HMRC staff are to begin calling new businesses to offer advice on how to correctly take care of their bookkeeping and tax obligations. HMRC is referring to this new practise as “telephone education”, and businesses will be contacted “at key stages in their lifecycles”.
Accountancy software giant Sage last week announced the disappointing news that it will not be issuing a software update to its accounting package to support iXBRL – a new markup format HMRC is mandating all electronic Corporation Tax returns use.
There is an ongoing debate about the benefits of contracting as a sole trader or working as a limited company owner. The typical scenario is for someone to start contracting or freelancing as a sole trader for its ease of set-up and small administrative burden. After increasing their earnings, they may then consider forming a limited company to lower their tax paying responsibilities and increase their attractiveness to potential clients.
This raises the question: when is a good time to form a limited company? And how substantial is the culture shift as you move from one business structure to another?
With recent research detailing the colossal expense and burden of niggling administrative duties (apparently we spend 37 days each year on opening letters alone!), isn’t it about time we got hold of the red tape and tore it apart with Hulk-like strength?
Freelancers and contractors can help make their lives significantly easier by offloading many of the menial tasks that blight their day. First though, you need to know when’s the best time to outsource.
We’re receiving news via the Freelance Advisor batphone of a developing problem with Umbrella Companies.
Umbrella Companies, for those unfamiliar with the term, are large organisations run under Limited Company rules, who deal with freelancer and contractor national insurance and tax issues by essentially “employing” these individuals in their company (hence, “umbrella”).
The proliferation of online accountancy services aimed at small businesses has opened up a debate about the benefits and drawbacks of these new fangled operations in comparison to more traditional accountancy practices.
Here we look at the rise of these services, and what impact they’ve had on the freelance workforce.
Last week the government came clean on their future plans for pension tax relief. Now we’ve had time to digest the news, we’ve called in our resident financial planner – Paul Cleworth of Wealth Matters – to give you a rundown of the changes and how they’ll affect you and your business. Here comes the science…
I’m always on the lookout for new online tools which are user-friendly and hopefully fun and maybe, just maybe, practical for my needs.
So, I randomly googled ‘lovely online tools’ and lo and behold came across Lovely Charts which promises to enable you to ‘create professional looking diagrams of all kinds’ that will ‘impress, convince and seduce – even if you don’t have the slightest design skill.’
For many freelancers and contractors finding a good accountant can be an arduous task. As a result, some small business owners end up employing the services of an accountant who turns out to be a poor fit for their needs.
That’s when you know it’s time to make a change.
A genuinely enlightening tax planning seminar for freelancers and contractors will be taking place on July 20 at the Cumberland Hotel in London.
An impressive roster of guest speakers will break down the recent Budget and offer expert insight into how it affects you, as well as looking in detail at the day-to-day financial trials and tribulations of being a flexi-worker.
As the dust settles after the June Budget Financial Planning Expert Paul Cleworth give us some good news for contractors.
TODO: Is a review of salary levels with your accountant requried?
The PCG’s continued lobbying of Tory top-brass has finally paid off in a firm commitment to a review of IR35 legislation by a future Conservative government.
The Conservative Party made the landmark announcement today that IR35 will be reviewed as part of an overall review of small business taxation should they win the General Election in May.
In a letter today to Chris Bryce, PCG Chairman, the Shadow Business Minister, Mark Prisk MP said that due to PCG’s strong representations to him and to Shadow Treasury Ministers “a Conservative Government would undertake a fundamental review of small business taxation matters, including IR35.”
From 1 April 2010, if you have an annual VAT exclusive turnover of £100,000 or more you will have to submit your VAT returns online and pay your VAT electronically. Also, if you register for VAT from 1 April 2010 onwards, you’ll have to file online from the start, whatever your turnover.
If you are a freelance sole-trader or a contractor working under an Umbrella company you may not be aware that going limited could save you money.
By going limited you can, save tax, open more avenues for employment, benefit from limited liability if you get into trouble.
If you have read our guide to the expenses freelancers can claim the following guide gives some in depth information on how to claim your business expenses.
Michael Rose | Getting a Job,Money
If you decide to set up your own limited company then you’ll need a business bank account to separate your personal and business finances.
It may sound like a lot of hassle but our quick guide shows you what you need to do.
The Self Assessment online deadline is fast approaching – if you still need to do your Tax Return you must do it online by 31 January
If you’re using HMRC Online Services for the first time, you will have to register for an online account. You will then be sent an Activation Code within 7 days to activate your account.
Setting up a Limited Company is one of the smartest way to get paid for your work. With a Ltd you get to define your brand, own everything you do, run your business in the most tax-efficient way and pitch for work you wouldn’t be able to get as a sole-trader.
