As I understand it, the employer pays the apprentice a training salary, typically £125 per week, for the duration of the Apprenticeship Programme (8 months). The minimum training salary is £2.60 per hour.

This provides your organisation with an extra resource without heavily impacting on financial output.

The Apprenticeship is fully funded by the Government. The employer pays a one-off registration and certification fee of £150 plus vat to register the Apprentice with the Awarding Body.

Recruiting an Apprentice is a cost effective solution during this economic climate, providing you with an affordable full-time staff member; and as an employer you are providing a young person with a great opportunity to kick-start their career.

I was alerted to this grant by Key Training based in Basingstoke. For further information please contact Samantha.carter@keytraining.co.uk who will be happy to answer any questions you may have.

But a recent article I read in Real Business gave a timely reminder of the mistakes that are sometimes made with employee share schemes. Here are the top 5:

1. Having no exit strategy so that the shares/options have no perceived value. Of course, if dividends are paid on shares this can counteract any such concerns- especially if they save tax too.
2. Offering shares or options at an unrealistically high price.
3. Giving too many shares/options to new, unproven employees and not being able to withdraw them later, and therefore also…..
4. upsetting existing team members who you have been less generous with.
5. Promising shares when values are low but deferring the formalities until the value rises, so creating unnecessary tax bills.

Following from point 5 above, in my experience, the number one problem is procrastination on the part of business owners. They know that making employees shareholders is that right thing to do (for the company, the employees AND for their own succession planning) but “seller’s remorse” and fear of change stops them from seeing through their promises, especially to key team member. Over time those key people become more and more disenchanted with promises not fulfilled and leave with ill feelings. Often they take with them valuable knowledge, contacts and experience that allows them to set up in competition with their old employer- the very worst scenario!

I think that “growth shares” can provide and answer to the business owner’s concerns, and they may bring an immediate tax benefit too (for employer and employee). Growth shares only give the employee a percentage of the increase in value of the company from the point at which they are issued. That way the business owner is locking in the wealth they have created to date and needn’t fear giving away everything they have sweated to create over the life of the business. The fact that the shares will have little or no value at the outset also means that there should be no tax on giving the shares.

Let me know if you’d like to learn more about growth shares or other ways of tax-efficiently getting employees on to the first rung of the share ownership ladder, and please post a comment with your own thoughts.

• The Government has given HMRC £917million to tackle the ‘tax gap’, and raise additional revenue of £7billion a year by 2014-15.

• HMRC has recruited over 2,500 new tax compliance officers.

• HMRC will conduct 20,000 Business Records Check this year alone.

An enquiry can cause a lot of personal stress and can incur a lot of professional fees in fighting your case even if you have nothing to hide.

How can you protect your self against a revenue enquiry?
My advice is as follows:

1. Keep up to date. Filing late increases your chance of an enquiry. Also if you are preparing a tax return that is several months old how can you sure it is accurate?

2. Pay your tax on time or if you cannot settle the amount due speak to the revenue at your earliest opportunity and explain your position.

3. Keep very good accounting records, you should have these anyway to run your business effectively.

4. Keep a diary and note in it any exceptional transactions. You may have made a sale at a very low mark-up or the reasons before a very profitable sale. Your accounts for tax purposes only show annual figures and results that are different from earlier years could lead to an enquiry. A note made at the time is very powerful in defending your case and is an excellent memory jogger to explain fluctuations in profits

5. Do not talk about your tax affairs to all and sundry, the revenue do act on ‘tip offs’ from disgruntled staff, partners and business associates.

6. Always speak to your accountant or tax adviser if you are not sure about anything.

7. Consider fee protection insurance to cover the cost of professional fees to deal with a revenue enquiry.

Even if you are completely innocent you could still be the subject of an enquiry
Despite taking every effort you can still be the subject of an tax enquiry.

I think the link below from the Daily Telegraph gives excellent advice on what to do if you are experiencing a tax enquiry.

Daily Telegraph article

Fee protection Insurance
The problem with any tax enquiry is the cost of dealing with the enquiry, typical tax enquiries require 19 months of professional representation and cost upwards of £5,000.

We have devised a new service in conjunction with one of the UK’s leading fee protection insurers.

This Service provides you with an expert technical defence from tax specialists and enables us to:

 Provide you with full professional representation in the event of a tax enquiry

 Deal with the tax authorities on your behalf

 Handle all correspondence and meetings with the tax inspector and Negotiate the best possible result for you

More information about the service is available on request but please let me know if you have any questions.

I strongly advise that all clients subscribe to the service due to the increasing risk of enquiry.

