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Establishing your own business with the ability to control your career path, and even being your own boss is definitely a desirable prospect. All that additional freedom and flexibility may perform extremely well ( even if sometimes it’s not exactly the way you’d expect). The fact owning your own business typically requires a little more administrative work than being an employee who is paid through Pay-as-you-go, but Self Assessment is just one of the additional aspects. If you’re an individual contractor, then you could be required to take Self Assessment as a sole trader or director for a restricted company. Depending on how you conduct your business. Confusing, isn’t it? That’s why we’ve put together this article to assist. Self Assessment for Contractors As with all businesses, contractors must file tax returns according to the type of business structure they have in place. Additionally, the best structure for your business of contracting is based on the circumstances of your business. Self Assessment can be described as a form of the tax return in which you provide details about the amount you earn during the tax year to HRMC. HMRC makes use of this information to calculate how much tax you are liable to pay. You will generally need to make Self Assessment submissions if you contract as a sole trader or in a partnership, or if you’re the director of a limited company.   Contractors who operate as Usually need to submit Self Assessment Sole Traders To report the income, they make from self-employment Partnerships For the partnership as an entity, as well as separate submissions for their own personal income Limited companies To report any income they take from the company as a director – such as dividends   Self Assessment generally works according to a tax year, which begins on April 6 and ends on 5th April in the year after. Be aware that if you require Self Assessment submissions it is necessary to declare your entire income, regardless of the source to ensure that HMRC can determine: How much did you earn How did you get it What allowable expenses can you claim tax relief for? Taxes that you’ve been paying (so you don’t have to pay twice) How and when do contractors pay for a Self Assessment tax bill? The deadline for paying any tax due after you have submitted Self Assessment is midnight 31st January. Therefore, if you are required to file a report for your tax year that began on the 6th of April in 2021, and concluded on April 5, 2022, the deadline for payment is midnight on January 31, 2023. It is also possible to make ‘Payments on account If your bill is more than £ 1,000. HMRC generally assumes they’ll pay you the same amount in the future, and request you to pay an advance toward the next bill. The advance payment will amount to half the amount of your last amount. Can I lower the monthly charges on my account? The reason is that usually, a business has a lower profit over the last year. If this is the case it is possible to request to lower the amount you pay on your account to avoid paying tax too much and then later claim it. It is possible to request this via the account you have created in your Government Gateway account, or talk to your accountant about the request. Will I be charged interest or penalties for late payment? It is crucial for you to settle your Self Assessment bill before the deadlines. Unfortunately, you’ll be penalized for late payment in the event that you fail to pay it in time. The interest will become due until you have paid the entire amount that is still due. If you believe you’ll face problems getting deadlines for your Self Assessment due dates for tax, the very last option is to try to avoid the issue. Call HMRC directly or speak with your accountant regarding what you should do. I’ve made an error on the Self Assessment tax return. How can I fix it? Yes, you are able to amend taxes within 12 months after the deadline for filing. Keep in mind that any modifications you make may cause you to pay additional taxes or pay interest. If you file your tax return and there are obvious errors or issues, HMRC can correct it within nine months after the date of filing. Does HMRC ever enquire into a tax return? Sometimes, yes. HMRC could initiate an inquiry into Your Self Assessment within 12 months after it has been completed. The IRS will notify you by letter if this occurs. There are no questions that can be asked by HMRC regarding your tax return until they have launched an inquiry. Don’t be concerned when this happens, however, it’s not necessarily a sign there’s an error or that there are difficulties. Most of the time, HMRC will just want to confirm the accuracy of your tax calculation, and sometimes it could happen randomly. What information should I record? You’ll have to keep accurate financial documents in order to finish Your Self Assessment accurately. Due to the forthcoming making tax digital for Self Assessment of Income Tax rules, you should think about adopting a digital approach to your bookkeeping, if you’re not already doing it. You may also require additional documents or information to ensure you have completed all the items in your self Assessment checklist. What do you think of CIS tax returns? How will they impact Self Assessment? Under the Construction Industry Scheme (CIS) contractors in the building trade keep back a percentage of what a subcontractor earns and then pay the deduction on to HMRC. This is similar to the way employers pay employees. The contractor will have to pay the administration is a little more complicated, but for sub-contractors, it can have a greater impact. This is due to the method by which CIS deductions are calculated. There are two elements to this equation: The CIS tax rate and the tax-free personal allowance. What is the CIS taxes? Contractors are able to deduct CIS tax based of whether or not the subcontractor is registered with the scheme.

