Small Business: 5 ways to get new customers

For many small business owners, the top priority is always this: how do I get more customers?

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Every small business owner knows that it is risky to rely on a regular base of clients, particularly when customers today tend to change their product or service providers often. The most desired outcome is to have a continuous stream of new customers, with some of them becoming loyal customers and thereby allowing the company to grow and expand organically.

Yet the task of finding new clients is easier said than done.

Traditional approaches to finding new customers – such as cold-calling and door-to-door marketing – require excellent communication and people skills, which not everyone possesses. On the other hand, modern marketing techniques can also be challenging for small business owners who struggle to keep up with the rapid evolution of technology, not to mention that some techniques like email marketing are also restricted by GDPR regulations. With this in mind, our small business accountants aim to discuss and explore a few tips which can hopefully help entrepreneurs like you gain new customers and generate new sales.

1. Finding new customers online

If you are running an eCommerce business, chances are, you have explored many online opportunities and now reap the benefits from your website, social media, online reviews, plus other eCommerce platforms and content tools at your disposal.

But if you run a traditional business, one that doesn’t sell online or has a small digital footprint, can you still gain new customers online? The answer is yes. Technology has indeed created a level playing field for companies big and small. Take a client of ours for example – this is a dedicated transport provider who relies on local business and has a simple website, yet thanks to the internet, he can now identify other local groups and associations that match the profile of his target customers. In addition, he also runs an online pay-per-click campaign targeting people in his immediate vicinity. As a result, he is able to get new clients and can keep building his customer base.

2. Finding new customers through networking

There are thousands of networking groups across the UK, many of which are eager to help business owners build relationships and explore new opportunities among their members.

Networking, at its core, is about building relationships that could produce mutually-beneficial opportunities, including quality leads. As one of our clients put it, “Effective networking is like having a good sales team but without carrying the overhead.” This is so well-said because when you make a new contact, you can potentially reach out to all the friends and business associates whom the individual has made.

Despite its benefits, you must also be prepared to reciprocate, meaning you must be willing to introduce your contacts to people in your network and help them to grow their business, just as they would help you to expand yours.

Recently, there has been a move from traditional greet-and-meet to ‘video-centric’ networking, where members meet and discuss opportunities via video conference calls. Some small business owners find this less stressful than meeting in person and if this suits you better, do give it a go.

3. Finding new customers through engagements

Raising your profile through a series of speaking engagements or getting featured in the news is fast becoming a popular option among small business owners.

Undoubtedly, speaking at a conference or an event – ideally one that is attended by your target audience – is likely to boost your credibility and help to reinforce your position as an expert in your industry. When your prospects see you as an expert, they are more likely to do business with you and become your clients. However, beware that most speaking engagements do not allow you to do the hard sell. Rather, you are expected to share your expert knowledge with the audience, preferably in a fun and engaging way.

Getting featured in the news (which can be newspapers, magazines, on radio or TV) is another way to raise your profile and build influence. While you can certainly contact journalists directly, there are also many PR sites that allow journalists to reach out to the small business owners and get their story across to a wider group of audience.

In addition to sharing serious business insights, you are welcome to pitch light-hearted stories. For example, a client of ours once helped to direct traffic and rescue a swan that was trapped on a central reservation a short distance away from his store – his story was featured in the local news and in the weeks that followed, he had more visitors to his store than ever before.

4. Partnering for success

Teaming up with another business that offers complementary services is a proven strategy that can help you and the partner to broaden product awareness, increase brand recognition and expand customer base, while saving costs for both parties.

The trick, however, is to find a partner who is on the same wavelength as you – having similar work ethics, believing in fairness, respecting and accepting each other’s shortcomings and sharing same goals, which are just some essential elements of a powerful partnership. Before any collaboration, it also pays to conduct due diligence on the other partner, and establish clear agreements and boundaries.

5. Give (some) stuff for free

Everyone loves a good bargain, which is why many of us look for discounts, sign up for a free trial, love a free sample, and shop with companies that provide free shipping, to name but a few. The objective of this is to encourage the prospects (who have received some free stuff), to take up your main services or purchase your products.

At Tax Agility, we also give a free introductory consultation session to new customers who are considering our accounting and bookkeeping service, as well as offering free quotes to customers needing tax or payroll management services. What we do is not unlike an optician giving you a free eye test or a car salesperson allowing you to take the car out for a test drive.

It is widely believed that your prospects respond more positively (albeit unconsciously) when they get something for nothing. For instance, they may believe that you are very generous and they are more inclined to reciprocate your generosity by becoming your customers.

Tax Agility is here for small business owners

At Tax Agility, our small business accountants work in tandem with entrepreneurs across London, Putney and Richmond. Our aim is to help entrepreneurs like you get the business account in order, so you can use the financial data to make informed decisions and grow from strength to strength.

Our services include:

  • Accounting & Bookkeeping: leave your day-to-day finances to us. We will also provide monthly management accounts, prepare statements and help you set-up cloud accounting.
  • Tax: if you are tax-efficient, you will have more money to invest, expand and create jobs in your community. Let us help you with tax planning, tax computation and tax returns.
  • VAT: from VAT returns to manging VAT on import and export goods, we take care of them so you don’t have to.
  • Payroll: As your team grows, outsource your payroll administration to us so that you and your team can continue to enjoy accurate and on-time payslips every month.
  • Management consultancy: take your business forward with practical advice based on financial data and benchmark analysis.

Call our small business accountants today on 020 8108 0090.

Alternatively, you can use the contact us form to get in touch.

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This blog is a general summary. It should not replace professional advice tailored to your specific circumstance.


A concept image of starting a business

Starting a part-time business

Not ready to take the leap, consider a business on the side while keeping your main employment.

A concept image of starting a business

Having a full-time job is, for many people, the path to job security and financial security. While employment is a more comfortable choice when compared to setting up, owning and running one’s own business, the pace of technology growth and a less than stable economy in recent times have threatened this supposed ‘safe-haven’.

Many working adults have come to realise that relying on full-time employment as their only source of income is potentially risky, as jobs can be outsourced or replaced, plus changes in business fortunes can leave them facing the stark reality of unemployment. Accordingly, more and more working people are considering starting a business on the side and seeking additional income streams. If you’re facing a similar situation, this post may make a great read.

Benefits of starting a business on the side

Starting your own business on the side while working full-time can seem quite a hill to climb, but the benefits often far outlay the early pains soon. For instance, after getting a business going and experiencing your first success, a side-line business could soon:

  • Provide a second income that supports the payment of your rent or mortgage, or ideally, help to pay down the mortgage more quickly than your main job could do on its own.
  • Lessens the impact of losing your job. In many cases, people who have started their own businesses on the side often quit their jobs to focus on the business full time later. This comes once they are confident that the business has overcome any initial teething problems and can continue to support their dreams.
  • The second income, or additional disposable income, could also help to afford a few extra luxuries in life.
  • Running your own business often brings you into contact with people in a similar situation. These interactions will broaden your circle of acquaintances, leading perhaps to greater opportunities.

While there are many benefits, it pays to be clear about what you want to achieve before setting up a part-time business though. Do you want it to be just a part-time or seasonal thing, or do you see it as a potential replacement for your main job? Setting realistic expectations is critical, and can help you to be better prepared too.

Things to prepare before starting your part-time business

While there are few businesses that just followed an idea and been successful right out of the gate, in reality most entrepreneurs spend a fair amount of time on planning and preparation. The main reason is that even the best and most innovative ideas may not turn into great business concepts, unless there is a nurturing environment to help them flourish.

