Making Contracting as Stress-Free as Possible

June 18, 2013 No comments

Going it alone

These days, the number of people in the labour force who are working as freelancers or contractors is on the rise.

Contractors work in all sectors, from construction to the creative industries and technological fields, as professional consultants or even as high street temps offering administrative and secretarial services.  More often than not, such independent workers are obliged to take care of their financial matters themselves rather than enjoying the benefit of a company accountant.  This can be a daunting prospect.  Everybody wants to get paid in full and on time and nobody wants to get on the wrong side of the taxman!

To assist in processing the unique red-tape needs of workers going it alone in their particular field, entities known as umbrella companies do the job for a modest fee.

 

Leaving it to the experts

An umbrella company offers a range of accounting services to contractors aimed at making the administrative side of their jobs simpler.  Anybody who works independently already has enough to deal with seeking out and pursuing career opportunities.  Having a service that deals with matters such as chasing payment, tax assessment and National Insurance payments can save time and, ultimately, money for busy contractors.

An umbrella company acts as an intermediary between a client and the contractor.  The most important task it carries out is that of payroll services.

Specifically, once the contractor submits a time sheet, the company bills the client on their behalf.  Depending on the umbrella company, contractors submit details of their hours manually or electronically along with any work-related expenses.

In addition to this, an umbrella company provides National Insurance and tax payments for the contractor known in the UK as PAYE (Pay As You Earn).

It is important to note that, within the PAYE system, the procedure for claiming professional expenses, known as a dispensation, is strictly monitored by the government authorities, as is the scope for reducing tax liability.

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What does it cost?

Service charges vary from company to company.  Some deduct a set fee on the gross salary that is advantageous to the contractor as it effectively reduces their tax contribution.  Others take their fee from the net pay.  A smaller number of these companies simply take a set percentage from a contractor’s earnings as their cut.

Payment schedules also differ across the board, with some umbrella companies forwarding salaries only when they receive funds from the client while others pay on a fixed date regardless.

 

It’s not just about tax

Many umbrella companies can also support contractors in financial areas that aren’t directly related to their jobs.  Advice on mortgages and pensions, even on eventually forming a Limited Company when the time is right, are stock and trade for a large number of these companies.

 

Why it’s worth it

Keeping on top of payments owed, as well as tax and National Insurance contributions, is essential to the present and future financial health of anyone who works independently.

An umbrella company can take the stress out of money matters and, at a small investment, ensure financial peace of mind.

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Microfinance Levelling the Playing Field

May 23, 2013 No comments

Mortgages, loans, credit cards and other financial products are taken very much for granted in the United Kingdom and other developed nations of the West. But that’s not the case in many poorer regions of the world where access to banking is either extremely limited or non-existent. Microfinance is attempting to level the playing field.

The Middle East and North Africa (MENA) region, which stretches from Sudan and Egypt in the south to Morocco in the west and Turkey in the north, is an area of tremendous contrasts and contradictions. Whereas bank loans and credit cards in Jordan, Qatar, the United Arab Emirates and other MENA countries may be readily available for large swathes of the population, in Egypt, for example, it’s a different story.

Most of the country’s more than 10 million poor exist on the equivalent of two or three US dollars a day. Around 70% of Egypt’s poor also live in rural locations which place them far from bank branches let alone useful financial products. Although there is still a long way to go, the growing availability of microfinance in recent years has begun to address the imbalance.

The International Fund for Agricultural Development (IFAD), a specialized agency of the United Nations, is at the forefront of efforts to combat rural poverty, both in Egypt and many other countries in the Middle East and elsewhere.

IFAD was established as an international financial institution in 1977 as one of the major outcomes of the 1974 World Food Conference, organized in response to the food crises of the early 1970s that primarily affected African countries lying to the south of the Sahara Desert.

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One of the most important insights emerging from the conference was that the causes of food insecurity and famine were not so much failures in food production but structural problems relating to poverty, and to the fact that the majority of the developing world’s poor populations were concentrated in rural areas.

