Dealing with absenteeism

No matter how big or small your organisation, absenteeism can be an issue. It is impossible to eliminate staff absences entirely but every business needs sufficient controls in place in order to minimise disruption and loss of productivity.

As an employer or business manager, the best place to start must be your sickness and absence records. Absences should be logged in a user friendly format. Managers need to be able to identify absence patterns easily so the days and dates and the reason for the absence need to be visually apparent. These records will help management to detect when an individual’s absence has reached a point that now needs to be examined.

Employee contracts should contain clear terms and conditions relating to absence. Should an issue be raised regarding an employee’s attendance, an appropriate course of action must be taken. Managers should first consider the facts surrounding the absence and then set up a meeting with the team member in question to discuss their reasons for absence.

This meeting should not be treated as a disciplinary meeting. This should be made clear from the outset (and the agenda for the meeting should reflect this). At the meeting explain that the frequency and amount of absence has triggered the company’s procedures regarding absence and you wish to explore the causes. This will give the employee an opportunity to raise any issues or identify any problems at work, which may have caused the frequent absences.

If, however, the explanation for the frequent absence is deemed to be unacceptable, the individual should be informed that the company’s disciplinary procedures regarding absence will be followed. If the business has a HR manager, they should be consulted at this point.  If not,  the disciplinary procedures outlined in the employee’s contract should be followed and if necessary, professional advice should be sought in order to bring the matter to a satisfactory conclusion.

So what is Fee Protection Insurance and do you really need it?

It is a service offered generally by Accountants, to protect their clients from HMRC queries. Clients can subscribe to the service and obtain the benefits described below.  The service is backed by an insurance policy, under which, the practice can claim professional costs incurred defending clients in the event of a tax enquiry.

What powers do HM Revenue and Customs now have?

Since April 2009, HMRC are able to visit business premises to inspect records covering all taxes including Corporation, PAYE, NI, Self Assessment, Capital Gains and VAT. They can also issue written queries before you have even submitted your annual tax returns.

Can anyone’s tax affairs be scrutinised by HMRC?

Anyone that pays tax can come under scrutiny. Every year, HMRC starts enquiries into thousands of personal and business tax returns and accounts. VAT and PAYE payments are also thoroughly checked.  The aim in every case is to collect more tax.

I’ve done nothing wrong, why should I worry about a tax enquiry?

Most enquiries are generated by computer “risk profiling” and many are selected completely at random. As a result HMRC sometimes picks the wrong targets.  Even if you have done nothing wrong, you may be selected for a time consuming investigation.

How much could a tax enquiry cost me in professional fees?

This is very difficult to answer as it will depend upon the individual circumstances.  The questions asked however do tend to be very detailed and time consuming to answer. The cost to be supported by your accountant through a detailed investigation could run into hundreds if not thousands of pounds.  This extra work is not covered by your normal annual fees paid to your accountant.

What are the main benefits of Fee Protection insurance?

  • Your accountant will defend you should you receive any correspondence or visit from HMRC.
  • The potentially high costs of professional fees for that defence will be claimed under the practice’s insurance policy.
  • It will not be necessary to accept unreasonable tax charges by HMRC due to concerns about professional fees.

What is, and what is not covered by the service?

You will appreciate that not all accountants will offer this service from the same provider and therefore there are likely to be differences in the cover provided.

At Opus Accounting Ltd, our clients are fully protected up to a value of £75,000 of professional costs in the following circumstances:

  • Dealing with correspondence from HMRC.
  • Attendance at any meeting with HMRC.
  • Appeal to the First-tier Tribunal or Upper Tribunal.

Cover is not provided for:

  • Routine compliance work, e.g. preparing your tax return
  • Overseeing HMRC whilst they review your records
  • Outstanding taxes, penalties, interest or any other amount due to HMRC
  • Defence of criminal prosecution cases or serious fraud enquiries.
  • Fees related to pre0existing tax enquiries.

What does it cost to benefit from this protection?