Also directors or partners of a subscribing business will automatically get protection for your own personal Return, making the annual fee excellent value for money.

The protection does not just cover income or corporation tax enquiries but includes VAT and PAYE enquiries as well.

Please contact to join the service. A typical fee for a company is only £160 plus VAT a year.

Countless businesses are forced to surrender to HMRC’s demands as they cannot afford a proper defence. Subscribing to this Service ensures that you’re not one of them.

1. They have a vision
2. They understand their mission (i.e. – purpose/reason for being in business)
3. This is a clear picture of where the business is going and what it will look like when it is finished
4. They appear to do little(!)
5. They are selfless i.e. unselfish
6. They do not protect people from themselves
7. They have no favourites/are unbiased
8. They have humility
9. They do not talk about people when they are not present
10. They speak simply/clearly and honestly using silences
11. They take decisions
12. They take effective action
13. They create harmony
14. They do not push therefore receive little resistance
15. They are open, receptive and considerate
16. They let go
17. They do not intervene unnecessarily
18. They facilitate a process
19. They use common sense!

Many of these are, like 19 above, just common sense, but I think it is always worth taking a moment to reflect on how well we score in these areas, and making small adjustments to how we lead.

It is also worth noting that this isn’t just about leadership for business owners- I think we should all aim to apply these principles in our work roles whether you are a business owner or not, but also in our personal lives in how we behave with friends, family and anyone else we have dealings with in our day to day lives.

Can you add to the list (or change it)?

With thanks to Jonathan Holroyd for inspiring this blog post.

But a recent article I read in Real Business gave a timely reminder of the mistakes that are sometimes made with employee share schemes. Here are the top 5:

1.  Having no exit strategy so that the shares/options have no perceived value. Of course, if dividends are paid on shares this can counteract any such concerns- especially if they save tax too!

2.  Offering shares or options at an unrealistically high price.

3.  Giving too many shares/options to new, unproven employees and not being able to withdraw them later, and therefore also…..

4.  Upsetting existing team members who you have been less generous with.

5.  Promising shares when values are low but deferring the formalities until the value rises, so creating unnecessary tax bills.

Following on from point 5 above, in my experience, the number one problem is procrastination on the part of business owners. They know that making employees shareholders is the right thing to do (for the company, the employees AND for their own succession planning) but “seller’s remorse” and fear of change stops them from seeing through their promises, especially to key team members. Over time those key people become more and more disenchanted with promises not fulfilled and leave with ill feeling. Often they take with them valuable knowledge, contacts and experience that allows them to set up in competition with their old employer- the very worst scenario!

I think that “growth shares” can provide an answer to the business owner’s concerns, and they may bring an immediate tax benefit too (for employer and employee). Growth shares only give the employee a percentage of the increase in value of the company from the point at which they are issued. That way the business owner is locking in the value they have created to date and needn’t fear giving away everything they have sweated to create over the life of the business. The fact that the shares will have little or no value at the outset also means that there should be no tax on giving the shares.

Let me know if you’d like to know more about growth shares or other ways of tax-efficiently getting employees onto the first rung of the share ownership ladder.

There is also a clear relationship between hours and commercial success. For businesses growing at over 10 per cent a year, the average working week is 52.5 hours.

But there has to be a balance – there is more to life than working!

How do you compare? Leave your comments below.

Mandeep Kaur Virdee

When a company is struggling financially, it can be difficult to judge whether the change in circumstances is temporary or permanent. The company itself is a separate legal body, but directors have duties that they must abide by under the Companies Act 2006.

Among other duties, a director must have regard to:

• the likely consequences of any decision in the long term
• the interests of the company’s employees
• the need to foster the company‘s business relationships with suppliers, customers and others
• the impact of the company’s operations on the community and the environment
• the desirability of the company maintaining a reputation for high standards of business conduct
• the need to act fairly as between members of the company

Section 123 of the Insolvency Act 1986 contains two principal tests for insolvency.

Section 123(1) of the Act sets out a cash flow test, which defines the insolvency of a company by its inability to pay its debts as and when they fall due.

Section 123(2) of the Act is a balance sheet test, which defines a company to be insolvent when ‘the value of the company’s assets is less than the amount of its liabilities, taking into account its contingent and prospective liabilities’.

There is a very good reason why directors need to be aware of when their business has reached the tipping point. If appropriate action is not taken when the company is in the onset of insolvency, a director can be held personally liable for debts that then accrue. Under the Insolvency Act 1986, actions ultimately detrimental to the business taken by a director who ignores the tipping point can be deemed to be Unlawful Trading, Wrongful Trading, Transactions at an Undervalue, or Preference claims (paying one creditor in preference to another, knowing that the business is insolvent).

