Originally written by Matthew Cushen on Small Business
Why should entrepreneurs care about EIS and SEIS? The simple answer is because your potential investors do.
No credible entrepreneur would consider launching a product or service without getting into the head of their consumer. They would make sure they understand the needs they were satisfying, when, where and how competing options where purchased and consumed, and what it takes to influence the consumer.
It’s no different when ‘selling’ your business to investors. The more you understand about them, their rationale and how they make decisions, the better you’ll do in attracting cash to your venture. This means researching what you can about a potential investor. Are they professional (i.e. invest for a living, as part of a structured firm, maybe investing other people’s cash) or amateur (an angel investor, either alongside their day job or having retired)? Where does the cash come from? What is their investment rationale? What else is in their portfolio? How much do they like to get involved?
There’s one aspect that drives many investors in the start-up space and one reason that equity investment for start-ups is more available in the UK than in many other countries. The government have
Tag Archive for Accounts & tax
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Small businesses may have to pay 2% online sales tax
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Small businesses face being hit with another sales tax as Rishi Sunak considers launching a digital sales tax for goods sold online.
The Treasury is debating whether to charge 2 per cent on top of goods sold online, as a way of giving High Street shops a slight price advantage over online retail, according to The Times newspaper. The levy would raise around £2bn a year.
Last year, the Commons Treasury committee called on the government to consider an online sales tax to create a more level playing field in the retail sector.
>See also: Nearly a quarter of small businesses cut jobs despite furlough scheme
Another idea under consideration is charging home-delivery customers a surcharge for having online goods delivered online, which say critics, is adding to urban congestion.
Both ideas are part of a wider review into business rates, which the Government launched as a consultation earlier this month.
The review, begun last week, will conclude by next spring. In a consultation paper, the Treasury said it was “exploring the potential strengths and weaknesses of alternative property and online taxes put forward as possible replacements for rates”.
The COVID-10 pandemic has struck when bricks-and-mortar shops are already struggling
Hot Business News Today
Small businesses may have to pay 2% online sales tax
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Small businesses face being hit with another sales tax as Rishi Sunak considers launching a digital sales tax for goods sold online.
The Treasury is debating whether to charge 2 per cent on top of goods sold online, as a way of giving High Street shops a slight price advantage over online retail, according to The Times newspaper. The levy would raise around £2bn a year.
Last year, the Commons Treasury committee called on the government to consider an online sales tax to create a more level playing field in the retail sector.
>See also: Nearly a quarter of small businesses cut jobs despite furlough scheme
Another idea under consideration is charging home-delivery customers a surcharge for having online goods delivered online, which say critics, is adding to urban congestion.
Both ideas are part of a wider review into business rates, which the Government launched as a consultation earlier this month.
The review, begun last week, will conclude by next spring. In a consultation paper, the Treasury said it was “exploring the potential strengths and weaknesses of alternative property and online taxes put forward as possible replacements for rates”.
The COVID-10 pandemic has struck when bricks-and-mortar shops are already struggling
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IR35 freelance tax changes will go ahead in April 2021 – are you ready?
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
The Government has voted through IR35 reform, which will bring millions of freelancers and contractors into pay-as-you-earn from April 2021.
IR35 puts the onus on employers to decide whether freelance contractors should pay national insurance will take effect from April 21 2021.
Contractors argue that although they will be taxed like regular PAYE employees, they will have none of the benefits of full-time staff, being both still on short-term contracts with no paid holiday.
>See also: Taxman will not fine you for getting things wrong with IR35 within first year
What is IR35 and how does it affect me?
Currently, contractors assess their own tax status, but impending reforms coming into force from April 6 2021 will shift this responsibility to hiring businesses.
The Government has proposed the changes to contracting tax rules in the private sector to combat what it calls “disguised employment”, where contractors do essentially the same work as employees but play less tax and reduced national insurance contributions.
Currently freelance contractors, one-man-band limited companies who work on projects for companies, pay corporation tax at 20 per cent instead of higher PAYE rates, while employers duck national insurance contributions. The Treasury sees both freelancers and employers as
Hot Business News Today
IR35 freelance tax changes will go ahead in April 2021 – are you ready?
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
The Government has voted through IR35 reform, which will bring millions of freelancers and contractors into pay-as-you-earn from April 2021.
IR35 puts the onus on employers to decide whether freelance contractors should pay national insurance will take effect from April 21 2021.
Contractors argue that although they will be taxed like regular PAYE employees, they will have none of the benefits of full-time staff, being both still on short-term contracts with no paid holiday.
>See also: Taxman will not fine you for getting things wrong with IR35 within first year
What is IR35 and how does it affect me?
Currently, contractors assess their own tax status, but impending reforms coming into force from April 6 2021 will shift this responsibility to hiring businesses.
The Government has proposed the changes to contracting tax rules in the private sector to combat what it calls “disguised employment”, where contractors do essentially the same work as employees but play less tax and reduced national insurance contributions.
Currently freelance contractors, one-man-band limited companies who work on projects for companies, pay corporation tax at 20 per cent instead of higher PAYE rates, while employers duck national insurance contributions. The Treasury sees both freelancers and employers as
Hot Business News Today
Coronavirus: how do I defer my next VAT payment?
by Anna Jordan • • 0 Comments
Originally written by Anna Jordan on Small Business
Some small business owners are still confused as to whether they should complete their VAT return, according to MHA MacIntyre Hudson.
