Unlocking Financial Freedom: Navigating Inheritance Tax with Trusts in 2024

Introduction:

In the ever-evolving landscape of financial planning, individuals and families in the United Kingdom are increasingly turning to trusts as a strategic tool to mitigate the impact of inheritance tax. In this comprehensive guide, we will delve into the intricacies of inheritance tax planning and explore how establishing a trust can be a powerful solution to safeguard your assets and ensure a smart transition for your loved ones.

Understanding Inheritance Tax:

In the UK, inheritance tax is a levy imposed on the estate of a deceased person. While it is an integral part of the tax system, it can often lead to a substantial reduction in the value of the inheritance passed on to beneficiaries. The current inheritance tax threshold is £325,000, and anything above this amount is taxed at a rate of 40%. For high-net-worth individuals, this can translate into a significant financial burden for their heirs.

The Role of Trusts when considering Inheritance Tax Planning:

A trust is a legal arrangement that allows individuals (known as settlors) to transfer assets to a separate entity (the trust) for the benefit of specific individuals or purposes (the beneficiaries). By establishing a trust, individuals can exercise greater control over the distribution of their assets while simultaneously reducing their exposure to inheritance tax.

Key Strategies to Avoid Inheritance Tax with a Trust:

1. Lifetime Gifts and Potentially Exempt Transfers (PETs): One effective strategy is to make lifetime gifts, transferring assets into a trust during your lifetime. While these transfers may be subject to inheritance tax, they can fall outside the taxable estate if the settlor survives for at least seven years after making the gift. These are known as Potentially Exempt Transfers (PETs), and they become completely tax-free if the settlor survives beyond the seven-year period.
2. Establishing Discretionary Trusts: Discretionary trusts offer flexibility in distributing assets among a class of beneficiaries, providing the trustees with the authority to decide when and how to distribute the assets. By placing assets in a discretionary trust, settlors can reduce the taxable value of their estate, as the assets technically no longer belong to them.
3. Using Business Property Relief (BPR) and Agricultural Property Relief (APR): Certain types of assets, such as qualifying business assets and agricultural property, may be eligible for relief from inheritance tax. Placing these assets in a trust can help maximize the relief available and minimize the overall tax liability.
4. Life Insurance Policies and Trusts: Settlors can also consider using life insurance policies as a means to fund the trust. By assigning the policy to the trust, the proceeds can be distributed tax-free to beneficiaries, providing an additional layer of financial security.

Conclusion:

In conclusion, navigating the complexities of inheritance tax planning in the UK requires a strategic approach, and establishing a trust can be a powerful tool in this endeavour. By utilizing the various strategies outlined above, individuals and families can proactively protect their wealth, ensure the financial well-being of their loved ones, and ultimately leave a lasting legacy without the burden of excessive taxation. As with any financial decision, it is advisable to seek professional advice to tailor a plan that aligns with your specific circumstances and goals.

Introduction

In a landscape where digital currencies are gaining momentum, the HMRC’s recent launch of investigations into unpaid taxes on cryptoassets has sent ripples through the cryptocurrency community. As the government tightens its grip on the evolving financial sector, it’s crucial for crypto enthusiasts to stay informed and compliant. In this blog post, we’ll delve into the details of HMRC’s initiative, understand the implications for crypto investors, and explore ways to ensure tax compliance without breaking a sweat.

Understanding HMRC’s Move

The HMRC’s decision to investigate unpaid taxes on cryptoassets underscores the growing importance of regulating digital currencies. With the crypto market witnessing unprecedented growth, authorities are keen to ensure that individuals and businesses involved in these transactions are fulfilling their tax obligations. This move signals a shift towards greater scrutiny, emphasising the need for transparency and accountability in the crypto space.

Implications for Crypto Investors

For those navigating the crypto landscape, the HMRC’s investigations serve as a wake-up call. Ignoring tax responsibilities can lead to serious consequences, including penalties and legal actions. It’s essential for crypto investors to accurately report their gains and losses, keeping detailed records of transactions. Failing to do so may result in unintended financial repercussions and legal ramifications.

Tips for Ensuring Tax Compliance:

1. Keep Detailed Records: Maintain a comprehensive record of all your crypto transactions, including dates, amounts, and counterparties. Accurate documentation is crucial when reporting gains and losses to the HMRC.
2. Seek Professional Advice: The complexities of cryptocurrency taxation can be overwhelming. Consulting with a tax professional well-versed in crypto regulations can provide invaluable guidance, ensuring you stay on the right side of the law.
3. Utilise Tax Software: Leverage specialised tax software designed for cryptocurrency transactions. These tools can streamline the process of calculating gains and losses, making it easier to fulfill your tax obligations.
4. Stay Informed: The regulatory landscape for cryptocurrencies is constantly evolving. Stay updated on HMRC guidelines and any changes in tax regulations that may impact your crypto investments.

Conclusion:

As the HMRC intensifies its focus on unpaid taxes related to cryptoassets, it’s imperative for investors to proactively ensure compliance. By staying informed, maintaining meticulous records, seeking professional advice, and utilizing available tools, crypto enthusiasts can navigate the evolving regulatory landscape with ease. Embracing transparency and responsible financial practices will not only protect individuals from legal repercussions but also contribute to the legitimacy and mainstream acceptance of cryptocurrencies.

Strategic Inheritance Tax Planning for Single Individuals in the UK: A Comprehensive Guide to Optimize Your Estate

Inheritance tax (IHT) is a topic that often evokes uncertainty and concern, particularly for single individuals in the United Kingdom. Planning for the future is a crucial aspect of financial management, and understanding how inheritance tax works is essential to ensure that your hard-earned assets are passed on efficiently to your chosen beneficiaries. In this blog post, we will explore the intricacies of inheritance tax planning tailored specifically for single individuals in the UK.

Understanding Inheritance Tax:

Inheritance tax is a levy imposed on the estate of a deceased person, and it is payable on the value of assets exceeding a certain threshold. As of my knowledge cutoff in January 2022, the standard threshold is £325,000. However, for those with a property, an additional residence nil-rate band of up to £175,000 may apply, bringing the potential total threshold to £500,000.

For single individuals, the absence of a spouse or civil partner can pose unique challenges in terms of tax planning. Here are some key considerations to keep in mind:

1. Utilizing the Nil-Rate Band: Single individuals should be aware of the standard nil-rate band and the potential residence nil-rate band. Strategies such as gifting and careful estate planning can help maximize the use of these thresholds.
2. Lifetime Gifts: Making gifts during your lifetime can be an effective way to reduce the value of your estate for inheritance tax purposes. However, it’s crucial to be aware of the seven-year rule, which states that gifts made within seven years of death may still be subject to inheritance tax.
3. Tax-Efficient Investments: Consider investing in assets that qualify for Business Relief (BR) or Agricultural Relief (AR). These reliefs can significantly reduce the taxable value of certain assets, providing a more tax-efficient approach to estate planning.
4. Setting up Trusts: Trusts can be a powerful tool for single individuals to manage their estate and potentially reduce their inheritance tax liability. Seek professional advice to understand the different types of trusts available and their implications.
5. Reviewing and Updating Wills: Ensure that your will reflects your current wishes and takes advantage of available tax exemptions. Regularly reviewing and updating your will is crucial, especially if your financial situation or family circumstances change.
6. Consider Professional Advice: Inheritance tax planning can be complex, and seeking advice from Gm professional accountants IHT specialist is highly recommended. They can help tailor a strategy that aligns with your specific circumstances and goals.

Navigating inheritance tax as a single individual in the UK requires careful consideration and proactive planning. By understanding the various strategies available, such as utilizing nil-rate bands, making lifetime gifts, investing in tax-efficient assets, setting up trusts, and regularly reviewing your will, you can work towards minimizing the impact of inheritance tax on your estate. Professional advice is invaluable in crafting a personalized plan that ensures your assets are passed on to your chosen beneficiaries in the most tax-efficient manner possible.

Mastering VAT Compliance: How to Correct Errors and Make Seamless Adjustments

If you’ve made an error in a previous VAT return that meets specific criteria, you can rectify it by adjusting a future VAT return, as outlined in HMRC’s VAT notice 700/45. To be eligible for correction:

1. The mistake must have occurred in a return for an accounting period ending less than 4 years ago.
2. The net value of the error (VAT overpaid minus underpaid) should be below the HMRC reporting threshold of £10,000.
3. The error must not be intentional (deliberate errors must be reported to HMRC).
4. The net value of the error must be between £10,000 and £50,000, but less than 1% of the sales reported in box 6 of the VAT return for the period in which the mistake was discovered.

Calculate the net value of errors by subtracting any VAT overpaid from any VAT underpaid. If your mistake meets these criteria, amend it in your next VAT return by adding the net value to either Box 1 (tax owed to HMRC) or Box 4 (tax due to your business).

For errors not meeting these criteria, contact HMRC to report them. When in doubt, seek advice from an accountant. Additional information on the Notice 700/45 VAT adjustment process is available on GOV.UK.

Reportable Errors: Not all errors can be corrected by amending a VAT return. Report errors falling into the following criteria to HMRC:

• Errors with a net value above the reporting threshold.
• Errors made more than 4 years ago.
• Deliberate errors (note: deliberate or careless errors may incur HMRC penalties).

Notification of Errors to HMRC: If you need to report a VAT mistake to HMRC that falls outside the criteria for a VAT adjustment, use a VAT652 form. You can fill it out online at GOV.UK, download a printable version, or request a paper form by calling the HMRC helpline on 0300 200 3700.

It’s also possible to report an error to HMRC without using form VAT652, but completing the form will streamline the process for both you and HMRC. If you can’t access the form, write directly to HMRC to report a VAT error at: [Include the appropriate HMRC address].

Correcting a Mistake on Your VAT Return

If you’ve identified an error on your VAT return, especially if it means you’re owed a refund, follow these steps to make the necessary adjustments.

1. Update Box 4: If the error results in a VAT refund, include the net value in Box 4 of your return.
2. Keep Detailed Records: It’s crucial to maintain a record of key information, including the date of the error, the date you made the adjustment, and specific details about the mistake.
3. Adjust Your VAT Records: Ensure that your internal VAT records are also updated to reflect the accurate figures.

Can I Edit a VAT Return After Submission?

If you’ve submitted your VAT return and later realize a mistake, there’s no need to panic. You have options to correct the error:

1. Manual Correction: You may be able to manually correct the mistake on your submitted return.
2. Report to HMRC: Alternatively, you can report the error to HMRC, seeking their guidance on the necessary corrective actions.

Time Limit for VAT Error Correction

It’s important to note that there is a specific time limit for correcting errors in your VAT return. You have a window of 4 years from the due date of the return for the prescribed accounting period in which the error occurred, especially concerning under-claimed input tax.

Remember, staying calm and taking prompt corrective measures will help ensure your VAT records remain accurate and compliant with regulations.

Understanding the VAT Concession for Nursing Agencies and Umbrella Companies

In the wake of IR35 reforms and the growing prevalence of umbrella companies among NHS workers, confusion surrounding nursing agencies’ VAT responsibilities has become more prevalent. This confusion primarily revolves around the application of a concession and determining who bears the VAT burden: the end client, the agency, or the umbrella company. However, it’s crucial for recruiters to understand that the nursing agencies’ VAT concession does not apply to fully compliant umbrella companies

What is the concession, and where does it apply?

This concession dictates that, under specific circumstances, nursing agencies and employment businesses are exempt from VAT accountability when providing certain healthcare workers:

1. Registered nurses
2. Unregistered nurses directly supervised by a registered nurse
3. Unregistered nursing auxiliaries whose services are supplied to a hospital, hospice, or care home

The primary goal is to reduce the cost of medical staff. However, HMRC stipulates that the concession should only benefit those directly supplying nurses, excluding umbrella companies deemed too distant in the supply chain to qualify.

What are the issues, and how should compliant umbrella companies respond?

In the absence of the concession, recruitment agencies typically charge VAT when supplying staff to an end-hirer. This VAT is then transmitted down the chain, and the umbrella company remits it to HMRC upon receiving funds from the agency.

Before the IR35 changes, nurses with their limited companies enjoyed VAT exemption due to low company turnover—a scenario not applicable to umbrella companies.

Compliant umbrella companies must levy VAT, even if the concession relieves the agency from charging VAT to the end client. In such cases, a responsible umbrella provider would decline collaboration unless the agency agrees to pay the VAT. Any umbrella company claiming VAT exemption is misinformed.

Despite the concession being informal and not officially classified as an exemption, recruiters face immediate risks if the umbrella company neglects to charge VAT. In most instances, the VAT responsibility falls back on the recruiter as the worker’s supplier.

If an umbrella company charges VAT and the agency opts for the concession, they might forfeit the right to reclaim the VAT charges. Errors in VAT liability can lead to substantial debts and potential penalties from HMRC.

Do I have to register as self employed straight away

In the dynamic landscape of the United Kingdom’s workforce, the allure of self-employment has become increasingly appealing. Whether driven by a desire for autonomy, flexibility, or the pursuit of a passion, becoming self-employed in the UK is a viable and rewarding option. However, before embarking on the entrepreneurial journey, it’s crucial to understand the specific criteria that define and shape self-employment in the UK. 1. Legal Structure and Registration:

One of the first steps towards self-employment in the UK involves choosing an appropriate legal structure for your business. Sole traders, partnerships, and limited companies are the primary options. Sole traders operate as individuals, while partnerships involve two or more individuals sharing the responsibilities. Limited companies are distinct legal entities. Registering your business with the appropriate authorities, such as HM Revenue & Customs (HMRC), is a mandatory step to establish your self-employed status.

2. National Insurance Contributions: Self-employed individuals in the UK are required to pay National Insurance contributions to access benefits like the State Pension and the National Health Service (NHS). The amount of contributions varies based on your profits, and it’s essential to stay informed about the current rates and thresholds. Ensuring compliance with these contributions is vital for maintaining your self-employed status and securing future benefits.

3. Tax Obligations: Understanding and fulfilling your tax obligations is a critical aspect of self-employment in the UK. Keeping accurate financial records, submitting self-assessment tax returns to HMRC, and meeting deadlines are integral to a smooth and compliant self-employed journey.

4. Financial Management and Record-Keeping: Effective financial management is a cornerstone of successful self-employment. Keeping detailed records of your income, expenses, and receipts is not only a legal requirement but also crucial for monitoring your business’s financial health. Utilizing accounting software or hiring a professional accountant can streamline this process, allowing you to focus on growing your business without the burden of complex financial tasks.

5. Client Relationships and Marketing: Building and maintaining client relationships is a key criterion for success in self-employment. As a self-employed professional in the UK, actively marketing your services, networking, and delivering exceptional value to your clients are essential

In conclusion, self-employment in the UK is a rewarding journey that offers numerous benefits, but success requires a thorough understanding of the criteria that define this entrepreneurial path. By navigating legal obligations, managing finances diligently, and fostering strong client relationships, aspiring self-employed individuals can embark on a fulfilling and prosperous career in the UK’s vibrant business landscape.

Do you need to register for self assessment, Complete the form below to determine if you need to file a self-assessment tax return.

1) How do I know if I need to register for self assessment?

Timing is crucial when it comes to Self Assessment registration. If you’re required to submit a tax return and didn’t do so last year, it’s imperative to register with HMRC for Self Assessment.

2) How much do you have to earn to register for self assessment?

Establishing yourself as a sole trader becomes necessary under certain circumstances, such as earning over £1,000 from self-employment between April 6, 2022, and April 5, 2023. Additionally, proof of self-employment may be required, particularly for purposes like claiming Tax-Free Childcare.

3) Will HMRC tell me if I need to do a self assessment?

HMRC may not send paper communications prompting you to file a return. Instead, you could receive email notifications indicating the need to file. This occurs only if you’ve enrolled in HMRC’s digital self-assessment email reminders service.

4) What is the fine for not registering for self assessment?

A prompt penalty of £100 is imposed. Twelve months after the initial missed deadline, on 1st February, you’ll incur an additional charge of £300 or 5% of the tax owed. Consequently, the total payment for filing a Self Assessment tax return a year later could amount to approximately £1,600.

5) Do you have to re register for self assessment every year?

If you’ve previously registered, there’s no need for a new registration. However, if you didn’t submit a Self Assessment tax return last year, you’ll need to reactivate your existing account.

6) Do I need to do self assessment if I earn more than 100k?

Earning over £100,000 annually introduces a distinctive tax scenario, diverging from the norm. Despite PAYE system taxation, an obligation arises to submit annual Self Assessment tax returns to HMRC.

7) Do I need to do a self assessment if I earn less than 10k?

In short, yes. If your self-employment earnings exceed £1,000, it’s imperative to register for Self Assessment with HMRC. Upon registration, you’ll receive a Unique Taxpayer Reference number, solidifying your status as a self-employed taxpayer.

8) Do I need to register for self assessment if I earn less than 1000?

Income under £1,000 requires no declaration. For income exceeding £1,000, registration with HMRC and completion of a Self Assessment Tax Return are necessary.

Introduction

Running a limited property company in the UK comes with its unique set of challenges and opportunities. Filing requirements, tax obligations, and compliance standards are crucial aspects that demand careful attention. In this comprehensive guide, we’ll explore the essential steps to ensure a seamless and successful filing process for your limited property company.

Foundation of Compliance: Understanding Your Limited Company Structure

As a limited company, your filing obligations are distinct from other business structures. It’s crucial to familiarize yourself with the specific requirements imposed by Companies House and HMRC for limited companies. This foundational understanding sets the stage for a proactive and compliance-driven approach to filing.

Annual Returns: Maintaining Company Transparency

One of the primary filing obligations for a limited company is the submission of annual returns to Companies House. This document provides a snapshot of your company’s vital information, including details about directors, shareholders, and the company’s registered office address. Timely submission ensures the transparency required by regulatory authorities and helps avoid penalties.

Corporation Tax: Calculating and Filing with Precision

Corporation tax is a core financial obligation for limited companies. Accurate calculation and timely filing are essential to comply with HMRC regulations. Ensure that you maintain meticulous records of your company’s profits, expenses, and any tax reliefs applicable to your business activities. Leveraging accounting software or professional advice can streamline the corporation tax filing process.

VAT Registration and Compliance: Strategic Financial Management

For limited property companies with a taxable turnover exceeding the VAT registration threshold, mandatory VAT registration is a critical step. Understanding the implications of VAT, choosing the right VAT scheme, and maintaining compliance with VAT regulations are pivotal for effective financial management. Regularly reviewing your VAT position ensures that your limited company aligns with HMRC requirements.

Property Income Reporting: HMRC Transparency

Reporting property income to HMRC is an ongoing obligation for limited property companies. Ensure that you accurately record and report rental income, allowable expenses, and deductions. Staying transparent with HMRC not only fulfills your regulatory duties but also positions your company for a smooth and cooperative relationship with tax authorities.

Corporation Tax Planning: Maximizing Efficiency

Strategic tax planning is a powerful tool for limited property companies. Seeking professional advice to optimize your company’s tax position, explore available reliefs, and plan for future tax liabilities can contribute to long-term financial efficiency. Proactive tax planning ensures that your limited company maximizes opportunities within the legal framework.

Annual Accounts: Reflecting Financial Health

In addition to annual returns, limited companies are required to file annual accounts with Companies House. These accounts provide an in-depth view of your company’s financial health, including balance sheets, profit and loss statements, and cash flow statements. Composing accurate and comprehensive annual accounts is essential for stakeholders, including shareholders, investors, and regulatory bodies.

Professional Support: Navigating Complexity with Experts

Given the intricacies of filing obligations for limited property companies, seeking professional support is a strategic move. Accountants and tax advisors specializing in corporate filings can offer expert guidance, ensuring that your limited company remains compliant, efficient, and well-positioned for growth.

Conclusion: Filing with Confidence for Future Success

In conclusion, successfully filing for your limited property company in the UK requires a proactive and informed approach. By understanding and fulfilling annual returns, corporation tax obligations, VAT requirements, and seeking professional support when needed, you pave the way for a compliant and thriving limited company. Stay vigilant, leverage professional expertise, and navigate the filing landscape with confidence for sustained success in the dynamic property market.

How to Amend Your Company Tax Return: Staying Compliant Made Easy

Introduction – How far back can you go?

Navigating the ever-changing landscape of tax regulations can be challenging for businesses. Occasionally, circumstances evolve, necessitating adjustments to your Company Tax Return. In this blog, we’ll delve into the key aspects of amending your return and explore the methods available to you. It’s crucial to remember that amending your return is subject to specific time constraints and potential penalties for errors. Let’s explore these details further.

The 12-Month Deadline

The first and most critical aspect to bear in mind when contemplating amendments to your Company Tax Return is the 12-month deadline. Generally, changes must be made within 12 months of the filing deadline. Complying with this deadline is of utmost importance to avoid potential penalties imposed by HM Revenue and Customs (HMRC). Thus, staying organized and proactively addressing any required adjustments within this timeframe is essential.

Methods for Making Amendments

When it comes to amending your Company Tax Return, you have several methods at your disposal. The choice of method hinges on your preferences and specific circumstances:

1. Commercial Software: Many businesses find using commercial tax software a popular and user-friendly option. These software packages often include intuitive interfaces and error-checking features to ensure accuracy. They can be especially beneficial for businesses with complex financial records.
2. Paper Return or Written Request: If you favour a more conventional approach, you can opt to send a paper return or a written request to your company’s Corporation Tax office. This method may suit businesses with less intricate tax situations, but it may require additional processing time.
3. HMRC Online Services: HMRC provides online services that may enable you to make changes to your Company Tax Return. Eligibility for this service may vary, so it’s essential to verify your qualifications. Online services are a convenient choice for tech-savvy individuals who prefer a digital approach.

