Questions & Answers

Please visit the Q & As section again soon as new content is added on a regular basis.

Q. My business needs to access finance to fund growth as the economy moves out of recession during 2010 - but offering sufficient security to the bank is likely to be a problem.  Is any alternative help available? (January 2010)

A. You might consider the Enterprise Finance Guarantee scheme, set up in January 2009 by the government to help SMEs to get bank funding where they have a viable business case, but no or insufficient security.  The scheme was originally set to run until March 2010 but has been extended to March 2011 in recognition of the continuing challenges facing businesses.  The scheme gives lenders a government-backed guarantee for 75 per cent of the loan value.  Businesses with an annual turnover of up to £25 million are eligible to apply for loans of between £1,000 and £1 million, repayable over a maximum period of ten years.  In return for the guarantee, the government charges an annual premium of two per cent per annum on the outstanding balance of the loan.  More details are available on the Department for Business Innovation & Skills (BIS) website: http://www.berr.gov.uk/whatwedo/enterprise/finance/efg/page50308.html

Q. We are a small, specialist food manufacturer producing a limited range of products targeted at children.  We know about the six food colours that have been associated with hyperactivity in children and we don't use any of them in our products.  Competition in our market is intense so we would welcome some way of alerting our potential customers to the fact that our brands are free from these colours, but short of an extensive - and costly - advertising campaign we don't have any idea of how to do this.  Any suggestions? (July 2009)

A. As a first step you could make sure that all your product labelling makes it clear that your ranges do not contain these colours.  You can also get details of your products included in a list on the Food Standards Agency website - this makes information about your products available to a potentially huge audience, including independent retailers who might be searching for just such a product range to stock.  The Agency regularly updates the list and has separate sections for caterers, manufacturers and retailers whose products are free from the six colours.  You can include the name of the business and the name of the colour-free product ranges.  The Food Standards Agency website contains further information at http://www.food.gov.uk/safereating/chemsafe/additivesbranch/colours/colourfree

Q. I want to import goods myself from abroad to sell in my shop, rather than buy them from a wholesaler in the UK. What guidance is available to help me get started? (May 2009)

A. The best place to start is the Integrated Tariff of the United Kingdom - usually referred to as the Tariff. This is a three volume guide that not only provides general information about trading internationally, but also contains details of the commodity codes that are assigned for import/export purposes to each type of product. There are around 16,000 commodity codes. Once you have established the commodity code for your particular product you can also find details of the duty payable when you import the goods and whether or not you require a licence. The Tariff also includes guidance on completing the relevant paperwork. The Businesslink website contains advice on importing generally as well as on how to use the Tariff. You can also use the online UK Trade Tariff tool to find the appropriate commodity code for your goods. The address is www.businesslink.gov.uk. Search for the tool in the International Trade section.

Q. One of my employees has notified me that they're starting a course of fertility treatment. Do they have any right to time off and/or pay? (January 2009)

A. No. There is currently no statutory right for an employee to have time off for fertility treatment.  However, many businesses are keen to support those employees who are trying for a family and are prepared to allow them time off, provided the employee provides the appropriate medical documentation.  For example you might decide to give an employee one week leave per treatment cycle, up to a maximum of three weeks.  It is up to you whether or not this is paid or unpaid leave and whether anything over and above this would need to come out of their annual holiday entitlement.  You could also consider flexible working arrangements or a temporary reduction in their contractual hours as a way of accommodating time off for appointments.  If the treatment has an adverse effect so that a doctor certifies that the employee is unfit to work, then this is dealt with through the normal sick leave procedures.

Whatever your company decides to allow employees in respect of time off for fertility treatment, it is wise to put it in writing as a formal policy so that all employees are treated fairly and consistently and know what they can expect.

Q. I run a care home. There’s a small cottage in the grounds which used to stand empty. Last year I discovered that some local youths were using it as a drinking haunt. This became apparent after some thefts from the home were reported to the police and their investigations revealed that the youths were the culprits and that they were using the cottage as a base. I have now asked one of my employees to live in the cottage as a caretaker. Since they moved in the trouble has stopped. I’m now told, however, that I am providing them with a taxable benefit. Surely this is wrong. I thought that it would be exempt because it’s necessary for caretakers to live on the premises so they can do their job properly. And anyway, the employee isn’t a director or earning £8,500 – they only get £150 a week. (November 2008)

A. If you provide an employee (or a member of their family or household) with living accommodation by reason of their employment, you’re providing them with a benefit. Unless it’s exempt, the benefit is taxable whatever the employee’s rate of pay – they don’t have to be a director or an employee earning at a rate of £8,500 a year or more.

There is an exemption that covers living accommodation provided for an employee when it’s necessary for the employee to live in it for the proper performance of the duties of their employment. Living accommodation provided for caretakers can fall within this exemption but the exemption doesn’t apply simply because the employee is designated as a caretaker.

The exemption only covers employees with a genuine, full-time caretaking job. So, for example, it won’t apply if an employee is asked to live on the business premises simply to discourage burglaries or vandalism. In your employee’s case, they have no caretaking duties. You are allowing them to occupy the cottage simply to discourage the youths from returning to it and either vandalising it or burgling the care home.

Q. What are the benefits of submitting our VAT Return online and paying the VAT electronically? (May 2008)

A. The main advantage of filing your Return online and paying electronically - for example over the internet or by telephone banking - is that there is no danger that your Return and VAT cheque will go astray in the post, leaving you vulnerable to a penalty for missing the filing deadline. HMRC also gives you a little extra time in which to pay.

At the moment filing online is voluntary, but you should be aware that from 2010 all newly VAT-registered businesses - and businesses with a turnover of more than £100,000 - will have to file their VAT Returns online and pay their VAT electronically.

Q. We are registered with the Information Commissioner because we process personal information about individuals. We are aware that such personal information must be kept secure but are not sure what steps we should take to ensure this (March 2008)

A. You are right in thinking that it is a legal requirement to keep personal information secure - and the more valuable or sensitive the information, the more securely protected it should be. Each business will need to tailor their security measures to reflect its own circumstances, but things to consider include:

  • staff training - for example, making sure that staff do not reveal computer passwords or that they encrypt personal information taken out of the office on laptops, discs or memory sticks
  • putting in place procedures so that identity checks are carried out before giving personal information over the telephone
  • making sure that your premises are physically secure with equipment like laptops, or filing cabinets holding paper-based material, locked up at night
  • disposing of confidential waste securely - for example using a shredder
  • putting in place the appropriate computer security controls. These will need to be particularly effective if you have a networked system connected to the internet

The Information Commissioner’s Office (ICO) has produced a comprehensive Good Practice Note to help businesses put in place appropriate security measures. Security of personal information can be downloaded from the ICO website at www.ico.gov.uk
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