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If you are already self-employed, you will be aware of self-assessments and your self-assessment tax bill. Many find it a stressful part of being self-employed, having to keep on top of incomings and outgoings throughout the year to ensure you submit an accurate assessment. What makes this even more difficult is if you are used to storing this information manually. As the tax return deadline approaches for the 2021 to 2022 tax year on 31st October 2022 for those completed on paper forms, and 31 January 2023 for online returns, HMRC is encouraging customers to plan ahead to give themselves the best chance to complete their Self-Assessment on time. Completing a self-assessment Self-Assessment is a process by which you inform HM Revenue & Customs of your earnings, income and expenses relevant for this tax period. This is done by filling out an income tax return, submitting your tax returns to HMRC and then calculating your tax liabilities. If you submit this information on the internet, it determines your tax obligation by itself. You are required to file a tax return if, during the previous period of taxation (6 May to April 5,) you were: self-employed as a sole trader, and earned over £1,000 (before subtracting anything you are entitled to tax relief for) A partner in the business partnership You will not usually need to send a return if your only income is from your wages or pension. But you’ll need to make sure that you have an income that is not taxed from: COVID-19 grants or support payments the money earned from renting out a house tips and commissions the income earned from investments, savings and dividends foreign income Making Tax Digital The intention of the government is to modernize the process of calculating tax-deductible income until April 2024. It will replace it with an entirely digital system called the Making Tax Digital. Making Tax Digital was first introduced at the time of the April Budget in 2015. It is designed to revolutionize how the UK taxes for individuals, entrepreneurs and self-employed companies. The goal is to make tax administration more efficient, efficient and simpler by the introduction of digital records-keeping. MTD will assist HMRC be one of most technologically advanced tax administrations. In April of 2019, all companies were also required to prepare their VAT return on an annual basis. Some were already doing it every three months this wasn’t a huge change, but these have to be recorded electronically using MTD-compliant software. Beginning in April 2022 the VAT returns are required to be recorded and submitted electronically regardless of the amount you earn. Through Making Tax Digital, HMRC intends to take in £4.8 billion in 2023. It is estimated that £9.4 billion of tax revenue gets lost due to mistakes or inaccurate tax returns, something the government hopes to reduce. Many freelancers, contractors and SME owners have kept records on paper or utilized Excel spreadsheets previously to track their invoices or expenses. This could lead to mistakes and records can get lost. We’re now at a point where VAT submissions have to conform to MTD, Gorilla can help. What exactly needs to be recorded digitally? Keeping certain information as MTD compliant digital records is now a requirement from HMRC, and they need to be as current as possible by storing and recording each transaction. Additionally, you will need to save the following data as digital records Name of the business Location of business VAT registration number Rate of VAT that is charged The items you made and then received Their value and time All of your records should be kept in a digital format for a period of 6 years. Your accounting program you are using will also be capable of showing the audit trail that runs between your the VAT returns and records. What happens if you are non-compliant with MTD? Companies must comply with MTD or else they’ll be subject to penalties. It will be applied to the very first VAT return you file and has been in effect since 1st April 2021. This is a default charge which lasts for 12 consecutive months. There is a further surcharge in the event that you do not adhere to the rules with the requirements again (applied to the VAT due on your last return) as well as an based-on points system in the event that you fail to meet your compliance. This surcharge can be calculated in a percentage of VAT not paid on deadline. The first late payment is 2.2% of the amount due in VAT. It will then increase to 5%, 10% and 15% for any subsequent payment. There is also the possibility of being punished if the VAT return is contaminated with errors it, which is why it’s essential to ensure all is in order. How can you avoid any errors? At Account-Ease, all of our clients get fully inclusive use of FreeAgent included in their monthly fee. FreeAgent is an award-winning bookkeeping software that is MTD compliant, which is cloud-based meaning you can access it anywhere, any time. Handling financial data, especially online, is something a lot of people worry about. However FreeAgent is completely secure, with all the financial data safely transferring to their backup servers several times an hour. Whether you’re a locum, contractor, sole trader or small business owner, you can submit your digital VAT returns through FreeAgent. Thousands trust FreeAgent daily to track expenses and income easily and quickly.

