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.

Have HMRC really waived £100 fine for late self-assessment filing?

If you keep up to date with accountancy news, you may be aware of the rumours that HMRC have been waiving the £100 late self-assessment fine that is usually imposed by HM Revenue & Customs, if the filer has a “reasonable excuse”.

HMRC staff were asked to waive the £100 fine if people with mitigating circumstances appealed after paying up – this was all reported in an internal memo allegedly leaked to the Daily Telegraph.

It is estimated that up to 890,000 people could have potentially benefitted from the amnesty for missing the 31 January deadline as HMRC deals with a backlog of nearly a million letters from British taxpayers.

HMRC said it was trying to focus its resources on tackling major tax avoidance instead of "penalising people for trying to do the right thing".

However, previously, people who appealed the fine faced a two- or maybe even three-week investigation of their tax affairs before a decision was reached.

Leaked HMRC memo

The HMRC memo questioned the "lengthy" process, especially given that the "overwhelming majority of appeals" were actually accepted.

The alleged leaked document stated;

"Our penalty regime is intended to influence customer behaviour, but also be clear and cost effective, fair and proportionate.

"The current way of managing penalties does not meet these objectives, and so we have decided to take a more proportionate approach where a customer has filed their return late, and then appealed against their penalty.

"This means that in the vast majority of cases we will be accepting the customer's grounds for appeal, and we can cancel the penalty."

So, have HMRC really waived the £100 fine for late self-assessment filing?

It may be a hunch, but perhaps the recent act of goodwill could be something to do with a backlog of paperwork and the need for a less complicated appeals system?

In any event, don’t risk filing your self-assessment late - a spokesman for HMRC did add that despite the policy, nobody will be getting off the hook unless they've now sent in their return and "have a good reason for sending it in late".

Don’t take a chance – particularly when affordable help is at hand from Omni Chartered Accountants. Click here to contact us now, request a free of charge call-back from our website http://www.taxandaccountancysolutions.co.uk  or take our Accountancy Savings Challenge today!

Is self-discipline a common trait of successful business people?

Success just happens, right?

We all want to get somewhere in life and in business. We have aspirations, goals and dreams. But why is it that only some people are able to get there?

Is it because of luck, circumstance, or talent?

Depending on the person it could be a combination of these elements.  The one common theme that does come up when conversing with successful people is discipline. Whether it’s a business person growing an organisation or a self-employed sole trader building a small business, discipline is the one element they all have in common. 

Discipline is a fundamental element in obtaining goals, dreams and desires.

Discipline is what keeps us going when times are tough and not going our way. It makes the bad times easier to get through. We must constantly practice, repeat, and believe in our purpose.

Given this knowledge, why do so many individuals leave self-assessment until the last minute?

Don’t leave your self-assessment until the last minute

The end of January may seem like a long way off right now but it will come round quicker than you think. Our advice would be to get your return done as early as possible.

How to avoid HMRC fines

The earlier you start to do it, the more time you have to check that you have everything to complete it, as you may find for instance that you do not have all the interest statements you need. HMRC won’t hesitate in fining you if there are mistakes in your tax return. The last thing anyone needs is a wholly avoidable fine from the tax man.

For many people, filing an online self-assessment return is a straightforward process. However, if you are unsure about the information you are submitting, don’t be one of the almost one million people caught out each year.

Omni Chartered Accountants can help you for as little as £95.00 – call 01902 837 408 and take the Omni Challenge today to see how much we could save you by managing your accounting affairs!

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! 

UHY Hacker Young report finds UK economy over-taxed

According to research by UHY Hacker Young, Top 50 firm, the UK economy is paying way over the global tax average. Britain has a tax burden of 18% above everyone else around the world.

So yes, it is fair to say that we are somewhat over-taxed as a nation.

