Finance in Cornwall - 10 May 2016 (Segment 2b)

Finance in Cornwall 2016

Start Ups and businesses trading for < 2 years

Ivan Burnard - Partner

“Cornwall, we have lift off!”

pkf-francisclark.co.uk

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Structure of morning

• Background, EU “calls”, grants and Banks (8:30am to 9:50am)

• LEP, Cornwall Chamber, FSB• Grants and Banks (intro)

• Funding and Business Support – stratified by age of business (10:10am to 11:20am)

• Equity, Business Support and Company presentations (11:40am to 1pm)

• State Aid• Crowdcube pitch..

• Q&A one to one/ Networking (1pm to 2pm)


8 minute presentations on:

• Bookkeeping*• Legal structures*• Start Up Loans (loan)• Approaching a bank – practical tips (loan)• Crowdfunding rewards • VAT*• Tax on Profits*• Outset Cornwall and RIO (Business Support)

• (* = inherited slots from “Start Up Cornwall”)

Funding and support – for business <2 years old

Bookkeeping – First Steps to the CloudLucy Davis

The Importance of Bookkeeping

We all love the day-to-day running of our businesses but its so easy to neglect doing our bookkeeping. The main reasons it is so important to keep your records up to date are:

• Decision making

• Time saving

• Save money

• Legal requirement

• Fines



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Cloud Accounting - The Way Forward

Cloud accounting is becoming increasingly popular as clients want to work smarter, faster and have the flexibility to run their business from work, home or on the go.

• What is cloud accounting?

• How will it benefit me? Real-time overview of financial position

Download business bank statements and import them directly

No desktop software – no backups/ risk from hardware failure

Always up to date with latest version

Multi-user access from any location

• Relevance?


.

How To Get Started

The thought of setting up your bookkeeping on the cloud or changing from your current method may seem like a lot of hassle but it’s easier than you think!

• If you are a brand new business….

• If you are an Excel loving business….

• If you are already on a desktop accounting software package….

If you’re looking to start up on the cloud or make the move then be sure to get a professional involved initially, this could be your accountant or a bookkeeper. Make sure they are certified advisors.


They all offer a monthly subscription which includes dedicated support from them.

Overall I would say that cloud accounting is designed for most small businesses. It is ever evolving and if it doesn’t currently meet your needs, it definitely will in the future.

If cloud accounting does interest you then download their free trials and have a play!

Cloud Accounting Providers

Corporate Structures

Gavin Poole

Gavin PoolePartnerCorporate

Stephens Scown LLPTel: 01872 265123Email: [email protected]

• Free information• “Corporate structures”• Choice• Tax• Liability

First steps

• Basic questions• “Contribution to the business’s overall mission

and goals”• Not set in stone• Admin

Some lessons...

Before you start

Responsibility

Exit plan

• Clarity of purpose• Responsibility• Skills• Attractive to investors• Succession planning and exit

Why this matters

“Structure follows strategy”

“If an organisation does not know where it is going there is no intelligent basis for organising human effort and material resources”

Best structure will not guarantee results and performance but wrong structure is guarantee of non-performance.

Peter Drucker

• Values• Behaviours• Climate

Organising human effort (cultures)

• Insist on doing everything through “channels”• Make “speeches”• Refer all matters to committees• Attempt to make committees as large as possible• Refer back to matters that were once closed and

re-open them

1944 CIA: Simple Sabotage Field Manual

Basic vehicles• Sole trader• Partnerships...• Trusts...• Companies...• LLPs• PLCs• Charitable Incorporated Organisations• Community structures

Summary• Structures are plentiful• Structures are good• Documented relationships give clarity• Adding value:

o The journey is helpfulo Insurance is in place

• Lack of clear structure will become a problem• It is a false economy not to have structures

• Bespoke• Covers key issues • Cost effective• Swift turnaround

Start-up package

Apply to Stephens Scown Cornwall Corporate Team:[email protected]

The content of this document is classified as INTERNAL

Debt, approaching the bank – Practical Tips

Lamorna Kenna

Business Growth Enabler



03/05/2023 26

Four things the bank will ask

03/05/2023The content of this document is classified as INTERNAL26

Purpose of Lending1

Amount2

Lending Term3

About your business4


03/05/2023 27

Assessing an application, what do we look at?


You1

Contribution2

Business Plan3

Affordability4

Credit History5


03/05/2023 28

You


Why do you want to set up in business?

Support network

Contingency planning

Strengths and weaknesses


03/05/2023 29

Contribution


Typically 50% contribution

Demonstrates commitment and confidence in your project

Can you raise money from other sources?


