Category Archives: Business

Tax for contractors explained

When you set up your contracting business, you have an awful lot of things to think about: developing your business plan, getting financial backing where appropriate, and developing and servicing a client base. As a contractor, one of the most important parts of running your own business is getting your taxes right.

If you are working on a contract basis between different organizations, then your tax situation can become quite complex to deal with. Here are some of the liabilities you will have to face up to if you set up as a limited company as opposed to an umbrella company – more on umbrella companies shortly.

Value added tax

If your turnover annually is £82,000 or more (it often changes in each government budget), you must register for VAT, though if it’s less, you could register for the Flat Rate VAT scheme, which could save you money if you’re a first year business. There can be hefty penalties if you don’t register but should and if you are late to pay your VAT.

Corporation tax

You pay this on your annual profits. You accountant will register your company for the tax, prepare your accounts and submit them. You need to pay your CT within nine months of the company’s year-end.

National insurance

You will be liable to pay NICs (National Insurance Contributions) on all salaries you pay your staff. You will have to pay it for yourself as well, depending on the level of your salary. You could choose to pay a salary below the threshold of contributions and make it up with dividends.

Dividend tax

If your company pays you a dividend and the income is less than the higher rate of income tax, you don’t pay tax on it, nor do you pay NICs.

Income tax

As an individual limited company contractor, you need to complete a self-assessment form every year, with the return being submitted each year by January 31. It’s possible, dependent on your circumstances, that you could have to make payments on account towards your tax liability in the current year.

Umbrella companies

These are very useful vehicles for contractors dealing with many other issues in their business. Essentially you become an employee of the umbrella company and are taxed exactly as if you were a traditional employee. You can make deductions for the fee for the umbrella company as well as aspects such as pension contributions. The rest of your income is then taxed at standard Pay As You Earn (PAYE) calculations. You’ll also have to pay NICs on that income.

Payroll will be processed on your behalf by your umbrella provider, and all deductions will show on the pay slip. It takes a lot of administrative work away from you and gives you more time to dedicate to building up and developing your business.

An umbrella company can also supply all necessary insurances and full statutory employment rights.

Planning for the future

Tax is a tricky business and it’s easy to get things wrong accidentally, leaving you open to penalties. Using the professional services of an umbrella company can remove that burden of worry.

Tackling substance abuse in a small business in order to improve profitability

Employee substance abuse is nothing new. Some people misuse alcohol, illegal drugs or prescription drugs every day. The effects of substance abuse can on the workplace is being understood more and more. Many jobs these days require employees to be bright, alert and have fast reflexes. If someone has been abusing substances and tries to do their job, there is a chance that a serious accident could happen, or at the very least, that the job will be performed inaccurately and below standard.

What is employee substance abuse? 

Employee substance abuse is when an employee misuses either legal or illegal drugs or alcohol in their own private time or while at work. This can cause many issues within your workplace and can cause problems in many areas such as:

  • Reduced productivity and performance from hangovers or the after effects of substance use
  • Having sick days frequently due to substance abuse
  • Lack of attention and concentration due to preoccupation with getting and using substances while at the workplace
  • Committing crimes by selling or buying illegal drugs while at work
  • Stress and anxiety from the abuse of substances by an employee’s love one
  • Health and safety risks

All these issues can affect health and safety, productivity, efficiency and profit within your small business. If people are working with dangerous equipment that requires them to be highly concentrated, there is a huge risk to health and safety regulations being carried out by that person. They are more likely to cost the company money through sick days and will slow down the rate of productivity within your business, therefore affecting profit margins.

How can employers avoid substance abuse in the workplace? 

As an employer, you can try to avoid substance abuse in the workplace by carrying out regular drug testing on your employees. Employers and their staff can work together to create a clear policy in regards to what behaviour at the work place will and will not be accepted. By creating an Employee Assistance Programme, employers can help any member of staff who needs help to avoid or recover from substance abuse.

Drug and alcohol testing in the workplace

Drug and alcohol testing can be part of your health and safety policy as well as a duty of care to your employees. There are several ways the test can be carried out such as with an oral fluid lab test, urine or hair sample. This is then sent for laboratory testing at an audited and accredited laboratory where the results will be found. The advantages of drug testing in the workplace is that it is clear for all staff within the company that drug or alcohol abuse will not be tolerated behaviour for health and safety reasons, the wellbeing of other employees and the cost to your company.

It is important to tackle substance abuse within the workplace and clearly communicate with your employees regarding this matter, as well as offering them help and support should they need it.

The Ongoing Payment Protection Insurance Scandal & You

As the ongoing payment protection insurance (PPI) scandal leads to more and more people claiming back the fees on policies they have been mis sold, so the lenders in the UK continue to suffer. Indeed, the collected lenders involved in the scandal have had to set aside many billions of pounds to cover the cost of repaying mis-sold fees, and many in the industry believe the eventual cost of the PPI saga will be colossal.

