Monthly Archives: September 2020

When is Your Hobby a Self-Employed Business ?

Has my hobby become a self-employed job? Its one of those thorny questions. For example you love dogs, you have several and you breed from them. At what point does HMRC decide that the money you make from your hobby is taxable? At what point i.e. does it become part-time self-employed job?

HMRC have a business test made up of six questions–

Below is the business test guidance in brief. The main words from the HMRC guidance are in bold with my comments in brackets after relating the guidance t oa dog breeder as an example. To see the guidance in full follow this link : httpsss://www.gov.uk/hmrc-internal-manuals/vat-business-non-business/vbnb22000

  1. Is the activity a serious undertaking earnestly pursued? (Do you carry out the activity for business or purely for enjoyment? Do you want to make money from selling puppies or are you more concerned with letting them go at cost to a really good home?)

2. Is the activity an occupation or function, which is actively pursued with reasonable or recognisable continuity? (Are there efforts to ensure that puppy sales are made regularly? Are you getting all your bitches pregnant as often as reasonably possible?)

3. Does the activity have a certain measure of substance in terms of the value of supplies? (Is the amount of money you intend to generate from the activity generates enough to be deemed to be business. If you only generate a hundred pounds a year from selling puppies its unlikely to be a business activity)

4. Is the activity conducted in a regular manner on sound and recognised business principles? (Are you advertising or putting the word around that you sell puppies? Are you decisions about your dogs based purely for your dogs as pets or are they influenced by commercial needs? If you are thinking in a businesslike way then you are more likely to be a business.)

5. Is the activity predominantly concerned with the making of taxable supplies for a consideration? (If it is your intention to make money by selling puppies it is more likely to be a business.)

6. Are the taxable supplies that are being made of a kind which, subject to difference of details, are commonly made by those who seek to profit from them? Someone who claims to be part of a known trade or occupation is likely to be in business. Someone who claims to be in business doing something completely improbable and unique is less likely to be in business. (Dog breeding does exist as a business and if your aim is to make a profit and to earn a living it is more likely to be business.)

If you want to be self-employed or need help with your existing business please contact me, I’m Jo from Barnowl Bookkeeping www.barnowl-bookkeeping.co.uk .The services I offer are Bookkeeping, CIS, VAT, Payroll and Self Assessments for the Self-Employed my specialisms are in Hospitality, Construction and Manufacturing industries. Based near King’s Lynn I am close to Downham Market, Wisbech and Swaffham to the South. To the North and East I serve the North Norfolk Coast and Fakenham areas.        

Is Cash Becoming Obselete?

The Covid-19 pandemic has accelerated the trend away from us using cash. There are a wide variety of electronic payment systems, many of which can download transaction data to your accounting software either automatically or via a manual download. If you are interested please contact me, I am Jo at Barnowl Bookkeeping httpsss://www.barnowl-bookkeeping.co.uk/ . My specialisms are Hospitality, Building and Manufacturing industries. The services I offer include VAT, Payroll, CIS, Pensions Administration and Self Assessment for the Self Employed. The services are taylored to suit your needs and I’m always happy to help you with queries, it is part of my service. My mobile is 07771 333324.

This article is from Accountancy Daily.

The audit watchdog says ten years ago, cash was used in six out of 10 transactions but by 2019 this had fallen to less than three in 10 transactions.

The outbreak of Covid-19 may have accelerated this trend, as data suggests that market demand for notes and coins declined by 71% between early March and mid-April during the lockdown, although demand has since been recovering.

The decline in the use of cash in transactions is putting pressure on the cash system. Commercial operators who distribute cash rely on high demand to maintain the attractiveness of their business models, and cover large fixed costs, such as bank branches and ATMs.

In the two years to December 2019, there was a 17% reduction in free-to-use ATMs.  The NAO point out that  while there remains a higher number of free-to-use ATMs in more deprived areas, in the two years to January 2020 the proportion of free-to-use ATMs has declined faster in those areas than in less deprived areas.

Published research shows that older people and those on a low income are more likely to make cash transactions, and the NAO warns there is a risk they will find it harder to access cash in the future.

In March 2020 the government announced that it would be bringing forward legislation to protect access to cash and address the sustainability of the cash infrastructure.

However, the NAO said it cannot currently see a clear link between the government’s aim to safeguard the consumer’s ability to use cash, and the responsibilities of the five public bodies in the cash system.

No single body has responsibility for reporting on the performance of the system in meeting the government’s aim. 

In May 2019, the Treasury established the Joint Authorities Cash Strategy Group (JACS) to coordinate work to support nationwide access to cash. Although the group has improved joint working towards government’s aims, JACS does not oversee the cash system and has no decision-making power.