Xero as well as QuickBooks Online are two of the most well-known and effective accounting software options for small-scale entrepreneurs. While both are able to aid in managing complex processes such as billing, invoicing, financial reporting as well as tax management, they are more suited to various types of businesses. In this comparison of one-to-one, we’ll explore the differences between QuickBooks and Xero so that you can determine which one is the best for your business. Introducing QuickBooks Online QuickBooks Online (QBO) is cloud-based accounting software that streamlines some of the tedious tasks in the management of invoices, bills, and business tasks. With a more robust bookkeeping function that incorporates inventory management and expense tracking by location or class, QBO offers an established system that can meet the most demanding requirements of the business. With QBO you can: Keep track of your expenses, income taxes on sales, sales, and mileage Keep receipts organized and capture them. Invoice (includes advance bill) and accept payment Send estimates or run reports to increase deductions for taxes At Account-Ease We often suggest QBO to our non-profit clients since its class-based functions assign revenue and expenses across different programs making fund accounting easier. Introducing Xero Xero is user-friendly, flexible accounting software that integrates the essential business functions of each plan, like the invoicing process, reconciling bank accounts, and bookkeeping. Xero’s full range of accounting tools and functionality lets you: Input bills, and then forward invoices and quotes. Reconcile (and bulk-reconcile) transactions Manage multiple currencies Upgrading to Analytics Plus to gain access to more advanced data In addition, it lets you capture receipts and bills using Hubdoc or scan them by using mobile or email apps and save documents online, Xero also provides real-time overviews of reports on cash flows. 7 The key distinctions in QuickBooks and Xero 1. Pricing and plans QBO QBO provides four plans (EasyStart, Essentials, Plus, and Advanced) to cater to different sizes of businesses. Beginning at just $9/month, the EasyStart plan offers basic accounting functions that are appropriate for the majority of startups. The more expensive plans, however, are priced between $19 to $60 per month. include features such as: Time tracking Multi-user access and support for multi currencies Budget, bill, and payment and project management QBO also provides add-ons such as Payroll and QuickBooks Payments for payment processing. Xero Xero has three plans (Starter, Standard, and Premium) starting at $14/month and ranging up from the basic Starter plan up to $46/month. On the other hand, the Starter plan restricts the number of transactions per month you can make The upside is that it does not limit the number of people that you can add Xero also provides additional paid services like expense reporting and tracking of projects for all plans. 2. Creation of transactions Both platforms allow you to configure and map your services and products to your account chart. QBO Since there is no draft function you’ll require all your data on hand for recording and posting the transactions using QBO. Xero With Xero You can save drafts of transactions and then continue the creation or editing later. This means that different users can finish or publish each transaction. 3. Tax report Both platforms allow you to calculate, track and control sales tax after which you can generate tax reports with amounts due. QBO Since QBO records different tax rates in different ledger accounts it is possible to utilize your balance sheet to determine the amounts due towards each authority. QBO can also be configured to define the province(s) you have to monitor tax, and it displays only the tax rates for those provinces. The system automatically records the correct transactions to keep track of the tax filings. Xero One of the major differences that are notable between QuickBooks and Xero is the fact that Xero integrates different taxes into an account ledger. This means you’ll require separate reports to track the amount due towards each tax agency using Xero to track your tax payments. It is also necessary to remove any tax rates you do not need from the Xero list of provincial tax rates. Then, you must manually enter the adjustments in your tax entries in order to show your tax filings. 4. Reconciliations and matching of feeds from banks Both platforms make it simple to reconcile feeds from banks by tying them up to the accounting software you use. QBO Simply connect QBO to your bank account feed and check off transactions that match items in that month’s bank statement (printing out your statements makes cross-referencing easier). Note that QBO’s bank feed matching is limited when it comes to foreign currency transactions. Xero Select an account with a bank, go to the Reconcile tab in Xero and then review your two columns (your bank statement and your Xero transaction) and then click the OK button for the respective row, to ensure the match. You can also make comments on transactions to make them visible to other users prior to posting. 5. Report Customization Both platforms have pre-set options for standard financial reports, such as balance sheets reports, income statements, A/P sales tax, A/R, and general ledger report. QBO QuickBooks Online offers more pre-set reports than Xero However, these reports tend to be not customizable. Xero Xero lets you personalize reports by creating formulas, grouping accounts, and altering the report’s format. You can also create drafts of your reports that you can modify later. 6. Multicurrency In accordance with the plan depending on the plan, both platforms will instantly adjust exchange rates and make transactions using foreign currencies. QBO With QBO the currency is determined on the basis of contract (customer as well as supplier) level. So if you work with a single person with multiple currencies, you’ll have to configure each of them independently. Also, you must manually value currencies at the conclusion of every period of reporting. Xero With Xero the currency can be determined at the level of transactions, so one contact can handle transactions that involve different currencies. Xero will also automatically change the value of currencies every time the report

