Counters Consulting

A Message from Lord Pickles and Lord Blunkett, followed by Counters Consulting's best practice article

The ability to listen and learn from one another has always been vital in parliament, in business and in most aspects of daily life. But at this particular moment in time, as national and global events continue to reiterate, it is uncommonly crucial that we forge new channels of communication and reinforce existing ones. The following article from Counters Consulting is an attempt to do just that. We would welcome your thoughts on this or any other Parliamentary Review article.

Blunkett signature Rt Hon The Lord David Blunkett, MP
Pickles signature Rt Hon The Lord Eric Pickles, MP

Highlighting best practice
John Wibberley, Director
Counters Consulting Limited is a south Midlands-based
chartered management accountants practice, providing
accountancy services and business solutions to SMEs. With the
advent of more intelligent systems and seamless, interfaced reporting,
the demands on the external accountant have changed; notably,
there is less need for “handle turning”. Explaining the numbers,
mentoring, identifying opportunities, solving problems and helping
develop strategy to grow businesses and improve profitability have
become more important. Counters provides a proactive, involved
and holistic approach, which is what today’s businesses need.
More than just accounting
In larger businesses, financial awareness is key. The CFO commonly sits at the
right hand of the CEO, supported by accounting people at every level. So an active
appreciation of wealth creation permeates the organisation. This is one reason why
big businesses, on average and over time, grow and generate more wealth for the
New small businesses are a wellspring of ambition and innovation, widely recognised
as being a key to future job creation and prosperity. They are the big businesses of
the future. But too often small businesses are undermined for the following reasons:
a lack of the financial awareness and guidance their larger counterparts have; a
disproportionate burden of bureaucracy; and a complex tax system, awash with
unintended consequences, which can at times disincentivise growth.
As a chartered management accountant, I spent over 20 years in industry, working
my way up from lowly beginnings as a trainee cost clerk in a bakery (doing all the jobs
nobody else wanted) to finance director of a multinational automotive components
manufacturer and distributor.
Big industry finds chartered management accountants at all levels, and the professional
body is unique in the way that operational involvement is a key requirement for
qualification. As a result of their experience, management accountants are ideally
placed to make a critical contribution, from the resolution of everyday operational issues
to the development of world-class strategy.
Management accountants are, however, under-represented in the small business
community. Here in-house accountants are rare, and external support comes primarily
from practices with a background in compliance work – particularly historical annual
accounts and tax returns.
Over recent years a relatively small but growing body of chartered management
accountants have become licensed “members in practice”. In 2002 I became an early
member of that group when I formed Counters Consulting. In doing so, my objective
was to offer an alternative accounting solution to support small businesses. I wanted to
bring to small businesses some of the advantages larger companies enjoy, in addition
to meeting their basic requirements. I wanted to help level the playing field and address
factors limiting success.
»Director: John Wibberley
»Established in 2002
»Based near Stratford-upon-
»Services: Accountancy,
business advice and taxation
»No. of employees: 4, plus
associates and specialist
Counters Consulting
A small business owner is often all
things to all people – strategic thinker,
producer, marketing department and
office cleaner. They cannot afford an FD
or an accountant, and they may do their
own book-keeping with mixed levels of
success. Counters aims to provide an all-
encompassing solution for all the missing
bits, and in a way that’s affordable.
Identifying where help is needed, and how
to deliver that help economically, is key.
When we meet our clients, we go the
extra mile to understand their businesses,
so increasingly they come to us first when
they have an opportunity or a problem. All
of our team have worked in commercial
businesses before coming into practice and
are well placed to do this. When cashflow
is short, we help identify the underlying
causes (for example, a genuine need for
investment to fund growth, or simply
poor credit control or overstocking) and
suggest practical steps to address them.
Small businesses, rightly, are given extra
support through the tax system, and
relatively recent initiatives (the £3,000
Employment Allowance, the £16,000
rateable value threshold for business
rates) are welcome.
Against this, requirements faced by all
businesses (recent additions to the list
include pensions auto-enrolment, GDPR,
Making Tax Digital) can cost as much to
implement and run for a firm with one
employee as they do for firms with 50-plus
employees. This leaves smaller firms at
a disadvantage – the extra support they
receive only goes some way to alleviating
this. We work with our clients to find
answers to these problems, which we
(as a small business) also face, commonly
collating and sharing experience and
solutions among our clients to reduce cost.
Avoiding unintended
The VAT threshold (currently £85,000
annual turnover) can have a massive
negative impact on businesses which
sell direct to the public (and cannot,
therefore, pass on the VAT). Take the case
of a young, expanding business with a
turnover £1 below the threshold, a 30 per
cent profit margin (giving the proprietor
a gross income of £25,500) and 70 per
cent costs split evenly between labour and
purchased materials. When the business
clicks over the threshold and is forced
to register for VAT it will immediately
become liable for a net annual VAT
liability of £9,200 – which comes straight
off the proprietor’s income.
As the turnover increases, the business
will gradually recover the profit shortfall,
but the £25,500 annual profit figure
will not be restored until turnover hits
£133,000 – a 56 per cent increase.
This cliff edge arises because when
businesses hit the threshold, VAT is
charged on all of their sales – not just
the extra turnover. Little wonder that
many small firms go to great lengths
to avoid breaching the threshold – and
opportunities for them and the wider
economy are consequently lost.
Perhaps a better solution would be a
graduated scheme, with a lower threshold
(say £30,000), a lower starting rate (say
10 per cent) and VAT only chargeable on
turnover above the threshold.
An actual example, in this case relating
to auto-enrolment, is a small charity with
one employee. The cost to the charity
of administering a pension scheme
for one person is nearly 1.5 times the
combined employee and employer
contributions. The charity does not have
the competence in-house to use one
of the “free” government schemes. A
better solution for such cases would
be for the employer to make enhanced
contributions to a personal pension plan
of the employee’s choice (having taken
suitable advice from an IFA), avoiding the
administration burden altogether. Both
employer and employee would benefit.
Perhaps one service that accountants
working in the small business sector
can perform is to inform the wider
community of challenges budding
entrepreneurs face. A client of mine,
who recently passed the £4 million
turnover mark, commented that the
first £1 million was by far the hardest
part. Above that level, businesses gain
momentum to accelerate growth. But we
need to help them get there.
Client meeting – IT
entrepreneurs, Cooper
When we
meet our
clients, we go
the extra mile
to understand

