For many, it can seem like a daunting task, so is there anything you can do to make the process easier? Here James Foster, Commercial Manager at specialist accountancy provider Nixon Williams, provides some top tips on completing the process.

The majority of the working population have their tax deducted at source from the company that they work for, however, anyone that is self-employed has to complete a self-assessment tax return in order to be taxed appropriately on their earnings by Her Majesty’s Revenue and Customs (HMRC).

When you start working for yourself, your workload includes everything that you might need to do to make your business a success – from marketing and advertising to admin and ordering stationery. You may find that managing your finances is more complex than you might have expected as you will need to keep records of all the money you spend in the running of your business, as well as how much you earn. Many people decide to use the services of a professional accountancy firm like ours to help them through the process, but some decide to manage everything themselves. Either way, there are some simple things you can do to make the process as straightforward as possible, so here are my top five tips:

• Get organised – compiling all your invoices and receipts ahead of time is the best way to alleviate last minute stress when it comes to self-assessment forms. Ideally, you’ll have kept some form of spreadsheet or an online portal up to date throughout the year of your accounts, and you can use that to finalise your tax return. But if that’s not the case, don’t wait until the very end of January to get started. There are often missing pieces of information you’ll need to track down, so give yourself plenty of time to work through everything. And don’t forget – if it’s your first time completing your Self-Assessment Tax Return, make sure you’re registered with HMRC in time.
• Know the key dates for completion – If you decide to complete your tax return online then the deadline for this is any point up until the 31^st January, whereas a paper tax return needs to arrive with HMRC by the 31^st October the previous year. If you haven’t sent an online tax return before then you will need to register and HMRC advises you to do this no less than 20 working days before the deadline.
• Separate your work and personal bank account – a number of self-employed people operate with just one bank account for personal and business use, but this can make it hard to separate out your business expenses from your personal expenses. It’s often easier to identify which costs are related to your business by having a separate business bank account. This will not only help you keep a track of your business expenditure throughout the year, but it will make your life a lot easier when it comes to your tax return.
• Know the expenses and tax reliefs that you can claim – if you are a sole trader, for example, make sure that you know the expenses that you can claim in your tax return, as there may be some items you might forget about such as business mileage and expenses relating to working from home. It’s also beneficial to know about other tax reliefs that you are entitled to such as personal pension and gift aid payments.
• Tax returns can be complex so use an accountant – having professional support can be really beneficial because an accountant should not only assist with the compliance side of things (i.e. helping you to file your tax return on time) but they will also give you pro-active advice where appropriate. Tax returns are something most accountancy practices deal with on a daily basis from April to January, alleviating a lot of the financial stress away from clients and helping them to focus on what they do best – making a success of their business.

Running your own business and managing the many tasks that come with it can often push your tax return submission to the bottom of your ever-growing pile of work to do – but help is always available from professionals with the right experience and knowledge of the latest legislation.

Below Finance Monthly hears from Catherine Rickett, a debt recovery manager at Roythornes Solicitors, on the topic of avoiding debt, especially at Christmas.

It’s pretty common for people to overspend at this time of year, and most will focus on spending money they don’t have on presents for their loved ones, rather than pay off the debt owed to you.

December can therefore be a tough month for businesses, particularly SMEs who might feel the impact on their bottom line more than a large corporate firm. For companies focused on footfall, the increase in online shopping may mean that sales have declined; your own outstanding invoices are due or income may be affected by closing over the holiday period. Added to all that is the extra pressure of parties, bonuses, and holiday pay.

The UK’s ‘late payment crisis’

Recent figures released by the Registry Trust confirm that, during the third quarter of 2018, 32,629 County Court Judgments (CCJs) were registered against businesses in England and Wales. This equated to a total of £100.2m being owed by commercial entities and represents an increase of 32% from the previous year. The average commercial CCJ has a value of £3,072, and the total figures show that if you have even one debt owed to your business, the impact could be detrimental if you do not have measures in place to protect yourself.

Further to this, annual research by Bacs Payment Schemes, part of payments authority Pay.UK, found that the country’s SMEs could spend up to £6.7bn this year in order to get back money owed by customers, up from £2.6bn in 2017.

When it comes to the festive period and late payments, the absolute worst case scenario is that your customer’s business fails in the New Year before you’ve been able to collect payment, leaving you completely out of pocket.

