The Week’s Top Energy News – 02/12/2016
The Christmas season has well and truly begun and, in true business style, you’ll either be incredibly b...Read More
UK SMEs have long relied upon HMRC’s Time To Pay arrangements (TTP) to help manage financial liabilities. Significant changes may adversely impact those most in need.
The often large compulsory payments required by the state on an annual, quarterly or monthly basis – such as PAYE, National Insurance and VAT – can leave businesses facing hefty bills at a very inopportune time.
Where businesses may have fallen into arrears with these payments, a HMRC Time To Pay arrangement could offer an option to pay the monies owed in monthly instalments.
TTPs come with all sorts of conditions, perhaps most importantly the demand that all future liabilities are paid on time. But the system became earned a reputation for (unintentionally) enabling businesses to miss or delay their payment deadlines with very little punishment, if at all.
HMRC’s response to this flouting of the rules is to remove the unintended breathing room. From 3 August 2015, TTP arrangements will be collected by Direct Debit – taking the onus away from individual businesses to transfer the money, or send a cheque.
Yet this re-imposes some of the challenges: switching payment collection to Direct Debit means organisations that already struggle to manage their cashflow will be required to have enough funds in their account on exactly the right day to deliver the payments required, or face further penalties from HMRC.
The very nature of TTP is to aid businesses that may have a lumpy cashflow, allowing them to catch up on monies owed. So how can companies still reap the benefits of TTP and comply with all its conditions?
There are some simple steps that can be taken, says Nick Haggitt, Director of IGF Invoice Finance. “It is important make sure that any money owed is received as quickly as possible, giving the money needed to pay overheads or even fund investment. Delivering the right product, at the right place, in the right quantity – in the best quality – will increase the chances of businesses being paid on time.”
Businesses should familiarise themselves regular customers’ payment habits, Haggitt adds. “Knowing who is reliable can make a realistic cashflow estimate easier to achieve. Avoiding any reason for clients to delay payment is key, so put preventatives in place, such as thorough invoice checking and communication of credit terms, early in the relationship.”
Business managers should also revisit their attitude to credit, Haggitt advises. “The general distrust of borrowing on credit is a hangover from the financial crisis. Interest rates will likely remain low for the foreseeable future so the economic climate is ideal for businesses to borrow. Bank loans are not the only source of funds; familiarisation of the full range of financial support available will help towards making an informed decision.”
Haggitt says that SMEs can get free advice to ensure their cashflow strategy matches their unique circumstances, including using alternative finance: “Although the changes to TTP may place additional pressures on some firms, it’s a sign that the Government now believes small and mid-sized companies are able to handle more rigour in their tax payments and repayments, which suggests confidence in the growing economy. SMEs should embrace this assurance and use these changes to take more control of their finances moving forward.”
You can find more about IGF Invoice Finance here
Fixed up in no time!
"I was contacted by Jonathan Burgess after making an inquiry on line, who was very informative in finding me the best deal for my business. There was no pressure selling,only information given to assist me in making an informed decision. There was ample opportunity during the process to question or pull out if need be. Everything was made clear,and would definitely recommend others using the service."This review was posted by john kril on the 05th of September 2016
"I was contacted by Aaron Gallagher after visiting SwitchMyBusiness.com. He was very helpful and knew a lot about the different contracts available but did not push me into an instant decision. Once our Directors had decided on the contract they wanted I called Aaron on his direct line and arranged our new contract. Aaron was at all times friendly and professional, completely different to other companies who contacted me about our renewal who were arrogant and pushy. Would recommend SwitchMyBusiness to anybody who is looking to switch their energy."This review was posted by Debbie on the 08th of September 2016
First Class Service
"I spoke with Mark Weeks today to get quotes for my business energy and he was extremely helpful. He talked me through the process clearly and also got me better prices than I could have done myself. Comparison sites are just so complicated and he did all the "leg work" for me. Very pleased with his assistance and would recommend SwitchmyBusiness to any of my friends and business acquaintances."This review was posted by Debbie Andrew on the 08th of September 2016
"Jonathan Burgess rang me back straight away and took me through my business switch. Polite thorough and easy to understand. Highly recommend to anyone looking to save money and switch business energy accounts. Thank you."This review was posted by Suzanne Richmond on the 09th of September 2016
"Jonathan Burgess did a great job of helping me through switching my business with both gas and electric. He was very thorough ,clear spoken and a pleasure to speak to today. I would recommend anyone to use this service"This review was posted by Louise holman on the 09th of September 2016