Minimum Wage and National Living Wage increases The national living wage and the minimum wage will rise from April 2019. Over two million workers will see their pay increase next April, as the National Living Wage increases to £8.21 an hour. This is the hourly rate for those aged 25 or over and working in Britain The minimum wage for those aged 16-24 also will also increase, whilst the pay for apprentices will increase by 20p an hour.v

Delivered by Chancellor Philip Hammond on Monday, the 2018 Budget had some important announcements for small businesses, contractors and freelancers.

The statement was welcomed by some business figureheads, but criticised by others. In this blog post, we unpack some of the key announcements and explain how they may affect your business finances.

Inflation puts income squeeze on freelancers

Record levels of inflation could hit freelancers and other microbusiness owners harder than other workers if they have higher than average travel costs.
With inflation rising faster than average earnings, freelancers are facing a large squeeze on incomes.
Inflation, as measured by the Consumer Prices Index (CPI), hit a five year high of 3.0% last month.
Prices outstripped wage growth by 0.9%, with earnings only increasing by an average of 2.1% since the start of the year.

If you work as a freelancer, or run your own small business, then using a spreadsheet may seem like the most natural bookkeeping solution.
And spreadsheets can work well, for a while..

Chancellor George Osborne delivered his fourth Budget statement in the last 12 months on Wednesday and there were some important announcements for contractors and small business owners.
We have summarised the most important changes below.
Increase in the tax-free allowances
The government will increase the tax-free personal allowance threshold from £11,000 to £11,500. The higher rate threshold will also increase from £43,000 to £45,000. Both changes will take effect from April 2017. This is a positive move for basic rate taxpayers who will be taking home an extra £56 each year. The government believes that 1.3 million lower earners will not be taxed at all.

Was the budget kind to the self-employed?

Having been battered by some recent budget statements, contractors and other self-employed workers might have had a sense of foreboding as Philip Hammond stood to deliver his budget speech to the Commons yesterday.
Rumours circulating in the run-up to budget day didn’t help matters. It was widely reported that the Chancellor could extend public-sector IR35 compliance rules to the private sector and it was rumoured that the VAT threshold could be lowered.

Strange tribunal decision for online jewellery business
Editor | 10 February 2017
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An unusual tax tribunal raises questions about online businesses paying VAT, particularly in cases involving multiple parties.

The case background:
The recent tribunal case concerned the jewellery business, Avalaya.com Partnership, which had a very close working relationship with a sole trader – Alla Kisil T/A Jewellery 4 All.

In 2009, the two members of the Avalaya partnership lent US$60,000 to the sole trader, who was a personal friend of the partners. The loan was to be repaid in pounds sterling.

FreeAgent: Freelancers missing out on £238 million

Leading cloud-based accountancy software provider FreeAgent has found that nearly a quarter of a billion pounds go unclaimed by freelancers and microbusinesses each year because minor expenses are deemed too insignificant to reclaim.
The software provider reported that because its customer base of freelancers, contractors and very small business owners were reluctant to claim expenses worth less than £10, they were missing out on a massive £238 million each financial year.

Xero TaxTouch

In the US Xero have launched, TaxTouch, a tax app designed to help contractors & freelancers stay on top of their accounts and to help them remove the tax burden.
Unfortunately if you search the UK apple store the app is not currently available in the UK. Being specialist Contractor Accountants we will keep our eye open for its UK launch.
TaxTouch appears to be a lighter version of the full Xero app and hence is available at a lower monthly cost.