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Financial Services Sector Is UK’s Top Tax Payer

The United Kingdom’s (UK) financial services sector paid £71.4 billion in tax last year, accounting for 11.5% of the UK’s total tax collection. This year’s contribution was the highest since 2007, accounting firm PwC noted in its annual report.

Banking institutions and insurance companies were the top contributing sub-sectors, paying an additional £8.4 billion and £3.4 billion respectively, thanks to reforms in corporate tax and the bank levy.

The report, which was commissioned by the City of London, underscores the potential adverse impact to public finances if Brexit limits UK’s access to the European Union’s (EU) single market.

Financial services firms in the UK have expressed concerns about the Brexit’s negative effect on their businesses. Main concerns include losing access to a skilled EU workforce and potential restriction on their ability to trade with the single market, among others.

About 1.1 million people are employed by the financial services sector in the UK, comprising 3.4% of the country’s total workforce.

Many are waiting to see whether the UK can retain “passporting” rights, which enable lenders to continue transact without restrictions across the EU.

Addressing reporters in Brussels on Tuesday, Chancellor Philip Hammond said the government would study the “costs and benefits” of continuing to pay for access to the EU single market after UK formally exits the union, echoing previous pronouncements made by Brexit Secretary David Davis.

Last week, Brexit Secretary David Davis said paying for continued access was a possibility.

Speaking at a tax event on Tuesday, Financial Secretary to the Treasury Jane Ellison acknowledged the concerns of the financial sector, and assured that the government would be negotiating for an deal that will help UK’s financial services sector to be “every bit as successful after our withdrawal as before.”

She adds that Brexit could also mean “new opportunities” for this economically-vital sector.

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Phil Hall Interim CFO and FD
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How CFOs Are Changing The Landscape Of Small-to-Medium Sized Businesses and Their Financial Success

Small to medium sized companies operate within a rapidly changing environment. And, due to this rapid changing nature, many are ill-prepared to handle the continuous movement and adaptability, usually the result of a lack of relevant management expertise.

In order for a company to survive and thrive, there must be changes made. A lack of adaptability can almost, inevitably, spell doom for a company.

What Factor Lead To Change Within An Organisation?

A company’s finances are the one factor that leads to a real insight into what is happening within a company. It’s the one factor that can lead to significant changes, both in terms of productivity and strategy.

By knowing what a company’s finances are like, steps can be taken to ensure crises are minimised or avoided altogether, and opportunities are capitalised on.  The company can also focus on management control systems, cash flow forecasts and more, including using this information to effectively communicate its strategies and operation.

The Importance Of CFOs In Work Environments

No company can afford to ignore and work without some type of financial structure, as it is necessary to boost employee and consumer confidence. Both economic climate and operative finance are a complicated but necessary issue for companies. Specialised support and expertise are required to manage challenges most effectively. These specialised professionals are referred to as Chief Financial Officers (CFO).

These specialised professionals provide a non-invasive, flexible and on-site intervention, working for however long they are needed, on a full time, part time or interim basis, to ensure that a company’s financial operations are working efficiently and in compliance with the law. It doesn’t matter how complex the issue is; a CFO utilises their knowledge and expertise to advise management of the best course of action.

A Chief Financial Officer will carefully and strategically review the company’s financials and all of its resources. Many small to medium sized businesses still have family finance and personal assets tied into the business. Therefore, the entire process is multi-faceted, and a strategy will be developed over time to strengthen the business’s position.

Mary Ellen Biery, has offered a summary of a CFOs responsibilities here:

4 Key Functions of a Chief Financial Officer

Book

The primary role of a CFO, of course, is to make sure financial records of the company are in order. “They’ve got to make sure the books are right,” says Brian Hamilton, chairman of Sageworks. “Most CFOs have that covered.”

Share

CFOs should make sure that management has critical decision-making data. In order to provide that forward-looking data, CFOs must develop good forecasts and utilise reliable benchmarking data.

Comply

Every company has compliance issues to address, and the CFO oversees many of them. Filing and paying taxes is one example. CFOs oversee duties related to shareholders, such as issuing dividends, preventing fraud and disclosing financial information.

Assist

The final CFO function that is vital to companies is assisting internal customers – the people in the company, such as operating managers, who need data to determine things like decisions on pricing or the lifetime value of a customer.

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Adopting the recommendations offered by a full-time or interim CFO can provide solutions to most complex financial problems… even for the most innovative companies.

For the immediate future, CFOs provide a new service that companies can benefit from when it comes to their finances and financial services. The market recognises the value and stability a CFO can bring, increasing business confidence right away.

If you are interested in discovering how you can utilise Assured FD Services, as your interim CFO, to ensure your business’s future stability and growth, call us on 07817 676371, or email us at info@assuredfd.co.uk.