1. Know your client! The best way to protect yourself from dealing with potential insolvency is, above all, to know your client, and to put in place a few precautions. Consider undertaking a credit check on new or even existing customers if you are having difficulty in obtaining payment. It may be that your customer is unable to make payments due to their own financial problems. Account application forms are an excellent way of identifying your customer from the outset. You need to know who you are contracting with in order to pursue the correct person later on if necessary. It’s very simple to carry out a free check of the insolvency register before allowing a customer credit, and credit checks can be undertaken for a relatively low fee.
2. Make it easy for your clients to pay. The easier you make it, the more likely is it that they will pay you. Consider having card payment facilities, BACS, direct debit, online payments or even PayPal. Be proactive about collecting payments from clients. Have solid, late-payment penalties and collections polices in place, and stick to them. Ensure that you keep copies of correspondence with the client including call logs, emails, letters and proof of delivery or collection. These may prove invaluable if the matter proceeds to court.
3. Consider applying an incentive for early payment. Money is better in your pocket than in your debtor’s and whilst you may feel uncomfortable lowering your prices for early payment, sometimes it can cost more to recover a debt than any discount applied.
4. Have clear procedures. You need effective systems in place, with standard letters going out the day after an invoice is due and then seven days after. These are very simple procedures to implement but effective – they not only give you a paper trail but act as a polite reminder for clients where an invoice might have slipped through the net.
5. Keep a ‘cushion’. Ideally three months’ operating expenses will protect you from unexpected cash flow issues. Bad payers are a business reality and if your company is working from an account balance of nil, one slow sales month could mean instant disaster.

If you do happen to find yourself in the unfortunate situation of being unable to recover your money, there are a few general things to be aware of, which could help allay your concerns over the costs of recovering the debt. If you have a term in your contract for interest, then you must adhere to it. Otherwise, for commercial debts, the Late Payment of Commercial Debts (Interest) Act 1998 gives protection to businesses which are owed money by other businesses in terms by assuring interest is payable at 8% above base rate.

In addition to this, you can claim late payment compensation and recovery costs under the Late Payment of Commercial Debts Regulations 2002 and 2013. These regulations provide that, as a supplier, you would also be entitled to a fixed sum of compensation as follows:

• £40 for a debt less than £1,000
• £70 for one between £1,000 and £10,000
• £100 for debts over £10,000

Costs incurred by creditors when instructing a lawyer or debt collection agency are recoverable, however, once the matter proceeds to court, it will be for the court to decide what costs are payable, dependant on the type and value of the claim.

If the debt is paid, but paid late, you are still entitled to claim late payment compensation and interest up to six years later.

Does this mean Santa’s business model is driven in its brand? If that is the case, and on the commonly agreed assumption that Christmas is a business in its entirety, what are the brand values that make Christmas so financially successful?

The truth is Santa and his gang can offer business leaders a great deal of know-how in the business world. Christmas is a tradition and a business that goes back at least 200 years, one which according to Forbes, accounts for over $1 trillion, or 25% of US annual retail income. As a corollary, Christmas also monopolises on retail data, as just like in Santa’s Grotto, we tell markets exactly what we like and want the most.

Starting with the business’ marketing, Father Christmas’ branding model is built on worldwide collaboration, in that everyone believes and trusts the brand, the promise of reward, in the form of gifts and celebration, and the use of emotive marketing, via songs, colours, smells, clichés and scenarios, all of which come together to stimulate feelings of family, community, togetherness, joy and nostalgia, among many.

The brand itself is the strongest driving part of Santa’s business model, and if anything could imitate the above formula as successfully, they would likely be the richest and most reputable company in the world. Brands that have tried and come close are the likes of McDonald’s, Coca Cola and Disney, yet these come with shortcomings, mistakes and elements that carry negative connotations, like sustainability, sourcing, sales and taxes. Not to mention their ability to stay as relevant and innovative as Christmas. With the Christmas brand as a whole however, being a collaboration of all businesses and consumers involved worldwide, these negative undertones are looked over and left mostly associated with what Christmas is about. When you think about Christmas you simply think about the good stuff.

The brand itself is the strongest driving part of Santa’s business model, and if anything could imitate the above formula as successfully, they would likely be the richest and most reputable company in the world.

In terms of the business operations, small to large firms around the world can learn several important pointers from Father Christmas. He treats his employees fairly, he has a diverse and equal workforce, each with an important role suited to their talents or features. Donner helps Santa navigate his delivery route, while Rudolph, lights the way with his ‘very shiny nose’. Santa himself, as the Director of his company, has a job that was tailor made for his likeness and character.

Assistant Professor Fang Ruolian of Management & Organisation at NUS Business School, said: “Santa’s enthusiasm is infectious and the reason why he has built such a loyal following over the years and across generations. He spends time getting to know his customers in his grotto, learning what they want for Christmas, and then goes the extra mile to see that their wishes are met; all the time accompanied by a jolly “ho, ho, ho!”

In doing this, Santa learns about his customer base, collects data on a regular basis, and actions operations and gifts based on said data. And as far as we can tell, Santa doesn’t share any customer personal data with third parties. In addition, every year Christmas happens is a new year, with new data, which in turn means growth and evolution, as Santa and his elves have to keep up with a changing market, adapting and innovating each Christmas. They work together and collaborate, each department preparing all year round to deliver an excellent service with impeccable timing and precision; his wishlist staff work closely with the customer service department to get the right gifts to the right people.

