Now that we’ve entered into a new tax year, businesses should start thinking about ways to extract cash from their business. There are several ways to do this, including lowering your salary and taking dividends, but this article will focus on purchasing electric vehicles with the UK Government’s plug-in grant.

The Government is offering a variety of grants making it more affordable to purchase an electric vehicle, and to help businesses keep more of their hard earned cash.

As part of the 2021 budget, the Government announced the super-deduction tax break. The super-deduction allows businesses to claim 130% of expenditure for new business equipment against their taxable profits.

The super-deduction begins from April 2021 and will provide up to 25p off your tax bill for every pound spent on eligible purchases of plant and machinery. This article explains how it works, which purchases are eligible, and how to calculate your savings.

From March 1st 2021, the domestic reverse charge VAT procedure will be introduced for the construction sector. You should start preparing for this change as soon as possible to avoid mistakes and fines.

The main change will be that the buyer will account for VAT for certain construction services rather than the supplier. This article outlines who is affected by this change and how to prepare.

As winter approaches, the coronavirus doesn’t seem to be going away. To help small businesses cope through the winter months, the UK government has announced new schemes, deferrals, and grants in their Winter Economy Plan.

This is a difficult time for everyone, including businesses and self-employed people. Due to the pandemic, you may experience reduced activity in the coming months.

In this article, I will discuss the different efforts brought in by the UK government, the eligibility for these schemes, and how to apply for support.

As the virus resurges, the UK government has announced measures to continue financial support to businesses and employees affected by the pandemic. The newly announced Job Support Scheme (JSS) will replace the current Coronavirus Job Retention Scheme from November 1st, 2020.

The Coronavirus Job Retention Scheme which allowed employers to claim wages for employees on furlough was due to end on October 31st. Due to the ongoing crisis, the government has replaced the scheme with the Job Support Scheme (JSS), which is a slightly less generous version of the original scheme.

In this article, I will outline the eligibility to claim wages under the new scheme, the amounts paid by both the employer and the government, and how to make a claim.

As a business owner, you’re probably aware of credit scores. In 2020, having a good credit score is essential for gaining funding, making business relationships, and proving your company’s financial stability. In this article, I will outline what a credit score is, what factors influence it, and ways you can improve your rating.

2020 has been an interesting year, to say the least. With the coronavirus pandemic, many businesses have had to shut their doors, however not all businesses are suffering. In this article, I will explain the best new business ideas for the post coronavirus era, as well as the tax and accounting considerations of starting a new business.

Without a doubt, the coronavirus has changed the way people run their business, hire employees, meet with clients, and sell their goods and services.

Although this has been a difficult time for many people and businesses, this pandemic may potentially make way for new and exciting business practices. Not only is it easier to accept online orders, but it’s also easier to set up and manage your business online with HMRC.

During the coronavirus pandemic, the UK government has laid out many schemes to help businesses, self employed-persons, and employees get through this difficult time. On May 4th, 2020, the Bounce Back Loan Scheme was introduced for SMEs.

As an accountant in the UK, I have received several questions regarding the Bounce Back Loans that were introduced last week. In this article, I will tell you everything you need to know including what the BBLS is, who is eligible, and how to apply.

Amid the COVID-19 pandemic, many people are encouraged to work from home and self-isolate. Whether you work from home permanently, or only temporarily during this crisis, there are certain tax issues and benefits that can present themselves when in a home office environment. Some topics I’ll cover are VAT, expenses, capital gains tax, and insurance.

If you’ve already started thinking about your self-assessment, it’s safe to say that you’re likely well ahead of other sole traders and small business owners across the UK. It’s certainly not uncommon for this required filing to be put off until the deadline (January 31st for online returns and payment) is looming.

In fact, HMRC reported that in 2017, more than 50% of self-assessment tax returns were filed in the month of January. The day with (by far) the highest number of self-assessment returns filed? January 29th, with an impressive average of 21,386 per hour on that day alone. If you were one of these or if you expect to be this year, it’s worth setting some time aside to get on top of your self assessment.

