Articles in Category: Tax Advice

Things to think about when you are starting your own business

on Wednesday, 13 June 2018. Posted in Making Tax Digital MTD, Startup Advice, Accountancy Advice, Business Advice, Cloud Accounting, Tax Advice, VAT advice

Did you ask your accountant everything that concerned you?

Plan for your first meeting with your accountant

 

As an accountancy practice that specialises in start-ups, contractors and entrepreneurial Small and Medium-sized Enterprises (SMEs), our first meeting with a new business-owner often covers the following areas:

  • Which trading vehicle to use: generally this boils down to being self-employed or incorporating the business into a limited company.
  • Company name: is the name you want to use available and does it contain sensitive words that you may not be allowed to use?
  • VAT registration: and now that covers the impact of Making Tax Digital (MTD) and the rules for recording all transactions digitally.
  • Corporation tax – how it is calculated and when it needs to be paid by.
  • Income tax – self-assessment and the 31 January deadline. Clients are also warned about the delights of Payments on Account. In essence beware of the £1,000 tax level but there is an exception!
  • Cloud Accounts Apps: our favourite is Xero but others to consider are FreeAgent, KashFlow and Intuit QuickBooks.
  • IR35– be aware of this ever-changing regulation.
  • The timing differences between PAYE that an employee suffers versus having your own company: just because there is £1 left in the business account it doesn’t mean you can take it!
  • We like to think of ourselves as the friendly approachable accountant. We always encourage clients to contact us about anything that is troubling them, there is no such thing as a stupid question.

If you would like to find out more about setting up your own business, about being an entrepreneur, then wherever you are: whether in Leeds, Bradford, Wakefield, Harrogate, Wetherby or elsewhere in the country or even overseas and thinking of setting-up in the UK, please get in touch.

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Which trading vehicle to use

on Friday, 15 June 2018. Posted in Startup Advice, Accountancy Advice, Business Advice, Tax Advice, Contractors

To incorporate or not?

Which vehicle is right for your business?

 

In another blog we highlighted some of the points we discuss at our first meeting with a new business-owner. This blog will consider the first of the points we mentioned.

When you have decided to start your own business and you know what you are going to do, one of the next questions to consider is which trading vehicle to use. Are you going to be self-employed or will you incorporate the business as a limited company?

Some of the pros of being self-employed are:

  • simplicity,
  • less bureaucracy,
  • there can be less expenses,
  • the tax treatment of cars can make it quite favourable to run a car through the business,
  • if the profits are low there can be less overall tax to pay.

And some of the cons of being self-employed are:

  • often existing businesses do not like trading with self-employed people – the gig economy can create confusion over whether you have worker’s rights and whether you are actually an employee or not.
  • Depending on the profits of the business you could be paying more tax than you need to. The higher the profits the self-employed have the more tax they will pay when compared to a company and its owner.
  • If the business fails you will be responsible for all the liabilities that are owed.

The Pros of trading via a limited company include:

  • Businesses prefer to trade with a “proper” business that is incorporated.
  • With higher profit levels overall less corporation tax, national insurance and income tax will be paid over to HM Revenue & Customs (HMRC) than a business that is self-employment.
  • Limited liability: if the company fails (and assuming the insolvency is not due to illegal reasons) your liability to pay creditors is restricted to those to whom you have given a personal guarantee to.

The Cons of using a limited company include:

  • Often it is not worth having a company car as too much tax is paid.
  • There are more costs of compliance: Companies House, the Accountant etc
  • The entrepreneur’s relationship with the company can become confusing as they can have multiple interactions: they are the owner, director, employee, creditor and often the landlord.

Aysgarth Chartered Accountants is an accountancy practice that specialises in start-ups and entrepreneurial SMEs. This blog is not intended to give advice, it merely introduces the subject and is not an exhaustive list of all the Pros and Cons of being self-employed or incorporating. If you would like to know more about establishing your own business we would love to discuss this in more detail with you at our Leeds office. Please get in touch.

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The Business Start-up and Corporation Tax

on Saturday, 23 June 2018. Posted in Startup Advice, Accountancy Advice, Business Advice, Tax Advice, Contractors

how it is calculated and when it needs to be paid

When to pay corporation tax

 

Companies pay Corporation Tax based on their profits. The profits chargeable to Corporation Tax may not be exactly the same as the profits before tax figure in the year end financial statements. Some of these differences include:

Permanently Disallowed Expenses: From the accounts figure there maybe some items that are permanently disallowed as a tax deductible expense, for example entertaining suppliers or customers. This means that whilst entertainment is a valid business expense for the accounts it is not a tax deductible expense, spending on entertainment will not reduce your tax bill.

