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If you’ve ever wanted to be your own boss, starting up a business is the way to go. Just think, you don’t have to answer to anyone but yourself – you set the deadlines, decide on the workload, and take control of every aspect of the business. But there’s one thing in the way: money.

It’s widely known that setting up your own business isn’t cheap, but it also doesn’t have to be financially crippling. It is possible to start up on a tight budget – you just need a few money-saving tricks to help you do it.

Work from home

Premises tend to be one of the biggest overheads when setting up a business, so it makes sense in the early days to work from home. This is a logical step if your business is one that’s largely desk-based, but it’s also an option if you work in a trade that requires workshop space.  If working from home isn’t viable though, look a little further afield for cheap working space – and the more out-of-town you go, the cheaper it tends to be. 

Utilise the people you know

Taking on additional members of staff is another major expense, but when you’re just starting out it pays to ask your friends and family if they’d be happy to help you. You might not necessarily have the funds to pay them a wage, but as long as you don’t take advantage of their kindness then you should be able to come to some sort of agreement. So don’t be afraid to ask, and make sure that you remember their help when your business gets off the ground.

Get some training – or teach yourself

Many start-ups demand you to be a Jack of all trades in those crucial early days, so it pays to get some training in key areas of your chosen business. This doesn’t necessarily mean forking out for courses and formal qualifications, though. There are plenty of free online courses from leading institutions on everything from business and management right through to marketing, branding and even data analysis.   

Of course, you can always use online resources to teach yourself and gain a basic understanding of the foundations that build a business. 

Don’t discount used equipment

Kitting out your home office, workshop or studio can be pricey, but not if you buy second hand. Used doesn’t mean you have to compromise on quality, and many items are as good as new if you look hard enough. You can find furniture like desks, chairs and cabinets at bargain prices, saving you plenty of money in those all-important early stages.

For things like tools, machinery and catering equipment, you can also lease rather than buy to save a chunk of cash that can be put into launching and growing your new business. Items that are leased tend to be kept in good nick, so search online to find your nearest outlet or warehouse.

If you need more information and advice, do get in touch and we can guide you through a successful process, call us on 020 8406 1524 or e-mail: services@angleaccountants.co.uk

Is your accountant better at invoicing you than they are at looking after your accounts? Here are five signs it’s time to think about switching accountant and some tips on how to easily make the change when you’re ready.

How to tell it’s time to switch accountant

1. You’re paying far too much

Sorting your accounts shouldn’t cost a fortune. If you think you might be paying over the odds, it’s time to shop around. Look for an accountant that offers a variety of packages, ideally at fixed monthly subscription with no extended tie-ins, allowing you to pick the one that’s right for you – otherwise, you’ll be paying for services you don’t need.

2. Your accountant charges you every time you want advice

When you’re running your own business, you need to be sure you’re paying the right amount of tax and claiming everything you’re entitled to. If your accountant is happy to advise on an ad-hoc basis but then delights in sending an invoice for the extra work, a change could be in order.

If you join Angle Accountants, you’ll get unlimited accountancy support relating to your business, so no matter how much help or advice you need you won’t be charged a penny extra.

3. You need to book an appointment to visit your accountant

Taking time out of your day to go and visit your accountant is not only a pain, but it’s also time that could be spent earning money. Switch to an customer focused accountant and you’ll be able to call or email whenever the need arises. At Angle Accountants, you get a dedicated Client Service Manager who’ll get to know your business inside out. We also pride ourselves on our quick responses, meaning you won’t be waiting for an age to get the advice you need.

4. Your accountant baffles you with endless jargon

There’s no getting away from the fact that the world of accountancy is full of curious and often confusing terminology. But if your accountant uses this to their advantage by rattling off jargon in the hope you’ll go bleary-eyed and simply pay their invoice, you should think about moving your business elsewhere.

We take a jargon-free approach to accounting. Your client service manager will always be on hand to explain anything you’re not sure about, while our handy business guides will set you straight on even the most complex of topics.