Every year Christmas happens is a new year, with new data, which in turn means growth and evolution, as Santa and his elves have to keep up with a changing market, adapting and innovating each Christmas.

On the topic of customer service, Christmas is built on several promises. That kids will get presents, that family will come together, that people can be good, that it will happen again next year, and the year after, and so on. Businesses around the globe have to keep these promises, accommodate logistics and operations to meet demand, and in doing so contribute to the overall success of the Christmas brand. Christmas breeds a likely 95%+ customer satisfaction rate and a customer retention rate that is just as successful. Can your business say the same?

All in all, Christmas is one of the most successful business models to have ever been conceived and all businesses should strive to imitate its values and methods. In terms of actually delivering gifts all in one night, there is a questionable logistics issue, but with everything else on the table, Santa’s workshop and staff make a winning business model possible. With the real-life Christmas period ahead of us, and as markets are set to action the Christmas spirit, we wish you good business and a happy new yield this quarter.

Sources:

https://www.forbes.com/sites/bryanpearson/2016/12/22/holiday-spending-to-exceed-1-trillion-and-11-other-surprising-data-points-of-christmas/#609c6dbb247f

https://www.intheblack.com/articles/2015/10/01/disney-cocacola-and-mcdonalds-fight-to-remain-relevant-in-a-digital-world

http://thinkbusiness.nus.edu/article/santa-claus-the-business-model/

https://designabetterbusiness.com/2017/12/21/why-the-business-model-of-santa-claus-is-so-successful/

https://www.omaha.com/money/retail/amazon-expands-free-shipping-ahead-of-christmas-to-compete-with/article_033de127-80b6-5c34-9085-c41042c19c46.html

Long shop queues, busy high streets and a distinct lack of money can be tiresome and stressful. So, we’ve rounded up the top five Christmas shopping hacks to get you through:

1. Know when to look for deals

To save a bit of money over the Christmas season, it’s important to know when to do your shopping. Lots of shops will have deals on over Christmas to encourage shoppers into stores so look out for deals in magazines, newspapers and on social media.

Black Friday is also a great time to do the bulk of your Christmas shopping. This year, Black Friday falls on the 23^rd November but many shops will be offering deals for up to a week before. Find out what deals you could snatch here.

2. Suggest Secret Santa

If you have lots of people to buy for; a big friendship group or a large family then you’ll understand the struggle of buying presents for everyone. But this is the year that you should suggest a Secret Santa with a price limit, it will save you shed loads of money. You can even organise your Secret Santa online on DrawNames!

3. Stock up with on-the-go, filling foods

If you’re going to hit the high street, then make sure you’ve stocked up on filling, on-the-go foods to save you spending money and time on expensive high street food options. Lizi’s Breakfast Drinks  from Lizi’s Granola (Available in Sainsburys, RRP: £1.49) are the perfect on-the-go option as they’re full of protein and fibre to keep you going! If you’re after something slightly different, then Jake & Nayns’ Naansters (Available in Sainsbury’s, RRP: £2.00) are the perfect option. They are delicious naans stuffed with authentic curries that can be eaten cold and on the go.

4. Buy late Christmas presents

If you’re not seeing someone until after Christmas then why not buy their present late? Prices are slashed on Boxing Day and it’s the perfect opportunity to buy lovely presents for half the price, or to stock up on presents for next year! If you want to get ahead of everyone else then check online on Christmas Day, most shops release their sale items then!

5. Consider DIY presents

You don’t have to be an art and craft whizz to make a DIY present. DIY presents can be a great way to save money and still give personal and thoughtful gifts. You could simply buy a cheap frame and print off a friend’s favourite quote or saying to pop in the frame – easy! Check out this YouTube video for a bit of inspiration.

Don’t let a lack of finances get in the way of creating new and memorable experiences! There are lots of ways for you to reduce travelling costs without having to compromise on the quality of your trip.

Here are a few of the best ways you can cut travel costs this season and do more travelling without burning a hole in your wallet:

1. Shop Around for Cheap Flights

One of the most common reasons people say they can’t afford to travel is because the “flights are too expensive”. And yes, sometimes the price of flights are on the verge of extortion, but if you can’t find more affordable flights, it’s likely to be because you’re looking at all the wrong places.

You’ve got to shop around for cheap flights to find the best deals. Going straight to your favourite airline website and booking directly from it without even checking other sources is a rookie mistake. What you should be doing is comparing flight prices, so you can see the best deals on flights including things like recommended times to travel and possible discounts on returns etc.