You probably didn’t start your business because you love bookkeeping. And you probably do your own bookkeeping to save money, but the benefits don’t end there. Regularly entering your income and costs into your financial records can give you a far better understanding of your business income and spending, so you can judge how well your business is performing and control your cash flow. Sound bookkeeping is key to running a successful business, but many small-business owners make the same bookkeeping mistakes. So, what are the seven deadly sins of bookkeeping and how can you go from sinner to saint if you’re committing them? 1. UNDERESTIMATING THE IMPORTANCE OF BOOKKEEPING Running a small business means having to “wear many hats” and with so many things vying for your attention, updating your financial records can easily slip down your to-do list – especially if you dislike doing it. But the wellbeing of your small business relies on you staying in touch with your cash flow, and updating your financial records regularly is pivotal to that. Lose track of your key numbers and your business could soon end up in serious trouble. Be sure to make updating your financial records regularly a key priority. 2. USING A PAPER-BASED SYSTEM INSTEAD OF BOOKKEEPING SOFTWARE Some small-business owners still maintain paper financial records, often because it’s what they’ve always done or they’re reluctant to use accounting software, because they lack knowledge and experience. Some simply don’t fully appreciate the many benefits accounting software brings. Using accounting software can save you lots of time and effort. It’s easier to correct mistakes and you can access your financial records wherever you are. Accounting software can also help you to quickly and almost effortlessly invoice your customers, as well as keep your expenses well-organised, so you can better manage your spending. Costs can be totalled up accurately, quickly and conveniently, while monthly subscriptions for accounting software are affordable (around a tenner a month). 3. NOT UPDATING YOUR BOOKKEEPING FIGURES REGULARLY For your financial records to be useful, you must update them regularly. Small-business owners often don’t do this because they’re short of time and busy with many other things. Sometimes they struggle with bookkeeping or avoid it because they dislike  it. Taking a “little and often” approach offers a solution. Much depends on how many sales and purchases your business makes; while a retail business owner might need to update their financial records every week, a service business might only need to do it once a month. The key is to regularly set aside enough time to concentrate on the task in hand and get it done and dusted. 4. GETTING YOUR BOOKKEEPING FIGURES WRONG Accuracy is essential if your financial records are to prove valuable. Mistakes can easily be made, and the bigger the mistake, the bigger the consequences. You need to ensure accuracy when updating your financial records. Giving yourself enough time and doing it somewhere you’ll be free from distractions can enable you to get it right the first time. Never rush when updating your financial records, because mistakes are more likely. 5. LETTING YOUR EXPENSES GET OUT OF CONTROL Many small-business owners struggle to manage their expenses, often because they don’t have a reliable system that they stick to. The results can be a huge mess, which wastes time and money when you need to work out your tax expenses as you’re completing your annual tax return. All of your expenses should be detailed and conveniently categorised within your financial records. Good organisation and updating your financial records regularly are essential. Need to know! You must retain receipts and invoices for business purchases for at least five years after the 31 January online-submission deadline of the relevant tax year. 6. FAILING TO RECONCILE YOUR BANK STATEMENTS AND YOUR ACCOUNTS Put very simply, this means making sure the balance in your business bank matches the balance you see in your financial records or accounting software. It can help you to spot errors or omissions in your financial records. If there are any mistakes, you’ll have a false impression of your cash flow, which can be very dangerous if your errors are big ones. It’s advisable to reconcile your bank statements at least every month. You should also reconcile all transactions, including credit card payments, PayPal transfers, etc. 7. NOT LISTENING TO WHAT YOUR BOOKKEEPING FIGURES ARE TELLING YOU Some small-business owners are pretty good at entering accurate figures and updating their financial records regularly. But where some fall down is they don’t take enough time or indeed any time to assess the figures within their financial records and understand what they say about business performance and development (or lack of). You should take time to look at your financial records, at least every month, to compare and better understand your costs and sales. It could enable you to make decisions that put your business on a better footing and ultimately much more successful.

Setting up as a sole trader is the most popular way of starting up a new business in the UK. It’s especially common amongst those going into business on their own for the first time. Starting your business as a sole trader has a number of advantages. These must be set against the disadvantages of the sole trader business model. The advantages of operating your business as a limited company. The positives about being a sole trader are: Full Control Being a sole-trader, you are in complete control of your company, and in the sense of ‘being your personal boss’. There is no need to consult with any other shareholders or directors, take note of their opinions, or alter your idea of what you want to achieve with the business. You are able to develop the business exactly in the way you want. Operational flexibility Since you are able to make your own choices on your own, it could be easy and fast to alter the company in order to adjust to changes in the market. For instance you could change the structure of your pricing or the services you offer by adding new products or eliminating those you don’t trust. This ability to make quick decisions and then implement them swiftly is an benefit when you are a sole-trader operating in an ever-changing, competitive market. In addition to acting as the only decision maker an individual trader will typically be in close contact with their clients. They are therefore able to be attentive to the requirements of their clients and their demands and able to respond swiftly and effectively to their needs. A few customers, particularly those seeking personal services might be turned off by the fact that it’s a small-sized company even if it’s passionate about customer service. This is especially true for local services, where a sole trader could gain trust and build confidence by relying on local roots and connections. A limited company, even if it is controlled by one person could appear unassuming and too corporate to certain. Easy and quick to start While forming a limited company is far easier that it used to be, setting up as a sole trader remains the quickest and simplest way to get your business up and running.t is not necessary to register your company through Companies House, therefore there are no Companies House forms to complete. There is a need to must inform HMRC that you are self-employed and running your business as sole trader. Low setup costs A lot of people use the services of a solicitor or a form agent to establish a limited-company (although it’s not difficult to begin a business by yourself). There’s generally less requirement for professional guidance in the event of becoming a self-employed sole trader. This means that these costs are lowered but not eliminated completely. There are no additional fees payable towards Companies House when setting out as sole trader. It is also unlikely that you will require any capital to get your company up. Running at the beginning however, it all will depend on the type