Category Archives: Saving Money

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The Consequences of Being Inside IR35

The financial consequences of being inside IR35 are mainly (there are other consequences) you lose the tax-avoidance facility of dividends. 

Essentially, if you are within IR35, you must calculate a “deemed payment” and pay NICs and PAYE (tax) on that deemed payment.

The tax-deductible amounts that you can claim in travel and expenses will also be affected.

Say no to 0870

… and other non-geographic numbers.

In recent years, more and more companies have been moving to “non-geographic” numbers (generally with a dialing code starting with 05 and 08, or worse still, a premium number which begins with 09).

If you have an inclusive tarif which means that all calls to geographical landlines are “free” (well, included in the standing charge), you may be charged extra (sometimes a premium) for calls to non-geographic numbers such as 0845, 0890 numbers.

There is always an underlying “geographic” landline number beneath the “non geographic” one.  Some organisations will give this number out, on request.  Unfortunately, some organisations (shamefully, this includes HMRC) will not give out the underlying geographic landline number that “underlies” the non-geographic number.  Personally, I am not sure why a company would want to put off its customers/potential customers in this way, but that is another debate.

However, at www.saynoto0870.com there is a growing database of corresponding geographic landline numbers.  It is possible to search for an alternative number by either company name or by non-geographic number and find the underlying geographic number.  It is also possible to add your own entry should you discover an underlying geographical number that isn’t already listed.

A quick guide to UK dialing codes:

  • 01 geographic landline code
  • 02 geographic landline code
  • 03 non-geographic code (charged at or below rates for geographic numbers)
  • 0500 national freephone numbers
  • 055 corporate numbers
  • 07 radio, personal or mobile numbers
  • 0800, 0808 national freephone numbers
  • 0844 non-geographic numbers (up to 5p/min from BT landline)
  • 0845 non-geographic numbers (up to 4p/min from BT landline)
  • 0870 non-geographic numbers (up to 8p/min from BT landline)
  • 0871, 0872 non-geographic numbers (up to 10p/min from BT landline)
  • 09 premium rate numbers

Online Banking

Online banking is now normal for many individuals and businesses.  It is great for keeping right up to date with your bank transactions.  It’s also a great way to save money:  many banks will charge business customers for processing cheques (either drawn by the business or paid in), however some banks will not charge for online payments and receipts.

However, online banking is not without it’s risks.  To minimise the threat of fraud and identity theft.  (Corporate identity theft is also common), here are some general pointers:

  • Always keep your login/registration details secret.
  • Make sure that you are logging into a secure server (the website address will generally begin https:// and some browsers will also display a little padlock icon.
  • Phishing emails (where a fraudster will send an email purporting to be from a bank, generally asking you to click a link in the email and confirm your registration details) are common.  Therefore, never click a link to your bank from an email.  Generally, banks do not send security emails addressed to “dear customer”.  Remember – your bank will know your name!  Also remember – no bank will require you to disclose your security information by email.
  • Never email your login details to anyone.
  • Report scams to the Banksafe online.

Your own bank will be able to provide you with more details about how you can protect yourself and how you can go about verifying whether an email is genuine or not.  Visit Banksafe online for more general pointers.

Why do a Bank Reconciliation

The point of carrying out a bank reconciliation is to check that nothing has been missed from the business’s records and also to ensure that there have been no bank errors.

A business’s cash book will rarely agree to the bank statement and it can be easy to miss transactions, such as direct debit payments if a bank reconciliation is not done.  Similarly, banks sometimes make errors too which may otherwise go unnoticed.

Bank reconciliation is a standard part of bookkeeping.  If you have not done a bank reconciliation as part of your bookkeeping, your accountant’s fees will almost certainly be much higher.  Many accountants will insist on a bank reconciliation having been done prior to their doing your statutory accounts.

Choosing an Accounts Software

I’ve recently been in the position of choosing accounting software, so this has been forefront of my mind.  This is a (by no means exhaustive) list of things to consider (in no particular order). 

  • price
  • functionality
  • ease of use/user friendliness
  • accounting knowledge
  • upgradeability
  • upgrade cost
  • ongoing support costs
  • flexibility
  • does it meet your legal obligations

Why use Accounting Software

The whole point of using accounting software is to make your life easier by saving you time and money.  Therefore, if it doesn’t and you can meet your legal requirements without it, you should question whether it’s worth the effort.

It should save you time because:

  • the whole process of bookkeeping should be faster (although setting up a package can take an initial “time investment” at the start)
  • you whould be able to answer queries much quicker (such as “did you pay supplier A last month, and if so, how much)
  • some things should be semi or fully automated, such as bank reconciliations, VAT returns
  • your “year end” should be more straightforward

It should save you money because:

  • you may be able to negotiation lower accountant’s and/or bookkeeping fees.
  • indirectly, you should save money by freeing up your/your bookkeeper’s time.
  • you may be able to make better financial decisions as a result of better and more timely information.