You would need to speak with your accountant to determine whether they offer Fee Protection insurance and obtain a quotation from them.

The good news for Opus Accounting clients is that we have made the decision to provide this service to all our clients, covering the work we do for them, as an added benefit at NO ADDITIONAL charge. We believe that it is already tough enough running a business, without the threat of HMRC appearing at random to undertake a thorough inspection.

So there you have it, Fee Protection insurance gives you peace of mind, in the event of a letter from HMRC you simply advise your accountant and for the most part let him or her deal with the matter, allowing you to continue to focus on your business.

Are you working to live? Or, are you living to work?

As business owners we all need to keep a close watch on the hours we work and, above all, what we, as individuals, actually want to achieve.  It can be all too easy to get wrapped up in expansion plans and self imposed pressures.  I came across this story the other day which I think puts things into perspective.

The Businessman and the Fisherman by Mark Albion (Apr 19, 1999)

IMG_3855A young businessman was at the pier of a small coastal village when a small boat with just one fisherman docked. Seeing several large yellowfin tuna inside the small boat, the businessman complimented the fisherman on the quality of the fish and asked how long it took to catch them. “Only a little while”, the fisherman replied.

A little surprised, the young business man asked, “Why didn’t you stay out longer and catch more fish?” The content fisherman said, “This is enough to support my family’s immediate needs. I don’t need any more.” “But what do you do with the rest of your time?” asked the confused young man. “I sleep late, fish a little, play with my children, take a walk with my wife, stroll into the village each evening where I sip wine and play guitar with my amigos; I have a full and busy life.”

The lad scoffed, “I am a Harvard MBA and could help you. You should spend more time fishing and with the proceeds buy a bigger boat with the proceeds from the bigger boat you could buy several boats, eventually you would have a fleet of fishing boats. Instead of selling your catch to a middleman you would sell directly to the processor, eventually opening your own cannery. You would control the product, processing and distribution. You would need to leave this small coastal fishing village and move to LA and eventually NYC where you will run your expanding enterprise.”

The fisherman asked, “How long will this all take?” to which the young man replied, “15-20 years.” “But what then?” The business man laughed and said “That’s the best part. When the time is right you would announce an IPO and sell your company stock to the public and become very rich, you would make millions.”

“Millions, sir? Then what?”

“Then you would retire, move to a small coastal fishing village where you would sleep late, fish a little, play with your kids, take a walk with your wife, stroll to the village in the evenings where you could sip wine and play your guitar with your amigos.”

With just the hint of a twinkle in his eye, the fisherman said “Senor – are these business degrees hard to get?”

The End.

If you resemble the Fisherman – then congratulations!

If however you would like to re-evaluate where you are why not book an entirely free session with me, Grahame Johnson.  Call me on (01635) 884 270 or get in touch by email, we can have a chat over a coffee and talk through your plans.

The Budget Summary

Dragon guarding the City of LondonGeorge Osborne presented his Budget on Wednesday 20 March 2013.

In his opening statement he set the scene for some of the new measures announced, stating ‘this is a Budget for people who aspire to work hard and get on’.

Towards the end of last year the Government issued the majority of the clauses, in draft, of Finance Bill 2013 together with updates on consultations. The publication of the draft Finance Bill clauses is now an established way in which tax policy is developed, communicated and legislated.

The Budget updates some of these previous announcements and also proposes further measures. Some of these changes apply from April 2013 and some take effect at a later date, so the timing needs to be carefully considered.

Our summary focuses on the issues likely to affect you, your family and your business. To help you decipher what was said we have attempted to remove as much ‘Accountanese’ as possible and included our own comments.

If you have any questions please do not hesitate to contact us for advice. Click on the link to open a PDF of the report.


Are you talking often enough to the right people?

Business DiscussionWhether you are a sole trader or a Limited company, the chances are you have a team of people who can support, or influence your business.  With that in mind, here are a few questions to ask yourself.  Who are they? Do each of them know exactly what is expected of them? Do they even know you consider them part of your team? When was the last time you met with them?

