Tag: businessadvice

How can Xero benefit your business?
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If you are a small business owner or self-employed, you will know how important it is to ensure your finances are managed well.
Ensuring you have a clear picture of your finances, better enables you to deal with challenges that arise in running a business.
That, along with the implementation of Making Tax Digital (now due in 2026), it’s never been a better time to get on board with accounting software.
As an accountancy practice, we use and recommend Xero, and in this blog we will cover the benefits of using Xero for your business.

Ok, so what is Xero? In a nutshell, it’s a cloud accounting software designed with the small business owner in mind. It is multi-functional and offers a clear picture of your finances at any given time.
From sending invoices to tracking projects, you can do it all on this piece of software.

What are the benefits of using Xero?

Anytime, Anywhere. In the words of Xero themselves. The software comes with an app so you can access what you need wherever you are. From creating invoices on the go, to reconciling payments, Xero makes it easy to do any accounting business quickly and efficiently. You can also have multiple users meaning team collaboration is at your fingertips.

You can sleep well in the knowledge that the software Is secure, data is protected and accurate, and can easily be used in collaboration with your accountant, saving time so you can get on with business. You’ll get handy analytics too so you can really build a picture of your business finances.

Late payments messing with your cashflow? With Xero you can get paid up to twice as fast by linking the software with online payment platforms, meaning you can add a ‘pay now’ button to your invoices making payments easier to track and easier to pay. You can even automate chasing late payments!

Would you like to eliminate having to sift through boxes of receipts and invoices? Xero is cloud based meaning all your documents are stored safely – no need for paper copies!
Another way this software saves you time is by linking your bank feed taking away the need for manual bookkeeping processes and ensures bank reconciliation.

As business owners, we know you wear many hats. By using an accounting software such as Xero, you are winning back much valued time to dedicate to growing your business.

Have any questions? Get in touch and we will be happy to chat!

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A guide to going self-employed
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Going self-employed can be both an exciting and lucrative move, with some of the benefits including setting your own work schedule and being able to scale your business. You can create what the perfect job looks like to you.
However, it’s also a challenge that comes with responsibilities – you will be in charge of your own destiny and that takes courage, determination and a particular mindset. You’ll have to take on multiple roles to ensure you are adhering with self-employment regulations and you may find this overwhelming at times.

It is your responsibility to ensure you research your options to make sure you are making the right decision for you.

We have put together a handy guide of things you will need to consider before going self-employed.

It’s on you.
Until you scale your business, (if that is the intention) then everything is on you and you will be working alone. From customer service to finances, there will be a lot to keep on top of.
Joining local networking groups for business owners is a good way to connect with likeminded individuals and gain that support you may feel is lacking. It’s also a great way to market yourself.

It may not be flexible in the short term.
Being self-employed is a great way to create a better work life balance as you can pick and choose what you do. However, with the loss of a regular pay day, it may be that you need to take on as much work as possible at first to establish the business in order to give you a flexible future. You may also find yourself tackling admin and customer service in between your working hours.

There are financial responsibilities.
Registering as self-employed means you will have an obligation to complete a self assessment tax return each year. This is to declare your income and pay the correct amount of tax owed. When you are self-employed, you are able to claim for certain expenditures which will alter your tax bill, so always get some advice from an accountant about how that works. Remember, an accountant is your business partner and will want to help you pay less tax.

You’ll have to keep accurate and up to date records of receipts and invoices too. Your accountant can advise you on what the best software to use for this is – HMRC will be implementing Making Tax Digital soon which means you will have to use approved software such as Xero to complete your assessments.

As your tax doesn’t get paid as you earn, you must also remember to put money aside so you are prepared for the tax bill!

Depending on your earnings threshold, you may also need to consider being VAT registered.

You’ll need to broaden your skills.
When you are self-employed you will have to undertake admin, market yourself, pitch for work and more.
Linked in offer some brilliant training videos across lots of different topics, including communication skills, which can be helpful for business owners.

You will have different rights.
Being self-employed means you wont have the same rights as employees. That includes no sick or holiday pay, and losing employer pension contributions.

