you a lot of time and free you up to focus on other areas of your business, but it also makes you look professional to your clients as they can see that you’re on top of your processes.

2) They help you remain competitive

One of the most common mistakes that business owners make is that they become too chargeable. I.e., they are not charging enough for their services. While this may bring in more business initially, in the long term, it will start choking your business growth.

By pricing correctly, you can let go of the clients who are not paying enough or who don’t align with the direction of your business. Once you start pricing what you’re worth, you’ll soon see that you will attract the right types of clients – the ones who support your growth and overall goal.

3) They help you look & feel confident

With an accountant by your side, you will be able to walk the walk as well as talk the talk. You will be making smarter business decisions such as increasing your capacity by outsourcing working rather than hiring a full-time employee, and you will have the figures you need at your fingertips. Figures that will give you, your clients, and any other third-party peace of mind.

4) They help to reassure your clients

If your business grows suddenly and takes on more clients, some of your existing clients may be worried that you can’t handle this growth, or they worry that they will become less important to you. To reassure your clients that you’re growing sustainably, an accountant can help you forecast the future and outline your business strategy. They can help you make necessary changes now so that you’re prepared for any growing pains.

Invest in your image 

A good impression of your brand is incredibly important, so invest in an accountant to make sure that you give off a positive one. From helping your business run smarter, to outlining the future for your business, an accountant can help you to reassure yourself and your clients that you will sustain value and growth for the foreseeable future.

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Minimum Wage Update 2022

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With costs going up across the board it is unsurprising that the national living wage is also being increased. However, for businesses, particularly small ones, this could have a dramatic effect on wage bills going forward.

From April 1st 2022, the minimum wage will be increasing from £8.91PH to £9.50PH. This is a 6.6% increase on salaries. There are also increases in the lower age brackets, please follow this link to find out full details – https://www.gov.uk/government/publications/minimum-wage-rates-for-2022 

We encourage you as a business to sit down and review what you are paying your staff, particularly if you have people close to the new minimum or if you are wanting to attract new team members. Keep in mind that £9.50PH is now an entry level salary and if you are wanting to attract high quality candidates you may want to pay them more than this. It is also sensible to look at what your competitors are offering in terms of salary. A good place to start is the supermarkets who are currently hiring at £11 PH.

Work out a plan of if and how you need to increase your team’s wages and then implement the changes by the 1st of April.

KPI blog

Setting KPIs for your business: 6 tips

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KPIs (Key Performance Indicators) are metrics that tell you if what you’re doing is working or not. As you can imagine, this makes them incredibly important for productivity and business growth.

How do you know that you’re on the right track to achieving your goals if you don’t measure progress?

How do you know that you’re doing exactly what you should to get to the place that you want to be?

The short answer is, you don’t.

If you want your team to work more efficiently and if you want to actually reach the goals that you set out for your business, you need to start setting and monitoring the right KPIs. Here’s how.

1) Set KPIs for everyone

Regardless of the size of your business and team, you need to set KPIs for each team member. Metrics allow you to measure performance and improve it, so don’t be tempted to not set them at all.

2) Don’t set too many KPIs

This is a big mistake that many business owners make. Avoid this. Less is more when it comes to improving performance, as too many goals affect focus. Aim to have no more than 5 KPIs for each team member.

3) Choose KPIs that are relevant to the businesses overall goal

KPIs need to directly link to the demands of the individual’s role and what the business is trying to achieve, so look at your business plan. Where is the business going? What are the key figures that you need to know and measure?

4) Agree on these with each individual

Once you’ve chosen the KPIs for each individual, sit down with them and agree on them. Set your expectations but also explain how they will support the business by achieving these targets. The more you can show them how they contribute to the overall success of the business, the better.

5) Measure and monitor KPIs

It’s not enough just setting KPIs, you need to measure and review them. Setting and monitoring KPIs is an essential business development task, so schedule in time to review this data every month. When you do, you’ll see what tweaks you need to make to improve productivity and move the business forward.

6) Review and reset these every quarter

As your business grows and changes, your targets will be out of date. Make sure to review them with your team every 3 months so that you can update them and ensure they are still relevant. During this time, give your employees feedback, seek out their views on what is working or not working, tell them how the business is performing, and discuss what they can influence to move the business forward.

Start getting results by setting KPIs

Don’t just set arbitrary goals, set KPIs too. If you do, and you track them and monitor performance, you’ll soon see if you’re getting the results that you want. If you’re not, then the great thing about KPIs is that you can identify that something isn’t working a lot sooner. All it takes is another tweak here and an improvement there, and you’ll find what works best for you and your business.

