10 Recent Blog Posts https://gorillaaccounting.com/blog/ Shows a list of the 10 most recent blog posts. Gorilla Fundraising https://gorillaaccounting.com/blog/gorilla-fundraising- <p>Gorilla often gets involved with raising money for various charities both local and national. For the rest of the year we have decided to up our efforts and focus our fundraising on a small number of different charities.</p><h2>Mind</h2><p><a href="https://www.mind.org.uk/">Mind provide advice and support</a> to empower anyone experiencing a mental health problem. They also campaign to improve services, raise awareness and promote understanding around mental health.</p><p>We raised <span style="text-decoration: underline;">£142.86</span> for Mind in May. We were able to do by setting up a ‘Jungle Tuck Shop’ in the office.</p><p> </p><h2>WWF</h2><p>Founded in 1961, <a href="https://www.wwf.org.uk/">the World Wide Fund</a> is an international non-governmental organisation, working in the field of the wilderness preservation, and the reduction of human impact on the environment.</p><p>To raise money for the WWF the Gorilla Accounting team baked cupcakes on National Cupcake Day and we also sponsored another 2 Gorillas through the WWF. We are still collecting money for the WWF, so an updated total will follow in a few weeks.</p><p style="text-align: center;"><img class="leftAlone" title="" src="https://gorillaaccounting.com/assets/Uploads/_resampled/ResizedImageWzYwMCw1MzFd/Screen-Shot-2019-07-19-at-11.26.19.png" alt="Screen Shot 2019 07 19 at 11.26.19" width="600" height="531"></p><p style="text-align: center;"> </p><h2>Bolton Lads &amp; Girls Club</h2><p>We're proud patrons on Bolton Lads and Girls Club and recently upgraded to Silver Patron status. </p><p><span><a href="https://boltonladsandgirlsclub.co.uk/">Bolton Lads and Girls Club is a youth club</a> and registered charity based in Bolton, Greater Manchester. They a<span>re one of the largest youth clubs in the United Kingdom, with a membership of over 3,500 young people. Based in Bolton’s town centre, are open 7 days a week, 52 weeks a year and welcome all young people aged 8 to 19 years old (up to 21 for young people with disabilities).</span></span></p><p style="text-align: center;"><img class="leftAlone" title="" src="https://gorillaaccounting.com/assets/Uploads/Screen-Shot-2019-07-19-at-11.37.49.png" alt="Screen Shot 2019 07 19 at 11.37.49" width="595" height="594"></p><h2>Ongoing Charity work</h2><p>Over the next weeks we plan to work with a local Bolton based charity which provides underprivileged children with lunches in the summer holidays.</p><p> </p> Fri, 19 Jul 2019 11:29:00 +0100 https://gorillaaccounting.com/blog/gorilla-fundraising- Clare attends Year 6 'Dragons' morning https://gorillaaccounting.com/blog/clare-attends-year-6-dragons-morning <p>We actively encourage all our staff to take part in volunteering, charity work, and helping the wider community, so when a local primary school contacted us to ask for help, we were thrilled to able to help.</p><p>The school runs a fiver challenge every year for year 6 pupils, and required judges to come in, watch the presentations and offer helpful advice and thoughtful critiques.  </p><p>We knew that one of our accountants, Clare Wilson would be perfect for the task!</p><p class="tweettextsize">After pitching their ideas to judges (or dragons) the children were able to receive feedback on their business strategies which has allowed them to go on and improve their Fiver Challenge projects.</p><p class="tweettextsize" style="text-align: center;"><img class="leftAlone" title="" src="https://gorillaaccounting.com/assets/Uploads/_resampled/ResizedImageWzYwMCwzNThd/Screen-Shot-2019-07-19-at-10.57.54.png" alt="Screen Shot 2019 07 19 at 10.57.54" width="600" height="358"></p><p class="tweettextsize" style="text-align: center;"> </p><p class="tweettextsize">Clare had a fun morning at the Primary school and was also thrilled to receive some lovely letters from the children, thanking her for her time and feedback.</p><p class="tweettextsize" style="text-align: center;"><img class="leftAlone" title="" src="https://gorillaaccounting.com/assets/Uploads/_resampled/ResizedImageWzYwMCwzMjBd/e80a782b-bda0-4bf0-8dba-da357f98b8ac.JPG" alt="e80a782b bda0 4bf0 8dba da357f98b8ac" width="600" height="320"></p><p class="tweettextsize"> </p> Fri, 19 Jul 2019 10:52:00 +0100 https://gorillaaccounting.com/blog/clare-attends-year-6-dragons-morning Moving from a permanent position into contracting: Gorilla speaks with Nitisha Patel https://gorillaaccounting.com/blog/moving-from-a-permanent-position-into-contracting-gorilla-speaks-with-nitisha-patel <p style="text-align: left;" align="center"><i>Image: Mr Ladd Media</i></p><p style="text-align: left;" align="center"><i>We sat down with professional chef and author of ‘My Modern Indian Kitchen’ Nitisha Patel, to discuss why she decided to move from permanent roles and into contracting.</i></p><p style="text-align: left;" align="center"> </p><h2>Q: What made you want to move from permanent employment into the interim world?</h2><p>I’ve always been quite entrepreneurial from a young age, ever since I graduated in 2011, I always had high hopes of doing something for myself but didn’t really pinpoint exactly what that was. In 2016, after 5 years of working full time in the new product development industry for large food manufacturing companies, I was hungrier than ever to revisit my ambitions to do something for myself. </p><p>At this point in my career I was doing well, I had worked for two of the UK’s largest food manufacturers and had carved a successful reputation for myself within those companies, however, having won sizeable business contracts for both of those companies, I was left feeling rather empty.</p><p>I wanted to focus on a project for myself and accomplish something to be proud of. That’s when the idea of a recipe book came to me. I was developing recipes for corporate companies, why not for myself?</p><p>In March 2017 I became a published author and launched my first cookery book, My Modern Indian Kitchen. As soon as my book launched, I was inundated with radio and TV interview requests, my social media following grew and lots of independent food business reached out requiring consulting on their food offering.</p><p>After researching and speaking to some of my contacts I decided to take the leap into the interim world. The thought of leaving a fulltime job was really scary, but the prospect of being able to work in the NPD industry whilst also being able to develop my own brand at the same time was twice as enticing</p><h2> </h2><h2>Q: How have you found the transition from permanent to interim?</h2><p>Looking back at my last day in full time employment, I remember handing back my company car, my company laptop and my company phone. I was living with my parents and had no car, no laptop and no savings. I also had no contract to go into at this point, but I still had my monthly outgoings which weren’t going anywhere anytime soon.</p><p>I remember waking up on a mid-June morning in 2017, my first day of being my own boss and thinking ‘what have you just done?’.</p><p>For the weeks and months that followed, I must have rung 20-30 recruiters a day desperately seeking a contract.</p><p>I didn’t land a big contract until October that year, I did have small bits of freelance work here and there keeping me afloat (just about), but for those 4 months of uncertainty I had to make a decision, do I stick to my guns or do I swallow my pride and go back to make a company thousands of pounds?</p><p>I’ll admit, it was a reckless decision and I was in a real sticky situation, but to be honest I don’t think I would have ever had the motivation to make it work unless I was in that situation. My ‘rock bottom’ situation gave me the drive to change things around and make things happen.</p><p>Landing a contract in October 2017 was the lifeline I needed, and I was determined to give the contract my all.</p><p>Putting my financial situation aside, I actually really enjoyed the transition from permanent to interim, after leaving a permanent role, I had 4 months to find myself and focus on my goals, I read books, I watched YouTube videos on entrepreneurship for hours on end, I networked like there was no tomorrow, I grew my social media following, I well and truly made use of the time I had available.</p><p> </p><h2>Q: From a financial point of view, what have been the biggest challenges you have faced?</h2><p>I would say that not having a constant stream of income will always be my biggest challenge. The interim world is a huge gamble as you never know when you will land your next contract, but you always need to have funds available to cover any up-front expenses for the next contract.</p><p>Another challenge that I have personally experienced whilst making this leap, is not having much knowledge regarding the accounts side of things. Being a VAT registered business, means having to complete a lot more admin and paperwork. I have had to get an accountant on board to look after my books because it’s not one of my strongest qualities.</p><p> </p><h2>Q: Would you recommend taking the leap from permanent to interim and why?</h2><p>I regret absolutely nothing about my decision, and for anyone else who also has a hunger to do something for themselves, I would very much recommend taking the leap from permanent to interim. Nothing beats the feeling of satisfaction you get when you go into a new business for a short period of time and end up making a difference. To be told that I have made a difference and hit the ground running means the world to me.</p><p> </p><h2>Q: What challenges did you find when starting out as an interim from an accounting perspective?</h2><p>Not being overly knowledgeable was definitely the biggest challenge, as well having to get up to speed very quickly.</p><p> </p><h2>Q: Is there any advice you would give to interim/contractors/freelancers looking to move into their contract position?</h2><p>Since going interim, I have had quite a few people reach out, some of which aren’t even from the food industry, who are looking to go freelance and need some advice. The first thing I always say is be prepared. Be prepared for being out of work for 6 months, you never know when you will land a contract and not having an income can affect you in so many ways.</p><p>The second piece of advice I give, is to network, not only online but in person too, go to events and sell yourself in person, tell people what you do, make an impact, be memorable.  </p><p> </p><p> </p> Thu, 18 Jul 2019 14:52:00 +0100 https://gorillaaccounting.com/blog/moving-from-a-permanent-position-into-contracting-gorilla-speaks-with-nitisha-patel IR35 Update | What is changing under the new Finance Bill and how will it affect you? https://gorillaaccounting.com/blog/ir35-update <p>The draft legislation in relation to IR35 changes proposed by the Government in recent budgets was finally published last Thursday (11<sup>th</sup> July 2019). The effective date of the changes will be <strong>April 2020.</strong></p><p>If you are self-employed as a Contractor or Freelancer, or indeed you work with the same as a Recruiter/Agency, then you need to be aware of the changes as they potentially affect your working practices directly. The below summary sets out how the changes may affect the private sector with regard to off-payroll working reforms.