Category: Sole Traders

Computer with light. New service for sole traders

Our new service for Sole Traders

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Our new service for Sole Traders.

We have all asked the question “will periodic lockdowns become the new norm?” – No one knows, but just in case we have launched a brand-new service for Sole Traders. All you have to do is take a photo of your receipts and issue your sales invoices – that’s it!

This blog update has been written on the 3rd of April whilst the whole country is in lockdown. The new tax year starts on the 6th of April. It is crucial for Sole Traders to know what to do regarding their tax and to know what is available from HMRC. Do you have up to date figures to be able to borrow money? Do you need to defer your July tax bill? Do you have losses to use to get a refund? Are you on CIS?

We have teamed up with the guys and girls at Receipt Bank to provide you with an app for your smart phone to take pictures of your receipts. Lie the receipt on a flat surface, take a picture and that will go through to the 1 Accounts team to process for you on a monthly basis.

Receipt Bank logo

Sales invoices, you will need to issue yourself. We can provide the tools for this at an additional cost. Just ask about the software upgrade for sales invoice processing.

Our New Sole Trade Service will provide you with the following for just £37.50+vat per month

  • Receipt Bank App
  • Online accounts software. (read only version)
  • Monthly book-keeping
  • Self Assessment Tax Return
  • Sole Trade Income & Expenditure accounts
  • 1 Accounts unlimited business E-Mail & Phone support
  • Refund Chasing for CIS

For all new clients that sign up before the 30th of April 2020, we will provide you with Receipt Bank and process your 19/20 accounts for a reduced fee of £250+VAT (normally £350+VAT) payable upon acceptance. Your monthly service will then start from the 1st of July, but we will process your records for free until the service starts.

If you would like to sign up to our new service please email jade@1accounts.co.uk

Help for Sole traders

Help for Sole Traders

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What help is there for Sole Traders!

Lockdown has most likely left you anxious about your future and desperate to find away to financially survive until June. Regardless of your political persuasion the government are doing there very best to help you get through. Click here to look at our blog issued after Rishi’s announcement.

The big (in fact huge) difference between the self employed and employees that have been furloughed is that you can still work! Yes you heard right, you can claim the 80% grant and still work. Obviously we know this won’t be possible in all industries, but, if it is possible, this is great news for many sole traders. Especially in the construction industry.

The drawbacks of the grant, are that it is based on your last three years profits filed with HMRC. However the government will take one or two year if that is all you have. This means you will need to of had at least a 18/19 tax return filed with HMRC to be able to apply for this grant. Pressure is being put on the Government to allow the newly Self Employed to be eligible for the grant. Things are changing by the hour, if the government change their minds, the self employed would need a 19/20 tax return completed as soon as possible to be able to apply for the grant. Click here to read an article from the Times

The other downside is that this grant will not be paid to you until June.

Wondering what you can do between now and June? Here are our top tips:

  • Work out exactly what you need to live on for April & May
  • Where possible, defer your mortgage by speaking to your mortgage company. 10 of the biggest lenders now let you apply online. Make sure you apply and don’t just stop your direct debit. Take a look at Martin Lewis’ help with how to apply.
  • Work out what grant you will be entitled to. If you would like us to work this out for you, or to send you our grant calculator. Please email jade@1accounts.co.uk
  • Work out what you need to borrow. If family and friends can help you, use them. Your grant will help to pay them back.
  • The Business Interruption scheme, should be able to help you. To access this, speak to your local bank.
  • Apply for universal credit. This is not a failure, use the help that is available!
  • Get your accounts up to date so you can see exactly how your business will be impacted.

What about my CIS refund? 

For CIS Sole Traders and Partnerships, getting your accounts up to date is extremely important right now as you are most likely due a Tax Refund. If you spend the next week getting your records up to date, your accountant should be able to file the Tax Return and Accounts as soon as possible to get you your refund.

For our CIS clients we will provide you with some additional software as part of our service. You can then take pictures of your receipts, sales invoices and CIS certificates and we will process your return as soon as we have all the information. We will also help you to apply for the grant in June. All of our frontline team are working to support you and are more than happy to help you get your refund.

If you are reading this and need help because your accountants can’t work remotely or haven’t been in touch, please email jade@1accounts.co.uk and she will fill you in on our offer to new clients.

Electrician and number 1

What help is there for the Self-Employed?

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What help is there for the self employed?

