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Autumn Statement: What it means for individuals and businesses

The Chancellor of the Exchequer gave his Autumn Statement to Parliament on 23 November 2016, but what’s its impact on the UK’s economy and how does it affect the individual as well as UK businesses?

The UK economy is forecast to be the fastest growing major economy in 2016, but the Office for Budget Responsibility has forecast growth to slow and inflation to rise over the next two years.  Despite this; employment is set to rise continually over the next 5 years with half a million more people forecast to be in work by 2021.

For the individual

In 2017, fuel duty will remain frozen for the seventh successive year, saving drivers £130 a year on average.

To support savers, NS&I will offer a new three-year Investment Bond with an indicative rate of 2.2% from spring 2017. The bond will offer the flexibility to put away between £100 and £3,000 and be available to those aged 16 or over.

The Personal Allowance is the amount of income you can earn before you start paying income tax. It is currently £11,000, and will rise to £11,500 in 2017-18, and £12,500 by 2021. The point at which you pay the higher rate of income tax will increase from £43,000 this year, to £45,000 in 2017-18.  This is set to increase to £50,000 by 2021.

The National Living Wage for those aged 25 and over will increase in April 2017 from £7.20 per hour to £7.50 per hour. More will also be spent on clamping down on those who do not pay the national minimum wages.

For businesses

The main rate of corporation tax has already been cut from 28% in 2010 to 20%, and will be cut again to 17% by 2020, by far the lowest in the G20 and benefitting over 1 million businesses.

Rural rate relief will increase from 50 to 100% in April 2017, saving a business up to £2900 a year. This business rate relief is available to businesses in rural areas with a population under 3,000

A new penalty is being introduced for those helping someone else to use a tax avoidance scheme. Tax avoiders are hit with significant bills when HMRC defeats their avoidance scheme, this new penalty will ensure that those who help them will also face the consequences.

From April 2017, most salary sacrifice schemes will be subject to the same tax as cash income.  In salary sacrifice schemes, employees exchange some of their salary for a non-cash benefit in kind (such as a mobile phone). Both the employer and employee make a tax saving, because the benefit is taxed less than a salary or not taxed at all.

Insurance Premium Tax (IPT) will increase from 10% to 12%. IPT is a tax on insurers and it is up to them whether and how to pass on costs to customers.

In summary the Autumn Statement appears to have been designed to get people back in work to stimulate the economy and growth.  How well it will work remains to be seen and depends upon many other factors.  To see how these changes can affect your business or for financial assistance, get in contact with a member of our team.

How to Get Ahead With Your Debtors…

Every small business in the country will have experienced late payments at one time or another.  Fortunately, the issue is often short lived with customers paying up after a gentle prompt, however sometimes customers operate to different payment terms or may delay payment due to their own business issues which can have a negative impact on the cash-flow of the supplying business.

Any delays to payment can be hugely frustrating and have a negative impact on a business.  In the past, businesses may have approached their bank to extend their credit facilities or for a loan, however today more companies are turning to alterative lenders who are able to offer a broader range of funding options, with flexible and bespoke solutions to their individual needs exemplified by the Invoice Discount or Factoring facility.

Statistics from the Asset Based Finance Association suggest that alternative lenders are providing more funding to SMEs than ever before. In the first quarter of this year alone, SMEs raised £711m from the sector according to the ABFA, a 60% increase on the same period of 2015. The sector’s total lending to SMEs now stands at £19.3bn.

The increasing use of other types of business finance reflects a heightened awareness amongst SMEs that they do have funding options other than what’s available from the banks, with research suggesting that more than 75% of SME CEOs are now aware of options beyond traditional banking.

Industry data suggests that this is feeding through into take-up, for example, 12% of SMEs are already using invoice finance, while a further 46% say they would consider doing so if and when they need to raise finance.

The reasons that invoice financing are proving to be so popular is the speed in which they can achieve access to funds as well as the cheaper cost of funding and its simplicity. Additionally, the stress and time consuming nature of chasing payments from your debtors is taken over by the Invoice Finance provider, either on your behalf, or confidentially.

In fact, in most cases, PFC’s client that have taken up Invoice Finance facilities, often see a significant increase in turnover and profitability as they are given the chance to concentrate on growing the business and not chasing payments or dealing with extended payment days.

For these and other reasons, the Federation of Small Business and the British Chambers of Commerce have been keen to promote the option as one of the diverse range of financing options.

With uncertain times ahead and much change forecast for the economy, having access to alternative forms of finance can be the lifeline for many small businesses.  With access to finance and the rise of alternative finance options, let’s hope the frustrations of a small business owner are short-lived.