Microfinance has proved particularly successful in Sudan where earlier this year IFAD announced a US$925,000 grant to scale up the existing Agricultural Bank of Sudan Microfinance Initiative (ABSUMI). With the help of the grant, ABSUMI aims to build on its achievements so far which have assisted some 60,000 people in 10,000 households across 97 villages in the country.

The objective of this latest grant is to further improve the livelihoods of 150,000 poor households by increasing income and savings through access to a wide range of agricultural and non-agricultural investments. The money also brings total IFAD investment in Sudan to approximately $252 million since 1979. Over that time, no less than 20 programmes and projects have been financed which in turn have helped nearly half-a-million households.

ABSUMI began in 2010 and entered the microfinance market through the bottom layers of the economic pyramid by providing smaller loans and serving the poorest segments of the population. Loans support small agricultural activities, livestock fattening and rearing, and a range of microenterprises such as petty trading, tea stalls and brick-making.

Since 1978, IFAD has invested about US$14.8 billion in grants and low-interest loans to developing countries through projects empowering over 400 million people to break out of poverty, thereby helping to create vibrant rural communities.

Check out the IFAD website, here.

Money and the World , , , , ,

All you need to know about Credit Card Limits

May 6, 2013 No comments

The Credit Card Market

The credit card market can be a confusing place to be. With so many lenders offering different cards at different rates, each designed to suit different financial situations it can be tough to know which one to apply for.

This is why you should always research the different products on offer to ensure that you get the best and most suitable deal for yourself. There are a number of things to look out for when searching for credit cards; APR, interest free periods, rewards and foreign spending charges should all be considered.

Credit Limit

One thing that many forget about when applying for cards is their credit limit. Credit limit is essentially the amount of money that you can have outstanding on your credit card at any given time.

The credit limit that you are given will be dependent on a number of factors including:

  • Your salary;
  • Your credit history;
  • Your current level of outstanding debt.

If you have a very good salary, you have no missed payments on your credit file and you only have small amounts of outstanding debt; then the likelihood is you’ll be given a high credit limit. If, on the other hand you have a modest income or even a low income, some missed payments and defaults on your credit file and high levels of outstanding debt; you’ll only be eligible for a credit card with a low credit limit.

Increasing your credit limit

1Fortunately though, there are ways to get a larger credit limit. The trick is to always make payments on time and never breach your credit limit which will in turn improve your credit score. If you felt you have done this then you are within your rights to submit a request for a larger limit, however whether this request is granted will be completely dependent on the lender and whether they are content with the way you have managed your card.

High/ Low Credit Limits

The type of card you apply for will also influence the credit limit you are given. If you’re applying for a credit builder card to rebuild or establish a good credit score then it’s unlikely that you’ll be offered a credit limit of over £1,000, whereas if you are applying for a low rate card via your bank then you may be given a limit of over £5,000.

Much like loans or any other type of credit, lenders work on a risk-assessed basis. If you are perceived to be a high risk customer then you’ll only be given a low credit limit, if you are a low risk customer then you’;ll be eligible for a high credit limit.

The same principle applies to APR too. If you’re a high risk customer you’ll only be eligible for high APR credit cards, however if you’re a low risk customer you’ll be eligible for the low rate cards via your bank or supermarket.

Whichever card you do apply for, be sure to stay within your limits and pay off the full balance at the end of the month. By doing this you’ll not only avoid all interest charges but you’ll improve your credit score too.

This article has been written by Jason Scott on behalf of Guarantor Loans Online. For more top money saving tips visit their website.

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How to Run your Business using Mobile Software

April 23, 2013 No comments

As any business owner can attest, the speed of business increases every year, and so too does the range of digital tools for doing business. It’s a surreal experience, paying for your latte at the local coffee shop on an iPad and downloading that latest sales report from the ‘cloud’. But from managing your company payroll to signing documents on the go, mobile software can ensure that businesses are always connected to the bottom line and new ways to add to it. While the dizzying array of mobile apps may be daunting, here are a few to get you started.

 

Dropbox

One of the most popular and powerful of the many mobile productivity apps, Dropbox allows easy access and secure sharing of documents, photos and other files, from any of your computers, as well as mobile devices such as iPhone and iPad. Users from around the world can edit, collaborate on and sync files across almost any device. A recent version configured for business adds new integration features and allows managers to track account usage.

