Every week on The Primer we ask a local business or product to introduce themselves in eight simple takes. This week we talk to James Fuller whose company, Hnry, handles financial admin (Income Tax, GST, ACC, Student Loans, KiwiSaver etc.) for self-employed people.
ONE: How did Hnry start and what was the inspiration behind it?
The idea for Hnry came to us a couple of years ago. My co-founder Claire (Fuller) and I both found ourselves in self-employment around the same time, and despite having an accountant, we had to do a whole load of work ourselves dealing with invoicing, calculations, payments, and getting insurance. It was a real headache!
Prior to that, we’d always been permanent employees, and it seemed crazy to us that banks and government agencies suddenly treated us as though we were running a small business. We weren’t employing anyone and we didn’t have inventory. We were just earning income as individual sole traders, and we couldn’t fathom why this should be any more complex than having a permanent job.
We’d also made the common mistake of assuming we needed to be registered as a business in order to earn income as a sole trader/freelancer/contractor, and so we’d inadvertently lumbered ourselves with double the number of calculations, payments and tax filings!
We started Hnry to help other self-employed freelancers, contractors and sole traders – making it simple, affordable and accessible for anyone to get into, and out of self-employment without any of that stress or hassle.
TWO: Did you have any interest/experience in business or entrepreneurship prior to starting Hnry?
Before starting Hnry, I’d spent the previous few years as a coach and mentor at CreativeHQ in Wellington helping governments, enterprises and startups embrace innovation and agile working. While working there, I really caught the bug for business and entrepreneurship. Spending so much time around fantastic, driven teams of people was so infectious. For years I’d always had business ideas (some more viable than others). But when we realised what an impact Hnry could have, it was a fantastic opportunity to put all of that experience into practice and solve a genuine problem for people.
THREE: How does Hnry go about calculating and paying a freelancer/contractor’s taxes? What relationship does Hnry have with organisations like IRD and ACC?
The part of our service that deals with taxes is simple. We provide customers with a Hnry bank account to have all their self-employed income paid into. The minute they get paid into that account, we automatically calculate, deduct and pay exactly the right amount of all their taxes, before passing what’s theirs on to them immediately (along with a payslip).
Hnry is a registered Tax Agent with both IRD and ACC so we can represent our customers to those agencies just like an accountant does. That means we’re not providing customers with a standalone software product and expecting them to do all the work themselves. We help them get the right tax relief on their expenses, we answer any questions they may have, and we ensure that all their tax affairs get dealt with to meet IRD and ACC standards.
FOUR: What about things like student loan repayments or Kiwisaver contributions? Does Hnry assist with those as well?
We do indeed. If you’ve got a Student Loan, we ensure that gets paid off at the right rate every time you get paid so that you can avoid any nasty surprises at the end of the tax year. With Hnry you can even allocate portions of your income to be paid to any New Zealand bank account. That means each and every time you get paid, you can automatically transfer a percentage of your income to anyone – savings, mortgages, friends and family, charitable causes, even to investment products like KiwiSaver and Sharesies.
For too long, self-employed people have had to deal with having inconsistent income patterns, whilst at the same time being expected to set up direct debits to go out of their bank account on a particular day each month. Hnry allows you to make those same regular transfers whenever you get paid by your clients, rather than you having to pick a day of the month to have all your payments go out and risk incurring bank charges if you haven’t been paid in time.
FIVE: How much does it cost to use Hnry?
Hnry works on a pay-as-you-earn model, charging a 1% fee on the income that gets paid into your Hnry account. For that fee, you get full access to the Hnry service, to our support team and to all the features of our online platform (we do a lot more than just taxes!). There are no ongoing subscription costs and no hidden fees.
We know that self-employed people aren’t always working full time, so you only pay when you’re earning with Hnry. Our fees are even capped so that if you’re a super-high earner bringing in over $200,000 per year, you’ll never pay more than $2,000 for Hnry.
SIX: Why is tax so much more complex for self-employed people?
I think for a long time, banks and government agencies haven’t quite known how to treat self-employed people. In days gone by, sole traders were generally running a small business or working in the trades, and so they got classed as being a ‘business’ and had to take on all the tax complexity of being a ‘small business’.
In recent years we’ve seen a massive increase in individual self-employed workers in the market – graphic designers, project managers, journalists, business analysts, vets – and even people working multiple different jobs at the same time. As more and more people take advantage of working in self-employment, they’re all being burdened with that same complexity. This leads to stress, uncertainty, admin overhead and cost – all because they’re earning their income independently.
Some people don’t even have a choice as to whether to be self-employed or not, especially people like courier drivers and those working in the film and TV industry. The inconsistent nature of the work and the way those industries are set up mean that they all have to be self-employed, and it seems unfair that they get lumbered with all of this pain through no choice of their own.
SEVEN: Do you have any other plans to scale/grow further and if so, what are they?
We’ve had some really rapid growth in New Zealand since we launched, and we’re already looking at expanding our service into overseas markets. We haven’t found anyone else that’s making self-employment simple in the same way that Hnry does, and there’s a $1.5 trillion global market of self-employed people (growing at 50% each year) who are all experiencing the same challenges.
EIGHT: Lastly, tell us about a New Zealand start-up or business that you really admire right now.
Tough question! There are so many awesome New Zealand start-ups that are doing some very cool things right now. Along with cool FinTech startups like Aider, Sharesies, Jrny and Hatch Invest, I think my inner geek is most excited about eight360 who are doing some really exciting things with virtual reality experiences. We were lucky enough to pitch alongside them at an investment showcase event a while back, and I really enjoyed their CEO Terry Miller’s pitch. It was honest, engaging and genuinely entertaining. I got a chance to chat to Terry afterwards and he’s so passionate about what eight360 could bring to VR experiences. As someone who messed about with a VR kit 15 years ago back at university, I’m really excited to see where Terry and his team take this very cool product.