Determining Eligibility for HMRC Online Services

To assess your eligibility for utilizing HMRC’s online services, refer to recent tax forms or correspondence from HMRC. These documents usually contain information regarding the Corporation Tax office’s address and contact information. You can also reach out to the HMRC helpline to receive guidance on utilizing online services and clarify any uncertainties.

Penalties for Errors

Maintaining vigilance when amending your Company Tax Return is crucial since HMRC may impose penalties for errors. The severity of these penalties varies based on the error’s nature, whether it was an inadvertent mistake or an intentional attempt to evade taxes. To steer clear of penalties, ensure that any amendments you make are accurate and supported by valid documentation.

Conclusion

In conclusion, amending your Company Tax Return is a necessary, sometimes unavoidable, process. Whether triggered by shifts in your financial situation or corrections of prior errors, the key to successful amendments lies in adhering to the 12-month deadline, selecting the most suitable method, and ensuring accuracy to prevent penalties.

Commercial software, paper returns, and HMRC’s online services are all viable options, contingent on your specific circumstances and preferences. Keep in mind to verify your eligibility for online services and seek guidance if required.

In the intricate realm of tax compliance, staying well-informed and adhering to the correct procedures is paramount. By comprehending the process of amending your Company Tax Return and the potential consequences of errors, you can guarantee that your business maintains compliance and avoids unnecessary penalties with ease.

Introduction

If you’re a budding entrepreneur or a small business owner, navigating the intricacies of Value Added Tax (VAT) can be a daunting task. One of the common questions that arise is whether you have to pay VAT on your first £85,000 of revenue. Let’s delve into the details to demystify this aspect of VAT.

The VAT Threshold

In the United Kingdom, businesses are required to register for VAT once their taxable turnover exceeds a certain threshold. As of my last knowledge update in September 2021, this threshold stands at £85,000. This means that if your business’s taxable turnover surpasses £85,000 over a 12-month period, you are obligated to register for VAT with HM Revenue and Customs (HMRC).

Voluntary Registration

It’s important to note that you can voluntarily register for VAT even if your turnover is below the threshold. Why would you do this? Well, voluntary registration allows you to reclaim VAT on your business expenses. This can be advantageous, especially if your clients or customers are VAT-registered businesses.

Benefits of VAT Registration

While the idea of dealing with VAT may seem like added complexity, there are potential benefits to registration, even if you’re not required to do so:

Credibility and Professionalism

Being VAT-registered can enhance the credibility and professionalism of your business. Many larger businesses prefer to work with suppliers who are VAT-registered, viewing it as a sign of stability and legitimacy.

Reclaiming VAT

Once registered, you can reclaim VAT on eligible business expenses. This includes goods and services purchased for your business, such as office supplies, equipment, and professional services.

Global Trade

If you plan to engage in international trade, being VAT-registered can simplify transactions, especially within the European Union (EU). It may also be a requirement for trading with certain countries.

The Process of VAT Registration

If your turnover exceeds the VAT threshold, or if you choose to register voluntarily, you can initiate the process with HMRC. This typically involves completing an online application and providing details about your business.

Conclusion

In summary, you do not need to pay VAT on your first £85,000 of taxable turnover. VAT registration becomes mandatory only if your turnover exceeds this threshold. However, even if you’re below the threshold, it’s wise to monitor your business’s growth and assess the benefits of voluntary registration, especially if you wish to reclaim VAT on business expenses or enhance your business’s credibility.

Remember, tax regulations can evolve, so staying informed and seeking professional advice is key to ensuring compliance with the latest requirements.

Capitals gains tax payable on probate value of the estate and the increase

Capital Gains Tax (CGT) is a subject that often leaves property owners and heirs scratching their heads. Understanding the intricacies of when and how CGT applies to property that has appreciated in value since probate can be a challenging task. In this blog post, we will unravel the mystery and shed light on when CGT is payable on property in the UK that has seen an increase in value since the probate valuation.

Probate Valuation: The Starting Point

Probate valuation serves as the foundation for determining CGT liability when property is inherited. It’s the estimated market value of a deceased person’s assets, including property, at the time of their passing. This value is crucial because it sets the baseline against which any future gains are measured.

CGT and Property: The Basics

CGT is a tax levied on the profit made when you sell or dispose of an asset that has increased in value since you acquired it. When it comes to property, CGT becomes a relevant concern in two primary scenarios:

1. Selling an Inherited Property: If you inherit property and decide to sell it, CGT may apply. The amount of CGT is calculated based on the difference between the probate value (the baseline) and the eventual sale price.
2. Transferring the Property During Your Lifetime: If you inherit a property but decide not to sell it immediately and instead choose to transfer ownership, CGT can still be triggered when you eventually sell the property. The CGT liability is determined by the property’s value at the time of transfer and the value at the time of the actual sale.

When is CGT Not Payable on Inherited Property?

It’s important to note that not all inherited properties will incur CGT. There are certain exemptions and reliefs that can shield you from this tax:

1. Principal Private Residence Relief: If you live in the inherited property as your primary residence, you may be eligible for Principal Private Residence Relief, which can exempt you from paying CGT.
2. Annual Exemption: Everyone in the UK has an annual tax-free allowance for CGT. This allowance was £6000 for 2023-2024. This means that if your total gains, including the property, do not exceed this threshold, you won’t be liable for CGT.
3. Letting Relief: If you have lived in the property at some point during your ownership and have let it out, you may qualify for Letting Relief, reducing the CGT liability..

Calculating CGT on Inherited Property

To calculate CGT on property that has appreciated in value since the probate valuation, you’ll need to follow these steps:

1. Determine the property’s current market value at the time of sale or disposal.
2. Subtract the probate value from the current market value. This is your capital gain.
3. Deduct any allowable expenses, such as improvement costs or legal fees related to the sale.
4. Calculate the tax based on your income tax band. As of September 2023, the rates were 10% for basic rate taxpayers and 20% for higher rate taxpayers.
5. Apply any available reliefs or exemptions to reduce your CGT liability.

Conclusion

Capital Gains Tax can be a complex topic, especially when it comes to inherited property. Understanding when CGT is payable on property that has increased in value since probate is essential for ensuring that you meet your tax obligations and can make informed decisions about your property assets. Always consult with a tax professional or accountant for the most up-to-date information and personalized guidance based on your specific circumstances.

Introduction

Welcome to the world of VAT (Value Added Tax), a crucial aspect of doing business in the United Kingdom. Whether you’re a budding entrepreneur or a seasoned business owner, understanding the ins and outs of VAT is essential. In this guide, we’ll walk you through the process of filing your first VAT return in the UK, making it a seamless experience.

Understanding VAT

VAT is a consumption tax that is added to the price of goods and services. In the UK, businesses are required to register for VAT once their taxable turnover exceeds a certain threshold. This threshold is currently £85,000, but it’s important to check for any updates as thresholds can change.

Registering for VAT

Before diving into the VAT return process, you need to ensure that your business is registered for VAT. You can do this online through the HM Revenue & Customs (HMRC) website. The registration process involves providing key details about your business, such as its turnover, trading name, and contact information.

Choosing the Right VAT Scheme

Once registered, you’ll need to choose a VAT scheme that suits your business. The most common scheme is the Standard VAT Accounting, where you file VAT returns quarterly. However, there are alternative schemes, such as the Flat Rate Scheme and Cash Accounting Scheme, each with its own advantages. It’s crucial to understand the implications of each scheme and select the one that aligns with your business model.

Maintaining Accurate Records

Keeping meticulous records is the backbone of successful VAT return filing. Ensure that you maintain detailed records of all your sales and purchases, separating them into standard-rated, reduced-rated, zero-rated, and exempt categories. This level of organization will not only simplify the filing process but also help you identify potential areas for cost-saving.

Calculating VAT

When it comes to filing your VAT return, accurate calculations are non-negotiable. Calculate the VAT you owe by deducting the VAT you’ve paid on your purchases from the VAT you’ve collected on your sales. HMRC provides guidelines on how to perform these calculations, and there are also accounting software options available to automate this process.

Filing Your VAT Return

The actual filing of your VAT return can be done online through the HMRC website. Ensure that you submit your return and any payments due before the deadline to avoid penalties. Late filings can result in financial penalties, so it’s crucial to stay on top of your deadlines.

Seek Professional Advice

If the process seems overwhelming, don’t hesitate to seek professional advice. Accountants and tax advisors can provide valuable insights, ensuring that you’re not only compliant with VAT regulations but also optimizing your tax position.

Common Mistakes to Avoid

Filing your first VAT return can be a learning experience. Be aware of common mistakes, such as miscalculations, late filings, and incorrect data entry. Regularly review your processes and seek feedback to continuously improve your VAT management.

Conclusion

Filing your first VAT return in the UK may seem daunting, but with the right knowledge and preparation, it becomes a manageable task. Stay informed about VAT regulations, maintain accurate records, and consider professional advice when needed. By doing so, you’ll not only navigate the complexities of VAT but also contribute to the financial health and success of your business. Happy filing!

How do I do my first VAT return?

1. Registration: Ensure that your business is registered for VAT. You can do this online through the HMRC website.
2. VAT Scheme Selection: Choose the most suitable VAT scheme for your business, such as Standard VAT Accounting, Flat Rate Scheme, or Cash Accounting Scheme.
3. Record-Keeping: Maintain accurate and detailed records of all your sales and purchases, categorizing them into standard-rated, reduced-rated, zero-rated, and exempt.
4. Calculation: Calculate the VAT you owe by deducting the VAT you’ve paid on purchases from the VAT you’ve collected on sales.
5. Filing Online: Use the HMRC website to file your VAT return online. Ensure that you submit your return and any payments before the deadline to avoid penalties.
6. Professional Advice: If needed, seek advice from accountants or tax advisors to ensure compliance and optimize your tax position.
7. Avoid Common Mistakes: Be cautious of common mistakes, such as miscalculations, late filings, and incorrect data entry. Regularly review your processes to improve accuracy.

Can I file my VAT return myself?

Absolutely, filing your VAT return yourself is entirely feasible, and many business owners choose to do so.

How long does a first VAT return take?

The time it takes to complete your first VAT return can vary based on factors such as the complexity of your business transactions, record-keeping practices, and familiarity with the process.

Can I submit a VAT return without an accountant?

While many businesses manage their VAT returns independently, if you find certain aspects challenging or want to ensure optimal tax efficiency, seeking professional advice from an accountant is always an option. However, it’s entirely feasible to handle the process on your own with careful attention to detail and staying informed about VAT requirements.

Introduction

As the financial year draws to a close, businesses find themselves amidst the annual ritual of filing their accounts with Companies House. However, unexpected challenges can sometimes impede this process, making it crucial for businesses to understand the protocol for requesting an extension. In this guide, we’ll explore the importance of timely annual accounts filing, common obstacles faced by businesses, and the step-by-step process of requesting an extension from Companies House.

Why Timely Annual Accounts Filing Matters

Timely submission of annual accounts is not just a regulatory requirement; it plays a pivotal role in maintaining transparency and accountability. Late filings can attract penalties and adversely impact a company’s credit score. Additionally, it may erode the trust of stakeholders, including investors, suppliers, and customers. Therefore, it’s imperative for businesses to plan well in advance and ensure that they meet the annual accounts filing deadline.

Common Challenges Faced by Businesses

Despite meticulous planning, unforeseen circumstances can sometimes disrupt a company’s ability to file its accounts on time. These challenges may include:

1. Internal Delays: Sometimes, internal factors such as changes in accounting personnel, unexpected workloads, or technical glitches can lead to delays in the preparation of financial statements.
2. External Factors: Economic uncertainties, changes in regulatory requirements, or global events (as we’ve witnessed recently) can create unexpected challenges that impact a company’s ability to compile and submit its accounts promptly.
3. Complex Financial Structures: Companies with intricate financial structures or those undergoing restructuring may find it particularly challenging to prepare and finalize their accounts within the stipulated time frame.

Requesting an Extension from Companies House

Fortunately, Companies House understands that businesses may encounter genuine obstacles that hinder timely filing. Consequently, they have established a process for requesting an extension. Here’s a step-by-step guide:

1. Understand Your Eligibility: Before initiating the extension request, ensure that your company meets the eligibility criteria. Typically, smaller companies are granted more leniency than larger ones. However, each case is assessed individually, so it’s essential to communicate the specific challenges your business is facing.
2. Gather Supporting Documentation: Compile a comprehensive set of documents that substantiate your request for an extension. This may include evidence of internal or external challenges, correspondence with stakeholders, or any other relevant information that demonstrates the legitimacy of your request.
3. Access the Companies House Online Service: Log in to the Companies House online service using your company’s credentials. Navigate to the section for filing annual accounts and locate the option for requesting an extension.
4. Complete the Extension Request Form: Companies House provides a designated form for extension requests. Fill out the form with accurate and detailed information. Clearly articulate the reasons for the extension and attach the supporting documentation.
5. Submit the Request: Once the form is complete, submit it through the online portal. Companies House will review your request, taking into account the provided information and the circumstances surrounding your business.
6. Monitor Communication Channels: Keep a close eye on your communication channels, including emails and the online portal. Companies House may request additional information or clarification during the review process. Timely responses will expedite the assessment.
7. Receive Confirmation: Once the review is complete, Companies House will communicate their decision. If your extension request is approved, you’ll be granted additional time to file your annual accounts without incurring penalties.

Conclusion

While meeting the annual accounts filing deadline is crucial for regulatory compliance, unforeseen challenges can create roadblocks. Companies House recognizes the complexities businesses face and offers a structured process for requesting extensions. By understanding the importance of timely filing, being aware of common challenges, and following the step-by-step guide for extension requests, businesses can navigate this process effectively and maintain their financial integrity. Remember, transparency and open communication are key when seeking an extension—Companies House is there to support businesses facing genuine difficulties.

VAT Return Calculation in the UK: Understanding Standard and Exempt Input VAT

Introduction

When it comes to VAT (Value Added Tax) in the UK, businesses need to navigate the complexities of calculating input VAT, which is the VAT paid on goods and services purchased for your business. In this blog post, we’ll demystify the process of calculating input VAT for both standard-rated and exempt supplies, ensuring you have a clear understanding of how it impacts your VAT return.

What is Input VAT?

Input VAT refers to the VAT paid by a business on its purchases. This VAT can usually be reclaimed, subject to certain rules, and is essential for managing your cash flow and ensuring you don’t pay more VAT than necessary.

Standard-Rated Supplies

Standard-rated supplies are goods and services that are subject to the standard rate of VAT in the UK, which is currently 20%. When you make purchases related to standard-rated supplies, you can usually reclaim the input VAT in full on your VAT return.

For example, if you purchase goods or services for £1,000 + £200 VAT, you can claim the entire £200 as input VAT, effectively reducing your overall VAT liability.

Exempt Supplies

Exempt supplies are goods and services that are not subject to VAT. Unlike standard-rated supplies, you cannot reclaim the input VAT paid on purchases related to exempt supplies.

For example, if you operate a business in the financial or healthcare sector and incur VAT on expenses related to these services, you cannot reclaim that input VAT on your VAT return.

Partial Exemption

In some cases, businesses may provide both standard-rated and exempt supplies. This situation is known as partial exemption. To calculate input VAT for partial exemption, you’ll need to apply a formula that considers both the standard-rated and exempt supplies.

The formula takes into account the proportion of standard-rated supplies to total supplies. You can then reclaim the input VAT that relates to your standard-rated activities.

Professional Advice

Calculating input VAT, especially when dealing with exempt and partially exempt supplies, can be intricate. It’s advisable to seek professional advice or use specialized accounting software to ensure accuracy and compliance with HMRC regulations.

Conclusion

Understanding how to calculate input VAT for standard-rated and exempt supplies is crucial for managing your business’s VAT liabilities. By reclaiming input VAT on eligible purchases, you can reduce your overall VAT payments, ultimately benefiting your bottom line.

Remember that input VAT calculations can become complex, especially in cases of partial exemption. Seeking professional guidance or using accounting software tailored to VAT calculations can help simplify the process and ensure compliance with HMRC rules.

Stay informed, keep accurate records, and make informed decisions to optimize your VAT return calculations and contribute to the financial success of your business.

VAT Return Due Date 2023 in the UK: Essential Information

Introduction

Understanding the VAT return due date in the UK is crucial for businesses of all sizes. Accurate VAT returns are not only essential for legal compliance but also for managing your finances effectively. In this blog post, we’ll delve into the VAT return due date for 2023 in the UK and provide you with the information you need to stay on top of your tax responsibilities.

What is VAT?

VAT, or Value Added Tax, is a consumption tax levied on the value added to goods and services at each stage of production or distribution. It is a significant source of revenue for the UK government and is administered by HM Revenue and Customs (HMRC).

VAT Return Overview

A VAT return is a form you submit to HMRC, typically on a quarterly basis, to report the VAT you’ve collected from customers and the VAT you’ve paid on business expenses. The difference between these two amounts is what you owe or what you’re entitled to claim as a refund.

VAT Return Due Date 2023

For the tax year 2023, the VAT return due date in the UK remains consistent with previous years. You are required to submit your VAT return and make any payment due by the following deadlines:

1. March 31, 2023, for the VAT period ending February 28, 2023
2. June 30, 2023, for the VAT period ending May 31, 2023
3. September 30, 2023, for the VAT period ending August 31, 2023
4. December 31, 2023, for the VAT period ending November 30, 2023

It’s essential to mark these dates in your calendar to ensure you meet your obligations and avoid any potential penalties.

Late Submission and Penalties

Failing to meet the VAT return due date can result in penalties and interest charges. HMRC takes compliance seriously, so it’s crucial to file your return on time. The penalty for late submission depends on how many times you’ve been late in the past 12 months, with increasing fines for repeat offenses.

How to Submit Your VAT Return

Submitting your VAT return in the UK is relatively straightforward. You can use HMRC’s online services, such as the Making Tax Digital (MTD) platform, or software that is compatible with MTD. Make sure to keep accurate records of your VAT transactions throughout the VAT period to ensure a smooth submission process.

Conclusion

Understanding the VAT return due date for 2023 in the UK is vital for businesses to maintain financial stability and comply with tax regulations. Remember the key dates: March 31, June 30, September 30, and December 31, and ensure that you submit your VAT return on time to avoid penalties. Staying organized and using digital tools can help simplify the process and keep your business on the right side of the tax authorities.

Stay tuned for more updates and insights on financial matters to help you navigate the complexities of running a successful business in the UK.

Introduction

In recent years, buying property through a limited company has become an increasingly popular choice for investors in the UK. This trend has been driven by various factors, including changes in tax regulations and the desire for greater financial protection. In this blog post, we will explore the benefits of purchasing property through a limited company in the UK and why it may be a smart move for investors.

Tax Efficiency

One of the most significant advantages of buying property through a limited company is the potential for tax savings. Prior to the changes in tax regulations, many investors purchased properties individually, leading to higher taxes on rental income and capital gains. However, by using a limited company structure, investors can take advantage of various tax benefits.

Firstly, limited companies are subject to corporation tax, which is often lower than the personal income tax rates that individuals pay. Additionally, mortgage interest payments are typically fully deductible as a business expense when property is held in a limited company, reducing the overall tax liability. This can result in substantial savings for investors, particularly those with multiple properties.

Asset Protection

Another advantage of purchasing property through a limited company is the increased level of asset protection it provides. When a property is owned by a company, it is considered a separate legal entity. This separation means that the property’s value and assets are distinct from the personal assets of the company’s shareholders.

In the event of financial difficulties or legal disputes, your personal assets remain protected. This can be crucial for investors who want to safeguard their personal wealth while growing their property portfolio.

Estate Planning

Limited companies also offer advantages when it comes to estate planning. In the event of the owner’s passing, shares in the company can be transferred to heirs more easily than transferring individual properties. This can simplify the inheritance process and potentially reduce inheritance tax liabilities.

Additionally, by structuring your property investments within a limited company, you have more control over how your assets are distributed among your heirs, ensuring that your wishes are carried out.

Greater Financing Options

Financing property acquisitions can be easier when using a limited company structure. Lenders often view property held by a company as less risky, which can lead to more favorable financing terms, including lower interest rates and higher loan-to-value ratios.

Moreover, limited companies can also provide greater flexibility in securing financing, as they can raise capital by issuing shares or taking on investors. This can be especially beneficial for those looking to expand their property portfolio or undertake larger projects.

Privacy and Anonymity

Another advantage of purchasing property through a limited company is the potential for increased privacy and anonymity. When a property is held in an individual’s name, the ownership information is publicly accessible in the Land Registry. However, limited companies can offer a layer of confidentiality, as the company’s name is listed as the owner instead of individual shareholders.

This can be particularly appealing to investors who value their privacy and want to keep their property ownership details more discreet.

Flexibility and Scalability

Limited companies provide flexibility and scalability in managing property investments. Investors can easily transfer or sell shares in the company to other investors or family members, making it simpler to adjust ownership structures and distribute assets as needed.

Additionally, if you plan to grow your property portfolio over time, a limited company structure can facilitate the acquisition and management of multiple properties within a single entity, streamlining administrative processes and reducing paperwork.

Conclusion

Buying property through a limited company in the UK offers numerous benefits, including tax efficiency, asset protection, estate planning advantages, improved financing options, privacy, and flexibility. However, it’s important to note that this approach may not be suitable for everyone, and individual circumstances should be carefully considered.

Before making any decisions, it’s advisable to consult with financial and legal professionals who specialize in property and company law to determine the best approach for your specific investment goals and financial situation. While there are significant advantages to using a limited company structure, it’s essential to make informed choices that align with your long-term objectives as a property investor.