Temporarily Disallowed Expenses (timing differences): Other items, like pension contributions, are only allowed in the financial year they are actually paid over and not when they are provided for in the year end accounts.

Depreciation of fixed assets is generally not allowed but instead Capital Allowances or an Annual Investment Allowance are given as a deduction.

Dividends: UK dividends payable and receivable are outside the scope of corporation tax

Other differences: There are claims, like the R&D allowance, that create a different tax deductible expense when compared to the expense in the accounts.

Corporation Tax rate. Once the profits chargeable to corporation tax have been calculated then the correct corporation tax rate needs to be applied. HMRC treat each year ending 31 March as the corporation tax year.

For the year ended 31 March 2018 all companies will pay tax at a rate of 19% of the profits chargeable to corporation. The previous year it was 20%. If then a company has a year end of 31 December, for the 2017 year it will pay tax at 20% for January to March 2017 and 19% for April to December 2017.

When is the tax due to be paid? Ignoring companies that are on quarterly payments, in general corporation tax is due 9 months and 1 day after the year end. Therefore a company with a 31 March year end should pay its tax by 1 January the following year. If tax is paid early interest is paid by HMRC, if tax is paid late they charge interest. A tax return also has to be filed within 12 months or there will be penalties.

HMRC is set-up to only process tax periods that are 12 months or less. Therefore if a company has a 13 month financial period for its accounts, 2 company tax returns will have to filed and the corporation tax due is payable on 2 separate dates: 9 months and a day after the end of each tax return.

And unlike other taxes, when corporation tax is paid the payment reference changes every year, the last number increases by 1 for each company tax return period.

This leads to the main point we try to get the directors of start-up companies to understand: unlike PAYE which is deducted immediately an employee is paid, corporation tax is not due until 9 months and a day after the year end. Make sure you do not spend all the company’s bank balance because you may well be spending the tax that will become due.

Don't worry! This blog is just a simplified version of the corporation tax rules. Rates and rules may change in the future. The comments above may seem complicated but in this short space they cannot cover every possibility or scenario. If you are our client we will look after all this for your company. But if you are stuck with your corporation tax or would like a second opinion on a tax matter then please get in touch.

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Self assessment

on Friday, 29 June 2018. Posted in Startup Advice, Accountancy Advice, Business Advice, Tax Advice, Contractors

Income tax and tax returns

31 January tax deadline

 

If you are self-employed or receive untaxed income then you have to file a self-assessment tax return. Technically that does not necessary mean a director has to file a tax return but usually HMRC like to think it does.

Self Assessment tax returns are your personal responsibility. If you pay an accountant to prepare your return on your behalf they should invoice you personally. If they invoice your limited company then there would be a benefit in kind and you would have additional tax to pay.

If you are going to file a paper tax return it must be filed by 31 October following the end of the tax year. Electronically filed returns have the deadline pushed back 3 months until 31 January. If the tax return is late there will be a fine to pay.

Tax arising from the tax return is due to be paid by 31 Januaryax arising from the tax return is due to be paid by 31 January after the tax year to which it relates. At new client meetings I then usually take a sharp intake of breath and try to explain payments on account!

If your tax is over £1,000 then you have to pay a further 50% of it as a payment on account (in advance) for the current year’s tax. Another payment on account is due by 31 July – ie in 6 months’ time (and AFTER the end of the tax year to which it relates). The tax then due by the next 31 January has the payments on account made over the last 12 months deducted but you then add 50% of the tax liability (before the payments on account were subtracted) for the next tax year. Confused?!

Try to follow through this table:

Tax year Tax due Payment on account 1 Payment on account 2 Less payment on accounts paid Total due 31 January Tax due 31 July Year tax paid
X1 500 0 0 0 500 0 2019
X2 1,500 750 750 0 2,250 750 2020
X3 1,500 750 750 (1,500) 750 750 2021
X4 2,000 1,000 1,000 (1,500) 1,500 1,000 2022
X5 2,000 1,000 1,000 (2,000) 1,000 1,000 2023
X6 2,000 1,000 1,000 (2,000) 1,000 1,000 2024
X7 3,000 1,500 1,500 (2,000) 2,500 1,500 2025
X8 3,000 1,500 1,500 (3,000) 1,500 1,500 2026
X9 3,000 1,500 1,500 (3,000) 1,500 1,500 2027