2. Consider the Destination

If you want to experience as much of the world as possible, but you’re on a tight budget, you might want to avoid the “big spender” destinations such as Las Vegas, Hong Kong, Tokyo and so on. Expensive holiday destinations will make budgeting increasingly tricky, especially when you’re paying £100+ per night.

Instead, think about more affordable holiday destinations that offer just as much sunshine and excitement, but at a lower cost. A few of the most affordable destinations include Costa del Sol in Spain, Budapest in Hungary and Bali in Indonesia to name but a few.

3. Find Alternative Accommodation

Not everyone wants to compromise on quality when it comes to accommodation, and that’s okay. But if you’re looking to cut back on travel costs and don’t mind giving up a little bit of luxury, in exchange for somewhere to rest your head at night, you’ve got to consider cheaper accommodation.

First, you might want to check online for cheap hotels. You might get lucky and find something amazing and within your budget. But if you’re struggling, you can also stay in a hostel. Hostels offer lower prices, and many of them even include free breakfast, which is fantastic if you’re looking for a wallet-friendly alternative. If you’re a little more on the adventurous side, you might be open to camping or renting a caravan.

4. Cook your own Food

Are you a whizz in the kitchen? Save money by skipping the expensive restaurants and cooking your own food. If you’re travelling for a week or two, you might end up spending more than you anticipated on daily meals. Of course, there’s nothing wrong with treating yourself to a nice dinner on holiday, but if you’re determined to cut back, you’ve got to cook for yourself!

You can even bring food with you and shop for groceries at the local supermarket. Cooking for yourself is slightly easier if you’re camping or renting an apartment with a group of friends. The cost of renting an apartment is usually cheaper than hotel prices and most come with their own kitchen, which is ideal if you feel like whipping up a Sunday roast dinner or making a stir-fry.

5. Avoid Taxis

Taxis are so expensive in foreign countries, and most people agree that they feel overcharged by taxi services for merely being a tourist. Always try to avoid using a taxi service when possible and opt for public transport instead. Or, you could get some exercise and walk to your destination or hire a bicycle. However, this will be more difficult if you’ve got a few suitcases to trail about. Buses and trains offer affordable means of transport, so make sure to take note of the schedule and make the most out of public transportation.

Last weekend, British shoppers were predicted to have spent almost £8bn on Black Friday sales – nearly four percent higher than last year. While this busy shopping period is certainly good for the British economy, it raises concerns about the opportunities for scammers and cyber criminals. Ross Brewer, VP and MD EMEA at LogRhythm, discusses for Finance Monthly below.

Indeed, all eyes have been on who – and there will be some – will fall victim to hackers’ increasingly persistent and clever tactics. Retailers are prime targets because of the confidential data they hold – whether it’s bank details, email addresses or personal information. There’s absolutely no doubt that cyber criminals will have tried to take advantage of the past week’s online sales peaks to access networks unnoticed or execute malware that has been sitting on the network for months. Retailers have a lot to prove when it comes to showing consumers that they are taking modern-day threats seriously.

As we only saw this week with Uber, it isn’t always a breach that makes headlines, it can be how it’s contained and disclosed. In such a competitive industry, retailers rely heavily on loyalty, which means reputation is key. They need to understand the true value of the data they hold and take the necessary steps to protect it.

Monitoring and detection is key

It’s hugely important that retailers are investing in tools that continuously monitors networks for any signs of a compromise. Indeed, online activity and network communications between components in the card processing chain need to be tightly controlled; a process that is specifically mandated by PCI-DSS. With time increasingly of the essence, it is also critical that, rather than simply scanning for threats and raising an alarm if something suspicious is identified, these systems are able to deliver actionable insight with supporting forensic data and contextually rich intelligence. Not only does this ensure that the right information is delivered at the right time, to the right people, but it guarantees that the appropriate context will be attached, significantly decreasing the amount of time it takes to detect and respond to threats.

Most retailers know by now that they cannot afford to take shortcuts when it comes to cyber security. With breaches now a case of when, not if, it’s essential that they are on high alert at all times – particularly during busy shopping periods. Despite growing concerns over the cyber threat, consumers are spending more and more money in store and online each year, but retailers cannot take this for granted. It only takes one data breach to damage a company’s reputation, hinder future sales and/or disrupt pending investments and deals.

The good news is that security intelligence has become so advanced that companies can now automatically detect a compromise as soon as it happens, enabling security teams to stop a cyberattack before any damage is done. With GDPR only a matter of months away, enterprise organisations and retailers are feeling the pressure to identify, mitigate and disclose an attack at the time that it happens. Only with rapid detection and response capabilities will retailers be able to take cyberattackers head on and protect their customers.

Only 12% of homeowners in the US had flood insurance in 2016. For every one inch of flood, it could cost a homeowner $20,000 in damages. Here’s how flood insurance works, the average cost and if it’s too late to get covered.