Aspen Waite Magazine - Spring 2017

Trus t ed Ad v i s or s

Sp ri ng Issue 2017 2

aspen waite Bumper Easter

Eggstravaganza 2017

in this issue... • Change the world with CSR

• Focus on Northern Ireland

• Is Sales a 4 or 5 letter word?

• Tax Rules for Rental Income

and much, much more!

Man's Search For Meaning Paul Waite - Chief Executive

Well, Spring has arrived and the prospect of lighter days and some warmth beckons. I am writing this sitting on a flight to Cape Verde, somewhere I have been meaning to go for a while now. The Tuesday previous I caught the train to London with an extra spring in my step as I was heading off to our new London office. I had to laugh on the way up because near Bath two ladies (a mother and a daughter) started talking about the mother’s husband, “well you know I caught him eating McCoys crisps in his study”. “The worst kind”, the daughter remarked, “even more calories than ordinary crisps”. I started to laugh, they looked at me and I said, “It’s just like being at home, it could be me you were talking about”. Further laughter ensued as I opened a bottle of sparkling water and it cascaded all over me. I arrived into London; Bakerloo Line to Piccadilly Circus, and then Piccadilly Circus to Caledonian Road. It is a relatively short walk to our office. I caught the lift to our floor (4) and, in our relatively small but nicely laid out room, i found Tim (visiting) and Monika, Katie, Gill, Grant, Abdul and Glen. It was the latter who I had my first meeting with; in one of the many meeting rooms at The Busworks. The team have done a fabulous job; they are an especially motivated and cheerful bunch and it was a pleasure to be there.

Frankl is a survivor of both Dachau and Auschwitz and his book is more to do with man’s pursuit of meaning and hope rather than his Holocaust experiences. He talks about success in a very wise way. He basically says success does not come to those who seek it. Success, like happiness, cannot be pursued, it must ensue and it only does as the unintended side-effect of one’s dedication to a cause greater than one’s self, “You have to let it happen by not caring about it!”. Having been in business as Aspen Waite now for nearly 24 years, I really think this is true. Another way of looking at it is that quality will out if given over a long enough period. If you have a quality product or service, have a clear message, create as much brand differentiation as you can and i believe you will become successful. With my own journey, the best side effect of the process is the wonderful people you attract along the way. I have just finished my first book, written entirely on my own. It is called “Raising the Bar” and it combines relevant stories from my life to date with real business tips and stories. My aim was to try and capture the many experiences I have had so that readers might be saved some of the pain I have encountered or perhaps become successful more quickly.

The next day, of course, London was, once again, the victim of a terrorist attack. It is terrifying how much carnage one deranged person can carry out.

I am proud of my achievements and, in many ways, I have had careers within a career. If you would like a copy of the book then please let me know.

Of course, London is such a cosmopolitan city it was inevitable that people from all over the world would be affected. Also, people of all ages and, ironically children from the Bridgwater school, my mother-in-law used to teach at, were in the House of Commons at the time of the attack.

Aspen Waite is now really strong across South Wales, the South and the South West. We have a share of an office in Aberystwyth with our innovation partners EcoSphere and about to have another share in Salford. The possibilities in South Wales are particularly exciting.

As a people we deal with such incidents as well as anyone could and the response was first class. There is, however, far too much political correctness and denial in terms of accepting and dealing with the problem.

I travelled to Belfast recently for a very long but rewarding day with David, Jim and Leo of Resistant Building amongst other companies they are involved in. This inspired me to include a feature on Northern Ireland in this News. Brexit is far more complicated for our Irish friends and, to me, it seems inevitable that Irish unification will now follow.

I have just read a fantastic passage in a book by Victor E Frankl called “Man’s Search for Meaning”. I know that at least two of my colleagues have read this book – David and Johno.

I have many good friends in the Republic and i still believe we will have a fully functioning business in ROI one day.

Through trust and quality comes opportunity. We are really focused on building our Corporate Finance expertise and full range of advisory services.

To show the international flavour of our work, we recently have had new clients based in Dublin and Kuala Lumpur.

Along with Cyber Security the other major issue facing business is technological change. In our case we are investing in:-

We have initiatives under way with the Slovakian Government (Monika) and potentially Indian and Chinese companies as well.

• • •

In this feature we have a number of high quality contributors including Sampson Hall who are experts in Cyber Security and the FD Centre who supply parttime quality FDs. Both are partners of Aspen Waite, lovely people and very like-minded.

Perhaps the most exciting initiative we have on the go (of many) is that we are rebranding. In the next issue we will launch what Carley, Ross and Katie have come up with. Until then, think big and be safe.

Tina Dulieu has known Gill for many years and works closely with my new best chum, Gary White. She is a fantastic introducer and a talented businesswoman. In her article, she talks about niche businesses and the direction entrepreneurs should go in. The way I look at it is that life is full of choices, there is no right or wrong. If we were to apply Aspen Waite as a case study then we have a high quality “bread basket” business being the accountancy practice. As a regulated business this also gives us credibility. We have then found a niche sector in R&D tax credits. This is definitely “relevant diversification”. In our pursuit of excellence we have become extremely good at this to the point of becoming experts.

A new telephone system; Corporate Finance software and database; CRM upgrades.

Paul Waite Chief Executive

In This

Issue

I have taken great care in building Aspen Waite and bravely invested in really good people, not always with the full support of all of my colleagues. We now have a Business Development team that is better than any of our clients and a match for any organisation in the world.

4-5

Change the world with CSR Is Sales a 4 or 5 letter word?

6-7

The FD Centre Aspen Waite in London

8-9

How accountants benefit working with R&D Tax Specialists

The diversification into the niche has allowed us to have what I call a “jam and cream” product and, because we look after people so well, we earn trust.

10-11 Focus on Northern Ireland 12-13 A Warm welcome to Katie Aspen Waite in the Community 14-15 Changes to the Minimum Wage 16-17 Changes to the Apprenticeship Levy Optimise your website with A/B Testing

A special thank you to all our guest writers, regular contributors and our readers - we appreciate the effort, enthusiasm and comments you all put in to help us make our news. We hope you enjoy! - Carley

18-19 Is your business cyber aware? 20-21 The Importance of Insurance 22-23 Niche vs Diversity in Business 24-25 Tax Rules for Rental Income

This issue has been brought to you by: Production Team Carley Jones and Ross Curry Editor - Paul Waite Proof Reader - Cora Joscelyn

26-27 The Importance of Credit Control 28-29 The Death of Local Banking 30-31 Industry Update: FRS 102

Making the World a better place...Corporate Social Responsibility, a positive mindset to adopt whatever your business. By Samantha Clyde - Commercial Director I read a great line in a business publication recently... "In the modern business world, providing a great product and shopping experience will only get you so far. If you want your customers to keep coming back, you need to let them know that their dollars will be doing some good" What a powerful, very thought provoking statement. Why wouldn’t we want our customers to think that something good was coming from the money they spent with us, from whatever product or service that might be.

For example, an organisation that aims to provide housing and employment to the homeless may operate a restaurant, to raise money and provide employment for the homeless. This new and increasingly popular approach to business culture recognises and exhibits social responsibility of businesses within the community and to the wider world CSR can be demonstrated in many ways, irrespective of business size, location, sector or financial status, Corporate or SME.

A lot of businesses and organisations identify and understand, to some degree, the importance and need to adopt a Social and Environmental awareness position and often promote any company related initiatives that align themselves with or display this activity to show their corporate social responsibility involvement. However, this is not part of everyday business culture and perhaps we should be thinking about how it could be..

So the questions is, does your business actively practice corporate social responsibility and if so, to what degree? Could adopting this beneficial initiative as part of your business strategy not only add value to your growth plans but also make a striking difference to the community?

What would happen if businesses actually adopted this as part of their integral business model? Instead of simple external initiatives. This would ultimately result in a winwin scenario for the business as it would :-

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Tesco's and Morrisons both have their own community champions who work within the communities and operate food banks, and when shoppers buy a school uniform from Tesco, another is donated to a child in the area where the uniform was made.

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Provide long term dedication to development of beneficial programmes therefore benefiting recipients

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Cement the reputation of the company as being a true contributor to CSR and strengthen its credibility

Greggs the Bakers - Developed in partnership with Job Centre Plus, this programme offers work experience placements and employment, where needed.

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Keep the customers returning as they know the value of their spend with that company is making a difference to someone or something somewhere in the world, whatever the purchase might be, product or service.

Altered Seasons is an eco-friendly candle company in the US, which shifted it to a one-for-one model to do more for the community. For every candle sold, Altered Seasons provides a meal to an American in need through Feeding America.

