Author: Admin

The problem - If you are currently a business owner or employee that has to travel for client meetings, to collect stock or a trip to the accountants, you will know the burden of recording the business mileage. First you have to write down where you start and where you are going to, find out how many miles this is and try to work out the ever changing fuel element of the mileage to work out the VAT. Then you need to send this to your accountant or enter this onto the system. This is something that takes up valuable time and has a lot of different factors that need to be checked each time you make a business related trip. The solution - We have a perfect solution to all the issues surrounding mileage claims and this is an app called 'Trip Catcher'.  The Trip Catcher app does exactly as...

Over 15,000 companies claim over £1.4bn in credits each year in the UK. Successful claims have been made across a wide range of business sectors including aerospace, electronics and construction. The Government have been concerned for a while now about how aware business owners are of this type of tax relief, do they understand the application/claims process and how, on a day to day basis, does the administration of the scheme function. There are rules which set out what types of R&D expenditure are eligible for tax credits, in particular the definition of what is research and development. R&D tax credits enable companies that incur costs in developing new products, processes or services to receive a cash payment or tax deduction. The two key criteria in determining whether an innovative company is eligible for R&D tax credits are 'advancement' and 'uncertainty'. If the company and the project both meet the criteria, then it is...

Historically payroll has always been something that is completed separate from your accounts, ready to be entered in manually at some point (or left to your accountant to enter at the year end) and holiday calculations have always been a bit of a nightmare. But Xero have come up a with a new solution that is built into their existing online accounting software. If you are already using Xero (and if you’re not already using Xero - what are you doing?? Come and speak to us!), this is great news as it means everything is in one place and Xero payroll integrates with Xero accounting, which means no more manual entries. Day to day payroll needs are all provided for with flexible earnings, deductions, benefits and reimbursement pay types all able to be entered onto payslips, P45s that can be produced easily, and holiday entitlement calculated automatically. Also at the year end,...

When your Limited Company donates to charity you can claim tax relief on your corporation tax. This is claimed by deducting the donation amount from your trading profits before you pay corporation tax. There are many different types of donations such as: money equipment such as office furniture, computers, vans and cars, tools and machinery trading stock, these are items you either sell or make in house land & property, you may sell this on behalf of the charity and still claim gift relief shares, you cannot claim for gifts for shares in your own company employee's, you can only claim this for charity volunteers, unfortunately you cannot claim this for community amateur sports clubs   For the donations to qualify the gift must be made to either a charity or a community amateur sports club. You cannot deduct payments that are loans that will be repaid, gifts that are subject to the charity using your services or buying...

VAT, or Value Added Tax, can seem like something quite complex that is only for the really large businesses.  So if your turnover is below the threshold (currently £82,000 for 2015-16) why would you want to register or have any involvement in VAT? Well it really depends on the type of customers that you have. If you deal with the public then there would not be much reasoning for you to register for VAT as it will instantly add on an extra 20% to your sales prices and private individuals cannot reclaim this VAT back - so to them it will feel as if you have raised your prices considerably. If your customers are other businesses, that are VAT registered themselves, then this is where it becomes worthwhile. This is because they can reclaim the VAT that you are charging them, so it makes no difference to them whether you are VAT...

If you've needed, or chosen, to become VAT registered, then the next question is which VAT scheme should you use!  There are numerous different ways to calculate your VAT, below are the common ones. Standard VAT scheme This is where you calculate the difference between what customers have given you in VAT and what you have suffered on your purchases.  The difference is either what you pay over to HMRC or what you claim back (i.e. if you have suffered more than what you have received back from customers then you will be due a repayment). The standard scheme is ideal for businesses where they have a lot of purchases so will benefit from reclaiming the VAT on the individual purchases (e.g. builders and restaurants). There are two further elements to the standard scheme and that is whether you calculate VAT on the accruals basis or the cash accounting basis. The accrual basis is where...

Ok, so you’ve got a great idea or a plan to start a new business when you get asked the question - ‘are you going to be a limited company or a sole trade or a partnership?’.  Or maybe you’re currently trading as one of those but wondering if you should be one of the others. Well it’s not a straightforward decision as one option does not fit all, it depends on your personal circumstances, financial income (both from the business and personally) and future plans or prospects. So what are the differences and when should you trade as them? Limited Company A limited company is a separate legal entity. This means any debts stay as the responsibility of the company and not you personally. You would become a director and/or an employee of the company and receive a dividend and salary (rules are changing on dividends soon). Any drawings or capital introduced into the...

The way in which you can extract funds as a director from a limited company will be changing on 6 April 2016 - dividends will still be a tax efficient way to extract funds but the way you are taxed on a dividend will change. Dividends pre 6 April 2016 All dividends before the basic rate tax bracket are taxed at 10% and all the dividends issue come with a 10% tax bracket. Essentially, this means that you do not have any tax to pay on your dividends on your self assessment tax return. Dividends after the basic rate band are taxed at 32.5% minus the 10% tax credit (i.e., 22.5%) up to the higher rate bracket, then 37.5% minus the 10% tax credit (i.e, 27.5%) for anything within the additional rate tax bracket. We suggest that you take out a salary of £10,600 (the current personal allowance) and then take dividends up to...