The UK Tax and Accounting Podcast from I Hate Numbers:

Cash is your financial priority, which is this weeks I Hate Numbers podcast.  In previous weeks turnover and profits have been in the spotlight, this time Cash is taking centre stage.

In this podcast I'm going to look at

• What cash is
• Why Cash is your financial priority
• Tips for managing your cash

Listen to find out more.

Profitable businesses have become basket cases because they run out of cash.  Profit is important, that always must be a financial goal, part of your thinking and action. Moreover, cash is what keeps the lights on, the wheels of your business turning.  It’s like the fuel that drives a car, no fuel, no movement.

Listen to find out more

How to make your cash flows better

To keep a ready supply of cash to pay your bills, your suppliers and yourself adopt good practices. Those include

• Manage the credit you give
• Update your books
• Pay your bills
• Do a cash flow forecast

A cash plan, a forecast is not a strait jacket, it is critical to realize your life and your business aspirations and goals. If you can’t think beyond today, then you have a problem.  Planning is liberating, empowering and life affirming

Above all, you need to know that Cash is your financial priority. This week’s podcast tells you this, plus calculations, tips, and advice.

Listen to find out more.

My mission is to help you get better acquainted with your best friend in business, your numbers-  improving your money mindset and wellbeing, making profit, save tax and time.

Help me share Number Love by telling your friends and family about the show.  Listen now and subscribe to I Hate Numbers, so I can send it straight to your inbox every week with all the latest updates from I Hate Numbers podcast! are

If you found this podcast useful then share this episode on social, leave a review on Apple podcast, connect with me on Instagram, You Tube, Twitter, LinkedIn and Facebook,

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Last week I talked about turnover, this week it’s What are your business profits?

Most people see profit as the difference between money in and money out. When people say money, they mean notes and coins, what's in their bank account.  That sounds nice, and easy to calculate. However, we are talking about the world of numbers and business here!

Welcome to another weekly episode of I Hate Numbers.  My mission is to inform, inspire and educate you to get closer to your numbers.  This is a must do if you want to make  money from your business and are not run it as a hobby.

Profit is not measured in terms of money in and money out.  When you calculate profit it’s a completely different ball game.

In this podcast I am going to look at four jargon words.  Don’t worry, I will convert that  jargon to normal speech!

The four key terms I’ll be de-jargoning, all necessary to understand What are your business profits.

• Turnover
• Cost of sales
• Expenses
• Incurred

Profit is about measuring your economic activity and converting that into numbers.  For an accurate calculation of profit, we apply the principle of number dating.  This is a key accounting rule known as the ‘matching principle’

In this podcast will talk about the two main profits in your business, gross profit, and net profit.

Listen to find out more.

Above all, you need to know what your business profit is.  This week’s podcast tells you what you need to know, calculations, tips, and advice.

Listen to find out more.

I love to help business owners connect with and understand their numbers, improve their attitude to money, make more profit, save tax and time.

Help me share Number Love by telling your friends and family about the show.  Listen now and subscribe to I Hate Numbers, so I can send it straight to your inbox every week with all the latest updates from I Hate Numbers podcast! are

If you found this podcast useful then share episode on social, leave a review on Apple podcast, connect with me on Instagram , You Tube, Twitter , LinkedIn and Facebook,

https://podcasts.apple.com/podcast/proactiveresolutionss-podcast/id1500471288

https://open.spotify.com/show/5lKjqgbYaxnIAoTeK0zins

https://www.stitcher.com/podcast/proactiveresolutionss-podcast

https://tunein.com/podcasts/Business–Economics-Podcasts/I-Hate-Numbers-p1298505/

What is turnover in business? Turnover is the total value of what your business sells before deducting costs. It is also called sales, revenue or income, and it appears in company accounts, tax returns and everyday business conversations. However, turnover on its own does not show whether your business is profitable or whether you have enough cash in the bank.

What is turnover in business is a short, practical episode about one of the most common terms used in business finance.

We explain what turnover means, how to calculate it, why it matters, and why it should not become your main financial priority. Turnover can feel exciting because it shows what you have sold, but profit and cash tell a deeper story about business health.

If you want a wider guide to business finance language, our episode on Understanding Financial Terminology: Capital Expenses, Operating Costs and Profit is a useful next step.

Turnover matters because it shows the value of sales made by your business. It helps us see whether people are buying, whether activity is growing, and whether the business is generating income.

That makes turnover useful. It can validate demand, show sales momentum and help us compare performance over time.

However, turnover is not the full picture. A business can have high turnover and still struggle if costs are too high, customers pay late, or cash runs short.

Turnover is the total value of what your business sells. If you sell products, it is the value of those product sales. If you sell services, it is the value of the services, hours, projects or days charged to customers.

Different terms can describe the same idea. You may hear turnover called sales, revenue, income, gross sales or net sales. In practical business terms, they all point towards the value of what has been sold.

