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Making Tax Digital

Prepare your business for Making Tax Digital (MTD) for VAT

Making Tax Digital for VAT becomes mandatory for all VAT registered businesses from 1 April 2022

Businesses with a taxable turnover above £85,000 have already been required to follow Making Tax Digital, keeping digital records and filing VAT returns using compatible software since April 2019.
From 1 April 2022, all VAT registered businesses must file digitally through Making Tax Digital from 1 April 2022, regardless of turnover.
We can sign you up to MTD, although you will be responsible for meeting your VAT obligations. Those who do not join Making Tax Digital for VAT may be charged a penalty for failure to do so.
If your business has not signed up to MTD compatible bookkeeping software then please talk to us urgently about how we can help your business comply with the new law.

Get in touch

The team at Kirkwood Wilson are always happy to provide advice and assist with changes like Making Tax Digital. To find out how we can help your business get in touch on 01704546000 or email us at [email protected]

Is Outsourcing Payroll a Good Idea?

If you ask most business owners, they’ll tell you there aren’t many more important elements to a successful business than a happy workforce.

When we begin onboarding a new client, invariably the first burning question on their lips will be, “will we have enough time to make sure the payroll is completed on time this month?”. An effective payroll department, whether it is outsourced or kept internally, is key to ensuring the team is paid when they should be paid, pension contributions are submitted to the relevant provider and taxes are filed and paid to HMRC on time.

Why employ an internal payroll expert?

For a long time, many business owners have employed a bookkeeper and a payroll manager within the business to complete the monthly pay runs for the company. The most obvious benefit to this is the knowledge of the team that the manager has, but also includes:

  • The company retains control of when the figures are completed, giving them instant access to payslips when they are completed. 
  • New staff members are more likely to be picked up by an internal expert as they’re often also in control of onboarding the employee.

Why should I consider outsourcing payroll tasks?

Whilst the reasons above might give food for thought for bringing someone into the business to manage payroll, there is clearly a significant cost to hiring someone as part of the team. 

Freeing up the business owners busy schedule

If the business owner completes the payroll for the company themselves, clearly the outsourcing of the monthly payroll processing will free up even more time for the owner to work on the business rather than in it, something we’re really keen on.

Ensures confidentiality and reduces training costs

There is no reliance upon one person completing the work when your payroll is completed externally. Internal training costs are minimised, and the outsourced provider bears the risk of ensuring there are no handover issues if the person processing the payroll leaves. Add this to the fact that any information you send to the accountant remains entirely confidential and you’ve removed one very big headache!

Ensuring your company is HMRC compliant

Payroll outsourcing services help to ensure that your company remains compliant with HMRC filing deadlines, whilst mitigating the risk of technical errors occurring with the team’s pay. Payroll legislation is an ever-changing landscape, with updates to Statutory Maternity Pay, Statutory Sick Pay and the National Minimum Wage occurring each year, making staying up-to-date with changes one of the most important tasks for a business.

Payroll outsourcing services from Kirkwood Wilson Accountants

You should of course weigh up both sides of the argument if you’re considering the next move for your company’s payroll. At Kirkwood Wilson, we have a vastly experienced team of payroll specialists who would be happy to have a conversation with you about our payroll outsourcing services to ourselves. Our payroll outsourcing service which we provide to our clients using leading software Xero, includes the management of auto- enrolment pension contributions using NEST and the construction industry scheme so you can be rest assured that all of the necessary reductions have been made.
For more information about the payroll outsourcing services available at Kirkwood Wilson Accountants get in touch with our specialist team. Call us on 01704 546000 or email [email protected].

How hybrid working has changed the face of business forever

Many of us will now be familiar with the phrase ‘working from home’. The COVID-19 pandemic has accelerated and, in most cases, forced employers to accept that working from home is now part of the way their employees engage with their workload. This recent development has brought about a boom in hybrid working. Read on to find out more about the benefits of hybrid working and how it has changed the way businesses operate. 

Hybrid working and the pandemic

Throughout the pandemic many employers were faced with two distinct options. These were to adopt remote working and face the challenges that working from home can bring, or to furlough staff where necessary. However, as the furlough scheme drew to an end on 30 September 2021 employers are putting plans in place to allow employees to continue with hybrid working arrangements. Such an agreement is where the team member works part of their week at the company’s central office location, and part of the week from home. 

