Ed’s Top Tips – Tip 8: Work For Yourself, Not By Yourself

Tip 8: Work For Yourself, Not By Yourself

Ed Goodman, business mentor, author and co-founder of Cambridge Business Lounge, presents Ed’s Top Tips – a series of short and useful guides for starting and running a business. This week: Work For Yourself, Not By Yourself.

When you work for yourself, you have that flexibility to work when and wherever you like! This has it’s up sides like being able to sit and work from your garden on a sunny day, or have two hour lunch break lounging on the sofa. The beautiful thing about working for yourself is setting your own rules for your working day.

It also has it’s downsides. Working for yourself can be pretty isolating and lonely, most of the time your day will go by without talking to another person (the cat or dog doesn’t count!). Overcoming problems when you have no one to air them to can cause you to feel frustrated  The great news is there is another way of working which isn’t so isolating.

Watch this video were Ed gives his top tips to avoid this situation.

Action Point:

Now you’ve watched this video, how do you think it would be advantageous for you to venture out and try a couple of different of working environments?

People who work from home don’t get the distinctive difference of separating work and home life. This could cause issues in the future.

If you’re not keen on meeting new people you could also look at different options like online networking groups. It’s a group which will provide you help and advice is Freelance Heroes. You can also find them on Twitter too.

Tell us if you do feel isolated or lonely when working by yourself  or how you overcame this. Leave us a comment below or Tweet us using the hashtag #EdsTopTips

Ed’s Top Tips – Tip 6: Answer your phone!

Tip 6: Answer your phone!

Ed Goodman, business mentor, author and co-founder of Cambridge Business Lounge, presents Ed’s Top Tips – a series of short and useful guides for starting and running a business.

We all own a smartphone, but are more likely to use it’s smart functions such as email and social media than it’s original function of making and receiving calls. Some new business owners are reluctant to put their personal number out there but all of these things could stop potential business coming your way.

Watch this video where Ed focuses on the reasons why you should answer your phone.

As a business you need to consider what form of communication is going to be most effective for the task you have in hand. A phone call can be more direct and productive than an email conversation.

Action Point:

What solutions have you found to help you answer your phone? Comment below or send us a Tweet including the hashtag #EdsTopTips.

Ed’s Top Tips – Tip 3 – Managing your cash flow

Ed Goodman, business mentor, author and co-founder of Cambridge Business Lounge, presents Ed’s Top Tips – a series of short and useful guides for starting and running a business.

Tip 3 – Managing your cash flow. It’s all about the money, money money…

One of the main reasons why a business fails is its mismanagement of its cash flow. In fact, according to a U.S. Bank study, as many as 82% of business failures are due to poor cash management.

Watch this video where Ed talks about the importance of managing your cash flow.

How do you track your finances? What lessons have you learnt in ensure your cash flow is managed effectively?

Let us know in the comments or Tweet us using the hashtag #EdsTopTips.

New VAT rules on Digital Services (VAT MOSS)

This is a guest post from Les Howard, VAT Consultant, who helps many people through the VAT maze. delivers VAT training in a number of contexts, writes about VAT in technical periodicals, and in general business magazines. In this blog, Les helps to unravel the details and rules surrounding HMRC’s new VAT MOSS scheme…

New VAT rules on Digital Services (VAT MOSS)

HMRC1 January 2015 marks the formal introduction of a significant new VAT regime which will affect suppliers making B2C digital supplies of services. The new regime is called MOSS (Mini One Stop Shop).

Some technical stuff!

VAT rules determine the ‘place of supply’ of cross-border supplies. Until 31 December 2014, the place of supply of B2C digital services is the place the supplier is established. For a UK-based business, UK VAT applies. If the supplier is not registered, then no VAT is charged.

From 1 January 2015, the place of supply is the country where the recipient is located. A UK supplier therefore has to charge French VAT to a French customer.  Without the introduction of MOSS, a UK supplier would find him/herself liable to be registered in a number of EU Member States. (There is no VAT registration threshold for non-nationals.)

What if I don’t want to use MOSS?

You can opt to register in each Member State in which you make sales. That would be an administrative nightmare!

Does MOSS apply to me?

Yes, if you supply B2C digital services to customers living in the EU. Digital services are telecommunications, broadcasting, and electronic services supplied with ‘minimal or no human intervention.’

How do I register for MOSS?

There is a portal on the HMRC website. It is a similar process to the usual VAT registration process. There is no provision for completing a hard-copy form; and you have to register in your own name. The portal does not allow an Agent to register a client taxpayer.

My turnover is less than £81,000. Do I have to register?

The legislation forces a UK business to register for VAT in the UK in order to register for MOSS. HMRC have issued a concession (Brief 46) which means that, having registered, you can ignore your UK sales, and only account for VAT on your EU (non-UK) sales. You simply enter £0.00 in the relevant boxes of your UK VAT Return.

How do I work out my MOSS VAT Return?

You need to provide the gross value of sales made in each EU Member State for each calendar quarter. The MOSS portal calculates the VAT due for each Member State, and tells you how much VAT to pay. You are required to submit and pay by the 20th day of the next month.

How do I determine where my customer is located?

All you need is 2 pieces of non-contradictory evidence. Your sales system should obtain this for you. You can use: postal address, credit card number, SIM number, bank account sort code. You need to retain this information for ten years.

What VAT can I claim?

