I had created this vision for something that might happen in the future, which was a complete horror story for my business and my life. Enter Alan, who provided another perspective, grounded in fact and logic. I chose his route and I am pleased to say that my personal horror story didn’t end the way it could have in my head.

As a business owner, whether you are running a new start up or a business that has been around for generations, sadly you can, quite easily, become the director, producer, scriptwriter and actor of our own horror story.

Talking to Alan, Scary movie land is a land of perception, a self-created perception that has a massive impact on how we feel, how we act, what decisions we make and ultimately how we perform. Part of this self-creation stems from the context we create and the language and words we use to describe a situation we find ourselves in. I was describing my situation as one where I wasn’t going to have enough money to pay back what I owed. It was catastrophic; it was the end of the world. In that context I was seeing myself as a failure, it was muddying my emotions, it was slowing me down and I was becoming limited.

To break the funk I was in, Alan encouraged me to talk about the service I wanted to give, my purpose for creating Cypher, the offer I was making to the world and how I wanted to inspire people through what I thought was possible from an accountant. It was a powerful moment. It helped me to reconnect with my passion and reminded me why I created Cypher in the first place. Of course, I had to keep a level of clarity on what needed to happen to pay the money back, but logic and the business financials showed me the likely end of the movie. Spoiler alert…we are still going strong.

One way to explain my self-perception is that the mind is a powerful thing that is designed to protect you. It is hard wired to make you pull back every time you get too close to the edge. It throws up all the possible negative outcomes to ultimately keep you safe in the status quo. But once you see passed that, see what’s likely, what’s possible even, then the weight off your shoulders is significant.

To help get a different perspective, Alan describes four domains through which one can view any situation. They are Logical, Emotional, Spiritual and Structural. Needless to say the more balance we can achieve, the more developed we are in each of these domains, the better our decision-making and the better our performance as we let go of the baggage that is dragging us down.

I was stuck in the emotional domain, which was draining my energy and limiting my performance, Alan, urged logic – and financials – to frame my context in a better way. A more accurate way in fact. He also reconnected me with my purpose through the spiritual domain and because of the structures we had already put in place at Cypher, we had created the ability to thrive.

To prevent your business’s movie from having a horrible ending and add a different perspective to your context, both Alan and I recommend creating partnerships with other professionals. To keep the movie metaphor going, they can become your supporting cast and crew. This could be a business coach, a marketing consultant or an accountant who can each give you access to new expertise, a new perspective that can help guide you.

Secondly, try to connect with your emotion, be clear what is it you are feeling, own it and be prepared for an honest answer. You might be too scared to look in the metaphorical basement because there may be a scary monster in there and you don’t want to confront it. Stay true to the intent you had at the start of getting better at whatever you do and suddenly you will access more useful insight and do less ruminating. Alan always recommends using your emotion to help you.

A trick Alan shares on the podcast is that if you use language like ‘I worry that’…for example; ‘I worry that I won’t sell enough’ or ‘I worry that my clients aren’t happy’, guess what, you are rewarded with a lot of worry. Instead, change your language to ‘I wonder how….’ So, for example; ‘I wonder how I can deliver a better service’, ‘I wonder how I can compete with bigger businesses and win more profitable clients’, then you will be rewarded with a more creative mindset, you will feed your purpose, which is liberating.

Another example of this change in mindset is giving bad news. Sometimes you have to have difficult conversations or give a client bad news. It is unavoidable. In my experience those conversations are never ever as bad as you think they will be. You build them up to be another brutal scene from your horror movie, when in reality they aren’t. As business owners, we have to be comfortable with the fact that not every interaction will go perfectly, not everything will be optimal every time. The important thing is recognising that generally it isn’t as bad as we think it will be and then doing something about it. Don’t fixate on the ‘what ifs’, think, ‘what else’.

Alan says we have around 6000 conscious thoughts a day (Google it). Not all of them are spent in the present. A percentage of these will reminisce in the past, while others will transport us to the future we have created- good or bad. If we accept this and come up with an accurate way to explain the situation, past, present or future while remaining true to our intent then it will change our context, change our perception of ourselves. it will change you into more joyous passionate emotions your axe bolder and your create better things for both yourself your business and your clients. Remember we create our own experience.

So much anxiety for business owners stems from a desire to make everything perfect; every client interaction, every piece of work. In reality that will never happen and often you don’t have to be the best in the world at what you do, but you need to be good enough. We have around 200 clients in our business and if three had an issue, this would have kept me up at night. In reality if I speak to them directly two may not see their issues as that big, the other may have a genuine concern, but the important thing is that by addressing it, understanding it, we will do something about it thus preventing the catastrophe we have predicted.

In summary, we called the podcast ‘Don’t create your own business horror story’. This title was based on the premise that perception and context are all self-created. How we describe a situation to ourselves is often how it will turn out. Identify the emotions you are experiencing about a context and try to view it through a new lens, ideally with the help of someone else. Getting clarity about the context and the situation can move you away from negative thoughts and lead to higher performance. Open the basement door, take a torch with you and confront the monster. It is unlikely to be as big or as scary as you think.

