Posts Tagged ‘Cash’

VAT is the problem?

January 13, 2011

With thanks to my esteemed colleague, VAT expert John Voyez, for his insight. Any errors or omissions are entirely mine!

Well, what a lot of rubbish has been written in the press in the last week or two about the increased VAT rate – never let accuracy get in the way of a good headline !

Just for the record, there is no VAT on most children’s clothing, no VAT on most basic food items, no VAT on train, bus and airplane fares, no VAT on books, newspapers and magazines, no VAT on residential housing construction, no VAT on most drugs and medicines, no VAT on betting and gaming, no VAT on education, no VAT on insurance or financial services, no VAT on ordinary postal services, no VAT on most sport activities, no VAT on entry to museums, no increase in VAT on a range of items including children’s car seats, domestic fuel, contraceptives, energy saving equipment, products that help you stop smoking, and, finally, no VAT on cremation or burial (unlike other taxes, death is still VAT free) !

So post 4th January, it will not cost you a penny more at the weekend to slap on an anti- smoking patch, jump on the bus to go to Sainsbury’s where you can buy some clothes for the kids, and at the same time buy most of the weekly shop, including a copy of Sporting Life, before picking up some aspirin to ward of the headache for when you drop in at the bookies on the way home and lose your savings (accrued VAT free) on the 2:30 at Epsom, followed on Sunday by a game of football at the local sports centre in the morning, and a trip to the museum (because you feel you should at least do one thing educational at the weekend), before finally falling asleep in your newly built Wimpey home in front of your brand new 90″ plasma 3D HD TV screen you have just bought, which unfortunately did cost you 2.5% more in VAT.

And, just for the record, if you are still feeling hard done by, most of our EU counterparts have for many years been paying VAT at 20%, and in some cases at a rate well in excess of 20%!

So VAT, exactly, is the problem?

Advertisements

Ode to an Emergency Budget

June 23, 2010

George Osborne spoke, he set the scene….

The nation is in debt.

We’re broke and he will fix it,

Clearly no need to fret!

A billion here, a billion there,

We’ll find the money now.

The poorest will be better off,

But nobody’s sure quite how.

For entrepreneurs, it’s not too bad,

That capital gains tax charge.

£5m they say, at 10%

What’s left may still be large!

For public sector workers,

The cuts will run quite deep.

Let’s hope there’s no strike action,

No promises to keep.

With VAT @ 20 per cent,

Luxury spending may wither.

So if you’re thinking of splashing out,

Whatever you do, don’t dither!

They say you’re still young at 66,

The new retirement age.

But it seems too late to me, you know,

To leave the employment stage.

So some have won and some have lost,

A very taxing day.

There’s only one question that now remains,

Will Capello stay?

M&A is back, so be prepared!

January 24, 2010

I’m no pundit, but all my senses are telling me that 2010 could be an awesome year for ambitious, well run, businesses. As someone told me earlier this week, luck happens when opportunity and preparedness collide. So, as the well known motto goes; “Be prepared”!

 Here are five reasons for my enthusiasm:

  • The world economy is recovering. The UK may be behind the curve but that won’t mean a lack of opportunities. At least some of these will come at the expense of less well run, failing businesses, where market share or other assets will be up for grabs.
  • Entrepreneurs are resilient and individual capitalism is the future. M&A activity will return as the realisation dawns that there may never be a better time to acquire good businesses at realistic prices.
  • On the other side of the coin, owners who have been unwilling or unable to sell their businesses will reappear. Death, divorce and retirement are a constant and don’t disappear in recessions – expect an increase in the number of sellers as the economy plays catch up.
  • There will be more help for entrepreneurial businesses and access to funding will improve. Expect a mixture of helpful government policy, increased bank lending, more business angel activity and a resurgence in earlier stage and mid-market private equity.
  • And finally, we are bored with recession! It’s not a very scientific observation, but the UK has always shown its mettle in times of stress, with ingenuity and collaboration coming to the fore. It will be no different this time, with the entrepreneurs and SMEs that employ the vast majority of our population leading us out.

Whether you’re a buyer or seller, this link may help you identify your options.

http://www.smith.williamson.co.uk/corporatefinancesurgery-register

Show me the money!

November 1, 2009

Entrepreneurs with good ideas or growing businesses that need funding may not realise that there is an abundance of cash out there. The banks may still be proving challenging, but they only represent one brick in a massive wall of opportunity for purposeful and determined entrepreneurs.

At the early, early stage, friends and family and business angels will be the main source of funding, but there are organisations, such as that run by Julie Meyer of Ariadne Capital,  the technology specialists, which pride themselves on getting involved. You may also want to take a look at Fredericks Foundation, a charity that helps with business support and micro- loan funding for start ups and small businesses.

At the growth stage, angels may still be an option but organisations like Hotbed, Pi Capital, NESTA and The Technology Strategy Board can provide access to a mixture of equity and debt capital to help you grow your business. Asset-based lenders, offering invoice and other finance can be found through the Asset Based Finance Association. And don’t forget about the possibility of grants from regional development agencies like SEEDA.

For more established businesses that are bumping into lending limits or struggling to raise development capital, there may be relief through VCTs or Private Equity. I like the Government-inspired Capital for Enterprise funds, providing up to £2m to profitable, well-managed businesses. They have £75 million to spend by 31st March 2010.

The opportunities are endless so don’t get frozen in the headlights.  With a good strategy, capable management and a well thought out business plan, there’s simply nothing to stop you.

 

Good news……or what?

September 23, 2009

There’s so much going on in the business world that it’s difficult to know what to talk about. For the time being, the good news continues to flow and stock markets and house prices are reaping the benefit. The question is whether this can be sustained in the face of increasing unemployment and the inevitable belt tightening that will follow the massive stimulus provided by Her Majesty’s Government. On the negative side, the pound is sinking as prospects for the UK relative to other countries retreat, with even the Bank of England warning of a “long-term decline” in the pound’s value. It’s not all bad news, of course, as a lower pound means more demand for the UK’s products and services.

All of this is interesting, but nothing ranks above the importance of cashflow to our nation of entrepreneurs and their businesses. We are still hearing far too many reports of banks refusing to lend (please only complain if you are a viable business!) and large companies taking extreme liberties with credit. Can it really be that one large company is charging 10% for paying within 60 days, whilst another is charging 3% for paying invoices on time? Is this outrageous, or what?! Why not email me at  guy.rigby@smith.williamson.co.uk  with  your experiences in these areas so I can publish them in future newsletters or on my blog?