This article was sponsored by Counters Consulting. The Parliamentary Review is wholly funded by the representatives who write for it. The publication in which this article originally appeared contained the following foreword from The Rt Hon Theresa May MP.

The Rt Hon Theresa May MP's Foreword For The Parliamentary Review

By The Rt Hon Theresa May MP

This foreword from the then Prime Minister appeared in the 2018/19 Parliamentary Review.

British politics provides ample material for analysis in the pages of The Parliamentary Review. For Her Majesty’s Government, our task in the year ahead is clear: to achieve the best Brexit deal for Britain and to carry on our work to build a more prosperous and united country – one that truly works for everyone. 

The right Brexit deal will not be sufficient on its own to secure a more prosperous future for Britain. We also need to ensure that our economy is ready for what tomorrow will bring. Our Modern Industrial Strategy is our plan to do that. It means Government stepping up to secure the foundations of our productivity: providing an education system that delivers the skills our economy needs, improving school standards and transforming technical education; delivering infrastructure for growth; ensuring people have the homes they need in the places they want to live. It is all about taking action for the long-term that will pay dividends in the future.

But it also goes beyond that. Government, the private sector and academia working together as strategic partners achieve far more than we could separately. That is why we have set an ambitious goal of lifting UK public and private research and development investment to 2.4 per cent of GDP by 2027. It is why we are developing four Grand Challenges, the big drivers of social and economic change in the world today: harnessing artificial intelligence and the data revolution; leading in changes to the future of mobility; meeting the challenges of our ageing society; and driving ahead the revolution in clean growth. By focusing our efforts on making the most of these areas of enormous potential, we can develop new exports, grow new industries and create more good jobs in every part of our country.

Years of hard work and sacrifice from the British people have got our deficit down by over three quarters. We are building on this success by taking a balanced approach to public spending. We are continuing to deal with our debts, so that our economy can remain strong and we can protect people’s jobs, and at the same time we are investing in vital public services, like our NHS. We have set out plans to increase NHS funding annually by an average by 3.4 percent in real terms: that is £394 million a week more. In return, the NHS will produce a ten-year plan, led by doctors and nurses, to eliminate waste and improve patient care.

I believe that Britain can look to the future with confidence. We are leaving the EU and setting a new course for prosperity as a global trading nation. We have a Modern Industrial Strategy that is strengthening the foundations of our economy and helping us to seize the opportunities of the future. We are investing in the public services we all rely on and helping them to grow and improve. Building on our country’s great strengths – our world-class universities and researchers, our excellent services sector, our cutting edge manufacturers, our vibrant creative industries, our dedicated public servants – we can look towards a new decade that is ripe with possibility. The government I lead is doing all it can to make that brighter future a reality for everyone in our country. 

British politics provides ample material for analysis in the pages of The Parliamentary Review 
The Rt Hon Theresa May MP
Prime Minister