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Positioning Compliance as the Distinction

As the threat landscape has become more perilous and complex, regulators have imposed a wide array of mandates designed to protect sensitive personal information. For most organisations, compliance is seen as the cost of doing business. However, if executed strategically it can not only improve a company’s overall security posture but shortens sales cycles and open the business to new markets.

In order to turn compliance from a check-the-box line item into a valued business initiative, businesses need to identify all global, local and industry regulations that apply to their business and, also, strategically implement the processes and technologies that keep them compliant. Whether you’re targeting specific industry or going after international customers, entering new markets requires continuous education about the latest in compliance and regulatory standards as they relate to data privacy and security.

A good way to get started is to put together a roadmap for how you will get, and stay, compliant with the regulations relevant to your business. What follows is an outline of such roadmap.

Start with the Basics

When you are building a house, a foundation is the key to a safe structure. This holds true for building a compliance roadmap.

Once the foundation has been set, it’s then time for the compliance, IT and security teams to determine which regulations apply to their business. This is the backbone of the compliance roadmap. The good news is that many of these regulations overlap so businesses can complete requirements for multiple regulations at the same time

The Roadmap Focal Point: GDPR

The General Data Protection Regulation (GDPR) brought compliance into the mainstream. When GDPR passed, it established strict regulations for how organisations must handle customer data. The regulation is so broad, stringent and complicated that it has motivated many companies to create new job titles to ensure compliance.

However, while there have been strict compliance regulations before, it’s the high financial stakes attached to GDPR that set it apart. A business can be fined up to 4% of its global revenue if it’s found to be non-compliant. Very few organisations can afford to take that kind of hit which is why so many make it the centre piece to their compliance strategy.

The privacy implications of GDPR are extensive but one of the most important and challenging requirements is the data breach notification. Organisations must notify authorities or specific data subjects within 72 hours of a breach. Most organisations are unable to locate sensitive consumer information within their environment, making this requirement near impossible. However, if the organisation puts data controls into its systems and enacts continuous monitoring and real time intrusion detection, it not only becomes achievable but improves internal processes. 

Compliance can be a powerful differentiator and business driver that inspire trust and confidence amongst prospects, customers and external partners. Although the above standards and regulations require extensive resources, non-compliance can result in fines and other punishment that can cripple a company. It’s important to remember that these compliance standards and regulations may have to be revisited, but once put into place and assigned to a dedicated compliance team; the once daunting task pays for itself.

For more information on how to meet your business compliance obligation get in touch with us on 08702281999 or contact us via info@stanleycarter.co.uk or further details on our website www.stanleycarter.co.uk.

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Brexit challenges and competitive advantage

As organisations seek to harness information to maintain and grow competitive advantage, the importance of developing a clear data strategy is becoming increasingly evident among enterprises. 

As the clock ticks on towards a no-deal Brexit on October 31st, the effects are already beginning on the UK economy.

The pound has hit a two-year low, and the economy contracted by 0.2% in the second quarter of this year. This is bad news for home based growth and a clear motivation for companies to look elsewhere for new opportunities, fuelling their move into new markets.

Not every business can follow Dyson’s business structure and set up a new HQ on another continent, but fast growth businesses looking to maintain their trajectory towards unicorn status are certainly eyeing the EU.

It’s clear that our nearest trading partners still exert a significant pull on UK enterprises consider Starling Bank’s recent £75m funding round to power their European expansion, or furniture retailer Made.com plans to move into four additional EU countries in 2019, bringing its total footprint to 13 across the continent.

Brexit will bring with it all kinds of challenges when looking to expand across the channel. One often overlooked challenge is around maintaining basic business communications.

Without a suitable communications plan in place for a post-Brexit transition, businesses may find it increasingly difficult to communicate with overseas offices, colleagues and contacts due to complex and varied regulatory requirements.

