HMRC are rolling out their Business Record Check programme which means that they might soon be asking to inspect your records. If your records are not up to scratch could this be a problem for you?
HMRC have a target number of 12,000 businesses to visit next year. If you are chosen for a Business Records Check (BRC) they will contact you and it is your own interest to co-operate, subject to negotiating a suitable time and date which suits you. The time it takes to carry out a BRC will depend on the volume and complexity of your records but generally it will last between two and three hours. HMRC will review a random sample of purchases, sales and expenses transactions. In theory you could be fined up to £3,000 for not keeping adequate records but this is extremely rare.
HMRC are generally more concerned about ensuring that records of all transactions exist, rather than worrying about their quality, on the basis that it will be possible to produce correct accounts and tax returns at any later time. There are separate rules for retaining records for VAT purposes but as a general rule you must have sales and purchase invoices to support your VAT Returns.
If you are a professional then the answer to the above question will almost certainly be yes. Whether you are an accountant, lawyer or from another discipline areas of your business are or will be commoditised.
Accountants will be experiencing this with services such as payroll, whereas lawyers will be .looking at conveyancing, for example. Anything that can be reduced to a process will be commoditised in the natural course of business. The trick as I see it is to recognise this and then embrace technology so as to be able to deliver it. This will enable you to retain clients and have a captive audience to sell more value added services which can command an hourly rate, as opposed to being a fixed price proposition. Hourly rates are clearly subject to market forces but give the opportunity to demonstrate benefits more easily that offerings that have been commoditised by the market.
For non professionals the way technology is harnessed has for some become inseparable from their sales proposition. This is a lesson professional firms must also learn if they are to survive and prosper. This will inevitably involve the cloud which presents a great opportunity to use a collaborative model to deliver a seamless level of service to clients. Services that are invisible will still be valued by clients as long as they address their “pain”. Identifying where their pain is is key as in the case of all personal service businesses.
The current generation will also expect professional firms to engage on-line. Effective use of social networking will enable firms to expend quickly, in conjunction with a complimentary face to face networking strategy. To say that networking is the new marketing may be a cliché but is undeniable for personal service propositions where the meet, like, know and trust model is the status quo. Linkedin replicates this model on-line and gives firm the opportunity to establish creditability by contributing to on-line conversations. To use another networking model think about it as visibility and creditability as a route to profitability, just remember the extra effort you need to make on-line to ensure that you engage potential customers.
The opportunities are out there to stand above the crowd. Competitors such as supermarkets and banks may try to enter the traditional markets of professionals but as long as professionals are competitive, proactive and focus on where the value is for them (and their clients) the future is not all doom and gloom.
HMRC again fell well short of convincing the Tribunal of their contentions that IR35 applies in the recent decision of Marlen Ltd, represented by our sister division, Accountax Consulting. The case under appeal was in relation to engineering services provided by Marlen Ltd, and Mr Hughes, to two JCB divisions under a series of contracts. Accountax argued that this was a situation where the IR35 legislation did not apply and the Tribunal emphatically agreed with Accountax!
It was Mr Hughes’s flexibility in terms of hours, holidays and absences that the Tribunal found to be markedly different to employees and, when considered in light of all the elements within this important factor, concluded the degree of control was not sufficient to constitute a contract of employment.
HMRC’s contentions that mutuality of obligations existed within each contract (having accepted there was no on-going mutuality) also bore no reflection of the facts. Crucially, and as in the case of MBF Design Services Ltd, Mr Hughes, as all contractors, had been sent home without pay when the computers were down. In addition to early terminations by both parties during the course of the engagements, the evidence was compelling that this was a case where no mutuality of obligations existed. In summarising all the factors, the Tribunal did not find one single aspect which was consistent with a contract of employment.
With such a string of defeats one asks whether HMRC will change their approach to IR35 cases, since it is becoming increasingly apparent that the cases they are choosing to pursue are not within the ambit of IR35
Hooray some heat in the UK at last!! Please see our employer’s tips to overcome the negative effects of hot temperatures in the workforce and the environment given we don’t have any legal maximum for working in the heat in the UK.
Suggestions to help keep things calm:-
• Invest in fans where needed and allow windows to be opened wherever possible.
• Move desks away from windows in direct sun light, draw the blinds or consider the benefits of reflective film on the windows.
• Allow staff to take more frequent breaks, especially those doing physical work.
• Provide a ready supply of cool drinks.
• Consider a flexitime system so employees have the option of avoiding the rush hour commute.
• Reconsider your dress code: for example are your male office workers still expected to wear a shirt and tie? And your female staff expected to wear tights? Consideration of a two-tier dress code, in-house and for external meetings. Don’t forget to be gender neutral, as you’ll have seen in the press claims have been won for discrimination in dress codes.
• For outside workers, don’t forget risk assessments. Involve your employees in reducing risks. For example hats and sun cream in very sunny weather, or ways of providing shade in areas where individuals are working.
• Keep an eye on your absence rates! Some maybe bona fide for example eczema and hay fever, however short-term absence rates can increase hugely during spells of nice weather… So don’t forget to monitor attendance, it’s very costly and can easily be managed through effective communication, monitoring and pro-active management.
• The cost of dehydration can result in decreased energy and lower performance. Being just 2% dehydrated can reduce concentration levels by up to 20%. The “Keep It Light!” health campaign aims to educate us and encourage healthy habits. For more details see: http://www.keepitlight.org
Working in hot temperatures can increase stress, irritability and reduce productivity. 1,500 employees employed by a recruitment firm, reported that not only does the heat stifle creativity (according to 78%), but it stops people from getting the job done, causes confrontation in the workplace and reduces concentration and productivity levels. 81% found it difficult to concentrate if the office temperature is higher than the norm and 62% admitted that, under hot conditions, a typical task may take up to 25% longer than usual to complete. – Source Office Angels.
Further guidance
If you’d like your company dress policy refreshed or created, or you’re in need of support then why not take us up on our current offer of 90 minutes free support? Are you ready to start? Call us on 01562 745747 or email us info@rapportstore.co.uk.