of work your company will perform. In some industries, operating expenses are very excessive whatever the legal status of the company. Accounting simplified Accounting is easier for sole traders than for limited companies, and there’s no requirement for annual reports or an annual Corporation Tax return, although you’ll still have to keep the records of expenses and invoices. If you’re a sole trader, you have to file a self-assessment tax return that includes details of the earnings from trading you’ve conducted as sole trader. Since there’s less accounting tasks to do and your accountant could cost you lower than you would if were operating as a limited company. It’s easier to change your mind People starting out on their own in business for the first time often do so on a part-time basis. They may remain employed elsewhere so they retain the security of a salary. Many people dipping their toes into the water of running a business will choose to do so as a sole trader. This allows them to wait until they have more confidence in the business. Its ability to support them and their family before deciding whether a limited company might work better. With its less formal appearance, operating a separate business as a sole trader might also be easier to explain. Justify to your current employer than forming a limited company for the same purpose. If you start out as a sole trader, you can always choose to form a limited company for the business at a later point. If you form a limited company at the outset and later want to operate as a sole trader. You’ll have to go through a more formal process of closing the company first. The right business structure will depend on your individual circumstances. For many the advantages of a limited company will outweigh the potential benefits of operating as a sole trader. There are also disadvantages to operating as a sole trader, which you should consider. Professional advice from an independent professional who knows your circumstances. Such as your accountant or solicitor, is always useful if you’re unsure how best to set up a new business.

Running a business as a sole trader means taking responsibility for its operations, decisions, and functionalities, from inventory management to sales, profit and loss. It is the simplest business structure in the UK; hundreds of sole traders sprout yearly. However, only one-third of the businesses survive the competition. One of the primary reasons is the poor accounting system. Before setting up your business to fight competitors, you must learn sole trader accounting, including the crucial role played by small business tax accountants in ensuring financial success and compliance with tax regulations. Who is a sole trader? If you are thinking of starting your own company, becoming your own boss. There are many options available to you. It is possible to start a company as a sole trader or a restricted company or an alliance with another. Each of these types of structures is distinct and uses different methods for accounting and bookkeeping, particularly. When someone runs their own business as an individual and believes they are self-employed they need to set up an entity as sole trader. The term ‘sole trader’ refers to an individual who is the sole responsible person to run their own business. They must identify themselves as sole traders and file with HMRC when they earn more than £1,000 in self-employment during a tax year. You can also consult small business tax accountants to fully or voluntarily pay your Class 2 National Insurance contributions and gain benefits If you are a sole-trader, you do not have to be registered in Companies House, have no directors, shareholders, or partner, nor do you have complete control over the direction and operations of your business. What are the accounting responsibilities of a sole trader? A sole trader faced with a variety of accounting requirements. For instance, if you are looking to hire employees, you need to make sure that you have a proper payroll management. Another example is the management of inventory, revenue and so on. Here are a few of the common responsibilities for sole traders in their early years. Open a separate bank account Solo traders should segregate their personal and business accounts to prevent the mixing of costs, even though it is there is no legal requirement to do so. If you operate your business as a sole proprietor, you and your company are considered to be the same entity to be tax- and legal. Separate personal and business accounts to prevent muddled transactions, and make keeping records simple, and ensure a thorough filing of tax returns. Keep records of income and expenses The sole trader’s bookkeeping involves keeping records of expenditure and income for the business like receipts from sales and purchase bills bank statements, etc. It can help owners comprehend how much cash they have and help them set the budget in order to make sure they are able to keep cash within their wallets. Pay the correct taxes on time Taxes are a fact that no company can afford to miss. Solo-traders must be aware of their earnings tax over calendrer year, because they will not be taxed through PAYE. They need to save enough money to cover each year’s tax expense. Sole traders are required to be liable for the following tax: Tax on income from net profit Class 2 and 4, NICs (National insurance contributions) VAT, if your turnover exceeds the threshold of VAT current threshold is £85,000. Sole traders might be eligible for a variety of tax-free allowances and deductions they should take into consideration when making tax returns. It allows them to reduce their tax costs without drawing the eye of HMRC and prompting an investigation. Proper bookkeeping Bookkeeping is vital for any business. It refers to collecting, updating, evaluating, and storing financial transaction data on your books. Keeping this information handy helps you during audits, lawsuits, investigations, preparing financial statements, etc. Creating and analysing financial statements Once you have financial data, you must create monthly or yearly statements. On analysing such statements, you can deduce the areas of improvement; your profits increased from the previous year, opportunities, and risks. It helps you look into business performance over a period. Follow government regulations You cannot miss out on government regulations and tax laws at the local and federal levels. It saves you from fines and penalties that impact business goodwill and may let you shut down at its worst. If it becomes difficult to deal with business operations and stay knowledgeable about a country’s changing laws, look for a sole trader accountant near me. Can I claim business expenses? Sole traders can claim back several business expenses on their tax returns, and HMRC will pay them. It includes: Equipment cost Advertising Cost of stock Delivery charges Heating and lighting in your commercial premise Business premise rent Postage and stationery Relevant books and magazine    Bank charges and telephone usage Travel allowance Bank charges and business accounts However, there are a few expenses that you cannot claim on your tax return. It includes: Parking fines Speeding tickets Child care and school fees Client entertainment and gym membership Hairdressing cost Training courses not related to your job As a sole trader, a few household expenditures may also be included under tax deductibles if you work from home. Ask your small business tax accountants to list such expenses. What are the common accounting mistakes of sole traders? Sole traders find it tempting to do their accounting, but they must avoid a few common errors, like: Waiting for the last minute to do your bookkeeping and prepare taxes Do not have a properly updated accounting system Misplacing paper bills and invoices Mixing personal and business finances Not preparing a proper budget Trying to avoid paying the right taxes or missing deadlines You can avoid making errors in calculation and misplacing paper bills and invoices but automating the accounting system.

