Talking even more tax – especially for freelancers

2013’s tax facts: New legislation freelancers should be aware of. busy

 Nothing is certain in life except for death and taxes’ – Benjamin Franklin – 1789

Depressing eh?

Sorry to start on that rather sour note, but it’s a phrase that holds true, even more so if you’re a freelancer. As a member of the self-employed you’re liable for a litany of tax laws and it often pays to know your tax facts, quite literally.

Getting your self-assessment finished and filed is probably paramount in your concerns, and whilst that might have been and gone, there’s still a lot to be wary of, especially given HMRC’s tendency to update their rules from time to time.

2013 is particularly tumultuous in this regard, with the taxman bringing in a slew of legislation that’ll affect the self-employed in a range of ways.

It’s a lot to get your head around, but thankfully you’ve got finance bods like CRUNCH who can clear things up a little. So, without further ado, here’s some of the tax developments freelancers should keep their eyes on this year…

KidsJanuary – Child Benefit changes

You may have felt this already, as it came into force on January 7th.

Essentially, it affects those in the higher echelons of earning, those with a salary of £60,000+ losing their entitlement to Child Benefit and those earning over the £50,000 threshold seeing their Child Benefit payments reduced. So, if you’re amongst the freelancers in these pay brackets, bear in mind the implication this could have on your finances.

April – introduction of Real Time Information RTI laptop

If you’re amongst the limited company freelancers out there, then Real Time Information is something that you’ll need to get up to speed with. Conversely, if you’re a sole trader, then you needn’t worry.

At its crux, R.T.I is a new scheme designed to streamline the flow of payroll information between employers and HMRC, the basic thrust of the scheme being to ensure that the payroll information HMRC holds for your company is as up-to-date as possible.

This will be achieved by getting companies to submit records on or before every payday instead of once a year. So for limited company freelancers this means that every time you draw a salary you must notify HMRC, either through a piece of compliant payroll software or by using HMRC’s Basic PAYE tools.

If you’re a limited company freelancer, chances are you’ll have an accountant, so have a chat with them to ensure that either they’ve got – or can at least point you towards – the appropriate payroll software. That way you’ll avoid any nasty fines.

April, again – rate and threshold changesHMRC logo

The 6th April ushers in a new tax year and this year, there’s a number of rate changes. Amongst the highlights you’ll find…

  • a 1% drop in the Main Rate of Corporation Tax to 23%
  • a rise in the Personal Allowance to £9,440
  • a drop in the Higher Rate threshold to £32,010
  • and a lowering of the Additional Rate from 50% to 45%

These will have varying implications depending on your financial position, so examine that and then try to determine how the above might impact upon you.

DWPOctober – Universal Credit

Elsewhere, something that’s worth bearing in mind if you receive Income Support, Working Tax Credits or Child Tax Credits is that your payments will be changing with the introduction of the Universal Credit. The usual parliamentary to-ing and fro-ing makes it hard to decipher whether its introduction is a good or a bad thing, but you can get a basic overview of just what this new piece of legislation means here.

Of 2013’s incoming legislation, these four are likely to affect the freelance community the most. Make sure you’ve taken the right precautions to avoid any fines and that you take the right steps to achieve optimum tax-efficiency. 2013 might then be a tad more profitable than the last!

Crunch log incl nameMark James is an in-house writer for online accountants Crunch. Thank you for  letting us share this blog post, which is a re-blog of the original.

Stay in touch with us at:

www.wiredwessex.co.uk

and on Twitter: @Wiredwessex

and on Facebook: www.facebook.com/wiredwessex  

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Talking Tax

RTI laptopFrom 6 April 2013 employers will have to start reporting PAYE information to HMRC in ‘real time’. You may have already seen this referred to as Real Time Information – or RTI.

What does it mean to you?

It means that employers (or their accountant, bookkeeper or payroll bureau) will have to:

send details to HMRC every time they pay an employee, at the time they pay them,

use payroll software to send this information electronically as part of their routine payroll process.

Significantly more than has been required until now! This means not only more of a burden on the employer, but also employers will need to be highly organised and have all the right systems in place by 6th April to not fall foul of the new regulations.

If you are an employer which this applies to, are you all set? idea to action

Or are you still marking time instead, and wondering what you should be doing?

