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Child Benefits

Working in tax for longer than I am prepared to admit, the one constant is change, and increasing complexity. Many Governments have been and gone, promising simplification of the taxation system and the reality has been the opposite.

You can debate the moral implications of any tax change, and with the changes in child benefit which came into force on the 7th January 2013 will be one of the most heated, the merits of which will have been debated over many a Christmas dinner table.

Commentators have estimated the changes will affect over one million families in the UK.

What can not be debated is the change in the rules has created an unnecessary complex system for tax payers, the real beneficiaries of which are the Government with their reduced payments to claimants. Tax advisers and accountants those who can advise on it, and complete the additional self assessments for people who are in the £50,000 to £60,000 tax bracket and continue to receive child benefit, will have more work due to the change.

You may be liable to this new tax charge if you, or your partner, have an individual income of more than £50,000 and one of you gets Child Benefit. Once a parent earns above £60,000 the benefit is totally withdrawn and it is proportionately withdrawn between £50,000 and £60,000.

It is estimated there will be about half a million people in this bracket who will now need to complete a self assessment tax form to continue to receive child benefit.

The biggest losers will be London and the South East of England.

Declaring Child Benefit for the High Income charge

If your individual income is more than £50,000 and you, or your partner, choose to carry on getting Child Benefit payments, you will need to declare these payments by registering for Self Assessment and filling in a tax return. Find out more about who should declare, how and when.

Who should declare the Child Benefit

You will be responsible for declaring the Child Benefit if either of the following applies.

  • Your own individual income is more than £50,000.
  • You have a partner whose income is more than £50,000 but your income is higher than theirs.

If your partner’s income is more than £50,000 and your income is less than theirs they will be responsible for declaring the Child Benefit you receive.

How to declare the Child Benefit

You will need to declare the Child Benefit by filling in a Self Assessment tax return.

What to declare

You will need to declare the amount of Child Benefit you, or your partner, are entitled to receive for that tax year providing your individual adjusted net income is more than £50,000.

If you or your partner are affected by the High Income Child Benefit charge and have decided to stop Child Benefit payments, there’s an online form to make your request. Only the person who is entitled to the Child Benefit payment can stop the payments. the payments.

If you or your partner has income over £50,000 talk to your Sherwin Currid Accountant who will be able to assist you in your best course of action.

Freelancer Accounting by Sherwin Currid Accountancy assists freelancers and contractors in London and the South East with their taxation and accounting requirements.

Are you a web developer?

If you are involved in web development, designing websites or mobile applications then 2012 should have been a good year for you financially.

Salaries for freelance web developers rose by about 25% over the year, and this is expected to continue into 2013, there is a limited supply of good develpers and companies requiring a web presence is continuing to rise.

Web development is definitely a good field to be in, and one which any new entrant to the workforce should consider, with a good demand for these skill expected to continue and skill shortages expected in web development for the next five years.

FreelancerAccounting assists many freelance web developers with their accounting and taxation needs.

What you need to know about subcontracting

As a freelancer and client of one of our accountants for freelancers here at Freelancer Accounting (http://www.freelanceraccounting.com), chances are that you’ll be used to adopting flexible approaches to assignments, based on such factors as your current workload and personal circumstances. Certainly, there are few freelancers who haven’t at least considered subcontracting – whether doing it for someone else or getting another person to subcontract for them. But what are the advantages and disadvantages of subcontracting?

 

It’s possible that you will have considered finding a subcontractor if an opportunity suddenly arises for work that you don’t have the free time to complete yourself, given other ongoing projects. Of course, you could always turn down the offer of work, but in the case of many clients, a similar opportunity may not arise from them again. But if you try to tackle the work yourself despite your crowded schedule, it’s very likely that the results won’t be up to standard.

 

That’s why, especially if the client is a massive one that you value your relationship with and that is offering money that you just can’t turn down, you might be tempted to bring in a subcontractor. Certainly, this is something that many of the clients of our contractor accountants do very successfully, as it lifts pressure off them and even places them in a position to attract bigger jobs than previously. There is, however, the potential for more stress, as you’ll suddenly be a client yourself and need to manage your subcontractor to ensure that they produce work of a satisfactory standard.

 

This project management side of things is something that our small business accountants always urge clients to bear in mind when they are negotiating fees. You might need to learn to manage staff, having never done it before. As so often, though, thorough preparation makes a big difference. Before you take on a worker, peruse their CV and do a bit of other research on them. Ask for samples of previous work, and pay attention to the seemingly small things that could indicate your likely experience of working with them – such as how long they take to answer an email.

