What’s the hardest thing about starting a new venture?
A study commissioned by Virgin Money asked 500 entrepreneurs what the hardest thing about setting up a new business is. Taking time off for holidays, working long hours and not having much disposable income came out on top, but struggling to keep accounts up to date and managing finances effectively also made it into the top 30 challenges.
Challenges of starting a new business
According to Virgin Money’s survey, entrepreneurs starting a business struggle the most with the following:
- Taking time off/holidays
- Working long hours
- Not having as much disposable income
- Striking a work-life balance
- Working weekends
- Getting customers
- Making a name for yourself and the business
- Never being able to switch off
- Spending time with family
- Ensuring accounts are up to date
- Completing admin
- Believing in yourself
- Taking work home
- Spending time with your partner
- Finding time for hobbies/other interests
- Managing finances more effectively
- Socialising with friends
- Having patience
- Staying motivated
- Finding/hiring employees
- Being able to deal with problems
- Being able to foresee problems
- Networking/meeting people
- Legal work
- Understanding jargon such as P&L, Net Profit, Gross profit etc.
- Writing up a five-year plan
- Dating/meeting new people
- Family/partner trusting you when you promise the venture would be a success
- Being more organised
Don’t be baffled by bureaucracy
Running your business is not easy, and at TaxAgility, we can at least help remove your accounting frustrations when you’re setting up a new business. In particular, the overly bureaucratic tax system can be confusing, and then there’s also the burden of general accountancy work such as bookkeeping and VAT returns. Our friendly, professional team can support you and free up your time, enabling you to focus on other important things, like your work-life balance.
Starting a business with TaxAgility
We have a team of small business accountants ready to support and work with you to evaluate your business plan, put the right financial structure in place, meet regulatory requirements and get your business up and running as quickly and as smoothly as possible. We can assess your financial requirements, provide advice on funding, and advise you on the most suitable structure for your business. And once you’re up and running, we’re happy to stay by your side to manage your finances and help your business grow.
For more information about starting a business with TaxAgility, check out our Accountants for Startups page.
What you need to know about changes to Inheritance Tax
Inheritance Tax (IHT) may not be on your mind, but when you have considerable savings and property to pass on, it’s a good idea to add IHT to your tax planning checklist.
In the past two years, HMRC has generated more revenue from Inheritance Tax than ever before, £5.3bn to be exact. This is thanks to rising house prices and that the tax authority has been closing down various loopholes. It may come as good news though for homeowners that there has been a boost to the residence nil-rate band, and TaxAgility is here to explain what that exactly means.
What’s the nil-rate band?
The Inheritance Tax threshold, also known as the nil-rate band, is frozen at £325,000 per person until 2021. This means no tax needs to be paid on assets (excluding property) passed to your descendants up to this value. Above this threshold, your estate will incur a tax of 40%.
An additional IHT allowance is in place for people who own property, and this is called the residence nil-rate band. Set at £100,000 per person in the past tax year, the threshold has been raised to £125,000 this month and will continue to rise by £25,000 every year until 2020/2021, to take into account rising property values. This means that your descendants will only need to pay tax on the inherited property if it is worth more than £125,000.
Married couples and civil partnerships
Your IHT allowance gets added to your partner’s allowance if you die before them. This means married couples and civil partners can pass on assets worth £650,000 completely tax-free. The same concept of doubling applies to the residence nil-rate band, giving couples a considerable tax break.
Inheritance Tax accountants
You can expect further changes to Inheritance Tax throughout the year as the Office for Tax Simplification has been urged to review the complex rules around Inheritance Tax on gifts. TaxAgility is keeping a close eye on the changes, and we’re happy to discuss what the new Inheritance Tax threshold could mean for you, your property, and those you wish to inherit it.
No one wants to leave a hefty IHT bill as part of their legacy. To speak with a professional accountant to discuss ways you can maximise the value of your estate with Inheritance Tax planning, contact us today on 020 8108 0090 or get in touch with us via our contact page to arrange a complimentary, no obligation meeting.
Business advice for SMEs: Six tips for running a better business
Starting a business can be an exciting, yet sometimes daunting, process. To help you with your new enterprise, TaxAgility’s team of accountants for small businesses and startups are here to work with you to get your business trading as soon as possible.
Once you’re up and running, there are steps you can take to ensure that your new venture has the best possible start in the current economic climate.
Here are six things you can do to run a better business:
1. Make a plan and stick with it
When you first started your business, you formulated an initial business plan that covered every aspect of the development of your new company, from acquiring funding to defining your marketing strategies. Your plan has gotten you this far so don’t disregard it now. Instead, review it regularly and adjust it to accommodate changes and challenges within your operations and the economy. Studies show planning and goal-setting give new business owners a greater chance of long-term success. As the saying goes, “if you fail to plan, you plan to fail”.
