As FreeAgent accountants one of the things we see often on portals is a bank feed enabled or a bank statement uploaded but none of the transactions explained. Without bank transactions being explained it means the tax timeline may not be accurate and the correct status of the business will not be displayed.
The new tax year has brought a fresh wave of tax bracket and regulatory changes that many small businesses and freelancers will need to adapt to.
Some of the changes will have a positive impact and some will be more negative.
We have summarised the most important changes and detailed who they are likely to affect.
The Chancellor’s final Spring Budget was met with frustration from large portions of the business community, particularly freelancers and other small business owners concerned about the National Insurance tax hike.
But there were also some small crumbs of comfort for small businesses. Here is some of the important budget news and reaction.
Accounting software company Sage has acquired Fairsail, a cloud-based human resources (HR) firm, in a bid to boost the personnel capabilities of Sage software packages.
Founded in 2007, Fairsail claims to offer larger businesses more visibility over their human capital, making it easier to manage workforces.
Fairsail’s end-to-end cloud system is used by more than 140,000 mid-sized companies, including multinational businesses like Paddy Power, Betfair, Skyscanner, Trainline and Trustpilot.
Previously a minority stakeholder, Sage chose to buy the remaining shares of Fairsail after the success of joint project Sage People, which launched last year.
A survey of small businesses has revealed that 49% have, at some point, lost money through self-assessment submission errors, either through paying fines or by paying additional tax.
The survey, conducted by a cloud accountancy software company, also asked small businesses for their opinions about the new Making Tax Digital initiatives that will change the way that small businesses pay tax.
Of the 1,000 respondents, 62% said that they were prepared for the changes, with 20% reporting that they weren’t aware of the changes.
Freelancers and contractors have welcomed the Chancellor’s decision to drop a National Insurance contributions (NICs) increase that would have affected self-employed people.
Chancellor Philip Hammond told MPs that the government would not proceed with NICs increases laid out in his budget last week after the government came under fire for apparently seeking to break a 2015 manifesto promise.
HMRC’s long awaited Employment Status Indicator (ESI) tool has now gone live, less than a month before the all-important IR35 rule change for limited company contractors in the public sector.
And it has raised a few eyebrows.
HMRC insist that the ESI isn’t completely finished yet, and so you might expect a few results to be incorrect, but some experts think that the problems go a little deeper than that.
Our Operations Director and Deputy Accountancy Services Manager attended the FreeAgent Practice Summit in London attended by contractor accountants across the UK and hosted industry experts such as Julia Kermode CEO of the FCSA, David Halsey, The Head of the Office at the Office Tax Simplification and John Stokdyk, the Global Editor of AccountingWEB
The Summit was extremely useful with excellent insights into the direction HMRC are looking to take and where Cloud Accounting looks likely to take the accounting profession. It’s all good news for clients as Cloud Based applications like FreeAgent and Xero automate more and more of the usual accounting tasks allowing more added value advice to be provided for the same fees.
Experts have claimed that the first revaluation of business rates since 2010 will benefit online retailers and high street chains, to the detriment of offline businesses and independent retailers.
Due in April, the controversial revaluation was initially welcomed by ministers.