There is a large waiver that accompanies this blog. If you do find yourself in a rickety old house, isolated on the moors and you hear a banging under the floorboards, don’t go down there. In this context horror movie rules do still apply!

Before today’s announcement he was clear that he would focus on three areas in particular; protecting jobs, protecting businesses and protecting the housing market. Our initial thoughts are that it feels like it’s a budget that is good for business and particularly small business which is the majority of our client base.

Along with the extension to the furlough scheme until the autumn and a freeze on personal tax allowances, three things stood out for us in the details of the speech, the widely anticipated Corporation Tax increase isn’t as bad as predicted, the super deduction and increases in capital allowances will represent massive savings for businesses that invest in plant material or electric car fleets and with the potential for an even bigger impact is the news that the loss carry back period for businesses has now been extended.

Let’s start with the Corporate Tax Rate rise to 25%

To balance the need to raise revenue with the objective of having an internationally competitive tax system, the rate of corporation tax will increase from April 2023 to 25% on profits over £250,000. The rate for small profits under £50,000 will remain at 19% and there will be tapered relief for businesses with profits under £250,000 so that they pay less than the main rate.

Firstly, the rate isn’t going up until 2023, so that does offer businesses the chance to bounce back somewhat after Covid, and realistically, I think 90% of small businesses will not be paying the new headline 25%. A huge amount will remain on the 19% rate they are paying now while under the new tapered system, the rest will be somewhere between 20 and 23%. Interestingly, under the previous budget, pre-Covid, the corporation tax rate was due to be going up past19% anyway. The flat rate was going up to 20, 21 and 22% over the next few years. So actually a number of small business with profit below 50K could look at this like a tax cut!

Linked into this is the super deductions capital allowances scheme.

From 1 April 2021 until 31 March 2023, companies investing in qualifying new plant and machinery assets will benefit from a 130% first-year capital allowance. This upfront super-deduction will allow companies to cut their tax bill by up to 25p for every £1 they invest, ensuring the UK capital allowances regime is amongst the most competitive in the world.

For businesses that buy plant machinery, electric vehicles or anything that capital allowances would normally apply to, or anything you would have got annual investment allowance for this is huge.

The chancellor has also removed the annual investment allowance limit. It was £1m which sounds like a lot but we have agricultural clients that can easily spend that in a year. It now appears the £1m limit has been abolished, and there is another 30% added to the tax relief you can claim.

The final and possibly biggest news of the day is the extended loss carry back for businesses.

To help otherwise-viable UK businesses which have been pushed into a loss-making position, the trading loss carry-back rule will be temporarily extended from the existing one year to three years. This will be available for both incorporated and unincorporated businesses.

In addition:

• Unincorporated businesses and companies that are not members of a corporate group will be able to obtain relief for up to £2 million of losses in each of 2020-21 and 2021-22
• Companies that are members of a corporate group will be able to obtain relief for up to £200,000 of losses in each of 2020-21 and 2021-22 without any group limitations
• Companies that are members of a corporate group will be able to obtain relief for up to £2 million of losses in each of 2020-21 and 2021-22, but subject to a £2 million cap across the group as a whole

At present if you make a loss in any given year, you can carry back that loss against profits you made the previous year. So let’s say you made £100,000 profit and paid £19,000 in tax last year, but this year you lost £50,000. Under the old rules you could carry that £50,000 loss back and get half of your £19,000 of tax back.

The new rules mean that we can go back two years.

So, if you made £50,000 of profit last year, but due to Covid you made a substantial loss of £100,000 this year, under the old scheme you would be unable to go back and recover the £50,000 loss over and above last year’s profits.(instead you would have to carry the rest of the loss forward against future profits). Now you can carry all of the losses back against profits last year, and if necessary go back to the before that and use any of the profits there. And if there are still losses that haven’t been relieved, at that point you can go back to the year before. Any regained funds will come in as a tax refund, which could represent a massive cash flow injection for a number of businesses.

There was also good news for a number of the sectors we support. The chancellor announced the up-to-£500,000 “nil-rate band” for stamp duty will finish at the end of June, rather than the end of March, as planned, which will continue to drive activity in the housing market.

The government will also provide ‘Restart Grants’of up to £6,000 per premises for non-essential retail businesses and up to £18,000 per premises for hospitality, accommodation, leisure, personal care and gym businesses, giving them a level of cash certainty to plan ahead and safely relaunch trading over the coming months. The government is also providing all local authorities in England with an additional £425 million of discretionary business grant funding, on top of the £1.6 billion already allocated. We will work with clients in these sectors to access these funds as they need them.

What is it?
Domestic reverse charge (DRC) is a new way of accounting for VAT, it will apply to all VAT registered construction businesses in the UK. The new legislation is being introduced as an anti-fraud measure, it intends to cut down on the ‘missing trader’ fraud, where companies receive high net amounts for VAT from their customers but have no intention of paying the VAT to HMRC.

