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Financial Monitor (July 2008)UK Steel Enterprise Expanding More companies in the region can now access growth funding as local investor UK Steel Enterprise extends both its operational boundaries and the amounts it will invest across the UK steel areas. Locally this means Barnsley, Chesterfield, Doncaster and Worksop are now added to their already established areas of Sheffield and Rotherham. At a time when finance from traditional sources may be difficult to access, UK Steel Enterprise is also raising its maximum investment to £750,000. UK Steel Enterprise has already financed over 2,600 companies, which are estimated to have created 58,000 new jobs. The company, a subsidiary of Corus Group, focuses on manufacturing, industrial and technology businesses. As well as providing equity based investments of up to £750,000, the company will continue to provide loans of up to £50,000 for smaller businesses and SFLGS loans (ie. loans part guaranteed by government) for eligible businesses. UK Steel Enterprise also owns the Innovation Centre in central Sheffield which provides serviced office and workshop space for growing businesses. Interested companies can contact UK Steel Enterprise on 0800 915 1188. Clients should contact us for an introduction and help with the application process. VAT Relief on Bad Debts Unless you are able to account for VAT on the cash basis then you will normally need to pay VAT to HM Customs and Excise in the quarter the invoice is raised. However, if the customer does not settle the invoice within 6 months of the payment becoming due (this will depend on your credit terms) then you can recover the VAT paid on the next appropriate VAT Return. When the debt is settled the VAT needs to be accounted for again. You need to have a system in place to ensure long outstanding debts are identified and the appropriate VAT recovered. If you are the customer then you need to monitor payment of your suppliers’ invoices because once a purchase invoice is unpaid more than six months after the invoice date (not the payment date) you will need to repay the input tax you have reclaimed by adjusting the next appropriate VAT Return. Spoof Tax Repayment We have seen instances of clients receiving emails purporting to be from HM Revenue and Customs (and they look genuine!) advising that a repayment is due and asking for bank account details so that payment can be made. Please be aware that HM Revenue and Customs do not contact taxpayers by email and would not ask for personal account details in such a way. Those taxpayers providing the information requested are likely to see money withdrawn from their account rather than any tax refund deposited! Key Person Insurance For businesses there can be great difficulty caused when a key employee/director is suddenly unable to work because of serious illness or early death. This difficulty can be financial either because of the cost of employing a replacement or a lack of sales due to the absence of that key person. Key person insurance can be used to provide a lump sum to assist until the business is able to adjust to the person’s absence. Such insurance uses critical illness cover which will pay the lump sum on death or diagnosis of one or more of around 30 life threatening conditions. Recovery from the condition would not require the lump sum to be repaid. Cost will depend on the type of cover and the individual’s age and health but need not be expensive. Please contact your Financial Adviser or ourselves if you require a quote for yourself or a key member of your team. VAT Mistakes From 1 July 2008 it is now possible to correct mistakes made on previous returns on your next VAT Return when the amount is less than £10,000 (previously £2,000). This avoids the need for a separate disclosure although this will, in most cases, still be required where the amount of the error exceeds £10,000. Electronic and Electrical Waste Recycling A newly launched electronic and electrical waste recycling service for businesses will be able to recycle almost 100% of all the waste it collects and in 99% of cases will not charge businesses for doing so. The company will collect the equipment and provide evidence of disposal. It then extracts all the recyclable items from the waste which it then sells. Under the Waste Electrical and Electronic Equipment initiative small items cannot be simply thrown away or placed in a skip with other waste as they can contain dangerous chemical elements which need to be processed properly. The company is SR Recycling and can be contacted on 01226 281999. Passport Checks on Employees Employers are required to check that all new employees are eligible to work in the UK. However, assumptions cannot be made about someone’s right to work in the UK on the basis of how they look or act. To avoid a charge of discrimination a passport or birth certificate check should be carried out on all new employees. Next Edition Our next edition of Financial Monitor will be at the end of September.
Whilst every care has been taken in the preparation of these notes we can accept no responsibility for errors or omissions contained in them or for any loss arising from their use unless we have been consulted professionally prior to any action being taken. UHY Wingfield Slater A member of the UHY Hacker Young Group of independent UK partnerships. A member of UHY, an international association of independent accounting and consulting firms. |
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