Are your overheads getting the better of you and your business? If yes, this blog might prove useful to you. Just follow the steps below for overhead relief. I will be listing 6 effective ways by which you can reduce your overheads and improve your cash flow.

Firstly, you might be wondering what an overhead actually is. Put simply, an overhead cost is a running cost of your business, also known as an indirect cost.

These can include:

• Office rent
• Office utility bills
• Workplace repairs
• Insurance
• Office equipment and furniture
• Employee salaries
• Telephone bills

… the list can go on and on. See more on overhead relief below.

Here are some top tips on reducing these:

Review

Firstly, ensure that you are keeping on top these expenditures. Review them monthly and make sure that all costs are necessary. So, cancel that subscription you no longer use, and it may sound harsh, but sack that slacking employee! Eliminate what no longer brings value to your business or employees.

Shop around

Once you have differentiated between the essentials and non-essential business expenses, you can now start to seek out cheaper alternatives. Just because you have been a loyal customer to an overpriced printing and stationery supplier for years now, does not oblige you to passively stay and not check prices elsewhere. It may only be a small difference in price, but all these small costs accumulate, especially if this is stock that you frequently require, and purchase large quantities of throughout the year.

Negotiate where you can

Following on from my last point, it always feels good to get a bargain. Therefore, it is important to try and negotiate where it is reasonable to do so, especially if you are a returning customer who gives them a fair amount of business. As you have probably been told before, if you don’t ask, you don’t get.

Outsource

As an alternative to hiring new employees, you can look to hire an external company to do these jobs on a required basis. This is commonly done by businesses for jobs such as website development, HR, bookkeeping, and even marketing. Outsourcing allows companies to remain focus on the core of the business by having these important, however, time-consuming aspects of the business handled for them by specialists.

If possible, take advantage of remote working

The pandemic forced many office-based companies into a virtual realm by which many have chosen to remain. By embracing this innovative way of working, you can wipe out many of your overheads. Think about it, many of your overheads are connected to your physical office: rent, utilities, repairs. And undoubtedly, by shifting to working remotely, will scrap the need for an office as whole. Not to mention, you will also contribute towards the planet’s carbon reduction as you will be saving your employees their daily commute- which most likely entails the burning of fossil fuels. Additionally, if you are currently covering your employees’ travel expenses- you would be saving on that too.

Go paperless!

This is an easy way to save your costs as well as the planet. Here at VAT Loans we have been a paperless office for several years now. It has saved us a lot of space and money. We have done this by uploading all files and documents up onto a network drive. Think of all the storage in your office that is consumed by ever-growing piles of documents. This can now be freed and put to better use. Or potentially, this free space can now be sublet to get your cash flowing with more ease.

Contact Us

Are your overheads weighing you down? Did you know that business loans are an effective way to ease up your cash flow? Contact us today to find out more about your business loan options here at VAT Loans. We offer a variety of business loans. So, from corporation tax and working capital, to dilapidation and insurance loans, we’ve got you covered with your overhead relief. Give us a call on 01494 956 871. Or, drop us an email to [email protected].

In this blog I will be discussing Professional Indemnity Insurance funding for solicitors and law firms. Did you know there are 12,000 legal firms in the UK placing their Professional Indemnity insurance by the 1^st October every year.

The Law Gazette recently published an article stating that premiums have increased by up to 50%*over previous years. This, coupled with some insurers unable to offer finance due to product complexities means that many firms are unable to find the funds they require.

Many solicitors and the legal sector in general are paying their PII premiums monthly. It’s not just the UK’s largest legal practises that fund their PII policies. We can fund a one partner practice just as well as much larger firms of solicitors.

Professional Indemnity Insurance – for both lawyers and solicitors

Law firms – like most UK companies – will look for a competitive finance quote. Even if you have been financing your PII cover in the past, please use our Professional Insurance finance calculator to see how much you can save. Our aim is to offer the most competitive finance premiums in the UK.

It may be such that you have been turned down for finance in the past by another finance company. We have access to a number of finance providers on our funding panel. Please still contact us to see how we can assist your firm.

Funding of professional indemnity insurance policies in the UK is delivered to you by VAT Loans, a division of WestWon. Our business dates back to 1976, we have worked with over 11,000 UK companies lending via leasing, asset finance, business loans, vehicle and VAT loans. We already have many firms of solicitors as clients who work with us on a regular basis.

Please note, we do not sell professional indemnity insurance policies to UK legal firms. This is the task of an approved insurance company. Our job is simply to fund your PII premium over one-year.

Contact Us

If you would like more information on Professional Indemnity Insurance funding for solicitors and law firms, then please give Georgia Blois a call at our office on 01494 956 871 or email her at [email protected]. If she is not available, there are other members of our professional indemnity funding team that will be more than willing to assist.

Thank you for your interest, we look forward to working with you.

*Average deal size calculated from private banking firm

VAT and Corporation Tax funding

VAT and Corporation tax funding is fundamental for many businesses. This is why finance companies, the lenders really like this business.

• The loans are short term. Most last three or six months for VAT and up to one year for Corporation Tax.
• Historically, the covenant of the underlying customer has been ‘high quality’ consisting mainly of what we refer to as the “professional” sector (i.e. accountants, solicitors, and architects).
• The loan principle is paid directly to HMRC. Therefore, this removes potential element of the loan being used for any other purpose (or fraud). This occasionally does occur within leasing and asset finance.
• The interest rate can be higher, relative to longer term financing over two to five years.
• There is a high customer retention rate, with many companies using this loan facility two, three, or four times every year.
• There is one large downside for these funders – the amount of profit they make on each deal. As the loans are all short term, even if they charge a 6-10% interest rate, the amount of money they make in interest is relatively small. Consequently, they can make money only by having an automated system and hoping for a high rate of repeat business.

Amount being lent to finance VAT or Corporation Tax

We do not know the exact amount that is being lent every year to finance VAT or Corporation Tax.  However, we estimate it is north of £250m. Two of the UK’s larger players in this sector probably do around £160m to £200m between them. So, the actual market total could be much higher.

However, we expect the funding for this market to increase significantly as we offer VAT and Corporation Tax bill finance for normal SME companies. With over 2 million companies in the UK, it potentially could be a £1 billion per year lending business. Many thousands of these companies are paying their HMRC tax bills late, with all the fines and aggravation that goes with that. Our service could help them better manage their tax bill and avoid the steep late fees and fines.

Jeremy Hall, CEO of VAT Loans noted, “We can see this business being very big, very quickly. For us, our journey with a client starts with the first deal. Companies often do not buy assets four times every year, other than vehicles. This product will allow us to interact with many hundreds of businesses we otherwise would not have had a relationship with.”

Contact Us

Do you want to learn more about how tax funding can benefit your business? Give us a call on 01494 956 871, or send an email to [email protected].