News

ARE YOU READY FOR MAKING TAX DIGITAL (MTD)?

In just over twelve months most VAT registered businesses will need to comply with new legislation requiring them to submit their VAT returns electronically using an Application Programme interface (API) between their accounting and HMRC software.

Keeping financial records will become digital and most businesses will need to use software or apps to keep their records – the days of manual record keeping are over!

There are exemptions, but for most businesses with turnover above the VAT threshold of £85,000 you will need to start planning for Digital Tax now.

So, what’s the good news?

We’ve teamed up with QuickBooks Online to provide our clients with the best possible fully compliant accounts package, and there are significant benefits to your business if you use our recommended package:

– It’s on the cloud so you can get a clear view of your finances any time any place;
– You will never need to do back- ups of your accounting software ever again;
– Run your business from work, home or on your mobile;
– It automatically grabs bank receipts and payments in real time;
– Use your mobile to photograph purchase invoices and expenses and upload these to the software; and
– Automatically generate and submit VAT returns and other reports with one click!

Just suppose you could see your results, who owes you money, who you owe and your business bank balance 24/7 from your smart phone!

Over the next few months we will be contacting all our clients to discuss the new HMRC rules and to demo how easy the new system is.
In the mean- time, if you are “Good to go”, call us and we will be delighted to help you comply with Digital tax legislation and take your business to a whole new level!

BUILDING A BUSINESS DEVELOPMENT CULTURE

As the business world becomes ever more competitive, it has become increasingly important to create a business development culture within firms. To achieve this, the whole firm must shift its focus from a culture of working “in” the business to also taking some time to work “on” the business.   Everyone has a role to play in business development The responsibility for business development shouldn’t just lie with your sales team or your marketing team. Everyone has a role to play in developing new business for your firm. Every employee has a network of friends and associates. Perhaps some of those friends could become customers of your firm – you just need your employees to ask them for their business.   Provide training and support Business development skills can be learned and cultivated. With the right training, feedback and support, your people can learn how to go about effective business development. It can be useful to conduct regular meetings with your people in order to brainstorm ideas and reinforce the message that “everyone can help to bring in a new customer or two”.   Remuneration and reward Ensure that your business has effective measurement, accountability and reward structures in place for business development activity. Perhaps you can offer a percentage commission to anyone who brings in a new customer. In addition, you can create objectives for each team member, which tie in with an annual bonus structure.   Communicate Ensure that you communicate the firm’s business development goals to all team members across the business. Give recognition to those who have contributed to the firm’s business development efforts and celebrate successes. Internal communication channels can also be useful to ask your team members for ideas in terms of improvements that can be made in order to ensure that everyone is invested in the overall objectives of the firm.   A firm that creates a culture of business development won’t have to rely on a few “rainmakers” to feed the entire business. Instead, everyone can play their part and benefit from creating a client focused firm where everyone can contribute to the success of the business and be rewarded for doing so.

ARE YOU SURE YOU OR YOUR WORKERS ARE SELF-EMPLOYED?

Last year we reported that the House of Commons Work and Pensions Committee published a report calling on the Government to close the loopholes that allow “bogus” self-employment practices, which burden the welfare state but reduce the tax contributions needed to sustain it.   Most of the people working for organisations such as such as Uber, Amazon, Hermes and Deliveroo are not on the payroll, have limited workers’ rights and are paid for each delivery or “gig”. The Committee recommended a default assumption of “worker” status, rather than “self-employed”. The economist Mathew Taylor was also asked to produce a report on the status of such workers and suggested that a new category of “dependent contractor” should be established.   HMRC and the Treasury have now published a consultation into a thorough review of employment status.   Consultation on employment status HMRC published a consultation on employment status on 7 February as a follow up to the Taylor Review of Modern Working Practices.   Individuals and their employers have to know which employment status applies to ensure the right protections are applied – from the National Minimum Wage and holiday pay, to unfair dismissal protection and statutory redundancy pay.   Employment status also affects the taxes that an individual and their employer pay. It is therefore essential in maintaining a clear and effective tax base, with individuals and employers knowing what rates of tax and National Insurance contributions (NICs) are applicable to everyone in their organisation.   The existing legislation defining an employee for both tax and employment rights ultimately relies on whether a contract of service exists. No further definition or clarity is provided in the legislation.   As a result, over time the courts have interpreted the legislation and developed tests to determine an individual’s employment status. These tests are contained in a number of key precedent cases, including a mixture of employment rights and tax judgments.   A possible solution suggested is to legislate a more detailed definition of employment incorporating the irreducible minimum core tests established by case law:

• Mutuality of obligation
• Control over the individual
• Personal service