Cash in circulation

Changes in cash use are having an impact on the production of coins, which has fallen by 65% in the last decade.

When the Royal Mint replaced the old £1 coin in 2017, the public returned large volumes of all coin denominations. As a result, the Royal Mint’s stocks exceeded targets in all denominations, and it has no plans to produce new 2p or £2 coins for at least ten years.

Despite fewer people using cash for transactions, the demand for notes has continued to increase. In 2020, the number of notes in circulation reached a record high of 4.4bn, with a value of £76.5bn.

In 2018, the Bank of England estimated that only 20%–24% of the value of notes in circulation were being used or held for cash transactions, with UK households holding a further 5% as savings.

Little is known about the remainder, worth approximately £50bn, but possible explanations include holdings overseas for transactions or savings and possibly holdings in the UK of unreported domestic savings, or for use in the shadow economy.

The NAO said the Bank and other government bodies have little reliable information to quantify how much is likely to be held where.

At March 2020 the Bank’s contingency holding of notes (£39bn) significantly exceeded its minimum guidance level (£20.5bn), which was partly affected by the launch of the new £20 note.

The NAO said it was not clear what process the Bank operated to determine adequate stock levels, and how the cost implications of building stock levels were taken into account.

It identified a £143m public sector cost of producing and issuing notes and coins in 2019-20.

The NAO recommends that the Treasury should set out more clearly the specific outcomes it wants the cash system to deliver for consumers and small businesses, and how this should be balanced against costs. To drive efficiency, the Mint and the Bank should maximise opportunities to learn from each other’s experiences of cash production and align production capacity closely to future needs.

Gareth Davies, head of the NAO, said: ‘As society progresses towards the wide use of digital payments, the use of cash in transactions is dwindling.

 ‘It may become harder for people to access cash when they need it and those without the means to pay digitally will struggle if cash is not accepted.

‘HM Treasury now works more closely with the public bodies in the cash system to achieve the government’s goal of safeguarding access to cash. However, the approach is fragmented, and it is not clear that the action being taken will keep up with the pace of change.’

West Norfolk Tourism Grant Deadline is Looming

The Norfolk Tourism Support Grant is offered by the borough council of Kings Lynn and West Norfolk. If you’re a small, West Norfolk based business working in the tourism industry you may be eligible. The deadline for applications is 9th October 2020. Money is allocated on a first come first served basis.

There are two grants. Firstly the “Tourism Adaption Business Fund” helps for the costs of adapting your business to enable it to meet social distancing and hygiene requirements. Secondly the “Autumn and Winter Adaption Fund” to help with new for adaptations to extend your trading season. The grants are open to hospitality, leisure and culture sectors excluding accommadation.

Link for more details : httpsss://www.west-norfolk.gov.uk/tourismgrant

If you are not in West Norfolk, please contact your own borough council for details of the Norfolk Tourism Support Grants.

Posted by Jo at Barnowl Bookkeeping www.barnowl-bookkeeping.co.uk. Here to help you with your Bookkeeping, VAT, Payroll, CIS and Self Assessment. My specialsims are Hositality, Building and Manufacturing industries. Based near King’s Lynn I am within easy reach of Wisbech, Swaffham and Downham Market. Out towards the Coast I cover Hunstanton, Fakenham and the North Norfolk Coast.

Kickstart Scheme

This is part of the governments help for the economy to recover from Covid-19. The Kickstart Scheme aims to create thousands of jobs for workers between 16 and 24. The Government will fully fund each “Kickstart” job — paying 100% of the age-relevant National Minimum Wage, National Insurance and pension contributions. The placement must be for a minimum of 25 hours a week. The scheme is set to run until December 2021.

HMRC website has full details : httpsss://www.gov.uk/guidance/check-if-you-can-apply-for-a-grant-through-the-kickstart-scheme

The scheme is set for employers placing 30 youngsters at a time. Smaller employers can club together to make up a group of 30 or more applicants. It is proposed that the local chamber of commerce will help with this. No information as yet (it’s still early days). You can email your enquiry to eastmidlands.kickstart@dwp.gov.uk (East Anglia)

Posted by Jo at Barnowl Bookkeeping – I acan help you with Bookkeeping, VAT, Payroll, Pension administration, CIS and Self Assessment. My specialisms are the building and hospitality industries. I am based near King’s Lynn so close to Wisbech, Swaffham and Downham market and also Fakenham and the North Norfolk Coast. You can contact me on 07771 333324 or look at my website httpss://barnowl-bookkeeping.co.uk/