DNS Accountants ‘Effortless Accounting’

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6 working weeks left…

With 34 working days left until your must submit your self-assessment, now is the perfect time to start using a cloud accounting software and reduce your workload by two-thirds.

Find out how we can offer you a simple solution to receipt storage issues; help you file your self-assessment on time and reduce your workload by 66%.

Contact us to find out more.

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Highlights of the Autumn Statement, Are you "match fit"?[/i]

Chancellor Philip Hammond’s post-Brexit Autumn Statement, he said, was about preparing the country for Brexit by maintaining fiscal discipline and offering investment for productivity, he said he was getting the UK "match fit". The chancellor confirmed a few things already announced at the Spring Budget and gave away very little – nothing for the NHS or social care to the surprise of some, for example. Then he added a "sweetener" or two to keep us interested and onside until the Budget in spring. His eye seemed quite fixed on perceived "anti-avoidance"; compliance and "fairness", these seemed to be very much at the top of the list.

Main points of Autumn Statement

Personal allowance increased from £11,000 to £11,500 in 2017/18, rising to £12,500 by 2020/21. These incremental increases are good for all taxpayers, meaning some will be taken out of the tax system altogether. That will save HMRC some time, and for contractors it leaves a bit more room for efficient tax planning;

Higher rate tax threshold increased to £45,000 in 2017/18, rising to £50,000 by 2020/21. This is excellent news, helping increase tax planning opportunities for anyone leaning towards the high income bracket or with multiple income streams, including BTL investments;

Corporation Tax rate to fall from the current 20% to 19% from 1 April 2017 and then to 17% on 1 April 2020. I’m sure many hoped it would go down to 15% in line with the incoming US president’s plans, but anyway this is excellent news for businesses as they cope with the turbulence of Brexit.

Anti-avoidance/compliance / "fairness": measures to stamp out the publicly perceived tax advantages of businesses, SMEs, contractors, so watch out! The chancellor hopes to raise £2bn from them, here’s a taste:

Disguised earnings / IR35 / intermediaries’ legislation: we’ve warned and we’ve informed, now it’s confirmed that employers within the public sector as well as contractors will be held jointly responsible for complying with the off-payroll rules. The 5% tax-free allowance for those working in the public sector is to be withdrawn as well, "to reflect the fact that workers no longer bear the administrative burden of determining whether the rules apply".

16.5% VAT flat rate percentage: now anyone using the VAT FRS, who provides services rather than goods, is likely to lose out. As of 1 April 2017, a new 16.5% rate (rather than the 12% or 14.5% VAT FRS rate used currently) will be introduced for businesses with limited costs, i.e. many businesses providing services. You need to urgently review your VAT situation and contact your account manager immediately, you may need to de-register, or revert to the standard rate VAT system.

Cut-back on salary sacrifice and benefit-in-kind (BIK) perks from 5 April 2017: no tax advantage for company cars, health screening, mobile contracts, laptops, school fees, accommodation; all these from April subject to the same tax as other taxpayers. Cycle-to-work, pension contributions, ultra-low emission cars, and childcare vouchers remain protected. There will be a transition period for existing schemes to April 2018.

A new penalty for anyone enabling tax-avoidance schemes that are later successfully challenged by HMRC: professional advisors discovered to be using aggressive or illegal tax avoidance schemes, or those that have introduced clients to the scheme, will be penalised. The defence of having taken "reasonable care" by seeking the advice of a non-independent advisor will no longer stand up for anyone involved.

Immediate Action required!
It is essential to address your personal VAT circumstances if you’re using the VAT FRS, and you should do so as soon as possible. As there have been so many changes to the rules that affect contractors, small businesses, online traders, and BTL landlords recently, why not take the opportunity now to get "Match fit" for the future, ask your account manager for a full review today.

Conclusion
In my view, this Autumn Statement was a big disappointment. This Chancellor has failed contractors completely largely, and worse still, he seems to have failed to understand the benefits self-employment brings and how important the self-employed are to the UK economy. This was a tentative Autumn Statement, lacking innovation and boldness. It will do nothing to give the economy the push it needs and I hope he takes a more forceful approach for the Budget in the spring.

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4 basic bookkeeping rules every contractor should know

Let’s be honest. Finding and tallying receipts isn’t most people’s idea of fun. But getting a handle on your bookkeeping is a necessary evil. Your cashflow will thank you for it and it’ll keep your business off HMRC’s radar (business records checks may be a thing of the past, but inspections are still with us). Sound bookkeeping will also help you to spot any gaping holes in your finances early on, so you can plug them and grow your business.