Are you a business owner who has seen your income/turnover rise above the £ 85,000 VAT threshold? Or Do you think that turnover will exceed £ 85,000 within these next thirty days? If you have answered yes to either of these questions, you need to be clear on the nuts and bolts of registering for VAT. It isn’t easy to determine the precise rules and regulations for businesses that need to be registered for VAT, particularly for first-time entrepreneurs. Who is eligible to register for VAT? (and When?) The VAT threshold currently stands at £ 85,000. If your company has exceeded the VAT-taxable limit of £ 85,000 within the last 12 months or is expected to do so during the tax year currently in effect, you need to register for VAT. The date you must be registered for VAT is up to the date on which you are likely to or have already reached the threshold. Companies who fail to declare VAT as their revenue grows above the threshold can be hit with a substantial fine from HMRC. How do I determine my revenue? HM Revenue & Customs (HMRC) defines turnover as sales with no VAT. It is assumed that the company is already registered for VAT since the VAT element isn’t money that the business can keep. If you’re at this point you may be thinking about how you will calculate your revenue. The turnover is based on the total value of all items your business sells and isn’t tax-free, such as: Goods that are lent or hired to customers Zero-rated products  Business goods used for personal use Part-exchanged or traded products Things given as gifts How do I How to register for VAT in 2022? The process of registering for VAT is fairly simple. The two primary methods to register for VAT are: Sign up online using a Government Gateway ID Print out a VAT1 form You’ll require the following items on be on hand at the time of registration: Business contact details Information on your turnover and the nature of your business Bank account details Unique Tax Reference (UTR) number Which VAT Scheme should I select? VAT Schemes are designed to provide companies a little breathing in the process of paying VAT. These schemes also take care of the different situations that are unique for each company with respect to turnover. This usually aligns with the specifics of the company. There are a variety of categories of VAT that you must be aware of prior to registering for VAT. For instance, with the Annual Accounting VAT Scheme, you’ll make advance payments on VAT towards the current year’s VAT based on your previous return or an estimation. If you’re a business owner newly-established business proprietor, understanding the amount you must pay in VAT, as well as the differences between the different VAT schemes is crucial. If you need advice on the different VAT schemes or need assistance registering for VAT, contact us today.

Bookkeeping helps you to understand the performance of your business by keeping track of the funds flowing within and out of your company. The bookkeeping process involves keeping detailed documents of your earnings as well as expenses and costs of expenses. This aids in understanding the financial performance of your company. It also gives you the data that you require to complete annually Self-assessment Tax Returns processing sales and purchase invoices and tracking unpaid invoices. The term “bookkeeping” originates from the usage of physical ledgers, daybooks, and cashbooks. Nowadays, the majority of small firms use software for digital accounting. How do you keep double-entry bookkeeping? Double-entry bookkeeping refers to a method of accounting that has been in use since the 13th century. With double-entry bookkeeping techniques, the business owner can monitor every financial transaction and know how their business is performing in terms of cash balances, and expansion. It also allows a company owner and their accountant access to the data needed to comply with financial and tax submission demands, including tax returns for VAT, annual accounts tax returns, as well as Cash flow forecasts. The principle behind double-entry bookkeeping is that each transaction contains two equal and opposite components. For instance, when you sell items and cash flows increase, as do your inventory levels down. Accounting records for a company consist of double entries, which can be summarized in what’s known as the general ledger. A general ledger is typically divided into at most nine major categories: Assets Liabilities Capital Introduced Owners’ equity/shareholding Income Expenses Drawings Gains Losses What are the major differences between accounting and bookkeeping? Accounting and bookkeeping can be misunderstood because they are often incompatible in many ways. Bookkeeping is the day-to-day recording and categorizing of a business’s financial transactions on the other hand accounting is the process of putting the financial information into use by analysis, strategy, and planning. Basic bookkeeping and bookkeeping for small businesses Maintaining a current, accurate collection of records is an essential aspect of a properly run company. Bookkeeping allows you to: monitor whether your company is earning a profit Access the data you need for tax-efficient returns and business planning. Check to see the cash flow situation to determine if it is coming up so that you can be prepared for it identify incorrect payments or the possibility of fraud Traditional accounting vs. cash basis accounting In order to keep track of your books and calculate your tax-deductible profits. You must choose the accounting method you prefer. The options are either traditional (accrual) accounts or cash-based accounting. Traditional accounting is the process of recording the income and expenses based on the date on which you invoiced or received a bill. Cash basis accounting implies that you will only have to declare the income or expense when it is incorporated into or departs your company. A typical example of accountancy:  An invoice was issued on the 18th of February 2021, however, you didn’t receive payment until the 20th April of 2022. The invoice is recorded as for the tax year 2021/22 even when it was paid during the tax year 2022/23. The amount of income must be reported in the tax return for the year 2021/22. A case study in cash base accounting. You paid an invoice on the 20th of March 2021 and then received the payment on April 30, 2022. Invoices are recorded as the tax year 2022/23 since it was the tax year that you paid the funds. Although the invoice was issued in the 2021/22 tax year, you are able to claim it on your tax return. Cash basis accounting when you’re a self-employed solo partner or a partnership that has an enterprise that has a turnover of less than PS150,000 annually. If you own multiple businesses Cash basis has to be used across all businesses and the total business’s turnover must not exceed PS150,000. If your business grows beyond that, you will need to apply traditional accounting on the next tax return. Limited liability and limited company partnerships are not eligible to utilize cash basis. There are certain kinds of companies that are not able to benefit from the cash basis scheme. These are listed at the gov.uk website. The government suggests that cash basis is not suitable for your business in the following circumstances: You would like to claim bank charges or interest that exceed PS500 to be a cost are more complicated to operate like holding large amounts of stock If you’re in search of business finance the lender could ask to view the accounts drawn using traditional accounting before deciding to fund Have losses you wish to offset against other tax-deductible earnings (‘sideways loss relief’) In traditional accounting, you must keep these files as well as your