New starter needing a reality check - The Book-keepers Forum (UK)

Prunes · Member

New starter needing a reality check

Peasie · Expert

When you are talking about remotely are you meaning like some people work where the paperwork is posted out and you never actually meet the client? Or do you mean you collect the paperwork and then work at your own time at home and then return paperwork. Most of my work is done at home apart from one client where I have to do ALL their paperwork and invoicing, paying cheques etc (the actual bookkeeping side of things I could easily do at home). And another accountant I visit weekly to do the wages for a few of his clients. But apart from those two I work at home. If the client is small they are unlikely to have an office for you to work out of.

Prunes · Member

Thanks for your reply.

Apologies, I should've been a little clearer.

When I say working 'remotely', I meant doing the majority of the work from home in my own time.

I'd be able to meet to clients from time to time, but not on a regular basis. So, a combination of them posting everything to me and a little bit of being able to meet them now and then.

Thank you.

Peasie · Expert

I can't see this being a problem.

Prunes · Member

Brilliant.

Thanks again for your insight. I'm sure I'll be back for some more help :)

Shamus · Forum Moderator & Expert

Hi Pesh,

Its doable but there's another logistical issue that you need to consider.

Your main role is as a pilot. Are you able to dictate when you work or does your employer dictate such as there are times where you need to be on top of your clients work due to deadlines.

For example, January is wall to wall last minute self assessments. Its not something that you can plan that much around as thats the time when you pick up a lot of clients who come in off the street expecting you to file their returns before the deadline.

Then there's monthly / weekly Payroll that is a lot less lenient than the old system as to when you can file retuns.

There are others as well such as VAT returns but the main two that you will find that tyou may have difficulty working around are RTI and self assessment.

You can of course with good planning and compliant clients... lol... sorry, just rolling on the floor laughing for a min... Compliant clients... The reality is that clients concentrate on running their businesses and leave what we consider to be the important stuff to the very last moment when we are supoposed to wave a magic wand to keep the fines, penalties, interest and surcharges at bay.

Clients are not at all like the one's that you read in the books. You are forever chasing them for missing paperwork and explanations... And they're the good one's.

If you cannot be there at the right times then you are making a rod for your own back.

The above said, this job can be done part time such as evenings only. But I think that you would struggle needing to work away espechially at critical times such as month ends, January and April.

Just my two penneth worth and I hope that it helps even though it may not be the answer that you wanted.

kind regards,

Shaun.

EPF_Solutions · Senior Member

Not quite the same, but in the previous incarnation of my business I was effectively the management accountant for my main clients. They did the basic book-keeping themselves, and I did the monthly accounts, bank reconciliations, and all the financial entries (accruals, prepayments, depreciation etc). I did nearly all this by teleworking, and only visited the clients on irregular occasions. One was 200 miles away, and it worked brilliantly without me ever visiting, once I'd trained the book-keeper. The important thing was that I was almost always contactable, but this was before the days of mobile phones, and we survived by leaving messages on answering machines. I've been known to do weekly payrolls on a Monday morning in a bed & breakfast while I was on holiday! And this was done without the sort of technology that's now available. The business evolved that way rather than being planned, but I did have 12 years of accounting experience when I started it.

So if you can find the right niche, it's possible, and can work well, but probably not for everyone.

Prunes · Member

Thank you Shaun and John for your advice.

I can only imagine the problems someone in this profession faces with some clients, especially in January and April.

My work as a pilot will give me at least 12 full days off every month in the UK, I'm hoping this will allow me to dedicate ample time to a handful of small clients.

Any other advise would be greatly welcome.

Thank you :)

Peasie · Expert

Shaun has said about the wages issue with RTI - a lot of bookkeepers have ditched payroll as a result (Shaun himself has). I think it's probably wisest to leave this side of things out given the nature of your employment.
The VAT return has to be done by the 7th of the month (eg period ending 31st May done by 7th July) so you do have a reasonable window in which to get it done.

EPF_Solutions · Senior Member

I'm not sure about doing payroll now either. It was different in the olden days when I last did this!

Prunes · Member

I think I'll have no choice but to ditch payroll work, as you've mentioned, it'll be very tricky to do it with my irregular available days.

VAT returns and other services which will give me reasonable windows to do my work in would be do-able for me.

Thanks again, I'm glad to hear it's a viable profession, but need to be aware that working with less than compliant clients could make things difficult.

You've all been most helpful and look forward to getting started in the industry.

