Updated Information on how small businesses and the self-employed can weather Covid 19 – July 11th, 2021

Ihelm Enterprises Covid 19 Updates July 11 2021

Last week the government provided guidance on the 5th SEISS grant. If you are eligible for the grant, based on the tax return you have submitted for the 2019/2020 tax year, HMRC will contact you in mid-July with a date to claim the grant. You will be able to start claiming for the grant from late July 2021 up until 30th September 2021. You can only claim this grant if you think your business profits will be impacted by Covid 19 between May 1st, 2021 and September 30th, 2021.

To be eligible to claim for the grant, it is important that you mean all of the criteria in stages 1, 2 and 3.

Stage 1:
– you must be self-employed or a member of a partnership
– you must have traded in both the 2019/2020 and 2020/2021 tax year
– you cannot claim the grant if you traded through a limited company or trust

Stage 2:
– you must have submitted your 2019/2020 tax return on or before March 2nd, 2021
– your trading profits must not be more than £50,000
– your trading profits must be at least equal to your non-trading income (non-trading income is any money you make outside of your business – if you have a part-time job or a pension)
– if you are not eligible based on your 2019/2020 tax return, HMRC will look at the previous tax years

Stage 3:
– you must intend to continue trading in the 2021/2022 tax year
– have a reasonable belief that your trading profits will be significantly reduced due to Covid 19 between May 1st, 2021 and September 30th, 2021

There are different circumstances that can affect your claim:
– you filed your 2019/2020 tax return late, it’s been amended or under enquiry
– you are a member of a partnership
– you had a new child
– you have loans covered by the loan charge provisions
– you claim averaging relief
– you are a military reservist
– you are a non-resident or chose the remittance basis
– claiming Maternity allowance will not affect your eligibility
You can read more about how different circumstances can affect your claim here.

How to claim the 5th SEISS Grant

This grant is different to the other SEISS grants that have been available. You will need to tell HMRC about your business turnover so that they can work out how much you will receive. HMRC define turnover as takings, fees, sales or money earned or received by your business.

In order to make your claim, you will need to have two different turnover figures:
– you will need to work out your turnover for a 12-month period starting between April 1st, 2020 and April 6th, 2020
– you will need your turnover for either the 2019/2020 tax year or the 2018/2019 tax year

HMRC will compare the figures to work out how much you will get.

If you only started trading in the 2019/2020 tax year, HMRC will not ask you for any turnover figures. You will receive 80% of 3 months’ average trading profits up to a maximum of £7,500.

How much will you get?

There are 2 rates for this grant and HMRC will work out the amount you will receive based on how much your turnover is down by after they’ve compared your two turnover figures.

If your turnover is down by 30% or more, you will get 80% of 3 months’ average trading profits up to a maximum of £7,500.

If your turnover is down by less than 30%, you will get 30% of 3 months’ average trading profits up to a maximum of £7,500.

How to work out your turnover in order to claim the 5th SEISS grant?

Step 1: Work out your turnover for a 12-month period starting between April 1st, 2020 to April 6th, 2020

To work out your turnover for Step 1, you must ensure you include turnover from all of your businesses. You can find this information on your 2020/2021 tax return if you’ve completed it, check your accounting software, go through your bookkeeping records that cover your self-employment invoices and payments received, check the bank account you use for the business to account for money coming in from customers, ask your accountant or tax advisor.

Do not include anything reported as other income on your tax return or any Covid-19 support payments, such as previous SEISS grants, Eat Out to Help Out payments, local authority or devolved administration grants.

Step 2: Find your turnover from either the 2019/2020 tax year or the 2018/2019 tax year.

If the 2019/2020 tax year was not a normal year for your business, you must be able to show in your records why that it is. For example, if you were on carers leave, long term sick leave or had a new child, carried out reservist duties, lost a large contract, are eiligible for the 5th SEISS grant but didn’t submit a 2019/2020 tax return.

Additional things to think about:
– if you stopped trading 2020/2021, you should include any turnover received between April 2020 and April 2021, even if it’s less than 12 months
– if you have more than one self-employed business, you must include the total turnover from all of your businesses, including any new businesses you started between April 2020 and April 2021
– if you are a member of a partnership, you will need to work out and include your percentage share of the partnerships’s turnover

There is more information here: https://www.gov.uk/guidance/work-out-your-turnover-so-you-can-claim-the-fifth-seiss-grant

It is important to note that the grant money you receive is subject to income tax and self-employed National Insurance Contributions. You will be required to report it on your 2021/2022 tax return. It will also count towards your annual allowance for pension contributions.