Rent a Room in Your Home: Tax Considerations and HMRC Requirements

Renting out a room in your home can be a great way to earn some extra income and make use of available space. Whether you’re a homeowner or a tenant, taking advantage of the UK government’s Rent a Room Scheme can make this process smoother. However, it’s essential to understand the tax implications and requirements when renting out a room in your home and submitting a tax return to Her Majesty’s Revenue and Customs (HMRC).

The Rent a Room Scheme Explained

The Rent a Room Scheme is a tax relief provided by HMRC to individuals who rent out a furnished room or part of their home. This scheme allows you to earn up to a certain threshold of tax-free rental income each year without having to report it on your tax return. As of my last knowledge update in September 2021, the threshold was £7,500 per year. It’s important to check the current threshold with HMRC, as it may have changed since then.

Here’s what you need to know about the Rent a Room Scheme:

1. Eligibility:

• To qualify for the Rent a Room Scheme, the room you’re renting out must be part of your main residence, where you live most of the time.
• If you’re a tenant, you should check with your landlord to ensure you have permission to sublet a room.

2. Income Limit:

• The income limit, as mentioned earlier, is the maximum amount you can earn from renting out your room tax-free.
• If your rental income exceeds this threshold, you will need to declare it on your tax return.

3. Reporting to HMRC:

• If your rental income is below the threshold, you don’t need to report it to HMRC. The income remains tax-free.
• If your rental income exceeds the threshold, you must report it on your Self Assessment tax return.

4. Expenses and Deductions:

• Under the Rent a Room Scheme, you can’t deduct any expenses related to the room you’re renting out from your rental income.
• However, if you have expenses that apply to the whole house (e.g., mortgage interest, council tax), you may be able to claim a proportion of these as expenses.

5. Other Tax Implications:

• While the Rent a Room Scheme can be advantageous, it may impact your eligibility for other tax benefits, such as Capital Gains Tax (CGT) relief on the sale of your home.
• It’s essential to consult with a tax professional to fully understand the implications for your specific situation.

Submitting a Tax Return with HMRC

If your rental income exceeds the Rent a Room Scheme threshold or you have other sources of taxable income, you’ll need to submit a Self Assessment tax return to HMRC. Here’s what the process generally involves:

1. Register for Self Assessment:

• If you’re not already registered for Self Assessment, you’ll need to do so by October 5th following the tax year in which your income exceeded the threshold.

2. Gather Documents and Information:

• Collect all relevant documents, including records of your rental income and any allowable expenses.

3. Complete the Tax Return:

• Use the HMRC Self Assessment system to fill in your tax return. You’ll need to report your rental income, any other sources of income, and claim any applicable deductions or allowances.

4. Pay Any Tax Due:

• If you owe tax on your rental income, you’ll need to make the payment by the deadline (usually January 31st following the end of the tax year).

5. Keep Records:

• It’s crucial to maintain accurate records of your rental income and expenses, as HMRC may request evidence of these during an audit.

Conclusion

Renting out a room in your home can be a beneficial source of additional income. Understanding the rules and requirements of the Rent a Room Scheme and HMRC’s Self Assessment process is vital to ensure compliance with tax regulations. Consulting with a tax advisor or accountant can provide valuable guidance specific to your situation, helping you make the most of this opportunity while staying on the right side of the tax laws. Always remember to stay updated with the latest HMRC guidelines and tax thresholds to ensure you remain in compliance with current regulations.

Introduction

In the dynamic landscape of business, it’s not uncommon for companies to face challenges that may lead to dissolution or striking off from the Companies House register. When this happens, the path to recovery can seem arduous. However, there’s a beacon of hope in the form of company restoration services specialists like GM Professional Accountants. In this blog post, we’ll delve into the world of company restoration services, highlighting the essential role played by GM Professional Accountants in helping businesses regain their legal status with Companies House.

The Crucial Need for Restoration Services

Companies House, the United Kingdom’s official registrar of companies, holds the authority to dissolve or strike off a company for various reasons. These reasons include non-compliance with statutory obligations, unresolved directorship disputes, or even ceasing business operations. When a company is struck off, it loses its legal existence, potentially leading to the loss of assets and business opportunities.

The demand for company restoration services arises when business owners realise the value of reviving their struck-off company rather than starting anew. This process can save valuable time, money, and resources.

GM Professional Accountants: Your Restoration Services Partner

GM Professional Accountants is a leading name in the field of company restoration services. With a team of experts specializing in company law and restoration processes, they are your trusted partner when it comes to navigating the intricate journey of reviving a struck-off company. Here’s how GM Professional Accountants can assist you:

a) Eligibility Assessment: The first step is a thorough assessment to determine if your company is eligible for restoration. Specialists at GM Professional Accountants analyse the reasons behind the dissolution and the duration since it occurred. They also assess the involvement of any assets.

b) Document Preparation: Restoration involves several crucial documents, including restoration applications, financial statements, and sometimes a statement of compliance. GM Professional Accountants help you meticulously prepare these documents, ensuring compliance with all legal requirements.

c) Liaison with Companies House: The team at GM Professional Accountants acts as intermediaries between you and Companies House. They expertly handle the submission of necessary paperwork, respond to inquiries, and facilitate a smooth restoration process.

Benefits of Engaging GM Professional Accountants

Hiring GM Professional Accountants for your company restoration needs offers numerous advantages:

a) Expertise: The team boasts an in-depth understanding of company law, guaranteeing that all legal requirements are met throughout the restoration process.

b) Time Efficiency: Restoration can be a lengthy process. GM Professional Accountants expedite it, allowing you to focus on core business activities.

c) Legal Compliance: Professionals ensure that all documentation is submitted accurately, minimizing the risk of rejection by Companies House.

d) Peace of Mind: Business owners can rest assured that experts are handling the restoration process, enhancing the chances of a successful outcome.

Costs Involved in Restoration

The cost of restoring a company can vary depending on the complexity of your case and the extent of assistance required. This typically includes Companies House fees, GM Professional Accountants’ fees, and any outstanding debts or liabilities. Many business owners find that restoration is a cost-effective option compared to starting a new company from scratch.

Conclusion

GM Professional Accountants stands as a beacon of hope for businesses facing dissolution or striking off from the Companies House register. Their expertise, deep knowledge of company law, and experience in handling restoration cases make them an invaluable asset for business owners navigating this challenging situation.

If your company has been struck off or you anticipate such a scenario, GM Professional Accountants is your go-to partner to explore restoration options and pave the way for a successful revival. With their guidance, you can resurrect your business and continue your entrepreneurial journey. Remember, when it comes to company restoration, GM Professional Accountants are your trusted allies in the path to recovery.

Introduction

Running a counselling or therapy business in the UK can be a fulfilling endeavor, but it also comes with various expenses. Fortunately, many of these expenses can be tax-deductible, helping you reduce your overall tax liability and increase your bottom line. In this blog post, we will explore some key tax-deductible expenses that counselling and therapist businesses in the UK can take advantage of, provided they are wholly and exclusively for business purposes.

Business Premises Costs

If you operate your counselling or therapy practice from a dedicated office or workspace, you can deduct a portion of your rent or mortgage interest, utilities, and maintenance costs, but only if they are solely for business purposes. Be sure to keep accurate records of these expenses, and if you work from home, you can also claim a proportionate amount of your household bills as business expenses, as long as they are exclusively related to your business activities.

Professional Development

To stay competitive and provide the best possible service to your clients, you likely invest in ongoing professional development. Expenses related to training courses, workshops, seminars, and memberships in professional associations are all tax-deductible, as long as they are wholly and exclusively for the betterment of your business.

Insurance Premiums

Professional liability insurance is essential for therapists and counsellors to protect against potential legal claims. The premiums you pay for such insurance are deductible expenses, as they are exclusively related to your business’s protection and security.

Marketing and Advertising

Promoting your counselling or therapy business is crucial for attracting clients. Expenses related to marketing and advertising, including website development, online advertising, and printing materials, are all tax-deductible if they are incurred solely for business purposes. Keep records of your advertising expenses to substantiate your claims.

Office Supplies and Equipment

Purchasing office supplies like stationery, office furniture, and computer equipment is often necessary to keep your practice running smoothly. These expenses can be deducted from your taxable income, provided they are exclusively for your business’s use and not for personal purposes.

Travel and Transportation

If you need to travel for work-related purposes, such as attending conferences or visiting clients, you can claim expenses for travel and transportation. This includes mileage, public transportation costs, and even hotel accommodations when necessary, but only if they are exclusively for business-related travel. Make sure to keep detailed records and receipts for these expenses.

Professional Fees

You might need to hire professionals, such as accountants, bookkeepers, or marketing consultants, to help manage and grow your business. The fees you pay to these experts are tax-deductible, and their assistance can ultimately save you money in the long run, as long as these fees are exclusively for business-related services.

Telephone and Internet Costs

As a therapist or counsellor, you likely rely heavily on your phone and internet connection to communicate with clients and manage your practice. You can deduct a portion of your telephone and internet bills as business expenses based on the percentage of their use for work-related purposes, provided they are exclusively for business use.

Software and Technology

Investing in software and technology tools to streamline your business operations is essential in today’s digital age. Expenses related to software licenses, appointment booking systems, and electronic health records systems are all eligible for tax deductions, as long as they are exclusively used for your business.

Health and Well-being Expenses

Since your profession revolves around promoting mental health and well-being, it’s important to remember that expenses related to your own well-being can also be deductible. This includes costs associated with maintaining your own mental health, such as therapy or counselling sessions, if they are exclusively for business-related reasons.

Legal and Accounting Fees

You may incur legal or accounting fees related to your business, such as tax preparation or advice on legal matters. These expenses can be deducted, helping you stay compliant with tax regulations while minimizing your tax liability, provided they are exclusively for your business’s benefit.

Conclusion

Running a counselling or therapy business in the UK comes with its fair share of expenses, but knowing which ones are tax-deductible can significantly benefit your bottom line. By keeping meticulous records and ensuring that all these expenses are wholly and exclusively for business purposes, you can reduce your tax liability and invest more in your business’s growth and your own professional development. Be sure to consult with a qualified accountant or tax professional to ensure that you are maximizing your tax deductions within the framework of UK tax laws and regulations.

Introduction

Filing a self-assessment tax return in the UK can be a daunting task, even for the most financially savvy individuals. The intricate nature of tax regulations and the fear of making mistakes often lead to errors that can have serious consequences. In this article, we will delve into the top five common errors people make in their self-assessment tax returns and provide guidance on how to avoid them.

Misreporting Income

One of the most prevalent errors in self-assessment tax returns is misreporting income. This can occur when taxpayers fail to accurately declare all sources of income, including freelance earnings, rental income, dividends, and interest. HM Revenue & Customs (HMRC) has access to various databases, making it easy for them to cross-reference the information provided in your tax return with the income reported by third parties. Failure to report all your income can lead to penalties and potential legal consequences.

How to avoid it: Maintain detailed records of all your income sources throughout the tax year. Use the information provided on forms like P60 and P11D as a reference to ensure accurate reporting.

Incorrect Expense Claims

Claiming excessive or inappropriate expenses is another common mistake. While it’s essential to claim legitimate business expenses to reduce your tax liability, some taxpayers exaggerate expenses or claim personal costs as business expenses. This can trigger HMRC‘s scrutiny and result in penalties.

How to avoid it: Familiarize yourself with the HMRC guidelines on deductible expenses. Keep organized records and receipts for all claimed expenses, ensuring they are directly related to your business activities.

Calculation Errors

Mathematical errors in calculations can lead to discrepancies in your tax return. These errors can be in the form of miscalculating income, deductions, or tax credits. Even a simple mistake can result in an incorrect tax liability, which might raise red flags during HMRC’s review.

How to avoid it: Use tax software or work with a qualified accountant to ensure accurate calculations. Double-check all your entries and calculations before submitting your tax return.

Missing Deadline or Incomplete Filing

Missing the self-assessment tax return deadline (31st January each year) is more common than you might think. Submitting your return late incurs an automatic penalty, which increases the longer you delay. Additionally, incomplete filings—leaving out important sections or failing to provide necessary documents—can lead to unnecessary complications.

How to avoid it: Mark the tax return deadline on your calendar and set reminders well in advance. Begin the process early to avoid a last-minute rush. If you’re having trouble completing your return, consider seeking professional help.

Inaccurate Classifications and Categories

Assigning the wrong classifications or categories to your income and expenses can confuse HMRC and potentially trigger audits. This includes misclassifying different types of income, such as mixing capital gains with regular income, or using incorrect tax codes.

How to avoid it: Educate yourself on the proper classification of various income sources and expenses. Use the guidance provided by HMRC or consult a tax professional if you’re unsure.

Conclusion

Filing a self-assessment tax return is a responsibility that requires attention to detail and a solid understanding of tax regulations. By avoiding these common errors—such as misreporting income, incorrect expense claims, calculation mistakes, missing deadlines, and inaccurate classifications—you can significantly reduce the risk of penalties, audits, and unnecessary stress.

While it’s possible to prepare your self-assessment tax return independently, seeking guidance from a qualified accountant or using reputable tax software can provide an added layer of confidence in the accuracy of your return. Remember, a well-prepared and error-free tax return not only ensures compliance with HMRC but also helps you make the most of available deductions and credits, ultimately minimizing your tax liability.

Introduction

In the bustling landscape of the United Kingdom’s counselling industry, staying on top of important deadlines is crucial for the smooth operation and success of your counselling business. From legal obligations to financial responsibilities, understanding and meeting these deadlines is not just a matter of compliance but can also impact the reputation and growth of your practice. In this blog post, we will delve into the key UK company deadlines that a counselling business must navigate to ensure its continued success.

Company Registration Deadline

The first milestone in establishing your counselling business in the UK is its registration. The Companies House is the authority responsible for overseeing company registrations. You must register your business within 30 days of starting operations. This deadline is essential as it formalizes your business structure and provides it with legal recognition. Failing to meet this deadline could result in fines and complications in the future.

Annual Accounts and Tax Returns

Financial transparency is a critical aspect of running any business. For your counselling business, submitting annual accounts and tax returns to HM Revenue & Customs (HMRC) is a non-negotiable requirement. The deadline for filing these documents is usually nine months after the end of your company’s financial year. Accurate and timely submission not only ensures compliance but also helps you keep track of your business’s financial health.

VAT Returns

If your counselling business’s turnover exceeds the VAT threshold (which can change annually), you need to register for Value Added Tax (VAT). This entails submitting regular VAT returns, typically on a quarterly basis. Meeting these deadlines is essential to avoid penalties and maintain a positive relationship with HMRC.

Employment and Payroll Deadlines

If you have employees working in your counselling practice, you have responsibilities related to their pay, taxes, and National Insurance contributions. Regular payroll submissions and payments must be made on time to avoid legal and financial repercussions. Stay informed about changes in tax codes and employee contribution rates to ensure accuracy.

Annual Confirmation Statement

The annual confirmation statement is a snapshot of your company’s information that must be submitted to Companies House. This document ensures that the information held about your company is accurate and up to date. You must file this statement within 14 days of the anniversary of your company’s registration. It’s an opportunity to review and amend details such as company addresses, directors, and shareholders.

CPD and Professional Memberships

As a counselling professional, Continuing Professional Development (CPD) is vital for maintaining and enhancing your skills. Various counselling associations in the UK require you to fulfill CPD requirements within specific timeframes. Meeting these deadlines not only helps you stay updated with the latest industry trends but also demonstrates your commitment to offering the best care to your clients.

Conclusion

In the dynamic world of the UK counselling industry, meeting deadlines is a fundamental aspect of running a successful business. From company registration to financial obligations and professional development, staying on top of these deadlines ensures legal compliance, financial stability, and a positive reputation. By integrating efficient systems and staying informed about regulatory changes, your counselling business can thrive in the ever-evolving landscape of the UK’s counselling sector. Remember, these deadlines are not just obligations; they are opportunities to demonstrate your professionalism and dedication to your clients and your practice.

Introduction:

For psychodynamic therapists in the UK, managing finances and maximizing tax deductions is essential for maintaining a successful practice. Understanding which expenses can be claimed as tax deductions can significantly impact your bottom line. In this guide, we’ll delve into the tax deductible expenses that psychodynamic therapists can take advantage of in the UK, ensuring they are wholly and exclusively for business purposes, helping you optimize your financial strategy while staying compliant with tax regulations.

Professional Development Costs:

Psychodynamic therapists often invest in continuous professional development (CPD) to enhance their skills and stay up-to-date with the latest industry trends. CPD-related expenses such as workshop fees, training courses, conferences, and study materials are typically tax deductible, provided they are wholly and exclusively for business purposes. Keeping accurate records of these expenses is crucial for claiming deductions.

Therapeutic Tools and Resources:

The tools and resources therapists use to provide effective treatment are also eligible for tax deductions if they are wholly and exclusively for business purposes. This includes the cost of therapy books, assessment tools, software for session management, and any other resources directly related to your therapeutic practice.

Business Premises Costs:

If you operate your practice from a dedicated business premises, you can claim tax deductions for associated costs, as long as they are wholly and exclusively for business purposes. This includes rent, utility bills, property insurance, and maintenance expenses. Keep in mind that if you work from home, you may also be able to claim a portion of your household expenses, such as rent, mortgage interest, and utility bills, proportional to the space used for your practice.

Office Supplies and Equipment:

The expenses incurred for purchasing office supplies like stationery, printer ink, and furniture, as well as essential equipment like computers and communication devices, are tax deductible if they are wholly and exclusively for business purposes. Keep records of these expenses and their receipts to support your claims.

Marketing and Advertising Costs:

Promoting your psychodynamic therapy practice often involves marketing and advertising efforts. Expenses related to creating and distributing promotional materials, maintaining a website, and running online advertising campaigns can be claimed as deductions, provided they are wholly and exclusively for business purposes.

Professional Memberships and Subscriptions:

Membership fees for professional organizations, such as the British Association for Counselling and Psychotherapy (BACP), are typically deductible if the membership is wholly and exclusively for business purposes. These memberships offer opportunities for networking, staying informed about industry updates, and accessing valuable resources.

Insurance Premiums:

Professional indemnity insurance is essential for therapists to protect against potential legal claims. The premiums you pay for this type of insurance can be claimed as tax deductions, provided the insurance coverage is wholly and exclusively for business purposes. This helps you manage your risk while also reducing your tax liability.

Travel Expenses:

If you need to travel for work-related purposes, such as attending conferences or visiting clients, you can claim travel expenses as tax deductions if the travel is wholly and exclusively for business purposes. This includes transportation costs (e.g., train fares, mileage for your car), accommodation, and meals. Make sure to keep detailed records, including receipts, to substantiate your claims.

Telephone and Internet Costs:

Therapists often rely on telephone and internet services to communicate with clients, manage appointments, and stay connected with colleagues. A portion of your phone and internet bills can be claimed as tax deductions, considering the business use portion, as long as they are wholly and exclusively for business purposes.

Supervision Fees:

Supervision is an integral part of maintaining the quality of therapeutic services. The fees you pay for supervision sessions with qualified supervisors are generally tax deductible if the supervision is wholly and exclusively for business purposes. These sessions help ensure your professional growth and provide a safe space to discuss complex cases.

Conclusion:

Maximizing tax deductions is a smart financial practice for psychodynamic therapists in the UK. By understanding the various expenses that can be claimed as deductions and ensuring they are wholly and exclusively for business purposes, therapists can optimize their financial strategies, reduce their tax liability, and reinvest in their practices. Remember to keep accurate records, including receipts and invoices, to support your claims and maintain compliance with tax regulations. Consulting a tax professional with expertise in the healthcare industry can provide further guidance tailored to your specific circumstances. With careful planning and a thorough understanding of tax regulations, psychodynamic therapists can build a stronger financial foundation for their practices.

Introduction

Are you a physiotherapist looking to establish your practice? One of the first decisions you’ll need to make is choosing the right business structure. This choice can impact your taxes, liability, and overall financial management. In this guide, we’ll break down the key differences between two common options: operating as a sole trader or forming a limited company. Let’s dive in and explore which option might be best for your physiotherapy practice.

Sole Trader:

Definition: A sole trader is a self-employed individual who operates their business as an individual entity. This is the simplest form of business structure.

Pros:

1. Ease of Setup: Setting up as a sole trader is relatively straightforward and requires minimal paperwork. This can be particularly advantageous if you’re just starting out and want to focus on building your practice.
2. Control: As a sole trader, you have complete control over your practice’s decisions, operations, and direction. This flexibility can be valuable for physiotherapists who prefer a hands-on approach.
3. Direct Taxation: Sole traders pay income tax and National Insurance Contributions (NICs) on their profits. This can simplify your tax responsibilities compared to other business structures.
4. No Annual Accounts Filing: Unlike limited companies, sole traders are not required to file annual accounts with Companies House, reducing administrative burdens.

Cons:

1. Personal Liability: As a sole trader, you’re personally liable for any debts or liabilities incurred by your practice. This means your personal assets could be at risk if the practice faces financial difficulties.
2. Limited Growth Potential: Operating as a sole trader might limit your ability to attract investment or take advantage of certain business opportunities.

Limited Company:

Definition: A limited company is a separate legal entity from its owners, providing limited liability protection and distinct tax advantages.

