The Shrewsbury Accountants Blog – Taxassist Accountants in Sundorne

March 21, 2013

The Shrewsbury Accountant, TaxAssist in Sundorne, has summarised the Budget for local business owners

Filed under: accounting, Budget 2013, owner-managed businesses — Tags: , , , , , , , , , , , , , , , , , , — taxassistshrewsbury @ 1:11 pm

Please find below a link to our Budget Summary covering the key points of George Osborne’s fourth Budget that affect small business owners and taxpayers.

TaxAssist Accountants budget_summary_2013_21 March 2013

Some of the changes were mentioned in last December’s Autumn Statement and earlier Budgets, but there were also many new announcements. The main highlights of the Chancellor’s speech were:

  • From April 2014, all businesses and charities will be entitled to an Employment Allowance of £2,000 per year towards their employer National Insurance contributions (NICs) bill. This will particularly help small businesses who want to hire their first employee or expand their workforce
  • An increase in fuel duty of 1.89 pence per litre, originally planned for 1st September 2013, will be cancelled. This is great news for trades people and service providers who make home visits and are dependent on their vehicles
  • The Government had already pledged to increase the personal allowance to £10,000 by 2015/16, but today announced that this would be brought-forward a year and will now increase to £10,000 in 2014/15

We hope that this summary is easy to digest and proves useful.

A further article with reaction from Jo Nockells of our technical team is on our web-site here

If any of the areas discussed seem likely to have an impact on your personal or commercial plans, please do not hesitate to contact us.

March 4, 2013

The Shrewsbury Accountant, TaxAssist in Sundorne, have advice on salary levels and dividends for 2013/14

Filed under: accounting, limited company, owner-managed businesses, payroll, Shrewsbury, small business, tax, tax savings — Tags: , , , , , , , , , , , , , — taxassistshrewsbury @ 2:28 pm

Following the recent announcements from HM Revenue and Customs, I am pleased to put forward our recommendations for tax-efficient wages and dividends for the year beginning 5th April, 2013.

If you are the owner of a limited company, the most tax-efficient remuneration package is an annual salary of £7,692 and dividends of £30,382 (profits allowing). This assumes you have no other income. At this level, you will have no income tax to pay. The limited company will have been taxed on the dividend income. Dividends in excess of this amount will be taxed as 25%.

There are some formalities about dividend vouchers and board minutes which we would be happy to advise on.

You may recall that last year we advised a salary of £7,600 and dividends of £30,933 – £459 more than we advising for this year. This is because the higher-rate income tax threshold has been reduced to take account of the increase in annual personal allowance from £8,105 to £9,440.  National insurance thresholds have not benefited from the same increases as income tax thresholds. Annual wages between £7,692  and £9,440  will be subject to a combined national insurance charge of 25.8%, more than offsetting the Corporation Tax relief.

By substituting £1,748 of dividends for rents charged for a use of home office, an overall annual tax saving of £350 can be achieved. Please contact for more details if this suits your situation.

March 22, 2012

The Shrewsbury Accountant, Nigel from TaxAssist Accountants, gives his summary of the Budget

Filed under: Budget 2012, owner-managed businesses, Shrewsbury, shropshire, small business, tax — Tags: , , , , , , , , , , , , — taxassistshrewsbury @ 11:23 am

Please click on the link below to access our really comprehensive review of the Chancellor’s announcements yesterday.

There is lots of detail to follow and we will, of course research it all and identify any potential effects. Aside from the headline grabbers, it is disappointing to note the continued aggressive taxation of motor vehicles. If you have company vehicles, you need to consider some further tax planning.

The Shrewsbury Accountant’s review of March, 2012 budget

As always, if you need further advice, please do not hesitate to contact us.