That is why turnover appears in company accounts, Self Assessment returns, partnership tax returns and business reports.

Turnover is calculated by multiplying the selling price by the number of items, hours, projects or services sold.

For example, if a food business sells six meals at £20 each, turnover is £120. That is the selling price of £20 multiplied by six meals.

The same principle applies to a service business. If you sell your time, turnover is based on the number of hours, days or projects charged to clients, multiplied by the price you charge.

Business language can make simple ideas feel more complicated than they need to be. Turnover, sales, revenue and income are often used to describe the value of what your business has sold.

The terminology may change depending on whether we are looking at accounts, tax returns, management reports or everyday business conversations.

The key point is to understand what the number represents. Turnover tells us what has been sold before we take away costs.

Turnover is easy to spot. We can see sales in till records, invoice books, accounting software, spreadsheets and bank activity.

More sales can also feel good. They can create energy, confidence and a sense that the business is moving in the right direction.

That feeling matters, but we still need to look beyond it. Sales are only one part of the story.

Turnover should not be your main financial priority because you do not keep all the money from sales.

From turnover, we still need to pay for costs such as materials, ingredients, printing, advertising, website costs, staff, freelancers, rent, tax and our own reward.

That is why profit matters. Turnover shows what came in from sales. Profit shows what is left after costs. Our broader profit guide, What Is Profit? Gross Profit and Net Profit Explained, explains that difference in more detail.

Turnover also does not always mean cash has arrived. If you sell on credit, you may record the sale before the customer pays.

Using the meal example, a business may sell six meals but only receive cash for four of them immediately. The other two may still need collecting from the customer.

That creates a cash flow timing gap. The business may have recorded turnover, but it may still be waiting for some of the money. For a deeper comparison, listen to How different is cash to profits?.

The episode sums this up with a useful phrase: sales are vanity, profit is sanity, cash is reality.

Turnover has value, but it should not distract us from the two numbers that keep the business stronger: profit and cash.

Profit tells us whether sales are leaving enough behind after costs. Cash tells us whether there is money available to pay bills, suppliers, tax and ourselves.

Good systems help us track turnover without guessing. Accounting software, cloud accounting tools or well-kept spreadsheets can show what has been sold and help connect turnover to profit and cash.

That matters because we cannot make good decisions from vague numbers. We need clear information about what we sell, what it costs, what customers owe and what cash is available.

Our episode on Cloud Accounting: Embracing the Future of Financial Management explains how digital systems can support better financial control.

• Do you know your total turnover for the month, quarter and year?
• Do you know which products or services generate that turnover?
• Are sales increasing, falling or staying flat?
• Do you know the costs linked to those sales?
• Do you know your profit after costs?
• Are customers paying on time?
• How much turnover has turned into cash?
• Are you relying on turnover as a vanity number?
• Do your systems show turnover, profit and cash clearly?
• Are you using those numbers to make better decisions?

Turnover is the total value of what your business sells before deducting costs. It may also be called sales, revenue or income.

You calculate turnover by multiplying the selling price by the number of items, hours, projects or services sold.

No. Turnover is the value of sales before costs. Profit is what remains after costs are deducted.

No. Turnover may be recorded when a sale is made, but cash may arrive later if the customer has time to pay.

• 00:00 – What turnover means and what the episode covers
• 00:58 – Jargon-free numbers for business owners
• 01:15 – What turnover is in different types of business
• 01:56 – Food business example: six meals at £20
• 02:24 – Turnover for service businesses
• 02:45 – Sales, revenue, income and other turnover terms
• 03:33 – Why turnover matters
• 04:16 – Why turnover is not profit
• 05:23 – Turnover and customer credit
• 06:06 – Why profit and cash matter more
• 06:34 – Sales are vanity, profit is sanity, cash is reality

• Understanding Financial Terminology: Capital Expenses, Operating Costs and Profit
• What Is Profit? Gross Profit and Net Profit Explained
• How different is cash to profits?

Turnover is the value of what your business sells, but it does not show the full financial picture. It tells us what has been sold, not what we keep.

Use turnover as one measure of activity, but keep your main focus on profit and cash. Those numbers show whether the business is truly making money and whether there is enough cash to keep going.

Plan it, Do it, Profit.

The I Hate Numbers podcast helps business owners understand accounting, tax, finance, profit, cash flow, and business planning in a practical way. We simplify financial topics so you can make better decisions and feel more confident with your numbers.

You can also watch more practical finance and tax support on the I Hate Numbers YouTube channel, or listen and follow on Apple Podcasts.

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What are the risks of self-employment? Great question.  Risks and life go naturally together. It's as natural as ham and pineapple pizza gin and tonics and cheese pickle sandwiches.  That's no different when you enter the world of business and you start working for yourself and become, self-employed think of those risks as part of your route to self-employment.

