How to use Google Analytics effectively

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Google Analytics is a free service which allows you to analyse visitors to your website. You could have thousands of visitors to your firm’s website every month, but those visitors don’t mean much if you don’t know anything about them.

Google Analytics is one of the best of many tools available to analyse traffic to your website as it is designed to be easy to use and is free of charge. Used properly, it can help you to understand who is visiting your website and enable you to turn them into potential customers.

The system allows you to track everything from how much traffic your website is getting, to where that traffic is coming from, the behaviours of visitors, what they are clicking on, etc. In addition you can track mobile app traffic and identify trends to assist you in making decisions in relation to how you market your business.

To use Google Analytics you simply sign up for a free Google account, click on Google Analytics from your Google Account home page and go through the various steps. Then you must click on Get Tracking ID. You can install this tracking ID on your company’s website and this will allow you to monitor traffic and start using Google Analytics.

The Traffic Sources section allows you to analyse where the visitors to your website are coming from. You can also set up custom reports in order to monitor metrics based on data specific to your business. For example, if you are an online retailer, you can monitor product codes in order to track which products are being purchased by your online visitors who are based in the EU.

You can also connect Google Analytics to your firm’s social media accounts. This allows you to track the results of your social media marketing. For example, is the article you published on LinkedIn driving people to click through to your website, etc.

Creating a business strategy

creating a great business strategy
When many of us think about business strategy, academics and expensive business consultants tend to spring to mind. The good news is that creating a really great business strategy doesn’t have to be complex.
Put simply, a strategy is what you need to get your business from where it is today to where you want it to be in say, 5 years time. Here are three simple steps to creating an effective strategy for your business:

  1. Manage business risk

Business risk is a fact of life. Some risks can be mitigated and some can’t. Of those risks that cannot be mitigated, you need to ensure that the opportunity for your business outweighs the potential down side. Don’t try to sweep risk under the carpet. Instead, create a risk register and list all of the major risks to your business. Beside each line on your risk register, describe what you are doing to mitigate each risk.         For example, next to “Cyber Security Risk” you might note that you have put a firewall and internet security software in place on your systems. Creating and maintaining a risk register will ensure that you don’t miss anything and that where possible, you do something to minimise business risk.

  1. Understand your market

To develop a successful strategy you need to understand the market in which you operate. How big is the market sector that you are targeting? Is it growing and if so, how fast? Who are your competitors and how do you intend to compete with them for market share? If you understand the key drivers in your market, you can spot new opportunities, harness the forces that are driving change and create a product or service offering that is competitive.

A good understanding of your market will allow you to calibrate your offering in order to create the right balance of supply and demand, pricing and service levels.

  1. Competitive advantage

Every business has strengths and weaknesses. Your business strategy should take this into account. Take time to analyse your main competitors and identify their weaknesses. Now consider how your product or service offering can exploit these weaknesses to give your business a competitive advantage. For example, if your competitors are expensive, perhaps you could gain a competitive advantage by offering a lower price alternative.  Perhaps you can focus on a particular niche sector in order to create an offering that is differentiated. This could give you a competitive advantage with the potential to last a long time.

Contact us to discuss how to improve your business strategy.

Preparing for your accounts year end

accounts preparation

The process of preparing your accounts from your accounts software can be greatly improved if you take the time to review your debtor/customer and creditor/supplier ledgers to make sure there are no outstanding items older than 6 months old.

If you do have such items, it will help your accountant if you include a brief explanation of any disputes you have had with your customer or suppliers so we can understand how best to account for these items and determine if any items should be written off. In addition it may help identify small errors which have been sitting on your debtors or creditors ledger which require tidying up before you pass on your records to your accountant.

We also advise that you review outstanding items on your bank reconciliations and in particular chase up people who haven’t banked cheques and offer to send out new cheques; this process will help you have a clearer idea of your true bank balance and will also improve relationships with suppliers/customers if your chasing them to bank a cheque they forgot they had been given.

Please contact us if you would like help with any of the above.

Clare Garrison Audit Manager Carlisle Office
Clare Garrison
Audit Manager
Carlisle Office

Charity accounts filing help

We understand for some trustees demystifying the terminology used by the Charity Commission can be confusing.

When submitting your accounts the Charity Commission refers to accounts, annual reports and auditors report. Where we prepare your accounts these are all within the one document, your financial statements. So there is no need to file more than one document.

Other issues identified when filing is the difference between a qualified and unqualified audit reports. To determine which is which, the unqualified report means that the auditors found no material errors in your accounts and the first paragraph of the auditor’s report will state the opinion. If the charity’s audit is qualified your auditor will have explained the implications of this to you and the qualification will be denoted in the first paragraph of the auditor’s report by the heading “Qualified Opinion”.