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How to attract the right clients (ones who value what you do)

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I heard this saying recently, “you get the clients you deserve.” At first, I wasn’t sure what it meant so I dug a little deeper, but my conclusion was and still is, that this is 100% true.

Think about it, if you’re accepting low-paying, nit-picky clients and you’re not setting their expectations for how you actually like to work, you’re going to keep getting these types of clients who you don’t even enjoy working for. Conversely, if you stick to your guns with your prices, you set client expectations, and you emanate confidence and passion for what you do, you’re going to weed out the energy-drainers and only attract the type of clients that you actually want.

Sounds perfect, right? It really is as simple as that. If you want to attract the right kinds of clients – the ones who actually value what you do and are willing to pay for it – here is how you do it.

Step 1: Create a growth plan and strategy

Choose your ‘one big focus’ for your business for the year ahead. Maybe it’s to win X amount of clients or to reach a financial goal. Whatever it is, write it down and work backwards to create actions that you need to take every month, week, and day, to reach this goal.

Step 2: do a full client portfolio analysis

Make a spreadsheet of all your clients and go through them all individually. Record what you do for them, how long it takes, your profit margin, whether they are easy/medium/hard to work with, if you like working with them, and whether you’d be happy to lose them.

Step 3: create your client personas

Now you have identified your best clients, create a client persona/s. This should outline their age, gender, occupation, education, family/marital status, goals, values, personal aspirations, fears, challenges, and pain points. The more detailed you can be with this, the clearer the picture will be of who you are targeting, what they want, and how you should communicate with them.

Step 4: tailor your marketing to your client personas

The mistake that many business owners make is being too generic with their marketing. They want to cast as wide a net as possible to “appeal to more people,” but what ends up happening is they make no impact at all. When you have your client personas, adapt your marketing message to target them. You only want to win these types of clients so address their specific pain points and position yourself as the solution or the guide that can help them achieve their goals.

Step 5: ditch your ‘D’ clients

Look back at your client portfolio analysis and identify your A-B-C-D clients. Typically, they are as follows:

  • Clients who make up 65% of your sales = A clients
  • Clients who make up 20% of your sales = B clients
  • Clients who make up 15% of your sales = C clients

D clients are those low-paying, nit-picking clients who you’re not really happy with and who don’t contribute a huge amount to your bottom line.

The last step in the process of attracting the right clients is to ditch these clients. Not only does this give you more time to go after the ones you actually want, but it makes room for them too so that you can provide them with the service they deserve.

Accounts receivable vs accounts payable: what’s the difference?

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You can only manage your finances effectively if you know certain numbers and, as we all know, credit control leads to consistent cash flow which is vital for business success.

To help you manage your financial processes more effectively, here are two numbers that you need to know: accounts receivable and accounts payable.

What are accounts receivables?

Also known as AR, your accounts receivable refers to all outstanding invoices that have been sent to clients but are yet to be paid. In simpler terms, this number is the money owed to your business.

Whether it is overdue invoices or lines of credit, all of your receivables are classified as a current asset. Why? Because they should all be turned into cash within 12 months.

If you are having trouble recovering your accounts receivables click here for some extra tips.

What are accounts payable?

As you can probably guess, your accounts payable is the opposite of your receivable. This is a record of all outstanding invoices that have been sent to you by your suppliers or creditors. To put it simply, this number is the money your business owes.

Inversely to your receivables, your payables are classified as a current liability.

Why is it important to know these numbers?

To be successful, every business owner needs to know how much money is coming into the business and how much money is going out. And that’s exactly what payables and receivables are.

  • Accounts receivable = money owed to your business (ASSET)
  • Accounts payable = money you owe (LIABILITY)

These make up the foundation of accounting as once you know these numbers, you can start to implement effective credit control processes to build a consistent cash flow.

By hiring an accountant, you can always be reassured that you’re filing on time and that your taxes are correct. You can have peace of mind that you won’t get a surprise letter from HMRC and you don’t even have to deal with them at all if you don’t want to.

Start managing your finances effectively

When it comes to your credit control processes, consider digital accounting software and a digital payment process. This will help you to get paid quicker and on time, and it will allow you to get an overview of your finances in real-time.

With reports regarding your payables and receivables, you can make sound business decisions whilst managing any financial risks. The result? A successful business with a healthy cash flow!

