How To Help Your Accountant Save You Money

How to help your accountant save you money

There are many benefits of helping your accountant by providing complete and organised records from the outset.

Here are some of them:

  • If you get your records to your accountant on time, you will give them enough time to work on your case without unnecessary pressure and file everything on time (don’t forget you are not their only client).
  • By providing organised and detailed records, you’ll understand your business performance better and it will save them time from processing and reorganising untidy paperwork.
  • By providing complete records of your business expenses, they can claim what is allowable and potentially reduce your tax bill.

When preparing your financial records you need to remember:

  • Separate your business from your personal finances.
  • Stay on top of your records and ensure they are orderly with no gaps in the dates.
  • Keep receipts and purchase invoices; you will need to provide proof of all expenditure and year-end creditors.
  • Bring bank statements for the complete period and downloads of your bank feed in .csv format if possible.
  • Sequential invoices for each sale, dated, to prove year-end debtors and accrued income.
  • Depending on your business, you may also need to keep records for things such as payroll, cash books, stock takes, travel and credit card statements.

Taxfile offer the full spectrum of accountancy services.

In an ideal world:

  • It is much better to keep on top of these things monthly than leaving it until the end of the year, where you may have lost or forgotten data around expenses, sales, or other financial details.
  • You would have a software package to help you track your bank, expenses, and sales.

At Taxfile we provide the full spectrum of accountancy-related services; integrating your business with accounting software like Xero, oversee your bookkeeping, run VAT returns and payroll, to filing your year-end accounts, corporation tax return & director(s) tax return(s).

Call  us on 0208 761 8000 if you would like to streamline your businesses finances and alleviate some pressures from your financial duties as a director. Alternatively, book an appointment with us here or drop us a message here — we’d be delighted to hear from you.

Need a Limited Company? Questions you may be asking yourself

Need a Limited Company: Questions you may be asking yourself

“What are the main differences between being self-employed and running a limited company?”

“What are the advantages and disadvantages of having a private limited company?”

The major difference between running a private limited company and being self-employed are the administrative requirements you are required to do by law & although the volume is more, the data contained within those returns are pretty similar to being a sole trader.

A limited company will:

  • need to keep company records
  • report any changes to Companies House & HMRC
  • need to file an annual company tax return along with the company’s accounts, giving an undistorted view of its finances.

So why go through the extra cost and resources of having a Limited Company?

In forming a limited company, you are limiting your personal liability.  What this means is that the Limited Company becomes a legal entity of its own.  Think of it as another being, that you work for.  However, it is important to keep in mind that you cannot abuse your power with the limited liability, to take selfish and unnecessary risks.  As a director, you are ethically and morally responsible for the business decisions and transactions the company makes.

As a director of a private limited company you will:

  • make decisions that benefit the company rather than your own
  • abide by the rules and regulations outlined by the company Articles of Association, which are written rules about running the company agreed by the shareholders or guarantors, directors and the company secretary
  • notify any shareholders if you might benefit personally from a company transaction
  • always act with the intention of making the company successful.

Having a Limited company can also add professionalism to your business.  This can help your business become even more successful because customers, clients, and B2B companies will be more inclined to trust you and buy your products or services if you are a limited company rather than a sole trader. It is quite common for B2B companies only to trade with another limited company as a general rule.

A final benefit is, if you have a profitable Limited Company, how you distribute salaries and dividends can have income tax savings, especially once your Read more

Making Tax Digital (MTD) delayed due to Brexit

HMRC delays the rollout of Making Tax Digital (MTD) for businesses & individuals beyond 2021:

Even though MTD for VAT has been rolled out, the wider extension of the MTD scheme for individuals & businesses has been delayed till at least 2021.

The Chancellor’s 2019 Spring Statement mentioned;

“The focus will be on supporting businesses to transition and the government will therefore not be mandating MTD for any new taxes or businesses in 2020.”

MTD for income & corporation tax was scheduled to come into effect from 2020, but as the UK prepares itself for Brexit, HMRC has redirected its focus on the implications of UK’s exit from the EU.

HMRC has said that its digital delivery team and business analysis team are being redeployed to focus on ensuring that a customs solution will be in place should it be required when the UK leaves the EU.

With the current perplexity surrounding Brexit, HMRC has stressed that ‘this does not indicate any expected outcome but is due to the level of work required to deliver any outcome’.

New tax planning & tax advice service from Taxfile

New: Tax Advice & Planning Service

New tax planning & tax advice service from Taxfile

You can now get tax planning and tax advice from Taxfile. We have highly experienced senior accounting staff who can give you the right tax advice when you need it most — for example, when your circumstances are changing, if you’ve had trouble keeping on top of your tax commitments and need to bring things up to date, or perhaps a friend or relative simply needs a bit of reassurance with regard to their tax situation. Perhaps you have assets or income abroad as well as income in the UK and want to make sense of your tax position. Or, perhaps you have recently made a tidy profit trading crypto coins like Bitcoin and want to know where you are from the standpoint of Capital Gains or Income Tax. Maybe you need to disclose income from property rental that you have previously not told HMRC about (more about that in a later post). Those are all examples of typical situations where our new Professional Tax Advice and Tax Planning services can help you to see the wood from the trees.

