What are my data protection obligations?

We woke this morning to hear that the Information Commissioner (he who supposedly regulates how organisations keep personal data) has finally sunk his teeth into two serious occurrences of data loss - the organisation A4E were the recipient of a £60k fine for the loss of an unencrypted laptop, and Hertfordshire County Council are fined £100k.

Both fines are significant sums for the organisations involved.....so for others handling or processing personal information - be they businesses, employers, councils, banks etc, its essential that all understand our own obligations.

The Information Commissioners website has some useful resources for the small business:

Do you need to register as an organisation processing data?

Failure to notify is a criminal offence by the way. Most smaller businesses who need to register will fall in the £35 per year category.

There is a whole load of other useful info on there about what the public can ask to see, sending data overseas, and perhaps most importantly in view of the above, the security measures your organisation should take.

Some businesses see all this as a bit of a chore, and yes it is another layer of compliance for small businesses. But the reality is we have a responsibility to those our businesses interact with, and if we can't guarantee the safekeeping of their personal information, should we really be in business?

Top 5 Tax / Accountancy Mistakes made by Start-ups

A quick list of start-up mistakes new businesses can easily avoid. If ignored, some of these will put the business owner in potentially significant financial pain later on:

• 5 : HMRC not notified that trading has started: The rules are clear - sole traders have 3 months from commencing trade to notify HMRC. One telephone call to HMRC quoting start date and NI number is all there is to it.  Failure to notify in time means a £100 fine, and if tax returns are missed as a result, penalties too. Easy to fix this one!

• 4 : No business bank account: Mixing up personal and business transactions presents a couple of issues - firstly it means that there is a lot more bookkeeping work to be done and secondly it means in the event of tax enquiry, there will be a lot more explaining to do to the taxman. Our advice - get a business bank account, bookkeeping savings will outweigh any costs.

• 3 : VAT: we find some start-ups often ignore VAT completely, and some get registered without thinking about whether they should do so, and some submit returns late. Businesses making vatable supplies don't have to register until they do £70k + in sales in 12 months, BUT it can be beneficial to register beforehand, in many cases. Submitting VAT returns late is a quick way to problems with the VAT man, our advice is keep on top of VAT.

• 2 : Forming a limited company before seeking tax advice : Surprisingly common, and generally occurs because someone's mate told them it was best down the pub. It may well be the best vehicle for a new business, but far from always, other structures exist, and which can often have significant tax advantages in the early days. Advice is needed on this point.

          and finally, the biggest mistake of them all........

• 1 : Not keeping records : The most common mistake we see remains not keeping a record of transactions in the business and no receipts. No receipts / records means higher tax bills - simples, as the Meerkats might say.

Do you use technology in your small business?

I thought I'd run through a few technologies out there, widely available now to small biz owners, yet still very much in an early growth phase in terms of take up:

Use of dual screens
We've run dual screens for our team here for around 12 months now I think. If I tried to take away anyone's second monitor they'd be kicking and screaming. Using two screens allows a much higher level of multi-tasking, and reduced time spent flicking between windows. The benefits in increased productivity are huge (I have seen them) and the cost of a monitor now ridiculously low. Before embarking on dual screens, check your pc can do it, sometimes a cheap graphics card is required.

Productivity increase HIGH, Cost LOW

Use of web based software applications
The web has arrived for the small biz owner in a huge and affordable way. This topic is vast, but to give a flavour, ways which we are seeing are tech-savvy clients benefit from the web include hosted services - allowing all staff in the firm to access key data and document templates (eg google apps) and also online accounting solutions - we have many clients running their own books who now have real time access to high quality management information - this is in itself an area thats taken off hugely recently, with the next major development being automated uploads from your bank to the accounts software - how much bookkeeping time (ed. & money!) would that save!

Cost wise - the pricing of these web based products tends to be pay as you go (monthly) rather than along the lines of the lump sum inivestment in software and hardware required in yesteryears.

Productivity increase HIGH, Cost LOW-MED

Smartphone technology
Iphones and Blackberrys are for playing games and catching up with the latest news, right? Wrong! The wealth of applications out there mean you can be in touch with customers and the office as much or as little as you want. You can hook into your office pc/network, print off documents via your phone, keep track of your put of pocket expenses (got to maximise that tax relief now!) for starters. Download 'mailchimp' to check the response to your latest newsletter campaign, or log into your online accounts software to get a snapshot of profitability. And thats all before making a call.......

Productivity increase MED, Cost LOW (many people have the phones now already)


To be honest in the past, many of these technologies have been the preserve of IT related and/or tech savvy firms - but those times have changed - the technology is cheap enough for everyone to use and when the accountants are embracing this type of stuff I think its fair to say its going mass market!

How do you set price in your business?

If you run a service business, how much is your time worth? And if you sell widgets, how much should you sell them for?

Small biz owners are notorious for under-pricing, but the difficulty is in knowing what to charge?

Some methods commonly used to arrive at price:

Cost based pricing (ie work out your costs and add your desired profit)
Market based pricing (what price can the market take)
Value pricing (what is the perceived value of your service / product to your client?)

These sub-divide according to your strategy - what are you trying to achieve? If its market penetration, then a lower short term price than will be expected in the long run would be the norm (think about when a supermarket introduces a new product line).

Alternatively if at near capacity already, and you are still in demand, then a 'skimming' / premium pricing approach could be relevant - ie price higher than 'normal'.

In most cases I reckon a combination of the three methodologies above is appropriate. An ESSENTIAL step is to know your cost base - if you don't know this, how do you know you haven't gone and lost money when you next sell that hour of your time, or that box of 25 widgets?

A Giant Leap into the Unknown.....or Not?

Sometimes thats how starting up your own business feels.........sleepless nights, wondering about paying the mortgage, needless to say I won't go on!

Of course the key to any new venture is planning, identifying risks, and minimising them, thus ensuring you give your new venture the greatest chance of success.

Thats where 'First Steps to Self Employment' comes in - its an exhibition being run at Plymouth Guildhall this Thursday, 10am until 2pm. You can speak to business link, the main banks, further education colleges, The Princes Trust, HMRC, providers of office space and Outset Plymouth will also be there who are funded to provide specific support to those starting out.

Finally, I will be there with my team from TaxAssist Accountants - we'll be there to provide advice on starting up, talking about record keeping, and have one or two nice offers up our sleeve.

Hope to see you there!