Pros:

1. Limited Liability: One of the most significant advantages of a limited company is that your personal assets are generally protected if the company faces financial problems or legal issues.
2. Tax Efficiency: Limited companies have the option to pay themselves through a combination of salary and dividends, potentially resulting in lower overall tax liabilities compared to sole traders.
3. Professional Image: A limited company structure can convey a more professional image, which might be appealing to clients, partners, and investors.
4. Access to Investment: If you’re looking to expand your practice and need funding, having a limited company structure can make it easier to attract investment.
5. Pension Contributions: Limited companies can contribute to pension schemes for directors and employees, offering tax advantages and aiding in retirement planning.

Cons:

1. Complexity: Operating a limited company involves more administrative work, including filing annual accounts with Companies House, adhering to legal requirements, and potentially hiring an accountant.
2. Higher Initial Costs: The setup and maintenance of a limited company can be costlier than being a sole trader due to registration fees and ongoing administrative expenses.
3. Less Privacy: Certain information, such as company accounts and details of directors, is publicly available on the Companies House register.

Choosing the Right Structure:

The decision between operating as a sole trader or forming a limited company depends on your individual circumstances, growth aspirations, and risk tolerance. Physiotherapists who are just starting out and prefer simplicity might find sole trader status appealing. On the other hand, those seeking growth, protection, and potential tax advantages might lean towards a limited company.

Conclusion:

As a physiotherapist embarking on your own practice, the choice between being a sole trader or forming a limited company is a significant one. Consider factors such as liability protection, tax implications, administrative demands, and your long-term goals. Seeking professional advice from accountants or business advisors can help you make an informed decision that aligns with your unique needs and aspirations. Remember, your choice of business structure can have a lasting impact on the success and growth of your practice.

Introduction

Mental healthcare service companies play a crucial role in supporting mental well-being and providing essential care to individuals facing various mental health challenges. To ensure these companies maintain financial stability and offer optimal services, it’s essential to understand allowable expenses that are incurred wholly and exclusively for business purposes. In this blog post, we’ll delve into the concept of allowable expenses for mental healthcare service companies, exploring various categories while emphasizing the importance of meeting the “wholly and exclusively” criterion.

Personnel Costs

Among the significant portions of allowable expenses are personnel costs, which include salaries, wages, and benefits for mental health professionals and administrative staff. It’s crucial to ensure that these expenses are exclusively related to business operations and directly involved in providing mental health services.

Training and Professional Development

Investing in continuous training and professional development for mental health staff is a crucial aspect of delivering high-quality care. Expenses for workshops, courses, certifications, and seminars are allowable if they exclusively enhance the skills and knowledge of staff members for business purposes.

Rent and Utilities

Allowable expenses also encompass the costs associated with office space, whether owned or leased. This includes rent, property taxes, and utility bills like electricity, water, and internet services. These expenses must be wholly and exclusively incurred to maintain a conducive environment for mental health services.

Supplies and Equipment

Necessary supplies and equipment are vital for the seamless functioning of mental healthcare service companies. Expenses for office supplies, therapy tools, assessment materials, and computer equipment are allowable if they are solely dedicated to business activities.

Marketing and Advertising

Effective promotion of mental healthcare services is essential for growth. Allowable expenses in this category include marketing materials, website development, social media advertising, and other promotional activities. It’s important to ensure that these expenses are entirely and exclusively directed towards expanding the company’s reach.

Insurance Premiums

Professional liability insurance provides crucial protection for mental healthcare service companies. Allowable expenses encompass insurance premiums, which should be wholly and exclusively related to safeguarding the company against legal claims arising from service provision.

Telehealth Services

Telehealth has revolutionized mental healthcare delivery. Expenses related to telehealth infrastructure, software, and technological upgrades are allowable if they are entirely and exclusively meant for facilitating remote consultations and therapy sessions.

Administrative and Software Costs

Investing in administrative tools and software enhances operational efficiency. Allowable expenses include costs for electronic health records (EHR) systems, appointment scheduling software, billing tools, and administrative platforms. These expenses must be wholly and exclusively incurred to streamline business processes.

Conclusion

Understanding allowable expenses is a cornerstone for the financial health and growth of mental healthcare service companies. To be eligible for deductions, these expenses must meet the “wholly and exclusively” criterion, meaning they are entirely and solely for business purposes. From personnel costs to administrative expenses, each category plays a pivotal role in delivering high-quality mental health services while maintaining a thriving business. By ensuring that allowable expenses adhere to the “wholly and exclusively” principle, mental healthcare service companies can continue making a positive impact on individuals’ mental well-being while maintaining strong financial foundations.

Introduction

As a psychotherapist, your primary focus is on helping individuals achieve mental and emotional well-being. However, managing the financial aspects of your private practice can be overwhelming and time-consuming. That’s where GM Professional Accountants step in to alleviate your accounting burden. With their expertise and tailored services, GM Professional Accountants can ensure your financial affairs are in order, allowing you to concentrate on what matters most – your clients’ mental health. In this blog, we’ll explore the various ways GM Professional Accountants can benefit psychotherapists, providing them with financial peace of mind.

Industry-Specific Expertise

GM Professional Accountants understand the unique financial challenges that psychotherapists face in their practice. Their team of specialised accountants has extensive experience in working with mental health professionals, making them well-versed in the intricacies of the industry. From handling billing procedures for insurance companies to navigating tax deductions specific to mental health services, GM Professional Accountants can efficiently manage your financial matters while staying compliant with relevant regulations.

Bookkeeping and Accounting

Proper bookkeeping and accounting are crucial for any business, including psychotherapy practices. GM Professional Accountants can handle all aspects of your financial records, including invoicing, expenses, and income tracking. By maintaining accurate and up-to-date books, they help you gain better insights into your practice’s financial health. This enables you to make informed decisions and plan for the future effectively.

Tax Planning and Preparation

Navigating the complex world of taxes can be daunting for psychotherapists. GM Professional Accountants specialise in tax planning and preparation, ensuring that you take advantage of all available deductions and credits. They stay current with tax laws and regulations, reducing the risk of costly errors or missed opportunities. By minimizing your tax liabilities, they help you retain more of your hard-earned income.

Financial Analysis and Reporting

GM Professional Accountants provide comprehensive financial analysis and reporting tailored to your psychotherapy practice. They generate regular financial statements, helping you understand your revenue streams and expenses better. With these insights, you can identify areas of improvement, allocate resources efficiently, and set achievable financial goals.

Business Growth and Expansion

As your psychotherapy practice grows, so do your financial needs. GM Professional Accountants can assist in evaluating the financial implications of expanding your practice, hiring additional staff, or opening new locations. Their expert guidance ensures that your growth is financially sustainable and helps you build a strong foundation for a successful future.

Conclusion

In conclusion, GM Professional Accountants offer indispensable services to psychotherapists, easing the burden of financial management. With their industry-specific expertise, reliable bookkeeping, tax planning, and financial analysis, you can focus on providing the best care to your clients while achieving financial peace of mind. Partnering with GM Professional Accountants can be a game-changer for your psychotherapy practice.

Introduction

When it comes to importing goods into the United Kingdom (UK), businesses need to navigate the complexities of the Value Added Tax (VAT) system. Two terms that often cause confusion are postponed import VAT and deferred import VAT. In this blog post, we will explore the differences between these two concepts and their impact on UK VAT returns. By understanding their unique characteristics and implications, businesses can make informed decisions and optimize their VAT processes.

Postponed Import VAT

Postponed Import VAT is a scheme introduced by the UK government after Brexit to simplify VAT procedures for businesses importing goods into the UK. Under this scheme, eligible businesses can postpone the payment of import VAT at the point of entry, providing them with greater flexibility and improved cash flow management.

To utilize the Postponed Import VAT scheme, businesses must be registered for VAT in the UK. They can then opt to use postponed VAT accounting, which allows them to account for import VAT on their VAT return rather than paying it upfront at the time of import. This means that instead of paying the import VAT immediately, businesses can defer the payment until the VAT return filing date, which is usually done on a quarterly basis.

By deferring the payment of import VAT, businesses can enhance their cash flow by avoiding the upfront financial burden of VAT at the time of import. This is particularly beneficial for businesses with high import volumes or those operating on tight budgets. However, it is important to note that postponed import VAT is only applicable to imports into the UK, both from European Union (EU) and non-EU countries.

Deferred Import VAT

Deferred Import VAT is another scheme available to businesses importing goods into the UK. It provides an extended deferral period for the payment of import VAT and customs duties, allowing businesses to manage their VAT obligations more effectively.

To qualify for the Deferred Import VAT scheme, businesses must apply to set up a deferred payment account with HM Revenue and Customs (HMRC). The application process involves demonstrating financial and compliance suitability, as well as meeting specific eligibility criteria. Once approved, businesses can defer the payment of import VAT and customs duties until a specified date, usually on a monthly basis.

Unlike postponed import VAT, which is applicable to all imports, deferred import VAT requires prior authorization from HMRC. This scheme offers businesses more control over their cash flow, as they can align the payment of import VAT and customs duties with their financial cycles. It is particularly useful for businesses that import goods regularly and want to streamline their VAT and customs processes.

Additionally, the deferred payment account provides businesses with a consolidated monthly statement that details all import VAT and customs duties due, simplifying the reconciliation and reporting processes. This helps businesses maintain accurate records and ensures compliance with VAT regulations.

Conclusion

In conclusion, postponed import VAT and deferred import VAT are two distinct schemes available to businesses importing goods into the UK. Postponed import VAT allows eligible businesses to defer the payment of import VAT until their regular VAT return filing date, providing improved cash flow management. On the other hand, deferred import VAT enables businesses to defer the payment of import VAT and customs duties until a specified date, usually on a monthly basis. By understanding these differences, businesses can choose the scheme that best suits their needs and optimize their VAT processes.

What is a deferred VAT?

Deferred VAT refers to a scheme where businesses are allowed to delay the payment of Value Added Tax (VAT) on goods or services until a specified later date. This scheme provides businesses with additional flexibility in managing their cash flow by deferring the VAT payment to a more convenient time. The deferred VAT is typically reported and paid on a later VAT return filing date. It is important to note that the eligibility and conditions for the deferred VAT scheme may vary depending on the country or tax jurisdiction.

Introduction

For businesses in the UK, adhering to VAT regulations is of paramount importance. To ensure compliance, Her Majesty’s Revenue and Customs (HMRC) has implemented a penalty point system for VAT. This system aims to deter and penalize businesses that fail to meet their VAT obligations. In this SEO-friendly blog, we will delve into the intricacies of the VAT penalty point system, exploring its purpose, how it works, and the consequences of non-compliance.

The Purpose of the VAT Penalty Point System

The VAT penalty point system serves as a deterrent and enforcement mechanism to encourage businesses to comply with their VAT obligations. It aims to ensure fairness in the taxation system and maintain a level playing field among businesses. By imposing penalties on non-compliant businesses, HMRC intends to encourage timely and accurate VAT reporting and discourage deliberate or persistent non-compliance.

How the VAT Penalty Point System Works

The VAT penalty point system operates on a cumulative basis. Under this system, each compliance failure results in the accumulation of penalty points. The number of points assigned depends on the severity of the failure. For instance, a late VAT return submission might result in a lower number of penalty points compared to deliberate tax evasion.

If a business reaches a specific threshold of penalty points within a specified timeframe, HMRC issues a penalty assessment. The threshold and timeframe depend on the business’s VAT registration status and turnover. Once a penalty assessment is issued, the business may be liable to pay a penalty, which is calculated based on the VAT liability involved and the number of penalty points accumulated.

Consequences of Non-Compliance

Non-compliance with VAT obligations can have serious consequences for businesses. The VAT penalty point system is designed to encourage compliance through escalating penalties. Accumulating penalty points can result in various consequences, including:

a) Financial Penalties: HMRC may impose financial penalties based on the number of penalty points accumulated and the VAT liability involved in the non-compliance. These penalties can be substantial and can significantly impact a business’s finances.

b) Increased Scrutiny: Non-compliant businesses are likely to face increased scrutiny from HMRC, leading to more frequent inspections, audits, and investigations. This can be time-consuming, stressful, and may result in further penalties or legal actions.

c) Reputational Damage: Non-compliance with VAT obligations can tarnish a business’s reputation, affecting relationships with customers, suppliers, and stakeholders. Negative publicity and loss of trust can have long-lasting consequences for a business’s growth and success.

Mitigating Penalties and Seeking Assistance

To mitigate the risk of penalties and ensure compliance, businesses should maintain accurate and up-to-date VAT records, submit VAT returns on time, and promptly address any compliance issues. It is crucial to seek professional advice or assistance from tax advisors or accountants who specialize in VAT matters.

By staying informed about VAT regulations, attending relevant training sessions, and engaging in regular self-assessment, businesses can minimize the risk of non-compliance and penalties.

Conclusion

The VAT penalty point system is a vital enforcement tool employed by HMRC to promote VAT compliance among businesses. Understanding how the system works and the consequences of non-compliance is crucial for businesses to avoid penalties, financial losses, and reputational damage. By maintaining accurate records, submitting VAT returns on time, and seeking professional advice when needed, businesses can ensure compliance and foster a healthy financial environment.

Introduction

For non-resident landlords in the United Kingdom, understanding the intricacies of income tax return is crucial. As a non-resident landlord, you are still liable to pay taxes on your UK rental income. In this blog, we will provide you with a comprehensive guide on how to file your non-resident landlord income tax return in the UK, ensuring compliance with the tax regulations while maximizing your tax benefits.

Understanding Non-Resident Landlord Status

Before diving into the income tax return process, it is important to determine whether you qualify as a non-resident landlord. Generally, if you live abroad for more than six months a year and receive rental income from UK properties, you fall under this category. Non-resident landlords need to register with the UK tax authorities and file an annual self-assessment tax return.

Registering for Self-Assessment

The first step is to register for Self-Assessment with Her Majesty’s Revenue and Customs (HMRC). You can do this by visiting the HMRC website or calling their helpline. During the registration process, you will receive a Unique Taxpayer Reference (UTR) number, which will be used to identify you for tax purposes. Ensure that you have all the necessary documents and information ready, such as your National Insurance number, passport details, and UK property details.

Calculating Rental Income

To accurately report your rental income, you need to maintain thorough records of your income and expenses. Rental income includes the rent you receive, any additional payments from tenants, and insurance reimbursements. Deductible expenses may include mortgage interest, property management fees, repairs, and maintenance costs. It’s crucial to keep supporting documents such as invoices, receipts, and bank statements to substantiate your claims.

Completing the Self-Assessment Tax Return

The self-assessment tax return can be completed online using the HMRC’s online service or through commercial software. Provide the requested information about your rental income, expenses, and other relevant details. Make sure to enter accurate figures to avoid penalties for incorrect information. If you’re using the online service, you can save and return to your tax return later if needed. Finally, submit the completed tax return by the deadline, which is usually by January 31st following the end of the tax year.

Tax Deductions and Allowances

As a non-resident landlord, you may be eligible for certain tax deductions and allowances. The most significant deduction is the mortgage interest relief, which is being phased out and replaced by a tax credit. Other potential deductions include repairs, maintenance, council tax, insurance premiums, and letting agent fees. Additionally, you may benefit from the personal allowance, which is the amount you can earn tax-free. It is important to stay updated on any changes to the tax laws and consult a tax professional if needed.

Do non-resident landlords need to complete a tax return?

Yes, non-resident landlords in the UK are generally required to complete a tax return. The tax return is part of the self-assessment system used by HM Revenue and Customs (HMRC) to calculate and collect income tax. If you receive rental income from UK properties and are classified as a non-resident landlord, you are still liable to pay taxes on that income.

The self-assessment tax return allows you to report your rental income, claim any applicable deductions and allowances, and calculate the amount of tax you owe. It is important to register for Self-Assessment with HMRC and file an annual tax return to ensure compliance with UK tax regulations.

It’s worth noting that certain exceptions and special rules may apply depending on your specific circumstances, such as if you have an agent responsible for managing your UK properties or if your rental income is below a certain threshold. It is advisable to consult with a tax professional or contact HMRC directly to determine your specific obligations and requirements as a non-resident landlord.

Do non residents pay tax on rental income uk?

Yes, non-resident landlords are generally subject to income tax on their rental income from UK properties. The UK tax system treats non-resident landlords differently from resident landlords, but both are required to pay tax on their rental income.

As a non-resident landlord, your rental income will be subject to UK income tax. The tax is usually calculated on the net income, which is the rental income minus allowable expenses such as mortgage interest, property management fees, repairs, and maintenance costs.

It’s important to note that the tax rates and rules may vary depending on your specific circumstances and the tax treaties between the UK and your home country. However, in general, non-resident landlords are required to register for Self-Assessment with HM Revenue and Customs (HMRC) and file an annual tax return to report their rental income and pay any applicable taxes.

To ensure compliance with the UK tax regulations and to determine your specific tax obligations, it is advisable to consult with a tax professional or contact HMRC directly. They will be able to provide you with the most accurate and up-to-date information based on your individual situation.

Conclusion

Filing a non-resident landlord income tax return in the UK may seem daunting, but with proper knowledge and preparation, it can be managed effectively. By understanding your status, registering for self-assessment, accurately calculating your rental income, and utilizing available deductions and allowances, you can ensure compliance with the tax regulations while maximizing your tax benefits. Remember to stay informed about any updates in tax laws and seek professional advice when necessary.

Understanding the Changes to UK Self-Assessment Threshold for PAYE Taxpayers (2023-2024)

Introduction:

Welcome to our comprehensive guide on the recent changes to the UK self-assessment threshold for taxpayers taxed through PAYE (Pay As You Earn). In this blog post, we will explore the details of the revised threshold, its implications for taxpayers, and the criteria that may still require individuals to complete a self-assessment tax return. Additionally, we’ll discuss the importance of claiming income tax reliefs and provide guidance for seeking assistance with personal taxes. Let’s dive in!

Table of Contents:

Overview of the Self-Assessment Threshold Changes

1. Previous Threshold: £100,000
2. Revised Threshold: £150,000

Immediate Action for Affected Taxpayers

1. No Action Required for 2022-2023 Tax Returns
2. Self-Assessment Exit Letter for Ineligible Submissions

Circumstances Necessitating a Self-Assessment Tax Return

1. Untaxed Income
2. Income from Overseas Sources
3. Business Partnership
4. High Income Child Benefit Charge
5. Self-Employment with Gross Income over £1,000

Utilizing the Government’s Self-Assessment Tax Return Checker

1. How to Check if You Need to File a Tax Return
2. Accessing the Online Tool

Leveraging Tax Returns for Income Tax Reliefs

1. Understanding Income Tax Reliefs
2. Claiming Reliefs for Pension Contributions
3. Claiming Reliefs for Charity Donations

Seeking Assistance with Personal Taxes

1. Contacting the Personal Tax Compliance Team
2. Benefits of Professional Guidance

Conclusion:

In conclusion, the recent changes to the UK self-assessment threshold for taxpayers taxed through PAYE have important implications for individuals’ tax obligations. While the threshold has been raised to £150,000 for the tax year 2023-2024 onwards, it’s crucial to note that certain criteria may still require individuals to complete a self-assessment tax return. Untaxed income, income from overseas sources, business partnerships, liability for the High Income Child Benefit Charge, and self-employment with gross income over £1,000 are among the factors that necessitate filing a tax return.

To determine whether you need to file a self-assessment tax return, you can use the government’s online tool, “Check if you need to send a Self Assessment tax return.” Moreover, individuals should consider leveraging tax returns to claim income tax reliefs on payments such as pension contributions and charity donations, as this can result in significant savings.

If you require assistance with your personal taxes or have any questions regarding these changes, it is advisable to reach out to the Personal Tax Compliance team for professional guidance. Remember, staying informed and taking appropriate actions will ensure compliance with tax regulations and help you optimize your tax situation.

Thank you for reading our comprehensive guide on the changes to the UK self-assessment threshold for PAYE taxpayers. We hope this blog post has provided you with valuable insights and guidance

Introduction

The world of taxation is ever-evolving, and staying informed about the latest changes is essential for every taxpayer. One recent development in the United Kingdom is the adjustment of the self-assessment threshold for individuals employed under PAYE (Pay As You Earn). Previously set at £100,000, the threshold has been raised to £150,000. In this blog post, we will explore the implications of this change, who it affects, and what it means for taxpayers in terms of completing a tax return. Understanding these adjustments is crucial for staying compliant with tax regulations and managing personal finances effectively.

The Self-Assessment Threshold Change Explained

The self-assessment threshold determines whether an individual is required to complete a tax return. Previously, individuals earning £100,000 or more per year were obligated to file a self-assessment tax return. However, as of the recent change, the threshold has been increased to £150,000. This means that individuals earning below £150,000 through PAYE will no longer need to file a tax return, as their taxes will be automatically deducted from their salary through the PAYE system.

Impact on PAYE Employees

The change in the self-assessment threshold brings relief to a significant number of PAYE employees. Those who were previously required to complete tax returns due to earning over £100,000 will now be exempt if their earnings fall between £100,000 and £150,000. This simplifies the tax process for many individuals, reducing the administrative burden associated with completing a self-assessment tax return.

Understanding the PAYE System

The PAYE system is the method through which individuals who are employed pay their income tax and National Insurance contributions. Under this system, employers deduct taxes and national insurance from employees’ salaries before paying them. With the self-assessment threshold raised to £150,000, individuals falling within this income range will no longer need to file a tax return as long as they are solely employed through PAYE.

Key Considerations for Taxpayers

While the change in the self-assessment threshold offers relief to many taxpayers, it is important to note a few key considerations. First, if individuals have additional sources of income, such as rental properties, self-employment, or investment income, they may still be required to complete a tax return regardless of their PAYE earnings. Second, individuals falling within the new threshold range should keep an eye on any changes in their income throughout the tax year. A significant increase in earnings could push them above the £150,000 threshold, requiring them to file a tax return.

