HMRC Warns: Declare Your Offshore Income Gains And Assets Or Else!
Time’s Up!
HMRC is urging you to come forward and declare any foreign income or profits on offshore assets before 30 September, to avoid higher tax penalties. New legislation called ‘Requirement to Correct’ requires you, as a UK taxpayer, to notify HMRC, about any offshore tax liabilities relating to UK income tax, capital gains tax or inheritance tax.
It is a legal requirement
You may not realise you have a requirement to declare your overseas financial interests. Under the rules, actions like renting out a property abroad, transferring income and assets from one country to another, or even renting out a UK property when living abroad, could mean you could face a tax bill in the UK.
From 1 October, financial data will be exchanged internationally
From 1 October more than 100 countries, including the UK, will be able to exchange data on financial accounts under the Common Reporting Standard (CRS). CRS data will significantly enhance HMRC’s ability to detect offshore non-compliance. It is in your interest, as a taxpayer, to correct any non-compliance, before that data is received or be faced with higher penalties.
Foreign Property, Investment, Income and Moving Money
The most common reasons for declaring offshore tax liabilities are in relation to foreign property, investment income and moving money into the UK from abroad. Over 17,000 people have already contacted HMRC to notify them about tax due from sources of foreign income, such as their holiday homes and overseas properties.
How Do I Notify HMRC?
You can correct your tax liabilities by using HMRC’s digital disclosure service as part of the Worldwide Disclosure Facility. Once you have notified HMRC by 30 September of your intention to make a declaration, you will then have 90 days to make a full disclosure and pay any tax owed. We can assist you in making the necessary disclosure and tax calculation, if these new rules apply to you.
Lotuswise Chartered Accountants and Business Consultants can support you and your business with these tax and payment rules. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.
Why do I need a Leadership Development Program?
You need a leadership development program because it is, actually, the management team’s responsibility to invest in, develop and grow the firm’s next generation of leaders.
Your Leadership Development Program
Begin with constructing a solid framework with which you can develop the next generation of leaders in your firm. Then identify the attributes and capabilities of the existing leadership team, and work from there to develop a program that builds on this foundation. In creating a leadership development program, make sure your business has a clear vision and stated goals. It seems obvious, but unless your future leaders understand the vision and strategy of the business, they are unlikely to engage and develop their skills in a way that contributes to the success of the business overall.
Align Your Expectations
Next, align your expectations of future leaders with the overall objectives of the firm. To do this, you must identify the behaviours that you want to reward, and articulate this to your future leaders. A simple way to go about this is to ask yourself: what do we want our future leaders to accomplish?
Develop Skills
You need to let your next generation of potential leaders develop their skills. Give them enough freedom to explore, experiment and experience some struggles, but still be reined in safely, if necessary. Identifying potential candidates for your leadership development program can be difficult. Most businesses tend to do this in different ways. However, identifying the employees who bring the most energy, ambition and success into your company is a smart way to focus your development efforts.
Assess Potential
You should be conscious that the best employees don’t always make the best managers. A good way of assessing this, is to allow potential future leaders to shadow a manager for a day or two. It will tend to become apparent pretty quickly, if the employee has the potential to become a manager or not.
Communicate
Finally, it is important to communicate. If you have identified an employee as a potential future leader in your firm, have a conversation with them to understand their career development aspirations. Some people want to develop and move up in the firm. Whereas others may be content with their current job and may have no desire to take on additional responsibility. You can only develop people who want to engage and be developed.
Lotuswise Chartered Accountants and Business Consultants can support you and your business with leadership skills. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.
Watch the video here.
Becoming Self Employed? Here are 5 Recommended Rules
1. Becoming Self Employed? Have clear goals and be realistic about what you want to achieve
When becoming self employed, consider what you want to achieve, whether it be the dream of building your business, eventually having staff, or giving something back to society. Do you want to work less hours, have a better work / life balance, or just be your own boss? Once you have decided, make sure your goals are realistic and ensure you determine your process goals – the things you will need to do, to get you to your overall goal. Have your goal and objective clear and written down at the start, and keep referring to it to avoid straying off course. Building a business takes time and any distraction is time you will not get back.
2. Be brutal with your time and leverage support around you
Be strict about working hours, as this may be one of the main reasons you considered when becoming self employed, in the first place. Don’t be tempted to waste your time: balance your working hours between building your new prospect base, networking for business, and delivering to your customers. Make sure you have a support network around you. It can be lonely working alone, and it’s great to have others with whom to share ideas and thoughts, to help you and your business improve. These can be colleagues, networking groups, or industry bodies.
3. Have professional standards
Consider all you do to put the customer at the heart of your business and be professional at all times. Be on time for all appointments and be dressed appropriately, acting professionally on the clients’ premises and following appropriate business etiquette. Balance what you do, as a professional off-line with that online. Make sure your website, invoices and methods of payment are all to a high professional standard. With cost effective business solutions such as QuickBooks Self-Employed, you can easily manage all aspects of your business process in a professional way.
4. Keep close and connected to your industry
Whatever industry you’re in, it will be constantly evolving, and it is key to keep connected, staying close to new developments, compliance, regulations, and best practices. This will help you get the training and certifications you need, as well as remaining an expert in your industry.
5. Maintain your work / life balance
Focusing only on work is not good for anyone, so do consider what other hobbies or family activities you might enjoy. Maintain your social and family balance, and avoid being over-worked, and you will have more chances of being successful when becoming self employed.
Lotuswise Chartered Accountants and Business Consultants can support you with the complexities of becoming self employed and also help you succeed. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.
Watch the video here.
Are You Making The Most Of Social Media?
Can your business use social media to deliver great customer experiences and develop deeper relationships? It all starts with a few simple points…
Create Good Content
Creating good content and distributing it over social media can be a very effective way to grow your business. That’s why businesses like PWC, Amazon and McKinsey invest huge amounts of resources into producing great content people want to consume.
