What impact will disorganised businesses have on the SME landscape?SME’s make up the financial backbone of our business economy, and we work with many of them, as well as their larger counterparts.
Part of PwC’s purpose is to solve things for society. If we can help enact a small change, such as reminding more small businesses to file their taxes on time, we can help more small businesses stay afloat and grow.The repercussions for failing to meet statutory deadlines is most severe for SMEs, and could run the risk of making the business look like it’s risky and poorly managed.
If businesses fail to submit their taxes and accounts on time, it can affect any ultimate sale of the business. Due diligence will be done and questions will be asked, including, whether they hit their accounting deadlines, do they file their tax returns on time? All these factors will impact the speed of the sale and perhaps even the value.If SME owners are looking to sell their business, buyers may be put off as failure to hit your filing deadlines may trigger the vendor to question what other issues is the owner not in control of? The same is also true when raising finance or having credit checks, with providers increasingly relying upon external data sources for decision making. Fundamentally, SMEs run on a tighter budget than larger companies, so having a clean financial record is even more important. SME’s simply cannot afford to be publicised as poorly managed, especially on a publically accessible platform such as Companies House.
The problem could threaten the lives of many SMEsAccording to Companies House only last year, up to 218,884 businesses in the UK were subjected to fines because of late payments and failure to provide financial filings. This amounted to a staggering £93.7 million pounds worth of fines, and a majority of those were recorded as double fines, which meant that businesses were making the same mistakes not once – but twice! “Helping businesses to pay their taxes on time helps the economy and creates jobs. In the climate of Brexit, this is even more important.” And as we know for smaller businesses, every little counts, and mounting fines, even if they are only in small amounts, can pile up, and threaten the longevity of a business. And importantly late submission of returns and tax payments can cause extra scrutiny and focus by HMRC which takes business owners time and focus away from growing and supporting this business. So, as you can imagine, we were keen to help. All we wanted was for everyone, including our clients, and others, to be able to effectively manage their financial deadlines, as everyone benefits from well-run businesses.
What the app doesSo founded upon our premise that every business owner has the right to a manageable financial life comes the “My returns reminder” app. To start, you simply download it, enter your company name and email address, and once set up the app will start to remind you about your reporting deadlines.
As of April next year, HMRC will no longer accept manual returns. We’re trying to become a forerunner in helping our clients get comfortable with the digitisation of the tax and accounts submitting process through Making Tax Digital.The app gives you the flexibility to set exactly when you want the reminders. It covers a range of filing obligations including PAYE, VAT, Corporation Tax, statutory accounts and annual returns. You can set them the week, or even the month before the particular deadline.
A gentle reminderJust as you get message reminders on Whatsapp, you’ll get a reminder of a VAT return that you’ll need to complete. To stop the reminder, all you’ll have to do is go into the app and click ‘paid’, then it will set up the next cycle.
There’s so much technology littering people’s computers. This app should encourage businesses to collaborate with their accountants to try and understand the process better.If you’re still a little fuzzy about what the app does, think back to one of the most iconic Disney movies of all time. In Pinocchio, you have the cute little side-kick called Jiminy Cricket. Well, we like to see our app as a sort of Jiminy Cricket character, who’s here to remind you, the business owner, about your financial reporting obligations The app is offering you those gentle reminders you need to submit a tax return, or submit relevant updates to Companies House, ensuring that your business looks, and is, well-managed.
Young entrepreneurs may only have a five- year plan with a business, and they might want an exit strategy, that’s why it’s so important that they are on top of statutory deadlines to make this possible for them.So, for business owners feeling overwhelmed with their accountancy obligations, why not download this completely free app to remind you of them?
An educational appThe app doesn’t sort out your accounting issues, instead, it’s a conscience alerting tool, that wants to make you a better manager of your business.
We hope our app will help businesses self-reflect, plan ahead and be disciplined. We want businesses to ask themselves, why didn’t we hit those deadlines? What tech do we need to get there and become more stable as a business?If you are constantly missing your payment deadlines, it could also be an indication that there’s something fundamentally wrong with your business, such as there’s not enough money in the company. Whatever the nature of your business, all of them need to look and be financially stable. So why not get smart, and up-to-date with the relevant obligations now to ensure success later? Suzanne Houghton is the My Financepartner Leader at PwC UK Business Solutions for Startups and Scale-ups. “My Returns Reminder” is available on the App Store and Google Play.
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