In the survey of 500 businesses, it was found that the death of a business owner came in as the top most disruptive scenario, at 43 per cent, as opposed to 23 per cent who specified fire damage and 14 per cent who cited critical illness.
In fact, the consequence of the death of the owners would be so serious that 12 per cent of those surveyed predicted that their business would cease trading immediately as a result of the death or critical illness of a key worker or business owner.
While a further 42 per cent thought that their business would cease trading in this situation but over a longer period of time. Of this cohort, a quarter felt that the business would cease trading within the first year of the deal, 6 per cent within the second years and 11 per cent after two years.
Given the results of the survey, it is surprising that small business owners either do not have key worker insurance in place or a continuance strategy in place that is communicated to the workforce.
Even firms with a number of workers need to think about planning for an unfortunate eventuality, particularly when chronic illness can wreak almost as much havoc as a sudden death, as grief can be equally disruptive, so professional help should be sought for guidance on what to do should the worst happen.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 591 )The latest survey on business optimism amongst small and medium-sized enterprises (SMEs) shows that over 80 per cent are currently upbeat about the general state of their business, with the majority expecting growth over the coming year.
This is a different picture from this time last year, when only 35 per cent of SMEs were optimistic about growth in the following six months, that figure has risen to 63 per cent.
In addition, 38 per cent believe they will make more profit this year than they did last year and a further 38 per cent believe profit levels will be similar, while the number who would bet their house on their company making a profit this year has risen by around a third, from 13 per cent to 17 per cent.
There has been a rise of around 25 per cent of those who think their personal earnings from the business will go up year on year, and perhaps swayed by recent good news for the economy, almost 60 per cent of UK SMEs believe 2014 will be an even better year than 2013.
The index looked in more detail at four broad sectors within the SME marketplace and, while the picture was again largely optimistic compared with last year, there are some marked differences between sectors.
The retail and distribution sector showed the highest levels and biggest rise in optimism about growth year on year. However, while building trades and industrial were still more optimistic year on year, they fell behind the other sectors in general levels of optimism around growth.
On a regional basis, SMEs in Scotland were the most optimistic at 88 per cent, which was 10 per cent above the average, while Wales was the least optimistic, although SMEs there were more likely to be planning on taking on new staff next year.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 479 )The Telegraph reported yesterday (June 20) on how the owner of a small firm has recouped thousands of pounds from late-paying customers and that an appeal court victory he won earlier this year could pave the way for more small firms to fight late payers.
Since 2007 James Morley has been using a little-known Act to challenge customers who pay late and has so far secured more than £40,000 in court victories and settlements.
The Late Payment of Commercial Debts (Interest) Act 1998 allows suppliers to charge interest of 8.5 per cent on late payments, but also compensation of £40, £70 or £100 depending on the size of the invoice in question.
While most business owners would be wary of taking their customers to court, Mr Morley has been determined not to take late payment lying down and his victory in the appeal court earlier this year could mean that other small business owners don’t have to either.
As his barrister said, the ruling is very significant, as it allows businesses to claim fixed compensation on every late invoice, and is binding on all lower courts in England, Wales and Northern Ireland, where the majority of late payment claims would be heard.
The barrister added that small firms have been taken advantage of for years by large businesses which ignore payment terms, and his words have been backed up by payment firm Bacs, which revealed that outstanding bills to businesses total more than £30bn, with very large companies typically being the worst offenders.
The Government has been so concerned about the effect late payment has on small businesses that it has been encouraging FTSE 100 and FTSE250 companies to sign up to the Prompt Payment Code, which promotes best practice between organisations and their suppliers.
According to analysis by Experian, current signatories to the Code represent over 60 per cent of the total UK supply chain, so the problem may be diminishing but, in the meantime, small business owners have the Act to rely on in the last resort.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 413 )The minutes of the Bank of England’s June Monetary Policy Committee (MPC) have been published, showing that the vote to keep interest rates at their historic low of 0.5 per cent was unanimous.
However, the nine MCP members were split over whether or not the Bank should extend its £375bn quantitative easing (QE) programme by a further £25bn, with the vote going 6-3 against.
Outgoing Governor of the Bank, Sir Mervyn King, who retires in a matter of days, was one of those in the minority and was outvoted for a fifth consecutive month over whether to expand asset purchases.
According to the minutes, the members who voted against further QE thought “the benefits of further asset purchases were likely to be small relative to their potential costs,"
They also believed current policy to be "appropriate" and said that the effects of previous asset purchases under QE were still working through the economy, so this, together with the Funding for Lending scheme, should continue to boost activity.
Incoming Governor, Mark Carney will chair his first MPC meeting next month, and although his first MPC vote will not be known until July 17, he has suggested that he is ready to deploy “unconventional monetary policies” to boost the UK's recovery.
He has promoted long-term public commitments to low interest rates during his time as head of Canada's central bank and Chancellor George Osborne has asked him to assess the viability of this strategy in the UK.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 480 )Leaders of the G8 summit have agreed new measures to clamp down on corporate tax avoiders, tax evaders and money launderers by giving each other automatic access to information on their residents’ tax affairs.
Speaking at the conference about the declaration, Prime Minister David Cameron said it would help to ensure "proper tax justice in our world" and "fight the scourge of tax evasion".
He added that the leaders had agreed a declaration at the summit that has the potential to rewrite the rules on tax and transparency for the benefit of countries right across the world, including the poorest countries.
The participating countries will also require shell companies, which are often used to exploit tax loopholes and invest money anonymously, to identify their effective owners.
Mr Cameron stated that the leaders have commissioned a new international mechanism that will identify where multinational companies are earning their profits and paying their taxes so that governments can track and expose those who are not paying their fair share.
However, Mr Cameron’s statement did not contain a firm pledge to create registers of the so-called beneficial or true owners of companies, which has angered campaigners aiming for greater financial transparency.
The Tax Justice Network blasted the Prime Minister for failing to get Russia and Germany to publish national action plans to combat tax evasion and to get the G8 leaders to agree that an agreement on automatic exchange of tax information should be open immediately to developing countries.
Other commentators have given cautious approval to the announcement, calling it an important first step towards greater tax transparency, but the consensus appears to be that it will do little in the short-term to increase tax fairness.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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