If you’re looking for access to finance, contact the team and let us discuss the options available to you.

A LITTLE SOMETHING FOR CHRISTMAS?

‘All I want for Christmas is my two front teeth’, may have been a popular Christmas request back in the 1940’s, but today the average Christmas costs UK families more than £800.

With increasing pressures on family finance and a fear of a weakening economy many business owners are turning to manageable personal loans to get them through this expensive time of the year.

When coupled with self-assessment tax returns scheduled for January, this time of year can put an extra strain on finances as businesses look to balance their books and make cash available for important projects or to simply make the payments needed to keep the plates spinning.

To support businesses and business owners at this time of the year, PFC has introduced tailored personal loans specifically for business owners or directors.  The loans are provided by a specialist market leading lender, and in some cases funds can be approved and transferred to the individual on the same day as the application.

The finance raised can be used on a range of different purposes from helping with a company’s cash flow at key times of the year to investment in stock or even to treat oneself to a holiday as a well-earned break at Christmas.

With access to state of the art online portals, PFC is often able to propose a personal loan and arrange payment to clients in less than 2 hours.  Clients can achieve unsecured borrowing from as little as £1,000 up to £100,000. Larger amounts are available, but will need to be supported with a charge over property.

To help provide quick access to finance, PFC has an easy application process that comprises one simple form.  The loans have a representative APR starting at 7.7%, with repayment terms ranging from 3 months to 5 years.

By providing bespoke and tailored access to finance, businesses and business owners have an extra layer of reassurance at an expensive time of year.  The support allows businesses to move forward with confidence and safe in the knowledge that they have access to finance when they need it most, particularly when there’s a little something special needed for Christmas.

BREXIT – IT’S BUSINESS AS USUAL

It’s now a couple of months since Britain took the brave step to exit the EU.  Since that time we’ve seen a new Prime Minister and Cabinet appointed, a volatile stock market and turbulent exchange rates as well as interest rates reach record lows.

Although only few may have predicted this situation at the start of the year, the reality is that the world continues to turn and that this economic environment is the new ‘norm’.  The good news however is that British businesses have been fast to react and return to business as usual.

According to the first estimate of the Office for National Statistics, GDP growth strengthened to 0.6 per cent in the second quarter of 2016, although much of that increase in activity was concentrated in the earlier part of the quarter, with a falling away seen in May and June as uncertainty crept in.

Although figures released this month show that the UK economy contracted by 0.2 per cent in the month following Brexit, the latest forecast from the National Institute of Economic and Social Research (NIESR) is that it’s increasingly unlikely that Britain will tip into recession.

Last week the Bank of England also forecast that the economy would narrowly avoid a recession, largely because of its decision to cut interest rates to a new historic low of 0.25 per cent and restart its Quantitative Easing monetary stimulus programme.

With the various initiatives in place to stabilise the economy and confirmation from Teresa May that Britain will leave the EU, we are however seeing more certainty and with it confidence return to the marketplace.

As a company that’s built a reputation for lending to a range of businesses from private practices to larger corporates, SMEs and individuals, we believe we are a good barometer of what’s happening in the UK.

Since Brexit we have seen the volume of requests for finance and actual lending increase by more than 20%, when compared to this time last year.  This is clearly a sign of confidence in the marketplace.

In addition to this, the number of funders willing to lend has also increased and we are pleased to announce that our panel of lenders has increased by nearly 10% allowing us to open even greater access to finance than ever before.

Having a wide range of funders willing to lend means that we are able to offer the most appropriate access to finance for the company’s requirements.  In the last few weeks we have provided an eclectic range of funding from six figure personal loans to invoice finance, VAT and tax funding to asset finance.

These are new and exciting times for the UK’s economy, with an unprecedented opportunity to take advantage of the low interest rates and more financial institutions with an appetite to lend, the outlook for SMEs that provide the backbone of British economy is extremely positive.

Does your Company need Corporation Tax Funding?

Unlike other taxes where there can often be some leeway for late payments if a company gets into difficulty, when it comes to corporation tax, once the deadline passes, those surcharges and penalties start accruing and can have a massive impact. This can put many companies under pressure in the run up to the tax payment deadline and force them into difficult decisions when it comes to business development and ongoing operational performance.

While there are many ways for companies to reduce their overall corporation tax bill, there’s always something to pay at the end of the day. Finding a solution that spreads the cost over the rest of year can help relieve unwanted financial pressure, release valuable capital for further investment, and give your business the breathing space it needs to get over potentially difficult periods.