03/05/2023 30

Business plan


Business Background

Competition

Route to Market

Advertising and Marketing

Your background

Breakdown of costs

SWOT analysis


03/05/2023 31

Affordability


Cash Flow Projections

Assumptions

Seasonality

Cost of your product

How much you expect to sell

Wages

VAT

Loan repayment figures


03/05/2023 32

Example cash flow projectionJan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total

IncomeCapital introduced

Income from café sales 3,000 3,000 3,000 7,000 6,000 8,000 12,000 12,000 8,000 4,000 3,000 4,000 73,000

Income from art sales 500 1,500 2,000 500 4,500

Total Income (A) 3,000 3,000 3,500 7,000 6,000 9,500 12,000 12,000 10,000 4,000 3,000 4,500 77,500Cost of salesFood 1,000 1,000 1,000 2,000 2,000 2,500 3,000 3,000 2,500 1,000 1,000 1,000 21,000

Beverages 300 300 300 350 350 350 500 500 350 300 300 300 4,200

Total cost 1,300 1,300 1,300 2,350 2,350 2,850 3,500 3,500 2,850 1,300 1,300 1,300 25,200Savings for Tax 0 0 0 200 200 200 200 200 200 200 200 200 1,800

Drawings 0 0 500 500 500 500 500 500 500 500 500 4,500

Staff costs 1,000 1,000 1,000 1,000 1,500 1,500 2,000 2,000 1,500 1,000 1,000 1,000 15,500

Loan Repayments 190 190 190 190 190 190 190 190 190 190 190 190 2,280

Rent 660 660 660 660 660 660 660 660 660 660 660 660 7,920

Rates 0 0 0 0 0 0 0 0 0 0 0 0 0

Water 0 0 100 0 0 100 0 0 100 0 0 100 400

Electricity 0 0 120 0 0 120 0 0 120 0 0 120 480

Wifi/Phone 65 65 65 65 65 65 65 65 65 65 65 65 780

Insurance 60 60 60 60 60 60 60 60 60 60 60 60 720

Total Expenditure (B) 1,975 1,975 2,195 2,675 3,175 3,395 3,675 3,675 3,395 2,675 2,675 2,895 34,380Net Profit -275 -275 5 1,975 475 3,255 4,825 4,825 3,755 25 -975 305 17,920


03/05/2023 33

Credit history


Be upfront and honest about previous problems


03/05/2023 34

Summary


Have some cash behind you to get started

Have written a detailed Business plan and be prepared to answer questions about it

Have prepared a realistic Cash flow projection

Have sought help from professionals should you need any help with preparing the necessary information


03/05/2023 35

Lamorna KennaBusiness Growth Enabler

07788347064

Twitter@LamornaKenna

SWIG Finance

John Peters, Managing Director

We finance businesses to start or grow

+ =

We can say yes when the bank says no

Review of 2015• Delivered record lending of £5,000,000 to 430 SW businesses• Created and safeguarded 621.13 FTE jobs • Established as leading Start Up Loans provider in the South

West• Launched the Seedbed fund for social ventures with DHT and

Plymouth University

Lending Growth 2010 – 2015

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

5,000,000458

360

153

100

37

15

Total Loans Drawn

Year

Loan

Am

ount

Lending by County

17.9%

24.9%

7.4%18.6%

6.8%

12%

8.5%

3.9%

CornwallDevon DorsetBristolGlosHampshireSomersetWiltshire

Funds Available May 2016• Start Up Loans - Loans up to £25,000 for businesses trading

up to 3 years in the SW with fully funded business support • South West Loans Fund - Loans up to £50,000 for eligible

businesses in Cornwall and the Isles of Scilly (Closes June 2016)

• Seedbed - Loans up to £50,000 for social ventures in the SW with fully funded business support

• Fresh Start and Pesca – Small loans for tenant farmers in Cornwall and fishing- related businesses in Devon and Cornwall

Future OpportunitiesTwo new streams of finance becoming available in 2016:

• National £60m loan fund – providing loans up to £100k in the South West

• Recycled legacy funds – providing loans up to £250K in the South West

Thank you

[email protected]

01872 223883

o crowdfunding

Crowdfunding in Cornwall

o crowdfundingCrowdfunded | 2016

o crowdfunding

Rewards crowdfunding is best explained by example

1. Phil from Leeds wanted

to start up a bakery

2. He needed £8,000 to

purchase a bread oven

3. The bank wouldn’t lend

4. He created a project

on Crowdfunder

5. And raised over £8,000

from 114 people

Leeds Bread Case Study

o crowdfunding

How it works . . .