2. Build an online presence
Potential clients no longer skim the yellow pages or trek to the local library for information on how to solve their problems. So how do people search for solutions today? They go online and find companies like yours that can help them out. If a new company doesn’t hold an online presence, it might as well not exist. Your business’s online profile doesn’t need all the bells and whistles, but a basic website should provide users with contact details, an “about page,” and what you have to offer. This will generate more business and keep your operation competitive.
Don’t forget about social media either. Use it as a way to connect and engage with your customers. Loyal followers translate to a steadfast customer base, so focus on providing quality content.
Looking for more information on how to build an online presence? Check out our “Is a website still important and what about social media?” article.
3. Hire help
As your business grows, tasks and responsibilities will become more complex and you may not have the skill set to deal with them on your own. To allow your business to progress, you may need to make a few hires. You don’t have to worry about figuring out the best way to pay them and how many new hires you can afford as TaxAgility can help you with all your payroll needs. We have payroll services to help small businesses overcome this common hurdle.
4. Make your invoicing effective
Invoicing may seem like an obvious process, but it’s something many small businesses struggle with. Make sure your small business is invoicing correctly by creating documentation to outline payment terms describing how, when and where your customers need to pay you. Add it to your invoice template so it’s clear to your customers. Even better, use invoicing software to automate the process. Make sure all the invoices are digitally archived and filed for quick accessibility, should the tax authority come for an audit.
5. Take advantage of cloud-computing software
As your business grows, it demands more time from you and you naturally want to know where to focus your strengths. Is it sales and account management? Maybe marketing? Cloud-based accounting software provides ways to create snapshot reports so you no longer need to wade through Excel spreadsheets to come up with your conclusions. One of the most popular cloud-based solutions, Xero, is very intuitive and easy to learn. It has an interface that integrates your current bank accounts, credit card reports, receivables, payables, tax liabilities, VAT and more. Also, as many accounting firms, including us, can use Xero to prepare your year-end tax returns, it means a lower accounting cost for you.
6. Find the right accountant
You can’t do everything on your own and there’s no shame in asking for help every now and again. As a small business owner, there will be many things you will be responsible for, some more daunting than others. Our Accountants at TaxAgility can manage your accounts, books and other finances so you don’t have to. Don’t worry, you’ll still be able to work on it too – cloud accounting software Xero allows more than one person to have access and to make changes to the information.
We have a philosophy at TaxAgility: you win, we win. Our expert accountants are dedicated to making your business a major success and so we will do everything we can to help you.
For more about building a better business, read our how to better your business page so you’re always on the road to success. You can also give us a call on 020 8108 0090 to discuss how we can help your small business grow.
Making a limited company dormant - What to look out for
Many contractors choose to close their limited companies completely when they have no intention of returning to contracting. But for those who are just considering a short break away from their limited company, making it dormant may be the better option. This will allow you to reserve your company name, brand and trademark until you return to your operations. However, making your limited company dormant does require you to meet certain filing requirements throughout the year.
In the following article, we look at what makes a company dormant and what steps you need to take to make your limited company dormant.
What is a dormant company?
When a company is dormant, it means it has stopped trading and is therefore inactive for Corporation Tax purposes. Under the term trading, HMRC means buying and selling, renting property, advertising, employing someone or earning interest. Transactions must be limited solely to the payment of shares and any outstanding fees to the Companies House.
When your company is dormant, you are not required to file tax returns. However, you are still required to maintain certain administration on an ongoing basis. This includes submitting a confirmation statement to the Companies House and submitting forms if there is a change to the company’s registered address or if there is a change in company’s directors.
For detailed guidance on requirements, visit the government’s website.
What actions do I need to take to make my active company dormant?
Once you’ve decided to make your limited company dormant, the process is fairly straightforward. To make an active company dormant, you should:
- Inform HMRC that your company is dormant in writing or by phone. This must be within three months of your company becoming dormant.
- Make sure your clients pay any outstanding invoices before you cease trading.
- Close your business bank accounts. Any transactions will otherwise void your company’s dormant status.
- Terminate your contracts with service providers and settle any outstanding bills.
- A dormant company cannot have employees. Pay any remaining wages if your company had employees and follow HMRC protocols to close your payroll.
- Deregister for VAT.
- Prepare your final trading accounts for your accounting year-end and file your final tax return.
Need assistance?
Talk to us at TaxAgility to speak with a professional to discuss the prospect of making an active company dormant if you’re not quite sure what you need to do. As small business accountants and accountants for contractors, we’ve seen all the scenarios and have the answers you’re looking for. If you decide to restart trading under your dormant company, we can also help.
Contact us today on 020 8108 0090 or get in touch with us via our contact page to arrange a complimentary, no obligation meeting.