Target Your Audience
Producing content for your target audience doesn’t have to involve massive resources. In fact, you can use anything from captioned photos, screenshots, or a few short videos to deliver simple content that keeps people interested. If you have time, producing relevant articles and sharing them on your LinkedIn or Twitter feeds can be a good way of getting people to engage with your firm. Make sure you use an attention-grabbing caption as part of this.
Seize Opportunities
In order to create effective content, you need to be ready to seize opportunities as they present themselves. Think about how you can act upon the many opportunities you and your team encounter, and turn it into relevant and timely content. For example, if there is a hot topic on the news that relates to your industry sector, you can respond with your view on Twitter or LinkedIn. Maybe your business offers a product or service that can help solve a problem that is identified in the news. Take the recent GDPR regulations as an example. If you run an IT company that can help businesses respond to a Subject Access Request, then it may be worth responding to GDPR related articles in the press, via social media in a way that identifies your product or service, as a solution to the problem, faced by potential customers.
Build A Relationship
The key goal of your content is to build a relationship with the people consuming it, so they build familiarity with your brand and will trust you enough to give you their attention when you have something to say in the future.
People Buy People
Creating relationships with people is key to developing brand loyalty. People buy people. As such, it is important that your social media presence features individuals and groups of people from your firm. People don’t want to build relationships with a faceless corporation. If you can deliver relevant and interesting content consistently to your target audience, you will build your brand and secure new business development / sales opportunities as a result.
Lotuswise Chartered Accountants and Business Consultants can help you and your business succeed. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.
Watch the video here.
Making Tax Digital For VAT Guidance Issued
Making Tax Digital For VAT Guidance Issued
HMRC have now issued their detailed guidance on the digital record keeping and return requirements for Making Tax Digital (MTD) for VAT. VAT Notice 700/22 clarifies that spreadsheets may still be used to keep your business records, provided there is a bridging software linking to the Government gateway. You will however get a one year “grace” period during your first year of MTD when your business will not be required to have digital links between software programs, referred to in the VAT Notice as a “soft landing”. You will see that the VAT notice includes a number of helpful examples, illustrating different accounting systems, and the digital links required to comply with MTD for VAT. This is essential reading if your business is VAT registered.
When Does MTD For VAT Start?
The Making Tax Digital rules apply from your first VAT period starting on or after 1 April 2019. A ‘VAT period’ is the inclusive dates covered by your VAT Return. For example, if your business submits quarterly returns covering the periods to 28 February, 31 May, 31 August and 30 November, then your business will need to comply with Making Tax Digital rules for the VAT quarter starting 1 June 2019 and ending on 31 August.
“Soft Landing” For MTD For VAT For The First Year
For your first year of MTD for VAT (VAT periods commencing between 1 April 2019 and 31 March 2020), your business will not be required to have any digital links between software programs. The one exception to this, is where data is transferred, following preparation of the information required for the VAT Return, to another product (for example, a bridging product) which is an Application Programme Interface (API). Enabled solely for the purpose of submitting the 9 Box VAT Return data to HMRC. Your transfer of data to this product must be digital. For your first year of MTD for VAT (VAT periods commencing between 1 April 2019 and 31 March 2020), where a digital link has not been established between any software programs, HMRC will accept the use of cut and paste as being a digital link for these VAT periods. However, for VAT periods starting on or after 1 April 2020, you must establish a digital link for any transfer or exchange of data between software programs, products or applications used as functional compatible software.
Use Of Spreadsheets In Preparing VAT Returns
Example 3 in the VAT Notice describes a business using a spreadsheet and bridging software from April 2019, which allows the information to be transferred to HMRC via an API. It uses a spreadsheet to record all sales, purchases, and expenses in a digital format. Your VAT Return is then prepared within the spreadsheet, using formulae already written into the spreadsheet. Your VAT Return information is then sent via a mandatory digital link to a bridging software, which digitally submits your information directly to HMRC. Example 6 shows how a spreadsheet would be acceptable in order to consolidate your VAT information prior to submitting your Group VAT return.
Lotuswise Chartered Accountants and Business Consultants can help support you and your business with the complexities of these tax and payment rules and help you get ready for this significant change in VAT accounting and reporting. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.
Watch the video here.
IR35 Update And Issues Regarding Employment Status
IR35 Update
Did you know that the Intermediaries Legislation – commonly known as IR35 – is almost twenty years old? In spite of this, IR35 issues regarding employment status are not getting any clearer. This is certainly true when considering the last few months, which have seen three IR35 related cases pass through the First-Tier Tribunal (FTT) – with conflicting outcomes…
Christa Ackroyd Media Ltd
If you remember, the BBC engaged (contracted) Christa Ackroyd through her Personal Service Company (PSC), Christa Ackroyd Media Limited (CAM), to co-present their Look North Program on a seven-year contract. In 2013, after a three-month period off air, Ackroyd was sacked. It was reported at the time that the sacking was because of an alleged dispute concerning her employment status and payment of tax. This was later supported by documents produced to the Courts, revealing that the BBC terminated CAM’s contract after HMRC issued Ackroyd’s company with a formal demand for unpaid tax.
Employed or not?
Despite Ackroyd’s insistence to the contrary, HMRC successfully argued before the FTT that she was engaged under a contract of service (employed contract), rather than one for services (a self-employed contract). The FTT’s ruling stated that she was “economically dependent on the hypothetical contract with the BBC,” which took up most of, if not all of, her working time and that a “hypothetical contract of that length […] terminable only for a material breach points towards a contract of employment.” The First-Tier Tribunal ruled that the TV personality’s contract was caught by IR35, and they landed her company with an eye-watering £420,000 bill.
Mark Daniels – MDMC Limited
And then a few weeks later (March 2018), a second IR35-related case came before the FTT, and with it came further layers of complexity and uncertainty. Mark Daniels provided his services to Structured Tone Limited (SLT) though a PSC (MDMC Limited) – which in turn was engaged by Solutions, a recruitment agency. In 2016, HMRC determined that the contract to provide services on large construction projects should have been caught by IR35, and that the service company should have paid PAYE and NIC. In effect, there had been a contract for service. Daniels successfully appealed, with the FTT finding that the engagement was for services, not for service, and that Daniels should not be treated as an employee.