Write a business plan

The first advice most seasoned business people give to budding entrepreneurs is to write a business plan. While there are no rules on what you should include in your business plan, standard items like stating your goals, highlighting market research, operation plan and financial strategy will help you see your business more thoroughly.

A concept image of resaerchConduct research

At the very least, you should know:

  • The needs and preferences of your target market
  • How are you going to find your customers?
  • Your competitors
  • Their price points versus your pricing strategy
  • Do they have any gaps in their product or service you can exploit?
  • What makes you different from them?

Know your responsibilities

If this is your first attempt at starting a business, you may not be familiar with all the responsibilities and duties of running a business. For example, if you are selling toys, your products need to comply with the provisions of the Toys Regulations 2011, meaning they must bear the CE mark, satisfy the ‘essential safety requirements’ in the regulations, be properly marked to ensure traceability, and be accompanied by instructions for use, along with warnings where necessary.

Crunch some numbers

The first number-crunching exercise you do should be about cost, revenue and profitability – because everyone wants to run a profitable business. Be sensible in how you plan your costs – especially marketing costs, as they are essential to get your products or services to the right people. Equally, be realistic about how much you can make over a period of time. Create a pricing strategy and calculate your break-even point. Find out about the risks you are exposed to and ways to mitigate them.

The second part of finance relates to funding. In essence, your plan to get the funds needed to launch and support the business until it turns a profit. There are a few types of funding – self-funding, funding through debt (borrowing money to start your business), equity (trading away ownership of your company to receive funding), and mezzanine (a combination of debt and equity). Most part-time businesses are either self-funded or through borrowing from friends and family members. Both approaches are helpful, albeit risky, so it is wise to have a back-up plan and know when to source for additional funding later. If you’d like to know more, follow the link to the article The complete guide to business funding.

Choose a company structure

Choosing to start your business as a sole proprietorship or as a limited company can impact how much tax you pay, how far you want to protect your personal liability, how much you want to pay to maintain the company, and how much administrative work you want to do it yourself. At Tax Agility, we help entrepreneurs to set-up a structure that works for them. If you’d like to talk to us about setting up a company, call us on 020 8108 0090 today.

Beware of pitfalls

Working fulltime can be exhausting, and by the end of a long work week, you probably do not have the time and energy to work on your part-time business. Add to that family obligations, and you may quickly find yourself defeated. One way to overcome this is to outsource the work you aren’t good at, if you have the initial investment funds ready. For instance, if you need a website, hire a good web company. If you need advice on company structure, talk to a qualified accountant like us.

Also, beware that those around you may not be as enthusiastic as you are. It goes without saying that to start and run your own business, you need to believe firmly in yourself and know what you want to achieve. Having a clear set of goals and milestones is critical. And, don’t forget to reward yourself a little along the way too.

Once your business takes off, you will soon find yourself spending more time with your clients. The challenge of juggling your time with the new venture may start affecting your day job, leading to undesirable consequences like making mistakes on your job and losing your job before you’re ready to quit.

Popular part-time businesses

Here are a few ideas to help you get started.

  • Selling products on an e-Commerce platform
  • Creating creative products – videos, pictures, jewellery etc
  • Providing handyman services
  • Becoming virtual assistants
  • Becoming a freelance designer
  • Writing for websites

Tax Agility is here to help small business owners

As leading small business accountants in London, Putney and Richmond, we have gladly worked with many entrepreneurs who started small and grew organically over the years. In the process, we become their trusted go-to accountants as well as business advisors.

Our services include:

  • Accounting & Bookkeeping: leave your day-to-day finances to us. We will also provide monthly management accounts, prepare statements and help you set-up cloud accounting.
  • Tax: if you are tax-efficient, you will have more money to invest, expand and create jobs in your community. Let us help you with tax planning, tax computation and tax returns.
  • VAT: from VAT returns to manging VAT on import and export goods, we take care of them so you don’t have to.
  • Payroll: as your team grows, outsource your payroll administration to us so that you and your team can continue to enjoy accurate and on-time payslips every month.
  • Management consultancy: take your business forward with practical advice based on financial data and benchmark analysis.

The beauty of working with us is that you have the freedom to choose the level of engagement you want from us – for instance, you may need us to manage bookkeeping for now, give you tax advice when you need money to invest, add payroll when your team expands, and use our management consultancy service when you are ready to grow. All of our services are competitively priced with no hidden charges, and our small business accountants are always here to assist.

Call us today on 020 8108 0090. Alternatively, you can use the contact us form to get in touch.

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This blog is a general summary. It should not replace professional advice tailored to your specific circumstance.


A concept image of a fraudster working on a laptop

Small Business: Protect your business against fraud

Learn how to recognise common fraud and protect your business.

A concept image of a fraudster working on a laptop
According to the National Crime Agency (NCA), the estimated annual cost of fraud in the UK is about £190 billion. Victims of fraud are varied – they could be individuals, major corporations, public sectors, and of course, small businesses, which make up 99.9% of the business population.

The NCA believes that private sector is hit the hardest, losing around £140 billion a year to fraudsters – this shouldn’t come as a surprise as many small business owners are regularly targeted by fraudsters who could be internal staff, customers, suppliers, or professional criminals.

Some examples of fraud committed by internal staff include an employee stealing and passing sensitive company data to third parties or a contractor deliberately fiddling their expenses. On the other hand, fraud involves external parties may include scammers selling counterfeit products to your company, requesting your business to pay fake invoices, or tricking you and your staff into installing software that allows criminals to access your files to steal information or lock your systems on purpose – which they then demand ransom from you.

Fraud affects us all, and when small business owners like you and I are being hit, we may see our profits being wiped out and reputations crumble, and the ripple effect may sadly lead to business closure.

An overview of fraud

The Fraud Act 2006 defines the three ways of committing fraud by:

  • False representation
  • Failing to disclose information
  • Abuse of position

The Act also covers a number of other offences relating to fraud, including:

  • Possession of articles for use in fraud
  • Making or supplying articles for use in frauds
  • Participation by a sole trader in fraudulent business
  • Obtaining services dishonestly
  • Liability of company officers for offences by company

Fraud covers every form of deception and it won’t disappear because there are always individuals looking to take advantage and make quick gains. There is no one solution to prevent all types of fraud too, and some also evolve quicker than the others. So let’s take a look at a few common types of fraud and discuss how we can protect our small business against them.

Fraud committed by internal staff

No business owner likes to think that they are being targeted by their trusted employees, but the sad truth is that fraud committed by internal staff is more common than we’d like to believe and many such cases have never been made public. In addition, research has shown that employees who hold positions of trust tend to be more dangerous as they can commit the crime longer and use various schemes to cover their tracks.

As chartered accountants for small businesses in London, Putney and Richmond, we do our best to help our clients uncover fraud committed by internal staff. For instance, when you’ve been tricked into signing off duplicate payments, especially on reoccurring charges, then we can spot and alert you when we go through the accounts. However, we must admit that sometimes it is impossible to tell if the transactions are genuine (or not) by looking at them alone.

Here’s an example – a business owner hires seasonal staff during busy periods, so when a manager authorises payments to temp staff, one can’t tell, without digging deeper, if these temp staffs are genuine or if the manager has committed payroll fraud, which is rather widespread.

Fraud committed by internal staff is often uncovered during an audit of a company’s annual accounts, which is burdensome and costly to most small businesses. In comparison, entrepreneurs may find it easier (and cheaper) to establish tighter internal controls and perform random checks.