3 hacks for embracing change in the workplace!

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Embracing change is the secret to business growth. It allows us to learn how to do things better and adapt to survive, which is an essential skill in today’s economy! This is easier said than done though. We all like our comfort zones, and it can be really difficult to break out of them. Then, we also have to help our employees get out of their comfort zones as well!

If you want to move your business forward, here is how to embrace change in the workplace and how to get your team to get behind it too.

1) Get yourself in the right mindset, so you can lead by example

You won’t be able to implement a change if you’re not behind it yourself, so take some time to embrace it first. What are the positives that will come from this change? Why is it needed? What will you and your team get out of this change? Re-frame this in your mind, and you’ll be far more effective in embracing and then leading this change.

2) Communicate the change to your support team

The worst thing you can do is spring change on your team and not communicate what it really means. You want to implement change in your business successfully and your team is a major key player in that, so you really need to communicate this in the right way.

To avoid resistance from your team, make sure to:

  • Communicate changes that are happening as early as possible -NOT at the point where it needs to be implemented.
  • Involve the right people in the process as early as possible – they have valuable insight and need to be the ‘champions’ of this change.
  • Share the overall vision with the team – your team needs to understand how this all links together and having a shared purpose increases the chance of success.
  • Communicate “what’s in it for me?” for every team member, not just how it will help the business – reward is a massive motivator so help your team get personally invested.
  • Provide them with sufficient training and support – how do you need to support them to implement the change successfully?.

3) Nurture the right habits and behaviours in the long term.

When times get tough and things are going wrong, this is when your team will revert to old behaviours and habits and how things were done before. To avoid this, start nurturing the right behaviours now by working on resilience and wellbeing. This will help to make sure that the change is a long term one.

Try implementing one or more of these strategies:

  • Rewards – take your team out for lunch or give them the afternoon off if they need motivation.
  • Check-ins – have monthly 1:1s to make sure each team member has what they need to succeed.
  • Good habits – encourage self-care among your team, especially everyone getting enough sleep, exercise, good food and recharge time.
  • Mindset – help your team reframe their thinking if they are struggling and lead by example.
  • Nurture initiative – if team members need help, don’t solve their problems straight away. Ask the right questions to guide them to the answer. This will help them start to identify and initiate change to improve working practices themselves too!

Following these hacks will not only help you and your team embrace change, but it will set you up for positive growth in the future!

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8 Key Marketing Tips for 2022

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Marketing today looks vastly different from that of ten years ago. Gone are the days where paid ads, membership of a local networking group and a presence at a local trade show were all you needed to promote your small business. To help you navigate this new age of marketing, we’ve outlined our top 8 marketing tips to promote your business in 2022.

1)Focus on your branding

Developing a strong brand is imperative if you want your marketing strategies (and business) to succeed. Your brand is what makes your business unique – it should encapsulate your values and services whilst also being distinctly recognisable. Effective branding should:

  • Be visually appealing.
  • Be consistent across all mediums. On and offline, your colour palette, font choices and imagery should all be cohesive. (PS Instagram is no longer just for creative people)
  • Convey your services and values through slogans and taglines.
  • Attract your target audience.

2) Refine your web design

Your website is the virtual hub of your business – it is the centre of all your online activity. Therefore, it must represent your business positively and professionally. If your website is unappealing and difficult to navigate, you will struggle to attract new customers and clients.

To ensure your website reflects the quality of your business, it must be:

  • Informative
  • Easy to navigate
  • Mobile-friendly
  • Linked to all of your other online platforms

3) Develop your online presence

To attract new clients, you must be active online – this means regularly posting on your website and social media channels. Posting helpful and informative content will allow your clients to engage with your business, whilst SEO strategies will ensure your posts are visible across multiple search engines.

If done consistently, you will successfully drive more traffic to your website.

A good way to see what social media platforms are useful for your business is look at your Google Analytics. Which of your social channels are bringing in the most traffic and buying customers? These are the social channels to spend most of your time creating and repurposing content for.

4) Harness social media platforms

Social media is a great way to reach new clients. It is also a fantastic way to develop brand loyalty amongst your current clientele.

Articles, captions and videos all add tremendous value to your social media followers, whilst comment sections, direct messages and re-tweets allow customers to interact directly with your team.

Social media platforms change all the time. What used to be a great platform for your business to be active on may not be as good. For example, you may find that Instagram is getting more traction and results than Facebook or Twitter now. If you are aiming to get your messages in front of teenagers then Tiktok is the place to be. So pay attention to your marketing analytics to see where you should be putting your marketing efforts.

