A good freelancer that uses an accountant in Richmond is also likely to keep up to date with all of the other aspects of their professional practice, training up their weaknesses and building on their strengths in such areas as making a proposal, negotiating a fee and marketing their services effectively. However, sometimes, there is a more elementary problem that the freelancer faces: the inability to concentrate and knuckle down to work.
This is a serious problem for any conscientious freelancer, given that every hour in which they are unable to motivate themselves means money lost. However attractive the low overheads of working from home can be, such an environment can also bring the greatest difficulties concentrating. There are many ways in which freelancers can recover their motivation and creativity and return to productive work once more, with one of them – taking a brisk walk – being the subject of a fascinating recent study in the Netherlands.
Anecdotes and literature have, for centuries, recommended going for a walk to those suffering ‘writer’s block’, and a Leiden University professor couldn’t pass up the opportunity to prove its effectiveness. In unveiling her findings, Prof Lorenza Colzato said that she had set volunteers convergent and divergent-thinking tasks to find conclusive evidence that creative powers could indeed be boosted by physical exercise. The test of each volunteer’s creative thinking was whether they could come up with ways of using a pen that didn’t involve writing, and sure enough, volunteers exercising four times a week outperformed those with more sedentary lifestyles.
The professor ensured the diversity of the test by also asking volunteers that exercised regularly and those that didn’t to find a common link between three words. Once more, it was those participants that spent more time regularly exercising that fared better on the test. The conclusion of the study was that a person’s brain was trained to “become more flexible in finding creative solutions” by physical exercise – although it didn’t seem to be a long-lasting edge, and also wasn’t as pronounced in people that were very physically fit. Nonetheless, the findings will intrigue many a freelancer using an accountant in Richmond (not, by the way, the worst place to go for a wander in the Surrey area).
Walking is not, of course, the only recognised technique for a freelancer whose concentration is flagging. Other known methods include switching off email, mobile phones and other frequent distractions, breaking down larger jobs into smaller, more manageable tasks with mini-deadlines and setting the morning alarm clock earlier. A freelance client of an accountant Richmond could also choose to perform certain tasks at a certain time of the day, only open an application when it is absolutely necessary for the task in hand and/or start with the easier work first, among the vast range of trusted concentration-boosting methods that probably haven’t been subject to a university study!
There is likely to be many a creative freelancer among those using an accountant in Canary Wharf, with many of those certainly likely to take an interest in the latest warning from the Institute for Public Policy Research (IPPR) that the government could be “missing a trick” in its failure to include the creative industry in its 11-sector economic blueprint. The think-tank described the omission as a snub to the considerable growth and job creation potential of this section of the economy.
The IPPR said that the government didn’t appear to be taking the creative sector seriously, despite 2012 seeing it surpass average industry growth 25-fold. The think-tank’s analysis also showed the creative industry’s growth to be almost three times the average since the bottom of the crash in 2009. While GVA growth for the economy as a whole was 1.1 per cent and 0.3 per cent in 2011 and 2012 respectively, the equivalent figures for the creative sector were 7.9 per cent and 7.7 per cent. In addition, GVA growth since the crash’s 2009 trough was 3.1 for the whole economy, but 8.7 per cent for the creative industries.
None of these figures will be greatly surprising to many of those at the sharp end of the creative sector making use of an accountant in Canary Wharf. Nor will they be shocked by the 8.7 per cent rise in turnover since the bottom of the crash in 2009, or the 18 per cent increase in the number of enterprises between 2008 and 2012 – from 185,000 to 217,000. The film and TV, advertising and marketing and design industries have been responsible for the greatest rises. However, noting the patchiness of growth across the country, the IPPR also suggested measures to support growth outside London’s boundaries.
IPPR Associate Director, Will Straw said that although the government was showing a commitment to a “march of the makers”, what he described as “the impressive efforts of one of the fastest growing industries in the UK” were not being noted sufficiently. He said that despite the likes of Arts Council funding, spectrum policy, broadband roll-out and the BBC license review already lending the government “major impact” on the sector, a coherent industrial strategy had not been provided across government departments. This, he stated, raised the possibility of some of the sector’s potential being squandered.
Mr Straw concluded, in words that will find little disagreement among creative freelancers using an accountant in Canary Wharf: “Given the rapid growth of this sector, which has been rapidly outstripping the rest of the economy since the financial crisis, there is a strong case for the creative industries to be prioritised by government. Eleven other sectors have been chosen but there seems to be little rationale for their inclusion while omitting one of Britain’s most thriving and exciting industries.”
