Our busiest
season has passed with the self-assessment deadline and now it’s the season of
love. With love in the air, its time to make your business your valentine. Take
the time to make a plan of action for your business. What do you want to
achieve in the next 12-18 months?
Are you
looking to expand your business and grow a larger list of customers? or are you
trying to cut back on the amount of expenses your business pays out ? These are
all goals that should be in the clear to you. Write down your plan of action, top
tip, something that is written down will be more likely to be achieved than
something that you have stored in your mind.
Having it
written down and somewhere in sight will give you the reminder and motivation
to try and achieve this. Think of the strengths and weaknesses of your business.
Refresh and re-train on yourself in terms of, what are your strengths, work on
weaknesses to learn and help achieve your goals.
Loving your
business will give you opportunities to take it to the next level. However,
with opportunities you also must weigh up the risks. This is where you need a
forecast for your business, a cashflow can help make the deciding factor
whether its time to hold back and watch the spending, or if there is spare cash
around to invest back in the business.
Happy New
Year to you all, we hope you’ve had a lovely Christmas. It’s the New Year but
some things remain the same, and that’s the deadline of 31st January
for Self-Assessment returns.
Self-Assessment
is a system HMRC uses to collect tax. For people who are self-employed, with
their own business or others who make additional income.
The dates for
Self-Assessment is
1st
April 2016 to the 31st March 2017. With online returns needed to be
submitted by
31st
January 2018 and paper returns to have already been submitted by 31st
October 2017.
The best way
to keep the tax bill down is to have your paperwork organised. You will need the
actual receipts to claim as expenses. Collate your receipts and keep together
as HMRC can ask to see evidence at any time. Another great way is to utilise
the ISA savings as any interest received is tax-free. You’ll keep your savings
on a tax-free basis for as long as you keep the money in your ISA accounts.
Higher rate
tax payers benefit from additional tax savings when they contribute in to
pension schemes and give to charity.
An example
of a list of records you will need are;
Business and personal bank statements
Records of income
Records of purchases
P60/P45
Rental Income
Interest Income
Child Benefit and Income Support
You need many
other records to keep, here at Cross Accounting we give our clients a more in
detail list of records which we require from them to complete their tax return.
This also includes a reminder of approaching deadlines to ensure not to be
penalised. HMRC fine £100 for anyone who misses the 31st January
deadline.
HMRC have
revealed a record number of people are filing for self-assessment this year as
the numbers are north of eleven million. If you’re a couple of years behind,
then do not worry as you’re not alone, we have taken on a number of clients in
this situation, and have supported them and brought them up to date. If you’re
not sure if you need to submit a self-assessment or you need to complete a
return, you can call us on 02920 653 995 or visit our website on www.crossaccountingservice.co.uk
to see how we can assist you.
Welcome to
our latest blog. Christmas is around the corner and it’s our favourite time of
the year here at Cross Accounting. It’s the time of giving and is there any
other way to give your business a boost a grant to get your finance in place.
A business
or an individual will be given a sum of money for a specific project or
purpose. A grant usually covers only partial costs involved. Grants are given depending
on your business activity, the amount of jobs that will be created due to this
investment or if you are in a specific industry sector. Sometimes grants are
linked to geographic areas. Such as those areas in need of an economic
transformation.
You should
ensure that you meet the requirements of the scheme before applying for grants
and finance. You’ll have to ensure you are ready to put up some of your own
money as grants only cover partial costs. You’ll also need to have a detailed
description of your project or purpose and a work plan with full costings. We
can assist with a budget and full detailed cashflow to secure the finance you
need.
The
application process for grants can sometimes be time consuming and there
usually is a lot of competition but on the plus side, most grants don’t have to
be paid repaid giving your business that extra boost.
If you’re
looking for that push to reach some New Years goals, the Development Bank of
Wales can support to get the finance your business needs to succeed. Visit https://developmentbank.wales/ to get
you ready for the New Year.
You will
need to have a polished business plan at the ready. If you would like us to look at your business plan,
then you can book in for a free one-hour consultation where we can discuss how
to start the New Year strong. Visit our website on www.crossaccountingservice.co.uk
or call us on 02920 653 995. We wish you all a Merry Christmas and a prosperous
New Year.
There has been a change in the VAT Flat Rate Scheme since
April 2017. The government are concerned that some businesses are using the
scheme to pay less VAT than appropriate. Read our blog to be reminded of the
rules and regulations.
The Flat Rate Scheme is designed to simplify your records of
sales and purchases. It allows you to apply a fixed flat-rate percentage to
your gross turnover to arrive at the VAT due.
