Outsourcing - a secret weapon to boost your profit

Outsourcing is contracting with another company or person to do a particular task. As a small company, outsourcing some of your work can be a very cost-effective and efficient way to build up your business and boost profits. The rise of technology has allowed many small businesses to outsource work as they can employ anyone from anywhere in the world to complete tasks and fulfil their every requirement.

In order to carry out outsourcing successfully, there are a few key areas that need to be addressed:

I. Finding the right time to start outsourcing: doing all your administration, accounting or IT tasks could make you feel trapped. You will soon realize that outsourcing this work could save you time and allow you to focus more on running your business.

II. Selecting the task or tasks to outsource: outsourcing the non-core work you are not trained for or not willing to complete. By outsourcing these tasks you will be able to concentrate on the main profitable business tasks.

III. Choosing an outsourcer wisely and communicating with them: many freelancers provide a wide range of excellent services. You should look for one who shares your views and understands your prospects. Having a good relationship with them will make things go more smoothly between you.

IV. Reviewing the outsourcing regularly and staying in control: you should check on the progress of all outsourced work on a regular basis and make sure they are meeting your targets. The entirety of the business is still your responsibility, so you should continue to overview all aspects, including the tasks you have chosen to outsource.

Our company provides full VAT, payroll, bookkeeping and accountancy services and can free you from time-consuming accounting work and allow you to focus on your primary business goals. We can also assist with iXBRL filing and RTI payroll submissions. Feel free to contact us on 0207 043 0052 for details.

Is Your Business Prepared For Business Record Checks?

HMRC has announced that its campaign to check businesses are keeping the right records is being relaunched. Small businesses will need to ensure that they are maintaining adequate business records to support the information in their tax computations.

Business record checks (BRC) are checks carried out by HM Revenue & Customs (HRMC) into businesses’ bookkeeping records. Businesses are required by HMRC to keep adequate business records so that they can complete their tax returns correctly. A pilot programme of Business Records Checks which began in April 2011 involved Small and Medium-sized Enterprises' (SMEs). SMEs are businesses with an annual turnover below £30 million who employ less than 250 people.

Around 3,431 checks were carried out up to 17 February 2012 as part of the pilot. It found 36 per cent of businesses had issues surrounding record keeping, of which 10 per cent had serious enough issues to warrant a follow up visit from HMRC. The pilot was suspended from the 3 February until the 31 October 2012 to allow HMRC to redesign the process. Since then the checks have been redesigned and were rolled out on a regional base between late November 2012 and February 2013.

Any SMEs can be contacted by HMRC, but those most likely to be contacted are companies who usually submit their accounts with errors in them. Following the initial telephone interview, if some issues have been identified, self-education literature on what records need to be kept will be offered by HMRC, however if more serious areas are identified HMRC will proceed with a full business record check.

If you are referred for a business record check, a visit from HMRC for up to two hours will be arranged to go through your bookkeeping records. If the outcome of the visit is that you have fallen short of what is required you will be given the help and support to make the required improvements by a certain date, usually three months later. As long as the requirements have been met by that date, no penalty will be issued, however if they have not been met a penalty of £500 will likely be issued for first time offences. Penalties of up to £3,000 can be issued if the visiting officer finds that the business records have been deliberately destroyed.

As a Limited company, you would be expected by HMRC to keep certain records to match your bookkeeping. These records need to be kept for a minimum of six years, the following of which are some examples:

1.   All evidence of all income - e.g. invoices from clients

2.   Proof of purchases and expenses

3.   Monthly file company bank statements

4.   Company credit card statements 

5.   Mileage records

6.   Contracts for supply of services

7.   Statements of dividends - e.g. dividend vouchers

8.   Any private money brought into the business.

9.   Any prior year information – e.g. tax returns and VAT returns.

In fact, everything your company does has to be documented and all proof of that event happening needs to be kept. In this way, you should have little to fear if you were contacted for a business record check.

Belsize accountancy specialise in working with contractors and SME businesses and can assist you in setting up systems to maintain accurate business records. This will provide you with better information to manage your business together with the additional comfort that your records will satisfy the HMRC should you be selected for a business record check (BRC). For more information feel free to contact us on 0207 0430 052 or info@belsizeaccountancy.co.uk.

Savers To Prepare For Deadline For Tax Free ISA’s on 5 April 2013

Individual Savings Accounts (ISAs) are a tax-free form of investment. Your account works in the same way as a normal savings account but you will not have to pay tax on the dividends you earn.

There are two types of ISAs: Cash ISAs and Equity (Stocks and Shares) ISAs. HM Revenue & Customs provide investors an annual allowance to invest tax-free each tax year. The ISA allowance cannot be carried forward to the next tax year, so either you use it up or you lose it. For this tax year 2012/2013, investors can deposit up to £5,640 in a Cash ISA, a maximum of £11,280 in Stocks and Shares ISA, or a mixture of both.

The Cash ISA deposit must reach the banks by 5 April 2013 or you will lose the allowance for this year. You should act swiftly and not leave it to the last minute. In the future, depositing a portion of your monthly savings into your ISA to take advantage of this tax free allowance will boost your investment.

Stock ISA’s have become increasingly important for savers as equities have performed well over the past year with FTSE companies paying higher dividends. Equities are currently the investment of choice whilst bond yields are weak and interest rates remain at historic lows. Investors have continued to increase their portfolio allocation to equities since interest rates were reduced to 0.5% back in 2009. The popularity of equities is reflected in the FTSE 100 index which broke the 6,000 mark in January and now stands at over 6,300, a near record high.

UK Contractors with spare cash should take note. The 2012/13 deadline for topping up your annual ISA allowance is fast approaching. Top up your payments before 5 April 2013!