Q: How much can a firm spend per head on Christmas parties and is it tax deductible?
A: Staff events and functions qualify as an exempt benefit for personal tax purposes providing that combined costs do not exceed £150 per head per annum. This figure is inclusive of VAT, as well as including any ancillary expenses such as the provision of overnight accommodation or transportation home. Exceeding HMRC’s specified threshold results in all costs being taxable as a benefit in kind and as such becomes reportable on each employee’s P11D unless the business holds a settlement agreement with the Revenue. Staff entertaining costs are generally allowable providing that these are not incurred as incidental to the entertainment of others such as clients.
Q: I have been fined as my accounts have been submitted to Company House late. Is this right and is there any appeal?
A: You have 9 months from the year end of your company to ensure that statutory accounts have been filed with companies house. Your professional advisor should monitor this and advise when records are needed to complete the work but ultimately it is the directors responsibility. Fines are set at following rates £150 up to 1 month late £375 1 month to 3 months, £750 3 to 6 months late and £1,500 if more than 6 months. Fines double if late 2 years running. There is no appeal either. You also run the risk of companies house starting proceedings to strike the company off and late filing also hits credit scores.
Q: I have some debts owed to me by some of my customers. What is the best way of recovering these?
A: . In reality there are only three mechanisms. One is to have an effective debt recovery procedure in place and write to the customer and hope that they pay. The second is to be able to issue county court proceedings. The third is to consider bankruptcy proceedings (individual debtors) or winding-up proceedings (for limited companies).
Q: If I issue Court proceedings, can I recovery my costs? I don’t want to be out of pocket at the end of the process.
A: It really depends on which mechanism you use. If the outstanding debt is less than £10,000 and you pursue it through the County Court, the matter would usually be dealt with in the small claims track. That would mean that costs over and above Court fee and some fixed expenses wouldn’t be recoverable. Over £10,000 and up to £25,000, the Court does have the discretion to award costs as it does with larger claims over £25,000.
Q: In your opinion, what is the best way of recovering a business debt?
A: It really depends on if you think the customer is likely to raise a dispute. This could be any number of things – such as poor quality goods, goods which are not fit for purpose, incorrect quantities being supplied etc. You should not use the insolvency procedure as a debt recovery mechanism (although many people and businesses do!) and if you use this procedure and the debt is genuinely disputed, there could be severe costs consequences imposed by the Court. Similarly, if you know there is a dispute likely to be raised, then you have to be prepared to see any Court action through to the end (whether this be a mediation or some other form of Alternative Dispute Resolution) or a trial held before a Judge.
Q: What are the likely costs of recovering a debt?
A: Unfortunately very difficult to predict. All clients want certainty and that is to be expected, particularly in relation to costs, but it really depends on whether the debtor defends the claim. If a defence is raised, it then depends on how complex the defence is. The added difficulty is that the amount of legal work required for a low value claim is often the same as a high value claim.
Q: What is the best advice you can give me to try and avoid bad debts?
A: You must have terms and conditions in place. For every customer and for every order. The terms should specify the amount of time for payment after delivery of the invoice. The terms should also include a dispute resolution mechanism if you want to avoid Court action. Many industries have an arbitration body that is universally recognised and you should consider including this in the terms. You should ensure that your terms are incorporated (and not the customer’s). And finally, you should check the credit worthiness of your customers at the outset and secure personal guarantees wherever possible – businesses are far less likely to default on payment if the director is personally liable under the contract!
Q: How long does it take for Google to recognise a new website?
A: How long is a piece of string… Essentially after building your website you have two options, you can sit and wait for Google’s search bots to find and index your website which can take months or even years or you can give Google a helping hand by letting them know you exist. To do this you would need to sign in or create a Google Webmaster account. Once your site has been verified you should upload an XML site map (a kind of interactive table of your websites pages and contents). This will let Google know you are open for business and help them to work out exactly what it is you do.
Q: I’ve just taken over a business but I can’t find where the domain name is registered.
A: You can find some basic information about the domain name by visiting www.nominet.uk/whois/ and searching by domain name. This lookup tool will provide you with details on the person who registered the domain name, along with their address and the domain registrar they used. If you are unable to contact the person directly you can open up a domain dispute with Nominet who are essentially the domain responsible for all .uk, .cymru, and .wales top-level domains.