The FMB Information Services Department brings you news of two important developments which will affect your business, firstly, alternative methods of payments to consider if cheques are eventually phased out and secondly, pension reforms which will start next year.
CHEQUES MAY BE PHASED OUT
Cheques were first used in Britain 350 years ago, but because banks consider them to be an expensive form of payment due to the time and cost associated with processing them, they are now considering doing away with cheques completely.
The Payments Council has set a target date of October 2018 to close the UK’s central cheque processing system.
However, a decision to go ahead will only be taken in 2016 if acceptable cheque alternatives are in place, and are actually being used.
The principle method of payment for tradesmen including builders, plumbers, electricians etc. is the cheque, so this decision will have a big impact on you and your business.
The Information Services Department advises members to avoid accepting cash payments when cheques are phased out The Information Services Department advises members to avoid accepting cash payments when cheques are phased out as this could have an impact on your business cash flow later on.
HMRC says that, on average, this group of tradesmen is 12 months late in paying VAT and the average amount owed is £6000.
Also Business Link South-East said that SMEs in the construction sector are badly affected by debt.
PREPARE FOR ALTERNATIVE METHODS OF PAYMENT
Banks and credit providers have been investing in chips which allow a customer to pay when the chip is pushed against a sensor, known as contactless technology.
The use of mobile phones is also regularly promoted as the future of payments systems and could be a favourite method for tradesman as it allows them to create quotes, accept orders, send invoices and take card payments. For further information on an example of this mobile technology, visit www.payforthis.co.uk.
