Forum urges firms to prepare for January VAT rise

A business support organisation is warning firms that the January VAT rise could leave them with a new year headache if they fail to prepare properly.   All VAT registered traders will be affected by the increase, which will see VAT rise from its current 17.5% rate to 20% at midnight on 4 January 2010.   The change only affects items charged at the standard rate of VAT. Goods and services which are zero rated, reduced rated or exempt will be unaffected. In theory, the change is relatively simple. However, the Forum of Private Business is warning smaller firms that things can easily get complicated when put into practice.

Forum chief executive Phil Orford explained:- “Many smaller businesses will have to changes their prices before they start trading on January 4 and this will take a sizeable amount of forethought for retailers with thousands of items in their product ranges. Businesses can of course keep their prices the same and absorb the increase but this will affect their bottom lines.   However, the main problems businesses are likely to encounter around the VAT rise will be with their accounting systems.  Firms will need to make sure that their accounting system changes accordingly and is issuing invoices and recording sales and transactions at the new rate from January 4. Any outstanding invoices for work which was genuinely carried out before the date can still be processed at 17.5% so most businesses will probably need to create a new standard VAT code at 20%, but retain a code for the old 17.5% rate.   Business owners also need to check that everything is at the correct rate when completing their next VAT return.  The good news is that HMRC says it will be taking a ‘light touch’ in dealing with errors made in the first VAT return after the change if the error relates to the change of rate. If you do, however, realise you’ve made a mistake, you’ll need to issue a credit note and then a new invoice at the correct rate to put things right.”

More information on implementing the increase can also be found via this HMRC guide.  The Forum is advising small businesses to invest in online accounting software in order to make the VAT change process a painless one.  Older desktop accounting programmes often expect the user to update the software to compensate for changes such as the VAT increase.  However, newer online accounting systems usually update themselves automatically, saving business owners time and money. The Forum has teamed up with Liquid Accounts Ltd, an award-winning market leader in the field, in order to provide its services to members at preferential rates.   The SME-specific software provides small businesses with a simple, flexible and cost-effective way to manage their bookkeeping online, and has been accredited by the Institute of Certified Bookkeepers and the Institute of Chartered Accountants of England and Wales.   Exclusive benefits for Forum members include one month’s free use of the service if they sign up before 1 January 2011. More information can be found under the ‘Finance Director’ section of the Forum’s website.

Businesses urged to get ‘bank ready’

WELL performing businesses may miss out on securing optimum bank funding due to poor financial housekeeping, experts warn. Many business owners who lost faith in their bank during the recession and plan to reassess their financial arrangements in the new year, might not be in the best position to do so, says North West accountancy firm, Hurst. The firm reports a surge of enquiries from businesses looking to transfer their finances. Hurst believes this is largely due to the need for an increase in working capital as the economic climate picks up. Insufficient working capital is the main restriction to a business, when competing for new work. New figures from the British Bankers' Association also reveal that credit conditions for smaller firms have begun to stabilise. This is the first time that the year-on-year credit figures have not slipped since the onset of the recession in 2008. Director, Andrew Judson, who heads up the Financial Development service at Hurst believes owners need to ensure they are ‘bank ready’ with an accurate view of their business’ finances prior to discussing opportunities with new or existing banks. Judson advises:- “Waning confidence in banks and new opportunities as we head out of a recession means business owners are investigating alternative arrangements and are looking to forge new relationships with financial institutions. Ensuring finances are ‘bank ready’ is vital for any good business as it helps decision making and gives both owners and stake-holders peace of mind. It sounds like a cliché but failing to prepare is preparing to fail. Banks remain sensitive to risk – funding is still scarce. Businesses might be seeking new providers but if their financial records aren’t transparent and up to scratch they’re giving banks an open invitation to turn them down, make a reduction to their facilities, or demand greater security... Businesses that have found themselves in costly specialist monitoring departments are advised that better management information may help get them out of these departments – something which can significantly reduce banking fees. Banks are requesting more detail than ever. It’s essential business owners can provide as much information as possible about the financial well-being of their business; open and up to date knowledge is key. Businesses that are doing exceptionally well can still miss out if they don’t have the information to support their success.”

Reminder - Free Christmas Day transport

MERSEYTRAVEL is offering free bus services on Christmas Day, designed to help people visit their loved ones in hospital or spend time with their friends and family.

On Christmas day free buses will operate a limited service on routes including 10A, 20A, 92A, 102, 201 and 212 in Liverpool, 110 and 118 in Wirral and the 10A, 24X and 194/195 St Helens Circulars. Buses will operate from around 12 noon until around 6pm.

Hospitals served include the Royal Liverpool, Liverpool Women’s, Whiston, Walton, Alder Hey, St Helens, Broadgreen, Fazakerley, Clatterbridge and Arrowe Park.

Please note that there will be no other services running on Christmas day.

A limited network of bus services on all major corridors will run throughout the region on Boxing Day and New Year’s Day. Mersey Ferries will operate every day except Christmas Day, Boxing Day and New Years Day.

The Kingsway (Wallasey) Tunnel will operate normally throughout the holiday period and Queensway (Birkenhead) Tunnel will be closed in both directions from 10pm on Christmas Eve until 6.30am on Boxing Day.

No train services will operate on Christmas Day and Boxing Day. On New Years Day all City Line services will operate as normal and Merseyrail’s Wirral and Northern Lines will be operating on a Sunday service.

Full travel and ticketing details are available on the Merseytravel website, a Guide to public transport during the Christmas and New Year holiday is available on the website or from the Brochure Hotline on:- 0151 330 1066 - or ring Traveline Merseyside:- 0871 200 22 33 for further information.

Traveline Merseyside will be open normally from 7am to 8pm on Mondays to Fridays and from 8am - 8pm on Saturdays, Sundays and bank holidays throughout the holiday, except for the following days:-  Friday, 24 December 2010 - 7am to 6pm, Saturday, 25 December: closed all day. Sunday, 26 December 2010 - 9am to 6pm, Friday, 31 December 2010 - 7am to 6pm.

Youngsters entertain their elders

YOUNGSTERS in Liverpool are getting into the festive spirit – by organising a special nostalgic night out for older residents on Monday, 20 December 2010.

The teenagers from Vauxhall and Kirkdale Detached Youth Project decided that it was time they met some of the older residents in their community, and are holding an evening of nostalgic entertainment for residents in partnership with the League of Welldoers.

The group have named the evening ‘Operation Christmas Tree’ and have been involved at every step, from arranging the entertainment to making invitations and Christmas cards for the older residents.

The entertainment will include will include a ‘swing’ set from a Frank Sinatra impersonator who has performed for Her Majesty the Queen, bingo and a quiz about the history of Liverpool.

The eight young people have also designed a three course menu which will be cooked by a professional chef which will be served to the older residents by the group.

As recognition for their achievements, the young people will receive accreditations in some of the skills they have gained, such as community engagement and conversational skills.

Megan and Sophie, two young people involved in the project, said:- “It’s been great to take leadership of our own event and we are hoping that by meeting with the older residents we can change people’s views of young people in the community.”

Councillor Ann O’Byrne, cabinet member for the youth service, added:- “The winter evening is a fantastic idea and it’s great to see the young people taking the initiative to engage with older members of their community. Events like this bring different age groups together and help break down barriers. Through their involvement the young people gain a greater awareness of their role in the community as well as valuable skills and experiences.”

Vauxhall and Kirkdale Detached, part of Liverpool Integrated Youth and Play Service, provides opportunities for young people in the community through informal education, new experiences, activities and advice.

For more information on the services provided for young people in the city visit:- liverpoolyouth.org.