Cinderella’s metamorphosis followed a series of steps that can also help transform your business if you’re willing to give them a try. Why not work smarter in 2012 with our financial and business coaching service?

You don’t need a handsome Prince, just your financial godmother

Cinderella made an extraordinary impression at the ball. Everyone wanted to know who she was and where she had come from. She knew what she wanted and was determined to get there.

Let us help you get to where you want to be by helping you identify and implement your plans.

Will the slipper fit?

You may be eligible for matched government funding under the Leadership and Management Specialist Advisory Service. Contact us to see if you are able to take advantage of this.

Hurry, it’s almost midnight!

In fairy tales, all magic comes with a price, and this story is no exception. The current funding expires in February, so the clock is ticking.  We are arranging initial meetings this month.

What’s your Cinderella story going to be?

You might be ready to grow your business larger than it has ever been. It doesn’t take magic to get there, just a phone call.

Call Kay on 020 3178 8394 to arrange an appointment.

Fuel
Chancellor George Osborne announced a 1p per litre cut in fuel duty in response to a recent surge in oil prices. He also stated that the fuel duty escalator (that adds an extra 1p on top of inflation each year) will be cancelled for the rest of this parliament. The planned April inflation rise in fuel duty will be delayed until 2012.

Tobacco and Alchohol
Alchohol and tobacco duty rates have risen by 2% above the rate of inflation.

Business Mileage
The approved mileage allowance payments (AMAP) rates for an employee using their own car for a business trip will rise to 45p per mile for the first 10,000 miles, from 6 April 2011. After 10,000 miles, the rate remains the same at 25p per mile.

Personal Tax Allowance
The personal allowance for the under-65s will be increased by a further £630 in April 2012. This increase, in addition to the £1,000 increase due to come into force in April, will mean that the personal allowance will stand at £8,105 in 2012-13.

Corporation Tax
Corporation tax will fall from 28% to 26% from April 2011. The rate will then be reduced by a further 1% in each of the following three years and will reach 23% by 2014.

Capital Gains Allowance
The annual exempt amount for capital gains tax will increase from £10,100 to £10,600 with effect from 6 April 2011.

VAT – increased registration and deregistration thresholds
The taxable turnover threshold, which determines when a business must be registered for VAT, will increase from £70,000 to £73,000 from April 2011.

The taxable turnover threshold for determining when a business may apply for deregistration, will increase from £68,000 to £71,000 from April 2011.

Have you set your goals for this year? Do you have a good knowledge of your sector and a clear idea of how your business fits into it? Your business plan should include an industry overview, key market trends and outlook for the coming year.

You must be able to set goals that are SMART – specific, measurable, achievable, realistic and timely. Are your goals inspiring? Will your team be proud to adopt them as their own? Setting realistic business goals is a necessary challenge if you want to maintain a business destined for growth.

Set Your Personal Goals First
When you want to take your business in a new direction, it is best to start by looking in the mirror. As the head of the company you need to have your own personal plan and goals for your future success and the wellbeing of yourself and your family.

Set Realistic and Visionary Goals
Your goals should challenge your business, your employees and your business model whilst still leaving you all room to succeed and achieve those goals. If you set the bar so high that no one can conceivably achieve the goals, then you are setting everyone – you, your business, every member of your team – up for failure.

Create an atmosphere of positive attitudes, ideas, plans and dreams for your company. Include members of your team in the goal-setting process. Some of their ideas may surprise and inspire you.

Creating a Plan to Meet Your Goals
Roll out a plan of action designed to make it happen. You can manage this is by setting smaller goals that take steps in the right direction leading up to the larger goal that is your primary objective. Small changes in attitude and working practices can mean big changes for the bottom line and future of the business. When everyone in the company is on board making these changes each and every day there is no limit to how far your business can go.

The standard rate of VAT will increase to 20% on 4 January 2011. For any sales of goods/services made on or after 4 January 2011, you must charge VAT at 20%.