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Mirage Spa and Recreation is able to encourage so many of its customers to take part in the company's philanthropic initiatives: it offers Customers a 15 % discount off their purchase when they bring in food, pet supplies or personal care items for Mirage to donate to a local food bank

With the phenomenal diversification that the internet offers nowadays, the opportunity to create this type of business framework from the outset has inspired the birth of 'social entrepreneurship' in the last few years. Social entrepreneurs are either non-profits or a 'hybrid' blend of non/ for-profit generating a positive "return to society".

Here are some examples of CSR at its best, from both the SME and corporate world.. Some food for thought!

Whatever you think , whatever you do , we all have a responsibility to help make this world a better place, in our local community or in the wider world.. So get your thinking caps on and let's commit to making a change for good.

Sam is part of our Business Development Team and our Commercial Director. If you're interested in becoming a partner or exploring opportunities, contact Sam at samc@aspen-waite.co.uk

Sales is Nearly a Four Letter Word By Glen Williamson - Group Sales Director

Ignoring the extra 's', for many people, sales is a fourletter word. But it needn’t be. Sales has developed a reputation over the years that it simply doesn’t deserve. Due to dysfunctional sales techniques and misguided sales management, companies often underestimate what is required to establish a foundational base for consistent sales performance. As a result, mediocre sales performance has become accepted as the norm.

Your best chance of selling consistently is to understand your buyers, and, in order to do this, you need to stand where they are, see what they see, so that you have a different conversation. You need to de-bunk the old sales myths and replace them with new sales truths, like;•

Part of the problem is a number of misalignments exist between sellers and buyers, and this has led to trust issues that result in missed opportunities on both sides.

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For example, the seller wants to close the deal whereas the buyer wants to open a relationship. Buyers don’t want to be closed; they want to progress in an open atmosphere of trust and understanding, underpinned with excellent products and services that solve their problems.

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Sellers often still believe sharing great volumes of information about their product and service increases the chances of the sale being made. But nowadays buyers can get as much information as they need to inform their purchase in this information age. Sellers think that price is critical and must be competitive, whereas buyers simply want excellent value delivered in a way that makes sense to them and/or their company. These are two very different things.

Glen Williamson is the Group Sales Director of Aspen Waite Group - If you want to develop your sales strategy, get in touch today. glen.williamson@aspen-waite.co.uk

•

• •

Buyers buy when their system buys into the transformation Price becomes an issue when the buyer cannot choose between two identical solutions The modern sales person is an expert communicator, teacher and collaborator The role of the modern sales person is not to communicate value it is to create it! Clarity is the foundation upon which all great sales are made Consistent sales performance happens when sales help their customers to achieve their goals

The opportunity to differentiate by selling well is greater than it has ever been and in changing your mindset, you help your customers to stay ahead of their competition and to avoid pitfalls. For this, you will be rewarded handsomely.

Focus on the

Several years ago, Sara Daw saw a gap in the market for a business to supply the highest quality Financial Directors to growth potential businesses, which needed the input of an FD but probably did not need such a high calibre person on a full-time basis. So the FD Centre was born. The operation has grown considerably, spreading all over the UK and also internationally, particularly into the major Commonwealth countries. There are nearly 190 “Franchises” operating throughout the UK and around 250 across the world. A typical client has a turnover of over £2m, up to a level of £50m. The combined turnover of the “FD Client Base” is believed to be circa. £5bn. The emphasis is on the higher level financial function, based on a thorough assessment of each client’s business. This includes a detailed risk assessment and a major focus on strategic matters.

We are always looking to offer our customers the best and most comprehensive service so are delighted to be working closely with Aspen Waite. We have similar cultures and ideals so are looking forward to an exciting time. We intend to work to mutual benefit allowing 2 companies with similar methodology statements and work ethics bound by the Customer Excellence Criteria that have seen both develop into the leaders in their fields. I am personally very excited and enthused that all the early signs are ones of synergy without crossing over and Into each other’s specific skill sets. The engagement of both teams within each other’s environments is also very encouraging. We have made a great start and look forward to making a difference.

The approach includes:(a) Funding; (b) Internal Systems; (c) Reporting; (d) Profit Improvement/Cost Minimisation; (e) Cashflow Management; (f) Compliance Reporting; (g) Outsourcing; (h) Funding/Financial Relationships including Banking.

Steve is Regional Director of The FD Centre - North London East, and can be contacted via e-mail at: steve.fox@thefdcentre.co.uk

Officially Open for Business in London By Gill Tiney - Business Development

I am thrilled to announce the long awaited presence of Aspen Waite in London. We opened our doors at The Busworks in Islington near Caledonian Road tube and have had a steady stream of visitors ever since. Our London team are made up of Monika Stukova who is looking after our Corporate Finance team, Grant Aldridge who I have nicknamed our forensic scientist for R&D Tax credit claims – he doesn’t miss an opportunity to claim, and our newest recruit Katie White who oversees our marketing offerings. Add to this mix the exceptional talents of Gary White who pops in to ensure we are all happy and we have an incredible group of dynamic pro-active people, all ready to go the extra mile for every client. Still in daily contact with the HQ in Somerset we ensure that our clients as always receive the very best support and advice. The whole operation has given me food for thought. One of the observations I have made is how different the culture is in different areas and organisations. From Somerset to London, there is a massive difference on the big issues, from Brexit to Trump, immigration to national security and many others. This difference can also be seen from the corporate world to the SME market, start-ups to those ready to exit their business, where opinions range from ‘it’s nothing personal, its business’ to wearing their heart on their sleeve and being passionate about supporting the underdog. These thoughts and opinions have come to us over years of influence on the world we experience around us. Were you brought up in the business world and always knew you had to find your own bread and butter, or born into privilege? Have you lost money along the way, or having come from nothing are always ready to fight for the next crumb? Whatever your experience it has all had an impact on how you view the world – and not necessarily in a good way. Just because you think it should be a certain way doesn’t mean others do too. In other words ‘common sense’ isn’t that common.

is my personal experience and one that made me realise what I had accepted as ‘normal’ wasn’t, depending on what location you were in. Having a set mind-set of what is, what should be, what ought to be, will actually limit us in our ability to adapt, change, and transform with this ever changing world we are in. Being open minded and consider that we are all human beings first, with needs, wants, and desires helps to create a space where we can see the point of view of others. Just because they don’t think the same way you do, doesn’t make them wrong, it is an opportunity to see things from a different perspective. Be open to explaining your point of view in an open and non-judgemental way in order for the other person to really hear your message. If you do them the same courtesy of listening with the intent to gain something, rather than the intent to refute what they are saying you will both experience life from a different perspective and potentially one of you will grow in your viewpoint. When you come from an immovable standpoint there is no room for growth. So as the London team come together with a myriad of opinions, dreams and viewpoints I relish the opportunity to learn and grow from each and every one of them. Probably one of the reasons I was attracted to the Aspen Waite Group is the overriding philosophy of helping people no matter where they are on their journey in their business. Whether they are a start-up business who need lots of help and advice or a multimillion pound company looking to exit, they are all human beings wishing to collaborate in order to achieve their goals. In turn by supporting them in achieving their goals we can also help everyone in their community to grow and develop and raise the bar for what is possible. As the Aspen Waite community grows we can be there for each other, sharing learning and inspiring a better future for all.

Age also creates a differentiator. I experience the young in London are ready to be transient in their jobs and accommodation in order to do the work they enjoy, whilst in others areas they are looking to set down roots and will compromise on the job they do in order to get those goals met. This is obviously a sweeping generalisation but this

Find out more Gill is part of our Business Development Team. If you're in London and would like to meet up, please drop her an email at gill.tiney@aspen-waite.co.uk

How can Accountancy firms or business advisors benefit from a strategic alliance with a Firm of Chartered Accountants who specialise in R&D Tax Credits? By Johno Harris - Business Development

If one has a specific medical condition, they are usually referred to a specialist consultant via their GP. When someone wants to make a particular investment, they would do well to consult with a specialist in the field who has developed invaluable skills in their chosen specialisation to ensure they receive the best advice. Would the same logic apply for research and development (R&D) tax credits? Aspen Waite has a number of highly successful J.V. partnerships with other general accountancy practices, but why is this not more commonplace? To have the privilege to work with a proven, reputable, external R&D tax specialist makes good, practical sense as not only does it generate maximum revenues for the client but, more importantly, it enhances the existing relationship between the client and their Accountant. Is it possible to place a value on being pointed towards a professional, reputable service that can identify income for a company where it can be difficult to identify or qualify? Customer loyalty is vital to business growth and in these highly competitive times we believe innovative ways to build loyalty are a good way forward. As Chartered Accountants ourselves our J.V. partners are sure their clients are getting the best, most relevant advice around their R&D activities. Furthermore, in situations where structural adjustments may be more beneficial for the client, this would always be discussed at a professional level with the J.V. partner beforehand, ensuring the client receives the best advice, yet peace of mind for the J.V. partner. All too often, we see accounting firms offer R&D credit services themselves without the necessary background and expertise required. This can quickly result in “professional inaccuracy/overload,� as the firm realises they cannot assume to be experts at what they are not. They then realise R&D tax credit application requires far more sophistication, experience and nuance than they bargained for.

