Jon’s calculated risk with Smart Accountancy Systems

Jon Jenkins set up Smart Accountancy Systems to
bring the benefits of cloud computing to his clients

After 12 years of working for other people, Jon Jenkins decided that setting up his own business would be better for both clients and himself.

Jon was frustrated by what he felt were the old-fashioned attitudes in many traditional accountancy practices. They lacked a commercial edge, a willingness to change and a commitment to client care. He felt he could do better and in March 2011, he started his own firm, Smart Accountancy Systems, based in Bournemouth, Dorset.

Founded on a desire to deliver outstanding service to clients and offering value for money by using the latest software and technology, it took about a year for Jon’s venture to find its feet.

As with so many small businesses, discovering what the service offering would look like in detail required time. But by early 2012, Jon was confident he had discovered the appropriate approach for his firm.

Results prove the value of the Smart Accountancy Concept

That he’s chosen the right direction has been vindicated by a recent tripling in client numbers. Clarity of vision has also allowed him to focus his marketing on the sectors where he’s already enjoying success, such as start-ups and growing firms.

Jon’s decided to invest heavily in cloud computing, spending a lot of time researching the best solutions available, and not just in accounting packages. He’s won a reputation as something of an expert in cloud solutions across a range of business services.

Having taken the risk of becoming his own boss, Jon’s also decided to restrict his services only to clients willing to embrace cloud accounting systems, such as Xero, KashFlow and FreeAgent. “Calculated risks are good for business,” he said, confident that a highly focused approach will set his firm apart from slower-moving, traditional firms.

“Online accountancy does not mean you never speak to a human,” said Jon, “but completely the opposite, as the technology allows you time to deal with clients’ needs. Our clients have up to date information on which to make business decisions and now spend money on planning, budgeting and forecasting rather than data entry.”

Jon has also put together a business package for start-ups, which has attracted the involvement of many established firms. He intends to begin marketing the package to local start-ups in the near future, helping them to take some of the risk out of their venture by getting support from a variety of organisations, many of whom have helped Smart Accountancy Systems achieve what it has to date.

The Bizoh blog loves to celebrate business success in Dorset. If your firm has a great story to tell, why not get in touch?

Read more Dorset start-up and success stories

New IR35 guidance from HMRC for freelance contractors

A guest post by Acconomy Chartered Certifed Accountants

After months of consultations with industry experts, HMRC has issued detailed guidance to help freelancers with personal service companies to evaluate how likely it is they will be investigated for IR35 compliance.

In a 47-page document, they set out business entity tests to help you assess the risk of investigation, along with the level of evidence required for each test. There are also six detailed examples of freelance contracting scenarios, and explanations of how HMRC would assess these for IR35.

There have been no changes to the IR35 legislation. The new guidance is intended to help explain how HMRC decides who to investigate, and the information they are looking for to make a decision. However, HMRC has also created new specialist units around the UK to focus on IR35, and there is an expectation that the number of investigations will rise.

The business entity tests for IR35

At the heart of HMRC’s guidance are 12 tests which determine whether your company is at low, medium or high risk of investigation.

Each test has a point score associated with it and your overall risk is determined by your cumulative total.  Score under 10 points and the risk is high; score over 20 and it’s low.

In summary, these tests are:

Premises - Does your company rent its own offices? 10 points if yes.

PII - Do you need professional indemnity insurance? 2 points if yes.

Efficiency - Could your business boost income through efficiency? 10 points if yes.

Assistance - Is at least 25% of the firm’s income through workers you engage? 35 points if yes.

Advertising - Have you spent over £1,200 in the last year (excluding entertainment)? 2 points if yes.

PAYE - Were you previously paid under PAYE by your client? Minus 15 points if yes.

Business plan - Do you have one, and a business bank account? 1 point if yes to both.

Repair - Do you have to pay to put right your mistakes? 4 points if yes.

Risk - Have you had to chase debtors or write-off unpaid bills? 10 points if yes.

Billing - Do you invoice before being paid and negotiate payment terms? 2 points if yes.