You can read more about the grant here: https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme

I am continually monitoring the updates that the government and other business-related departments release and will continue to share that information for as long as I feel that it is beneficial to all businesses in the UK.

The information and policies are continually being updated by the government, so I urge you to keep on top of the information by visiting the relevant website for your area.

UK:
https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses
Scotland: https://www.gov.scot/coronavirus-covid-19/
Wales: https://gov.wales/business-and-employers-coronavirus
Northern Ireland: https://www.nibusinessinfo.co.uk/

I will be trying to keep myself as informed as possible and will share relevant information on my fb business page: https://www.facebook.com/ihelmenterprises/

Updated Information on how small businesses and the self-employed can weather Covid 19 – July 5th, 2021

Ihelm Enterprises Covid Update July 5 2021

During the press conference held by the Prime Minister this evening, the government announced what things will look like from July 19th, if we move onto stage 4 of the roadmap – which will be decided on July 12th.

You can read more about the press conference here: https://www.gov.uk/government/news/prime-minister-sets-out-plan-to-ease-restrictions-at-step-4

If England moves to stage 4 of the roadmap, from July 19th, the following will apply:

– the vaccination program will be revamped to reduce the time frame between doses so that all people aged 18 and over can be fully vaccinated by mid-September 2021
– there will be no legal limits on mixing indoors or outdoors
– all UK businesses, including nightclubs, will be allowed to open
– there will be no requirement for social distancing
– masks will not legally need to be worn, however, people will be asked to use common sense and to wear masks in certain situations like on public transport, in crowded indoor places, and if they are going to be mixing with people they don’t know or with someone who is vulnerable
– people will still need to isolate if told to do so, though a different regime will be outlined in the coming days
– the education secretary will do an announcement tomorrow (July 6th, 2021) about how things will be dealt with in schools
– there will no longer be a requirement for all staff to work from home
– limits on named visitors to care homes will be lifted, as well as limits on the numbers able to attend concerts, theatres and sports events.

I am continually monitoring the updates that the government and other business-related departments release and will continue to share that information for as long as I feel that it is beneficial to all businesses in the UK.

The information and policies are continually being updated by the government, so I urge you to keep on top of the information by visiting the relevant website for your area.

UK:
https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses
Scotland: https://www.gov.scot/coronavirus-covid-19/
Wales: https://gov.wales/business-and-employers-coronavirus
Northern Ireland: https://www.nibusinessinfo.co.uk/

I will be trying to keep myself as informed as possible and will share relevant information on my fb business page: https://www.facebook.com/ihelmenterprises/

Answering Commonly Asked Questions about Bookkeeping and Accounts

Ihelm Enterprises Limited - Commonly Asked Questions about Bookkeeping and Accounts

During the June 2021 Facebook live, I answered some of the common questions about bookkeeping and accounts that I get asked quite a lot so I wanted to add the information into a blog post for you.

Do I need a separate business bank account?

There is no actual rule that says you need a separate business bank account; however, it is good practice that you do have a separate account as that way you can ensure you know exactly what funds the business has and it makes it easier to prepare your accounts.

How long should I keep my records for?

If you are a sole trader or a partnership, you are required to keep your financial records for 5 years.

If you are a limited company, you are required to keep your financial records for 6 years.

The date you need to keep your receipts from is not the date your financial year ends, but it is actually January 31st after the tax year ends.  This takes into consideration that the end of year tax return must be filed by January 31st of the next year.  For example, for the 2020/2021 tax year, your tax return doesn’t need to be filed until 31/01/2022.  In that instance, you would then be required to keep your financial records for 5 or 6 years from 31/01/2022.

If HMRC do an inspection on your business, they can ask for financial records dating back to the previous 2 decades, so you may want to store the information for a longer period of time.

How should I be producing invoices for my business?

You don’t always need to issue an invoice to a customer, it could be that you issue a sales receipt instead.

The easiest way to produce your invoices is through accounts software – like QuickBooks Online – if you are using software.  If you are using a CRM system or time tracking software you could potentially create your invoices on that software.

If you aren’t using any accounts software, you could just create an invoice using Word and send that to your customers.

If you are an e-commerce shop, depending on the website software you are using for your shop, it may automatically produce the invoices for your customers, which means you wouldn’t need to re-create the invoices as you would already have them.  You would just need to find a way to import the sales information from your e-commerce shop into your account’s software.

Is there software I can use to link my paid invoices straight to my tax return figures?

The easiest way to ensure your invoices are linked to your tax return is by using accounts software, like QBO, to issue your invoices.