Businesses must consider that each new market must navigate the varying legal regimes and requirements, and make costly infrastructural investments with high potential costs (fines, operating restrictions, even criminal culpability for business owners) for getting it wrong. As a final anti inducement, many European regulators still accept only hard-copy paper-based applications in their native language to be filled out in triplicate.

If you need any assistance or require further information please contact us on 0870 228 1999

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What to consider if you are expanding overseas

Since the UK voted to leave the European Union (EU) in 2016, there has been one thing on the minds of HR professionals and business leaders alike the issue of hiring and maintaining overseas staff.

Business, HR, EU, Around the world
Planning to move or expand your business overseas?

Brexit has cast a question mark over the future of the global workforce and with VISA issues for existing staff looking to be problematic and hiring overseas talent going to become more difficult, businesses need help.

To achieve this, Human Resource (HR) departments and those responsible for recruitment must be aware of the options available to them to enable the business to easily expand and hire the people they want, where they want. This is where organisations should look towards partnering with a direct Employer of Records (EOR) service provider.

With a potential economic slump on the cards, preparation is key. A third party service used by businesses looking to expand and create entities overseas, an EOR takes care of all of the issues traditionally associated with the minefield that is global recruitment. Helping make the transition into new territories more simple, these service providers speed up the process of setting up shop abroad in a cost effective way. So how does it work and how can it really help in a post-Brexit world?

Time saving

Carrying out HR tasks is time intensive and it’s no wonder that companies often wildly misjudge the time it takes to carry out processes which are traditionally the expertise of HR professionals during periods of global expansion.

Sorting out documentation and translations, hiring new staff, and getting to grips with local payroll and tax regulations are all obstacles that can take a relatively long time to work through when setting up a new office abroad. Underestimating the time it takes to establish a business overseas is a key pitfall faced by organisations expanding globally.

But this is where an EOR service provider can help. Taking responsibility for all processes relating to employment contracts, payroll and tax compliance away from HR departments, EORs can save them time and prevent unnecessary stress when it comes to dealing with the nuances in specific regions.

Outgoings

The costs associated with expanding overseas can be crippling, especially for small business wanting to ride the wave of success onto pastures new.

Unforeseen costs can come from multiple sources, depending on the country you are looking to expand into. These include, but are not limited to, recruiting staff, funding health or housing benefits and complying with the legal requirements for annual leave outlined by the host country.

For instance, in China, an employer is required by law to foot the bill for an employee’s housing fund and social healthcare programmes and in Switzerland, those under the age of twenty are entitled to one week more annual leave than the rest of the population. And those are countries that aren’t even in the EU, so add the other twenty seven member states and the nuanced ways they do business into the mix and you can see how complex things get. Especially as the UK does much of its business with EU countries.

It’s factors like these that not only mean business owners are confronted with costs they were not expecting, but also are at risk of legal repercussions should they not comply with these country specific regulations.

EOR service providers can help here too. Setting up an entity abroad no longer needs to be decided on the basis of the financial reserves; time or legal expertise a business has available to it. Instead, this will be the only time that hiring another entity won’t actually cost the company money, but help it make savings.

Legal compliancy

Ensuring the decisions a company makes are above board is paramount to both its financial success and the longevity of its trading. The process of ensuring legal compliancy can be a daunting one and can put companies off recruiting staff and setting up shop in overseas territories altogether, or lead them to cut corners. The principal issue with this is that by bypassing the aforementioned formalities, businesses then run the risk of breaching both employment and tax laws.

EOR service providers can not only save businesses time, money and prevent them from breaching these local laws, but now the once-daunting process of setting up an entity abroad has never been easier. With EOR, companies can embrace the opportunities that lay ahead of them overseas with open arms, rather than confining them to function on a national basis only and HR departments and recruiters can rest assured things will be done correctly without affecting the talent pool.