Many freelance clients of Richmond accounting firms are likely to have amassed, through considerable experience, much knowledge of what practices can financially help and hinder their work. Hence, they are likely to be opinionated about the recent claims of Scott Fletcher, an entrepreneur and the founder of award-winning cloud expert ANS Group, that the government should invest in high-speed broadband rather than the intended high-speed railway commonly known as HS2.
Mr Fletcher suggested in an article recently published on the website of Freelance UK that the move would bring greater financial benefit to the country than spending in excess of £46billion on the High Speed 2 railway. HeeHeHe proposed that UK businesses should be equipped with two forms of broadband, fibre-to-the-premises or FTTP and fibre-to-the-home or FTTH.
The entrepreneur argued that FTTP would be more useful to businesses in the short term, while FTTH would be similarly helpful to businesses over a longer period of time, given the increase that it would bring in the rate of development of new technology. This was because, he elaborated, common business practices in the UK are rapidly changing and will continue to rapidly change, leaving as the only certain prediction that fast data speeds will be crucial as the UK corporate world becomes increasingly digital.
The ANS Group founder’s suggestions are likely to provoke intriguing responses from freelance clients of Richmond accounting firms, and we reckon that the suggestions do have some merit. It is worth pointing out, for example, that though the government has claimed that HS2 would result in £12.6billion of economic benefits simply due to the reduced time spent on business travel, the National Audit Office has taken issue with this figure. The NAO claims that the figure has been reached due to “a simplifying assumption that that time spent travelling is unproductive.” This therefore suggests that corporate productivity could be boosted more cost-effectively through the provision of speedier broadband and a greater number of carriages on existing inter-city trains.
The Internet has done much to revolutionise corporate practices and, it seems, will continue to do so for a long time to come. For example, digital conferencing and mobile computing devices are likely to be used more and more often by businesses in future. This means that over time, face-to-face business meetings will likely become less necessary and therefore, so will very fast trains. We reckon that many UK businesses, including Richmond accounting firms and the freelance businesses that rely on them, will agree with such sentiments.
The period since 2011-12 has seen a quadrupling in the number of new IR35 investigations into consultants and freelancers using limited companies, the many freelance clients of Canary Wharf accountants may be interested to read. It brings the number of enquiries in a 12 month period to the highest level for seven years, according to official data.
No doubt that many Canary Wharf accountants and their clients will have taken note of the new figures recently released by HM Revenue & Customs (HMRC), showing that in the 12 months from April last year, 256 IR35 enquiries were launched. This compares to a mere 59 in the previous tax year, 2011-12.
It equates to a greater number of freelancers and contractors facing an IR35 investigation in 2012-13 than in all of the previous five tax years put together, which saw a total of 223 enquiries being made under the legislation. The latest data vindicates HMRC’s earlier pledge to MPs that the target of 230 IR35 probes a year would be exceeded.
However, this figure is a long way shy of the 2,000 enquiries a year that the website of the freelancers’ trade body, the PCG, had claimed to have been made under the rule in the five months since May 2012. Indeed, according to HMRC data, even the 1,000 barrier of total IR35 investigations has only been broken twice, in 2003-04 and 2002-03, when there were 1,166 investigations and 1,016 investigations respectively.
However, the 2012-13 figure is still the highest that it has been for some time, freelancers making use of Canary Wharf accountants may be intrigued to know. Indeed, one has to look back to 2005-06 to find a higher figure, with 656 investigations having been launched that year.
As for the current 2013/14 tax year, the first six months have seen 112 IR35 investigations carried out, a Lords committee investigating personal service companies was told. This is well short of the 193 IR35 investigations that had already been launched at the same point in 2012-13. However, the 112 figure still constitutes almost one investigation per day being opened by HMRC since the commencement of the current tax year.
As HMRC’s employment status team leader, Robin Wythes, stated to the Personal Service Companies Committee, the 112 cases launched thus far were “all cases that we consider to represent a high risk of IR35… i.e. those companies where, generally, we believe all their contracts of the year would be within IR35.”
In other news of relevance to contractors making use of Canary Wharf accountants, HMRC officials also revealed a fall in the average duration of an IR35 enquiry, from 110 weeks and 140 weeks in previous years, to 28 weeks in the current tax year. Mr Wythes said that “Possibly, in truth for the first time, [HMRC is] trying to see IR35 from the view of the worker,” also asserting the need for Business Entity Tests – part of last year’s released IR35 guidance – to be made “fit for purpose.”