From Monday 1 March 2021 the domestic VAT reverse charge must be used for most supplies of building and construction services.

The charge applies to standard and reduced-rate VAT services:

• for individuals or businesses who are registered for VAT in the UK
• reported within the Construction Industry Scheme

What does it mean for you?
Firstly, please do not panic, put simply, the new legislation moves the VAT liability from the supplier (subcontractor) to the customer (contractor) but also not always, only if certain criteria is met, so please read on and we hope this document helps. There is a lot of information included here, so please do not hesitate to contact us if a call would be useful.

If you are a CIS subcontractor you will no longer charge VAT to your CIS customers. Instead, on your invoices you need to state your customer is responsible for the VAT and show what VAT rate should be applied.

If you are a CIS contractor when you receive a bill from your CIS subcontractor you are responsible for reporting both the input and output VAT on that bill.

This change may impact your cash flow. If you are a subcontractor then it’s likely your short term cash flow will be adversely impacted as you will no longer be receiving the VAT element from your customer. If you are the contractor, you will likely have a short term cash flow benefit.

Good News
If you are on Xero, they are ready and the movement to DRC will be pretty straight forward. Once we get our heads around when we charge who for what, Xero will handle the VAT return calculations with the introduction of the new tax codes. We will make these live for you and you will see these available for use from Monday. By using these new tax codes your sales invoices will be prepopulated with the required note that no VAT is charged under the domestic reverse charge. It also applies the correct treatment itself on the return, where the amount basically goes in quite a few boxes and would otherwise give us all a headache, so thanks Xero for making this step easier!

For most, this is another scheme that you will not need to know much about. VAT loves schemes and there are quite a few around, but it is something we need to bear in mind so we are hoping this fact sheet will just make life a little easier.

Finally, we are obviously on hand if you would like to talk through any of this information or if you would like us to go through your first invoice under the scheme together please do not hesitate to contact us and we are more than happy to talk.

HMRC understands that implementing the reverse charge may cause some difficulties and will apply a light touch in dealing with any errors made in the first 6 months of the new legislation, as long as you are trying to comply with the new legislation and have acted in good faith.

If you would like to talk to HMRC their contact details are:

CIS Helpline on 0300 200 3210 (or +44 161 930 8706 if outside the UK).

VAT Helpline on 0300 200 3700 (or +44 2920 501 261 if outside the UK) for any uncertainty or clarity on whether the reverse charge applies.

Let’s understand if the work you are carrying out is subject to DRC?

When you must use the reverse charge
You must use the reverse charge for the following services:

• constructing, altering, repairing, extending, demolishing or dismantling buildings or structures (whether permanent or not), including offshore installation services
• constructing, altering, repairing, extending, demolishing of any works forming, or planned to form, part of the land, including (in particular) walls, roadworks, power lines, electronic communications equipment, aircraft runways, railways, inland waterways, docks and harbours, pipelines, reservoirs, water mains, wells, sewers, industrial plant and installations for purposes of land drainage, coast protection or defence
• installing heating, lighting, air-conditioning, ventilation, power supply, drainage, sanitation, water supply or fire protection systems in any building or structure
• internal cleaning of buildings and structures, so far as carried out in the course of their construction, alteration, repair, extension or restoration
• painting or decorating the inside or the external surfaces of any building or structure
• services which form an integral part of, or are part of the preparation or completion of the services described above – including site clearance, earth-moving, excavation, tunnelling and boring, laying of foundations, erection of scaffolding, site restoration, landscaping and the provision of roadways and other access works

When you must not use the reverse charge
Do not use the charge for the following services, when supplied on their own:

• drilling for, or extracting, oil or natural gas
• extracting minerals (using underground or surface working) and tunnelling, boring, or construction of underground works, for this purpose
• manufacturing building or engineering components or equipment, materials, plant or machinery, or delivering any of these to site
• manufacturing components for heating, lighting, air-conditioning, ventilation, power supply, drainage, sanitation, water supply or fire protection systems, or delivering any of these to site
• the professional work of architects or surveyors, or of building, engineering, interior or exterior decoration and landscape consultants
• making, installing and repairing art works such as sculptures, murals and other items that are purely artistic signwriting and erecting, installing and repairing signboards and advertisements
• installing seating, blinds and shutters
• installing security systems, including burglar alarms, closed circuit television and public address systems

Subcontractors – what do you need to do?
Life just got a little simpler for you! If applicable you do not need to charge VAT, you just need to state on your invoices that your customer is now liable for the VAT and you just state if this is at 20% or 5%. Do this in Xero by using the appropriate tax rate when creating a sales invoice and they does the rest! Now let’s look at who this will apply to:

The reverse charge will need to be used if you sell building and construction services when:

• your customer is registered for VAT in the UK
• payment for the supply is reported within the Construction Industry Scheme (CIS)
• the services you supply are standard or reduced rated
• you’re not an employment business supplying either staff, workers or both
• your customer has not given written confirmation that they’re an end user or intermediary supplier

If the criteria above is met – What you now need to do:

1. Check if your customer has a valid VAT number.
2. Check your customer’s CIS registration.
3. Review your contracts to decide if the reverse charge will apply and tell your customers.
4. Ask your customer to confirm whether they are an end user or intermediary supplier with a written notification, as discussed below
5. Record the invoice in your accounts with the correct VAT treatment.