</p><p>The proposed changes, although <strong>not as draconian as expected</strong>, do mean that you need to review your working practices regularly to ensure you remain compliant. Although much of responsibility for determining IR35 status will fall on your client, you still have a vested interested as the Contractor or Recruiter, to ensure the determination is accurate and monitored.</p><p>For those of you who are compliant and operate correctly outside of IR35 – you have nothing to worry about. The legislation is aimed at targeting those individuals who blur the lines of Self-Employment and manipulate the current system to afford themselves a more favourable tax position. </p><h2>The Changes</h2><p>From April 2020, new legislation outlined in the draft Finance Bill proposes that private sector clients will be responsible for assessing contractors’ IR35 status, shifting the responsibility from contractors as has been the case since the introduction of IR35. This measure will apply to contractors who engage with medium or large-sized organisations in the private sector, while engagements with small organisations outside the public sector will be exempt, in an attempt to reduce the administrative burden; therefore contractors engaging with small companies will still be responsible for  determining their IR35 status, as before.</p><p>HMRC defines a small company based on the guidelines set out by the Companies Act 2006, which describes three main criteria in order to qualify as a small company:</p><ul><li>Annual turnover must not exceed £10.2 million</li> <li>Assets outlined on the balance sheet must not total more than £5.1 million</li> <li>No more than 50 people employed by the company</li> </ul><p>Should a company exceed the above conditions, it will then be considered either a medium or large company and will therefore be responsible for evaluating their contractors’ IR35 status. By clients we mean the end company/organisation which you/the Contractor is provide their services to. The Client will be required to pass their status determination and supporting reasons for their conclusions to both the first party they contract with in the labour supply chain and the worker.</p><p>When assessing IR35 status, the end client or Agency must complete a status determination, meaning that there should be <strong>no blanket assessments</strong> placing contractors inside IR35.   Any issues surrounding the determination will be addressed via a new ‘<strong>client-led status determination process</strong>’. The full details of what this process will include are yet to be published.</p><p>As a result, a contractor<strong> will be able to dispute their status</strong> by appealing directly to their client, should they feel a decision has been made incorrectly.  With this in mind, it is important that contractors work with their clients to continue to ensure that their contracts accurately reflect their working practices and remain to be classed as outside IR35 where appropriate.</p><p>Guidance on how clients can take ‘reasonable care’ to decide their status and how the dispute process could operate will be published by HMRC. </p><p>Targeted reviews of the compliance position in prior years where an engagement is assessed to be within IR35 for the first time from April 2020 will not be carried out by HMRC  (this isn’t a commitment from HMRC that there is an amnesty on incorrect status determinations by personal service companies for tax years prior to 2020/21).</p><h2>Implementation</h2><p>Over the next few months HMRC will release further guidance on the new legislation and will roll out targeted communications to raise awareness.</p><p>An updated online Check Employment Status Tool (‘CEST’) will be made available before the end of the year, although it’s still unclear what changes will be made to the tool. It will be interesting to see whether the points raised following the recent success taxpayers have had in court arguing that IR35 does not apply to them are also addressed in the update. </p><p>Rules surrounding who would be considered an employee for IR35 purposes remain the same, the only difference being the party who determines this shifting from the contractor to the end client as described above. The new regulations should therefore not alter the status of a contract, providing it has been correctly identified as either inside or outside based on the existing guidelines surrounding IR35.</p><p>Interestingly, HMRC has confirmed that it will not conduct targeted reviews of the compliance position in prior years where an engagement is assessed to be within IR35 for the first time from April 2020.</p><h2>Non-Compliance for Medium and Large Companies</h2><p>The draft legislation suggests that the liability for any unpaid PAYE and NIC transfers to the party in the supply chain closest to the client and, if necessary, <strong>ultimately to the client itself.</strong></p><p>The draft legislation however does recognise that in certain situations (unclear what these are at this stage) it would be inappropriate for HMRC to pursue unpaid liabilities in this way. HMRC will indeed issue detailed guidance on this in due course and clarify further which steps clients will need to have taken to show “<strong>reasonable care</strong>”.</p><p style="text-align: center;"><img class="leftAlone" title="" src="https://gorillaaccounting.com/assets/Uploads/_resampled/ResizedImageWzYwMCw0Nzld/adult-banking-blonde-1059119-2.jpg" alt="adult banking blonde 1059119 2" width="600" height="479"> </p><h2>How will this affect me?</h2><p>The new legislation will act as an extension to existing regulations surrounding IR35 in order to increase compliance, and is aimed at individuals supplying their services through an intermediary to a medium or large-sized organisation. HMRC’s view on the impact of this that <i>“<strong>Those who are complying with the existing rules should feel little impact. The measure is targeted at individuals who are not compliant with the current rules.”</strong></i>  - so the main effects will be felt by those who are non-compliant, meaning they will be required to pay tax at the correct levels, which could incur additional tax liabilities as a result.</p><p>The flexible workforce remain an important part of the economy and we anticipate that demand for contractors and freelancers will not be affected by the updated regulations, <strong>as the criteria surrounding IR35 itself is not changing</strong>. Providing contractors have taken the necessary steps to ensure compliance, they will not be likely to encounter any issues as a result of the new legislation. A proactive approach is ideal in this scenario, so contractors should begin discussing the updated regulations with their clients sooner rather than later, to make sure that both parties are informed and compliant in their working practices.</p><p style="text-align: center;"><i><img class="leftAlone" title="" src="https://gorillaaccounting.com/assets/Uploads/_resampled/ResizedImageWzYwMCw0MDBd/desk-electronics-hands-159761.jpg" alt="desk electronics hands 159761" width="600" height="400"> </i></p><h2>Our Opinion</h2><p>The changes are not as bad as everyone expected. For those that are genuinely self-employed and operate outside of IR35, there should be nothing to worry about. It is however crucial that you as a Contractor, or a Recruiter, ensure you align yourself with a specialist advisor in this area.</p><h2>How can Gorilla help?</h2><p>Our advice surrounding IR35 remains the same. We are specialist Accountants/Advisors to the self-employed and we live and breathe IR35 every single day.</p><p>Our advice is simple – have your contracts properly reviewed. We have specialist advisors connected to Gorilla who can quickly look at your papers and give you an accurate determination as to your current IR35 status. The consequences of not getting specialist advice or indeed operating in an non-compliant way could be devastating for you and your company.</p><p>At Gorilla Accounting, we specialise in providing a service for freelancers, locums and contractors and we will continue to support our customers by providing tailored tax and accounting advice throughout these changes, to ensure our clients stay informed and have the necessary tools at hand to maximise their finances.</p><p>Ultimately, we expect contractors who are fully compliant will notice little change once the bill is in effect and we will continue to offer advice and guidance to our contractor clients.</p><p>If you are affected by the above then get in touch with us as soon as possible.</p><p><i>If you would like to read further on the subject then <a href="https://www.gov.uk/government/publications/rules-for-off-payroll-working-from-april-2020">here is a useful link to the draft legislation </a></i></p> Tue, 16 Jul 2019 09:35:00 +0100 https://gorillaaccounting.com/blog/ir35-update What You Need to Know About HMRC Tax Enquiries https://gorillaaccounting.com/blog/what-you-need-to-know-about-hmrc-tax-enquiries <p>HMRC tax enquiries may sound daunting, but this doesn’t mean the government thinks you did anything wrong. However, it’s still important that contractors are aware of what an HMRC tax enquiry is in order to prepare for it fully. When HMRC open an enquiry into you or your business, they are checking in detail that the information on a tax return is complete and correct. Your submission may also be randomly selected for enquiry.</p><p>So, if you’ve been chosen for a tax enquiry, you don’t need to worry needlessly. As <a href="https://gorillaaccounting.com/">contractor</a> accountants, we can help you to make sure you’re prepared for what comes after receiving a letter from HMRC.</p><h2>What is an HMRC Tax Enquiry?</h2><p>First of all, it’s crucial that you understand what makes up an HMRC tax enquiry and why you shouldn’t panic. A tax enquiry is the process by which the government checks the information on your tax return in detail; HMRC are looking to see whether these documents are filled out properly and in their entirety. You may have to answer a few questions to clarify something HMRC don’t understand or they may request that you send them specific documents. If you’ve inherited money recently, for instance, you may have to explain where it came from.</p><p>HMRC will ask you questions about your return through meetings and will also review your records, seeing as they have a right to open an enquiry into any tax return they wish. The enquiry may focus on the return as a whole or on specific points; the latter refers to specific parts of your files, such as certain information that is not clear or consistent.</p><p>This means that the information requested by HMRC will depend on the type of enquiry they’re launching. Usually, you have 30 days from the date of the letter to send the information HMRC is requesting, although this doesn’t happen all the time, with some deadlines being longer and other shorter. Additionally, you can request more time if you believe you can’t meet their deadlines for one reason or another; just let HMRC know as soon as you can make sure to agree to a new date together.