Freelancers making use of accountants Richmond have received timely encouragement from the very top ahead of a 24 hour celebration of freelancers across the UK on Thursday 21st November, with Prime Minister David Cameron describing the country’s freelancers as “the engine of our economy” and deserving of his “very best wishes on National Freelancers Day.”
The PM’s warm words follow a month of support for NFD from various quarters, including from other MPs like shadow business secretary Chuka Umunna, as well as business leaders and celebrities.
Mr Cameron said that the country owed “a huge debt of gratitude to the thousands of men and women who have decided to make their living as freelancers”, telling the freelance clients of accountants Richmond that “You have not only taken your own future into your own hands, but you are the engine of our economy and economic revival. Indeed, SMEs are the very lifeblood of our country.”
The country’s freelancers also drew the praise of the mayor of London Boris Johnson, who described them as “brave and ambitious” and providing the UK with “vital talent”. NFD’s London launch will take place later on Thursday, keynoted by BBC The Apprentice star and vice-chair of West Ham United, Karren Brady.
Ms Brady will take part in a Question Time-style debate alongside a panel of experts, to discuss the economic impact of flexible working. The event, at which BBC small business expert Liz Barclay, journalist and broadcaster Nick Ferrari, Salisbury’s Conservative MP John Glen and Sunday Times political editor Isabel Oakeshott will also appear, will be hosted by one of the UK’s best known freelancers, broadcaster Sue Lawley.
Ms Brady signalled that a dedicated celebration of the country’s 1.72 million freelancers was well-deserved, stating: “As a businesswoman, I have first-hand experience of working with freelancers and know that they provide an invaluable flexible resource to clients, helping them grow.”
Other influential figures to have previously hailed the event and the work of freelance clients of accountants Richmond include Countdown co-presenter Rachel Riley and shadow economic secretary Catherine McKinnell MP, who said that freelancers “played an increasingly prominent part in creating economic growth and prosperity.”
The chair of PCG, Julie Stewart, commented: “We are honoured that David Cameron has shown his support for freelancers. Backing from the prime minister shows that our unique way of working is being recognised at the highest level.”
She added that the purpose of National Freelancers Day was to promote and celebrate freelancing’s positive effect not just on the UK economy, but also the work-life balance of workers, concluding that it was “brilliant” that so many prominent individuals were choosing to join in with the celebrations.
The BBC is set to run a much-anticipated employment test on its freelance professionals, both high-profile and obscure, as it seeks to clamp down on personal service companies (PSCs). Clients of Richmond accountants may remember the corporation promising to carry out the test a year ago, following negative national press coverage of its use of PSCs and a critical report from the Public Accounts Committee.
Back then, the BBC had said that it would undertake the test on more than 800 ‘on-air’ workers who were paid not as individuals, but through their own limited companies. The report had said that the government and the BBC had too many staff making their own arrangements for the payment of tax and national insurance, potentially equating to a lesser contribution to the exchequer.
The new test will scrutinise the amount of editorial ‘control’ that the broadcaster has over the activities of each of the freelance workers, which are expected to be predominantly on-air. Should the assessment find a “significant” amount of BBC control of certain presenters and newsreaders, they will be asked to join the payroll, enabling them to be taxed at source rather than allowed to continue with their PSC.
The BBC stated in a news item outlining the assessment that it could not accurately gauge the number of ‘to camera’ freelancers set to be affected, given the “case-by-case basis” on which the test will be run, although top BBC talent, such as Jeremy Paxman and Fiona Bruce, could be within scope. Users of Richmond accountants may be interested to read that so-called ‘off air’ BBC freelancers are already being assessed for the appropriateness of their use of PSCs.
It is estimated by the corporation that around one fifth of its 16,000 production freelancers presently operating through their own limited companies could be requested to join the payroll as employees of the BBC.
The trade group PCG, which represents many freelancers using Richmond accountants, expressed its disappointment at the corporation’s measures against its freelance talent, pointing out that a distinction between employed and self-employed was already made by existing tax rules like IR35. It said: “If there are concerns about tax, it is the tax system that should be reformed, not the way these experts are working.”
The group continued: “Rather than taking the retrograde step of pushing back against these vibrant, successful and rewarding working practices, the government should instead be embracing it.”
The BBC has described the employment test as its response to the criticism of the Public Accounts Committee, despite “no evidence” being found last November that PSCs were used by the corporation to assist tax avoidance. That the test is going ahead will doubtless concern many present and prospective freelance clients of Richmond accountants.