As a subcontractor you should also be aware that your customers will no longer be paying you VAT, which will reduce the gross value of payments coming into your business, as no VAT will be due on payments from customers where the supply is covered by the reverse charge. So you’ll need to consider and plan for the impact of this on your day-to-day cashflow. On the bright-side though, you aren’t having to worry about a large VAT bill when the VAT you have been collecting for HMRC is due!

What if the criteria is not met – Who does the reverse charge NOT apply to?
The reverse charge does not apply to any of the following customers:

• A non-VAT registered customer
• ‘End users’ i.e. a VAT registered customer who is not intending to make further on-going supplies of construction
  • For reverse charge purposes consumers and final customers are called end users. They’re businesses, or groups of businesses, that are VAT and Construction Industry Scheme registered but do not make onward supplies of the building and construction services supplied to them.
  • The reverse charge does not apply to supplies to end users where the end user tells their supplier or building contractor in writing that they’re an end user.
• ‘Intermediary suppliers’ who are connected e.g. a landlord and his tenant or two companies in the same group
• Overseas customers – it only applies to UK companies providing building and construction services in the UK

If you supply services that are not subject to the reverse charge, for example to private individuals or end users, you must account for VAT as you did previously, either standard 20% or reduced rate 5%.

In order to confirm if a customer falls under end user or intermediary suppliers HMRC request that you receive written notification in the form:

• on paper and sent by post
• electronically in an email
• in a contract

The notification should be kept as part of normal business records and show clearly what supplies are covered. Contracts can be either for specific supplies or it can be a Heads of Agreement or call-off type contract for supplies that are to be made at some time in the future.

If a written notification is not made correctly the customer will be liable for accounting for the VAT that should have been charged under the reverse charge. It’s important that the person making the notification knows and understands that it’s correct.

An example of the wording to obtain for the written notification is:

‘We are an end user for the purposes of section 55A VAT Act 1994 reverse charge for building and construction services. Please issue us with a normal VAT invoice, with VAT charged at the appropriate rate. We will not account for the reverse charge.’

The below flowchart has been provided by HMRC to help determine whether the supply is DRC or normal VAT rules applies:  

Contractors – what do you need to do?
Life just got a little better for you, you should notice the difference of the scheme with a short term cashflow boost. If applicable, subcontractors will not be charging you VAT so you will not be paying it over to them when settling their invoice (everyone likes to hold on to their cash a little bit longer)!

The reverse charge will need to be used if you buy building and construction services when:

• payment for the supply is reported within the Construction Industry Scheme (CIS)
• the supply is standard or reduced rated
• are not hiring either staff or workers, or both
• you’re not using the end user or intermediary exclusions

If you receive a service subject to the reverse charge from subcontractors you’ll have to account for the VAT in your VAT Return and recover it simultaneously on the same VAT Return, subject to the normal rules on VAT input tax deduction.

If the criteria above is met – What you now need to do

1. Check if your supplier has a valid VAT number.
2. Tell your supplier if you’re an end user or intermediary supplier, as the reverse charge will not apply.
3. Find out how to account for the charge.

Once you’ve confirmed your accounting systems and software can account for the reverse charge, you’ll need to:

• make sure the invoice you receive is correct
• check the list of services that must use the reverse charge
• record the reverse charge on your VAT return and reclaim it in the usual way

The Reverse charge does not apply to any of the following supplies:

• Supplies of VAT exempt building and construction services
• Supplies that are not covered by the CIS, unless linked to such a supply
• Supplies of staff or workers

The Reverse charge does not apply to any of the following customers, you as a contractor to a subcontractor:

• A non-VAT registered customer
• ‘End users’ i.e. a VAT registered customer who is not intending to make further on-going supplies of construction
  • For reverse charge purposes consumers and final customers are called end users. They’re businesses, or groups of businesses, that are VAT and Construction Industry Scheme registered but do not make onward supplies of the building and construction services supplied to them.
  • The reverse charge does not apply to supplies to end users where the end user tells their supplier or building contractor in writing that they’re an end user.
• ‘Intermediary suppliers’ who are connected e.g. a landlord and his tenant or two companies in the same group
• Overseas customers – it only applies to UK companies providing building and construction services in the UK

Telling your supplier (subcontractor) that you are an end user or intermediary supplier:
In order to confirm if you as a customer fall under end user or intermediary suppliers, HMRC request that you provide written notification in the form:

• on paper and sent by post
• electronically in an email
• in a contract

The notification should be kept as part of normal business records and show clearly what supplies are covered. Contracts can be either for specific supplies or it can be a Heads of Agreement or call-off type contract for supplies that are to be made at some time in the future.