-- Edited by Prunes on Wednesday 4th of June 2014 12:01:46 AM

-- Edited by Prunes on Wednesday 4th of June 2014 12:02:25 AM

EPF_Solutions · Senior Member

My main clients became friends too. I did a good professional job for them, but having a relationship where you turn up in jeans and a T-shirt accompanied by a dog, or need somewhere in their office to park your bike, made for quite an easy going relationship, where not being available sometimes, or only being able to offer limited support on occasions, was OK. Of course it didn't work with everyone, and has to be earned with the ones it does work for.

David Ballantyne · Senior Member

Hi,

I'm curious. What's the problem with RTI? Could someone educate me?

I'm not in practice yet, but planning to do so in the near future. Just need to clarify whether I should offer payroll services.

Thanks,

David.

Don Tax · Expert

Hi David.

In my opinion the problem with RTI is overkill. Is there a really good reason why pay must be reported in advance and not as a historical fact? I doubt that it would matter very much if pay was reported within a week, when the facts were known.

Given that many of us here a remote from client bank accounts or till, the 'on or before' reporting requirement needs quite a bit of investment. It wouldn't be even any use if we had direct access to the bank account in order to check daily if any wages had been paid, as that would be too late or completely uneconomical for me to check every evening.

To cover myself, I want the client to have seen the entire payroll at least a day in advance of pay day. Ideally, they would then confirm that this is what they are going to pay. Straight away then, there are 2 visits to the payroll desk. (Sentence deleted due to a personal insult to a senior politician).

Of course, confirmation will rarely happen. The pay day can vary if someone is going on holiday so my sending payroll on a Wednesday for Friday may not always be good enough. Conceivably there could be many pay days in a single week for a 5 employee company - all requiring an 'on or before' submission. I find they don't want to pay monthly.

The extent of overkill will be in proportion to the strictness of the penalty regime. I have one client who pays 2 wages a year. If there is going to be a de-minimis level of late chances, it is unlikely he will ever be fined, despite him having no intention of telling me when these 2 payments are going to happen. Conversely, the weekly 5 employee company may bust a gut confirming RTI on seventy different occasions in a year, be a day late on 5 occasions and receive a penalty.

So in summary, if the number of submissions were relaxed to say, 12 p/a and there were say 3 late filing 'lives', then I think it's do-able on an economic basis. Otherwise, to comply, I think there will be a tightrope walk between on time and accuracy - never quite achieving either.

Just my opinions but hope that gives you the flavour of it.

Kind regards,
Tim

RobH · Expert

Don Tax wrote:
(Sentence deleted due to a personal insult to a senior politician).

I would like to start a petition for the reinstating of all insults to senior politicians...they can take it!

Shamus · Forum Moderator & Expert

but there's so much choice, where to start Rob...

Then again, are we insulting the politician or their focus group that they need to consult before opening their mouth's.

... I think maybe I need my own personal focus group

EPF_Solutions · Senior Member

Poly = Many
Tics = Parasitic insects

My MP, and the MP for a certain English south coast constituency excluded!

Anyway, back to RTI! I used to do monthly payrolls for my previous clients, and weekly ones for a couple, where they gave me the details on a Monday morning, and paid everyone on a set day each week. So is that a problem with RTI, or is it just the unpredictable and erratic clients? If it's just the unpredictable ones, can you cover yourself by having a clear contract with them covering what each party does, and when?

Don Tax · Expert

LOL Rob. I'd no previous dislike of the gentleman in question although his Wiki bio is less than complimentary on a couple of points.

It's just bizarre how the 'on or before' imposition got past a right wing politician. They're not known for believing small businesses have nothing better to do than to be filing Returns every week. In fact, I'm beginning to think it's a hoax and they'll only enforce it where payment is by Bacs.

I'd still oppose it on principle. Just because firms have the info ready to file doesn't mean the Government need it beforehand.

And to think when it was first shown, I used to laugh at all those Grumpy Old Men lol

Don Tax · Expert

Hi John,

I had one recently that had agreed to Gross per year Notice pay. He was under pressure and did this verbally and paid out. I had previously discussed and corresponded on the matter at some length making it clear this was taxable. Due to the new Employer Allowance, the mistake has cost him under £100 but he couldn't have told me beforehand he was going to say "gross" instead of net.

He has always delayed telling me of payroll events, but now there's a contract every time he accepts the payroll I have sent in advance. Never any systematic effort to delay or defraud PAYE and if an under-payment happened he incurred interest -- just as likely he'd be paying out SSP before having claimed it.

I guess we'd all like government with a light touch, but 52 x the previous number of deadlines has to be overkill. I find the on or before requirement more suitable for in-house payroll officer.

