Business Advice

Accountancy Advice When Starting A New Business | Accountants for Start Up | Accountancy Help for Business Start-Up
Accountancy advice when starting a business 758 513 Stepping Stones Accountancy

Accountancy advice when starting a business

The COVID Pandemic has seen many changes to the world of employment across the world. From remote working whilst home-schooling to zoom meetings from makeshift home offices, the workplace landscape has changed dramatically. Many businesses were forced to scale back their workforce and many industries had to shut completely. Indeed, 16 months ago many of us had not even heard of the word furlough!

They say though necessity is the mother of invention and never has this been truer than over the last year. Indeed in 2020 Companies House saw a significant surge in first-time entrepreneurs seizing the opportunity to turn an idea into a reality. Whether it was new business ideas as a result of life with COVID or those that had been dreaming of being their own boss for a long time, many individuals decided it was the right time to take the plunge.

As an accountancy firm we recommend that for those just starting out, there are a few basic steps which need to be covered to ensure a successful start.

Firstly, ensure that you have a business bank account. Many sole traders try to make do with using their personal bank account but having a separate business account makes it easier to separate personal and business transactions and simplify tax returns.

Secondly, good cashflow is vital. Monitoring income and expenditure enables you to make informed business decisions, pay your suppliers and keep on top of outstanding payments. This can be done easily with one of the many software programmes available, which your accountants can then use to assist you with your end of year accounts.

Knowing where to go to access funding is vital for any growing businesses. Whether it is your bank, invoice and asset financing or peer-to-peer lending making sense of all the options can be tricky and something which your accountant can help you navigate.

Lastly, setting up in business can sometimes feel like quite a lonely place to be, particularly if you have come from a busy office environment to being a sole trader. Long hours and long to do lists can be all consuming. This is where meeting like-minded individuals can really help. Your accountant will know others in the same boat as you and the local business networks which will be good to join. Never be afraid to ask for advice or recommendations, having someone to talk to can make a big difference when you are starting out.

If you have any questions or are in need of any help please feel free to call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk.

Flexible Working | Advice on Flexible Working | Accountancy Support | Proactive Accountants Bristol
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Flexible working

The way we work has fundamentally changed over the last 16 months. Technology has allowed businesses to adopt flexible working practices to enable employees to safely work from home during the Pandemic.

As life slowly begins to return to ‘normal’ many businesses have recognised the benefits not only for their employees, but also their businesses, when staff are permitted to work flexibly. Staff are happier, work-life balance is improved and as a result productivity is increased.

More and more companies, both large and small, have decided that the changes that we have all experienced in our working lives since last March should be adopted permanently. There are, as would be expected, a number of different approaches from employers across all sectors and all sizes. From allowing staff to choose how and when and where they would like to work 100% of the time to those dictating that a minimum percentage of time should be spent in the office. Whatever the approach, advances in technology and software packages mean that it is easier than ever to work remotely but with a joined-up approach.

One thing is for sure, for many, the days on Monday to Friday 9-5pm in an office are now considered old fashioned and counterproductive. The business world, along with many other parts of society, have adapted and changed their practices, leading to a more flexible way of earning a living whilst maintaining high standards of work and enabling quality time to be spent with our families and friends.

If you are looking for some business support please feel free to call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk.

5 Tips To A Smooth Tax Return 150 150 Stepping Stones Accountancy

5 Tips To A Smooth Tax Return

If you apply our simple tips you can be assured that your tax return will be a lot easier to complete.

I Thought I was Employed | Am I Employed or Self Employed
I thought I was employed! 758 513 Stepping Stones Accountancy

I thought I was employed!

This article focuses on the importance of having the correct employment documentation in place. All characters are fictional for explanation purposes.

Jamie was working on behalf of XZY Ltd, all work activities were agreed verbally but no written and signed contracts were put in place. Jamie worked at home, in the offices of XYZ Ltd and at customer sites. He was provided with a laptop, business stationery and a company credit card but had no formal induction, no company handbook and did not have a dedicated desk space.

When initial discussions were held it was proposed that Jamie would become an employee and he was sent a payroll form by XYZ Ltd. However, Jamie did not return the completed form or any details regarding his preferred employment status. During the first 4 months various discussions were held about employment for an agreed working relationship but nothing was finalised, although a couple of e-mails were sent.

The last e-mail thread was what both Jamie and XYZ Ltd were adhering to, it stated that the salary would be based on a tiered commission basis but again no written agreement or formal employment agreed because Jamie was too busy to arrange it.

Although he did not have any written agreement Jamie believed he was employed by XYZ Ltd and had an official contract with them. However, when he contacted HMRC to request a copy of his P60 he was advised this was not possible. After several frustrating months Jamie was then advised by the HMRC that under the s8(1) Social Security Contributions (Transfer of Functions) Act 1999 he was classed as being self-employed. This meant he was not entitled to any of the employee benefits such as sickness pay, holiday pay, pension, etc.

