Self-employment tips – part one

One of the main benefits of becoming self-employed is the ease with which you can start up and run your new business.

In part one of our special feature, we take a look at some of the important things that you may wish to consider before taking the plunge.

You can even become a sole trader (another term for self-employed) whilst working as an employee for someone else, so you can test the water and see if you’re suited to working for yourself.

Here are first top tips for when you decide to go self-employed:

How to register as self-employed with HMRC

Once you set up as a sole trader (or work as a partner in a partnership if there’s more than one of you), you will be responsible for paying your own income tax and National Insurance (NICs).

You must register as self-employed with HMRC within three months of starting trading, even if you already pay tax via the self-assessment process each year. You can register online or call HMRC on 0845 915 4515 if you’d prefer to speak to someone.

If you are unsure whether or not you need to register with HMRC, here is some help to establish whether you are employed or self-employed.

Once you start operating as self-employed, you will need to pay your own National Insurance contributions (NICs).

Do you need to register for VAT?

As of April 2015, if your business has an annual turnover of £82,000 or more, you must register for VAT.

At any stage of the business cycle, if you look like you’re going to hit this annual VAT threshold over the coming 12 months, you must also register. The threshold usually rises by a few thousand each year. Make sure you let HMRC know within 30 days, or risk paying a fine.

In many cases, you might decide to register for VAT even if you don’t need to. You may gain more credibility by having a VAT number, and you’ll be able to claim the VAT back on eligible purchases you make.

You might also consider the flat rate VAT scheme, which makes accounting for VAT much simpler. Your accountant will be able to advise you if you’d be better off on the Flat Rate or standard VAT scheme.

Need advice?

If you need advice about becoming self-employed, we are here to help – request a free of charge call back from our website or click here and we will contact you to discuss your situation.

What is an HMRC trivial gift?

What is an HMRC trivial gift?

As you will be aware, HMRC tax certain gifts to staff. Instead, you should consider giving your staff the following which have been stated as “trivial” by HMRC:

Small gifts

As an employer, you may provide an employee with a small gift, such as a box of chocolates or bouquet of flowers.

As long as this is made in recognition of a particular event (e.g. an employee’s marriage or birth of a child), and is not part of any reward for services, the benefit should be treated as trivial.

Tea and Coffee

As an employer, you may provide your employees with access in the workplace to tea, coffee or water from a cooling dispenser. If this refreshment is available generally to all employees, the benefit is exempt from charge.

Seasonal gifts

As an employer you may provide employees with a seasonal gift, such as a turkey, an ordinary bottle of wine or a box of chocolates at Christmas.

If the gift extends beyond one of the items mentioned above, for example from a bottle or two to a case of wine, or from a turkey to a Christmas hamper, you will need to consider the contents and cost before being able to determine whether the benefit is trivial.

If you are in any doubts then talk to us – Omni Chartered Accountants are on hand to help guide you through in tax matters for your business, however ‘trivial’ they may be.

Why not take our price challenge today and see how much we could save you, as well as getting the very best advice at the same time!

Women beat men in ICAEW examinations for first time in history

Women beat men in ICAEW examinations for first time in history

Interestingly, after our recent blog exploring the gender wage gap, it seems that the ladies are steaming ahead when it comes to the ICAEW examinations.

And this is for the first time in the institute's history.

In November 2014, 77 percent of top scorers in the ICAEW's Advanced Level results were women – 100% were female and will win the prizes.

PwC boasted the best performing students with others coming from KPMG, Hagen Streiff Newton, Deloitte & Oshiro Accountants.

Modern female accountancy careers

It is hoped by the institute that these latest figures will encourage more females to choose accountancy as their career – hopefully, it will mean the end of the age-old gender wage gap as the younger professionals start their careers.

At present, ladies entering into accountancy stands at around 35% of students, according to latest figures from accounting watchdog FRC.

Executive director for learning and professional development at ICAEW, Mark Protherough, said;

"Women are demonstrating real excellence when it comes to chartered accountancy exams. At this stage of entering the profession, it's women who are dominating the top scores and they are role models for all women thinking about taking up chartered accountancy.

“Our qualification is known for creating business leaders, and I hope these scores mean we see a stream of female business leaders in the future.

"I'd like to congratulate all our students as these results were phenomenal. We had consistently high pass rates across the papers. It's important to celebrate these results - our students are showing us and employers that we have a bright future of ICAEW chartered accountants coming through. It's not just about passing these exams, it's about taking that next step in their career."

Do you think that this new wave of success could help with the gender wage gap problem as the new generations embark on their chosen career path? Let us know your thoughts @Omnitastax or of course, join in the conversation on Facebook! 

Is public trust in British business still dangerously low?

Is public trust in UK business still dangerously low?

Polling and Research Company research YouGov have just released their findings following their recent survey regarding public attitude towards business.

The results do not make for happy reading.

Some six years on from the financial crisis, trust in corporate Britain remains at worryingly low levels. Asked how much they trusted various sectors and professions, the public revealed the extent to which trust between business and customers has been eroded.

Whilst 81% trust teachers and 89% trust nurses, only 49% trust managers of small firms. Entrepreneurs are trusted by just 30% of the public.

What are your own experiences and thoughts? Is trust affecting your business?

In this new economy, a positive trust rating is highly prized by both buyer and seller. Transactions are humanised and social media allows experiences – good or bad – to be shared locally and around the globe.

Addressing the lack of trust in business should be a priority for government, policy makers and, of course, for business owners themselves.

The price for not addressing this will be the emergence of a society that risks turning permanently against its wealth creators, and a society that goes down that road will very soon face a number of serious challenges.

A new economic system based upon trust, transparency and accessibility is one we at Omni strongly believe in.

We would love to hear your thoughts on the matter. If you are a business owner, how do you build trust with your clients? Is the interactive way in which we all research our purchases and decisions a good or bad thing?

Tweet us @OmnitasTax and let us know your thoughts, or join in the conversation on Facebook – we are here to help and offer impartial free of charge advice to UK businesses, however big or small they may be. 

Reprieve for small businesses affected by new EU VAT laws

Businesses affected by the change in EU VAT regulations have been given until 30 June 2015 to ‘adapt their websites to meet the new data collection requirements.’

This ‘transitional period,’ announced by HMRC, is aimed at businesses selling digital services to other EU member states.

VAT charges dependent upon consumer location

New laws state that rather than the VAT on digital products being dependent on the country it is being sold in, it is dependent upon the consumer’s location.

The change in EU VAT on digital products was changed initially to stop companies from residing in certain countries to either avoid or decrease the VAT they had to pay. Luxembourg, for example, was a popular choice for relocation.

Small business owners, however, are worried about the new legislation, fearing that it may have a detrimental impact on their digital EU sales. A major concern is administration costs, which would include adapting their websites to alter the VAT for each consumer’s product and to provide proof of their place of supply.

HRMC VAT Moss

To combat concerns, HMRC set up VAT MOSS, an online service aimed at helping small businesses comply with the regulations. Signing up to this service means that digital service suppliers won’t have to singlehandedly register for VAT in every EU state.

HMRC provided the following guidance;

“Until 30 June 2015, micro-businesses that are below the current UK VAT registration threshold, and which register for the VAT MOSS online service, may base their ‘customer location’ VAT taxation and accounting decisions on information provided to them by their payment-service provider. They do not need further information to be supplied directly by the customer.”