Financial Matters

With David Frederick FCCA | Marcus Bishop Associates | marcus-bishop.com

The Fallacy Of Stunting Small Business Growth

Some small business owners faced with the challenge of small business growth seem happy to apply a strategy designed to stunt or even kill the growth of their business. What is really enlightening is that when questioned these business owners, would never dream of treating any child or human being in this same manner. However, they offer their small business no such respect or protection. These small business owners are quite happy to champion a case for not allowing their business to enjoy a turnover beyond £85,000. What is magical about £85,000? This is the threshold for mandatory registration of VAT. Small business owner often cite the burden of VAT as a wholly justifiable explanation for their behaviour to stunt or in some cases stifle their small business. This it never reaches maturity. One may reflect and ask, have these small business owners ever attempted parenthood as either a single or joint parent? For the alleged administrative burden of VAT pales into insignificance when benchmarked against parenthood. Alas each to their own. This label of administrative burden is an interesting and perplexing explanation. Furthermore, what is most concerning to learn from small business owners, is that their argument has been endorsed by accountants. Really! The idea of stunting or let’s be real, stifling business growth because of the VAT burden is justifiable? Just looking around, one can only reflect and ask what would our local and national economy have looked like if all small business owners of yesteryear had adopted this desire to stifle any positive signs of business growth? Nevertheless, this requires a deep dive into the operations of this VAT administrative burden. Let’s start by assigning VAT its full name, Value Added Tax. In short, any business that provides vatable supplies must register for VAT once their turnover of vatable supplies over a rolling 12 months approaches or reaches £85,000. However, a business may register for VAT if their vatable sales is below this £85,000 threshold. The £85,000 threshold is only applicable to vatable supplies. This is fundamentally important because small business owners and their accountants need to be aware whether the goods and/or services being supplied are vatable. Whilst it may not seem that difficult, a recent discussion with a small business owner revealed that their former accountant, had advised them to register for VAT although their sales were not vatable. Whilst this is the complete opposite of stunting small business growth, it further demonstrates the misunderstanding of the fundamentals of VAT. Such misunderstanding, may partially explain why many small business owners are encouraged to stunt their business growth because of the administrative burden of VAT. The administrative responsibilities of a VAT registered small business are threefold: • maintaining accurate and reliable business records; • reporting VAT activity and making VAT payments to HMRC quarterly and • since 1st April 2022 maintain business records digitally. The maintenance of accurate, reliable and digital records are fundamental requirements for effective small (or large) business management. Let us not forget, the rights to business success comes with some responsibilities. Even, the great fanfare and noise surrounding the burden of MTD (Making Tax Digital) for VAT has not materialised with any greater or adverse burden on the well run small business. Quite the contrary, digital record keeping affords small business owners and their accountants a better opportunity to understand the development and progression of the small business. Today, any small business contemplating or at this VAT crossroads may want to reflect upon the poem, ‘For want of a nail’. Perhaps the 2022 revision may be rewritten, “for the misunderstanding of VAT a real business was lost.” A small business often takes the journey of the road least trodden and attempts to stunt its growth should be taken with due care and attention.

YOUR LOCAL, INDEPENDENT PLANT HIRE

Perfect for small builders and DIY customers, we pride ourselves on offering a friendly service with expert advice to make sure you get the right plant for the job. Call us for a quote today. 07843 145294 | hello@dulwichdiggers.co.uk

Your Company Here!

Book our small but mighty ad for the next issue. Call 020 8693 9040 for our rate card!

Call now for FREE consultation 020 8338 0189 or 0800 092 1068

Please feel free to email me your queries at: info@sspcrepair.co.uk

Alleyn’s School

-V

Alleyn’s off ers co-educational excellence in a caring community for children aged 11-18.

We offer a range of scholarships and means-tested bursaries. For more details, and to learn about life at Alleyn’s and our next Open Event dates, please visit our website. www.alleyns.org.uk

Wednesday 19 October: Chener Books Poetry Month 3

7:30pm - 9pm. Chener Books is hosting a series of four poetry readings throughout October, to celebrate National Poetry Day. On Wednesday 19th October Ella Frears, Will Burns, Maurice Riordan and Rushika Wick will be reading. Tickets can be purchased at www.eventbrite.co.uk. Chener Books, 14 Lordship Lane, East Dulwich.

Wednesday 19 - Saturday 22 October: Romeo & Juliet

8pm -10pm. Directed by Yohann Philip. ‘Two households, both alike in dignity, in fair Verona, where we lay our scene, from ancient grudge break to new mutiny, where civil blood makes civil hands unclean...’ On a London high street, two rival businesses are locked in a violent struggle for supremacy, while young lovers defy their families to follow their passion. Join us for an exciting, contemporary, and immersive adaptation of Shakespeare’s most famous tragedy. Performance dates: Wednesday 19th to Friday 21st October at 8pm., and Saturday 22nd October at 3pm and 8pm. Venue: Edward Alleyn Theatre, Dulwich College, London SE21 7LD. Tickets at: www.ticketsource.co.uk/dulwichplayers

Wednesday 26 October: Cooking with Scissors

6.45pm-8pm. An opportunity for local business professionals to meet, make new contacts and gain new business. The last Wednesday of every month. Free Admission. To find out more or register www.cookingwithscissors.co.uk/ The Lordship Pub, 211 Lordship Lane, SE22 8HA

Thursday 27 October: Chener Books Poetry Month 4

7:30pm – 9:00pm. Chener Books is hosting a series of four poetry readings throughout October, to celebrate National Poetry Day. On Thursday 27th October Sophie Herxheimer, Arji Manuelpillai, Clare Pollard and Natalie Linh Bolderston will be reading. Tickets can be purchased at www. eventbrite.co.uk. Chener Books, 14 Lordship Lane, East Dulwich.

Friday 28 October: John Kirkpatrick, John Haseler, Trista Selous

7pm – 11pm. We are delighted to be welcoming John Kirkpatrick back to The Goose Is Out! this time solo! John is one of the most prolific figures on the English folk scene, performing solo, in duos, acoustic groups and electric bands, and has established an enviable reputation as an instrumental virtuoso (melodeon, Anglo concertina and button accordion), as well as a leading interpreter of English folk music. He is also very funny! We think he is brilliant! Support tonight is from two excellent but very different local singers, John Haseler and Trista Selous. Expect a very interesting mixture of songs, probably including the UNexpected! Venue: The Ivy House, 40 Stuart Road, Nunhead, SE15 3BE. Tickets can be purchased on:

www.wegottickets.com/thegooseisout