Autumn Statement 2023: Key Announcements for UK Businesses

UK Chancellor Jeremy Hunt has delivered his Autumn Statement to MPs on 22nd November 2023, in which he declared Britain’s economy is ‘‘back on track’’ but ‘’the work is not done’’.  

The Autumn Statement is an update on the government’s plans for the economy based on the latest forecasts from the Office for Budget Responsibility (OBR). It defines the government’s plans to help rebuild the economy, reduce debt, and restore the UK’s credibility with international markets. But how does this budget affect UK businesses? 

In this blog we highlight the main points from the Autumn Statement which affect UK businesses, with analysis from Christine Lawless, one of our experts in the AVASK Accounting department.

Taxes

  • National Insurance contributions to be cut by 2% to a new rate of 10% as of 6 January 2024
  • Class 2 National Insurance contributions to be abolished for the self-employed, saving the average worker around £192 a year
  • Class 4 National Insurance contributions to be cut from 9% to 8%
  • Temporary tax break known as ‘full expensing’ aimed at allowing businesses to offset any investments has been extended indefinitely

Christine Lawless:  

Whilst there has been little support this time around in reduction to taxes for businesses, the various tax cuts for employees and self-employed individuals will boost the economy, ease inflationary pressure, and incentivise public spending. It was thought that reductions to inheritance taxes and income taxes may have been announced in this statement, however, this has been potentially moved to Spring now.

Cost of living support 

  • National Minimum Wage will be increasing from £10.42 to £11.44 per hour from April 2024 for ages 21 and over.
  • The National Living Wage will be increased by £1.11 to £8.60 per hour from April 2024 for ages 18-20.
  • Universal Credit will rise in line with September’s inflation figure of 6.7% from next April. Universal Credit will benefit next year by around £800
  • State pension to rise to 8.5% from April 2024, in line with the triple lock commitment, worth up £900 a year.

Christine Lawless:  

The increased minimum wage along with new guidelines to be laid out for those that qualify for universal credits should incentivise many more to search for employment and therefore boosting the workforce and in return the economy. Furthermore, the increase in income across the board will boost spending.

Additional pledges

  • Treasury has announced a £320m plan to help unlock pension fund investment for technology and science schemes
  • Alcohol duty has been frozen until August 2024
  • A 75% discount on business rates has been extended for retail, leisure and hospitality businesses
  • £4.5bn has been committed to green technology in a bid to keep Britain at the forefront of the global transition to net zero

Christine Lawless: 

Attention has been particularly paid to continuing to boost the businesses hit hardest in covid such as retail, leisure, and hospitality. There is also shown to be longer term growth plans for the country with attention and focus on technology and science.

If you have any questions, please contact AVASK today. You can also telephone us on:

+44 (0)23 8060 0120 or email: accounts@avaskgroup.com

Are you prepared for the self-assessment deadline on January 31st?

The end of January in the United Kingdom marks an important deadline for many individuals and businesses – the self-assessment tax return due date. Whether you’re a seasoned taxpayer or tackling your first self-assessment, it’s crucial to have all your financial affairs in order and submit your self-assessment tax return by January 31st to avoid late filing penalties.

In this blog, we’ll explore what a self-assessment is, why it’s important, and how to ensure you meet the deadline.

What is a Self-Assessment?

In the UK, the self-assessment tax return is a system for individuals, self-employed professionals, and businesses to report their income, calculate their tax liability, and pay any taxes owed to HM Revenue and Customs (HMRC). This process applies to various sources of income, including employment, self-employment, rental income, dividends, and capital gains.

A self-assessment is also applicable if your gross annual income is more than £100,000, or if you are in receipt of child benefits with an annual net income of more than £50,000. In conclusion if an individual has any untaxed income, now is the time to declare this to HMRC, specific guidance on whether or not an individual has to complete a self-assessment tax return can be found on the UK Government website.

Key Dates:

April 6th: The tax year begins.

April 5th: The tax year ends.

April 6th (following tax year): The tax return filing period begins.

July 31st: Second payment on account for previous tax year

October 5th: Registration deadline for self-assessment.

October 31st: Paper filing deadline.

January 31st: Online filing deadline and payment of Annual liability plus first payment on account for the following tax year.