Partnering with an R&D Tax Credit Specialist Whenever a firm offers a specific, highly detailed service, it is good practice to draw on the expertise of a specialist. That is why we recommend that general practice accountancy firms partner with external specialists who are themselves Chartered Accountants, primarily to identify innovation where there does not initially appear to be any, to manage the technical reporting aspect of R&D tax credit claims, and oversee the financial calculations for clients. Most firms don’t have the inhouse expertise or time required to perform this type of initial reconnaissance or sufficient knowledge around the financial aspects and technical reporting to maximise the claim, and its more cost-effective to outsource the effort. Enhancing Client Relationships: For many accounting firms, the process of establishing new client relationships or maintaining existing relationships to continually add value presents a challenge - it requires the firm to devote resources that are often not equipped or trained to discuss wider aspects of business growth with their clients, on a speculative basis. Clients may perceive the documentation process to be challenging; yet having proven expertise and knowing what to ask behind the numbers inspires confidence in providing the necessary information. A good accountancy practice is seen by the client as a trusted partner and has access to the required financial information to make any relevant R&D Claim, partnering with a specialist who only works on a success fee provides both the existing accountants and the client a low risk opportunity to receive previously unbudgeted income. The client will also become a loyal devotee of their accountants as it was them who recommended the specialist in the first instance.

What to Look For Most people/companies believe R&D only happens in laboratories or high tech industries. Once an accountancy practice fully understands R&D tax credits, they become an integral part of the client service charter and can present an outstanding opportunity to grow your practice. It is important to identify the right R&D Tax Credit partner and we list below some of the criteria we feel make good partnership potential:

The ideal partner will: •

Provide outstanding references;

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Have an extensive, positive reputation in the accounting community;

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Have the resources to service your firm’s clients locally - by this we mean they will be able to go and physically meet with your clients to discuss the R&D opportunities and advise on where the R&D may be, and how to document qualifying activities going forward;

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Have an outstanding record of success;

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Be accessible to your firm;

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Be easy to work with and flexible in your desired client approach;

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Work with your clients without going around your relationship—you don’t want to work with a service provider who markets directly to your clients;

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Possess the highest degree of integrity;

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Understand your clients’ business or industry;

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Charge reasonable and justifiable fees

Find out more

The R&D tax credit can also be another income stream for the services a general accountancy practice provides. If a client may be unsure about either the potential benefits of the R&D tax credits or working with a joint venture partner, we recommend that they have a conversation with other end-user clients of the R&D specialist being considered, to better understand the process and the opportunity for potentially large tax savings and/or cash back. In summary: Clients should be made aware that they are entitled to R&D tax credits if they perform qualifying activities. Most accountancy firms are surprised at just how many of their clients do. Eligibility requirements are clearly defined by HMRC— companies seeking to take advantage of the R&D Tax Credits must be prepared to identify, document and support their qualifying activities. It is essential that businesses establish appropriate tracking mechanisms and documentation strategies for their R&D activities. Aspen Waite provide training for our general practitioner J.V. partners in this regard.

Johno is part of our Business Development Team - if you'd like to grow your business, get in touch today by emailing johno.harris@aspen-waite.co.uk

Focus on Northern Ireland By Paul Waite

Recently I spent a very enjoyable, albeit tiring, day in Belfast with David Good, Jim Byrne and Leo Bagnall. These gentlemen are experienced entrepreneurs who represent a number of businesses. I first met David and Jim over 2 years ago when I was representing a client of mine, Sealwise Limited. Carl (Turner) and I flew to Belfast and stayed the night, enjoying a splendid Pan-Asian meal (one of my most favourite cuisines) after a few beers. My initial reflection on Belfast was that it was somewhat of a contradiction; beautiful and not so beautiful buildings intertwined. David has a wonderful eye for a quality product so he is always involved in a lot of really good companies. I very much like his premises and a very nice boardroom with a wooden rugby ball in situ that I covet. As a result of the visit, a new 50/50 company called Sealwise 2014 was formed and operationally based in Belfast. Sealwise is a remarkable product and I remain confident that it will one day be a household name. It is the brainchild of Paul Huggins, a very loyal supporter of Aspen Waite and a man of great intelligence who bears a debilitating medical condition with tremendous fortitude. Paul is always fighting our corner and was pushing to get me over to Belfast to look at the R&D tax credit possibilities for David’s other interests.

Shortly after the money paid out, I was driving away from the office and my phone rang. It was David Good. “I am very impressed with what you have done”, he said, “best you come over to Belfast and see what you can do for me”! David is involved in some wonderful technology including nano-technology and magnesium oxide boards. I had always perceived Jim as the archetypal Accountant (FD) prior to my second visit but he proved to be a revelation. We were joined by Leo, someone new to me but who made a very big impact. We talked a lot of business while having a lot of fun. I am about as British as anyone can be; paternal line on the male side essentially Cumbrian and female side Manx and, on the maternal line, male side originally Scottish (Scott albeit settled in Somerset for some time) and female side Somerset. I love history, politics and culture and I love meeting people. Ireland has always fascinated me, even as a little boy. How did things go so wrong that Ireland is not even in the Commonwealth?

It took the processing of two relatively substantial claims we did for Sealwise 2014 to make the difference.

I used to know Northern Irish people who would support England against Ireland at rugby. Jim tells me it still happens but is far less frequent as the Irish selection no longer discriminates against those in the North.

I did them myself, aided greatly by Cora as well as Paul and Ben from Sealwise. We showed that 2 and 2 really can equal 5.

We talked about Brexit and the future and, to be frank, I felt ashamed, as should most of Whitehall/the Government.

Northern Ireland is a small country, albeit with a proud history. Famous sons include George Best, Rory McIlroy, Graeme McDowell, Liam Neeson, the Undertones and many more. The Northern Irish are often called the Scots Irish, particularly in the context of emigration. Ireland broadly represents 3 groups – the indigenous Celtic population, the invading Normans (whose legacy includes the Fitzgeralds and the Fitzpatricks, amongst others) and the largely Scottish Protestants who mainly colonised Ulster, starting around the 16th Century. Dublin was a Viking stronghold for a very long time so there is also a strong Viking influence. During the military campaign which accompanied the efforts of William, Prince of Orange, to become King of England and Ireland, the incumbent Catholic King James II raised an army in Ireland and there were a few landmark battles, and most famously the Battle of the Boyne.

It is a much changed land (for the better) and there now seems a very real prospect of Irish unification. The traditional industries of the North, notably textiles, manufacturing and shipbuilding (the Titanic) are no longer of significance and the biggest employers now are in agriculture, services and the public sector. I consider myself both a learned man and a patriot and I did not know that three of Ulster’s counties were in the Republic, nor that there are Orangemen marches in Donegal, for instance. I have always thought that the Northern Irish were arguably the most patriotic of all the Home Nations but times change and it is a small country with a small voice and largely, it seems to me, ignored. The visit has changed my opinion and I am now once again older and wiser. I look forward to returning and seeing how things pan out.

The Orangemen, as they became, still celebrate this victory today in a land strictly divided into two by religion but where a lot more common sense prevails. As a Brexiteer I had given no thought really to the circumstances of the Northern Irish. They share a border with the Republic so they face a unique set of circumstances.

Key Facts Population: Capital: Counties: Also in Ulster: Religion: GDP: Largest Lake in UK: Unemployment: Exports: Imports:

1.8 million Belfast 0.8 million (10th biggest in the UK) Antrim, Armagh, Down, Fermanagh, Londonderry and Tyrone Cavan, Donegal and Monaghan (38% by population) 50.8% Roman Catholic £50 billion Lough Neagh 6.1% £6.36 billion (54.7% the EU, 33.4% ROI, 17.6% USA, 5.8% Canada) £6.086 billion (the EU 55.1%, ROI 27.2%, China 16.5%, USA 8.2%)

Spotlight on Katie Favourite Colour: Duck egg blue/green Favourite Country Visited Italy Favourite Film Just Friends

A warm welcome to our latest addition... Katie graduated from the University of East Anglia with a degree in Business Economics and has since gained a wealth of experience and knowledge of different companies and industries. As a fresh-faced graduate she worked as a Project Manager for the European Medical Journal, a publishing house based in Chelmsford, Essex. As this was a start-up company Katie quickly got to work on a variety of different projects and ideas for cheaper, affordable solutions to their marketing tactics. Katie then went on to work as an Account Handler for multinational Insurance Broker, Jardine Lloyd Thompson (JLT), giving her insight into the workings of a large, successful enterprise. She joins the Aspen Waite family after working as an Account Handler for a Marketing Agency in Essex, where she managed a portfolio of clients, getting to grips with their different markets and niches, creating various successful marketing strategies and campaigns. Katie is particularly keen to learn about different types of companies and the many activities which make them unique and successful. This is one of the many reasons she enjoys listening, communicating and learning from clients. Katie enjoys the analytical side of Digital Marketing and particularly enjoys writing technical reports for our many fascinating clients. In her spare time, Katie loves going to Combat classes at the gym and going out for meals with her family and friends and particularly enjoys going to the theatre which is now easier to do since she is working in the London office. She is partial to a bit of online shopping and couldn’t tell you how many shoes she owns!