Payment Protection Insurance and You

The payment protection insurance scandal came about when a number of allegations of mis-selling were investigated by the powers that be. This uncovered widespread mis-selling within the industry, and a full revision of the regulations was deemed to be necessary. Fines were also levied on the main protagonists, and the High Court eventually ruled that fees on mis-sold policies must be repaid. The regulations regarding PPI are now geared towards protecting the consumer, and if you think you have a valid claim you should consider getting things underway as soon as possible.

Can I Make a PPI claim?

If you have taken out a mortgage, loan, credit card, car finance or other type of credit in the past few years, it is very possible that you have a PPI policy (whether you already know about it or not!).

PPI is also known as Loan or Credit Protection Cover, or ASU (Accident, Sickness and Unemployment Cover).  Essentially its an insurance policy designed to cover the repayments in the event you are not able to pay due to sickness, injury or loss of job.  In itself, the policy is not problematic, it’s the way it was mis-sold that is the scandal.

People were automatically opted in to the policy, with or without their knowledge, and some were told it was mandatory.  Others had it sold to them despite their employment status (of self-employed or retired) meaning that they are not eligible or suitable for PPI, and therefore it was a complete waste of their money.  Legally, at point of sale, customers should also have been given the option of looking at other PPI deals, not only having to take the one offered by the lender.  These are just some of the examples of the mis-selling that was common.

You should check your original paperwork for PPI, though if you don’t have that to hand you can check over your credit file for details of all your previous credit agreements.  If you suspect you had PPI and think it was mis-sold, you should seek advice to see if you can claim.

How to Make a PPI Reclaim

You may wish to make your payment protection insurance claim with the help of a claims handling company such as ours at www.haveigotppi.org.uk.  Our team of experienced advisers and claims handlers are waiting to help you in any way we can. We can handle your claim on a no win no fee* basis so you won’t pay if you are not successful, and we give every case the individual attention it deserves. With an industry average repayment of £2750 per policy it is certainly worth getting things underway, so get in touch if you want to claim back your mis sold PPI charges.

We have already helped lots of people make successful claims and we are confident that, with our experienced team of claims handlers, we can help you, too.

The Balance between Data and Security: How can Companies Remain Informed and Safe?

The majority of the time, it feels as though large corporations and dominant market brands can do no wrong. Omnipotent both in terms of their stature and the influence that they yield in their chosen market, they turn over billions of dollars each year and grow wealthier with each new innovation. From Facebook to Google, these brands set trends and break rules with breathtaking regularity.

It may, therefore, come as a surprise to learn that Google are set to face a privacy lawsuit in the U.S. and Europe. After a federal judge recently rejected the business’s efforts to dismiss a lawsuit regarding the inappropriate sharing of consumer data with advertisers, suddenly we are faced with the realisation that no single entity is safe from the reach of international laws and rule makers. What this means for Google has yet to be seen, but it certainly provides a lesson that small business owners should learn from: even Google gets caught out sometimes.

How to strike the Balance between Data and Security

More specifically, if Google can fall foul of stringent data protection laws then so can you. It is no longer acceptable to take a relaxed approach towards data management, as even smaller businesses can access viable and affordable software packages that enable them to collate, manage and securely store sensitive information. While it may be easier than ever to achieve these aims, however, it does require a proactive approach from independent business owners if they are to maintain long-term compliance with international laws.

As a starting point, it is important to recognise the need for data storage. Essentially, modern business is driven by the successful accumulation and interpretation of data, whether this is retained in electronic form or through a series of hard copies. While the storage of data may be easier than ever, it does provide a significant security risk in an age where cyber-crime and sophisticated identity theft is increasingly prominent. It is both how you store data and how you dispose of it once it is no longer useful to you that will ultimately help to keep your sensitive information safe.

The disposal of paper-based data is arguably the single most crucial factor, as once it has been discarded it is no longer protected by locks, keys or server passwords. This means it is suddenly out in the open and vulnerable to the machinations of criminals, who may choose to use consumer identity data as a way of executing fraud. It is therefore crucial that you partner with a reputable and innovative recycling firm such as Lombard Recycling, as this provides a reliable and sustainable solution to your document disposal issues.

In Summary

As Google’s recent legal battle shows, even small business owners cannot afford to become complacent when it comes to data management and handling. After all, while Google will most likely be forced to pay an easily manageable fine to account for their reported privacy infringements, the equivalent sanction on an independent venture could drive them out of business. So be proactive when establishing a data management strategy, and make sure that you achieve the delicate balance between storing information close at hand and keeping it secure.