Don’t forget insurance!
You’ll need to get business insurance for added protection. Whether someone injures themselves at your workplace, or you flood a customers property – you need to get covered.

Use professionals.
Setting up solo can be daunting and there is a lot to remember. By hiring a professional accountant or bookkeeper, you can relax in the knowledge that all of your finances are being looked after, and you can concentrate on growing your business.

Does this article resonate? Are you thinking of going self employed? Did you find this blog helpful? We would love to hear from you.

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Autumn Statement 2022 – Lowdown for Small Business
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The much-anticipated Autumn Statement – announced by Chancellor Jeremy Hunt yesterday – included a number of measures that will have an impact on small businesses and landlords in the UK. Here’s a roundup of the key takeaways.

Business tax and National Insurance changes
Rate of Class 2 National Insurance to increase
From 6th April 2023, the rate of Class 2 National Insurance for self-employed people will increase to £3.45 per week.

VAT registration threshold to remain at £85,000
The Chancellor confirmed that the threshold for VAT registration will remain at £85,000 worth of VATable sales until 1st April 2026.

Employment Allowance to remain at £5,000
The Employment Allowance – which reduces or cancels out employer’s National Insurance for certain employers – will remain at £5,000.

Corporation Tax rate to remain at 19% for smallest companies
From 1st April 2023:

companies that make a taxable profit of £50,000 or less per year will continue to pay Corporation Tax at the ‘small profits rate’ of 19%
companies with taxable profits between £50,001 and £250,000 a year will pay Corporation Tax at a rate of 25% with a ‘marginal rate relief’ deduction
companies with taxable profits of £250,001 or more a year will pay Corporation Tax at a rate of 25%
National Minimum Wage thresholds increased
From April 2023, all thresholds for the National Minimum Wage will increase. Meanwhile, the National Living Wage will increase by 9.7% to £10.42 an hour for those aged 23 and over.

Increase in bills capped for the smallest businesses affected by reductions in rate relief
For the smallest businesses affected by reductions or changes in eligibility to small business rate relief or rural rate relief, the increase to their bills will be capped at £600 per year from 1st April 2023.

Research and Development (R&D) changes to be implemented
For expenditure on or after 1st April 2023, the Research and Development Expenditure Credit (RDEC) rate will increase from 13% to 20%. The small and medium-sized enterprises (SME) additional deduction will decrease from 130% to 86%, and the SME credit rate will decrease from 14.5% to 10%.

Personal tax and National Insurance changes
Additional rate of tax threshold reduced
The threshold for the additional rate of tax will be reduced from £150,000 to £125,140 from April 2023.

Changes to this and other Income Tax thresholds for non-savings and non-dividend income currently apply to England and Northern Ireland only. The Scottish government has yet to announce changes to Income Tax rates or thresholds. The Welsh government has the power to vary Income Tax rates but has never yet done so.

All other changes, including changes to the thresholds where they apply to savings or dividend income, apply UK-wide.

All other Income Tax and National Insurance thresholds frozen until April 2028
The existing thresholds for all rates of Income Tax and National Insurance will be frozen until April 2028, including the Personal Allowance.

Dividend allowance cut
In April 2023 the dividend 0% tax allowance will be cut from £2,000 to £1,000. In April 2024, it will be reduced further to £500.

Changes to the Annual Exempt Amount for Capital Gains Tax
The Annual Exempt Amount for Capital Gains Tax will be reduced from £12,300 to £6,000 from April 2023. In April 2024, it will be reduced further to £3,000.

Electric cars will no longer be exempt from Vehicle Excise Duty
From April 2025, electric cars will cease to be exempt from Vehicle Excise Duty.

To learn more about the changes announced in the Autumn Statement, you can read the full report on the government’s website.