It seems that every day the realities of the situation the economy is in just gets worse. I am sure you are like us you are pleased that the government is pumping money into small businesses. But what happens if you are self-employed or trade as a sole trader rather than limited business?

So, included in this blog is a summary of what help is available for you if you are self-employed or worried about your personal financial affairs.  We are monitoring this closely and will be in touch once we know more.

Universal Credit 

Universal Credit is a monthly payment to help with your living costs. It is available for anyone, even if you are self-employed. But as always you need to meet fairly specific criteria; namely you are on a low income or out of work.  If you’re expected to look for and be available for work, then it needs to be identified whether you’re ‘gainfully self- employed’.

Gainful self-employment means that:

  • your main employment is self-employment
  • you have self-employed earnings
  • your work is organised, developed, regular and in expectation of profit

As you would expect, you must provide evidence about your business and what you are earning through your business.

Money tree in hand

If you’re gainfully self-employed, your Universal Credit payment may be calculated using an assumed level of earnings, called a Minimum Income Floor.  It’s based on what an employed person on minimum wage would expect to earn in similar circumstances. If you earn more than this, then your Universal Credit amount is based on your actual earnings. If you earn less, the Minimum Income Floor is used to work out how much you can get. You may need to look for additional work to top up your income.

To check if you are eligible for Universal credit go to: https://www.gov.uk/self-employment-and-universal-credit

Mortgage Repayment

From 17th March you can ask for up to a three-month repayment deferment on your mortgage to give you some breathing space. This deferment applies to homeowners and buy-to-let landlords, to allow them to pass on the payment reduction or deferment to their tenants. It will not affect your credit score. However, you must agree your repayment deferment with your bank, otherwise you may skip a payment and it will show a default on your credit score. Please speak to your bank if you want to organise a deferment on your mortgage.

House key ring

Talk with your network and get creative

Now is not the time to lie low. Now is the time to get talking to your network. Firstly pick up the phone, otherwise email or message via social media. They may be aware of some opportunities for you to generate some work. Now, is also the time to be creative with your skill set. For example, if you run a hospitality business and can’t work from home, how about offering skype one-to-one cooking classes?

Event cancellations

If you lost money due to an event being cancelled the outline is:

  1. Contact the organiser first
  2. Organisers that postpone events don’t have to refund until they announce the new date
  3. Ask your ticketing platform about refunds
  4. If you are struggling to get a refund then your credit card provider could help with a refund

You might not get all of your money back – but it’s worth fighting for.

Event plan written on notepad

Time to Pay Arrangement

Lastly, a dedicated Helpline has been set up to help businesses & self-employed in financial distress and with outstanding tax liabilities. Call this helpline to be able to agree a bespoke Time to Pay arrangement with HMRC. This is where you agree with HMRC a bespoke payment plan for your outstanding tax liabilities. If you are concerned about being able to pay your tax due to COVID-19, talk to us first as we can help you plan your call to HMRC’s dedicated helpline on 0800 0159 559.

July 2020 payment on account

As announced on Friday you could defer this payment but as it is 22 March, I would keep this option on the back burner as you may still have to pay it in January 2021, it is effectively a loan.

VAT Deferment

VAT on ipad

We do not know enough about this, but again it is a deferred loan that may help you now.  If you are going to take advantage of this “loan” I would take it, put it in the bank and pay it back once business is back as usual, treat it like a quick safety net but it is a loan.

Our Advice

As your accountants we can help you as part of our service (no extra charge at all!) we can help you to plan initially for the next four months by looking at your business online and helping you to forecast.  We can also negotiate with HMRC or the banks for you and anyone else that you want us to, we are here to help.

I would also suggest that you list all of your household bills including leisure time (restaurants, shopping etc) and make decisions about what you are paying for, again we can help.

Once we have done that the next step is to Plan Plan Plan and Plan even more.  We will all get through this together and once we are back to business in full with the right planning and staying on top of your business you will without doubt be stronger and in a great position to thrive.

Don’t let the Christmas period get in the way of the Self-Assessment deadline!

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Don’t let the Christmas period get in the way of the self-assessment deadline!

Christmas is always a busy time of year, but for us it doesn’t stop after the festivities are over. With the Self-Assessment tax return deadline on January 31st, January is our busiest time of year.

A self-assessment tax return is required if you are a sole trader earning over the personal tax allowance, the director of a company who receives dividends, or if you have additional income which is not taxed through PAYE. If you are a client of ours on our Young Business service, Growing Business service, Rapid Growth service, or a sole trader then we take can care of this for you.

