But across the Atlantic, today’s date represents a long-standing, annual tradition that supposedly predicts when the year’s Springtime weather will arrive: the Groundhog Day holiday.

The legend goes like this: if the skies are cloudy on February 2nd then a groundhog will leave its burrow and herald the start of the Springtime. But if the sun is shining, the creature will see its shadow and retreat back to its burrow, signalling six more weeks of winter.

Of course, many people will also associate the Groundhog Day holiday with the famous Bill Murray film about a man stuck in a time loop, where he has to live the same day - and make the same mistakes - over and over again.

For small businesses and freelancers, staying on top of their accounts can represent a similar scenario. It’s sometimes unclear how long the bad weather will last before things start to get easier - and you’re scared of making the same mistakes over and over again.

So here are a few tips to help make your accounting a little easier over the next year, and ensure you avoid a Groundhog Day scenario for your business.

Keep your books in good order

It’s easy for small business owners to quickly fall behind on their accounts. They have a hundred other things to consider in order to keep their business moving forward, and often these take priority over what appears to be the boring task of bookkeeping.

But you shouldn’t just wait until you have a tax or VAT return due before considering how much money you owe. Some forward thinking at the start of the year will help you stay on top of your finances, ensure you know how much your business is making, and may even make your bookkeeping a manageable - if not enjoyable - experience.

Make sure you’re keeping proper records and know exactly what you can claim in expenses. Have a robust, simple system like FreeAgent in place, so you can easily manage all of your payments and keep on top of your earnings, invoicing and tax throughout the year.

Remember by keeping your books accurate and up to date, you’re not just keeping the tax man and your accountant happy - you’re ensuring that you always know how your business is performing. You’ll have a constant overview of your cashflow, profitability, expenses and tax, so that you’re in full control of your business every step of the way.

Be prepared for your taxes (and avoid penalties)

You may have heard of HM Revenue’s “Time to Pay” scheme, which can give you more time to pay your tax - but anecdotal evidence suggests that this isn’t always very helpful.

Instead, try to put money aside each month to pay your taxes on time. You can even use a different bank account to keep this money safe if that would help you remember not to spend it.

If you file your returns and pay your taxes on time, this will not only avoid interest and penalties from HM Revenue, but will improve your relationship with them. It’s always best to work with HM Revenue rather than against them when you can.

And it’s better to prepare for your tax return rather than running around frantically at the last minute trying to complete it before the deadline.

Get an expert opinion

It’s easy to think you can do everything yourself, but there could well be times when you’re tearing your hair out trying to stay on top of your company finances. Whether it’s calculating your VAT, claiming the right expenses, preparing your tax return or simply maintaining your records, you may find you need some guidance from an expert, rather than trying to muddle through on your own

Don’t be afraid to call in the help of an accountant to advise you about your bookkeeping and make sure you’re on the right track. Getting help at an early stage could help you avoid making the same mistakes time and time again.

Happy Groundhog Day!

Normally they would fine anyone who files after the 31st January deadline.

They have also announced that they won’t charge interest to anyone who pays their tax by 2nd February.

But what they haven’t said is that this represents a change in the actual deadline itself - and their own website still gives the deadline for tax returns as 31st January.

Why does that matter if I won’t be fined for filing late?

HMRC normally have a year from the date that your tax return was filed to open any enquiry they may wish to make into your return.

But if your return is filed late - and filing on 1st or 2nd February still counts as filing late, because HMRC haven’t changed the official deadline, they’ve only said they will not impose fines and interest - then HMRC have longer to open an enquiry.

So if you file on 1st or 2nd February, HMRC could potentially open an enquiry into your return any time until 30th April 2013.

For that reason, and for your own peace of mind, we would still recommend filing your return online by 31st January.

Use FreeAgent to help you add up your figures for your self-employment.

HMRC has announced, due to pre-planned strike action, that a two day extension has been granted for late return submissions - meaning that anyone who submits their return and pays their tax up to 2nd February will not receive an automatic fine. But despite this respite, it’s still important to get your tax return submitted as soon as possible.