regular expenses and income: what you’re due but haven’t yet received costs you’ve committed to, but haven’t yet paid the value of your stock and work in progress at closing of the accounting period Year-end bank balances the amount you’ve put into the company during the year the money you’ve gotten from the business to use for personal use It is suggested that you consult an experienced accountant to determine what’s the best method of accounting for your business. Software for bookkeeping that is suitable for small-sized businesses If you utilize the software for bookkeeping your process is likely to be more efficient. The automated bookkeeping apps for small-sized firms speed up processes and allow your accountant to assist by allowing them to log in and see the way in which items are classified. Other benefits of online accounting and bookkeeping software are: Automatically issue invoices to customers. Automatically pay bills You should keep track of the amount your customers owe you. Be aware of what you are owed by your suppliers. Access financial information about the move have up-to-date information that are required by lenders or providers who offer credit Do I have to manage my bookkeeping? Although it is recommended to hire an accountant or bookkeeper who is a professional, however, you can complete your bookkeeping. If you decide to do this, you have to be aware of the steps

As a contractor, IR35 will have been on your radar for the past two years and making sure that everything you do is IR35 compliant is high on your priorities. If you are self-employed, it is important to know where you stand with IR35. In short, IR35 is the name given to the rules surrounding off-payroll working. It is in place to assess whether someone should be paying tax as an employee or as self-employed. It was created to ensure people weren’t unknowingly operating as self-employed when they should be paying tax as an employee. The consequences of getting it wrong can be very serious. It’s important to keep on top of the legislation and understand the terminology. As well as explore options which you may have read elsewhere What does inside and outside IR35 mean? IR35 is a piece of tax legislation which looks to determine a genuine business from what is called a “disguised employee”. It targets limited company contractors who may be working as an employee of their end client rather than providing a genuine business to business service. IR35 legislation seeks to reclaim the additional PAYE tax and NICs that they would have paid as an employee. When explaining IR35, people often use terms “inside” and “outside” IR35. This indicates your IR35 status as being a genuine contractor (outside) or an employee for tax purposes (inside). The terms reflect whether you are operating within the legislation’s scope or not: The meaning of Inside IR35 –        To be ‘inside IR35’ means that you are considered, for tax purposes, an employee of your end client and therefore subject to PAYE. –        If you are operating ‘inside IR35’, you need to ensure that the appropriate taxes are being paid. –        This usually involves a ‘deemed payment’ of income tax being made at the end of the tax year, which your accountant will help you with. You should ensure that your status is reassessed in the event of a change in your working practices, and/or when you begin a new contract. –        If engaged to the public sector or medium-large private sector business, the fee-payer (usually recruitment agency) will be required to deduct your tax and NICs at source. If you find yourself under investigation and an IR35 enquiry finds you ‘inside IR35’, HMRC will raise a determination for the income tax, NICs and interest that should have been paid during the period in question, as well as a potential penalty. This can run into the tens of thousands of pounds. Am I inside or outside IR35? For both public sector contractors and private sector contractors providing services to medium-large organisations, your end client is responsible for determining your status. They will likely use the CEST tool from HMRC to determine this, or an independent service. If you find yourself contracting for a client who simply places their contractors inside IR35 to avoid admin or liability concerns associated with the rules, this is not compliant with the legislation. Others place contractors based on their role, such as determining that all nurses are ‘inside’ IR35. Although HMRC has deemed this appropriate, it is fraught with issues when it comes to compliance with the legislation. For private sector contractors working for small end clients, you remain responsible for your status. If you do need any assistance in determining your compliance, Account-Ease can help. We work with partners who offer an IR35 Review which includes: A consultation with experts who will advise you on your position regarding IR35. A quick, conclusive status result with all the support needed to guide you through the reform. A comprehensive report that pulls through the notable positives or negatives of your engagement. By obtaining an independent status review you are showing that you are taking due diligence in understanding your IR35 status. At Account-Ease, and in partnership with Kingsbridge, we’re pleased to provide a comprehensive IR35 review service for contractors. The way you provide your services is crucial. Whilst HMRC usually begin an enquiry by looking at the contractual terms. They will seek to clarify the terms directly with the end client. If your contract does not reflect reality. Any positive elements of the agreement would have very little bearing in an IR35 enquiry. You should therefore always consider a review of your working practices when determining your status. Can contractors band together to work via small consultancies to bypass IR35? Recently, some contractors have read online about structuring a ‘consultancy’ to bypass IR35 legislation. The hope is that such a structure puts beyond doubt that ‘personal service’ is not required and so the IR35 rules of April 2021 are unlikely to apply. The IR35 regime investigates the contractual nature of the relationship between a worker and the end-user. This is to establish whether a contract of employment would exist between them in the absence of the intermediary. The nature of the relationship (whether employee, worker or contractor/freelance) impacts a range of variables. Including the legal protections enjoyed and how earnings are taxed. One of the main benefits of working as a freelancer as opposed to being an employee is that a freelancer has the freedom to sort their tax affairs more tax-efficiently than a conventional employee. HMRC has become increasingly aggressive in its attempts to investigate the tax affairs of purported freelancers in the past few years. This is to examine whether they are genuinely freelancers, or are ‘disguised employees’. This scrutiny is to recoup any tax or national insurance contributions that freelancers have avoided paying. As HMRC have intervened in the tax affairs of freelancers, especially high-profile TV personalities, freelancers have adjusted their position to try and better protect themselves from HMRC’s investigations. One adjustment made by freelancers is to ‘band together’ to form small consultancy businesses. The aim of which would be to argue that they are exempt from IR35 rules. “Because the consultancy is small and they charge for services rendered rather than labour supplied”. Forming consultancy Forming consultancy companies could mean