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Things to consider before you start a business
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Whether you’ve had a lightbulb moment, a brilliant idea, or you have had enough of your day job, if you are considering starting a business there’s a lot to think about.
From legal obligations to scaling the business – it’s going to take lots of work and it is a big deal!
At Soldi Partners we help lots of new businesses lift off and have put together a list of considerations before you take the jump!
If you are reading this article then you are already on the right track – research, whether it’s market research or looking into the best accountants in your local area, is imperative when planning a new business.
Coming in at number one is BUSINESS PLAN. A business plan is the structure of the outfit. Having goals set and how you will achieve them will keep the business steering in the right direction and enable you to visualise and detail where you are starting, and where you want to go. Not forgetting, if you want potential investors or bank loans you’ll need a solid business plan. It’s helpful to evaluate your business plan yearly to ensure you are on track to achieving the goals and outcomes you set out.
Don’t know where to start? There are some brilliant templates on Canva.com to get you started, and thousands of free resources on the internet. (Watch this space for downloadable resources coming to this website soon).

Once you have a plan, you are going to need to think about the LEGALITIES of starting a business. If you set up a company, you’ll have certain legal responsibilities to adhere to including filing important paperwork to HMRC and paying corporation tax. If you opt for self-employment, you’ll need to remember to file a tax return yearly or you could face penalties. An accountant will be able to talk to you about what the best option for your circumstance is.

Regarding accountants, the next piece of advice is to KNOW YOUR NUMBERS. It can be easy to go in blind when starting a business but getting a grip of your finances from the start will help you in the long run. You’ll need to consider your overheads and costs, whether you need investment, what your margins will be and much more. Hiring an accountant or bookkeeper will be invaluable for your business – and professional services are tax deductible. You can read more reasons to hire an accountant here.

If you have a BUSINESS PARTNER, it’s a good idea to think about a shareholder’s agreement. This will protect you both if there are any disputes down the line. It can and does happen! Business partners are often family members or friends, and it can feel unnatural to have these agreements in place, but nonetheless imperative to future proof the business.

Figuring out how you are going to MARKET your product or service is important. Do some research, look at what your competitors are doing, think about a budget and plan. Outsourcing things like logo’s, branding and website is beneficial if budget allows – making the right marketing choices will be hugely impactful on how successful your business is.
Finally, speaking to other business owners will be invaluable on your journey. Being a business owner isn’t a 9-5 – it can feel like a 24/7! You will likely wear many hats when you start your journey and networking with other likeminded people who can help, advise, or even just empathise is going to be a huge support for you. You’ll find plenty of UK business support groups on Facebook and there will be dedicated business networking groups in your area that not only provide support but often end in business relationships and referrals too.

I hope you found this helpful, and wherever you are on your business journey, Good Luck!

For more business start up support, Enterprise Nation have a wealth of information, advice, and events.

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VAT registered businesses must act now for MTD
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From Tuesday 1st November, VAT registered businesses not already signed up to Making Tax Digital, will no longer be able to use their existing VAT online account to file their monthly or quarterly VAT returns. It is now a legal requirement to sign up to Making Tax Digital and use compatible software to file returns. If you don’t you may face penalties.

It’s easy to sign up – using the following steps.

1: Choose a MTD compatible software that is right for you. You can find a list of options on gov.uk or talk to your accountant.

2: Check the permissions in your software, and allow it to work with MTD. You can then file your returns easily.

3: Keep digital records for your current and future VAT records.

Your accountant may offer training in the compatible software you choose, or offer packages with their practice that includes it.

If you need help or advice about Making Tax Digital for VAT – contact Soldi Partners.

 

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What’s in Kwasi Kwarteng’s Mini Budget?
Posted on by soldi_admin

New Chancellor Kwasi Kwarteng set out a mini-budget on Friday with some headline grabbing tax cuts, which he says are the biggest in a generation.

What do they mean for you?

 

Income Tax.

Kwarteng has cut the basic rate of income tax from 20% to 19%, effective April 2023. The Government estimates 31 Million people will benefit from £170 more a year.

Basic rate applies to people who earn between £12,571 and £50,270 Per Annum.

He has also abolished the higher rate income tax of 45%, instead keeping one single rate of 40% for people who earn over £50,270.

 

Corporation Tax.

The Chancellor has decided to stop the planned rise in corporation tax to 25%, opting to keep it at the current 19%.

