Ava Blog

HMRC Making Tax digital

Monday Monday, September 26, 2016 by Administrator

It is no secret that HMRC are introducing computerised submission of returns for individuals and for companies.

 

 

It’s actually the third time HMRC have attempted to do this. However a couple of years ago this particular effort was initiated by the then Chancellor George Osbourne and so from the top down it got greater priority. There are a number of advantages for HMRC in having all this computerised: They do not have the large expense of processing paper forms and to turn them into data with inevitable errors and omissions. The data is immediately in a form where they can analyse it and find the rogues.

There is at least one disadvantage: they are presenting the top UK hacking target, even above private royal photos.

 

HMRC have produced a cartoon illustration of the process as they see it:

It concerns an imaginary accountant Alfred and an imaginary Florist sole trader Flo. They use imaginary software COG and LION. Each has a digital identity registered with HMRC.

Many Agencies in the temporary staffing industry start off as one or two employees operating as sole traders marketing their skills under sole trader status which has a number of tax advantages for them. Often they group together to become a small agency. Often small agencies grow because they have the friendly employment environment arising from knowing their industry first hand. At some point someone takes first responsibility for the book keeping process. Sometime they may then feel it is cheaper or more efficient to employ an accountant or third party book keeping service. This is their story in an overview.

Accountant Alfred is preparing for Making Tax Digital (MTD).

He knows we’ll need to subscribe his agency, accountants, to HMRC's agent services to handle tax for clients who have subscribed to Making Tax Digital For Buisness (MTBFB). He uses imaginary business software called COG.

 

Florist Flo is growing her business

A friend recommends using imaginary LION software to manage her accounts. It will save her time with bookkeeping and chasing invoices. She can even use it to send here tax return to HMRC.

 

Geoff requests authorisation from Flo so that he can represent her for Making Tax Digital for Business Income Tax Self-Assessment (MTDfB-ITSA)

 

  • Alfred wants to subscribe to HMRC agent services using COG.
  • MTD 1
  • Alfred needs to complete security checks.
  • MTD 2
  • Alfred’s software needs permission for this new interaction.
  • MTD 3
  • Alfred's subscription to agent services is complete.
  • MTD 4
  • Flo’s self-assessment Tax Return is due soon.
  • MTD 5
  • Flo subscribes to MTFB-ITSA. (MTB self assesment)
  • MTD 6
  • Flo needs to complete a security check.
  • MTD 7
  • Flo’s software needs permission to interact with HMRC.
  • MTD 8
  • Flo’s subscription to MTD is not complete.
  • MTD 9
  • Flo sends her first MTD update.
  • MTD 10
  • Alfred adds Flo’s UTR and postcode into COG.
  • MTD 11
  • COG displays the matching client from HMRC’S database.
  • MTD 12
  • COG sends Alfred’s authorisation request to HMRC.
  • MTD 13
  • LION notifies Flo and she approves Alfred’s request.
  • MTD 14
  • Alfred gets access to Flo’s data.
  • MTD 15
  • Alfred submits Flo’s tax update.
  • MTD 16

Watch this space....

 

 

 

Starting and running an Agency, some of the things you should know.

Monday Monday, August 22, 2016 by Administrator

Starting and running an Agency, some of the things you should know.

 

Starting an agency is not as difficult as you may think. Most people starting agencies, start them as limited companies. The reason is that this limits their personal liability in future. Should things go badly wrong (we hope this does not happen to you): it protects their assets, possibly their home, probably everything else they have built up over the years. It also allows them to put “Company Director” on their passport which is kind of cool. It may also (negatively) affect their car insurance costs: which is not so cool.

So here are some of the do’s and don’ts. It’s not an exclusive list and it should not stop you getting valuable advice elsewhere.

When you register your new company, do it directly on the Companies House website. The link is at the bottom of this page. This page has lots of good links to everything the Government requires you to do.

Your company will probably start life as a Private limited company. There are two types of company: Public and Private. Private means it will initially be small (worth less than a few million) and its shares will not be traded on the stock market. Public limited companies are big and you can buy shares in them.

There are unscrupulous organisations out there which will charge you a fee for what is freely available via the links on this page. So don’t spend what you don’t have to, spend a few minutes reading the links (and their links) and it will probably save you a few hundred pounds.

There are also Accountants out there who will happily charge you for full accounts when limited or abbreviated accounts are all you need and maybe you do not even need an accountant! At least till you have a turnover of more than six and a half million pounds  and have more  than 50 employees on average. There are other considerations on why you may be exempt from having an audit (and not to complicate things file what is known as abbreviated accounts). The link is at the bottom of the page.