Conclusion

The recent adjustment of the self-assessment threshold from £100,000 to £150,000 for PAYE employees brings a positive change to the tax landscape in the United Kingdom. This modification reduces the tax obligations for many individuals and simplifies the tax filing process. However, taxpayers should remain aware of other income sources and any changes that may affect their tax obligations.

Introduction

Compliance with Companies House regulations is crucial for any business, including beautician companies. This blog post aims to provide a comprehensive guide to the Companies House deadlines that beautician companies need to be aware of. By understanding these deadlines and ensuring timely submission of necessary documents, beautician companies can maintain legal compliance and avoid penalties. Let’s delve into the key deadlines that every beautician company should keep in mind.

Annual Confirmation Statement

The Annual Confirmation Statement is a crucial document that all beautician companies must submit to Companies House. It confirms the accuracy of the registered company information, including details of directors, shareholders, and the company’s registered address. The statement should be filed within 14 days of the anniversary of the company’s incorporation. It is important to review and update the statement’s information before submission to ensure accuracy.

Annual Accounts

Beautician companies must prepare and submit their annual accounts to Companies House within nine months of the end of the financial year. The annual accounts consist of a balance sheet, profit and loss statement, and accompanying notes. Small companies can take advantage of the abbreviated accounts, which provide a summarized version of the financial statements. However, larger companies or those with specific reporting requirements may need to prepare and submit full statutory accounts. It’s essential to ensure that the accounts are prepared accurately and in compliance with accounting standards.

Changes in Company Information

Whenever there are changes in a beautician company’s registered information, such as directors, registered office address, or shareholders, it must be updated with Companies House. These changes should be reported within 14 days of the occurrence. Failure to do so may result in penalties or legal consequences. It is crucial to maintain accurate and up-to-date records of company information to ensure transparency and compliance.

Corporation Tax Return

Beautician companies are also required to file their Corporation Tax Return with HM Revenue and Customs (HMRC) within 12 months of the end of the financial year. The return includes details of the company’s income, expenses, and tax calculations. It is important to keep accurate financial records and meet the tax deadlines to avoid penalties or interest charges. Seeking professional assistance from accountants or tax advisors can help ensure the accurate completion and timely submission of the Corporation Tax Return.

Conclusion

Complying with the Companies House deadlines is vital for beautician companies to maintain legal compliance and avoid penalties. By staying organized and ensuring timely submission of documents such as the Annual Confirmation Statement, Annual Accounts, and Corporation Tax Return, beautician companies can focus on their core business activities with peace of mind. Regularly reviewing and updating company information with Companies House is also crucial to ensure accurate records.

Introduction

As a psychiatrist, your primary focus is on providing quality mental health care to your patients. However, it’s crucial not to overlook the importance of managing your finances effectively. This is where accountants for psychiatrists come in. In this blog post, we’ll explore the role of accountants in the mental health field and discuss how they can help you navigate the financial aspects of your practice.

Specialized Knowledge for Mental Health Practices

Accountants who specialize in serving psychiatrists and mental health professionals possess a deep understanding of the unique financial challenges faced by those in the industry. They are familiar with the specific regulations, tax implications, and financial considerations that impact mental health practices. By working with accountants who have experience in this field, you can ensure that your financial matters are handled accurately and efficiently, allowing you to focus on your patients.

Be sure to subscribe to our channel for the latest tax updates

Managing Tax Obligations

One of the critical areas where accountants for psychiatrists can provide valuable assistance is in managing tax obligations. They will help you understand the tax deductions and credits available to mental health professionals, such as deductions for professional development expenses or office space costs. Accountants will also guide you in properly documenting your expenses, ensuring compliance with tax regulations, and maximizing your tax savings.

Financial Planning and Budgeting

Accountants can assist psychiatrists in developing effective financial plans and budgets for their practices. They will analyze your revenue streams, assess your overhead costs, and identify areas for improvement. By creating a comprehensive financial plan, you can set realistic financial goals, manage cash flow, and make informed decisions about expanding your practice or investing in new equipment or technology. Accountants provide financial forecasts and projections to help you make strategic decisions that align with your long-term objectives.

Bookkeeping and Record-Keeping

Accurate bookkeeping and record-keeping are essential for any psychiatrist’s practice. However, keeping track of financial transactions and maintaining up-to-date records can be time-consuming. Accountants for psychiatrists can handle these tasks efficiently, ensuring that your financial records are organized and accurate. They will help you maintain a clear picture of your practice’s financial health, prepare financial statements, and provide regular reports that give you valuable insights into your practice’s profitability.

Payroll and Employee Management

If you have employees or support staff in your practice, managing payroll can be complex. Accountants can handle payroll processing, including calculating salaries, withholding taxes, and preparing payroll tax returns. They will also ensure compliance with employment tax regulations and provide guidance on employee benefit programs. With the help of accountants, you can streamline your payroll processes, avoid costly mistakes, and ensure your employees are paid accurately and on time.

Business Structure and Tax Planning

Choosing the right business structure is crucial for psychiatrists, as it can have significant implications for taxes and personal liability. Accountants can guide you in selecting the most appropriate business structure, such as a sole proprietorship, partnership, limited company (LTD). They will evaluate your specific circumstances and help you understand the tax advantages and disadvantages associated with each option. By optimizing your business structure and tax planning, accountants can help you minimize your tax liabilities and protect your personal assets.

Conclusion

Accountants for psychiatrists play a vital role in helping mental health professionals manage their financial matters effectively. From tax planning and payroll management to financial planning and bookkeeping, their specialized knowledge and expertise can alleviate the burden of financial management, allowing you to focus on delivering quality care to your patients. Partnering with a reliable accountant can provide peace

Introduction

Real Time Information (RTI) is an essential aspect of payroll management in the United Kingdom. RTI payroll submission refers to the process of reporting payroll information to HM Revenue and Customs (HMRC) in real time. In this blog post, we will delve into the concept of RTI payroll submission, its significance, and how it works, providing a comprehensive understanding of this crucial requirement for UK employers.

What is RTI Payroll Submission?

RTI payroll submission is the method by which employers report payroll information to HMRC on a real-time basis. It involves sending accurate and up-to-date data regarding employee earnings, tax deductions, National Insurance contributions, and other payroll-related information. RTI ensures that HMRC has real-time visibility into payroll records, enabling accurate tax calculations, benefits administration, and compliance monitoring.

Significance and Benefits of RTI Payroll Submission

RTI payroll submission plays a vital role in the efficient management of payroll processes and compliance with UK tax regulations. It helps ensure accurate tax deductions, correct National Insurance contributions, and timely reporting of employee earnings. RTI also facilitates the administration of employee benefits, such as statutory sick pay, maternity pay, and pensions. Moreover, it simplifies the process of tax reconciliations and year-end reporting, reducing administrative burdens for employers.

How Does RTI Payroll Submission Work?

RTI payroll submission involves the use of payroll software or a payroll service provider that is RTI-compliant. Employers need to ensure that their payroll records are accurate and up to date. With each payroll run, employers submit payroll data to HMRC, typically on or before payday. This includes information about each employee’s pay, tax deductions, National Insurance contributions, and other relevant details. The submission can be made electronically through the Government Gateway, using the Full Payment Submission (FPS) or Employer Payment Summary (EPS) forms.

RTI Payroll Submission Deadlines and Penalties

Employers must adhere to specific deadlines for RTI payroll submission. Generally, the submission is made on or before each payday. Late or incorrect submissions may result in penalties from HMRC. The penalties are typically based on the number of employees and the frequency of errors or late submissions. It is crucial for employers to understand the deadlines and ensure timely and accurate submissions to avoid unnecessary penalties.

Maintaining RTI Compliance

To maintain RTI compliance, employers should keep their payroll records accurate, complete, and up to date. It is essential to implement RTI-compliant payroll software or engage a payroll service provider with RTI capabilities. Regularly reviewing and reconciling payroll data, promptly addressing any errors or discrepancies, and staying updated with HMRC guidelines and updates are crucial for ensuring ongoing compliance with RTI requirements.

Conclusion

RTI payroll submission is a critical component of payroll management in the UK. By understanding the concept and requirements of RTI payroll submission, employers can ensure accurate and timely reporting of payroll information to HMRC. This promotes compliance with tax regulations, streamlines payroll processes, and avoids penalties, contributing to efficient and effective payroll management.

Introduction

MTD, or Making Tax Digital, is a transformative initiative implemented by tax authorities to modernize tax systems and streamline reporting processes. In this blog post, we will delve into the key aspects of MTD, its benefits, requirements, and how it affects businesses and individuals alike.

What is MTD?

Making Tax Digital is an HM Revenue and Customs (HMRC) initiative in the United Kingdom that aims to digitize the tax system. It requires businesses and individuals to keep digital records of their finances and submit tax returns using compatible software. MTD simplifies tax-related processes, reduces errors, and enhances efficiency. The digital transformation enables the seamless exchange of information between businesses, individuals, and HMRC.

MTD for Businesses

MTD impacts businesses in various ways. From April 2019, VAT-registered businesses with a turnover above the VAT threshold (currently £85,000) are mandated to keep digital records and submit VAT returns through compatible software. This ensures accurate, timely reporting and reduces the risk of errors.

The scope of MTD is expected to expand to other taxes like income tax and corporation tax. Businesses should adopt MTD-compatible software and systems to comply with future requirements. MTD also encourages better record-keeping practices, allowing businesses to have a clear overview of their finances and make informed decisions.

MTD for Individuals

Although MTD is primarily focused on businesses, individuals are also affected. Self-employed individuals and landlords with annual business or property income exceeding £10,000 will eventually be required to comply with MTD for income tax reporting.

MTD offers individuals the opportunity to maintain digital records of their income and expenses, simplifying the tax filing process. Digital tax accounts provide a consolidated view of tax liabilities and entitlements, making it easier to manage personal finances. It also reduces the risk of errors and eliminates the need for manual calculations.

Benefits of MTD

The benefits of MTD are far-reaching. By leveraging digital technology, MTD improves accuracy, reduces tax gaps, and minimizes the administrative burden for both taxpayers and tax authorities. It promotes real-time reporting, ensuring that financial information is up to date and accurate.

MTD enables faster processing of tax information, leading to quicker tax refunds and fewer compliance queries. Additionally, digital records provide greater visibility into financial data, allowing businesses and individuals to make better-informed decisions. Overall, MTD fosters a more transparent and efficient tax system.

Conclusion

Making Tax Digital is transforming the tax landscape, requiring businesses and individuals to embrace digital record-keeping and reporting practices. By streamlining processes, reducing errors, and improving efficiency, MTD offers numerous benefits to both taxpayers and tax authorities, paving the way for a more digitally-driven and effective tax system.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham

Introduction

The tax season can be a stressful time for individuals and businesses alike, but staying organized and aware of important dates can help alleviate some of the pressure. For individuals who are required to file self-assessment tax returns, having a clear understanding of the key dates in the tax calendar is crucial. In this blog post, we will outline the essential dates for the tax year 2023/24, ensuring you stay on top of your tax obligations.

Start of the Tax Year – April 6, 2023

The tax year for 2023/24 officially begins on April 6, 2023. It is important to note this date as it marks the start of the financial year for tax purposes. Any income or expenses incurred from this day onwards will fall under the tax year 2023/24.

Registration for Self-Assessment – April 6, 2023

If you are new to self-assessment or have not filed a tax return before, you must register with HM Revenue and Customs (HMRC) by October 5, 2023. However, it is advisable to register as soon as possible to avoid any last-minute rush. Failure to register on time may result in penalties. To register, visit the HMRC website and complete the necessary forms. Once registered, you will receive a Unique Taxpayer Reference (UTR) number, which you will need for future tax filings.

Paper Filing Deadline – October 31, 2023

If you prefer filing your tax return by paper rather than online, the deadline for submitting your self-assessment tax return for the tax year 2023/24 is October 31, 2023. This option is gradually becoming less popular due to the convenience of online filing, but it is still available for those who prefer the traditional method. It is essential to ensure that your completed tax return reaches HMRC by this date to avoid penalties.

Online Filing Deadline and Payment Deadline – January 31, 2024

For most individuals, the deadline for filing your self-assessment tax return online and making the payment for any tax owed is January 31, 2024. This date is of utmost importance, as failing to file and pay on time will result in penalties and interest charges. Therefore, it is recommended to complete your tax return well in advance to allow for any unforeseen circumstances or difficulties that may arise during the submission process.

End of the Tax Year – April 5, 2024

The tax year 2023/24 concludes on April 5, 2024. This date is significant as it marks the end of the financial year for tax purposes. All income, expenses, and other relevant information should be accounted for up until this date when preparing your self-assessment tax return. Any financial activities or transactions occurring after April 5, 2024, will be attributed to the following tax year.

Conclusion

Keeping track of key dates in the tax calendar is essential for individuals required to file self-assessment tax returns. By knowing when to register, when to file, and when to pay, you can avoid penalties and ensure compliance with HMRC regulations. Make sure to mark these important dates in your calendar and allow yourself ample time to gather the necessary documentation and complete your tax return accurately. Remember, staying organized and prepared will make the tax season a smoother and less stressful experience.

What is VAT?

As a psychologist, it’s crucial to grasp the concept of Value Added Tax (VAT) exemption to effectively manage your finances and comply with legal obligations. In this blog post, we will explore the intricacies of VAT exemption for psychologists, shedding light on its benefits, eligibility criteria, and practical considerations.

VAT is a consumption tax levied on goods and services in many countries. It is typically a percentage of the sales price, added at each stage of production or distribution. However, certain goods and services, including those provided by psychologists, may be exempt from VAT due to their societal importance and nature of service.

VAT Exemption for Psychologists

Psychologists may be eligible for VAT exemption based on the nature of their services. In most jurisdictions, mental health services are recognized as essential healthcare, and thus exempt from VAT. This exemption applies to diagnostic assessments, therapy sessions, counseling, psychological evaluations, and related services. However, VAT rules can vary by country, so it’s important to consult local regulations and seek professional advice to determine the specific criteria and documentation required for exemption.

Benefits of VAT Exemption

VAT exemption offers several advantages for psychologists. Firstly, it reduces the financial burden on clients seeking mental health support, making services more accessible. Additionally, it allows psychologists to focus on providing quality care rather than managing VAT-related administrative tasks. Furthermore, VAT exemption can enhance the competitiveness of psychologists’ services by offering cost advantages compared to VAT-registered professionals, attracting more clients and fostering growth.

Eligibility for VAT Exemption

Eligibility for VAT exemption varies across jurisdictions. In general, psychologists must meet certain criteria to qualify. These criteria may include holding recognized qualifications, being a member of a professional body or association, and providing services within the scope of mental health care. Psychologists often need to document their qualifications, professional memberships, and service offerings to demonstrate eligibility for VAT exemption. It’s advisable to consult local tax authorities or seek professional advice to ensure compliance with specific requirements.

Practical Considerations

While VAT exemption brings benefits, psychologists should consider some practical aspects. It’s essential to maintain accurate records of services provided, invoices, and relevant documentation for tax purposes. Psychologists should also be aware of any limitations on VAT exemption, such as restrictions on certain supplementary services or products. Regularly reviewing local tax laws and regulations is crucial to stay updated on any changes that may affect VAT exemption eligibility or reporting requirements.

Understanding VAT exemption for psychologists is vital for managing finances and ensuring compliance. By qualifying for VAT exemption, psychologists can alleviate financial burden for clients, streamline administrative tasks, and enhance their competitive advantage. Remember to stay informed, consult local regulations, and seek professional advice to navigate the specific requirements in your jurisdiction.

Understanding Working from Home Tax Relief :

In recent years, remote work has gained significant popularity, and the COVID-19 pandemic has accelerated this trend further. Many individuals in the UK have found themselves working from home for extended periods. However, what they may not realize is that there are several tax relief opportunities available to offset some of the expenses associated with working from home. In this blog post, we will explore the various tax relief options that UK residents can take advantage of, ensuring they maximize their tax savings.

Working from home tax relief allows eligible individuals to claim tax relief on certain expenses incurred due to remote work. The UK government recognizes that working from home can result in additional costs, such as increased energy usage or office supplies. While most employees can’t claim tax relief for general household expenses, they may be eligible for specific deductions related to their work. Understanding these deductions is crucial for ensuring you take full advantage of the available tax relief.

Claiming Tax Relief for Home Office Expenses

If you regularly work from home, you may be entitled to claim tax relief for certain home office expenses. This includes items like office supplies, computer equipment, and internet and telephone bills that are exclusively used for work purposes. To claim this relief, you need to maintain accurate records and calculate the appropriate portion of your expenses that are attributable to your work. Keep receipts and records of your expenses, as you may be required to provide evidence to support your claim.

Deducting Utility Costs

Another area where you can potentially claim tax relief is for utility costs. Since working from home often leads to increased electricity, heating, and internet usage, you can calculate the portion of these costs related to your work and claim them as deductible expenses. HM Revenue and Customs (HMRC) provides guidance on how to calculate these expenses accurately, and it is essential to maintain records to substantiate your claim.

Transportation and Travel Expenses

Although commuting expenses are generally not tax-deductible, there are exceptions for certain circumstances. For instance, if you are required to travel for work-related purposes, you may be able to claim tax relief for the cost of travel and accommodation. However, it’s important to note that commuting from your home to a regular workplace is not considered a tax-deductible expense.

Tax Relief for Equipment and Uniforms

If your job requires specific equipment or uniforms that you purchase and maintain yourself, you may be eligible for tax relief on these expenses. This can include items such as safety boots, specialized tools, or protective clothing. Keep in mind that to claim this relief, the equipment or uniforms must be essential for your job and not provided by your employer.

Working from home offers numerous benefits, and UK residents can take advantage of various tax relief opportunities to reduce their financial burden. By understanding the different types of expenses that qualify for tax relief, such as home office expenses, utility costs, travel expenses, and equipment/uniforms, individuals can maximize their potential tax savings. It’s crucial to keep detailed records and receipts to support your claims and ensure compliance with HMRC guidelines. By being proactive and knowledgeable about tax relief options, you can make the most of your remote work situation and reduce your tax liability effectively.

As a medical professional in the UK, rising costs and taxes can be a significant concern. The cost of running a medical practice can quickly add up, making it essential to manage expenses effectively. At the same time, managing your taxes is crucial to ensure you are not overpaying and maximizing your financial health. In this blog, we will discuss five strategies to help medical professionals manage rising costs and be tax-efficient in the UK.

Understand Your Expenses

The first step to being tax-efficient is to understand your expenses. Keep track of all your expenses, including medical supplies, rent, and other operational expenses. By understanding where your money is going, you can identify areas where you can cut costs.

For example, you may be able to negotiate better rates with suppliers, reduce energy usage in your office, or explore shared services with other medical practices to reduce overhead costs. By keeping a record of your expenses, you can track your progress and ensure you are not overspending.

Take Advantage of Tax Deductions

As a medical professional in the UK, there are several tax deductions available to you. These include deductions for medical supplies, office rent, and other operational expenses. By taking advantage of these deductions, you can reduce your taxable income and lower your tax bill.

It is essential to consult with a tax professional to ensure that you are taking advantage of all the deductions available to you. Tax laws change frequently, and a tax professional can help you navigate these changes and ensure you are not missing any opportunities to reduce your tax bill.

Consider Incorporation

Incorporating your business can help you reduce your tax burden in the UK. By incorporating, you can take advantage of tax deductions and pay lower taxes on your income. Additionally, incorporating can provide you with greater protection against legal liabilities, such as malpractice lawsuits.

It is essential to consult with a tax professional and legal advisor to ensure that you are incorporating your business correctly. They can help you navigate the legal and tax implications of incorporating and ensure that you are complying with all the necessary regulations.

Utilize Tax-Free Allowances

The UK has several tax-free allowances available to medical professionals. These include a personal allowance and a trading allowance. The personal allowance is the amount of income you can earn before you have to pay income tax. The trading allowance is a tax-free allowance for individuals with trading income.

Ensure that you are taking advantage of these allowances by consulting with a tax professional. They can help you understand how to use these allowances to reduce your tax bill and maximize your financial health.

Join a Group Purchasing Organization

Joining a group purchasing organization can help you save money on medical supplies and equipment. By joining, you can take advantage of bulk discounts on supplies and equipment, which can save you a lot of money in the long run.

There are several group purchasing organizations available to medical professionals in the UK, such as the British Medical Association and the National Association of General Practitioners. By joining one of these organizations, you can access a wide range of products and services at discounted prices.

Conclusion

Managing rising costs and being tax-efficient as a medical professional in the UK can be challenging. However, by understanding your expenses, taking advantage of tax deductions and allowances, incorporating your business, and joining a group purchasing organization, you can minimize your tax burden and manage your expenses effectively.

It is essential to consult with a tax professional and other advisors to ensure that you are making the best decisions for your financial health. By taking a proactive approach to managing your finances, you can reduce your stress and focus on providing the best possible care to your patients.

What is accounting advisory services

Advisory services are an important aspect of the accounting profession. They are provided by accounting firms and professionals to help clients make informed business decisions and improve their financial performance. In this blog post, we will discuss the various advisory services offered by accounting firms, and how they can benefit businesses of all sizes.

What are Advisory Services for Accounting?

Advisory services are consultative services provided by accounting firms to their clients. They are designed to help clients make better business decisions and improve their financial performance. These services cover a wide range of topics, including risk management, financial planning, mergers and acquisitions, and business valuation.

