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Quarterly snapshot for business owners who want to be in the know December 2018
Marketing Ideas from Spinning Around at a Music Concert...
One of my guilty pleasures is live music!! I would hate to add up all that I’ve spent on gigs, concerts and festivals over years, although the memories I have from these events is priceless.
had been split into two. The section around the stage had been partitioned off for her super fans... those that were willing to pay extra to get a better view of the tiny pop princess.
All my snapchat and Facebook friends will already know that last week I went to see Kylie Minogue in Manchester. This isn’t the first time I’ve seen her; over my daughter’s 24 years we’ve seen her 9 times.
This is another example of the 80/20 principle. If you haven’t heard of Pareto’s principle there is a blog that explains it well (search online for it) and see how Pareto saw that there was a 80/20 rule in most things.
This time though I noticed something new. The arena had the usual seating and standing arrangements however the standing section
This means that 20% of your clients will generate 80% of your income. The highest 20% of your clients will take up 80% of your
TI Accountancy: Tip The Wink - Dec 2018
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Marketing Ideas from Spinning Around at a Music Concert... time. So in short you can guarantee that if you offered a higher value product, 80% would continue to pay the lower price but 20% of clients would be willing to pay for a higher value service. Other businesses have been doing it for years … first class on trains, priority boarding on flights. None of these costs the companies much, if anything, in service but add profit direct to their bottom line. Whatever your business you can add a premium service into your offerings, think of things that won’t eat into your cost of sales but offer value to your client. If you’ve been to Alton Towers you’ll have seen this working well with their queue jumping tickets. Each person that is going on the ride would have still paid for a ride ticket, but those that don’t want to wait in a long queue can pay extra to “jump the queue” and get on sooner. This
has zero cost to the park but value to the paying visitor. Just like sectioning off the stage at the Kylie concert, all those people would have attended the concert anyway but for the price of a few barriers those who wanted to make sure they were close to the Australian singer paid extra to do so. Once you’ve worked out your own equivalent of this you’ll find 20% of your customers choosing the higher value product. Just think what this could do your profit margin!! So why don’t you get your thinking cap on and figure out your premium product instead of just wishing that “you should be so lucky”!
Tracy x
Do you know if you’re entitled to a £900 tax break? Are you married or in a civil partnership? If so you may be entitled to a £900 tax break called the marriage tax allowance. It is estimated about one million couples are still missing out!
Are you one of the millions of people who are eligible but haven’t claimed yet? To find out what it is and how it works, read on!
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What is the Marriage Allowance?
The allowance can be claimed by married couples or those in a civil partnership. The allowance allows couples to transfer 10% of one partner’s tax free personal allowance to the higher earning partner each year. So in 2018/19 tax year this would be £1,185, therefore potentially cutting the higher earner’s income tax by up to £238.
Who is eligible?
Eligibility depends on how much you earn. The allowance can only be transferred if: • One partner has a total income of £11,850 or less and, • The other partner is not a higher rate or additional rate tax payer (earning £46,350 or less). So basically one partner must be a non-taxpayer and the other a basic rate taxpayer. The non-taxpayer transfers 10% of their personal allowance for the tax year in question. Please be aware that if the non-taxpayer has already used part of their personal allowance and the 10% transfer tips them over the £11,850 threshold, they will have to pay tax on the difference! How to apply?
You will need: • National Insurance number for both partners • Proof of identity such as payslip details, p60, passport details or the bank account number where you receive any benefits / tax credits / pensions etc. Assuming the application is successful, HMRC will provide the taxpaying partner with the extra allowance by changing their tax code, or
when they submit their Self-Assessment Tax Return. Once it has been processed (this can take up to 2 months), the change will be backdated to the start of the current tax year. If you are eligible to claim the allowance, your claim can be backdated to include each tax year since 2015/16 when the allowance was first introduced. In 2015/16, the allowance was worth £212, in 2016/17 it was worth £220 and in 2017/18 is was worth £230. So, assuming you’ve not made any claim to date, you could be eligible for a tax refund of £212 + £220 + £230 + £238 = £900 in total! How long can you claim for?
HMRC will continue to pay the allowance unless you inform them that your circumstances have changed e.g. if your get divorced, your civil partnership is dissolved or if your partner dies. So why don’t you check to see if you qualify for this up to £900 tax break? If you would like any further clarification please do not hesitate to contact us.