What are the benefits of hybrid working arrangements

A huge benefit to this new way of working is that our clients are seeing a large upturn in staff morale as a result of this increased flexibility. In fact, studies suggest that 57% of remote workers feel their productivity increases with working from home, something we can vouch for from our team here at Kirkwood Wilson Accountants!

Working from home has placed more emphasis on technology, with working in the cloud now being at the forefront of business owners’ thoughts. Many businesses have operated for a long time with internal servers holding everything that is dear to the company information-wise.

How Xero can help with hybrid working

You might be familiar with Sage and the historical rigors of backing up your company’s information at the office, storing it on a memory stick and then transporting it home to continue processing data. Working from home makes this already lengthy process far more difficult but you can feel safe in the knowledge that Xero was designed exactly for this.


Xero allows your internal bookkeeper to log in remotely using a web browser, at work or at home, picking up exactly where they left off. There’s no need to back up, just log in and carry on. This is why digital accounting software, such as Xero, has had such a positive impact on business operations during the pandemic. 

Another complementary piece of software which ties in well with Xero is Dext. It allows you to take photos of invoices that can be stored in the cloud within Xero for forever and a day – meaning you will never run the risk of losing a paper trail. It’s ideal where a team member is in the office and the bookkeeper is at home. The team member can take the photos required and within minutes the invoice appears in Dext, ready to be synchronised with Xero.

One obvious downside to this more flexible way of working is accountability in terms of your employee’s time. How exactly do you know that they’ve completed their allotted hours for the week? Whilst a huge emphasis is placed on trust in this situation, it’s always nice to be sure where you stand when employees are at home.

Deputy is another Xero-integrated app, which allows your team to ‘clock in’ when they start their day and ‘clock out’ when they’re done. The employee downloads an app to their phone and you get all the reporting functionality you need to help you keep control of when and where your team is working.  

Integrate digital accounting to support hybrid working in your business.

If anything we’ve mentioned above ticks a box for you, please get in touch with our friendly team on 01704 546000. We’ll be happy to get your bookkeeper set up on Xero so that they can start processing your information wherever they are. Alternatively, we’d love to give you a quote and to discuss the benefits of outsourcing your bookkeeping services to ourselves.

Building your knowledge with our Construction Industry Scheme guide

Since its inception in 1999, the Construction Industry Scheme (also known as CIS) has undergone many changes. The CIS was initially brought in with the aim of applying more rigorous testing and compliance for any businesses that wanted to receive any form of gross payment from a contractor or contractors. Read our Construction Industry Scheme guide to find out more about CIS and the most important terms you need to know. 

2007 – CIS verification becomes mandatory

In 2007, the Construction Industry Scheme was introduced in its current format. Thereafter, online subcontractor verification became mandatory and three new classes of subcontractors were implemented. Under these new classifications, new tax deductions were introduced. For ‘Verified Subcontractors’, tax was set at 20% tax deduction, whilst ‘Unverified Subcontractors’ face a tax deduction of 30%. 

This means that under the Construction Industry Scheme, greater emphasis is placed on the contractor to consider the employment status of the subcontractor that is working for them. 

2021 – Changes to VAT rates

The Construction Industry Scheme saw another significant change in 2021. Value Added Tax (VAT) is no longer charged by subcontractors unless they are working for the end user. 

One of the major benefits of this is that it makes things far more straightforward from a cash flow perspective, as subcontractors now tend to be in a refund position for VAT on a regular basis. However, the knowledge required to make the right administerial decision has gone to another level. 

To make sure you’re submitting the correct CIS tax returns, you should speak to a specialist accountant who has experience of working with CIS and can advise you appropriately. 

Construction Industry Scheme guide and glossary

Read on to find out more about the Construction Industry Scheme and some of the most common terms you will come across when you’re delving into the world of the Construction Industry Scheme. 

Whether you’re a seasoned CIS veteran, or you’re about to complete your CIS return for the very first time, our team of expert accountants here at Kirkwood Wilson Accountants can support you with your CIS return.  