</p><p>The investigation into your returns could last for several months or it could be quick; this will hinge on how serious your case is. The size of the business tends to matter too, as larger businesses will take longer to analyse. However, if you’re a one-man band as the owner of a limited company, it will probably take less time to complete the investigation.</p><h2>Why is HMRC Contacting Me for a Tax Enquiry?</h2><p>As we mentioned above, the government regularly checks a certain percentage of tax returns to ensure they are filled out correctly; sometimes, HMRC need more information than what is given in order to understand the numbers. They may have noticed a clerical error in your submissions or received an anonymous tip that there are discrepancies in your business as well.</p><p align="center"><img class="leftAlone" title="" src="https://gorillaaccounting.com/assets/Uploads/_resampled/ResizedImageWzYwMCw0MDBd/desk-electronics-hands-159760.jpg" alt="desk electronics hands 159760" width="600" height="400"> </p><p>They can also check tax returns at random, so you may be one of the contractors chosen. Because this could happen to any contractor, it’s crucial that you keep all of your documents and important information properly and keep them until HMRC is no longer allowed to enquire about them. If you are unable to present HMRC with the records they request – for example, because you didn’t store them correctly and now can’t find them – you may be fined up to £3,000.</p><p>The type of work you do can have an impact on HMRC’s choice to include you in their random sample of returns as well, since some may be seen as a ‘higher risk’. In addition, the software the government uses can identify irregularities between your declared income and other sources of information, so it’s vital that all of your documents are in order and completely correct.</p><h2>What Happens During an HMRC Tax Enquiry?</h2><p>If HMRC wishes to conduct a full enquiry, they will likely review every single point in your tax return in-depth; if needed, your business records will also be analysed.</p><p>HMRC will ask for you to send them specific documents and information, although they may also request to review information on-site, be it your home or your office. You’re not obligated to attend a meeting with HMRC; however, should you choose to do so, it’s crucial that you know your rights. Additionally, you may want to enlist the help of your tax specialist instead of going alone.</p><p>All information you provide to HMRC needs to be accurate. You may be fined otherwise. This includes giving the wrong information by accident, be it because you had the wrong data or because you didn’t know the answer but took a guess. If you don’t know what to say to HMRC, be truthful and ask them for time to find the correct answer.</p><p>Usually, the type of information requested by HMRC include bank statements, invoices and expense receipts, as these can help them to determine whether your business is in order. The government can also investigate companies that have closed down, as well as reopen cases that have been settled if they deem necessary.</p><p>So, <a href="https://www.gov.uk/government/publications/your-charter/your-charter">know what is expected of you and what you can expect from HMRC</a> ahead of time. If you’re still unsure about your rights or what to say should they request a meeting, talk to us and we’ll be happy to help you during this process.</p><p>While each case will be different, you can more or less expect the same typical steps during your tax enquiry. These stages may include the following:</p><ul><li><strong>Receiving a letter from HMRC</strong> – first of all, you should always check whether the deadline to open an enquiry has passed or not; in addition, you’ll want to verify if the information requested is sensible and to challenge HMRC if you think it isn’t.</li> <li><strong>Formal request</strong> – you will receive a formal request if you don’t comply with the original request for information, and you may also be penalised for missing deadlines. HMRC will ask that you clarify certain information.</li> <li><strong>Potential meeting</strong> – HMRC may want to meet in person, which can help to speed up the enquiry process – and can signal to the government that you’re happy to cooperate. Make sure you receive an agenda beforehand, so you can be prepared to answer any questions.</li> <li><strong>The meeting</strong> – keep to the agenda, clarify concerns and send information after the meeting if you can’t remember something while talking to HMRC. Ask questions if you’re unsure about what you’re being told or asked. Giving an answer you’re not fully comfortable with because you feel like you <i>need</i> to say something is a mistake – you can be penalised for giving HMRC false information, even if you didn’t mean to. Knowing your rights is key; if HMRC wander away from the agenda, you are entitled to request a stop to the meeting, for example.</li> </ul><p align="center"><img class="leftAlone" title="" src="https://gorillaaccounting.com/assets/Uploads/_resampled/ResizedImageWzYwMCw0MDBd/brainstorming-businessman-businesswoman-615475.jpg" alt="brainstorming businessman businesswoman 615475" width="600" height="400"> </p><h2>What About Tax Fraud?</h2><p>If there are errors in your tax submissions, HMRC may believe you committed tax fraud and investigate you for it. If this is the case, then you should seek professional advice immediately in order to protect yourself. At Gorilla Accounting, we have been helping contractors for many years, so we will be happy to discuss your case with you.</p><p>But what exactly constitutes tax fraud? Simply put, this refers to deliberate acts that result in personal gain at the expense of the government, which means actions that caused HMRC to lose tax. These acts may include smuggling goods, not declaring all of your sources of income, and intentionally trying to cut down your tax bill by omitting, concealing or misrepresenting information in your submissions.</p><h2>What Happens After the Enquiry?</h2><p>Once the review into your business and tax returns has been completed and nothing wrong was found, HMRC will send you a closure notice. This notice means their enquiry is closed and there will be no changes to your submissions; in fact, HMRC will let you know that they accept the submission you made. If you’ve overpaid tax, your returns will be revised, and you’ll receive a repayment – this will include interest from the date of the incorrect payment up until you receive your money back.</p><p>However, if you’ve paid too little tax, you will have to change the return and pay what you owe within the first 30 days of notice. Of course, if you believe you’re in the right and HMRC have the wrong figures or information, it’s important that you challenge their review.</p><p>If HMRC believes you’re guilty of fraud, you will be charged penalties on top of the extra tax and interest you will have to pay. It’s likely you will have to sign a formal contract explaining that you agree to pay these fees and overdue tax and, in exchange, HMRC won’t charge you for income tax and class 4 national insurance contributions for the years in question. If you are unable to reach a deal with HMRC, they will likely utilise their legal powers to assess your case in a way they believe is best, which may not be beneficial to you.</p><h2>FreeAgent Can Help You to Keep on Top of Your Documentation</h2><p>It’s crucial that you understand the importance of HMRC’s tax enquiries; so, while you shouldn’t panic, you should take their letters and requests seriously and ensure there are no delays in your replies. If you’re under investigation, you may want to ask for the help or advice of professionals who specialise in these issues, so that you can be confident your case will be resolved quickly and painlessly.</p><p>As we mentioned, some tax returns may be randomly selected for investigation – however, more often than not, the submissions chosen tend to present incorrect or incomplete information. If you want to do everything in your power to prevent this, then you need to have your documents in order.</p><p>This couldn’t be easier with <a href="https://gorillaaccounting.com/free-agent-book-keeping-software/">FreeAgent bookkeeping software</a>, which allows you to store all of your tax-related information in one place, offers real-time data you can access from any device, allows you to upload receipts and manage expenses, automatically uploads bank transactions daily, and so much more. With this, you can rest assured that your tax returns will be filled out properly and on time.</p><p align="center"><img class="leftAlone" title="" src="https://gorillaaccounting.com/assets/Uploads/_resampled/ResizedImageWzYwMCw0MDBd/arm-black-bracelet-196656.jpg" alt="arm black bracelet 196656" width="600" height="400"> </p><p>At Gorilla Accounting, we believe it’s important you know what to expect if HMRC contacts you for a tax enquiry. You have the right to appeal against decisions you don’t agree with, including penalty charges, and may even request a stop to the investigation if you think it’s unfounded. To do this, you need to make sure you’re in the right, which our friendly team can help you with.</p><p>Meanwhile, why not make use of our <a href="https://gorillaaccounting.com/contractor-tax-calculator/">contractor tax calculator</a> to figure out your take-home pay or check out the benefits you get from choosing us as your <a href="https://gorillaaccounting.com/contractors-limited-company-accountants/">limited company accountants</a>?</p> Fri, 12 Jul 2019 00:00:00 +0100 https://gorillaaccounting.com/blog/what-you-need-to-know-about-hmrc-tax-enquiries Importance of Networking for Contractors and Freelancers https://gorillaaccounting.com/blog/importance-of-networking-for-contractors-and-freelancers <p>As we’ve mentioned a few times before, it’s important that contractors choose the best operating structures for their business and that they have a deep understanding of their market. However, as <a href="https://gorillaaccounting.com/">contractor accountants</a>, we also believe it’s fundamental that contractors and freelancers invest in networking. While it’s true that most self-employed individuals will often work alone, this doesn’t mean you don’t need to develop your professional relationships.</p><p>In fact, building up your connections is one of the most important things you can do to grow your business.</p><h2>Why is Networking so Important?</h2><p>In today’s market, you have many opportunities to be your own boss; however, this also means there can be a lot of competition as well. Taking time to network with others in your industry can be a game-changer, both in getting new customers and in expanding your business. Connecting and collaborating with others is not a new concept; on the contrary, vendors in ancient times would discuss new opportunities with other traders as well.</p><p>Networking can help contractors and freelancers to sell more products and services, as well as gain a deeper level of understanding of your business. Working by yourself can be vital to complete certain projects, but not talking or meeting anyone else for extended periods of time can be challenging.