Favourite Pop Group/Artist Lana Del Rey Dogs or Cats Dogs!!! Tea or Coffee Depends on the time of day! Favourite Food Sushi Town or Country Town Which Four People Alive or Dead would you Invite to a Dinner Party? Whitney Houston, Prince Harry, Ryan Reynolds, Sheryl Sandberg Likes Humility, manners, genuine people Dislikes Manipulation, greed and animal cruelty

Find out more

Katie makes up part of our new London Office, helping clients with their R&D. She is also part of the marketing team, offering insight and online marketing strategies. Get in touch by emailing katie.white@aspen-waite.co.uk

Aspen Waite in the Community

Proud Sponsors of the Business News on Sedgemoor FM

Sedgemoor FM Prides itself by focussing on the needs of the listener as well as local business, and is in an amazing position to create opportunities...whether that's work experience, personal development, outreach programmes or creating advertising solutions for small business. Aspen Waite are pleased to support a local business and sponsor the Business News throughout the year.

Heybridge Swifts I was approached by Heybridge Swifts FC who are a local Ryman Isthmian League team and play at the level 4 of non league football which is the same level as Taunton and Tiverton Football clubs. The club had been through a period of financial difficulty and I was originally taken on as treasurer in order to help manage the club's finances. This was in November 2015 and by June 2016 the chairman at the time decided to stand down and wanted me to take over as he felt I would be able to take the club further. I was voted in unanimously at the June 2016 AGM. I had previous experience in the world of football as I was a director of the League One club Colchester United FC from 2008 to 2010 when I acted as non executive finance director. I also assisted the current owner and chairman of the club with its acquisition in 2006. I also worked on a consortium to acquire the Premier League football club West Ham United from 2004 to 2006 and worked with the Icelandic owners who acquired the club and then decided to go it alone without football of professional advice. My role now as chairman of Heybridge Swifts involves overseeing all aspects of managing the business of a football club including liaison with football club manager, committee and sponsors. This includes assisting with financial management and fan engagement as well as promoting the club in the wider community. The club dates back to 1880 and has a tradition for always punching above its weight, being essentially a village team competing against those from much bigger towns across the south east and East Anglia. The club's finances are in good order now and have applied for planning permission to move to a new stadium half a mile from the existing one which will have a state of the art 3G playing surface. The existing stadium will be sold to accommodate 120 houses and the local authority are believed to be in support of the move.

After a break of a few years we are delighted to have returned as the main sponsors of the Vikings. The team is not as strong as it was but are looking for a mid-table or better finish. The other teams in the league are really representative of the Aspen Waite geographical representation which is a real bonus. My father played for Widnes Vikings, a team I ardently support and Gary’s X played for Barrow so it is in the blood. More information about the Club can be found at www.pitchero.com/clubs/somersetvikings

Industry Update

Changes to The National Minimum and National Living Wage National Minimum Wage (“NMW”) The NMW is the minimum pay per hour most workers are entitled to by law. The rate depends on a worker's age and if they are an apprentice.

National Living Wage (“NLW”) The NLW was introduced in 2016 for all working people aged 25 and over. As of April 2017 this is increasing from £7.20 per hour to £7.50 per hour. The current NMW for those under the age of 25 still applies.

The key points to note are as follows:• • • • •

Most workers over school leaving age will be entitled to receive the NMW. The NMW/NLW rate is reviewed annually by the Low Pay Commission. HMRC can take employers to Court for not paying the NMW/NLW. There are a number of exemptions to those who receive the NMW/NLW. These do not relate to the size of the business, sector, job or region. The compulsory NLW is the national rate set for people aged 25 and over.

Rates of Pay It is important to note the rates, which came into force on 1st October 2016, apply to pay reference periods beginning on or after that date.

National Minimum Wage April 2017

October 2016

Adult rate (21-24 Inclusive)

£7.05

£6.95

Development rate (inc 18-20 year olds)

£5.60

£5.55

Under 18 but over compulsory school age

£4.05

£4.00

Apprentices under 19 or in first year

£3.50

£3.40

N.B. The new pay rate will only affect someone’s pay from the first full Pay Reference Period after that date, e.g. if the Pay Reference Period starts 19th March to 19th April then the pay between 1st and 18th April will be based on the NMW rates. The allocated pay from 19th April to 19th May would be at the new NLW rate because this is the first full pay reference period after 1st April.

The same rules apply when a monthly paid employee reaches the age of 25, e.g. if the employee’s birthday falls on 25th May and the next Pay Reference Period starts on 10th June, the employee is entitled to receive the NLW pay rate on 10th June and not their birthday.

Exemptions There are a number of people who are not entitled to the NMW/ NLW as follows:• • • •

Self-employed people. Volunteers or voluntary workers. Company directors. Family members or people who live in the family home of the employer who undertake household tasks.

All other workers, including pieceworkers, home workers, agency workers, commission workers, part-time workers and casual workers, must receive at least the NMW.

Agricultural Wages Agricultural and horticultural workers in England employed after 1st October 2013 must be paid the appropriate NMW rate (see above). Workers who were already employed before 1st October 2013 will still be entitled to the same terms and conditions set under their contract of employment; this may include overtime rates, agricultural wages, sick pay or dog allowance. DEFRA will continue to enforce complaints made by workers in respect of underpayments or non-compliance with terms and conditions of an Agricultural Wages Order before 1st October 2013 for up to 6 years after the breach occurred. For agricultural workers in Scotland there is no change and in Wales workers must be paid at least the Agricultural Minimum Wage or the NMW if that is higher.

Family Member Exemption For this exemption to apply, workers must either be a member of the employer's family or live in the employer’s family home. Either the worker is a member of the employer's family and:• •

resides in the family home of the employer shares in the tasks and activities of the family

or the worker resides in the family home of the employer and:-

• • •

is not a member of that family, but it treated as such (in regards to the provision of living accommodation, meals and the sharing of tasks and leisure activities); is neither liable to any deductions, nor to make any payment to the employer, or any other person, as respects the provision of the living accommodation or meals; if the work had been done by a member of the employer’s family, it would not be treated as work.

Non-payment of the NMW It is against the law for employers to pay workers less than the NMW or to falsify payment records. If an employer does not pay the correct rate, a worker should talk to their employer and try to resolve the issue informally first. If this does not work, a worker may make a formal grievance to their employer. A worker can make a complaint to HMRC who will investigate the complaint. If HMRC find that an employer has not paid at least the NMW, they can send a notice of arrears plus a penalty for not paying the correct rate of pay to the worker.

Penalties for failure to comply with the NLW With the introduction of the NLW the penalty for non-payment will be 200% of the amount owed, unless the arrears are paid within 14 days. The maximum fine for nonpayment will be £20,000 per worker. However, employers who fail to pay will be banned from being a company director for up to 15 years.

The difference between the NLW and Living Wage The new NLW is different from the Living Wage, which is an hourly rate of pay and updated annually. The Living Wage is set independently by the Living Wage Foundation and is calculated according to the basic cost of living in the UK. Employers choose to pay the Living Wage on a voluntary basis.

Working Time Directive - Mobile Workers September 2015 The European Court of Justice in a case gave the Judgment that mobile workers who have no fixed place of work, and spend time travelling from home to the first and last customer, should have this time considered as working time. The Court added that, because the workers are at the employer’s disposal for the time of the journeys, they act under their employer’s instructions and cannot use that time freely to pursue their own interest.

Changes to the Apprenticeship Levy By Liz Atyeo

The Government wishes to create a further 3 million apprenticeships by 2020 and therefore launched The Apprenticeship Levy in April 2017. The responsibility for funding the extra places has been put squarely at the feet of the large employer. Specifically, the system will be funded by employers with an annual wage bill of £3million or more. This is calculated on “total employee earnings” and is therefore likely to include bonuses and commission. How will the money be used? Employers hitting the wage bill criteria will have to pay a monthly sum to the Government, through their PAYE, that will be placed into a digital account that the employer can draw on to fund the external costs of apprenticeship training. The mandatory funds can be topped up by the employer, if they wish, up to a limited amount . Funds can be drawn from the “pot” but only for a limited time (probably 2 years but this is not yet confirmed). This will be called the Digital Apprenticeship Service. Funds collected but not used are likely to be spread amongst other employers. Importantly, however, although funds will be collected from all employers in the UK, only employers in England will be able to directly access their money. The Government will be in talks with Scotland, Wales and Northern Ireland to consider how the levy will work for them. This is because skills training is a devolved matter. Employers will use the Digital Apprenticeship Service to direct funding towards an apprenticeship. The Service will help employers advertise apprenticeship vacancies, find a candidate and choose a training provider. The funds will not be used to pay the apprentice’s wages; they will pay for the off the job training provided to the apprentice.