If you’re a business owner or freelancer who carries out work from your own home, you are entitled to include part of the running costs of your home in your accounts, which will save you some tax.

So if you’re still unsure about what you can and can’t claim for your home expenses, here are some tips to consider when completing your tax return:

Apportioning the costs

How much of the running costs of your home you can claim, depends on the type of business you have and what you actually do at home.

For example, if you’re a jobbing gardener you might spend an hour or two a week writing up your books at home, but spend the rest of your working life at your customers’ premises.

But if you’re a web designer, you may well do 90% of your work at home and only occasionally visit clients.

HMRC say that you need to apportion the running costs of your home on a “fair and reasonable” basis between the private element of that cost - the part that relates to your actually living there - and the business element.

One method that’s often used is to work out how many rooms you have in your home, and how many of those rooms you use for business - and how much you actually use that room for business.

It’s not a good idea to use any part of your home solely for business activities all the time and never use it for any private activities, because capital gains tax will then be due on the part you use just for business if and when you sell your home.

For example, my own office at home is also my music room, and I could easily prove that to a visiting HM Revenue inspector because there’s a piano in there.

But the room must be used for business only for part of the time.

There are 10 rooms in my home. I only use one for business, and 90% of the use of that room is for business. So I would add up all the costs I can claim, and multiply that by 1/10 and then by 90%, to get my accounts figure for business use of home.

But what running costs of the home can I actually include in my accounts?

Costs you can claim

Here are some of the costs you might incur to run a home, which you may then be able to claim part of in your business accounts:

Rent

You can’t charge your business rent when you’re self-employed, because legally you are the business. But if you are renting your home from a landlord, then you can claim a proportion of the rent for your business.

Mortgage

If you’re buying your home through a mortgage, you can claim a proportion of the interest only, not the capital repayment.

Council tax

You can claim a proportion of your council tax cost.

However, depending on how much you use your home for business, you might have to pay business rates rather than council tax.

Repairs to the property

If the repair relates solely to the part of the property that’s used for business, you would include this cost in your accounts in full, subject to the business use of that room.

So for example, if the ceiling in my office-cum-music-room was repaired and that cost £200, I wouldn’t need to divide that by 10 because the repair was only for that room – I would just multiply by 90%, and include £180 in my accounts.

If the repair is to the whole house, for example a repair to the roof, you can include that in the same proportion as you would the rent or council tax – so in my case, the repair cost x 1/10 x 90%.

But if the repair is just for a part of the house that’s not used for business, such as replastering of a bedroom, then you couldn’t claim any part of that repair in your business accounts. 

Telephone and broadband

Remember that what you can claim for your telephone and broadband is not apportioned on the basis of the number of rooms in your home, but on what your actual usage of the line is.

You can claim the full cost of all your business use of the line, and a percentage of the line rental, based on how much you use the line for business purposes and how much is for personal use.

Water

If your home water supply is used a lot for business, for example if you run a car valeting service, then you would need to apply to the water company for this to be separately charged, and you could claim the full cost. 

But if your business use of water is only minor, you can’t claim any of the cost for your business.

Claiming costs of working at home is not as simple as it initially sounds. If you’re in any doubt as to what you can claim, you should seek further advice from an accountant.

Are you unsure about what figure should you be putting in the box for “business income” in the self-employment pages of your tax return, which must be filed by 31st January? (This is box 8 of the short self-employed pages, and box 14 of the full self-employed pages.)

If so, here are some useful tips to help you make sure you include the right amount of income on your tax return:

1) Check the dates

Most self-employed businesses prepare accounts each year to match the date of the tax year.

That means that, for this tax year, you need to include all your business’s income that was earned between 6th April 2010 and 5th April 2011. 

2) Earned income, not received

You must include income in the tax year it was earned – not when your customers paid you.

