EC Sales Lists - penalties

For those that do not have to complete them, EC Sales Lists are a piece of EC Beaurocracy. It is administered by HM Revenue and Customs and connected to VAT administration. Broadly it is a quarterly report listing any sales a company has with customers in the rest of the EC.

So there is no tax collection aspect to this. It is something UK business is required to do to help the beaurocrats prepare their statistics.

We prepare these reports for some clients and sometimes they can be fairly labour intensive. The process to set up and file the reports on line is also a bit cumbersome. The reports hold no value for our clients and we or our clients gain no reward or credit for preparing them.

So here's the rub. HMRC are inclined to issue penalties for late submission of these reports, sometimes without prior warning, many months after the reports are overdue. By this time daily penalties have clocked up to a staggering £500! The penalty bears no relation or any tax undeclared (there is none) or even the value of sales understated. So a one off £10 sale to a customer in Europe could result in a £500 fine if a report is not submitted. Is this fair and proportionate? I think not, but reading some Tribunal reviews, in many instances these penalties appear to be upheld.

I think a much gentler compliance regime would be appropriate for these reports. Maybe more helpful reminders and support to file the reports and less of the 'blunt stick' of a disproportionate penalty sent without prior warning. This smacks of a revenue raising scheme by HMRC and I wonder how may other businesses have been caught out by this?

Networking for growth

When I first started my accountancy practice 12 years ago I asked a contact who had run his own business successfully for several years for some advice. 'Use your network' was how he put it succinctly. We expanded on this on what he meant was keep in touch with people who know you, be they ex work colleagues, friends, local business owners etc and let them know your plans. Keeping in touch could be the occasional email, meeting for coffee or lunch or maybe a phone call. These days the explosion of social media has made it much easier to stay in touch through a variety of tools.

There was wisdom behind this advice. The network you have built up through friendship or shared work experience already has a foundation of trust. If these people already know you they are much more likely to be supporters of your business, either directly by becoming clients or by spreading the word.

I was very lucky in that many of my old work colleagues became clients and many are still clients to this day. I hope we are continuing to do a good job for them. Even now, 12 years after leaving my previous employer we still receive referrals from 'Someone who knew someone I worked with who said you had an accountancy practice'. It is amazing how word gets around and people want to work with someone they have personal experience of or are recommended by someone they know and trust.

So that was great advice that I'm very glad I listened to and acted upon. Since forming my own business I have also done lots of networking with local groups. This has ranged from the tightly structured, such as BNI to the more informal. Both have their place and often it is about finding a group which suits your business and your personality.

After careful thought we are about to launch our own networking group at Base52 called the 'Growth Club' staring in October 2015. The name of the group gives a clue to its focus. We will be doing our best to help visitors grow their businesses. Anyone is welcome, be they clients of Base52 or not. The format of the meetings will be a guest speaker and some facilitated networking. Surprise , surprise, the speakers will usually be fellow business owners and entrepreneurs I have met on my own business journey. In the main, they will be speaking about aspects of business growth, drawn from their own business experience. The structured networking part of the meeting will give visitors an opportunity to raise the profile of their own business and meet other business owners who could be potential customers, suppliers or supporters.

For more details of our first Growth Club meeting and to book your place, please follow this link http://www.base52.co.uk/events. Tony Blair once famously said his three priorities for government were 'Education, education, education'. For business owners a good mantra could be, 'Network, network, network'. I hope you can join us.

Surprised by statistics

Lots of things ping into our inbox and Twitter feed these days and if you are like me most of it gets ignored or sent to trash. The other day though I saw a tweet from a bank about local insights. Following the link I was able to drill down to my constituency, 'Hitchin and Harpenden' and see some interesting insights about consumer spending, business growth, business start ups etc

Some of the insights were as expected but several were not. It made me think that as a small business owner I should pay more attention to this kind of data.

Here is an example of some statistics I was a little surprised by. Apparently growth in the construction sector has declined compared to the same quarter last year whereas retail is thriving. That does not fit with my own experience where broadly our construction clients are doing very well indeed and some of our retail clients are still finding it tough. Overall small businesses grew by about 5% compared to the same quarter last year. The professional and administration sector is booming with growth above 11%.

Perhaps the most surprising statistic (well it was for me) is that nearly one in 3 of people living in Hitchin and Harpenden are over 60.

A statistic I have heard many times that still holds true is that more than one in three new businesses fails within three years. Most of these new businesses appear to be started by people who are, how should I put it, passed the first flush of youth. The average age for someone starting a business is 48. The average age for small business owners overall is 52, so I am pushing the average up a little now. The proportion of female business owners is 20%. I don't have this statistic to hand in my business but I'm sure that our proportion of female business clients is significantly higher than this.

So as someone once said, 'There are lies, damned lies and statistics', but what are the lessons to be drawn from these facts and figures? Well for me there are several. Number one is I need to make more use of this local information to help with business planning. Number two is I need to work a bit harder - if our sector is growing by 11% we need to do much better than this. Number three is I need to think more carefully about marketing to business - I may think I know the profile of business owners, but the stats may say something different. I hope there is some useful learning here for your business too.