July Newsletter

July Newsletter

New VAT rules for the construction sector:

Under new rules due to come in on 1 October 2019 builders, sub- contractors and other trades associated with the construction industry will have start using a new method of accounting for VAT.

Under the new rules, supplies of standard or reduced-rated building services between VAT-registered businesses in the supply chain will not be invoiced in the normal way. Under the reverse charge, a main contractor would account for the VAT on the services of any sub-contractor and the supplier does not invoice for VAT. The customer (main contractor) would then account for VAT on the net value of the supplier’s invoice and at the same time deduct that VAT from the payment to the sub-contractor.

This is intended to ensure that VAT is correctly accounted for on supplies by sub-contractors.

The new reverse charge will apply to a wide range of services in the building trade, primarily those activities covered by the construction industry (CIS) payment rules. Note that normal VAT invoices will continue to be issued to domestic customers.

Please contact us if you are likely to be affected by these changes and we can work with you to ensure you are ready for the new system.

 

Make school holidays easier with tax-free childcare:

Did you know there is a government scheme available that can help contribute towards childcare costs? Tax-Free Childcare is a scheme available to working parents with children from 0-11 years and many parents are not taking advantage of the scheme. HMRC would thus welcome help from employers in changing that, so please tell your employees about Tax-Free Childcare and how it can reduce their childcare costs.

Eligible parents can get up to £2,000 per child, per year to spend on qualifying childcare (effectively a 25% top up). Note that Tax-Free Childcare isn’t just for everyday childcare costs, such as childminders and nurseries, parents can also use it to pay towards the cost of:

•             after school clubs

•             summer camps

•             school holiday activities

 

Scaling up your business:

How do you scale up your business and take it to a new level? A scale-up business is any firm that is looking to grow in terms of market access, revenues, and number of employees, adding value by identifying and realising new opportunities. Scale-up businesses are the engine of growth for the UK economy, creating wealth, opportunities and employment in a competitive environment.

Organic versus inorganic growth Firms can scale up in one of two ways. They can focus on organic growth - growing gradually thorough increased sales and market share. Alternatively, they can scale up through inorganic growth strategies such as through an acquisition or a merger with another business.

Commit to growth

Scaling up a business takes a huge amount of time and effort so you need to ensure that your management team is committed to growing the business. You and your team will need to create realistic growth targets and develop plans and concrete actions of how growth will be achieved.

Upskill your team

Your management team will have a given level of expertise. However, delivering a growth strategy may require an expanded skillset. Take the time to identify the skills required to realise your growth strategy. Do you have people with good management experience, an understanding of the relevant technology, good financial skills and a background in change management? If not, you will need to upskill your current team or hire in experienced professionals to help drive growth.

Collaborate

In order to scale up your business you will need to create partnerships with people and firms outside of your business. Consider your routes to market and identify potential service providers, sales channel partners, suppliers and key clients who you can work with in order to form alliances which will drive the growth of your business.

If you are focused on expanding into new markets, you will need to create collaborative business relationships with sales partners and suppliers in those countries, and may need to create formal agreements with these new business partners.