Lack of rights
An absence of rights under the hypothetical contract – the lack of a notice period, holiday pay, or any employment benefits – proved to be a key factor influencing the FTT. All of these would have had to be present if Daniels had been engaged directly as an employee. Interestingly, the FTT dismissed “control” as a factor by concluding that, in a large project, there is a clear structure to the work which had to be done, and that an individual working within that structure was not being controlled by the end user; and that they were merely working within the structure.
Ian Wells – Jensal Software Limited
Details of an October 2017 case have recently received publicity. Its focus was on weak Mutuality of Obligation (MOO). Wells worked on a project concerned with DWP’s Universal Credit (UCs) rollout. It involved him attending a DWP office and travelling to different sites. He had the use of a secure DWP laptop and the tribunal heard evidence of meetings between Wells and DWP managers involved with the project. HMRC concluded that there had been a direct contract between Wells and the DWP during the period of engagement – a contract of service, not a contract for services. Wells was asked to pay £14,658 in income tax and £12,011 in respect of Class 1 NICs. At the FTT stage, the judge examined in detail three conditions determining employment status:
- Mutuality of obligation (MOO)
- The degree of control
- Sufficient mutuality of work-placed obligation
On the question of MOO, the judge stated: “The essence of the relationship was that there was no continuing obligation on the part of the DWP to provide work; if it chose to abandon the project there was no contractual basis upon which Mr Wells could demand further work…” The MOO was too weak, and, as a result, the relationship did not go far enough to be classed as one of employment.
Lack of control
When he turned to degree of control, the judge said ‘The level of control exercised did not go beyond that which was usual for an independent contractor…” He concluded that Mr Wells was not subject to a degree of control to an extent that would constitute a contract of employment.
Off-payroll working for the public sector
New IR35 rules concerning “Off-payroll Working” in the public sector came into effect on 6 April 2017. The effect has been to shift responsibility for decisions on whether IR35 is applied – from the intermediary-worker providing their services via a PSC, to the public-sector engager. Where an engagement is deemed to fall within the new IR35 rules, the person paying the PSC (that is the public-sector body or third-party-agency) is responsible for deducting tax and NICs under PAYE. In many instances, public-sector bodies have made blanket decisions. In these cases, workers providing their services through an intermediary have been caught under the new rules even when they clearly are not.
New Off-payroll consultation
Things could become even more complicated if Phillip Hammond’s stated intention to widen the reach of Off-payroll working legislation to the private sector becomes reality. On the 18 May 2018, HMRC and HM Treasury published a consultation document called “Off-payroll working in the private sector”.
Where does this leave us now?
The recent flurry of FTT cases, combined with last year’s legislative changes and the recently published private sector worker consultation, only serve to underpin how difficult it is to navigate the intermediaries’ taxation legislation. If you are concerned that you might be caught by IR35, or if you are considering working through a PSC, contact us on 020 3367 1106 for the right advice.
Lotuswise Chartered Accountants and Business Consultants can help support you and your business with the complexities of these IR35 update tax and payment rules. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.
Watch the video here.
7 Top Tips To Improve Your Productivity And Success
Productivity = Success
Are you like most business owners, managers and senior executives? Juggling day to day responsibilities, growing the business and various other projects? With so much to do, improving your productivity is key if you want to succeed. Here are 7 top tips to help you improve your productivity.
1. Stop multi-tasking
In today’s always-on environment, many of us have fallen into the trap of multi-tasking and trying to do too much. Instead, try to focus on doing individual tasks properly. Create a priority list each day and focus on getting each item on that list ticked off. That way you can focus on processing the task at hand.
2. Delegate
The very best business leaders are masters of delegation. Build a team of effective people around you and delegate as much as you can. Empower them to take on projects and avoid micro managing. Delegation is the key to productivity!
3. Learn to say no
Taking on too much at once will reduce your productivity and increase your stress levels. Say no to things that are not important. Just because you are invited to a meeting doesn’t mean it should be a priority. Focus on the things that really matter to you and your firm and say yes to them. Everything else is just a distraction.
4. Cut out the noise
With email, instant messaging, social media and phone calls, we are all distracted by constant noise. Schedule specific time for checking your various email and messaging inboxes and refrain from checking your messages outside of these specific times.
5. A day of no meetings
Scheduling a “no-meeting day” every week can have a positive impact on your productivity. Every manager needs uninterrupted blocks of time to deal with projects, reporting and whatever else is on the “to do” list.
6. Leave work at a reasonable hour
The most productive managers make it home at a reasonable time. Successful leaders don’t work long hours every day in an attempt to tick more items off their to-do list. Instead, they think through their priorities, schedule time for each, then it’s time to go home.
7. Fuel your mind and body with the right nutrients
Super efficient managers know that the foods they eat affect them more than they know. Food has a direct impact on your cognitive performance, which is why a poor decision at lunch can derail an entire afternoon. Make sure you pre-plan your meals / meal purchases and eat food that will support both your brain and body functions to be super productive. As well as grazing throughout the day to avoid your blood sugar levels getting too low, make sure your food sources are clean and healthy as opposed to processed food which tends to be quick to buy and consume but will badly impact your performance later on in the day / next few days.
Lotuswise Chartered Accountants and Business Consultants can help you and your business succeed. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.
The General Data Protection Regulation – So what does it now mean for selling and my sales teams?
The General Data Protection Regulation –What does it now mean for selling and prospecting new customers?
Are you asking yourself if and how can you continue to prospect new customers without breaking the new General Data Protection Regulation (GDPR)? From May 2018, the way you used to prospect will have received a major update, due to the EU data protection regulation. Failure to comply with GDPR can result in fines of up to €20 million or 4% of global turnover, whichever is greater. Will the General Data Protection Regulation affect your sales team? If you still rely on purchased leads to fill up the sales pipeline, or if you automatically add business card contact data to mailing lists and ask existing customers for referrals and recommendations, then the General Data Protection Regulation has an impact on you and your business.