Managing the company accounts is rarely at the top of a business owner’s “love to do” list. It can be frustrating and rob you of valuable time that could be spent improving and developing your business. The services of an external accountant are a lifeline for around 91% of small businesses in the UK (source ICAEW), but does your limited company need to have Accountants For Limited Company? There is no legal requirement for limited companies to use an Accountants For Limited Company, but it is very beneficial. They can perform valuable services like filing annual accounts and corporation tax returns. They can also offer business advice and devise efficient strategies to save your company money. If you are not sure you need an Accountants For Limited Company, please read on to find out how Account Ease can take hours of number crunching, form filling and box ticking off of your hands, and let you get back to running the business you love. What can an accountant do for my limited company? If you’ve ever dreamed of more time in your day, having a professional accountant handle your finances is akin to letting the genie come out of bottles. Plus, there’s possibility of more than three wishes. Here’s a sample of some of the beneficial solutions accountants can provide to your small business. Setting up a new company Your accountant can register your business with Companies House if you wish to save time and hassle in those important formative days. They’ll also give you the lowdown on your new tax liability and liaise with the fine folk at HMRC regarding tax registration. Payroll In larger companies Payroll is typically handled in-house. However, for smaller companies, it’s best to delegate it with an accountant. Or, you can say goodbye to the hours of your day being buried in calculation along with HMRC paperwork. Luckily, accountants who are good have also become payroll experts who love this type of work (each on their own). VAT If these three words (VAT) fill you with fear, you’re not alone. VAT can be a bit confusing and the rules are constantly changing. A professional accountant can help to navigate your company’s tax obligations and help you choose the best arrangement for payment so that you don’t more than you should. They can also make easy task of the annual VAT return and make sure that you don’t face unanticipated penalties. Bookkeeping Daily bookkeeping is the foundation of a sound managing finances… As it can be tedious, time-consuming and boring Let’s face it. Invoicing every receipt may feel like a chore and, at the year-end (or when HMRC is knocking) it is not a good idea to search to find missing receipts or transactions. Fortunately, accountants are meticulous, and are able to handle your bookkeeping with absolute efficiency, which will free your time and energy. Tax return In addition to submitting your annual financial statements and financial statements. Your limited company has to complete a tax return on behalf of the company at the close of the financial year to disclose its taxable profits and to calculate your corporation’s tax liabilities. The most important information to be included is a profit/loss statement and, to make it enjoyable. You can choose you can choose a different one from that included in your annual financial statements. Beginning with the statement of profit and loss then the amount must be adjusted to reflect the income taxable. This is accomplished by reversing the disallowable expenses as well as accounting for allowances to capital arising from capital expenditures, among other items. The paperwork may be overwhelming It is possible to be overwhelmed, however it is possible to have an accounting professional can create your tax return for corporations on your behalf and determine the amount due. They must also send you regular reminders of when your tax due date is. What is the ideal moment to obtain an accountant for a limited company? The proverb (almost) suggests that the ideal moment to engage an accountant is right now. The next ideal time to hire one is today. An accountant who is competent can bring value from the beginning, offering expert advice to start your business off on the beginning. A lot of business owners seek out an accountant when the end of the year arrives. But it is generally better to get an accountant in place prior to the end of the year. This way, your financials are in order and you’ll have a clear idea of your tax liabilities so that you don’t get unexpected expenses. Certain proprietors are more proficient in the field of accounting than others and have more authority. However, while it’s appropriate to manage your own financials but as your business grows accounting becomes more complicated and time-consuming, particularly if you decide to hire employees. While keeping one eye at your day-to-day operations and the other one on how much cash you have, the things could quickly go wrong. Payroll administration can be extremely time-consuming and it’s easy to forget about costs and unpaid invoices. With the assistance of a professional, your accounting is much easier and precise and, of course, more cost-effective. Why should I pick Account Ease as my limited company accountant? Your company and you both should have every chance of success. The right Accountants For Limited Company will give you the financial confidence you require to succeed. Account Ease has won multiple awards and has extensive experience in small-scale business accounting. Our staff is a friendly and friendly group and you can be assured of excellent customer service. We recognize there are many who don’t get enthusiastic about accounting as we are. That’s why we break down the jargon and try to alleviate the stress of completing your financial obligations. We will not only manage your company’s accounts as if we would the ones we had. We’ll also look for ways to reduce costs for you. You might be amazed at the cost-effectiveness of the use of professional accountants can prove. Contact us today