July 31st: Second payment on account for the following tax year

Why Is It Important?

Completing your self-assessment on time is crucial for several reasons:

  • Avoid Penalties: Late filing or late payment of taxes can result in penalties and fines, which can add up quickly. HMRC imposes an initial £100 penalty for missing the filing deadline, and additional fines can be levied for continued delays.
  • Peace of Mind: Filing early ensures you have a clear picture of your tax liability, so you can plan and budget accordingly.
  • Tax Refunds: If you’re owed a tax refund, filing early means you’ll receive your money sooner.
  • Financial Planning: Completing your self-assessment on time enables you to make informed financial decisions, including contributions to pensions or ISAs.
  • Legal Obligation: In the UK, paying the right amount of tax is not only a financial responsibility but also a legal one. Ignoring your self-assessment could lead to legal consequences.

How to Prepare for the January 31st Deadline

Preparing for the self-assessment deadline can be a straightforward process with some organization and planning:

  • Gather Documents: Collect all the necessary documents, including P60’s, income statements, employment expenses, and any relevant receipts. This could encompass payslips, bank statements, rental income records, and more.
  • Register Online: Ensure you have registered for online self-assessment with HMRC if you haven’t already. The deadline to register is 5th October.
  • Seek professional advice: Consider using tax software or hiring an accountant to simplify the process. These tools can help you to accurately calculate your tax liability and submit your return efficiently.
  • Submit Early: Don’t wait until the last minute. Submit your self-assessment well in advance of the January 31st deadline to avoid any technical glitches or unforeseen issues.
  • Pay on Time: If you owe taxes, make sure to pay by the deadline. Late payments can also result in penalties and interest charges.

Meeting the January 31st deadline for self-assessment in the UK is a crucial financial responsibility that can save you from penalties, provide peace of mind, and ensure you’re in compliance with tax laws.

Working with an accountant to complete your self-assessment will not only take the hassle away from you but will also ensure you are paying the correct amount of tax. Get in touch with AVASK today to find out more.

A Global Seller’s Toolkit: Why SKU Reports Are Essential for E-commerce Businesses

A SKU report can help make sure you have the right products in stock, in the right quantities, and at the right prices in each country you sell in, as ultimately you are here to make a profit and not a loss!

 A SKU report can do all of that and more.

What is a SKU report?

A Stock Keeping Unit (SKU) report is a document that lists all of your products, along with their SKU numbers, quantities, prices, selling fees and other relevant data. 

From the report you will be able to identify the low performing SKUs that might be costing you money, but also the individual high performing SKUs where you are making a healthy margin.

Why is a SKU report important for an international e-commerce seller such as yourself?

The report can provide you with a wealth of information about your global operations, including:

A breakdown of margins and retailing prices of each product in each country

These figures can help you track your costs and ensure that you’re pricing your products competitively in each country.

The sales history of each product in each country

This information can help you identify your best-selling products in each country and make decisions about your product assortment and how you specifically market the product.

The profitability of each product in each country

This information can help you make decisions about which products to keep in stock in each country and which products to discontinue.

How to use a SKU report to improve your global selling: 

There are many ways to use a SKU report to identify areas of improvement in: pricing, product selection and advertising. Here are a few ideas:

Identify slow-moving products in each country

A SKU report can help you identify products that are not selling well in each country. This information can help you make decisions about whether to discontinue those products in that country, reduce their prices, or promote them more heavily.

Making informed decisions about your product assortment in each country

The report can help you track the sales history of your products in each country and identify which products are your best sellers. This information can help you make informed decisions about your product assortment in each country, such as which products to add or remove – this may come down to culturally reasons.

Tracking your costs and ensuring that you’re pricing your products competitively in market

A SKU report can help you track the costs of your products in each country and ensure that you’re pricing them competitively in that country. This data is essential for ensuring that you are maximising your profits from each market. 

Summary

A SKU report is a valuable tool for you to utilise, especially if you’re operating cross multiple countries. It can help you track your inventory, identify slow-moving products, and make informed decisions about your product assortment in each country. 

If you’re not already using a SKU report on a bimonthly cycle, I encourage you to start using one today. 

