The question as to whether someone is employed or self employed is not as straightforward as it might at first appear. Many people assume they are free to choose, but HM Revenue & Customs (HMRC) emphasises that this is not the case.
Viewing your accountant as a business adviser, not just as a professional trained in traditional accountancy and tax compliance services, could boost your company’s bottom line.
In addition to performing routine accountancy duties, a large part of an accountant’s day is spent advising clients on their budgets, profitability improvement, and operational procedures - and performing other tasks not often associated with accountants.
The ‘IR35’ rules are designed to prevent the avoidance of tax and national insurance contributions (NICs) through the use of personal service companies and partnerships.
The rules do not stop individuals selling their services through either their own personal companies or a partnership. However, they do seek to remove any possible tax advantages from doing so.
Today the remuneration of many directors and employees comprises a package of salary and benefits.
A person does not have to pay tax on the first £2,000 of dividend income, regardless of the level of non-dividend income.
An individual is entitled to make contributions and receive tax relief on the higher of £3,600 or 100% of earnings in any given tax year. However tax relief will generally be restricted for contributions in excess of the annual allowance.
Prospecting is the art of identifying and cultivating prospective clients. It is probably the most mundane, least understood, and consequently the most ignored aspect of practice development among accountancy firms.
It is also the most important – the key to successful practice growth. No matter what level of sales skills, client skills, or people skills you have, without prospective client opportunities your growth will be severely limited.
It is quite possible within the VAT system for a business to be in the position of having to pay over VAT to HMRC while not having received payment from their customer.
Bad debt relief allows businesses, that have made supplies on which they have accounted for and paid VAT but for which they have not received payment, to claim a refund of the VAT by reference to the outstanding amount.
As accountants and business advisers we get to know our clients very well. From our position, it is all too clear to us that many clients are too focused on ‘today’ to give serious thought to the future, and in particular to a future in which they will not play a part.
The key advantage of a LLP compared with a traditional partnership is that the members of the LLP (it is very important that they should not be called partners but members) are able to limit their personal liability if something goes wrong with the business, in much the same way as shareholders in a company have always been able to do.
All businesses plan to some extent, but the planning is often informal and ill defined. You should always set out your plans in writing, however roughly, because this forces you to define your ideas clearly.
The position of director brings both rewards and responsibilities upon an individual. Whether you are appointed to the Board of the company you work for or you are involved in establishing a new business and take on the role of director you will feel a sense of achievement.
This factsheet considers the operation and reporting of employee expenses and benefits. We can advise on the creation and implementation of a robust expenses system. We can also help with the completion of annual forms P11D. Please read the following and then contact us for any further assistance.
The capital gains tax (CGT) exemption for gains made on the sale of your home is one of the most valuable reliefs from which many people benefit during their lifetime. The relief is well known: CGT exemption whatever the level of the capital gain on the sale of any property that has been your main residence. In this factsheet we look at the operation of the relief and consider factors that may cause it to be restricted.
A capital gain arises when certain capital (or 'chargeable') assets are sold at a profit. The gain is the sale proceeds (net of selling costs) less the purchase price (including acquisition costs).
Although the VAT rules normally prevent you reclaiming VAT on supplies that are not made direct to you, there are certain circumstances when the rules are relaxed.
We consider the optional rules which allow small unincorporated businesses to calculate their profits for tax purposes on a cash basis rather than the normal accruals basis.
If your business is running perfectly, wastes no money, is making maximum profit and dominates its market, then you can pat yourself on the back and get back to work. But if you think your business performance can improve and, amidst the meetings, phone calls, e- mails and office challenges, you find it difficult to know how to begin, then you will benefit from reviewing your business planning.
If you are thinking of running your own business, you should start by discussing your plans with an experienced accountancy firm that can give you the help you need.
The more forethought you can give to the job of running your business, the more likely you are to succeed.
The required format of statutory accounts that small companies have to prepare and send to Companies House has changed. This factsheet sets out the choices that small companies now have. The nature of the company’s activities, the types of assets which it has and whether external scrutiny is required / desired will need to be considered.
The timing of certain payments and receipts of income is crucial for tax purposes. By moving a date of payment or receipt by just a few days either side of the company’s year end, you can reduce the tax bill and defer payment until the next tax
If you start working for yourself, you must register with HMRC by 5 October following the end of the tax year in which your self employment starts. Otherwise you may be liable to a penalty based on the tax due to HMRC.
Does the structure of your business minimise our accounting work? It may be more effective and cheaper to structure an expanding business as a company with branches or divisions rather than as a group of separate companies.
When starting a new business, you will no doubt recognise the need for insurance. It can provide compensation and peace of mind should things go wrong but can also represent a significant cost.
In this factsheet we consider the different types of insurance you need to consider.