</p><p>Networking can also help people to learn new things from others. Whether more experienced contractors or thought leaders in your market, it pays to gain new ideas and advice from those who have ‘been there and done that’ – receiving feedback from others can also help you to improve your business as well.</p><p>Networking is crucial for career growth and is about forging long-term relationships, as well as a good reputation, over time. There are several ways to do this, such as attending industry events, talking to people on social media, connecting on LinkedIn, and so much more.</p><h2>Advantages of Networking</h2><p>More specifically, when you spend time networking, even if it’s not your favourite activity and you’d rather be spending that time doing what you love, you can enjoy serious benefits. The advantages you get when you network efficiently can help you to stay ahead of the game, something that gains even more importance when you consider the current competitive market. So, networking allows you to:</p><h2>Access Job Opportunities</h2><p>A major benefit of networking is that you have access to more opportunities. You can be introduced to a potential client, receive a referral, or become aware of certain job openings, for example; networking can open new doors when it comes to professional growth, so keep it in mind when you start networking.</p><p align="center"><img class="leftAlone" title="" src="https://gorillaaccounting.com/assets/Uploads/_resampled/ResizedImageWzYwMCw0MDBd/adult-brainstorming-businesswoman-515169.jpg" alt="adult brainstorming businesswoman 515169" width="600" height="400"> </p><h2>Become More Confident</h2><p>You may not think this is a significant benefit of networking but, in fact, it can have a massive impact on your life as a contractor. Putting yourself out there can be daunting, especially if engaging in conversation with strangers is not your strong suit. The same goes for selling your services and products; most contractors and freelancers don’t like to talk about themselves in such a way, but this is a key skill to develop. The more you network, the more this will become second nature to you, and the more easily you can create long-lasting relationships.</p><h2>Raise Your Profile</h2><p>Visibility is an important issue for contractors and freelancers. You want people to know who you are and what you do so, by communicating with potential customers or partners on a regular basis, you can more easily raise your personal and professional profiles and remain in people’s minds for longer.</p><h2>Solve Problems</h2><p>As a contractor or freelancer, you’re good at what you do. However, running a business, whether you’re operating solo or own a limited company, requires more than just knowledge and experience in your field. Networking can help you to find business solutions that will help you to grow your business. For example, if you don’t understand finances or HMRC rules very well, finding someone who specialises in <a href="https://gorillaaccounting.com/">accounting for contractors</a> ensures you’re doing everything right.</p><p>Networking allows you to come into contact with a multitude of professionals that can make your life easier, so don’t underestimate it.</p><h2>Meet Key People</h2><p>You may have heard the saying ‘it’s not what you know, but who you know’; this is often true in business, as people need to have reliable and relevant connections in their network in order to thrive. By networking, you have the chance of meeting many interesting people who may have been difficult to meet or contact otherwise. These key, influential professionals can open the door to great opportunities or put you in touch with other businesses.</p><p align="center"><img class="leftAlone" title="" src="https://gorillaaccounting.com/assets/Uploads/_resampled/ResizedImageWzYwMCw0MDBd/adult-analyzing-brainstorming-1080865.jpg" alt="adult analyzing brainstorming 1080865" width="600" height="400"> </p><p>Networking Tips to Help You to Grow Your Business</p><p>But how can you network efficiently? At Gorilla Accounting, we understand this can be a little intimidating in the beginning, especially as you want to make a good first impression. It’s easy to feel under pressure because of this; however, there are plenty of ways to start building connections and growing your business, but not feeling overwhelmed by the networking process.</p><p>Make the most out of your valuable time by following these networking tips which Gorilla Accounting put together:</p><h2>Have a Plan of Action</h2><p>While this may sound strange, given that networking can be as simple as talking to someone else, the truth is that it pays to be prepared instead of improvising – this is crucial for people who dread going up to strangers to strike up a conversation, since it can help to make them feel more confident.</p><p>Plan ahead by jotting down relevant points of discussion if you know you’re going to be attending an event with other contractors, potential clients or key industry figures. This way, you can easily cover all the topics you wish to put across and establish that you’re a professional.</p><p>You don’t have to focus solely on work; on the contrary, you can request a future meetup to discuss a work-related topic, for example, and choose to talk about other subjects instead. Don’t forget to bring business cards to give out to people.</p><h2>Attending Industry Events</h2><p>Attending events in your industry, such as conferences, trade shows and product launches, can be incredibly beneficial for career growth. Attending these types of events will help you come into contact with like-minded professionals in your industry throughout the year, so consider joining them every time you have the chance.</p><h2>Know Who Will Be in Attendance</h2><p>It’s a good idea to research people who will be in attendance before you meet them, so you can feel more at ease when talking to them. This can also help you to decide which events are worth your time and which aren’t. Targeting the right audience is vital, given that it can maximise your job prospects. The same goes for online connections, so research someone before connecting with them or sparking conversations.</p><p>Making sure that your services are targeting the right people means you need to be clear on what you’re offering. If your pitch isn’t engaging, your efforts may fall flat.</p><h2>Forging Business Relationships</h2><p>A big part of building connections is to help other people. By doing so, you are nurturing your relationship with them. The best way to go about forging these types of relationships, therefore, is to focus on what you can do for people, not on what they can do for you. Even if they don’t require your services at the time, by facilitating connections and putting them in contact with people who can help, they are likely to remember you in the future.</p><p align="center"><img class="leftAlone" title="" src="https://gorillaaccounting.com/assets/Uploads/_resampled/ResizedImageWzYwMCw0MDBd/adult-brainstorming-caucasian-1437908.jpg" alt="adult brainstorming caucasian 1437908" width="600" height="400"> </p><p>In addition, when you’re attending an event, trade show or conference, make sure to talk to as many people as possible. Anyone can be a potential customer so, while approaching people or teams can be nerve-wracking when you work alone, you shouldn’t underestimate the power of making new contacts.</p><p>Even a quick two-minute conversation could make the difference when it comes to getting new leads. Because people are busy, keeping the conversation snappy and to-the-point can actually work in your favour; when attending events, for example, most people will have an agenda for the day and will want to remain on track. Taking too much time to discuss your business or your services, therefore, can be detrimental to your budding connection with a potential client or partner.</p><h2>Use Social Media</h2><p>Nowadays, there is more to networking than just face-to-face meetings; while these are still incredibly important and, for many, the preferred way to communicate, social media provides a platform for contractors and freelancers to connect with their audience and grow their network of people. This is also a very cost-effective way to keep in touch with existing and potential clients, promote services and products, advertise a launch, grow your brand, and so much more.</p><p>Social media will keep your business relevant and visible to potential clients as well – if you’re not online, you’re missing out. After all, your competition is likely online and advertising their brand and services to a wide audience.</p><h2>Stand Out from Your Competition</h2><p>When it comes to standing out from the crowd, contractors and freelancers have their work cut out for them. By working alone and not for a company or with a team, you have to do everything yourself, including marketing your business in such a way as to draw people’s attention. Making yourself known can be a challenge but it’s not impossible. In-person networking can be a great way to stand out in industry events, for instance, while social media offers you the perfect platform to brand your business the way you want to – and talk to people at any given moment.</p><p>Make sure to mention your success stories. Giving potential clients a laundry list of your services is not a very efficient way to stand out, as people aren’t likely to retain all that information. Talking about successes, on the other hand, such as mentioning a solution to a similar problem that your prospect may have discussed with you, will show them how you can help.</p><h2>Follow Up</h2><p>After an event or meetup, it’s crucial that you follow it up with an email, a simple LinkedIn connection, an informal message on social media or a call – whatever your contact prefers. You will be meeting a lot of people at events, and so will everyone else, so make sure to remind them of who you are and how you can help them.</p><p>You could have excelled at researching your audience and networking, but a lead can fall apart if not properly nurtured. And follow up in a timely manner too. Others will be competing for the same project, so don’t wait too long to follow up. The biggest part of networking is building relationships, so don’t let your connections fizzle out before they even take off.</p><p>This step is crucial no matter whether you’re new at contracting or freelancing or whether you have many years of experience. Without it, you may find yourself falling behind the competition.</p><p> </p><p>Drawing from years of experience in the financial sector, Gorilla Accounting aim to help contractors and freelancers to build successful relationships and networks – and, of course, to grow their business to its full potential. We also provide you with the necessary tools for success, from our <a href="https://gorillaaccounting.com/free-agent-book-keeping-software/">FreeAgent bookkeeping software</a> to our <a href="https://gorillaaccounting.com/contractor-tax-calculator/">contractor tax calculator</a>, which allows you to figure out your take-home pay.</p><p>Get in touch today to learn more about what we can do for you.