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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 – A New Time Line

Making Tax Digital (‘MTD’) was announced as the new initiative by HMRC to revolutionise and modernise the tax system in the UK.

MTD centres around keeping digital financial records that can then be accessed by software to calculate and submit taxes through to HMRC. The goal is that there will be direct ‘digital link’ between the financial record and the software used to calculate and submit the records and therefore ensuring an accuracy in the figures being generated.

With initial teething problems, MTD for VAT started back in April 2019, and as a result of various delays around Brexit & COVID-19, it still has not sailed out of its ‘soft-landing’ period.

On 21st July 2020 the Treasury published a 10-year plan to modernize the UK’s tax system which outlines a blueprint for the transition of the UK’s tax system into the digital age.

MTD for VAT

Introduced in April 2019, MTD for VAT had a soft-landing period where the rules for this ‘digital-link’ were relaxed.  Prior to COVID-19, April 2020 was the date stipulated where all digital links were to be in place for submissions.

As a direct consequence of COVID-19, it has been now been stated that as of 1st April 2021, the ‘soft-landing’ period comes to an end and all VAT registered businesses submitting VAT returns will need to ensure they have these digital links in place for their submissions.

Furthermore, from April 2022, MTD for VAT will apply to all VAT registered businesses and not just those that have a turnover greater than the VAT threshold.

MTD for Income Tax

The 10-year plan targets 6th April 2023 for self-employed businesses and unincorporated landlords to begin reporting 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’.

Taxfile's May 2018 e-newsletter

May Newsletter – New Battersea Branch, Easy CIS Tax Refunds, Avoid £10 Daily Fines & More

Taxfile's May 2018 e-newsletter

Our informative May e-Newsletter is now ready to view online. It includes exciting news of our new branch opening in Battersea along with important tax and accountancy-related news that might affect you. Here is a quick summary of the newsletter’s contents:

  • The first article announces the opening of our new Battersea Branch in London SW8. New and existing customers are welcome to pop in and say hello and to get expert help with your tax affairs and accountancy requirements. Learn more about the opening of the Battersea branch, and the core services on offer, here or click the big button below to read the newsletter.
  • If you work on one of the many Battersea construction sites in or around SW8, we can help you reclaim overpaid tax and much more … see the newsletter for more details – click the big button below.
  • If you’re a sub-contractor working in the construction industry scheme (‘CIS’), you’re almost certainly due a tax refund (learn why here). Taxfile are experts at getting tax rebates from HMRC, so come and see us and we’ll get you the maximum refund possible. Read the newsletter (click the big button below) to learn how we make your tax refund application fast and hassle-free.
  • We can help limited company contractors too! We’re tax and accountancy experts so we can help you register as a limited company or register for CIS if you’re not already set up, we’ll help you with the monthly tasks demanded of you by HMRC including accounts preparation, confirmation statements, corporation tax handling, CIS set-off rebate, National Insurance (NI), VAT, bookkeeping, payroll and much more. We’ll save you time and will make operating the Construction Industry Scheme a breeze. Click the pink newsletter button below for more details.
  • If you introduce a family member, friend or colleague to Taxfile, you will get a discount off your next tax return if they sign up as a new paying customer with us. Click the button for details.
  • Taxfile recently printed some brightly coloured postcards to promote our new Battersea office and our tax-related services. Simply get in contact if you’d like some of these postcards to hand out to colleagues. If you write your full name on the back and use it to refer a colleague, it might even save you money! Click the button for more details.
  • Our team are multi-lingual and always happy to help. If English is not your first language, let us know and we’ll try to match you to the most appropriate staff member.
  • If you, your friends, family or colleagues have not dealt with your old tax returns, HMRC will be adding £10 per day to the penalty from 1st May. That’s on top of the £100 fine that will have applied immediately after missing the original 31 January deadline. Let Taxfile get your tax records, tax returns and overdue tax all in order so you don’t have to pay any more in fines than you have already. Learn more here or contact your nearest branch for a consultation.
  • All Taxfile clients get free ‘Tax Enquiry Fee Protection Insurance when they file their tax return through Taxfile by the statutory deadline. So – if you’re investigated by HMRC – our fees to sort it out are covered. Click the button for more details.

Feel free to 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

George Osborne

Summer Budget 2015 – Key Tax Takeaways

The Summer Budget was announced last week and in this blog post we’ll take a look at only those changes which will affect ordinary taxpayers and SMEs.

In his opening remarks, the Chancellor of the Exchequer, George Osborne, promised:

A Budget … to keep moving us from a low wage, high tax, high welfare economy; to the higher wage, lower tax, lower welfare country.

So, taking each of those goals in turn …

Higher Minimum Wages

With regard to the higher wages promise, Osborne announced that there would be a new National Living Wage of £7.20 per hour from April 2016 for those aged over 25 and over, rising to more than £9 per hour by the year 2020.

Lower Tax

With regard to the lower tax promise, the Personal Allowance (the amount people can earn before paying any tax) will increase – as anticipated – from £10,600 in the financial year 2015-16 to £11,000 in 2016-17. A longer term plan is to increase this still further to £12,500 by 2020. The ultimate ambition is pass a law to make sure that those working 30 hours a week and earning the National Minimum Wage will pay no tax whatsoever, although clearly this will need further clarification in due course.

Dividend tax will also be reformed. Here the existing dividend tax credit (this reduces tax paid on dividends from shares) will be replaced by a new £5,000 tax-free allowance on income from shares from April 2016 and this will be available to all taxpayers. To offset the cost of this to the Exchequer, those with more significant dividend income will see an increase in the tax rate they pay.

Inheritance tax will also be subject to changes from 2017-18. The idea is to allow individuals to each have a ‘family home allowance’ which they can pass on to their children or grandchildren, tax-free, when they die. This allowance will be added to the existing Inheritance Tax threshold currently set at £325k and will potentially allow property up to the value of £1m to be passed down from 2020-21 (see table below). For those with estates valued over £2m the allowance will be gradually withdrawn.

This is how the effective Inheritance Tax thresholds will look in 2020-21: Read more

The Chancellor’s Budget, March 2014

The Chancellor, George Osborne, has now presented his March 2014 Budget to Parliament. There was lots of talk about the economy, growth forecasts, supporting UK businesses and employment – as well as some obvious political spin bearing in mind the European and General Elections are just around the corner – however we thought we’d concentrate on the most important changes, mainly in relation to tax itself as that’s what is going to affect Taxfile customers and readers the most. So here is our snapshot:

For individuals:

  • The threshold before earnings are subject to income tax (the ‘tax-free personal allowance’) is set to rise to £10,500;
  • The higher rate of tax will kick in for earnings above £41,865 from April 2014, rising again to £42,285 in 2015;
  • The first part of the ‘Help to Buy’ equity loan scheme for those aspiring to buy a new home is to be extended until 2020 (previously 2016);
  • The Stamp Duty on homes worth over £500k is to increase to 15% for those which are bought by companies;
  • Inheritance tax will be scrapped for members of the emergency services who “give their lives protecting us”;
  • Cash and Shares ISAs will be merged into a single New ISA (“NISA”). The annual tax-free limit for the NISA will be £15k (£4k for junior equivalent) from 1 July 2014.
  • From April 2015, pensioners will no longer be forced to buy an annuity with their pension fund. They will now be able to cash in as much or as little as they want to from their pension pot.
  • From June 2014, the amount people will be able to invest into Premium Bonds will increase to £40k (from £30k). From 2015 this will rise again to Read more