If you are using an external system to manage projects or invoice customers – like Zoho or WooCommerce for example – you can use 3rd party apps to automatically link the software to your accounts software and your sales information can be pulled through, so you don’t need to duplicate the work you have done with creating invoices.

Do I need to use accounts software to produce my accounts?

By April 2023, all VAT registered businesses, sole traders and landlords that meet the requirements must submit their figures quarterly to HMRC as per the rules of Making Tax Digital.  Using MTD compliant accounts software to record all of your incomings and outgoings will make it so much easier for you to do this.

Not only will it help you meet the requirements of MTD but using accounts software can help you to improve your cashflow, have an accurate and up to date picture of your business, and help you to be able to grow the business and achieve your goals.

If I use QBO, do I need a bookkeeper?

The software companies have been quite clever in their marketing and have made it look like using the software is as easy as clicking a couple of buttons, and in some ways that is true.  However, you do need to have an understanding of where the various numbers should appear in your accounts so that you can make sure you are entering the information correctly.

I have had clients come to me who have been doing their own bookkeeping but now they want some help and I have found several big mistakes in how items were recorded that if I hadn’t picked up – would have resulted in the client having a very large tax bill due to overstating their income.

You may not necessarily need a bookkeeper, though I do advise all businesses to have one to ensure they are entering all their information correctly and meeting all of their legal obligations.  It may be that you do the bookkeeping yourself but have a bookkeeper on hand to ensure the information is entered correctly and to help provide you with support.

If you do want to do the bookkeeping on your own, I would advise that you get training on how to use the software.  I have a number of PDF help sheets on my website, can provide 1:1 training on QBO and I also have an online 5-day self-study course that will teach you the basics of using QBO.  It will help you to understand how to create nominal codes, create products and services, how to create customers, issue invoices and how to receive payments, ensure you are dealing with suppliers correctly, how to correctly use the bank feed to help reduce duplicate transactions and show you how to access some of the basic reports.  The course doesn’t teach you how to do the bookkeeping but will help to ensure you are using the software correctly.

What does reconciling accounts mean and why is it important?

Reconciling your accounts is the process of comparing two sets of data to ensure the figures agree and are correct.  For example, your bank account – you would compare the information on your actual bank statement with the information you entered into your accounts software to make sure all transactions are included, and that the information is correct.  It is extremely important that you do this even if you are using a bank feed in accounts software like QBO or Xero because sometimes transactions do get missed.

Going through and reconciling your accounts each month also helps to confirm the accounts are accurate and complete.  Checking that all customer invoices and payments have been entered correctly and to the correct customer account can help you to see if any customers owe money and help improve your cash flow.  It can also help you to spot amounts posted to the wrong account – for example, if you accidentally recorded a transfer of money to a savings account as income.

By reconciling your accounts, you are ensuring that the information is accurate.  This will help to give you a clear picture of the financial situation of your business and allow you to make those important business decisions so you can grow your business and achieve your goals.

If you have any questions about hbookkeeping or keeping your accounts, feel free to e-mail me and I will get back to you! I am going to try and do this type of FB live and blog post a couple of times throughout the year, and I am thinking about doing a specific Q&A webinar, so please keep your eyes open for any future Q&A sessions so you can get your questions to me!

Updated Information on how small businesses and the self-employed can weather Covid 19 – June 14th, 2021

Ihelm Enterprises Limited Covid 19 Updates June 14 2021

During the press conference held by the Prime Minister this evening, it was announced that England will not be moving onto Stage 4 of the roadmap until at least July 19th.

You can read more about the press conference here: https://www.gov.uk/government/speeches/pm-statement-at-coronavirus-press-conference-14-june-2021

At this point in time, due to the increase in infection rates and not enough data being available to determine whether the link between infection rates and hospitalisations has been severed, the Prime Minister has announced that Stage 4 of the Road Map will be postponed until at least July 19th, 2021.

They will be monitoring the situation every day, and if after 2 weeks they have concluded the risk has diminished, they may consider lifting the restrictions earlier than July 19th.

The government want to allow more time for more people to have received their second dose of the vaccine, and for a larger number of the population to have had their first dose, to help reduce the chance of a person getting Covid and from the virus spreading even more than it already is.

While the final step of the roadmap won’t be taking place just yet, a couple of changes will be allowed to take place:

– limits on the number of guests that can attend weddings will be lifted, as long as social distancing guidelines can be met
– limits on the number of guests at wakes will be lifted, as long as social distancing guidelines can be met

I am continually monitoring the updates that the government and other business-related departments release and will continue to share that information for as long as I feel that it is beneficial to all businesses in the UK.