January 25, 2012

The Shrewsbury Accountant, Nigel from TaxAssist, suggests you save yourself a lot of hassle by downloading our mileage recording and expense claim tracker

Filed under: owner-managed businesses, shropshire, tax, VAT — Tags: , , , , , , — taxassistshrewsbury @ 12:18 pm

We have a brilliant free app which keeps a track of your business journeys and works out the tax-free amount to reclaim (based on HMRC approved mileage rates) and makes sure you claim the correct amount of VAT on  the fuel.

It is available by clicking the link below

http://www.taxassist.co.uk/mobile-apps.php

January 23, 2012

The Shrewsbury Accountant, Nigel at TaxAssist, summarises the principles of partnerships

Filed under: owner-managed businesses, shropshire — Tags: , , , , , , , , — taxassistshrewsbury @ 2:19 pm

I was recently asked by a client to explain the basics of partnerships and advise on whether a formal agreement is needed.

Although a written partnership agreement is not required to form a partnership it is vital to avoid uncertainty and the automatic application of unsuitable statutory law. A partnership is created when two or more people come together in business to share profit and losses. This type of agreement is usually made for relationships of a long term nature.

Without a partnership agreement the actions, powers and rights of each partner are controlled by the Partnership Act 1890. This act has many provisions but those which can have a significant effect include:

  • All partners are entitled to share the profits equally no matter how much capital, effort or skill they bring into the business.
  • Any partner can bring the partnership to an end just by giving notice to all the other partners. It is also dissolved if a partner dies.
  • All partners are jointly and severally liable for the liabilities incurred by the company. This means that if a debt cannot be paid then the creditor can pursue all the partners individually and one may be forced into the position of paying the whole debt by themselves.
  • Should a partner get into financial difficulties then their creditors can take assets from the partnership to settle them.
  • All partners are considered “agents” of the business and act on behalf of the other partners. They can enter into contractual and financial arrangements which are not good for the business but these will be binding.
  • All partners have an equal say in the business and decisions can take time or the business break down in the event of a severe dispute.

Advantages of a partnership include:

  • Each partner is able to specialise in their own area of the business
  • More finance can be raised than by sole-traders as more owners are investing in the
    business. As it is often a larger business than a sole-trader, it often has a better chance at generating other sources of finance e.g. bank loans, etc
  • There are no legal formalities to complete prior to starting the business
  • Partners can cover each other during times of absence, e.g. holidays or illness

 

We do not normally recommend to operate a business under any partnership basis without an agreement in place.

The aim of the agreement  is to provide a written structure of your business with respect to each partner’s responsibilities, rights, profit/liability sharing, entering and leaving, and also the terms on which disputes are resolved and the partnership can be terminated.

Thank you to http://www.legal-advice-centre.co.uk for this content.

January 17, 2012

Nigel from TaxAssist Accountants in Shrewsbury wants to remind you about the rent a room scheme

Filed under: small business, tax, tax savings — Tags: , , , , , , — taxassistshrewsbury @ 12:57 pm

We have just saved a client £850 in tax by amending a tax return he had submitted without claiming the rent-a-room relief.

Here follows a brief expanation of this very valuable relief.

Under rent-a-room a taxpayer can be exempt from Income Tax on profits from furnished accommodation in their only or main home if the gross receipts they get (that is, before expenses) are £4,250 or less.  In addition, receipts over the £4,250 exemption limit can be taxed on an alternative basis that may produce a lower tax bill. Briefly, the excess of the gross receipts over the exemption limit is treated as the taxable rental income instead of the actual profit. But they can’t then claim any of the expenses of the letting.

For the purposes of the rent-a-room scheme, gross receipts include not only rents but also payments made to the taxpayer for the provision of any other goods or services (such as meals, cleaning, laundry etc) in connection with the letting.

The rent-a-room scheme applies to ordinary lettings of living accommodation in the taxpayer’s own home. It does not apply to rooms let as an office or for other business purposes,

Where a taxpayer has taxable receipts after rent-a-room has applied, they are normally taxable as property income together with the rest of their rental business income (if they have any). In some cases, income from a lodger etc may be taxed separately as a trade (see below).