The high effective rate of 32.9% GDP could well be meaning that our growth could be in jeopardy; the global average is 27.8% of GDP. The US is at 25.4% GDP and Ireland is at 28.3% - even Japan come in at 29.5%.

In saying this, many of our European counterparts also have high tax burdens, with most coughing up around 40% in tax.

The report by UHY Hacker Young warned that such high tax can put off investors, which has knock on effects when it comes to large corporations choosing to locate their bases outside the UK where the tax burden is lower.

UHY Hacker Young tax partner, Roy Maugham, said;

"While our tax burden compares favourably with some of our Western European neighbours, increasingly, that is not where the most intense competition is coming from. It needs to be a clear ambition to make our economy globally competitive by keeping a close eye on the overall tax take - perhaps even setting a specific target.

"That will need to be balanced by greater efforts to ensure that spending on the public sector delivers the best results for its customers.

"How much tax is too much ought to be discussed much more openly during the election campaign."

What do you think of the latest report? Are we running the risk of falling behind with the rest of the world due to our high taxes? Let us know your thoughts @OmnitasTax & join in the conversation on Facebook – with the General Election only weeks away, the debate is certainly sure to be a lively one!

To Dom or non-Dom? That is the question

Labour has announced that it will remove the existing tax benefits in April 2016 if it gets into power. This follows the recent Budget announcement where a £90,000 charge was introduced for non doms (a person who lives in a country but is not legally domiciled in it, in other words) who have lived in the UK for 17 out of the last 20 years.

Whichever party forms the next government, it appears that non doms are clearly in the sights of the major political parties and the long standing tax benefits future looks bleak. Most non doms should now consider the likelihood of the tax benefits they receive continuing in the long term as remote.

To dom or not to dom? That is the question

It is estimated that its abolition would affect 116,000 people but there are no certain sources as to how much tax would be generated. What is certain, however, is that it would make the UK less attractive to those who have the resources to choose where they live and work.

Obvious casualties would be the high end London property market and businesses like hedge funds that can easily relocate to more tax friendly jurisdictions.

Like many tax strategies, the long term effects may take years to materialise; new businesses may simply not chose to come to the UK.

Weighted against this is the prevailing view that everyone should pay their fair share of tax. Historically, non dom status is an aberration in the tax system and its original reason for existing has long disappeared.

So what are your thoughts about it all? Do let us know and join in the conversation @OmnitasTax and Facebook – we are also here to help with any tax advice that you may need so please do feel free to call us on 01902 837 408 or click here.

Keeping ahead of the new UK tax changes from April 1st 2015

A cut in corporation tax to 20%, a new diverted profits tax against corporate tax avoidance and an increase in the bank levy were amongst the tax changes introduced by the UK government on 1st April 2015

Other UK tax changes include:

• New reporting requirements came into force on 6 April 2015 for employment intermediaries and agencies that engage and supply workers. They will now have to submit quarterly reports providing details of all workers they place with clients where they do not operate PAYE.
• Air Passenger Duty has been restructured, abolishing bands C and D
• Hospice charities, blood bikes, search and rescue and air ambulance charities will be eligible for VAT refunds
• Business rates changes (England only): the business rates multiplier has increased from 48.2p to 49.3p (47.1p to 48.0p for small business multiplier). This includes the 2% inflation cap.
• The Small Business Rate Relief scheme has doubled for a further year, providing 100% relief for businesses with a single property with a rateable value of less than £6,000, and tapered relief with a rateable value of £6,000 - £12,000
• The business rates discount for shops, pubs, cafes and restaurants with a rateable value of £50,000 or below has increased from £1,000 to £1,500
• The cultural test for ‘high-end’ TV tax relief has been modernised and the minimum UK expenditure requirement for all TV tax reliefs has reduced from 25% to 10%

If you have any questions regarding the above and how they affect you and your business, why not request a free of change call back from our website?

Follow us on Twitter @OmnitaxTax and Facebook for all of the SME business tax and accountancy latest news.