If you expanding overseas and require help and assistance registering your company and/or employment contracts give us a call on 01612056655 or send us an email info@stanleycarter.co.uk or check our website for further details www.stanleycarter.co.uk

 

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The Hard Brexit and London Stock market

If the Brexit negotiations last year seemed tense, they are likely to pale in comparison to the upcoming discussions regarding the terms of the new trading relationship between the UK and Europe.

UK politicians are not in agreement about what would replace the EU Single Market and Customs Union memberships.

London Stock market, London, UK markets
The uncertainty surrounding London Stock market

Negotiations need to be completed within nine months to leave enough time for any new agreement to be ratified by parliaments before the UK leaves the EU on 29 March next year.

Given the stakes, there is a high probability of a breakdown in talks and of the economically damaging “hard Brexit” materialising.

In such a scenario, the UK would lose tariff-free access to its largest export market and have to fall back on World Trade Organisation rules. This would entail the imposition of mid-single digit tariffs on UK exports to the EU.

More importantly, exports would also have to abide by complex rules of origin regulation, a heavy burden that would be both time consuming and costly, particularly for SMEs. A hard Brexit would likely lead the pound to retest its post-referendum lows. Higher inflation would likely push gilt yields up.

Another risk, with arguably a wider range of consequences, is the spectre of early elections. With Brexit negotiations dividing the government, there is a material probability of a general election before the end of 2019, particularly as Theresa May has a razor-thin working majority of only 13.

A Labour Party win cannot be dismissed, given its surge in the polls since mid-2017.

A wide array of outcomes would then be possible for financial markets. On the one hand, should Labour win a sweeping majority and push for a hard Brexit, UK financial markets would almost certainly come under pressure due to nationalisation and £500bn fiscal spending programme.

In a more benign scenario, Labour would emerge victorious, but without a majority of seats, making it more difficult to pass extreme policy measures. Should it also shift its stance on Brexit and opt for a Norway style agreement where access to the Single Market is retained, it is conceivable the pound and economy could both strengthen.

In our view, UK equities present a less attractive proposition than those of other regions, despite having more appealing valuations.

UK equities lagged in 2017 and we think this is set to continue in 2018, given the unappetising stew of severe political risk and a comparatively weak economy. UK equities look especially cheap compared to other markets, particularly on a price-to-book value basis. This is partly due to the structural derating of banks and commodities.

On a forward price to earnings basis, excluding commodities, the UK trades at a 10 per cent discount to global markets; a level it hasn’t seen in nearly a decade. In our view, such cheapness is warranted, given the risks enumerated above. The earnings growth expectation of less than six per cent for 2018 is comparatively uncompelling. With the number of profit warnings at a six-year high in the third quarter of 2017, earnings expectations may well be reined in further.

As a high dividend paying market, yielding four per cent overall, the UK has tended to underperform when monetary policy is tightened. UK equities are also still largely exposed to commodities and emerging markets, which are both highly sensitive to the US dollar. Should the dollar rally, as we expect, it could also contribute to restraining UK equity performance.

Should the pound weaken due to a breakdown in negotiations, some argue that UK equities could rally, much like they did after the referendum results. But we think this could be interpreted as the worst scenario, in which case, equities may well dissipate. The outlook is finely balanced.

We remain selective, preferring high-quality businesses with sound balance sheets, robust cash flow generation, and a track record of compounding returns to shareholders. We maintain our bias towards international exposure, focusing on companies exposed to the robust European economy, or US tax reform.

We struggle to be enthusiastic about domestic stocks. Domestically focused FTSE 350 stocks have underperformed their peers with international exposure by more than 15 per cent over the past three years.

With the barrage of pressures unlikely to fade in the short term, we believe it is too early to step back into domestic stocks. The UK outlook is mired in uncertainty, and we expect volatility to increase. This could mean better entry points for equity, fixed income, and foreign exchange investors in the months ahead.

