Author: admin

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Interest on directors’ loan account (DLA) 

If you have put money into your limited company that has not yet been repaid then you can pay yourself interest on this loan. This can be a tax efficient way to take money out of the company BUT you would need a CT61 form completed for HMRC each quarter. 

If, on the other hand, you have borrowed money from your company then you may face a higher tax charge and even a personal tax charge.  

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Time Management Tips for Entrepreneurs 

If you’re managing a business then you probably have 101 tasks requiring your attention even if you have delegated as much as you can. 

  1. Schedule tasks in your calendar. Knowing how long each task will take will help you to understand what is realistically achievable 
  1. Prioritise tasks based on importance and urgency. We use internal deadlines to ensure that we’re not running up against important external deadlines but also to keep internal projects on track 
  1. The way to eat an elephant is one mouthful at a time. Break larger tasks into smaller, bite-sized steps. This seems less daunting but it may also be possible to fit a smaller task in around larger ones so that you make forward progress. 
  1. Avoid multitasking to maintain focus. Easier said than done! I often flit around when I have ‘too many’ tasks on my list and end up achieving nothing as I stop-start each task multiple times. 
  1. Set aside specific times for checking emails and messages. I do a quick triage each morning and then answer emails and call backs from 4pm (unless I’m doing the flitting around in 4 above!) and all of Monday is to clear leftover bits. 

I’d love to hear what works for you. Any habits or apps to recommend? 

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Tax Tip – Changes to Companies House reporting 

From 1 April 2027 all small and micro businesses will need to file a profit and loss accounts at Companies House. This makes sense as an anti-money laundering measure but it can mean sharing confidential information such as turnover and margins with competitors. 

As the tax benefits of trading through a limited company are now minimal you may prefer to become a sole trader or partnership BUT remember that MTD (Making Tax Digital) will mean quarterly tax filings from April 2026. 

Talk to us if you want to learn more.

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How to achieve work-life balance as a business owner 

You may have started your business with the intentions of having a better work-life balance or for some other reason and the work is now taking over your life. If so here are a few tips. 

  1. Set clear boundaries between work and personal time (and place). I find it helpful to clear my desk each evening and to ensure that I actually log off my computer (it’s also better for keeping your software updated) 
  1. Prioritise tasks – you’ve probably already seen the matrix of urgent vs important where you start with the tasks that are urgent AND important 
  1. Delegate where possible – be aware of how much you could earn in an hour and delegate everything possible to somebody with a lower hourly rate. This might be a virtual assistant, a junior member of the team, or even buying in help at home. 
  1. Schedule regular breaks – I always block out an hour for lunch and an alarm to finish working at the end of the day. My need for tea ensures that I take regular breaks to make another drink (or go to the loo after drinking so much!) 
  1. Schedule holidays – I start each year by blocking off the last week of March, June, September, and December as well as a week around my birthday. I sometimes need to change these dates nearer the time but it means that I don’t book meetings in when I expect to be away. 
  1. Practice mindfulness or other stress management techniques – I don’t meditate but I do enjoy running and letting my brain unwind. It’s how I originally got into triathlons 
  1. Create a flexible work schedule that works for you and your life – this isn’t just for the business owner as all our team have this option 
  1. Monitor KPIs around this – I track my weekly working hours and also my profit per hour. 

What are your top tips for work-life balance 

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Cyber security tips for small businesses 

When we do a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis for our business cyber security is pretty high up our list of risks. As accountants we hold a lot of confidential data of a personal and/or commercial nature so it is important that we do everything that we practically can to protect that data.

Having worked in the Disaster Recovery team during my stint in IT here are my top tips on cyber security:

  • Use strong, unique passwords for all accounts.
  • Use a password keeper such as Onepass to store these so that they can be used on your different devices.
  • Implement 2 factor authentication
  • Don’t share accounts/software licences!
  • Always use the latest version of your software and instal updates asap as these will include security updates
  • Train your team on best practice
  • Do not display your router password to casual visitors or on the router itself – this is a particular weakness for those of us who use cloud software
  • Backup regularly and hold the data securely. Cloud software can help with this.
  • Take extra care to look out for phishing attacks. Hover over senders’ email addresses and any links. Any HMRC/government links should end .gov.uk
  • Delete access for former employees as soon as they leave.

I recommend getting CyberEssentials certified. Find out more here: https://www.gov.uk/government/publications/cyber-essentials-scheme-overview

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Tax tip – Alphabet Shares 

All shares of the same class must receive the same dividend. For example, if you have 100 ordinary shares and vote a dividend of £10 per share then each shareholder must receive £10 for each of their shares. These dividends should be paid into an account in the shareholder’s name. 

If you wish to pay different shareholders at different rates then you will need to have different share class. These are often, rather unimaginatively, called A shares, B shares, etc and usually referred to as alphabet shares. Each class may also have different rights (voting, distributions on winding up, etc) It is simplest if these different share classes are created at incorporation.  

