Business Basics: Finance

Tax highlights:

• Because of the coronavirus pandemic, if you delayed paying VAT normally due before June 2020, it now has to be paid by March 2022.
• Class 2 NI contributions are £3.05 per week for 2020-21. (£3.00 per week, 2019-20.)
  The proposed abolition of Class 2 has now been abandoned.
• Class 4 NI is still 9% in 2021-22. In 2022-23 it will go up by 1.25 percentage points. In 2023-24 NI will go back down, but there will be a new Health and Social Care Levy which will be 1.25% of earnings for anyone paying NI.
• For the 2021-22 tax year, the personal allowance (i.e. free of income tax) is £12,570
• The higher income tax rate of 40% kicks in after £50,270 (2021-22) for England, Wales and NI. The income tax bands for residents of Scotland are now very different. Check help sheet 3.
• VAT threshold is £85,000 from 1 April 2017. So you have to be VAT registered if your turnover in any 12 months hits that level. This threshold has been frozen until 2023.
• The Annual Investment Allowance (to buy kit and machinery) is £1m per year in 2019, 2020 and 2021.
• Corporation Tax is 19% for all Limited Company profits since April 2017. From April 2023 the rate will be 19% for companies with £50,000 profits or less. Over £250,000 profits corporation tax will be 25%.

Change to HMRC phone numbers

• Worried about paying tax as a result of coronavirus pandemic? Phone: 08000 241222

• HMRC Helplines (opens in new window)

Grants and loans for new businesses

Coronavirus Bounce Back Loans are the most likely place to borrow money because of the pandemic.

Here are some tips for more normal times:

The most important thing is to keep a sharp eye on your cash and don't throw money around. You might also be able to get a loan or grant from some of these places:

• Business Finance for You - an advice site for business
• The New Enterprise Allowance - an allowance and business mentor, through JobCentre Plus
• Prince's Trust - aimed mainly at 18-30 year olds

Useful sites to deal with late payers

• www.payontime.co.uk includes an interest calculator
• www.gov.uk info about the legislation
  Late Payment Legislation was introduced across all EU countries from March 2013.

For Microsoft Office (Excel and Word) users...

If you need these templates in other formats, please email us at: training@davidthomasmedia.com

Download all MS Office templates together (Zip file)

Or individually:

Budgeting sheets to control spending
Spreadsheet - for personal (not business) spending

NEWSpreadsheet - Monthly budgeting sheet for freelancers

Cash flow planners
Spreadsheet - Cash flow for sole trader/Ltd

Spreadsheet - Cash flow planner incl. household and PAYE income

Business income record sheets
for Sole Traders, Partnerships, or Ltd Companies
Spreadsheet - Income and Expense (Profit and Loss) account for businesses

UPDATEDSpreadsheet - Pay Slip record for PAYE freelancers

Getting paid properly
Template 7 - Invoice. (Or here for a pdf example with notes.)

Handout 13 - Blank project proposal form - with notes


For media freelancers (including payroll freelancers)Simple "Confirmation of Booking" letter - downloads Word doc in new window

For Apple format (Numbers and Pages) users...

Download all Apple format templates together (Zip file)

Or individually:

Budgeting sheets to control spending
Spreadsheet - Personal (non-business) spending

NEWSpreadsheet - Monthly budgeting sheet for freelancers

Cash flow planning sheets
Spreadsheet - Cash flow planning for sole trader/Ltd Company

Spreadsheet - Freelancer cash flow planner with household costs

Business income record sheets
Spreadsheet - Income & Expense (Profit & Loss)

UPDATEDSpreadsheet - Pay slip record for PAYE freelancers

Getting paid
Invoice template