The BBC have published details of a report from The All Party Group for Micro Businesses which concludes that the definition of a micro business should be changed to allow more targeted legislation and support.
Needless to say the government rejected their advice!
I never understand why when a group made up of a cross section of political views makes a recommendation to change things, does the government reject it.
Just yesterday morning a start up business asked me if they were eligible for any grants or assistance and I had to answer in a word
No
HMRC have just produced a leaflet to help people know how much money they should be saving towards their first tax bill.
What a wonderful idea. It could be improved in places, but it is better than nothing, which is about all most newly self employed people have to calculate their tax liabilities, unless they are using FreeAgent which does provide an estimate of any tax due and the dates it has to be paid.
The problem of not having any money to pay is compounded by the time between starting self employment and having to pay the first tax bill. Someone who started self employment last April (2011) will not have any tax to pay until 31 January 2013, but will then be faced with a bill for 18 months tax and Class 4 National Insurance!
The most difficult part of using the table in the leaflet will be arriving at a profit figure. HMRC define profit as income less expenses. It is vital that you don’t include the money you take out of your business for yourself (drawings) as an expense like wages paid to your staff – it isn’t.
Finally, may I suggest that if you are saving for your tax you keep the money in a separate account from your business current account otherwise it will just “disappear” and when the time comes to pay the cupboard will be bare.
This morning I have to register a business for Self Assessment which involves completing a form CWF1 (available on the HMRC website).
Easy I thought until I tried to print it and received the following message
Not wanting to give up at the first hurdle, after all this is the HMRC website so it wasn’t ever designed to be user-friendly, I decided to save the form to my desktop and then print it and received the same message!
Do HMRC expect everyone to enter the information in the form before printing it? If so, how do I manage when I don’t have all the details to hand?
I could understand it if the form was submitted online but it isn’t it has to be printed, signed and posted to HMRC.
I have checked with HMRC that I’m not missing the bleedin’ obvious and have been told that the form cannot be printed unless it is complete but I can phone the Newly Self-Employed Helpline and ask them to send me a paper copy to complete!
Have HMRC ever heard of the word efficiency?
About ten years ago I was made aware of a study conducted by Dr Alan Williams, PhD in the early 1970s of nearly 14,000 Australian businesses which found that, in contrast to failed businesses, successful businesses were most likely to have:
- Better accounting records
- Records which were more frequently made available
- Better preparation for business ownership
- Consulted with a knowledgeable person or other source of information before starting business
- Conducted a market survey to assess whether or not a market existed for their product or service
- A large number of customers
- Used formal written long-range (more than one year) plans
- Used time management techniques
- Regularly reviewed the suitability or otherwise of their location
- Continuously updated their product knowledge and the technologies associated with their major products and the services
- Continuously reviewed their firm’s marketing effectiveness and quality of business image
- Used financial data for managing
- Hired and retained good employees
- Been able to manage the firm’s financial resources
Nearly 40 years on some of the findings may be considered out of date but I can’t help thinking that these traits still form the bedrock of success in business.
It isn’t every day that the HMRC website advertises up to £50,000 for start up businesses and in actual fact it isn’t quite as good as it seems but if you’re starting a new business it’s a way of saving National Insurance Contributions. The full details are on the Business Link website but very briefly:
- The scheme runs for three years from 6 September 2010.
- Relief is available for the first ten employees.
- It only cancels the employer’s NI contributions. Employees will still have to pay National Insurance on their pay.
- The business has to be a genuinely new business and not situated in an excluded region.
- Only businesses qualify. It doesn’t apply to your au pair’s salary!
