Is your salon business fit for 2014?

It’s good to begin a new year with an attempt to ring in the changes and with that in mind here are four areas that it wouldn’t hurt to pay some attention to. Any one of these could offer cash savings or at the very least, an easier life. Business record checks It’s a fact that HMRC needs us as individuals and businesses to make returns and pay our taxes. It is, after all, how the state pays for services to the population. And as part of the process HMRC use a carrot and stick approach to compliance. The carrot being tax allowances and a system that some might be able to use (but not abuse). The stick is the visits, investigations, penalties and sometimes prosecutions that follow non-compliance. However, what few appreciate is that HMRC has had, for a year or so, the power to investigate how businesses keep their records before any submissions are made and taxes paid. Called ‘in year Business Records Checks’, they can lead to large penalties of between £250 and £3000 for businesses that don’t keep records in a form that HMRC are happy with. The argument, from HMRC’s perspective, is that poor record keeping means that firms may overpay, underpay or even pay no tax with cost implications to the Treasury.  HMRC have posted detail on the powers on its website Employment law changes Businesses need to be aware of some changes that are coming in 2014. Firstly, there’s a new approach to sickness absence with a new health and work assessment and advisory service from Spring 2014. The plans include a state-funded assessment by occupational health professionals for employees who are off sick for four weeks or more and case management for employees with complex needs to facilitate their return to work. There’s also going to be a compulsory pre-claim ACAS conciliation procedure from April 2014. Under this employees will have to submit details of their dispute or concern to ACAS before bringing a claim. ACAS will then try to resolve the dispute before it goes to an employment tribunal. Also from April 2014, employment tribunals will gain the power to impose a discretionary financial penalty of 50% of any financial award, up to a maximum cap of £5,000, on employers who lose at tribunal. Lastly, there also going to be a new right to request flexible working and a new system for employees to make requests. Employers beware. The ACAS website offers loads of information. Check your business rates With the announcement in the Chancellor’s Autumn Statement of a 2% cap on business rates bill increases (it could have been the expected 3.2 %) now is a good time to check that the present rates bill is correct. Firms that suspect that the bill is wrong can appeal, but only on the basis of one of three grounds - the new valuation was wrong; the property has been changed and should be reflected in the rateable value; or an alteration made to the valuation is wrong. There are various ways to challenge a rating and businesses should seek advice from a professional advisor, the Royal Institute of Chartered Surveyors or the Ratings Surveyors Association. Businesses who want to challenge the rating themselves, can contact the local Valuation Office Agency – the administrator of the system - to state why they consider the valuation to be incorrect. It can also be done online at www.voa.gov.uk. If a business can close off sections (floors) of a building because if part of a building is empty, and not being used, it can qualify for rate relief. Further, if a business is affected by local disruption, it can also contact the VOA directly to lodge an appeal to have the rateable value of the property temporarily reduced for the period of the works. Pensions auto-enrolment Auto-enrolment is heading to all businesses over the next few years and will require employers to automatically enrol an employee into a workplace pension if they earn over a certain amount (currently £9,440 a year) and the employee is aged between 22 and state pension age. While the employee will have to pay in a percentage of their earnings, in most cases, the employer will also have to pay into the employee’s pension. Importantly, the Pensions Regulator reckons firms should allow 12-18 months to prepare for system. Auto enrolment is going to have cost implications. Estimates vary, but as an indication, research by the Centre for Economics and Business Research suggests an average for small businesses of £8,900 to enrol, and for medium sized employers with up to 100 employees costs of £12,600 would be typical. They identified 33 separate administrative tasks that every business will have to carry out, and reckoned this could take up to 103 days to complete. Boycotting the regime is not an option as there are penalties starting from £50 per day for the smallest employers which rise to up to £2,500 daily if they have more than 50 employees on their books. There’s a 12-page guide on the pensions regulator website  which sets out an overview of what firms need to do.