Many people often dream of escaping from the rat race and becoming their own boss. Having nobody to answer to but yourself, to work the hours you want to work and to have the freedom to choose the work that you do.
There are now over 4.6million self-employed people in the UK, more than ever before! So it’s clear that many more of us want to take control of our careers in this way.
Going it alone is a huge gamble and fraught with risks. Without the safety net of a regular salary we still have to meet our rent/mortgage payments, cover bills, eat and hopefully still be able to save for retirement or have holidays. When you’re self-employed you also don’t get sick pay or holiday pay, so each day you’re not working there’s no money coming in. We recently met a client who was taken ill and unable to work for 4 months, which had a major impact on his personal finances.
There will be decisions to make around how you set your business up, maybe a Sole Trader, Partnership or Limited company. When setting the business up there are decisions to be made about shareholdings, involving your spouse or other family members and so on.
Once you are up and running there are many things you might not even think about that you need to do alongside your main business. It’s not just going out and doing work for a customer or selling your items on eBay. You’ll have to market your business, go and meet potential clients, quote for work, raise invoices, do your banking, chase late payers, buy stock/tools, potentially do payroll and so on. It can be a very trying time, so it’s good to have support you can rely upon to help you out.
There are a lot of services that we offer which can help save time and use our expertise to reduce your tax bill. From using our address as your registered office through Accounts, Bookkeeping, VAT, Tax Returns, Payroll and Pension Auto Enrolment we can do as much or as little as suits your needs. And we’ll always be here at the end of the phone or email to answer any questions you may have as you get started – we don’t charge for that advice either, it is part of the service. Our goal is to help you grow and develop your business every step of the way. We also have a lot of contacts in other business sectors to introduce you to who will be able to help you along the way.
If you’d like to talk about this in more detail please get in touch with on 01543 426271 or email@example.com to arrange a FREE no obligation meeting.
"Making Tax Digital" is something many of you have probably not heard of, yet! But it is a change that is coming and will impact everyone who is self-employed or has income from property rental. The government is still finalising details, and we'll update what is known as things become clearer.
The government believe that there is a "tax gap" between what is earned and what is declared on tax returns and that more regular reporting will reduce this gap.
From April 2018 the current annual tax return will be replaced by a requirement to file details of your income every quarter.
You will be able to do this yourself using software, and then continue to use an accountant for end-of-year reporting as you currently do, or simply give your records to us every quarter rather than every year. We will be selecting a small number of clients to do a trial run during 2017 ahead of this being rolled out next year.
At various times of the year you may consider holding a party for your business, particularly at Christmas. There are tax implications for your employees. The below are key points for you to consider:
1 - If you entertain your staff with parties during the year then you should limit your spending in the year to £150 per person for it to be a tax-free benefit. If you broach the £150 then your staff would be taxed on the full amount, not just the amount you go over by.
2 - Parties must be available for all employees to attend, not just directors.
You may have seen the recent TV advert from DWP regarding Pension Auto Enrolment for businesses. The cuddly character (Workie) in the TV advert is being used to drive home the message. The government is trying to encourage more of us to save for our future and have additional income to the state pension.
The rules are changing to so that all companies who employ staff will have a duty to have a pension scheme in place and enrol staff onto that scheme. Employers will also have minimum contributions to make into this scheme, starting at 1% rising to 3% by 2020. It is important that your business is aware of these changes and planning accordingly. You will face fines if you do not have a scheme when your business has employees.
If you are a director of a business that has no employees then the rules don't apply to you. If you are a husband & wife company then providing neither of you has a contract of employment the rules don't apply to you either.
Up until September 2017 a minimum of 2% of qualifying income has to be paid into the scheme. By October 2020 this will have increased to 8%. Whether this contribution comes solely from the business or is split between employer and employee is up to the employer to decide.
All employees have the right to opt out of the pension if they so wish. But as an employer you can not force your employee to opt out.
This can be very confusing for smaller businesses. We provide a number of services for our clients surrounding pension auto enrolment and payroll. If you would like to find out more about pensions and whether your business has to set-up a scheme get in touch with us on 01543 426271 or firstname.lastname@example.org
Each year more than 10 million have to complete a Self-Assessment tax return by 31st January each year or face fines of £100. If you are self-employed, a director of a business, have income outside of PAYE such as property rental or selling on eBay then you'll have to complete a tax return.
Of those 10million more than 1.3 million were filed in the last 3 days in 2016! So it's perhaps not unsurprising that January is a very busy time for us Accountants. We start filing them on behalf of our clients from April each year, particularly sub-contractors who are seeking a quick repayment of CIS tax that was deducted. There's no reason to wait until January, gather together your P60, mortgage statements, statements from your bank showing interest received and all other relevant information and drop it to your accountant. Even though the tax isn't payable until January we can advise you 8 months earlier of any tax liabilities you may face.
If you have received a letter from HMRC asking you to complete Self-Assessment then you must do this. If you file your return after 31st January you will have a £100 fine, the fine increases daily after 3 months.
Although the tax is due to be paid by 31st January, you won't be fined for late payment only late filing. You will be charged interest on any tax not paid.
At Bradleys we complete more than 450 tax returns a year. So if you have had a letter and are unsure what to do next, don't stress about it. Get in touch with us and we'll do it for you. Don't leave it TOO late!