Contractor

You’re considered a contractor if you bring in workers to help you to complete work for your clients. However, you can of course be both a constructor and subcontractor. 

Subcontractor

You are classified as a subcontractor if you get your work from someone else who is ‘higher up’ in the building chain than yourself. For example, you are a part of the building process for a house builder, such as a bricklayer. 

Subcontractor Verification

When a subcontractor comes onboard you must verify them with HMRC using their UTR number and National Insurance Number or Limited Company Registered Number, before you even make a payment to them. Upon verification, HMRC will then tell you how much tax to deduct before you can pay them. The subcontractor will either be classified as gross or will have 20% or 30% tax applied. 

Tax Deductions

In our Construction Industry Scheme guide we will go into further detail about the specific tax deduction amounts below. However, where a subcontractor has provided you with labour services, you may need to withhold an amount of CIS tax to be paid over to HMRC later in the month. CIS tax is not deducted from the VAT amount charged by a subcontractor or any materials you are reimbursing them for. 

Gross Payment Status

Your subcontractor does not need any tax deducting from you. For example, if they send you an invoice for £1,000, you will pay them £1,000 as requested. 

Verified Subcontractor

Upon receipt of their verification number, you will be required to deduct 20% from your subcontractor’s invoice. For example, if they sent you an invoice for £1,000, you will deduct £200 and this amount will be paid to HMRC. This means that the subcontractor will receive £800. 

Unverified Subcontractor

Here, you won’t receive a verification number for this subcontractor and therefore you will need to deduct 30% tax from them. This means that if they issue you with an invoice for £1,000, you will pay £300 of this to HMRC and will pay £700 to your subcontractor.

Domestic Reverse Charge for VAT (DRC)

This is a relatively new term. This means that subcontractors are required to use the DRC for VAT if they satisfy a certain criteria set out by HMRC. This criteria can be found on the HMRC website here

CIS Return Period

Each CIS tax return period runs in line with the months of the year for payroll purposes. You may already know that these dates run from the 6th of one month to the 5th of another. For example; the first month of each financial year is 6th April to 5th May. 

CIS Filing Deadline

At the end of each return period, you will need to make a declaration to HMRC that includes all of the deductions you have made for each subcontractor. The filing deadline is the 22nd of the month following the end of the period.

Subcontractor Statement

A subcontractor requires a statement from the contractor, which can be provided either monthly or yearly. This is to offset the tax they’ve had deducted against the end of year liabilities. Here at Kirkwood WIlson Accountants, we use digital accounting software such as Xero to make this administration much easier to manage. 

CIS tax accountants

We understand that the Construction Industry Scheme can be a bit of a minefield to navigate. The introduction of digital accounting software has helped to ease the burden for contractors and subcontractors alike significantly over the last few years. Xero digital accounting software has helped simplify the entire admin process by making CIS tax calculations and submissions a straightforward task. 
The team at Kirkwood Wilson are experts in digital and cloud accounting and would love to have a chat with you if you’re finding returns difficult to cope with. Contact us on 01704 546000 or at [email protected] and one of our friendly, knowledgeable team members will be happy to help.

Accountant working at desk

The Changing Face of the UK Tax Sphere

As accountants and business advisers, we’re used to keeping on top of the ever-changing UK tax changes in legislation within the UK. The landscape has evolved even more rapidly over the last 18 months since the COVID pandemic swept across the world.

We’re accustomed to annual amendments to the personal allowance and capital gains tax allowance thresholds being the most commonly occurring changes we see. However, 2020 brought VAT deferrals, the furlough scheme and self-employed grants, all of which had an impact on the tax system in some way.

HMRC has a roadmap on which it plans to make further UK tax changes across the board over the coming years. We’ll discuss some of these below in our updated UK tax guide.

Updates to National Insurance (NI) and Dividend Tax Rates

The government has recently announced an increase to both NI rates and dividend tax rates from 6 April 2022. The planned 1.25% increase to both taxes will go ahead and will affect people from all walks of business.

Employed people will pay an additional 1.25% on any earnings over £9,568. This change will also affect people who pay higher rate tax (earning over £50,270) and additional rate tax (those who earn above £150,000).

Self-employed people will also be subject to the change, paying an additional 1.25% NI over £9,568.