The scheme is for businesses with a turnover no more than
£150,000 a year, excluding VAT. The Flat Rate Scheme is a simpler method of
working out the VAT you have to pay to HMRC. The flat rate percentage you
use depends on your business sector. The correct sector is the one that most
likely describes what your business will be doing in the coming year. Click
here to find out your sector percentage https://www.gov.uk/vat-flat-rate-scheme/how-much-you-pay
From 1 April 2017 the flat rate changes if you’re a limited
cost business. The flat rate percentage will be 16.5% regardless of your sector
if you are a limited cost business. You’re a limited cost business if the
amount you spend on relevant goods including VAT is either, less than 2% of
your VAT flat rate turnover or greater than 2% of your VAT flat rate turnover
but less than £1000 per year.
You will also get a 1% discount if it is your first year as a
VAT registered business. If you’re unsure about your VAT and would like to
discuss, then please don’t hesitate to contact us.
Summers out
and schools are back in. Those 6 long weeks of entertaining the children are
over and it’s truly back to business. As summer comes to an end and we prepare
for darker evenings, the new season is the best time to plan for your business.
The lead up
to Christmas is best to note down and plan for the next couple of months. Its
best to hand in your paperwork for self-assessment and year end to your accountant
so that you can fully concentrate on the build up to Christmas and New Year. There
will be no stress on your behalf to meet HMRC’s deadline, leaving you to focus
on what matters most, your business.
Since
everyone is back from holiday, it is a good opportunity to go out networking.
This will build connections and get your business name out there. Meeting new
people and old familiar faces will keep your business from being forgotten.
Get your
cashflow and budget up to date, this will help you plan for the seasonal events
to come. Having an idea of your businesses ins and outs can shape your business
for the busy Christmas and New Year period. There will be a lot of people spending
during this period, so make sure your business is always on its ‘A’ game.
As mentioned
earlier, note your plans down, as it is better to have something written down
and in front of you than in your memory. This will help you achieve your goals and
remember planning is key!
In our
latest blog, we talk about the best methods of finance for your business.
Sometimes it’s great to have that extra push to take your business to the next
level. To attract the best funding for your business, you will need a business
plan. We are experts in the field of preparing a cashflow and a business plan
and can assist you in achieving the best method of finance for your business.
Finance
Wales
Finance
Wales are set up to aid in funding. They offer bespoke debt and equity
investment packages designed to boost your business and accelerate growth. They
offer three types of packages, micro loans under £10,000 have an easy two-day
process. Have a look at their website,
Bank loans
are probably the most common types of finance for you and I. These types of
finance are an amount of money borrowed for a set period with an agreed
repayment schedule. The repayment amount will depend upon the size and duration
of the loan and rate of interest. The terms and price will vary between bank
providers. There isn’t just one type of loan, there are many different types,
which I will look in to and describe the differences.
·Working Capital Loan – This type of loan
is usually required at short notice or emergency situations. This will usually
incur the highest percentage of interest.
·Fixed Asset Loan – For buying assets,
where the asset itself is used as a security for repayment.
·Factoring Loans – This type of loan is
based on money owed to your business by customers or clients.
·Hire Purchase Loans – For long term
purchase of assets such as vehicles or machinery.
It’s best to
talk to your bank or bank manager, as they will let you know the exact amount
you can get for finance. The bank managers love an excellent business plan and
cashflow, so make sure yours is current and polished to get in the good books
of your bank manager!
Overdraft
This method
of finance is a sum of money extended to you as credit by your bank, set at a
pre-arranged limit when your account balance drops below zero. Usually charged
interest on any amount of overdraft you use. The terms and price, like the
loans, vary between providers. This is a good source to manage cashflow, but it
is probably not suitable if you’re looking for long term financing.
Crowdfunding
Crowdfunding,
also known as crowd financing or crowd sourced capital is usually carried out online.
This allows several investors to individually invest smaller amounts of money
in to a business. The individual investments are then combined to help a
business reach its funding target. Crowdfunding is an excellent option for
businesses that struggle to raise finance through loans or the conventional
funding methods. Since crowdfunding is conducted online, you should make sure
your idea is protected. In return of the funding, investors usually get a
percentage of share of the business.
Governments
usually offer support to businesses in all different shapes and sizes. https://www.gov.uk/business-finance-support
here you can find from funding and finance, to grants and to mentoring for your
business.
Caerphilly
council are offering a business development grant. This grant can provide up to
45% of eligible expenditure to a maximum of £2,000. Business must be based in
Caerphilly and be in the manufacturing or service to the manufacturing sector,
or have a minimum of 60% business to business. For businesses in the Caerphilly
area, please look at this link http://www.caerphilly.gov.uk/Business/Business-grants-and-funding/Business-development-grant
to get more information.