So, who are your team?  Here are some suggestions of those that can positively or negatively influence your business:

  • Husband / Wife / Partner / Parents / Children / Family
  • Colleagues – a sole trade can still employ staff
  • Bank Manager – they still do exist, probably now called a Relationship Manager
  • Accountant / Bookkeeper
  • Suppliers
  • Clients

It is all too easy, when you are growing and running a business, to keep your nose to the grindstone, and not look above the parapet to see how things are going.  You should be talking to each of the parties above; to engage them in your plans and make sure they are ‘on side’.  Simply by talking to people about where you are now, and where you want to get to, can really clarify things and motivate you to achieve your goals.

It is critical to maintain support from family members. If they know what you are doing and why they are more likely to support you, so talk to them – frequently! You will be astonished how many great ideas can come out of the mouths of children and parents! Young people may see things in black and white, whereas the benefit of experience can be equally valuable.

If you have staff, they may be closer to the challenges and problems than you are yourself. At Opus Accounting we have one to one meetings with each one of our team every month to get, and to give feedback, on the previous month. The ideas and suggestions we get are priceless!  We credit the person with the idea at the next monthly staff meeting, where we provide lunch for the team.

Keep in touch with your Relationship Manager at the bank. It will be much easier to seek some advice or help, if you don’t have to spend the first five minutes explaining who you are!  We get a call from our bank at least once a month to check we are happy, and see our relationship manager for a coffee and a chat at least quarterly.

What is your accountant doing for you? If you are only seeing or talking to him/her once a year you really are missing a trick. Assuming you are using a ‘qualified’ practice e.g. ACCA or ICEAW you can be sure they are up to date with changes in legislation.  If you are worried about running up a big bill, speak to them and find out what their fees include.  Our fees include a reasonable amount of telephone and face to face contact all year round so we can really add value. Let him/her know your plans; if you need funding for example, then they may be able to help, or at the very least ensure your accounts are prepared in the right timeframe.

Never under estimate the need to maintain adequate records.  A good bookkeeper, preferably one with some qualifications to demonstrate competency, can make a huge difference.  If however, they can’t immediately tell you how much you owe, and how much you are owed either you haven’t given them all the necessary information or they may not be up to the job.  You can of course maintain your own records using one of the many online systems such as SageOne.

If you have plans to expand, talk to your suppliers.  They can then increase stock availability and potentially review your credit terms. With increased volumes a discount may be negotiable.

Finally speak to your clients or customers on a regular basis.  If you don’t, the chances are your competitors will and the first you will hear is the loss of the business!  Let them know of your plans, new products or services and, above all listen to their suggestions.

Remember, effective communication is key to a successful business, speak to all the parties involved and engage with then so they are all pulling the same way.



Isle of Man Bank Accounts…

If you have, or haisle_of_man-1969pxve had, a bank account in the Isle of Man, you should be aware of an agreement reached between HMRC and the Isle of Man Government.

A disclosure facility will run from 6 April 2013 through to 30 September 2016 giving those who have not declared the existence of an account in the Isle of Man to now do so, and pay all liabilities back to 1999/2000. Those who have a tax liability on income earned during this period will be required to pay the tax and a penalty. The penalty will be between 10 and 40% of the tax due, according to a tariff set out in the agreement.

HM Treasury and the Isle of Man Government are finalising an agreement for the automatic exchange of information. HMRC have made it clear that they will seek higher penalties for those who do not come forward voluntarily, and are identified by the intended exchange of information agreement.

Finally, HM Treasury has emphasised that the disclosure facility does not include a guarantee against criminal investigation.

On a slightly more positive note, the agreement does enable a professional advisor to discuss a client’s circumstances with HMRC, without disclosing the identity of the client.

If you feel you may be affected by this, you should seek the advice of your professional advisor or of course you can contact Nigel Coombs FCCA on (01635) 884270.

An awkward moment? – Not if you have a plan!