 

Alternatively, of course, you may fancy becoming a subcontractor yourself, which allows you to take on grander projects than you might have previously been able to attract on your own. Doing this can be a good experience if you want to move up another level, but on the minus side, it’s likely that you won’t receive credit for the work. Earnings may also be lower.

 

Nonetheless, as a client of one of Freelancer Accounting’s (http://www.freelanceraccounting.com) accountants in Guildford, you may feel that the downsides are a worthwhile price to pay for the chance to take on more intriguing and prestigious assignments. Contact us now for tailored advice on your accounting and tax affairs as a freelancer.

It’s the end of the year… Self Assessment time!

We’re into December now, which is a time that many non-clients of our accountants London dread. No, we’re not talking about Christmas present shopping and beating the scrum for the Boxing Day sales, but instead the obligatory Self Assessment tax return, for which the online submission deadline is 31st January. Freelancer Accounting (http://www.freelanceraccounting.com) gives you access to well-qualified tax and accounting experts who can assist you with your return.

 

It is, though, very helpful to have some pointers as to the basic Self Assessment process, even before you get in touch with us – and irrespective of whether you are a company director, a sole trader business such as a plasterer or plumber, or even an employee who pays tax at a higher rate. Once you’re familiar with the basic steps, you might then wish to contact our contractor accountants for the most recent tax advice and the peace of mind of knowing that such an important tax return has been completed correctly in readiness for submission. Our Self Assessment tax return services are available at a competitive fixed price.

 

Prior to registration, you will naturally need to determine whether it is necessary for you to submit a Self Assessment tax return at all. But presuming that you’re a freelancer, the short answer to that question is “yes”, as this type of tax return is generally applicable for anyone whose income is not taxed “at source”. For this year’s submission deadline, you should have registered by 5th October, with penalties to pay for those who missed it. In return for registering, you will get a Unique Taxpayer Reference Number (or UTR Number) and will not need to register again each year.

 

On-time and accurate Self Assessment is so important, which is why our accountants for freelancers would always urge you to properly organise your financial records – as tedious as this may seem – in order to avoid headaches further down the line. Timing is also obviously important, with conventional wisdom dictating that you should not leave your Self Assessment tax return until the day of the deadline. By submitting earlier, you’ll know your amount of owed tax earlier, so you’ll be able to plan ahead all the sooner. A failure to submit your return on time means an instant £100 fine, which can easily increase if you continue to delay.

 

The good news is that if you have prepared well, the actual final completion of the Self Assessment tax submission form shouldn’t be that arduous. It should simply be a case of logging into HMRC Online services with your username and password before working your way through the form with your records to hand. But if you are still in doubt about anything, feel free to contact the small business accountants here at Freelancer Accounting (http://www.freelanceraccounting.com) for prompt, professional and informed advice.

How to cope at the beginning of your freelance career

If you read our previous entry on the Freelancer Accounting (http://www.freelanceraccounting.com) blog, then you’ll know that many freelancers become so largely by accident, rather than design. You’ll also be aware, however, of the great earnings that many freelancers can command, while we have also previously covered many of the knotty tax responsibilities with which our accountants in London can assist. For many freelancers, though, just surviving is tough enough.

 

It is at the start of your freelance career, in particular, that you are especially vulnerable. For those that don’t have any jobs, contacts or clients to begin with, it can feel like an uphill struggle to constantly chase up those opportunities. Indeed, you may wonder whether you’re ever likely to get on a stable financial footing. At worst, you can find yourself trawling for odd freelance jobs on sites that seem to be aimed more at students than long-time professionals.

 

Try, try and try again

 

However, it is that word, ‘professional’ that sums up the attitude that you must take in the early months of your freelance career, with ‘persistent’ and ‘patient’ being others. The most successful clients of our small business accountants got to where they are today by taking chances and being more than merely ‘eager’. They had business cards designed and websites developed and generally made the most of every opportunity, making sure that each and every job was done to as high a standard as possible so as to attract recommendations and repeat business.

 

But of course, even the most altruistic freelancer still needs to eat, which is why many of them take on other part-time work to begin with, so they have a certain degree of financial security for those lean weeks and months when work seems thin on the ground. You’ll also need to ensure that in all of your eagerness to price your services competitively, you don’t find yourself working full-time hours for part-time pay. Be open to the range of jobs that you are willing to do, and view those inevitable mistakes as mere learning experiences.

 

Look to our highly-rated specialist expertise

 

A freelancer’s tax matters can be especially daunting, even more so if you’re new to taking care of them yourself after years of employment under PAYE. Things like your self assessment tax return suddenly become deceptively easy to forget about, and subjects like IR35 and limited company formation can confuse even some seasoned freelancers. That’s why it’s such a good idea to seek out a PCG accountant who can guide you on matters like the business expenses that can be claimed against tax.