The trade association representing freelancers and self-employed professionals, including many making use of a Canary Wharf accountant, Professional Contractors’ Group (PCG), has suggested that the government opens a “witness protection” telephone hotline, through which firms failing to pay in time can be reported.
The body made the call while welcoming plans to allow the naming and shaming of non-paying customers by smaller firms, with a consultation on means of tackling late payments among the four million UK businesses having recently been announced. It is news that will be welcomed by many of those using a Canary Wharf accountant, as it represents a significant acknowledgement of one of the biggest problems facing the freelancing profession.
With freelancers being the smallest businesses in the UK, they also tend to have the greatest scarcity of resources, meaning that they disproportionately suffer when clients fail to pay in a timely manner. Many of those benefitting from a Canary Wharf accountant will be familiar with the major cash-flow problems that can occur in the wait for payment, and in the worst case scenario, it can mean everyday tasks at work and home coming to a halt.
However, PCG did express concern about the potential adverse consequences for small businesses and contractors calling out larger businesses when they did not pay promptly. For freelancers, the relationships that they enjoy with clients are paramount, and it might not help them to be seen to complain about customers. As chief policy director at the Confederation of British Industry, Katja Hall has pointed out, such fears of damaging customer relations prevents many firms from using the means of redress that already exist.
No doubt many of those using a Canary Wharf accountant will agree with Simon McVicker, PCG director of policy and public affairs, that “Anything that puts the prospect of future contracts and recommendations in jeopardy would be disastrous for independent professionals who live or die by the strength of their client relationships. The last thing we want to see is blacklisting of those micro-businesses who are brave enough to speak up when big businesses do not pay within a reasonable time frame.”
This has led the organisation to suggest that an alternative system is considered by the Department for Business, Innovation and Skills (BIS), whereby big businesses can be anonymously reported by small firms in the event of failure to pay within a “reasonable time frame”. According to the government’s own figures, struggling to receive payment from a customer is a problem with which 85 per cent of the UK’s small and medium-sized enterprises have been familiar in the past two years, suggesting the scale of the issue.
Over the summer, it was suggested by business secretary Vince Cable that late-paying companies could be subject to fines, and current clients of a Canary Wharf accountant will be interested to see that this proposal is featured in the present BIS consultation document.
If you are a freelancer in Canary Wharf, it will be your responsibility to report your income and expenses to the tax authorities. That means declaring such information on your Self Assessment tax return – which poses a surprising number of problems to many of the self-employed. With freelance life also meaning none of the holidays and sick pay that the employed enjoy, the onus really is on you to make good use of the free time that you have to keep your tax affairs in order.
Although there are many Canary Wharf accounting firms that can help freelancers in the area to keep on top of their tax obligations, giving tips on how to save tax while remaining in compliance with all of the important legislation, it is important not to be lulled into a false sense of security by this relationship. Ultimately, the responsibility for keeping records and filing tax returns that appropriately report your accounts, lies with you and you alone. Neither your bookkeeper, nor your accountant, nor anybody else is responsible for ensuring that your paperwork or accounting calculations are immaculate.
One reason why it’s so important for the clients of Canary Wharf accounting firms to know that the buck stops with them, is that an Inland Revenue enquiry is highly inevitable, sooner or later. When the taxman examines your tax return and accounts, they should see that the right amount of profit has been declared, and accordingly, the right amount of tax paid. Enquiries can be stressful, and they will be so much more so if your tax records are disorganised and don’t immediately and clearly back up what you have stated on your tax return. Instead, store your invoices and receipts neatly and in good order.
If you’ve already spent some time as a freelancer or contractor, you might already be waist-deep in your work and growing your business – so take the time right at the start to ensure the good organisation of your vital paperwork. Research the various elements of tax law, determining which ones apply to you and your situation. The Inland Revenue website is one obvious place to look for information, while Canary Wharf accounting firms may also be able to provide limited free advice.
You’ll feel so much less anxious whenever the next Self Assessment deadline nears, if you are in full control of your paperwork and aware of your specific responsibilities, rather than having to make sense of a heap of disorganised data and paperwork, dating back a year. Look at the actual Self Assessment tax return that you will need to complete, identify the relevant parts to you and ensure that your records have been kept in a corresponding fashion, well ahead of the deadline. It all means that you spend so much more time on your core business, rather than furiously calling Canary Wharf accounting firms at the last moment before a deadline.