Within the modern day, it is no surprise that more people opt for working as a freelancer or a sole trader, particularly in the context of BOOKKEEPING SERVICES IN UK. The promise of better work-life balance, control over workload, and increased earning potential are large factors contributing to this shift in employment. However, working as a free agent produces new concerns and challenges; mainly related to getting paid. In general, freelancers rely on multiple different clients, which can make it difficult to manage finances and keep track of payments. This may be daunting for some, and so it is recommended that one of the first steps a freelancer should take is to hire a freelance accountant to ensure good accountancy is maintained from the beginning. In addition, accountants can provide you with valuable tips and even recommend useful applications, which will be integral to you developing organized records, such as online accounting software such as FreeAgent, xero, sage and QuickBooks. The Importance of Bookkeeping for Freelancers Bookkeeping is an essential skill that provides an instant overview of your business, especially when changes occur regularly. Many freelancers opt to hire expert accountants to manage central records, ensuring financial stability. Advantages of Updated Accounts While maintaining precise accounting may seem time-consuming, it facilitates quicker payments. Thorough books help freelancers track payments efficiently and stay informed about the financial state of the company. Easy Tips for Effective Bookkeeping Set Up an Organized System Choose a suitable accounting program like FreeAgent, xero, sage and QuickBooks, offered in comprehensive accounting packages. Regular Record Updates Dedicate time each week to update records manually or use accounting software to track expenses and payments. Customized Invoice Emails Utilize FreeAgent, xero, sage and QuickBooks to create and send personalized invoice emails to each client. Set up reminders for overdue payments. Identify Late Payers Leverage aging reports to highlight overdue invoices and quickly identify problematic clients. Track Key Business Aspects Use accounting software to record operational hours, client hourly rates, business costs, and payments. Expense Offset Against Tax Keep accurate records of business-related expenses to offset against taxes. Consult a professional accountant for complex tax laws. Set Aside Tax Payment Freelancers should set aside money for tax payments, as it is not automatically deducted. Work with an accountant or use software to determine the correct percentage. Account Ease – Your Specialist Partner Account Ease is a specialist accountancy firm exclusively for Contractors and Freelancers operating through a Limited Company or Umbrella Solution. For more information, contact our New Business Team at 0208 133 4599 or email askus@account-ease.co.uk

Chancellor Jeremy Hunt has delivered the Autumn Statement 2023, announcing tax and rates changes which affect the self-employed, business owners, employees and employers. The updates are rolling out at various stages, though some can be expected to start at the beginning of the new tax year in April 2024. • Business rates • Full expensing • National Living Wage and National Minimum Wage • Employees and employers –  National Insurance • Self-employed people –  National Insurance • R&D tax relief changes Business rates The previously announced support package to help those paying business rates will continue, with Hunt saying he will extend the 75% discount on business rates up to £110,000 for retail, hospitality and leisure until 2025. The Chancellor will also freeze the small business multiplier for a further year, although the large business multiplier will not be frozen. Full expensing update for businesses Full Expensing (FE) is a type of first-year capital allowance which permits companies to deduct the full amount of any spending that qualifies from their taxable profits in the year the expenditure occurs. Originally announced as a temporary measure in the Spring Budget 2023, Full Expensing has now been made permanent. National Insurance – employees and employers Although the thresholds for National Insurance will remain frozen until April 2028, the main rate of Class 1 National Insurance payable by employees on their wages between £12,570 and £50,270 will reduce from 12% to 10%. National Insurance for employers remains unchanged, although employer’s NI relief for veterans is extended by one year, and the £5,000 Employment Allowance will stay in place. 2023/24 and 2024/25 Class 1 (Primary) National Insurance thresholds and rates for employees 2023/24 Weekly Threshold 2023/24 Annual Threshold 2024/25 Weekly Threshold 2024/25 Annual Threshold Lower Earnings Limit (LEL): Employees earning less than this limit won’t incur National Insurance, or accrue benefits such as qualifying payments towards their State Pension. Earnings which are more than the threshold, but below the Primary Threshold still won’t incur NI, but employees will earn NI ‘credits’, and accrue NI benefits. £123 £6,396 £123 £6,396 Primary Threshold: Earnings above the Primary Threshold up to (and including) the Upper Earnings Limit incur National Insurance at the following rates: 6th April 2023 – 5th January 2024: 12% 6th January 2024 – 5th April 2024: 10% 2024/25: 10% £241.73 £12,570 £241.73 £12,570 Upper Earnings Limit (UEL): Earnings above the Upper Earnings Limit: incur NI at: 2023/24: 2% 2024/25: 2% £967 £50,270 £967 £50,270 National Insurance – self-employed people As a self-employed person you’ll make National Insurance contributions based on the profits you make above the National Insurance threshold (so don’t forget to claim tax relief on your expenses!). There are two types of self-employed National Insurance: • Class 2 National Insurance is a weekly flat rate. This will be abolished from April 2024 • Class 4 National Insurance is a percentage of your self-employed profits. From April 2024, Class 4 NI reduces from 9% to 8% 2023/24 Annual Threshold 2024/25 Annual Threshold Profits in this range don’t incur National Insurance, but you can make voluntary contributions if you want to. £0 – £6,724 £0 – £6,724 Small Profits Threshold (SPT): Profits between this and the Lower Profits Threshold (LPT) don’t incur National Insurance, but you will accrue National Insurance credits. £6,725 £6,725 Lower Profits Threshold (LPT): In 2023/24 you’ll pay Class 2 National Insurance at a flat rate of £3.45 per week once profits reach the threshold. Class 2 National Insurance will be abolished from April 2024 onwards. 