The information and policies are continually being updated by the government, so I urge you to keep on top of the information by visiting the relevant website for your area.

UK:
https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses
Scotland: https://www.gov.scot/coronavirus-covid-19/
Wales: https://gov.wales/business-and-employers-coronavirus
Northern Ireland: https://www.nibusinessinfo.co.uk/

I will be trying to keep myself as informed as possible and will share relevant information on my fb business page: https://www.facebook.com/ihelmenterprises/

How can a bookkeeper help me understand where my business is at throughout the year and where I have room to grow?

how can a bookkeeper help you understand your business

The May 2021 Facebook live talked about how a bookkeper can help someone to understand where their business is at throughout the year and where they have room to grow so I wanted to add the information into a blog post for you.

Do I need a bookkeeper?

The first question you really need to ask yourself is “Do I need a bookkeeper?” and the answer to this is going to be different for everyone, and it will also be different depending on what point you are at with your business.

For example, if you’ve just started out with your business and haven’t yet got a lot of income coming in, and think you can manage things on your own, you may decide that at this point in time, you do not need a bookkeeper.  Six months down the line business is booming, you are trying to keep on top of orders, and deal with the marketing, and deal with the accounts, and deal with customer queries, and still have time for yourself and your family – you may decide that you need to start outsourcing some items and perhaps getting a bookkeeper is a good idea.

Another question is, “Do I really understand how to correctly record my financial information and am I meeting all of the legal obligations that I need to in terms of submitting information to HMRC or Companies House”?  If you aren’t sure whether what you are doing is correct, it’s time to seek out some help from a bookkeeper.  You will want to ensure that the bookkeeper you choose is someone you can work with, that they are experienced and knowledgeable about the software you would like to use, that they are registered with either a professional bookkeeping body like The Institute of Certified Bookkeepers or The International Association of Bookkeepers or even with HRMC for Anti-Money Laundering Regulations Supervision, and that they are properly insured.  Not everyone that claims to be a bookkeeper is registered for AML supervision and as a regulated profession it is an absolute must that they are.

How can a bookkeeper help me with my business?

By having a bookkeeper, you can be confident that they will be able to provide you with proper support and advice when it comes to how to keep your accounts, what your legal obligations are, and some bookkeepers can also provide you with tax and/or payroll advice.

Here are 5 ways a bookkeeper can help you with your business:

  1. Frees up your time – A bookkeeper will be able to help free up the time you would have spent on the accounts meaning you can then put that time to better use by using it to promote your business, helping your customers, or even getting your weekends/evenings back so you can relax.
  2. The accounts will be done correctly – A qualified bookkeeper will know exactly how the accounts will need to be done.  They will understand how to categorise the money coming in and out of the business, ensure that you have all the receipts attached to the accounts and that your bank accounts have been fully reconciled.  This will in turn help you to have a better understanding of the financial picture of your business but also means that if HMRC checks your accounts, they are less likely to find any mistakes and fine you.
  3. Gives you a better idea of the financial picture of your business – As the bookkeeper will be ensuring that your accounts are kept up to date on a regular basis, you will have a more accurate picture of the financial situation of the business, meaning you can make important business decisions like whether you can afford to hire new staff or buy a new laptop, or if a marketing campaign worked.
  4. Improve your cash flow – By keeping the accounts up to date, you will have an accurate picture of who owes you money, and who you owe money to.  This can really help you to have a better handle on your cash flow and ensure that you are being paid by your customers on time, but also that you are paying your suppliers on time.
  5. Make sure you are meeting your legal obligations – Having a bookkeeper on hand who can help you to ensure your accounts are up to date on a regular basis, will also mean that they can help you with filing your VAT returns on time, which helps you to avoid any fines and can help with ensuring your year-end tax return is ready to be filed way before the deadline, and they can even help you to have an idea of what amount of tax you will owe throughout the year.  They will also be able to ensure that you are meeting your obligations in terms of Making Tax Digital.

Can a bookkeeper really help save me time and money?

The answer is absolutely!

Your time is very valuable, and you have a lot of demands on your time.  Not only do you need to fulfil customer orders and support your clients, but you have to grow your business, deal with ordering stock, managing employees if you have any, dealing with the day-to-day admin, and then you also have responsibilities outside of work!  In the evenings, you spend 30 minutes on your accounts trying to ensure it’s all entered correctly, ensuring every transaction has been accounted for, looking up online how to categorise something, maybe searching online for how to use the accounts software, by the end of the 30 minutes you feel more stressed out and unsure if things have been done right, and you are doing this every single day of the week.  By the end of the week, you have spent 3.5 hours on your accounts when you could have been using that time for something else – either for the business or personally.