Whichever you are, use the lists and checklist below to see if you are ready to roll or there are things you need to arrange before the new tax year cometh and the old way goeth:

The links below take you to detailed guidance on getting your business ready to report PAYE in real time. There are also links to other PAYE information you may need throughout the tax year within the literature the links take you to – all on HMRC’s website.

bright ideaSo let’s get started:

You will need to take several actions to prepare for operating PAYE in real time, which are set out below. Decide which actions apply to your business – you can use the checklist provided to tick them off as you go.

WHAT TO DO:

Before 6th April:

*** If you run your own payroll system, you need payroll software that is ready for RTI in order to send your PAYE information to HMRC online, every time you pay an employee. You can do this in three ways:

  1. Using commercial payroll software? Upgrade your existing software if necessary (your provider can advise on this), or
  2. Use a payroll service provider, such as an accountant or a payroll bureau, who will do it for you, or
  3. If you employ nine or fewer people, you can use one of the free payroll software packages or HMRC’s free Basic PAYE Tool. Go to www.hmrc.gov.uk/rti for more information.

If you are planning to send your returns yourself, you need to register for PAYE Online to get your PAYE login details (if you have not done so already).

Next: 

*** If you use an agent, payroll bureau or payroll service provider, you must talk to  them now about the service they will provide for you in future, and ask what you need to do to get ready for RTI.

*** If you pay by Bacs using your own Service User Number, you need to speak to your solution supplier or bureau.

And: 

***You need to get prepared by making sure you hold accurate and up-to-date information about all your   employees (name, date of birth, gender, address and valid National Insurance number).

From 6th April:6 ways pic for blog

You need to change some of the ways you report PAYE, including:

  1. Providing new information in your payroll records, such as hours worked.
  2. Completing employee information for temporary and casual workers and employees paid below the National Insurance Lower Earnings Limit.
  3. Letting HMRC know whenever you change a payroll ID – otherwise HMRC will treat the change as a new employment, which will result in duplicate employment and incorrect tax codes.
  4. How you tell HMRC about starters and leavers.

*** Ensure you or your payroll service provider uses RTI-ready payroll software to send your real time PAYE information because you won’t be able to use HMRC’s PAYE Online service (sometimes called the ‘portal’) for this.

*** You still need to send your end-of-year return (P14s and P35) for the year 2012-13 by 19 May 2013.

The individual steps are expanded on here:

http://www.hmrc.gov.uk/payerti/getting-started/rti.htm

And they include:

–          Getting your software organised or using a payroll provider

–          Checking your employee data is correct

–          Checking you are registered for PAYE online

–          Including new information in your payroll record keeping

–          The action to take if you pay employees by Bacs

–          How to be ready to update HMRC with your latest payroll data

–          How to start reporting your payroll information

–          Where to go for more help

HMRC logoThe full instructions are here:

www.hmrc.gov.uk/rti

And there are webinars on the topic here:

http://www.hmrc.gov.uk/webinars/live.htm#1

Make sure you’re ahead of the game Real Time! And if you’re still unsure of where you stand, make the most of an opportunity to ask the real McCoy when Darrell Warren from HMRC talks tax at the Wired Wessex networking evening on Thursday 25th April:

‘Let HMRC help!’  http://www.wiredwessex.co.uk/events/1576

And keep in touch for more information on our website:

www.wiredwessex.co.uk

and on Twitter @Wiredwessex

or Facebook: www.facebook.com/wiredwessex 

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The end is nigh (of the tax year and the old ways that is…)

HMRC logoWhether you love HMRC or loathe them, you can’t argue with the taxman’s determined efforts to modernise their services. Last year HMRC moved all VAT filing online, and this year – in what has been described as ‘the biggest change to payroll since the introduction of PAYE in 1944’ – they are pushing forwards with the introduction of Real Time Information, or RTI.

In simple terms RTI means companies will have to file payroll, tax and National Insurance information about their employees every time they pay them, instead of once every tax year. Of course, in practical terms, the changes are far greater.

crunch logo

Old school accounting software providers, for whom the predictable cycle of the financial year is sacrosanct, have been thrown into turmoil by the concept of “real time” data, and many have had to abandon their current payroll packages are rebuild them from scratch, rather than just issue an update as they do when rates change. (scratching head pic)

For businesses this means an ordinarily routine software upgrade can become a potentially expensive purchase of a new suite, plus the cost of training bookkeeping and accounting staff on the new software.