This is because the General Data Protection Regulation provides EU citizens with greater control over personal data regardless of where the data is processed. Such personal data is in several forms – such as name, email, phone number, interests, as well as IP address, social media posts, bank details, and medical information. The resolution to this is to request and obtain permission from customers and prospects to collect, store, and use personal data. As well as clearly outlining your company privacy statement. Under the new General Data Protection Regulation, individuals have the right to be informed about what data you collect, why you are collecting it, and how you intend to use it.
So, what does this mean for sales prospecting? Here are three key points you can adopt:
1. Stop automated emails to prospect lists without getting their permission first.
If it is your first contact with a prospect, you will need to indicate that you have tried to contact them by phone prior to emailing them. That being said, you can continue to send cold sales emails to prospects, if the email is sent to an individual and not to a group of recipients. You will need to include a link to your privacy statement explaining why you are contacting them in the first place (i.e. you have a legitimate interest). Be cautious about purchased lead lists. If you acquire leads that contain personal data from third-parties, they will need to have obtained prior consent to share that information with you. But you will also be required to get specific consent to use any email address on the list – unless they have given their consent to be approached by associated partners.
2. Leverage social media platforms
The new legislation does not stop sales agents finding and connecting with potential customers on social media, be it for a recommendation, or for directly reaching out to new prospects. Examples include Twitter, LinkedIn, etc, which can help to get the discussion underway. Once connected, you must seek consent, and the recipient must have given it to you, prior to any future emailing contact.
3. Pick up the phone
This is the most effective way to build new relationships with potential customers, as this approach – cold calling – is not under the same regulation as the General Data Protection Regulation. Once connected with a new prospect, you will need to obtain their consent, to add their information to your CRM database. That is before any promotional emails can be sent. You can formally record their consent by sending an email summarising the discussion and establishing consent for future email contact. Other options to consider are networking events and asking customers for referrals, reaching out to their contacts on your behalf. Once again, if there is an agreement to partner, this requires their consent for any future prospecting emails.
The main message to take away here is that the General Data Protection Regulation is not about being restrictive. Instead, it introduces discipline around the handling of client and prospect data. Combined with a more personal approach to building networks – over the phone and through social media. This will in turn enable you to build deeper and more targeted relationships.
Lotuswise Chartered Accountants and Business Consultants can help support you and your business with the complexities of the new GDPR regulation. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.
Do I Really Need A Digital Marketing Strategy?
Over the last 10 years or so, marketing has moved more towards digital, thanks to the prevalence of fast Wi-Fi connections, smartphones, social media and data analysis. In today’s hyper-connected world every business should have a digital marketing strategy.
What are my Digital Marketing Channels?
Most businesses tend to utilise digital marketing channels, however many businesses don’t have an actual strategy. Building an effective strategy involves gaining insights from data in order to make informed marketing decisions. The end goal is to understand your customer’s digital experience in order to maximise new business / sales opportunities for your firm. A digital marketing strategy doesn’t have to be overly complicated. Depending on the size of your firm and the budget you have available, your strategy could be as simple as leveraging social media channels and having an effective website.
What is a Digital marketing data analysis?
Data analysis forms a key part of your digital marketing strategy. You can use free tools such as Google Analytics in order to understand the profile, location and number of visitors to your website and social media pages. You can gain insights from your data – such as “on average, it takes 150 views of your social media posts to generate 1 new business enquiry.” Using this example, lets say that your target is to generate 10 new business enquiries per week. That means that you need to achieve at least 1500 views per week in order to generate the required number of enquiries. Setting this type of objective forms the basis of your strategy.
How do I use Digital marketing to understand potential customers?
In order to create a truly effective digital marketing strategy, you need to understand your potential customers. Start by creating a profile of your target customers. Look at the demographic data – age, location, gender, etc. Then dig a bit deeper and identify the problems that you and your business can try to solve for these potential customers. Don’t forget to identify the profile of the people who influence your customers. These will be the influencers that your strategy should target, in addition to your potential customers and existing client base.
How do I choose the right digital marketing media to reach my customers?
Finally, choose the media that is most likely to be used by your target customers. For example, if your customers are business people, perhaps LinkedIn is a more effective social media tool for reaching your target audience than Facebook or Instagram.
Lotuswise Chartered Accountants and Business Consultants can help you and your business get the right digital marketing strategy in place. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.
Outsourcing, why do I need to consider it?
The benefits of outsourcing
Why outsource? Quite simply, there are only so many hours in the day and you / your team probably don’t have the bandwidth to do everything you would like to do. Outsourcing can save you time and money, but there are many other reasons to consider outsourcing certain business functions.
Outsourcing increases efficiency
If as a company, you do everything yourself, you will have much higher costs which must be passed on to customers. When you consider outsourcing, this allows your company to minimise these costs. Time gained back as a result of contracting out certain functions can be deployed in a more effective way, in order to make your business more efficient.
Control capital costsCost-cutting may not be the only reason for you to outsource, but it’s certainly a major factor. It converts your fixed costs into variable costs, releases capital for investment elsewhere in your business, and allows you to avoid some large expenditure. When you outsource, you can also make your firm more attractive to investors, since you’re able to pump more capital directly into revenue-producing activities.
Focus on your core business activities
Every business has limited resources, and every manager has limited time. Sub-contracting can help your business to shift its focus from peripheral activities towards work that serves the customer, and it can help your people to set their priorities more clearly.
Risk management
There is a degree of risk inherent in any type of business. However, you can outsource certain risks to the balance sheet of an external provider. For example, Payroll, Tax Returns and Compliance can largely be outsourced, thereby moving that risk away from your people and putting it on the shoulders of the outsourcing firm’s team.
Competitive advantage
Outsourcing can allow smaller businesses to benefit from the economies of scale, efficiency and expertise enjoyed by larger firms. If you choose the right outsourcing providers, your business should be able to benefit from the latest systems, technology and processes. This could give your firm a clear competitive advantage.