 

National Insurance.

The recent rise in NI contributions will be reversed from November 6th. Since April, both workers and employers have paid an extra 1.25% in the pound.

 

Stamp Duty.

There are changes to when and how much stamp duty you pay now when you buy a property in England and Northern Ireland.

The price in which you pay has now doubled from £125k to £250k. (First time buyers don’t pay until £425k)

From then the rates are:

5% £250k-925k

10% £925k-£1,500,000

12% £1,500,000 +

 

Energy.

The big talking point this summer. Kwasi Kwarteng has announced there will be a freeze on energy bills for both residential and businesses, costing the government an estimated £60 Billion for 6 months.

 

Working and Investments.

Companies can invest tax free annually at £1M indefinitely.

IR35 rules are going to be simplified.

Regulations are changing so pensions funds can increase UK investments.

Share options for employees have been doubled from £30k to £60k.

New and start up companies will be able to raise up to £250k under a scheme giving tax relief to investors.

 

Good news if you are a banker. The limitations on bankers’ bonuses have been scrapped.

 

For a more detailed overview of the plans, go to gov.uk .

If you’d like to discuss how the changes will affect you or your business, as always, give Soldi Partners a call.

Kindest,

Theresa.

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How can my business survive a recession?
Posted on by soldi_admin

The UK seems to be officially heading for a recession and in this blog we will be discussing how you can prepare your business for the coming months.

Before we evaluate the steps you can take to protect your business in a recession, it’s important to highlight that a recession is part of a normal economic cycle, and there will be easier and better times ahead.

A recession can in fact, focus your attention on cost control and have a long-term positive impact on your financial processes and disciplines. (We like to focus on the positives where we can!) So let’s take the perspective of a challenge that we are ready to complete with the following tips and advice from our expert panel of accountants.

 

1: Cash flow is King. Cash flow is the number one priority in surviving a downturn in the economy and this requires stringent financial management. Remember, if you don’t often speak with your accountant, now is the time to take a look at the business accounts together.

2: Manage your debt. Companies with higher debt are more vulnerable in a recession as your outgoing commitments are higher. Can you consolidate your debt into one payment? It may require a longer term at a higher interest rate but could that be less impactful on your business and retain more cash In the business? Whatever you do don’t bury your head in the sand – more that likely something can be arranged to help manage this better.

3: Credit control needs to be tighter than ever. It is likely that your customers are facing the same financial issues, therefore it’s more important than ever to get a tight control on credit. This is something your accountant can help you with if you prefer to outsource invoicing so as to keep your professional relationships stress-free.

4: Overheads. Can you cut back on any overheads? If sales are down, can you cut back on staff or staff hours? Business owners are often reluctant to do this, but it could be essential to your business surviving or not.

Maybe now is the time to invest in automation and IT systems for your business to ensure a smoother running and less staffing overheads.

Can you outsource more jobs so you don’t have to employ an in house staff member? For example HR, Payroll or bookkeeping?  This can be higher in cost yet more cost effective as they will be experts, likely more efficient and you won’t need to absorb employer obligations such as holiday and sickness pay.

Are you on the best deals for your utility bills? Take some time to look at all of your expenses and ensure that you aren’t overpaying in places.

Do you still need that big premises? Can you move to remote working? Can you make better use of space and downsize?

 

5: Re assess your marketing strategies. A recession is not the time to cut back on your marketing spend. In fact, your voice needs to be louder than ever and your customers need to know why they need to choose you over your competitors when they are having to tighten their belts.

Take time to assess your marketing strategies and ensure you are really talking effectively to your consumer – focus on them. Offer meaningful deals and promotions, but don’t compromise on quality.

 

6: Prioritise networking events.

Post pandemic networking is on the up – not surprising! And it’s more important than ever to make those all important business connections and lasting business relationships. These connections can likely offer business opportunities, offer collaborative ideas and usually you can gain advice and support from other like minded business owners. Collaboration is key.