Using the funds in the digital account will mean that employers are making an investment in training a new crop of employees who will learn the ins and outs of a business from scratch. How much will the levy be? The levy will be different for all employers because it is calculated as 0.5% of their annual wage bill. However, every employer will receive an allowance of £15,000 which can be offset against their levy amount. Here are some examples:Example 1 – Employer has an annual wage bill of £5 million Levy sum: 0.5% x £5,000,000 = £25,000 Allowance: £25,000-£15,000 = £10,000 annual levy to be divided into monthly instalments Example 2 – Employer has an annual wage bill of £9 million Levy sum: 0.5% x £9,000,000 = £45,000 Allowance: £45,000–£15,000 = £30,000 annual levy to be divided into monthly instalments Example 3 – Employer has annual wage bill of £2.5 million Levy sum: 0.5% x £2,500,000 = £12,500 Allowance: £12,500–£15,000 = –£2,500 (no levy is payable) The effect of subtracting the £15,000 allowance means employers with a wage bill of less than £3 million would have a levy of £0 or less, so would not have to pay one. Contracts for apprentices Apprentices in England and Wales should be engaged on Apprenticeship Agreements which offer the utmost flexibility in terms of managing and developing the apprentice. Apprentices in Scotland are still engaged on contracts of apprenticeship, which carry extra protection when compared with a normal employment contract. Specific advice should be taken when encountering any difficulties with your apprentices.

Find out more

Looking to outsource your payroll? Contact Liz to find out more - liz.atyeo@aspen-waite.co.uk

Optimize your website with A/B Testing By Ross Curry

A recent survey showed 45% of small and medium businesses don’t optimize their websites through A/B testing. The two most common reasons given were a "lack of employee resources" and "lack of knowledge to get started" - however it could be one of the most effective ways to improve your online marketing efforts and return on investment. What is A/B Testing? In its most basic sense, A/B testing is the process of comparing two versions of a web page to see which one performs better. The idea is that you show one version (A) to 50% of your traffic, and another (B) to the remaining 50%. Over time the conversion rate of the page will change by a statistically significant amount, suggesting one variation is more effective at converting traffic. Why do A/B Testing? All websites have a goal - whether it is to generate leads, sell products, engage users or help their customers access product information. Every goal has a conversion rate - that is, the % of users that take the desired action to achieve a desired outcome. By using A/B testing you can obtain data that tells you how your website is working - and then learn from it. Examples include: • Differences in copy-writing - headlines, paragraph text, call to action text, images or links • Design or layout changes • Pricing structure, sales promotions, length of free trials and much more The more intelligence about your website that you generate, the quicker and more effectively you can optimize your marketing strategy. If used right, A/B testing can help improve your business and increase its profitability. Even small changes in conversion rates on your website could bring about significant positive results in terms of lead generation and future sales revenue.

Find out more

Interested in learning how analytics could help you understand your business better? Contact Ross today via email ross.curry@aspen-waite.co.uk

Which button will perform better? Don't guess - with A/B testing you can make improvements with statistically significant data.

Get started with A/B Testing There are plenty of tools available online: Google Optimize www.google.com/analytics/optimize Optimizeley www.optimizely.com Zarget www.zarget.com

Is Your Business Cyber Aware and Protected? By Phil Sampson - Sampson Hall

Risk has previously been transferred to the IT department and the risk to a business from a cyberattack is far more serious than that. It is estimated that 63% of UK businesses would not survive a significant attack. Talk Talk’s losses are estimated to be £60 M after the October 2015 attack, with another recent fine of £400,000 from the ICO. In 2016 the UK lost £49 bn to cyber criminals from all over the world - that is almost the estimated cost of Brexit to the UK economy. Organised crime is now heavily involved in cyber-crime given the potential rich rewards. The frightening thing is that, as a result of organised crime becoming involved, the figure of £49bn will only increase significantly year on year. This is because the UK’s cyber defence strategy depends upon business protecting itself. There is no effective national cyber defence capability that will prevent cyber-attacks on smaller businesses, protect UK business from cyber-attacks or prepare them for the inevitable attacks they will suffer. Because of the enormous resource implications UK business is currently having to fend for itself and this threat requires totally new thinking from within business. The problem with this virtual world is that rarely do we see a criminal, a victim or the police. Our traditional perspectives on what is a crime will have to be altered to enable us to take this clear and present threat seriously enough to deal with as businesses ourselves. Businesses are led generally by middle aged people who have not grown up with the web; how many us were born after 1991? IT experts are not de facto IT security experts, indeed many have a limited knowledge of security. IT is generally more about connectivity and processing than it is about security and access.

A significant cyber-attack on a medium size business will cost between £500,000 to £3.5 million! Which organisation has that sort of figure ready to survive such an attack? But what threat is worse, financial loss or reputational loss? It is not just big businesses that hackers are after; 43% of attacks are against small businesses who are poorly defended and easy to get at. 80% of cyber-crime is preventable but it is up to organisations and individuals to make sure that they do not fall victim to cyber crime.

People •

Have the right security expertise available

•

The board or business owners need to understand the threat

•

Middle tier leaders need to understand and lead this throughout the business

•

All staff need to be aware, educated and suspicious

•

Maintain cyber awareness and induct new staff effectively

•

Who has access to your systems and network?

Technical

Processes •

Check that processes are in place to substantiate, such as: invoice payment or account changes

•

Use top quality Antivirus software

•

Carry out regular penetration testing

•

Physical security matches the cyber security profile

•

Web monitoring

•

Complex password protocol

•

Network monitoring

•

Policies on revoking access

•

Business continuity

So here is some timely advice in 2017 to make sure that you are as well prepared as possible for the inevitable cyber-attack that your organisation will be exposed to:

1. Know your network and assets.

By this I mean understand your vulnerabilities. By knowing and understanding where your organisation is connected to the internet and other networks you begin to identify areas that need defending. Many cyber- attacks on organisations that consider themselves to be secure have come through third parties. Just who are you connected to, with BYOD and personal mobile phones many organisations find they have three times the connections they thought they had! Are your staff allowed to download apps via your wifi?

2. Educate your people.

People are your weakest link and it is key that they become your greatest asset. People need to be suspicious and they need to check on anything odd. This requires a change in attitudes and behaviours which comes from cyber awareness training and a comprehension of the real impact a cyber-attack can have. Training and constant testing to raise awareness are key.

3. Use top-quality antivirus.

Always have a good antivirus on your network that will prevent any virus from attacking the system. The proliferation of new viruses means most anti-virus is 9 months behind the latest threats.

4. Remember patch management.

When updates or patches are sent to you they are there because a vulnerability has already been

exposed. The longer that vulnerability is left open the greater the opportunity for exploitation. Insurance companies and banks are starting to consider such delays as negligence.

5. Protect your users from the web.

The web has brought significant opportunities for business but is has brought the same to organised crime. The dark web is a significant place of criminal and unethical activity. People who work within large organisations often feel that they are better protected than they really are. Everyone involved needs to understand the threat the web holds and protection needs to be in place to prevent intrusion.

6. Proactively monitor.

Human behaviours change, the threat changes, the infrastructure changes, suppliers and customers change and this all requires proactive monitoring to identify the next vulnerability or the next threat. Finally, on the 25th May 2018 the EU General Data Protection Regulations will become enforceable in the UK. This updated data protection regulation will mean that businesses will need to understand how they hold and use personal data. The new regulations are very wide reaching and the emphasis is on the fact that data belongs to the individual. If businesses suffer an identifiable data breach then they will have up to 72 hours to report that breach. There are many changes to these regulations including the fact that individuals will also have the “right to be forgotten”. The new regulations will also carry fines of up to 20 million euros or 4% of global turnover, these are pretty significant sums, so our question is - Are you GDPR aware and ready?