These are all very serious actions and a director may face civil and criminal sanctions. Directors can also be subject to disqualification, which means that they cannot be a company director for a specified period. In extreme cases, that disqualification can be permanent.

If you are worried that you might be getting close to the tipping point or want to take early advice about the options, our specialist team can help you. If necessary, we can put you in touch with the right people either to restructure the business or to close it down properly.

For further advice, contact Mandeep Kaur Virdee on 01276 686222 or by email on Mandeep.virdee@herrington-carmichael.com.

We thought she was having twins, but this quickly increased to quads, then quins, sextuplets, and then nonuplets. I’m now at a loss to find the name for her collective brood which stands at 10 – if you know, do let me know. I’m now an avid fan of our ‘Bird Channel’ and will keep you posted with news of hatching.

Here’s a video:

Yet more baby news this month. Our congratulations go to Jackie French who is now a very proud grandmother to a beautiful baby boy.

Reading Half Marathon
Congratulations also to Andrew Gray who, for the third year running (that wasn’t a pun!) has very successfully completed the Reading half marathon, which was held on 1 April. Each year he has managed to clip about 3 minutes off his previous time, which can’t be bad.

Sage Hints & Tips Workshop
We’ve had a very successful Sage Workshop last month. If you missed it, watch this space for details of the next one.

Life insurance
If you are thinking of reviewing your life insurance any time soon, especially you ladies, then I recommend you read Andrew Gray’s blog on this subject – here.

Guest writers
We’ve had some really interesting Guest Writer blogs over the past months, and if you missed any you can catch up here.

“I was walking along the beach the other day, when out of nowhere I was swooped up and sucked out to sea by a huge sleeper wave. Caught in the swirl, I found myself powerless in the face of the extraordinarily strong undertow…”

When business owners talk about being overwhelmed, it often sounds like they’re describing this sleeper wave. Arriving and engulfing them unexpectedly, it overpowers them. Unable to do anything about it, they find themselves incapacitated.

Part of what makes being overwhelmed so overwhelming is that you usually don’t see it coming; and before you realise what’s happening, you’re in the midst of it.

Hidden benefits of being overwhelmed
To prevent yourself from being overwhelmed in your role as a business owner, you need to understand what it is and how it happens. Ask yourself:

• What is the first clue that you are overwhelmed?

• How do you respond to being overwhelmed?

• How did you get into this situation?

• Is there a pattern that leads up to you being overwhelmed?

• What are you not doing that is making you overwhelmed?

But the big question is: “Do you benefit in any way from being overwhelmed?”

By being overwhelmed, we can avoid taking personal responsibility for the choices we make and how we spend our time. And we miss the opportunity to ask:  Who or what has overwhelmed us?

This line of questioning becomes even more powerful when we step out of victimhood and become curious about what we may have done to get ourselves into that riptide of being overwhelmed. This is one of the most effective ways of getting out of it.

Take the helm
You can be overwhelmed when you suddenly realise that you have more things to do than time in which to do them. By saying “yes” without referring to your schedule and identifying specific times when you can do these things, you are setting yourself up for being overwhelmed.

As these ‘yeses’ pile up, the overwhelming wave builds up off-shore and inevitably comes crashing in.

If you find yourself looking at a list of things to do and they all feel as if they should have been done days ago, you are overwhelmed.

Take a breath, and ask yourself “What exactly is the experience I am having?”

Get out of the current
From here, you can ask any of the other questions listed above. Often one of the reactions to being overwhelmed is freezing.  If this is true for you, try asking: “What am I not doing that is keeping me overwhelmed?”

Notice whatever comes to mind first, and get into action. This will get you moving again.

Incidentally, the lifeguards at the beach advise much the same thing if you find yourself caught in a sleeper wave. “Stop struggling, and don’t try to swim against it or back to shore. You’ll exhaust yourself and drown. Relax and swim alongside the wave, parallel to the shoreline, until you’re out of the current.”

Read the full E-Myth article here.

All courtesy of European legislation and the ‘EU Gender-neutral Directive’. The fact that women live longer than men will no longer be reflected in cheaper life insurance costs. 

The message is clear: buy now or pay more later. Life insurance is cheaper than you think but won’t be at these rates for much longer. 

So if you want life cover and related plans, better to consider prices this year rather then next.

Note also that you may be able to pay the premiums through your company and effectively halve the cost.

Thanks to Jim Monger for alerting me to this deadline.