What is bookkeeping? Bookkeeping is the record-keeping element of the accounting process, which involves detailing all the transactions and financial activities undertaken by your business.

The main reasons for keeping your books are twofold – firstly, to ensure that they’re prepared for review by your accountant and, secondly, to get your business finances in inspection-ready shape (in the event of an HMRC inspection).

The essential points to record in your books are as follows:
• Sales and personal income. Record how much income you and your business received, why you received it and who you received it from.
• Costs(expenses). Make a note of what you bought, how much you bought it for and when you bought it.
• VAT calculations and returns (assuming you’re VAT registered).
• PAYE deductions (if you employ staff).

Here’s a whistle-stop tour of four rules every contractor should know about bookkeeping.

1. Keep your financial house in order
Each contractor’s business is unique, so your accountant should always be on hand to advise you what the bookkeeping requirements are for your business and line of work.

In general, though, you should aim to collect and maintain three types of records:

this is for payments entering and leaving your bank account. It’s good to get into the habit of checking your bank statements monthly. You’ll not only know which areas your business is spending money on, you’ll also lower the risk of becoming a victim of fraud, identity theft or being on the receiving end of an innocent mistake by your bank.

]Sales invoices[/i]: although these can be issued and stored physically, nowadays most people tend to use online accounting software to do the job. Some packages allow you to upload scanned invoices to the ‘cloud,’ which stores the information electronically, so you don’t have to fret about losing the originals.

: the important information to note on these documents is when and how you settled them.

2. Always ask for a receipt
Whenever you make a purchase – on or offline – hold onto your invoice or receipt (or ask for a receipt if you didn’t get one).
By meticulously documenting all your purchases (preferably, as and when you make them), you’ll save yourself a whole lot of bother if the taxman decides that he wants to cast his prying eyes over your finances.

3. Don’t mix business with pleasure
When it comes to spending money, it’s good practice to keep your business and personal expenses separate.
It’s so much quicker and easier to keep track of the comings and goings in your business when there is only your business finances to focus on (not your personal finances commingled with them).

4. Make bookkeeping a priority
As tempting as it may be, try not to leave your bookkeeping until the last minute.

One huge reason for not putting it off is that HMRC won’t hesitate to land a hefty fine on your doorstep if you’re slow off the mark in sending them all the information they need – when they need it. The longer you leave it, the worse it’ll be.

The good news is, if you stay on top of your books and do them on a regular basis, soon enough it’ll become second nature and something you can get done and dusted in less than an hour each month. There are also some accounts software packages on the market that can make the bookkeeping process a little less painful. Some of them also offer a free trial, so you can try before you buy.

At DNS Associates, all our clients have access to our custom-built cloud accounting solution called Nomisma, which covers bookkeeping and so much more.

If all else fails, ask an accountant!
If bookkeeping isn’t something that you have the time or the inclination to do, why not hire a professional to do it for you?

Your business finances are important, so cutting corners on cost should never be an option. In any case, any accountant worth their salt will always save you far more money than they cost to hire. Plus, they’ll more than likely do all your bookkeeping in less than half the time it would take you.

The price of this service is fully deductible for tax purposes, which means, in effect, HM Revenue and Customs will refund you a portion of the cost (subject to the rate of tax you pay).

It’s a simple equation – balanced bookkeeping equals a bountiful business. Furthermore, get top tips to save taxes for freelancers and contractors by emailing us.

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Benefits of filing your tax return early[/i]

It gives you time to save for your tax bill
You may choose to file your Self-Assessment early, yet your tax bill still isn’t due until January 31st. So if you file in early, you will have plenty of time to budget for any tax you owe. If you file in January, you might find you are unable to pay the bill and will be in line for one of HMRC’s famous on-the-spot £100 fines.

You might get a refund
In these rare instances, you’ll often get your refund shortly after you file.

You can get help easily
If you’ve ever attempted to get in touch with HMRC’s personal tax helplines in January. Wait times could easily stretch into hours.

Your Christmas won’t be ruined
With the number of self-employed in the UK growing faster than ever, more and more people are facing their first ever filing. A recent survey shows that one in twenty admit, they are “terrified”.

You will avoid penalties
This is the most obvious benefit.

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