It could help you boost your profits in each country you sell in! 

How can AVASK help?

Reach out to our dedicated team of experts today to book in a free consultation and discuss the first steps of having your SKU report completed. 

How to maximise profitability in Q4

The Fourth Quarter (Q4) is the busiest and most profitable time of year for the majority of e-commerce sellers. Being able to stay on top of high demand, inventory management, promotional periods and financial obligations can be overwhelming.

However, Q4 also brings fantastic opportunities to maximise your profits and showcase your brand.

Monitoring your SKU performance is particularly important for e-commerce sellers, especially in Q4.

What is SKU performance monitoring?

SKU performance monitoring refers to the process of closely tracking and analysing the performance of individual Stock Keeping Units (SKUs) within your e-commerce inventory.

Each SKU represents a specific product variant, and SKU performance monitoring involves assessing how well each of these products is doing in terms of sales, profitability, and other key metrics.

Why is it important in Q4?

1. Seasonal Demand

Q4 is typically the busiest time of the year for e-commerce sellers due to Black Friday, Cyber Monday and Christmas.

By monitoring your SKU performance, you can identify which products are in high demand and adjust their inventory levels accordingly. This ensures that they can meet customer demand and maximise sales during this crucial period.

2. Inventory Management

Monitoring SKU performance helps you optimise your inventory levels.

By tracking the performance of each SKU, you can identify slow-moving or low-performing products and make informed decisions about restocking, liquidating, or discontinuing them. This prevents overstocking or understocking, reducing storage costs and the risk of stockouts.

3. Pricing and Promotions

Q4 is also a time when many sellers will offer discounts, promotions, or special deals to attract customers.

You can identify products that have margin potential and adjust the pricing strategies accordingly by monitoring SKU performance. You can also track the impact of promotions on SKU sales to evaluate their effectiveness.

This will enable you to maintain a competitive edge whilst withstanding profitability.

4. Marketing and Advertising

In Q4, competition among e-commerce sellers is high, and marketing and advertising budgets are often increased to capture customer attention.

Monitoring SKU performance helps you identify which products are driving the most sales and adjust the marketing efforts to focus on those high-performing SKUs. This ensures that marketing resources are allocated effectively to maximise return on investment.

5. Customer Satisfaction

Monitoring SKU performance allows you to ensure customer satisfaction during the busy holiday season.

By tracking SKU performance, you can quickly identify any issues that might be impacting the sales levels of a certain product whether that be the product quality, shipping, or customer feedback.

Addressing these issues promptly helps maintain a positive customer experience, leading to higher customer satisfaction and repeat purchases.

How AVASK can help you maximise profitability

Overall, monitoring SKU performance in Q4 helps e-commerce sellers make data-driven decisions, optimize inventory, maximise sales, and enhance customer satisfaction during the busiest time of the year

AVASK can provide an extensive report that not only breaks down your SKU performance metrics, but also provides deeper insight into the drivers that affect their performance and analysis for key improvement areas going forward.

Is 2022 the perfect year for you to plan an exit strategy for your business?

Find out how AVASK can support you to negotiate the best possible deal when exiting your business.

2021 had seen an exponential growth in e-commerce sales.  With the pandemic opening consumers eyes to the ease and simplicity of online shopping, the demographic of online shoppers expanding, and many traditional brick and mortar businesses filing for bankruptcy, the e-commerce world is only expected to continue growing.

Meanwhile, the e-commerce market had a breakout year with firms known as aggregators looking to acquire successful brands on Amazon having attracted more than $13 billion in raised capital.  There are approximately 89 active Amazon aggregators from all over the world, with 45 having announced additional funding rounds.  This makes 2022 a key year for businesses looking to sell.

As a seller, looking to sell your business can appear quite an overwhelming concept.  

AVASK’s assistance in helping you to overcome this overwhelming concept include:

  • Helping you gain a valuation to know what your business is worth.
  • Helping you find a buyer.
  • Being able to perform due diligence on your business’ financials and reviewing the sales contract.
  • Aiding completion of the sale.

2022 represents an opportunity for you a seller to capitalise on the unprecedented interest currently shown in e-commerce businesses.  

Are you ready to plan your exit strategy?