Alphabet shares need to be structured correctly to minimise any challenge from HMRC. Definitely not one to do yourself. 

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When can you afford to retire? 

At some point we all want to retire from our business so it’s important to understand how that will impact on our future income. For me, this starts with a personal balance sheet.  

Whilst there’s no financial reporting standard for this here are the sort of things that I include: 

  • Sale value of your business less any costs of sale and capital gains tax 
  • Property less outstanding mortgages, costs of sale and capital gains tax 
  • Pension funds 
  • Other investments 
  • Long term savings 
  • I exclude short terms savings and current accounts as these are usually less substantial and they probably need to be maintained into retirement. 

I then look at a forecast of personal income and outgoings.  

Income might include 

  • Salary and dividends from your own business 
  • Pension income 
  • Rental income 
  • Other investment income 
  • Sale of assets (which might reduce income that those assets generate) 
  • Gifts and inheritances 

And outgoings would be your household bills, hobbies, holidays, etc 

When doing a long terms forecast these will change over time as you plan in major life events such as buying property, weddings, children, school fees, sale of property, cashing in some of the investments above, retirement homes, crises and even nursing homes.  

As with any long range forecast there are huge assumptions to be made, your date of death being one of them, but it is a good start on when you can afford to retire and what sort of lifestyle you will be able to achieve. 

Also worth mentioning that you should ensure that you have a valid will, and power of attorney for your finances, health and business. 

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Plan your business like a marathon 

Building your business isn’t a sprint but a marathon. It takes a bit of planning. 

  • Plan – find a plan that is right for you. Right for where you are now, where you want to be, and how much time you have available 
  • Track performance – what KPIs will show that you are on track? These should be things that you can control such as how often you train each week, rather than how fast you will be by a certain date. How many times do you need to show up on line each week? How many networking events? How long do you need to write for each day (and do you take weekends off?) to complete that book? 
  • Track your progress – each time you run a longer distance or a faster time record this PB (personal best). In business this might be tracking your GRI (gross recurring income), your record month of sales, number of clients, average fee etc. 
  • Invest in the right equipment – a good pair of trainers (and the right sports bra) can make your training so much more comfortable. Have the right people and technology to maximise your chances of success. 
  • Running partner/group – these will provide moral support, accountability, and they will run alongside you as you each focus on your personal goals 
  • Coach – as an athletics coach as well as a business coach I can’t recommend this highly enough. Somebody with technical expertise, moral support, and accountability will help you get to your destination faster. 
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Does 2% feel like nothing? 

It’s a pretty small increase but increasing your prices by 2% will increase you turnover, your profits, and your cash.  

Reducing your costs by 2% will increase your profits and your cash. 

Increasing your clients by 2% will increase your turnover, profits, and cash. 

This is the sort of thing that we identify when we carry our Clarity reviews for clients. We hook Clarity HQ software up to Xero etc to see where they are today and then play with scenarios to improve the business’s profitability, cash, valuation, and efficiency. But we’re not the sort of accountants who just tell you what you need to do, our business advice goes much further. 

We advise on how to do it and help clients by agreeing an action plan, any additional support they need (from us or our network of associates), and accountability to make sure that it gets done. 

Tech does so much of the day to day work which means that accountancy has moved on and isn’t just about measuring last year’s numbers. Instead of number crunching we like to CHANGE THE NUMBERS. 

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Limitations of AI 

At risk of sounding like a luddite: AI is not the answer to everything. 

AI has the potential for so much good but people really don’t understand the limitations.  

  • The main one for accountants is that information put into the free version of ChatGPT is not confidential. For this reason we use Copilot as our default sand other Ais as needed so that client information is never accidentally compromised. 
  • The free version of ChatGPT is only based on information available up to a certain point in time so it excludes more recent updates and data.  
  • AI is the answer to all the problems that you never knew you had! Originally AI was developed as a solution to certain problems but now developers are busy creating solutions to problems that don’t really exist … until their product team tell you that they do. 
  • AI is only as good as the user. As with all technology, garbage in = garbage out. You need to train your AI in exactly the same way that you would train a new apprentice in your organisation. 

The biggest problem is that LLMs (large language models) like ChatGPT are prone to ‘hallucination’. They extrapolate the known data in order to fill in any gaps. Like the accountant’s nightmare ‘Dave at the pub’, who tries to help everybody with doubtful tax advice, hallucinating AI is about as reliable as a toddler with a face full of chocolate denying that they’ve been stealing Easter eggs. 

One AI quoted from my talk at an accounting conference earlier this year. It was probably a great talk but … I didn’t speak at that event! If a journalist was to report this badly they would be out of a job and probably laughed out of their industry.  

I love AI and use it regularly in my businesses but please remember to approach with caution. 

PS If the conference in question would like me to do a talk on this topic I’d be happy to oblige 😉 

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