Millions of workers in the UK will get a pay rise this week when a change to National Insurance (NI) kicks in. From today (6 July). The National Insurance threshold has increased to match the income tax personal allowance, rising from £9,880 to £12,570. The majority of workers however are unlikely to see the rise in July wage packets. As they are usually paid in arrears, although those paid in advance will see it this month. Who will benefit from the allowance rise? Since April, employees have paid 13.25 per cent in contributions on any earnings between £9,880 and £50,000, and 3.25 per cent on everything over £50,000. The move was introduced by former Chancellor Rishi Sunak, as a one-year levy to fund social care in the UK. The NI threshold rise means a pay hike for around 30 million people and at the same time, just over two million on low earnings will be exempt. A typical employee will save more than £330 in the year from July, according to the Government. What happens in 2023? The move is designed to lessen the impact of the 1.25 percentage point rise in employee NI in April. Anyone earning less than around £35,000 will see their pay packet return to roughly the same level. It was before April, but higher earners will still pay more in NI contributions than they did in March. Someone on £30,000 would have paid around £204 per month before April. Then rising to £222, and they will now see this fall to around £192. From next April, the 1.25 percentage point increase will be replaced by a new Health and Social Care Levy, a new tax in its own right, and separate to NI which will return to its previous level. How much will working pensioners pay? At that point, the Health and Social Care Levy is also due to be applied to the earnings of those above the state pension age. Pensioners who are still working after the state pension age (currently 66) don’t pay national insurance. However, from April 2023 the new levy will be deducted from their earnings. For help and advice on NI and other tax matters, contact our team today.

Bookkeeping is one of the administrative priorities for any self-employed individual. Maintaining accurate records of your income and business expenses is essential as it helps you understand your finances and track progress against any targets or cash needs you may have. Bookkeeping also helps you to provide your accountant with the information they require to finalise and submit your annual self-assessment tax return. When it comes to your annual income and expenditure as a sole trader, it is important to retain records of all your invoices and receipts. This makes it faster for your accountant to reconcile your financial records. Process your self-assessment to calculate any tax liabilities or refunds. It also helps you deal with any questions HMRC should raise about your tax affairs. What records do I need to keep as a self-employed person? Unlike the rigid bookkeeping and reporting requirements for limited companies, those for the self-employed are more relaxed. However, this does not make it any less important for individuals to track their finances. Do you keep asking yourself the question “What records do I actually need to keep?”. We have set out a brief summary below as a guide: All forms of income Keep track of your invoices or other supporting documentation for all forms of income generated through your business or self-employed work, as well as any additional personal income. All forms of business expenses Keep all expenses and receipts that relate to your business or self-employed activity, as these may be deductible from income when calculating your profits in your annual self-assessment tax return. You don’t need to submit these receipts in your tax return but it’s useful to have digital expense records to support all transactions should your accountants, HMRC or others need more information about your finances. VAT records (for those VAT-registered) All VAT registered businesses must also keep a record of their VAT invoices charged to customers and all expenses where VAT has been charged to them. This will support the completion of VAT returns and submissions. Bank records All bank transactions relating to your business or self-employed activities should be recorded. Your accountant can help with this by supplying you online bookkeeping software that links into most bank accounts, simplifying record keeping. Any records of grants from the Self-Employment Income Support Scheme (SEISS) It is important to note that all grants received from HMRC during the lifespan of the SEISS must also be recorded and reported as taxable income as part of your self-assessment. Do sole traders need to produce accounts? It is not a legal requirement for self-employed sole traders to publish formal accounts. However, there are often benefits to producing formal accounts – it can help owners to better understand how their business is performing and support banking relationships and requests for loans/finance. What is the best accounting software for sole traders? If you are seeking sole trader accounting software that can improve your bookkeeping accuracy and efficiency and help to make sure you are ready for Making Tax Digital, we would highly recommend the following tax accounting software solutions as a starting point: Xero The Xero software offers an award-winning solution that links well with the personal, expert service delivered by our own accountants. Xero can automate lots of your conventional accounting legwork. Including the distribution of invoice reminders and importing bank transactions to update your records. It is also easy to integrate with other Xero products such as Xero Payroll for seamless bookkeeping. QuickBooks Access your QuickBooks software 24/7 on any device, with real-time information and reconciliation from all your active business bank accounts. You can send bespoke invoices and quotes via mobile to build your brand image and reputation. Can I do my own bookkeeping? If you want to keep your overheads low and avoid paying accounting fees. It is possible to look after your own bookkeeping. However, there are risks as you will need to be 100% accurate with recording your income and expenses. The consequences of making mistakes with your own bookkeeping can be disastrous, particularly if this triggers an unexpected HMRC investigation. Professional bookkeeping can help save time by taking the pain of maintaining your own records away. Allowing you to focus on building your business and achieving the right work/life balance. It will also help you understand