2023/24: £3.45 per week 2024/25: Abolished £12,570 Abolished Lower Profits Limit (LPL): You’ll start paying Class 4 National Insurance on earnings above this threshold at a rate of: 2023/24: 9% 2024/25: 8% £12,570 £12,570 Upper Profits Limit (UPL): Self-employed profits above this threshold incur Class 4 National Insurance at a lower rate: 2023/24: 2% 2024/25: 2% £50,270 £50,270 An increase to National Living Wage and National Minimum Wage from April 2024 The National Living Wage is the minimum amount employers must pay to someone who is aged 23 or older, and not in the first year of an apprenticeship. The Chancellor’s statement announced that as of 1st April 2024: • National Living Wage will increase from £10.42 to £11.44 per hour • The rate will also apply to those aged 21 and older (who currently must receive National Minimum Wage at a rate of £10.18) Though they sound similar, the National Living Wage and minimum wage are different. The National Minimum Wage (NMW) sets the minimum hourly rate which employers must pay younger employees and apprentices. These rates will also increase from 1st April 2024 although the amounts have not yet been set. R&D tax relief changes Hunt announced a planned simplification of the current Research and Development (R&D) system, merging the existing R&D Expenditure Credit (RDEC) and SME schemes from April 2024 onwards. The Chancellor also confirmed a reduction in the ‘intensity rating’. This refers to the proportion of expenditure that loss-making businesses must spend on R&D activities in order to qualify for additional relief in the form of a 10% cash credit. Under current rules, R&D must account for 40% of a loss-making company’s spending to qualify, but this will reduce to 30% for accounting periods that start on or after 1 April 2024. There will also be a grace period for companies which dip below the 30% threshold, allowing them to continue receiving relief for one year. How Account-Ease Can Help You As the UK’s most trusted accountants, we can help you make sense of the Autumn Budget and how it could impact your business. Our accountants are on-hand to answer any queries you have regarding the Budget, your business accounting, tax optmisation, compliance and much more. If you need an accountant that you can trust with your finances, Account-Ease have specialists in your field. For expert advice, speak to an accountant on 0208 133 4599.  

Sole trading has emerged as a popular business option in the UK recently. According to statistics, there are 5.6 million private sector businesses, with 3.2 million being sole proprietorships. The number of sole traders is rapidly increasing in the UK. Despite the positive outlook presented by these statistics, the dedication and efforts that sole traders invest are noteworthy. This is where the significance of Accountants For Sole Traders comes into play What is a sole trader? Before we begin, let’s be aware of the meaning of the word “sole trader” is. Accountants For Sole Traders is the person who is running an entire company, which could also be referred to as self-employment. One person is wearing many hats, including the owner of the business, the leader, accountant, the sales manager, marketing manager and any other hat necessary to run a company. This person will get all Profits from business after having paid tax. This is the reason why sole trading is unique. But, they are also responsible for any loss and are responsible for the burden on their own. Sole traders are among the most straightforward business structures available in UK. It comes with its own tax rules that are set by HMRC and requires a specialized sole trader accountants to make sure they comply with all regulations. Does a sole trader need an accountant? So, a sole-trader is in charge of every aspect that they run their company, which can make them tired sometimes. Additionally, If the individual has a problem with numbers, there are many chances of making mistakes when working and they aren’t able to afford to make mistakes. It’s one of the main reasons to hire an accountant who is specialized. You’ve probably heard that those accountants who work for sole trader offer customized services for sole traders and this is a particular area that they are experts in. Giving them the task can bring a sense of peace for sole trader owners. They can concentrate in other areas of their work without rushing at the computer. There are additional benefits of employing accountant for sole traders who is expert in filling tax returns. Are you planning to start sole proprietorship? ensure you study this complete article. 1.Get the basics right With the internet in your hands, you can know everything about  starting the business   , but what about the taxes part and the business jargon you aren’t aware of or familiar with? Internet has enabled any kind of information easily accessible however, it can be confusing and could confuse anyone who is new to this area. If you’re trying to understand the basics right and get your finances correct, you’ll need a seasoned accountant. There’s a particular process to get you set up to be a sole-trader. Thus, seeking help from an experienced accountant is crucial. They can handle the business’s setup as per HMRC regulations. 