Rent-a-room applies to people who let a room in a home they rent as well as to people who own their homes.

December 8, 2011

Nigel from TaxAssist Accountants in Shrewsbury points out some issues with PAYE coding notices for Directors and warns about over-paying tax on dividends

Filed under: owner-managed businesses, shropshire — Tags: , , , , — taxassistshrewsbury @ 1:02 pm

We have had a few questions lately from clients who have received coding notices for 2011/12 tax year saying that they are liable to pay higher rate income tax on their dividends. This follows the filing of their 2010/11 tax return.

Have HMRC got this right, they ask.

The answer is yes and no.

In 2010/11, an owner/director of a profitable limited company would have been advised to take a salary of £5,760 to “stamp” his NI contribution whilst avoiding class 1 NI and take £34,304 as dividends. Assuming no other income, there would be no income tax to pay.

But there were major changes in 2011/12 income tax rates, allowances and NI thresholds.  The NI threshold went up dramatically but was offset by a reduction in the tax-paid “dividend allowance”. We have advised owner directors  to take a salary of £7,200 p.a. but  reduce net dividends to £31,725.

So the answer is yes because HMRC assume that 2011/12 dividends will be the same as 2010/11 dividends and so higher rate income tax of £645 will be due. They then seek to collect this tax before 5th April, 2012 through the PAYE code. That’s a bit naughty.

We believe HMRC are wrong because owner directors will manage their tax affairs to avoid the higher rate tax and adjust their dividends.

It all re-inforces the need to carry out some tax planning with  your accountant before 5th April to avoid this additional tax.You could also ask HMRC to adjust your PAYE code or wait until it comes out in the wash in your 2011/12 tax return.

Please see our previous blog articles on dividends by typing dividends in the search box in the right hand column.

 

November 30, 2011

Nigel from TaxAssist Accountants in Shrewsbury gives his view on yesterday’s Autumn Statement

Filed under: accounting, autumn statement 2011, owner-managed businesses, shropshire, small business — Tags: , , , , , , , , — taxassistshrewsbury @ 11:05 am

I know you will probably be bombarded by these newsletters. Here’s ours which gives an update as it affects owner-managed businesses.

We are awaiting more details of the Seed Enterprise Investment Scheme which may encourage equity investment in small businesses.

Autumn Statement Summary 2011

Autumn Statement 2011On 29th November 2011, the Chancellor of the Exchequer, George Osborne, announced the Autumn Statement which provides an update on the Government’s plans for the economy, based on the latest forecasts from the Office for Budget Responsibility.

Small businesses across the UK have seen the devastating impact that excessive red tape and lack of funding have had, however some elements in this Autumn Statement offer chinks of light amongst the Chancellor’s doom and gloom.

Businesses in need of finance

Guarantees - The Government is to back £20 billion of business loans under the National Loan Guarantee Scheme. The scheme will lower the cost of bank loans for smaller businesses. Ministers hope the scheme will be live by the start of 2012 and it is envisaged it will run for the next two years. The scheme should deliver up to a one percentage point reduction in the cost of a business loan.

Trades people

Affordable mortgages - Under the New Build Indemnity Scheme, the Government hopes to increase the supply of affordable mortgages. The Government and house builders will provide security for the mortgages and home buyers will only require a five per cent deposit in order to purchase a new build house or flat. The scheme should help around 100,000 families and first time buyers to buy their own home plus increase opportunities for self employed builders, plumbers, plasterers and electricians to name but a few.

Right to Buy Scheme - Firstly, the Government will increase the discounts on the market value of homes purchased under the Right to Buy Scheme. And secondly, for each home purchased, the Government will provide an extra affordable home – in addition to the 170,000 already planned through the new Affordable Homes programme.

Small businesses that employ staff

Unfair dismissal - The qualifying period for unfair dismissal claims will increase from one year to two years from April 2012, to help reduce employers’ fears about taking on new staff. The Government also announced that it will be considering how the dismissal process could become simpler, quicker and clearer.