Phil Sampson is an expert strategist who has a deep understanding of strategy, leadership, incident management, cyber security and organisational culture. He served in the Royal Marines for 32 years. As a counter terrorism expert he served in Whitehall, the Security Service and the US National Counter Terrorist Center. As the founder of Sampson Hall he recently led the UK’s Cyber delegation to Mexico and specialises in getting people within organisations to adopt the right attitudes and behaviours to cyber security. Contact Phil on 0844 848 9594 or email info@sampsonhall.co.uk

Fledgling Steps of an Entrepreneur The Importance of Insurance. By David Scheeres

In the 1980’s when the Internet was merely a glint in the eye of Tim Berners Lee I had enjoyed modest manufacturing success in the plastics industry and decided to try my hand at exporting. I decided that the USA would be the best market as they spoke English (I thought!) and the demographics indicated a market up to 36 times larger than our own. How could that be you may ask when the population ratio is only six times larger? The answer is consumerism and in the plastics packaging sector, which included “fast food”, the use of plastic disposables was far greater than in the UK where, we were still eating fish and chips out of newspaper and to most people McDonalds was a Scottish clan. I ordered a copy of the USA Thomson yellow pages directory and several trade directories including the Kompass directory. For the benefit of our younger readers, the Kompass directory was a huge black tome of subscribed business data that weighed around 12 pounds in weight. It had its uses but as it was a subscriptions only work of reference, not every company bothered subscribing so it was not exhaustive by any means. I learned by trial and error that the best use for Kompass was to prop open office doors during hot summers. Eventually I made a short list of companies to visit and arranged meetings by telephone and telex, booked flights and arranged car hire. My prospective new customers or victims depending on your perspective appeared to be keen or bemused by my approaches. I was soon to learn some fundamental cultural differences... The first thing that impacted me on my arrival in the USA was the familiarity and the broad spectrum of manners and courtesy I encountered. Whilst in New York I held the door open for an elderly, blue rinsed lady and instead of thanking me she snarled at me calling me a creep and then something about my mother. I was shocked; my experience didn’t extend to elderly ladies swearing. In contrast anybody who tried to sell me something appeared to be my next best friend, insisting on calling me by my Christian name and showing the utmost concern in hoping that the rest of my day would be “nice”

My first visit to an American company was memorable. My initial impression was that every desk had a computer monitor which was a complete novelty to me. I was also staggered by the size of the offices and workshops; even the carpark seemed to be as large as an average UK industrial estate. The place was buzzing and there seemed to be an aura of optimism and “can do”. I had arranged to meet the senior components buyer and I was told at reception to ask for “JB”. I was introduced to JB’s secretary who said that JB was waiting for me in the next office. I knocked at the door to hear a loud “Enter”. Behind a large, uncluttered desk was an Amazonian woman who having raked me up and down with sharp eyes, who ordered me to take a seat. I know this is sexist, but this was the eighties and my immediate thought was “JB must be important to have two secretaries; this one must be the portal keeper”. Wrong! JB lifted her head and said “I’m Judy the senior buyer” she placed a clock in front of her and said “you have 10 minutes to tell me your sh*t”. I responded with a choked “I beg your pardon” to which Judy responded “you have 9 minutes 30 seconds left”. Over the next couple of years Judy proved to be a shrewd and tough negotiator and relationships were cordial to the extent that the clock disappeared and she seemed keen to learn about “Wales, England”. Then came the fateful day I learn about the importance of insurance. I turned up and asked to see Judy and her secretary said “ask Judy about her vacation”. This seemed a reasonable ice-breaker to me so I did. “Oh “ said Judy, “It was fabulous, we had a trailer in the Yellowstone National Park and the wildlife was wonderful” “ We saw Whitetail Deer, Eagles and did you know there are giant redwood trees so big they have carved a tunnel through one” “No I said, sounds wonderful”. “Yes," said Judy, "it was a great vacation only marred by one thing”. “What was that?” that I said. “A Bear ate my husband on the last day, now your last quote was 4% out compared to the Germans”. I was dumbfounded but could see my time was running out so I agreed to look at our quotes again, made my goodbyes and left. In the outer office Judy’s secretary was smirking and I asked if a bear had really eaten her husband? “Oh yes” she replied, “They heard something at night so her husband went out to investigate and it was a Grizzly Bear rummaging through their trash. The bear dragged him off and the Rangers only found bits of him” “Judy didn’t seem too bothered” I said. “Ah that’s because he was really well insured “replied the secretary so she got over it quickly. It pays to be insured”. I learned quite a lot on that trip but to this day have never worked out if Judy was displaying the epitome of professionalism by focusing on the business in hand or was the hardest buyer I ever dealt with. My bank for some reason insists I am fully insured... Next issue brushes with authority.

A serial inventor and engineer, David Scheeres helps clients identify R&D activities within their business, as well as providing advice on product design, technology and innovation. You can email him at david.scheeres@aspen-waite.co.uk

Niche vs Diversity in Business: which is the Route to Success? By Tina Dulieu, B.Ed., DipCEC Business & Executive Coaching - Coaching Dynamics

On starting out in business, the inspired are commonly told that being ‘Jack of all trades and master of none’ is a something to be wary of. “Become a specialist in a particular field and grow around that” they are told by experts. Good advice that leads people into learning a trade, a profession, a skill, selling or developing a product line as a starting point and building from there.

First there was Virgin Records where music was Richard Branson’s niche market and he built a very successful brand and platform. When he sold Virgin Records to finance Virgin Atlantic Airways, he completely diversified and put all his money into buying his first plane to fly the Atlantic building on the Virgin brand he’d created through the Virgin Record label and stores.

So, a business is launched with great hopes and the ambition to be successful and profitable. They build around their niche service, become proficient and possibly experts in their field and serve loyal customers or clients. Some become recognised names in their industry and it is their name or brand that sells their services, others are less successful and reach a plateau of either stabilised satisfaction or unstable dissatisfaction. Not all companies want to be nationally or globally active, others do but seem unable to achieve their ambitions beyond a plateau; why is that I wonder?

Other times diversification is within a niche market and is a natural progression moving into newer markets or keeping up with the times.

Let’s look at it from another angle. Is diversity in business the knock of opportunity on the door of progression? In this ever-changing technological and digital age – in decades to come this era will be known as ‘The Digital Revolution’ (like the Industrial Revolution) - businesses have to move with the times or find themselves left behind. Does this mean diversifying then? In many cases, it does. New ways need to be found to do the same things within their niche offering, often faster, more efficient, more cost effective. Sometimes areas of our niche service no longer serve the purposes they were designed for, so diversification into new territories is the only option. Some do diversify and continue to thrive, others fall into the pit of obscurity because they were unwilling or unable to diversify effectively enough. In the interests of progression, for some the diversification is in a completely different direction. Take Virgin for example.

Accountancy is a specialist niche market experiencing this currently with the introduction of the Cloud accountancy platforms, steering away from paper records or file servers. Even HMRC are encouraging digital accountancy platforms for quarterly tax reporting to be the way forward within the next year or two.

Sometimes we diversify as people within our careers or businesses, as has been in my own case. I have diversified several times during my career, looking back, there has always been a theme running through – ‘developing people to achieve their potential’. This has been my niche, my expertise and specialism but I’ve achieved that in seemingly diverse ways. A brief history annotates the journey. Post "A" levels I worked in the corporate world and realised that I needed to do something drastic if I was ever to reach my potential – the first diversification. I took a Bachelor of Education degree majoring in Mathematics and taught the subject in High School and Further Education for 12 years – my journey had begun. With a desire to be independent, I bought into a franchised educational opportunity and launched

my first business – my second diversification. Here I learned coal-face how to run and grow a business, employ and train staff, understand finance, put systems in place, marketing and keep customers happy. It was very successful and I was proud of my achievements. The theme of helping others achieve their potential was the thread but the platform was different, this was business. Ten years later I sold the educational business and won a scholarship to study Corporate & Executive Coaching and Management Training. Launching Coaching Dynamics in 2007 was diversification number three. I used my experience of running a business and newly acquired accreditations to build a successful and thriving Business Coaching practice. Diversification? Yes. Still my niche thread of helping people reach their potential? Yes. This time in helping other businesses, which I find intellectually stimulating, exciting and ever-changing.

So back to my original question: Niching verses Diversity in Business – which is the route to success? That is a philosophical question on which there will be many different views, I suspect. My view, is that everyone has to start somewhere and so a specialism of service or product - the niche - is the starting point and could be the thread that runs through the core. Diversity, on the other hand, is often the game changer – whether it be an expansion of what is already a niche into new, bigger markets or a complete change of direction. In a world that seems to change at the speed of light, keeping up with the trends is seen as either a challenge or an exciting opportunity for the future. So, is diversity in business the knock of opportunity on the door of progression?

What’s your view?

For the past 10 years I’ve expanded the Coaching Dynamics offering to include Business Growth Strategy Coaching, Senior Management Training and specialise in DISC Personality Profiling. The mathematical theme runs throughout as my logical thought processes helping clients enormously with strategic planning of the growth of their businesses. In 2015 my own profession recognised my achievements and contribution to the industry and I won an International Coaching Award for Business Coach of the Year, a true highlight in the life of Coaching Dynamics! Coaching Dynamics continues to be strong and is well established and so I find myself diversifying again… at the beginning of 2016, with two business partners, we launched The Business Growth Forum – a monthly strategy day for established businesses bringing in Strategic Advisors and Guest Speakers for a stimulating day of ‘learning, sharing and collaborating’. 2017.. I became a Director of ClubRight – an on-line membership portal for Gyms and Sports-related membership. Added to this my association with Aspen Waite in the niche world of R&D for my clients, sees another tributary of the Tina Dulieu river!