</p> Fri, 05 Jul 2019 00:00:00 +0100 https://gorillaaccounting.com/blog/importance-of-networking-for-contractors-and-freelancers I Employ Contractors, How Will IR35 Affect My Business? https://gorillaaccounting.com/blog/i-employ-contractors-how-will-ir35-affect-my-business- <p>Many companies in a multitude of industries rely on off-payroll workforces. Using contractors, consultants and freelancers gives businesses much needed flexibility and agility, especially during times when it doesn’t always make sense to take on additional full-time employees. Perhaps you need to quickly bring in more resource during a busy period, or maybe you need a specific skill set for a certain business challenge or project. It’s a growing trend, but worryingly, changes to off-payroll tax rules, which have already caused widespread chaos for contractors and their employees across the public sector, are now coming to the private sector.</p><h2>How will IR35 impact companies and contractors?</h2><p>Figures from the Office for National Statistics show that the number of self-employed workers in the UK has been on the rise since 2001. Today, they account for approximately 15% of the country’s working population and growing.</p><p>Yet in 2017, the government targeted this segment by overhauling how contract workers for public sector firms are taxed, threatening livelihoods and increasing the tax burden for HR departments, recruitment agencies and contractors.</p><p>Organisations from the <a href="https://www.larsenhowie.co.uk/knowledgehub/ir35-changes-causing-serious-damage-nhs">NHS</a> to the <a href="https://www.larsenhowie.co.uk/knowledgehub/bbc-address-ir35-failings">BBC</a> have already been hugely affected by the IR35 reforms, which shifts the liability for defining a worker as employed or self-employed from the contractor to the employer. The government’s aim is to crack down on so-called “disguised employment”, where a company uses contractors who work through their own limited companies or umbrella organisations and operate in the same way as employees but pay less tax. However, the repercussions have been far more serious. Worried about getting the rules wrong, many organisations have decided to automatically class contractors as falling within IR35, making them pay more tax, while others have had to force contractors to become permanent employees or laid them off.</p><p>Now these IR35 rules are being extended to the private sector, coming into effect from April 2020. Large and medium-sized organisations including media firms, employment agencies, consultancies, building firms, hospitality businesses, engineering firms, training providers and financial businesses all stand to be affected.</p><p>Some companies have already taken steps to prepare themselves for the imminent changes, and with good reason. If they fall foul of the rules, they will be liable for paying back taxes and fines amounting to tens if not hundreds of thousands of pounds. <a href="https://www.larsenhowie.co.uk/knowledgehub/hsbc-cull-contractors-ir35">Firms like HSBC</a> have taken more drastic measures and confirmed they will no longer engage limited company contractors.</p><p>But there are other options that don’t involve inadvertently losing highly skilled contractors to competitors.</p><p style="text-align: center;"><img class="leftAlone" title="" src="https://gorillaaccounting.com/assets/Uploads/_resampled/ResizedImageWzYwMCw0MTVd/adult-businessman-ceo-618613.jpg" alt="adult businessman ceo 618613" width="600" height="415"></p><h2>How to check whether contractors fall in or outside of IR35</h2><p>First and foremost, companies should try to familiarise themselves with the new IR35 rules and study all existing contracts. Conduct a full review of all staff and contractors currently working with you and aim to identify which will be bound by the new rules.</p><p>When looking at the employment status of each worker you will need to consider:</p><ul><li>What are the worker’s responsibilities?</li> <li>Who controls the individual? Do you stipulate when, where and how they work?</li> <li>How are they paid?</li> </ul><p>There are tools like HMRC’s Check Employment Status for Tax (CEST), designed to helped businesses decide if a worker falls inside or outside the scope of IR35. However, the government has openly admitted that CEST is flawed and experts have called for it to be reviewed. If in doubt, seek professional advice by taking a look at <a rel="nofollow" href="https://www.larsenhowie.co.uk/ir35-contract-reviews" target="_blank">Larsen Howie's IR35 contract reviews range</a> and also see our expert <a href="https://gorillaaccounting.com/what-is-ir35-advice/">IR35 advice</a>.</p><p>It’s importance to get it right. If you incorrectly class a contractor as falling outside of the IR35 rules, yet they are found to be an employee for tax purposes, your company will be fully liable for tax back payments as well as fines for late payment. At the same time, companies that incorrectly classify contractors whose working arrangements genuinely fall outside IR35 will find themselves paying unnecessary employers’ national insurance contributions.</p><h2>Steps you can take to cover yourself</h2><p>The good news is that companies and contractors can insure themselves against the risk of HMRC fines and litigation if they are found to be non-compliant.</p><p>IR35 Tax Investigation and Liabilities Insurance covers the cost of professional representation for both the defence and pursuit of HMRC enquiries as well as any back tax, interest and penalties applied by HMRC at the conclusions of their investigation. For more information on IR35 insurance, <a href="http://https//www.larsenhowie.co.uk/knowledgehub/what-is-ir35-insurance">read this article.</a> <a href="https://www.larsenhowie.co.uk/knowledgehub/what-is-ir35-insurance"><br></a></p><h2>What to do in the event of an HMRC investigation</h2><p>HMRC may have limited resources so the chances of being investigated are slim. But don’t count on this. HMRC can open an enquiry with no reason and regularly carry out random checks. </p><p>If your company finds itself the subject of an HMRC investigation, don’t panic. HMRC conducts hundreds of IR35 tax investigations a year and many result in no action. High-profile cases such as those of TV presenters <a href="https://gorillaaccounting.com/blog/gorilla-accounting-react-to-lorraine-kelly-ir35-ruling">Lorraine Kelly</a> and <a rel="nofollow" href="https://www.larsenhowie.co.uk/knowledgehub/kaye-adams-ir35" target="_blank">Kaye Adams</a> demonstrate that HMRC can be defeated. But others like BBC presenter <a rel="nofollow" href="https://www.larsenhowie.co.uk/knowledgehub/bbc-presenter-christa-ackroyd-pursues-ir35-appeal" target="_blank">Christa Ackroyd</a> haven’t been so lucky. Now the presenter is appealing the decision and the BBC could be held liable.</p><p>It is not usually a good idea to try and manage an IR35 investigation yourself. Contact professionals who are experienced in dealing with IR35 cases such as your business accountants and, if you have cover in place, your tax enquiry investigation insurance provider. Ensure all worker contracts, arrangement forms and communication with contractors is up-to-date and accessible. Importantly, remain prepared and organised.</p><p>Your business need not necessarily change the way it uses off-payroll workers, but it is key to undertake a risk assessment to determine how IR35 changes may affect your organisation. And now is the time to do it.</p><p>Speak to Larsen Howie today to understand your IR35 insurance needs and find out more about how to protect your business in case of an IR35 investigation. You can also read the latest IR35 updates in our Knowledge Hub.</p> Tue, 02 Jul 2019 12:15:00 +0100 https://gorillaaccounting.com/blog/i-employ-contractors-how-will-ir35-affect-my-business- How Can You Improve the Cashflow of Your Business? https://gorillaaccounting.com/blog/how-can-you-improve-the-cashflow-of-your-business- <p>A crucial step for businesses, cashflow management can determine a contractor’s success or failure. Managing and improving the cashflow of your contractor business, therefore, should be a priority; after all, even if you have a huge sales figure every month, this doesn’t mean much if your expenditures are equally large.</p><p>In our many years as <a href="https://gorillaaccounting.com/">contractor accountants</a>, we have helped many businesses and contractors to improve their accounts and, therefore, improve their cashflow. Have a look at how you can achieve this goal and ensure that your incomings are greater than your outgoings.</p><h2>Track and Review Spending</h2><p>Ineffective cashflow management is one of the biggest reasons new businesses fail in their first few years. Being aware of how money arrives or leaves your business is vital, so tracking and reviewing your spending should be something on your regular to-do list. Once you know where money is going, it’s easier to reduce the outgoings flowing out of your business to boost your cashflow.</p><p>Gaining control of even the smallest of details can help you to manage spending and allow you to be more strategic when it comes to business decisions; all of this benefits from and also contributes to an improved cashflow.</p><h2>Set the Right Wages</h2><p>Setting the right prices, be it hourly, daily or by project, will help you to improve your cashflow. If your wages aren’t accurate and don’t indicate the work you do, you’re not bringing in the necessary revenue to keep the business afloat. You can work out your rates with an accountant who can advise you every step of the way. Why not start by using our <a href="https://gorillaaccounting.com/contractor-tax-calculator/">contractor tax calculator</a> to figure out your current take-home pay?</p><p>Make sure you re-evaluate your wages from time to time as well. Markets are often volatile and daily expenses can change too, so your rates should reflect this. It’s vital that you assess your sales figures too, so that you can better update your rates to a number you feel comfortable with.</p><p>Increasing your prices can feel overwhelming at first, with many contractors being afraid of alienating their client base. However, most clients will understand and, if you provide them with a good service, they will keep coming back to you, price increase or not. If a customer isn’t happy about your decision and would prefer to still retain your services at a lower cost, you may want to review whether you should continue working with that client.</p><p>To reach a new rate figure, you can consider what your competitors are charging, if prices for equipment have increased, whether your services are coming off as ‘too cheap’ and if you’re undercharging for the amount of work you’re putting in. All of this also means that you should review your costs regularly as well. A good cashflow is not just about your incomings but also about money going out. This means that you need to keep on top of your spending by conducting regular reviews of your expenses – by doing this, you can more easily gain a deeper understanding of areas where you could be more efficient.</p><h2>Switch to Cloud Accounting</h2><p>With <a href="https://gorillaaccounting.com/free-agent-book-keeping-software/">FreeAgent bookkeeping software</a>, you’ll find it easy to gain this insight and to keep on top of your financials. With 24/7 access to real-time information about your business, from sales figures to annual revenue and everything in-between, you have a rich source of data available to you, allowing you to make decisions that will improve your cashflow.