Compensated No Fault Dismissals - The government will be seeking views on the introduction of Compensated No Fault Dismissals for micro-businesses with fewer than ten employees. Under such a system, employees could be dismissed without employers having to cite a particularly reason, but happy in the knowledge that the notice period and pay would be predetermined and there would be no fear of tribunals (provided no discrimination is involved).

Fees – The Government will introduce fees for individuals who want to bring cases to employment tribunals. The level of the fees will be consulted on.

Work experience - All unemployed 18 to 24 year olds will be offered work experience or a Sector Based Work Academy place after three months on Job Seekers’ Allowance.

Incentives - The Government will provide an estimated 160,000 wage incentives of £2,275 each to entice employers to recruit young people.

Red tape – Deregulation is firmly on the Government’s agenda and as part of this; they have pledged to accept a recommendations review of health and safety regulation and look to go further with its Red Tape Challenge.

Mobile businesses

Fuel Duty – The fuel duty increase of 3 pence per litre that was due to take effect on 1st January 2012 will no longer occur. Furthermore, the increase planned for 1st August 2012 of 5 pence per litre will now only be 3 pence.

Small businesses operating from premises

Business rates - The Small Business Rates Relief holiday will be extended by six months from 1st October 2012.

Deferral – The Government will also give businesses the opportunity to defer 60 per cent of the increase in their 2012/13 business rates bill (as a result of the Retail Price Index uprating) and repay it equally across the following two years.

Businesses seeking planning permission

Non-planning consent – The Government will introduce a 13-week maximum timescale for the majority of non-planning consents, which will take immediate effect for Government agencies.

Appeals - The Government will ensure that there is a more effective system for applications to obtain an award of costs, if there is an appeal against an unsuccessful planning application where a consultee has acted unreasonably. This should start to be implemented in summer 2012.

Agricultural buildings – The Government will consult on proposals to allow existing agricultural buildings to be used for other business purposes such as offices and retail space.

Small business owners with a family

Child and Disability Tax Credits – The child element of the Child Tax Credit and disability elements of tax credits will be uprated in line with the Consumer Price Index (CPI) in 2012/13. By using the CPI, these tax credits should fluctuate according to changes in consumer spending patterns relative to changes in the price of goods and services.  This should mean that the child element of the Child Tax Credit will increase by £135 but the Government will not be going ahead with the planned £110 above-inflation increase.

Working Tax Credits - The couple and lone parent elements of the Working Tax Credit will not be uprated in 2012/13.

Live Updates as they happened on 29th November 2011

Time   Details

  • 12:20   George Osborne Has left the Treasury and is now heading for the House of Commons
  • 12:35   OBR revises GDP forecast for 2011 down to 0.9%
  • 12:35   OBR not predicting another recession
  • 12:46   Osborne asks the Unions to call off the strikes #AS2011
  • 12:48   Pension credit to increase by £5.30
  • 12:50   State pension age to increase from 66 to 67 in 2026
  • 12:53   Osborne hoping credit easing measures will reduce interest rates paid by small businesses by 1%
  • 12:55   Osborne to reinvigorate the Right to Buy Scheme
  • 12:58   Over 500 new infrastructure projects planned
  • 13:07   ”Planning laws need reforms” Osborne
  • 13:09   Osborne wants to “cut the burden of Health & Safety on small firms”
  • 13:11   50% income tax relief on loans up to £100k to qualifying small businesses
  • 13:12   Business rates holiday extended to April 2013
  • 13:17   Planned fuel duty increase in January 2012 scrapped
  • 13:18   Fuel duty increase planned for August 2012 reduced to 3p
  • 13:19   Coalition government to take Britain “Safely through the storm”
  • 13:19   George Osborne sits down and Ed Balls takes the stand
  • 13:20   Ed Balls states “Plan A has failed”

If you need further clarification, please do not hesitate to contact us.