Substitute - Could your business send in someone other than you? 2 points if yes.

Actual substitute - In the last 2 years, have you hired someone to take your place? 20 points if yes.

Initial response to these tests has been negative, with many observing that most contractors using their own personal service companies would appear to be high risk.

The key points

• There are no changes to the IR35 rules. What HMRC has done is issue more guidance about the interpretation of the rules.
• HMRC has created new teams to focus on IR35, and the level of investigations will rise.
• It is important to assess each contract separately for IR35.
• A wide range of commentators has criticised the new guidance as being unhelpful, saying that HMRC has missed an opportunity to improve clarity and fairness around IR35.

Take advice if you are concerned

If you’re a freelancer working through your own limited company, the new guidance from HMRC, combined with the news of a rise in investigations, should not give you sleepless nights. But it does appear to increase the chances of an investigation, with all the inconvenience and uncertainty that comes with it.

It is important to remember that every engagement you undertake should be separately assessed for whether it falls inside IR35.

If you have worries about the increased risk of an investigation, or would like to understand the potential financial impacts based on your personal situation, please get in touch.

As one of the first members of the Professional Contractors Group (PCG), Acconomy are committed to helping freelancers overcome the threats to their prosperity. If you have any questions, we would be happy to hear from you.

Acconomy Chartered Certified Accountants are specialists in IR35 for freelance contractors.

Dorset accountants Inspire named best independent firm in south west England

Poole based accountancy firm Inspire has won recognition for being the most forward-thinking independent practice in the south west of England.

Inspire has been awarded the title 'Best Independent Firm' in the region at the British Accountancy Awards 2011. The ceremony, held in Old Billingsgate Market, London, was attended by over 800 representatives from many of the UK's leading accounting firms.

In awarding the title to Inspire the judges said: “This was an easy choice. They impressed their clients, were innovative and showed good involvement in the community. They caught our attention with their international focus and expert focus.”

Inspire was founded in 2004 with a vision of being a proactive and relationship-based advisory firm serving entrepreneurs and owner-managers.

Speaking of the achievement, Warren Munson, MD of Inspire, said: “This is another great achievement for Inspire and our team. We pride ourselves on being different to other firms in the area by focusing on real business needs and offering true value added services to our clients in addition to standard compliance.”

This isn't Inspire's first accolade. In 2009 they won the Accountancy Age 'Small Firm of the Year' award.

The British Accountancy Awards are the only awards dedicated to the accountancy profession in practice. They are run in partnership with the ACCA, a leading professional body, and succeed the Accountancy Age awards.

Well done to everyone at Inspire for raising the profile of accountants here in the south west of England.

Portland accountant starts building his own business

Mark Franklin, a Chartered Certified Accountant, has taken the bold step of creating his own accountancy practice in Weymouth.

Mark, who’s lived on Portland all his life, is well known to many local businesses. He's working for a local accounting firm for over 12 years and over that time gained his professional qualifications, along with an extensive knowledge of accounts and tax.

One of Mark’s strengths is his ability to translate the sometimes obscure language of finance into something his clients can understand. As a result, they give him glowing testimonials.

Laura Dench, of H20 Hair Salon in Weymouth, says that Mark “takes the stress out of it all”.  Another hairdresser, Francesca Hegg of Steven May Hair Design, calls Mark: “A true professional and always with a smile.” She “would not hesitate in recommending him to anyone looking for an accountant.”

Moving from the security of a regular salary to the challenge of having to find your own work can be a daunting prospect, particularly in today’s challenging economy. Mark is confident that his professional skills, excellent reputation and local knowledge will allow him generate the income needed to support his family of four young children.

He says: “By taking the time to go through the figures in detail with my clients they are able to make sense of the accounts, see where they have done well and identify areas for improvement.”

Mark’s enthusiasm for his new venture is clear to anyone who meets him. You can experience this for yourself if you choose to take up his current offer of free consultations for local firms. Find out more about Franklin and Co by visiting his website.

The Bizoh blog loves to celebrate business success in Dorset. If your firm has a great story to tell, why not get in touch?