The Budget and small business

By Ken Maggs, Moore Thompson

There were a number of announcements in last week’s Budget that will affect small business owners, contractors and sole traders, from the extension of Entrepreneurs’ Relief to a decrease in Capital Gains Tax (CGT).

The extension of Entrepreneurs’ Tax relief means that entrepreneurs will be able to access a 10 per cent rate of capital gains tax on newly issued shares in unlisted companies purchased on or after 17 March 2016, provided they are held for a minimum of three years from 6 April 2016. These will be subject to a separate lifetime limit of £10 million of gains.

The Government will also allow entrepreneur’s relief to be claimed on the disposal of privately held-business assets to a family member, and will allow more relief in joint ventures and partnerships where the existing 5 per cent minimum holding conditions are not satisfied.

In addition, the rate of CGT has been reduced from 28 per cent to 20 per cent for higher rate taxpayers. The rate for basic rate band taxpayers will change from 18 per cent to 10 per cent. While this does not apply to gains made on the disposal of residential properties, for those looking to close their company, a capital distribution will be more tax efficient than an income distribution, or dividend, even in cases where Entrepreneurs’ Relief cannot be claimed.

Small firms are also delighted that almost all the recommendations made by the Office for Tax Simplification (OTS) have been adopted by the Chancellor, with others still to be discussed. These include an investment of £71m to make it quicker and easier for small businesses to deal with HM Revenue & Customs (HMRC) and a proposal for an asset protection model for the self-employed.

 

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10 smart online marketing tips for small businesses

If you run a small business, the chances are high that your marketing budget is limited at best. To help you make the most of your money and place your attention where you’ll see the best return on your investment, we’ve put together ten tips that you can action straight away.

1. Know your goals

One of the big mistakes businesses make is to carry out ‘spray and pray’ marketing where they aim at everyone and everything, and try to achieve something, without really knowing what that something is. With each marketing activity you carry out, it’s best to start with a single goal, whether it’s driving more traffic to your website or securing more sales of a particular product.

2. Know your target audience

We see it all the time but as well as knowing what you want your marketing to achieve, it’s important to figure out who you’re aiming it at. When you understand the typical person in your target audience, you can talk to them and encourage specific people to become customers.

3. Audit your website content

If you wrote your own website copy, you may need to take a step back to see how it can be improved. Are you talking about ‘we’, ‘me’, ‘I’, and ‘our’ all the time or are you talking directly to your customers, using ‘you’ and ‘your’ to reach out to them? Marketing copy should always put the customer centre stage.

Trying asking the following questions about your website content to:

  • Does each page have a unique focus and message?
  • Is the navigation clear?
  • Is there a call to action on each page?
  • Does your website offer value to your customers?
  • Does your content reflect your goals?
  • When was the last time you added fresh content to your website?

4. Spring clean your SEO

Search engine optimisation can feel overwhelming to small businesses as it feels as though the rules are changing all the time. The best thing you can do for your organic SEO is to create a website that’s entirely focused on giving value to your customers.

Other steps can help to drive traffic to your site though and make a good first impression. This includes:

  • Making sure the SEO <title> tag for each page is unique, less than 55-60 characters and contains your primary keyword for the page.
  • Creating a compelling and unique meta description for each page that is fewer than 155 characters and includes the primary keyword for your page.
  • Making sure that your main headings have an H1 tag.
  • Adding alt tags to your images (preferably with at least one per page including your primary keyword).
  • Adding internal links to related articles.
  • Adding Schema markup to your website copy.
  • Checking your website’s page speed insights and correcting any problems.

Baffled by SEO? Check out the Moz Beginners Guide to SEO.

5. Start using Google Analytics

The single biggest mistakes many small businesses make is to neglect to measure the success of their marketing activities. By tracking your conversion rates – i.e. how many click throughs to your website are turning into sales – you can figure out which marketing activities are the most cost effective.

Google Analytics is a good place to start as it gives you a massive selection of information about how people are behaving on your website, including where they come in (and where from), where they go, and where they leave. Google Search Console (previously Google Webmaster Tools) is fantastic too.

6. Track where phone calls are coming from

If you decide to run a campaign to encourage phone calls, it’s a good idea to use a tracked phone number that will let you monitor where calls are coming from. Services such as HostedNumbers.com can help with this.

7. Add your business to free local directories

If you run a bricks and mortar business that relies on local footfall, then adding your company to good local directories can be a successful marketing avenue. Since Google Pigeon, Google tends to prioritise local businesses with a strong presence in local directories. Just make sure that you list the same contact details and use the same name in all directories, so that you create a consistent presence.

8. Do some mystery shopping

While we would never recommend trying to be a carbon copy of your competitors, it doesn’t hurt to check out what they’re up to from time to time.

  • What keywords are they using to attract new customers? You can find out by using the free Moz toolbar to check any website’s meta data.
  • What are they doing and saying?
  • What offers are they running?
  • How are they differentiating themselves from their competitors?
  • How are they using social media?

9. Start blogging

There are lots of benefits associated with blogging regularly. Not only is a blog fresh content for search engines to index, but each new article is also a fresh reason to contact your customers via your newsletter, something to share to social media, a way to build your authority and showcase your knowledge, and a way to give extra value to your customers.

10. Use videos on social media and/or your website

Video is a great way to show the people behind your business and to connect with potential customers. Even a two-minute video giving advice to your customers could be a surprisingly easy way to add value and stand out from your competitors. Video is also a great way to show your products in use or demonstrate your services. You don’t have to spend a fortune on production – many people within small businesses record themselves on their phones or tablets and share straight to social media.

So there you have it – our ten smart online marketing tips for small businesses. What one of these do you think you would find easier to action today? Let us know how you get on! If you’ve found it useful, we’d love it if you would hit the share buttons and spread the word. It only takes a second but it means a lot.

 

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Payroll tax abusers – Taxman nets £500m

By Ken Maggs, Moore Thompson

The taxman collected £5224.6m through its investigations into payroll tax abusers between 2014 and 2015, mainly through the clampdown on so-called ‘umbrella companies’ that employ contract workers.

These umbrella companies often use complex structures to minimise PAYE and National Insurance Contributions (NICs) for their clients by employing them directly and paying them as employees, or, on occasion as self-employed.

As HM Revenue & Customs (HMRC) points out, although many of these companies operate within the law, some use the structures to disguise self-employment and avoid paying the correct amount of tax by abusing the travel and subsistence tax reliefs that are currently available to contract workers.

In addition, some of these firms pay their contractors the national minimum wage and then supplement their income by paying inflated travel and subsistence allowances or other benefits under salary sacrifice arrangements, which significantly reduces the amount of tax and NICs that should go to the taxman.

However, there are concerns that HMRC’s continued clampdown on umbrella companies could put law-abiding firms at risk, making it harder for them to carry on working, with the result that the entire industry could be facing a bleak future.

In fact, according to construction union Ucatt, the policy change introduced by HMRC from April this year could cost around £3,000 per contractor. The change relates to the tax treatment of employees of umbrella companies, which HMRC maintains will cost them around £360 per person. However, a recent case study undertaken by the union shows a different picture.

It gives the example of a construction worker employed by an umbrella company with £144 per week of travel expenses. Under the new law, the expenses will be taxed at 45 per cent (20 per cent income tax plus both employees’ and employers’ NICs), which will mean a loss of £3,369 per year.

 

 

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