At a time of unprecedented uncertainty for contractors across the UK, a new tax-tech platform called Ember gives small businesses one less thing to worry about.
This week, a welcome alternative to the cumbersome world of small business accounting launches in the form of Ember, an app that automates tax and provides real time accounting advice for self-employed people.
The UK is home to approximately 2 million contractors who contribute around £119 billion to the economy each year. Despite embodying the workforce of the future, the administrative burden that bookkeeping represents for this group is little-known and underserved.
The UK tax system remains one of the most manual in the EU. Rules of compliance are opaque and accounting systems remain startlingly labour-intensive, requiring business owners to self-categorise every transaction they make all year in order to be tax-compliant. As a result, most contractors pay an accountant upwards of £130 a month to do it for them – a cost that Ember co-founders Aaron Shaw and Daniel Hogan believed could, and should, be saved.
“The idea for Ember was born of first-hand frustration with being self-employed with no financial training,” says Aaron Shaw, a full-stack software engineer with experience working for Google, Red Bull and Unilever, and Ember’s CEO. “After setting up my own company as an IT contractor, I was struck by how onerous the process of managing my books was: hours spent decoding HMRC’s website, precious time wasted categorising expenses. When I eventually buckled and paid an accountant, I felt constantly in the dark about what he was lodging on my behalf. It became painfully obvious to me throughout the experience that so much of the accounting function could be automated, and other parts made simpler.”
Powered by Open Banking and leveraging machine learning, Ember simplifies the accounting process by only showing the user what they need to see. In the background, the app takes care of all tracking, management, calculation and submission of tax – all for the extremely competitive price of just £39 a month.
In more detail, Ember launches with the following features:
- Live bank feed integration with the majority of UK-based banks.
- Automatic classification of transactions into HMRC’s tax categories, making clunky spreadsheets and piles of receipts a thing of the past.
- Real-time reporting, so that contractors can see their up-to-date Profit & Loss and Balance Sheet at all times.
- Real-time tax estimates, so that contractors can know how much tax they owe at all times and avoid nasty surprises when the taxman comes knocking.
- One centralised feed that consolidates all a contractors transactions and accounts into one place.
- Expense management and receipt capture, prompted by push notifications every time a transaction goes through.
- Automatic VAT return submission in just a couple of clicks, in keeping with the HMRC’s recently introduced Making Tax Digital.
- Tax submission reminders and scheduling, ensuring contractors never miss a tax deadline.
- Usage across multiple devices as both a desktop and mobile app.
- Advice on the most tax-efficient pay package between salary and dividends.
- Trained accountants always on hand to answer questions and provide in-app support.
The following features coming soon:
- Pay optimisation
- Automated tax payments
- End of year accounts directly submitted from Ember
- Company tax return directly submitted from Ember
- Director self assessment directly submitted from Ember
With funding from the venture capital firm Startup Funding Club and a member of NatWest’s Accelerator Program, Ember has big plans to bring contractor accounting up to speed with the modern day
“We believe in an economy powered by small business, where everyone is able to work freely and flexibly with no barriers to contracting or starting your own thing,” says Daniel Hogan, ex-Deloitte qualified Chartered Accountant and Ember’s COO. “With progressive tech, intuitive software and language everyone understands, we’re putting control back in the hands of the business owner rather than the accountant. Our vision is to automate the entirety of the business admin process, from starting a company to closing it down, and everything in between.”