Expert advice on the business of running a garment decoration company

UK Growth forecast and unfair contracts

  • In September, the Bank of England said it expected to increase its growth forecast for the third quarter of 2016 as the economy continues to perform more robustly than expected after the result of the Brexit vote.
  • Research by the Federation of Small Businesses (FSB) suggests that more than half of small firms have been stung by unfair contract terms with suppliers, with costs thought to total nearly $4 billion over the past three years. Unfair terms include suppliers failing to make auto-rollover clauses clear up front, tying businesses into lengthy notice periods, charging high early termination fees and concealing details in small print. Forty percent of the small businesses surveyed said they felt powerless to do anything about unfair contract terms.


I’ve been renting our current premises for a while, but they are too small and so we need to move. I’d like to buy somewhere as I feel that I’m throwing my money away on rent – would you advise me to go ahead with remortgaging my home to get the cash to fund the commercial property purchase, or are there better routes to raising the money? The business is profitable with a decent turnover, but any extra cash we’ve had has been spent on new machinery and staff.

You’re not alone in questioning the value of spending money on rent. Unlike tenants in residential properties, who can ask their landlord to carry out any repairs needed, tenants in commercial properties typically have self-maintaining leases, which means they pay for any repairs or maintenance needed. The commercial property landlord has the best of both worlds as someone is maintaining the property for them whilst they are benefiting from the capital growth.

Businesses that rent commercial properties can offset their rent costs against their trading income. However, businesses that own their commercial property can similarly offset the mortgage interest portion of their mortgage repayments against their tax bill.

Typically you can obtain a commercial mortgage through a bank with a deposit of 25-35%. If you remortgage your own home to raise the deposit, then as you are using that money for business purposes, that mortgage interest cost may also be offset against your trading income.

One other possible way of funding your purchase that is very tax-efficient involves investing via a Self Invested Personal Pension (SIPP). If you have any type of pension, you could move it into a SIPP and you can also contribute up to £40,000 into the SIPP during the current tax year. You get tax relief on the contributions as they go into the SIPP, which is significant at 40% if you’re a higher rate taxpayer.

A SIPP can then invest its money into commercial property, and can also obtain a loan for up to 50% of its value to increase the amount available for a purchase.

Your business would then pay rent to the pension, which is tax-free income for the pension holder and an allowable deduction for the business. When you come to eventually sell the property, there is no capital gains tax as it is held in a pension. Thus, as the business owner you are receiving the benefit of the tax-free income in your pension and also the capital growth of the property.

The suitability of investing via a SIPP may depend on your age as pensions cannot be accessed until you are 55, although if you sold the property you could reinvest in another commercial property. It’s also worth remembering that apart from the 25% tax-free lump sum, pensions are taxed as you withdraw money from them, depending on your other income.

Simon Misiewicz is business development manager at Optimise Property Tax Specialists, a company set up to help reduce tax for property investors. The owners and employees of Optimise Property Tax Specialists are also property investors, so they have first-hand experience of maximising property returns whilst minimising the tax liability of such investments.

Responsive Design: What is it and how does it affect your online business?

The question that pops up most whenever we pitch to a prospective customer is: “Is the website mobile-friendly?”

There has been a shift in the way that customers operate online over the past few years. The number of users searching online using smartphones or tablets is continuing to grow year on year: according to Search Engine Land, last year approximately 65% of searches were carried out on a portable device.

What exactly is responsive design?

A responsive or ‘mobile-friendly’ website is essentially three websites in one. The website responds to whatever device it’s being viewed on appropriately.

So what does this mean?

If you study your businesses traffic statistics you are likely to see an increase in the number of portable users over the past few years, which suggests your website needs to function well on a portable device. With customers not afraid to shop around online, your site needs to provide your customers a website that works on portable devices, because if you don’t offer your customers a mobile-friendly site, you can certainly bet one of your competitors does.

How can I make my website mobile-friendly?

Whoever you deal with, whether it is a homegrown website builder like Wix, WordPress and so on, your local online agency, or other providers like ourselves, they should be offering responsive websites as standard as it is seen as best practice in the web design industry.

What if I don’t go mobile-friendly?

In April last year, Google relayed the importance of being mobile-friendly to webmasters in an update dubbed ‘mobilegeddon’.

This update saw responsive design become a factor that affects how businesses rank in search engines, meaning that traditional sites that are not mobile-friendly will start to lose rankings, traffic and sales to those which are mobile-friendly.

Your business should be able to operate in the same way on a portable device as it does on a laptop or desktop computer. If not, customers shopping on portable devices will shop elsewhere. The trend is only going one way, so it is a case of jump on board and join the trend!

You can check online using ‘Google’s Mobile-Friendly Test’ to see if your businesses website is mobile-friendly.

Andrew Langridge is from eTrader, one of the industry’s leading suppliers of websites to garment decorators across the UK.

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