What abolishing the  tax return means for your business

Digital tax accounts taxpayer easy guide 2015

It is nothing new for taxpayers or their agents who already use HMRC’s services to manage their tax affairs online. In fact, over 85 per cent of Self Assessment tax returns are already completed this way.

Digital tax returns to replace tax returns announced in 2015 Budget

The Government has announced their plans to update the tax system, by replacing traditional tax returns with digital tax accounts for millions of UK individuals and businesses.

From early 2016, around five million SMEs and ten million individuals will have access to their own digital tax account and by the end of the next Parliament, every individual and SME in the country will have one. But what does this mean  to you and your business?

At the moment, there is still some uncertainty as to the finer details and many sole traders and small businesses are concerned about the changes and how it will affect them.

Later this year, the government intends to publish its roadmap and further consult on the changes; some of these changes will require investment in new systems and changes to legislation.

What abolishing the  tax return means for your business

Digital tax accounts taxpayer easy guide 2015

• Businesses and individuals will be able to view and manage their tax information online
• Taxpayers will be able to see how their tax is calculated
• There will be options for paying securely online
• Taxpayers will be able to check how much tax they owe or need to be repaid online
• Businesses with more than one tax affair - like corporation tax, VAT and Pay-As-You-Earn (PAYE) - will be able to view their total liabilities across the board
• HMRC will already hold information on file along with third party data
• Those who pay tax through PAYE will have their National Insurance contributions, income tax, and pension position shown in their digital tax accounts, including any interest from banks and building societies

Although it is not exactly clear yet as to the timing or the implications, we will keep you informed with all of the latest news and developments. Losing the paper does not mean that you will no longer need an accountant – looking ahead and adapting your business to deal with any changes will be the key to making the transition smoothly. 

HMRC will be in receipt of real time data and information, it is going to be vital to ensure that all information entered is clear, correct and validated prior to updating your digital account.

In the meantime, if you would like to contact us please click here, or request a free of charge call back from our website. We are also available for online chat via @OmnitasTax or you can join in the conversation on Facebook.

3 common misconceptions SMEs have about accounting and tax

Anyone who is thinking of, or has already set up, their own business may admit to having preconceived ideas about how tax and accounting works.

For some, these misconceptions could have put them off even starting up their own business so instead, they have stuck with the security of working for an established employer.

Don’t let this stop you from fulfilling your dream of running your own company.

Below are some of the most common misunderstandings.

1. My business is too small to need an accountant

Regardless of how big or small your business is, you can always benefit from the help of an accountant.

If cash flow is limited then admittedly a full time employee may not be the most practical step. However, many small companies enlist the help of an accountancy practice that can keep track of figures, submit tax returns on time, carry out payroll services and best of all, advise you on the best ways to save your company money.

Even if you’re happy to take on the extra workload yourself, hiring an accountant purely for the money saving advice can be well worth your time. You stay in control of what you want when, but you benefit from the professional knowledge, experience and advice.

2. I can do my accounts myself

This is of course true – you can do your accounts yourself. However, as mentioned above, even though it may not seem like it at the time, an accountant can save you a lot of money in the long run.

Furthermore, very few successful entrepreneurs got to the top because they spent their days bookkeeping.

You are of much better value to your business when you spend time working on new business development and growing the company rather than doing things that you can hire others to do.

3. HMRC is always right

Just like any business, HMRC isn’t immune to making mistakes. Although they endeavour to achieve incredibly high levels of accuracy, human error is part of life.

If you are uncertain about a tax bill, the complexities of filing online, your tax code or anything else to do with your accounts, check out the FAQ’s and help available on the HMRC website.

Alternatively, if you have been left incredibly confused by tax codes and balance sheets, or just want help or advice, contact Omni Chartered Accountants who will be able to advise you accordingly.

HMRC eases stance on late PAYE filings

UK businesses with less than 50 employees will now be allowed three days’ leeway by HMRC before being penalised for late filing of PAYE submissions.