Business Colleagues Working Together

How do you start a conversation at a networking event? How do you describe your business? Does your explanation inspire interest or simply confirm ‘what you are’ rather than ‘what you do’?  Do you have a strategy to ensure you benefit from each and every networking event you attend?


Let’s imagine, you go to a networking event. Eventually someone comes across to you or vice versa and says “Hi, my name is Grahame”.

You respond with “Hello Grahame, I’m Susan” (for example) and then Grahame asks that standard question: “So, what do you do Susan?”  How do you respond?  “I’m an IFA” or “I’m a Virtual Assistant” or “I’m an Accountant” or “I’m a …………..”

Those responses merely confirm ‘what you are’ and not ‘what you do’. Such a response may quickly close the door to any meaningful conversation, as you have labelled yourself with no differentiator.

You may be aware that I’m a Director of Opus Accounting but not an Accountant, and I use this fact to good effect when I am networking. My responses vary to the question “So Grahame what do you do…?”

I quite often say “I act as the company translator….” This usually raises a smile and a request for an explanation which opens the conversation and relaxes the pressure. The explanation varies along the following lines….

“Well, my colleagues are Accountants and on occasions they can’t help themselves and fall into Accountanese and that’s where I step in. I translate Accountanese into plain English so our clients really understand every word and know exactly where their business is financially all year round.

I then try and switch the conversation; “Enough about that, tell me about you”  Hopefully, they will now have decided, I have a sense of humour, I work with Accountants that are not stuffy, who help clients understand their business, all year round. There are quite a few points which we hope differentiate us from a stereotypical accountant!

The purpose of switching the conversation is to determine firstly whether we could develop a rapport, remember never sell at a networking event! If the individual has absolutely no personality and immediately starts to sell to me I will swiftly move on. More commonly however, the individual will start to tell me about themselves and their business. Using open questions starting with What, Where, When, Why, Who and How I can quickly get a feel for their situation. I can then decided whether a longer conversation would be mutually beneficial, and arrange to meet for a coffee later in the week.  I then have some time to consider their situation, and develop some ideas of how we, as a business, could help then.

At the next conversation I will reinforce what makes Opus Accounting different to other accountants but focus completely upon how we can add value to our future client’s business, giving away free advice to further build trust.

So what are your networking tactics? Please share your ideas by commenting on this post, we can then help each other to develop and fine tune our respective approaches.

How much is owed to your business – right now? What do you mean you don’t know?

j0178366We quite often get approached by clients and contacts, asking if we know of a suitable company to help recover an outstanding debt. With the challenges associated with the recession, there can’t be too many companies who have not experienced an unpaid invoice.

Regrettably, from our experience there is no quick fix. A collection agent, no matter how efficient they may be, has only recourse to the courts if they are unsuccessful at collecting the outstanding sum.

Having attended court on a couple of occasions with what could be considered a very strong case, we have found there is absolutely no guarantee that a judge will necessarily see it your way. Even if the case is successful and you are awarded judgement and costs, there is still no guarantee that the money will be forthcoming.

Having been awarded judgement, should a debt not be paid, you can then seek a “Warrant of execution”. When I first heard this I thought it a little excessive for a debt of a few hundred pounds, then realised it did not involve an executioner, but the appointment of a bailiff!

Bailiffs will attempt to recover the outstanding amount or goods to the appropriate value. However, I know of one case where the bailiff allegedly attended the debtor’s premises three times and on each occasion, accepted excuses, such as, “I don’t know anything about a court case” and “I am going to have the judgement set aside.”

It turns out that it was purely a delaying tactic as when the bailiff returned a final time the chap had left the premises with no forwarding address. The collection agent who was handling the case said they could involve a private investigator at an hourly rate but, realistically, there was little chance of recovery.

Be aware there are costs involved in progression of a claim through the courts. These costs soon mount up to over £100. In addition, a collection agent will often charge a percentage of the debt. These fees should be recoverable from the person or company owing you the money. However, if as in the above example, money is not recovered then the fees are also lost.