5) Create original content

Did you know that websites with blogs attract 55% more traffic than those that don’t? Having a blog allows you to connect with your audience by sharing your expertise. By posting helpful and relevant content, you’re able to answer consumer questions, build trust and draw more people to your website.

If your business already has a blog, why not take it further and start producing downloadable templates and guides?

6) Utilise email subscription services

Email subscriptions ensure your customers and clients don’t miss out on any news, posts or updates, by delivering weekly/monthly newsletters directly to their mailboxes. Other reasons to invest in email marketing are:

  • It’s inexpensive
  • It has a high ROI
  • It draws people back to your website via direct links
  • It promotes customer loyalty

7) Encourage customer reviews

Whether you’re buying a new toothbrush or switching energy companies, we all like to do our research – and that means checking the reviews.

Reviews are vitally important to any business as they provide an honest and unfiltered response to your quality of service. So as long as you’re providing excellent service, more reviews can only encourage more customers! There are loads of places where your customers and clients can place a review for your business. Always ask them to put a review on Google, and potentially Facebook or any other important recommendation platform for your business such as TripAdvisor for hospitality and leisure businesses.

8) Sponsor local events

Not all marketing strategies are online, nor should they be. Sponsoring local events can be hugely beneficial for your business. It provides you with the opportunity to meet new clients, share your company values and, of course, promote your business to the local community.

Similarly, attending local charity events, making donations and partaking in voluntary work will also paint your business in a positive light.

Marketing made easy 

Effective marketing is essential to attract new clients and expand your business. Therefore, you must dedicate sufficient time and effort to developing your brand and online presence.

The devil is in the details, so focus on upholding consistently high standards (for branding and content) across all of your platforms and watch your online traffic surge.

Marketing done well costs money. However, if you are aiming to maintain or grow your business in 2022, marketing is an activity which needs to constantly happen in your business. If you are unsure of how much of your income you can afford to spend on marketing, get in touch. We can help you see how your numbers stack up and whether you can afford to spend what you marketing suppliers are suggesting you need to spend!

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7 Ways an Accountant Can Save You Money

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In today’s competitive business world, it is not uncommon for people to do their own bookkeeping and accounting. There are many reasons why this is done – the most common being that you can save money doing so. Of course, saving a couple of hundred pounds is an enticing prospect, but there are actually many more ways in which hiring the services of one will help you make money instead. Here are 7 ways an accountant can save you money:

1) They free up your time

Time IS money, so the more time you free up doing your bookkeeping, taxes, and financial statements, the more time you can dedicate to the tasks that will actually generate money for your business.

Not to mention that it will take you a lot longer to do all your finances than a professional anyway. Why would you waste your time when you could be doing what you do best and what you actually enjoy?

2) They help you be more tax-efficient

Accountants can help you save money by being more tax-efficient. This means claiming what you can, obtaining loans if you are entitled to financial support, and maximising the tax deductions you are entitled to.

3) They help you avoid fines and penalties

You need to file your taxes correctly and you need to do this on time. With legislation changing all the time, this isn’t easy, and you could be leaving yourself vulnerable to penalties and charges, simply because you didn’t know.

By hiring an accountant, you can always be reassured that you’re filing on time and that your taxes are correct. You can have peace of mind that you won’t get a surprise letter from HMRC and you don’t even have to deal with them at all if you don’t want to.

4) They identify opportunities for growth

Accountants keep your records up-to-date so you will always know the figures of your business. At a glance, you’ll be able to see how you’re performing, what’s coming in and what’s going out, and also your liquidity.

There is power in data! For example, your accountant can help you ascertain how long you could survive if there was a recession, where you can cut down expenses to save money, and where you should be delegating most of your budget if you want to grow.

5) They assist in gaining funding

It takes a lot of time to secure financing from banks and as we said previously, time is money. Your accountant can help you secure loans and financing really easily from creating a business plan and helping you budget to applying and assisting you in the loan process.

6) They advise on investments

If you’re interested in investing, an accountant can help you understand different investment options. From stocks and money markets to real estate and investment vehicles, they can show you how you can grow your money and which opportunities are the best for you and your business.

7) They offer invaluable business advice

As well as accountancy, accountants can offer business guidance to help you increase your chances of success. They can help you build a business from the ground up; they can help you with goal setting and planning, budgeting and forecasting, and pricing to increase your profit margin. This isn’t even everything that’s included in their advisory services so make sure to take advantage of their knowledge.