One thing accountants are a bit reticent about is that there is no "legal" qualification to be an accountant. Many accountants are members of trade bodies but this is as relevant to them doing you books (as a private limited company or sole trader) as a loyalty card at your local supermarket. Provided your accounts are accurate and readable you are as entitled to do them yourself or have a friend do them for you. 

Do ask people who you know who are experienced in these things.

Do file your accounts with Companies House in advance of deadlines. The reason for this is that if your company is only a few years old then there is little public data for customers who look up these things to go on. They will expect your company to be small, may have made a loss in the first few years, fulfilled its legal obligations to meet the legal (and frankly minimal) accounting requirements placed upon it by the accepted framework of running an (eventually) successful company. So at this point your published credibility rating is determined by these filing and most importantly them being on time.

Do leverage any friends you have to come and work for you or maybe even invest in your company.

Do use your standing in your profession to talk to people you know or have worked for who are likely to need your services. It’s far easier to do this when you are working for them rather than when you are not.


Good luck

 

Links that will help you set up a company with minimum costs

 

You will notice that all these pages are on "Gov.uk" it's secure, it's direct from the horses mouth and it's free.


Companies House
Overview forming a private limited company
Accounting exemptions for private limited Companies
What you need to do running a company with Companies House: registration and filing (not HMRC requirements of VAT, PAYE or RTI) 
Business and self employed: running a limited company
Register for Self assesment

 

Sage Software users hit by “internal data breach” is Sage accounting properly?

Monday Monday, August 15, 2016 by Administrator

Is Sage accounting properly?

 

Sage said today on their web site:

 

“We believe there has been some unauthorised access using an internal login to the data of a small number of our UK customers so we are working closely with the authorities to investigate the situation.”


This is a very vague statement and gives no real indication of the size of the breach. Should you be concerned? How economically are Sage accounting for the truth?


So when is a “small number of users” really a small number? Is ;less than ten small? Probably we all agree yes, Less than a hundred? May be, more than a hundred?  I suspect most people would think that more than a hundred probably isn’t “small” and several hundred not small. Now if each of these (reportedly 280) customer accounts that have been compromised contains details of 50 – 500 employees, let’s guess 200? Then the actual number of bank account details may be in the region of 280 (company accounts) for 200 each employees.

 

Is possibly in excess of  half a million bank details, dates of birth, addresses, NI numbers etc. a small number?

 

 

 

What good integrated payroll, payslip and invoice generation can do for you

Monday Monday, August 1, 2016 by Administrator

What good integrated payroll, payslip and invoice generation can do for you.

 

There are many ways good software pays for itself and our integrated pay and invoiceing system will recover more than the total cost of our software in reduced bookkeeping costs alone. Adding in all the other money, pain and time saving features: our software pays for itself many times over.

We update our product on a weekly basis, some of these updates are fine tuning, others are more significant.

We have a new clear detailed payslip meeting HMRC and all a UK employee's legal requirements. These can be automatically emailed to employees as pdf attachments with a single click.

Ava addvanced agency software also provides HMRC Full Payment Submission or FPS as HMRC refer to it. FPS is the requirement to report to HMRC all employee payment submissions on or before the day employees are paid.

There are many firms that offer to perform FPS for you. At first it seems a daunting task and the firms supplying these services will support this view. In fact with our software it is extremely straight forward and should take only a few minutes.

 

Legal requirements for payslips

 

 Example payslip:

Detailed Pay Slips

 

 Example Invoice:

Sample Invoice

 

 

 

Ava RTI submissions have been tested and recognised by HMRC

Monday Monday, July 4, 2016 by Administrator

Added value applications Ltd is committed to reducing temporary staffing agency running cost to a minimum. We are also dedicated to maximising productivity across all aspects of running a temp Agency.

 

So we are very proud to announce that we have become an recognised supplier for HMRC RTI submissions. Passing of all HMRC RTI tests is a mandatory requirement by HMRC to merit this recogition.

 

A review of the suppliers on this list and their payroll and staff management packages will uncover a wide range of price structures. Whilst not a free product we have placed our product at the leading edge when it comes economy of usage and low cost of ownership.

 

HMRC RTI

 

What is more, we won’t be increasing the cost of our software to existing customers for this and other new features. Find out more: call us on 01491 845 400

 

HMRC RTI Software suppliers list

 

Brexit - what does it mean for the Temp staffing industry

Friday Friday, June 24, 2016 by Administrator

Brexit - what does it mean for the Temp staffing industry?

