Phoning HMRC Cost Taxpayers £97 Million in a Year

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Last year, waiting on the phone to HM Revenue and Customs (HMRC) cost taxpayers millions, according to spending watchdog the National Audit Office (NAO). Thanks to long wait times, people calling the taxman spent a collective £10 million in call costs while on hold and waiting to speak to an adviser, the NAO said.

Over the span of 18 months, starting in 2014, the NAO said that HMRC’s standards of service when dealing with telephone queries “collapsed.” Over that space of time, the Office claims, the time that customers spend waiting to speak to an adviser tripled and many calls went unanswered. While HMRC has claimed that the majority of incoming calls now get an answer within six minutes, the NAO says that the time spent waiting on hold with HMRC last year could be up to an hour.

In the course of its recent investigation into the standards of HMRC’s service, the NAO calculated the amount that these lengthy calls had costs taxpayers. The cost of phone calls, the organisation reports, was £10 million in total, and the NAO believes that much of this is a result of long waiting times.

The NAO also included the value of people’s time in the calculations, averaging this at a rate of £17 per hour. On this basis, the organisation estimates that taxpayers spent a total of £66 million worth of their time just waiting on hold to speak to an adviser, and a further £21 million while talking to HMRC after their call is finally answered. This brings the NAO’s estimate for the total amount lost to taxpayers on calls to HMRC, including both call charges and time spent on the phone, at £97 million.

One of the key causes for the drop in standards for HMRC when it comes to dealing with phone queries, the NAO claims, is staff cuts. Specifically, the organisation points to the fact that the tax authority drop 11,000 of its staff as part if its drive to increase the number of tax returns completed online, on the assumption that this would result in fewer phone calls to be answered. These cuts took place in stages between 2010 and 2014.

Seemingly recognising this as a misstep, HMRC has since increased the number of staff available to answer helpline calls by 2,400. These extra staff were brought in last autumn, after typical waiting times for calls to HMRC peaked at 47 minutes.

In response to the NAO’s report, HMRC director general for customer services Ruth Owen said: “We recognise that early in 2015 we didn’t proide the standard of service that people are entitled to expect… We have since fully recovered and are now offering our best service levels in years.”

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Millions of Tax Returns “Unnecessary,” say Critics

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Critics are claiming that millions of people across the UK are filling out tax returns that are just not necessary. It is claimed that a large portion of those filling out tax returns are required to do so despite not owing HMRC any money at all.

At present, an annual tax return is required of roughly a third of taxpayers across the UK. Nearly a quarter of them (24%) owe very little – less than £50 for the entire year – and two thirds of these (16% of the total number who must fill out a tax return) owe nothing to HMRC at all.

Some of those who must complete a tax return are sole traders or owners of businesses which have not turned a taxable profit – in which case a tax return is necessary to show HMRC that profits have not reached taxable levels. However, many others are required to complete a tax return for entirely different reasons. For example, company directors and employees earning over £100,000 per annum must complete a yearly tax return even if they have no additional, undeclared income whatsoever. Furthermore, recent changes to the administration of child benefit mean that one parent or guardian often finds themselves with the need to submit a self-assessment tax return even if they do not owe HMRC money.

Others, however, may register for self-assessment voluntarily even if no money is owed to HMRC. For those in some unusual and specific financial circumstances, tax returns can serve as useful records to assist with things like applications for loans.

HMRC has defended itself from these criticisms, however. A spokesperson said that the organisation “[doesn't] want anyone to fill in a tax return unless it’s absolutely necessary.” For this reason, he claimed, HMRC automatically takes 400,000 people out of the self-assessment process each year.

The spokesperson also insisted that HMRC goes to great lengths to ensure that the self-assessment process is as easy as possible for those who do have to complete an annual tax return. In particular, he pointed to the organisations’ “bringing in short tax returns and online self-assessment, and we are taking this much further by introducing the new digital tax accounts.”

Indeed it is hoped that new online tax accounts, which will be regularly updated with information about people’s income, could almost completely eliminate the problem of people filing unnecessary tax returns. Fully rolling out this new process, however, is likely to take some years.

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The Costs of Moving Your Home Business to an Office

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A lot of businesses start out based in the founder’s home. Most likely, your spare bedroom, garage or even shed was turned into a home office to accommodate your new business.

But if your business has been very successful, it may be starting to outgrow its home office and you might consider moving it into a real, purpose-built office outside of your home. This can be an exciting time, but also an expensive one. It is important not to take this step without properly considering all the costs involved.

