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Owner Managed Business (OMBs) name accountants as ‘number one’ service, report finds.

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91% of small businesses rate accountants as an ‘important part of their business’ operation’ and just under half (49%) of all OMBs go to their accountant for strategic business guidance.

Accountants are reportedly the UK’s “number one” go-to business service, according to Sage, the leader in accounting, financial, HR and payroll technology for small and mid-sized businesses.

According to Sage, when asked what services they would go to when first starting out a business, OMBs named accountants as their number one (34%) “go to service”.

Over a quarter (28%) said COVID-19 had driven them to seek out the help of an accountant and a fifth (18%) named Brexit as the driving factor. In fact, during the pandemic, over half increased their reliance on accountants.

Sage also found that two-fifths (39%) of OMBs name making tax digital as the number one reason they sought accountancy services.

The ‘Count on Accountants’ research also suggests (91%) of small businesses rate accountants as an “important part of their business’ operation”, while half of small businesses go to their accountant for strategic business guidance.

Named by small and mid-sized businesses as ‘critical’, the new study discovered a “staggering” (92%) of OMBs use the service of an accountant, with half (49%) using their services at least weekly.

Paul Struthers, MD, Sage, said: “Accountants play a critical role in accelerating this success and our research shows they are vital to the UK’s economic recovery. Our research shows accountants have an open door to become a de-facto strategic partner for their clients – this is an opportunity they must embrace.”

Ross Boyd, CEO of RB+ Chartered Accountants added “This research supports the need to provide OMBs with the important financial services they need to not only run their businesses but enable them to grow profitably through adding wealth which has been our focus here at RB+ for over ten years”.

Ross Boyd of Ross Boyd Chartered Accountants

SPOILER ALERT: REASONS TO BE WARY OF INFLATION RATE OPTIMISM
Ross Boyd advises economic headwinds may upset Bank of England predictions

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December 2021: The Bank of England is likely to predict that inflation, a measure of the rate of rising prices of goods and services in the economy will peak in December 2021 at 4.5 per cent and reduce to around 2 per cent by December 2022.  Ahead of the Monetary Policy Committee’s meeting on December 16th, Ross Boyd, Director at Belfast-based accounting consultancy, RB+, suggests that this forecast may be optimistic for a number of reasons including the ongoing pandemic, automation, Brexit, rising taxes and utility bills. 

Ross believes that inflation could remain high, which could potentially have a significant impact on Northern Ireland’s 120,000 owner managed businesses. Ross advises, “Covid 19 remains a massive factor. Whilst we have hopefully overcome the worst of the restrictions, our base of owner managed businesses is concerned that the Bank of England’s prediction of inflation gradually decreasing to 2 per cent by December 2022 may be optimistic.

“We continue to advise all of our clients to remain cautious as Covid 19 may continue to disrupt businesses for some time. Among other complications, ongoing or new restrictions can create global supply chain issues resulting in price fluctuations. You only need to look at supermarket shelves to see the impact. It will likely take years for us to adjust to these new conditions and regain equilibrium.”

Ross also notes that the current Brexit arrangements and associated uncertainties continue to impact the economy – ultimately driving up prices, particularly in Northern Ireland, despite its special status. Ross comments, “Brexit clearly isn’t done and it’s likely these issues will take significant time to resolve”.

Business owners in Northern Ireland must also continue to prepare themselves for an ongoing rise in taxes of anything up to 8 per cent between 2015 to 2025. Ross advises, “Our clients will have to absorb a number of tax increases depending on their sector, for example, those in hospitality will have a 7.5 per cent VAT increase to contend with after 1 April 2022. The rate of Employer National Insurance contributions will also go up 1.25 per cent on 6 April 2022, whilst Corporation Tax will increase for all business earning over £50,000, up to a maximum of 25 per cent once profits exceed £250,000. Minimum wage increases are also on the horizon – so overall, businesses are likely to see a bottom-line decline unless they drive up prices to accommodate the cost base.”

The rise in automation, ongoing restrictions, homeworking, and longstanding demographic trends are all contributing to a paradigm shift in the labour market.  Ross asserts that Northern Ireland’s owner managed businesses are already facing real challenges with recruitment, as the balance of power shifts to the employee who can demand a higher wage, which again, may further drive inflation.

Ross’ final point is that, whilst potentially only a short-term issue, the pressures created by the widespread increase in energy prices are considerable. He says “Northern Ireland’s largest domestic energy retailer, Power NI, is increasing its prices by over 21 per cent in January 2022. This is just one example of a change that will imminently and considerably impact upon businesses and consumers across Northern Ireland, again putting pressure on spending.”

However, it is possible for Northern Ireland’s business owners to navigate the situation with the right guidance. Ross concludes, “The positive news is that owner managed businesses in Northern Ireland are renowned for being both creative and resilient. We know from years of working closely with these businesses, that despite the economic challenges that they are facing, many will come up with intelligent solutions.”

“Our pragmatic advice remains the same – we should all hope for the best – whilst supporting our clients to forecast and plan for the challenges ahead to enable them to successfully navigate these uncertain times.”

For more expert business advice, email: hello@rossboyd.co.uk

Ross Boyd: Let’s Reshape our Brexit Perspective to See How the One Stop Shop (OSS) Can Simplify Selling for NI Businesses

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I’m well aware that businesses in Northern Ireland have been negotiating challenges post-Brexit when it comes to trade arrangements. Let’s face it – selling to EU member states has long been a tricky issue for businesses when it comes to EU VAT thresholds and rules around VAT registration.

It may appear that the NI protocol, which keeps Northern Ireland aligned with the EU single market for goods, will see businesses grapple with new trade complications between Great Britain and Northern Ireland, such as increased customs checks and shipping costs, along with supply chain issues.

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How you can earn up to £43,590 tax-free!

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Whilst we all understand paying our taxes are important and play an essential role in today’s economy. There are several ways from protecting your personal pocket and reducing your tax liability!

With the new tax year in April 2021 and Mr Sunak’s Budget came increases to some allowances, therefor you can earn more tax free. Here’s an update on ways to protecting your hard-earned money.

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Protecting your business against fraud

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The pandemic has saw the rise of big fraud threats, with SMEs being particularly targeted as they often do not have security systems as robust as larger organisations.  With new security processes being quickly implemented, there may be gaps in the chain which fraudsters could exploit. Now, more than ever, your business needs to be aware of these threats and how to protect yourself against them. Read More