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To hire a new employee, you need to:
- Check if your business is ready to hire a new staff
- Kickstart your recruitment efforts. You can recruit employees on your own, or by using a recruitment agency.
- Check that the candidate has the right to work in the UK
- Find out if they require a DBS check
- Check if you need to enrol the employee into a workplace pension scheme. Here's a guide for first-time employers. If you've already hired employees previously, refer to this resource instead.
- Before carrying out salary negotiations, you need to check the National Minimum Wage for different ages and types of jobs. You'll also need to finalise the employment contract, and provide a written statement of employment particulars within 2 months of the start of employment.
- Notify HMRC that you've hired a new employee. Make sure you're aware of the steps you need to take when you start paying your employee.
If you're hiring staff for the first time, refer to HMRC's guide on the steps you need to take.
Download our Ultimate Expenses Guide
Download our Ultimate Expenses Guide
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Contractor Accounting Services
We pride ourselves on providing an unparalleled level of support that will make you feel valued, eliminate your admin and ensure you're being as tax efficient as possible.
VAT registration & filing
We'll registered your company for VAT, and ensure VAT is always filed well ahead of the deadline. We will ask you to confirm that you're happy for us to automatically file your VAT without having to approve it which will ensure that we can get this filed as soon as possible.
We'll also help you get setup with a Direct Debit for HMRC so that you can make your VATpayments automatically without having to manually do this every quarter. This saves you time and the stress of ensuring you've paid on time, and importantly will make sure you don't have to pay a penalty for a missed deadline.
We aim to complete your annual accounts well ahead of schedule to ensure you have complete financial records.
You should never have to guess how much corporation tax is due. We'll make sure you know how much is due and when it's due.
We'll make sure to keep your Companies House account up to date and ensure your confirmation statement is filed on time.
We include a Self Assessment with our operate and grow packages and this is also available as an additional £99+VAT one-off charge.
From your salary, dividends, pension, investments and company expenses, we'll help you optimise your tax.
What is a PAYE scheme?
PAYE-or Pay As You Earn-is a system of income tax withholding by employers.
Tax and National Insurance contributions from your wages or occupational pension and sent to HMRC, before your employer pays you your wage or pension. Student loan repayments may also be deducted in this manner.
5 Common Small Business Accounting Mistakes & How to Fix Them
A broad swath of small business owners are tackling the myriad tasks required to pay bills, invoice customers, cut checks to employees and contend with past-due accounts, among other accounting tasks.
While that might work for very small businesses, it often opens the door for firms to make accounting mistakes that undermine their growth and siphon precious time and mental focus from other important areas of their business.
Here are five accounting mistakes that can derail growth for small businesses and how to avoid them.
5 invoice template tools to help you invoice when self employed
An invoicing problem is a good problem to have.
It means that you have too many clients or too much work to properly charge for it. The good news is that it's an easy problem to fix.
I know how important this is because I've been there as a small business owner - and I searched for a long time to solve this problem and make it painless.
Besides hiring a personal assistant or part-time accountant (which is impractical for most smaller-time, one-person-show contractors), there's the option of using invoicing software that makes the process easy.
Below, I break down the difference between five popular invoicing tools to help you get started on making a decision.
Your decision will ultimately depend on what your business really looks like.
These are some questions you can ask yourself:
- Do you only have a handful of regular clients?
- How do your clients prefer to pay you in a certain way?
- Are late payments a recurring problem for you?
- Do you send out invoices, or does somebody else?
- Do you already have accounting software in place, or are subscribed to an accounting package that includes the use of an accounting software?
- What other applications and tools do you use for your business?
Bookkeeping vs Accounting Differences
As a small business owner, having a good grasp of your business financials is key-even if you've hired an accountant.
While you can delegate your accounting tasks, understanding the basics will place you in a better position when it comes to discussing your business finances with your team members, financial professionals or potential investors.
Previously, we've explained about the top accounting terms and concepts you need to know. In today's post, we'll explain the differences between bookkeeping and accounting. While these two terms are often used interchangeably, they refer to two vastly distinct functions and roles.
What are National Insurance numbers?
The National Insurance number is a number used in the administration of the National Insurance or social security system. It is unique to each individual, and helps ensure that the National Insurance contributions and tax you pay are properly recorded against your name.