In this podcast, I will guide you through some of the main issues that you are likely to face. I'm going to discuss how to best prepare for them, knowing and dealing with those risks gives us a clear path to success.  Hi folks. My name is Mahmood. I am the podcast host of I hate numbers and my mission in life is to simplify the world of finance and numbers for business owners, help them make more time, help them save tax, make more profits and improve what goes on between their ears.

There are many benefits to going alone, there are also downsides.  Control, responsibility, destiny, and money are some of them.

Wanting to explore the tax differences?  Check out or FREE online calculators.

What are some of the other risks of working for yourself looked at in this podcast?

• Uncertainty, risk, and your money attitude
• Working capital, money fuel to run your business.
• Mistakes, and what Edison’s take on it is
• Pricing your products and services correctly
• Tracking and understanding your money in and money out
• Sales and marketing. It’s more than your website and a bunch of business cards.

Check out or FREE online calculators.

Moreover, do you want to know the answer to the question ‘What are the risks of self employment ?  This podcast tells you all you need to know, with tips, and advice

Listen to find out more.

Firstly, I love to help business owners connect with and understand their numbers.  Above all I want you to improve your attitude to money, make more profit, save tax and time.

Help me share Number Love by telling your friends and family about the show.  Listen now and subscribe to I Hate Numbers, so I can send it straight to your inbox every week with all the latest updates from I Hate Numbers podcast! are

Links

https://podcasts.apple.com/podcast/proactiveresolutionss-podcast/id1500471288

https://open.spotify.com/show/5lKjqgbYaxnIAoTeK0zins

https://www.stitcher.com/podcast/proactiveresolutionss-podcast

https://tunein.com/podcasts/Business–Economics-Podcasts/I-Hate-Numbers-p1298505/

Can you claim tax back for working at home?  Have you had to work from home because of COVID? Would you like to know how you can claim tax relief and get extra cash into your pockets? Well, carry on listening to this this week I Hate Numbers podcast episode to find out how.

Firstly, I will let you know how the tax relief works.  Secondly, how you can check if you are eligible to make the claim.  Lastly, how you make the claim and what that can be worth to you.

Listen to find out more.

If you work from home, or have staff working remotely for your company, then this podcast is for you!  The pandemic resulted in millions of people having to work from home.  Tax relief for working from here has been with us for several years, but for 20-21 and 21-22 the rules have relaxed.  One day working from home, can result in being able to claim £125.

Listen to find out more.

Can you claim tax back for working at home? Short answer, yes.  Firstly, either claim tax relief based on a flat rate allowance’ or claim the extra costs you have actually incurred.  To do so you’ll need evidence such as receipts, bills, or contracts

This can be worth as much as £125 for a year.  You can claim for previous years, there is up to £500 on the table.  Follow the link to check if you can claim

Moreover, do you want to know the answer to the question ‘Can you claim tax back for working at home?    This podcast tells you all you need to know, calculations, tips, and advice

Listen to find out more.

I love to help business owners connect with and understand their numbers, improve their attitude to money, make more profit, save tax and time.

Help me share Number Love by telling your friends and family about the show.  Listen now and subscribe to I Hate Numbers, so I can send it straight to your inbox every week with all the latest updates from I Hate Numbers podcast! are

https://podcasts.apple.com/podcast/proactiveresolutionss-podcast/id1500471288

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https://tunein.com/podcasts/Business–Economics-Podcasts/I-Hate-Numbers-p1298505/

Payments on account can catch you out if you submit a UK Self Assessment tax return and owe more tax than expected. They are advance payments towards your next tax bill, and they can create a nasty shock if you only budget for the tax you already owe.

This episode is for self-employed people, landlords, company directors, shareholders and anyone with untaxed income who needs to understand how payments on account work. We explain what they are, when they apply, how they are calculated, when they are paid, and what you can do if your future tax bill is likely to be lower.

Payments on account are not always properly explained, but they are an important part of the UK Self Assessment system. If money reaches your pocket without tax being deducted first, you may need to complete a tax return and pay what you owe directly to HMRC.

In this episode, we explain the basic framework of Self Assessment, why payments on account exist, how HMRC uses last year’s tax bill to estimate the next one, and why setting money aside throughout the year matters.

If you are self-employed and want a wider foundation before looking at payments, our episode on Tax basics for self employed: What You Need to Know is a useful starting point.

Payments on account matter because they affect your cash flow. You may think your January tax bill is just the tax for the year you have already completed. However, if payments on account apply, you may also need to pay an advance amount towards the next tax year.

That means January can feel heavier than expected. You may have your balancing payment for the previous tax year, plus the first payment on account for the next tax year. The second payment on account is normally due later in July.

This is why tax planning is not just about completing a return. It is also about saving regularly, understanding your likely tax bill, and avoiding surprises before the deadline arrives.