There are some discrepancies between employment and tax law when it comes to employment status. However, the lesson is very simple; you are not employed until you have a written and signed contract.

If you need some help, advice or guidance in regard to being a contractor or an employee please feel free to call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk.

Complete your tax return in June 150 150 Stepping Stones Accountancy

Complete your tax return in June

In our latest animated video we explain why you should completed your tax return in June.

Do I Need An Accountant | Accountant Advice Bristol | Business Accountancy Help
Do I need an accountant? 758 513 Stepping Stones Accountancy

Do I need an accountant?

At some stage, a business owner will inevitably have asked themselves the question, “do I need an accountant”? They will all have also found themselves unsurprisingly faced with the answer, “yes, I do”. No matter what stage your business is at, an accountant can offer help, support and guidance.

From the outset

At the initial start-up phase of a business an accountant can offer support for:

  • Helping to finalise business plans – giving advice and feedback on business direction, goals and funding.
  • Business structure – providing recommendations on how to structure the business to become a sole trader, private limited company, public limited company or limited liability partnership.
  • Licenses – advising what business licenses you need to set-up and what your legal obligations are in relation to monthly, quarterly and annual accounts.
  • Accounting software – advice and recommendation on the best type of software to use along with feedback on what modules would be most beneficial.

Tax and compliance

Throughout the life span of a business there will be a requirement to seek specialist tax and compliance guidance such as:

  • VAT – giving guidance on when to start charging VAT or if already on the scheme whether to continue.
  • Payroll – helping to keep on top of all payroll commitments and ensuring wages / compliance matters are correctly adhered to.
  • Reporting – providing support in relation to tax liabilities, regular reporting processes, creditors, and debtors.

Small business support

All small businesses will benefit from meeting regularly with an accountant. They can assist with:

  • Being smart – having some expert advice on hand to help make smart decisions, especially during key growth stages helps to avoid costly mistakes.
  • Liabilities – as a business grows so does its liabilities, making sure you recognise what these changes will be and how to account for them requires specialist help.
  • The bigger picture – business owners can often become consumed in day-to-day activities and unable to recognise blind spots within the business, an accountant can help with seeing the bigger picture to assist with ongoing growth.

If you are looking for some specialist accountancy support both for you and your business, then please feel free to call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk.

Speeding Up Your Invoicing Process | Accounting Software Advice | Business Invoicing Help
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Speeding up your invoicing process

Every business owner will agree that spending as little time as possible on your administration tasks and focussing on fee earning activities is critical to success. With the introduction of online accounting software (such as QuickBooks) business productivity has vastly improved and become more streamlined.

One of the most beneficial elements of implementing this type of software is the improvements that can be made with the invoicing process. Here are our top 5 reasons why:

  1. You can create personalised and professional looking invoices, on any device. If you are on a client site, you can access your software on the go and raise an invoice which is sent automatically to the client as soon as any work is completed. You no longer have to manually raise an invoice when you get back into your office or get home after a busy day on site.
  2. You can manage all your sales and invoicing in one place. Easily track your paid and unpaid invoices whilst also setting up automated payments through solutions such as PayPal and GoCardless.
  3. You can check all your payments in real-time, for example if you are called upon for an urgent job but there is already an outstanding invoice you can quickly request payment to be made before undertaking any more work. You can also set automatic reminders to chase up overdue payments.
  4. You can create custom invoices from different templates, displaying your professional brand at all times. Invoices can be e-mailed on any platform or printed for sending in the post.
  5. Any quotations or estimations can be quickly converted into an invoice. You can automatically apply discounts, promotions or VAT and you can also invoice in any currency.

If you would like to find out more about how you can improve your invoicing processing by implementing some online accounting software, feel free to call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk.

HMRC Explore Options for Changing Tax Payments | HMRC Tax Advice | Modern Tax Administration | HMRC Tax Help Bristol
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HMRC exploring options of changing tax payments

The Government have recently announced a 10-year strategy to build a modern tax administration systems and as part of this they have begun a consultation period which lasts until 13 July 2021. This will involve a “call for evidence” approach which focuses on the benefits and challenges of the current tax payment system with a view to reducing the gap between when income/profits increase and income tax or corporation tax is paid. 

As with any new scheme there will be some issues to overcome. For example, how do you consider payments that are made under the income self-assessment heading or corporation tax for small companies, as these do not fall under the quarterly tax instalments?

How it currently stands

As it currently stands any self-employed taxpayer who has just started trading will have up to 22 months to pay their first tax bill. For an established trader, payment will typically be made twice a year and a balancing payment on any outstanding liability.

If we look at corporation tax there is also a delay between making profit and when a corporation payment is due. Payment is due in 1 instalment no later than 9 months after a company’s accounting period.

