If you would like a question answered please e-mail us at info@soloaccounting.com
1. Q - What is the cost of e-solo accounting and administration software?
A – The annual licensing fee is £650.00 inclusive of VAT and insurance premium tax. This includes a review of contract terms and working arrangements (typically such a review would start at £100.00), and tax enquiry / legal expenses insurance underwritten by Axa (typically such a policy would start at £100.00 per annum).
Spread over a year the weekly gross cost is therefore £12.50. After tax relief the weekly net cost is less than £10.00 per week. You can also spread the cost using one of our payment plans see question 7 below.
2. Q - How much will I save in accountancy fees if I use e-solo?
A – In our experience most professionally qualified accountants charge fees in excess of £100.00 per hour + VAT. Those supplying accountancy services to the contract marketplace typically charge upwards of £30.00 per week + VAT to produce weekly invoices, payroll, expenses and accounts. This equates to a minimum of £1,500.00 plus VAT per annum (£1,762.50 inclusive of VAT). Add the cost of legal/accounting expenses insurance, typically a further £100.00 per annum and the cost of a contract terms and working arrangements review also typically a £100.00 and the total cost is just short of £1,970.00 a year. It is therefore reasonable to assume that you will save around £1,000.00 per year using e-solo, as long as you are prepared to spend approx 10 minutes per week inputting your data.
3. Q - Will I still need the services of an Accountant?
At the end of the company’s trading year, e-solo will calculate a closing trial balance which then needs to be presented in a set of final accounts. We consider that the process of preparing the accounts should be undertaken by a suitably qualified professional accountant.
If you have not appointed a qualified accountant to carry out this work for you then Solo Accounting’s team of highly experienced and qualified staff will be happy to assist. We offer highly competitive fixed rates for this type of work. Alternatively we can recommend a suitably qualified accountant in your area.
4. Q - How does the cost of e-solo compare with the average cost of using an Umbrella Company?
A - In our experience the average cost of using an Umbrella Company is around £25.00 per week inclusive of VAT. Therefore the cost of e-solo represents a 50% saving. It is a myth that there are special expense rules that apply to contractors employed by Umbrella Companies that allows them to claim daily expense allowances without receipts. Only expenses which are wholly, exclusively and necessarily incurred in the performance of the duties of the employment may be claimed as a deduction and offset through a limited company.
Most umbrella companies claim to use overarching employment contracts. We recommend you obtain a copy for your contract with the umbrella company and obtain independent legal advice about your employment rights and allowable expenses under the terms of this employment contract.
5. Q - What are my responsibilities as a Company Director?
A - You must adopt and file a Memorandum and Articles of Association. This is normally completed for you by a company formation agent. You must also produce and file annual accounts and file an annual return with the Register of Companies. You must file Corporation tax returns with HMRC and pay tax on your profits. You must register for PAYE within 3 months of commencement of trading and VAT (if applicable). Typically you must settle the company's PAYE on a monthly basis and the VAT on a quarterly basis. You must file corporation tax returns with HMRC at the end of the year and pay tax on your profits.
6. Q - How will Solo help me to be tax compliant?
A - e-solo includes a review of your contract terms and working arrangements to establish your employment status to help determine the amount of income tax and NIC that you are liable to pay. Please view the compliance area of our website for more information. Each pay period e-solo advises you of your tax liability and the net income that you can withdraw from your business bank account and transfer to your personal account.
If you follow the system prompts, e-solo will advise you of the outstanding tax liability and due date for payment. Once you have made the payment the system can be updated to reflect the reduced liability. If you withdraw more than the system indicates you will be unable to meet your tax liabilities on the due dates and you will be trading wrongfully.
If you get into this position you must contact either an accountant of your choice or Solo Accounting who will review your circumstances and propose a recovery solution. Obviously there will be an additional charge for this.
7. Q - Do I have to pay the whole annual licensing fee in advance?
A – No you can pay an initial deposit of £95.00 and 5 subsequent monthly instalments of £120.00, or a £95.00 deposit and 20 weekly instalments of £30.00 A £45.00 admin fee is charged for payment by instalments. Please contacts the e-solo sales team for further details.
8. Q - What if I fail to make a planned instalment payment to Solo?
A - We will give you 14 days grace to bring your account up to date, thereafter access to e-solo will be denied until such time as the account is brought up to date.