When you’re running a business, the day-to-day often requires your full attention and all of your time. Thinking about the accounting side and upcoming tax filing that is not within the next week is hardly foremost on your mind.

Although things are still up in the air concerning what kind of Brexit we will be facing, when it comes to running a business, there can certainly be added complications depending on what type of deal is eventually decided with the EU.

In the event of a hard Brexit, there will be extra requirements for businesses that wish to continue working across borders - namely with imports from EU countries. The primary two things that these businesses need to look into include the Economic Operator Registration Identification (EORI) and the C79 certification - both of which pertain to EU imports to the UK.

Running a small business is a rewarding, challenging, and, especially in the early stages, time-consuming experience. When it comes time to file your accounts, you may find that a little more time would be helpful.

It can seem a little daunting to deal with all of the information required for filing accounts, getting organised, working with your accountant, and ensuring this is all done on time.

If you discover that a little extra time could mean the difference between rushed filing and a thorough understanding of your accounts, there is an option that you might consider with Companies House.

While there is a considerable amount of information available regarding HMRC’s new Making Tax Digital (MTD) initiative, it can quickly become confusing for businesses that are required to now submit their VAT returns online with approved software.

For example, many businesses were not aware that it is necessary to sign up for MTD. Qualifying businesses are not automatically able to submit VAT returns online.

Businesses already working with HMRC-approved software also had the belief that this meant they were already signed up for MTD, or that by connecting through their current software, this would sign them up. This is not the case.

With Brexit looming, the impact on the economy is almost palpable. Yet business must continue and so on March 13th, Chancellor Philip Hammond presented the Spring Statement to provide details on measures that could affect UK businesses.

This article breaks down the 2019 Spring Statement and focuses on elements that have the potential to affect UK freelancers, sole traders, and small businesses.

Many who are self-employed either start out with or continue to run their business from home. The home office is a cost-effective way to get started with a business, also preventing the hassle of finding and arranging a workspace or shop.

Whether you’ve converted a room to your home, made a space in your living area, or equipped your garden or garage to meet your business needs, your home office is a space dedicated to growing your business.

While you save money on the obvious rental costs of a space outside your home, there are also a number of tax advantages to the home office.

Last week, Chancellor Philip Hammond gave a speech going over the changes to the Budget for Autumn of 2018. It was delivered earlier than usual, owing mainly to an effort to avoid any conflicts with budgets or regulations expected as part of Brexit on March 29th, 2019.

The topics touched upon in the budget have a broad range - affecting both large and small businesses based in the UK. While small businesses are already expecting changes thanks to Making Tax Digital for business (expected April, 2019), a new set of figures from the budget generally give a little more breathing room.

Next spring might seem ages away, but it will arrive more quickly than we expect. With it comes the final stages of Brexit in March 2019. While the full impact of Brexit won’t be clear until after the official deadline, there are some things that can reliably be predicted beforehand.

In freelancing or running a small business, it can be difficult to determine how much to take out of your business to support your personal living expenses. But it is possible to determine the optimal amount, depending on your business. After all, you still need to get paid.

It can feel like you’re taking money out of your business, but it is important to support your own needs while ensuring your business can still run efficiently. It’s rare for a business to be profitable right off the bat.

So the question becomes: what is the right amount for a small business owner to be paid from their business?

In mid December last year (2017), HMRC made a number of announcements that will affect the way that many businesses pay tax. Occurring just before the annual tax return date, the changes can have implications for freelancers, sole traders, and small business owners looking to manage costs.

A popular topic, especially after the events that unfolded over the course of 2008 and the economic impacts that have been experienced since. Ethical behaviour in business has certainly come up in the past but it’s arguable that it’s never received so much attention.

It’s arguable that there is a clear line between ‘ethical’ and ‘illegal’, the latter of which is certainly to blame for the eventual economic depression. However, to what extent does unethical business behaviour contribute?

The UK’s Construction Industry Scheme (CIS) tax deduction is applicable to those working in the construction industry, working regularly with subcontractors. The scheme outlines that a tax deduction be added to each invoice of 20% or 30% on applicable items, depending on the registration status.