</p><p>Because your information is kept in the cloud, you can go about your day not having to worry about security issues. Cloud accounting is a fantastic way to keep your data safe and private; FreeAgent encrypts your details for peace of mind, and also constantly monitor for potential malicious activity and work hard to prevent vulnerabilities. It’s difficult to find this level of security in other types of accounting systems.</p><p>And, with Making Tax Digital, switching to cloud accounting software is no longer optional, given that contractors have to send their VAT returns to HMRC digitally. Switching sooner rather than later not only ensures that you’re HMRC-compliant, but you can also benefit from having all of your business’ financial information in one place. From your sales figures to your income tax data, it’s easier to see the bigger picture when it comes to your business’ accounts.</p><p align="center"><img class="leftAlone" title="" src="https://gorillaaccounting.com/assets/Uploads/_resampled/ResizedImageWzYwMCwzNzld/adult-analysis-chart-1516704-2.jpg" alt="adult analysis chart 1516704 2" width="600" height="379"> </p><p>It’s also efficient when it comes to time. Accounting software like FreeAgent allows you to effortlessly take care of your cashflow – you can simply and quickly access and manage your financials on your mobile, tablet or laptop no matter where you are. No more having to look over piles of paperwork to get a good idea of your business’ accounts or cashflow.</p><h2>Develop Strong Client Relationships</h2><p>While this may not be directly linked to an improved cashflow, it will contribute to it. Forging strong relationships with your existing customer base is less time-consuming than being on the constant lookout for new clients and can bring you many benefits. These range from new projects and timely payments to referrals.</p><p>But how can you nurture and grow the relationship you have with your clients? There are many ways to do this and it will depend on who your client is. For example, you may find that they respond well to compromises; if this is the case, it may be worth being more flexible (such as with project completion dates) while still remaining on your terms. Meeting in person can be extremely helpful as well, so why not spend some time outside of business to get to know them better?</p><p>Request regular feedback and suggestions too. Your clients will surely appreciate having their opinions valued. This has the added benefit of helping you to improve their experience by adapting and changing your services. Evaluating your customer base can help you to plan, manage and streamline the cashflow of your business as well. Ask yourself a simple question: are you working with the right clients? Make sure to work on projects that you like and choose clients who pay on time, which will help you to keep on top of your cashflow.</p><h2>Diversify Your Revenue Sources</h2><p>Don’t rely on just one source of income. To prevent cashflow problems should your client stop doing business with you or stop paying you, it’s important that you have your eggs in many baskets; work on several projects and with different clients simultaneously and you will be able to minimise risks associated with irregular payments or lack of work, for example.</p><p>Most contractor businesses will have levels of income and expenditure that fluctuate often, and which can be harmful to their cashflow if not managed correctly. Diversifying can, therefore, have a stabilising effect on your business.</p><p align="center"> <img class="leftAlone" title="" src="https://gorillaaccounting.com/assets/Uploads/_resampled/ResizedImageWzYwMCw0MDBd/comfort-comfortable-contemporary-920382.jpg" alt="comfort comfortable contemporary 920382" width="600" height="400"></p><p>Sometimes, an extra helping hand is needed. To maintain the cashflow of your business if you find yourself struggling, getting a loan can be the solution. This temporary injection of money can help your business grow as well, especially if you’re seeing more outgoings than incomings.</p><h2>Reduce Expenditure</h2><p>Cutting down the amount of cash leaving your business is a priority when it comes to managing your cashflow. Start by eliminating unnecessary business expenses by asking yourself if they’re really needed and, if so, if there are more cost-effective alternatives. For instance, if you acquired an office and wish to furnish it, you will have several different choices at your disposal – pick the ones that meet your business needs but also fit within your budget at the same time.</p><p>A way to reduce your expenditure is to invest in better and more efficient equipment, including purchasing technology that is up to date. Buying better tools and equipment may be more expensive initially but it will save you money down the line, since they lead to improved productivity. They will also contribute to more incomings because they give you the ability to take on extra projects or tackle more complex ones. Additionally, if you rely on suppliers to provide your services, why not request bulk inventory rates? Some vendors offer discounts for bulk purchases so it’s worth to ask if they have any deals.</p><h2>Don’t Delay Invoices</h2><p>Making sure to send invoices on time is vital to ensure good cashflow in your business. After all, you can’t run a business without getting paid for your services or products. In addition, by offering several payment options, you can get paid more easily. Instead of relying just on cash, direct debit or PayPal, for example, have all of them at your clients’ disposal. You can also choose to charge a deposit to make sure you get some cash up front, which is also a good idea in case the contract falls through.</p><p>Sometimes, however, clients don’t pay you on time (or don’t even pay you at all). Successful cashflow relies on timely payments, so it’s important that you’re also on top of any overdue invoices you may have. We recently wrote an article discussing this subject, titled “<a href="https://gorillaaccounting.com/blog/contractors-guide-to-dealing-with-late-payments">A Contractor’s Guide to Dealing with Late Payments</a>”, which can help you to ensure you get paid on time.</p><p>You should also be strategic about invoicing terms to facilitate payment. Be as clear as possible, use specific dates and not time frames, and display late payment penalties, for instance. Most of your clients will have specific days to pay invoices, so take this into consideration as well when you send them an invoice, as your cashflow could be affected otherwise.</p><h2>Claim Business Expenses</h2><p>One of the main benefits of being a contractor who owns a limited company is that you can claim business expenses. By doing this, you can cut down your tax bill and run your business more efficiently tax-wise. A lot of contractors believe that claiming expenses is complicated and time-consuming, taking away precious time and effort from the daily running of their business. However, it doesn’t have to be like that. If you follow HMRC’s rules, are aware of what you can expense and <a href="https://gorillaaccounting.com/blog/why-contractors-need-to-keep-good-business-records">keep good business records</a>, the process should be fairly quick and painless.</p><p>For instance, valid business expenses include certain professional subscriptions, equipment necessary to do your job, utilities, travel expenses. If you’re unsure what to do – or how to make sure your accounts are in order – just let us know. We have many years of experience providing quality <a href="https://gorillaaccounting.com/">accounting for contractors</a>, so we can lend a helping hand whenever you need us.</p><p align="center"><img class="leftAlone" title="" src="https://gorillaaccounting.com/assets/Uploads/_resampled/ResizedImageWzYwMCw0MDBd/accounting-blur-button-1028726.jpg" alt="accounting blur button 1028726" width="600" height="400"> </p><p>With Gorilla Accounting, you know you’re in good hands. For many years, we’ve helped contractors handle the financial side of their business and are looking forward to working with you as well. Get in touch to learn more about how we can help, whether you wish to operate through an umbrella company or are the director of a limited company.</p> Tue, 25 Jun 2019 11:51:17 +0100 https://gorillaaccounting.com/blog/how-can-you-improve-the-cashflow-of-your-business- IR35: Questions to Ask Your Accountant https://gorillaaccounting.com/blog/ir35-questions-to-ask-your-accountant <p>IR35 regulation continues to be an important subject in the contracting world, especially because it can have a serious impact on businesses across the country. This piece of legislation can be confusing to fully understand and to be sure whether you’re caught within it or not. At Gorilla Accounting, we can help you sort out the IR35 issue once and for all and let you know where you stand.</p><p>In our wide range of services, we offer answers and advice to your most pressing questions, so have a look at what you should be asking your accountant when it comes to IR35.</p><h2>Am I Affected by IR35?</h2><p>Knowing if you’re caught inside IR35 is vital, as this will determine your course of action. While, until recently, only contractors were responsible for establishing their IR35 status, the new reform means that hirers can determine this status instead. In addition, agencies are responsible for deducting tax from contractors’ pay and risk being liable for unpaid taxes and penalties if the contractor is working inside IR35.</p><p>IR35 was introduced to fight tax avoidance by workers who supply services via an intermediary, such as a limited company, but who would be considered an employee if the intermediary wasn’t used. This is also known as a worker being a  ‘disguised employee’. If they are not caught by IR35, a worker can  provide services to clients as a one-man limited company, receive a large part of earnings and dividends but save on income tax and NI deductions. So far, HMRC estimates that the IR35 reform in the public sector, implemented from April 2017, has generated £410 million in additional revenue for the Treasury.</p><p>IR35 status is determined through several status tests. In essence, if you’re a contractor, freelancer or consultant working on your own account, the legislation won’t apply to you; but if you have the same benefits, responsibilities and control as a permanent worker, then you’re likely inside IR35.</p><p>If you want to know for sure whether you’re working within IR35, seeking the advice of <a href="https://gorillaaccounting.com/">contractor accountants</a> can help put your mind at ease.</p><h2>What is a Personal Service Company?</h2><p>A term coined by HMRC back in April 2000, personal service companies refer, essentially, to a contractor’s own limited company. They’re often considered to be a UK-registered limited company where the contractor acts as the director, and where he or she is the sole shareholder (in some cases, the contractor will be an equal shareholder to their spouse in a 50/50 division). Additionally, in a PSC, the contractor also manages and controls the company’s bank account and provides professional services to clients via this company.