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Your summer strategy

 

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Is your business feeling the burden of inflation? Business Control’s Richard Starkey proposes some priorities for cutting costs over the coming weeks, and signposts some useful sources of support.

Rising costs continue to pose a challenge for many businesses, especially SMEs. But there is support out there and ways that you can mitigate the effects of a challenging economy.

First of all, consider these changes and schemes that the Government are implementing:

  

Support

Help to Grow: Digital – UK

This scheme provides discounts and subsidies to help SMEs in the UK find, buy and adopt digital technologies in the interest of improving productivity.

Next steps: More information, eligibility and how to apply.

Fuel bills subsidy 

To alleviate soaring energy costs, all households in England, Wales and Scotland will be given a one-off £400 grant towards their fuel bills in October – this is perfect for business owners running things remotely.

Also, National Grid intends to roll out a scheme where people can save money if they avoid using energy at peak times of the day.

 

Next steps: Read more about the grant here, and find more information on the National Grid proposal here.

Employment Allowance 

This allows eligible employers to reduce their annual National Insurance liability by up to £5,000. Which means paying less employers’ Class 1 National Insurance each time you run your payroll until the £5,000 is used up or the tax year ends (whichever comes sooner).


Also from 6th July, employees can hold on to more of their income before they start paying National Insurance contributions. For workers earning less than £34,000, this change will more than offset the 1.25p National Insurance increase that came into effect in April.

Next steps: Check if you’re eligible.

Cost-savings

Fuel duty rates cut 


Fuel duties are levied on purchases of fuels by manufacturers, importers, distributors, retailers and household and business consumers. This new measure reduces fuel rates for twelve months, including cutting rates for diesel, unleaded and leaded petrol by five pence per litre.

Next steps: Find more info.

Super-deduction 

From 1st April 2021 until 31st March 2023, your company can claim back up to 25p for every pound you invest in ‘qualifying’ machinery and equipment. This includes, for example, machines such as computers and printers; office equipment such as desks and chairs; vehicles such as vans, lorries and tractors (but not cars); warehousing equipment such as forklift trucks and stackers; tools such as ladders and drills; and construction equipment such as excavators, compactors, and bulldozers.

Next steps: Further guidance.

Annual investment allowance 

This allows a business to deduct the total amount of qualifying capital expenditure up to a certain limit from its taxable profits in a given tax year. This is designated for business equipment such as tools and machinery.

Next steps: Find out more about what you can claim on here.

 

Business rates relief 

If your business is eligible, you could get 50% off your bills for the 2022 to 2023 tax year up to a total value of £110,000 per business. 

 

Next steps: Contact your local council to see if you’re eligible.

These Government provided opportunities are well worth researching to find out if your business fits the criteria.


Reducing your outgoings

In the meantime however, consider some cost cutting measures that you can implement on your own:

Do you need an office?

Depending on the nature of your business you could consider downsizing or asking the team to work from home. If this isn’t an option, given the impact of inflation, you could approach your landlord to renegotiate rental arrangements.


Quick fix: Switch providers or negotiate a reduction on your office utility bills.

How’s your budget looking?


Sticking to your budget will enable your business to maintain financial discipline as well as benchmark your business costs on an ongoing basis. Not to mention the fact that it’ll expose areas that you could cut down on your spending.

Quick fix: Do you have any subscriptions that are no longer pulling their weight? Cancel them.

What’s your marketing strategy?

Marketing your business online is a cost-effective way to implement marketing campaigns that are measurable. Using social media, blogs and insightful content are far more cost-effective ways of marketing when compared with print.

Quick fix: If you don’t already have a company social account, create one!


Share equipment 


Do you have sound relationships with other SMEs? Consider collaborating with them. That way you can reduce costs on equipment, bulk buy items and exchange expertise.


Quick fix:
Drop fellow business owners a line to see how they’re getting on; this is a great way to build relationships.


Keep up with your finances 


Make sure you don’t miss going over your credit card limit on the company card or being late with repayments. You’ll avoid interest charges, late repayment fees and any nasty surprises like less money in the account than you expected.


Quick fix:
Use a free reminder tool so you don’t miss a deadline.


Knowing your options and what opportunities you can take advantage of are crucial in these trying times. So keep a weather eye, do your research and make sure that your accountant (we know a very good one!) is providing you with effective cost cutting strategies and advice to keep your business ahead of the curve.

 

Check out our Accounting for COVID-19 blogs here periodically to get the very latest insight and information from the Business Control team.

 

Better still, you can access a whole host of resources for business owners including blogs, smart guides and infographics for free. Simply opt in here

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BA2 2PP,
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