Tina Dulieu, the founder of Coaching Dynamics and a Coaching Academy Licensed Trainer, has been helping people be successful in an abundance of ways for over 25 years. Tina can be contacted via e-mail tina@coachingdynamics.co.uk

Changes in the Tax Rules for Rental Income on Residential Landlords By Irene Harris - Account Manager - Bridgwater Office

Changes are being introduced to the income tax relief on property finance costs (e.g. mortgage interest payments) such that relief will be restricted to basic rate only. However, this isn’t just a case of limiting the level of relief but also involves a fundamental change to the method of obtaining relief, as no deduction will be allowed for finance costs when calculating taxable property income and, instead, the resulting tax liability can be reduced by the basic rate (20% currently) of the finance costs. The changes are being phased in from 2017/18 such that relief for finance costs is split between the existing and new rules until 2020/21, when only the new rules apply.

Relief for finance costs

2016/17

2017/18

2018/19

2019/20 2020/21

Deduction from taxable income - OLD Rules Basic rate deduction from tax liability - NEW Rules

100%

75%

50%

25%

0%

0%

25%

50%

75%

100%

Clearly, most (not all, as those without mortgages are far less likely to be impacted) higher rate tax paying landlords will incur increased tax liabilities as a result but a potentially overlooked impact of the new rules is that they don’t only affect higher rate payers, even though this is how they were described when announced. There could be other impacts for landlords: higher total taxable income (due to finance costs not being deducted) may lead to a high income child benefit charge, reduced tax credits, personal allowance restriction for incomes over £100,000, etc. There has been talk of landlords putting up rents in order to offset the cost of the tax changes and it remains to be seen whether this will happen or if the economics of supply and demand prevents this. Although the government has introduced these tax changes in an attempt to rebalance the housing market more in favour of first-time buyers, it is perhaps yet possible that these same persons find it harder to get onto the housing ladder in the first place if renting becomes a more expensive option; lower income families without any aspiration to own their own homes could also be worse off.

For more information about this, or anything else relating to your accounts, get in touch with Irene irene.harris@aspen-waite.co.uk or by ringing our Bridgwater Office on 01278 445 151

The Importance of Credit Control By Cora Joscelyn - Bridgwater Office

Every year, start-up and small businesses in the UK fail because they run out of cash. One of the main reasons for this are cashflow problems caused by slow-paying customers and bad debt. Unless you implement a clear credit control process, your business’ ability to grow will be under threat. There are 6 key considerations for improving overall credit control procedures as follows:-

1) Create a clear credit control process It is crucial to implement a clear and coordinated procedure for credit control. Initially, you need to establish a realistic timetable, including all the stages that need to be completed and adhered to by various team members within your business. Credit terms need to be set and, after establishing these, you need to turn your attention to the stages involved in chasing payments. For example, your process may consist of the following:•

Establish the importance of prompt payment of invoices by politely reminding customers of the payment schedule when the order is fulfilled.

•

Send reminder letters on the day the invoice becomes overdue.

•

Send subsequent letters every 7 days if the invoice remains overdue.

•

After a specific period of time, it might be useful to pass the debt over to a reliable, commercial debt collection agency.

Simply recording this process ensures that all the relevant parties are aware of the terms and conditions and, in addition, will help to reduce the problems associated with late payment before they even occur.

2) Research your customers

3) Maintain a positive relationship

A further consideration in streamlining your credit control process is researching your customers before offering credit. This credit management tactic is often overlooked. This is partly due to the costs of producing credit reports. However, some of these costs can be off-set by establishing which of your clients pose the greatest risk and focussing your attention on researching these.

Your credit control process need not be about threatening your customers with debt collection. Building a positive relationship and clear channels of communication with your clients is just as important.

Once you have obtained all of the necessary business information – such as full trading name, registration number, addresses and key contact details – you can easily check credit risk through a variety of online services. Examining these reports can help you decide if that particular customer is safe to do business with. While credit checking prospects will not guarantee payment, the valuable information it will give you will allow you to make a more informed decision about the terms and conditions of their order.

This kind of courtesy not only helps you to show that your business is friendly and professional, it also gives your customer plenty of opportunity to explain their situation.

One of the best ways of achieving this is by making courtesy calls to confirm receipt of paperwork or in advance of the invoice due date.

4) Invoice quickly and accurately The most basic way to improve your credit control procedures is by invoicing quickly and accurately. There are some really simple tips that make help your business to increase the efficiency of this process:•

Send the invoice as soon as orders are fulfilled or services are provided.

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Email the invoice instead of or in addition to sending by post.

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Ensure that the invoice is addressed to the right person.

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Make sure that there are no mistakes in the invoice.

After an invoice has been sent, it is worth confirming that the invoice has been received. This can help to solve potential problems at an early stage, as well as giving you the chance to build a rapport with your customer.

5) Encourage early payment At the most obvious level, early payment can be encouraged by making sure that it is as easy as possible for invoices to be paid. Ensure, for example, that all your banking details are clearly stated on all invoices, as well as accepting different forms of payment – particularly online payments. Incentivising payment is a further way of encouraging early payments. In terms of incentives, you could offer early settlement discounts for those risky customers if they pay within the stated credit terms. It can also sometimes be beneficial if certain customers pay the majority of their invoice on time, rather than paying all of it late. If this sounds like it might have an effect on your profit margins, these incentives can be incorporated into your pricing structure.

6) Compile a watch list and take action Due to the problems that late payment of invoices can give rise to, you should never just ignore it. If a specific customer often pays late, you can add them to a list of companies to watch. This will ensure that you undertake the necessary due diligence when selling to them in the future. For example, for those companies on your watch list, you could decide to only offer credit terms when they pay a deposit. While customers may have legitimate reasons as to why invoices have not been paid, do not be afraid of taking action for persistent offenders. If a particular customer is continuously ignoring your calls, a simple solicitor’s letter can often spur them into action.

Find out more Get in touch with Cora by emailing cora@aspen-waite.co.uk or ring our Bridgwater Office on 01278 445 151

The Death of Local Banking A Local Feature By Carley & Paul - Head Office

We Somerset folk are rightly very proud of our rich heritage and history, with a bountiful amount of stories of legends and mystical tales of old; our roots grow deep. When most people talk of Somerset and what we are famous for the list is endless – The battle of Sedgemoor, Arthurian Legends, rolling hills and beautiful countryside, Cheddar Cheese, Glastonbury Festival – or as it was originally know “Pilton Pop Festival”, England’s smallest city and not forgetting the all-important drink of the motherland – Cider, to name just a few. A recent article featured in a National newspaper highlighted that a very important part of our heritage appears to be disappearing from under our feet. It will come to the surprise of many who know little about our history that the small town of Langport, roughly 12 miles from Bridgwater was the Birthplace of Britain’s banking system and home to two of the most influential bankers in UK History – Vincent Stuckey and Walter Bagehot Both Vincent and Walter were born and died in the small town. Vincent was born in 1771, the son of a merchant. As well as being one of the country’s leading bankers of his day he also served as Mayor of Langport, a local magistrate, church warden, grammar school trustee and Deputy Lieutenant and High Sheriff of Somerset. Walter was born in 1826, the son of the managing director of Stuckley’s banking company. He attended the University College London and studied mathematics and earned a Masters’ Degree in moral philosophy. He was regarded as one of the 19th Century’s most influential financiers and wrote The English Constitution – which analysed the constitution of the United Kingdom and the history and workings of the British political system. During the 18th Century Stuckley’s “S&G Stuckley & Co” was second to the Bank of England in the number of notes it issued across England and Wales. The Langport site was only the second joint stock bank in England. At the time of Vincent’s death in 1854 the bank had a note circulation of £375,000. Following his death his influential nephew Walter became the bank's secretary and oversaw further rapid expansion and acquisitions of a number of private banks throughout Somerset, carrying on the family business. The building in Langport that has such a rich heritage and history is currently occupied by Natwest.