Lotuswise Chartered Accountants and Business Consultants can help you and your business become more efficient. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.
HMRC Warns: Declare Your Offshore Income Gains And Assets Or Else!
Time’s Up!
HMRC is urging you to come forward and declare any foreign income or profits on offshore assets before 30 September, to avoid higher tax penalties. New legislation called ‘Requirement to Correct’ requires you, as a UK taxpayer, to notify HMRC, about any offshore tax liabilities relating to UK income tax, capital gains tax or inheritance tax.
It is a legal requirement
You may not realise you have a requirement to declare your overseas financial interests. Under the rules, actions like renting out a property abroad, transferring income and assets from one country to another, or even renting out a UK property when living abroad, could mean you could face a tax bill in the UK.
From 1 October, financial data will be exchanged internationally
From 1 October more than 100 countries, including the UK, will be able to exchange data on financial accounts under the Common Reporting Standard (CRS). CRS data will significantly enhance HMRC’s ability to detect offshore non-compliance. It is in your interest, as a taxpayer, to correct any non-compliance, before that data is received or be faced with higher penalties.
Foreign Property, Investment, Income and Moving Money
The most common reasons for declaring offshore tax liabilities are in relation to foreign property, investment income and moving money into the UK from abroad. Over 17,000 people have already contacted HMRC to notify them about tax due from sources of foreign income, such as their holiday homes and overseas properties.
How Do I Notify HMRC?
You can correct your tax liabilities by using HMRC’s digital disclosure service as part of the Worldwide Disclosure Facility. Once you have notified HMRC by 30 September of your intention to make a declaration, you will then have 90 days to make a full disclosure and pay any tax owed. We can assist you in making the necessary disclosure and tax calculation, if these new rules apply to you.
Lotuswise Chartered Accountants and Business Consultants can support you and your business with these tax and payment rules. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.
Why do I need a Leadership Development Program?
You need a leadership development program because it is, actually, the management team’s responsibility to invest in, develop and grow the firm’s next generation of leaders.
Your Leadership Development Program
Begin with constructing a solid framework with which you can develop the next generation of leaders in your firm. Then identify the attributes and capabilities of the existing leadership team, and work from there to develop a program that builds on this foundation. In creating a leadership development program, make sure your business has a clear vision and stated goals. It seems obvious, but unless your future leaders understand the vision and strategy of the business, they are unlikely to engage and develop their skills in a way that contributes to the success of the business overall.
Align Your Expectations
Next, align your expectations of future leaders with the overall objectives of the firm. To do this, you must identify the behaviours that you want to reward, and articulate this to your future leaders. A simple way to go about this is to ask yourself: what do we want our future leaders to accomplish?
Develop Skills
You need to let your next generation of potential leaders develop their skills. Give them enough freedom to explore, experiment and experience some struggles, but still be reined in safely, if necessary. Identifying potential candidates for your leadership development program can be difficult. Most businesses tend to do this in different ways. However, identifying the employees who bring the most energy, ambition and success into your company is a smart way to focus your development efforts.
Assess Potential
You should be conscious that the best employees don’t always make the best managers. A good way of assessing this, is to allow potential future leaders to shadow a manager for a day or two. It will tend to become apparent pretty quickly, if the employee has the potential to become a manager or not.
Communicate
Finally, it is important to communicate. If you have identified an employee as a potential future leader in your firm, have a conversation with them to understand their career development aspirations. Some people want to develop and move up in the firm. Whereas others may be content with their current job and may have no desire to take on additional responsibility. You can only develop people who want to engage and be developed.
Lotuswise Chartered Accountants and Business Consultants can support you and your business with leadership skills. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.
Watch the video here.
Becoming Self Employed? Here are 5 Recommended Rules
1. Becoming Self Employed? Have clear goals and be realistic about what you want to achieve
When becoming self employed, consider what you want to achieve, whether it be the dream of building your business, eventually having staff, or giving something back to society. Do you want to work less hours, have a better work / life balance, or just be your own boss? Once you have decided, make sure your goals are realistic and ensure you determine your process goals – the things you will need to do, to get you to your overall goal. Have your goal and objective clear and written down at the start, and keep referring to it to avoid straying off course. Building a business takes time and any distraction is time you will not get back.
2. Be brutal with your time and leverage support around you
Be strict about working hours, as this may be one of the main reasons you considered when becoming self employed, in the first place. Don’t be tempted to waste your time: balance your working hours between building your new prospect base, networking for business, and delivering to your customers. Make sure you have a support network around you. It can be lonely working alone, and it’s great to have others with whom to share ideas and thoughts, to help you and your business improve. These can be colleagues, networking groups, or industry bodies.
3. Have professional standards
Consider all you do to put the customer at the heart of your business and be professional at all times. Be on time for all appointments and be dressed appropriately, acting professionally on the clients’ premises and following appropriate business etiquette. Balance what you do, as a professional off-line with that online. Make sure your website, invoices and methods of payment are all to a high professional standard. With cost effective business solutions such as QuickBooks Self-Employed, you can easily manage all aspects of your business process in a professional way.
4. Keep close and connected to your industry
Whatever industry you’re in, it will be constantly evolving, and it is key to keep connected, staying close to new developments, compliance, regulations, and best practices. This will help you get the training and certifications you need, as well as remaining an expert in your industry.
5. Maintain your work / life balance
Focusing only on work is not good for anyone, so do consider what other hobbies or family activities you might enjoy. Maintain your social and family balance, and avoid being over-worked, and you will have more chances of being successful when becoming self employed.
Lotuswise Chartered Accountants and Business Consultants can support you with the complexities of becoming self employed and also help you succeed. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.
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Are You Making The Most Of Social Media?
Can your business use social media to deliver great customer experiences and develop deeper relationships? It all starts with a few simple points…
Create Good Content
Creating good content and distributing it over social media can be a very effective way to grow your business. That’s why businesses like PWC, Amazon and McKinsey invest huge amounts of resources into producing great content people want to consume.