Those who use outsourced bookkeeping services should see these costs mitigated somewhat as bookkeepers will be able to spread the cost across their client base – however a recent survey showed that a massive two thirds of accountancy firms would be hiking their rates to recoup the costs they will incur when RTI comes into force.

RTI is launching (with optional fanfare) in early April to coincide with the beginning of the trumpet fanfarenew tax year. Although it promises to be burdensome in the short term, it’s not all bad news.

Once the dust has settled employee payroll should be a more automated affair, and a few tax forms (P35s and P14s specifically) will be quietly retired.

It is vital your business is prepared for RTI, as non-compliant businesses are in line for a slap on the wrist from HMRC (although actually monetary penalties have been delayed until 2014/15). It’s also important to remember that the introduction of this new scheme does not change reporting requirements for the 2012/13 tax year – all payroll information must still be filed, same as it has always been!

Does RTI apply to you and your business? Crunch Accounting will be covering this and many more essential topics at their workshop on Wednesday 13th March 2013, including:

  • GoLimited.co, a simple, at-cost limited company formation agent, operated by Crunch,
  • FreelanceAdvisor.co.uk, and ContractorAdvisor.co.uk which provide expert advice, support and new for the UK’s freelance and contractor communities
  • And most importantly some excellent practical and live tips for the small business or freelancer to target and win new clients and make sure you keep them longer term.

Book your place here:

http://www.wiredwessex.com/events/1559

And beat the end of tax year blues.

Crunch log incl nameAbout Crunch

Launched in April 2009, Crunch already boasts more than 3,000 clients, and is committed to helping the UK’s self-employed community.

More next week from Wired Wessex: www.wiredwessex.co.uk

but do follow us on Twitter @Wiredwessex in the meantime, or find us on Facebook:

http://www.facebook.com/wiredwessex

and Linked in

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Love at first bite

This weeks’ blog, in honour of Valentines Day week (go and get that card now guys, whilst you remember it) is from Elisa McGarry, who owns and runs Elisa Rose cakes and who was one of our Fab 4 winners at our Using Video to Promote Business networking evening on 31st January. Thank you Elisa, for sharing a mouth-watering recipe with Wired Wessex – and a gentle reminder about the art of being romantic, no matter what you do for business.

Attachment_ Valentines cakeLove makes the world go round, don’t they say…

My favourite gifts are those that are homemade – especially if it involves food! My most memorable and loved Valentine’s gift were some handmade ginger biscuits in the shape of cats and whales from my boyfriend. You might be imagining some perfectly baked cute little kitten-shaped biscuits with pink icing on top, but in actual fact they looked like something a small child had made (possibly whilst blind-folded). The blue food colouring had turned the biscuits a strange grey colour and the icing made the whales look like their eyeballs had exploded. I’d never seen anything like it! They actually tasted pretty good, and after my laughter subsided I felt very happy with my mangled biscuits; it really is the thought and effort that counts!

While I can’t give you the recipe for exploding whale-eye biscuits I can share my favouriteAttachment_ Whale biscuits lemon drizzle cake recipe. It’s delicious enough to be served as it is, but for extra points this Valentine’s you could fill with a layer of raspberry jam and pink buttercream. This is a really quick and easy cake to make – I promise!

Ingredients

200g soft margarine

350g caster sugar

350g self-raising flour

2 teaspoon baking powder

4 large eggs

5 tablespoons milk

Freshly grated rind and the juice of 1 lemon

(For a treat in summer, add a few handfuls of fresh raspberries to the cake mix)

For the lemon syrup

Juice of half a lemon

Granulated sugar (approx 100g, but add more if required)

Method

Pre-heat the oven to 180˚C/350˚F/Gas 4. Grease two 8 inch sandwich tins.

Beat all the ingredients for the cake in a large bowl until thoroughly mixed. Divide the mixture between two tins. Bake for 35-40 minutes (use a skewer or knife to test if it’s cooked after 35 minutes – if it comes out clean, it’s ready).

While the cake is baking prepare the lemon syrup. Squeeze the lemon juice into a bowl and gradually add the sugar until you have a thick syrup to pour over the cakes.

