The Chancellor George Osborne made his annual Autumn Statement in Parliament earlier today, and as always it's been a mixture of good news and not-so-good revelations for the small business sector.
So here's a brief run-down of some of the golden nuggets that were announced in the Autumn Statement for freelancers, contractors and small service-based businesses - and also a few potential timebombs!
If you pay business rates on a property you use for your business, and are eligible for Small Business Rates Relief (SBRR), this has been extended for another year to April 2015.
But that's just the tip of the iceberg. You also won't lose your entitlement to SBRR if you take on a second property; you can retain SBRR on your first property for a year after you take the second one on, with effect from 1st April 2014.
Also, there'll be a £1,000 discount on the rates of retail premises (including pubs, restaurants, cafes, and charity shops) if the property rateable value is under £50,000. This will run for 2 years from April 2014.
And, if between 1st April 2014 and 31st March 2016 you take over and move into a retail property that's been empty for more than a year, then for the first 18 months you will receive a 50% discount on your business rates.
These measures are all aimed at boosting Britain's high streets and increasing the number of small shops and other retailers trading.
The planned fuel duty rise in September 2014 has been cancelled, which is good news for business owners who spend a lot of time on the roads.
Train fares are also capped to rise in line with the Retail Prices Index, rather than above it.
The British Business Bank's funding will also be increased by a further £250 million.
From April 2015, if you employ staff aged under 21, you won't have to pay employer's NI on their wages, so long as they are earning less than £42,285 a year (£813 a week).
Above that limit employer's NI will be charged as normal.
There will be a tax exemption for amounts up to £500 paid by employers for medical treatment for employees. It wasn't made clear when this will come in.
The full report of the Autumn Statement said, "The government will legislate to prevent employment intermediaries from being able to use contrived contracts to disguise the employment of workers. This will take effect from April 2014 and raise around £400 million each year."
It further refers to "amending existing legislation" and "consulting on strengthening existing legislation".
We can expect changes to IR35 early in the New Year, so if you are a contractor or freelancer operating through your own limited company, be vigilant and keep your eyes open for more detail in this area.
At the moment, if you have a company car or van, your tax code will be altered to collect the extra tax on it, which can happen months after you are first allowed to use the vehicle.
From 6th April 2014, however, we're promised legislation which will "ensure individuals make payments for private use of a company car or van in the relevant tax year".
More details can be expected.
This is a classic piece of tinkering at the edges of the tax system, rather than implementing the wholesale reforms and simplification it so sorely needs. KPMG apparently describe the UK's tax system as the most competitive in the world - given its complexity I would beg to differ!
Nine of the Office for Tax Simplification's recommendations to simplify the taxation of employee benefits and expenses are due to be implemented in January 2014, though nobody has yet said which ones, and continued developments to simplify National Insurance for the self-employed are also promised.
But it is my belief that if the UK is genuinely to compete on a global business scale, it needs a simple, flexible and robust tax system which does not require an accountancy qualification to fully understand.
And we're a long way from that.
Hands up who hates doing their Self Assessment return? Yep, thought as much. Well today’s news may be of interest to you.
We’ve just released a huge update to the Self Assessment section in FreeAgent for Sole Traders. In the past we provided accurate calculations of Self Assessment liability based on the fairly limited set of data already in FreeAgent. Today’s update introduces support for more of the HMRC Self Assessment forms, and lays the groundwork for something more exciting.
There’s too much to list, but this includes full support for the Self Assessment Main Return, Self Employment and Employment (including adding multiple Other Employments) forms.
I know right! So why go to all the hassle of completing them in FreeAgent? It’s a great question, to which there are two very good answers:
I’ll repeat that second one: if you're a Sole Trader, by early January you'll be able to file your Self Assessment return through FreeAgent!
So there’s that.
Obviously this is a huge deal. Self Assessment filing is still one of the most stressful times for sole traders, and being able to seamlessly file from within FreeAgent will significantly simplify the process. For the first time, we might actually fulfil the promise that tax doesn’t have to be taxing.
There are caveats: if you have income from Property, Capital Gains, Foreign Income or Trusts you won’t be able to file through FreeAgent this year unfortunately.
If you want to know more head on over to the Knowledge Base where we’ve added a new Self Assessment section walking you through the pages and giving a detailed guide on how to fill them in.
This is one of the biggest releases we’ve ever done, so we know there will be lots of questions. If you want to ask anything, just email me at firstname.lastname@example.org and I’ll make sure to get back to you.
We’ll be releasing more information about how filing will work soon, so stay tuned for more details.
In April of last year we released API 2.0. Since then, we’ve continued to support our legacy API 1.0, but we’ll soon be switching off life support for the old girl. It’s been a hard decision, but it's what she would have wanted.
Most applications that use our API have long since transitioned over to API 2.0 so this should have no impact on any important integrations, but if you are using our API 1.0 then you’ve got until the end of the year to move over. More details can be found on our Engineering Blog.
We’re also dropping support for Internet Explorer 7 in FreeAgent. Our analytics show there is a vanishingly small percentage of users using this browser to access the app, but if you’re one of them then you’ll need to upgrade your browser to a more modern one. You’ll thank us for it, promise.
Until next time,
Roan and the team at FreeAgent
Here at FreeAgent, we know that Self Assessment season can be a pretty stressful time when you’re running a small business.
The deadline for filing your tax return with HMRC is looming ever closer and you may be facing what seems like a herculean task of getting your books in order - including sorting through all of your expenses and working out exactly what you actually need to put in your Self Assessment return.
Millions of people have to go through Self Assessment every year and a huge number of them actually end up failing to get their tax returns submitted on time. In the 2011-12 tax year alone, HMRC issued 915,000 fines to people who missed the deadline.
During the run-up to the January 31 deadline, we know that there are also many people who search for information about Self Assessment. We actually get quite a few questions every January about the Self Assessment process, often from people who are looking to get their tax return filed on time.
So that’s why we’ve decided to take the bull by the horns this year and give people who run small businesses a helping hand for navigating Self Assessment.
How? With a 12-week email programme designed to provide really useful information about the Self Assessment process. Called the Game Plan, it’s designed specifically for people who are either filing their tax returns for the first time or have been frustrated by the process in previous years.
We are sending out weekly emails to all Game Plan subscribers, which break down Self Assessment into bite-sized chunks. Each email is packed with tips and information about that week’s Self Assessment topic, and we’ll also be offering access to additional whitepapers and social media Q&A sessions during the run-up to the submission deadline on January 31st.
So how do you join? Simple: just follow the link and sign up - http://bit.ly/19ffu8t - and we’ll help get you fighting fit for Self Assessment in no time!
We’ve looked recently at strategies and systems that can help you manage your business more effectively. But how do you check to see whether you’re actually making a difference? Here’s some examples of how successful businesses use measurement to check that they’re on the right track.
Is there something that you measure in your business which you find particularly useful? Hit us up on twitter or leave a comment to let us know. Have a great weekend everybody!
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Really love @freeagent. Great product, but also love that their support take the time to explain concepts to you.
I decided to go with @Freeagent after their FREE 30 day trial - accountant is also happy! You can get 10% off too : http://t.co/u99mvCaRBN
Thanks @freeagent for making it an absolute doddle to do my tax return! Job Done.
I took it for a test drive, its awesome....so i signed up: http://t.co/aU2LotSZG7 @freeagent
Seems like doing your self assessment just became alot easier thanks to @freeagent - keeping an eye on it, you never know whats round corner
It's accounting not brain science. See how easy it can be.Try FreeAgent for Free