 

Intuit Payroll

Labor is one of the biggest costs for any company or business, and keeping accurate, timely payroll records is essential whether you employ three or 300 people. Intuit’s payroll software gives you the freedom to easily manage payroll from the web or from a mobile device. Not only can you arrange payment with check or direct deposit, but this app gives you access to employee records and payroll history. Available add-ons also make paychecks and record-keeping easier for employees, allowing them to view their checks from the web and even access and print w-2s.

 

EchoSign 

While we may be years away from the President signing a bill into a law on a tablet device, many signatures are increasingly being delivered with just the touch of a finger. Adobe’s EchoSign lets you e-sign, send and track contracts or documents across a wide range of mobile devices. This is an ideal application for the traveling sales rep or companies dealing with multiple signers on complex documents. With automatic filing options and comprehensive tracking, you never have to worry about misplacing your paper files.

 

Paypal, Square

Though there is a certain feel of authenticity in signing your own documents or exchanging paper currency, you’ll likely be forgetting about hitting the ATM before the local farmers’ market or next indie craft fair. Mobile payment applications from Paypal and Square have been a godsend to creative entrepreneurs, small merchants and even touring musicians who do point-of-sale business outside of traditional brick-and-mortar stores and want to avoid costly credit card processing fees and equipment. The mobile card reader hardware is free with sign-up, and both Square and Paypal charge relatively low fees per transaction.

 

Running a business can be a stressful and at times overwhelming endeavor. Technology has connected us to our work as never before, and many are still tethered to their jobs or businesses wherever they may roam. However, good mobile software and applications give you the power to manage your finances and send documents from anywhere in the world, so hopefully you can have a little more peace of mind at the end of the day and some more money in the bank.

 

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The Dos and Don’ts of Debt Settlement

March 26, 2013 No comments

Debt settlement is agreeing to pay a creditor an amount that is much less than what you owe. This is a process that should be avoided, if possible, but when you’re on the verge of bankruptcy, it is certainly better to get help from the debt settlement companies. Since you don’t repay the entire amount that you owe, this has a huge mark against you on your credit score and the fees that you might have to pay while settling your debt might offset the saving that you accumulate through debt settlement.

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However, despite knowing the upshots of settling your debt, if you’re still determined about your decision, you should be aware of the debt settlement dos and don’ts so that you don’t take a wrong decision while taking the plunge.

  • Don’t procrastinate while taking decisions: Don’t make the mistake of waiting until your account has been charged off and this will generally happen when your account has become more than 6 months delinquent. A charged off account is a term that the lender uses when he sees that the possibility of getting repaid are slim. However, this doesn’t mean that you no longer owe the debt. As long as your debt hasn’t been written off, there are some creditors who will certainly talk about debt settlement so as to help you get back on track.
  • Don’t overlook the upshots: Any kind of settlement, for which the forgiveness of debt is more than $600, becomes a taxable income, according to the IRS. Hence, you may feel that you’re saving a huge amount; this isn’t actually the fact as you actually have to pay taxes towards that account. Debt settlement even hurts your credit score badly and the more your score was before your settlement, the more will be the drop in the score.
  • Do be prepared to show your documents: Before the creditors agree to settle your accounts, the creditors will ask for documentation of your income, the assets that you have and of all the existing debts. They will also like to see some convincing proof of your hardship. You should be ready with all such documents so that you can easily remain on the right financial track so as to settle your debts successfully.
  • Don’t make a promise that you can’t keep: When the creditors agree to reduce a portion of your balance, you will be asked whether you’d want to repay the remaining amount in a lump sum or in a monthly payment structure. You should therefore be able to make a promise that you can live up to. Determine your expenses and then choose the way you would like to repay the remaining amount.
  • Don’t default on the payments: Once a portion of your debts are reduced and you start repaying the remaining amount, you shouldn’t default on the monthly payments. This will trash your credit score and therefore you should make timely payments on your settled credit card debt accounts.