Small Business Accounting Guide
- When and why you may want to register a Limited Company
- Advantages and disadvantages of a Limited company
- Limited company alternatives
- When to register for VAT
- Advantages and disadvantages of VAT
- How to take money out of your company
- Dividend tax rates
- Limited company expenses & corporation tax
- Annual accounts and deadlines
- Confirmation statements and deadlines
- Self Assessment tax returns
How do I plan cashflow?
Here are a few strategies to better cash flow management:
Be rigorous about updating your cash flow: It can be helpful to update your cash flow whenever there is new information-such as when you've made a payment, or when a client informs you that a payment is coming in late. You'll need to have a system for managing your cash flow, whether that's a spreadsheet or cash flow management tool.
Carry out an in-depth analysis on a regular basis: Carve out a block of time each quarter to carry out an in-depth review of your cash flow. You'll want to assess your overall financial position, and look ahead at your cash flow projection for the next quarter.
Implement milestone payments for extended projects: If you're working on an extended project, consider structuring your payments by milestones-rather than receiving a single payment at the end of the project.
How much should accounting cost?
As a new business owner, you'll often find yourself juggling numerous roles and tasks-from growing your business, to managing your operations, financesand taxes.
In addition, you're now required to meet your legal obligations as a limited company director-such as filing the necessary paperwork and accounts on time-or you'll risk being penalised.
Staying on top of all of these tasks can feel overwhelming, and here's where a limited company accountant comes into the picture.
Below, we'll look into:
- What you can expect to pay for limited accounting packages
- Services that are included in the cost
- FAQs relating to choosing a limited company accounting provider
My tax code is incorrect ‚- how do I change it?
If your tax code is incorrect, you can use HMRC's check your Income Tax service to notify them. If you're not able to use the online service, you may get in touch with HMRC through other contact methods.
What can accountants help contractors with?
The goals for accountant's is to help businesses with tax and compliance duties whilst providing strategic advice to save money and time, allowing the business to focus on it's core activities.
Everyone knows that accountants will complete tax returns and accounts but the very best accountants will go one step further in ensuring the very best for the business.
Where can I find my Accounts Office Reference number?
You can locate your Accounts Office Reference number (AORN) on the confirmation letter you receive from HMRC when you first register as an employer. The AORN contains 13 characters, and follows the format 123PA12345678.
What are PAYE Forms?
There are different forms associated with PAYE. These are:
P45: A P45 form is issued to an employee when he or she stops working for you. It shows how much the employee has paid in tax and NICs throughout the tax year.
P60: A P60 form is an official form issued to employees at the end of the tax year. The form indicates how much the employee has earned over the tax year, as well as the amount they've paid in PAYE income tax and NICs. You need to issue the P60 to your employees by 31st May each year.
If you're a limited company director, you're considered both an employer and employee. As such, you'll have to issue yourself a P60 form.
P11D: The P11D is a tax form that records employment benefits that the employees and directors of a company have received across the year.
A copy of the P11D is to be issued to employees who've received certain benefits by 6 July each year. You should also submit the form online by the same date. If you're paying tax on all their benefits through your payroll, submitting a P11D isn't required.
Are there any penalties for delivering Company Accounts late?
The following penalties for private limited companies will be imposed if you fail to file your accounts with Companies House on time:
- Up to 1 month late: £150
- 1 - 3 months late: £375
- 3 - 6 months late: £750
- More than 6 months late: £1,500
How to make and send an invoice for your clients
You've delivered your work, and it's time to receive your payment.
Before that, you'll need to make an invoice. It's an important document: not only does it help you obtain money you're owed, it also serves as evidence of a transaction in the event that you need to seek legal action to handle non-paying clients.
If this is new to you, you might be wondering: How do I create an invoice, and what must I include? Are there best practices or tips I need to know?
We'll answer all of these questions below:
Creating your business budget
Running a business involves catering for many aspects of the business that can bog you down.
You can even forget crucial roles, such as monitoring your small business finances. Although budgeting may not be the best and most exciting part of running an enterprise, it is fundamental for success.
When starting a new business, a budget is a vital part of your business plan. Once the business is open and operational, then budgeting becomes an essential exercise that takes place annually or quarterly.
A budget comprises of fixed and variable costs accompanied by the allocation of monies to reflect business objectives.