At PFC we provide tailored tax funding for businesses that allows them to meet their corporation tax liabilities whilst spreading repayments more equitably over a period of months. This reduces the impact of a potentially large one off payment to the Treasury and can have numerous benefits including:

  • Makes sure businesses avoid being late with corporation tax payments because funds, for whatever reason, are not available or tied up at that particular time.
  • It releases valuable capital that can be used for developing new avenues and making sure existing business strategies remain on track.
  • It can relieve short term cash flow problems by essentially extending your tax payment deadline and making sure your business has more money in the pot.
  • PFC offers a flexible way to cope with any tax funding issues. Our tax funding facility allows for tailored loans between £1,000 and £2.5 million paid back over a period of 6 to 12 months.
  • The change to a fixed monthly cost for your corporation tax bill means that you can better budget over the year. You can choose to do it as a one off solution for current problems or incorporate into your ongoing business strategy.
  • Access to fast track decisions at PFC means you don’t have to wait long for a decision and solutions can be agreed in around 48 hours.

How PFC works

We are a brokerage group with a vast amount of experience in the field of private loans for companies, helping them manage areas such as tax funding, subscription payments and insurance premiums among our other funding provisions. We do this by having a close working relationship with our private financers, providing competitive funding for businesses that need it.

Sourcing commercial funding that works for the business that is accessing it is a fine art and obtaining the right terms is something that takes a great deal of experience and industry know how. At PFC our focus is in finding the right solution that suits your business and not a one-size-fits-all proposition that fails to tick all your boxes. To find out more, contact our experienced and friendly team today.

Spread the Impact of your Partnership Tax Bill with Tailored Tax Funding

Partnership tax generally costs more as a whole than corporation tax and working out each member’s liability can be difficult at the best of times. This can affect businesses such as architects, lawyers and accountants who share a common cause but often operate as self-employed entities within the partnership.

Making sure everyone in the partnership is well equipped for dealing with the tax payments due in January can ensure your business runs more smoothly and everyone stays on track and can meet their commitments. Swapping a one of payment to the HMRC for tax funding, where you basically get a loan for the amount you are liable for and pay it over monthly instalments can relieve a huge amount of pressure on practices.

At PFC we offer tailored, private tax funding that helps businesses working through partnerships to spread their liability over a short term period of 6 to 12 months. Most businesses falter when faced with unexpected financial settlements such as tax bills and having a way to ameliorate that impact can make a huge difference to the day to day operation of all partners.

The Benefits of Tax Funding for Partnerships

  • It spreads the cost of tax payments across a longer period, making sure that partners don’t have to find valuable funds as the deadline for HMRC returns approaches.
  • It allows partners to know where their tax liability lies and how much they need to pay each month rather than trying to get the payment together at the last minute.
  • Some partners are better at dealing with cash flows and tax liabilities than others and introducing tax funding can make sure additional pressure isn’t put on their capabilities because of the failures of another member of the team.
  • It gives breathing space for the partnership that allows it to grow and develop especially at a time of year when business is naturally slower.
  • The loan can be made by an individual who is self-assessing, to make sure liabilities are covered, or by the partnership as a whole to ameliorate any unforeseen charges.

How it Works for Partnerships

At PFC we’ve got a fair deal of experience in dealing with all aspects of tax funding for corporations, self-assessors and partnerships. With access to private funding that can be tailored to individual needs, we can work with you to find the right solution that suits your business. Payments can be made either directly to the HMRC or to the partner or partnership concerned and repayments can be spread over 6 to 12 months.

Tax funding is available for small and large partnerships whether the bill is just a few thousand pounds or much larger. If you want a solution that makes it easier to pay your all-important tax bill, then contact our highly skilled and professional team today.

Sweating your assets

Leveraging the potential of everyday business assets is just one way that cash strapped practices can generate the extra finances needed to grow or forge new paths within their industry. Find the right solution, and the right management company to handle it all for you, and a number of avenues can quickly open up that enable your business to function more flexibly.

Getting the Most out of Your Business Assets

According to the BBA, after a fairly stagnant period, it’s claimed that banks are beginning to loan more out to small and medium size businesses with over 30,000 loans agreed in the second quarter of 2015. For many businesses however, this may not be enough or there may be too many hurdles to overcome to access the finance. To such an extent, last year actual bank lending actually fell by some £400m.

As such, there are still many practices that go to their bank and get turned down for valuable financing, even when it is a relatively small amount. When that happens it can be difficult finding alternative sources of funding and a business can start to stagnate without the necessary cash flow. One avenue that’s proving increasingly popular is using your practice’s assets to secure a loan. You may be surprised how much you are actually worth.