</p><p align="center"><img class="leftAlone" title="" src="https://gorillaaccounting.com/assets/Uploads/_resampled/ResizedImageWzYwMCw0MDBd/adult-beautiful-beauty-826349.jpg" alt="adult beautiful beauty 826349" width="600" height="400"> </p><h2>What Are My Payment Options If I’m Inside IR35?</h2><p>If you’re found to be inside IR35, then you can’t avoid PAYE and National Insurance contributions. Generally speaking, if this is the case for you, you have three different ways to make your payments:</p><ul><li><strong>PAYE</strong> – This is paid directly by your agency, usually on a reduced hourly rate.</li> <li><strong>Umbrella</strong> – Paid by the umbrella company on your hourly rate after deductions.</li> <li><strong>Remain as a PSC</strong> – Both tax and National Insurance would be deducted based on  payments are made to your personal service company – or a contractor’s own limited company.</li> </ul><h2>How Will the Private Sector Be Affected?</h2><p>The off-payroll changes to the IR35 regulation will be rolled out to the private sector as well, as announced by the Chancellor in the 2018 Autumn Budget. This reform has not been great news for contractors working in the private sector, but it will only take effect in April 2020; in addition, the changes, which will be the same as the IR35 rules impacting the public sector, are only applicable to contracts where the end client is a medium or large business. Just like in the public sector, end clients will usually be the ones responsible for determining the employment status of contractors.</p><p>But what constitutes a medium or large business? According to Companies Act 2006, this means companies that satisfy two or more of the following requirements: annual turnover inferior to £10.2 million, a balance sheet total of less than £5.1 million and fewer than 60 employees.</p><h2>If Within IR35, Do I Get the Same Benefits as a Permanent Employee?</h2><p>It’s perfectly logical to wonder if you’re entitled to the same benefits as a permanent employee if you fall within IR35. Unfortunately, this is not the case if you’re working through a personal service company; if you operate via an umbrella company, on the other hand, you will have some rights; this will depend on the company you choose to work with. We offer <a href="https://gorillaaccounting.com/contractor-umbrella-company-accountants/">umbrella services for contractors</a> here at Gorilla Accounting, so get in touch if you’d like to learn more about how we can help.</p><h2>Which Factors Contribute to HMRC’s Decision?</h2><p>There are several rules that help HMRC determine whether or not a worker is inside IR35; knowing which factors the government takes into consideration can help you to learn more about your current status and what you can do to prevent issues. These factors include, but are not limited to, the following:</p><p><strong>Control</strong> – If your client can move you according to their priorities or have a good degree of control over your duties or how you complete a project, then you are considered to be employed, as opposed to self-employed.</p><p align="center"><img class="leftAlone" title="" src="https://gorillaaccounting.com/assets/Uploads/_resampled/ResizedImageWzYwMCwzNzld/adult-analysis-chart-1516704-1.jpg" alt="adult analysis chart 1516704 1" width="600" height="379"> </p><p><strong>Right of Substitution</strong> – If you have the freedom to choose whether you’re working on a project or hiring someone else to do it, then you’re not considered an employee. After all, if you’re allowed to provide a substitute to finish your work, then you’re not under the direct supervision – and control – of your client either.</p><p><strong>Mutuality of Obligation</strong> – There is an expectation for permanent employees to continue providing services and doing work, which is another way for HMRC to tell whether or not someone is self-employed. If you are, then you will work on a specific project you’ve been contracted to do but your client won’t have the expectation of further work beyond that – unless otherwise specified, of course.</p><p><strong>Contract Termination</strong> – Most employee-employer relationships require notice periods in order for a worker to terminate their contractor; however, if you’re self-employed, then you’ll be able to do so at any time without having to give notice.</p><p><strong>More Than One Job</strong> – Are you allowed to do other work? If yes, then this is a major factor in determining whether or not you’re self-employed, as employees don’t usually have the right to work for several clients at once.</p><h2>How Will My Salary Be Affected?</h2><p>It goes without saying that this is one of the most frequently asked questions about IR35, given that knowing how your take-home pay will be affected if you’re caught within IR35 is of the utmost importance. If this legislation applies to you, you will be liable to pay full tax and NI contributions, but you’d be entitled to a salary and dividend structure if otherwise.</p><p>You can also make use of our <a href="https://gorillaaccounting.com/contractor-tax-calculator/">contractor tax calculator</a> today, which will help you to calculate your take-home pay.</p><p align="center"><img class="leftAlone" title="" src="https://gorillaaccounting.com/assets/Uploads/_resampled/ResizedImageWzYwMCw2MDBd/adult-browsing-businesswoman-1251093.jpg" alt="adult browsing businesswoman 1251093" width="600" height="600"> </p><h2>I Thought I Wasn’t Within IR35, But I Am – Now What?</h2><p>We can understand the frustration – and worry – of thinking you’re outside IR35 and have the freedom to operate as independently as you want, only for that to be wrong. If you’ve been taking advantage of the tax benefits awarded to those working outside IR35 but HRMC is now challenging your status, there are several things you can do.</p><p>First of all, you can agree with the decision and pay back the taxes and interest you owe; for many contractors, this isn’t a feasible option, since, more often than not, they will have to pay a pretty hefty sum. You can choose to disagree with HMRC and argue your case instead; should you follow this path, make sure you’re in the right and fully prepared.</p><p>If you lose, your tax bills will be higher, as all of your income from contracting will be treated as if you’ve been permanently employed from the beginning. This can be very costly to you so, in order to avoid such an issue, it’s best to seek specialist advice from a professional accountant to be completely sure you’re right.</p><h2>Questions to Ask Before Hiring an Accountant</h2><p>If you’re considering hiring an accountant to help you deal with IR35, then it’s important that you know you’re getting the right person or company for your business. After all, while it’s clear that contractors can benefit greatly from specialist advice when it comes to this legislation, it’s also important to note that not everyone will be able to help the way you hope.</p><p>By asking the right questions, you can make a decision easier:</p><h3>How much experience with IR35 do you have?</h3><p>Asking this question will allow contractors to understand whether an accountant or accountancy firm is the right choice for them – if they don’t have much experience with IR35, then it’s best to go with someone else.</p><h3>How ready are you for the IR35 reform?</h3><p>Another thing to keep in mind is whether the accountant is prepared for the IR35 reform of the private sector. An accountant who is up to date on the legislation will know how to deal with HMRC and what to advise when it comes to these upcoming April 2020 changes.</p><h3>How many IR35 enquiries have you handled?</h3><p>Equally vital is understanding how many IR35-related enquiries the accountant has actually worked with and how he or she handled them. After all, IR35 is a complex piece of legislation and there is no easy way around it; the last thing contractors want is to worry about whether their accountant can actually deal with it.</p><h3>What other services do you offer?</h3><p>Understanding IR35 is vital, but contractors often need their accountants to offer other types of services as well. In order to fully benefit from having a dedicated accountant, contractors need to make sure they’re entitled to a range of services, whether you’re a limited company owner, are self-employed or operate through an umbrella company.</p><h3>How much experience do you have with my industry?</h3><p>Contractors and freelancers work with many different clients, so it’s important that they can have the peace of mind of knowing their accountant fully understands their <a href="https://gorillaaccounting.com/sectors/">specialist sector</a>. This way, contractors can receive the best advice and help, tailored to the requirements of their business and of their industry.</p><p align="center"><img class="leftAlone" title="" src="https://gorillaaccounting.com/assets/Uploads/_resampled/ResizedImageWzYwMCwzOTRd/businessmen-businesspeople-businesswomen-1249158.jpg" alt="businessmen businesspeople businesswomen 1249158" width="600" height="394"> </p><h3>What type of clients do you usually work with?</h3><p>The answer to this question can help contractors realise if an accountant can actually meet their needs. A company that specialises in contractor and freelancer accountancy will be the best bet, since they will be more knowledgeable and experienced in the intricacies of this type of work.</p><h3>What type of support can I expect from you?</h3><p>Another key question contractors will want to ask. Before choosing an accountant, it’s crucial to understand exactly how they can help. Will they provide same-day responses? Will you receive unlimited support, be it in person, by email, Skype call or on the phone? Once contractors know what to expect from their accountants, it will be easier to make a decision.</p><h2>How Can Gorilla Accounting Help?</h2><p>If you’re looking for <a href="https://gorillaaccounting.com/">accounting for contractors</a>, we can help. Our specialist IR35 Contract Review provider for contractors, freelancer and consultants, Larsen Howie, will be able to answer all of your questions and help you to understand the intricacies of IR35 and its reforms. You can find out more about this in Larsen’s <a href="https://gorilla.larsenhowie.co.uk/">dedicated page</a>.</p> Thu, 20 Jun 2019 13:53:16 +0100 https://gorillaaccounting.com/blog/ir35-questions-to-ask-your-accountant Why Contractors Need to Keep Good Business Records https://gorillaaccounting.com/blog/why-contractors-need-to-keep-good-business-records <p>Keeping good records is essential for all businesses, including if you’re self-employed or working as a contractor. You need to be able to show that all of your records are in order so that you can prevent issues from arising – and to avoid a hefty penalty from HMRC.</p><p>Because we offer <a href="https://gorillaaccounting.com/">accounting for contractors</a>, we’re aware of the importance of keeping good business records no matter the type of work you do. So, whether you’re self-employed, operating through an umbrella company or working as a limited company, you will need to have your accounts in order at all times.