If a written notification is not made correctly the customer (you) will be liable for accounting for the VAT that should have been charged under the reverse charge. It’s important that the person making the notification knows and understands that it’s correct.

An example of the wording to use for the written notification is:

‘We are an end user for the purposes of section 55A VAT Act 1994 reverse charge for building and construction services. Please issue us with a normal VAT invoice, with VAT charged at the appropriate rate. We will not account for the reverse charge.’

The subcontractor should report on their invoice to you what rate the reverse charge is applicable, please be aware this can be standard 20% or reduced rate 5% depending on the service and supply.

The below flowchart has been provided by HMRC to help determine whether the supply is DRC or normal VAT rules applies:

Are you using the Cash Accounting Scheme or Flat Rate Scheme?
You cannot use the VAT Cash Accounting Scheme for supplies of services that are subject to the reverse charge – VAT is due when a VAT invoice is issued (tax point) or the payment is received, whichever is earlier.

Reverse charge supplies are not to be accounted for under the Flat Rate Scheme. Flat Rate Scheme users who receive reverse charge supplies will have to account for the VAT due to HMRC and recover it simultaneously on the same VAT Return. Users of the Flat Rate Scheme will have to consider if it’s still beneficial to them bearing in mind that under the scheme they cannot recover VAT incurred on purchases of materials, overheads and so on.

In a blog at the start of the year, we wrote about the various options to defer Tax owed from last year. If you did decide to defer your VAT payments, due between 20 March 2020 and 30 June 2020 and still have payments to make, you now have three options. You can:

• pay the deferred VAT in full, on or before 31 March 2021
• join the VAT deferral new payment scheme – the online service is open and has been extended to 21 June 2021
• contact HMRC on Telephone: 0800 024 1222 by 30 June 2021 if you need extra help to pay

Over half a million businesses are thought to have deferred VAT payments last year, mainly due to the Covid Pandemic, but these businesses can now join the online VAT deferral payment scheme which has opened last month.

Under the VAT Payment Deferral Scheme, businesses have the option to pay their deferred VAT in equal, consecutive monthly instalments from March 2021 April, May or June 2021 without incurring interest. 

Payment Instalment options available

The date you join the scheme will determine the maximum number of payment instalments that are available to you.

The following table sets out the monthly joining deadlines (to allow for Direct Debit processing) and the corresponding number of maximum instalments (including the first payment):

Businesses need to opt-in to the VAT Deferral New Payment Scheme themselves; their agents can’t do it for them, while it is open between 23rd February 2021 and 21st June 2021. For those that opt-in to the VAT Deferral New Payment Scheme, this means that your VAT liabilities due between 20 March and 30 June 2020, will now need to be paid by 31 March 2022.

If you don’t pay your VAT, don’t opt in to the new scheme and don’t contact HMRC to discuss your situation, you may be charged interest or a penalty on the outstanding funds.

If you are still concerned about not being able to pay HMRC, speak to your accountant or ring this number and speak to the HMRC Coronavirus Helpline: 0800 024 1222 before 30 June 2021.

As the UK begins its journey on the roadmap the Prime Minister has set to come out of lockdown, it’s important that as a business- and a sector- we learn our lessons from 2020 and adapt accordingly. For the last 12 months we have tried to ensure that business owners know their options, understand the support that is on offer and that we are available for them.

The news and timing of joining 90 other local organisations in support of the club is slightly bitter sweet as during week two of the new sponsorship, the league that the Hoops play in; the Vanarama National League South was cancelled with immediate effect.

Clubs in the league had been asked to vote on their preferred outcome of the campaign after a £10m government grant expired last month. And 24 of the 43 sides in both the National Leagues North and South opted for the season to be declared null and void.

We know this is a massive blow for City, who were fourth in the table, unbeaten since December and wanted to play on.

But we remain optimistic. In the past 12 months, in particular, we have spent a lot of our time working with clients and business that have had to pause, close and then reopen after a period of furlough or due to lockdown. And that, along with the other 90 commercial partners I am sure, is what we intend to do for Oxford City.

The Business Club we are members of as part of our new deal gives business owners the perfect platform to share ideas and network with local organisations associated with the football club. Ultimately, being involved in the Business Club helps us help the club make a real difference to the local community.

We were buoyed by these words from Mick Livesey, Commercial Director, Oxford City FC.

“I am delighted to welcome Cypher as one of our latest commercial partners. I am so proud that our commercial partners are the best in the business, they have our back, and they support us. Alongside them, Oxford City is ready and willing to carry on being a vehicle for positivity in the community and a beacon of positivity for everyone in Oxfordshire. Anything in the future is possible.”

Our first episode was titled, Getting Started; obviously it was our first crack at a podcast, but getting started also reflected our thoughts that for entrepreneurs and new business owners 2021 is the year to get started!

At Cypher we see lots of people who have perhaps become disgruntled with their lot, sick of working for ‘the man’ and have decided to try it for themselves. We have also seen, throughout our towns, that traditional big high-street chains are struggling, so maybe, this year we will see a new generation of independent shops, cafes, and businesses reclaim our high streets.

