Four Fines You Need To Avoid as a Business Owner

When you think about your new business losing money you probably imagine a major client failing to pay you or a piece of equipment failing and needing to be replaced in an emergency. These are certainly ways in which a new business could lose money but are not the complete picture. If you fall foul of the law, you could find yourself with a hefty fine and it could be enough to make you go out of business for good. Ignorance of the law is no defence. As a business owner, you are expected to seek out the laws that apply to you and to comply with them. Here are four ways in which your business could get fined and how to avoid them.

Health and Safety at Work Laws and Regulations
You have a duty to ensure that no-one is harmed by the way in which you operate your business. This includes employees, customers, people entering your business premises (such as contractors) and even yourself! You need to take steps to make sure that health, safety, and welfare are protected. If you do not do that, you could find yourself facing a large fine. Don’t make the mistake of thinking that health and safety legislation only applies to heavy industry. It actually applies to offices, shops, schools, and factories. It can be enforced in any workplace. You can get plenty of general help and advice from the Health and Safety Executive or from your local council Environmental Health Department. The principle that supports all health and safety legislation is the risk assessment. As an employer, you are required to assess every task that is carried out in your business to identify potential hazards. Then you have to take steps to control those hazards. This could be anything from providing an ergonomic chair in an office to providing breathing apparatus in a dusty work environment. You are required to keep the situation continually under review. You cannot just carry out one risk assessment and then forget about it. It will soon become out of date. It needs to be checked to ensure that it is still relevant and that it still protects all employees. Every time you introduce a new system of work, a new machine or a new chemical into the workplace it will need to be updated. All of your staff need to know about it and know how to suggest changes to it. There will be specific laws and regulations that apply to special work situations. For example, there are regulations relating to lifting heavy weights, working with electronic equipment and handling chemicals. You need to find out which laws apply to your type of business. Health and safety laws are changing all the time as new research is carried out. You can keep up to date by joining the relevant trade organisations and reading trade publications. 

Cyber Security Laws and Regulations
As a business owner, you are the custodian of a lot of data. You may hold personal details relating to your clients ranging from email addresses to dates of birth and even bank account details. Some businesses hold sensitive medical information as well. From May 2018, you could be fined if you are found guilty of not adequately protecting data. The fine could add up to 4% of your annual turnover and this could be a financial disaster for any business. Once you have worked so hard to get your business online, you need to ensure that it stays safe there. You should consult business security experts to ensure that you are compliant with the rules relating to cyber security. Many business owners have major concerns about security, recoverability and availability of sensitive data and burying your head in the sand is not a sensible approach. The experts will be able to check your compliance with data security regulations such as FCA and GDPR. That way, you avoid two costly implications namely hefty fines and bad publicity. The main benefit to your business is that you will be protected from a cyber-attack which may demand a large ransom from you to retrieve your data. This could be so damaging to your reputation that you go out of business and completely lose your customer’s trust. It is not fair that you should lose your business in this way so you need to be protected.You can get help to put together an IT security policy. You can learn how to spot phishing emails, and not fall for tricks used by cyber criminals. 

Tax Rules and Regulations
It is all too easy to forget that your new business needs to be registered with HMRC. The best way to find out what you have to do is to consult a professional business adviser or an accountant. There are several types of tax that you may be required to pay. If you have set up a limited company, you will need to pay corporation tax. The alternative is to register as a partnership or a sole trader. The problem is that tax law is changing all the time and so you need professional advice to ensure that you doing the right thing. If you employ anyone then you will need to register for PAYE and will need to send in a monthly return. Also, once your income rises above a certain threshold you will need to register for VAT. As an individual, you may need to submit an annual tax return. There are financial penalties if you do not do this in the correct way. A professional tax adviser can advise you on the most tax-efficient way to run your business and could end up saving you money. They could certainly save you from getting a fine!

Pension Rules and Regulations 
Pension law has recently changed and you need to know about this if you have employees. A law called the Pensions Act 2008 requires every employer in the UK to put certain staff into a pension scheme. As an employer, you also need to contribute towards it. This is called ‘Automatic Enrolment’ and it aims to secure an adequate pension for all working people.  Automatic Enrolment may apply to you if you have at least one member of staff. Also, it is relevant to people who do not strictly have a business. So, for example, if someone works directly for you as a cleaner, personal carer or a nanny, the law will treat you as an employer. You will, therefore, need to make sure that enrol them into a workplace pension. You can find out some more information on whether these laws apply to you on The Pensions Regulator’s website. There is even a tool that you can use to provide a few details about your employees. It will tell you which duties apply to you and when they come into force. As with all the other laws, things do not stay the same and so you may want to appoint an accountant who can advise you on the latest developments. The minimum contributions that you and your staff pay may change each year. If you fail to enrol your employees or pay the correct contributions you may be liable for a fine.

These are just a small selection of the rules and regulations that a small business owner needs to be aware of. By consulting the appropriate experts and government departments you can keep on the right side of the law and avoid costly and damaging fines.

1 comment

  1. Awesome information. Thanks for sharing.