 

Short term not a lot! In a year or two then there are certain to be effects dependant on how immigration policy is formulated.

 

It will be a bit more complicated for the Scots: with their love of referenda, my Scottish blood tells me they will probably have a referendum to decide if they should have more referendums and then one to consider if they should re-join the EU.

 

Whist most large company shares dropped quite significantly, especially Banks, Rolls Royce was unchanged. This points to a degree of realism, large companies that export and large foreign EU companies that import to the UK will push hard for the trading process to be largely unchanged. VAT however will have to change hands for these, and the likes of Microsoft, Starbucks and friends will with any luck not be able to transfer funds around the EU without paying tax on their profits from the UK tax payer. Win!

 

At the top end of the Housing market, things are unlikely to change or maybe get pricier. The super-rich always have ways around these things. At the bottom end in the affordable housing market things are likely to ease (relatively) as the migrant pressures hopefully ease.

 

How will it differ across Healthcare workers, Construction, Events etc.?

 

When the mooted points system comes into force, IT and Healthcare workers are likely to score well. Builders and Events staff not so much. However, there will be increased barriers and unit costs and margins are likely to come under pressure. So it will be even more important to keep avoidable overheads under control. Specifically those associate with book keeping and accountancy. Modern web temporary staffing software can all but eliminate admin, book keeping and banking costs. Our software is at the fore front, offering probably the easiest to configure and most flexible payment and invoicing system, HMRC approval and standard file formats for one click uploading to Banks or in the case of RTI and other standard HMRC payments direct one click submission to their services.

 

Give us a call on 01491 845 400 to find out more.

 

 

 

How to develop your own temporary Staffing recruitment software

Tuesday Tuesday, June 21, 2016 by Administrator

How to develop your own temporary Staffing recruitment software
Let’s face it: that is always going to depend on how big you are. So what are the figures?


Typically a software development company with any degree of longevity will have invested between a quarter of a million and two million pounds developing agency staff software. This includes essential testing, then refining the features as the temporary staff management processes and market evolves. Testing again, updating again due to changes in the law or regulations and then re-testing.

 

Over the last 10 years,  regulation changes have been a more than annual event. With layers of bureaucracy continually thickening, it’s not ever likely to decrease. Essential continued development means that is a lot of your profit to absorb. You can buy or lease software at a fraction of this cost yearly and even or perhaps especially over a ten year period.


You may say “I don’t need all the features they have” and “I need some features they don’t have”. I want “perfect” software for my temp staff supply agency niche. Unfortunately the world does not stand still and this makes for a “perfect” moving target for "perfect" software.


So there some things to consider when you are developing your perfect staff agency software:
You are specifying it. Ultimately your consultants and your bottom line are testing it. To be fair this occurs to some degree for any new software. Fortunately for any group of customers, the live implimentation process is spread across a much wider customer base. The commercial customer probably only "beta tests" the features they specifically asked for.


Who is going to write your TemporaryStaff Agency software? An indivual, a team of short term contract developers or a specialist sofware develpment company? If they are a specialist company do they know your industry so they can spot the questions you should ask in developer speak? What sort of contract are they on? Is it a fixed price contract or are you writing an open cheque? Is Any credible Development Company likely to enter into a fixed price contract without an exhaustive and complete description including test cases? A credible developer will want to prove they have done exactly what you specified so they can demand payment. This is irrespective of the product meeting your actual needs as opposed to the ones you specified in the initial document. This is not unethical or immoral, you entered willingly into a business contract and they have fulfilled their part of it (or gone bust which leaves you out on the end of a pier).


Let us take a very simple starting example:


You specify that when you record a customer’s request for shift to be filled by your agency, you take the customer’s name, the location to be worked, the dates, the times and any compliance checks necessary for that job. This is fine and simple and the developer agrees that any issues are fixed within a year free of charge. Although compliance checks do change, let us assume no authority makes any new rules. The compliance checks you specified are recorded, properly checked and met.  Just over a year down the road the database performance degrades. Is it that someone has hacked into your system? Is it a hardware fault? Is it just a matter of the number of records that need to be checked by your system? How do you find out?  Is it simply that it’s a lot easier to find something when you are choosing from a few dozen or even hundred records but when it comes to approaching or exceed a thousand then the completely acceptable half second for under a hundred becomes 10x half a second or 5 seconds when there are ten times as many record to check?


So how many shifts do you have? 1,000, 10,000 or with some Ava systems 1 Million plus? So you need to test with the number of shifts, customers and employees that you expect to have 3, 4, 5 or more years down the road. Where does this test data come from? It has to be you because are you are specifying the system.