Payments on account are advance payments towards your next Self Assessment tax bill. HMRC uses your previous year’s tax bill as a guide and asks you to pay towards the next year before that return is completed.

They are designed to spread the cost of tax into instalments. However, they can still feel like a shock if you are not expecting them.

They are especially relevant where your income has not already had tax deducted at source. This can include self-employment income, rental income, dividends and other untaxed income.

You should pay attention to payments on account if you complete a Self Assessment tax return and your tax bill is above the relevant threshold.

This often affects self-employed people, landlords, directors and shareholders who receive income that is not fully taxed before it reaches them.

PAYE employees may have most of their tax collected through payroll. However, once income falls outside that system, more responsibility sits with you to calculate, report and pay the right amount on time.

Payments on account are usually based on your previous year’s Self Assessment tax bill. Each payment is normally half of that previous bill.

For example, if your relevant tax bill was £4,000, HMRC may ask for two payments on account of £2,000 each. The first is normally due by 31 January and the second by 31 July.

If you have already made payments on account in the previous year, those payments are offset against your final tax bill. If they do not cover the total amount owed, the remaining amount is called a balancing payment.

The first time payments on account apply, the amount due can feel especially heavy. That is because you may need to pay the tax you owe for the year just ended, plus the first payment towards the next tax year.

This is where many taxpayers are caught out. They budget for one tax bill, but the system asks for an advance payment as well.

Understanding this early gives you time to prepare, save and avoid a last-minute scramble.

You may be able to reduce your payments on account if you expect your next tax bill to be lower than last year’s.

That might happen if your profits fall, your income changes, your allowances increase, or your tax position changes. However, the reduction should be realistic and based on a sensible estimate.

If you reduce payments too much and your final tax bill is higher than expected, HMRC may charge interest on the difference. Therefore, reducing payments on account needs care.

The best way to deal with payments on account is to plan ahead. Every time you raise an invoice, receive rental income, take dividends or earn untaxed income, set aside a proportion for tax.

A separate savings account can help. That way, the money for tax is not mixed in with everyday spending or business cash flow.

You can also estimate your likely tax bill during the year. This helps you avoid surprises and gives you time to adjust your savings before the payment deadline.

• Do you need to submit a Self Assessment tax return?
• Was your previous tax bill high enough to trigger payments on account?
• How much tax have you already paid through PAYE or other deductions?
• Do you have untaxed income from self-employment, rent, dividends or other sources?
• Are your profits likely to be higher or lower this year?
• Do you need to reduce your payments on account?
• Have you saved enough for the January and July deadlines?
• Have you allowed for any balancing payment?

If a missed deadline leads to penalties or interest, our episode on HMRC Reasonable Excuse: How to Appeal a Tax Penalty Successfully explains what to consider when appealing a tax penalty.

Payments on account are advance payments towards your next Self Assessment tax bill. They are usually based on the previous year’s tax bill and paid in two instalments.

Payments on account are normally due by 31 January and 31 July. The January deadline may also include any balancing payment for the previous tax year.

You can ask HMRC to reduce them if you expect your next tax bill to be lower. However, if you reduce them too far, interest may be charged on the underpaid amount.

It may include more than one amount: the tax still owed for the previous year, plus the first payment on account towards the next tax year.

• 00:00 – Why payments on account can create a tax shock
• 00:40 – Introducing payments on account
• 01:04 – What we cover: calculation, reduction and payment dates
• 01:24 – How the UK Self Assessment system works
• 02:29 – Rishi and Boris example: profits and tax bills
• 03:29 – Self Assessment deadlines and first payments
• 03:57 – When payments on account are triggered
• 04:44 – January and July payment dates
• 05:44 – Existing taxpayers and payments already made
• 08:20 – Why HMRC assumes next year will follow last year
• 09:05 – Reducing payments on account
• 10:27 – Saving ahead for your tax bill
• 12:16 – Final reminder to watch your tax bill

• Tax basics for self employed: What You Need to Know
• Tax and Your Self-Employed Business: Sole Trader or Limited Company?
• HMRC’s Invisible Crackdown: What Business Owners Need to Know

Payments on account explained simply are advance payments towards your next tax bill. They can help spread tax across the year, but they can also surprise you if you are not prepared.

The practical answer is to understand when they apply, estimate your tax during the year, save regularly, and only reduce payments on account when you have a sound reason to do so.

Plan it, Do it, Profit.

The I Hate Numbers podcast helps business owners understand accounting, tax, finance, profit, cash flow, and business planning in a practical way. We simplify financial topics so you can make better decisions and feel more confident with your numbers.

You can also watch more practical finance and tax support on the I Hate Numbers YouTube channel, or listen and follow on Apple Podcasts.

📘 Book

https://www.ihatenumbers.co.uk/i-hate-numbers-book/

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Self-employed and want to know more about the fifth Self-Employment grant?