5. Your accountant demands you fill out an antiquated spreadsheet

With the Self Assessment deadline looming, freelancers, contractors, and small business owners up and down the country are wrestling with the spreadsheet provided by their accountant. One false move, and you’ll accidentally delete a formula that affects the whole spreadsheet.

Far better to shift your accounting method to a new manageable system. You’ll be able to see your tax liability at the drop of a hat, as well as raise invoices and record expenses anywhere, anytime. To see what hassle-free accounting feels like, grab a free demo of our software today.

How to switch accountants

The first steps

Many freelancers and contractors are reluctant to end their relationship with an accountant. After all, the accountant holds all the financial information relating to their company – gathering all of that up to then hand over to a new accountant can seem like an arduous task.

First off, check the terms and conditions of your contract. Often there’s a notice period you have to serve with an accountant before you can leave (and stop paying them).

You should always give your accountant notice when you’re leaving their practice.

Your new accountant can ease the process by sending them a professional clearance letter or disengagement of services, asking for all the relevant documents and information relating to their business.

However, if your current accountant hasn’t been given this notice then the process may take longer or they may choose to ignore the new accountant and only respond to you personally.

Of course, as long as your accountant is registered with a professional body, they’ll be obliged to give this information.

What is a professional clearance letter?

A professional clearance letter is a correspondence that your new accountant will send to your old accountant to ‘ask permission’ to take you on as a client.

It’s also a great opportunity for them to seek out any documents and paperwork the old accountant is happy to part with – or to check if there’s any reason they shouldn’t take you on as a client. It’s not something you’ll need to worry about taking care of.

What does your previous accountant need to send?

Here’s a list of the information that you need to get from your accountant (your new accountant should do this for you):

Full financial statements (with detailed profit and loss accounts), including Year Ends, Analyses of fixed assets, trade debtors, bad debt provisions, other debtors, prepayments, trade creditors, accruals, other creditors and capital account movements, Details of any hire purchase or finance lease agreements together with appropriate calculations Bank reconciliation in respect of all accounts, Summaries of stock and work in progress, if appropriate.

A copy of the Corporation Tax computations, A copy of the most recent CT600 submitted, together with any supplementary pages. Any information which affects the company’s future liability, Form CT620/CT600 issued by HMRC in respect of the last accounting period, Confirmation of disengagement sent by the accountant

Any other relevant documentation or matters outstanding, including PAYE scheme reference and PAYE Accounts Office reference if applicable.

A better way to do your accounting

A good accounting system shines a light into what was once a dark and mysterious art. When you have your account, your account information is readily available to you at the click of a button. Not in an accountant’s file at the bottom of a drawer.

This, in turn, means that should you ever need to leave that service, the process will be much easier.

Need a new accountant?

Ask us how Angle Accountants makes switching easy, by giving us a call today on 020 8406 1524 / 07487 301 902 or arrange a free consultation.

You may or may not be aware that a limited company is legally recognised as being a separate entity from its owner, which means that when it comes to the limited company’s assets, it is the company itself that owns them.

When it comes to investing in property, using a limited company to do so can have many benefits – and not only monetary ones.

It is true that the tax-related benefits are usually going to be better when using a limited company to invest in property rather than buying property personally, but there are more practical reasons to take this route, too.

1. There is no mortgage interest relief restriction for limited companies

Although the amount of tax relief accessible to individual property owners is being cut back, any interest paid on a mortgage to purchase property through a limited company is fully tax deductible. This means that it can often work out more tax efficient to purchase an investment property through a limited company.

It is also worth noting that from April 2020, landlords will no longer be able to deduct mortgage interest from their rental profits, which will affect their income tax bills significantly. There is less than a year to go until this change comes into play, so if you don’t already have a limited company set up for your investment properties, it is worth seriously considering going this route.

2. Limited companies have a significantly lower tax rate than individuals who pay income tax

A limited company pays corporation tax rather than income tax, and the latter of which is currently paid at 19% of the company’s profits, compared to income tax, which can be up to 45% for high earners. From 1st April 2020, corporation tax is set to increase to 25% of the company’s profits, but this is still far more tax efficient compared to sole trader when it comes to property ownership.