If you are unsure of any other terminology when filing your charity’s accounts please do not hesitate to contact a member of our charities team.

Clare Garrison Audit Manager Carlisle Office
Clare Garrison
Audit Manager
Carlisle Office

Charities Gift Aid Small Donations Scheme

We take the opportunity remind you of the Gift Aid Small Donations Scheme (GASDC). Under this scheme a charity or community amateur sports club (CASC) can claim top-up payments on small donations up to £20.

From 6 April 2017 charities have also been able to claim tax back on donations made using contactless technology, such as a contactless credit or debit card.

Before 6 April 2017, charities could only claim top-up payments on small cash donations. Cash donations can be in coins or notes that have been collected and banked in the UK. The charity does not need to know the identity of the donors or collect Gift Aid declarations.

GASDS claims are worked out in the same way as Gift Aid. If the basic rate of Income Tax is 20%, the charity can claim a GASDS top-up payment of £2,000 on up to £8,000 worth of small donations. This is limited to 10 times the amount that the charity receives in Gift Aid donations that tax year.

Cash and digital payments in the new economy

cash and digital payments in the new economy

One of the announcements in the Spring Statement was the possible demise of the 1p and 2p coins and the £50 note, but for different reasons. It seems that more and more of us are paying for small transactions such as our morning coffee by using contactless payments.

Those who do pay in cash and where the cost is say £2.99 we put the penny change in the charity pot and many are thrown away! The £50 note has been linked to money laundering and other illegal cash-based payments.

The increase in contactless transactions and consequent reduction in the number of small coins in circulation will have a significant impact on the charity sector as many are reliant on peoples’ small change being donated outside supermarkets and stations.

The consultation on the future of cash in the economy also considers the role of cash in tax evasion and illegal activities. The vast majority of traders and businesses accepting payments in cash will do so honestly. However, in some cases, the anonymous and untraceable nature of cash transactions is perceived to facilitate tax evasion, hidden economy activity, or money laundering. This harms the honest majority of businesses who find it harder to compete, and means less money goes towards our vital public services.

HMRC are aware that payments in cash can be a problem for tax compliance. In some cases, this is because taxpayers find it difficult to keep accurate records of all their transactions. HMRC have identified that cash is used by a small minority of people to hide or disguise their taxable income by not reporting, or under-reporting, what they owe.

The consultation paper suggests that the increasing use of digital payments and reduction in the use of cash could have a positive impact on increasing tax compliance and decreasing money laundering. However, the increase in digital payments may only have a limited impact, if the dishonest minority continue to use cash to hide or suppress their income. Could the next step be to make it mandatory to pay your window cleaner or gardener electronically? Not yet…

Are you ready for the new General Data Protection Regulations (GDPR)?

General Data Protection RegulationEuropean data protection laws are changing and come into force 25 May 2018. These new laws will affect all businesses in the UK and the current Data Protection Act (DPA) will be updated to reflect the GDPR obligations.

The GDPR is a framework with greater scope, much tougher punishments and judicial remedy for those who fail to comply with new rules around the storage and handling of personal data, be it in physical or electronic format.

Why are these new laws being introduced?

Since the DPA was introduced in 1998 technology and the internet have developed at such a rapid rate that these rules are now deemed to be ineffective. Nowadays, the ease and sophistication of data collection means that thousands of SMEs not only collect personal details, but store, move and access them online. Personal data is used in everything from sales to customer relationship management to marketing. Cybercriminals are now much more common. In 2016, companies in the UK lost more than £1billion to cybercrime. Major data breaches have given criminals access to names, birthdates and addresses and even social security and pension information.

A recent report from the Federation of Small Businesses (FSB) claims that SMEs are now more likely to be targeted by cybercriminals than their large corporate counterparts and cybercriminals consider SMEs softer targets!

The GDPR is considered a necessity for the protection of data in a modern internet based society.

It is also a chance to take a fresh look at your data security as data breaches may impact on your business reputation.

What does the GDPR mean for SMEs?

Businesses must keep a detailed record of how and when an individual gives consent to store and use their personal data. This means a positive agreement and cannot be inferred from a pre-ticked box. Customers or individuals have the right to withdraw consent. Details must be permanently erased.

This means businesses should review their existing data and delete any that they do not have a valid reason to hold it. The GDPR sets out the legal bases available for processing personal data such as needing it to perform a business contract. Businesses should review what data they hold, have they got consent and do they need to keep it?

Data should be kept secure and this will require a review of current practices to prevent data breaches.

Personal data is a key tool for SMEs looking to target and retain customers: GDPR means it must be handled with the utmost care.

You should start planning for the GDPR now and consider an information audit and, for many businesses, a change in culture.

How can we help?