When you think back to your school days, you might imagine swapping football stickers in the playground and some boring science lessons, but if the Chartered Institute of Taxation (COIT) had its way, your children would also receive compulsory lessons in taxation. A good idea to teach those important financial lessons early, or taking taxation just that bit too seriously? We’re sure that there will be a wide range of opinions on the matter among the clients of our accountants Richmond here at Freelancer Accounting (http://www.freelanceraccounting.com).
The idea of such lessons, according to the body of chartered advisors, is that they would give school children a better idea of how tax works, why it is necessary and the obligations that they will have in their post-school life. The COIT’s recommendation came as it expressed its disappointment at the removal of a specific mention of education on taxes for 5 to 16 year olds from a new version of the draft national curriculum.
The most recent draft of the curriculum does still mention the teaching of “financial skills”, but clients of our contractor accountants will be interested to read that this was not enough for the COIT, which described tax as “one of the least understood areas of personal finance” faced by citizens. The body’s president Stephen Coleclough argued that with most schoolchildren eventually becoming employees, they would need to be able to understand a PAYE coding notice or payslip, in addition to identifying when it is wrong.
He added, in words that might make many of the clients of our IR35 accountants rue their own lack of knowledge of certain taxes prior to becoming self-employed, that many of today’s schoolchildren “will go into business where tax is a key cost and administrative burden that cannot be ignored. An understanding of taxation – how it works, why it is necessary and what the obligations of the taxpayer are – is an essential part of financial education.”
There are various roles that schoolchildren can find themselves playing as adults in relation to tax. These include students needing to understand the by no means straightforward effect of PAYE, investors like those with an interest in investing in ISA and tax credit claimants. The institute therefore emphasized the importance of tax becoming “as familiar a feature of school education as Bunsen burner experiments and football” – something with which many of those using accountants for freelancers may feel inclined to agree.
In addition, the COIT drew attention to about a sixth of the ‘tax gap’ being attributable to error and carelessness on the part of taxpayers, according to HM Revenue & Customs. It said that public education could be instrumental in tackling this. This perhaps suggests that if such teaching ever became a reality, the sons and daughters of those turning to Freelancer Accounting (http://www.freelanceraccounting.com) for accountancy services could yet be rather better informed on tax than their often struggling parents. In the meantime, contact us now for more information on our tax accounting expertise.
So many freelancers and contractors approach Freelancer Accounting (http://www.freelanceraccounting.com) over worries about Value Added Tax (VAT), unsurprising given its reputation as a very complicated tax that is easily misunderstood. Without the assistance of the right PCG accountant, you may struggle to manage your VAT – and now, a study commissioned by Sage shows that significant cash savings are being missed by more than a third of smaller businesses as a result of their failure to claim back the tax, often due to a lack of understanding of the associated rules.
The study found that many of those running smaller businesses are unaware of every item on which it is possible to recoup VAT, resulting in at least half of all owner-managers estimating that they miss out on more than £500 each year. Although business owners tended to be aware that they could deduct tax for everyday office items like stationery and printer ink, they weren’t as likely to know that the same rules applied to certain other purchases, such as petrol. This may explain travel – including that by car – topping the list of the greatest expenses for owners, followed by “food and refreshments” which, like fuel, could also have VAT reclaimed on them in a business context.
Managing director of Sage’s small business unit, Lee Perkins, warned that businesses failing to claim back the VAT to which they were entitled were putting themselves at a competitive disadvantage, adding that “Despite being around for 40 years, the ever-changing nature of VAT has put many business owners off from digging into VAT and fully understanding what can be refunded.” This news suggests the potential value to small traders of enlisting the help of the accountants in Canary Wharf of Freelancer Accounting.
The findings showed that 36 per cent of owner-managers missed out on savings due to the complexities around VAT reclaiming, while 52 per cent think that they and their businesses are down by hundreds of pounds each year as a result of such negligence. It’s all the more of a shame, given the highly efficient and cost-effective VAT service offered by the accountants for contractors of Freelancer Accounting, encompassing the preparation of VAT returns, ensuring that the client is on the most appropriate scheme, representation of the client in meetings with HMRC, dealing with all HMRC correspondence and assistance for the client with registering for VAT.
As a highly regarded provider of fixed fee accountancy services, Freelancer Accounting (http://www.freelanceraccounting.com) can ensure that small traders across London and the South East of England benefit from the most informed and tailored advice on their VAT situation. Contact us now for the help that you need to better understand the reclaiming of VAT.