A bookkeeper can help you to claw back that time!  Think about how much more time you would have, if all you had to do was provide the receipts and information to the bookkeeper, and they dealt with ensuring that all the information was correctly entered into the accounts?  Think about not only the time you would have saved, but how much less stressed you would be.

This testimonial from a client demonstrates how a bookkeeper can help you. “I no longer need to read (and re-read, and re-read without understanding) all the HMRC regulations. I can clearly see how my business is doing, financially. I know where I am spending too much money for little return so I spend more wisely and effectively on advertising, marketing, training etc. Arianna has advised me on setting up savings accounts so that I can plan how to grow my business further. She has kept me up-to-date with changes in regulations and what it actually means for me personally, my business and my future plans in terms I can understand and apply to my business plan.”

Money – now that is something that all businesses need to be very careful about, especially if they are brand new and still growing.  What happens if you are doing your own accounts and instead of categorising a transaction the way it should, you categorise it wrong and it ends up causing you to have a huge tax bill?  I have had people come to me to do their accounts for them, and while I have been going through and tidying up the accounts, I have come across times where clients have actually categorised transfers of money from their main bank account to the savings account as income which is not correct at all.  If I hadn’t spotted that issue, it could have caused the client to be paying three times the amount of tax they should have due to the inflated income!  I was able to save that client from a huge tax bill.  Another example, a client hadn’t realised that they had paid for a VAT return twice because they hadn’t allocated the first payment correctly within their software.  When they asked me to reconcile their accounts and I realised what had happened, they were able to receive almost £2000 back from HMRC for the duplicate payment.

Bookkeepers often work closely with accountants and while you might think it would be more costly to have a bookkeeper and an accountant, in fact, it’s more efficient from a money perspective and here’s why. Please note that the names and amounts used in the following example are all fictional and just for illustration purposes:

Jane is a bookkeeper. She charges £20 per hour for her services. She gets financial records in order so that they can then be passed on to an accountant, saving the accountant hours of work.

James is an accountant. He works for £50 an hour. When he receives documents from a bookkeeper, his work takes half the time it otherwise would.

Fred is a business owner. He’s currently paying his accountant, James, £200 per month for four hours of his time. James is spending two of those hours doing bookkeeping tasks for £50 an hour, and the other two are spent doing his accountancy work. Fred could cut his costs by working with Jane. She would do those first two hours of work for a total of £40, and Fred would only have to pay £100 to James. Overall, he’d save himself £60 per month.

In summary, having a bookkeeper can be very beneficial for so many different reasons and they really can help you to grow your business.

If you do have an accountant, then make sure you are all working together as a team and collaborating so that every person on the team is able to bring their skills and knowledge to the table and really help you to grow your business.

I love working with my clients, and their accountants, as it allows me to focus on putting all of the bits of information together into a completed picture for the accountant to file the taxes, but also because it really does help my client to see exactly where their business stands and allows them to make those all-important business decisions and grow their business.

If you have any questions about how to enter the pension information into your accounts, feel free to e-mail me and I will get back to you!

Updated Information on how small businesses and the self-employed can weather Covid 19 – May 10th, 2021

Ihelm Enterprises Covid 19 Update May 10 2021

During the press conference held by the Prime Minister this evening, it was announced that England is now moving to Step 3 of the roadmap that was outlined on February 23rd.

This is just a brief summary of the roadmap and you can read more about the press conference here: https://www.gov.uk/government/speeches/pm-statement-at-coronavirus-press-conference-10-may-2021

From Monday May 17th, 2021, the following will be able to happen:

– all pubs/restaurants/bars will be able to serve food and drink indoors
– indoor entertainment (cinemas, museums, children’s play areas) can open
– theatres/concert halls/conference centres/sports stadiums can re-open with capacity limits
– indoor leisure facilities such as gyms can re-open for organised adult sports and indoor exercise classes; saunas/steam rooms can start to be used
– all remaining accommodation can open (hotels, hostels, B&Bs)
– domestic overnight stays can happen within England with up to 6 people or 2 households
– limit on the number of people who can attend funerals will be lifted
– up to 30 people able to attend a support group or parent and child groups (children under the age of 5 do not count).
– care home residents can have up to 5 named visitors
– outdoor gatherings will be limited to 30 people or two households
– people can meet indoors in groups of 6 or up to 2 households
– foreign holidays can resume with specific restrictions – please see this page to find out which countries are on the green list: https://www.gov.uk/guidance/travel-advice-novel-coronavirus
– children no longer need to wear masks in classrooms or communal areas within secondary schools
– all remaining university students eligible to return to in-person teaching
– next week the government will publish guidelines for personal contact

The next set of changes are due to take place on June 21st – as long as the 4 tests set out by the government are met. Further updates will be released in due course.