your business finances, monitor your cash balances. Plan for future tax liabilities and pinpoint trends to help support important business decisions. How Account-Ease Accountants can help with your bookkeeping We can look after your bookkeeping on your behalf. Saving you time and money to focus on doing what you do best – running and growing your business. Our rates are competitive and we can provide you with software solutions to help make your life easier. As a tried and trusted accountant for sole trader and business clients nationwide, we can reduce the risk of human error, ensuring accurate self-assessment tax returns are submitted and improving your business’ overall tax efficiency. We have a range of online bookkeeping services that can help to handle day-to-day record keeping and provide a smoother process for sending receipts. Invoices and expenses digitally. These intuitive platforms also enable you to make commercial decisions with greater foresight. To arrange a free initial consultation about our bookkeeping services, which can take the administrative hassle away from you , call our team today on 0208 133 4599 or drop us a line using our online enquiry form.

With the aid of an accountant you can save your business valuable money and time in the long run. Such savings come from the reduced level of risk of human error and the avoidance of late filing penalties from HM Revenue and Customs due to missed tax deadlines. You do not need the hassle of managing your own bookkeeping. Particularly when you need to dedicate most of your energies to training and empowering staff, developing and improving your products or services and improving your firm’s bottom line. When juggling all the above, it is not surprising that errors can creep into your accounts. Below are some of the most common errors that professional accountants find during preliminary reviews of small business’ bookkeeping habits. Overdue self-assessment tax returns When it comes to self-assessment tax returns, there are multiple deadlines and responsibilities for sole traders and small business owners to be aware of. You must file your tax return on time to avoid a late filing penalty. Furthermore, you must pay the tax you owe on time to avoid incurring additional fines and interest on your bill. In most cases, the latest date to file a tax return for the previous tax year is 31st January. For example, the deadline for 2021/22 tax returns will be 31st January 2023. Furthermore, any tax due will also be payable by this date too. The penalties for late filing are as follows: 1 day late – Automatic fixed penalty of £100. This applies even if you have no tax to pay or you have paid the tax you owe on time. 3 months late – £10 per day up to a 90 maximum of £900. 6 months late – £300 or 5% of the tax due, whichever is higher. 12 months late – £300 or 5% of the tax due, whichever is higher. In serious cases, you may even be asked to pay up to 100% of the tax due instead. The penalties for late payment of tax bills are as follows: 30 days late – 5% of tax due Six months late – 5% of outstanding tax due at that date 12 months late – 5% of outstanding tax due at that date To avoid these penalties, you should enlist the help of a dedicated local accountant that can work periodically on your behalf to maintain your tax return commitments – and provide a schedule for tax payments. Inaccurate records for expenses and invoices There is no need to pay for extra hours for your accountant to untangle your confusing record of expenses and invoices. Find a local accountant who can offer you a dedicated solution to accurately record expenses. Platforms like Dext ensure you never lose another expenses receipt, as you can quickly photograph or scan your receipt at source and send it instantly to your accountant. Overpaying of tax The inaccurate categorisation or classification of regular transactions such as monthly subscriptions or payments happens more often than you think. Small business owners who handle their own books may classify these regular transactions in a certain column one month and include it in another column the following month, making it difficult to keep track of outgoings. Equally, it is also possible small businesses miss out on claiming the maximum allowable amount for tax because of this. They may even be forced to pay for their accountants to spend more time recalibrating periodic transactions under one heading. Using unsuitable bookkeeping solutions Many small business owners will choose a bookkeeping software without identifying whether it is the right fit for the way they do business. If a business does not issue invoices, an accounting solution with an invoicing function is not necessary, for example. During initial consultations with a professional accountant, they will often specify an accounting solution that would work best for your business. You should not have to fit around your bookkeeping software – your software should fit around you! Now is the ideal time for your small business to digitise its accounting regime. If you are a landlord  or an unincorporated business such as a sole trader with turnover above £10,000 per year, you will be required to onboard for Making Tax Digital (MTD) for Income Tax from April 2024. Making Tax Digital is designed to revolutionise the UK tax reporting system, making it more efficient and effective.. At Account-Ease, we can can work with you to comply in advance of April 2024, including the selection of appropriate accounting software that is compliant and futureproof for your business. Manual entry record keeping which eats in to your family time For some small business owners, manual accounting and administration has been the status quo for many years, if not decades. But many are unaware of the time that can be saved by harnessing the speed. Automation of state-of-the-art accounting and expense software and apps. Some entrepreneurs spend time pulling their bank statements and uploading them, but these next-generation solutions can pull your bank data directly into accounts to save you valuable time and energy. Quite often business owners will use their family time, i.e. evenings and weekends, to work on the record keeping for their business which probably isn’t the reason someone chooses to work for themselves. Alternatively, this work can eat into the valuable time that could be spent improving. Developing the business and driving up income. Timely, accurate accounting and bookkeeping really does add significant value to businesses of all shapes and sizes. It is a false economy not to lean on a professional so that you can focus on growing your business. There is no longer any need to fall victim to any of the above small business accounting errors. Account-Ease can help you with the right advice to support your business. For friendly advice and support, why not arrange a free initial consultation about your firm’s accounting needs with us today? You can pick up the phone and call us on 0208 133 4599 or fill out our online enquiry form to get the ball rolling.