Important things to be aware of are:

  • if your tax is less than £1,000 then you will escape payments on account.
  • you will also escape payments on account if the tax due is less than 90% of your total tax suffered, eg if you earn a large salary under PAYE but have other minor income that is untaxed
  • Payments on account do not mean you are paying MORE tax, it just means you are paying it EARLIER (but still a lot later than our PAYE friends are)
  • Payments on Account are fixed by legislation but if your income goes down or you have more taxed income (ie a PAYE salary) then you can justify reducing the payments on account
  • If you under pay payments on account HMRC charges interest on the late tax but if the payments on account were too much HMRC will give you interest on the money deposited with the government.

All this can soon become very complicated. If your income stays roughly the same then all that happens is that once you are into Payments on Account there is a rhythm: every January and July paying some income tax. If your tax liability is gradually increasing then the January payment will also include a balancing payment, so the rhythm is large payment January, “small” payment July, large payment January…

The tax rules do change so the rules mentioned today may not be applicable in the future. If you are unsure about your tax return then please contact us to take the stress and worry out of self assessment.

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IR35 and disguised employment

on Wednesday, 15 August 2018. Posted in Startup Advice, Accountancy Advice, Business Advice, Tax Advice, Contractors

A brief introduction

IR35 – be aware of this ever-changing regulation

IR35 is the name given to the legislation that was introduced to stop people misusing limited companies and puts them back to the same tax position as if they were employees. Essentially the veil of incorporation is removed and consideration is given as to whether the appropriate employee of the removed Personal Service Company (PSC) is really an employee of the client company. In the past it was for the directors of the PSC to decide but since April 2017 the client (if it is a public sector organisation) has to decide and in the future this may be extended to the private sector.

IR35 is probably best explained with an example. Andrea has her own company, A Limited, which contracts with Big Plc. A Limited is contracted to deliver a project for Big Plc, which Andrea will deliver. Is Andrea a disguised employee of Big Plc or not?

There are no simple answers to this question. In the courts they will consider Mutuality of Obligation (MOO) – does the client (Big Plc) have an obligation to provide future work and does the contractor have to accept this work. HM Revenue & Customs (HMRC) has an online Check for Employment Status for Tax (CEST tool), which they now admit does not test for this critical factor.

The CEST tool does however ask about: personal service, control, financial risk and part and parcel. If you take the online CEST checker then as soon as the tool decides IR35 does not apply it will end the test. Make sure you keep a copy of these results. If you get to the last section the result will either be that IR35 applies or (unhelpfully) that it is unable to determine the status. This last result is frequently the answer CEST gives when the facts of IR35 cases that HMRC have lost are fed into it.

The tax consequences of IR35 puts the individual (in our case Andrea) in the same tax position as an employee but they do not (probably) have any employee rights and they have the expense of running a company.

HMRC have lost many cases over the IR35 status of a contractor but they have won some. The main problem is that it is not always clear whether IR35 applies. Sometimes it obviously does and frequently it obviously doesn’t. But in the middle ground , which is neither black nor white, there are many shades of grey!

The solution to the IR35 problem is to remove the temptation to save tax and national insurance. This will not happen with simplistic questions but by a radical overhaul of the tax system – but that is a whole new topic!

This blog is not a technical article that covers all aspects of IR35. This blog is part of a series for ordinary people thinking about doing an extraordinary thing: setting up their own business. Professional advice should be obtained if you think your business may fall foul of the IR35 rules. We would be happy to discuss this further with you so please get in touch.

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Tax Timing Differences

on Saturday, 18 August 2018. Posted in Startup Advice, Accountancy Advice, Business Advice, Tax Advice, VAT advice, Contractors

Don't spend that last pound!

Don't be caught out with tax timing differences

When you start your own business you move into a different way of being taxed – everything is deferred, your payment of tax is delayed.

As an employee you receive a payslip that details the PAYE and National Insurance (NI) that has been deducted from your gross salary to arrive at your net salary. There will, probably, be other deductions like pension contributions. As long as your tax code is correct then your PAYE should be calculated correctly – as we have warned before: all employees should regularly check their tax codes.

When an employee is paid, their tax and NI has already been deducted and usually will never need to pay any more tax in the future, errors aside.

If you are self-employed or have your own company, both you personally and the company will pay tax in the future. These taxes are based on the taxable profits of the business.

