TT172: What to expect for 2012

February 23, 2012

2012 has begun in earnest! Following the publication of the “Barnes Roffe Voice” survey results last month, we have tailored our upcoming Topical Tips to reflect the trends and expectations for 2012.

Here’s an overview of what to expect…


You will hear this harped about by the politicians throughout the year. Expect a raft of new or extended measures, including more that will likely be announced in the next Budget, to pledge more Government support to stimulate the economy.

There are already relatively generous reliefs, tax credits, allowances and grants available. However, expect changes. Assistance and support cost money, something UK Limited is short of with its burgeoning debt and budget deficit.

For example, Annual Investment Allowance is dropping from £100k per annum to £25k from April 2012. We shall cover this in more detail in our next Topical Tip, including planning tips. Remember Business Premises Renovation Allowance (“BPRA”)? This is valid for expenses incurred by 11 April 2012 only.

Whilst the above allowances are reducing, Research & Development Tax Credits continue to become more generous. We will be providing a further update on this in a future topical tip.

Enterprise Investment Scheme (“EIS”) tax reliefs remain generous. From 6 April 2011, income tax relief is given at 30% (previously 20%). Again, we will publish a Topical Tip on this later this year, together with planning tips.

Companies continue to enjoy “stimulus” with the top rate of corporation tax falling to 25% from April 2012. Will the Chancellor announce further reductions? We will update you following the Budget, or please feel free to attend our free Budget Seminars.

2012 will continue where 2011 left off in this regard. There is likely to be some significant changes within the banking world, both due to pressure groups and the Eurozone debt crisis.

The knock-on effect? Forget the superficial debate about bankers’ bonuses. The real effect on SMEs is an ever increasing burden to provide full financial transparency to their bank (and business partners, and potentially credit rating agencies).

Be prepared to be ever more up-to-date and transparent with your financials. Regular management accounts would be essential not only for the bank, but for your ability to convince business partners that you are credit worthy.

Be wary of changes to banking covenants – inspect the small prints for any subtle changes; breaches will be frowned upon and taken advantage of!

Check your credit report as regularly as you check others! Correct any errors, and update for any positive changes.

Barnes Roffe will of course continue to strengthen our “Accounts Services” team to provide you with cost effective and value added management accounts service. A number of clients have taken to “outsourcing” – is this a new trend?

Look out also for these words and phrases – they will no longer be reserved for the theory books, you will need to actively apply them to your business – “productivity”, “efficiency”, “product mix”, “cost control”, “head count”…..

Elsewhere, HMRC may have seemed an unlikely friend in the early stages of the recession. This will seem a distant memory. Business Support Helpline staff are now much stricter and instalment repayment plans are more difficult to agree.

Further, in an effort to increase tax revenues, HMRC are likely to want something for every visit and enquiry. Do consider our fee protection cover to mitigate the costs of dealing with enquiries.

Be aware of HMRC’s Business Records Review initiative. In 2012, we are planning to reiterate the importance of regular “health checks”. We have organised certain seminars to cover this, and shall also provide topical tips on this. Better you or we prevent, detect and/or remedy issues than HMRC!

Threats abound, but opportunities also come knocking.

2012 is likely to see some of the highest number of casualties in the business world. A number of high profile businesses have already gone into administration – sadly, more are expected!

It is essential that if you are a director, you must know your responsibilities especially when trading close to the wire. We work very closely with our clients, and hopefully with regular management accounts, clear financials, we can manage through the difficult times together.

A lot of our clients have also been bombarded with opportunities to acquire “fire sale” business and assets. Be wary of these, but do cherry pick.

We intend to issue a future topical tip on both these threats and opportunities during 2012.

There is one sector that has shown utmost resilience to the recession, and indeed double-digit growth – E-commerce. E-businesses have thrived whilst the high street is struggling,


A number of clients are now seriously investing in their e-presence and expanding sales reach by going online.

Your e-store, your website, branding, social media marketing, software and infrastructure may warrant specific accounting, tax and VAT analysis and treatment. We plan to issue a topical tip to cover this. In the meantime, please feel free to speak to one of our experienced e-commerce team members who have a detailed understanding of the key issues.

Last but not least, we know that we will continue to help our clients do the one thing that matters most – thrive.

It is business as usual for us to provide you with valuable advice throughout your business’s life cycle. From start-ups to mature businesses, we shall assist you to maximise your returns. Having maximised your returns, we shall continue to employ bespoke tax planning to help you keep as much possible from the taxman.

As the sun sets, we shall assist you on succession planning, grooming your business to maximise its value whether to sell or to pass down to the next generation. Look out for more topical tips and seminars throughout 2012 to target these important areas.

We wish you the very best for 2012.

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