Obviously, you will have to pay income tax when accessing the funds from your limited company – but it is very likely that you will be better off from a tax-efficiency point of view doing this than having to pay high levels of income tax, such as 45%.

3. Multiple shareholders

Sharing company profits between multiple shareholders, whether by way of salary or dividends, means that you can take advantage of using multiple individual tax allowances e.g. you and your spouse, or your children (if they are over the age of 16). You can each use as much of your income tax allowance as you want, and you can be flexible with this approach; you don’t have to take the same amount of profit as each other, and you can vary the frequency of sharing out the profits, too.

It is worth noting that it is very simple process to onboard new shareholders as well to a company structure (especially if you have an accountant to do it for you!), therefore allowing the profits to be distributed amongst even more people if you so wish.

4. You can rely on the fact that creditors do not have access to your personal assets

Particularly useful when buying land and then developing property, relying on limited liability protection rather than personal liability can come in very handy, especially in the case of a recession

Creditors only have access to the company’s assets, so if the company’s financial situation was to deteriorate, the people behind the company i.e. directors and shareholders will be safe from creditors. Be aware, though, that if you are a first-time landlord, your lender may insist that you put a personal guarantee behind a mortgage, which can mean that creditors can access personal assets if the company’s financial situation were to deteriorate. More seasoned landlords with a good track record, however, can often escape being asked to provide a personal guarantee.

5. You can retain the company profits and reinvest them without paying more tax

When you own a property in your personal name, you need to pay tax on any profit you receive from that property, even if you are intending on using the profits to reinvest in more property. With a limited company, all of your profits (after corporation tax, which, as mentioned before, is lower than income tax) can be kept in the company and used to reinvest, if that is the route, you want to go down.

6. Cheap stamp duty when selling shares of a company containing properties

When a company owns a property and it is time to sell up, there is an option to sell shares of the property rather than the property itself. This can be advantageous to the buyer, as they only have to pay small percentage of stamp duty on such a transaction. Stamp duty for personally owned properties can be as high as 15% – so this one really is a no-brainer!

7. Access to better loans when looking to grow the business

When growing your property portfolio, you can use this to your advantage when approaching lenders for loans. By showing that you have a strong portfolio of investment properties and a well-managed limited company behind it, creditors are more likely to offer good rates when applying for loans.

By using one limited company for all your properties, you will have the ability to see the performance of your entire investment portfolio to enable you to work out which properties are making and losing money, which can, in turn be provided to investors or creditors to help support any requests for financial backing.

Next steps

While it seems like a no-brainer to invest in property via a limited company, the cost, time and effort associated with running a limited company can often seem like a lot of effort – sometimes overshadowing the potential tax-related benefits associated with this method. Your solicitor, conveyancer and accountant, for example, may charge you more because they have to deal with the further work involved with dealing with the limited company in addition to yourself.

If you would like tailored advice about using your limited company to invest in property, please do get in touch – book a call with Cavelle Batchelor, or drop him an email, cavelle@angleaccountants.co.uk

When it comes to your business we know how to see things with perspective. We understand that your business is unique, your business is important and this is the perspective from which we provide our first class services.

Why not book our free consultation and see why are clients choose us to manage their business needs.

Simple Packages

Angle Accountants offers three service packs but we understand the need to be flexible and so we also offer one-off and monthly account services.

Contact us if you wish to discuss our services.

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We are committed to helping you grow your business and ensuring you are operating at optimum level. We treat all our clients as individuals and therefore we will never offer a one-size fits all approach.

What is included in a free consultation?

We offer consultation via telephone or face to face at our location near east Croydon station. During the consultation we will get to know your business, discuss your business needs and we will provide you with some practical advise and recommend the best Angle Accountancy service for your needs. This is a no obligation meeting, with no pressure to use our service, although we are sure you will want to!

Tip:

How to check your business health – ask yourself:

1. Are you making money or losing money
2. Do you need to avoid paying fines?
3. Have I booked a free consultation?