 

Give Freelancer Accounting (http://www.freelanceraccounting.com) a call now for more information about our specialist accountancy services for new freelancers. We charge a competitive fixed fee so that you can budget well in advance.

Do you have what it takes to be a freelancer?

Did you know that November 21st was National Freelancers Day? If you did know, then you may be currently employed, but curious about what the freelance ‘lifestyle’ has to offer, prompting you to visit this site. Certainly, Freelancer Accounting (http://www.freelanceraccounting.com) is committed to providing the highest quality accountancy services for this section of the UK workforce, but our experience also puts us in a good position to provide advice on what it takes to succeed when self-employed.

 

You might have presumed that freelancers are all a bunch of jetsetters with salaries far exceeding that of the rest of the population. On that front, perhaps your presumptions aren’t too inaccurate. After all, a recent study revealed that the average freelancer salary is more than twice that of the average British worker, with those in fields like banking, engineering and IT doing especially well. However, freelancing also frequently involves long hours with no holidays, with 40% of freelancers working more than 41 hours a week – and 15%, more than 51 hours a week. There’s no holiday pay, after all.

 

Indeed, there are other statistics around that tell a story of some perhaps being forced into freelancing, such as the record number of part-time workers in the UK and the 80% increase in the number of freelancers across Europe. Indeed, 1 in 4 of the UK’s 4.2 million freelancers – 14% of the nation’s workforce – admitted to being forced into self-employment having been made redundant. Given the increasing trend for cash-strapped companies to outsource services, it seems that accountants for contractors will be in demand for some time yet!

 

In truth, freelancers ideally need to have certain characteristics to succeed, with some people simply preferring the comfortable structure that being employed provides. Many of those who make use of our accountants for freelancers find it difficult to say “no” to work as it comes in, not least given the uncertainty of how much work will be available from one week to the next. Those in self-employment are lonelier and need to be ‘self-starters’, proactively seeking out contacts and constantly waking up to work each day, unprompted, and that’s not a transition that some people easily make – even if the rewards are potentially great.

 

Another potentially complex area to which freelancers need to pay attention is, of course, their own accounting. To be a freelancer at all, you’ll need to be self-confident in your work, so that’s rarely such a big problem… but if you’re one of the many freelancers or contractors who admit to being “terrible with numbers”, you’ve got a potential issue. That’s why Freelancer Accounting (http://www.freelanceraccounting.com) is here to guide you through the various intricacies of freelance accounting and relieve stress, providing you with a well-qualified PCG accountant so that you can spend more time doing what you do best!

What is day to day life like as a contractor running a limited company?

Here at Freelancer Accounting (http://www.freelanceraccounting.com), we take pride in supplying specialist contractor accountants who can remove a considerable amount of the stress from the task of keeping your financial and tax affairs in order, and as any seasoned contractor will tell you, there are definitely certain things that can catch you out from your very first day contracting, which makes our extensive range of services especially invaluable.

 

With one of our accountants for contractors by your side, you’ll find it easier to face up to your long list of obligations, with one of the main ones that you will have to consider – not only as you begin contracting for the first time, but also every time you are presented with a contract – being IR35. Contractors are continually complaining about the difficulty of understanding IR35, but we’ll help you to familiarise yourself with its requirements and construct contracts that stand up to an IR35 inspector’s scrutiny.

 

It will also be necessary for you to invoice your agent on a weekly or monthly basis, providing an approved timesheet. This will need to be forwarded to them within their prescribed deadline to ensure that there are no delays in payment. You will also need an effective method for recording all of the company transactions, namely payments, invoices and expenses – and again, our small business accountants can advise you on the most suitable arrangement.

 

Payroll is another aspect to which you will need to pay plenty of attention as a contractor, as in your capacity as a company director, you will normally take a salary from the company irrespective of whether you are working under IR35. The preparation of payslips will need to be arranged and necessary taxes will need to be paid in good time. Once the tax year comes to an end, an employers annual return (form P35) will need to be filed, in addition to forms P14, P60 and P11D if any expenses or benefits in kind have been taken by you from the company during the year.

 

Those contractors that work outside the scope of IR35 will take most of their income from the business by way of dividends, with board minutes and dividend counterfoils needing to be prepared as each one is taken. You’ll also need advice from a contractor accountancy firm like us on a sensible amount of dividends to withdraw, as they should not exceed the company’s profits after corporation tax. And of course, accounts will also need to be submitted by your company to the Inspector of Taxes and Companies House each year.