So, if you issued an invoice for work done in March 2011 and your customer paid you on 30th April 2011, that invoice has to be included in your income for the tax year to 5th April 2011 – because that was the tax year in which you did the work.

3) Earned income, not invoiced

This one’s a bit harder.

If you’re selling services rather than goods, you need to work out your income on the basis of when you did the work.

So, if you completed a piece of work in March 2011 but you didn’t invoice your customer for it until 30th April 2011, you have to include that income in the tax year to 5th April 2011 - because the work was done before the end of the tax year.

If you had partly finished a project before the tax year ended but there was still some work to do in April, then you need to include the income that would have been due on the work completed before 5th April.

This is a bit complicated so if you are in any doubt, you should seek further advice from an accountant.

4) Business income only

When you’re filling in the self-employed pages of your tax return, make sure you only include trading income from your business.

That means you should leave out income from the following sources:

• Employment (from any job you have in addition to running your business. Remember your own business does not count as employment)
• Rent of a personal property
• Transfers into the business bank account from a personal account
• Bank interest (even if it’s earned on a business account)
• Money that you put into the business
• Inheritance

This list is not exhaustive, so do seek advice from an accountant if you are still unsure about what qualifies as business income.

5) Exclude VAT

If your business is registered for VAT, remember that the figure for trading income will be your sales exclusive of VAT.

If your business is on the flat rate scheme, however, then this figure would be your sales net of flat rate VAT.

Even something that sounds as straightforward as “add up all your income for the tax year” has hidden pitfalls. Therefore make use of a tool such as FreeAgent to keep your books and it will add this figure up for you ready to go into your tax return!

 This idea is a fairly simple one. Since John Lewis is owned by its employees and they all take a share in its profits, the Lib Dem leader thinks that similar co-ownership schemes should be implemented by other UK businesses. He believes that, not only will this create better-rewarded workforces, but will also increase productivity and morale among employees and help to spearhead the country’s future economic growth. 

Although the idea of a “John Lewis-style economy” where every company is majority-owned by its employees is an ambitious - and unlikely - scenario, Nick Clegg’s proposals are still fairly positive. And he’s correct that the introduction of a right for staff to request shares in the companies they work for will not only be beneficial to these employees, but also to the wider economy.

It’s critical for every business to consider implementing some form of employee co-ownership scheme if they want to be successful. By allowing staff to co-own part of the company, every employee is given a real opportunity to see how their own performance links with the wider success of the business, rather than thinking that their employment is ‘just another job’.

There’s no doubt that offering staff the chance to purchase shares in the company they work for also helps to raise morale and increase motivation among those employees - as they get the chance to share in the business’s profits. It breeds a positive workplace culture where everyone is focused on the same goal of seeing their company grow and perform better.

Of course, the appropriate level of co-ownership will be different for every business. For example, the John Lewis model won’t be suitable for a high-risk, venture-based start-up that relies on the capital-raising activities of its founders for growth, or for a small company with a limited workforce that provides a niche product or service. But even these businesses can benefit from offering a limited percentage of the company up to be shared among their employees, regardless of how small this is.

It’s a model that works well for us here at FreeAgent, where we offer all of our staff option grants when they start working with us, and we also let them take their annual bonus in the form of additional options if they want. Although the majority of the company remains owned by our founders and investors, we make sure that we give our staff the chance to have a stake in the business as well. The bottom line is that this ensures we have highly-motivated, brilliant staff who are committed to driving our business forward and reaping the mutual rewards.

No doubt there will be some resistance to Nick Clegg’s proposals - probably from a few successful big-name companies that don’t currently offer shares to employees and have no desire whatsoever to do so - but hopefully the majority of businesses won’t share this view. The reality is that co-ownership would be highly beneficial for many of them and mean that they get to have what we already enjoy at FreeAgent - a team full of awesome people who go above and beyond for us.

Invoice email history

You can now view the email history for each invoice, so you can see what emails (including reminders and thank yous) have been sent.