Types of Advisory Services

1. Risk Management: Accounting firms help clients identify and manage financial risks that may affect their businesses. This includes identifying potential risks and developing strategies to mitigate them. Accounting firms can also assist clients in developing internal controls to prevent financial fraud and other irregularities.
2. Financial Planning: Accounting firms provide financial planning services to help clients achieve their financial goals. This includes developing a comprehensive financial plan, identifying investment opportunities, and managing cash flow.
3. Mergers and Acquisitions: Accounting firms provide advisory services to clients who are involved in mergers and acquisitions. They can help clients identify potential acquisition targets, negotiate deals, and develop integration plans.
4. Business Valuation: Accounting firms help clients determine the value of their businesses. This includes conducting a comprehensive analysis of financial data and market trends to determine a fair market value.

Benefits of Advisory Services

Advisory services offer numerous benefits to businesses of all sizes. Here are some of the key benefits:

1. Improved Financial Performance: Advisory services help businesses improve their financial performance by identifying potential risks and developing strategies to mitigate them. This leads to improved profitability and cash flow.
2. Informed Decision Making: Advisory services provide businesses with the information they need to make informed business decisions. This includes identifying investment opportunities, evaluating potential acquisitions, and developing strategic plans.
3. Compliance with Regulations: Accounting firms help businesses comply with regulations and laws that may affect their financial operations. This includes tax laws, financial reporting requirements, and other regulatory issues.
4. Enhanced Reputation: Advisory services help businesses build a positive reputation in their industry. This is because they are seen as responsible and ethical businesses that take a proactive approach to managing financial risks.

Conclusion

Advisory services are an important aspect of the accounting profession. They help businesses of all sizes make informed business decisions, improve their financial performance, and comply with regulations. Accounting firms provide a wide range of advisory services, including risk management, financial planning, mergers and acquisitions, and business valuation. If you are a business owner, consider working with an accounting firm to benefit from their advisory services and improve your financial operations.

Income tax

The UK government’s budget for 2023 has recently been announced and it includes several updates that will affect individuals and businesses. Here is a summary of the key changes:

There will be no changes to the income tax rates or thresholds for the 2023-24 tax year. However, the government has announced that it will be reviewing the income tax system with a view to simplifying it and reducing complexity for taxpayers.

National Insurance Contributions (NICs)

The government will be increasing the National Insurance threshold from £9,568 to £9,900. This means that individuals earning less than £9,900 per year will not have to pay any National Insurance contributions. The upper earnings limit for NICs will also increase from £50,270 to £51,000.

Pension contributions

From April 2023, the minimum employer contribution to workplace pensions will increase from 3% to 4% of an employee’s qualifying earnings. The employee contribution will also increase from 5% to 6%. This means that the total minimum contribution will rise from 8% to 10%.

Be sure to subscribe to our Youtube Channel.

Corporation tax

The main rate of corporation tax will increase from 19% to 25% from April 2023. This will apply to companies with profits over £250,000. Small companies with profits under £50,000 will continue to pay the current rate of 19%, and there will be a tapered rate for companies with profits between £50,000 and £250,000.

VAT

There will be no changes to the VAT rates, but the government has announced that it will be reviewing the VAT system with a view to simplifying it and reducing complexity for businesses.

Capital gains tax

There will be no changes to the capital gains tax rates or thresholds for the 2023-24 tax year.

Business rates

The government has announced a two-year extension to the business rates holiday for retail, hospitality, and leisure businesses in England. This means that these businesses will not have to pay business rates until April 2023.

Environmental taxes

The government has announced several environmental taxes, including a new Plastic Packaging Tax and a reform of the Climate Change Levy.

The Plastic Packaging Tax will apply from April 2023 to all plastic packaging produced in or imported into the UK that does not contain at least 30% recycled plastic. The tax will be set at £200 per tonne.

The Climate Change Levy will be reformed from April 2023 to include a new electricity generation tax. This will apply to companies that generate electricity using fossil fuels, with the aim of encouraging them to switch to renewable sources.

Fuel duty

There will be no changes to the fuel duty rates for the 2023-24 tax year.

Alcohol and tobacco duties

The government has announced that there will be no changes to the alcohol and tobacco duties for the 2023-24 tax year.

Overall, the 2023 UK budget contains some significant changes that will affect individuals and businesses. The increase in National Insurance thresholds will provide some relief for low earners, but the increase in corporation tax rates will hit larger businesses hard. The extension of the business rates holiday will be welcome news for many struggling retail, hospitality, and leisure businesses, while the new environmental taxes show the government’s commitment to tackling climate change. As always, it is important for individuals and businesses to keep up to date with the latest changes in the budget and to seek professional advice if they are unsure how they will be affected.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham

UK Budget Update 2023: What Construction Companies Need to Know

The UK government has recently released its budget for 2023, and it includes a range of measures that will affect businesses across various sectors. For construction companies in the UK, there are several key updates to be aware of. In this article, we’ll highlight the budget updates that matter most to construction companies and how they could impact your business.

Investment in Infrastructure

One of the significant updates in the budget is the government’s commitment to investing in infrastructure. The government has pledged to spend £650bn over the next five years on roads, rail, broadband, and other infrastructure projects. This investment is expected to create new opportunities for construction companies, particularly those focused on infrastructure projects.

To support this investment, the government is also providing additional funding for training and apprenticeships in the construction industry. This funding will help to address the skills shortage in the industry and support the development of a more skilled workforce.

Changes to Corporation Tax

Another update in the budget that may affect construction companies is the change to corporation tax. From April 2023, the corporation tax rate will increase from 19% to 25%. However, small businesses with profits of £50,000 or less will continue to pay the current rate of 19%. Companies with profits between £50,000 and £250,000 will have a tapered rate.

This change to corporation tax could impact the profitability of construction companies, particularly larger ones with higher profits. However, it’s worth noting that the government has also introduced a “super deduction” for investment in plant and machinery. This deduction allows companies to claim 130% of the cost of new equipment against their taxable income.

Extension of the Reduced Rate of VAT

The government has also announced an extension of the reduced rate of VAT for the hospitality and tourism sectors. This reduced rate of 5% was introduced in 2020 to support these industries during the pandemic. The reduced rate has now been extended until September 2023, which will provide continued support for businesses in these sectors.

While this extension may not directly impact construction companies, it could indirectly benefit those involved in building or refurbishing hospitality and tourism properties. The extension of the reduced VAT rate may encourage businesses in these sectors to invest in new projects or refurbishments, which could create new opportunities for construction companies.

Changes to Immigration

Finally, the budget also includes updates to immigration policy. From January 2024, the UK will introduce a new points-based immigration system. This system will prioritize highly skilled workers, and those who do not meet the criteria may face additional restrictions.

This change to immigration policy could impact the construction industry, which has historically relied on migrant labor. However, the government has also introduced a new skilled worker visa, which will make it easier for highly skilled workers to come to the UK to work. The construction industry may need to adjust its recruitment practices to attract highly skilled workers from overseas.

In Conclusion

Overall, the UK budget update for 2023 includes several measures that will impact construction companies in the UK. The investment in infrastructure and training is a positive development, as it could create new opportunities for construction companies. The changes to corporation tax may require some adjustment, but the super deduction could offset some of the impact.

The extension of the reduced VAT rate for the hospitality and tourism sectors may indirectly benefit construction companies, and the changes to immigration policy could create new challenges for recruitment. It’s important for construction companies to stay informed about these updates and adjust their business strategies accordingly.

Can You Claim VAT Back on Fuel Without a Receipt?

If you’re a business owner or self-employed individual, you know that every penny counts when it comes to managing your expenses. One way to save money on your business expenses is by claiming VAT back on certain purchases, including fuel. However, what happens if you lose your fuel receipts or forget to collect them in the first place? Can you still claim VAT back on fuel without a receipt?

The answer is not straightforward, but it is possible under certain circumstances. Here’s what you need to know:

What is VAT?

VAT stands for Value Added Tax, which is a tax added to the price of goods and services in the UK. The standard rate of VAT is currently 20%, but some goods and services have a reduced rate of 5% or are exempt from VAT altogether. VAT-registered businesses are required to charge VAT on their sales and can claim back the VAT they pay on their business purchases.

Can You Claim VAT Back on Fuel?

Yes, you can claim VAT back on fuel used for business purposes, but there are some conditions you need to meet. Firstly, you must be a VAT-registered business or self-employed individual. Secondly, the fuel must be used exclusively for business purposes. This means you can’t claim VAT back on fuel used for personal use, such as commuting to and from work.

How to Claim VAT Back on Fuel

To claim VAT back on fuel, you need to keep accurate records of your fuel purchases, including the VAT element. This is usually done by keeping fuel receipts or using a fuel card that provides a detailed statement of your fuel purchases.

However, if you’ve lost your fuel receipts or forgotten to collect them, you may still be able to claim VAT back on fuel. You can use other evidence to prove your fuel purchases, such as bank statements or credit card statements, as long as they show the date and amount of the fuel purchase and the VAT element. You may also need to provide additional evidence to support your claim, such as a mileage log or vehicle logbook to show that the fuel was used for business purposes.

It’s important to note that the HM Revenue and Customs (HMRC) may ask for further evidence or clarification of your claim, so it’s always best to keep as much evidence as possible to support your claim.

In conclusion, while it’s preferable to have fuel receipts when claiming VAT back on fuel, it is possible to claim VAT back on fuel without a receipt under certain circumstances. As long as you have other evidence to support your claim and can prove that the fuel was used exclusively for business purposes, you may be able to claim back the VAT element of your fuel expenses. However, it’s always best to keep accurate records of your fuel purchases and seek professional advice if you’re unsure about your eligibility to claim VAT back.

5 Top tips for NHS Therapists – Self employed

As a therapist running your own business, filing a self-assessment tax return can seem daunting. With the complexity of tax regulations and the fear of making mistakes, many therapists find the process overwhelming. However, with proper preparation and organization, completing a self-assessment tax return can be a smooth and efficient process. Here are five tips to help you successfully complete your self-assessment tax return for your therapist business.

1. Keep Accurate and Organized Records

One of the most critical aspects of completing a self-assessment tax return is maintaining accurate and organized records of your business transactions. Keep track of all your income, expenses, and receipts throughout the tax year. Use accounting software or a spreadsheet to record all financial transactions related to your therapist business. This includes payments from clients, expenses such as office rent, utilities, supplies, and any other business-related costs.

Organize your records in a systematic manner, such as by month or category, so that you can easily locate and reference them when it’s time to complete your tax return. Proper record-keeping not only helps you stay compliant with tax regulations but also allows you to claim all eligible deductions and reduce your tax liability.

2. Understand Deductible Expenses

As a therapist, you may be eligible for various deductions that can reduce your taxable income and lower your tax bill. It’s crucial to understand which expenses are deductible and keep accurate records of them. Deductible expenses typically include business-related expenses such as office rent, utilities, supplies, professional development, insurance premiums, marketing and advertising costs, and professional memberships.

Make sure you are aware of the tax rules and regulations in your jurisdiction and consult with a qualified accountant or tax professional if you have any questions. Properly claiming all eligible deductions can significantly reduce your tax liability and help you save money on your tax bill.

3. Plan for Tax Payments

As a self-employed therapist, you are responsible for paying your own taxes throughout the year. This includes income tax as well as self-employment tax, which covers Social Security and Medicare taxes. It’s crucial to plan for these tax payments to avoid any surprises when it’s time to file your tax return.

Estimate your tax liability for the year and make quarterly estimated tax payments to the relevant tax authorities. Keep track of your payments and retain receipts as proof of payment. Failing to make estimated tax payments or underestimating your tax liability can result in penalties and interest charges.

4. Review Your Tax Return Thoroughly

When completing your self-assessment tax return, take the time to review it thoroughly before submitting it. Double-check all the information, including your personal details, income, expenses, and deductions. Make sure that all the figures are accurate and entered correctly. Errors or inconsistencies in your tax return can trigger an audit or result in penalties.

Consider using tax preparation software or hiring a qualified accountant to help you complete your tax return. They can provide expertise and guidance to ensure that your tax return is completed accurately and in compliance with tax regulations.

5. Meet the Filing Deadline

Meeting the filing deadline for your self-assessment tax return is crucial to avoid late filing penalties. The deadline for submitting your tax return depends on your jurisdiction and the type of business structure you have. Make sure you are aware of the filing deadline and mark it on your calendar to avoid missing it.

If you anticipate that you may need more time to complete your tax return, you can request an extension from the tax authorities. However, keep in mind that an extension only extends the deadline for filing your tax return, not for paying any taxes owed. Make sure to pay any taxes owed by the original deadline to avoid interest charges and penalties.

In conclusion, completing a self-assessment tax return for your therapist business requires careful planning, accurate record-keeping, and attention to

NHS Pension Entitlement

If you are employed by the NHS in roles such as a dentist (associate/performer), technician, hygienist, or therapist while also serving private clients, you may have considered whether registering as a sole trader or establishing your own limited company could help reduce your tax liability.

Be sure to subscribe to our Youtube Channel.

As a dental professional, the choice you make could considerably impact not only your personal tax obligations but also your NHS pension entitlement. Prior to making any alterations to your contractual agreements or employment status, it is essential to consult with the NHS Business Services Authority and the British Dental Association to comprehend how such changes may affect your NHS pension entitlement.

Despite recent modifications, the NHS pension scheme remains a highly beneficial ‘defined benefit’ plan that can serve as an outstanding means of saving for your retirement. Based on your unique circumstances, you may need additional, specialized guidance concerning your retirement planning and pension.

What Is a Limited Company?

Creating a limited company allows you to establish a separate legal entity to operate your business, even if it’s a one-person operation. As the director, you bear the responsibility for any legal and financial decisions made by the company, and the company’s assets and liabilities are distinct from your personal finances.

If you work privately or your annual income from private work exceeds £35,000, forming a limited company may be more tax-efficient, resulting in higher take-home pay and greater flexibility in tax planning. Your company may also make pension contributions to a non-NHS private pension on your behalf. However, as previously mentioned in this article, your limited company cannot contribute to your NHS pension, and it is recommended that you seek expert advice on this matter.

Upon setting up a limited company, you will become a director and shareholder. You may receive a salary and/or dividends from the company’s available profits. As a director, you are responsible for ensuring that the company submits various annual returns and files annual accounts with statutory bodies like Companies House and HMRC. In our informative article, we outline several additional deadlines and responsibilities. Additionally, we offer another article detailing the primary benefits of incorporating a limited company.

What Is a Sole Trader?

As a sole trader, you are a self-employed individual running your own business. You have the ability to retain all of your business’s profits after paying taxes, but you are personally liable for any losses incurred by the business. Your business must adhere to specific regulations regarding its operation and name, and you must register with HMRC to declare your intention to pay taxes through an annual Self Assessment.

Should I Get an Accountant if I’m Self-Employed?

As a small business owner, having an accountant as your guide can be invaluable. They possess expertise in the intricate fiscal requirements of a business and can serve as a reliable authority on the subject. Furthermore, a certified accountant may provide you with tax saving tips, and they may have strong relationships with various government bodies from which you can benefit.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham

What are the new Corporation Tax rates?

Smaller businesses will not be required to pay the whole Corporate Tax rate but there is still the standard 19% which will increase to 25%. While businesses with yearly earnings of 250,000.00 Pounds or more are subject to the maximum 25% rate. Meanwhile, the current 19% rate will still be in effect if the annual profits are less than 50,000.00 Pounds. Hence, there will be an implemented application of a system of marginal relief between these two rates.

What about short accounting periods and associated companies?

According to the initial press announcement about the Corporation Tax raise, during brief accounting periods and in cases where there are connected entities, the lower and higher limitations will be correspondingly lowered. For instance, the criteria will be between 25,000.00 and 125,000.00 Pounds if two connected entities exist.

Electrical Vehicle

1. Capital Allowances

The firm can deduct a 100% First Year Allowance from its corporation tax bill if a fully electric automobile is acquired outright or purchased by a hired entity. Nonetheless, the business will be responsible for paying corporation tax on any revenues from the sale of the car.

Electric vehicles are not eligible for the 130% super-deduction. The government offered qualified equipment and machinery. The super-deduction can only be availed until March 31, 2023.

2. Corporation Tax and Lease Payments

Lease payments are applicable if the vehicle is for leasing. This will be recorded as an expense, reducing the company’s profit and taxable income for the year.

3. Corporation Tax and Hire Purchase

The firm will benefit from a 100% first-year allowance and save corporation tax on interest on monthly payments if acquired through HP (Hire Purchase) arrangement.

4. VAT

It may be more favorable for businesses to use their electric vehicles for business purposes to be eligible for a VAT refund. If the vehicle is leased, they can deduct 50% of the VAT from the lease payments.

5. Benefit-in-kind

Electric vehicles have a benefit-in-kind or BIK rate of 2% of the vehicle’s list price, compared to 37% for gasoline and diesel vehicles. Note that this benefit-in-kind is not installing a charging station for a business vehicle. The employer and/or employee are responsible for paying tax and national insurance on benefits-in-kind, with the corporation paying the list price multiplied by 2% and the employee paying the marginal income tax rate. This 2% is added to the 13.8% national insurance rate payable by employers.

How will Corporation Tax work in 2023?

The standard rate of corporation tax for businesses with profits of at least 250,000.00 will be 25%. Meanwhile, businesses with earnings of at least 50,000.00 will be subjected to a 19% Small Profits Tax.

What are the changes to UK Corporation Tax 2023?

Corporation tax will be leveled at 25% and 19% for small profits threshold in the fiscal year 2024 (April) as proposed in Spring Finance Bill 2023.

How will the 25% Corporation Tax work?

Profits for companies with accounting periods that overlap April 1, 2023, will be the schedule of implementation of the Tax rate increase.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham

How Do You Track Income and Expenses on a Monthly Basis?

Let’s face it; you can never fully attain success in life with a poor financial plan. True, as Alan Lakein memorably said, “Failing to Plan is planning to fail.” The most successful individuals are, without a doubt, the best financial planners. This important strategy not only gives you clarity in life but also provides meaning and direction to your financial decisions.

A good financial plan should help you track your income and expenses as well as invest and manage funds without compromising on your standard. What’s more, with monetary planning, it is possible to earn, invest, track your cash flow, prepare for emergencies, and make sound financial decisions.

In this article, we will provide you with detailed insight into how to track your income and expenses on a monthly basis to help you create a good financial plan.

Check Your Account Statements

How often do you check your account statements? Well, a good financial planners should be aware of their spending habits. The best way to track your spending habits is to take inventory of all your accounts and credit cards.

Note that your spending will consist of variable and fixed expenses. Variable expenses are the day-to-day expenses like food, travel, and clothing. Fixed expenses, on the other hand, can include rent or mortgage, debt payment, utilities, and insurance. They are likely not to change every month.

Categorize Your Expenses

Now that you have identified your monthly spending habits, you need to categorize your expenses. Begin by grouping them into different categories. The majority of financial institutions will automatically categorize your purchase with tags such as “automotive” or “department store.”

One of the best things about categorizing your expenses is that it helps you sort your wants and needs. In doing so, you can prioritize your spending based on your budget, especially if you need to cut costs for debt repayment or savings.

Build Your Budget

Budgeting is the most critical step in financial planning. You need to put into consideration every category of your needs and wants to help you build a good budget. Consider using an app to help you track your expenditure. There is quite a wide range of budget apps that can save you time and help you build momentum with new spending habits. Besides, it is imperative to ensure you revisit your budget every few months and make adjustments where necessary.

Find a Good Budgeting App

Mint and You Need A Budget are some of the best financial planning apps that are specially designed for on-the-go cash management. These apps allow you to allocate a specific spending amount every month based on how much you are getting and what you are buying.

If you want the best results with the apps, you must be willing to fill in your purchase log including the time, and ensure you strictly stick to your budget. You can also opt for a paid app. Although it might be a bit expensive, it might be worth the cost depending on the results you get.

Identify Room for Change

Change is inevitable. Even as you track your expenses, you need to be ready to make adjustments where necessary. Lower your big fixed expenses such as vehicles and utilities or the cost of housing. They can make an impact on your budget.

Apart from that, look for additional ways to save money to give you some room to breathe.

Final Thoughts

There is no doubt that the success of your business relies on the steps you take to track your income and expenses on a monthly basis. The process can prove to be daunting, but you can always choose to work with a professional to help you achieve your financial goals in the shortest time possible.

Is there an app that tracks expenses and income?

Yes, there is quite a wide range of apps that are specially designed to help you track your monthly income and expenses. Mint is the most recommended app, especially for beginners. Other apps include Personal Capital, which is best for Investors. Expensify, on the other hand, is best for Receipt Saving, while QuickBooks Accounting is best for Small Businesses.

How can you track monthly income and expenses for small businesses?

The first step should be to open a business account with your desired bank. Choose accounting software from the wide range of options available online and connect your financial institutions. After doing so, file all your receipts and ensure you review your business expenses regularly.

What is the best way to track income and expenses for self-employed?

Ledgers are the oldest and most successful methods of tracking income and expenses. It is a fancy word for your normal standard bookkeeping. Although you can keep a record of your income and expenses in an online accounting software or spreadsheet, handwritten ledgers are the recommended option.

What are the two main methods of tracking income and expenses?

Cash and accrual are the two main methods of tracking income and expenses. In the cash method, expenses are recorded only when they are paid, while income is recorded after it has been received. There is also an alternative bookkeeping method, which is a combination of the two methods.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham

What is companies house?

It is essential to acknowledge that we are not associated with Companies House; instead, we are an independent Certified Accountancy firm. Companies House is a government-run agency under the remit of the Department for Business, Energy and Industrial Strategy and provides an easily searchable database of all UK businesses using either a company name, number or director’s particulars.