Create your project

on Crowdfunder

Share your idea with

the crowd, they pledge

cash for rewards

Your idea gets

funded!

How it works

o crowdfunding

Why run a project?It’s so much more than money . . .

Marketing

Validation Funding

Advocates

Benefits

o crowdfunding

Launch

o crowdfundingProject page

o crowdfunding

Grow


o crowdfunding

Scale


o crowdfunding

Local business


o crowdfunding

Bonkers projects


o crowdfunding

“Exporting”


o crowdfunding

Social Enterprise


o crowdfunding

Small


o crowdfunding

Big


o crowdfunding

What next

Get a team

together

Create a project

on Crowdfunder

Get your idea

funded!

What next?

Read the funding pack

and make a plan

Tell us about your idea: http://www.crowdfunder.co.uk/your-idea

http://www.crowdfunder.co.uk/your-idea

Tax the basics and the pitfallsNigel Somers

Tuesday 10th May


.

Income Tax

Allowances

2016/17 2015/16

Personal allowance £11,000 £10,600

Basic rate band £32,000 £31,785

Higher rate threshold £43,000 £42,385

Additional rate threshold £150,000 £150,000

Personal allowance abated by £1 for each £2 of income from £100,000 £100,000

Personal allowance lost at £122,000 £121,200


.

Income Tax

Rates

2016/17 2015/16

Basic rate 20% 20%

Higher rate 40% 40%

Additional rate 45% 45%

Dividend tax rate (BR) 7.5% 0%

Dividend tax rate (HR) 32.5% 25%

Dividend tax rate (AR) 38.1% 30.6%


Income Income TaxGross Income

Personal Allowance:

50,000

(11,000)

-

Taxable 39,000

Tax Payable: @ 20% 32,000 £6,400

@ 40% 7,000 £2,800

£9,200

Mr X

Tax Calculations – 2016/17

Ignores National Insurance Contributions


Income Income TaxGross Income

Personal Allowance:

60,000

(11,000) -

Taxable 39,000

Tax Payable: @ 20% 32,000 £6,400

@ 40% 17,000 £6,800

£13,200

HICBC 1,788.80

Mr X

Tax Calculations – 2016/17

Ignores National Insurance Contributions


Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Total

1,083 1083 1084 1,083 1083 1,084 1,083 1,083 1,084 1,083 1,083 1,084 13,000

216.60 216.60

216.80 216.60 216.60 216.80 216.60 216.60 216.80 216.60 216.60 216.80 2,600

917 917 916 917 917 916 917 917 916 917 917 916 11,000

SALARY - £24,000

Taxable

Annual allowance

Tax due £1,083 @ 20% = £216.60

Tax

Profit & Loss £Sales 200,000

Less: Cost of Sales (100,000)

Gross Profit 100,000

Less: Admin Expenses 50,000

Net Profit £50,000=======

Mr X

Profit & Loss Account – Year Ended 28 February 20XX



Income £ £Self Employment 50,000 Total Income 50,000

Personal Allowance (11,000)

Taxable Income 39,000

Tax Thereon Non-Savings 32,000 @ 20% =

7,000 @ 40% = 39,000

6,400.002,800.00

Income Tax 9,200.00

Total Tax DueAdd: Class 2 National Insurance dueAdd: Class 4 National Insurance due

9,200.00 145.603,284.60

Total Tax & Class 4 NI 12,630.20

Tax Liability 12,630.20

Mr X

Tax Calculations – Year Ended 5 April 2017Note: Calculation is based on rates and allowances at the time of the 2015 Summer Budget


Income £ £Tax Liability 12,630.20

Less: Tax paid on Account 31 January 2017 31 July 2017

Tax Due 12,630.20Due 31 July 2017 31 January 2018

-12,630.2012,630.20

=========

Payments on Accounts for 2017/18 31 January 2017 31 July 2017

6,315.10 6,315.1012,630.20

=========

Summary of Payments due 31 July 2017 31 January 2018 31 July 2018

-18,945.30 6,315.10

Mr X

Tax Calculations – Year Ended 5 April 2017


Income £ £Self Employment 50,000 Total Income 50,000

Personal Allowance (11,200)

Taxable Income 38,800

Tax Thereon Non-Savings 32,400 @ 20% =

6,400 @ 40% = 38,800

6,480.002,560.00

Income Tax 9,040.00

Total Tax DueAdd: Class 2 National Insurance dueAdd: Class 4 National Insurance due