The company has to pay corporation tax 9 months and 1 day after the end of its accounting year. Therefore if the year end is 31 March the corporation tax is due to be paid on the following 1 January. You can read more about corporation tax here.

If an individual has untaxed income: property rentals, self-employment profits or company dividends, these have to be declared on their self-assessment tax return, which covers a tax year: 6 April to the following 5 April. The tax and NI due from the tax return is due to be paid by the following 31 January. Therefore the tax due for the tax year 6 April 2018 to 5 April 2019 needs to be paid by 31 January 2020.

As payments on account have already been discussed in this startup series, you can read about them here. Payments on account are paid each January and July.

If your business is VAT registered then the VAT should be paid one month and a week after the end of the VAT quarter or if you pay by direct debit it will be taken out one month and 10 days after the end of the VAT quarter. Read more about VAT here.

All this means is that you and your business have tax liabilities (for Income Tax, NI, Corporation Tax and/or VAT) to pay an undefined amount of tax in the future. You must set aside some money to pay these future costs. HMRC have to collect these taxes and usually they are very good at collecting them. This is the tax timing difference you must be aware of and is why we warn clients that just because everyone else has been paid and there is £1 left in the business bank account at the end of the month, unless you have set aside some money for tax, you cannot touch that £1!

If you need help with your tax affairs then please do not bury your head in the sand but do something constructive – get in touch with us.

Time2

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There is no such thing as a stupid question

on Monday, 27 August 2018. Posted in Startup Advice, Accountancy Advice, Business Advice, Tax Advice

And Finally...

Aysgarth Chartered Accountants the friendly approachable accountancy firm

When you start your own business you enter a whole new world of regulation. Aysgarth Chartered Accountants is a recommended Accountancy Practice that specialises in Small and Medium sized Enterprises [SMEs] and we are here to help you navigate this new world. As a professional firm we put your interests first.

This blog concludes the series we have run on starting your own enterprise. The best way to read the other blogs is to click through to the introductory blog: Things to think about when you are starting your own business and follow the links to the other blogs.

There are a few final things we need to bring to the new entrepreneur’s attention:

Companies House: regardless of whether or not your company has recorded a single transaction, every limited company and LLP have to file a confirmation statement and a set of financial statements. If the company meets the requirements they can file dormant accounts or filleted (previously called abbreviated) accounts. Each company has to have a registered office: an official address for the business, most of our clients use our address and ask us to look after the Companies House filings for them. As part of our service we monitor all our limited company clients’ Companies House record and investigate any filings we were not aware of. This helps minimises the impact of any frauds as does joining PROOF.

Non-cash expenses: your enterprise can incur expenditure that it never pays out in cash. A good accountant will discuss these with you and bring them into your year end financial statements. Such costs may include mileage and use of your home as an office. These expenses help to properly record the expenses of your SME and help to record a more accurate profit and consequently a lower tax charge.

And finally: we are a firm of friendly approachable accountants. We always encourage clients to contact us about anything that is troubling them, there is no such thing as a stupid question. We tell clients that if a problem is worrying them they should get in touch. From our experience most questions have a straight forward answer and our clients are not charged.

This is one of many ways we work for you. We do not force clients to only use our recommended accounting software. We do not confuse clients by issuing Payment Requests and then only issue a VAT invoice once the Request for Payment has been paid. We like to keep everything simple and straight forward and we respond promptly to clients.

If you like our approach then please get in touch, we would love you to join our expanding band of satisfied clients.

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No excuse for filing tax returns late

on Wednesday, 20 April 2016. Posted in Startup Advice, Accountancy Advice, Business Advice, Cloud Accounting, Tax Advice

Using technology, being prompt

There really is no excuse for filing tax returns late.

 

Recently tax returns have been in the news with leading politicians feeling the pressure to publish their returns. What did we learn? The Tory politicians had other sources of income and the leader of the Labour party completed his return by hand, forgot to include his pension income and was fined £100 for filing his return late.

There really is no excuse for filing tax returns late. The tax year finishes on 5 April and we have until the following 31 January to file our tax return and pay the tax. That is nearly 10 months. This year our first client’s 2015/16 tax return was filed on 15 April and the second one was filed on 20 April.

That does not mean we can avoid filing tax returns right up to the deadline on 31 January 2017. We do our best to keep our clients on the straight and narrow and if a tax return is filed late we know that it is not due to our incompetence but due to our client not providing us with the information we need. However, we know of some accountants who are routinely disorganised and frequently file their clients’ tax returns late. If you have had experience of that and it wasn’t your fault then you really should move advisers. Contact us to see how we can look after you properly.

