The FreeAgent Blog

Video: VAT accounting schemes explained by HMRC

Posted on 22 June 2017 by Jessica Adair - Jump to comments

If your business is registered for VAT or approaching the VAT registration threshold, you may have considered the range of VAT accounting schemes available and wondered which one might be right for your business.

In our latest joint webinar, HMRC explains the three most popular VAT accounting schemes:

Looking for more support?

If you’d like to learn more about VAT after watching the webinar recording, why not head over to our VAT hub page, where you’ll find lots of helpful articles and other resources to help you get to grips with VAT!

Cough up! A practical guide to getting paid on time

Posted on 6 June 2017 by Adrian Mather - Jump to comments

If you’re a freelancer or a small business owner, then we don’t have to tell you how frustrating late payments can be.

While this is a problem that has been around for some time, the government is now taking steps to try and resolve it. As well as the ongoing recruitment of a Small Business Commissioner to help resolve disputes and provide guidance, last month new legislation came into place forcing big businesses to make reports on their payments to small businesses public. While these changes may be a step in the right direction, the toxic culture of late payments will take a lot more than a little legislation to fix.

So what can you do to protect your business against reluctant payers? Follow these steps to arm yourself as best you can:

Draw up payment terms

First things first: make your payment terms known loud and clear. Your payment terms are the conditions that you impose on your customers to make sure that you receive payment within an acceptable timeframe. Before you start working with a client, draw up a brief summary of these terms, and ask them to sign it. As well as laying down your payment deadline (e.g. 30 days after invoicing), you might want to request a deposit in order to secure some of the cash upfront.

You can also preemptively guard against being paid late by introducing a late payment penalty into your terms. You can legally charge 8% interest plus the Bank of England base rate on invoices that are over 30 days late, and you’re also entitled to claim debt recovery costs of up to £100 for the inconvenience. Having a written agreement in place makes everything clear right from the beginning, and can give you a cast-iron comeback against any flimsy excuses.

Have a watertight invoice

If your invoices are missing information, then you’re giving your clients an opportunity to take advantage. It’s vital that you list your full business details, plus a rundown of the work completed and a clear cost breakdown in your invoices. Be sure to include any late payment penalties, and if you like, you could even include your full payment terms on every invoice.

Do you use services like PayPal, GoCardless or Stripe? Make your invoices even slicker by adding an instant payment link, so making that payment couldn’t be any easier.

For more ways to make sure your invoices are untouchable, check out these tips to make sure it stands up to client questions.

Be firm (but friendly)

Relationships with clients can often be a little tricky, requiring you to constantly toe the line between being friendly, yet professional. However, if you want to keep things sweet between you, then it’s crucial that you be assertive and upfront about your payment terms.

Part of taking a firm hand could be requesting immediate payment for any work done. Our research has shown that small business owners who issue zero-day terms, often get paid far quicker than their more lenient counterparts.

Send a prompt, professional invoice (FreeAgent offers a gallery to choose from, so it's easy to find one that fits your brand) and you’ll be off to a flying start. Once you’ve sent that invoice out, don’t be afraid to chase your client up. Be firm yet friendly, and remember - you’re only asking for something that is rightfully yours! To really take the awkwardness out of repeated invoice reminders, let FreeAgent take care of it by sending automated invoice reminders out for you.

Fight for your rights

If, despite all your best efforts, you still can’t get a client to cough up, you are well within your rights to take legal action. Whether it’s taking your case to small claims court, referring the matter to a debt collection agency or even getting a solicitor involved, you have lots of options to help claim what is rightfully yours. Check out our comprehensive guide on options for UK-based small businesses faced with this situation.

Hello FreeAgent, goodbye bank holiday envy!

Posted on 30 May 2017 by Jessica Adair - Jump to comments

The three-day weekend - is there anything better? A whole extra day to relax, recharge and possibly even enjoy some good weather! While most of the UK’s employees were treated to a blissful bank holiday this week, freelancers and small business owners can’t always take a break when the rest of the country downs tools. Here at FreeAgent, we’re on a mission to change that.