Spend money to make money

While you can save a couple of hundred pounds doing your own books, you won’t save as much with an accountant and you could actually end up losing a lot more. With an accountant on your team, you can save both time and money while having the reassurance and peace of mind that you’re making sound business decisions for your future.

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10 tactics to make sure your invoices get paid.

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Wouldn’t life be simple if you could guarantee that your invoice would get paid on time every time? Sadly, this isn’t always the reality. With the economy coming out of recession, there is a very clear and present danger that your business invoices may not get paid in a timely fashion. Here are our best tips for getting your invoices paid:

1 . Invoice promptly

The longer you take to invoice someone, the more likely the bill won’t get paid. Of course, no invoice normally means no payment… Do you remember the early days of running your business? When you were amazed that some business owners got lax with their billing? Then, you get busy servicing your customers and clients and the admin slips. Before you know it, you become that business owner who has become slow to invoice.

If you are finding that you are getting behind on your admin, then give us a call. We can take care of your bookkeeping and other financial processes to leave you free to run your business.

Cloud accounting software such as Xero, include the feature to do recurring invoices. So, where you have a regular repeating invoice for the same amount with a customer, use this recurring invoice feature to cut down the chance of missing an invoice.

2 .No billing surprises

The more unexpected a bill, the more likely it won’t get paid. If a project is going to occur some extra expense or cost, always talk to the client or customer promptly about it. If you just crack on with it and don’t tell the customer about the unexpected cost coming their way, you risk getting into a payment dispute.

Before you bill someone, always make sure that:

  • They are aware and expecting the bill
  • They have agreed to pay the bill

3. Set up a Direct Debit or payment mandate for your customers and clients

If you have regular customers, getting a direct debit mandate signed from them is a great way to be more in control of when they pay you. GoCardless is an inexpensive direct debit solution that integrates well with the likes of Xero. Our team can help you set up Direct Debit for your customers.

4. Make it easy to pay your invoice

This is such a simple one but easily missed. Make sure you are removing any barriers to pay your bill. Such as:

  • Including a ‘pay now’ button linked to a payment gateway on your invoices. For example, Xero will do this for you with your Stripe account. Some customers may be happy for you to type in their card details over the phone using this option.
  • If you visit the customer on-site, then have the means to take payment whilst you are on site. E.g. with a card machine. Technology is such that you can easily connect a gadget or download an app to your phone to take card payments. No need for an expensive and bulky card terminal.
  • Including your bank details on the invoice. (You will be surprised how many businesses and tradespeople don’t do this).
  • Offer your customers the option to do a bank transfer, set up a direct debit or pay by credit card. If possible, try to avoid offering the option to pay by cheque as getting to the bank can take time.

5. Ask for payment before you start working for the customer or client

There is no rule saying you can only invoice after you start work for a client. In fact, we will ask for payment upfront for some of our services, such as a client wanting a one-off tax return. If you (or your customers) are not happy with a 100% upfront payment, why not ask for a deposit to get the work started?

6. Build a relationship with the accounts payable team at your customer

It always helps to be nice to the person at your customer’s business who actually pays your bill. The stronger the relationship you have with them, the more chance your invoice gets paid promptly and without being ‘delayed’. This may not be your direct contact. It could be someone in their finance or accounts payable team. So, who in the customer’s organisation is responsible for accounts payable? Can you get their name and contact details to help ‘ease the way for your invoice to be paid’?

7. Understand your customers’ accounts payable process

Do you need a PO number on your invoice? How does the invoice need to be addressed and who too? What needs to be on the invoice for it to be paid promptly? Who at your customer’s organisation needs to sign off the invoice before it will be paid? Who in the customer’s organisation is responsible for accounts payable? And can you get their name and contact details to help ‘ease the way for your invoice to be paid’?

When a finance department is preserving cash for a business, they will reject an invoice for payment for the smallest reason.

8. Put in place a process for unpaid invoices

For example, this could include a series of communications when the invoice is issued. Then a call or email the day before the invoice is due to see when it is going to be paid. Then a series of calls or emails a number of days and weeks after the invoice is due to be paid.

Most accounting systems such as Xero will have a feature for automated reminders for invoices. If you need more than the basic invoice chasing that this software will provide, consider using a more sophisticated credit control tool such as Chaser.