If you’re a UK VAT registered business and have a VAT payment due between 20 March 2020 and 30 June 2020, you can opt to defer the payment until 31 March 2021 or pay it as normal.
You don’t need to tell HMRC that you’re deferring your VAT payment, but you still need to submit your return in time for your original date. Those who make their payments by direct debit should contact their bank to cancel them in good time.
Alison Horner, indirect tax partner at MHA MacIntyre Hudson, says:
“The VAT deferral scheme is automatic but this fact has lulled some businesses into thinking they don’t need to complete a VAT return. It’s easy to think this is no longer necessary, especially as the national shutdown means many businesses can’t physically get to their offices or have furloughed the relevant staff.
“While VAT returns may be digital, businesses still often need to look through paper invoices to get the information they need. Businesses may assume government understands this, and don’t expect a VAT return given
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Don’t scrap entrepreneurs’ relief, argue small firms
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Small business has asked chancellor Rishi Sunak not to renege on the Conservative election manifesto promise to reform, not scrap entrepreneurs’ relief.
The Treasury is said to want to abolish the £2.7bn tax break in the March 11 Budget in order to fund pay for nurses and police officers and for projects that could help “level up” the north and the south.
The relief allows business owners to pay a 10 per cent rate of capital gains tax when they sell their companies, compared with the usual 20 per cent. It usually applies to gains of up to £10m. Entrepreneurs’ relief was introduced in 2008 by Alistair Darling to encourage people to start or back new companies.
The cost of the relief has risen from £427m in 2008-09 to £2.7bn in 2018-19.
However, the Federation of Small Businesses, has hit back at the Sunday Times report that the chancellor will scrap, not reform, entrepreneurs’ relief. Previously, former chancellor Sajid Javid was mulling scrapping entrepreneurs’ relief for start-ups but keeping it on for existing business.
Only around 10 per cent of people who claim entrepreneurs’ relief are selling businesses worth more than £1m, says the FSB. And the vast
Hot Business News Today
Taxman will not fine you for getting things wrong with IR35 within first year
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
The government has confirmed those affected by IR35 tax changes, potentially bringing hundreds of thousands of freelancers within PAYE, will not be fined if they get things wrong in its first year.
Unless, that is, the taxman finds evidence of deliberate non-compliance with the controversial new IR35 rules.
This soft-landing period will only last until April 2021.
The Treasury has published the findings of its review into IR35 off-payroll working rules, due to come into force next month.
As expected, there will be no delay to the implementation to IR35, but the key changes are:
Customers (both employers and freelance contractors) will not have to pay penalties for inaccuracies relating to the off-payroll working rules in the first 12 months unless there is evidence of deliberate non-compliance
HMRC will amend the legislation to exclude wholly overseas organisations with no UK presence
The government will have a legal right to force clients to respond to a request for information about their size from an agency or worker
Brian Palmer, AAT tax policy adviser said: “This means that if employers or [freelance] contractors have taken reasonable steps to comply but get something wrong, HMRC will not be pursuing them with fines and penalties.”
>See
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Rishi Sunak blinks, says HMRC will ‘go soft’ on IR35 changes in year one
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Chancellor Rishi Sunak says the taxman will not be “heavy handed” when IR35 changes come into effect on 6 April, potentially bringing 230,000 sole traders within PAYE.
Answering questions in Birmingham on Saturday night, the new chancellor sought to reassure both companies and freelance contractors, saying the controversial policy will have a soft landing – at least in year one.
HMRC is keen to bring freelance contractors within PAYE in order to tackle what it calls “disguised employment”. Currently freelance contractors, one-man-band limited companies who work on projects for companies, pay corporation tax at 20 per cent instead of higher PAYE rates, while employers duck national insurance contributions. The Treasury sees both freelancers and employers as gaming the system, as effectively many freelancers are full-time employees. The IR35 reforms are projected to bring in £3bn over the next four years.
>See also: One third of freelancers say IR35 changes affecting mental health, contemplating suicide
However, the IR35 changes have triggered howls of protest, with freelancers complaining that rushed implementation has seen unprepared and panicked employers drop them. Nearly one third of freelancers say they are having mental health issues, and even contemplating suicide, because of the uncertainty.
And
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Chancellor Rishi Sunak may scrap business rates in favour of a land tax
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Chancellor Rishi Sunak may scrap business rates in favour of a tax based on tax values.
This land value tax would be levied on landlords, delivering a potential tax cut for hundreds of thousands of small businesses which rent premises.
However, any change could be years away, and for now the new chancellor will announce a “fundamental” business rates review in his March 11 Budget, according to The Times.
>See also: Hike corporation tax to cut business rates, urge retail bosses
A separate package of measures will be included in the budget to provide more short-term relief, the newspaper reported.
Small retail businesses complain they shoulder an unfairly high burden from business rates, which are based on shop rental values and are paid by tenants, rather than landowners.
The tax brings in about £30bn a year, making it the sixth biggest contributor to Treasury coffers, and is viewed by the government as easy to collect and hard to avoid. Rates have also become an increasingly important source of funding for local authorities.
>See also: Influential MPs call for government to rethink broken business rates
However, Ed Cooke, chief executive of retail group Revo said any change in business rates needs to