People who earn income via dividends will also be affected by the 1.25% rise at all levels of income. 

The table below should help explain the changes:

Table

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Source: moneysavingexpert.com

Alignment of Tax Periods for Sole Traders and Partnerships

A significant portion of our sole trader and partnership clients have their period ends aligned with the 5 April tax year end. There are however a number whose year ends differ to this date. These clients will be affected by the new tax year basis which will come into force in the 2022/2023 tax year.

Clients with a May year end have been used to paying their taxes 20 months after the period ends. For example, a client with a 31 May 2021 year end will only pay the tax due on profits in that period in January 2022. 

Using the above example, in 2022/2023, clients will have some of the tax they pay advanced in order to change and align their year end to 31 March 2023. Such a client will pay tax on the profits they make to 31 May 2022 as well as the profits they make on the 10 months from 1 May 2022 to 31 March 2023. 

This might feel penal in that it will accelerate the payment of the taxes in this year. Although, it would mean if you were to ever stop trading, you’d have paid your taxes closer to the period in which your trade ceases. Cash flow planning for this additional element of tax in 2022/2023 will be vital and we’ll be here to help you through that period of additional cash out of your business. 

Making Tax Digital (MTD) for Non-VAT Registered Sole Traders and Partnerships

You’ll no doubt have seen the term MTD (Making Tax Digital) floating around in the tax atmosphere for the last few years. HMRC has already implemented this change for VAT registered businesses. From 6 April 2023, the MTD legislation will affect non-VAT registered sole traders and partnerships.

Many businesses still operate older systems when it comes to keeping track of their business performance. MTD will force clients to move to cloud-based accounting software in order to make returns to HMRC each quarter, as opposed to the historical annual return which needs to be completed by January each year.

The new MTD rules for sole traders and partnerships will help to some degree with the impact of personal taxes on your cash flows. In addition to making quarterly submissions, you’ll make payments on account each quarter, in line with the tax due on your profits for that quarter.

At the end of the fourth quarter, you’ll then be given time to make a final return for the year along with any balancing payment which might be due.

We’ve been huge fans of Xero (as well as being experts!) for a long time now, and we’re certain that our team will be able to help you navigate the changes. In fact, we can bring your business into the era of digital accounting with ease.

Corporation Tax Changes from 1 April 2023

Another legacy of the COVID pandemic is the need to recover some of the costs to the treasury caused by the pandemic itself and the support offered to businesses.

HMRC has announced that it will increase Corporation Tax for Limited Companies from 1 April 2023. Businesses that make taxable profits of less than £50,000 each year will continue to pay 19% Corporation Tax. Businesses whose profits exceed £250,000 will pay Corporation Tax at the rate of 25%.

Where a business makes profits between these two amounts, the amount of Corporation Tax will be tapered, providing a gradual increase in the rate of Corporation Tax from 19% up to 25%. Specific details of this ‘marginal rate’ are yet to be released.

The lower limit of £50,000 and the upper limit of £250,000 will be affected by the associated companies rule. Where two companies share the same owners, or two companies have a majority owner (i.e. over 50%), then the limits will be split by the number of associated companies.

An example of this would be where a business owner has two associated companies. The lower limit for each company would be divided by two and would become £25,000, with the upper limit being £125,000.

It may be that planning is required over the coming 18 months to ensure that companies have the correct trade in the correct company. 

Kirkwood Wilson’s UK Tax Guide

The team at Kirkwood Wilson is always looking at ways we can help you with tax planning and the next couple of years will certainly be interesting in terms of the tax landscape and how we can offer our assistance. 
To receive the most comprehensive tax planning advice from KW Accountants, be sure to get in touch on 01704 546000 or email us at [email protected].

Accountant working at desk

Business Health Check – How much are you paying your accountants?

These past 12 months have been difficult for all of us, particularly those who have been working hard to keep their businesses up and running despite the economic downturn brought about by the Covid-19 pandemic. The one thing all businesses need at the moment, whether an SME or a multinational, is some reassurance that things are improving and that we’ll soon be able to get back to focusing on the things that matter the most. With restrictions lifted there is a collective sigh of relief happening in the business world, but this is no time to rest on our laurels; there is no better time than now to undertake a thorough business health check to make sure that your company is in the right position to take advantage of opportunities. We review below what a small business health check entails and how it could help you. 