November 8, 2011

Nigel from Shrewsbury has posted the latest TaxAssist Accountants newsletter

Filed under: accounting, owner-managed businesses, shropshire, small business, tax — Tags: , , , , , , — taxassistshrewsbury @ 1:34 pm
01743 366669
FREE INITIAL CONSULTATION

 

 

Welcome to the November edition of News for Small Business.

We know that it’s not easy out there for small businesses so this month we have included a few schemes that could be of help to you, such as; the Business Acceleration programme, launched by well-known entrepreneur Deborah Meaden; the new Community Business Loan Scheme, courtesy of NatWest and RBS; and the currently undersubscribed National Insurance Scheme Holiday.

Read our articles below to find out which schemes may benefit your business…

 

Business Accelerator scheme will give firms ‘the best chance of success’
The new Local Business Accelerator Scheme will greatly improve a small firm’s chance of success, it has been claimed… read more

RBS and NatWest launch £5m Community Business Loan Scheme
Small businesses around the UK could be set to benefit from the launch of a new lending scheme… read more

Vince Cable in tax return blunder
Business secretary Vince Cable has been forced to pay back £15,000 in back taxes and fined £500… read more

Paper tax return deadline passes
Taxpayers can no longer file their tax returns on paper and must now meet the online deadline… read more

National Insurance Holiday for Employers

 

Wages is generally the second largest expense for businesses (after their purchases or materials), and this cost has been exacerbated by ever increasing minimum wage rates and the one percent increase in National Insurance which was introduced this year.

But since June 2010, new businesses have been able to apply to HM Revenue & Customs (HMRC) for the Employer’s National Insurance Contributions (NICs) Holiday.

Under the scheme, new businesses have the potential to reduce their employer’s NICs liability for a maximum of twelve months by up to £5,000 for each of the first ten employees they take on. So there is a whopping £50,000 saving possible!……..read more

November 2011

ABOUT US

TaxAssist Accountants are the largest network of accountants who focus their accountancy skills specifically on small businesses and taxpayers in the UK.

OUR SERVICES

WHO WE HELP

As a network we look after over 38,000 clients including.

Sole Traders
Partnerships
Limited Companies
Start up Business

Over 200 TaxAssist Accountants are located across the UK offering local accountancy services to small business owners.

NEWS

For more news affecting small businesses, please click below:

Tax News
Tax Tips
Questions & Answers

CONTACT US

01743 366669
FREE INITIAL CONSULTATION

Nigel Lomax
TaxAssist Accountants
1 Sundorne Avenue
Shrewsbury
Shropshire

SY1 4JW
  www.taxassist.co.uk/nigellomax/      

 

DISCLAIMER: Advice shared in this newsletter is intended to inform rather than advise. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this newsletter, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

 

01743 366669
FREE INITIAL CONSULTATION		 ©2011 TaxAssist Accountants. All Rights Reserved.

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October 24, 2011

Nigel from TaxAssist Accountants in Shrewsbury advises about the latest HMRC initiative

Filed under: accounting, owner-managed businesses, small business, tax, tax administration — Tags: , , , , , , , , , , , , , , — taxassistshrewsbury @ 8:18 am

Following on from HMRC’s amnesty with regard to undeclared income from the plumbing trade , the next sector to come under review is private tutoring through the Tax Catch-up Plan (TCP).

As with previous schemes, reduced penalties for voluntary admissions will be offered.  The scheme will be aimed at those who profit from tuition and coaching and have not previously advised HMRC of the income.  This will not just be aimed at academic studies, but will also cover all areas of teaching such as fitness, dance and music instruction and life coaches.

Under the TCP, tutors have until 31 March 2012 to come forward and tell HMRC about their outstanding tax for the years up to 5 April 2010 and settle any amounts due.  After this date, HMRC plan to start investigations and those who do not come forward under the voluntary scheme will face much higher penalties.

Please contact us if you need any further advice.

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