9,040.00 145.603,226.60

Total Tax & Class 4 NI 12,512.20

Tax Liability 12,512.20

Mr X

Tax Calculations – Year Ended 5 April 2018Note: Calculation is based on rates and allowances at the time of the 2015 Summer Budget – some tax allowances may have been ESTIMATED


Income £ £Tax Liability 12,512.20

Less: Tax paid on Account 31 January 2017 31 July 2017

(6,315.10)(6,315.10)

Repayment Due (118.00)Due 31 July 2017 31 January 2018

- -

-=========

Payments on Accounts for 2017/18 31 January 2018 31 July 2018

6,256.10 6,256.1012,512.20

=========

Summary of Payments due 31 July 2017 31 January 2018 31 July 2018

-6,256.106,256.10

Mr X

Tax Calculations – Year Ended 5 April 2017

VATJulie Towers, Partner VAT ServicesMay 2016

VAT registration


• Taxable income

• Threshold £83,000 from 1 April 2016

• Last 12 months

• Next 30 days

• Exemption if income predominantly zero-rated

• Exception if ‘one-off blip’ and turnover in next 12 months is expected to be below deregistration threshold (£81,000).


.

VAT registration

• Voluntary registration can be requested where it is advantageous to register before the threshold is breached

• Only zero-rated income

• Recovery of VAT on expenditure

• VAT can be recovered on expenditure incurred by the taxpayer before registration

• Services in previous 6 months

• Goods purchased in previous 4 years

• VAT can be recovered on pre-incorporation expenditure in certain circumstances


.

Overseas issues

• Purchase of goods from EC suppliers can trigger liability to register in the UK

• Similar rule for services from any non-UK supplier

• EORI required for import of goods from non-EU country

• Most income from overseas customers counts towards the VAT registration threshold. Exceptions: • Most services provided to businesses in other EC countries• Most services provided to any customer outside the EC

• Additional compliance for trade with EC countries

• Consider VAT if storing goods in other EC countries

75

Outset Cornwall

Ian Williams

76

Outset CornwallConsortium of partners:-

- Outset Cornwall- YTKO

- Spark- Truro & Penwith College

- Business Enterprise for Women (BEW) - Truro & Penwith College- The Engine Room

- Cornwall Neighbourhood for Change- Real Ideas Organisation- School for Social Entrepreneurs Cornwall

77

Outset Cornwall

• European Regional Development Funded Programme

• Covers Cornwall and the Isles of Scilly

• Start their own business or register self-employed

78

Outset Cornwall• Information Sessions

• Workshops

• One to one coaching

• Networking – Annual Events with speakers

• Outset Online

79

Outset Cornwall

• Contact us at:-

Outset Cornwall 0800 917 4324 [email protected] www.outsetcornwall.co.uk

80

Truro & Penwith College

• Spark

• Business Enterprise for Women (BEW)

- European Regional Development Funded

- Innovative Programme, First Class Support

- Workshops and Events

- One to One Coaching – Personalised Development Plans

- Six-Week Test Trade Period

Business Enterprise for Women (BEW)

- European Regional Development Funded

- High Quality Business Start-up Support

- Personal Development

- Unlimited Specialist One to One Coaching

- Dedicated Mentoring

Truro & Penwith College

Contact us:-

Truro & Penwith [email protected] Sekula: 07834 155024

Jon Rolls

Delivered in partnership by:

Supporting Cornish SMEs and social enterprises

That are:• Pre-start• Start up• Less than 12 months trading

Offering:• A minimum of 12 hours specialist support across a range of activities

Engine Room support includes

• Information Sessions• Business Development Programme• Group Workshops• Open Events• A comprehensive website and online listings• 1:1 coaching and support• Networking opportunities• Conferences and events

Eligibility criteria:

• Participants must be resident in Cornwall for the duration of the programme

• Businesses must be based/registered/will be registered in Cornwall

• Proposed business must be eligible for funding

• Must be a new businesses – not trading for more than 12 months

Further information www.theengineroom.org.uk

• Cornwall Neighbourhood for Change: 0800 328 4065 [email protected]

• Real Ideas Organisation: 08458 621288 [email protected]

• SSE Cornwall: 01726 216105 [email protected]

mailto:[email protected]




BreakSession 3 start time

11.40am

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Finance in Cornwall - 10 May 2016 (Segment 2b)

Business

Transcript of Finance in Cornwall - 10 May 2016 (Segment 2b)