Most importantly, the fifth Self-Employment grant differs from previous grants. There’s an extra turnover test to see how much you can claim. This podcast looks at this, grant eligibility, what you must do. In addition, I will share examples and tips. Above all, your claim is based on your reasonable judgement, evidence, and judgement.

Click here for the full podcast now! You won't regret it! I'll answer your questions so you can make an informed decision about applying for the grant.

This fifth Self Employment Grant is for those affected by the coronavirus outbreak.  The grant will cover the period May 2021 to September 2021.

No government announcements have been made for additional financial support for the self-employed beyond September 2021.

In today’s podcast, I am going to be looking at how the fifth self-employed grant differs, compared to previous grants.  Furthermore I look at eligibility criteria, and evidence.  Lastly, I will be looking at how much the grant is worth, and possible HMRC follow up action.

Firstly, HMRC will make the initial assessments as to whether you are eligible to apply.  They should you to to confirm whether you can make the application.

Initial eligibility, for example whether you are self-employed, level of your trading profits, and filing your tax return HMRC will know that.  No change compared to previous claims, check out those details.

You don't need to provide any financial data because HMRC have that on file, you've got to make a declaration that you intend to continue to trade, you've got a reasonable belief that there's going to be a significant reduction in your trading profits because of reduced business activity.  The key thing is the link and connection between Coronavirus and your business between May and September 2021.

But make sure you have the evidence to back that up. More of that in the podcast.

Above all, do you want to know more about the fifth Self-Employment grant?  You can get it if you meet all these conditions.   This podcast will tell you what you need to know about eligibility, the pitfalls, examples and tips.  Your  claim is based on your reasonable judgement, evidence, and judgement.  What does this mean?

Listen to find out more.

Help me share Number Love by telling your friends and family about the show.  Listen now and Subscribe to I Hate Numbers, so I can send it straight to your inbox every week with all the latest updates from I Hate Numbers podcast! are

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In this episode, we explain what a Community Interest Company is and how CICs can support social enterprises that want to make money while creating positive community impact. A CIC can be a useful structure for people who want to run a business with a clear social purpose, without becoming a charity straight away.

We also look at the key features of Community Interest Companies, including the community interest test, asset lock, different CIC structures, and how CICs compare with charities. If you are planning a values-led organisation, this episode will help you understand the main options before taking the next step.

A social enterprise is more than a business with a social conscience. It is a business that combines commercial activity with social goals. The aim is to generate income, remain sustainable, and use that income to support a wider mission.

Examples mentioned in the episode include the Eden Project and The Big Issue. These show that social enterprises are not just small community projects. They can operate at scale, generate income, and still place social impact at the heart of their work.

For small business finance UK, this matters because a social enterprise still needs good financial control. It must understand income, costs, profit, and reinvestment if it wants to survive and make a lasting difference.

A Community Interest Company is a company created to benefit the community. CICs were introduced in the UK in 2005 and have grown in popularity since then.

A CIC operates as a business, but it has features that make it different from a traditional private company. Its primary purpose is not simply to reward shareholders. Instead, the underlying aim is to benefit the community and reinvest funds into products, services, or activities that support that purpose.

This makes CICs a strong model for social enterprises that want a business structure with a clear public benefit. They can also attract investment, particularly where investors want both a financial return and a social outcome.

CICs matter because they give social entrepreneurs another route. Not every organisation that benefits the community will qualify as a charity, and not every founder wants the restrictions that come with charitable status.

A CIC can offer more flexibility than a charity while still protecting the social purpose of the organisation. It allows people to run an organisation, earn income, take strategic control, and focus on community benefit.

This is important for business planning because the structure you choose affects control, tax, funding, governance, and future growth. Good decisions at the start can reduce confusion later.

The main purpose of a CIC is to provide community benefit rather than private benefit. This principle is reflected in the community interest test.

A company satisfies the test if a reasonable person might consider that its activities are carried on for community benefit. When applying to register as a CIC, you must explain how your organisation will benefit the community and who will benefit from its activities.

A CIC must be clear about the community it intends to serve. That community could be broad, such as the general public, or more specific, such as a local area, NHS workers, or young unemployed people.

The important point is that the community should be wider than just the members of the CIC. The organisation should exist to create benefit beyond the people who own, run, or work in it.

A CIC can be limited by shares or limited by guarantee. A company limited by shares can have shareholders and may distribute dividends, although CICs face restrictions on how much can be paid to private investors.

A company limited by guarantee is more common in the not-for-profit sector. It has guarantors rather than shareholders, and profits are usually reinvested back into the company. The right choice depends on how the organisation is funded, governed, and expected to grow.

The asset lock is one of the most important features of a CIC. It is designed to make sure that assets and profits are used for community benefit.

A CIC cannot usually transfer assets below full market value unless the transfer is to another asset-locked body or is clearly for community benefit. If the CIC is dissolved, any surplus assets must be transferred to another asset-locked body after liabilities are settled.