What is a business health check?

A business financial health check is a service that works to assess how ‘healthy’ and successful your business is, in relation to where you want it to be. 

This kind of service is a great way to find out whether your business is on the right track, as well as understanding the type of growth that you could potentially achieve and some of the things you may need to consider in order to work towards that growth. 

A business health check is also a great way of finding out whether your company has potential resale value, and what you could do to improve its market value – if and when you decide to part with it. Even if you’re not looking to sell, a business that is attractive to buyers is usually a healthy business with potential future value, and something that we all want our companies to represent. 

Some of the things we would consider when undertaking a business financial health check include: 

  • Ensuring that you have a strong strategy for growth and development that aligns with your business plan and your vision for the business. 
  • Testing your understanding of who your customers are and how you will work to increase their conversion to new products and their spend year on year.
  • An assessment of your profits and sales year on year to ensure that the business is growing. 
  • Reviewing the people, systems and processes that underpin your business. We would look at how you currently utilise these resources and whether there are efficiencies that you could make in order to reach their full potential. 

Why do you need a small business health check?

A small business health check is a great way to understand how your business is performing using the perspective of a fresh pair of eyes. We may spot things that you are too close to see, or that you simply don’t have the time to review. Any areas in which we find any potential problems can then be addressed, and we will provide advice  on how you can improve your business to achieve your planned growth. 

A small business health check can be particularly valuable for SMEs, who often have neither the time nor the internal resources to spare for such a review. If you are already paying for an accountancy service, it may be time to ask yourself whether you are really seeing value for your spend; are you getting the advice you need to move your business forward? Are you paying a monthly retainer for little in return? 

The business health check from Kirkwood-Wilson Accountants

We understand the importance of making every penny count when you are growing your business, whatever size you are now. That’s why our team offers impartial advice as part of our overall accounts service. Our business health check-ups help you to understand where your business is at financially, as well as what you need to do to secure sustainable growth. 

As a family business, we understand the importance of having people around you that you can trust, and how much it means to know that there is someone there to support you through both good and tough times. That is why, through the difficulties of the past 18 months, we have made sure that we have been available to support our clients to help them make the best choices for their business. Can you say the same of your accountant? 

Choose Kirkwood Wilson Accountants to support your business growth<

We offer three standard packages which are made up of a range of accounts, payroll and personal tax services, alongside our expertise in business planning. This is to ensure that you can pick the level of support that best suits your business needs.

We put each team member through a training programme to ensure that they fully recognise the importance of working together to provide a package of support for your business’ growth. When you work with us, we not only just complete your annual accounts, file your financial statements and complete payroll, but we also provide business advice as part of your small business health check. 

Find out more about how we can help you Why not visit our accountancy packages page to find out more about our available services and how we can integrate business health checks to make your business work for you? If you’re interested in learning more about how a tailored accountancy package could work, then speak to one of our team at Kirkwood Wilson Accountants to find out more about the services that we offer. Call us today on +44 (0)1704 546 000 or fill in our contact form and someone will be in touch shortly.

Etsy Accounting

How to turn your hobby into a side hustle

If you’ve assumed that your hobby couldn’t possibly make you money, think again. Whether you’re a wild swimmer who wants to guide beginners in the wonder of taking a dip in the wilds, or a crochet fanatic who fancies selling your wares online; from teaching grunge guitar to sketching pampered pooches, there is the potential for money to be made from just about anything. Provided you have access to the right audience and a way of reaching them, you can work creatively to carve out a living from your spare time – whilst doing the thing you love most. We look below at how to turn your hobby into a side hustle and the kinds of choices you have in terms of starting up side hustles from home.cf

Something you love vs something you’re good at

Any business thought leader worth their salt nowadays will tell you that one of the key aspects of starting and running a successful business is the importance of that intersection between the thing you are passionate about and the thing you are good at. Let’s not pretend otherwise; running a business can be hard work – even when it is successful, even when you love what you do. Therefore, when you’re thinking about setting up a side hustle from home, be sure to look for something that gives you purpose; there is good reason that when people talk about how to turn your hobby into a side hustle, they’re specific about the ‘hobby’ part of the equation. If you choose what you do for fun as well as some extra cash, you’re far more likely to make a success of it.