Talking to Alan, he feels that there could be a great reset coming; a clearing of the way for new, independent businesses that bring high levels of service and diversity to their towns and cities. Entrepreneurship brings something different to the market; it’s inspiring.

Welcome to 2021, welcome to the New Entrepren-year!

But getting started is hard. We speak to a number of start-ups and typically, as employees who have worked in a business maybe in a key role, outside of their function the accounting, the marketing, the recruitment- in fact all of the back office functions have been done for them. Now as an entrepreneur, one of the hardest things to adjust to is that they are now responsible for everything. Usually this includes things they have never encountered before, for example, dealing with accountants, dealing with suppliers, dealing with marketing or keeping their business Facebook or personal LinkedIn profile up to date.

It can be great fun dealing with some of the more creative aspects of setting up a new business, choosing fonts for letterheads or getting your logo right and building a website for example, but there is also a lot fear for the future when we get started. It means we can terrify ourselves from day one.

One of Alan’s top tips for business owners to help them overcome this initial surge of terror is to really connect with the change they want to bring to the world; connect with their purpose. It allows them to put their time and energy into that rather than worrying whether anyone will like a LinkedIn update! Get real clarity on the product and service you offer and why you are doing it – the scary future is largely made up anyway!

Our second tip is to not be afraid to ask what you think is a beginner’s question. Everyone that has started a business has, at one time or another, been where you are. Everyone has to speak to an accountant for the first time. Everyone thinks they are asking silly question like should I be a sole trader or limited company, when should I register for VAT, how should I pay my Corporation Tax. Well two things to note here. One, no, they aren’t silly questions and two, everyone asks them!

Another, helpful context, at any stage in your business cycle, is to think more about the experience you create. Reconnect with the big, game changing idea you had in the first place and create the best service and experience for your clients. Don’t worry about the competition. It will help bring your anxiety levels down and it can be extremely liberating too.

This idea of creating a great experience doesn’t have to just apply to customers either, it can be a way you deal with suppliers, your network and as you grow the people that work with you in your business. You can create a wonderful end to end experience for your team and you can do this right at the start. Too many people focus on the customer journey but if the staff hate working with you, it will fall over pretty quickly.

It is also much better to build the systems for the business you want in 12 months from the start, while you are nimble. Otherwise, you will get really successful and have to change all of your systems and processes when you are really busy, which is painful. Or, another way to look at it is if you think small, you will stay small. If you don’t have the ambition to get to the next level your business will always just be a job for you. When you are looking for promotion, you dress for the job you want, so implement the systems you want for a bigger business.

There is a trap for every business owner is that they don’t create a business for themselves, they create a Job. Once the product or service is out there, then the next step is to take someone on. It isn’t a business until it is earning money when you’re not there. It is the big hurdle for many small business owners.

Alan calls this intent. If you start with the intention that you will implement the systems and structure, the culture and the service levels that helps you run a business and delight clients, you won’t have to worry that they will be able to evolve as you grow. You have all heard the adage ‘reach for the stars, you might hit the moon’, well this way of thinking allows a business owner to access a mind-set that stretches you, it makes you better and as you get better, more people talk about you and you do go to new levels without limiting yourself.

As a business owner, being the best version of yourself you can be, will get you to the stars, or at least the moon.

Another metaphor I have heard was likening a successful business to the Chard in London. It is a skyscraper visible from all over the capital. Look at it now and it looks very impressive. But when we see only the finished structure we forgets the fact – like a successful business – that it took 10 years to build and in that time there were mistakes and hardships and struggles. Another similarity is that it was built amongst other skyscrapers that already dominated the skyline. They were there to be seen, like other businesses already in your marketplace.

The start of this blog focused on a throwback to when high streets were dominated by small, independent, diverse businesses. Well in another trip down memory lane, we think the famous Lord Kitchener World War 2 image is apt. Right now your business community needs you! We know it can be tough to get started but the business landscape is ready for diversity.

In summary, to avoid the fear of failure, before you even start, get real clarity in your purpose, be absolutely clear on the offer you are bringing to the world and then get better at it. Get a mentor, get a coach, buy books, read and learn, because a fundamental truth is that the better your product and service the more people will buy it. Then build the systems and infrastructure for the business you want, not the one you have on day 1. Be agile, your business plan will change, it will evolve and that is good.

Ultimately remember that version 1 is better than version none!

Despite this, we have a lot of conversations with business owners who want absolute certainty about an idea or a proposal before they can progress it. Often when building a financial forecast, they are projecting a financial future for themselves, their families and want us to tell them that 100% what we project will happen. They want absolute certainty that if they take on three more hires, or open another office or venue that their business will make another £500,000. Sadly no-one can guarantee that level of certainty and so we encourage clients to focus on clarity.

Clarity is something we can control. We can be very clear on the product or service we’re going to deliver, we can get very clear on when we are going to do this and we can clear on why we are doing it, our purpose. With this clarity, we can maximize the possibility of a set of results. It’s still not a certainty but we are maybe moving into the realms of probability.