Apart from the excitement of creating a new product or service, startup entrepreneurs also have the opportunity to design and build a new business culture from the ground up. A viable approach to diversity, equity and Inclusivity (DEI) for a startup firm is more than simply scaling down the procedures used by larger organisations. It demands a new strategy that is more agile and adaptive. Putting equity for startup rules in place at the start of a company’s life will go a long way toward overcoming the biases that underrepresented groups confront throughout the hiring process and the barriers placed in their path once they are hired. This blog will examine the measures that a startup can take to consider DEI while creating a business actively. What is DEI? Diversity It refers to how people differ, including visible and less evident differences. It includes race and ethnicity, gender, cultural background, class, religion, sexual orientation, disability, language, and life experiences. These differences influence our perspectives and shape who we are as individuals. It takes planning to hire a diverse workforce but having one will help you discover blind spots and design a product that appeals to a broader audience. Inclusion It involves creating an organisational culture where people are free to be themselves and bring their unique perspectives to the table. They are respected and welcomed, particularly if they disagree with the majority. Inclusion is critical, especially in a diverse workforce, because it ensures that everyone is heard and can participate regardless of their background. Equity It refers to working toward equal treatment, access, and opportunity for all people by attempting to identify and remove structural or individual obstacles that prohibit groups and individuals from fully participating and engaging in society. Recognising and resolving institutional and environmental systems of injustice and unequal distribution of resources and opportunity is part of improving equity. It means establishing fair and equitable processes in the workplace, removing barriers that make it difficult for individuals to work with you, and ensuring that you develop a product that does not perpetuate bias and inequality. With the above definitions in mind, here’s how to make DEI a priority for your startup with straightforward steps. 1. Decide what you want to care about DEI For a founder, deciding how to operate your firm and how DEI fits into that vision is personal. As a founder, many things are competing for your attention right now. What role does DEI play among them as a priority? It must be a deliberate decision, as it will not occur naturally. There are many structural obstacles to a diverse and equitable organisation emerging organically. It takes a conscious commitment to make DEI a priority and commit time and resources. So, to make this conscious decision, consider the following questions: What kind of organisation do you want to start? Which type of business are you proud to put your name on? What sort of relationship do you want to have with your workers? What kind of global influence do you want your product to have? You don’t need to compose a complete vision statement; all you need to do is consider these questions regarding DEI and be on the same page as your company’s other leaders. 2.  Build your culture purposefully by role modelling inclusion There’s a common belief that employing a diverse workforce is the most crucial aspect of DEI for companies (often, startups focus their efforts on hiring women). Yes, having a diverse team is critical, but gender diversity is just one part. The more significant and immediate opportunity for startups is focusing on an inclusive culture from the start. The creators and leadership team play a critical role in deliberately creating this culture. First and foremost, it’s essential to consider how inclusion, bias, and equity fit into a workplace culture. Take some time to learn more about how bias affects our decision-making. Also, try understanding how our identities have made life easier or more challenging for us. It doesn’t matter who your founding team is when it comes to role-modelling behaviour; you have the power to establish the company’s culture and acceptable behaviour. You must take deliberate steps to demonstrate inclusive conduct. Small businesses are a close-knit community. Whether they are doing it purposefully or not, the founders are already role models. Employees naturally look up to the founders. It’s an excellent opportunity to acknowledge that responsibility and put the qualities of DEI in your firm. 3.  Ensure equal opportunity in the employment process and take steps to eliminate bias In this regard, equality of opportunity ensures that diverse applicants are fairly represented at all stages of the talent pipeline, including the final step. For example, Setting targets for each stage of the pipeline aiming for 50% women candidates and 30% minorities ethnic candidates at the first round of interviews, and ensuring at least two or more varied candidates at the last stage, is one way to ensure equality of opportunity. You have to create interview panels as diverse as possible regarding ethnicity and gender and hold calibration meetings before the interviews to ensure that the interview team is aligned on hiring criteria to avoid individual bias influencing decision-making. 4.  Put fair and transparent policies and processes in place Start recording your HR and employee processes, including recruiting, promotion, benefits, holidays, and harassment, even if it sounds early. Otherwise, as your firm grows, many unplanned decisions are made with no regard for transparency. It is how bias sneaks in. These procedures don’t have to be overly complicated; you can summarise some of them on a single page. Here are a few things to consider when it comes to processes and policies: Ensure that all job descriptions are clear to the individual and their coworkers. It’s fine if they change over time, but keep track of them. For employment purposes, keep track of how an application is evaluated, selected interview candidates, and what the interview process comprises. Make sure there’s a transparent process for deciding