We have produced a checklist of actions you should undertake before 25 May 2018 to ensure you have a policy for compliance to ensure you have the correct permissions and data is stored as securely as possible.  For a copy of this checklist please click here.

Contact us if you require further help with your planning.

Tax efficient extraction of profit from companies for 2018/19

The new tax year means that many directors of family companies will be considering the most tax efficient method of paying themselves.

For many years accountants and tax advisors have suggested that director/shareholders should extract profit by paying themselves a low salary with the remainder of their income being extracted in the form of dividends.

Although dividends are not deductible in arriving at the company’s taxable profits, they do not normally attract National Insurance Contributions (NICs). The starting point of NICs will rise to £162 a week from 6 April 2018. This is now significantly lower than the £11,850 personal income tax allowance. A salary just below £162 a week, £8,424 a year would mean no NIC would be due but would be sufficient to count as a qualifying year for State Pension purposes (if above £6,032 lower earnings limit).

Remember that employers other than those where the director is the only employee are entitled to a £3,000 employment allowance that can be set against employer’s NICs. If this has not been utilised against NICs on staff wages then consider increasing the directors’ salaries up to £11,850, as the additional salary would save corporation tax at 19% on the £3,426 extra salary which equals £651, whereas the employees NIC would be £411.

As far as the level of dividends is concerned, the rate of tax changes from 7.5% to 32.5% at £46,350 so ideally the dividends should not exceed £34,500 if a salary of £11,850 is paid. The first £2,000 would be taxed at 0% with £32,500 being taxed at 7.5%. Don’t forget that this tax will then be due on 31 January 2020.

Contact us to discuss other ways in which you can extract profits from your family company tax efficiently.

Property and trading allowances and how to claim them

Two new £1,000 allowances have been introduced for the 2017/18 tax year, these are designed to take out anyone earning £1,000 of property income or self-employed income from the need to complete a tax return. For those earning over £1,000 of property or self-employed/trading income you have a choice as to whether you deduct the £1,000 allowance or deduct the costs incurred in relation to your income. Therefore it is not possible to claim expenses, capital allowances or relief under the Rent a Room Scheme if the allowance is claimed. Note that where a house is owned by multiple persons i.e. spouses or siblings each person gets a £1,000 allowance to put against their share of the property income.

Example: A husband and wife own a flat which they rent out for £400 per month. Their share of the property income is £2,400 each. If the expenses relating to the property are less than £2,000 a year (i.e. a 50% share would be £1,000) then the husband and wife would be better claiming the property allowance rather than claiming for the associated expenses. They would therefore only have to pay tax on £1,400 of the property income.

Where we complete your return for you we will choose the most beneficial option for you. If you complete your own tax return using the HMRC website then in the property pages you need to fill in the box which reads “Property income allowance” under the “total rents and other income from property” box.

An example of where the trading allowance could be claimed is say a tradesman who is employed but also does small jobs for his friends outside of his work, which required little materials cost. In total for the year he received £1,500 from these jobs, he would have to pay tax on only £500 of this income as the trading allowance of £1,000 would be claimed. Note that if multiple trades exist it is a total of £1,000 that can be claimed (you do not get £1,000 to set off against each trade).

Please also note that neither allowance can be used to create a loss, i.e. if you have £700 of income you cannot claim an allowance of £1,000 as this would create a loss of £300, therefore you would only be able to claim £700 of the allowance if you have included the income on your tax return.

Where we complete your return for you we will choose the most beneficial option for you. If claiming yourself through HMRC’s self assessment programme, in the self employed pages, you will need an entry in the “Trading Income Allowance” box (shown under the Turnover earned by your business box).

Clare Garrison Audit Manager Carlisle Office
Clare Garrison
Audit Manager
Carlisle Office

 

Scottish income tax rates rise from 6 April 2018

Scottish Income Tax Rates rise from 6 April 2018

The Scotland Act 2016 provides the Scottish Parliament with the power to set all income tax rates and bands that will apply to Scottish taxpayers’ non-savings, non-dividend (NSND) income for tax year 2018/19.

From 6 April 2018 there will be significant discrepancies between the Scottish rates of income tax and the rates paid by taxpayers in the rest of England, Wales and Northern Ireland. Will this result in some taxpayers moving south or supplying their services via limited companies to avoid this increase?

From 2018/19 the Scottish higher income tax rate will be 41% on income between £43,430 and £150,000 where the top rate is 46%. Note that under the Scottish system there is a 19% starting band on the first £2,000 of taxable income and an intermediate rate of 21% for income between £24,000 and £43,430. The 20% rate applies to income between £13,850 and £24,000 (taxable income £2,001 to £12,150).

If you employ Scottish taxpayers they have a special S PAYE code so that payroll software collects the tax correctly.

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