We can assist and advise  on how to invest on London stock market. send us an email on info@stanleycarter.co.uk or contact us on 01612056655

 

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Money has been generated from HMRC payroll investigations

HMRC collected £819m in additional tax through payroll investigations last year, as it continued to crack down on organisations that wrongly classify workers as self-employed.

PAYE, Payroll, HMRC , stanley carter
Employers Payroll

It was a 16% increase on the additional tax generated in 2015/16 and was recovered following payroll investigations by its employment status and intermediaries team, which was set up to investigate businesses that have declared a high number of self-employed workers.

The team looks into the use of self-employed workers in the gig economy and organisations that classify workers as self-employed in order to avoid paying tax and national insurance contributions, acting on intelligence and complaints about alleged misuse of self-employed workers.

HMRC, which released the information following a freedom of information request, also revealed that investigations into the payrolls of large businesses specifically generated £503m in additional tax in 2016/17, up 31% from £383m the previous year.

HMRC is making no secret of its suspicions of how companies classify their workers. Considering the scale that the gig economy has grown to, it is no surprise that it is now under intense scrutiny by HMRC.

As well as its broader brush investigations in which HMRC aims to collect millions at a time, it is also combing carefully through the minor details of payroll. Even the most trivial of expenses are now being investigated.

We feel that it was more productive for HMRC to target employers and intermediaries than individual workers, and therefore it is vital that employers kept up to date with HMRC initiatives and reviewed their PAYE systems.

If you require assistance with your Payroll systems contact us on 01612056655 or send us and email info@stanleycarter.co.uk or check our website for further details www.stanleycarter.co.uk

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FRC needs greater transparency

Despite some negative coverage in recent months, the majority of the Financial Reporting Council’s (FRC’s) stakeholders still consider it to be independent of the auditing profession.

corporate governance, FRC, UK
More transparency needed within corporate governance

However, the UK audit watchdog could do more to help itself; particularly when it comes to convincing institutional investors who are the most concerned about its independence, by making its processes and outcomes more transparent.

Given the variety of areas that the FRC covers, nevertheless, a number of clear messages for the FRC come across, not least that as an organisation that holds others accountable, it also needs to be seen to be holding itself accountable to the same measures.

More than a quarter of institutional investors told researchers that they did not believe the FRC was independent of the audit profession. Reasons cited include the fact it hires many ex-auditors, it receives funding from audit firms, and a suspicion that it does not always hold auditors as accountable as they should be.

When you’re setting standards of governance for other companies and telling companies what they should be doing, then you have to be whiter than white.

Stakeholders want more transparency in the FRC’s disciplinary and enforcement activities.

One way round this issue would be for the FRC to step up its communication about its goals and activities, the researchers suggest. They point out that those stakeholders who are more engaged with the FRC have a greater understanding of its internal processes and constraints. Increasing outreach and communication with less-engaged stakeholders could help to improve favourability and perceptions of transparency.

In response, the FRC says that it has already made changes to meet many of the issues raised, including revising its governance structure to improve processes, publishing its register of interests and investing in its enforcement division.

For your corporate governance queries send us an email on info@stanleycarter.co.uk or check our website for details

www.stanleycarter.co.uk 

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The challenges of using technology

Technological advancements require accountancy firms to review not only their internal processes relating to workflow and business management, but also their working environment, including employee reward and engagement practices

Techonology, accountants, UK
Is technology helping accountants?

The rise of technology has transformed the accounting industry and the way in which accountants work in recent years, with cloud tools automating processes which previously took up valuable staff time, increasing efficiency in practices throughout the UK.

Yet, technological advancements require accountancy firms to review not only their internal processes relating to workflow and business management, but to also examine their working environment, including employee reward and engagement practices.

Cloud-based technology automates the collection and processing of financial transactions, helping to build better accountant-client relationships. It can capture, read, and store receipts and invoices automatically, removing the need to store paper, type in data, or chase clients. It also vastly decreases the likelihood of error.