Target Your Audience
Producing content for your target audience doesn’t have to involve massive resources. In fact, you can use anything from captioned photos, screenshots, or a few short videos to deliver simple content that keeps people interested. If you have time, producing relevant articles and sharing them on your LinkedIn or Twitter feeds can be a good way of getting people to engage with your firm. Make sure you use an attention-grabbing caption as part of this.
Seize Opportunities
In order to create effective content, you need to be ready to seize opportunities as they present themselves. Think about how you can act upon the many opportunities you and your team encounter, and turn it into relevant and timely content. For example, if there is a hot topic on the news that relates to your industry sector, you can respond with your view on Twitter or LinkedIn. Maybe your business offers a product or service that can help solve a problem that is identified in the news. Take the recent GDPR regulations as an example. If you run an IT company that can help businesses respond to a Subject Access Request, then it may be worth responding to GDPR related articles in the press, via social media in a way that identifies your product or service, as a solution to the problem, faced by potential customers.
Build A Relationship
The key goal of your content is to build a relationship with the people consuming it, so they build familiarity with your brand and will trust you enough to give you their attention when you have something to say in the future.
People Buy People
Creating relationships with people is key to developing brand loyalty. People buy people. As such, it is important that your social media presence features individuals and groups of people from your firm. People don’t want to build relationships with a faceless corporation. If you can deliver relevant and interesting content consistently to your target audience, you will build your brand and secure new business development / sales opportunities as a result.
Lotuswise Chartered Accountants and Business Consultants can help you and your business succeed. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.
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Making Tax Digital For VAT Guidance Issued
Making Tax Digital For VAT Guidance Issued
HMRC have now issued their detailed guidance on the digital record keeping and return requirements for Making Tax Digital (MTD) for VAT. VAT Notice 700/22 clarifies that spreadsheets may still be used to keep your business records, provided there is a bridging software linking to the Government gateway. You will however get a one year “grace” period during your first year of MTD when your business will not be required to have digital links between software programs, referred to in the VAT Notice as a “soft landing”. You will see that the VAT notice includes a number of helpful examples, illustrating different accounting systems, and the digital links required to comply with MTD for VAT. This is essential reading if your business is VAT registered.
When Does MTD For VAT Start?
The Making Tax Digital rules apply from your first VAT period starting on or after 1 April 2019. A ‘VAT period’ is the inclusive dates covered by your VAT Return. For example, if your business submits quarterly returns covering the periods to 28 February, 31 May, 31 August and 30 November, then your business will need to comply with Making Tax Digital rules for the VAT quarter starting 1 June 2019 and ending on 31 August.
“Soft Landing” For MTD For VAT For The First Year
For your first year of MTD for VAT (VAT periods commencing between 1 April 2019 and 31 March 2020), your business will not be required to have any digital links between software programs. The one exception to this, is where data is transferred, following preparation of the information required for the VAT Return, to another product (for example, a bridging product) which is an Application Programme Interface (API). Enabled solely for the purpose of submitting the 9 Box VAT Return data to HMRC. Your transfer of data to this product must be digital. For your first year of MTD for VAT (VAT periods commencing between 1 April 2019 and 31 March 2020), where a digital link has not been established between any software programs, HMRC will accept the use of cut and paste as being a digital link for these VAT periods. However, for VAT periods starting on or after 1 April 2020, you must establish a digital link for any transfer or exchange of data between software programs, products or applications used as functional compatible software.
Use Of Spreadsheets In Preparing VAT Returns
Example 3 in the VAT Notice describes a business using a spreadsheet and bridging software from April 2019, which allows the information to be transferred to HMRC via an API. It uses a spreadsheet to record all sales, purchases, and expenses in a digital format. Your VAT Return is then prepared within the spreadsheet, using formulae already written into the spreadsheet. Your VAT Return information is then sent via a mandatory digital link to a bridging software, which digitally submits your information directly to HMRC. Example 6 shows how a spreadsheet would be acceptable in order to consolidate your VAT information prior to submitting your Group VAT return.
Lotuswise Chartered Accountants and Business Consultants can help support you and your business with the complexities of these tax and payment rules and help you get ready for this significant change in VAT accounting and reporting. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.
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IR35 Update And Issues Regarding Employment Status
IR35 Update
Did you know that the Intermediaries Legislation – commonly known as IR35 – is almost twenty years old? In spite of this, IR35 issues regarding employment status are not getting any clearer. This is certainly true when considering the last few months, which have seen three IR35 related cases pass through the First-Tier Tribunal (FTT) – with conflicting outcomes…
Christa Ackroyd Media Ltd
If you remember, the BBC engaged (contracted) Christa Ackroyd through her Personal Service Company (PSC), Christa Ackroyd Media Limited (CAM), to co-present their Look North Program on a seven-year contract. In 2013, after a three-month period off air, Ackroyd was sacked. It was reported at the time that the sacking was because of an alleged dispute concerning her employment status and payment of tax. This was later supported by documents produced to the Courts, revealing that the BBC terminated CAM’s contract after HMRC issued Ackroyd’s company with a formal demand for unpaid tax.
Employed or not?
Despite Ackroyd’s insistence to the contrary, HMRC successfully argued before the FTT that she was engaged under a contract of service (employed contract), rather than one for services (a self-employed contract). The FTT’s ruling stated that she was “economically dependent on the hypothetical contract with the BBC,” which took up most of, if not all of, her working time and that a “hypothetical contract of that length […] terminable only for a material breach points towards a contract of employment.” The First-Tier Tribunal ruled that the TV personality’s contract was caught by IR35, and they landed her company with an eye-watering £420,000 bill.
Mark Daniels – MDMC Limited
And then a few weeks later (March 2018), a second IR35-related case came before the FTT, and with it came further layers of complexity and uncertainty. Mark Daniels provided his services to Structured Tone Limited (SLT) though a PSC (MDMC Limited) – which in turn was engaged by Solutions, a recruitment agency. In 2016, HMRC determined that the contract to provide services on large construction projects should have been caught by IR35, and that the service company should have paid PAYE and NIC. In effect, there had been a contract for service. Daniels successfully appealed, with the FTT finding that the engagement was for services, not for service, and that Daniels should not be treated as an employee.