This gives the CIC structure long-term protection, but it also means founders must understand the consequences before setting one up.

A CIC is not a charity, and a charity is not a CIC. They may both serve the public or community, but they are governed by different rules and expectations.

One important difference is control and payment. In a charity, it can be difficult to retain strategic control and be paid for running the organisation. With a CIC, you can be part of the governing body, lead the organisation, and be paid for the work you do.

A CIC can also be set up more quickly than a charity. The episode explains that a charity may take three to six months to create and incorporate, while a CIC can normally be formed more quickly.

• Be clear about the social or community purpose.
• Define who the community is and how they will benefit.
• Decide whether the CIC should be limited by shares or guarantee.
• Understand the community interest test before applying.
• Consider the long-term impact of the asset lock.
• Compare the CIC route with charity status before deciding.
• Think about funding, investment, tax, governance, and future growth.

If your organisation needs support with financial control, bookkeeping, or planning, our Xero accounting support may help you build stronger systems around your numbers.

• Community Interest Companies and Tax
• Understanding Your Financial Statements
• Build Your Cash Flow with a Spreadsheet

A Community Interest Company can be a powerful structure for social enterprise. It allows an organisation to trade, generate income, attract investment, and pursue community benefit without becoming a charity immediately.

However, the structure needs thought. The community interest test, asset lock, and choice between shares or guarantee all matter. Before moving ahead, we should be clear about the purpose, the community served, and the financial model needed to make the organisation sustainable.

• 00:00 – Introduction to Community Interest Companies and social enterprise
• 01:10 – What social enterprise means and why it matters
• 03:00 – What a CIC is and why CICs were introduced
• 04:15 – Defining the community a CIC serves
• 05:20 – The community interest test
• 06:45 – CICs limited by shares or guarantee
• 08:00 – The asset lock and long-term consequences
• 10:00 – CICs compared with charities
• 11:30 – Final thoughts before choosing a structure

The I Hate Numbers podcast helps business owners understand accounting, tax, finance, profit, cash flow, and business planning in a practical way. We simplify financial topics so you can make better decisions and feel more confident with your numbers.

You can also watch more practical finance and tax support on the I Hate Numbers YouTube channel, or listen and follow on Apple Podcasts.

📘 Book

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When and how to complete form W-8BEN-E is a must for non-US tax resident entities earning money in the US.  This week’s I Hate Numbers podcast follows on from last week.

Last week I dealt with individuals and sole traders earning money from the US, who have income from the U S.  This week in I Hate Numbers, it is the turn of companies, partnerships, charities, and single member companies.

Tax and forms, tax and forms go hand in hand, just like chips and gravy, gin and tonic and pineapple and pizza. None more so do tax and forms go hand in hand when, as a non us tax resident, you are dealing with the us and earning money from there.

In this week podcast, it is the turn of companies, partnerships, charities, and single member companies.  When and how to complete form W-8BEN-E is my this week podcast focus .

I will walk you through form W-8BEN-E.  My podcast may not be the perfect format for showing what the forms look like.  I have got you covered, check out my you tube video video for a visual.  Moreover, I am going to take you on step by step by journey to explain the form, what it is about, and what goes into it.

At 30 sections, the W-8BEN-E IS a weightier tome compared to the one that individuals and sole traders must complete.  Do not get overwhelmed though, not all thirty sections will apply to most of you, it’s a one size fits all form.

Abbreviations and forms are natural bedfellows, it must be a word space thing!   Let’s face it, it would not be a form unless you had abbreviations.  Abbreviations are FATCA, NFFE and TIN.  Phrases keep the abbreviations company.  One such phrase, or term if you prefer is the ownership and based erosion test.  You need to know what this is to complete the form.

Listen to find out more.

There are different tax and business structures in the US compared to the UK.  One example is the C corporation , which is the most common business structure.  The C corporation is taxed like UK limited companies.  The company pays tax on its profits. The individual shareholders directors will pay tax on the basis that dividends are withdrawn, or salaries paid to the owners.

Moreover, single shareholder companies are not recognized as US C corporations, which are limited company as we know them in the UK.   If you are a single member company that wants to be taxed as C Corporation then you must complete a couple of extra forms, as well a form W-8BEN-E.

Listen to find out more.

In conclusion. If you do not complete the W-8BEN-E form correctly you will get a financial kick in your balls, 30% tax stopped at source.  Ouch! This podcast on When and how to complete form W-8BEN-E is useful stuff.

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If you are a UK individual or sole trader receiving certain payments connected with the United States, the W-8BEN form UK question can appear before you get paid.

The form is used by foreign individuals to establish that they are not a US person, confirm that they are the beneficial owner of the income, and, where relevant, claim a reduced rate of or exemption from US withholding under a tax treaty.

In this episode, we look at who the W-8BEN is for, why a US payer may ask for it, the information that goes into the form, and how the UK-US tax treaty can affect withholding.