Contractors should generally be registered under CIS if they are working with subcontractors, and there can be a hefty penalty fee in the event that a self-employed worker in this industry fails to register.

A side business (or the buzz-worthy ‘side-hustle’) is not an uncommon pursuit for those already employed in the UK. In fact, recent studies have revealed that over a third of workers pursue more creative pursuits in their off hours. And get paid for them.

The income generated by these side businesses contributes an impressive £15 billion to the British economy each year. There’s a number of factors that keep these side hustles running, but the majority reports that it’s not about the money but about their passion for what they do. However, 10% do plan to eventually shift their focus and efforts 100% to their side business.

So what kinds of side businesses are most popular? Creative endeavours reign, with food, gardening and photography being the most popular. Knitting isn’t far behind.

Recording and managing business accounts is far from the most exciting and rewarding part of running a business. For performers such as musicians, artists, actors and dancers, this aspect of being self-employed is no less important.

With the changes to the tax filing method that come with HMRC’s digitisation of the system, performers, as other sole traders and small businesses, will be expected to submit Self Assessment returns quarterly as of April 2018.

So does this impact what you can claim? And what can performers claim, anyway? This article provides an outline of the different deductions and claims you can make from the expenses you encounter in your career.

With an estimated 1.4 million individuals working as landlords across the UK, any changes to accounting practices impacts a significant part of the population.

Confirmed in the Spring Budget 2017, all landlords in the UK will automatically be in cash accounting. Departing from the usual expectation that individuals would need to opt IN to an accounting system, it is instead now an opt OUT.

Landlords will still be able to use the UK GAAP for tax preparation, but should look into whether cash accounting is the right option for their business.

Expenses are more than just a recording of the outgoing cash flow of your business. Expenses also include amounts that are claimable against tax. When recorded and tracked correctly, expenses provide a clear indication of the health of your business.

Expense checking is generally fairly straightforward; it involves going through the recorded claimable expenses for business purposes. Travel is a common source of expenses such as petrol, accommodation, meals, etc. For companies that work in an industry that requires travel, this is a crucial part of managing finances.

Tracking expenses is so important, that HMRC has outlined expense payment management and how an expense checking system should operate effectively, based on the size of the business, in two internal manuals: EIM30270, and EIM30275.

A popular choice for many sole traders and small businesses, the Flat Rate VAT Scheme was developed to provide a simple solution to the often tedious task of registering and tracking the VAT owed.

For businesses with an annual turnover under £150,000 (excluding VAT), the flat-rate scheme allowed them to determine how much VAT to pay HMRC at the close of each quarter.

In the last 12 months, over 70% of businesses in the UK have reported experiencing late payments for invoices. Small businesses are particularly susceptible to late and missing payments, with the average payment date falling more than 41 days after the agreed upon due date.

Although January 31st may still seem a long way off, it might be time for freelancers and small business owners to start considering how they need to prepare. Or what they can do to be ready for their Self Assessment tax returns.

While there is a large amount of information available regarding who needs to file a self-assessment, what information they’ll need to complete it, and how they can do so, this can sometimes seem overwhelming and conflicting.

It doesn’t need to be. HMRC provides a fairly clear and straightforward resource for self-assessment, starting with an online wizard to help you determine whether you need to do so.

An oft-referenced part of UK society, the hidden economy refers to businesses that either don’t pay tax, or under-report their tax.

While many that fall into this category don’t realise their mistake, there are indeed others that intentionally and deceptively work to disguise taxable income.

In August, HMRC released a series of consultations revealing increased power and search capabilities in uncovering businesses that are operating in the hidden economy.

These tactics will include a multi-pronged approach from search to tightening advisory requirements in order to find the unregistered in the crowd.

There’s good news for parents who are self-employed. The new tax-free childcare scheme that will be launched in early 2017 now makes it easier and more accessible for more parents to take advantage of tax-free childcare.

In early 2017, a new scheme will be introduced for childcare. Unlike the current scheme, the new system will feature a digital registration and account for which all parents, including the self-employed, will be able to register.

While there are some pros and cons for parents and employers, what will these changes mean for childminders? When the new scheme is rolled out, there are a few things that are important to keep in mind in order to be included.