The need for change

The current situation brings with it a range of issues, having a large liability to pay at a specific time of the year can cause problems, especially when a tax bill comes out higher than what was expected. Changing this to a more regular payment based on the end of year reports could provide more accurate figures and greater control.

The issue

The HMRC are focussed on trying to improve how they receive funds, especially considering that 34% of their outstanding debts are for income tax and corporation tax.

What are the plans?

Consideration is being given to whether payments should be on either a monthly or a quarterly basis. As it stands HMRC are exploring all options.

Tax payments could be calculated in the year, developed as a result of up-to-date information and with projections on annual liability. Alternatively, tax payments could be based around the previous year’s tax liabilities. Finally, it could be based on estimations of the taxpayer’s liability for the operating year.

Of course, all ideas are on the table at the moment. The focus is to develop ideas that can be given careful consideration before a framework for moving forward can be finalised. HMRC also recognises that plans might need to be different for specific industries or taxpayer types.

If you have any questions or would like to discuss your tax liabilities please call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk.

IR35 Off-Payroll Working | Advice on Off-Payroll Working | Help with IR35 | Accountancy Help IR35
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The changes to IR35 and off-payroll working

Historically, when a business engages with a freelancer or contractor to work on a project over a long-term basis they do not appear on any payroll, instead they receive payment once an invoice is submitted. This freelancer or contractor though will often only be working exclusively for the one company.

Due to the recent changes with the off-payroll working rules (also known as the IR35 rules), there is a potential that this will need to change and the contractor will have to become an employee and paid via the company PAYE system.

The following provides a little more information on the IR35 changes and what they mean to self-employed contractors and businesses.

What changes does the IR35 rules bring?

A company (considered to be a medium or large company operating in the private sector) can now determine what a contractors IR35 status is. Obviously the company needs to consider this carefully as it will have a negative impact on a contractor. The contractor will have to become considered an “off-payroll worker”, and added to the payroll system, covering all requirements for tax and national insurance.

If the company is considered to be a small private organisation then no changes are needed and the contractor is in control of their own assessments and employment status.

Contractors need to remember:

  • There is a stronger chance that you will now be considered as employed, impacting tax and national insurance contributions.
  • If you have the choice, you get better tax benefits when being classed as self-employed.

What is a medium/large company?

Within the new IR35 legislation, it will clearly show the criteria that dictates a medium/large company. In essence it has to meet 2 or more of the following conditions:

  • A turnover in excess of £10.2 million
  • Employing more than 50 staff
  • A balance sheet which is larger than £5.1 million

Any contractor working for this size of company will need to be made aware of these changes and the business will need to decide whether they fit in the scope of IR35 and become employed.

How do I deal with “off-payroll working”?

Obviously, with these changes there will be some significant paperwork and key steps a company will need to undertake (to commence at the start of 2021/22 tax year):

  • A company must take the lead in determining IR35 responsibilities (the HMRC CEST tool can assist with this) and they must advise all contractors of the outcome (normally by issuing a status determination statement).
  • As soon as a contractor is identified as being within the IR35 criteria they need to become an employee and be paid under the “off-payroll worker” classification. At this stage the company (or recruitment agency supplying the worker) will become responsible for deducting the income tax and national insurance contributions from the monthly payments.

If you have any questions in relation to IR35 and off-payroll working then the Stepping Stones team would be happy to help. Please call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk.

Gain Control of your Self Assessment | Help with Self Assessment | Self Assessment Hints & Tips
Gain control of your self assessment 758 513 Stepping Stones Accountancy

Gain control of your self assessment

It is surprising how a to-do list can achieve so much. The art of writing down a list of actions and then following them through to completion is nothing new but it still remains an incredibly powerful tool for efficient people. So how can this method help you get control of your self assessment?

Quite simply, if you follow some specific instructions to a set timeframe every year then you will have complete control of your self assessment. For example, if we look at the period of 2021 to 2022, it really is a very simple process based on 5 key steps:

  1. Monthly – keep track of all your monthly business transactions, logging a record of invoices, receipts and expenses.
  2. Register for self assessment by 5th October 2021 (if you have never done this before)
  3. When filing online submit your return by midnight on 31st January 2022
  4. Ensure relevant tax payments are made by midnight on 31st January 2022

In order to complete the self assessment you will need the following:

  • Your 10-digit unique taxpayer reference (UTR)
  • Your national insurance number
  • All details of your untaxed income for the period 2021/22 (this will include income from self-employment, dividends and interest on any shares
  • All records of expenses in relation to self-employment
  • Charity or pension contributions that should be eligible for tax relief
  • A P60 or any other records to demonstrate how much income you have received which has been paid on

Keeping in control of your self assessment can be a very simple exercise just follow your to-do list. Otherwise simply delegate and get your accountant to look after it for you.

Should you have any questions or need any help in relation to your self assessment please call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk.

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