Therefore, when you’re worried about your soaring debt level and you’re not being able to get back through bankruptcy, you should get help from a debt settlement firm. Consider the dos and don’ts mentioned above to avoid committing mistakes.

Dealing With Debt , , ,

The Dangers of Payday Loans

March 11, 2013 No comments

Due to the financial crisis of a few years ago, payday loans are now more popular than ever before. Millions of people are struggling to take control of their finances, which means they are looking for a short-term solution to tide them over.debt

However, there have been growing concerns about payday loans from various sources, which has led to some bad publicity for the payday industry. Many experts think that these type of loans are extremely dangerous, and only serve to lead many people deep into a spiral of debt.

 

With this in mind, the payday loan industry is expected to become heavily regulated in the near future. For example, in the UK, new laws have just been passed by the government, with the aim of reducing the amount of interest lenders are allowed to apply to the loan amount.

Although payday loan companies are obviously not happy about these new regulations, the industry is expected to survive, as the demand for short-term cash loans will always be strong.

If you are thinking about taking out a payday loan, here are 3 dangers you need to be aware of so you can make an informed decision…

Cycle of debt

The biggest danger facing payday loan borrowers is sinking into a cycle of debt. It’s just so easy to get caught up into the trap of taking out one payday loan to pay back another.

In order to avoid this situation, you should only ever borrow the minimum amount that you need, and only take out a loan when you are certain that the money can be paid back comfortably by the deadline.

Damage to credit rating

Although payday loan companies don’t usually check your credit rating when assessing an application, that’s not to say that your credit rating won’t take a hit if you fail to repay the money back on time.

In fact, if you miss multiple payment deadlines, then your debt will be passed onto a collection agency, where the details of your missed payments will also be added to your credit file.

Paying for things you don’t need

Another huge danger of payday loans is the growing trend of borrowing money for things that are not essential.

Payday loans are meant to be used for emergencies, but many people now use them to help pay for holidays and buy clothes. Don’t fall into this trap…it’s not worth it.

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How To Reduce The Cost of Your Home Insurance

March 4, 2013 No comments

Home insurance is one of those expenses that most of us commit to year after year, and once we’ve set it up, it’s easiest just to stick with the same insurer rather than having to go through the rigmarole of getting a fresh quote each year.

However not doing so could mean that you are losing out on significant savings, and with so many different price comparison websites now in operation on the internet, getting a few different quotes has never been easier. You only need to put in your details once in order to get a number of quotes.

Get one or two quotes directly as well, though, because not all insurers use comparison websites. When looking at the different quotes, double check that you have asked for the same level of cover with each insurer and that the excess level before a claim is the same. Otherwise you won’t be getting really comparable quotes.

If the prices are too high, consider increasing the voluntary excess you’d be willing to pay as this will usually lower the premiums. Also check that you have the right level of security in place in your home. The more window locks, smoke alarms and security alarms you have in place, the more likely you are to get a discount on your home insurance.

One more thing to remember is to see if your membership to any particular organisation entitles you to a better rate with certain insurers. There are lots of trade union insurance offers, for example, so if you are a member, find out whether your trade union is affiliated with a particular insurer and make sure you get a quote from them too.

Even if the results of your searches for a better deal don’t find you great savings, at least you know that you’ve got a reasonable deal with the insurer that you already have. But make sure to check again next year, prices are always subject to change.

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Insurance, Personal Finance , , , , ,

Guide To A Debt-Free Life

February 28, 2013 No comments

When you have debts hanging over you, it can affect every aspect of your life. Your sleep, your health, even your relationship can be put under strain by the stress of being in debt and not knowing how you’ll ever get clear of it.

However, if you’re at that stage, don’t despair. It is possible to get free of debt, but the path to a debt-free life is not an easy one. Unfortunately there isn’t a quick fix solution, and generally the only way to get clear is through hard work and commitment.

There’s a simple mantra though, that you should keep in mind on your journey to shedding your debts. Spend less than you earn. If you can do this, and keep doing this, then gradually you will work clear of your debts.