Lucy www.tiaccountancy.co.uk
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A Company Profile Virginia House is an 8 bedroomed guest house in Ulverston, Cumbria owned by Craig and Louise Sherrington. The guest house also offers a Brasserie style restaurant, Craig’s Kitchen, and intimate gin bar. Craig and Louise first started running their own business in 2010 when they took on the tenancy of a local public house, the General Burgoyne, in nearby Great Urswick. Although Craig had been a chef for more than 15 years he had never run his own business and Louise was then a Biomedical Scientist in Haematology and Transfusion Science at Furness General Hospital. They felt a tenancy was a risk free way of seeing if they could run a successful business together. Armed with a five year plan, they fruitfully turned the Burgoyne around from an ailing country pub into a popular destination for food pub. After this achievement they decided to go it alone, jumped in with both feet and bought Virginia House on Queen Street in Ulverston. When they moved into the property there was no bar or restaurant on the premises although there was plenty of space for both, so they decided to drag Virginia House, kicking and screaming into the 21st century - renovating each of the bedrooms and establishing a bar and restaurant on the ground floor. Louise lists marketing as the biggest challenge they have faced while growing
TI Accountancy: Tip The Wink - Dec 2018
their business. If you are a small business that cannot afford to pay for PR opportunities, then it is very difficult to get press coverage when you are consistently achieving and doing well. She also feels that reducing VAT for hotel accommodation and restaurant food service would help the industry as a whole. She believes 20% absolutely cripples hospitality businesses and shows a real lack of value to the industry in comparison to our European counterparts where a job in hospitality is considered a career. She said that so many times their staff are asked "what do you want to do when you get a proper job!" in the assumption that hospitality is just a stop-gap job! Strange really when everyone wants to eat and drink out, and expects great service - yet you only get that from a professional....!? Also getting the right message out to the public and managing their expectations, presumptions and mis-conceptions is a struggle. As a true restaurant, Louise thinks that with the abundance of pub restaurants and 'world food' eating establishments people often get confused at what Craig’s Kitchen offers. Craig and Louise’s motto is "Expect the Unexpected", Craig's food is creative and quirky and they love surprising their guests. They want to be at the top of the list when people think about celebrating birthdays, anniversaries and special occasions, yet by also offering an Early Bird Deal we also fit into the 'date night' category or a 'girls catch up' type night out! A highlight of achievements for the restaurant has been achieving and maintaining 2 AA Rosettes for Culinary Excellence - they're the
only restaurant in the area with 2 rosettes. They've gained entry into Waitrose Good Food Guide (aka The Foodie Bible) with a cooking score of 5 - meaning that these accreditations put them in the top 2% of restaurants in the entire country! Craig also competed in BBC2 Great British Menu 2018, representing the North West regional and making it through to the final. His main course of Penny Bridge Dexter Beef with shin beef, cabbage and truffle was awarded a perfect 10 by all 4 judges on the regional final and then again 4 10's by the national finals judge panel, but narrowly missed making it all the way to the banquet. As you can imagine Louise and Craig don’t get a lot of spare time, but when they do, they love to spend time with their daughters and do the fun things they love to do like running around
on the beach, going to the cinema, going to places like Chill Factore in Manchester or simply cuddling up on the sofa, watch a bit of tv with some 'scooby snacks' as the girls say! They also have big plans for some community and charity events bringing celebrity chefs to the area too!! Virginia House is fairly new to client to TI Accountancy and are still settling in. In the past they feel they may have chosen accountancy firms which were more focused on corporate companies but now feel, since TI Accountancy are primarily a bookkeeping company, they feel their needs are catered for (pardon the pun) by having a much closer, more down to earth relationship and feel they can ask questions without being made to feel stupid by some corporate accountant in a grey suit!
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Do you need Employers’ Liability Insurance for your Sub-contractors?
Itemised payslips are you compliant with upcoming legislation?
As the law doesn’t provide a definition, it can be difficult to determine whether a sub-contractor status is bona-fide or labour only and you need to clarify this to ensure you have the correct insurance for your business.
Are you an Employer paying employee’s a fixed salary? There’s only 5 months to go until the new legislation comes in that requires all employees to be provided with itemised payslips.
If a sub-contractor is a labour-only sub-contractor (LOSC), then you need Employers’ Liability Insurance to cover them.
On the 8 February 2018, a new statute was laid before Parliament: The Employment Rights Act 1996 (Itemised Pay Statement) (Amendment) Order 2018.
If they are a bona-fide sub-contractor (BFSC), you do not need this cover.
Currently, under section 8 of the 1996 Act, an employer only has to include:
Labour-only sub-contractors, hired people and self-employed people embedded within your business, working for you and under your control are considered as employees. If they are not directly working for you or under your control and have their own insurance, they are BFSC. If you are unsure how to class your sub-contractor status, answer the following questions:• Are they paid by the hour, week or month? • Can they receive overtime payments? • Do you supply their materials and tools (perhaps small hand tools) in order to work? • Do they have to carry out the work themselves and not have someone sent in their place? • You can tell them what to do, where to work and how to do it at any time? • Are they able to work a set amount of hours?
TI Accountancy: Tip The Wink - Dec 2018
Can you move them from one job to another? If you have answered Yes to most or all of the above, then the worker is probably a LOSC and you would need Employers’ Liability Insurance. The Health and Safety Executive (HSE) enforces the law on Employers’ Liability insurance and HSE inspectors can check that you have an Employers’ Liability insurance, with an approved insurer, for at least £5 million. They may ask to see your certificate of insurance and other insurance details. You can be fined up to £2500 for any day which you are without suitable insurance. If you do not display the certificate of insurance or refuse to make it available to HSE inspectors when they ask, you can be fined up to £1000. If you wish to discuss this further or would like a quotation for this cover, please contact me on 01229 490341 or sarah@tiaccountancy.co.uk
Sarah
• The employee’s gross wage; • deductions from the gross amount; and
In all these cases, the employee will be able to use their payslip as evidence. What action you need to take as an Employer? Before the order comes into place employers should: Ensure payroll processes are adjusted to collect the new information required; and Amend the format of their payslips to include this new information, where appropriate. If you feel you may not be complying with this new legislation and would like some advice then please do not hesitate to contact us.
• the net wage received. From April 2019, when the new legislation is put in place, provide itemised payslips on which the employer must include: • the hours worked for which payment is being made; or • give separate figures for different types of work, worked or where different rates of pay are paid for the work done.
Kelly
Puzzle
The aim of the Order is to increase transparency over whether employees are paid correctly and to address the issue of underpayment. An employee will be able to see, when they read their payslip, whether the number of paid hours matches their understanding of how many hours they have worked. Employees can then: • challenge their employer if they think their payslip is wrong; • alternatively raise a case with the Advisory, Conciliation and Arbitration Service (ACAS); or • raise a case with HMRC (if the National Minimum Wage has not been paid). www.tiaccountancy.co.uk
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