Tax & admin · 1 March 2017

How small business owners can prepare for the new pound coin

New pound coin
Business owners will need to spend or bank old pound coins before the end of October

Ending a 30-year legacy, the new 12-sided pound coin will enter circulation on 28 March. Now is the time to prepare for the new pound.

A “co-circulation” period will run until September 2017, but you may have even noticed a shortage of round pounds already – with 50m old coins taken out of circulation since Christmas.

With hologram imagery, micro lettering and a hidden security feature, the Treasury is convinced that the coin will be almost impossible to counterfeit.

To ensure a smooth transition, owners at small firms will need to make a number of preparations.

How to prepare for the new pound coin

Chartered accountant organisation ICAEW has provided a five-step preparation guide to give the UK’s small business community a head start in adopting the new pound.

Take all old coins to the bank

As of 15 October 2017 the old coins will cease to be legal tender, so get ready to dig out all of your round pounds. Ensure that they are either spent or banked before the cut-off date.

Make all necessary upgrades to machinery

The new pound coin is different in shape and weight to its predecessor. To be fully prepared, business owners will be required to adapt any coin-accepting machinery, such as vending machines and lockers. The race is also on for local councils to make upgrades to parking ticket machines.

New notes are on the way

Following on from the success of the new polymer £5 note, a new £10 note will arrive in the summer of 2017. Looking further into the future, a new £20 note is expected to be introduced in 2020. Small business owners will need to schedule in time to prepare for these modifications.

Ensure you plan ahead

It is vital that small business owners plan ahead. Leaving it until the last minute to update machines or to collect old one pound coins could result in business owners losing the precious minutes needed for the daily operations of a small company.

Seek advice

Business owners are advised to visit the Royal Mint website for all information regarding the new pound, with resources and videos available to help prepare. The ICAEW has offered advice to small businesses from its free Business Advice Service.

Commenting on the coin’s imminent introduction, Clive Lewis, head of enterprise at ICAEW, said its arrival came at a time of growing  business costs for owners experiencing currency fluctuations.

“To avoid further costs when implementing this change, small business owners should ensure they are on top of the introduction of the new pound coin and do not leave preparation until the last minute,” he said in a statement.

Could rural businesses suffer from the transition?

According to the British Parking Association (BPA), around a quarter of the UK’s 100,000 pay and display machines won’t have had the necessary modifications required to incorporate a new coin by 28 March.

The BPA raised concerns that rural communities, where out-dated parking machines are more common, could be at a significant disadvantage.

Richard Boultby, marketing director at ticket machine manufacturer Metric, assured Daily Telegraph readers that the “backlog” of upgrade requests would be completed by June 2017, four months before the end of the co-circulation period.

Rural businesses owners – already facing the loss of thousands of cash machines and “literally running out of money” – will hope that the queue is managed efficiently by the Royal Mint, or risk losing customers.

Could the new fiver protect your firm’s cash flow?

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ABOUT THE EXPERT

Simon Caldwell is a reporter for Business Advice. He has a BA in politics and communications from the University of Liverpool, and previously worked as a content editor in the ecommerce industry.

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