Tax Tips For The Self-Employed

Britain has seen a large increase in the number of people becoming self-employed recently, with many people taking advantage of the opportunity to become their own boss. The transition from employment to self-employment can be daunting, particularly when it comes to the wages aspect. There is a mountain of paperwork that comes with tax returns and trying to understand the rules surrounding self-employment can be confusing. Here are a few tips on how to keep on top of your self-employment tax affairs:

Keep financial records

Self-employed people have a tendency to late their paperwork mount up and push their tax return to the back of their mind. If your tax return is turned in late, you could incur a penalty. Keeping your receipts, statements and other data in an orderly fashion from the commencement of your self-employment will help you greatly when it comes to tax return time.

Self-assessmentSelf-employed helpline

Filing an annual self-assessment is compulsory as the information is used by HMRC to assess how much tax is due from you. You must return it by October 31 if its a paper return or January 31st the following year if you choose to submit it online.

Help with your return

There are alternatives to filing your return yourself. An accountant is one option, you will need to provide them with all of your income and outgoing information and they will do your tax return for you, for a fee. You can also use a free online tax return service.

National Insurance Contributions

The responsibility falls to you to pay your own National Insurance Contributions when you become self-employed, they are mandatory payments made by anyone earning an income. The amount you contribute depends on how much you earn.

If you need any further advice about any of these aspects of the tax process, do not hesitate to call the Self Employed Helpline.

 

 

 

 

Primary School Children To Be Taught About Self-Employment

Schoolchildren who are as young as five will learn how to set up their own businesses for a profit under new plans revealed by the Government in June. Prime Minister David Cameron will support the dramatic overhaul of teaching in both primary and secondary schools in order to encourage children to be more entrepreneurial, preparing them to start their own companies later on in life.

The reforms have been proposed by a former Cabinet minister who advises David Cameron on competitiveness in Britain. The move is intended to change attitudes towards self-employment and mSelf employment helplineake Britain more welcoming to people who set up their own companies. The minister studied teaching syllabuses and techniques and found that lessons are irrelevant to thousands of children as they no longer apply to today’s society.

In the Enterprise for All report, several changes will be set out. The changes should be made at every level of education from primary school to university. It would mean that even the youngest children will be taught about the importance of business in society.

The minister is understood to be supporting the expansion of a Government pilot named the ‘Fiver Challenge’ where primary school children are given £5 to set up their own mini business to make a profit. The scheme is underway currently at 500 schools across the UK, with 20,000 children running their own business.

The report is also calling for more schemes such as Founders 4 Schools which sees people who have set up successful companies come in and talk to schoolchildren about creating businesses.

The report comes as it was found last year that the UK is only creating half as many new businesses as in similar countries across Europe. Britain is underperforming when it comes to business start ups due to apparent cultural reasons such as social depravity and language barriers as well as literacy levels.

 

Why Self-Employment Is On The Rise

Newsflash: the economy is recovering. One of the key indicators of this is the fact that unemployment is falling. It is down to 6.9% in the three months before February 2014. However, whilst the Government and media are quick to push this statistic, there’s more to it. Since the economic crash, there has been a significant increase in the number of self-employed workers. The number of people who work for themselves is up by more than 600,000 since 2010. Industry experts are wondering if the increase is due to more ambition and drive, or something else?

According to PCG, the freelance union, a significant factor in the increase in the number of people who are self-employed is the reduction in start-up costs. A spokesperson for the Union said that peopSelf-employed helplinele are now able to start with less capital, or sometimes no capital at all. Previously, potential business owners were turning to banks for a £100,000 start up loan, now they can start with just £500. This is partly due to the technological changes in society. Starting a business used to mean you had to find a premises to base it in, materials, stock and employees whereas now, often a laptop, phone and internet connection can get your business off the ground. Industry insiders are saying that this notion makes self-employment a much more secure career path or a route out of unemployment when the job market is sparse.

However, it is important to note that the four most common self employment occupations: taxi drivers, joiners, farmers and other construction trades have not changed a lot, so it would be unrealistic to credit digital technology completely with the growth in self employment.

A large part of the rise could be down to part time self employment used by employers. Critics say that this is a way for companies to dodge expensive employee benefits by creating part time jobs. Another sector is those stuck between working and not working, such as new mothers who create a business from home in order to try and strike a balance by generating some income.