The Cost of the Office

The first, most obvious cost associated with moving your business into a real office is that office’s own price tag. Purchasing an office is very expensive, so unless your business is really thriving or you are prepared to risk a large chunk of savings you are more likely to rent. Make a careful and realistic assessment of how much potential you think your business has to expand as a result of moving to its new home, and compare this to the rent to ensure the cost is worthwhile. Remember that this expansion is not going to be achieved overnight, so make sure that the cost of the rent will not have too big an impact on your business in the meantime.

Bills

Rent isn’t the only ongoing cost associated with an office. You will also have energy bills, which are likely to be greater than the addition that working from home makes to your household energy bills. On top of this, there may be bills for services associated with or required by the office such as cleaning. If you are renting an office which includes a cleaning service, this is probably included in the rent but not necessarily so it is worth double checking. Make sure you also know whether any repair or maintenance bills fall to you or whether this is entirely your landlord’s responsibility.

Furniture and Equipment

You may be renting a fully-furnished office, ready for you to move in and pick a seat at one of the handy desks. On the other hand, you may well be renting part-furnished or unfurnished office space, in which case you will need to supply the necessary furniture. This is essentially  a one-off cost, but it can be a hefty one so look into the cost of everything you will need beforehand so you can factor it into your decision. If you are expanding into a dedicated office in order to take on employees, include the costs of supplying them with equipment. While it’s not part of the cost of the office, don’t forget that when you reach the stage of hiring those employees there will be costs associated with this outside of just paying their wage.

 

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How to Increase the Sales of your Products/Services

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All business owners want to increase the sales of their products or services, but actually achieving this goal is often easier said than done. After all, there are many firms out there all vying for custom, and it can be hard to build market share. Fortunately, help is at hand. This brief guide will talk you through the basics of boosting sales.

Hone your offerings with effective market research

Effective market research is a must. Getting feedback from potential customers provides you with the perfect opportunity to hone your offering so that they have maximum appeal. This research should be undertaken before you launch your products or services and at regular intervals thereafter. This will help ensure you keep your finger on the pulse of changing consumer habits, needs and preferences. Don’t worry if you lack the resources or know-how to conduct market research yourself. To make this task easier, you can turn to experts like Wirral Sensory Services, who are able to conduct a range of studies on your behalf.

From focus groups to online surveys, this fact finding can prove highly valuable as a means of increasing sales. After all, selling your goods or services will be much easier if people actually want to buy them.

Make sure your advertising’s up-to-scratch

No matter how good your offerings are, your sales figures will disappoint if you don’t make the most of marketing opportunities on offer. There are now many different forms of promotion available. As well as taking advantage of traditional communication methods, like radio and print ads, you can raise awareness of your products or services online using organic and paid search techniques, and by engaging with consumers through social media.

There’s a science to making yourself seen and heard online, and you might benefit from bringing in expert third parties to help you achieve your goals.

Run reward schemes and promotions

You could also increase sales by offering your customers added incentives to make purchases. Temporary special offers can cause a stir and create a spike in demand, and reward schemes are an effective way of encouraging higher levels of repeat custom.

Expand your target market

Another top tip is to consider expanding your target market. By offering your goods or services to more people, you stand to significantly increase your sales figures. Depending on the type of business you run, you might benefit from targeting consumers overseas. Thanks to the web and improved transport links, it’s now easier than ever to trade internationally, and doing so could give your business a major boost. Just make sure you do your research first so that you are aware of all the legal and logistical issues involved in selling to individuals or organisations abroad.

By following suggestions like these, you should be able to increase your sales levels and bolster your business’ long-term prospects.

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Why it is important to make a good first impression in business

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First impressions always count. It all starts on face value. In the business world, competition is always on the high and this is why CEOs are always mindful of first impressions. They think about approachability, accessibility, credibility and the appearance of their business on a whole. Here is why it is so important.

The seven second window

This is how long it takes to leave a first impression on someone you meet. In this case you are meeting clients, so in a way treat it like a job interview. Exercise good eye contact because this will help you come across as attentive and interested. Smile to convey friendliness and have a good handshake. Introduce yourself in a clear voice. Listen well to your client’s needs first before proposing your sales pitch. Also be presentable in your appearance because you are an extension of your brand.

The waiting

Usually you have to wait to meet your new client and this can leave you hanging out in the foyer. Keep in mind that the receptionist is always watching, so try and keep busy. Look around and learn about your client. They might be a fan of a sporting team because they have a signed poster on the wall. Keep that in mind when you make small talk. If the nerves make an appearance and your hands are sweating, you can wipe your hands on your pants when you stand up before shaking your new client’s hand.

