Many clients have found our business records checklist useful when assembling their paperwork. There is a link to the file below (pdf)
When you combine this with our purpose design record keeping wallets, you are really helping yourself save money by saving us time.
With our online accounting system (powered by Kashflow) , you can save time, be better organised and have a better insight into your financial position.
Kashflow software has been built with owner-managed businesses in mind. We know that you want to spend your time on what you do, not struggling with complicated software trying to understand how it works.
That’s why our online accounting software gives you everything you need: from Invoicing to cashflow management to VAT reports and everything else you need at your fingertips to keep your business running smoothly and you focused on doing what you do best – running your business.
Read on for all the existing features and benefits that our software (powered by KashFlow) offers you and if there is a specific feature you are looking for that isn’t listed here then please feel free to contact us.
We offer a 60 day free trial to give you the chance to experience our online accounting service with no obligation, so contact us to get started in a matter of minutes
With the Christmas season approaching and businesses making plans for staff functions, bonuses and gifts, we would like to make you aware of the various tax implications of your generousity.
Cash gifts and bonuses to employees -
Cash gifts and bonuses are treated as normal pay and subject to tax and National Insurance (NI) in the normal way. The payment should be put through the payroll. This also applies to any vouchers you give that can be exchanged for goods or services.
However, gifts to employees that can be considered trivial benefits such as a turkey, ordinary bottle of wine or box of chocolates will not need to be declared on form P11d. There is no set monetary limit below which benefits are deemed to be trivial but probably any amount less than £20 per employee would be considered trivial.
Any gifts of a higher value (and classed as non trivial) would be subject to tax and NIC and declarable either as a benefit on form P11d or the tax and NIC could be paid on these gifts by the employer by arranging a PAYE settlement agreement (PSA). A PSA is voluntary arrangement that the employer makes with HM Revenue and Customs (HMRC) to account for tax and NI on benefits provided to employees.
Christmas parties (and summer events) -
Parties are a tax-efficient way of rewarding employees. Employees and their partners do not pay tax and NI on any parties they attend if the cost to the business is less than £150 per head in the tax year (starting 6th April). The cost per head is the total cost of putting on the function – accommodation, food, drink etc divided by the total number of guests including the non-employees. For this purpose, the cost includes VAT whether you are VAT-registered or not. The event must be made available to all employees or those at a location (if the business has more than one site).
There are some hidden dangers. If the cost per head of a single party is greater than £150, then the whole amount would be subject to tax and NI. For example, if the cost of an event is £175 per head the employee (with a partner) is taxed on a benefit of £350. In another scenario if the employer laid on 3 parties costing £100 per head then £90 per head then £40 per head, then tax and NI would be levied on the £90 party. Though the £100 and £40 parties were covered by the £150 annual exemption, the £90 party was not and so the whole event was taxable. So plan carefully.
I know it is very early to be talking about this
If you do not receive our news for owner-managed businesses by e-mail, I have copied it below. Enjoy …
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Welcome to the May edition of News for Small Business where this month our focus is on the new tax return penalties to be enforced by HMRC as part of their toughened stance on tax evasion. ‘Notice to complete a tax return’ letters have landed on the desks of small business owners across the UK and in our article below we have explained the new penalties and the impact that they will have…
Businesses flock to govt’s Red Tape Challenge site More than 6,000 respondents have aired their views on the government’s new red tape website… read more HMRC announces tax evasion crackdown The department has hired additional officers in a bid to recoup an extra £500 million in tax… read more Employer Annual Return reminder HMRC is urging taxpayers not to delay filing their P35 and P14 documents… read more Business confidence is ‘bouncing bank’, says FSB Business confidence is bouncing back but job creation “remains weak”, the FSB has claimed… read more
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We have a wide variety of clearly written guides to explain some of the most common issues encountered by small businesses. An example is the excellent explanation of the mechanics of the UK self-assessment tax system. It is a must-read for anyone newly self-employed. The guide can be accessed from the link below.
Personal_Tax_Self_Assessment client sheet
A full list of other guides can be accessed by clicking the link below. If you would like one, please contact us.
Thank you for my friends at Liquid Accounts for this information:
The HM Revenue & Customs (HMRC) have warned that they are planning to clamp down on around 50,000 small businesses over the course of 2011 for failing to maintain proper records and underpaying corporation tax. They say that 40% of all SMEs keep poor records and are likely to owe tax.
HMRC said it will use its existing powers to deal with the worst cases each year from the second half of 2011 and penalties would be put in place “for significant record keeping failures”. More than 2 million small firms that keep their financial records in poor order will be faced with investigation and fines in excess of £3,000.
The HMRC claim that this will create benefits for SMEs (other than avoiding fines and taxes) from better record keeping such as “improved financial management” and “improved chances of business success”
In very basic terms, you have to keep records going back 6 years and HMRC will be looking for things like:
It’s best to keep your business records organised and methodical. Broadly speaking, businesses should keep records going back at least six years. For tax purposes, this includes invoices, bank statements, paying in books, and details of purchases, expense details and so on.
Matt Holmes, MD of Liquid Accounts says, “Regardless of the what the HMRC say, there are clear benefits for SMEs from better record keeping. It is a proven fact, that businesses are more likely to succeed if they keep good accounting records as they’re able to see instantly if they’ve got enough money coming in, if people are paying them, and are able to plan ahead. According to a survey carried out by Yorkshire Forward, 80% of businesses who use computerised accounting succeed whereas 80% of businesses who don’t, fail! The key is to focus on creating business intelligence that you can use to your benefit rather than just keeping records for the tax man because you have to.”
With the New Year just started this could bring a great opportunity to revisit how you do your business’ accounting, it may be the time to update your accounting package to something that will make your life easier and more organised.
By choosing newer online accounting packages, you could be one step ahead of the game. Liquid Accounts may be able to provide the perfect solution, as it is easy to use, instantly accessible, flexible and cheap.
Being online means that you can let your accountant and bookkeeper access your accounts remotely, giving you the choice of doing as much or as little of your own accounting as you’re comfortable with or can afford. And as seen with the recent weather we’ve been having, working in the cloud is a huge bonus meaning you can work from home instead of struggling with that commute.
HM Revenue and Customs have included 2 useful links on their latest agent update:
http://www.hmrc.gov.uk/agents/update21.pdf
The first one explains the new penalty regime :
http://www.hmrc.gov.uk/about/new-penalties/penalty-pres-agent.pdf
The second one (developed in conjunction with Business Link) is an online interactive record-keeping tool that allows you to create a bespoke ‘shopping list’ of records that are appropriate for their business and evaluate your record keeping practices. There is no short link to this but it can be accessed from page 5 of the PDF document (under the HMRC service tab).
We hope you find this useful.
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