Lack of rights
An absence of rights under the hypothetical contract – the lack of a notice period, holiday pay, or any employment benefits – proved to be a key factor influencing the FTT. All of these would have had to be present if Daniels had been engaged directly as an employee. Interestingly, the FTT dismissed “control” as a factor by concluding that, in a large project, there is a clear structure to the work which had to be done, and that an individual working within that structure was not being controlled by the end user; and that they were merely working within the structure.
Ian Wells – Jensal Software Limited
Details of an October 2017 case have recently received publicity. Its focus was on weak Mutuality of Obligation (MOO). Wells worked on a project concerned with DWP’s Universal Credit (UCs) rollout. It involved him attending a DWP office and travelling to different sites. He had the use of a secure DWP laptop and the tribunal heard evidence of meetings between Wells and DWP managers involved with the project. HMRC concluded that there had been a direct contract between Wells and the DWP during the period of engagement – a contract of service, not a contract for services. Wells was asked to pay £14,658 in income tax and £12,011 in respect of Class 1 NICs. At the FTT stage, the judge examined in detail three conditions determining employment status:
- Mutuality of obligation (MOO)
- The degree of control
- Sufficient mutuality of work-placed obligation
On the question of MOO, the judge stated: “The essence of the relationship was that there was no continuing obligation on the part of the DWP to provide work; if it chose to abandon the project there was no contractual basis upon which Mr Wells could demand further work…” The MOO was too weak, and, as a result, the relationship did not go far enough to be classed as one of employment.
Lack of control
When he turned to degree of control, the judge said ‘The level of control exercised did not go beyond that which was usual for an independent contractor…” He concluded that Mr Wells was not subject to a degree of control to an extent that would constitute a contract of employment.
Off-payroll working for the public sector
New IR35 rules concerning “Off-payroll Working” in the public sector came into effect on 6 April 2017. The effect has been to shift responsibility for decisions on whether IR35 is applied – from the intermediary-worker providing their services via a PSC, to the public-sector engager. Where an engagement is deemed to fall within the new IR35 rules, the person paying the PSC (that is the public-sector body or third-party-agency) is responsible for deducting tax and NICs under PAYE. In many instances, public-sector bodies have made blanket decisions. In these cases, workers providing their services through an intermediary have been caught under the new rules even when they clearly are not.
New Off-payroll consultation
Things could become even more complicated if Phillip Hammond’s stated intention to widen the reach of Off-payroll working legislation to the private sector becomes reality. On the 18 May 2018, HMRC and HM Treasury published a consultation document called “Off-payroll working in the private sector”.
Where does this leave us now?
The recent flurry of FTT cases, combined with last year’s legislative changes and the recently published private sector worker consultation, only serve to underpin how difficult it is to navigate the intermediaries’ taxation legislation. If you are concerned that you might be caught by IR35, or if you are considering working through a PSC, contact us on 020 3367 1106 for the right advice.
Lotuswise Chartered Accountants and Business Consultants can help support you and your business with the complexities of these IR35 update tax and payment rules. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.
Watch the video here.
7 Top Tips To Improve Your Productivity And Success
Productivity = Success
Are you like most business owners, managers and senior executives? Juggling day to day responsibilities, growing the business and various other projects? With so much to do, improving your productivity is key if you want to succeed. Here are 7 top tips to help you improve your productivity.
1. Stop multi-tasking
In today’s always-on environment, many of us have fallen into the trap of multi-tasking and trying to do too much. Instead, try to focus on doing individual tasks properly. Create a priority list each day and focus on getting each item on that list ticked off. That way you can focus on processing the task at hand.
2. Delegate
The very best business leaders are masters of delegation. Build a team of effective people around you and delegate as much as you can. Empower them to take on projects and avoid micro managing. Delegation is the key to productivity!
3. Learn to say no
Taking on too much at once will reduce your productivity and increase your stress levels. Say no to things that are not important. Just because you are invited to a meeting doesn’t mean it should be a priority. Focus on the things that really matter to you and your firm and say yes to them. Everything else is just a distraction.
4. Cut out the noise
With email, instant messaging, social media and phone calls, we are all distracted by constant noise. Schedule specific time for checking your various email and messaging inboxes and refrain from checking your messages outside of these specific times.
5. A day of no meetings
Scheduling a “no-meeting day” every week can have a positive impact on your productivity. Every manager needs uninterrupted blocks of time to deal with projects, reporting and whatever else is on the “to do” list.
6. Leave work at a reasonable hour
The most productive managers make it home at a reasonable time. Successful leaders don’t work long hours every day in an attempt to tick more items off their to-do list. Instead, they think through their priorities, schedule time for each, then it’s time to go home.
7. Fuel your mind and body with the right nutrients
Super efficient managers know that the foods they eat affect them more than they know. Food has a direct impact on your cognitive performance, which is why a poor decision at lunch can derail an entire afternoon. Make sure you pre-plan your meals / meal purchases and eat food that will support both your brain and body functions to be super productive. As well as grazing throughout the day to avoid your blood sugar levels getting too low, make sure your food sources are clean and healthy as opposed to processed food which tends to be quick to buy and consume but will badly impact your performance later on in the day / next few days.
Lotuswise Chartered Accountants and Business Consultants can help you and your business succeed. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.
The General Data Protection Regulation – So what does it now mean for selling and my sales teams?
The General Data Protection Regulation –What does it now mean for selling and prospecting new customers?
Are you asking yourself if and how can you continue to prospect new customers without breaking the new General Data Protection Regulation (GDPR)? From May 2018, the way you used to prospect will have received a major update, due to the EU data protection regulation. Failure to comply with GDPR can result in fines of up to €20 million or 4% of global turnover, whichever is greater. Will the General Data Protection Regulation affect your sales team? If you still rely on purchased leads to fill up the sales pipeline, or if you automatically add business card contact data to mailing lists and ask existing customers for referrals and recommendations, then the General Data Protection Regulation has an impact on you and your business.