The Department for Business, Energy, and Industrial Strategy oversees Companies House – a government-run agency that offers an easy to access registry of all organizations situated in the UK. This can be looked up by either providing the name or registration number of the company as well as information about its director.

How to incorporate on Companies House?

In the United Kingdom, forming a business necessitates registering with Companies House. This procedure can be accomplished either online or through conventional mail (which is slower and pricier). On completion, you will obtain an incorporation document that comes equipped with the following: selecting a company name & registered address; appointing directors & secretaries; designating shareholders/guarantors; determining who has noteworthy control over the firm’s operations (e.g., one founder); generating a memorandum of association when enrolling electronically; preparing articles of association using model articles or creating original ones, and paying the filing fee before submitting your application.

Choose a company name and registered address.

-Choose a Board of Directors, including a Secretary, to preside over the company

-Decide upon those who will serve as Shareholders and/or Guarantors

-Identify all individuals with significant control (PSC) over the organization (e.g., an individual originator)

-Craft a Memorandum of Association, which shall be automatically generated for you when registering online

-Compose Articles of Association either utilizing model articles or creating your own unique version thereof

-Remit payment for filing fees and submit the application

What can you submit on the Companies House WebFiling service?

Managing a limited company necessitates the upkeep of multiple documents and records that must be submitted to Companies House using their WebFiling service. HM Revenue & Customs (HMRC) may carry out audits to make sure your firm is making its proper tax payments. To enable online submissions, Companies House has various forms ranging from yearly returns and financial declarations to updates regarding director information. The full scope of these services is detailed hereunder.

Confirmation statement and accounts

In this section, you can post the following documents: a CS01 Confirmation Statement, an AA01 amendment for the accounting reference date, an AA02 set of dormant company accounts, audit-exempt abbreviated accounts and full accounts; furthermore a joint file of yearly returns/financial statements to Companies House/HM Revenue & Customs (Tax return & annual acccounts) alongside micro-entity account production.

How to log in to Companies House?

Logging into the Companies House webFiling service is straightforward. All you need to do is navigate to https://ewf.companieshouse.gov.uk and enter your email address, password, authentication code, and company number before clicking submit. Once logged in, you will be met with a dashboard that gives an overview of all the details pertinent to your firm as well as any documents which have been published up until now. Furthermore, if desired you can set up eReminders at this point for promptness regarding future filing deadlines!

Is Companies House different from HMRC?

Companies House and HMRC are distinct entities, yet they have a tight-knit joint venture in some regions. They interchange crucial details, modify their operations to be more compatible with each other’s systems, thus improving productivity due to the partnership.

What happens if I don’t file with Companies House?

If you fail to hand in your financial records and tax filings to Companies House and HMRC before the expiry date, then you will be liable for a penalty. For public firms, there are different fines than those applicable for other organisations. If your accounts aren’t filed by the due date, an automated penalty notice will be distributed.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham

Do I need to register my limited company for CIS?

If you work for a contractor and fall under one of the following categories, you should register for the Construction Industry Scheme (CIS):

– an individual who runs their own business;

– the owner of a limited corporation;

– a partner in a partnership or trust

A contractor is required by CIS to take 20% from your payments and send the remainder to HM Revenue and Customs (HMRC).

These deductions are considered payments in advance of your tax and National Insurance obligations.

Contractors are required to withdraw 30% from your payments if you don’t sign up for the program.

How do I register for CIS?

If you are a contractor, you must first register with HMRC as an employer. You may do that right here.

After completing this, you will receive a letter from HMRC outlining all you need to know about operating as a CIS contractor. Your Employer Reference Number and a 13-digit accounts office reference number will be included in the details. To access the CIS service online, you’ll need these.

You must complete HMRC form CIS305 if you are a limited company working as a subcontractor in the construction sector. You can request gross payment status using this application as well.

How do I register for CIS?

If you are a contractor, you must first register with HMRC as an employer. You may do that right here.

Once the process is finished, HMRC will send you a letter outlining all you need to know about operating as a CIS contractor. The details will include a 13-digit accounts office reference number as well as your employer reference number. To access the CIS service online, you’ll need these.

You can access your self-assessment account on the HMRC website using your UTR and password if you are a sole owner and want to apply for CIS as a subcontractor.

You must fill out HMRC form CIS305 if your company is a limited company and you are working as a subcontractor in the construction sector. You can request gross payment status using this application as well.

Do Ltd companies have to pay CIS?

If you make CIS deductions, you must claim them back through the regular payroll process of your employer. Try not to make a claim through your Corporate Tax return; doing so could result in a fine. Give HMRC your regular monthly Full Payment Submission (FPS).

How does CIS work for limited company?

Contractors withdraw money from a subcontractor’s payments under the Construction Industry Scheme (CIS) and send it to HM Revenue and Customs ( HMRC ). The deductions are considered advance payments for the tax and National Insurance of the subcontractor. Contractors must enroll in the program.

How can I register as a limited company with CIS (Construction Industry Scheme)?

Does my limited company need to be CIS registered?

If you work for a contractor and fall under one of the following categories, you should register for the Construction Industry Scheme (CIS):

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham

What are the reasons to Register for VAT?

Legal obligation: As we’ve already talked about, you have to sign up for VAT if your business makes more than £85,000 in a calendar year. Penalties and fines may apply if this is not done.

Credibility: When you sign up for VAT, clients and suppliers will see that your business is trustworthy and well-run.

Ability to Reclaim VAT: If your business is registered for VAT, you might be able to get back any VAT you paid on goods or services you bought for the business. This may lead to significant financial savings.

Why would you register for VAT if you don’t need to?

Even if your company’s annual sales are less than the £85,000 threshold, you can still sign up for VAT voluntarily. If your business often buys from vendors who are registered for VAT, this could be helpful because you can get back the VAT you paid. Additionally, it can help your reputation as a VAT-registered company.

Are there benefits to being VAT registered?

Yes, there are a number of advantages to having a VAT registration:

Ability to Reclaim VAT: If your business is registered for VAT, you can get back the VAT you paid on goods and services for your business. For your company, this could lead to significant savings.

Improved Credibility: An increase in trust from customers and vendors is a direct result of becoming a VAT registered business.

When calculating its VAT bill, a business that has registered for Value Added Tax (VAT) can select froma number of different VAT schemes, including the standard VAT rate and alternative VAT schemes, such as the Flat Rate VAT plan.

What are the downsides of VAT registration?

Although there are multiple positives to having a VAT registration, there are also some drawbacks to think about.

Businesses that are registered for VAT are required to file regular VAT returns and keep very detailed records of all VAT invoices they send out and receive. This adds to their administrative work. This may take a lot of time and put more administrative work on the company.

Complying with Regulations Costs: The expense of adhering to VAT laws, the added bookkeeping workload, and the possibility of an HMRC inspection or inquiry.

Price Increases for Consumers: With a valid VAT registration, you are required to add VAT to your sales. As a result, your customers may have to pay more, which could make your products or services less popular. Customers who are VAT registered will not be negatively affected because they can simply earn back the VAT they are charged.

It’s possible that your company’s profit margins will shrink if you are unable to increase prices to account for value-added tax.

Do you pay vat on profit or turnover?

The value of a company’s taxable supplies is what determines the amount of value-added tax due in the United Kingdom. One common term for this is “turnover” of a business.

What expenses can you claim as a social media influencer?

Here are a few examples of tax-deductible expenses:

-Website design and development

-Accountant Fees

-Web Hosting

-SEO expenses

-Photographers

-Camera and Equipment

What are the justifications for filing for VAT?

Legal obligation: As we’ve already talked about, you have to sign up for VAT if your business makes more than £85,000 in a calendar year. Penalties and fines may apply if this is not done..

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham

It is imperative to bear in mind that we are in no way affiliated with Her Majesty’s Revenue and Customs, as we are an autonomous accounting firm acting independently.

Agent Dedicated Lines for Self Assessments, PAYE and Tax Credits

• HMRC Debt Management offers a specially reserved line, namely 0300 200 3887, for representatives that are in need of instant reply.

• Those who require the aid of HMRC Self Assessment and PAYE services for individuals may call the number 0300 200 3311 to be connected with an appropriate advisor.

• Finally, all those seeking assistance from Tax Credits Department can take advantage of 0345 300 3943 as their contact option.

Campaigns and Disclosures

For individuals looking to take advantage of HMRC’s various campaigns and disclosure facilities related to payment arrangements or any undisclosed tax information, they can do so by calling the appointed phone numbers. Such services include:

– Contractual Disclosures (0300 057 9336)

– Credit Card Sales Campaigns (0300 123 9272)

– Disclosure Line (0300 123 1078)

– Let Property Campaign (0300 123 0998)

– National Minimum Wage Campaign (0300123 2671)

– Offshore Disclosure Facility (0300 322 7012)

– Second Income Campaign (300123 0945)

– Tax Avoidance Schemes(300 058 8993).

Employers

Employers looking for general queries and inquiries can contact the HMRC Employer Helpline at 0300 200 3200.

Also available at the Employment Status number on 0300 123 2326.

Individuals, employees and agents may reach out to HMRC with queries via:

• The Individual Employee Queries line at 0300 200 3300

• The dedicated helpline for new employers at 0300 200 3211

• Agent Dedicated Lines for Income & Capital Gains Tax matters, available on request by calling0 300 200310

• Online Services Helpdesk over telephone by dialing up 03000 200360.

HMRC Postal Address? Please deliver to post addressed to HM Revenue & Customs Benton Park View Newcastle Upon Tyne NE98 1ZZ.

Can you chat with HMRC online?

Generally, individuals have a range of options when it comes to getting in contact with HMRC. Options include using an online form, taking part in a webchat session, making a telephone call or sending mail. For those who may find it difficult to get in touch due to their health situation or personal circumstances, there is additional assistance available from the HMRC team, which can help provide guidance and support for these specific cases.

How do I ring HMRC about tax?

If you are in need of assistance from the HMRC, it is important to get in touch with the correct helpline for your specific needs. One of the most commonly used lines provided by HMRC is their Income Tax general enquiry number which can be reached on 0300 200 3300. This line allows customers to speak directly with an experienced advisor who can address any questions or concerns they may have about taxes, ensuring that all queries and issues are resolved quickly and efficiently.

Is 0300 200 3300 free?

Calling this telephone number will incur charges of 7p per minute in addition to your phone service provider’s access fees. This is a call connection facility; an alternative way you can reach HMRC without charge is by utilizing their website or via direct contact with them free of charge. Please note that we are not affiliated with Her Majesty’s Revenue and Customs (HMRC).

HMRC Contact Corporation Tax VAT PAYE Self-assessment Tax Credits

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham

Prepare for your Accounts throughout the year

Your company’s accounting period normally ends at the end of the year. It is often referred to as a limited company’s accounting reference date. When you file the mandatory year-end accounts with HMRC and companies house, your accounting period for the fiscal year is officially closed.

It is not advisable to wait until the very last minute to gather all the data needed for your year-end accounting. To eliminate and avoid your extra stresses, prepare for it all year long. In order to track down outstanding invoices and payments, we advise beginning work on your year-end accounts one month in advance of the deadline.

Gather relevant Paperwork

Income records, bank statements, statements of account from suppliers, invoices, and receipts are the documents you must make sure you have.

Chase Late Payments

To make sure your accounts are as accurate as possible, you should chase any outstanding bills before the reporting due date and deposit any money you receive.

Sort any expenses

Keeping track of your spending will help you cut your corporation tax because expenses will lower your company’s profits.

Double-check your records

Ensure your records and the supporting documentation are in accordance with each other. Be sure that any sales that have been made but have not yet been paid for are recorded as debts due, not as income.

Update Staff Records

Ensure that all of your staff’s records, particularly those pertaining to payments, benefits, and costs are current. This is to avoid any tax penalties or National Insurance errors.

Hire an Accountant

Hiring a competent accountant who can learn all there is to know about your company in confidentiality and transparency will make your year-end account and tax reporting and filing the easiest tasks possible! HMRC offers these services with satisfactory results and in an orderly professional manner.

Be mindful of meeting the deadline for submitting your year-end accounts

You may submit your accounts to HMRC Companies House for assessment and consultation. If you have modified the accounting period with Companies House, the deadline can vary. Check out the website of Companies House for the following details:

• Within 9 months following the conclusion of your company’s fiscal year, submit any subsequent annual accounts to Companies House, and we will assist you with the filing and documentation of your tax and accounting needs.
• HMRC can also file and work out your Company Tax Return at the utmost professional standards.
• HMRC can receive payment for your corporate tax or you can negotiate that the business owes no tax or any other payable. This can be done after 9 months and 1 day following the conclusion of your accounting period.

How do you prepare a year-end account?

The following should be included in your year-end accounting checklist:

1. Preparation for a closing schedule
2. Gathering of outstanding voice receipts
3. Reviewing asset accounts
4. Reconciling all transactions from pending, canceled, or on-going
5. Closing out accounts receivable and payable
6. Accrue receivable accounts
7. Accrue payable accounts

What is the Preparation of Annual Accounts?

The balance sheet, income statement, statement of changes in net assets, cash flow statement, and statement of financial position are all included in the annual accounts.

Can I Prepare Company Accounts myself?

One can always be able to create and submit business accounts, tax documentation, and records. But, if the workload is of larger bulk and your company has less time to finish it, it could be wiser to use the services of accounting and tax firms to do the entire process or even adjust grants and entitlements

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham

What are Annual Accounts and Corporation Tax Return Deadlines?

In every business may it for-profit or non-profit, there’s always a need to hire an accountant who is in charge of all the recording, classifying, summarizing and interpreting of financial transactions. Accounting knowledge, skills, and expertise are always important and big contributors to the overall flow and operation of the business.

Most limited companies are liable and there’s a need to file annual accounts with HMRC and Companies House annually on or before the deadline. If you fail to submit this, you will be penalized by paying substantial fines and other cases will lead to companies finding themselves struck off the register and worst case facing legal action. Your hired accountant is the best person who will not let these scenarios happen. They will gather all the documents needed, prepare all significant business-related paperwork and ensure they are all submitted before the deadline. The preparation of all these documents especially financial statements depends also on the size of your business. Common statements included in their works are a profit/loss account or income statement, balance sheet, changes in owner’s equity, cash flow statements, and a report from the company’s director.

What Allowable Expenses Can Design and Marketing Agencies Claim?

Talking about claiming business expenses for your limited company, there are different rules you need to follow:

• Claiming for expenses can only be made if you incur those expenses wholly and exclusively during the daily business operation.
• You can’t claim if the expense incurred has a dual purpose like using it for personal and business purposes. Like if you have a business trip abroad and extend your days for leisure purposes or personal consumption, then you can only claim for those business-related days, not the additional personal days.
• These business expenses can be paid through the bank account of your company or you can reclaim the monetary value of business expenses paid by you and reimburse those expenses by your company.
• The majority of limited expenses of a company can be compensated against its corporation tax liability but there are exceptions to this like business entertainment.
• You need to sustain the accuracy of all the records of pre-formation and running expenses including receipts of VAT.

Do Limited Companies Need an Accountant?

When you started your design/marketing agency, you did it out of a passion for the art of marketing!

Then came all the complicated work like preparing legal documents in setting up a company, bookkeeping and accounting tasks, taxes, and all business-related transactions. Your business is as unique and simple as any other business when it all started and when it becomes progressive and at its peak of success, more accounting work is needed to be performed. That’s why you need an accounting firm or an accountant who will do the tasks that better understand how it works and free you from the stress and burden of the complexity of numbers.

What Does an Accountant Do for a Company?

An accountant is a big help for the business as their analysis and interpretation make critical financial decisions. Collecting, monitoring, and making adjustments to the finances of the business, will make sure everything works well. They are responsible for reconciling bank statements, and financial audits, and making sure that all financial records are precise throughout the calendar year.

In every business may it for-profit or non-profit, there’s always a need to hire an accountant who is in charge of all the recording, classifying, summarizing and interpreting of financial transactions. Accounting knowledge, skills, and expertise are always important and big contributors to the overall flow and operation of the business.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham

How should you choose your company name?

You can easily set up a private limited company in the Uk following six simple steps. Here are the six steps to setting up a limited company.

Start by choosing an appropriate name for your company. The company name you choose should be unique and not closely resemble an existing company. In addition, the name shouldn’t be offensive or create false implications. While you can trade using a different name, the law restricts you from adding ‘ltd’ to this company name if you haven’t registered it as your name.

How do I add a director to company House UK?

The law requires you to have at least one Director (where you can include yourself) to register the company. While the minimum is one, you can include several directors who should follow the company’s rules. The directors help to agree on decisions pertaining to the company collectively. In addition, directors help to file accounts and ensure the company adheres to the corporation tax.

How do I add shareholders to Companies House?

The law states that a company must comprise at least one shareholder (the Director can be the shareholder). The company can divide the shares among the directors or shareholders. Company shareholders help in voting on various issues at shareholders’ meetings, where one share represents one vote. The significance of shareholders varies, as the one with over 25% of shares becomes a ‘Person of Significant Control’ (PSC).

Create Your Company Documents

You must create documents that show your company formations and describe how you’d want to run it. These documents include the following;

● The memorandum of association – it’s a legal statement that all initial shareholders sign that shows the agreement to form the company.

● The article of association – this document contains rules on how you intend to run the company. All directors, shareholders, and the company secretary must sign it. You can write your own or choose model articles of association.

Confirm What Records You Need to Keep

While setting up the company, you’ll need to keep records of the essential details of the company. These records include accounting records, PSCs, etc. Remember that you have to keep these records for approximately six years. You can visit the government’s website to find out more.

Does my company have to be registered with Companies House?

You can register the company and the official address after finishing these steps. Select the right Standard Industrial Classification (SIC) code when registering your company with Companies House. The SIC code helps to specify your business’s nature. While registering with the Companies House, remember to register for corporation tax.

How to Register a Limited company?

You can either use Form INo1 to register your company or register it with Companies House online. The law requires you to register by post if you consider not using ‘limited’ when registering the company name.

How long does it take to set up a limited company?

It takes very little time to set up your limited company in the United Kingdom. You register the company in eight to ten working days when setting up the company by post.

Can you set up a limited company yourself?

The law allows a single individual or multiple stakeholders to set up a limited company. You can register as the company director and sole shareholder.

What is needed to set up a limited company?

Here are the things you require to set up your limited company:

● Business activity

● Shareholders’ details

● Registered office

● Secretary details (not compulsory)

● Director’s details

● People with significant control (PSC) detail – when the person isn’t a shareholder, secretary, or Director.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham

What is Meant by Management Accounts?

While the words, management accounts, may seem self-explanatory, it actually is not. Management accounts refer to financial reports designed for managers and business owners. Generally, management accounts include a Balance Sheet and a Profit & Loss report that these business professionals can use quarterly or monthly.

These reports are similar to Year-End accounts. However, they tend to be personalized for business owners, and these reports tend to be more informal than Year-End accounts.

Management accounts allow company owners to gain a better understanding of their company’s financial trading position. And from there, business owners can make better business decisions.

What Should Management Accounts Include?

The lifecycle stage of the business determines what management accounts should include. The business goals and the business sector it is in also decide what should be in management accounts. Other than that, the usual management accounts include:

• The Balance Sheet
• The Cash Position
• A Profit & Loss Statement
• Key Performance indicators

How Often are Management Accounts Prepared?

Management account preparations are usually done on a monthly or quarterly basis. There is no set time to prepare management accounts. Nevertheless, they must be prepared regularly and consistently, so business owners or management teams can take full advantage of these reports.

What are the Benefits of Keeping Management Accounts?

As previously mentioned, management accounts do not have a set format. They are also not mandatory, but it is in the best interest of every business to consistently produce them. Doing these reports on a consistent basis goes a long way because the financial performance data obtained can lead to decisions for optimal business results. In fact, the following includes some of the benefits of maintaining regular management accounts:

• Growth Monitoring

Businesses can compare their management accounts on a monthly, quarterly, semi-annually, or annual basis. And from that, they would gain accurate monitoring of their performance and financial growth.

• Planning for the Future

With management accounts, companies can observe cash flow and income patterns. This observation gives companies the power to make more accurate revenue forecasts. Companies can also make allowances for accounts that are doubtful, and they can plan accordingly around slower months.

• Motivating for Funding

Investors love to see a good business plan which includes a good set of management accounts. So, business professionals can confidently approach investors with their business plans and be better prepared to answer investors’ questions.

• Optimizing processes

Companies can make any required improvements when they understand their cash flow.

What is the Difference Between Statutory Accounts and Management accounts?

Statutory accounts include a breakdown of the company’s financial actions during the year and they have set standards that must be met and must be submitted to Companies House and HMRC at a set deadline. Management accounts, however, are for internal decision-making preparation purposes.

Is Xero Good for an LTD Company?

Yes, Xero is an adaptable and versatile cloud accounting tool that companies can use to prepare management accounts. And even though management accounts are not mandatory, these reports are beneficial for companies to perform regular financial health checks. Also, as previously stated, management accounts are spectacular for any business.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham

What are quarterly management accounts?

Management Accounts are financial statements that provide valuable information to business owners and managers for making decisions and effectively managing the company based on recent performance. These reports are typically prepared on a quarterly, monthly, or weekly basis and include essential key performance indicators that offer insight into the company’s financial health.

Reporting only one Profit and Loss statement for the entire company is insufficient. To truly understand where your business is making money, it’s necessary to report Profit by Product, Service, Customer type, or location. For instance, a hotel might analyze profit by location and the most lucrative types of rooms. Without this level of detail, it’s difficult to assess profitability accurately.