Collection agents are inclined to make it sound very straightforward, and I am sure that they have a reasonable measure of success. However, from our perspective, it is far more effective to avoid the situation in the first place.

In the majority of cases you, as a business owner, may have to undertake the work, or provide the goods or services, prior to being paid. However, there are a few simple safeguards that can massively increase the chances of being paid on time.

  1. Always provide a written quote and obtain written acceptance, even if it is only a signature on the quote.
  2. Agree the payment terms in advance including any stage payments.
  3. Obtain and use some standard terms and conditions which set things out clearly and concisely. Such ‘standard terms’ may state that the officers of a limited company become personally liable for any costs that the company cannot honour. At least then if the Limited Company client fails there may be the opportunity to recover the debt from the director(s).
  4. Consider taking a credit reference check on your potential new client so you can assess their creditworthiness.
  5. Set a defined credit limit on individual accounts, review them regularly and adjust accordingly. By doing so you are at least then managing the risk.
  6. Use a simple accounts package, such as Sage One, which will very easily help you understand how much you are owed and by who, plus how much you owe and to who! Cash is still ‘King’ in business and a lack of cash flow is the most common reason for business failure.
  7. No matter how good the relationship is, how long you have known the customer, or how desperate for the work you may be, immediately cease supply if your set credit limit is reached.
  8. Avoid the temptation to be the “Good Samaritan” by giving a business extended credit, unless you can afford to, and are prepared to write off the amount in full.
  9. Explore the costs of taking credit card or debit card payments. There may be some transaction fees, but generally it is a secure and reliable method of receiving payment.
  10. Allocate some time in your working week to manage your cash flow, time during the day when you can speak to people, not during the evening, when you finally get round to the paperwork.
  11. Have a defined process to chase outstanding payments. Document everything including giving the option for the client to contest the amounts. Should it progress to the courts, this audit trail will be critical.

Look upon non payment with indignation. You would never walk out of a hotel or restaurant without paying, making an excuse and promising payment next week, so don’t allow your suppliers to do so with your business.

We appreciate that you may find this approach quite harsh, but, like many businesses, we employ a great team of staff and they deserve to be paid for their efforts in full on time. To do so we need to be paid in the same manner and we are pleased that the vast majority of our clients do just that.

HMVFinally we would just like to reiterate that positive cash flow is absolutely critical. Without ‘cash’ you will be unable to pay your suppliers, and this very quickly can affect your reputation and your business. We have seen some very significant failures in the retail sector quite recently; it is interesting to note that such failures often happen immediately after Christmas or in March, June or September. It is towards the end of these months that ‘quarter days’ occur, the day that rent generally becomes due for commercial property. Often these quarter days coincide with a companies VAT period resulting in a need for significant cash.

With insufficient funds and exhausted credit, a company can quickly find themselves in trouble.

If you need advice or support in getting a grip of your cash flow, producing budgets and cash-flow forecasts, then we would be only too pleased to help. For a no obligation discussion simply pick up the phone and call us on (01635) 884270 or email

Are you concerned about all this talk of Payroll RTI?

We have been working on a programme for some time to ensure our payroll team and our clients are up to speed with the changes.  Our Payroll Manager, Jan Butler has attended several seminars and webinars on the subject and is now undertaking the final checks on employee information to ensure a seamless transition.

We have just received the following infographic, hot off the press from Sage, this does raise some concerns as to the lack of preparedness of the small business community.

If you currently run your own payroll then maybe the time has come to explore outsourcing the task to a company with a team that could run your payroll every week, fortnight or month, without you having to plan around holidays or deal with unexpected absences.

Sage - 3 Steps to RTI infographic
This infographic was produced by Sage

If you have any questions regarding RTI please don’t put it off until next month, this is not going to go away! Don’t forget that at Opus Accounting we have abolished Accountanese we speak in plain English and will explain exactly how it works and your responsibilities without unnecessary jargon.

Call us now or email , we can then arrange to meet and discuss how we could make the implementation of RTI as painless and cost effective as possible.