I am continually monitoring the updates that the government and other business-related departments release and will continue to share that information for as long as I feel that it is beneficial to all businesses in the UK.

The information and policies are continually being updated by the government, so I urge you to keep on top of the information by visiting the relevant website for your area.

UK:
https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses
Scotland: https://www.gov.scot/coronavirus-covid-19/
Wales: https://gov.wales/business-and-employers-coronavirus
Northern Ireland: https://www.nibusinessinfo.co.uk/

I will be trying to keep myself as informed as possible and will share relevant information on my fb business page: https://www.facebook.com/ihelmenterprises/

Pensions and Being Self-Employed

self-employed and private pensions

The April 2021 Facebook live talked about being self-employed and how to deal with a private pension so I wanted to add the information into a blog post for you.

Do I need a pension?

The answer to this question is not an easy one and it is 100% a personal choice.  If you are self-employed and are paying the NI Class 2 contributions, you will qualify for the basic state pension or the new state pension (which came into play from April 2016), but the state pension may not be enough for you to live on.  The current value of the new State Pension is £179.60/week for the 2021/2022 tax year.

You could start paying into a private pension scheme or look at other ways to invest your money – for example, putting money into an ISA – which you can invest up to £20,000 for the current tax year.  These sorts of things can help you to be able to have an income once you have retired.

If I set up a personal pension, can this be claimed in my accounts?

As a self-employed person, any private pensions that are set up, are not able to be claimed on your accounts.  If you pay for the pension through your business account, it would need to be recorded as Owner’s Equity.  The reason for this is that the pension is not “wholly and exclusively” for business.

If you were an employer, and you had a pension scheme set up for your employees, the pension contributions paid on behalf of the employees would be an allowable business expense and would be recorded in your accounts.

Can I claim my pension contributions on my self-assessment tax return?

Not all pension schemes work the same way.  Most of them work on the basis of the pension provider adding the additional tax relief to the pension contributions you make, meaning that the tax relief is taken care of straight away.  However, if you are paying a higher rate of tax, or have paid in more than the annual allowance, you will need to enter the pension contributions into a special section on the self-assessment tax return.

At the end of the tax year, your pension provider will send you a pension contributions certificate which tells you how much you have paid in contributions through the year where deductions were made after tax.  You then use this information to enter on your self-assessment tax return.  It will be entered in a separate section to your self-employed income. 

When you are filling out your tax return, before you even get to the sections where you start to fill out the numbers, you will be asked a series of questions so that the return can be tailored to the pages you need to submit.  You will need to say that you have made pension contributions and you will then be able to enter the information provided to you in the tax return.

How do I find the best pension?

As a bookkeeper, I am not qualified to provide financial advice in regards to pensions, so I would advise anyone that is looking to sort out a pension scheme – either for themselves or for their employees – to contact a Financial Advisor and speak with them to ensure that the pension is the right one for them.  While I am not able to advise on the pension scheme, I am able to help with how to enter the information into your accounts.

If you have any questions about how to enter the pension information into your accounts, feel free to e-mail me and I will get back to you!

Self-Employed Income Support Scheme – 4th Grant

Ihelm Enterprises Covid-19 Updates SEISS 4th Grant

The 4th Self-Employed Income Support Scheme grant will cover the time period 01/02/2021 to 30/04/2021 and those who are eligible to claim will be contacted by HMRC in mid-April to give you a date that you can make your claim from. They will contact you either by email, letter or within the online service. You will need to make your claim before 01/06/2021.

Who can claim?

The 4th grant can only be claimed by those who are self-employed or a member of a partnership. If you trade through a limited company or a trust, you cannot claim this grant.

This time, HMRC are going to be including the 2019/2020 tax returns if they have been submitted on or before 02/03/2021. You must have traded in both the 2019/2020 tax year and in the 2020/2021 tax year as well.

