Originally written by Stephanie Spicer on Small Business
Many UK sole traders are making plans to address the impact of proposed off-payroll reforms (also known as IR35) – where contractors must pay employment taxes without the equivalent of employment rights – even though the legislation will not affect them.
Not only are 18% of sole traders making unnecessary preparations for when off-payroll reforms hit the private sector in April 2020 but 13% of limited company contractors said they will stop contracting as a direct result of the planned reforms. This would be equivalent to losing 78,000 people from the contracting workforce, based on estimates of there being 600k personal service companies in the UK, carried out by the Freelancer & Contractor Services Association (FCSA) which undertook the research with accounting software provider FreeAgent.
The FCSA believes its research findings should be a warning to the Government that off-payroll reforms will put medium and large-sized businesses under continued pressure – ‘and that the UK economy cannot withstand another hit in an already tight labour market’.
It says firms are already struggling to fill their staff vacancies, as recorded in the Chartered Institute of Personnel’s Labour Market Outlook report and that a depleted contractor workforce able
Tag Archive for Accounts & tax
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Call for Treasury to simplify small business tax regime
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Government has been urged to simplify the current small business tax regime, replacing myriad taxes with a levy on turnover.
Free-market think tank the Centre for Policy Studies argues that small and family businesses with revenue of under £1m should be given the option to replace corporation tax, business rates, VAT and employer’s National Insurance with a “simple consolidated tax”.
Home Secretary Sajid Javid was due to launch the Think Small report in London today. The report is written by Nick King, former special adviser to Javid when he was business secretary.
According to a YouGov poll commissioned for the report, 75pc of small business owners believe the current tax regime is too complicated.
Entrepreneur enthusiasm
Seventy-two per cent out of more than 2,000 SME owners and managers said they would move to a simple turnover tax if the amount of tax they had to pay remained the same, because of its simplicity. More than a quarter of respondents said they’d move to the new system even if it meant paying more tax.
From the Treasury’s viewpoint, a SCT would raise the same amount of money as current arrangements, while SME owners who found themselves paying more under the
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Q&A – Sarah Turner, Angel Academe: ‘Women tend to talk more honestly about their business’
by Anna Jordan • • 0 Comments
Originally written by Anna Jordan on Small Business
It’s only a few days until the 2019 BAFTAs and I’m heading to the charity’s home in the West End of London.
The café is abuzz with clinking mugs, gently rumbling chatter and the whooshing sound of the steamer on the coffee machine.
I’m meeting Sarah Turner, CEO of Angel Academe, an angel investment network supporting tech businesses with at least one female founder.
She’s sitting next to the window in a high-backed purple chair – I feel as if I’m about to present a pitch to her. As I take the seat opposite, I wonder if she feels the same way.
We’ll be talking about the difficulties that women face both as entrepreneurs and in becoming investors themselves.
Research from the British Business Bank recently found that only 1p out of every £1 of venture capital funding goes to female start-ups. At the current rate, it will take over 25 years for all-female teams to receive 10p for every £1 of venture capital investment. A huge 89pc is going to all-male teams with the remaining 10pc going to mixed gender teams.
Meanwhile, the UK Business Angels Association (UKBAA) says that a meagre 14pc of the UK’s angel investors
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How to tackle late payments to your small business
by Antti-Jussi Suominen • • 0 Comments
Originally written by Antti-Jussi Suominen on Small Business
Small businesses face an ongoing threat from late payments. Chancellor Phillip Hammond announced in his Spring Statement plans to “tackle the scourge of late payments” by large corporations to their small suppliers. Promising a “brighter future”’ for the UK’s 5.6 million small businesses, he outlined a requirement for big companies to report on how they’re paying their suppliers.
According to the Federation of Small Businesses, around four in five businesses have been paid late, the impact of which is far-reaching.
Bacs, the bank money transfer service, has calculated that Britain’s small businesses spent £6.7 billion in 2018 just to collect money they were already owed. Furthermore, the same research revealed that over a quarter of small business owners who have experienced late payments have been forced to pay their own suppliers late, and 28pc say they’ve had to cut their own salaries in order to keep their business afloat. Indeed, cash flow issues arising from late payments mean that more than two million people in the UK may not have been paid in time.
Late payments result in the closure of more than 50,000 small businesses each year, says the FSB, costing the economy £2.5 billion.
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Why small businesses are missing out on millions in R&D tax credit relief
by Mark Tighe • • 0 Comments
Originally written by Mark Tighe on Small Business
Businesses grow by increasing sales. The more and the faster you sell, the quicker you will grow, conventional wisdom tells us. However, there are ways to accelerate or boost business growth without the constant need for new sales or new customers, and these rest largely on one key ingredient: innovation.
First, we should define this overused term.
Innovation does not refer only to new products or ideas but can apply to new ways of doing things, such as altering business models to better suit the needs of customers and staff or adapting processes to improve the end product or service.