By utilising magic-pixie-dust technology, we're also able to tell you if the emails were received by the client, which may prove useful. Not that your clients would ever deny receiving invoices, of course.

See the Knowledge Base for full details.

Other treats

• We've tweaked the way the estimate filters work on the main estimates table so 'invoiced' and 'sent' only explicitly show estimates in those states. 
• You can now add your referral link to outgoing emails with a new [referral_link] email macro, which will make get those referral discounts even easier. 
• The Bills table can now be filtered across All time. Like, far out man. 
• You can now send invoices and estimates in Finnish and Estonian! 

And finally

As is traditional for us now, we're donating the money we would have spent on Christmas cards to a worthy organisation instead. 

This year we're supporting Ward 79 at the Royal Manchester Children's Hospital, which means a lot to Kilian, one of our sales team, whose son spends a lot of time there. We're told the money will be used for toys for the children to play with. We offered them management accounting books, but kids prefer toys apparently. 

See you all in 2012, when we'll have some big things for you!

Until next year,
Roan & The Team at FreeAgent.

Attachments for email templates

File attachments can now be added to email templates for new invoices, reminders and thank yous.

Add the default attachments through Settings > Invoice emails and they'll automatically go out along with the relevant invoice emails.

Rebilled expense receipts

If you rack up lots of expenses as part of your projects, you probably rebill these to the client, who may want proof that you're not trying to pull a fast one. Really, where's the trust?

Thankfully, you can now attach receipts from any expense you've rebilled on an invoice. On the email screen just tick the Attach Expense Receipts checkbox and they'll be added to the outgoing email.

Save Timesheets to Files

On a similar note, you can now save Timesheet Report pdfs directly into your Files area, which means they can be easily attached to invoice emails so you can demonstrate all those hard hours of toil you put in.

Simply click Save to Files area after you generate a report, and it'll be saved alongside your other files.

Stocking fillers

And to conclude this embarrassment of riches we humbly present:

• Support for decimal rates for mileage expenses.
• Support for date variables in recurring invoices, so you can dynamically add months and years. Nerdy, but cool.
• A 2-monthly option for recurring invoices

Phew, and it's not even Christmas yet!

And finally

Ever find yourself wistfully wondering what the FreeAgent team do all day? Well wonder no more! Work with us and find out for yourself:

• Data Analyst
• Front End Developer
• UI Designer
• Ruby Engineer (Product)
• Accounting Engineer (Platform)
• Senior Platform Engineer
• Digital Marketing
• Online Content Manager

Join us and together we can rule the accounting galaxy.

Until next time
Roan and the team at FreeAgent

* Yes it is. Empire Strikes Back is a glorified chase scene intercut with a Rocky-esque training montage.

In saying that, and despite having been in business since 2007, when you find yourself in the same short list as some very established names, it's hard not to feel like the new kids on the block sometimes.

Our latest "stay-up-late-on-a-school-night" escapade was last night at the British Accountancy Awards, hosted by Accountancy Age - both well regarded institutions in their own right - attended by over 500 accounting industry professionals. And us.

Over the course of the evening, awards were presented for outstanding effort by both individuals and firms of all sizes and it was obvious quite how passionately the finalists and winners felt about excellence in their profession. Great to see and participate in.

There was only one category for software, Software Package of the Year, where the finalists ranged from Business Intelligence dashboard tools and secure data exchange solutions through to a number of online and offline accounting solutions, including FreeAgent.

I am absolutely delighted to report that we won, with the judging panel of industry experts commenting:

"This is a comprehensive financial package complemented by the latest cloud technology. Their product shows continuing and adventurous innovation combined with a strong focus on supporting their customers."

We have always believed that the future of accounting, book-keeping and financial software lies online and it is great to see that, increasingly, others recognise this too.

What might that mean for small businesses?

Additional access to finance

A new National Loan Guarantee Scheme is to be introduced. The government will allow certain banks access to cheaper-than-usual funding under a government guarantee, on the basis that the banks must then lend that money on to small businesses at preferential rates.