You can either be currently trading but are impacted by reduced demand due to coronavirus or have been trading but are temporarily unable to due to covid-19. You will also need to intend to continue to trade and have a reasonable belief that you will have a significant reduction in your trading profits due to the pandemic between 01/02/2021 and 30/04/2021, and you will be required to keep evidence that shows how your business has been impacted and resulted in less business activity than normal. You can find examples here for different situations where there has been reduced activity, capacity or demand: https://www.gov.uk/guidance/how-your-trading-conditions-affect-your-eligibility-for-the-self-employment-income-support-scheme#examples.

When you are trying to decide whether you have had a significant reduction in your trading profits, you do not have to take into consideration any of the coronavirus support scheme payments that you’ve received.

How will HMRC work out eligibility?

HMRC will look at your 2019/2020 Self-Assessment tax return to start with. In order to be eligible for the grant, your trading profits must be no more than £50,000 and at least equal to or more than your non-trading income. From there, HMRC will then look at the self-assessment tax returns for the 2016/2017 tax year, 2017/2018 tax year, 2018/2019 tax year and the 2019/2020 tax year. They will then work out your average trading profits and grant amount. The grant will be worth 80% of 3 months’ average trading profits with a maximum amount of £7,500. This page will explain the process fully as to how HMRC will work out your average trading profits: https://www.gov.uk/guidance/how-hmrc-works-out-total-income-and-trading-profits-for-the-self-employment-income-support-scheme.

There are some circumstances that can affect your eligibility such as your return being late, you are a member of a partnership, you’ve had a new child, you have loans covered by the loan charge provisions, you’re a military reservist, and a few other situations. HMRC have provided further information here about the various circumstances: https://www.gov.uk/guidance/how-different-circumstances-affect-the-self-employment-income-support-scheme.

How do I treat the grant in my accounts?

The grant must be recorded in your accounts and on your self-assessment tax return for the 2021/2022 tax year, as it is subject to income tax and self-employed national insurance contributions.

When will the next grant be available?

The 5th SEISS grant will cover May 2021 to September 2021 and the information for that grant will be provided at a later date.

I am continually monitoring the updates that the government and other business-related departments release and will continue to share that information for as long as I feel that it is beneficial to all businesses in the UK.

The information and policies are continually being updated by the government, so I urge you to keep on top of the information by visiting the relevant website for your area.

UK:
https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses
Scotland: https://www.gov.scot/coronavirus-covid-19/
Wales: https://gov.wales/business-and-employers-coronavirus
Northern Ireland: https://www.nibusinessinfo.co.uk/

I will be trying to keep myself as informed as possible and will share relevant information on my fb business page: https://www.facebook.com/ihelmenterprises/

Updated Information on how small businesses and the self-employed can weather Covid 19 – April 5th, 2021

Ihelm Enterprises Covid19 Updates April 5, 2021

During the press conference held by the Prime Minister this evening, England is now moving to Step 2 of the roadmap that was outlined on February 23rd.

This is just a brief summary of the roadmap and you can read more about the press conference here: https://www.gov.uk/government/speeches/pm-statement-at-coronavirus-press-conference-5-april-2021

From Monday April 12th, 2021, the following will be able to happen:

– all non-essential retail can open
– all close-contact service business can open
– public buildings – including libraries and community centres can open
– indoor leisure facilities such as gyms can re-open but ONLY for use by people in their own household groups
– most outdoor attractions and settings (zoos, theme parks, drive-in cinemas) can open
– self-contained accommodation – campsites, holiday lets – where indoor facilities are not shared with other households can open and people within the same household can take a holiday in England
– hospitality venues can open and serve to people outdoors – people will not need to order a substantial meal with alcohol and the curfew will be lifted – only table service will be allowed, and the wider social contact rules are still going to be in place to prevent indoor mixing between households
– 15 people will be able to attend weddings, receptions and commemorative events
– children can attend indoor children’s activities and indoor sports
– parent and child groups can happen for up to 15 people indoors (children under the age of 5 don’t count)
– outdoor gatherings are still limited to 6 people or two households – there is not to be any indoor socialising with anyone outside of your household or support bubble
– those in care homes can have up to 2 visitors
– people must continue to work from home
– minimise domestic travel
– no international holidays

The government also announced that from Friday, April 9, 2021, everyone will be able to get lateral flow tests and be able to test twice weekly. These tests will be able to be picked up for FREE from pharmacies, designated pickup points and on the government website (https://www.gov.uk/order-coronavirus-rapid-lateral-flow-tests).

They have also shared their Roadmap Review Update with the public which covers a number of things including Covid-Status Certificates, Global Travel, re-opening of large events, and social distancing. You can read the whole report here: https://www.gov.uk/government/publications/covid-19-response-spring-2021-reviews-terms-of-reference/roadmap-reviews-update

I am continually monitoring the updates that the government and other business-related departments release and will continue to share that information for as long as I feel that it is beneficial to all businesses in the UK.