It is also important to understand why an employee may choose to commit fraud against your company – usually it is driven by personal greed, to fund an expensive addiction like gambling or drug use, or in some case, they simply want to abuse the trust the company has placed on them. And after a while, the staff who has been defrauding the company is likely to show a change in their lifestyle habits, such as taking frequent holidays or showing off their knowledge about high-end brands.

Fraud committed by customers

If you run an eCommerce site or a retail shop, you may be familiar with card-not-present fraud committed by some customers. It happens when someone uses a fraudulent card to pay for goods over the phone or online, and the goods are picked up by courier to the customer right away. In the UK, which party should be responsible for the amount lost in a fraud case depends on the payment method. If the customer gives their fraudulent credit card over the phone or online (without using 3-D secure like Verified by Visa), then the merchant is often liable. But if the merchant uses 3-D secure for all online payment, then they are not liable.

On the other hand, if a customer walks into the shop and uses contactless or Chip & Pin to defraud the owner, in this case the owner is not liable. To minimise customer fraud, banks and credit card companies often encourage business owners to deploy 3-D secure online or have the customers pay in person.

Fraud committed by suppliers

Most small business owners tend to be careful when they first select their suppliers but after a while, they tend to let their guard down and do not notice if the supplier is over-changing them. Sometimes, business owners also comply when the supplier asks to be paid in cash and avoid VAT on a sale, which is also a type of fraud.

If you believe your supply chain is vulnerable to fraud, then it is good to review the process and conduct due diligence when necessary.

When seeking out a supplier like an accountant or a cybersecurity specialist, it is also worth checking their credentials. For example, we are ICAEW (Institute of Chartered Accountants in England and Wales) chartered accountants and this means we follow a set of principles such as integrity, objectivity, professional competence and due care, confidentiality, and professional behaviour. In other words, as our client, you will receive honest answers from our knowledgeable teams who keep abreast with the latest developments in practice, legislation and techniques. We also act diligently and respect confidentiality.

Fraud committed by criminals

Out of all the cases mentioned in this article, fraud committed by criminals is perhaps most widely encountered and reported, and phishing and malware (or ransomware) remain high on the agenda.

Phishing happens when scammers pretend to be from a trusted company and they trick you into giving out personal information, such as bank details. They often appear helpful, like alerting you to suspicious activity on your bank account, offering you financial rewards (including tax refunds from HMRC), or helping to verify and restore your records after a technical error. They are also good at manipulating your emotions, using words that can make you panic, fearful, or even curious and hopeful, so that you can divulge information quickly. The best thing to protect yourself against phishing is to take a step back and don’t respond to their requests. If you think the message could be genuine, then seek to verify the message yourself – by calling the authority or the company from a number listed on the website. Under no circumstances, you should use the contact you have been given over the phone or email.

Malware or ransomware, on the other hand, is about scammers trying to trick you into installing software that allows them to access your files or lock your systems unless you pay the ransom. It may come in an email or is attached to a file you have downloaded online. Sometimes it also involves a scammer impersonating as your IT provider and informing you that something isn’t working (like your software is compromised, broadband speed is reduced, etc). Their goal is to get you to install something so they can take over your system later. To protect yourself, be vigilant when you click on attachments, links in email, or access breaking news through an unknown link. Also, keep a back-up of your data offline.

Don’t let fraud ruin your business

Many small business owners work hard to create a successful business, so it is very unfortunate that fraud can cause a serious reputation and financial damage to businesses.

While prevention is key, entrepreneurs also know that the cost of fighting fraud can spiral out of control quickly and have a direct impact on your profit margin. If operating costs and profitability are a concern, perhaps you can talk to one of our small business accountants.

When we review your business finance, we can also help you with accounting & bookkeeping, tax, as well as payroll management.

Our approach is flexible and entirely depends on your business needs. You can hire our bookkeeping and tax services now, add payroll when your team grows, then use our management consultancy service when you are ready to take your business to new heights.

All of our services are competitively priced with no hidden charges. Call us today on 020 8108 0090, or use the contact us form to get in touch.

 

You may also like:

This blog is a general summary. It should not replace professional advice tailored to your specific circumstance.


Happy Holidays

Happy Holidays from Tax Agility

Happy Holidays
2020 has been a challenging year to say the least, but there are also positive moments where we witness strength and resilience. We also would like to thank all of our clients who have continued to work with us this year.

From everyone at Tax Agility to you and your family, may joy and peace fill your heart this holiday season.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Social media icons concept

Small Business: Adapting to changes in social media

Many small businesses view social media as an important component in the marketing mix, but have you kept up with the changes?

Social media icons concept

Many social media services that we are familiar with today are well over a decade old, with some approaching 20 years soon. Yet many of them don’t remain still – they continue to evolve and adapt, pushing out new features that aim to make communication easier. In view of this, small business owners like you and I are wondering what does it all mean? Do we have to continue using social media as part of our marketing mix? And if so, how do we adapt? Questions like these deserve honest answers, so we think it is time to create a post that can help us – and also our clients – to understand social media better.

Before we start, it must be said that we are not social media experts – our expertise lies in accounting & bookkeeping, tax, payroll and management consultancy for small businesses across London. We work with clients and help them become efficient, meet regulatory compliance, and confidently rely on accurate financial data to make informed decisions. When our clients grow, we grow too, which is why we are always keen to share ideas that can benefit small business owners, including how all of us can harness the power of social media better.

Social media for small businesses

Social media refers to internet services and mobile applications that allow users, including individuals and companies, to share content and interact with others. As these services are free and easy to use, they can attract millions of users in a short space of time, and with that many people congregating on any one of the platforms, companies big and small soon realise the potential of social media.

Nowadays, most companies spend time crafting social media posts and share them on popular platforms such as Facebook, Twitter and Instagram. Those with a bigger budget also create videos and post them on YouTube and TikTok. Essentially, they all hope that their content is viewed and shared rapidly, thereby broadening their reach.

But social media isn’t all rosy and full of promise. It has given unhappy customers, jealous competitors, disgruntled ex-employees and even trolls a platform to complain, provoke, with some choose to hurt your brand on purpose simply because they can.

Big companies respond to these negativities by hiring a team to investigate, monitor and talk to customers directly. But small business owners tend not to have such luxury, leaving many question the benefits of social media. With this in mind, let’s look at a few areas which can help small businesses.

Take another look at your social media strategy

If your small business has been posting on social media for a while, chances are, you will continue to do the same without giving it much thought.

A good place to start is to take another look at your social media strategy and ask what social media can do for your business. To get the answer, you need to look at your customers, your competitors, and also your financial data. In other words, you are examining several key factors, including but not limited to:

  • What is the purpose of your social media strategy?
  • Where does your target audience congregate online?
  • What information is relevant to your target audience?
  • What are your competitors doing on social media?
  • What social media inspiration can you draw from industry leaders?
  • How much do you intend to spend?
  • How do you evaluate the process?
  • How do you measure success?

Once you have reviewed your social media strategy, the next step is to understand the risks of social media so you can actively avoid them. Some common risks include:

There may not be any tangible return

While social media can help to amplify your brand, often it may not contribute to tangible return. For example, a person seeing a short video clip of your service may not call you and become your client. Sometimes, it can be hard to measure the return on investment too.

Undesired information may go out of control

You may make a mistake in one of your social media posts, a troll may decide to inflict hurt, or a customer’s complaint may have gone viral, when this happens, it is hard to control the spread of undesired information.