 

This list is not exhaustive and as always, please do give Soldi Partners a call if you’d like a chat. It’s always jargon free – and its always no obligation.

www.soldipartners.co.uk 

Theresa x

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5 Ways to Get Support for your SME
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Five ways you can get financial support for your business

1: Claim up to £5,000 with employment allowance

Employment allowance is a tax relief which allows eligible businesses to reduce their national insurance contributions bills each year. You can claim this is if you are a business, and your employer Class 1 national insurance liabilities were less than £100,000 in the previous tax year.

That’s a new tax cut that’s worth up to £1,000 for nearly half a million SMEs!

2:Get a discount of up to £5,000 on software, with Help to Grow: Digital

Help to Grow: Digital is a UK wide Government backed scheme that aims to help businesses choose, buy and adopt digital technologies that will help to grow their business.

Eligible businesses can receive a 50% discount on buying new software worth up to £5,000 per SME, alongside free, impartial advice and guidance about what digital technology is best suited to boost their business performance.

3: Get up to half off your business rates 

From April this year, small retail, hospitality and leisure businesses can benefit from 50% off their business rates bills. The business rates multiplier has also been frozen.

4: Invest in your business with Super-deduction and Annual Investment Allowance

To spur business investment, the super-deduction allows companies to cut their tax bill by 25 pence per every £1 they invest in any qualifying machinery and equipment. This can include the purchase of computers, most commercial vehicles and office furniture. This allows businesses to spend up to £1 million on qualifying business equipment , and deduct in-year its full cost before they calculate their taxable profits.

5: Benefit from the cut in fuel duty

The government has cut fuel duty on petrol and diesel by 5 pence per litre for 12 months – effective from 23 March 2022.

This cut, plus the freeze in fuel duty in 2022-2023 , represents a £5 billion saving worth around:

  • £200 for the average van driver
  • £1,500 for the average haulier

 

Information on behalf of HMRC – for more information visit Gov.uk or Call us for a no obligation Consultation. 

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Five things to know if you are considering employing someone
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You’re thinking of employing someone? Great news! This is a positive sign that your business is thriving.

Taking on employees can be a lucrative move – whether you are hiring for someone’s particular expertise to grow your business, expanding your services, or making use of an extra pair of hands so you can dedicate your precious time to scaling the business.

Employing someone isn’t straightforward (nothing ever is in business, right?) and you’ll need to take on new responsibilities, so we have put together some handy tips to bear in mind when taking this exciting step.

 

1 – Know your facts.

There are numerous responsibilities you will take on when employing someone, so it’s important to have knowledge of employees’ basic statutory rights, employment law, and your PAYE obligations. It might be worth hiring an expert to help you navigate new company policies and contracts to ensure you are compliant as necessary.

 

2 – Get insured.

You’ll need to get Employment Liability Insurance when taking someone on – this is a legal requirement and is there to protect your staff if they get injured or become ill as a result of working for your business. It’s a relatively small monthly cost to ensure you aren’t liable if something goes wrong.

 

3- Be careful not to discriminate.

When recruiting you’ll need to ensure you are not discriminating against anyone in the process. Ensure you have a thorough job advert, which clearly states the skills you require for the job.

Don’t ask questions or make decisions based on a candidate’s ‘protected characteristics’  – which include gender and gender reassignment, race, age, disability, religious belief, sexual orientation, pregnancy and marriage, and civil partnership.

 

4- Can you afford it?

There will be costs involved when hiring someone. You’ll need to check:

  • What the National Minimum wage is
  • How much National Insurance you’ll have to pay
  • How much sick pay your employee is entitled to
  • How much you’ll need to pay towards their pension
  • Maternity / Paternity leave costs (this will include direct payments to your employee along with taking on someone to cover their absence, should you need to)

 

5- Register as an Employer.

Once you’ve done all of the above checks and you are prepared to take on an employee, you’ll need to register as an employer with HMRC. You’ll find all of the information you need on the GOV.UK website along with the online forms to submit. Click here for more info.

 

Soldi Partners is able to offer friendly, reliable, and simplified support for your business at all stages.

If you’d like to discuss anything covered in this article, get in touch.

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