The transition from hobby to business

It doesn’t have to be a landmark moment, with a website, business cards, employees, and neon signs all ready to go from the off. The transition from hobby to income can be gentle and kept within your time allowance and comfort zone. For example, if your hobby is something that you’re thinking of teaching, find someone that you know and trust who has an interest in dipping a toe in. If you make things that you want to sell online, test the waters by setting yourself up as a seller on a third part site like Etsy – there’s no need to have your own ecommerce store until you know that there is a real market and you’re happy with how your side hustle from home is progressing. And if you intend for your side hustle to remain just that, then it may be that you never scale up, you simply use your hobby to provide an additional income stream with no pressure for growth. When you’re thinking about how to turn your hobby into a side hustle, then, create a plan – but keep it realistic, with bite-sized tasks to work through. Rome, as they say, was not built in a day. 

The pitfalls of side hustles from home

The reality is that your side hustle is what you make it; it will take as much time and energy as you are willing and able to give. The return on that effort will be the result of a combination of creating a demand through your platform of choice, being able to charge enough to make a profit, your ability to create happy customers and, let’s face it, a little bit of luck. However, the one area where you must be properly informed is around the likely tax implications. It’s not as daunting as it may seem, but you must be sure to understand what is required from the outset so you don’t find yourself with unexpected bills further down the line. Here are some simple steps that you must take:

  • Set yourself up as a sole trader, partnership or limited company. That simply means letting HMRC know that you are trading – and it’s fine if you are already employed, you simply give them the full details. 
  • Keep records of what you sell, any invoices you receive and any additional expenses that you incur. 

You don’t need to register for VAT unless you expect to turn over more than £85,000 in a year (and for most side hustles that’s a tall order). At the end of your first year of trading you will submit a tax return online which uses the information from the records you have been keeping. 

Starting a side hustle from home is an exciting prospect, and a road that many people now choose to take. If you are worried about the financials, Kirkwood Wilson Accountants offer a range of services for small and micro businesses including sole traders, and would be happy to help or advise you on anything from your tax return to your accounting software. If you would like an informal chat then get in touch on 01705 546 000 or email us on [email protected]

What is the best accounting software for construction companies?

Construction businesses face additional challenges compared to retailers, the service industry and even manufacturers. Not only is their environment and customer base very fluid with work dependent on other parts of the supply chain as well as material availability and even the weather, but they are often working on many projects at the same time, each of which need a proportion of both direct and overhead costs attributed to them. If you are wondering which is the best accounting software for your construction company, read on to find out why it’s such an important question and how to go about answering it.

What are the challenges in accounting for construction companies?

Wherever your business is positioned in the world of construction – at the design stage, the main build or specialist services – whether a small sub-contractor or one of the larger contractors, keeping control over your finances is vital. The key challenges facing businesses looking for accounting software for use in construction companies are:

  • Large numbers of contractors and sub-contractors to manage
  • Temporary, contract and short time workers meaning that payroll can be fluid and complex
  • Equipment and tools, both owned and hired/leased
  • Purchasing for stock, for one-off builds and for multiple builds 
  • Staff and equipment used across multiple projects over any given timeframe.

What to look for in accounting software for construction

There are a few critical areas to consider when deciding on what the best accounting software is for construction. These include:

  • Finances on the go. Unless you take a laptop with you everywhere you go or are stationed in the office permanently, you need to be able to update your records on the move. The simplest way of doing this is through cloud-based accountancy software, which allows you to record, monitor and track details from an app on your phone. 
  • Recording of day-to-day transactions. This needs to be straightforward to make sure you maintain daily records regardless of your busy schedule. That means recording labour costs, material costs, accounts payable and accounts receivable as they happen.
  • Job costing breakdowns by project. Construction companies need to be able to allocate all expenses and monies received to a specific project, to ensure that you can track profitability, help you to quote for future work and to ensure the right level of information is available at the point of completing your tax return. 
  • CIS deduction calculations. The government’s Construction Industry Scheme can be a headache in terms of administration and tax returns. An automated way of tracking CIS deductions as you go takes away the hassle at the end of the financial year. 
  • Also required are standard features of any accountancy software such as the facility to track business expenses and allocate them (or a portion of them) to a project, and bank reconciliation. You may also want your accountancy software to handle payroll.