Craving clarity not, certainty was a wonderful topic to discuss with Alan Clark on the Mind your Business Podcast. Typically this conversation comes up a lot when we are business planning with clients. In every forecast, there is an element of the known and an element of the unknown. For the majority of businesses the large area of uncertainty is around sales. To counter this, we have precedents that help us predict what will happen; we look at past performance, we look at industry benchmarks for a particular product, we make sure that we have absolute clarity on costs such as overheads and wages and we know what a business owner wants to take out of the business. If we are clear on all of this then use probability and a bit of common sense and try to set realistic goals.

Global pandemics aside, if your sales haven’t fallen off a cliff in the last 12 months, then the likelihood is they won’t this year.

Clarity starts when you write down your plans. This scares a lot of business owners because as soon as you write down that you want to be a half-a -million-pound business or you want to take out a £30,000 dividend, you feel you have to achieve it and if you don’t then you will have failed. But if you don’t write it down you’ve never failed that’s just the human psyche at work.

In his coaching business, Alan has frameworks that he uses to describe this level of clarity for clients. One of his particular favourites is called V.U.C.A. V.U.C.A was originally coined by the American military to allow them to view the world in a certain way. It stands for Volatile, Uncertain, Complex and Ambiguous.

In the UK over the last 12 months against a backdrop of Brexit or the Covid pandemic, your markets might be volatile, uncertain, complex and ambiguous, but there is an antidote to this called V.U.C.A Prime. V.U.C.A Prime stands for Vision, Understanding, Clarity and Agility. We talked a lot about Getting Started on the Podcast and in a previous blog. We discussed how business owners could shoot for the stars to get to the Moon, but to get there they needed to be agile, flexible and allow a business to evolve over time.

Clarity brings control. Before any performance comes action. Clarity defines that action it allows you to act in a focused way. You’ve done your thinking, you know what you’re doing, why you’re doing it, how to make the product or service better, how to astonish customers, how to act, how to work with your team. All of this comes from clarity and that 100% has an impact on your performance.

During the pandemic, we have seen business owners that had clarity and who created action, while others were crippled by inaction. They were swamped with information, burdened by negativity, they didn’t know which way to turn and so we spent a lot of time trying to provide that clarity, looking forward to how businesses could get itself back out there, open up again and be a strong as possible.

Many of those that acted brought subtle changes to their business. They pivoted. They looked at their business and understood its purpose and what their customers wanted and needed from them. Some, for example decided that they didn’t need bricks-and-mortar but could still deliver their purpose. They retained the clarity on what they were trying to achieve. These businesses might find they will need to pivot a number of times over the next 4 or 5 years but that is ok.

As well as useful frameworks, Alan likes a quote too. He cites Werner Erhard, an American author and lecturer who says ‘what is undistinguished runs you’. It means that without clarity you are run by emotion. Emotion makes you unclear, runs you ragged and prevents you from creating your optimal levels of service for your customers.

If you are reading this and are unsure where to start, there are two elements that it is essential you have clarity on. The first is your financials; your costs, your margins, your overheads, your conversion rate. The second is your purpose. Take a piece of paper and write down all the ways that you can delight your clients, your customers and your team. Obviously, there is a lot more to running a business but even this small activity frees you to undertake an action and ultimately delight your customers, which ultimately has to be very positive for your business.

In summary, seek clarity not certainty. V.U.C.A is a lens through which you can interpret the world. It comes in two forms; volatility uncertainty complexity and ambiguous which is a way to describe the world or the business environment you find yourself in. The Antidote is V.U.C.A Prime, which stands for Vision, Understanding, Clarity and Agility. It’s about understanding what you want to bring to the world, the industry you are in, what your clients are looking for, the change that the world is craving and then adding clarity about what you are going to do about it.

Businesses can choose which payroll system to use and it will help record employees’ details, work out employees’ pay and deductions, report payroll information to HMRC and calculate statutory pay, for example, maternity or sick pay.

Payroll is a complex, time-consuming part of your business and payroll errors, such as late or incorrect pay slips, are a sensitive topic that can cause a lot of tension between employees and their employer. It’s a service that Cypher offers clients and Clare Haynes, who heads up our Payroll Team has noticed, more and more, that one element of the payroll requirement is managed less well.

When we manage the Payroll for a member of staff who is leaving the business, often, when we come to calculate their annual leave allowance, we find it isn’t managed well or accurate.

Often, in a small business, with a limited HR function, this information will be kept on a spreadsheet as a manual process, which leads to inaccuracies. This means that when we are processing a leaver for example, it is difficult to identify what leave they have accrued, what they have taken and what they are owed.

To avoid this, with our clients, we use a piece of software called BrightHR. It is smart software that can help manage this potential minefield.

All employees and workers can have time off with pay, but the amount varies between full and part-time staff. Workers are entitled to a minimum of 5.6 weeks is 5 x 5.6 = 28 days. The 28 days includes the UK’s eight bank holidays.