In a recent survey*, our customers told us that FreeAgent helps them win back an average of seven working hours each month by automating and simplifying some of their most time-consuming business and finance admin tasks. The equivalent of a bank holiday every single month - it’s the dream! Here are just some of the ways that FreeAgent makes it happen:

Invoices chase themselves (and say thank you!)

Chasing late payment can be time-consuming, not to mention stressful! FreeAgent takes the pain away by sending out an automatic chaser email to your client the moment your invoice becomes overdue. You can use the friendly (but firm) wording provided or draft your own message to send with the email.

With FreeAgent chasing your overdue invoices for you, not only will those awkward conversations with late-paying customers become a bit easier (and hopefully less frequent), you’ll save loads of time. No more agonising over when to start chasing an invoice or what to say in your email!

It’s not just about late-paying clients, either. You can set FreeAgent up to send thank-you emails automatically too, so that when your clients do pay they’ll receive a friendly note of thanks from you right away.

Bank transactions automatically appear in your accounts

You’ve got better things to do with your time than trawl through your bank statements, adding every single transaction to your accounts! FreeAgent automates a big chunk of this particularly thankless task by connecting to your bank once a day to import bank transactions straight into your accounts. Once your transactions are safely delivered into FreeAgent, all you need to do is explain them as either ‘money in’ or ‘money out’ and your accounts and tax forecasts will automatically be updated.

FreeAgent Mobile lets you do the admin while you’re on the go

FreeAgent’s iPhone and Android apps have made burning the midnight oil trying to catch up on your business admin a thing of the past. Whether you’re on a train, in a cafe or even sitting in the dentist’s waiting room, you can use FreeAgent Mobile to record your expenses, explain your bank transactions and a whole lot more - all you need is a connection to the internet. With business taken care of during the day, the laptop can stay switched off when you get home and you can enjoy a well-earned rest. If you’ve not checked out FreeAgent Mobile yet, you can download it here:

Self Assessment and VAT calculated for you - and filed to HMRC in seconds

Self Assessment tax returns and VAT returns can be two of the biggest time drains for freelancers and small business owners. From sorting through all the paperwork and completing the forms to figuring out how much to pay - and then submitting it all to HMRC - tax and VAT returns have prompted many a freelancer to kiss goodbye to the prospect of a bank holiday!

Fortunately, FreeAgent comes to the rescue again. Using the data you enter throughout the financial year, it calculates your annual Self Assessment liability and pre-populates some of the forms (90% of the self-employment form, if you’re a sole trader). Ask an accountant to give it all a quick once-over and then you’re good to go - simply file your tax return directly to HMRC with the click of a button! If you’re VAT-registered, FreeAgent uses similar wizardry to pre-populate your quarterly VAT return and calculate how much you owe. All you have to do is review the information and hit ‘send’ to submit each VAT return directly to HMRC.

So, are you ready to start enjoying a bank holiday every single month? Why not get started with FreeAgent and make employees up and down the country green with envy - their next bank holiday at the end of August is a long way off!

*Survey of FreeAgent customers conducted in January 2017 with 366 total respondents.

Team FreeAgent runs for Mind

Posted on 29 May 2017 by Emily Coltman - Jump to comments

Mind over matter? It definitely was for the FreeAgent team members who took part in the 2017 Edinburgh Marathon Festival last weekend!

A group of us decided to raise money for Mind, the mental health charity, in memory of our much-missed colleague Graeme Mathieson. So on Sunday we took to the streets of Edinburgh to run the marathon in three relay teams, with each runner taking on a distance of either eight or five miles.

Overcoming a number of obstacles on the day, including lost bus drivers, extremely hot weather and injuries, we all finished safely and - just about - smiling!

We were also very proud to see our colleagues Tom, Murray and Donald complete other events at the festival, with Donald acing the half marathon, and Tom and Murray both smashing their first full marathons!

Big thanks to our senior content editor, Jess, for being one of the awesome marshals, and to FreeAgent support accountants Stuart and Ioannis for turning up at the end to cheer us home!

Our fundraising page is still open if you would like to donate.

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