Making a situation worse

When a small business owner responds in anger, or when a company’s social media team cannot adequately handle customer complaints, things can go out of hand quickly and the domino effect can undo a company’s years of hard work in just a few hours (or less).

Legal issues

Every content you use online must adhere to the appropriate policies like copyright law and privacy legislation. Otherwise, you are putting yourself and your business at risk.

A few tips

Every business uses social media somewhat differently, depending on their strategy, however, there are a few common tips that we believe can benefit small businesses.

Local versus international

It is said that there are now 3.5 billion social media users worldwide, but if you are a brick and mortar company relying on local footfall, this astronomical number probably doesn’t mean much to you. Instead, you may choose to advertise locally (through local targeting or using selected hash-tags).

Show personality with care

Everything you post on social media is a reflection of your company – this is why sticking to the script is safe. You can, of course, show some personality by using emojis to inject some fun. At Tax Agility, we choose to share an inspiration quote once a week to encourage fellow small business owners.

Don’t respond when you’re angry

Social media gives many unhappy people (customers, competitors and trolls) a platform to vent, but it doesn’t mean that you need to act when you’re angry. Stay calm and remain professional. Also, don’t confuse angry customers with trolls who simply want to provoke and hurt.

Plan your posts

Many popular social media posts today are carefully crafted, accompanied by an appropriate picture or a video. So it is worth planning out your posts and making sure they are suitable for your audience.

Tax Agility is here for small businesses in London

Like many small businesses, we are still working on how to better engage our target audience – and also our customers – on social media. While we may not be able to assist your day-to-day management of social media, we certainly can help small business owners rest easy, knowing that their accounting & bookkeeping, tax, as well as payroll management are in our capable hands.

Our approach is flexible and entirely depends on your business needs. You can hire our bookkeeping and tax services now, add payroll when your team grows, then use our management consultancy service when you are ready to take your business to new heights.

All of our services are competitively priced with no hidden charges. Call us today on 020 8108 0090, or use the contact us form to get in touch.

 

You may also like:

This blog is a general summary. It should not replace professional advice tailored to your specific circumstance.


A concept image of outsourcing

Small business: Gain competitive advantage through outsourcing

Outsourcing allows small business owners to optimise the use of resources and achieve maximum customer value.

A concept image of outsourcing
In today’s business ecosystem, small business owners are familiar with the concept of outsourcing, which is to use third parties to perform work that is normally done within a company, as the third parties can provide a better service at a lower cost.

At Tax Agility, we have a team that is dedicated to serving companies’ outsourcing needs in accounting and bookkeeping, as well as payroll. Over the years, we have built up strong relationships with our clients and witnessed the advantages of outsourcing brought to them. If you are a small business owner looking to outsource your bookkeeping and payroll, give us a call on 020 8108 0090.

The eight benefits of outsourcing

1. Lower costs

The true costs of hiring a full-time staff can be substantial once you add National Insurance, pensions, benefits, as well as office facilities and equipment which you need to provide for the person to work. Outsourcing is often a cheaper alternative.

2. Increase efficiency

Companies that focus on core competencies and outsource activities they aren’t good at tend to be lean and efficiently-managed. For example, if you rely on third parties who have the economy of scale to perform the same tasks inexpensively, you can pass the savings to your customers and remain competitive.

3. Improve flexibility

Outsourcing allows you to pick and choose the level of engagement that suits your business at a particular moment in time. For instance, you can select the bookkeeping service from us when you first launch your business, add payroll when your team expands, then engage our management consultancy service when you are ready to grow and take your business to new heights.

4. Access to specialists

Outsourcing allows small businesses to access the same level of expertise enjoyed by big companies. For instance, a small business may not afford to hire a full-time CFO, but by outsourcing and becoming our client, you now have a team of chartered accountants who are ready to assist.

5. Reduce risk

Our chartered accountants and payroll specialists help to reduce your financial and compliance risks by managing every task accurately, including sending the right documents to HMRC on time.

6. Not affected by staff holiday or sickness

The companies that you outsource the work to often have a big team that can provide year-round cover; therefore, your tasks and deadlines are not affected by staff holidays or sickness.

7. Increase confidentiality

Most offices today have an open-plan layout with limited storage space. Confidential data such as salary information may be left on a table or stored in an unlocked cabinet that can be accessed by all employees. When you outsource a business function that contains confidential data, you essentially increase confidentiality within your office.

8. Support your wellbeing

It is no secret that small business owners take on a lot, with some work so hard that they experience stress and anxiety. Outsourcing is a cost-effective way to help busy entrepreneurs reduce workload, giving them time to focus on their strengths and their mental wellbeing.

Five popular business functions to outsource

Small business owners tend to outsource niche business functions that require specialists who know what they are doing and can generally do the tasks cheaper and better. These functions include but not limited to:

  • IT support – covering network, wireless, cyber-security, database management, web development, and digital transformation.
  • Accounting & bookkeeping – from day-to-day bookkeeping to filing the right documents with HMRC and Companies House.
  • Marketing – evolving quickly, marketing today has a sharper focus on email, social media, video, search advertising, native content advertising, and apps.
  • Customer support – having first-level customer support that can provide quick answers to customers and keep them happy is valuable.
  • Payroll – every payslip in the UK must be calculated accurately and delivered on time, this complicated process is best left with the professionals.

Choose Tax Agility’s accounting and bookkeeping service

Tax Agility has worked with small businesses in London, Putney, and Richmond-upon-Thames since 2008. We have worked with entrepreneurs from all walks of life and different companies with varying business models.

Our accounting and bookkeeping services specific to small businesses cover everything from basic data entry to high-level management reporting and analysis. Accurate financial data that we provide, such as management accounts, budgets, cash-flow forecasts, can also help you to:

  • Improve profit margins
  • Reduce costs
  • Compare performance
  • Make informed decisions
  • Unlock business potential
  • Ensure regulatory compliance

Call us today on 020 8108 0090.

Choose Tax Agility’s payroll services

Payroll demands absolute accuracy, and each payslip must be calculated individually and delivered on time. Our payroll team has worked with all types of industries, including companies that offer commissions, ad-hoc bonuses, as well as restaurants, bars and hotels that use the TRONC scheme.

By outsourcing your payroll administration to us, you can keep your costs down while maintaining accuracy and efficiency. Our team also provides year-round covers, so your Full Payment Submission to HMRC is always on time, undisturbed by staff holidays or sickness.

Call us today on 020 8108 0090.

Other services

Apart from bookkeeping and payroll, we also provide tax and VAT services, along with management consultancy to small businesses across London.

Our aim is to assist entrepreneurs in becoming tax-efficient, so you have more money to invest, expand and create jobs in your community.

Management consultancy also puts a sharper focus on using financial data and benchmark analysis to improve efficiency, increase profitability and grow sustainably.

The challenges of outsourcing and how to address them

Outsourcing has indeed helped many small businesses to grow from strength to strength, but it is not without some challenges. It is useful to discuss a few tips that can help you navigate around common pitfalls.

Choose a reputable company

Only outsource your selected business functions to a reputable company that belongs to a trade organisation with a defined code of ethics. For example, we are ICAEW (Institute of Chartered Accountants in England and Wales) chartered accountants, and we follow a set of principles, including integrity, objectivity, professional competence and due care, confidentiality, and professional behaviour. This means that as our client, you will receive honest answers from our knowledgeable teams who keep abreast with the latest developments in practice, legislation and techniques. We also act diligently and respect confidentiality.