2.Recording the money After you’ve completed the basics and you are ready to move on to the business. The flow of cash is essential to manage and growing a business. It is essential to record the cash outflow and inflow accurately. There are two options for recording transactions: accumulation and the cash. With the cash method you keep track of transactions once cash is received or paid, while with the accrual method it is recorded whenever they occur. There is a method that you can choose to use for standard accounting, and the other to calculate VAT only. This may sound complicated however, it could bring benefits for cash flow advantages if you provide an extended credit period for customers. A single mistake on the tax filing could lead to massive penalties. This isn’t something companies can afford. In addition Taxes must be filed prior to the timeframe that is set by the government or else you’ll be fined. While you attempt to keep track of all the transactions, submitting taxes will not be simple. It is important to understand that tax is a tangled topic as well. UK includes one of the tax laws with the longest length around the globe. Accountants have to learn for years these tax rules and working more work to comply with the HMRC regulations. They are professionals who have an understanding of what they should do and not to do. Making the investment in an sole trader accountant service is the most efficient and the most convenient method to get your taxes completed. 3.No need to research terms Understanding certain terms and financial documentation It can be a hassle and time-consuming process and difficult if you do not come financially savvy. You have to do ample research. An accountant is acquainted with these terms and documents. They can complete the forms in a short time and help you comprehend these terms with no amount of study. Tasks sole trader accountant will do for you An accountant can help the sole trader with various tasks. If you hire one right when you start the business, they will guide you through different situations. 1.Self-assessment tax return You must file a tax return  you earn more than £1,000 during the tax year. You need to sign up with HMRC to self-assessment, get a UTR for your business, create profits and loss workings as well as calculate deductions and submit your tax return before the deadline. A sole trader accountant will assist you in the registration process and after a fiscal year is finished the accountant will file your taxes for you without worrying about the tax. HMRC has deadlines for filing these taxes and you must adhere to them completely. 2.Contribute to national insurance Self-employed, like employed people or sole traders can also contribute in the National Insurance. There are two kinds of National Insurance Certificates: Class 2 NIC and class 4 National Insurance Card. Class 2 NIC – A sole trader is required to pay £3.05 per week when they earn more than £6,515 in their tax-year. Class 4 NIC: A sole trader is liable for 9 percent of their earnings per year between £9,568 to £50,270 plus an additional 2% when they reach the profit threshold. 3.VAT The threshold for

A Self Assessment tax return can look daunting. But if you’re prepared, organised and understand what you’re being asked for, it’s a lot simpler than it looks. Make sure you understand the form so you can file it correctly and avoid paying any penalties. Do I need to fill in a Self Assessment tax return? Yes, if: Your self-employment earnings were greater than £1,000 (before subtracting everything you are entitled to claim tax relief for) the rent you received from renting out your home exceeded £2,500 (you’ll be required to inform HMRC when it’s in between £1,000-£2,500) You made more than £2,500 in income that was not taxed, for instance from commissions or tips your your savings and investments was more than £10,000 or more prior to tax You are required to you must Capital Gains Tax on profits from the sale of items such as shares or even a second house you are a director in the company (unless it’s an non-profit organization like a charity) you or your partner’s earnings were greater than £50,000 and you’re entitled to Benefits for children. Benefit If you earn money from abroad that you have to pay tax on, or reside in another country but earn an income that is in the UK Your taxable income was greater than £100,000 If you earned more than £50,000 during the tax year and made pension contributions, you may have to submit an assessment in order in order to claim back the additional tax relief you’re entitled to you’re a trustee in an trust or a registered pension scheme Your State Pension was your sole source of income. It was greater that your individual allowance You received a letter from HMRC that said you didn’t pay tax enough the previous year. National Insurance contributions You can also file an Self Assessment tax return if you wish to make the voluntary class 2. National Insurance contributions. This will allow you to get benefits like state pensions. It is not necessary to submit the Self Assessment tax return if you’re an employee that has made tax payments through The Pay As You Earn (PAYE) program. This is the case unless you earn more than £100,000. How to register for a Self Assessment tax return If you’ve never filed returns before you’ll need to sign up to take the Self Assessment. There are a variety of methods to register if you’re self-employed, but not self-employed and must declare your income, or if you’re an association. After you’ve registered, you’ll be notified of the Unique Taxpayer Reference (UTR). If you’d like to complete the Self Assessment form online, you’ll need to create an account on the Government Gateway account. To set up this account follow the steps on the form that comes with your UTR. After you’ve created your account, you’ll receive an activation code within the email. After that, you’ll need to finish the configuration to set up Your Gateway account. If you’ve previously submitted Self Assessment tax returns before