 

Here at Freelancer Accounting (http://www.freelanceraccounting.com), we can assist with these and the various other related tasks that will confront you as a contractor, such as completing and forwarding your company annual return to Companies House and personal tax and VAT returns. Contact our accountants in London now to learn more about our various well-priced packages.

IR35 accountants – how important are they?

If there is one subject that makes any experienced contractor’s blood boil, it may well be IR35. Indeed, it has been the cause of considerable consternation among contractors for more than a decade now, with the Professional Contractors Group (PCG) having been formed in response to it. So, what has IR35 done to give rise to such ire over the years, and why might you appreciate the services of the IR35 accountants here at Freelancer Accounting (http://www.freelanceraccounting.com)?

Well, first of all, we need to properly establish what IR35 is. Termed ‘The Intermediaries Legislation’ in 2000, IR35 was announced in 1999 with the aim of stopping people working through their own personal service company whilst performing work as if they were an employee, all so that they could allegedly avoid tax. The target was individuals who set up as a contractor and worked through a Limited Company, and who could therefore, until that moment, be taxed as if they were self-employed – despite the work itself barely distinguishing them from an employee.

An example cited by HMRC is of an IT specialist leaving his permanent job one Friday before returning the following Monday as an IT contractor working through his own limited company. Despite doing exactly the same work as previously, he is only paying himself a small salary – on which tax and NIC is payable – with dividends providing most of his income, meaning that he pays less tax and national insurance. In reality, however, the legislation has been condemned by PCG on account of its “unfairness and complexity”, which highlights the necessity of accountants for contractors to advise on matters relating to IR35.

IR35 is seemingly clear in that it applies to those who carry out work through “intermediaries” to an end user under circumstances in which, if there was a direct contract between the contractor and the end user, it would be one of employment. However, the legislation is also so complex that contractors frequently struggle to correctly assess whether or not they fall within it, with their status possibly being dictated by contracts that they have never seen. That is unfortunate, not least given that those contractors who are outside IR35 pay considerably less tax than those inside it.

It’s obvious, then, that for contractors, it pays to find specialist accountancy services that can advise them on their IR35 status and make it easier for commercial relationships with clients to be constructed that are outside IR35. Although numerous cases have arisen that have made IR35 a little easier to understand, it remains the bane of many a contractor’s existence. Plus, with so many myths still flying around about IR35, it’s never been more important to have a PCG accountant by your side to ensure that you avoid the remaining pitfalls.

Visit http://www.freelanceraccounting.com now to find out more about the affordable services of our well-qualified and experienced accountants in London.

Accountants for contractors – Freelancer Accounting’s USPs

With the rise of flexible working practices, more people are working as contractors than ever before. This has created a growing demand for accountancy services for contractors, so when it comes to choosing which provider to hire, it pays to look for their USPs (Unique Selling Points) to ensure you get the most for your money. At Freelancer Accounting (http://www.freelanceraccounting.com/), we are accountants for contractors with USPs that set us apart from the competition.

 

PCG Accredited Accountant

Just as for any services with increasing demand, providers can flood the market and not all are created equal. Given the importance of accountancy services to freelancers, helping them to run their financial and tax affairs smoothly, it is vital to secure the services of an accredited accountant. Not only is Freelancer Accounting a regulated ACCA (Association of Chartered Certified Accountants) practice, but we are also fully PCG accredited, which means we have undergone additional training regarding issues pertaining to tax and accounts for freelance workers in particular. This not only provides our contractor clients with the specialist expertise they require, but also gives peace of mind that they are getting the best possible advice from a trusted provider.

FreeAgent Online Accounting Software

By using our accountancy services, freelancers get to benefit from the FreeAgent online accounting software which streamlines and simplifies the accounts process specifically for  contractors. FreeAgent allows our clients to pass the management of their accounts entirely over to us while still maintaining control and transparency. FreeAgent saves freelancers time and money and stress, something every contractor could do with!

Face-to-Face service

Finally, something we hear on a gratifyingly regular basis is how happy our clients are to be dealing with accountants on a face-to-face basis. Freelancer Accounting understands that a contractor’s financial and tax matters are of great importance to them. Rather than just being hard data, this is information which is both private and at the very core of a contractor’s business. Therefore we believe that to give a personal, tailored and attentive service, accountants should be on hand to have face-to-face meetings at the client’s convenience. We have offices in Central London, Canary Wharf, Richmond, Reading and Guildford and can make our team available to meet a client in person to talk over their accounting affairs. We’re proud to offer personable yet professional accounting services in London for freelancers.

 

These are just some of the things which we believe set us apart from our competitors. Find out more about our full range of services and affordable fees at http://www.freelanceraccounting.com