Some people, usually the folks at Umbrella companies, will tell you that setting up a company is costly and complicated but with low-cost solutions out there it’s a no-brainer.
In conjunction with PCG, Wealth Matters have been running a number of Contractor Seminars this year. When it comes to investing they’ve found quite a few questions keep repeating themselves among the 250-strong contractors in the audience. Today Wealth Matters’ Director Paul Cleworth answers these questions for a wider contractor audience.
Master-moaner and freelance freedom-fighter Malvolio takes a look at Tax and Employment Benefit Trusts (an alternative to Umbrella Companies that promise up to 25% more in your pocket).
Are these tax schemes a good idea for freelancers and contractors looking to earn a little more? Are they good for the UK?
I was following a discussion over the weekend about someone asking if it was OK to expense accountancy training as part of his role as a company owner. My understanding of any expenses, including training costs, is that the expense must be wholly and exclusively in the line of your work. So clearly you can’t [...]
The specialist freelancer and contractor-focused accountancy world is hotting up as Crunch continues to cause ripples in the sector. It’s been a busy month for Crunch with the news that the all-in-one online accountancy service has received investment from Bebo co-founder Paul Birch and Skype chairman Michael van Swaaij. Combined with news of an award [...]
ReceiptFarm turns all those horrible scrappy bits of paper with numbers on into a single, online database of your recent expenses. They scan, scrape, sort and send them back to you in a few days and everything, from VAT amounts to payment type are all captured online.
Brilliant stuff!
SPECIAL OFFER: 20% off for Freelance Advisor readers.
Got a great accountant but lousy software?
Or great software but an accountant who wants everything in Excel spreadsheets?
Crunch Managing Director Darren Fell explains why choosing an all in one accounting solution can save you a lot of time and hassle when it comes to your year-end.
Darren Fell covers the correct steps to setting up your accounting system. Step 1: Find the good accountant Step 2: Make sure you like their software
The PCG, the association that represents freelancers and contractors in the UK, has revealed the exact amount of money raised by the Government’s IR35 tax regulation rules.
Following a request under the Freedom of Information Act to HMRC, asking just how much tax revenue IR35 raises for the exchequer, PCG have found that between tax years 2002/03 and 2007/08, IR35 directly raised just £9.2 million. This equates to an average of around only £1.5 million per tax year – a tiny sum in Governmental terms.
Michael Rose | Money,Resources
If you’ve read the tax overview and know what to expect this guide gives you a simple to understand guide to Self Assessment, National Insurance contributions, VAT, employing others (PAYE) as well as some of the help you can get in the form of Allowances, reliefs, incentives and Tax credits.
Essential reading if you’re starting out and struggling to understand tax and self-employment.
The PCG is a non-profit organisation that fights the freelance corner by lobbying government for better tax and regulation and promoting fair and ethical behaviour among recruiters. It also provides a host of tools and knowledge to its members to help them handle tax and regulatory matters properly.
PCG insider Charlie Bradburn tells us why they could be your greatest ally if you were ever to suffer a tax investigation and how their help-line can help you feel more at ease when confronted by a letter from the HMRC.
Michael Rose | Money,Resources
To help launch our new Resources section we’ve teamed up with Business Link and the HMRC: Over the next few months we’ll be offering the latest advice, guidance and short videos from the people who know.
If you’ve recently gone self-employed or are thinking about working for yourself this first PDF guide will give you an overview of initial questions you might be asking yourself when planning on starting a business.
Accounts and Audit Manager Michael Riazi helps freelancers and contractors find the advice they need. Last month Michael gave some great advice on how to find an accountant that is right for our freelance business – this month he gives us ten things we should ask on our first meeting. Before you choose an accountant… [...]
Part 2 of an interview with Steve Crouch of SRC Chartered Accountants. Here Steve tells us about the types of expenses freelancers can claim such as those associated with working from home and some more general things to look out for. Topics Covered: The expenses a freelancer can claim; Expenses associated with working from home; [...]
#6: Five Things you always wanted to ask your accountant - part 2 [ 17:54 ] Play Now | Play in Popup | Download
Andy White | Lifestyle & Time out,Podcast
Part one of an interview with Steve Crouch of SRC Chartered Accountants. Steve answers questions on such things as salaries, dividends, section 660, IR35 and VAT. Topics covered: Limited company verses sole trader; Taking a small salary with big dividends; Section 660 – profit share between spouses; Consideration to IR35; When to register for VAT; [...]
#5: Five things you always wanted to ask your accountant - part 1 [ 19:08 ] Play Now | Play in Popup | Download
Heard of it? Most have but still it manages to send a shiver or two down the spine of even the most newbie contractor or freelancer who’s not quite sure! So what actually is it? Well essentially it’s the Inland Revenue’s (HMRC) definition of ‘self employment’ and it’s designed to catch those who are [...]