Accounting for construction companies: the solution

There is more than one option when it comes to cloud accountancy software, and finding the right solution for your business can be daunting. Xero is a great software application developed specifically for the construction industry. Not only does it work seamlessly on both PCs and mobiles through an app, making your finances easy to track and update wherever you are, but it ensures that your data is secure and backed up at all times. Most importantly, however, Xero has features that have been developed specifically for construction businesses, including running CIS calculations as you go, with each transaction automated so that you can get on with managing your business. You can also verify your subcontractors with HMRC directly and run monthly reports on your CIS subcontractor payments and deduction statements. Tracking codes within Xero allow you to track and report on specific projects to review progress, check against a budget and ensure that profitability is on track. In our view, Xero is the best accounting software for construction businesses, designed specifically with you in mind.

If you would like to find out more about working with Xero as the choice for accounting within your construction company, take a look at our dedicated page. If you’d rather have a chat with us then get in touch with the team at Kirkwood Wilson Accountants; we are a Xero Gold Partner with experience in working with companies throughout the building trade and would love to see if we can help you find the right solution for your business. Call us on 01704 546 000 or email [email protected]

Picture of working at home desk

Starting a side hustle – everything you need to know

According to a study by Henley Business School, two fifths of the working population of Britain already have a side hustle. Whether it’s intended as a financial top-up, a new challenge or a hobby that can earn you a couple of quid on the side, this kind of hustle is becoming the norm for us working Brits. If you have a great idea for a side hustle but want to know how it might affect you and your existing work life, or if you are looking for ideas on side hustles you can start today, fear not – we have you covered! 

What kind of side hustle should you consider?

The first thing you need to look at is whether your current employment contract allows for you to work outside of your paid job. Some businesses have no policy at all, some don’t allow extra work on top of your day job where others require you to proclaim any extra paid work – usually on the basis that they can judge whether there is a likely conflict of interest. So the first piece of advice? Don’t set up in competition with your current employer; they are bound to find out at some point and it won’t be taken lightly. 

Many business owners are starting to buy into the school of thought that says a happy employee is a successful employee – and if a side hustle makes you happy, well they are likely to be right on board with the idea. You may have to convince your employer that you won’t be falling asleep at your desk through overwork, but aside from that, there is nothing legally stopping you from starting a side hustle unless it is specified within your employment contract that you cannot. 

Side hustles you can start today:

There are so many options for side hustles, with the world of social media and ecommerce platforms making it easy to set up and start selling on a very small scale. The main question you need to answer is around your motivation; why you are doing it, and therefore which side hustle might suit you best. We’ve put together a list of some of the side hustles you can start today: 

Starting a side hustle for cash:

If your main motivation is to earn a bit of extra cash, take some time out to assess your availability and your skills. Popular side pursuits include:

  • Delivery driver – businesses like Deliveroo have plenty of side hustlers on their books, and for those of you working a 9-5 it could be ideal. 
  • Tutoring – if you have an in-depth knowledge in a particular subject matter, this is an ideal way to earn some extra cash.
  • Taxi driving – if you already have a vehicle, you could work just about any hours you choose on a casual basis.

Starting a side hustle for passion:

If you have a particular hobby or love of something that you need to cover the costs of, selling your skills or your output is a great way to fund it – and it may be that you can scale up over time and eventually give up the day job.

  • Etsy seller – if your skills and passion lie in craft, design and making things, artisan and quirky gifts fly off the virtual shelves here.
  • Dog walking – if you love animals but can’t keep one yourself, why not take advantage of other working Brits and walk their dogs while they are on shift?
  • Artworking – sketches, pencil drawings and paintings of people’s pets, children and homes are extremely popular nowadays. If you are artistic, this could be a great place to look at starting a side hustle.

Starting a side hustle to gain experience:

New out of college? Have some new skills but no experience to start a full-blown business? Freelancing in your field can be a brilliant starting point.