Send us your information early to avoid missing the deadline

Our clients on these services have the stress of completing their tax return taken away as we do a calculation to work out how much tax they owe and complete all the HMRC forms on their behalf. Once the tax return is approved by the client, we make sure it is filed with HMRC before the deadline.

As a firm, we try to prepare early by requesting all the information we need to complete your tax return at the end of the tax year on April 5th. This allows us to avoid the rush and get many tax returns in well ahead of the deadline. Our tax return clients will have received an email from us asking them to upload their documents to our secure platform. This platform is fully compliant with GDPR and data protection regulations, so there is no need to worry about your personal information!

We also send regular reminder emails throughout the year to make sure that all our clients don’t forget to send their documents to us on time. It is important to send us this information as early as possible as you can face a penalty from HMRC if you do not get us the required information in time for us to complete and file your tax return.

By sending us all the information we need before Christmas, you can relax over the festive period knowing that your self-assessment will be taken care of!

No one wants a Tax Investigation.

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No one wants a Tax Investigation.

It is true that as business owners we don’t want HMRC asking awkward questions and taking up our precious time by visiting us on a routine (or not!) compliance visit.

This week two of our clients have been subject to compliance visits from HMRC, one for PAYE and CIS, and the other for VAT. Understandably, our clients in both cases were worried by a visit from HMRC and needed our support from start to finish.

PAYE Investigation

In the case of the PAYE compliance, which included CIS, we were able to speak to our client before the meeting, attend the meeting along with our client, and reply to HMRC’s request in order to close the enquiry. We dealt with the issues and questions raised in the meeting successfully and HMRC could see that we had a good handle on our client’s business. They have now closed the case without penalty or further tax charge.  Our client was very happy that we were able to attend and support them at the meeting as it gave them extra peace of mind.

VAT Investigation

The VAT visit was very similar. We briefed our client before the meeting and attended the meeting with the VAT officer. One item was picked up by HMRC and a small adjustment will be made on the next return. In this case HMRC were complimentary about our business set up and the service that we provide our client, especially in understanding the business from the client’s point of view. This client is also really pleased with the service and were reassured by the fact that we were able to attend the meeting and deal with any questions that came up.

We have you covered

We insure ALL of our clients to cover our fees for dealing with HMRC from start to finish in these situations.  We often have clients tell us that they are covered by The Chamber of Commerce or The Federation for Small Businesses, however the cover from both organisations does not allow us to deal with any investigation that may occur, and so our support is limited. It is for this reason that we took the decision to fully cover our clients for no additional charge.

We appreciate that no one wants a Tax Investigation, however if a client does have an investigation it is really important that we are there, as we can help the client to deal with HMRC effectively. In both cases this week HMRC didn’t find anything of significance and both of our clients were very happy with our service. They were especially happy that our fees for assisting with the visits are covered by the insurance policy benefit that we have taken on their behalf and that there was no extra cost to them.

Tax Building Blocks

Making Tax Digital – Are You Ready?

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Making Tax Digital – Are You Ready?

July 2019 marks the period that you have to submit your VAT returns using HMRC’s new Making Tax Digital (MTD) regime. Already Accountants, VAT registered businesses and HMRC are struggling to cope.

Take a look at Accounting Web’s report on how HMRC’s systems were already struggling in May – Read report here

If you have not addressed MTD you need to do this NOW!

Your accountant should have been in touch to make sure your systems allows you to send HMRC compatible VAT returns. You may have been offered a bridging software to read from Excel (or other non-compliant accounting products) to then transfer to HMRC. In our opinion this is a sticky plaster over an open wound and not a long term solution. You have probably been given this type of software because your accountant does not understand or is overstretched.

Our recommendation is that you use Xero or SageOne to manage your businesses finances. Both pieces of software are fully compatible with MTD. 1 Accounts are Making Tax Digital certified and can help you transfer your business over to software that will not only be compliant but save you heaps of time to.

You should make sure your accountant can help you through the process of transitioning you to online software, registering you for MTD and maintaining your VAT returns. HMRC have some guidance on their website we recommend reading – Read article here.

If your VAT return (period ending 30th June 2019) is not filed by the 7th of August 2019 you may get a fine from HMRC. It is unknown to us if HMRC’s systems will be able to cope with this months filings. Our advice would be don’t leave it till the last minute.