9. Q - What does the inclusive insurance cover me for?
A - Axa provide cover of up to £75,000.00 in any one claim towards your legal and /or accountancy fees, in the event of an HMRC enquiry or dispute relating to the following:-
income tax self assessment enquiries, corporation tax self assessment enquiries, VAT disputes, employer compliance disputes, PAYE, P11D, National Insurance Contributions, IR35, Income Shifting and the Managed Service Company Legislation. This cover would typically cost in excess of £100.00 per annum if you purchased it separately.
10. Q - What help and support do Solo offer?
A – We offer unlimited telephone and e-mail support for current licensed e-solo users from qualified professionals offering guidance on tax, VAT, legal and regulatory matters. Our team have a wealth of experience on all matters relating to contract work. In addition, with your prior approval, our customer support team are able to access your accounts data and correct any input errors.
11. Q - What if I am unable to complete a statutory return such as a VAT return?
A - You may be on holiday, you may be on a training course, or you just may not be confident enough to undertake a task the first time. Solo Accounting provides ad hoc accountancy services at highly competitive rates. Providing we have all the information, most ad hoc accounting tasks can be completed within 30 to 40 minutes. Ring our customer services team and we will advise you prior to undertaking the work of the approximate cost. Please do not leave these tasks to the last minute as doing so can lead to HMRC charging penalties for late submission.
12. Q - Can anyone be a Company Director?
A – In general terms yes, but not if you are an undischarged bankrupt, or have been disqualified by a court from holding a directorship, also you must be at least 16 years of age.
13. Q - Can you help me set up a business bank account?
A – Yes, we can offer you assistance through a number of different banking partners. We strongly suggest that you do not open a business bank account without checking to see if their business internet banking services are adequate to meet your needs. Please contact our customer care team and we can guide you through the process.
14. Q – I need to create a contract for my services, what shall I do?
A – Please call us and we will assist you to prepare a contract at a very competitvie price compared to typical market rates.
15. Q – I have a contract for services supplied by my agency but it has not been checked for the purposes of IR35, what should I do?
A – e-solo includes a review of your contract terms and conditions and your working arrangements (this typically costs £100.00), through leading tax compliance specialists Qdos Consulting Ltd, to help you clearly establish your employment status and to comply with the IR35 legislation.
We can also recommend a number of independent industry experts who can assist you in this regard. These specialist advisors are recognised leaders in the field of tax/NIC employment status and IR35. We can help you to get your tax and NIC status right. Their services range from the review or drafting of contracts to negotiation of terms with agencies and end clients.
16. Q - What other services can Solo provide?
A - We offer company formation services, registered office facilities, Companies House filing services. We can assist you with obtaining business insurance, finance, factoring and invoice discounting. We can advise you and your business associates on compliant structures and contractual terms that will alleviate future risk of HMRC status enquiries. We have a wealth of experience.
17. Q - How do I know my data is secure?
A - Firstly all Solo companies are registered with Information Commissioners Office to comply with Data Protection legislation. All data is encrypted to prevent it from being understood by an unauthorised party. Solo utilise the highest levels of security available.
18. Q - Could I become personally liable for the debts of my limited company?
As a Director you can become personally liable for the debts of a company if you give personal guarantees or secure borrowings against your assets or if you trade fraudulently or wrongfully. An example of this is allowing the company to trade whilst insolvent, not keeping proper accounting records, failing to send tax returns and pay taxes and failing to prepare and file accounts. In these cases you could face criminal charges, fines or be made personally liable for the company's debts. Insurance does not cover fraudulent or wrongful trading.
19. Q - Does my company still need to appoint a Company Secretary?
A - With effect from 6th April 2008 Private Limited Liability companies are no longer required to appoint a Company Secretary.
20. Q - What if I no longer need my limited company?
A - You can apply to Companies House to remove the company from the Register. Companies House charge a fee of £10.00 in this regard. You will need to ensure that accounts are prepared and submitted to HMRC for the last financial year or part thereof and settle all outstanding liabilities. Companies House will advertise in the London Gazette that there is a proposal to strike off the company from the Register provided there are no objections from any creditors the company will be removed. The process can take between 3 to 6 months.