you’ll require to previous UTR to sign up and open the account. It is recommended to ensure you have access to your Gateway account prior to attempting to complete the Self Assessment. This can save time if in any way you are unable to log in. What are the Self Assessment deadlines? You submit tax returns for tax years, not calendar years. And you do this in arrears. For instance for the 2022/23 tax year, which runs from 6 April 2022 through 5 April 2023 will: You must sign up to participate in Self Assessment by 5 October 2023, if you’ve never filed your return prior to that date. complete your tax return by midnight, 31 October 2023 if you are you are filing your tax return on paper File your tax return by midnight on January 31, 2024 if you are you are filing online You must pay the tax due before midnight on January 31, 2024. If you don’t meet any times, these dates are due. You may be liable for a penalty as well as interest on late payments. What information will I need to fill in a Self Assessment tax return? If you’ve never filed an self assessment tax return prior to it might seem a bit intimidating. If you’re familiar with the process, it’s easy, provided that you have all the data that you need. Before you start, be sure you’ve got the following: your ten-digit Unique Taxpayer Reference (UTR) Your National Insurance number Information on your income that is not taxed from the tax year such as self-employment earnings, dividends, and interest on shares the records of any expenses related to self-employment any donations to charities or pensions which could be tax-deductible P60 or any other record that shows how much you earned on which you’ve already paid taxes on. It’s an excellent idea to go through the relevant HMRC help sheets, specifically on the additional sections (called extra pages) which relate to the reason you’re filling in your Self Assessment tax return

The UK has a wide range of taxes that all businesses, large or small, are required to pay. These taxes may seem annoying, but they are important and should be taken very seriously. The VAT is one of the most important taxes that a company has to pay. Although it’s a fairly straightforward tax, there are nuances worth examining to avoid financial headaches. In today’s blog we will cover VAT. We’ll explain what it is, how much it costs, and the impact on your business. We here at Account Ease have helped a wide range of businesses in their accounting and tax setups. Account Ease experts can help you if you are in the following industries: Property, Construction, Professional Services (including Digital & Creative), Retail & eCommerce, Technology & Software, or Retail & eCommerce. What Is VAT? VAT is Value Added Tax. It is a tax collected whenever is added to a service or product. Businesses must pay HMRC VAT when they rent or sell their products or services. Both consumer and business sales are subject to VAT. The VAT is a tax on consumption, so it’s paid not by the business that sold the product, but rather the customer. It is an indirect tax, because the company collects the tax for the business. VAT registered businesses charge VAT to their customers on their products, but also on the goods and service that they purchase such as stock or raw materials. The amount of VAT you must register for depends on your annual sales and the type of products that you sell. Different types of goods are subject to different VAT rates. What Is The VAT Registration Threshold? The VAT threshold is determined by your VAT taxable turnover, which includes the total value of all your sales that are not exempt from VAT. VAT registration The threshold is more than £85,000. Registration of distance selling The threshold for selling goods to UK businesses is £70,000. Registering goods imported from the EU This is more than 85,000 £. Deregistration threshold If you’re no longer eligible for VAT you must cancel your registration, the threshold for this is less than £83,000. What is the VAT percentage? Standard VAT is 20%, and it applies to most products. There is also a reduced rate of 5 % on certain goods like car seats for children, as well as a zero (0) rate on children’s clothing and food. What Is My VAT Number? A VAT registration number, also known as a “VAT number”, is unique to each business that has registered to pay Value Added tax. You can find this number on the VAT registration certificates that HMRC gives you. You can find the number on the invoice of the business that you are looking for. The VAT number has 9 digits and usually starts with GB. This number is important because if you enter an invalid number, your invoice will be invalidated by HMRC. How Does VAT Impact My Business? The amount that you charge for goods and services is the main way VAT affects your business. After registering, you will be required to charge an additional 20% on any sales made when the invoices are paid. This is where VAT is deducted. Benefits Of Being VAT Registered You can claim VAT you paid on business services The VAT is applied to supplies like computers, chairs and desks. These items are subject to VAT at the time of purchase. However, you can claim it back from the government by filing your taxes. Looks professional A VAT registration will show other businesses that your business is professional and serious. You can make your business appear bigger than it is It can make you appear larger than you really are. Investors, lenders, or suppliers will assume that your turnover is over the £85,000. Need advice about VAT or looking for an accountant to help with your business’ finances? Contact us today. We are confident that our team, with its level of expertise and experience, can provide a wide range of solutions to help you. We can assist you with a wide range of services, including accounting, tax, self assessment tax return accountants and payroll services, as well as R&D tax credit. To find out more, call us on 0208 133 4599 or send us an askus@account-ease.co.uk .