This is because the General Data Protection Regulation provides EU citizens with greater control over personal data regardless of where the data is processed. Such personal data is in several forms – such as name, email, phone number, interests, as well as IP address, social media posts, bank details, and medical information. The resolution to this is to request and obtain permission from customers and prospects to collect, store, and use personal data. As well as clearly outlining your company privacy statement. Under the new General Data Protection Regulation, individuals have the right to be informed about what data you collect, why you are collecting it, and how you intend to use it.
So, what does this mean for sales prospecting? Here are three key points you can adopt:
1. Stop automated emails to prospect lists without getting their permission first.
If it is your first contact with a prospect, you will need to indicate that you have tried to contact them by phone prior to emailing them. That being said, you can continue to send cold sales emails to prospects, if the email is sent to an individual and not to a group of recipients. You will need to include a link to your privacy statement explaining why you are contacting them in the first place (i.e. you have a legitimate interest). Be cautious about purchased lead lists. If you acquire leads that contain personal data from third-parties, they will need to have obtained prior consent to share that information with you. But you will also be required to get specific consent to use any email address on the list – unless they have given their consent to be approached by associated partners.
2. Leverage social media platforms
The new legislation does not stop sales agents finding and connecting with potential customers on social media, be it for a recommendation, or for directly reaching out to new prospects. Examples include Twitter, LinkedIn, etc, which can help to get the discussion underway. Once connected, you must seek consent, and the recipient must have given it to you, prior to any future emailing contact.
3. Pick up the phone
This is the most effective way to build new relationships with potential customers, as this approach – cold calling – is not under the same regulation as the General Data Protection Regulation. Once connected with a new prospect, you will need to obtain their consent, to add their information to your CRM database. That is before any promotional emails can be sent. You can formally record their consent by sending an email summarising the discussion and establishing consent for future email contact. Other options to consider are networking events and asking customers for referrals, reaching out to their contacts on your behalf. Once again, if there is an agreement to partner, this requires their consent for any future prospecting emails.
The main message to take away here is that the General Data Protection Regulation is not about being restrictive. Instead, it introduces discipline around the handling of client and prospect data. Combined with a more personal approach to building networks – over the phone and through social media. This will in turn enable you to build deeper and more targeted relationships.
Lotuswise Chartered Accountants and Business Consultants can help support you and your business with the complexities of the new GDPR regulation. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.
Do I Really Need A Digital Marketing Strategy?
Over the last 10 years or so, marketing has moved more towards digital, thanks to the prevalence of fast Wi-Fi connections, smartphones, social media and data analysis. In today’s hyper-connected world every business should have a digital marketing strategy.
What are my Digital Marketing Channels?
Most businesses tend to utilise digital marketing channels, however many businesses don’t have an actual strategy. Building an effective strategy involves gaining insights from data in order to make informed marketing decisions. The end goal is to understand your customer’s digital experience in order to maximise new business / sales opportunities for your firm. A digital marketing strategy doesn’t have to be overly complicated. Depending on the size of your firm and the budget you have available, your strategy could be as simple as leveraging social media channels and having an effective website.
What is a Digital marketing data analysis?
Data analysis forms a key part of your digital marketing strategy. You can use free tools such as Google Analytics in order to understand the profile, location and number of visitors to your website and social media pages. You can gain insights from your data – such as “on average, it takes 150 views of your social media posts to generate 1 new business enquiry.” Using this example, lets say that your target is to generate 10 new business enquiries per week. That means that you need to achieve at least 1500 views per week in order to generate the required number of enquiries. Setting this type of objective forms the basis of your strategy.
How do I use Digital marketing to understand potential customers?
In order to create a truly effective digital marketing strategy, you need to understand your potential customers. Start by creating a profile of your target customers. Look at the demographic data – age, location, gender, etc. Then dig a bit deeper and identify the problems that you and your business can try to solve for these potential customers. Don’t forget to identify the profile of the people who influence your customers. These will be the influencers that your strategy should target, in addition to your potential customers and existing client base.
How do I choose the right digital marketing media to reach my customers?
Finally, choose the media that is most likely to be used by your target customers. For example, if your customers are business people, perhaps LinkedIn is a more effective social media tool for reaching your target audience than Facebook or Instagram.
Lotuswise Chartered Accountants and Business Consultants can help you and your business get the right digital marketing strategy in place. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.
Outsourcing, why do I need to consider it?
The benefits of outsourcing
Why outsource? Quite simply, there are only so many hours in the day and you / your team probably don’t have the bandwidth to do everything you would like to do. Outsourcing can save you time and money, but there are many other reasons to consider outsourcing certain business functions.
Outsourcing increases efficiency
If as a company, you do everything yourself, you will have much higher costs which must be passed on to customers. When you consider outsourcing, this allows your company to minimise these costs. Time gained back as a result of contracting out certain functions can be deployed in a more effective way, in order to make your business more efficient.
Control capital costsCost-cutting may not be the only reason for you to outsource, but it’s certainly a major factor. It converts your fixed costs into variable costs, releases capital for investment elsewhere in your business, and allows you to avoid some large expenditure. When you outsource, you can also make your firm more attractive to investors, since you’re able to pump more capital directly into revenue-producing activities.
Focus on your core business activities
Every business has limited resources, and every manager has limited time. Sub-contracting can help your business to shift its focus from peripheral activities towards work that serves the customer, and it can help your people to set their priorities more clearly.
Risk management
There is a degree of risk inherent in any type of business. However, you can outsource certain risks to the balance sheet of an external provider. For example, Payroll, Tax Returns and Compliance can largely be outsourced, thereby moving that risk away from your people and putting it on the shoulders of the outsourcing firm’s team.
Competitive advantage
Outsourcing can allow smaller businesses to benefit from the economies of scale, efficiency and expertise enjoyed by larger firms. If you choose the right outsourcing providers, your business should be able to benefit from the latest systems, technology and processes. This could give your firm a clear competitive advantage.