HM Revenue & Customs has confirmed that late payment penalties will carry on being reviewed on a “risk-assessed” basis as opposed to being issued automatically.

No change to PAYE filing deadlines

HMRC have confirmed that there will be no change to the actual filing deadlines, which usually means that businesses need to file them actually on or before each payment due date.

HMRC will be closing close to 15,000 PAYE schemes in March 2015 in a bid to prevent unnecessary penalties being issued, for companies that have not filed a PAYE report since April 2013, and as a result, look to appear to have ceased trading.

These company schemes will be written to, advising them about the planned closure and what they should do if they are - or should be - operating PAYE.

Employers with less than 50 employees are also reminded that late filing PAYE penalties will apply from 6 March.

A discussion document has been published by HMRC in order to gauge views by the deadline of 11th May 2015. Suggestions concerning potential improvements to the way in which penalties apply for PAYE payment failure or to meet deadlines for registration or returns will be considered.

How to run your PAYE smoothly and avoid penalties

Of course, it is not always easy running a business and PAYE is something that a good accountant like Omni Chartered Accountants can help you with.

Seeking help with your PAYE affairs may work out more cost-effectively than you may think, especially when you consider the time saving and potential problems that your company could face if deadlines and payments are not made by the dates as set out by HMRC.

For more information, contact us now by clicking here or request a free of charge call back from our website by clicking on the link at the top of this page. 

5 tips to being successful in business

Everyone has their own unique working habits and you are unlikely to ever find two people who work in exactly the same way – regardless of whether or not they are successful.

However, research has shown that hugely successful people do often share certain habits and personality traits that are thought to be a massive contributing factor to their success.

1.     Work hard

When it comes to running a successful business, there are no shortcuts and there are very rarely any overnight success stories.  You can’t be truly great at anything unless you put an incredible amount of effort into it. Successful people have a long list of things they want to get done which means they put in a lot of time and work more hours that the average person.

2.     Have big ambitions

Right from the outset, successful people identify where they want to end up and set that as their goal. Once they know what they want to achieve, they work backwards and lay out every step that is required to meet their goal.

Smart leaders find that this helps them to make better decisions and makes it easier for them to work harder because they know that their ultimate goal is success.

What’s more, achieving a goal, no matter how big it is, merely acts as a launch pad for successful people to set another equally ambitious goal.

3.     Sell, sell, sell

The vast majority of very successful people will agree that the one skill that has contributed the most to their achievements is the ability to sell. Selling is the foundation to success because being good at it means that chances are you will know how to negotiate, deal with people saying no to you, can maintain confidence when being rejected, can communicate effectively and very importantly, build long term relationships. All of these skills are vital to success but those who truly believe in what they do find that they don’t need to sell – they simply communicate their feelings about something they truly believe in.

4.     Don’t have a back-up plan

Whilst many people might argue that a back-up plan is a sensible thing to have, highly successful people feel that this merely creates an easy out when things get tough.

Chances are that you will work a lot harder and a lot longer if your primary plan simply has to work and you don’t have any other fall-back options.

5.     Don’t let pride get in your way

Even the most successful people in the world will never be too afraid to admit when they are wrong, when they have made a mistake and when they need to say sorry.

This grounded nature makes them much nicer people to work with and as a result, professional and personal relationships thrive and so does the business.

Summary

If you would like to be successful, these are of course, general pointers to help guide you in the right direction. Having the right accountant and getting the right advice when it comes to your business finances should also be a crucial part of any plan that you may have to make a success of your venture.

Omni Chartered Accountants are here to guide you along the way and offer impartial advice; our years of experience make sure that clients always get a cost-effective solution to managing their tax and accounting affairs.

For more information, call us today on 01902 837408 or request a free of charge call back from this website. Alternatively, click here to make an enquiry and we will contact you by return.