  • Marketing – if you have marketing skills or a recently earned degree, why not try offering social media services to those without the time or knowledge to spend on Instagram or Twitter?
  • Decorating – if you want to be an interior designer but have no client portfolio, start small and work on basic projects until you have some examples under your belt; once you earn people’s trust you can work your way up to larger projects. 
  • Gardening – whether you want to be a landscaper or an agricultural consultant, starting small with people’s chores will get your foot in the door and some testimonials onto your website. 

Think twice before diving in

Whether you have the skills is just one of the questions you need to consider. You should also think carefully about the impact of starting a side hustle on your mental health, your family and your physical health. Increasing a 40-hour week to a 60-hour week with a side hustle you love may just be the outlet you need to fulfil your artistic or social needs. However, if you are simply putting in the hours to pay the bills, you may find that it pushes you over the edge of exhaustion. Starting a side hustle should prove both rewarding and financially worthwhile, and getting that balance right can be challenging. 

What about the tax implications?

Assuming that you set yourself up as a sole trader, provided you keep records of what you earn and what you spend as you run your side hustle, you should have nothing to worry about. You do need to declare your business to HMRC once you start trading, and you need to do this by 5th October following the tax year – however, the sensible thing to do is to register as soon as you can to avoid any fines. Once you have registered as self-employed (you can have this status as well as being an employee of a different business), HMRC will require you to file a tax return by the 31st January following the end of the previous tax year. 

Basic sole trader businesses are not complicated to run or file a return for, and you shouldn’t let it put you off starting a side hustle. If you are concerned about the financial, accounting or tax side of the business, then you can employ a local accountancy firm who will help you in just those areas in which you need support to ensure that you don’t end up in difficulties. 

If you would like advice in starting a side hustle and want to be sure that you’ve covered the financials properly, get in touch with Kirkwood Wilson today and we will be happy to work with you in ensuring that you get your new business off to a great start.

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Business recovery planning: How your local accountants can help your business get back on track

What is business recovery planning?

Business recovery plans are the plans used by the operational teams of a business following an incident which affects their ability to operate normally. They usually consist of contingencies for core processes, plant and assets, business partners and human resources. They also include (but are much more comprehensive than) disaster recovery plans for information systems. Their main goal is to facilitate business continuity. 

Why is a business recovery strategy high on today’s agenda?

Business recovery planning covers all sorts of unforeseen events, from fires to floods to terrorist attacks, and therefore the plan is usually very broad in its scope. Where the assumption is a physical set back of some kind (like a flood or a fire), the business recovery strategy employed will be around buildings, equipment, etc.

However, the impact of COVID-19 has put many businesses, large and small, into positions where they have been trading at levels far lower than those required to make a profit – in some cases businesses in industries like hospitality have had to temporarily shut down. In both cases, although the government has been supporting the wage bill through furlough, rent and other overheads have still been outgoing costs which have had to be covered in the meantime and businesses that are still operational have had to completely adjust working practices.

If you didn’t have a business recovery strategy in place before Covid, it may be that you’re thinking about putting one in place for future contingencies.

When should business recovery planning be put in place?

Realistically, as soon as possible after the event in question. It’s a potentially complex and wide-ranging strategy that can cover things as simple as where people can work from in lieu of the usual office space availability and getting business insurance claims started, through to IT backups, failover sites (digital and physical) and supplier failure contingency.

Where do accountants fit in with your business recovery strategy?

Having an accountancy business in place and ready to support you when you need it most is critical not only to ensure business continuity during what may be a financially tough time, but will also give you peace of mind that someone who knows your business is there to help. Accountants will be able to help with the following areas:

  • Cash flow modelling and forecasting
  • Cost reduction recommendations
  • Securing additional Time to Pay through HMRC
  • Sourcing alternative finance options
  • Overall health check and solvency review

How Kirkwood Wilson Accountants can help in your business recovery planning

As local accountants who specialise in healthcare and construction – including CIS – we have an in-depth knowledge of the kinds of issues that can arise in your industry and the types of support that you will need to get your business back on track.

We work closely with our clients to ensure we understand where your skills lie and where you might need us to step in during an emergency. For more information on how we can help your business recovery strategy take shape, get in touch on 01704 546 000 or email [email protected].