...from RIFT Accounting!
The 2019 rollercoaster’s lurching to a juddering halt, and what a wild and twisted ride it’s been! Let’s kick things off by wishing you, your families and the businesses we’re building together the very merriest of Christmases, and best wishes for an extremely prosperous New Year!
With the sleigh bells already jingling, we’d like to grab a moment by the fire to welcome our 2019 crop of incoming team members to the RIFT. Welcome to new Assistant Accountant Luke James, Business Development and Support Administrator Laura Glynn, and Junior Accountants Emily Rogers and Sophia Johnson. We take pride in hand-picking the best new recruits, and we can’t wait for you to see what this latest batch of RIFT Warriors bring to the table in the years to come.
Looking across the Business Battlefield as 2019’s smoke starts to clear, we’d have to say that Santa’s hefting more of a mixed bag than a bulging sack this year. On the one hand, smaller retail businesses are set to have a pretty good festive season, with Christmas shoppers looking like they’ll be throwing about £4.4 billion their way. All told, surveys are showing people spending close to 20% of their present-buying budgets on independent businesses, at a rate of £140.4 million per day in the last month of the year. Gen-X shoppers alone are lobbing a £1.1 billion snowball in indie stores’ direction, so it’s a decent time to be in the small business retail game right now.
On the other hand, it’s been a pretty rough road to get here for some SMEs. Many of the country’s smaller businesses are fighting for their very survival right now. In fact, a below-expectation Christmas season could actually kill off around 20% of them over the next year. A little over 8% are already expecting to be driven out of business within weeks if the seasonal bump doesn’t give their finances the boost they need. It’s not just SMEs who are feeling the chill, either. Even major retailers have been closing thousands of shops throughout 2019.
Looking ahead, the teeth of the government’s Making Tax Digital for VAT scheme will start to bite down in April 2020. The basics of MTD are a change in the way businesses handle their accounting, with a shift toward what they’re calling “functional compatible software” that creates an all-digital journey to HMRC for your information. There are, admittedly, some peculiar twists and turns that journey could take. For example, many were surprised to find that simply emailing spreadsheets to an accountant or physically handing them a memory stick would count as obeying the MTD rules - but then even the taxman himself does move in mysterious ways sometimes. The main point is that RIFT has been helping clients to get ready for MTD, so if you’re still not 100% sure what it all means for your business, get in touch.
The “domestic reverse charge” system for CIS construction work was kicking up a lot of fuss in the summer, but things have quietened down about it for the moment. Long story short, this is a big shake-up in the way contractors and subcontractors handle VAT in the building game. When it all kicks in, subcontractors will no longer charge VAT to the contractors they’re working for. Instead, the contractor will be stuck reporting the input and output VAT in their own VAT returns. Originally set to come into force back in October, the new system’s been pushed back a year to give people more time to get set up.
Yet another 2019 shake-up saw new IR35 rules hitting the construction sector. In an effort to tighten the thumbscrews on tax dodgers, the government changed the game so that contractors themselves will soon be responsible for working out which of their workers are legitimately self-employed. When the system was originally rolled out for public bodies, it caused a lot of noise. Contractors simply weren’t geared up for the change, and started firing off blanket assessments that put a lot of people at risk of being wrongly declared as employees. After April 2020, the same rules will apply to the private sector, which has seen some understandably nervous twitching across the building industry. If you’re unclear on how the changes affect you, or you think you’re being steered wrong by a contractor, get in touch with RIFT to find out where you really stand.
In happier news, RIFT launched a few brand new schemes of its own this year. For instance, our Launch Essentials Accounting Package (LEAP) is the perfect launch pad for your dream business. If you’re just setting up or in the first 3 years of trading, it’s a full year of hands-on support and guidance from the UK’s leading small business experts. Whether you’re a Sole Trader or a Limited Company, your LEAP package will be tailored to your specific needs and ambitions. The package includes:
LEAP costs just £50 + VAT, then £20 + VAT per month (which is only £270 + VAT per year) or, if you prefer, you can pay £250+VAT for the full year up-front. There are no hidden fees or catches, the cost is completely tax-deductible and all it takes is a phone call on 01233 653006 to kick things off.
On top of all that, we’ve also launched RIFT Formations, our off-the-rack Limited Company service. If you’re making over £40,000 a year as a Sole Trader, the tax bracket maths mean you’d probably be better off as a Limited Company. Setting up a Limited Company takes time. You’ve got to get your business its own Unique Taxpayer Reference number (separate from the personal one you may already have for Self Assessment). That alone can take weeks. When you’re competing for customers or waiting to get on site, that’s time you really can’t afford. Here’s where RIFT Formations comes in. Our new service means you can get your Limited Company up and running in no more than a few days, because we’ve already done all the legwork. Your UTR number’s ready to go, meaning you can pick up your new Limited Company “off the rack”. It’s a great option if you’re:
So that’s about it for our RIFT Accounting 2019 wrap-up. We’ve got plenty more to come next year, with the Brexit boot finally dropping and an apparent end to the parliamentary deadlock bringing a lot of implications for small businesses all across the UK. In the meantime, have an amazing Christmas, stuff your stockings till they burst and keep listening out for more Voices from the RIFT…