Doing business with the US can bring a new set of forms and tax language into the conversation.

You might have a US client, receive royalties, hold US investments or receive other US-connected income. A payer may then ask you to complete a form from the W-8 family before making payment.

This episode focuses on the W-8BEN, the form generally used by foreign individuals. It also explains why the form matters, what a TIN means, and how treaty relief can affect US withholding.

Form W-8BEN is the IRS Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting for individuals.

In practical terms, it tells the payer that you are a foreign individual and, where appropriate, lets you claim the benefit of an income tax treaty.

You give the completed form to the payer or withholding agent that requests it. You do not normally send the W-8BEN directly to the IRS.

The payer then uses the information on the form to work out how the payment should be treated for US withholding and reporting purposes.

The W-8BEN is generally for a foreign individual who is the beneficial owner of an amount for which the payer needs foreign-status documentation.

For a UK audience, that can include an individual or sole trader who is asked by a US payer to document their foreign status.

However, there is an important current-guidance point here.

It is too broad to say that every non-US citizen who receives money from a US customer must always complete a W-8BEN. The correct form depends on who you are, what type of income you receive and why the payer needs the documentation.

For example:

• foreign individuals commonly use Form W-8BEN
• foreign entities commonly use Form W-8BEN-E
• effectively connected US business income can require Form W-8ECI
• certain personal services performed in the US can require Form 8233 when treaty exemption is being claimed

So the starting point is not simply, "I have an American client." It is, "What is the payment, what is my status, and which US tax form applies?"

If you operate through a company or other entity, see our guide to Form W-8BEN-E.

The payer needs documentation that supports how it treats you for US withholding purposes.

Without valid documentation, certain US-source amounts that are subject to foreign-person withholding can be subject to a 30% statutory withholding rate.

That does not mean every payment from every US client automatically suffers 30% withholding.

The source and type of income, the relevant US tax rules, any treaty relief, and the form you provide all matter.

That distinction is important because the original practical message remains useful: do not ignore a W-8 request from a payer. If the payer needs valid foreign-status documentation and does not have it, the withholding result can be expensive.

The distinction in the episode is still a useful one.

The W-8BEN is for foreign individuals. The W-8BEN-E is generally for foreign entities.

That said, the W-8 family contains other forms as well, so a company, charity, partnership or intermediary should not assume that W-8BEN-E is automatically the correct form in every situation.

Our broader guide to W-8 forms explains the wider family.

Part I of the W-8BEN is about identifying you as the beneficial owner.

The current form asks for information including your name, country of citizenship, permanent residence address and, where relevant, other identifying information.

Use your proper legal details. Do not treat the country-of-citizenship box as the same thing as tax residence. Treaty residence is dealt with separately in Part II.

If you provide a mailing address that differs from your permanent residence address, the form has space for that too.

The TIN is the Taxpayer Identification Number.

That language can sound unfamiliar from a UK perspective because the UK does not issue one universal number called a TIN in the same way some countries do.

UK taxpayers can have TIN-like identifiers, including a National Insurance number and a Unique Taxpayer Reference, or UTR.

The current W-8BEN has a line for a foreign tax identifying number, or FTIN, in relevant circumstances.

Do not simply copy an identifier onto the form because an old example used it. Use the identifier that is appropriate to your circumstances and the request being made. If you are claiming treaty benefits, the IRS can require a US or foreign TIN in relevant cases.

For a sole trader, your UTR may already be familiar from Self Assessment. Individuals may also have a National Insurance number. If you are uncertain which identifier the payer expects for your particular W-8BEN, check the current IRS instructions or take advice before submitting it.

The form also includes a date-of-birth field in the circumstances covered by the current instructions.

When it is required, the IRS format is MM-DD-YYYY, so the month comes first.

That is easy to reverse if you are used to the UK day-month-year format.

This is where the UK-US tax treaty becomes important.

Part II of the current W-8BEN deals with a claim of tax treaty benefits. This is a useful correction to older explanations that referred to the treaty section as Part III. Part III is now the certification section.

If you are claiming treaty benefits, you identify the country in which you claim residence for treaty purposes and, where required, provide the relevant article, withholding rate, type of income and explanation.

The treaty does not simply say that every UK resident pays no US tax. Different types of income have different articles and conditions.

Examples discussed in the episode include:

• Article 6 for income from real property
• Article 7 for business profits
• Article 10 for dividends
• Article 12 for royalties

The correct article depends on what the income actually is.

For many UK sole traders dealing with US business customers, Article 7 is the part of the UK-US treaty that attracts attention.

Under Article 7, business profits of a UK enterprise are generally taxable only in the UK unless the enterprise carries on business in the US through a permanent establishment there. If a US permanent establishment exists, the US can tax the profits attributable to it.

