Coronavirus: Support For The Self-Employed

The outbreak of coronavirus COVID 19 is having a significant impact on self-employed people across Derby, Nottingham and the wider United Kingdom.

The UK Government has announced some measures to support the self-employed at this time. You can find a list of support that is currently available below, with links to official government resources. 

Coronavirus: Small Business Grants, Loans & Advice

The outbreak of coronavirus COVID 19 is having a significant impact on businesses across Derby, Nottingham and the wider East Midlands area due to the disruption caused by social distancing measures.
The UK Government has announced several funding options to support businesses at this difficult time. You can find a list of available business loans and grants below, with links to official government resources. 

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UK Budget 2020: The Key Points

On 11th March 2020, Rishi Sunak announced the new UK budget. He presented several announcements that are set to affect businesses, the self-employed, and working families. Here is a summary of the main points from the latest budget.

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Planning for the New Tax Year

As we near the end of the tax year, it is important if you are self-employed to start planning for the new tax year. This guide explains when the tax year ends and provides a year-end tax planning checklist.

We have provided a summary for the main 2020/2021 tax year changes to help guide you through the main changes that will come in to force. Taking action at the start of the tax year may give you an advantage. Here’s what you need to know about the 2020/2021 tax year. 

What Is IR35 And When Does It Apply?

IR35 is a piece of legislation designed to counter tax avoidance. It is used to decide if contractors are actually contractors or are just disguised as an employee for tax purposes. This article will help you understand the IR35 legislation and provide tips on if it applies to you and how to be compliant.

tax return documents

How to Complete a Self-Assessment Tax Return

A self-assessment tax return is the form used by HM Revenue and Customs (HMRC) to collect income tax from individuals. Whilst income tax is deducted from your salary automatically if you work for a company, most people who are self-employed must complete one each year.

This guide will explain who needs to complete a self-assessment tax return, when they’re due, and how to complete one (with a handy checklist).

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How Long Should You Keep Financial Records For?

The purpose of a document retention policy is to establish how a company should keep and maintain its documents such as financial records and insurance documents. 

In this guide, we will advise you on how long you should be keeping personal and business financial records. It will also explain the process of drafting a document retention policy for your business.

How long do you need to keep personal financial records?

The amount of time you need to keep personal financial records varies depending on the type of record:

  • You should keep your last three bank, credit card, and loan statements unless you receive an annual summary, in which case you should keep them until you receive your next annual summary.
  • Utility bills should be kept for at least one year.
  • Warranties should be kept until they are outdated and important receipts should be kept for at least six years.
  • Payslips should be retained until you receive your annual P60 form (the form that summarises all of your pay and deductions for a specific year).

How long should business financial records be kept?

HMRC may charge a penalty of up to £3,000 per tax year for failure to keep records or for keeping inadequate records.  If you don’t have a lot of space to keep your business’ financial files, they can be stored digitally.

The types of records that you should retain depend on your type of business. Sole traders and limited companies are expected to keep different kinds of documentation for different periods of time.

Sole traders should keep all sales documentation, business expense records, and VAT and PAYE information for five years after the end of the relevant tax year. If you are subject to an HMRC investigation, you’ll need to retain these documents until HMRC advises you otherwise. Sole traders that have received a government grant must keep these documents for four years from the date of accepting the grant.

Limited companies, on the other hand, have a lot more documentation to consider.  As well as the documents listed above, directors need to retain records such as loans secured against the company’s assets, shareholder transactions, liabilities, and business assets. Limited company records must be kept for a minimum of six years. Some documentation, however, will need to be retained for 10 years – this includes VAT MOSS records, minutes of meetings (detailing any resolutions), and the companies’ statutory books.

 

How long should insurance documents be kept?

Different types of insurance policy will necessitate different approaches to document retention:

  • Personal insurance documents should be kept for as long as they are valid.
  • Business insurance policies should be kept for at least seven years after the policy has ceased for paper copies and at least 10 years for electronic copies.
  • For business insurance claims documents, paper records should be kept for at least seven years after the claim is closed except for subsidence, employer’s liability, and public liability claims, which should be kept for 10 years. All digital records should be kept for 10 years.

 

How to draft a document retention policy

A good document retention policy (DRP) should provide the structure for a company’s information management program. It should also give some direction on how employees should manage any information created or used within the company and how long a record should be kept before it is destroyed. 

For a document retention policy to be effective, your company should have a comprehensive understanding of all the records that it stores in different formats, such as paper documents, electronic files, telephone call records, and social media. Guidelines on how to handle all of this information should be included in the DRP.

A DRP should include a records retention schedule. This is a simple way to instruct employees on how long they must keep company records. Typically, a records retention schedule consists of a series of charts that list the categories of records and the length of time that records should be retained.

Company records are owned by the business and it is vital that every organisation has efficient record management to avoid the penalties mentioned above. It is also important to review the DRP once a year to maintain its accuracy and to republish it as needed. The changes should be highlighted to employees to show how they will affect their daily tasks.

 

Have further questions?

If you would like any more information or professional advice about the retention of financial records, please get in contact with us here and we will be happy to help.

How To Avoid Cash Flow Problems

It’s common that most small businesses will have a cash flow problem at some point; luckily these can largely be prevented with planning and preparation. In this article we’ll run through some of the most common causes of cash flow problems, as well as offering practical advice on how to improve your cash flow.

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How To Prepare Your SME For Brexit

With the UK set to leave the EU on 31st October, it is important to have a plan in place to prepare your business for Brexit and put it in the best position possible in time for the changes. We have listed some of the key things you need to consider before the UK leaves the EU.