For part-time staff, holidays should be calculated pro-rata and be representative of their typical working week, so if they work three days a week the calculation is 3 x 5.6 = 16.8 days of annual leave.

And it affects agency workers individuals with irregular hours, or those on zero-hour contracts. Plus your employment contracts might include additional terms covering annual leave, such as:

• Additional days off for all staff
• Additional days off linked to the individual employee’s role or length of service
• Payment in lieu for annual leave not taken
• Rules for taking and accruing contractual annual leave while off sick or on maternity leave. (Remember, employees always accrue statutory annual leave in these circumstances).

We think it is good business practice to work out as soon as possible what an employee is entitled to, so your workers know what they have available to them when they start their role.

Right now, holiday entitlement may seem a trivial concern, but by law you must get it right. BrightHR automatically calculates employee holiday entitlement, even the awkward calculations like when a new member of staff joins during the holiday year. All staff entitlements auto-refresh when your new holiday year begins and it handles booking mandatory leave easily. Your employees can request a holiday and you can sign it off in seconds—even if you are all working remotely.

With so many work patterns affected by the COVID pandemic, another useful tool from BrightHR, we find is the shift scheduling software which is great for shift and rota planning. It avoids piles of paper rotas littering the office, which are pretty useless if colleagues aren’t even in the building. Everything you need is in one place in the people management hub.

Finally, for clients with multiple locations BrightHR also has a function that helps to easily track your employees’ work hours and locations. We know that whether your team is working from home or they’re back in the office, it’s difficult to stay on top of all of their hours. To make it easier, the software can create a clever ‘geofence’, which is a sort of virtual boundary around your chosen workplace. Then, when your employees enter or leave the ‘geofence’, it picks up their location and asks them to clock in or out—helping you to see exactly when your staff have worked and how long for. It means that employees clock in properly and keep track of their hours, so you pay for their allocated time and they get credit for the hours worked, wherever and whenever that is.

January is a very busy month for accountants, but it could get busier in the next few weeks. As the deadline looms for self-assessment tax returns at the end of January, HMRC reported earlier this month that nearly half of those due to file a return hadn’t done so.

As of January 4^th, HMRC had received 6.6m of the total 12.1m expected self-assessment tax returns due to be filed before the January 31^st deadline.

Due to the various lockdowns we have experienced since March, many people are still struggling to gather the data that they need – often from third parties to file these returns. However, as things presently stand, if you are not able to finalise your tax returns by the end of this month, you would be subject to automatic late filing penalties – even if there is no tax due.

VAT

In addition to the self-assessment payments, Government figures suggest that some £30bn of VAT payments were also deferred this year.

Up to half a million businesses are thought to have taken advantage of the COVID-19 VAT payment deferral scheme, which allowed them to defer VAT payments falling due between 20 March 2020 and 30 June 2020 until 31 March 2021. HMRC has recently issued guidance on the process of extending the deferral by a year to the end of March 2022.

Businesses choosing this route will need to opt-in to the scheme, and for those who do, this means that your VAT liabilities due between 20 March and 30 June 2020 can be split into smaller, interest free payments over the course of 11 months until March 31st 2022. Of course, those that can pay their deferred VAT can still do so by 31 March 2021.

The scheme will allow organisations to pay their deferred VAT in instalments without incurring interest charges and select the number of instalments from 2 to 11 equal monthly payments. To use it organisations must still have deferred VAT to pay, be up to date with VAT return declarations and be able to pay the deferred VAT by Direct Debit.

Time to Pay Arrangements

As well as deferring VAT payments, HMRC has allowed business owners to defer their Corporation Tax bills. For many, largely due to COVID, this was a chunk of money they don’t have. Paying out a large sum, in one go, could jeopardise cash flow so many have sought to put this off. If you are still unable to pay the VAT or Corporation Tax due and need more time, you can apply to HMRC for a Time to Pay Arrangement.

HMRC Time to Pay Arrangements (TTP) are structured payment plans for debt repayment over an agreed time period. Be aware that HMRC does not give these out lightly, but equally they do recognise that in certain circumstances businesses need help. In light of the impact that the Coronavirus (COVID-19) pandemic has had on so many businesses, across all industries, they may well be more permissive than ever as the Government recognises that it must does everything it can to help businesses through these challenging times.

HMRC has even set up a helpline for business owners, ready to offer advice and support. Usually, these TTP agreements come with a 3.5% penalty charge but, according to Chancellor Rishi Sunak’s autumn budget statement, this will be waived for the duration of the virus.

If you concerned about not being able to pay HMRC, speak to your accountant or make this number a first port of call.

HMRC Coronavirus Helpline: 0800 015 9559, Monday to Friday, 8am to 8pm, Saturday, 8am to 4pm

As the UK experiences another nationwide lockdown, it’s important that as a business- and a sector- we learn our lessons from 2020 and adapt accordingly. Since March we have tried to ensure that business owners know their options, understand the support that is on offer and that we are available for them. The whole point of offering a ‘you can get hold of us anytime service’ is that clients can actually get hold of us.