Formalise processes

Formalise a set of guidelines which you want the outsourced company to follow and communicate your expectations clearly. This way, you have greater control over the quality of services rendered.

Check their data security commitment

If the tasks you outsource involved confidential information, like customer information or personal data from your employees, ask the provider what steps they have to keep the data secure, and what happens if there is a breach.

Local versus overseas

Outsourcing to local companies may also work better for some businesses, as they don’t have to manage time differences and cultural barriers. At Tax Agility, our offices are in Central London, Putney and Richmond-upon-Thames, so clients could pop in to ask a question at any time, without having to worry about time differences.

Outsourcing has indeed helped many small businesses to scale, remain efficient and competitive, so are you ready to enjoy the benefits of outsourcing?

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This blog is a general summary. It should not replace professional advice tailored to your specific circumstance.


A concept image of a happy businessman

Small Business: Delivering excellent customer service

Customer service is a skill which all of us can learn and improve upon.

A concept image of a happy businessman

It is said that the main reason for customer churn is not price, but bad customer service. Many unhappy customers simply don’t return, especially in today’s world where there are plenty of alternatives and choices available. On the other hand, happy customers can help your business grow, as they tend to purchase more and refer others through valuable word-of-mouth referrals.

At Tax Agility, we are small business accountants in London and we help other small businesses to grow through exceptional accounting services. If you have worked with us, you know that we diligently take care of the accounting and bookkeeping duties, along with providing solid tax advice and payroll administration, leaving you time to focus on running the business.

We are also keen to share tips that can help small business owners like us. So in this article, we shall take a look at the principles that underpin customer service and discuss how to deliver excellent customer service.

Principles of good customer service

Every business has some ideas on how to provide good customer service. Generally, they centre around:

  • Listening to your customers – finding out what they consider to be good customer service and what they expect from you.
  • Understanding that customer service is a process – it exists in all aspects of your business and every interaction is an opportunity to show your professionalism.
  • Following up with both positive and negative feedback – resolving the issues quickly and amicably, without getting emotional, will win you respect.
  • Being honest – if you don’t understand how a product works or if you can’t troubleshoot, let them know and find another solution for them.
  • Practising empathy – putting yourself in their shoes when addressing their concerns.

Delivering good customer service

After speaking to small business owners who excel at customer service, we are able to categorise the three aspects needed to deliver good customer service. They are commitment from you the business owners, a good understanding of how your customers expect you to meet their needs, and an effective customer service program to help you deliver. When all the three aspects are working cohesively, you will create a virtuous cycle that can yield a string of positive outcomes.

Commitment from you

If you are fully committed to customer service, you will hire like-minded individuals, foster a service culture, empower your staff to take ownership, recognise and reward their work, and provide adequate training. You want happy staff who will go out of their way to give the customers what they want and deliver when they want it, in the best possible way.

Having a positive attitude goes a long way too. Remember to:

  • Smile: Someone said that a smile alone doesn’t guarantee good customer service, but good customer service almost always starts with a smile.
  • Take initiatives: Go up to the customers and ask if they need assistance or suggest complementary products, if you run a brick and mortar business.
  • Be patience: Some customers may require more time to convey what they want or what is wrong with the product purchased. Take time to understand, clarify if needed, and always offer genuine help.
  • Say ‘please’ and ‘thank you’: When you say please, you are showing respect; and when you say thank you, you are showing gratitude. Small business owners who value their customers use ‘please’ and ‘thank you’ regularly.

Know what your customers expect from you

Every customer has a unique perception as to what customer service means to them. The level of service they expect also varies from one provider to another. For example, they may expect a no-frill service from a discount store, but more personalised service from a close-contact provider like a hairdresser, a sports therapist and a tailor. If you don’t yet know what your customers want from you (and your business), it is time to start talking to them and gathering feedback.

Creating a customer service program

An effective customer service program should contain three things – it should define the level of customers service your business wants to provide at every interaction, describe the necessary steps to achieve it, and methods to sustain the program.

Here are a few examples:

  • Your business receives a fair amount of calls and you want your staff to answer them within the first three rings, use a greeting message, and remain professional throughout.
  • You want your staff to take the initiative and suggest complementary products to customers – like a pack of rechargeable batteries to go with an electronic gadget.
  • Your business may receive a bad review on social media from time to time. When it happens, your staff will contact the unhappy customer quickly (hopefully within the same business day). The process will see them investigate the issue, acknowledge when there is a mistake, and seek to resolve the issue with the customer amicably.

Don’t forget your staff

As a small business owner, you know the importance of hiring and retaining staff who are as committed as you. So it makes sense to invest in training and equip them with the appropriate skills and knowledge to help you meet your business goals.

It is equally important to recognise and reward staff who put in the hard work. Some recognition could be spontaneous – whenever you see them do a good job, thank them personally. On the other hand, planned recognition could involve a monetary or non-cash incentive when they reach certain targets, or when they consistently offer a high level of service to your customers.

Data protection and your business

If your business collects and stores customer information, you must understand the legal requirements regarding what you can do with the information. The data protection rules state that you must make sure the information is kept secure, accurate and up-to-date. When you collect their personal data, you must also tell them who you are and how you will use their information (and if you intend to share the information with another organisation). You must also inform them that they have a right to:

  • See any information you hold about them and correct if it is wrong
  • Request to have their data deleted
  • Request their data is not used for certain purposes

Good customer service will help you grow

Your happy customers will undoubtedly come back to buy more and recommend others to you through word of mouth referrals. They can generate more sales for you, which in turn will feed a positive loop and produce more favourable results.

At Tax Agility, we know the importance of good customer service because most of our clients come through referrals, from other small business owners who are very happy with our accounting, bookkeeping, tax and payroll services. If you are a new client, you will know that our approach is to understand you first – including your business objectives and financial circumstances – only then we can suggest how to assist you.

You also have the freedom to choose the level of engagement you want from us – for instance, you may need us to manage bookkeeping for now, give you tax advice when you need money to invest, add payroll when your team expands, and use our management consultancy service when you are ready to grow. All of our services are competitively priced with no hidden charges, and our small business accountants are always here to assist.

Call us today on 020 8108 0090.

Alternatively, you can use the contact us form to get in touch.

Our services:

  • Accounting & Bookkeeping: leave your day-to-day finances to us. We will also provide monthly management accounts, prepare statements and help you set-up cloud accounting.
  • Tax: if you are tax-efficient, you will have more money to invest, expand and create jobs in your community. Let us help you with tax planning, tax computation and tax returns.
  • VAT: from VAT returns to manging VAT on import and export goods, we take care of them so you don’t have to.
  • Payroll: as your team grows, outsource your payroll administration to us so that you and your team can continue to enjoy accurate and on-time payslips every month.
  • Management consultancy: take your business forward with practical advice based on financial data and benchmark analysis.

 

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This blog is a general summary. It should not replace professional advice tailored to your specific circumstance.


A concept image of marketing

Small Business: Simplify marketing to increase sales

Every business needs to market their brand, products and services. Have you done enough to create awareness, attract new customers and build relationships?

A concept image of marketing
Marketing is a process where you (the business owner) identify your unique selling proposition (USP), profile your target market, communicate your brand and your USP to the target market, persuade them that your products and services can satisfy their current and future needs, and your company is here to nurture loyal customers.

The marketing process is long, sometimes costly, and definitely more comprehensive than just ‘advertising and selling’. Occasionally, marketing also requires unwavering commitment from you and your staff.