The information and policies are continually being updated by the government, so I urge you to keep on top of the information by visiting the relevant website for your area.

UK:
https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses
Scotland: https://www.gov.scot/coronavirus-covid-19/
Wales: https://gov.wales/business-and-employers-coronavirus
Northern Ireland: https://www.nibusinessinfo.co.uk/

I will be trying to keep myself as informed as possible and will share relevant information on my fb business page: https://www.facebook.com/ihelmenterprises/

Paper Receipts and what to do with them

Paper Receipts

The March 2021 Facebook live talked about Paper Receipts and I wanted to add the information into a blog post for you.

How long do I need to keep my receipts for?

If you are a sole trader, you need to keep your receipts for 5 years.  If you are a limited company, you need to keep them for 6 years.

It is important to note that the date you need to keep your receipts from is not the date your financial year ends, but it is actually January 31st after the tax year ends.  This takes into consideration that the end of year tax return must be filed by January 31st of the next year.  For example, for the 2019-2020 tax year, your tax return doesn’t need to be filed until 31/01/2021.  In that instance, you would then be required to keep your records for 5 or 6 years from 31/01/2021.

You might need to keep your receipts for a longer period of time if you filed your return late, have been investigated before by HMRC or are currently under investigation.

There is no guarantee that HMRC won’t ask to see records that go back further as they can investigate any time period over the previous 2 decades – so you may want to store the receipts for a longer period of time.

Do I need to keep paper receipts, or can I digitise them?

It is relatively new that HMRC are now accepting digitised receipts for most items, which means you won’t need to store the paper copies as long as you have got a digitised copy.

With the various cloud-based software, and in line with Making Tax Digital, you can attach the digital copies of all receipts and invoices to the transactions in the accounts meaning that all of your digitised receipts are in one place.

In line with MTD, there are some special items that must be stored digitally in compatible software, but there are some items that HMRC say must still be stored in paper format and they include links like your C79 (Import VAT certificate).

You can read about the rules around MTD and digital record-keeping by reading VAT Notice 700/22 which you can find here. The relevant section you are looking for is section 4 and more specifically section 4.3. However, this does just relate to keeping records in terms of VAT and digital record keeping. As more information is released about MTD for Self-Assessment Income Tax, I will share that information as well.

When do I have to follow MTD?

Currently, in terms of MTD, only those who have had to register for VAT due to reaching the VAT threshold need to follow MTD, but from April 2022 all VAT registered businesses will be required to follow MTD with those businesses who are self employed or landlords that meet the requirements from April 6, 2023.

It would be a good idea to start getting into the habit now in regard to attaching your receipts in a digital format so that by the time you are required to follow MTD you already have all of your processes in place.

You can refer to an earlier blog post I wrote in July 2020 about the updates on Making Tax Digital here.

What else do I need to know?

There are different ways you can digitise your receipts and attach them to your accounts, especially if you are using cloud-based accounts software.  Some software, like QuickBooks Online, has in-built receipt capture software but I do find it quite basic and not as efficient.

You can just scan/photograph your invoices and receipts and attach them to each transaction manually or you could use 3rd party software like AutoEntry or Receipt Bank to capture your receipts and send them to your accounts software.  My personal favourite is AutoEntry, and I use this with all of my VAT clients.  It makes capturing the various purchase invoices and receipts and getting them entered into the accounts software more efficient.  Especially the auto scrape feature which can be used to automatically retrieve invoices from many different suppliers.

If you have any questions about what to do with your receipts or about your accounts, feel free to e-mail me and I will get back to you!

Are you a UK Business Owner and use QuickBooks Online Simple Start, Essentials or Plus?  Are you unsure of how to use the software correctly?

If so, why not take a look at the 5-Day Online Video Training Course I have created to help UK Business Owners learn how to use the basic features of QuickBooks Online?

Over the course of 5-days, you will be guided through how to set up your products and services, how to set up for VAT, how to invoice customers and receive payments, how to track purchases and expenses, how to properly use the bank feed, and how to access some of the most common reports that every business needs.  You will have access to this course for life, so you can work at your own pace and keep going back to it!

For a one-off fee of £79.00, you will receive full access to the course and can continue to return back to it anytime you need to!

Visit: https://courses.ihelm-enterprises.co.uk/courses/the-basics-of-quickbooks-online-a-5-day-training-course/ to read more about the course and buy it today!


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