A Free Telephone Consultation

In the first instance, we are inviting clients to speak for just 15 minutes with one of our resident tax planning experts. This will be in the form of a free, introductory telephone call, perhaps in February or March if it suits you. We can then see what’s needed and take it from there. We can, of course, discuss any costs with you before you commit to anything further, and there is no obligation.

Whether it’s about labour taxes, investment taxes, business taxes, disclosures to HMRC or even professional help to support you during an HMRC tax investigation, we can make sense of all the options for you and — in a fair and ethical way — help to make sure you are paying no more tax than you should do. With decades of experience in accountancy and tax planning, we know exactly what’s what when it comes to tax, so can definitely help you. Call 0208 761 8000 to arrange your free 15 minute telephone appointment with a tax expert, at a mutually convenient time. Alternatively, Read more

The Spring Budget, March 2017

Spring Budget 2017: Key Changes Affecting SMEs & the Self-Employed

Philip Hammond, Chancellor of the Exchequer, delivered his Spring Budget to the House of Commons today.

If you missed it, you can watch and listen to the entire speech by clicking the video above. For those without 55 minutes to spare, we spotlight the key changes, particularly in relation to tax, National Insurance, the self-employed and small businesses.

  • For the self-employed, Class 2 National Insurance Contributions (NICs) were already set to be abolished from April 2018. Today, to the surprise of many, the Chancellor announced that Class 4 NIC rates will increase from 9% to 10% from April 2018, increasing again to 11% in April 2019. The Chancellor said that this was to more closely align self-employed NI rates with those paid by employees, particularly in view of the new State Pension to which the self-employed will now have access.
  • Tax-free dividends for those working through a limited company will also be reduced from the current £5,000 level to just £2,000 in April 2018. Corporation Tax will then be charged above that threshold. Again, the reason cited was to bring the self-employed more in line with employees in terms of tax paid overall.
  • The National Living Wage, for those over 25, will increase to £7.50 per hour from April.
  • From April this year, the personal allowance (the amount people can earn before paying income tax) will increase to £11,500 and to £12,500 by 2020. The threshold for higher rate tax will also increase from £43,000 to £45,000 this April.
  • Up to £2,000 (tax-free) will be available towards the cost of childcare for children under 12 from April this year. So for every 80 pence you pay in childcare costs up to £10,000 maximum, the government will add a further 20 pence.
  • Those lucky enough to be able to afford it will be able to save up to £20k maximum in their ISAs from this April. There will also be an NS&I bond introduced, which will pay 2.2% interest on a maximum of £3,000 per person.
  • There will be help for businesses following business rate increases, particularly pubs, which will receive a £1,000 discount if their rateable value is less than £100k (apparently that’s 90% of all English pubs). Also businesses coming out of ‘small business rate relief’ will be helped through the transition with a promise of increases no larger than £50 per month from next year.
  • There will also be an expansion of the clampdown on tax avoidance where some businesses were converting capital losses into trading losses.

Other announcements made by the Chancellor Read more

Taxfile multi-lingual staff at a glance

Taxfile’s multi-lingual, multi-talented staff, at a glance

multi-lingual accountants and tax advisers[Updated]: It’s common knowledge that most of Taxfile’s South London staff are multi-lingual but can you guess which staff member speaks no less than four languages fluently (Russian, Pashto, Dari and English) and which staff member is into both metal music and Irish dancing? And who should you ask for if you need payroll services? And who specialises in bookkeeping … who in limited company accounts and so on? Our staff ‘mind map’ tells you a bit more about each member of the team, what their specialities are, key interests and, of course, their contact details in case you ever need their help. Take a look … Read more

George Osborne

How the Chancellor’s 2014 Autumn Statement affects YOU!

George Osborne, the Chancellor of the Exchequer, announced his Autumn Statement on Wednesday (3 Dec 2014) in what could be seen as a mini budget. Here we focus on the key announcements, concentrating on those relating purely to taxation, as it is those which affect you, our customers, most directly.

1). First some good news: The UK is seeing the fastest growth out of all the G7 countries, and the number of people employed is at its highest point ever. This is good for all of us because it restores optimism in the UK economy, higher employment speaking for itself.

2). As we announced in a separate blog post, Stamp Duty (Land Tax) has been given a major shake-up and, for anyone buying a house for £935,000 or less, the amount of Stamp Duty which they’ll have to pay will be less, and sometimes very significant. See our separate blog post and infographic for more detail.

3). In the financial year 2015-16, the tax-free personal allowance (which is the amount you can earn before you start to pay any tax) will increase to 10,600 which is an increase of £600. So … more tax-free money in your pocket, which is good.