Have a clean website

Customers these days are very tech savvy and will Google your business. So make sure your key messages are written clearly and concisely. Include bold lettering to maintain your reader’s attention and include lots of white space because you don’t want your text to be unreadable. Website readers read in a left to right motion so be sure to include your best key message on the top left hand corner of your webpage. They might also contact your staff so be sure that your receptionist is just as courteous as you appear. Having a virtual administrator is more cost effective. Some agencies provide administration as a part of a package, for example Servcorp Virtual Office.

Good photos

Invest in a professional photo shoot because you need to convey professionalism in every aspect of your marketing collateral. People are not going to see professionalism if you have a blurry photo on your Facebook page and busy graphic design. Keep it simple and only post photos that convey your brand the best because photos can tell a thousand words.

Exercise an A-List attitude

The act in meeting new clients is just as important as your presentation. So be nice to everyone but not too overly sweet that it looks overdone. Be genuine when you greet your new clients and start straight away when you walk through the door. Greet the receptionist and employees you walk past. Greet everyone.

Body language

Have a good posture and don’t slouch in your chair. If nervous, try not to hold anything that you could fiddle with, such as pens. Also psychologically people like people who are like them. Mimic your client’s movements but subtly. When they cross their legs, wait a few moments then do the same while maintaining eye contact to keep the move looking natural.

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Why Recruitment Agencies Outsource Payroll Functions

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All businesses struggle from time to time with their financial and legal responsibilities and it’s easy for a lot of time to be spent in the important but mundane functions of administration. This time could be better spent in developing business opportunities and new income streams; instead of being engaged in paperwork employees could be making valuable contributions to a company’s growth.

A solution that is proving more and more popular with recruitment agencies is to outsource payroll, removing a large burden from the company’s administrative process whilst ensuring that contractors recruited get the financial and insurance services they need.

 

Umbrella companies and how they work

In essence, an umbrella company provides contractors with a payroll service. It processes the payroll and also legitimate business expenses to be set off against tax; this also eliminates the necessity of dealing with IR35 legislation – the tax authorities’ method of defining if a contractor is self-employed or acting as an employee to a business.

Acting as a middleman between contracting parties, an umbrella company collects all data that is relevant to contracts and processes it, ensuring that payment and tax issues are handled comprehensively and competently.

Benefits to recruitment agencies of effective payroll solutions

It’s not uncommon for smaller businesses in the field to look for added value to their mainstream operation. Many agencies will have employees who can handle the basics of payroll, but it takes time and most are unlikely to be experts in employment law and taxation. Using an umbrella company means that access to all those specialist resources to deal with payments is convenient but is still at arms length. The bureaucratic burden is therefore relieved and company employees can concentrate on what they do best, growing the business.

Additional benefits are that because an umbrella company is a specialist in taxation and payroll issues, it could help an agency to save money by knowing how business expenses can be balanced against taxation to bring down the overall tax bill. This is a particularly useful specialism because the laws on allowable business expenses can be very complicated at times, and having an expert to call upon means it is far less likely that HMRC will come knocking on the door requesting extra payments.

The umbrella company will also collect all appropriate data to make sure that contracts are fulfilled properly in terms of paying invoices and financial settlement.

 

Keeping it legal

In the world of employment law and taxation there are many grey areas that the majority of small businesses and contractors find hard to understand clearly. The last thing they need is to be taken to task – or even court – for doing something wrong and not complying with legislation. It’s a weight off the collective shoulders when payroll is outsourced in the knowledge that an umbrella company will be working to the contractor’s advantage, where money spent on outsourcing is money saved on the costs of employing in-house specialists to do the work.

 

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Managing your payroll online

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For many small businesses and contractors, one of the biggest administrative burdens is managing the payroll.  Large amounts of time can be spent on the payroll processes, when in business terms this time would be better invested in working with customers and developing commercial ideas.  For this reason alone, the payroll activity is frequently outsourced, but there are also other good reasons for managing the payroll online and through an external agency.

What an umbrella company does

One of the solutions that many contractors and entrepreneurs turn to in managing their payroll administration is an umbrella company.  The essence of an umbrella company is that it provides a payroll service to contractors by processing the payroll while enabling business expenses to be set against tax, and eliminating the need to deal with IR35 legislation. The umbrella company acts as an intermediary between contracting parties to collect all the relevant data in respect of the contracts, and to process this so that payment and taxation are competently and comprehensively handled.