At Tax Agility, we are small business accountants working with entrepreneurs from all walks of life. Our objective is to help small businesses flourish by managing their business accounts accurately and effectively. In addition, we provide a range of business consulting services that aim to help companies reaching their goals. Like our clients, we are small business owners ourselves, and we see marketing as a key discipline which allows us to communicate what we do and build lasting relationships with our clients. With this in mind, we spoke to several marketing specialists and put together this article which we hope could help our clients and other small businesses to establish a stronger competitive advantage through marketing.

The seven ‘Ps’ of marketing

The seven ‘Ps’ refer to a set of recognised marketing tactics which small business owners could use in any combination to create a successful marketing strategy. The seven aspects are:

1. Product

Product refers to the goods and services you are selling – naturally, you want to sell goods and services that are in demand. Successful small business owners tend to spend time researching what the target market needs (or wants), and can highlight the features and advantages of their products and services to the target group, convincing them to purchase.

When marketing products or services, bear in mind that you cannot give false or misleading information to customers. It pays to understand the law on product safety and demonstrate compliance. You should also prepare for (and respond to) product safety incidents and take up appropriate product liability insurance.

Here’s a quick example: one of our clients found out that there is a market for toy robots in the UK and he imports them to sell. In his marketing campaign, he highlights the physical features of the robots and shows how these robots can interact with growing children (through voice, touch and/or remote control). All toy robots he sells also comply with the provisions of the Toys Regulations 2011, meaning they bear the CE mark, satisfy the ‘essential safety requirements’ in the regulations, be properly marked to ensure traceability, and be accompanied by instructions for use, along with warnings where necessary.

2. Price

As consumers ourselves, we all know that a product or a service is only worth what the customers are prepared to pay for it. The price has to be ‘right’ and perhaps even competitive, but not necessary the cheapest. Ideally, the optimal price is what your customers are willing to pay and it also allows you to make a profit (after covering your costs).

Accordingly, setting a suitable pricing strategy for your products and services take some planning. You probably need to spend a good amount of time reviewing your costs – fixed and variable – as well as knowing your break-even point. The break-even point can help you to work out how much you need to sell before you make a profit and how profitable a particular product or service is. If you need help with business costs, talk to a trusted small business accountant like our team here at Tax Agility.

Sometimes, you may choose to enforce the value of your products or services through a higher price tag. This could be a wise approach, especially if the value you provide is not something that your competitors can easily copy.

3. Promotion

This is about the promotional activities you undertake to make your customers aware of your products and services. They can include direct marketing, telemarketing, above-the-line advertising, PR activities such as media releases, sponsorship, as well as short-term sales.

Successful promotional campaigns tend to tell a story, so give your brand a story – why it exists, why it cares about customers and the world, for instance. Savvy customers today prefer to engage with businesses that they can connect and build direct relationships with, so don’t be afraid to show your passion, talk about the values you stand for, and why your business is the one to choose.

Keeping up with the times, your promotional activities may include an online element too. You can find out more about online marketing by following the link to the article Small Business: Win customers with a strong online presence.

4. Place

The place refers to where your customers are able to see and purchase your products and services. The place may be your website, an online marketplace, a physical store, via other distributors, or a combination of the above.

If you are selling your products and services in a physical store, then you probably know the importance of using effective visual display to create an identity and maximise sales. Retail display is actually a part of branding, helping to make a statement about your business as well as attracting prospects to purchase your products and services.

If you are selling online, then you know the benefits of using excellent photographs and concise product descriptions, along with online optimisation. You may also consider using ‘behaviour targeting’ to show your products and services to your target market throughout their buying process – from needs or problem recognition, information search, evaluation of alternatives, making a decision, to purchasing.

5. People

The fifth P here refers to everyone in your company, including yourself and your staff. The aim here is to recruit the right people who are as committed to the company as you are. Devoted staff will champion excellent customer service, which in turn will help you win referrals and grow your business.

To retain good staff, you may need to provide adequate training and skill development opportunities, along with suitable motivators (which may or may not be monetary). A good tip that our small business accountants often share with entrepreneurs is to look at the products and services with the highest profit margins, and check to see if they are adequately supported by your staff.

6. Processes

This refers to the processes involved in delivering your products and services to the customers. It ranges from the process to ordering new stock, ensuring products and services are delivered in a timely manner, allowing customers to give feedback, handling negative customer reviews, and regularly reviewing your financial statements to make sure that your company is on track.

Good processes will undoubtedly increase efficiency, thereby saving your company time and money. On the other hand, inadequate processes (or lack of) may create confusion and mistakes, risking a vicious circle that may lead to business failure.

7. Physical evidence

Physical evidence refers to everything your customers see when interacting with your company. Ideally, everything they see should reinforce a positive image of your company and boost their confidence in your brand, products and services.

Accordingly, think about every aspect, from how you package your products, the physical environment where you provide or sell the products or services, to how your staff act in the premises.

Marketing and growth

While the above seven ‘Ps’ of marketing are vital points for small business owners to consider before creating a marketing strategy, we must also point out the financial aspect. For instance, your marketing plan should have a clear financial objective, like how a campaign can help you achieve a net profit of x through sales of product y within the next 12 months.

Your marketing plan should also include campaign costs, which must be affordable by your business. From time to time, we do hear stories that business owners spending most of their money on branding or sponsorship, hoping to make a big impact but only to find little return.

As the financial aspect is critical, do talk to an experienced small business accountant like our team here at Tax Agility. We can help to review costs associating with your products and services, find ways to reduce wastage, calculate the break-even point, make profitability projections, among others.

We can also help you with the followings:

  • Accounting & Bookkeeping: leave your day-to-day finances to us. We will also provide monthly management accounts, prepare statements and help you set-up cloud accounting.
  • Tax: if you are tax-efficient, you will have more money to invest, expand and create jobs in your community. Let us help you with tax planning, tax computation and tax returns.
  • VAT: from VAT returns to manging VAT on import and export goods, we take care of them so you don’t have to.
  • Payroll: as your team grows, outsource your payroll administration to us so that you and your team can continue to enjoy accurate and on-time payslips every month.
  • Management consultancy: take your business forward with practical advice based on financial data and benchmark analysis.

Call our small business accountants today on 020 8108 0090.

Alternatively, you can use the contact us form to get in touch.

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This blog is a general summary. It should not replace professional advice tailored to your specific circumstance.


Invoice

Business records checks: how to keep good business records

Invoice

HMRC requires business owners and sole traders to keep good business records so the correct amount of tax can be calculated and paid.

On this gov.uk page, HMRC makes it clear that businesses must keep records to fill in tax returns and pay the right amount of tax at the right time. HMRC also states that it can choose to check your records.

While the checks are usually conducted over the phone, HMRC can choose to pay you a visit and ask you to explain about your business and how your records are kept. They will also seek to verify a few transactions before deciding if your business records are adequately kept or not.

The thing is, even if HMRC doesn’t tell you to keep good business records, it is wise to make the process as part of your financial discipline. Business records are useful – for example, historical data can help you plan and set realistic goals for the future, making sure that your business remains profitable and on the right growth path.

In this article, our small business accountants aim to discuss:

  • Business records for a limited company
  • Business records if you are self-employed
  • PAYE records if your business employs staff
  • VAT records if your business is VAT-registered
  • Pay and tax records for your Self Assessment

Keeping business records for a limited company

HMRC is very clear that every limited company must keep two types of basic records: records about the company, as well as financial and accounting records.