The main concern for self employed people is that they do not have access to pension schemes. 2013 figures show that self-employed workers have smaller pensions. Economically speaking, self employment creates lower earnings as people tend to work less. It also creates financial insecurity which impacts the level of disposable income being put back into the economy.

So perhaps beneath the surface, self-employed people are struggling more than we think.

 

 

What Does Flexitime Mean For Employers?

News shook the working world when it was announced that all employees in England will have the right to ask to work flexitime after 26 weeks of service to their employer. Previously, only parents and carers were given the right to ask.

It has been claimed that the new rights will make workers ‘happier’ and improve their productivity. Liberal Democrat business minister Jo Swinson said that the belief that workers need to be in the office in order to work was a ‘1950s mindset’. However, employment lawyers predicted a rise in the number of workplace disputes and rising resentment between colleagues who get flexible hours and those who are refused. The new right to flexitime is anticipated to lead to a shift in employment practice, specifically in companies where flexitime is not yet allowed. Requesting flexitime allows workers to ask for part-time hours, working from home, compressed hours or job sharing. In the past, the right to this request has been predominantly led by parents, which has in turn meant frustrated childless employees who do not get the saEmployers Helplineme treatment.

Miss Swinson said that workers can benefit from compressed hours, commuting outside of the rush hour or working from home, as can employers. She said that employers often find that workers who are given flexitime are more motivated and productive and thus, less likely to leave. She pointed out the technological advances which mean that employees no longer need to based in the office in order to get their work done.

However, employment lawyers believe that the new rights will lead to new complaints from those who miss out. Already, lawyers are dealing with cases where workers feel that they have to take on the work of their colleagues who have flexitime due to having children. With everyone now available to request it, the number of the complaints will rise.

A survey also found that 84% of employers expect the new right to be the cause of resentment among employees, with more than half believing that the changes will adversely affect the day-to-day running of businesses.

Experts have also warned that some workers may see the new rules as a right to have, rather than a right to ask. Under the current rules, three out of five requests are granted and a further one in four following negotiation with employers.

An employer can refuse a flexitime request for one or more of these reasons:Employers Helpline

  • The burden of additional costs.
  • Inability to re-organise work among staff.
  • Inability to recruit additional staff.
  • Impact on quality.
  • Impact on performance.
  • Impact on the ability to meet customer demand.
  • Insufficient work for the periods that the employee plans to work.
  • Planned structural changes to the business.

If you are an employer and you need advice on the new rights to flexitime, call the Employer Helpline.

Kent Job Seekers Fall By Over 1000 For Third Month Running

job centreMore than one thousand people in Kent have managed to get of Job Seekers Allowance and find work for the third month running. May’s figures show that there was another huge plummet in the amount of people securing employment or training to leave welfare. The total figure dropped below 25,000 as a result – the first time it has been that low since the start of the financial recession in November 2008. The Office For National Statistics confirms that the total fall this month was 1137 bringing the overall figure to 24,774.

Every county in Kent saw a drop in the number of job seekers. The Medway area of Kent, which has been performing the worst in terms of the amount of people out of work, still had the highest number of Job Seekers Allowance claimants, but the figure went down by 102 in May taking it before the 5000 mark and landing at 4978. Even Thanet, despite the closure of the airport leaving 140 people without a job, dropped to 3775 claimants with a fall of 174.

The figures are estimated to be a result of the demand for part time summer work. However, the Dover MP Charlie Elphick is hoping that this is, in fact, a sign that the government’s plan is working. He said:

[quote]This is really encouraging because it shows our long-term plan is working. We need to ensure it is a sustainable recovery for everyone. The claimant count in Dover and Deal is now 10% lower than it was at the time of the general election and youth unemployment is 22% lower.[/quote]

The figures also took a slight drop on a national level. There were 161,000 people across the United Kingdom who were able to find work over the last month. However, the overall number still stands at a staggering 2.16 million demonstrating that close to 7% of the United Kingdom are out of work.

The senior manager at Maidstone’s Job Centre in Kent said:

[quote]Employers are more confident that they can take the right people on and that we are getting people ready for them. The economy is picking up as well and they are saying they are getting more work through.[/quote]

Job Seeker’s Allowance is afforded to people in the United Kingdom who are out of work and actively looking for employment. It requires claimants to ‘sign on’ at their local Job Centre on a regular basis and demonstrate the ways in which you have been seeking work e.g. applications, networking, etc.