So you are now happy that the system works with not only a small amount of data but real amounts in every part of your system and it gives as good a response as something you could buy off the shelf.


One of the reasons for any system is to minimise expensive bookkeeping or accounting efforts and leverage your consultants’ time. You want to put data in once and everything to come out the end, correct? Minimising expensive bookkeeping is one of the main areas where your system will pay for itself. So your perfect system will be calculating pay (or generate statements for self-invoicing limited companies) and customer invoices.  It will submit mandatory RTI information to HMRC and avoid their fines. The system will be submitting payment details to your bank so avoiding a substantial part of your hard erned profit margin going to factoring or accounting companies. So passing HMRC tests this year is a must. If and when there is a failure with next year’s HRMC format, your departed developers will fix it the same day? Its what HMRC demands. Best you keep a developer on and adding to your costs?


Of course there is a solution. You could take a developed Temporary Staffing package from a willing company and ask them to add the specialist bits you need. The day to day updates to ensure general compliance will be covered under their standard commitment to their product and you will only need to cover special features you alone will require. You can even have access to their code through a 3rd party software escrow process.

Teamviewer or Join.me accounts hacked and why we dont use either

Wednesday Wednesday, June 8, 2016 by Administrator

Some years ago we were investigating which remote support tool to adopt for our customers.

I must admit we were jaundiced to start over this product as we had previously had one of those scam phone calls (which we recorded) where we were asked to download remote access software to fix our computer performance problems as there were apparently “red lights” on the Microsoft monitoring equipment. The software (to be) used was a previous incarnation of Teamviewer.

We contacted them to advise their software was being used in this scam.

We got no response.  

We got a couple more scam calls and as with the first one we kept them on line as long as possible stringing them out on the principle that the particular scammer was not calling some unfortunate less knowledgeable person if they occupied by being on the phone to us. The scammers got quite irate when we “apparently” could not understand their instructions or “accidentally” did not do what they asked. Ah happy days!

A second reason for not choosing TeamViewer is that it left parts of itself on our machine even when we tried to uninstall the trail.

We use a product call ISL online. It wasn’t as pretty as Teamviewer and it hasn’t been entirely issue free. The issues have been occasional and importantly to us and our customers, none of those issues to date concern security.

So you can be as confident as possible that that you are not exposing yourself unnecessarily when we demo our software and when you close the session, the remote support software is removed as completely as possible.

 

Relevant links:

 

BBC News item on hacked accounts.

What is concurrent usage and how does it benefit customers

Monday Monday, May 23, 2016 by Administrator

Added value advanced agency web system is licenced on a concurrent user basis. That means if you have 4 back office users but only two of them are logged in at one time, you only need 2 licences.

So what are the advantages?

  • This normally works out significantly cheaper that other licencing models (for example needing a licence for every user).
  • Fairer: You only pay for what you are using.
  • More accurate: You can keep an exact track of who has done what without incurring additional costs.
  • Simply better security: If a user leaves and is replaced by another, then you cancel the previous leaver and add the new user: no extra cost and access by the leaver is blocked as soon as you cancel their access.

If you have an extremely distributed management model, then pleas e contact us to discuss a per transaction licencing agreement.

New EU data security law may result in punitive fines for breaches

Thursday Thursday, April 7, 2016 by Administrator

You're in the Employment Agency business and that means you store personal data.
 
Previously in this blog we reported on the average cost of data breaches: it was around £20 per personal item breached. The British Pregnancy Advisory Service received a fine of £200, 000 for a breach a few years ago. It meant that 10,000 of their customers did not have the correct protection when indulging in the relevant activities.

Well the GDPR fines are going to get a bit more serious. The maximum fine is now going to be £20 million Euros: enough to bring tears to even the most affluent Director.

This is the headline for the new General Data Protection Regulation or GDPR as it is being referred to. So when you see an article about GDPR, this is what it is about.

The following links may (or may not!) help as typically the advice is very general. However it has to be said that Data protection is in our view an attitude of mind and starts with the ground floor approach.

You may notice that the entire Ava web site is secure.
We use the latest recommended https security standard.
Passwords are at least eight letters and there needs to be a punctuation mark included.
Our servers are "locked down" according to best practice.
We use a top rated ISP for our servers.

Some useful links where you can read more:
Preparing for the GDPR: 12 steps.pdf

ico.org.uk: for organisations: improve your practices: a data protection self assessment toolkit

wikipedia General Data Protection Regulation

Previous blog on The British Pregnancy Advisory Service fine of £200, 000

 

 

 

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