Assets can come in all shapes and sizes, not just stock and infrastructure. For instance, your brand and logo is an asset and has a financial value as well as product and service developments and even written content. Your productivity and future potential is an asset too, though less tangible.

What your practice is worth today if it was sold is important. Whilst many very young practices may well have a negativity equity, others could have several thousands in previously unconsidered assets that can be packaged together and used to help get a loan.

How Asset Financing Can Benefit Your Business

Many practices require extra funding to meet short term and long term financial requirements, including partner buyouts and acquisitions as well as refurbishments and cash flow concerns. When the bank won’t agree to a loan it can get extremely difficult. The first thing practices need to do is identify the assets they have and then find how to leverage these.

At the Practice Finance Company our experienced advisors can help businesses find the right route to finance and secure a loan that not only matches and maximises your assets but also enables you to handle repayments. We’ve arranged over £3 million in funding for practices across the UK this year alone, helped by our access to private funding avenues. With the right financial team to support your business you can make your assets work harder and find you the right access to finance.

When The Computer Says No…

Whilst we may officially be out of the recession and business is definitely on the up, many practice partners and SME owners are still finding it difficult to obtain the financing from time honoured, mainstream sources that they need for development or day to day business operations.

Let’s face it, banks are still reluctant to lend to small businesses – the level of lending fell last year by almost £400 million and though things have picked up in 2015 there are still plenty of businesses who cannot access extra funds when they most need it. According to recent feedback, access to credit continues to be one of the major hurdles that small businesses face, on a par with the rising costs of utility bills and problems associated with getting payment from clients.

In short, there are plenty of instances when companies need a loan and the banking computer just says no.

So what does a small business or private practices do when it needs to grow or access finance and can’t get the bank to agree a loan? The good news is that there are alternative solutions available and many SMEs are starting to explore these avenues, building long term relationships with private financing companies that are more than simple monetary arrangements.

PFC works in a totally different way to your local bank. It’s not just about filling in a form and meeting set criteria that are largely skewed against lending in the first place. We are here to build a long term business relationship and not just tick off boxes for a loan formula in the vain hope that you might be eligible.

Our aim is to find the loan package that suits your business and give you access to fast, reliable finance that helps you to stay competitive. We do this by having on board more than 30 funders who are willing to lend to a variety of SMEs, from new start enterprises, to long-established companies.

Whether investing in new equipment, or simply a desire to introduce capital into the business for intangible purposes, our standard working capital lines of credit are ideal for general business investment needs.

Our combined 30 years’ experience is honed across multiple industry sectors, encompassing nearly every type of UK SME business.

With dedicated account handlers who get to know what your business really needs and fast response times, the PFC team has over 30 years experience of providing finance that simply helps businesses like yours grow. It’s not about targets and algorithms, it’s about building relationships that matter which is why we are able to provide the right access to finance for over 90% of our clients.

The Unavoidable Truth

They say that there are only two things you can be sure of in life and they are death and taxes. The good news however is that there are measures that you can do in both cases that prolong life or reduce the impact of taxes on your business or personal cash flow.

Many will have the first in hand with ‘Dry January’ or various New Year resolutions to get fit, eat more healthily or give up smoking in an effort to live a healthier and hopefully longer life. When it comes to managing taxes, unfortunately you can’t put off the inevitable deadline of 31st January for self assessment tax returns, however there are plenty of options to consider if looking to secure funding and help manage the tax bill payment.

With a range of lenders making up PFC’s funding panel, no tax bill is too great or too small. In addition, there is a specialist team on hand to provide a quick decision making process and advise on the required levels of funding, your preferred terms and how repayments can be structured to allow you to budget for manageable repayments.

Arrangements can be made for payment to be made directly to HMRC or into an office account, typically within a week of the application. The repayments are in turn arranged in line with the liability so typically between 6 and 12 month terms for self-assessment tax funding.

Having the flexibility of a short term loan for tax liabilities allows you to spread the cost of the liability into manageable monthly payments to assist with the budgeting in the company, help ease cash flow and relieve the pressure of having to find a lump sum payment.

The short term, unsecured fixed rate loan facilities offered by PFC cover all types of tax funding including; Schedule D tax, corporation tax or capital gains tax to name a few. With the right tax funding support in place it can give individuals and businesses a new lease of life by removing the worry and freeing cash for other business priorities.

It’s also good to know that with your tax taken care of there’s a weight off your shoulders and a great stress relief. Maybe with this support you can take care of two of life’s certainties by better managing your tax and in turn potentially living a longer stress free life.