What business owners should know
In the coming tax season, it is important to keep up-to-date with everything you need to know about your business and obligations in the coming year. Garrett O’Donohoe, Head of Business Banking for KBC tells us about the challenges businesses face, his ti
Garrett O’Donohoe, Head of Business Banking for KBC Ireland tells us about the challenges businesses face, his tips on making payments and the launch of business banking at KBC
“Planning for the next year for any business is always about planning early,” says Garrett O’Donohoe. “When it comes to the end of October, and tax deadlines in particular, there can be a lot of stress since everyone tends to leave their taxes to the last minute when it is extremely busy.
“As a bank, the sooner customers come to us and we know their requirements, the better. If a business prepares as early as possible, the season will run more smoothly.”
According to the Central Statistics Office (CSO), small to medium enterprises (SMEs) account for 99.7% of active enterprises and 50.3% of turnover. SMEs employ almost 7 in every 10 persons in the business economy. Every business sector is different but with SMEs, it is even more important to plan appropriately for taxes and savings.
O’Donohoe says that one size does not fit all when it comes to preparing for the future. Every sector has different challenges and businesses themselves know only too well what these challenges are.
Business owners must tackle with employment law, property law and the General Data Protection Regulation (GDPR) which came into being on May 25th 2018. This imposes more obligations on companies who control and process customer data. This has been a major change for business owners as they had to complete a full overhaul of their data protections and even hire employees to specifically deal with data.
“GDPR wasn’t a once off, employers should regularly review their current practices and documentation and assess how they process data to make sure this is in line with regulations.”
Non-compliance fines can be costly with maximum fines of €20 million or 4% of annual turnover if the company has a major data breach.
Another massive force affecting businesses in the next year, is the looming idea of Brexit, which O’Donohoe says has caused great concern for businesses.
“At a macro level, the biggest effect will most certainly be Brexit but, it’s more the uncertainty of what will happen that is concerning businesses.”
With Brexit coming into force in March 2019, the best way to prepare is to plan for
TIPS FOR TAXES
the worst.
“It’s difficult to prepare for uncertainty, so I would always advise businesses to plan for the worst-case scenario. If all things go wrong, you can put that plan in place and if it is better, you’re still prepared.” Tax season can be a difficult time of a business’ year as deadlines approach and money must be paid. O’Donohoe says the best tip he can give to SMEs on taxes, is to do it early and get the right help and advice.
“The most important thing a business can do is focus. When running a company, it can be easy to be stretched in many different directions. Business owners have to run the day-to-day of a business, and while the financial and taxation side is a big part of that, it can sometimes be pushed to the side until deadlines start approaching.
“That’s where I believe we at KBC can add value to a business. We can help a business apply for a loan early for taxes and pensions. On an on-going basis we can help with cash-flow loans or if a business is expanding and wants to upgrade or purchase a new premises. If businesses contact us early, we can help them prepare and it does make a difference further down the line.”
For example, KBC have a product called the ‘Tax and Pension Contribution’. This is a product for professionals in the medical, financial, legal, pharmacy and other professional sectors. It helps self-employed professionals with their payments either in taxes or pensions.
“If someone wants to put €20,000 into their pension this year, they will most likely find it hard to extract that from
their business at once. However, they can get that €20,000 with a Tax and Pension Contribution loan and spread the cost over a period of time. Their pension contribution is paid for without having to take a large amount out of the business at a time when there may be many other payments to make.
“We can finance tax payments that a business needs to pay right now and they pay it back over 9, 10 or 11 months. This means they don’t have to take a big lump sum out of their business to pay their tax bill. They can spread it out and then re-apply again next year if needed. It’s a very straight-forward cash flow loan to finance their taxes. We have done a lot of research on these areas and found that these products are of great help to our customers. ”
BUSINESS BANKING AT KBC
KBC recently launched their Business Banking proposition which focuses mainly on micro SMEs in the professional sectors. KBC undertook extensive research with businesses and small business owners to gain an understanding of what businesses really wanted and needed from their bank. The banking offering was then designed based on the feedback those businesses provided.
“I have been with KBC for over 17 years,” says O’Donohoe. “When I joined the bank, it was a much smaller organisation. Five years ago, the bank moved into retail banking and has now grown into a ‘digital first’, customer-focused challenger bank with over 273,000 customers. With the new launch of business banking, we have progressed into micro SME banking.
“On the decision to launch Business Banking right now, we spoke to businesses and conducted a significant amount of research into what the next step should be for us. We saw a big need for a challenger bank in the micro SME space and that’s when we made the decision to launch Business Banking.”
Most of the Business Banking products have been launched so far such as secured lending to fund, for example, business premises, unsecured lending, Tax and Pension Contribution, business deposits and savings accounts. They also have partnerships for asset leasing and merchant services.
The last product to be launched is their day-to-day banking for businesses which is to arrive soon.
“We try to do things differently at KBC. All of our customers receive a Business Partner who acts as a relationship manager for the bank. The Business Partners work with customers individually and customers really appreciate the attention they receive.
“We have received feedback from customers about their confusion when talking to banks. They said that when they visit or call their bank, they don’t know who to speak to which is why we have a dedicated business manager who can meet them in their workplace or wherever suits that customer. It’s always good to know that the person at the end of the phone and at the other side of the desk knows about your business and can answer specific questions.”
There are many benefits of business banking with KBC and O’Donohoe says that the research they conducted helped them create bespoke banking for their clients.
“In our research, customers highlighted that they wanted a simpler day-to-day online banking solution. So, we’re trying to keep online banking simple, clean and straightforward. It will be very much aligned to KBC’s digital strategy. And, since we deal with businesses from all different professional sectors, we have set out to specialise in those sectors, understand them and know what’s important to them at any given time.”