Small vaping businesses will probably see many changes and face many specific challenges within the vaping sector. More broadly as a small business, there are also a number of changes on the horizon. Here are some of the key changes coming up in 2020.
Compared to the noise being made about Brexit in 2019, things seem to have gone a bit quieter since the end of January.
So, what impact could Brexit have on your vaping business in 2020?
Now the UK has agreed a deal with the EU we have entered a transition period during which negotiations will begin on a new trade deal, amongst other agreements. During the transition period, no real changes will happen, and businesses will be able to operate in the same way that they do today.
The transition period finishes at the end of the year and this is when we are likely to see any changes as a result of Brexit affect SME’s and all other businesses. Indeed, there is still the possibility of leaving without a deal in December 2020 if negotiations do not agree a trade deal before the end of the transition period.
IR35 – or off payroll working rules affect those who provide their services to a business through their own intermediary, such as contractors.
IR35 rules have been designed to ensure that working as a contractor is not used as a way to avoid paying taxes. This is people who are employees in all but name.
Changes were made in 2017 to off payroll working in the public sector. The changes saw responsibility for determining IR35 status fall to the ‘hirer’ not the contractor themselves. If found to be within IR35 by their ‘hirer’, a contractor could then be taxed and pay NI in the same way as an employee. However, they would not receive employee benefits such as holiday or sick pay.
A review is currently underway of IR35 in the private sector. It is expected that changes will be made in the private sector from April 2020 to reflect those made in the public sector. So, amongst other changes, businesses will have to determine whether or not contractors that they work with are inside or outside of IR35 rules.
However, the rules are likely to apply only to medium and large businesses. Small businesses will be exempt from the rules. With this in mind be sure to understand whether or not the rules will apply to your vaping business.
The IR35 changes could dramatically impact the income of contractors if found to be within IR35 rules. And businesses will be responsible for determining the employment status of their contractors – given that the legislation is relatively complex this could add a significant workload to businesses.
In December 2019, the Conservatives won an overwhelming majority in the election. This means that in 2020 and beyond we are likely to see the implementation of the policies that they campaigned on and included in their manifesto.
Business rates system review
A fundamental review of the business rates system was promised in the Conservative manifesto. As well as increases in the business rate discounts available to businesses with a rateable value below £51,000 in 2020-2021.
Full details of the review are likely to be revealed in the budget (expected to take place on 11th March 2020) but with the UK thought to have some of the highest business property taxes a review should be good news for small business.
National Living Wage increases
It is thought the national living wage will be increased to £10.50 within the next 5 years. There are obvious consequences of this for employers.
Helping small businesses and self-employed individuals
Manifesto pledges also revolved around exploring how to better help the self-employed such as access to credit and finance, clamping down on late payments and making the tax systems easier to work with.
There was also talk about helping small business fund training programmes and looking at how the apprenticeships levy works.
With some limited 5G network coverage launched in 2019 we are likely to see more progress in 2020. And 5G is promising some transformative benefits for businesses.
This Telegraph article cites the following as key benefits of 5G to businesses:
- Low latency – reducing the time between commands being issued and responses happening
- Increased capacity – for traffic and network efficiency
- Augmented reality – increased speeds will assist data hungry AR applications
- Internet of Things – capability to connect all types of devices and things
The article also suggests that businesses should think about how they can best utilise the benefits that 5G will bring to get ahead and bring business advantage.
Have you given any thought to the role of Artificial Intelligence (AI) in your business?
Adopting AI could see time efficiencies, cost efficiencies and stop your business from being left behind. Areas such as using cloud services, chatbots and automating processes are just some examples of the applications of AI in today’s business world.
As well as bringing benefits, AI can also bring new risks to your business. You’ll need to give security serious consideration and think about your cyber liability. As well as ensuring that you comply with GDPR when it comes to the data that you own.
At Anthony Jones, we wrote recently about the benefits that SME’s can derive from working with an insurance broker. Director Steve Green, also addressed this at a recent Broker Expo event. Steve touched on areas such as duties of disclosure, the appropriateness of the insurance covers purchased by small businesses, and which covers SMEs may choose not to purchase. These are all vital in managing risk profiles and ensuring that your business is sufficiently protected by insurance.
In 2020, it is expected that there will be further disintermediation of the SME insurance market. But with added complexities emerging all the time, such as contract and employment law, there are inherent disadvantages to SMEs of making non advised insurance purchase decisions. For businesses in the vaping sector, the importance of using a broker is even more compelling.
At Anthony Jones we work hard to keep up to date with the real issues which affect our clients. Those that may pose both opportunities and risks. We then work to reflect this in the advice we provide with regards to your vaping business insurance requirements. If you have any questions about the insurance for your vaping business don’t hesitate to get in touch with us.