It’s estimated that under this scheme, small businesses will be able to borrow money with interest rates of up to 1% less than usual.

Businesses with turnover up to £50million a year will be eligible for the scheme, which will give priority to new loans and overdrafts.

The scheme will initially have access to £20billion worth of investment in its first two years.

It’s planned to start in the “next few months”.

The Enterprise Finance Guarantee, which aims to help security-poor small businesses access finance, will be extended to cover businesses with annual turnover of up to £44million (the limit is currently £25million), and some new lenders will be accredited to offer EFG lending.

£75million of government funding is also to be provided to support technology-based SMEs and help them ensure their ideas develop into viable businesses. It’s not yet clear who will be entitled to this money and how it will be distributed – by way of bank funding, or guaranteed investment, for example. 

Trading globally 

Currently the government aims to help 25,000 small UK-based businesses trade internationally, via UKTI. This number is to be doubled to 50,000.

Improved broadband Internet connection

A National Infrastructure Plan has been published today, identifying investment on 500 new projects, including broadband networks.

£100million is to be invested to create up to 10 “super-connected” cities in the UK. “Super-connected” means broadband connectivity at 80-100 megabits per second, and city-wide high-speed mobile connectivity.

The 10 cities will be Edinburgh, London, Cardiff and Belfast, plus six other cities which will be chosen by a UK-wide competition. The details of that haven’t yet been explained. 

Tax

Capital allowances of 100% will be available on plant and machinery bought between April 2012 and March 2017 in certain Enterprise Zones: Black Country, Humber, Liverpool, North Eastern, Sheffield, and Tees Valley. 

So if you’re in one of these zones and planning a large asset purchase, wait till April!

At the moment small businesses have a holiday from business rates. That’s to be extended to April 2013 – an extra six months.

Employment

The government believes that simplification of employment law will help create new jobs. They’re calling for evidence on further reforms to this, and in particular, they want to seek views on the idea of “compensated no-fault dismissal” for firms with fewer than 10 employees, and also on a simpler, quicker and clearer dismissal process.

Watch this space.

Conclusion

So it looks like there are quite a few potentially useful nuggets in the Autumn Statement for small businesses. 

We’ll need to see how the National Loan Guarantee Scheme evolves, in particular, and whether this does genuinely make more funding available for small businesses.

Organised by PCG, it's a chance to celebrate the value of independent workers to the UK economy, but equally, it serves as a focal point for all those freelancers throughout the UK to connect, network and share their views, experience and come together as a community of like-minded individuals.

Seen as "the voice of freelancing" the PCG, with around 20,000 members, has become the main hub of knowledge, advice, education and representation for freelancers in the UK, as well as forging links with other similar organisations elsewhere in the world.

As well as the day of events, there are also some more light-hearted ways to get involved, such as PCG’s “Are You Fit to Freelance?” quiz where you can find out your freelance ranking, from humble apprentice  right up to the heady heights of Freelance Ninja!

We’re delighted to be involved this year in a couple of practical ways. Firstly we co-sponsored and presented at an event in Manchester yesterday with Enterprise Freelance Fair designed to help freelancers maximise their potential routes to successful business.

Secondly, FreeAgent is pleased to be sponsoring the National Freelancer Day webinar sessions around the changing nature of work, which includes a contribution from Dan Pink who 10 years ago wrote the foresighted “Free Agent Nation - The Future of Working For Yourself” as well as Matt Barrie from freelancer.com.

I’m also looking forward to attending the Freelance Lecture this evening with some world class speakers and no doubt informed and lively debate.

More and more people are beginning to understand the benefits of self-employment, and as a result they are contributing more and more to the UK economy as we navigate these difficult financial waters. With supportive and progressive thinking organisations like PCG, and fantastic tools like FreeAgent to help guide them, this is one trend we’re pretty confident will keep on going for some time yet to come.