We also use technology to speed up the whole process. Politicians have to file a hard copy of their tax returns but most other people file online. 100% of our clients had their 2013/14 tax returns filed online and every year since has been the same. Once the tax return has been completed we put it in a secure part of the cloud, our client approves it and we then file it. This whole process can take minutes and not a single stamp will have been used!

If you like our approach – the use of technology and being prompt – then we would like to have a chat with you to see how we can take away the worry of tax returns so you can focus on something more productive.

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Are you paying too much tax?

on Wednesday, 15 April 2015. Posted in Accountancy Advice, Tax Advice

Are you paying too much tax?

 

I am always surprised at how many employees who are paid under PAYE have no idea about their tax affairs and are therefore paying too much tax. Are you one of them? You need to ask yourself: Am I paying too much tax?

Do you know what your Tax Code is? And more importantly how much it should be? Have you ever received a PAYE Coding Notice and did you read and take time to understand it?

In the 2015/16 tax year, which covers the 12 months from 6 April 2015 to 5 April 2016, everyone pays no tax on their first £10,600 of income (this figure is correct at the time of writing but may subsequently change). This means most people will have a tax code of 1060L. For the 2014/15 tax year the usual code was 1000L.

If you have a different code do you know why? If you don’t then you should call HMRC (HM Revenue and Customs) on 0300 200 3300 and ask them – but please allow at least 40 minutes to get through!

Let me tell you about two case studies:

An employee left her job with one of the top 4 banks and set up her own business. I reviewed her old tax code, which just looked wrong. Then going back over a few years managed to get her a tax refund of £3,161.41.

The problem was that the bank had told HMRC about some benefits in kind, so they correctly altered her tax code, but the employer then processed her salary as if they had paid her a sum equal to the benefits in kind. She was therefore taxed twice.

The second case was where an employee had two jobs. HMRC had placed all her personal allowances with the second job that she eventually stopped. Her main employment suffered with a tax code of BR. This meant everything she earned was taxed and she suffered with no tax-free amount for years. Again I was able to get her a refund.

However in both cases the refunds could have been more but we were restricted by how many tax years we could go back.

Action: you need to check and make sure your tax code is correct and keep checking it every year. If you ever get a PAYE Coding Notice letter then read it!

I cannot guarantee you are due a refund but are you certain you are paying the correct amount of tax?

Simon Young

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Cookie-Cutter Approach?

on Saturday, 13 December 2014. Posted in Accountancy Advice, Business Advice, Cloud Accounting, Tax Advice, Contractors

perhaps it is time for a change as we are not all from the same mould

Are you an individual or a commodity? And what about your business? We treat our clients as individuals. We go out of our way to listen to and to understand our clients. That means we recognise they have choices, which they will exercise based upon their knowledge. All clients are different.


We will recommend what we think is the best approach but if the client wants to take another way (and it is legal!) we will work with them.


For example, we generally do not think spreadsheets or desktop accounting packages are the best way for most small businesses to record their bookkeeping. We recommend Cloud-based accounting packages, for example Xero or IRIS KashFlow. If a client, however, wishes to use another package or spreadsheets we will not sack them, unlike some other accountancy practices.


Likewise we will recommend the approach for owners of family run businesses to take in order to pay themselves. If the owner-managers wish to take another legal approach then once we comprehend their reasons we will work with them, we will not take our bat home.


If you do not like accountants (or other suppliers) dictating how you should operate then perhaps it is time for a change, time for a different approach, as we are not all from the same mould.

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“My mate in the pub says…”

on Saturday, 25 October 2014. Posted in Startup Advice, Accountancy Advice, Business Advice, Tax Advice

Choose your advisers carefully as cheap isn’t always best value for money

Choose your advisers carefully

 

I hate it when I receive a call from a client that starts "My mate in the pub says..." As a general rule whatever follows next will be answered: no. The best example I had of this was many years ago and the call went like this:

Client: My mate in the pub says he doesn't pay any tax. So why do I pay tax?
Me: Where does your friend live?
Client: Switzerland
Me: And where do you live? [I already knew the answer to this question!]
Client: Bradford
Me: Well, if you want to go and live in Switzerland then a Swiss accountant might be able to help you achieve the zero tax goal but if you wish to stay in the UK and earn what you are earning then there will be tax to pay.

