The FreeAgent Blog

6 reasons to file Self Assessment right now

Posted on 20 July 2017 by Adrian Mather - Jump to comments

There are a lot of perks to being self-employed, from flexible hours and being your own boss, to the privilege of working from home in your pants. There are definitely some drawbacks to freelance life though, and one of these can be the annual filing of the Self Assessment tax return.

Unless numbers are your jam, chances are that bookkeeping is not the highlight of your working week (unless you use FreeAgent, of course). Keeping your accounts in order is vital for the smooth running of a business though, and leaving them to the last minute can be a recipe for disaster. So this year, tackle your books on time, and experience the pure bliss that is filing your tax return early.

1. Money in the bank

If you leave your Self Assessment until just before the January 31st deadline, then you run the risk of receiving an unexpectedly high tax bill, with not enough savings put aside to comfortably pay it. Aside from being out of pocket, you’ll be liable for a £100 fine if you’re even a day late. The earlier you deal with your taxes, the more time you’ll have to budget for them. January can often be a month where the purse strings are especially tight, so do your sanity (and your bank account) a favour, and get that return filed ASAP.

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2. All the time in the world

Completing your tax return requires you to get an awful lot of figures, reports and certificates together. Leaving this to the last minute runs the risk of you not being able to find some of these important documents, and potentially having to file late. On top of this, HMRC registration can take up to 10 days to provide you with your UTR confirmation code, so it’s in your interest to get that paperwork ready nice and early. This way, there will be no last minute scrabbling for files, and you can get things done in your own sweet time.

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3. The joy of being organised

As the best-selling book by Marie Kondo testifies, there is joy to be found in being utterly and completely organised. If you can check Self Assessment off your list sooner, rather than later, it will be a huge weight off your shoulders. No longer will you spend the year dreading digging out those old documents, as it will be already done and dusted. Along with the feeling of sweet relief, you will now have freedom to fully focus on what’s really important - your business.

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4. Freedom to enjoy the festive season

No-one wants taxes to be looming in the back of their mind while they’re tucking into turkey. The annual January 31st deadline for Self Assessment submission leaves a lot of freelancers fretting over the Christmas holiday. Get your taxes sorted well before winter, and you’ll be free to focus on much more important things, like eating your body weight in chocolate.

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5. Time to find a great accountant (if you don’t have one already)

While you don’t legally require an accountant to help you file your Self Assessment, it can often be a good idea to let an accountant check over your work. Although FreeAgent automatically populates a lot of your tax return for you, by letting a pro take a look you can make sure that you haven’t missed anything out. Accountants are notoriously busy in the run-up to the Self Assessment deadline, so find one you like now, before everyone else books them up.

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6. Self Assessment smugness

The final - and most important - reason of all to file your Self Assessment now, is the complete and utter smugness you can radiate from the moment you’ve filed. While your self-employed pals are complaining that they’re going to be bogged down in their books for the next few months, you can hit them with a ‘Self Assessment? Oh, I filed that months ago…’.

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Making Tax Digital to be delayed

Posted on 17 July 2017 by Emily Coltman - Jump to comments

The government has announced that its plans for Making Tax Digital (MTD) - the initiative to transform the UK’s tax system and end the tax return - are to be delayed until at least 2020. Here’s what’s changing:

  • Only businesses with turnover over the VAT threshold (currently £85,000) will have to keep their records digitally, and then only for VAT.
  • They will only have to do this from April 2019.
  • Businesses will not be asked to keep digital records, or to update HMRC quarterly, for other taxes until at least 2020.

This news means that there will be at least a one-year delay for everyone, since MTD was originally due to start in April 2018 for businesses with turnover over £85,000.

Here at FreeAgent we’re keeping a close eye out for any further updates from the government regarding Making Tax Digital. We expect these to be included in the upcoming Finance Bill, now scheduled for publication in September 2017.

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.

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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