As soon as the cakes come out of the oven leave them in their tins and poke holes all over the cakes using a skewer or knife. Divide the syrup between the cakes, pouring all over until you’ve covered the tops of each cake. Leave the cakes in the tins until completely cooled. A little tip – cakes always taste better a day after baking to let the flavours work their magic!

If you would like to learn how to professionally decorate your cakes, Cakes by
Elisa Rose will be running a Cake Decorating Masterclass at the Colour Factory
in Winchester this Sunday 17th February. I also provide personal
tuition in the comfort of your own home, available to purchase as a gift
voucher!

Good luck with your cake creations – I’d love to see pictures of your final cakes on Facebook. I am sure they will be fabulous.

Happy Valentine’s!

Elisa Rose cakesA sweet bit about Elisa Rose cakes:

Cakes by Elisa Rose is a small cake business with a big heart. Our cakes are about moments of celebration, fun and sharing with friends and family, and we endeavor to create bespoke cakes which truly capture the essence of your occasion. You can contact Elisa for your special order on:

http://www.elisarosecakes.co.uk/

07747 096965 or by email: elisarosecakes@mail.com

Or follow her on Twitter or Facebook:

@cakeselisarose

https://www.facebook.com/CakesElisaRose

Next week Wired Wessex is back in the business of marketing with an introduction to one of our Mentors at our Meet-a-Mentor session on the 21st March. In the meantime, stay in touch with us:

www.wiredwessex.co.uk

or on Twitter @Wiredwessex

or on Facebook: https://www.facebook.com/wiredwessex

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5 tips for looking better in your profile pictures

Watch this and weep:

http://www.youtube.com/watch?v=QUvLZeDgU-c

We all often say ‘Oh no, I look terrible in that photo!’ So how do you avoid the horrible picture?

pic 1First:

  • What are you wearing? – you need to look the part – for guys it’s usually a choice of a classic suit jacket (and tie?) or a modern jacket or workwear – for women in business, remember that close up means that the neck line is important. Low necklines may make you look naked when enlarged!
  • expression – relaxed and self assured, yet alert and friendly. Leaning forward slightly creates a feeling of confidence.pic 2
  • background – Yes, it’s important – conveying as much as those extraneous background noises you hear on the phone. A plain background is safe, but misses the opportunity of putting you in the context of your business.
  • lighting – because your profile picture is small (even smaller if viewed by phone) it pic 3wants to be carefully lit. Avoid overhead lighting which casts shadows into the eyes, or flash which creates harsh shadows without giving any form to your face.
  • the right spec. – It’s square! So remember that if you upload a rectangular photo, it will be cropped. The best quality is achieved by uploading a jpg file, in srgb colour,at 72 dpi, 4000 x 4000 pixels.pic 4

So  much better in the end …

Thanks to Belinda Harvey for some invaluable tips on how not to watch a weep. Harvey nstudios

Together with Cathy Foster, Belinda is introducing our February networking event on Thursday 28th February on presenting yourself positively:

Looking good – feeling good – presenting your Positive Image

http://www.wiredwessex.co.uk/events/1566

We’ll look forward to seeing you there, and in the meantime, have a look at what else is on with Wired Wessex at:

www.wiredwessex.co.uk

Follow us on Twitter @Wiredwessex

Find us on Facebook: http://facebook.com/wiredwessex

and join us in our Wired Wessex group on Linked In.

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All Great Ideas Need a System…

All Great Ideas Need a System!

We all have ideas, right?

Some of us have LOADS of them!bright idea

You may see yourself as a great Ideas Person. Ideas just pop out of your mind all the time and it’s hard to keep track of them all. But how many of your ideas actually leave your mind and making it to reality in the world?

Many of our ideas float around like untethered kites and never crystallize into anything tangible. The latest idea just becomes another distraction as you keep generating more and more of them. They stack up in a holding pattern waiting to come in to land. This stack of ideas can become exhausting and overwhelming because you don’t know where to start or what to do with them all.

I often coach creative clients who have loads of ideas. Every coaching session, they arrive with another one or even multiple ideas (yes… I’m guilty of this sometimes too!). And of course, this latest idea is the best one yet! …Until the next idea comes along a few days later! Months can be wasted dreaming and talking but nothing ever gets done. There’s no momentum or completion, there’s just the next idea coming along…

IDEA                     IDEA                     IDEA                     IDEA                     ANOTHER IDEA!

