As the new tax year approaches, it will be about survival for some, but for others, recovery and in many cases, a time to reflect on a busy year and an opportunity to examine the priorities and new markets. Ulster Business hears from the experts
It may have been something of a doom-and-gloom scenario for many out there in the last few months.
But, despite the hugely debilitating impact of Covid on society and certain sectors in particular, others have continued to trade successfully – in many cases, growing and expanding.
And now may be an opportunity for reflection, to step back and ask “what is really important?”, according to Darren McDowell, senior partner at Harbinson Mulholland.
“(A recent survey we were involved with) looked at family business performance through this crisis, and family business as a whole,” he told Ulster Business.
“Around 50 chief executives and 250 of their employees were surveyed. There were a couple of theses coming out of that – it’s given some the opportunity to step back.
“This major crisis has given us all a chance to step back and ask ‘what is really important?’.”
“From a long-term strategic point of view, those businesses which have traded successfully through this might be asking themselves questions around how they operate their business going forward.
“This is an opportunity for them to do that, to look at structuring and perhaps looking at elements of the business that were less profitable, on reflection.
“Even if you are in a strong position, there’s an opportunity to look to the future and perhaps restructure your operations going forward.”
Looking ahead to some of the tax changes, and the additional responsibilities which will be placed on the shoulders of employers, is Sam Beattie, associate director, payroll at Grant Thornton in Belfast.
“As we approach the anniversary of the first lockdown, this is a good time to look ahead at a few important changes for employers to note.
“April will bring a new tax year and, as before, we have been given notice of some changes ahead of the Budget that we should be ready for,” he says.
“One significant change is the reduction in age from 25 to 23 to qualify for the National Living Wage. The rate payable increases to £8.91 with a larger cohort of employees included.
“You can also expect some changes to the higher rate tax band and NIC thresholds, included in the November HM Treasury spending review. The administrative changes are lessened when using payroll software that should be updated in advance of the new tax year.
“The current Coronavirus Job Retention Scheme (CJRS) (announced in November 2020) was due to end on March 31, but has now been extended to April 30. The benefits of the scheme are well-known for employee and employer alike.
“As an employer, you have a separate administrative duty in keeping detailed records for review. We await the publishing of CJRS data on Gov.uk, which will allow your employees to locate their employer and identify if a CJRS claim has been made in their name towards the end of February.
“The overwhelming majority of businesses have nothing to fear from this measure, having kept to the letter and spirit of the regulations, but undoubtedly a minority could be exposed. HMRC already publishes the names of those who fail to pay National Minimum Wage and it doesn’t take a huge leap of imagination to see the potential for a similar CJRS process in the months ahead.”
But elsewhere, looking towards some of the businesses which are continuing to struggle, one financial solutions firm has launched a dedicated ‘pandemic recovery team’, which it says, has the aim of saving up 100 businesses in 2021.
Established by GDP Partnership, the business – founded by Conor Devine and James Gibbons – has also teamed up with former rogue trader Nick Leeson, who now runs his own trading company, Bull and Bear Capital, based in Galway.
“Up until now, we have seen some of the pain being insulated for many business owners given the vast amount of government financial support,” Conor Devine said. “However since the turn of the year, we’ve been contacted by more and more businesses that are starting to fail, and many entrepreneurs are starting to lose hope, as banks start to squeeze their customers again.
“It’s the global financial crisis all over again, but this time even more acute and profound, as it has impacted almost every business in some way.
“From our perspective, we have the knowledge and knowhow from the last crash, and it’s the experience of helping so many people and businesses come through that, which will allow us to help so many businesses deal with the current challenges this coming year.”
And for those looking at their books, with the numbers not adding up, Darren McDowell says seeking professional advice still remains key, as well as establishing a forecast for the business in the coming months.
“This is still a challenge. It was a challenge back in the summer after a relaxation… how do you accurately forecast what the demand for your business is going to be in this environment,” he said.
“That will vary depending on what sector you are in. You have to make a stab at it. Find out where you are standing at the minute. Then make a stab at what level of income you are going to get. And if there are difficult decisions around redundancy, then it is better to start planning for that as early as possible.”