These benefits mean that technology provides significant time savings, with firms needing to adapt to the new business climate as a result, eliminating time-based pay and incentive’s productivity to foster happier employees, and therefore happier clients. Ultimately, time is freed up for accountants and bookkeepers to focus on more important activities, and provide their customers with a quick, hassle-free service.

With staff wanting to feel challenged in their role and recognised for the performance they give, firms need to find an effective way of boosting productivity and rewarding employee performance.

Incentivised pay ensures that the amount an individual earns is relative to his or her results, profit, or performance. Short-term schemes, like bonuses and commission, motivate employees to hit or exceed targets while longer schemes, such as profit sharing, help to generate in the employee an interest in the success of the company.

Firms that fail to get on board with these productivity practices will likely find themselves unable to compete with the more tech-savvy businesses, and risk losing their best employees to competitors offering more recognition for individual performance.

If you are looking for new accountants send us an email info@stanleycarter.co.uk or check our website for further details www.stanleycarter.co.uk 

 

 

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Corporate Governance and the pay gap

Executive pay fell last year but top bosses will still have made more money in three days than the typical worker earns in a year, new figures reveal.

UK top companies, Corporate Governance, pay gap
UK top executives pay gap

The mean pay of chief executives in FTSE 100 companies fell by a fifth from £5.4 million to £4.5 million – 120 times more than an average full-time worker, a slight drop on the ratio of 122-1 in the previous year.

The High Pay Centre think tank and the Chartered Institute of Personnel and Development (CIPD) said there had been “modest” restraint by company boards but the pay gap between the top and average workers remained wide.

All listed companies will have to publish the pay ratio between bosses and workers under new corporate governance reforms this year.

While it was encouraging to see a tiny amount of restraint on pay at the top of some FTSE 100 companies last year, there are still grossly excessive and unjustifiable gaps between the top and the rest of the workforce. Publishing pay ratios will force boards to acknowledge these gaps.

The drop in pay in the last year is welcomed but will have largely been driven by the Prime Minister’s proposed crackdown on boardroom excess.

It is crucial that the Government keeps high pay and corporate governance reform high on its agenda, but we also need business, shareholders and remuneration committees to do their part and challenge excessive pay. We need a radical rethink on how and why we reward chief executives, taking into account a much more balanced scorecard of success beyond financial outcomes and looking more broadly at areas like people management.

The current review of the UK Corporate Governance Code provides a great opportunity to broaden the remit of remuneration committees to ensure that there is much more focus on the wider workforce and employee voice when decisions on chief executive pay are being made, to improve fairness and transparency.

We are experienced on corporate governance and if you have any queries send us an email  info@stanleycarter.co.uk or check our website for further details www.stanleycarter.co.uk

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What should Accountants expect in 2018

We’re just a matter of days into the New Year and no doubt accountants are already looking ahead at the new challenges and obligations 2018 will bring.

self assessment, tax return, accounts, tax
Preparing self assessment in 2018

Of course, some of the most important deadlines for accountants to meet fall in the first few months of the year, and May 2018 brings a deadline of a different nature – with firms needing to ensure their data is compliant with the new EU-led  General Data Protection Regulation (GDPR).

But what other challenges might accountants be facing this year, and how might they need to prepare to respond to them?

Self-assessment deadline looms large

The first real target to meet for accountants is the annual scramble to ensure clients submit their online tax returns in order to meet the 31 January deadline.

In truth, of course, the majority of accountants will have done the bulk of preparation by now; readying their clients and securing the necessary information for the 2016-17 tax year in the hope of comfortably ensuring submissions are made.

 

However, if you are struggling to extract the last pieces of information from your clients it’s worth sending out one last mail shot as soon as possible, not only to remind them about the deadline but also to ensure they fully realise they are entirely responsible for submitting their returns and thus avoiding triggering the automatic £100 penalty.

You don’t want to be in a position where any client tries to put the blame for any penalty at your door.