Of course, it’s easier said than done, and there will be many a setback along the way. But taking the first step towards paying off your debts will give you a massive incentive to continue. Each small amount that you manage to save and reduce your expenses by each month, will give you some surplus cash that you can use to reduce debts.

It may be that you find it easier to do this with the assistance of a debt management company, who can help you devise a debt management plan, or perhaps offer you a debt consolidation loan. This is basically where you take out a new large loan to pay off all existing debts. You’re swapping one form of debt for another, but debt consolidation loans are generally available with lower rates of interest than your existing store or credit card debts.

If you have really serious debt levels, you might need to consider getting bankruptcy advice, but think carefully before declaring bankruptcy, as there are usually other options open to you before you have to go down this road. Bankruptcy will remain on your credit record for a long time and may require that you sell off some of your assets, so it shouldn’t be entered into lightly.

The path to being debt-free isn’t easy, but with persistence, you’ll get there in the end!

Dealing With Debt , , , , ,

Things That Will Eat Up Your Savings

February 13, 2013 No comments

Admittedly money is there for the spending but there are habits that you need to kick if you don’t want to see your savings go down the drain. This is would be a great loss; think of all the effort that you put which turns to be nothing but an empty bank account. Things that you need to watch are:

Debt

Debt can be detrimental to your budgeting. In addition if you do not have that constant income you will most probably have to get into your savings kitty to pay off. Dept from banks need you have constant income and collateral so if you do not want to loose your security better make sure you have a stable income.

debt

Bad spending habits

Harmful habits and careless spending can eat up your savings in a flash. Things like gambling, addiction and expensive hobbies are some of the things that can induce irresponsible spending.

Lack of proper budgeting of your savings is bad since you lose track of how much you spend of your money and end up realising that your account is running low when it is too late.

Impulsive buying is also something that most people need to work on if they are to stop killing their savings.

State of economic inflation

Though you have little control over this you need to be well prepared. This is testament to the economic down turn. Inflation in addition leads to general increase of prices so the value of your money diminishes with time. So you will generally be spending more if you rely on your savings. It is better to invest in relatively  inflation proof ventures like property for example.

You want to save your savings? Always take time to take a look at your budget and plan on your expenditure accurately so that you will always have confidence in your savings. Adjust your budget immediately anytime there is a change. Let budgeting be your guide and with it you won’t have to worry about your savings.

Money Management , ,

Mis-sold to by Banks – Small Businesses to be Redressed

February 3, 2013 No comments

An “appalling scandal” is how the Business Secretary Vince Cable described the latest mis-selling of complex financial products by big banks. Small business customers were sold interest rate hedge products which they though would protect their loans from future changes in interest.

However, an investigation by the Financial Services Authority found that in nine out of ten cases, customers had been mis-led and did not fully understand the risks associated with the products they were purchasing.  In some cases, attempts failure to keep up with charges for the products they had bought led to businesses shutting completely.

In many cases, business owners thought they were purchasing a form of insurance for their loans and often they were told they had to buy interest rate protection to borrow money from the bank.

Mr Cable commented on the dispute saying, “The banks have just now to get on, and help the companies to whom they have mis-sold these products- many who have been driven out of business”. He reprimanded the banks, saying they “must clean up their act”.

Hundreds of thousands of companies are estimated to have been affected.  Mr Cable was clear that “banks must not pursue companies for money whilst the dispute is still been resolved” to avoid more businesses failing. He has stressed the importance of addressing the issue for small and medium sized businesses, describing them as “the companies that will drive our (economic) recovery”.

11 Banks including Barclays, HSBC, Lloyds and the Royal bank of Scotland have agreed to review as many as 40,000 sells of interest rate hedge products and to recompense customers where the sales did not meet FSA regulations. Chief of the British Bankers Association, Anthony Browne has said, “Where customers have suffered unfairly the banks have all agreed that they will put it right.” He added that companies who had the “greatest need” would be a priority.

The regulator has given banks 6 – 12 months to evaluate cases of inappropriate selling of interest rate hedging products and give ‘fair and reasonable redress’.

To find out how to put in a claim for your business’ redress go to www.InterestRateSwapsClaim.co.uk.

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