Zero-rated, exempt and supplies subject to VAT at the 5% reduced rate are not affected by this change.

Sales that span the change in rate
If you provide goods/services before 4 January 2011 and raise a VAT invoice after that date, you can choose to account for VAT at 17.5%. There is no need to tell HMRC if you do this.

Services started before 4 January 2011 but finished afterwards
You may account for the work done up to 3 January at 17.5% and the remainder at 20%. If you choose to do this, you must be able to demonstrate that the apportionment is fair.

Continuous supplies of services
If you provide services on a continuous basis, you must charge VAT at 20% on invoices you issue and payments you receive on or after 4 January 2011. You may, if you wish, charge VAT at 17.5% on the work done before 4 January 2011 and 20% on the rest. If you choose to do this, you must be able to demonstrate that the apportionment is fair.

Credit notes
If you raise a credit note on or after 4 January 2011 against an invoice before that time you should use the same VAT rate on the credit note as on the original invoice.

Retailers
Retailers should start accounting for VAT at 20% with effect from 4 January 2011. If the customer has an account and takes the goods away prior to the change, then you should account for VAT at 17.5%.

Flat rate scheme
The flat rate percentages have been revised. These new rates will take effect from 4 January 2011.  Full details can be found here.

Please contact us if you would like more detailed information on the VAT rate changes, or go to the HMRC website.

The Pareto principle, also known as the 80/20 rule, states that, for many events, approximately 80% of the effects come from 20% of the causes. The Italian economist Vilfredo Pareto, observed that 80% of the land in Italy was owned by 20% of the population; he developed the principle by observing that 20% of the pea pods in his garden contained 80% of the peas. This observation translates to business extremely well; for example, “80% of your revenue will come from 20% of your clients.” How can you use this in your own business?

Analysing your client base
Who are the clients occupying the top 20% of your customer base? Here are some quick steps to get you started:
Print out your sales ledger for the current year by client. Sort the clients by size, number and total sales value.

Analysing the results
Is your business heavily reliant on the top 5-10% of your client base? If one or two customers took their business elsewhere, would a large proportion of your total sales be lost? Are you spending a lot of time serving smaller customers, who contribute only a small percentage of sales? If so, one of the key questions you should be asking is, “Could time spent serving 80% of the customer base be better spent on the larger customers?”

Another use of 80/20 analysis could be to help with cash collection. Focus more effort on contacting the top 20% of clients on the list first, thereby utilising your time more efficiently.

These are just a few examples to get you started. We know that what you can measure you can manage, and, armed with this information, your decision making will improve dramatically.

If you’d like to find out more about Pareto’s law, here’s the link to a book by Richard Koch – The 80/20 Principle: The Secret of Achieving More with Less

I live in North London and have recently purchased a shop in South London. I currently do not have a car to travel to the shop or to make cash and carrys; instead, I commute to the shop by train and use the delivery option provided by the suppliers. Can I claim the travel expense through my business? Also, if I were to buy a car solely for the shop, would I be able to claim on fuel?

Travel costs incurred wholly, exclusively and necessarily on company business can be reimbursed. However, travel to work from home is not an allowable expense. The travel costs associated with commuting cannot be reclaimed.

The cost of using your car for business purposes is allowable. For the self-employed, there are two ways of calculating the cost.
The chosen method must be applied consistently from year to year:

• a fixed rate for each business mile travelled, using HMRC’s approved mileage rates;
• the actual business expenses, calculated using detailed records of business and private mileage to apportion the costs.

The current approved mileage rates are 40p per mile for the first 10,000 miles and 25p per mile thereafter. This method can be used when the turnover of the business is less than the VAT registration threshold (currently £70,000). No other motoringexpenses can be claimed, with the exception of interest on a loan used to purchase the vehicle. A mileage log should be kept.

With the second option, you could claim capital allowances on the cost of the vehicle  together with any loan interest plus a percentage of running costs, including fuel, servicing and repairs.