Kind regards,
Tim

-- Edited by Don Tax on Wednesday 4th of June 2014 06:34:10 PM

EPF_Solutions · Senior Member

Don Tax wrote:
I find the on or before requirement more suitable for in-house payroll officer

Maybe that's part of the difference then. I was effectively the in-house management accountant for the clients I did payroll for. Although I actually worked from home, using my own systems and doing things my way etc., so was genuinely self-employed. I expected, and got, the timely information the payroll department in a big company would have expected, and for some clients I had access to their online banking to make the payments. But I also supervised their accounts staff to a certain extent, so they did things properly. So I don't think RTI would have been a major problem.

Still not sure if I'll offer payroll now!

Amanda · Expert

Payroll is OK just don't do too much of it. Take on easy ones like Directors that are paid the same each month, and small employers with 10 staff or less, get the ones with staff to email the details or phone them to confirm if they don't know how to use a computer (yes there are still some like that!), I don't really go out of my way to get payroll, it kind of finds me, so I wouldn't turn it down if there is money to be made.

I certainly wouldn't take on a pub or anything big like that, or if I did they would have to be paid monthly not weekly.

EPF_Solutions · Senior Member

That's how I think I feel Amanda. As I haven't got any clients yet, I'm just hoping the nice straightforward ones will appear first!

When I started the previous version of this business way back in 1988, my first client was almost ideal. I could handle the work, and more or less handle him! Plus his accountant became a friend, we sometimes worked together, and we passed each other work. I also got one of my best clients through the client. Will I be that lucky this time?

Peasie · Expert

Amanda wrote:
I certainly wouldn't take on a pub or anything big like that, or if I did they would have to be paid monthly not weekly.

Haha - I've just taken on a pub. They're paid weekly as well. They tell me the hours on the Monday and I hand their payslips in the next day. I make more from the payroll than I do from the bookkeeping. The only reason I hand in the payslips is because I can just walk down there on my way to an accountants that I visit to do weekly wages for. A new start company so no time to get into any bad habits.

EPF_Solutions · Senior Member

You need to go to the pub before you visit the accountant? Is it the accountant who's the problem, or is it RTI that drives you to drink?

Peasie · Expert

I couldn't even tell you how much a pint of lager costs these days. I'm assuming the till printouts don't differentiate between pints and half pints as "Sales" of draught beers divided by "Quantity" is around £2.90 and I don't think that's right.

kjmcculloch83 · Expert

I've managed to get all of my clients to run their payroll on a Friday or monthly. They text me or email me the details on a Thursday.

The biggest problem with RTI is, as said, the unforgiving nature of when it needs to be run. Other than that I've found it much easier to run than how it was previously done.

Kris

Don Tax · Expert

EPF_Solutions wrote:
Don Tax wrote:
I find the on or before requirement more suitable for in-house payroll officer
Maybe that's part of the difference then. I was effectively the in-house management accountant for the clients I did payroll for. Although I actually worked from home, using my own systems and doing things my way etc., so was genuinely self-employed. I expected, and got, the timely information the payroll department in a big company would have expected, and for some clients I had access to their online banking to make the payments. But I also supervised their accounts staff to a certain extent, so they did things properly. So I don't think RTI would have been a major problem.
Still not sure if I'll offer payroll now!

Yep, that's probably the difference. I've always seen payroll as an ancillary service that's expected of us and RTI possibly affects our clientele more than yours.

We check the existing channel of communication (quarterly bookkeeping), and amend any discrepancies in the payroll. There were always interventions for redundancy, sick pay, holidays etc, but with a light touch, it was perfectly possible to comply with statutory provisions. Now we pretty much have to do the same as your routine.

We've rarely done management accounts. Those with £1m turnover have an in-house bookkeeper/accountant or at least information systems in place. It's something I could offer more often. My mindset has always been just to take away the burden so they could get on with doing whatever it was they good at.

Anyway, just ensure the employees work a week in hand and are paid as seldom as possible lol

Kind regards,

Tim

Don Tax · Expert

kjmcculloch83 wrote:
I've managed to get all of my clients to run their payroll on a Friday or monthly. They text me or email me the details on a Thursday.

The biggest problem with RTI is, as said, the unforgiving nature of when it needs to be run. Other than that I've found it much easier to run than how it was previously done.

Kris

That's quite interesting Kris. Is it the client or yourselves that are primarily operating PAYE?

I remember you saying you found RTI easier, but forgotten exactly the reasons.

Just to look at it from a government point of view for a second. I can understand more regular data may help these three aims in order of frequency :

Calculation of State Benefits
Faster collection of deductions
Revising PAYE codes

In none of the three do I think we really need a 'weekly on or before' deadline. This encourages employers to pay wages less often merely to insulate them from penalties.