Are you at Risk of Identity Theft?

IMG_4374Most people are familiar with this term, but are you really sure what it means? Are you aware of the impact of identity fraud, and just how difficult it can be to recover from such an issue?

Quite recently one of our clients received a letter seeking immediate payment of an outstanding sum of over £270 on a recently commenced mobile phone contract. The letter also advised the individual of a liability for an additional £850 in contract early termination fees.

This was quite a surprise, bearing in mind that the individual had been out of the country on business for the previous 6 months!  It soon became apparent that they had become a victim of identity theft.  The person concerned was very surprised to have been targeted as they have always been exceptionally diligent in shredding all personal information, and safeguarding their personal details.  Despite this, sufficient information had been obtained, by a fraudster to convince Vodafone, to enter into a new contract with a monthly payment of £47.00 per month for a two year term.

This does beg the question, as to whether companies undertake sufficient checks to adequately safeguard consumers.  It would be interesting to know what checks Vodafone undertook, prior to setting up this new agreement.

Our client contacted the police to report the crime, but was referred to Action Fraud, who provides a central point of contact for information about fraud, and financially motivated internet crime.  Contact details, including websites and phone numbers for each of the agencies mentioned in this blog, are listed below.

In the above case, the individual was requested to first contact the company concerned, to advise them that they believed they had become a victim of identity theft.  A call to Vodafone via their 191 customer service line swiftly resulted in details being taken and a Fraud Case Reference Number being provided.  Contact was then made with Action Fraud who also recorded the case and issued a further case reference number.

Action Fraud, and their website, is a great resource for information, to both avoid fraud, but the actions to take should you believe you have been targeted. We have previously blogged about fraudulent emails claiming to be from Banks, Building Societies, HMRC etc.  The Action Fraud website includes a reporting system for such emails, to enable information to be gathered, and the perpetrators to hopefully be identified.

During the reporting process, Action Fraud recommended that our client seeks an up to date credit reference for themselves from the three principal credit reference agencies; Callcredit, Equifax and Experian.  The purpose of doing so, is to ascertain whether fraudulent attempts to seek, or obtain credit have adversely affected our client’s credit rating.  If so, records can be updated by these companies having recorded the identity theft with Action Fraud.

Action Fraud also suggests that individuals should register with the CIFAS, this is a not-for-profit membership association representing the private and public sectors. Their website has lots of useful information including a section ‘Help to stop identify Fraud before it happens’

Once an identity has been fraudulently obtained, it can take some considerable time for everything to come to light.

Fraudsters can use your identity details to:

  • open bank accounts
  • obtain credit cards, loans and state benefits
  • order goods in your name
  • take over your existing accounts
  • take out mobile phone contracts
  • obtain genuine documents such as passports and driving licences in your name.

How long could it take for these things to come to your attention, and what damage to your reputation could be achieved along the way?

One final point, Social Media is everywhere and we all love Facebook, it’s a great way to stay in touch with family and friends, it’s also nice to receive all those birthday wishes on your birthday isn’t it?  However, does your Facebook profile include your home address and your date of birth?  I’ve just checked a good few of my Facebook friends and found more information than I would expect.

The full address and date of birth are two pieces of information fraudster’s use as the foundation for their activities, just one or two more pieces of the jigsaw and that’s enough. A Mother’s maiden name is very often used as a check on identity which you would imagine is quite secure.

Isn’t it great that you can share those photos on Facebook with the Grandparents or even Great Grandparents…..? So, now we have date of birth, full address and Mother’s maiden name and we haven’t left Facebook yet.

Why not check your Social Media accounts now, and if necessary, amend your location to just the town or city and at least delete the year of your birth, and maybe showing the relationship with family members may not be such a good idea.

Now for all those contact details we promised at the start of this blog:

Action Fraud


Telephone:      0300 123 2040

CIFAS – The UK’s Fraud Prevention Service


Stop ID Fraud


Credit Reference Checks



Call Credit