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Tax and finance changes that will affect Liverpool businesses in 2018

Liverpool is a great place to run a business. Across most sectors, the number of companies choosing to set up in the city is on the increase. For example, an average of 194 tech-related firms set up their new business in Liverpool each year.

Its great transport network, infrastructure and funding schemes all help to make the city a desirable place to be based. Also, the city´s population is growing, which means more potential clients for you.

Liverpool is a competitive place to work

However, the fact that so many firms choose to base themselves here also makes it a competitive place to work, and companies need to be very aware of this. In a city like Liverpool, there are usually dozens of firms offering similar services or products to the ones you provide. This means you need to work hard at keeping your prices competitive; something that a good Liverpool based accountancy firm will certainly help you to do.

The best Liverpool accountancy firms are always on the lookout for changes in legislation that make it easier for you to raise funds for your business and keep your overheads as low as possible. In the UK, the environmental climate in which you are working is in an almost constant state of flux.

Those firms that understand each change and plan for them are definitely more likely to be profitable. Below is an overview of some of the proposed changes, which are most likely to make a significant difference to the thousands of firms based in this city.

Scraping of the staircase tax

In Liverpool´s city centre, much of the office space is situated in high-rise buildings. This means that a significant percentage of Liverpool businesses have been negatively affected by the introduction of the staircase tax.

It meant that companies that based themselves across multiple floors of an office block ended up having to, suddenly, pay higher business rates. This was the case if each floor was accessed via a communal lift or staircase. In that situation, each floor was categorized as a separate business location. So, rates were due for each location. Plus, it also meant that many firms were no longer considered small businesses. The net result of which meant that they no longer qualified for some rate rebates.

Naturally, having to suddenly pay higher business rates had a negative impact on many Liverpool-based firms, and some will be relieved that the tax is in the process of being scrapped by the UK government. This should help more firms to become more profitable.

In addition, some companies will be able to claim a rebate. Now, is the best time to study the changes and adjust your financial models to take account of them. Potentially, you can use some of the additional funds that may be available to you to grow your business. It may also enable you to reduce your prices or run some big marketing campaigns later in the year.

Liverpool office rental rates are likely to begin to climb

Currently, Liverpool has some of the lowest office rental rates. The latest Big Nine survey, which was carried out by Bilfinger GVA, shows that prime rental rates in the city are just £21.50 per sq. ft. This is far lower than the regional average, which is £27.78 per sq. ft.

Most firms view this as good news. Paying less for their office space than others in the region helps to keep their overheads lower than those of their competitors. However, it does mean that Liverpool is not as attractive to developers. Eventually, this fact will make it increasingly difficult to find suitable space within the city. That, in turn, will cause the per sq. ft. price of office space to rise.

There are signs that this is already starting to happen. The average cost of office space has already risen from £21to £21.50 per sq. ft., with further rises predicted.

Firms need to recognize this trend and plan accordingly. Adding a little extra to your premises budget now will help you to be more realistic about how profitable you can be in 2018. Thus, helping you to avoid potential cash flow issues later in the year, should office rental rates rise.

The Liverpool 2018 scheme

This year marks the 10th anniversary of the city´s tenure as European City of Culture in 2008. To celebrate, Liverpool is hosting numerous cultural events. Included on the list are Tall Ships Regatta, which takes place in May, and The Clothes Show in October.

Firms need to be aware of these big events. They need to plan their workflow and take advantage of any marketing opportunities. Looking at the list of events that are due to be held now will ensure that companies benefit as much as possible from these events.

It also gives them time to set aside additional funds for marketing campaigns; something your Liverpool accountant can help you to manage effectively.

Review funding opportunities

Every year, new funding schemes are announced. Some are available at a national level. However, there are also many local funds that Liverpool-based businesses can potentially tap into and benefit from.

Your Liverpool-based accountant will be aware of most of them. Therefore, it makes sense to sit down with him or her and work out whether you could access some of these schemes. They will be able to help you to quickly identify those that you qualify for. Plus, in many cases, they will be able to help you fill out the application form. With their help, you can significantly increase your chances of securing the funding.

A good firm of Liverpool accountants will also help you to put together an effective business plan for those funds. This will ensure that you spend the funds you secure wisely, and that you track how they are spent.

As you can see, 2018 offers many opportunities for firms based in and around Liverpool. All you need to do is to identify them and work with your accountant to plan for these financial changes, so you can continue to prosper.

Posted by Louise
January 2, 2018

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