If this sounds like you, then you need a formula to create some momentum…

Without a having a system it’s difficult to take an idea and make it happen (even the good ones).

If you’re creating a workshop or webinar, it’s very easy to get lost in a pile of content. Here’s the thing… If you’re confused, your delegates will be too and they’ll soon switch off and stop learning or listening.

I’ve learned that there are three elements to taking an idea an making it real:

idea to action

Your idea needs to become grounded if you want to give it a chance of becoming reality.   Creating a system or process helps you to ground your idea and plan HOW to create some momentum. You then need to take specific action to make it real.

 IDEA

I’ve sat in the annual daylong leadership strategy meetings where loads of ideas are floating around and everyone is excited. There’s much enthusiasm and optimism. A year later the same ideas are still being talked about, because nothing happened in between.

The challenge for some of us is that we see the IDEA as the sexy exciting bit because it’s fun being creative. There’s nothing quite like that adrenalin rush when you think you’re on to something exciting and great!

Get clear about your idea understand WHY you want to make it real.

Sometimes we stop at the idea stage because we’re frightened to take the next step and make it happen. If you don’t start then it can’t fail, because you didn’t have to try. Your idea needs your energy and belief if it’s going to germinate into reality. You have to take a few risks and step out of your comfort zone and do some things scared.

 SYSTEM

For an Ideas Person, the SYSTEM bit is the painful process of planning and working out how it’s going to happen.

For some of us the planning it out, thinking it through and then creating a stepped process to make it work is the tedious bit. It involves sitting down and getting on with it a step at a time. Creating the idea was much more fun! But THIS STAGE is difference between your idea staying just a dream or becoming real…

Creating a system or process for implementing your idea will save you a lot of time and energy. You can get an expert to support you, someone who can help you create a framework for your journey.

If you’re always having loads of ideas then create an Ideas Book. Write each one down in a paragraph as you think it. Re-visit your book every one-two weeks to re-read each idea and cross out any that no longer feel like they have legs.

Schedule time to sit with your idea and break it down into smaller steps. The idea is the strategy, the system is the tactical plan: What tactics you will employ to make it happen? What’s specifically involved in making this become real? What individual steps need to be taken? Who else needs to be involved? When to you need to do it? Where will it happen?

Creating and then working through a process gives you clarity and direction. It helps you to feel more confident and in control.

busyACTION

This is where the rubber has to hit the road. You have to show up and do the work! Just talking about it doesn’t work! Do it!

Schedule small pockets of time in your calendar and do one step at a time, then the next step. You may be delegating or outsourcing elements of the work to others. This requires you to take ownership and responsibility for leading them to get the job done. Remember there is a difference between delegation and abdication!

Taking conscious, deliberate action little and often, will help you to create some momentum towards your ultimate outcome. Momentum encourages to keep taking action and you’ll start to feel a sense of completion.

Review your progress regularly, so you can tweak and modify your plan if necessary.

If you want to create a workshop or webinar, always create a system for it and plan ahead for its arrival!

Success needs a system – Every time!

Our blog post today is from Elaine Bailey who is running the workshop on Webinars on Wednesday 13th February. The booking link is here:

http://www.wiredwessex.com/events/1577

So do come along and help yourself to a whole lot more of Elaine’s excellent advise and information  then – and to tell you a bit more about Elaine, here’s what she says about herself:

Elaine Bailey is the founder and CEO of Elaine Bailey International Ltd a learning Elaine picorganization committed to growth and empowerment of inspired entrepreneurs and busy corporate leaders.

She mentors and trains busy people to move away from the chaos and overwhelm of settling and surviving by offering them a whole new approach to self-leadership, productivity, business and lifestyle.

Her weekly eZine WorkBrilliant™ goes out every Thursday and is full of practical tips and techniques to move from misery to mastery! You can sign up for a F.R.E.E. subscription to WorkBrilliant™ at http://www.elainebaileyinternational.com/.

Check out Elaine’s blog at http://www.elainebaileyinternational.com/wordpress/blog/

More next week from Wired Wessex@

www.wiredwessex.co.uk

Follow us on Twitter @Wiredwessex

Find us on Facebook: http://facebook.com/wiredwessex

and join us in our Wired Wessex group on Linked In.

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