Maslins December 2009 Newsletter
Flippin 'eck, is it that time of year already? If you enterred our basement office without a coat you'd quickly realise it is!
It's December everyone, and that means (no matter how much you try to put it off) it's nearly Christmas. What better topic to talk about than the government giving small businesses a bit of cash (rather than taking huge wodges as it normally does)...apparently it does sometimes happen.
Applying for small business grants/loans
The government is constantly banging on about all it is doing to help small businesses. There's an ever increasing number of public sector people creating schemes and intiatives with the noble aim of assisting small businesses when they need it most.
Sadly, actually getting your hands on any of the supposed £billions available is a tough task.
The below aims to clarify some facts, and provide tips for those who may be eligible.
- Most businesses ARE NOT eligible for grants - The assumption that you're a small start up so you're entitled to government backed grants/loans isn't correct. Many business sectors and industries are specifically excluded. Check the eligibility criteria for the fund you are applying to carefully before putting a lot of effort into the application form.
- Is the grant you're interested in still available? - Funding schemes come and go at a rapid pace at the whim of politicians. Don't assume the one you read about a couple of years ago is still available.
- Applying is typically very time consuming - This shouldn't stop you trying, but do be warned there will be a lot of hoops to jump through and forms to fill in. Even after you've done all you need to, there will be another delay before your application is processed. Make sure your business can survive for a while without the funding, because it may be a long time before any actual cash comes through.
- There's no such thing as a free lunch - If you get funding, even from a "non-commercial" source, if it's a loan you'll have to pay it back with interest, and if it's a grant you typically have to match it with funds of your own.
- Do you have a specific project in mind for the grant? - Any offer of a grant will typically be towards a specific project rather than just to bolster your coffers, so you'll need to have something in mind. Also, the project will need to be financially viable. Your figures will need to stack up, and demonstrate a realistic future payback.
- What will you do if you don't get the money? - This should also be included in your proposal, and it's an interesting part that needs to be played correctly. You obviously want to make it clear your project would really benefit from any funding, but at the same time want to show a huge willingness, and ability, to achieve something without it.
You may gather that we're a little pessimistic about your prospects of actually getting any money. The cynic in us believes most schemes have more to do with boosting politician popularity/ego than actually helping anyone.
Having said that, if you think you're eligible, go get some advice from the likes of Business Link. It won't cost you a penny, and you never know, you might get lucky!
Tax tip of the month
VAT rate going up
It may seem a distant memory to some of you now, but it was only a year ago that the standard rate of VAT dropped from 17.5% to 15%. Unless the government do a huge last minute U-turn, the rate is set to revert to 17.5% on 1 January 2010.
For many businesses the actual time of supply is not always clear. Perhaps you provide an ongoing service over a year, or you're billing a 3 month project in stages, with some flexibility over the invoice dates. If the work you're doing straddles the New Year, which VAT rate do you use?
The basic rule per HMRC is "The tax point is the earlier of payment, or delivery (goods)/performance (services). However, if the invoice date is within 14 days of this, or if the invoice date is earlier than this, then the invoice date is the tax point."
In English, this means in the majority of cases the tax point is the invoice date. If goods are delivered/services performed or payment made in excess of 14 days before the invoice date, then the invoice date will be overruled.
For many businesses, they perhaps want to raise invoices as soon as work is done, but there will be a degree of flexibility. For example, one situation where it may be beneficial to bring forward an invoice is if your client isn't VAT registered. If you bill it on 31 December rather than 1 January you'll save the client 2.5% of the price.
Local Events
With Christmas fast approaching, there's dozens of events and shows. Since this newsletter began, our good friend (and top notch web developer) Dave Barnett has created the website Tunbridge Wells Events. This has a far more complete database of things to do and see.
I strongly recommend all Tunbridge Wells folk bookmark it and take a look every so often to check they're aware of any exciting events.
