Emergency Summer Budget

Here is a link to our summary of the Chancellor proposals. The changes to taxation of dividends is going to need to be carefully considered. There was also a major increase in the minimum wage (now living wage).

Emergency Budget 8 July 2015

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Please do not hesitate to contact us if you have any questions.

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Our summary of the March 19th, 2015 Budget

Please click on the link below to see a summary of yesterday’s budget.

budget_summary_2015_19_March

Please do not hesitate to contact us if you have any questions.

 

30 Ways to Reduce Your Tax Bill

Here is a really useful guide to reducing your tax bill.

Please contact us if you need any further infomation

TaxAssist_30_Ways_14.15_Tax_Year

A neat summary of yesterday’s Autumn Statement relevant to owner-managed businesses

There was a surprising amount of content in yesterday’s Autumn Statement.

This is neatly summarised in a PDF file which can be opened by clicking on the link below.

Autumn Statement December 2014

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

Nigel Lomax explains how the VAT Flat Rate scheme operates

The Flat Rate VAT scheme (FRS) is available to all small businesses. The FRS differs from standard VAT accounting as you pay a percentage of turnover rather than paying VAT on the difference between sales and purchases. So, while you continue to charge clients the standard 20% VAT rate, you can potentially give a smaller percentage to HM Revenue and Customs.

The FRS helps to simplify VAT calculations and record keeping. This is particularly helpful to smaller organisations that may not have the time to conduct their accounting in the traditional way. This is important bearing in mind the increasingly severe penalties that can be charged for errors. It shortens the process, removing the need to keep a record of VAT charged for each individual sale or that paid on purchases. However, you do still need to show a 20% VAT amount on each sales invoice.

It might also save you money. Example:

Standard VAT Calculation

Total Billings £50,000
Output VAT 20% £10,000
Total invoiced £60,000
VAT reclaimed through purchases £750 (this figure is arrived at by adding up the VAT on all your business costs)
Total payable to HMRC £9,250

With this scheme, you are acting as an unpaid tax-collector on the VAT generated by you business.

Flat Rate Scheme Calculation

Total Billings £50,000
Output VAT 20% £10,000
Total invoiced £60,000
Total payable to HMRC at 14.5% of total invoiced £8,700

In addition, while you are in your first year of vat registration you can benefit from a 1% reduction to your FRS rate.

If you make use of the scheme, you cannot reclaim VAT on purchases, except in certain circumstances. As a result, the FRS works best for people who have few expenses compared to their fee income. VAT on expenses can only be recovered if they are capital items costing £2,000 or more or if the assets are still within the business on the date of VAT registration.

I must credit http://www.contractoruk.com for their article which contains further information for IT Contractors

Please contact us if you need further advice. The FRS scheme means that it can make sense to voluntarily register to be VAT-Registered where your customers are VAT-registered.

Latest information on HMRC enquiries

TaxWise, who provide us with our fee protection insurance, have shared with me their latest statistics on HMRC enquiries. It makes dramatic reading. In the last 5 years, HMRC enquiries have increased 5 fold. You can see the information by clicking on the link below:

Claims by Month to TaxWise (July 2014)

Our clients are protected by the TaxWise scheme, which means that we will not charge our clients for time spent on HMRC enquiries (subject to some conditions).

If you are not a client, I strongly recommend that you consider getting some protection.

The Shrewsbury Accountants, TaxAssist in Shrewsbury, has some information about the Growth Accelerator scheme

Thinking about raising finance

I have recently found out about a new government scheme called Growth Accelerator which aims to  help businesses get the funds they need to grow.

Growth Accelerator provide professional independent support to businesses to find potential investors or lenders and help them secure the funds.

The service is provided by  a leading financial advisory firm but it is made very affordable because the costs are subsidised by the Department for Business Innovation and Skills (BIS). The link below will give you more details about the scheme.

Access To Finance

We can help with management accounts and financial forecasts.