Records about the company

As a company director, you must keep the followings:

  • Details of directors, shareholders and company secretaries
  • The results of any shareholder votes and resolutions
  • Promises made to repay medium to long-term loans at a specific date in the future and who the creditors are
  • Promises made if something goes wrong and it is the company’s fault (‘indemnities’)
  • Transactions when someone buys shares in the company
  • Loans or mortgages secured against the company’s assets
  • Register of people with significant control, referring to anyone who has more than 25% shares or voting rights, can appoint or remove a majority of directors, and can influence or control your company.

Financial and accounting records

You must keep:

  • All money received and spent by the company
  • Details of assets owned by the company
  • Debts the company owes or is owed
  • Stock the company owns at the end of the financial year
  • The stocktakings you use to work out the stock figure
  • All goods bought and sold
  • The suppliers you bought the goods from and the clients you sold to (unless you run a retail business where you can’t identify each customer)
  • Records that are used to prepare and file the annual accounts and Company Tax Return

The last point can include:

  • All money spent by the company, for example receipts, petty cash books, orders and delivery notes
  • All money received by the company, for example invoices, contracts, sales books and till rolls
  • Any other relevant documents, for example bank statements and correspondence

How long to keep these records

All company and accounting records must be kept for 6 years from the end of the financial year they relate to. Sometimes you are required to keep them longer if:

  • They show a transaction that covers more than one of the company’s accounting periods
  • The company has bought something that it expects to last more than 6 years, like equipment or machinery
  • You sent your Company Tax Return late
  • HMRC has started a compliance check into your Company Tax Return

If the records are lost, stolen or destroyed

In the event that your records are lost, stolen or destroyed, you must do your best to recreate them. You must also inform your Corporate Tax office accordingly and mention this in your Company Tax Return.

Business records if you are self-employed

If you are a sole trader or a partner in a business partnership, you must keep records of business income and expenses, which are:

  • All receipts for goods and stock
  • Bank statements, chequebook stubs
  • Sales invoices, till rolls and bank slips

If you are using traditional accounting, you must also keep:

  • What you’re owed but have not received yet
  • What you’ve committed to spend but haven’t yet paid out, for example you’ve received an invoice but haven’t paid it yet
  • The value of stock and work in progress at the end of your accounting period
  • Your year end bank balances
  • How much you’ve invested in the business in the year
  • How much money you’ve taken out for your own use

You do not need to send your records when you submit your tax return but you need to keep them so you can work out your profit or loss for your tax return. Also, when HMRC asks, you have records to show them.

In addition, you must keep records of your personal income.

How long to keep these records

You must keep your records for at least 5 years after the 31 January submission deadline of the relevant tax year. If you send your tax return more than 4 years after the deadline, you’ll need to keep your records for 15 months after you send your tax return.

If the records are lost, stolen or destroyed

In the event that your records are lost, stolen or destroyed, you must do your best to provide the figures. When you file your tax return, tell HMRC if you are using estimated figures or provisional figures. Provisional figures mean temporary estimates while you wait for the actual figures and once the actual figures arrive, you will need to submit them.

PAYE records

A large portion of small business owners today choose to outsource their payroll service to an accounting firm like us for cost-saving purposes. Providing complete payroll services, we take care of your payroll function (including records keeping) and make sure that it is complying with regulations.

Payroll records to keep are:

  • What you pay your employees and the deductions you make
  • Reports and payments you make to HMRC
  • Employee leave and sickness absences
  • Tax code notices
  • Taxable expenses or benefits
  • Payroll Giving Scheme documents, including the agency contract and employee authorisation forms

How long to keep these records

You need to keep them for 3 years from the end of the tax year they relate to.

If the records are lost, stolen or destroyed

With Payroll, you report the figures to HMRC every month so when you cannot find the records, HMRC may be able to help by providing you with the historical figures you have paid your employees.

If you are using estimated or provisional figures in your final payroll report to HMRC, you must tell them accordingly.

VAT records if your business is VAT-registered

If your business is VAT-registered, the records to keep are:

  • Sales and purchases
  • VAT invoices
  • A separate VAT account

If your business has a turnover of more than £85,000, you must follow the rules for Making Tax Digital (for VAT) which require you keep some records digitally.

The VAT account is a summary of your total VAT sales, total VAT purchases, and the VAT you either owe HMRC or can reclaim from HMRC. It can also include the VAT on any EU purchases or sales if you trade with EU countries.

When it comes to writing off bad debts (of more than 6 months old), things get a little complicated. In this case, you should keep a separate VAT bad debt account showing the total amount of VAT involved, amount written off and any payments you’ve received, the VAT you’re claiming on the debt, when you paid the VAT, the relief you are claiming, as well as the corresponding invoices. Talk to our friendly VAT team if you have questions concerning your VAT account or the VAT bad debt account.

How long to keep these records

You must keep VAT records for 6 years (or 10 years if you use the VAT MOSS service). For the VAT bad debt account, the information must be kept for 4 years.

If the records are lost, stolen or destroyed

You can easily reconstruct the data lost by reviewing your invoices or asking your suppliers for duplicated copies.

Pay and tax records for your Self Assessment

For company directors and PAYE individuals who submit Self Assessment every year, you must keep your records for at least 22 months after the end of the tax year the tax return is for. For example, if you send your 2018 to 2019 tax return online by 31 January 2020, you should keep the records until the end of January 2021.

For self-employed individuals, you know that there is no separation between and your sole proprietorship. In this case, you must keep your records for at least 5 years after the 31 January submission deadline of the relevant tax year.

Get your accounts sorted with Tax Agility

Business owners know the importance of keeping good records but not everyone has the time to go through and organise them – after all, your focus should be on running the business and not dealing with administrative burdens. Contact our teams at Tax Agility on 020 8108 0090 and let us help instead.

Our teams consist of:

  • Small business accountants: championing small business across London, our small business accountants aim to save you time and money by getting your financial statements in good order. We also help you to interpret the financial data so you can use them to make business decisions with greater confidence.
  • Tax accountants: be it personal tax, business tax, corporation tax, our tax accountants are here to help you minimise your tax obligations and maximise your income legitimately. We do not believe in shortcuts that can get you into troubles. Also, we can provide expert tax advice and assist companies when they are being questioned by HMRC.
  • Payroll specialists: providing a complete range of PAYE and payroll administration, processing and reporting functions. We can also provide specific payroll advice pertaining to your industry.
  • VAT specialists: taking care VAT registration, quarterly returns, VAT control and reconciliation, as well as providing the best VAT strategy for your business.

Give us a call today on 020 8108 0090 or use our contact form to get in touch.

 

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This blog is a general summary. It should not replace professional advice tailored to your specific circumstance.


Filing a tax return image

All you need to know about Self Assessment tax return

Filing a tax return sheet - image

Self Assessment is one of the two ways which HMRC uses to collect Income Tax. Find out if Self Assessment applies to you, the important dates, penalties and common questions in this article.

In the UK, HMRC collects Income Tax through PAYE and Self Assessment. PAYE is where your income is taxed at source, meaning the money you receive has already been deducted off tax and National Insurance. Most employees in the UK are taxed under PAYE.

Self Assessment is for people whose income has not been taxed at source. Examples of such income include the money you receive as a sole trader, your rental income, income from a trust, casual freelance earnings, occasional income like selling products on online, to name but a few.

Also, if you were taxed at an incorrect rate or if you want to claim allowances or reliefs, then you may need to file a Self Assessment tax return.