9. Consider offering a payment plan for customers who have built up a large unpaid debt

Most customers want to pay your bill. But sometimes stuff gets in the way. So consider offering a payment plan. Getting paid over 6 months in instalments is better than not getting paid at all.

10. Stop work if your invoices don’t get paid

We see this regularly. Where a business owner carries on working for a customer in the hope that the invoices will get paid eventually. The debts pile up and may never get paid. You’ll be surprised how quickly your unpaid invoices may get paid if you stop working for a client.

Is it time to change the tax rules for Christmas parties?

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HMRC rules currently allow employers to spend up to £150 tax-free per employee per tax year, on events such as Christmas or summer parties. This has been the case since 2003.

The tax and advisory firm Blick Rothenberg has called on the government to double this amount to £300 as they believe the current limit is “massively out-of-date”.

The firm also states that increasing the limit to £300 per employee per year would help reduce the overall costs faced by employers and encourage them to provide employees with a ‘genuine thank you’ for all their efforts throughout the last two years.

Specifically, the raised limit would mean that in most reasonable cases, there would be no need for employers to report any taxable benefit-in-kind charge via a PAYE settlement agreement (PSA).

An additional benefit of changing the limit is that it would also provide businesses, particularly in the hospitality sector, with some ‘much needed support’ as they continue to try and recover from the Covid-19 pandemic.

The firm states that where employers need to cover the tax cost of a Christmas party via a PAYE settlement agreement, they can face an effective tax liability, including taxes and National Insurance contributions (NIC), of up to 107% of the core value of the Christmas party.

This can mean that the effective, cumulative cost to the employer of providing a Christmas party can easily in some cases be up to 200% of its headline, initial per head cost.

Robert Salter, a tax service director at Blick Rothenberg said: ‘Employees need to ensure that they avoid making some common mistakes, when it comes to budgeting for their Christmas party.

‘For example, the £150 value mentioned above is not an ‘allowance’.  Hence, if the per head cost of the event is above £150, the full value of the event becomes a taxable benefit and not just the excess amount over the £150 threshold. It can be a minefield.

The tax-free amount should really be increased, and the rules should be simplified.’

The current system means that businesses do not have to report to HMRC or pay tax and national insurance on a party or social function if it is open to all employees, is an annual event, such as a Christmas party or summer barbecue, or costs £150 or less per person. If there are multiple events in the year it is still exempt from tax if the combined cost of the events is no more than £150 per head.

Blick Rothenberg states that if a company spends £100 per employee on a summer event and another £125 per employee on a Christmas party, the tax would have to be paid on the whole amount for the cheaper event rather than just the amount that takes the total up to the £150 per employee limit.

Salter concluded: ‘As Christmas approaches, it’s time for the government to show a bit of goodwill to firms, employees, and the hospitality industry.’

In December 2020, gift company Hampers.com’s survey of 500 businesses revealed that UK companies were expected to spend an average of £225 per employee for the Christmas season, which was 12% less than was recorded in 2019, when they spent £257 a head.

However, many catering and hospitality businesses have seen a slump in their December bookings for parties. This is said to be due to the rising cases of Covid-19 with many deciding not to attend an office party in order to be able to go home for Christmas.

On Times Radio this month, business secretary Kwasi Kwartang reassured people that it is still worth planning an office party, stating that he was ‘looking forward to having a Christmas party as usual’.

Last month, health secretary Sajid Javid stated that the public should take advantage of the free lateral flow test provided by the government and that if they are attending a Christmas party then they should take a lateral flow test before they attend.

Some companies are choosing to give their employees a gift instead of a Christmas party. Belfast accountancy and advisory firm Tilly Mooney Moore states that if companies are considering gifting then they must be aware of the tax implications.

The firm states that gifts to employees such as hampers will be tax free, provided they fall within the ‘trivial benefit’ exemption.

This applies when the cost including VAT does not exceed £50 per person, it is not cash or a cash voucher that could be exchanged for cash, it is not provided in recognition of past or future services by the employee, bears the name or logo of the business and does not include food, drink, or tobacco.

Where the employer is a ‘close’ company and the benefit is provided to a director, the total value of trivial benefits they can receive in a tax year cannot exceed £300.

In terms of gifts from third parties, such as suppliers or customers, employees can receive vouchers without tax as long as they do not exceed £250. This must be genuinely intended as a gift, however, and not provided in recognition for hard work.

We think this is an important discussion to have, especially as companies want to give their employees an extra treat for all their hard work during the pandemic.