So we've instituted 13 exchanges of penalty-driven email with clients. Much of it results in no change to the payroll at all.

Giving HMRC x52 penalty powers is a new 'speed camera' for raising revenue. A future administration or this one will inevitably wish to do so.

I CAN see the point in a marquee policy with the modernising hero, seemlessly making PAYE and benefits more accurate. I hope IDS achieves these aims, but at the moment it seems about as popular as his novel. lol

Tim

EPF_Solutions · Senior Member

I'm fascinated to see how Universal Credit will work for the low earning self-employed. That's if there are any left after it's introduced. It only needs reporting monthly, but appears to be a complete nightmare for anyone who whose receipts and payments vary each month. This crazy stuff they're doing to the benefits system seems to be what RTI is all about.

Amanda · Expert

Tim- I know you said that you had to check the company were paying their staff when they said etc but surely this isn't our responsibility, we are here to report the payroll before or on the day that it should be paid, and make sure that the payslips are produced and emailed over accordingly. A few of my clients I do just payroll for I don't see the bank accounts to see when they actually paid their staff, so in that case I have to assume that they have paid the correct amounts at the correct time. If it has been reported at the correct time as it has to be with RTI, then the onus is down to the client to pay on time and the correct amount. If I had to check all my clients actually paid everyone on time I would never get anything else done!

This is just my take on it.

I do think we should be allowed to submit late a few times during the course of the year without getting fined.

Don Tax · Expert

Hi Amanda.

What's the purpose of RTI though? There's only Universal Credit can justify instant pay data so what if they haven't got any employees claiming?

U.C. is only payable monthly. Tax Credits were based on previous YEAR income so why the sudden hysteria over / under paying benefits for a month.

Our clients are only confirming the earnings data. Even where there are employees making a claim, they're not all committing fraud and can show payslips / P60s etc.

If we don't stick up for clients who will?

As I say, there is a case for more regular payroll data but it's pretty weak and U.C. awards depend on lots of other factors so there won't be any massive improvement in benefit accuracy. The DWP already know many who might under-declare income. They used to send out letters for employee earnings. Targeted confirmation could be made much quicker now.

Whats next? Monthly P&L's for the self employed. Oh wait, we've already got that lol

Take care,
Tim

EPF_Solutions · Senior Member

Don Tax wrote:
Whats next? Monthly P&L's for the self employed. Oh wait, we've already got that lol

That's my biggest concern about UC. It's not a monthly P&L they want, it's monthly receipts and payments. If customers are slow paying one month, and you buy several months stock, your business isn't viable and you have to look for a job, even if you've really got a very viable business.

Shamus · Forum Moderator & Expert

So then they stop being self employed and start limited companies, simples.

EPF_Solutions · Senior Member

So will a company director who is paid less than the minimum wage (or nothing at all) qualify for UC then? A quick Google didn't find anything.

Peasie · Expert

I'll be interested in the reply to this.
There's still some time left in Working Tax Credits, isn't there?

My hours are gradually building up over time. As a single person I'd need to work over 30 hours a week to qualify. At the moment I'm probably around 21 hours a week if it was averaged out. Some are only once a year and some every three months. But with WTC they don't allow averaging out.

You are allowed to claim for admin, advertising and other such stuff.

I use fixed prices so it is quite difficult to figure things out. If you need to keep a record of things. Starting yesterday I started taking a note of all the time I spend work related. I don't work a normal 9 to 5 (who does?) so I can work a bit then go on the internet to watch people arguing on Twitter then back to working again. It's funny just how long things actually take. Tidying up my desk for more space to work. Filing away paperwork. Writing emails. Phone calls. Travelling time to jobs. I think I'll be well over the 30 hours each week already and there are another three or four potential clients lined up. So I'm thinking of putting in a claim.

But then I read about this Universal Credit and the self-employed. I had in my mind actually using the WTC money and putting it towards renting an office. It would hit my income to start with but I think in the longer term it may be beneficial. But with Universal Credit it would be a complete non starter as they'll say you're better off finding yourself a job rather than being self-employed. I really do think this UC is unfair on self employed. It is only recently I have started to pay any attention to it so the rest of you may have known this along along.

So to cut a long (rambling off in all directions) story short - the thought of setting up a Limited Company did cross my mind. Or do they have this loophole covered?

EPF_Solutions · Senior Member

I read a few articles that other people had written, then carefully read what it says on the HMRC web site. So I'm going by the official explanation of it. Whenever I talk to anyone who I know is self-employed and on WTC I warn them about it.

