Does not compute

== HMRC IT problems (Part one...) ==

Anyone familiar with the history of government IT developments over the past 40 or more years shouldn’t have been too surprised to see the recent announcement by HMRC of some forthcoming disruption to their computer systems arising from an upgrade of the IT system that is used to handle PAYE tax and National Insurance details.

The new PAYE system, which is due to be introduced this month, will create a single record of every individual employee’s tax and National Insurance information. At the moment, those details are spread across 12 regional databases. The intention behind the new IT system is to collate all those details into just one database, irrespective of how many jobs an employee has held.

In a statement, HMRC warned employers and taxpayers that the upgrade would lead to "a temporary period of planned service interruption from 12 June that may continue until the new service is available to all trained staff and outstanding records are brought up to date". In addition, the National Insurance computer system will be unavailable for a "short period", although HMRC said that it will still be able to provide general advice and guidance but won’t be able to answer specific questions regarding individual National Insurance records or most recent PAYE changes. The Department for Work and Pensions’ operations will be affected as well.

HMRC insisted that it would do everything possible to deliver a normal service but added that, in a few cases, it may not be able to respond to queries as quickly as usual. Employers are being told to submit details as normal, as HMRC will be storing both online and paper submissions until PAYE services are restored.

Well, at least they’ve learned to tell us in advance of the problems - similar developments at other departments have often resulted in massive disruption for months on end, and more than once the result has been that they’ve scrapped hundred of millions of pounds-worth of development work and had to start all over again (which is why this could be merely ’Part one’ of a series). We have been warned. Just remember though that this is their excuse for delays, not yours - you’ll still be expected to make all of your returns on time, even if they’re not going to be processed for a while!

== Health and safety - a freebie ==

Just as last month we warned that small businesses in general - and petrol retailers in particular - needed to keep abreast of the ever more dense and demanding legislation in the legal minefield that is ’health and safety’, some good news arrived a few weeks later. It came in the shape of an announcement by The Health & Safety Executive (HSE) that it was going to make a lot of its guidance available free on the internet from this autumn.

From September 2009, around 250 publications that contain health and safety advice and guidance will be posted on the HSE website in PDF format to view and to print. The publications cover the full range of HSE’s guidance as well as information on associated codes of practice and safety regulations. HSE said it was making the information available to help employers understand their legal duties and what health and safety precautions they need to take.

So what’s the big deal you ask? Well, if you wanted to buy the same publications now, you’d have to pay for them. The HSE claims that it’s putting £1m-worth of information out for nothing. It’s a very welcome idea, although you’ll still have to find the time to read all of the stuff, and chances are it could cause some readers to lose the will to live (or at least to stay in business) when they actually realise how much of this stuff they’re expected to comply with! We’d still expect most businesses to need professional advice on health and safety issues, but the publication of the guides does at least give you a chance to read up on the subject before speaking to someone who can explain it in plain English.

== Small businesses - less expensive to run? ==

You might not have noticed, but according to at least one academic study the cost of running a small business has fallen for the second successive quarter.

According to the Business Inflation Guide, which is put together with the help of Warwick Business School and measures a range of essential expenditure items for small businesses, business costs dropped by 1.4% in the first three months of this year. Business costs have now been declining since the last quarter of 2008 when the rate of deflation stood at 2.9%.

Labour, advertising, raw material and vehicle costs all showed a drop. Overall, the costs faced by small firms were 0.6% down on the same period a year ago, with recent price falls offsetting rises in costs experienced in the first half of 2008. However, the report’s authors warned that, although overheads were down, small business profit margins are still being squeezed as demand for products and services continues to be weak. Over the last year, the index has registered a series of record levels of both inflation and deflation.

In the second quarter of 2008, the Guide measured a cost inflation of 9.9%. Within six months, though, this figure had plunged to -2.9%.

As we said, it may not have been stunningly obvious to you when you’ve been looking at your own costs recently, and since the report was published a few weeks ago pump prices have crept back over £1pl, which will eventually feed back into everyone’s costs.

However it does at least confirm a point that we’ve been making for many years - when it comes to realistic assessment of the cost of goods and services to individual businesses the general RPI (Retail Prices Index) can be a very crude measure.