The MOSS Return does not allow you to claim VAT (input tax). But you can claim UK VAT, as least in part:

  • If your UK sales are less than £81,000, and ignored (see above), you will only claim VAT in relation to non-UK sales, on your UK VAT Return.
  • If your UK sales are over £81,000, of if you choose not to ignore them, you will claim all the VAT you are charged on your UK VAT Return.
  • You cannot reclaim any VAT incurred in another Member State. You need to submit a separate claim using the Refund Scheme.

 For more information, contact Les at vatadvice.org or on twitter @LesVatAdvice

 

 

Breaking The Back of Bookkeeping

b imageFollowing on from “Why You Need an Accountant When Starting a Business”, I want to focus on the financial paperwork that you can (and need) to manage yourself, and that you don’t need an accountant for.

Imagine this dark scenario…

You’ve done your research; got your product or service to market, found customers who are interested in what you do…and then you run out of cash. A dramatic, but not uncommon, situation and one not caused by banks not lending.

This situation is often created by not knowing who owes you money, who you owe money to and HMRC penalties for late or incorrect payment and filing of returns. There are more benefits for having your house in order as Emily Coltman FCA, Chief Accountant to FreeAgent Central, explains “Not keeping your books up to date is very risky. Plus, you won’t be able to make informed decisions such as which new markets or new products to try if you don’t have accurate and up-to-date financial information”

“I don’t have the time”

It’s vitally important to make the time, and how much time often depends on the complexity of the business. If you’re a retailer selling a high volume mix of VATable and non-VATable products, your bookkeeping is likely to be more involved than a business which raises 5 invoices per month. A good system will be easy to use, easy to understand and as Emily suggests “we believe that spending just one hour a week on your books will make all the difference.”

It certainly will be if you put these tools in place when you set up your business, rather than play catch-up when you’ve been trading for weeks or months.

“Which system should I use?”

There are a plethora of bookkeeping systems out there, far too many for me to list. So, if you haven’t used one before, seek advice from your peers, accountant or bank manager. An accountant may even suggest using the same system as them, which could be a benefit to you and may even help to reduce your accountancy bill. But is it the right system for your business? Emily warns “Don’t accept an antiquated bookkeeping system because it’s what your accountant has always used. Look for a system that puts YOU in control – after all, this is your business and you are responsible for it to HMRC!”

Using a system that’s different to the one your accountant uses shouldn’t hinder your professional relation with them, as Emily explains “With the right system for you, you will be able to work more closely with your accountant, who will be able to give you proactive business advice such as whether your prices aren’t high enough or you’re paying too much in bank charges.”

Download Software Vs Cloud Based Systems

Market leading tools have historically been QuickBooks and Sage and there is a growing increase in the number of online tools available, with the most popular versions being FreeAgent, Xero and KashFlow. Others are available, but I’d recommend one of these as the starting point for your research.

Online accounting software is, in my opinion, the best way to go. Your information is then accessible from anywhere in the world and, more importantly, it is safe and secure. Also, many online systems offer free trials so you can see how intuitive they are before you commit. When you do try one, also test their customer service/tech support as these will be invaluable to you in the early days of use, and you don’t want to be spending more time on hold or with an unsupportive advisor than you need.

To summarise:

  • Start as you mean to go on, and put systems in place now.
  • Use the tool that’s right for you and YOUR business, not your accountant or bank manager
  • The time spent on this will actually save you time in the future.

Email your comments or questions to info@cambridgebusinesslounge.com

It’s Okay To Ask For Help For Your Business

helpStarting a business can be an extraordinarily exciting, yet daunting experience and the need for peer to peer support is greater than ever…

One morning, a boy was playing in his sandbox with his box of cars and trucks, his plastic pail, and a shiny, red plastic shovel. In the process of creating roads and tunnels, he discovered a large rock in the middle of the sandbox and, with a little bit of struggle, he pushed and nudged the large rock across the sandbox by using his feet. However, when the boy got the rock to the edge of the sandbox, he found that he couldn’t roll it up and over the wall.

Determined, the boy shoved, pushed, and pried, but every time he thought he had made some progress, the rock tipped and then fell back into the sandbox.

All this time the boy’s father watched from his living room window as the drama unfolded and, at the moment his tears fell, a large shadow fell across the boy and the sandbox.

Gently, but firmly, the father said, “Son, why didn’t you use all the strength that you had available?” Defeated, the boy sobbed back, “But I did, Daddy, I did! I used all the strength that I had!”

“No, son,” corrected the father kindly. “You didn’t use all the strength you had. You didn’t ask me.” and, with that, the father reached down, picked up the rock and removed it from the sandbox.

I have absolutely no doubt that you are great at what you do and that you are incredibly passionate about the products or services that you offer. But what don’t you know? And what is stopping you from getting your rock over the wall? I suspect that many don’t ask for help because pride gets in the way, or that we don’t know who to ask outside of traditional businesses like accountants or solicitors. Or maybe because a mental cry for help is closely followed by “but I wonder what it will cost me”.

But there is so much more help out there. In fact, at the time of writing, almost ¼ million businesses started up in the UK* this year alone and many will be sharing the same challenges and feeling the same frustrations.  So, get out there to networking events and coworking spaces; find other start-up businesses, whatever their industry, and support each other. You’ll be amazed how quickly your rock is removed and how much it will help your business to grow.

” Alone we can do so little; together we can do so much” – Helen Keller

* http://www.startupbritain.org