 

The benefits of payroll solutions through an umbrella company

Contractors and small businesses that choose to handle payroll and contract invoicing through an umbrella company can glean a number of advantages.  The first of these is the general benefit that persuades many small businesses to outsource administrative components of their work. Namely, the umbrella company reduces the bureaucratic burden on a contractor or entrepreneur and frees time for operating and growing the business. Next, as a specialist in payroll and taxation issues, the umbrella company can potentially save the business money by effectively using valid taxation principles to balance expenses against taxation and reduce the overall tax bill.  In addition, the umbrella company, by gathering all the necessary data, ensures that contracts are properly fulfilled in terms of invoice payment and financial settlement.

 

Tips on choosing an umbrella company

After deciding to use an umbrella company, there are a few tips for contractors and entrepreneurs concerning what to look for when choosing the right umbrella company for their needs.  As with any business transaction, the primary means of assessing the suitability of an umbrella company lies in the clarity and level of fees to be charged.  Fees at any stage of the business relationship should be fully transparent and listed in detail, so that fair comparisons can be made between companies to ensure that there are no nasty surprises at any stage.  In addition, a track record that shows high levels of expertise and sound, wide-ranging experience is to be preferred. Full liability and indemnity insurance cover is also essential.

 

In addition to these more common sense points of comparison, it is also good to choose an umbrella company that provides a simple and personal online service.  The management of data online should be clear and easy, and it should be possible to contact a competent representative in person, if the need arises.  Furthermore, the umbrella company should be able to show that it operates procedures in expenses and taxation that are both transparent and comprehensive, in line with current tax requirements set out by HMRC.

 

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Qatar vs. the UK: Benefits of doing business in the Middle East

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Are you at a crossroads in deciding whether to stay in the UK or relocate to Qatar and the Middle East? Will it be financially viable to move to Qatar and the Middle East? Expat banking and investment are subjects of continuous interest for financial moguls, but some of the most interesting differences between the two countries are social customs that are recognised when companies do business.

Personal financial affairs

According to the HSBC Expat Explorer Survey 2012, expats in the Middle East have a relatively positive economic outlook. In terms of economic satisfaction, expats in Oman (90%), Qatar (89%) and Saudi Arabia (83%) reported a higher satisfaction level about the state of their current economy than expats across the world (59%). The key factor that attracts expats to Middle Eastern nations is job opportunities, with 77% of expats citing this as a reason for relocating to Qatar, 76% for Saudi Arabia, 74% for Bahrain and 65% for the UAE. As it has been reported by business experts, there are more job opportunities in Qatar than in Bahrain, UAE and Saudi Arabia.

In addition, the survey indicated that the high salaries and low tax rates on personal income in many Middle Eastern countries have enabled expats to secure higher disposable income than expats living in other regions. The majority of expats interviewed in the survey reported higher earnings potential in some Middle Eastern countries such as Qatar, Oman and Bahrain than the global average. In the New Horizons article series published by the Guardian, there are now 4.5 million Britons abroad. Young and single expats prefer the tax-free income offered by countries in the Middle East and they normally stay for around 5 years and typically take middle-management roles in Dubai, Abu Dhabi and Qatar.

In Qatar, the government does not levy personal income taxes on employee earnings, estate or gift taxes and any social security taxes. In contrast, the basic tax rate in the UK for 2013-14 is 20% for the first £32,010 and higher rate of 40% will be taxed on annual income between £32,011 and £150,000, according to HM Revenue & Customs.

One of the most important things that expats do is to open saving accounts in Qatar. You can either open an account before you leave or set up one when you arrive in Qatar. If you are a customer of an international bank that has a presence in Qatar, you can open an account in Qatar before you set off. Your account will be opened before you arrive and your banking credit history will be consistent.

Social customs

In addition to financial issues, expats deciding to relocate also consider lifestyle and emotional factors such as cultural fit. By respecting the culture and customs in Qatar, you can blend into the Qatari society. While Arabic is the official language, English is commonly used for business. Given Qatar’s attractive investment climate, there are many professionals moving there with their children. For expats relocating with children, advice given by expats living in Qatar is to plan and apply for a place in school before you move (as reported in the Telegraph). Qatar has an excellent health care system and the Qatari government is planning to implement a universal health insurance system.

It is natural to feel uncertain before emigrating to a new country – no matter where you go! Before you uproot yourself and your family, evaluate how you want to move your career forward and the long-term benefits of becoming an expat and starting afresh in a new country.

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