It’s been a tough time for small businesses over the past couple of years. In fact, it’s been a tough time for most people. However, no business, big or small, was able to escape the impact of the Covid-19 pandemic. Now, regulators have warned that the energy price cap will rise further in October to around £2,8000, due to continued volatility in the gas market. With that in mind, it’s difficult to not reflect on what small businesses have had to deal with since 2020. With two years of uncertainty, restrictions and lockdowns to comprehend, it has likely taken its toll. Covid-19 cost SMEs an estimated £126.6 billion. Double what owners predicted it would cost them at the beginning of the pandemic. With six million SMEs in the UK – accounting for over 99% of all businesses, 33% of employment and 21% of all turnover – this £126.6 billion hole in the books was a huge blow to the economy. Behind every small business is an owner with families, livelihoods and dreams. The impact of the pandemic was devastating for a lot of businesses, both financially and emotionally. More than four in every five small business owners say the pandemic has negatively impacted their mental health. Finances have been at the root of many worries as 61% of small business owners have had serious financial concerns at some stage of the pandemic. 81% of self-employed people felt that the government did not support small businesses enough, as over 2 million SMEs were unable to access about financial support. Yet in all of this, we have seen countless examples of the resilience, resourcefulness, and creativity that we have come to associate with the UK’s small business owners. And at Account-Ease, we’re lucky enough to work with so many of them on a day-to-day basis, supporting the financial side of their businesses. Respectfully, many small businesses have grown over the last 2 years. Stemming from passions that they may not have had the time to explore if it wasn’t for lockdowns and furlough. With energy prices and the cost-of-living soaring, it’s set to be a difficult time once again. But what makes an SME able to thrive and survive during tough economic times? What are your goals for the next 12 months? All businesses will set goals as part of their business strategy, to ensure growth year on year.  KPIs provide targets for teams to aim for, milestones to gauge progress, and insights that help people across the organisation make better decisions. Some of these may include: Make the business more profitable –        Bringing in more money than the previous year is always a key aim in business, but with the rise in energy and therefore more outgoings, you may be looking for new areas to cut costs. Build an online presence –        If the pandemic taught business anything, it’s that having an online presence is vital if for some unbeknown reason, such as a pandemic, was to force the world to stay indoors. For a lot of people, social media was the only way to interact with customers. Making sure your website is up to date and has ecommerce ability and having social media profiles can turn business on its head. Generate returning customers –        Customer acquisition and retention marketing is key to successful business development. Acquiring a new customer can cost five times more than retaining an existing customer and increasing customer retention by 5% can increase profits from 25-95%. The success rate of selling to a customer you already have is 60-70%, while the success rate of selling to a new customer is 5-20%. Release new products –        Keeping your business new and exciting is paramount to success. Keeping up with the times and ensuring your offering is timely, innovative, and ahead of the times is key. Give back to the local community –        With so many people struggling in your area, it may be a goal to give back to those that have supported you in the past. This could be by donating to the local foodbank, organising fundraisers, or simply giving a top rate of service at a price that is fair. One aim for many businesses this year is to give back as much as they can. Tips for Success this Year Behind every successful business is someone who is creative, organised, financially savvy and understands the risks and rewards when it comes to being self-employed. Here are a few tips for success in what could be another difficult business year: Organisation is key Organisation is essential for a successful small business. Being flexible and able to quickly adapt to changes puts you ahead of the crowd. It’s also incredibly important to be able to communicate these changes to loyal customers quickly and efficiently. The quickest way to do this is via social media. But it’s also important to have your website, Google business page and listings up to date with your opening hours and contact information. Gaining customer’s trust and keeping them informed of any changes were pivotal in trading during the pandemic, and is something that you need to continue now. More than four in 10 small businesses have managed to grow over a turbulent two years by pivoting their business and embracing new ways of generating revenue. However, 46% believe they are still a few years away from accomplishing their business goals. It’s important to be patient and break your goals down into smaller achievable actions. Reduce Energy Consumption With energy prices rising again. It’s a good idea to review your energy consumption and reduce it in any way possible. To do so, you could replace standard light fixtures with LEDs to reduce energy consumption. Switch to a renewable energy provider and request a smart meter from your business’ energy supplier to ensure your bills are accurate. Businesses who have taken measures to become smart with their energy usage are able to lower their overheads amid rising costs. In a recent study