4). Economy flights will become cheaper for under 12s from 1 May 2015 and under 16s from 1 March 2016, because their tickets will become exempt from tax on those dates. So … a small concession, but another welcome one. Average 4-person families will save £26 for flights within Europe and £142 on flights to the U.S.

5). From 3 December 2014, spouses will be able to inherit their partner’s ISA benefits should their partner pass away. Currently this is not the case and the change will mean that, from 6 April 2015, the surviving spouse or civil partner will be able to Read more

Business Payment Support Service

Business Payment Support Service (BPSS) was launched on 24 November 2008. This service is designed to support businesses having trouble payment their tax bills in the current economic crisis.
Very important to realise is that this service does not deal with anyone that has already made a payment arrangement with HMRC .
Also, the BPSS does not deal with you if HMRC has already got in touch with you regarding an overdue payment.
In order for the BPSS to be able to help your business, you need to contact them before the tax, VAT, Corporation Tax, Pay As You Earn or National Insurance contributions liabilities are due.
You can contact them seven days a week on 0845 302 1435.
According to HMRC, this service “designed to assist all businesses (large and small) that will be unable to pay their tax. The service is primarily available to self-employed people and companies but can be used by any of your clients who are having difficulty in meeting their tax liabilities. It covers most taxes and duties including Income Tax, Corporation Tax, VAT, PAYE and National Insurance.”
The Payment Support service only applies to businesses that cannot genuinely meet their tax payments on time and they are likely to pay their tax over a longer period of time.
Also according to HMRC, “ surcharge(s) can be avoided on late payment of income tax where a Time to Pay agreement is entered into before the relevant surcharge date AND the terms of the agreement are adhered to.”
Although surcharges can be avoided, interest on late payment will be charged in the normal way.
If you would like to know more about this service , you can follow this link.
Taxfile‘s tax agents in South London and Exeter can discuss your business position with HMRC on your behalf and arrange a Time to Pay agreement.

Deferred tax scheme for loss-making companies

One of the better tax-related things to come out of the Chancellor’s recent budget is the potential help some struggling companies may receive from HMRC. Companies who anticipate making a trading loss in the current tax year may be allowed to take the anticipated loss into account earlier than previously possible, when scheduling payments of Corporation Tax or Income Tax. Such businesses will no longer need to wait until the end of their complete accounting period (which is often some considerable time ahead) before they can take probable losses into account for payment of tax. Qualifying businesses may be able to agree extensions to the time in which they can pay with a couple of provisos: firstly that they really are likely to make a trading loss in the current year and secondly that they are genuinely unable to pay straight away or enter into a reasonable instalment agreement with HMRC.

Since launch, more than 110,000 businesses have already agreed deferred tax payment arrangements, equating to around £2 billion. Typically, repayments are scheduled over 3 to 6 months. The scheme is administered by the BPSS (Business Payment Support Service).

For further information and help with any of your tax affairs, contact Taxfile, accountants based in Tulse Hill, South London (tel: 020 8761 8000) or go to the relevant HMRC web page.

Corporation Tax (CT)

The fourth largest source of government revenues is Corporation Tax, charged on the profits and chargeable gains of companies. The main rate band is 30%, which is levied on taxable income above £1.5m. The small companies rate of 19% is charged on the first £300,000 of profits where profits are between £50,000 and £1,500,000.
Profits between the lower and upper profit thresholds (£300,000-£1,500,000), are in effect charged at a marginal rate of tax of 32.75%.
Companies that are resident in the UK are subject to Corporation Tax on their profits (income plus gains) arising in an accounting period which cannot be more than 12 months.
Non-resident companies may be subject to Corporation Tax (CT) where they trade in the UK through a permanent establishment.
• A company incorporated in the UK is treated as UK resident.
• A non-UK incorporated company is treated as resident in the UK if its central management and control is exercised in the UK.

A company’s trading losses can normally be set against:
• Income and gains of the same accounting period.
• Income and gains of the previous year.
• Trading profits from the same trade in future years.

In terms of Dividends, companies do not have to pay tax at the time they pay a dividend. Corporation tax is paid at the normal time on the company’s taxable profits without any deduction for dividends paid. For small companies, profits that are paid out as dividends are charged at not less than 19%.
A shareholder receives the dividend with an accompanying tax credit equal to 10% of the dividend plus tax credit. The tax credit is equivalent to the basic rate of income tax on dividends. Companies pay no tax on dividends received.
Companies normally have to file their return within 12 months of the end of the accounting period. If a return is filed late, the company is automatically charged a fixed penalty of between £100 and £1,000, depending on how late the return is and whether lateness is habitual. An additional tax-linked penalty is charged if the return is filed more than six months late.
If you need to know more about corporation tax, our tax experts at Taxfile in South London can help you understand it better and at the same time minimize your tax liability, making sure you pay the right amount of tax.