36 finance


Three top tips for use of excess cash in your business


Companies that have been trading for a number of years can build up large cash deposits – even in this economic climate, writes Chris Duggan of Griffins


Three ways to utilise these cash resources are:


1 Make sure you are receiving a market interest rate from your bank


Many clients I see are being told by their bank that they are receiving the best interest rate that they can offer but when they test this and go to a third party bank for confirmation of rates they are offered double, if not treble, the rates they are currently receiving. In most cases, their bank will match these rates but please be aware before investing that some banks are regarded as having a greater commercial risk than others so you must make your own judgement call as to whether any extra implied risk for these banks are worth the extra gain in interest.


2 Obtaining the best deals from your suppliers


Make sure you are getting the best deals from


your suppliers, both for early settlement discounts if you pay within a certain period (normally between 1-2.5%) and also for 'buying in bulk', although under no circumstances should you buy more than you need therefore placing your business under cash pressure in order to obtain a few extra percent discount. You must consider what is reasonable and weigh up the commercial risk again.


3 Try to 'think outside the box'


A company can legally do everything that an individual can do, for example it can make investments and it can buy and sell anything. If you have surplus cash, there are opportunities out there so tell your advisers, family and friends that you are looking for something. Remember though any investments should be treated with due care and attention and a full commercial analysis should be taken. I have dealt


with companies who make more profit from these ventures than from their main business.


If you would like to discuss any of the above, contact Christopher Duggan.


Details: Chris Duggan 0118-9235020 c.duggan@griffins.co.uk www.griffins.co.uk


Payroll reporting shake-up set to create enormous burden for SMEs


PAYE real time reporting will create a significant burden for SMEs managing their own payroll, warns JC Payroll Services, the specialist payroll bureau of accountants and business advisers James Cowper.


Pay As You Earn has been a constant for employees and employers since 1944, when it revolutionised the way the Government collected taxes on wages. In 2013 it will undergo the biggest shake-up in its near 70-year history with the introduction of Real Time Information (RTI).


Gregg Braseby at JC Payroll Services said: “RTI will require businesses to tell HMRC about PAYE payments at the time they are made as part of the payroll process instead of waiting until the end of the tax year. The new regime starts in April 2013 for large and medium-sized employers and from August 2013 for small employers. It will benefit staff and the taxman but create a significant burden for SMEs, particularly those that


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manage the payroll themselves and those who pay their staff weekly.”


The reason and benefits for introducing RTI are to:


• Make PAYE more accurate for employees, reducing the need for HMRC to issue often hefty tax demands for underpaid PAYE at the end of each tax year;


• Enable HMRC to chase late payments more effectively;


• Reduce benefits fraud; and


• To support the new universal credits benefit regime to be introduced next year.


Braseby explained: “Under the new approach employers of all sizes will need to submit what is called a ‘Full Payment Submission’ to HMRC every time an employee is paid. This must show details of all employees paid in the current payroll period including the employees’ taxable pay, tax, NI, pension and hours worked.


“Employers must also submit by the 19th of each month an ‘Employment Payment Summary’ if no payments were made to any employees or if the employer wishes recover statutory payments, NIC compensation and construction industry deductions.


“We are recommending that businesses start to prepare now because before the new RTI regime begins in the spring employers will be expected to complete various processes and submit information to HMRC.”


He added: “At the end of each tax year employers will no longer have to complete and submit an annual return (P35), but indicate on their submission to HMRC that this is the final submission of the tax year and complete the year-end declaration. Employees will still require a P60.”


JC Payroll Services has been given a unique insight into the new RTI regime having been chosen by HMRC to pilot the scheme.


From September 2012 James Cowper’s 160 staff began operating under the RTI regime with its payroll managed by JC Payroll Services.


THE BUSINESS MAGAZINE – THAMES VALLEY – NOVEMBER 2012


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