Remember the
key to accelerating your business in the positive forward thinking way to get
that extra push is to have a business plan and cashflow in place. We offer a
one hour no obligation consultation, where we can sit down with a cup of coffee
and discuss your business.
Its a couple of weeks to get everything done and ready for the
when the New Year starts up again
6 April 2017
The government have made a number of changes to taxation
during the year so its good to have a plan to make sure you maximised your tax
free allowances.
Check you have used up all of your tax code, because once its gone its gone for good and
starts fresh again in April. The tax code is currently £11,000 for the
year for individuals.
Husband and wife you can transfer £1,000 from either
partner to the higher earner, this is good for part time or if a partner doesn’t
work.
Have you bought your equipment ready for the new year to
start. Think of new equipment as not a
ill put that off until later but an opportunity be more efficient, speed up
your work or even make it easier for you.
Capital Gains Tax allowances timing of when you sell an
asset is key as theres £11,100 tax free allowance for each year this is additional
to your normal income tax code.
Flat Rate Scheme is changing from April 2017 are you
ready, it will be 16.5% payment over if you are a business that is mainly
labour orientated.
Are you one of the many higher tax rate earners who is
having to deal with the mortgage tax relief restriction. Wear and tear allowance has now gone, keep all of your receipts if you are
replacing furniture or equipment in your rental house, you cannot claim without
your documents. It is replacement only,
first year purchases are excluded now.
Again Child Benefit is restricted or even taken away if
you are a higher earner over £50,000
Child Care Vouchers ceases at the end of April 2018, have
you signed up to them its £55 per week tax free allowance which saves you tax
and national insurance for income of less than £43,000 per annum.
Have you used your £15,240 ISA allowance it all starts
again in April.
Don’t forget the dividend tax rules have changed dividends
now attract 7.5% to basic rate if your dividends are over £5,000. 32.5% for anything over £43,000 make sure
youre saving your tax money.
So get planning, check these items if you missed any of
these out of your routine this could be saving you money.
The Flat
Rate Scheme is designed to simplify your records of sales and purchases. The
process is to apply a fixed flat-rate percentage to your turnover to arrive at
the VAT due. Fixed-rate percentage do vary depending on the type of business.
You can find a list for percentage on this link https://www.gov.uk/hmrc-internal-manuals/vat-flat-rate-scheme/frs7300
From April
2017, there will be a new rule to start regarding the flat-rate scheme, this is
because the government is concerned that some businesses are using the Flat
Rate Scheme to pay less VAT than is appropriate. This will mainly affect
businesses that spend very little on goods, such as businesses that provide service.
So, what is changing? The new change will only
affect businesses which have a very low cost base. These businesses will now be
called “limited cost traders”. A business will be a “limited cost trader” if it
spends less than 2% of its sales on goods or less than £1,000 a year, even if
this is more than 2% of the businesses turnover on goods.
VAT returns
can be a pain and take up time and not allow you to do what you do best,
running your business! Visit www.crossaccountingservice.co.uk
to discuss your VAT issues with us.
Restricting
finance cost relief for landlords
From April
2017, there will gradually be an introduction of a basic rate reduction
restricting the relief for finance cost. Finance cost includes mortgage
interests, interest on loans to buy furnishings and fees incurred when taking
out or repaying mortgages or loans.
Landlords will
no longer be able to deduct all their finance costs from their property income
to arrive at their property profits. Instead, landlords will receive the
introductory basic rate reduction from their income tax liability for their
finance costs.
The
governments gradual change will be as follows:
·2017 – 2018 the deduction from property income
as it currently is will be restricted to 75% of finance costs with the
remaining 25% being available as a basic rate tax reduction.
·2018 – 2019 the deduction from property income
as it currently is will be restricted to 50% of finance costs with the
remaining 50% being available as a basic rate tax reduction.
·2019 – 2020, 25% finance costs deduction and 75%
given as a basic rate tax reduction.
·2020 – 2021, all financing costs incurred by a
landlord will be given as a basic rate tax reduction.
This change
is being implemented to make the tax system fairer. The government want to
ensure that landlords with higher incomes no longer receive the most generous
tax treatment.
For
landlords in Wales, there is also a new law that has come in for self-managing
landlords to obtain a licence or have an agent to deal with their properties.
This is compulsory and to find out if you need to apply visit www.rentsmart.gov.wales
We have a
lot of clients with a portfolio of properties and help them when it comes to
their
self-assessment.
If you’re a landlord and don’t understand the rules, you can contact us on 02920653995 or send through an email on nicola@crossaccountingservice.co.uk