</p><h2>What Are the Advantages of Keeping Accurate Records?</h2><p>As a contractor or limited company director, you have certain financial responsibilities to comply with, including keeping certain company and accounting records. Aside from the fact that you are required to do this by law, there are also many benefits to ensuring that all documents, transactions and returns are recorded correctly. These include, but are not limited to, the ones we are discussing below.</p><h3>Pay Taxes Correctly</h3><p>It goes without saying that paying taxes correctly and on time is vital to avoid HMRC penalties. If your records are accurate, then you don’t have to wonder whether your information is right or if you’ve made a mistake in your taxes – after all, you don’t want to under or overpay either. Another advantage is that accurate documentation will help you to plan for tax payments, meaning you will always be prepared for the expense.</p><h3>Proof of Expenditure</h3><p>Keeping complete and accurate business records ensures that you have proof of expenditure as well; if you don’t have this information, then you won’t be able to claim tax relief on it. This is applicable whether you’re a sole trader or a limited company owner.</p><h3>Work Out Profit or Loss</h3><p>How can you be sure that your business, independently of the type of structure you choose to operate through, is turning a profit? When you have good records, you can easily tell whether or not you’re making a loss, which will help you to make changes to your business accordingly.</p><p align="center"><img class="leftAlone" title="" src="https://gorillaaccounting.com/assets/Uploads/_resampled/ResizedImageWzYwMCwzNzld/adult-analysis-chart-1516704.jpg" alt="adult analysis chart 1516704" width="600" height="379"> </p><h3>Allows You to Make Key Decisions</h3><p>Having all your paperwork in order will enable you to manage your business better and make it grow. Even if you know your business inside out, having accurate information on hand will be beneficial to making important business decisions – if your records aren’t accurate or you’re missing crucial documentation, then it will be much more difficult to make good decisions that will reflect positively on your business.</p><h3>Identify ‘Pain’ Points in Your Business</h3><p>Another reason to ensure that you’re keeping good records is that it helps you to identify the strengths and weaknesses of your business (for instance, it will enable you to spot patterns, such as certain type of projects that are making you more money). This, in turn, will allow you to address any potential issues or seek opportunities, which can help you to grow your business.</p><h3>Stay Organised Easily</h3><p>Whether you’re dealing with HMRC, clients or suppliers, being organised is a must. You need to be able to produce documents such as invoices and quotes, as well as estimates, so that you know how much to charge, for example. Of course, having everything in order will also help you should you find yourself investigated by the government. HMRC may ask to see your financial information, in which case it’s vital that you can show everything is up to date and accurate.</p><h3>Manage Change Better</h3><p>As a contractor, it’s especially important that you’re able to adapt to change, whether this is change happening in your business or in your sector. By having good records at your fingertips, it will be easier to be flexible and make improvements in your business.</p><h3>Save Time</h3><p>When you’re working with accurate records, it will be easier and quicker to prepare your accounts for year-end tasks. You also won’t have to spend time going through old projects and trying to remember if everything is in order – or trying to find an important file.</p><p>When you’re a business owner, time is better spent growing that business, instead of wasting time pouring over your accounts. This is tied to your peace of mind as well – if you know your records are up to date and accurate, you don’t have to stress about a thing.</p><h3>Easier to Distribute Profits</h3><p>If the financial information you have is correct, you can easily use it to allocate profits to shareholders or take dividends, for example. You will also have the added confidence of knowing that you’re distributing the correct amount every time.</p><h3>Get a Bank Loan More Easily</h3><p>Having a correct overview of your business, being aware of your business financials and having all documents in order will also make it easier to get a bank loan or an overdraft. You have a lower chance of getting rejected if you keep accurate records.</p><h3>Check if HMRC is Correct</h3><p>Everyone makes mistakes and this can include HMRC as well. By being organised, knowing where everything is and having your financial information up to date will help you to check your tax position accurately – this means that you can easily notice if a mistake has been made in your favour.</p><p align="center"> <img class="leftAlone" title="" src="https://gorillaaccounting.com/assets/Uploads/_resampled/ResizedImageWzYwMCw0MDBd/desk-email-laptop-7112-1.jpg" alt="desk email laptop 7112 1" width="600" height="400"></p><h3>Avoid Getting Fined</h3><p>As a contractor, the last thing you want is having to pay penalties to HMRC due to late or incorrect tax information. Running your business can be stressful enough without also worrying about whether you’d paid the right amount of tax or if you filed all returns on time. Having good, accurate records will help you to pay the right amount at the right time.</p><h2>What Documents Should You Keep?</h2><p>As a contractor, it’s crucial that you keep records of all sales and income, all business expenses, VAT records and returns if your business is VAT-registered, and PAYE and National Insurance contributions. You should also ensure that your records include receipts, bank statements and sales invoices.</p><p>As a limited company owner, you’ll have added responsibilities that sole traders or umbrella company employees don’t have, and this includes keeping good records of debts owed by the company, details of transactions and of inventory, dividend minutes, payment records, charges to the company’s assets, annual accounting statements, and more.</p><p>As the director of a limited company, you could find yourself being fined £3,000 by HMRC – or removed from your position as director – if you don’t keep financial records. If you’re operating as a limited company, you will need to keep financial records for, at least, 6 years as well.</p><h2>How FreeAgent Can Help</h2><p>While before it was possible to keep records manually, this is no longer the best option. After the implementation of Making Tax Digital in April 2019, all of your financial records, from transactions and sales to VAT returns and income tax need to be stored digitally via accounting software compliant with HMRC.</p><p><a href="https://gorillaaccounting.com/free-agent-book-keeping-software/">FreeAgent bookkeeping software</a> is one such system. This cloud-based service will help you to keep on top of your paperwork and keep certain records digitally, including the all-important VAT information. After all, businesses that are VAT-registered and with a turnover above the VAT threshold of £85,00, will have to comply with the requirements set by Making Tax Digital.</p><p>Getting the right accounting system will help you to keep good records. Contractors should make sure this system is set up as soon as possible so that they can begin to keep track of expenses, income and taxes from the get-go. FreeAgent is also user-friendly, which is ideal for both contractors who are just starting out and contractors who already have years of experience. By being easy and simple to use, FreeAgent will save you time by automating all calculations, running reports for you and allow you access to real-time information. The latter is of the utmost importance to manage your contracting business, as it enables you to make quick, informed decisions.</p><p align="center"><img class="leftAlone" title="" src="https://gorillaaccounting.com/assets/Uploads/_resampled/ResizedImageWzYwMCw0Nzld/adult-banking-blonde-1059119-1.jpg" alt="adult banking blonde 1059119 1" width="600" height="479"> </p><h2>Developing Good Record-Keeping Practices</h2><p>Even when using the best accounting software, it’s still crucial to input the correct data into it, as well as manage it well. While this process may seem like it will take a long time to get right, accurate bookkeeping shouldn’t be time-consuming; on the contrary, if you have ‘your house in order’, then you won’t waste time trying to get up to speed with all your documentation – and can even save money in the long run if your returns are all filed correctly and sent to HMRC in a timely manner. You’ll also be running a more efficient business.</p><p>Start by making sure you are keeping on top of important deadlines, like corporation tax, National Insurance payments and VAT. If you miss these deadlines, you will likely be liable to pay penalties, which can quickly add up over time. By making sure your accounts are up to date, you can easily keep track of your obligations, including how much you owe HMRC.</p><p>It’s also good practice to get the right accounting advice. There is a lot of information out there about record-keeping – or any other financial matter – and some of it can be contradictory. Talking to professionals who know the ins and outs of the accountancy world is crucial. In addition, bookkeeping can be a complicated subject with a wide set of rules, most of which you may not be familiar with; for this reason, it’s key that you ask for support if you need it.</p><p>You will also want to make sure that the information in your accounts match reality. This means that your income, expenditure and transaction information needs to be accounted for and is correct. This process has been made a lot easier by using accounting software, as you can automate it by importing bank statements; after this, the system will match your transactions to the information in your accounts.</p><p>Lastly, but definitely not least, you’ll want to use the data in your accounts and records to gain a deeper understanding of your business. Otherwise, you’d be missing out on valuable information that can be helpful to your business. Of course, it’s important to produce good accounts and keep accurate records for HMRC purposes – however, there is a beneficial insight to be gained from it as well, so don’t lose sight of how valuable that data can be to monitor the performance of your business.</p><p> </p><p>At Gorilla Accounting, we have many years of experience helping people navigate the complex world of contracting. When it comes to the subject of record-keeping, ensuring good practices and staying on top of any potential issues will allow you to avoid penalties and grow your business.</p><p>We also aim to help contractors by offering tools such as our <a href="https://gorillaaccounting.com/contractor-tax-calculator/">contract tax calculator</a>, which calculate your take-home pay. Get in touch if you wish to learn more about what we can do for you.</p> Fri, 14 Jun 2019 13:22:00 +0100 https://gorillaaccounting.com/blog/why-contractors-need-to-keep-good-business-records