I have a friend who is on disability benefits and WTC, and does her best to work but just doesn't have the energy to keep any job she is offered for very long. She was advised to become self-employed, by the Job Centre I think, and has her own little business that doesn't make much money but is actually good therapy for her. At the moment it's in her interests not to make much profit, as if she did she'd lose benefits but wouldn't have the energy to earn enough to make up the shortfall. When she goes on to UC, she'll suddenly need to turn that around, and I don't think she'll be able to do it. I think she will be forced into work that I'm certain she won't be able to cope with, and will get pretty deep into the brown smelly stuff.

One of the activities of the social enterprise I'm working on is to work with, and help set up, small local businesses, and UC is going to have an impact on it.

Shamus · Forum Moderator & Expert

A company director is an employee of the company, wages are reported under RTI and hence are entitled to tax credits without the monthly reporting requirements on the self employed.

Thats not saying that they will get an easy ride in that HMRC will want to see the directors contract of employment with the company (minimum wage legislation does not apply to directors but the expectation is that at least the minimum wage will be paid if the company can afford to pay such) and may require evidence to prove why the director is paid so little (copy of the accounts although such will be annnually rather than monthly).

If the issue goes on for a long time HMRC may force a winding up of the company as a company exists to make profit and if it is not making a profit and shows no signs of making a profit imminently then such is merely being used as an engine for other reasons.

The flip side of this equation is that if HMRC start making people unemployed so moving the amount of money that they are getting from x to y and reducing tax yield (#1) in the process then there will be a spike in unemployment figures when they are making a lot of noise about the falling unemployment statistic (due largely to the number of people setting up small businesses) and that would not go down well on the run up to an election (or independance).

The assumption that there are thousands of jobs out there to be had is so wrong that it's laughable. Unfortunately the people coming up with the policies exist in their utopian bubble's down South of Watford gap services (Where it's always sunny, the sun never sets and farts smell like flowers) and they assume that people always go self employed by choice (rather than necessity) and if they're not rich from it then they only did it to defraud the Government.

Can I vote that Scottish independance starts just South of Birmingham... Actually, I'm hearing the distant sound of Wales asking if they can come too... Might be far easier to just go and lower the Thames flood barriers as it would solve so many problems.

Bah humbug,

Shaun.

#1 although not very much as by definition the businesses claiming tax credits are unlikely to be paying much if any tax (sweeping generalisation statement there which I'm sure someone will be able to drive a bus through).

EPF_Solutions · Senior Member

Set up a social enterprise then. A CIC has to have its social objectives accepted by the regulator, and its primary aim doesn't have to be making a profit. See what HMRC make of that! The bonus is that new businesses would have to be set up to do socially useful stuff.

A big wall round London, with guard towers to keep the politicians and banksters in, should deal with the cause of the problems!

-- Edited by EPF_Solutions on Friday 6th of June 2014 04:40:09 PM

Shamus · Forum Moderator & Expert

Ah, but thats not where all the bankers are!

Yes there's presence in London but the head offices are generally country estates or offshore or with backups in Edinburgh... You won't get us all like that John wink

The walls and watch towers are well worth the investment though just for the politicians and civil servants.... And once the walls built then can we lower the thames barrier and fill it up to the brim.

It's ok though, the bankers own all of the tallest building so we'll survive.... Shame about parlaiment.

Sorted.

EPF_Solutions · Senior Member

That's OK. The ones in their tall buildings will be trapped there by the surrounding water, and aren't most of the big data centres in London? I know of plenty of people who will happily turn the country estates into low-impact smallholdings, and may be kind enough to share a bit of food with the ones who are in residence when their money supply gets cut off!

Shamus · Forum Moderator & Expert

Actually... Lloyds made a boo boo on that front a few years back now as they had all this land so put a bit of it to use with pigs and sheep but then found that diversification wasn't in their memorandum and articles so they were actually acting illegally.

All sorted quickly of course, whats the point in having the very best legal team on payroll if you can't use them for internal silliness occassionally.

Anyway, if the tall building were cut off from everything else then the bankers would just declare them seperate states... lol... I'm now thinking of canary wharf being reinvented as a a tax haven.

EPF_Solutions · Senior Member

Pigs and sheep! Plenty of people with their snouts in the trough, and lots of sheep obediently following what they're told in the mainstream media, and by the face of the politicians that's pointing towards the camera!

I wonder if Prunes is still following this, or has given up all hope!!!!

Shamus · Forum Moderator & Expert

She gave up on June 4th.

No stamina these kids today. lol.