Who needs to file a Self Assessment tax return

Individuals who need to file a Self Assessment tax return include:

  • Self-employed individuals, aka sole traders
  • A partner in a business partnership
  • A company director whose income is not taxed under PAYE
  • A trustee who is responsible for reporting and paying tax on behalf of the trust
  • An executor or administrator of a deceased’s estate

In addition, you may also need to complete a Self Assessment tax return if:

  • You have untaxed income from property rental, investments, other freelance assignments, etc.
  • You receive regular income from a trust or settlement
  • You receive a gift from a loved one at some point in the seven years before they passed away
  • You have an annual income of £100,000 or more before tax
  • You have foreign income
  • If you get child benefit and your income (or your partner’s income) is over £50,000
  • You have capital gains

The list above is not exclusive. There are also other scenarios where you need to file a Self Assessment tax return.

Call our Personal Tax Accountants on 020 8108 0090 for expert Self Assessment advice.

Important deadlines

We will highlight a few important dates below but beware that the dates may be applicable to you during this particular tax year or they may be applicable following the end of the tax year.

31 January

Before midnight on 31 January, one of the followings may be applicable to you:

  • File your tax returns online for the previous tax year.
  • Pay any tax you owe for the previous tax year.
  • If you’re self-employed, pay your first payment on account. The phrase ‘payments on account’ refers to advance payments towards your tax bill.
  • If you’re self-employed, pay your balancing payment if you still have tax to pay after you’ve made your payments on account.
  • Amend your past tax return when you realise that you have made a mistake.

6 April

6 April marks the beginning of a new tax year in the UK. This is an important date as changes agreed in the Budget and new tax regulations may come into effect.

31 July

If you’re self-employed and you pay your taxes through payments on account, then you know that you need to make two payments a year. The first payment is before midnight on 31 January and the second payment is before midnight on 31 July.

Note: Due to the Coronavirus COVID-19 pandemic, the due date for the second payment on account for 2019/20 is now 31 January 2021 (instead of 31 July 2020).

5 October

If this is your first time submitting a Self Assessment, you must register by 5 October. Upon completing the registration, you will get a Unique Taxpayer Reference number and a code (in the post) which you need to activate your account.

31 October

31 October is the deadline for filing a paper tax return. Increasingly, HMRC wants you to file online but if you choose to continue with a paper tax return, then you will need to download one or request for a paper Self Assessment return.

30 December

If you have incomes taxed under PAYE and you also file your Self Assessment, you can pay your Self Assessment bill through your PAYE tax code if:

  • You owe less than £3,000 on your tax bill
  • You submitted your paper tax return by 31 October or your online tax return by 30 December

Please note that you can’t pay through your tax code if you don’t have enough PAYE income for HMRC to collect it.

Late filing and the penalties

Unless you have an excuse deemed reasonable by HMRC, filing late will cost you money. Here is an overview of the penalties:

  • One day late: £100
  • Up to three months late: £100, plus £10 a day (capped at 90 days), so up to a total of £1,000
  • Up to six months late: £300 or 5% of the tax due (whichever is higher), plus the penalties above
  • Up to 12 months late: Additional £300 or 5% of the tax due (whichever is higher), plus the penalties above

Every year, hundreds of thousands file the Self Assessment late and risk a fine. You can avoid this by getting in touch with our Personal Tax Accountants on 020 8108 0090 now. We can help you plan, prepare and file on behalf of you.

Late tax payment and the penalties

31 January is the deadline for paying any tax you owe for the previous tax year (assuming you have not requested to pay your Self Assessment tax bill through your PAYE tax code). If you miss this deadline, you may be charged interest plus a penalty of 5% of the tax outstanding. Visit this gov.uk page to calculate your estimated penalties if you file your Self Assessment late or pay your Self Assessment tax bill late.

Reasonable excuses

If you’ve missed the deadline for your return or payment, you can appeal against some penalties if you have a reasonable excuse.

According to this gov.uk page, examples of reasonable excuses are:

  • Your partner or another close relative died shortly before the tax return or payment deadline
  • You had an unexpected stay in hospital that prevented you from managing your tax affairs
  • You had a serious or life-threatening illness
  • Your computer or software failed just before or while you were preparing your online return
  • Service issues with HMRC online services
  • A fire, flood or theft prevented you from completing your tax return
  • Postal delays that you could not have predicted
  • Delays related to a disability you have

You must send your return or payment as soon as possible after your reasonable excuse is resolved.

Mistakes on your Self Assessment tax return

Mistakes can happen and after you’ve filed your Self Assessment tax return, you can make still make a change by signing in to your Government Gateway portal (if you’ve filed it online) or download a new tax return and send HMRC and the corrected pages (if you’ve filed a paper return).

Beware that if HMRC doesn’t think that the mistakes are genuine, you could face a fine. How much fine you will need to pay depends on how HMRC sees the mistake; whether you have made the mistake due to carelessness, you have made it deliberately, or you have made it deliberately and have tried to conceal it.

Also, if HMRC finds the mistake (instead of you) and believes that you have been careless or you have deliberately done so, the penalty is usually more severe than you finding it.

Frequently asked questions about Self Assessment

As Personal Tax accountants with offices in Richmond, Putney, Wimbledon and London, we get many questions pertaining to Self Assessment. Here are a few common questions and their answers.

I’m self-employed and my business has made a loss, do I need to file a Self Assessment?

The answer is yes. In fact, you can carry the loss forward to deduct from any future profits you will make.

I’ve got a full-time job now, do I still need to file a Self Assessment tax return?

If you have a full-time job now and you don’t receive any income from any freelance work, then contact HMRC to let them know that your circumstances have changed. This gov.uk page lists how you can get help.

If you have a full-time job but you still receive untaxed income (like you are still selling products online or renting out a room in your home), then you must continue to file a Self Assessment tax return.

What records do I need to keep?

If you are self-employed, you must keep good records of business income and expenses for at least five years after the 31 January submission deadline of the relevant tax year. For more information, check out this post “Business records checks: how to keep good business records” and scroll to the self-employed section.

If you file Self Assessment but you are not self-employed, you should keep the relevant records for at least 22 months after the end of the tax year.

More questions are likely to arise during preparation and filing, which is why many individuals (particularly self-employed contractors) rely on an experienced Personal Tax Accountant like us to prepare and file Self Assessment.

Tax saving tips

If you are self-employed, you will have a higher tax liability if your business is prosperous and naturally, you may look to lower the liability and this is where professional advice can make a difference.

At Tax Agility, we work with you to look at how you can save some money when filing your Self Assessment tax return. For instance, we may look at:

  • If you have claimed for allowable expenses and capital expenditures
  • If you have invested in a personal pension scheme
  • Other tax saving ideas applicable to you

Tax Agility can help with your Self Assessment Tax Return

At Tax Agility, our team of Personal Tax Accountants has been serving residents in London, Richmond, Putney and Wimbledon with personal tax issues, including Self Assessment.

We can act as your agent and we will deal directly with HMRC on your behalf.

As everyone’s financial situation is unique, we can customise our service to you depending on your needs. For example, we can:

  • Calculate the amount of tax owed
  • Share tax saving options
  • File on your behalf
  • Represent you if HMRC asks questions

Our Personal Tax accountants are experienced, competent and we offer professional and friendly advice. Above all, our fees are transparent with no hidden charges. We also provide a no-obligation meeting to understand your case first.

Give us a call on 020 8108 0090. Alternatively, use our online form to arrange a complimentary, no-obligation meeting.

This blog is a general summary. It should not replace professional advice tailored to your specific circumstance.