Choosing the right adviser is important. Your family and friends may be knowledgeable and good in their chosen field but paying for independent and professional advice from an expert is an important investment.

We were recently asked what one piece of advice we would give an entrepreneur, our answer was get good advisers. Good advisers should be good value for money but they might not be cheap and will probably not be free.

We set up many limited companies and charge for it. I have met individuals who only approached an accountant after they had incorporated their businesses themselves. Sometimes this was perfectly done but two incidents stick out in my mind. The first was the company where the shareholders decided they would put their £8,000 redundancy into the company. Instead of having a small share capital and lending the company the balance, it all went in as shares. The second was the company where the husband was a director and the husband and wife were both company secretaries. Neither of these cases were necessarily wrong they were just unorthodox and when I asked them why their company was structured the way they had chosen they could not answer the question.

In life you usually get what you pay for. Following cheap or free advice may end up being the most expensive decision you ever make. We are not the cheapest accountants but we do look after our clients and give advice. One client who left for a cheap accountant soon came back to us. On another occasion we lost the informal tendering process on price but once we pointed out some of the errors their current cheap accountant had made (and we later discovered even more mistakes) they decided we would be good value for money and another client was won.

Be friendly, go to the pub with your mates, but choose your advisers carefully. We love questions and want our clients to approach us if they have a worry about anything and because of that we have many wonderful and varied discussions. But we do not advice clients after an evening in the pub!

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VAT and the startup business

on Monday, 11 March 2013. Posted in Startup Advice, Accountancy Advice, Tax Advice, VAT advice

VAT1 Application for VAT registration

One of the many issues we discuss with people starting out in business for the first time is VAT, the dreaded Value Added Tax.

Should your new business be VAT registered? Consider your expected sales levels and who your customers are. Also think about the expenditure you will be incurring. When you register for VAT you can reclaim VAT on any services incurred in the previous 6 months or any assets that are less than 4 years old that you still have: i.e. fixed assets and stock.

Consider one of the many VAT schemes. Cash accounting is great if you sell to other businesses and have to charge VAT. VAT is only accounted for as you receive the cash or pay it over. However only small businesses can use this scheme – you have to plan for the cash flow issue of when your business out grows the scheme.

The flat rate VAT scheme can be useful but it depends on the rate that has been allocated to your sector and how much VAT you think you will suffer. The scheme is wonderfully simple and there is an additional 1% reduction in the flat rate during the first year of trading. Be careful because many accountants over look this scheme.

Also be careful of property and VAT, which can be a minefield. Talk to an experienced qualified accountant about this area.

The VAT registration limit increases each budget and there is a trap here that everyone must be aware of. The VAT limit covers a 12 month period. This year is any 12 month period. Your accounts might show that in each of two years you kept below the current registration limit, however if your sales were not incurred evenly but were bunched together at the end of one accounting period and at the start of the next then you may quite easily have gone over the limit. This can be a disaster if you get it wrong. If you cannot go back to your customers to recover the VAT then you must pay it out of your profits, and there will also be penalties and interest to pay.

If you wish to discuss VAT further please get in touch.

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Tax, Child Benefit and Fairness

on Thursday, 22 November 2012. Posted in Tax Advice

Tax, Child Benefit and Fairness

Have you received your High Income Child Benefit Charge letter? Mine arrived today, 22 November 2012.

In the present economic climate it is correct that child benefit should be looked at and the government assess whether or not it should keep paying it, especially to the better off in society. I do not have a problem with that. My issue is the ridiculous way the government is introducing the reforms.

If a couple both earn £49,000 they keep all the benefit, but if a single parent earns £50,001 he or she will start to lose some of the benefit and if they earn over £60,000 they lose the lot. How can it be right that one household with a total income of £98,000 still receives child benefit whilst another with £60,000 does not get any?

The new policy is being introduced on 7 January 2013. Why is the policy not being introduced at the start of a tax year, say 6 April 2013? This would be a lot simpler and straight forward.

The result of this tax reform is that 500,000 more people are likely to have to prepare and submit self assessment tax returns. The present government pays lip service to cutting bureaucracy but if it really wanted to why are taxpayers, who probably have extremely simple tax affairs, being made to file their own returns or pay my profession to do it for them?

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xero-certified-advisor-logo-hires-RGB cashflow-logo

 

We love Cloud Accounting and think it is the way forward for most businesses. We are Silver Partners with Xero Online Accounting Software and Certified Partners of IRIS’s KashFlow. Please contact us for more information on Cloud Accounting and also read our blog.