Natwest have confirmed that it will be closing the branch in Langport in the autumn. What was one of the most powerful financial centres in the UK will be left with no form of banking outlet at all in a history that dates back over 160 years. A letter sent out by the bank has explained its reasons for closing the branch, due to the way people choose to bank with 53% of customers in the Langport area choosing to use digital options. This has caused many locals to voice their concerns about the closure of the bank and how it will affect them. For people who own businesses in the area they will now have to travel over 12 miles out of their away to attend to their affairs; this will be costly to business owners who want to focus trading. Langport and the surrounded villages have a large elderly community, who for many the thought of digital banking sets in a real fear, most of these individuals come from a time when computers and mobile phones were not even invented. Old school systems where you deal with a real person seems to be diminishing at a very substantial rate and for these elderly individuals a trip to their local bank during the week can be for some the only conversation they get. This is not the first situation where banks want to take facilities away from local thriving towns in Somerset. Glastonbury was subject to a similar situation back in March 2016 where three of the big banks decided to shut up shop. This left no banking facilities in the town at all. With Glastonbury not only being a tourist hotspot all year round with an average of about 2million visitors a year, having banking facilities in the town not only for visitors but for local’s and local business owners alike is a crucial part of the town’s day to day running. In true Glastonbury style, there was only one thing to do to show the banks how much this was going to affect the people of Glastonbury. the town come out in force for a good old fashioned protest and singsong, bringing a sense of unity and togetherness; even the local celebrity “Michael Eavis” come out to show is support for his much-loved local town. So a year has passed since the closure of the banks in Glastonbury, to which it has had a serious effect on the people who reside in the town; they have to travel to neighbouring places such as Street, Wells and Shepton Mallet, taking their day to day business out of their special hometown and, after much consultation, petitions and protesting, good old fashioned banking is making a return with Nationwide opening a brand-new branch this summer. The reaction to the news about the town has been phenomenal and, after a consultation meeting held by Nationwide in the town hall results have confirmed that over 1,000 people residing in Glastonbury have said that they will be opening a current account with the lender, enabling them to complete their banking in a branch. The lesson to be learnt here for the banks is to do some research about our local towns, people, businesses, history and heritage before making financially driven decisions as to what is best for small local independent towns just like Langport and Glastonbury. Small communities rely on real not virtual facilities to allow them to go about their daily needs. The banks are trying to thrust a digital solution upon them when this is not what people want.

INDUSTRY UPDATE

Impact of Change in Accounting Standards to FRS 102 During the course of 2015 and 2016, a major change took place concerning the accounting standards which govern the way a set of accounts is put together. This could change both the figures and the explanations in accounts, including making retrospective changes to the prior year’s figures which are shown. In some situations there can also be taxation implications. Below is an overview of the possible areas of change. This is on the basis of using Financial Reporting Standards (FRS) and Statements of Standard Accounting Practice (SSAPs) or the Financial Reporting Standard for Smaller Entities (FRSSE) issued by the old Accounting Standards Board and moving to FRS 102. Small companies are generally affected in the same way as larger companies although there are a few differences which are highlighted below. Summary of Key Changes Financial Statements These might look a little different because, for example, there are some new choices for terminology, moving to more internationally used phrases such as property, plant and equipment instead of tangible fixed assets and inventories instead of stock. The primary statements required are now as follows:• •

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Statement of Financial Position (previously the Balance Sheet); Statement of Comprehensive Income or Income Statement (previously the Profit and Loss) and a separate Statement of Comprehensive Income (previously the Statement of Total Recognised Gains and Losses); A Statement of Change in Equity (not required for a small entity); A Statement of Cash Flows (not required for a small entity); Notes.

Cash Flow Statement Small companies are not required to have a cash flow statement but, for others, the format of this has changed quite significantly. There are now just 3 main headings – operating, financing and investing activities. For subsidiaries there is no automatic cash flow exemption but there is a reduced disclosure regime which would permit the Statement of Cash Flows, together with other disclosures, to be omitted if certain conditions are met.

Financial Instruments These include a wide range of assets and liabilities which are financial, rather than tangible, or intangible in nature. For example, cash, debtors and creditors are all financial instruments. The main changes in respect of these items are that:•

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Investments in shares which are not group companies must be measured at fair value, if possible, with any unrealistic or realised gains or losses reflected in the profit or loss. Derivatives, which includes items such as a forward currency contract, an interest rate swap, futures or options, all need to be recognised in the balance sheet at their fair value with gains or losses in the profit or loss. In the past these were ignored until the contract was completed. The new treatment means that it will be necessary to check if there are any such contracts and, if so, obtain a valuation for them, together with the valuation method used. Loans which are not at a market rate need to be put into the accounts as if they are at market rate. This requires the calculation of notional interest at a market rate. (Note that public benefit entities, such as charities, do not need to do this.)

Foreign Currency Translation The rules have changed so that, where there are foreign currency transactions, the amounts need to be translated at the rate ruling on the date of the transaction (the spot rate). In the past, it was possible to use the rate of any related forward contract or a contracted rate if one was agreed. There is a requirement in FRS 102 to establish the functional currency of the entity. Normally this will be GBP for a UK company but, if most of its cash flows are in another currency or impacted by another currency, then this may not be the case. Hedge Accounting Because the impact of the changes described for foreign currency and financial instruments can be to increase the volatility in the profit and loss and not to match related transactions, there is the ability to use hedge accounting. This is a complex process but ensures close matching of related contracts, such as a foreign currency purchase and forward foreign exchange contract.

Business Combinations, Associates and Joint Ventures Acquisitions, or so-called business combinations, are usually dealt with in the consolidated accounts if these are required (small groups are not required to prepare consolidated accounts). Under the new rules it is more likely that intangible assets, such as customer lists which have been purchased as part of the acquisition, will have to be recognised. Previously, these would often have just been part of the goodwill figure. There are also some minor changes regarding associates, joint ventures and the accounting treatment of acquisitions or disposals achieved in stages. Related Party Transactions There have been some changes to the definitions and to the disclosure requirements although, unless it is a small company, these are fairly minor. Small companies will only need to disclose limited related party transactions and, in particular, only those which are not concluded under normal market conditions. Goodwill If it is not possible to reliably estimate the life of goodwill, there are new rules which require the maximum life to be 10 years (or, in some cases in 2015 only, 5 years). This may mean that some adjustments are needed to the amortisation period and/ or value of goodwill in the accounts. Investment Property Investment property has to be shown at fair value in the balance sheet but changes in value will go through the profit and loss for the year. In addition, a property held by one company in a group and let to another group company will now meet the definition of an investment property. This means it will need to be at fair value, with changes in value recognised in the profit and loss account in the individual company accounts. On consolidation, if relevant, it will be treated as a normal item of property and depreciated over its useful life. Property, Plant and Equipment There are only minor changes to the rules here, although a transitional option exists which allows the valuation of an asset to be used as its deemed cost. This means, for example, a property could be valued just once and then that value treated as if it were cost. This avoids having to continue valuing on a regular basis, which is required if the revaluation model is adopted. Instead, this transitional option allows a one-off uplift of the value of an asset. Lease Incentives A lessees or lessor of an asset under an operating lease who has a lease incentive, such as rent free periods, will now need to be spread the lease incentive over the whole lease term. Currently they are just spread over the period to the first rent review. The lease term is now defined as the period over which there is reasonable certainty that the lease will continue, even if there is a break clause before that. This can have taxation implications.

Deferred Tax The rules for this have now been tightened up, meaning that deferred tax is required on some items which were previously exempt. This means that deferred tax will need to be recognised on all revaluations and also sometimes on unremitted earnings from a subsidiary. This will generally mean that the deferred tax figure will be higher than before. Employee Benefits The new rules mean that it will be necessary to consider whether an accrual for holiday pay is needed where holiday is due at the year-end but has not been taken. If this amount is material it will need to be calculated each year and put into the accounts. It is usually only material if the holiday year and the accounting year are different or if staff are allowed to carry over significant amounts of holiday into the next year. There have also been some changes to the accounting for defined benefit pension schemes but these are rare. Share-Based Payments (FRSSE Companies) FRSSE companies have in the past been exempt from the requirement to account for equity settled share based payments. However, under FRS 102 they will now need to be accounted for. For other companies, the requirements for these are essentially the same as under the current rules. Transitional Changes The general rule when dealing with the move to FRS 102 is that all of the changes are applied retrospectively through the calculation of what is termed a prior year adjustment. However, as this would sometimes be very onerous, there are a number of transitional exemptions which enables the new rules to be applied only in the future. It should be noted that these do not cover all of the changes and so in the first year there will probably be some adjustments made to reserves. Therefore, disclosures will need to explain the impact on the balance sheet and profit and loss. (Small companies are not required to give these disclosures although they are likely to be helpful to anyone using the accounts.) Practical Impacts on the Changes There are some areas of a business which could be impacted adversely by the changes in the accounting rules if the issues are not carefully considered. Broadly speaking they include any contract, covenant or other agreement which is based on or refers to accounts or specific figures in them. In particular, because the profit can be more volatile and include items such as gains on investment properties that are not yet realised, the following should be considered:• • •

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Is there likely to be an impact in meeting any bank covenant requirements? Do any bonus or profit related pay agreements need to be changed to exclude gains on items not yet realised? Are there any earn-out agreements on, for example, a business acquisition which are based on profit in the accounts but which have not taken account of the changes due to FRS 102? Do any tax elections need to be made in connection with financial instruments so that tax is only charged when the final transaction takes place? Does the impact of tax on cash flow forecasts need to be considered?

info@aspen-waite.co.uk 01278 445 151