Claiming for expenses can be complicated. You want to get the most out of your claims but it’s not always clear what can be claimed and what shouldn’t be included. Especially if you work as a childminder in the UK.

Most individuals in this field work from their homes, minding children for working parents. Childminders face a variety of costs in running their business, many of which are eligible for claiming against tax.

While income is usually subject to Income Tax as gross income, if you’re a childminder and a member of the Professional Association for Childcare and Early Years (PACEY), you could benefit from the agreement between HMRC and PACEY concerning the expenses that you are able to claim against tax.

Your interaction with your customers and your suppliers has changed dramatically over the past decade or so. With the constant introduction of new technology, combined with new channels for communication and interaction, it’s no wonder these relationships have shifted to suit the times.

How you work with your accountant is no different. The myriad methods for recording, communicating, and assessing financial data, whether personal or for a business, have changed the way you interact with your accountant.

Setting out as a freelancer or founding a small business is exciting but is not without its set of challenges and obstacles. In the beginning phases, or when launching a new project, one of the major issues faced by entrepreneurs is that of funding.

While capital can be gained through outside investors, loans, or personal accounts, often the more simple ways to find funding can be found in the structure of your business itself. By using one of the following business models, you allow your customers to supply the funding.

As a sole trader considering the transition to a limited company, the most common deterrent usually has something to do with the cost. Sole traders are in charge of their own accounts and Self Assessment returns and often incorrectly assume that as a limited company, the costs for these services would be too high.

As a freelancer or self-employed worker, it is often important to cut down on costs whenever possible. If you run your own business, there are many expenses you may not be claiming against tax. Find out if you are making the most of your status by claiming the maximum from your expenses.

This week, the Bank of England expressed concerns about Buy-to-Let Investment and lending levels. New rules have been proposed that aim to tighten requirements for landlords involved in investment properties and limit the amount that can be borrowed for these types of endeavours.

This reaction comes from recent suggestions that mass buy-to-let property management could have a destabilising effect on the UK economy.

The rules put a spotlight on lenders, encouraging them to require more extensive financial information from the potential landlord before granting a mortgage.

The requirements go beyond ensuring the rental income of the property is significantly higher than the mortgage payments (the income coverage ratio), to also considering an individual’s overall financial situation.

The UK has seen the fastest growth in self-employment in Western Europe over the past couple of years. As a sole trader or small business, it's important to have a good grasp on your business finances, how you and your employees are compensated, and what this means for tax purposes. There are a number of ways you can minimise your tax, but first:

What are the differences between employees and the self-employed?

So what does this mean for your tax? Self-employed individuals can be exempt from PAYE (pay-as-you-earn) - a withholding tax on income and employee income payments. Determining whether you and/or your employees fall in this category is a first step in reducing tax on your business.

Small Businesses dominate Britain and Self Employment in the UK has the fastest growth rate in Western Europe. Here you have a few interesting statistics from the Federation of Small Businesses.

• There was a record of 5.4 million private sector businesses at the start of 2015.
• This is an increase of 146,000 since 2014 and 1.9 million more since 2000.
• Small businesses accounted for 99.3% of all private sector businesses at the start of 2015 and 99.9% were small or medium-sized (SMEs).

By the time you actually start trading, you may have spent thousands of pounds on research and setting up the business.

Provided you have formally notified HM Revenue & Customs that you have started up a business, most of these costs are usually allowable as business expenses in the first year.

In this blog, you will find relevant information on Pre Trading expenses, Simplified v's Actual expenses and Capital Allowances on equipment.

As you might know by now, it is Self Assessment time and even though you can submit yours from April on, most returns are filled out online in December and in January. So, if you are about to start filling your self assessment, I recommend you to watch Ruth Owens's - HRMC Director General Personal Tax - video where you will find great advice on submitting your self assessment.

As you can see on the following chart, created by HMRC, in 2012, the majority of returns were filed in January, and the trend continues until today.

Around one in nine (11%) of the 560,000 people in Inner London who had to send in a tax return last year didn’t do so by the relevant deadline – 31 October for paper returns and 31 January for online submissions.