HMRC is in the process of reviewing how penalties are applied, with a review suggesting a driving licence-style points system, but for now, the immediate £100 fine remains in place, with further penalties following for clients who continue failing to submit.

New dividend threshold

In terms of new policies coming in place this year, that you may need to direct your clients towards, the first involves the reduction in the tax-free allowance for dividend income.

From the start of the new tax year in April, legislation will come in reducing the band where dividends incur a 0% tax charge from £5,000 to just £2,000. Clearly, this could have an implication for how some clients choose to be remunerated in the future.

Tax relief for finance costs reduced

Also in April, the tax relief available for the finance costs of individual landlords will continue to be hit.

During the current 2017-18 tax year, higher rate tax payers have only been able to claim higher rate tax relief on 75% of the total finance costs deductible from rental income received. The remaining 25% of finance costs incurred only qualify for tax relief at the basic rate. From April 2018, the higher rate relief available will fall to 50%. Ultimately, landlords will only be able to claim basic rate tax relief on finance costs incurred; this process is set to be completed at the start of the 2020-21 tax year.

Making Tax Digital comes ever nearer

Finally, while Making Tax Digital (MTD) will not start to come into force until April 2019, many sole traders, partnerships or limited companies likely to be affected should be advised to consider whether their existing bookkeeping function will meet HMRC’s strict MTD filing requirements. If it doesn’t they will need to invest time and effort into adapting their record keeping to be MTD-compliant. This is not something that can happen overnight. The smooth transition can only be achieved if sufficient time is allowed for planning and evaluation.

While many VAT registered entities are already virtually compliant, for others the process will take a little longer, and it will be prudent to consider software choices a good nine months in advance of any new legislation coming into place. For a number of businesses therefore, the summer of 2018 will be a good opportunity to choose an option that will work best for your needs.

If you need assistance with your self assessment or any other tax matters email us on info@stanleycarter.co.uk or check our website for further details www.stanleycarter.co.uk 

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Things to consider if you not long wish to use spreadsheet to do your accounts

For many UK contractors and micro-business owners, the process of managing business finances has historically been a solid Excel spreadsheet and a lot of patience.

accounts, spreadsheet, Vat, HMRC, self assessment
Doing accounts using spreadsheet

But with an ever-changing small business landscape and the looming spectre of digital tax on the horizon, more and more people are looking past their spreadsheets and searching out more sophisticated technology to help them with their accounts.

Although technology is becoming increasingly sophisticated, we are not quite at the point where everything can be fully automated and your accounts just take care of themselves. So while software is designed to make the process easier, you still have to do some work too.

When approaching accounting software for the first time, the most important thing is to ensure that the information you are entering into it is correct. This includes everything from inputting accurate bank data (if you’re manually entering transactions rather than using a direct bank feed), and categorising your expenses correctly, right through to simply making sure your company start and year-end dates are correct. By doing this, you will avoid making simple mistakes that could cause you a headache with your finances down the line.

Bookkeeping is not the most exciting task when it comes to running your business, and it’s easy to let it slip down your priority list, especially if you’re facing the prospect of using a new method after years of your reliable spreadsheet. But the less disciplined you are, the more difficult it will become.

Take out a dedicated time each week to do your basic admin (such as inputting expenses, chasing invoices and reconciling bank transactions) and stick to it. By making bookkeeping a regular habit, you will keep on top of your finances more easily while getting better acquainted with your software much faster.

Perhaps the biggest obstacle that puts people off stepping away from spreadsheets and giving accounting software a try is the issue of data security. It’s certainly not a mistake to be concerned about this; data security is absolutely vital and any accounting software provider worth its salt will take it very seriously. These providers should be completely transparent about what they do with your data and how they store it, so take the time to do some research and put your mind at rest.

But if you are looking for new accountant that you can trust and give you impartial advice please send us an email on info@stanleycarter.co.uk or check our website for further details www.stanleycarter.co.uk