The current IRS W-8BEN instructions also say that someone claiming treaty benefits on business profits not attributable to a permanent establishment must complete line 10 and include the relevant treaty article.

This is why the words "permanent establishment" matter in the episode.

However, do not turn that into a blanket rule that every freelancer with a US client should write Article 7 and 0% on a form. The facts still matter, including where services are performed and whether another US form or rule applies.

In the UK-US treaty, a permanent establishment broadly means a fixed place of business through which the business of an enterprise is wholly or partly carried on.

Examples can include a place of management, branch, office, factory or workshop.

This is different from simply having a customer in the United States.

If your situation involves people, premises or business activity in the US, do not assume the treaty position from a general example. Get the position checked.

The final part is certification.

You sign and date the W-8BEN and certify that the information is correct.

If an authorised agent signs for the beneficial owner, additional authority requirements can apply.

Once completed, give the form to the payer or withholding agent that requested it rather than sending it directly to the IRS.

A W-8BEN does not make income disappear for UK tax purposes.

Its US purpose is to document foreign status and, where applicable, support the correct US withholding treatment.

If you are UK tax resident, the income may still need to be included in your UK tax position under the normal rules.

1. Confirm which form applies. Do not assume W-8BEN is correct simply because the payer is in the US.
2. Use your legal details. Enter your name, citizenship and permanent residence information carefully.
3. Check your tax identifier. Use the appropriate TIN or FTIN where required.
4. Check the treaty position. If you are claiming UK-US treaty benefits, identify the correct income article and conditions.
5. Use the correct date format. Where a date of birth is required, the form uses MM-DD-YYYY.
6. Sign the certification. Make sure the form is complete before giving it to the payer.
7. Keep a copy. Retain the form and supporting information with your tax records.
8. Review changes. If your circumstances change, check whether a new form is required.

It is used by a foreign individual to establish foreign status, confirm beneficial ownership and, where applicable, claim a reduced rate of or exemption from US withholding under an income tax treaty.

Normally, no. You give it to the payer, withholding agent or other requester that needs the documentation.

Not on every type of payment. However, certain amounts subject to foreign-person withholding can face a 30% statutory rate when the payer does not have valid documentation supporting a lower rate or exemption.

No. W-8BEN is the individual form. A foreign entity may commonly use W-8BEN-E, although other W-8 forms can apply depending on the entity and type of income.

The UK uses TIN-like identifiers including the National Insurance number and UTR. Which identifier is appropriate depends on the circumstances and why the form is being provided, so check the current instructions and payer requirements rather than relying on a generic example.

Article 7 of the UK-US treaty covers business profits. Broadly, UK business profits are taxable only in the UK unless the business operates in the US through a permanent establishment, but the facts and form requirements still need to be checked.

If you are within the UK tax rules for that income, yes. The W-8BEN deals with US withholding documentation. It does not replace your UK tax reporting obligations.

• 00:00 - Why Form W-8 matters when you receive US-connected income
• 00:44 - The who, why and how of W-8 compliance
• 01:05 - Who the W-8 forms apply to
• 01:32 - W-8BEN and W-8BEN-E
• 01:58 - Individuals, sole traders and US income
• 02:19 - Withholding tax and the 30% risk
• 03:05 - What Form W-8BEN establishes
• 03:26 - Part I and beneficial ownership
• 03:46 - Citizenship and personal details
• 04:06 - Permanent residence address
• 04:30 - Trading address and the UK perspective
• 04:52 - TINs and tax identification numbers
• 05:13 - National Insurance numbers and UTRs
• 06:14 - Date of birth and US date format
• 06:34 - Tax treaties and why they matter
• 07:21 - The UK-US tax treaty
• 08:02 - Treaty articles for different income
• 08:46 - Claiming treaty benefits on the form
• 09:09 - Business profits and withholding rates
• 09:30 - Signing and dating the form
• 09:46 - US withholding and UK reporting
• 10:09 - W-8BEN-E and the next episode

• What Goes Into Form W-8BEN-E?
• How to Complete W-8 Forms
• Current IRS Form W-8BEN

The W-8BEN form UK question matters because a US payer may need evidence of your foreign status before it can apply the correct withholding treatment.

For individuals, the W-8BEN can establish foreign status and, where the conditions are met, support a treaty claim.

However, the form is not a universal answer for every non-US person receiving money from America. The type of income, your status and the relevant treaty or US tax rule determine what documentation is actually required.

Complete the right form, use the current instructions, and do not wait until a payment has already been held up or reduced before dealing with it.

If you receive income connected with the US and need help understanding which form applies or how the UK-US tax position affects you, you can contact us for an initial chat.

We can also help with UK tax reporting, international income, sole trader and company tax, and the accounting systems behind your business.

You can use our free online business calculators to support your wider financial planning.

For more practical finance and tax guidance, visit the I Hate Numbers YouTube channel, or listen and follow on Apple Podcasts.

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