All these things could, of course, help you sell more. But such innovations usually require significant time and financial investment before they become commercially viable — and not all “innovations” will prove to be successful.
But even failed innovations can bring rewards that can benefit your bottom line, providing extra capital that can be reinvested to fuel further business development.
It does this through two main vehicles — research and development (R&D) tax credits and Patent Box tax credits.
These two forms of government tax relief are designed to reward and encourage greater innovation across the UK business sector
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SMEs hit by new UK transfer pricing rules
by Batanayi Katongera • • 0 Comments
Originally written by Batanayi Katongera on Small Business
On 1 April 2019, the UK introduced new anti-profit fragmentation legislation intended to counter cross border structures which result in a tax mismatch. The rules are intended to apply where UK value is transferred or undervalued, resulting in that value being realised in a lower tax jurisdiction.
The rules place an obligation on taxpayers to prove that the arrangements are priced at arm’s length which means pricing the arrangements on the terms that would apply if there was no relationship between the UK person or company and the overseas person or company. SMEs are generally exempt from UK transfer pricing but the new rules effectively extend the UK transfer pricing rules to SMEs.
Background
The new measures were first introduced in the Autumn Budget of 2017, followed by a consultation that ran from April to June 2018.
The draft legislation and a response document were published in July 2018. After a period of consultation the legislation was introduced in Clause 16 and Schedule 4 of the Finance Bill 2018-19, including material changes to make it less burdensome with regards to measures such as self-notification and upfront tax payments.
The legislation introduced new anti-avoidance rules, effective from April 2019,
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Funding my business led to stress-related alopecia – podcast
by Anna Jordan • • 0 Comments
Originally written by Anna Jordan on Small Business
Welcome back to Small Business Snippets, the podcast from SmallBusiness.co.uk
In this episode, Anna Jordan chats to Helena Murphy, co-founder of investment consultancy, Raising Partners. She explains how funding a previous business led to losing her hair, her tips for managing stress and common misconceptions around raising funds.
Be sure to visit SmallBusiness.co.uk for more articles around funding, stress management and social media as a business owner.
While you’re there, remember to like us on Facebook @SmallBusinessExperts and follow us on Twitter @smallbusinessuk, all lower case.
You can listen to it here:
Helena Murphy: Funding my business led to stress-related alopecia
We’ve also got podcast episodes looking at:
One entrepreneur’s first professional public speaking engagement
Adapting to UK life and learning English before starting a business
Securing seed funding
Finding the perfect head of customer care
Reaching a £1 million annual rate of return
Boosting client numbers from 30 to 850
Starting a brand new business from scratch
To find out more about Small Business Snippets, you can also download the trailer.
If you want to listen to the podcast elsewhere, it’s available on iTunes, Google Play, SoundCloud and Spotify.
Funding my business led to stress-related alopecia – podcast
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5 ways small businesses can keep on top of freelance payments
by Nick Woodward • • 0 Comments
Originally written by Nick Woodward on Small Business
Many small businesses rely on highly skilled freelance and flexible workers to help them grow and run efficiently. It is imperative that in order to retain and attract the best talent, businesses do not repeatedly make freelance payments late.
According to the Federation of Small Businesses, late payments are killing 50,000 businesses a year.
For a small business looking to scale up and grow, it is vital that they avoid late payments and do not join the list of businesses that are dying because of them.
Here are five ways that businesses can keep on top of their payments:
Standardise timesheets
Many small businesses that rely on contractors receive a vast array of timesheets, ranging from highly detailed Excel spreadsheets to handwritten letters and even faxes. The process of sorting all this information out is confusing and a waste of time.
Small businesses should ensure that all freelance or flexible staff submit their timesheets in a coordinated and standardised fashion to reduce time spent organising them.
Ditch paper timesheets
Paper timesheets may have worked in the past, but the truth is that they are more prone to human error, use up paper and take up physical space. Timesheet errors are made
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Off-payroll legislation and loan charge set to devastate UK plc
by Stephanie Spicer • • 0 Comments
The contentious loan charge debacle and concern over off-payroll legislation continues – with MPs squeezing in time between Brexit to debate the issues yesterday in Parliament, something welcomed by worker representatives. Two debates have taken place in Parliament : MPs meeting to express their concerns around the off-payroll rules. And MPs also debated the impact
The post Off-payroll legislation and loan charge set to devastate UK plc appeared first on Small Business.
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Reduce your tax bill before the end of the tax year using ten key actions
by Jonathan Amponsah • • 0 Comments
In the world of tax, it can be said that if you do not plan ahead to reduce your tax bill, it is certain that you will pay more tax than you should do. If you are a higher rate tax payer, a sole trader or have a company with a March year end, here
The post Reduce your tax bill before the end of the tax year using ten key actions appeared first on Small Business.