Management Accounts are financial reports that the business owner and management use to make decisions and run the company based on recent performance. They’re typically produced every quarter, month, or week and include Key Performance Indicators. By providing insight into a company’s financial health, Management Accounts can help improve future decision-making.

Regular reporting of Management Accounts is crucial because it allows you and your team to see the impact of business decisions shortly after they’re made. This enables you to continually fine-tune your strategies and make informed decisions that drive the company’s success.

How to Know if You Need Monthly or Weekly Management Accounts?

Weekly

To minimize costs when dealing with multiple transactions, it’s advisable to generate weekly reports. This approach is especially advantageous for restaurants, which can benefit greatly from weekly management accounts and budgeting.

Large restaurants typically have average net profit margins of 6%-8%. By improving this margin by just 5%, a restaurant can increase its earnings by £60k. Success in this industry is dependent on continuous monitoring and analysis of key metrics. The advantage lies in the details. By implementing this strategy, you will outperform your competitors who are unwilling to put in the effort, and you’ll see the results firsthand. Generally, large restaurants can save at least 4% in net profit margin by using weekly budgets. For more information on this, please refer to the “Why do you need Management Accounts?” section above, which includes a comparison between professional and hobbyist budgeting.

Monthly or Quarterly

For industries with mostly fixed costs, such as nurseries or hotels, it is unnecessary to provide weekly reports. Instead, you can choose to provide reports on a monthly or quarterly basis, with monthly reports being the recommended frequency. You can gain a competitive advantage over your rivals by using more up-to-date information in your decision-making.

What should be included in monthly management accounts?

As for what should be included in monthly management accounts, typically, they should contain financial statements such as profit and loss, balance sheet, and cash flow statements. In addition, you may also want to include key performance indicators (KPIs) such as sales figures, gross profit margin, customer acquisition costs, and employee productivity metrics. Including these KPIs will give you a more comprehensive understanding of your business’s financial health and help you make informed decisions.

• Profit & loss statement.
• The balance sheet.
• Key performance indicators
• The cash position.

What Are the 5 Accounting Elements in Bookkeeping?

Your finances can be categorized into five major account types: equity, assets, liabilities, expenses, and revenue, which are organized in the chart of accounts.

The Does Xero have management accounts?

Answer is yes if you’re wondering whether Xero includes management accounts. Xero is a flexible cloud accounting platform that can be used to prepare management accounts.

At Gm Professional Accountants, our team of experienced management accountants can provide you with all the necessary information to help plan a promising future for your business. If you have any pressing questions or are interested in our Management Accounts Service, please reach out to us by sending an email to info@gmpa.co.uk.

What is a Self Assessment?

Simply stated, a Self Assessment, otherwise known as Form SA100, is HMRC’s way of determining how much National Insurance and Income Tax you require to pay on any income which is not taxed at source.

Check our calculator to see if you need to complete a tax return

Is it mandatory to do a self assessment tax return?

In general, anyone who receives income not taxed at source is required to complete a Self Assessment.

In the case of the sole trader, the income that you receive from the trade does not have Income Tax or National Insurance Contributions deducted from it, which means you need to let HMRC know about such income on the Self Assessment form so it can calculate what tax you owe, if applicable.

If you are a limited company director, you will typically require to file the Self Assessment so you can notify HMRC about any dividend income that you have received from the company.

Other examples of income that are not taxed at source may include income from abroad, investment (dividend) income, or rental income from any of the properties you own.

Consider visiting the Gov.uk website so you can take a look at a complete list of who requires to complete the Self Assessment, The website has an online tool as well that will let you know if you require to file a return.

When must I submit my self assessment?

You need to file the Self Assessment by January 31st after the end of the tax year that it applies to. As for tax years, they run from April 6th to April 5th. In case you are employed, you may submit the Self Assessment immediately after you receive Form P60 from the employer.

If you run the company, you will have to issue Form P60 from the PAYE system or get an accountant to prepare the form for you.

In case you are a sole trader, you may file the Self Assessment immediately after the tax year ends. Also, note that there are many good reasons why filing the Self Assessment early is the necessary step to take.

What happens if I don’t do a self assessment tax return?

If you do not notify HMRC, you may face a penalty or fine and will be required to submit Self Assessments for previous tax years if applicable. If you are not sure whether you have registered, try contacting HMRC with a National Insurance number at the ready to confirm one way or the other.

If you will not able to submit your return after you have registered for the Self Assessment, you may incur fairly significant penalties as HMRC is becoming more and more strict on the deadlines and penalties for any late returns, therefore, we cannot stress enough how important it is for you to get the Self Assessment filed right on time.

In case you are a GM client, our GM team can take away the hassle and headaches associated with completing and filing personal tax. We will prepare the Self Assessment for you and after you have approved it, we will then submit it online and let you know how much you require to pay to HMRC.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham

Claiming Capital Expenses as a Builder

PAYE Builders cannot claim capital expenses. If you, as a builder, are working under CIS, you can claim capital expenses for business use. The prime example is a car you use for business purposes or a laptop you use for your work.

Claiming Motor Vehicle Costs as a Builder

The rules for claiming motor vehicle cost as capital expenses are the same as stated above. If you use the vehicle only for business purposes, you can claim vehicle costs as capital expenses and the tax back. While buying a vehicle, numerous tax-related expenses are involved like insurance, road, and fuel tax. You can claim them back.

Claiming for Tools, Equipment, and Uniform

PAYE individuals can claim money spent on any tools and equipment as expenses. CIS workers can claim even the replacement of tools and the purchase of new tools as an expense. The only caveat is that the item shouldn’t be from your employer.

CIS and PAYE workers can claim the expenses of uniforms or protective equipment. Check out our uniform expenses guide to know the details.

Travel and Subsistence Expenses

CIS workers can claim travel and subsistence expenses while working temporarily. If the workplace contract is less than twenty-four months, it is temporary. Even if the contract duration is uncertain, it is also considered a temporary workplace. It is considered a permanent workplace only when you have completed twenty-four months.

PAYE worker who has a permanent workplace cannot claim travel and subsistence expenses. However, if the same worker works at a construction site or anywhere else, they can then claim travel and subsistence expenses for travelling to that place.

Builder Admin Costs

CIS workers can claim administrative costs, separate from the categories highlighted above. However, the expenses should relate to your work. A few examples include stationary, phone and postage expenses.

PAYE Builder usually doesn’t anchor admin costs and, therefore cannot claim such expenses under this category.

What expenses can I claim as a subcontractor?

We will highlight the categories under which you can claim expenses below.

• Tools, equipment, materials and so on

• Travel expenses

• Protective clothing and uniform

• Phone, stationery, postage

• Use of home (for business purposes)

• Administration costs

While claiming the expenses, make sure you file them under the right category. Also, you shouldn’t miss label the expenses as that can lead to penalties and other problems.

Can you claim fuel as a contractor?

Yes, you can claim motor vehicle expenses, including fuel, servicing, repair, and oil. You can even claim interest on your vehicle loan. If you have re-leased it, you can claim lease payments. Of course, insurance, registration, and appreciation of the vehicle can be claimed as well. The only condition is that the vehicle should be used exclusively for business purposes. If it is partially used for business purposes while the rest of the time it is used for personal reasons, you cannot claim any of these expenses.

When claiming vehicle expenses like fuel, ensure that you record every payment made accurately. That way, it makes it easy to claim expenses.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham

What are Allowable Expenses? ltd company 2023/2024

The allowable expenses are actually the costs that are mandatory or essential for running a business. In case the expense is used for dual purpose i.e. personal use as well as business use, then you can claim the portion that is used for business purpose only. You can get the entire detailed list of all the allowable expenses along with the regulations from the government webpages of your city/state/country.

Accountant for Self-Employed Financial Consultancy Business Limited Company

Being a consultant means you have to closely work with different departments in a company. This will help you to come up with some efficient solutions that can maximise the growth of your business. In some cases, you may have to work along with the financial system of a client to formulate some strategies in future.

However, you can face difficulty in dedicating enough time for managing your own finances while you are taking care of other’s businesses. So, our team of expert accountants for consultants can be quite helpful.

How Can We Help?

Our team of consultant accounting is specialised in providing the best and most efficient accounting services. Their work can help you in maximising your profits. We are here to work along with you and help you in improving your efficiency in accounting and taxes. This will also help you to avoid any chances of penalties related to incorrect or delayed submissions. We cater our service for your consultant company, regardless of which industry you are in i.e. architecture, finance and engineering etc.

Just like you provide your specialised knowledge and expertise to your client as a consultant, we can guide or advise the consultants regarding accounting.

Our Accounting Services

We believe in hi-tech solutions and our accountancy firm is driven with modern and latest technologies. This can make the tasks much easier, better and more accurate. We, at GM Professional Accountants, make sure to serve the best job as your personal accountant. We are just a call away to offer you with our unparalleled services and support.

We are quite pro-active and we are here to ensure that your business or company is completely following all the tax rules and regulations efficiently. Do you have some questions or queries? Contact us! We are here to answer all your accounting-related questions, regardless of how big or small they are. We can provide you with answers via email as well as via phone calls. We guarantee you to provide the best service and you can be at complete peace of mind that your accounts are in safe hands.

Sole Traders – They may subtract the cost of total expenses that is allowed from the gross income before they work on the taxable profit. This means the income tax will not be paid on the incomes used for expenses.

Limited Company – Just like the sole traders, these limited company contractors can deduct the expenses only that are incurred for the business purpose solely. However, they can do the same from the gross income before they calculate the net profit for the purposes of Corporation Tax.

Frequently Asked Questions

1. What expenses can you claim when you are self-employed?

If you are a self-employed worker, then you will be able to claim a lot of allowable expenses. These are:

• Travel
• Costs of office (i.e. stationary cost and rest of the commercial premise)
• Cost of insurance
• Marketing or advertising cost
• Training cost
• Financial costs

2. What expenses can you claim if you are self-employed and working from home?

According to the reasonable method of diving cost, a person who is self-employed and is working from home can claim some of the part of their expenditure. These are:

• Use of internet
• Heating cost
• Cost of electricity
• Rent or mortgage interest

3. What you cannot claim as your expense?

You cannot claim the expenses on the money that you can take from a business for playing the private purchases or expenses. These can be penalties or fines even related to business travels. You cannot claim expenses for the gifts or entertainment for customers or clients. Even clothing cannot be claimed as an expense in some of the circumstances.

You will not be able to claim money for the clothing that you are using for daily wear outside of your company or business. You can only claim clothing as your expense when the clothing is directly related to the necessity or safety. For instance, it can be a safety suit or costume in a children’s entertainment company.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham

Do I charge VAT if my turnover is less than 85000?

Shortened VAT, the value-added tax is a levy imposed on many products and services offered for sale by licensed businesses. Businesses are required to enroll for VAT if their VAT-taxable income surpasses 85,000. Even when the turnover falls below 85,000, businesses should still register.

What happens if I go over the VAT threshold temporarily?

Businesses whose taxable income surpasses the threshold temporarily should submit an application for a registration exception. Write to HMRC with supportive documents explaining why you are confident that your VAT taxable turnover, won’t come cross to the 83,000-deregistration threshold for the next 1 year.

Find out more

What is the VAT threshold for 2023?

The VAT-taxable income and sales are anticipated to remain the same for nearly all businesses in 2023. When the cumulative amount equals or exceeds the 85,000 VAT registration minimum for a period of 12 months ending in 2022/23, then you have up to the subsequent month to register.

What happens if you go over the VAT threshold without Realizing it?

Once you’ve surpassed the supply threshold, you will be required to register for Vat within 30 days. Failure to do so will attract a penalty whose extent will depend on whether you notified the HMRC of the error yourself or the HMRC detected the error on its own and whether it was a result of oversight or you intentionally tried to defraud HMRC.

Will the VAT threshold go up in 2024?

For the next two years starting 1st April 2022, the threshold for VAT registration and deregistration is will remain unchanged. It’s also expected that the 85,000 taxable turnover thresholds used in determining those eligible for VAT registration will remain unchanged until 31st March 2024.

How does HMRC check VAT returns?

VAT staff can come to your premises to examine your VAT records, also known as compliance checks in a bid to ensure that the amount of VAT you are paying or reclaiming is right. More often than not, HM Revenue and Customs (HMRC) gets in touch with you to plan the visit. In most cases, they issue a 7-day notice ahead of the visit.

Is it necessary to charge VAT as a sole trader?

Just as is the case with other business structures, sole traders have the same VAT threshold and conditions. With absolute control of your business and organization activities, you will be liable for VAT registration. Even as sole traders oversee the computation, charging and transfer of VAT to HMRC, it’s necessary to have a deep understanding of the process from the beginning to the end.

Do I need to charge VAT on shipping?

In the UK, VAT is levied in virtually all shipping activities except for the delivery expenses for zero-rated goods, which includes basic foods, newspapers, children’s clothes and footwear, water and books. Keep in mind that postage is categorized as a business expense and therefore you can file a claim to get it back.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham

What expenses can a landlord claim on a rental property?

In the UK, landlord allowable expenses/ costs on rental property income come with a terrific relief. You can claim the overall maintenance and repairs of your rental property, not including any improvement.

Here is a unique breakdown to help you fully understand your allowable expenses easily.

Some examples of allowable expenses a landlord can claim are.

Being a landlord comes with a lot of busy schedules, but there is a need to always stay on track when it comes to your allowable expenses- gives you ample time for an easy workflow. You can claim your allowable expenses which include;

Firstly if you bought anything to be used in the rental property.

Utility and tax bills such as water, gas, electricity, and council bills, if only you paid for them.

Insurance includes landlord policies for rental property, contents, and public liability- that is, the cost of services such as gardeners’ and cleaners’ wages.

Letting agents fees.

Legal fees for renewing a lease of fewer than fifty years.

Accountants fees.

Rents, ground rents, and service charges.

Find out more

How does an allowable expense affect your tax bill?

As a landlord, you probably wondering how exactly an allowable expense will affect your tax bill, the truth is that, yes, it does affect your tax bill- positively. More reason to put on a smile as you work on your self-assessment tax return. When you deduct your allowable expenses, it reduces your tax bill too, as tax is charged according to the profit you make, Being a landlord in the UK.

Can I deduct my cell phone for a rental property?

Well, this is a challenging question for a majority of landlords, and you too need to find an honest answer to it. With that said, the answer is yes, you can deduct your cell phone for rental property, if only you did use it for purposes of your rental business. Be brave enough to separate business calls from personal calls, and also keep a record of the same for time-saving and easier access to your cell phone’s allowable expenses.

What are my expenses as a landlord?

The need to know your expenses as a landlord in the UK is very important as it plays a crucial role in matters of rental income and taxable profits. It helps in understanding what you will need to deduct from your rental income. These expenses include;

Maintenance and repair costs.

Insurance and service costs-cleaners and gardeners.

Council tax.

Utility bills.

Letting agents fees.

What is included in operating expenses for a rental property?

Operating expenses for a rental property are what keep your property in a good condition always, to maintain it. These are the costs that will recur, and they include;

Insurance.

Marketing and advertising- very essential for the rental property business’s prosperity.

Leasing and property management.

Repairs and maintenance.

Property tax.

In the UK, you, the landlord needs to understand your allowable expenses on matters of rental property. Be sure to know and enjoy your allowable expenses on rental business.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham

How to prepare Ltd accounts for smaller companies?

Statutory accounts must include the following:

• A balance sheet, which indicates the worth of all the company owns, owes, and is owed
• A profit and loss account, which indicates the company sales, running costs, and any profits or losses made throughout the financial year
• Notes about the accounts

It is considered small when a company meets at least two of the criteria below:

• 10.2 million or less turnover
• 5.1 million or less on its balance sheet
• 50 or fewer employees

It is considered a micro-entity when a company meets at least two of the criteria below:

• 632,000 or less turnover
• 316,000 or less on its balance sheet
• 10 or fewer employees

Small companies and micro-entities qualify for an exemption so that their full accounts do not need to be audited. They can also decide whether to send a copy of their profit and loss account and directors’ report, and their balance sheet may be made simpler. Moreover, micro-entities are able to prepare simpler accounts that simply need to comply with the statutory account minimums and only send their balance sheet to the Companies House.

Statutory accounts must adhere to these accounting standards:

• International Financial Reporting Standards
• New UK Generally Accepted Accounting Practice

Find out more

How to file Ltd company accounts?

You may create and file your annual accounts using a variety of accounting software that is readily available. Or, if you are a small company or micro-entity, you might be eligible to use the Company Accounts and Tax Online (CATO) service, which enables you to send your accounting data at once to both Companies House and HMRC.

You must file your company tax return online. But you may use the paper form CT600 if you have a valid reason why you can’t file online or wish to file in Welsh.

Can I prepare my own limited company accounts?

For a limited company, you have the option to handle accounting on your own, including preparing and filing annual accounts. To manage their finances, however, most limited companies use an accountant. Because compared to sole proprietorships, limited companies have more complex structures and obligations, making it challenging to handle everything on your own. If you make a mistake, there are severe penalties.

Do I need an accountant for my LTD Company?

Although having an accountant is not legally required, doing so has several advantages, including making it easier to complete your annual accounts and company tax returns. Furthermore, they can handle the tax registration of new companies.

Can I submit my corporation tax return myself?

You have two options for filing your company tax return, either do it yourself or hire an accountant to do it for you.

Do Ltd have to file their accounts with Companies House?

Accounts must be delivered to Companies House by all limited companies. It doesn’t matter if your company has been successful, breaking even, not trading, or idle. You may contact HMRC directly if you have any questions concerning HMRC accounts or other tax-related matters.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham

Can you have a limited company with one director?

Yes, the full truth is that you can indeed establish a limited company with one individual in the United Kingdom. If you look at the designated application form, you’ll notice that you have to mention at least one member and one director. The member can be a guarantor or shareholder. Despite that, it’s not unheard of at all for a sole individual to be named in both slots. This indicates that one person undoubtedly can establish a United Kingdom limited company with the assistance of Companies House.

Small business owners who wish to work independently may appreciate the answer to that question. The same thing applies to small business owners who do not require the cooperation of business partners for any reason. Limited company arrangements are extremely adjustable as well. Because of that, owners can recruit “extra” directors and members as they wish. They can do this freely once they first develop their companies.

The vast majority of individuals can create limited companies on United Kingdom soil. They simply have to be at least 16-years-old. They cannot be undischarged debtors or disqualified directors, either. Note, too, that people don’t necessarily have to live in the United Kingdom in order to establish limited companies in the nation.

What are the Requirements of Setting Up a Limited Company

The requirements of limited company establishment go beyond having to mention members and directors.

Limited companies have to provide registered office addresses during the incorporation process. These have to be tangible ones as well. P.O. boxes are not permitted. Mail items that HM Revenue & Customs, Companies House or government agencies in general send to your specific company go straight to the aforementioned registered office address.

Find out more

How Long Exactly Does It Take to Establish a Limited Company?

The official website for Companies House features the previously mentioned addresses. This is for public record purposes. Business owners have to make statutory company records accessible to all on these sites.

You need to mention various details on your application form. These details include:

The name of your company

Registered office address

Member and director information (service addresses, etc.)

Business operations details (1-4 SIC codes, etc.)

Influential company representative information

You can start trading using your newly established business soon you incorporate it. Just wait to get your incorporation certification.

Do You Pay Less Tax as a Limited Company?

Limited companies aren’t like sole traders. These companies aren’t required to pay national insurance or income tax. They are accountable for corporation tax payments for their business profits, though.

Can I Employ Myself in a Limited Company?

Self-employed persons are considered to be personally responsible for any and all debts that are accumulated by their companies. This fact may make their personal possessions vulnerable in various ways. If you have a limited company, you can take advantage of something that’s called “limited liability.” This safeguards personal assets. It classifies business owners as being their own entities.

How to register as self employed with HMRC?

Here is a brief review of the self employed registration procedure while we walk you through it in further detail:

1. Check to see if your work qualifies as self employed.

2. Register online for an account with gov.uk

3. Complete your registration by using your Government Gateway information, as well as details about your business, such as your trading name and contact info.

Once you have registered as a self employed person, you will have a number of duties and responsibilities, such as filing an annual Self Assessment tax return.

When do I need to register as self employed?

HMRC says that you need to register as soon as possible. There is a deadline, unfortunately. Legally, you are required to register by the 5th of October after the end of the tax year during which you began to work as self employed. In an ideal situation, you would not want to wait until it is too late to register. You can be stuck with a hefty tax charge if any goes wrong and you are not able to register by the deadline.

Find out more

Do I need to register as sole trader?

Being self employed does not always imply that you are a sole trader. If you work for yourself, you are most likely a sole trader, but there are other alternatives. Meanwhile, if you are involved in a business partnership, you must register as self employed, but not as a sole trader rather as a partner.

Your responsibilities once you’ve registered as self employed

You will have a number of responsibilities after you have registered.

1. Most essential, you should keep accurate records, specifically of any sales or outgoings related to your business.

2. It is also a good idea to save any correspondence from HMRC. These letters and documents might assist you in completing your tax return quickly and effectively.

3. You must file your Self Assessment tax return online by the 31st of January each year.

4. You must pay HMRC on the 31st of January and the 31st of July. However, you may be permitted to delay these payments if HMRC agrees. Besides paying income tax, you will be required to pay the National Insurance Contributions (NICs) for both Class 2 and Class 4.

Is registering as self employed the same as registering for Self Assessment?

The calculation and payment of your own tax and National Insurance liabilities will be your responsibility once you have registered with HMRC as a self employed individual. This indicates that you will be required to finish and submit a Self Assessment tax return to HMRC each year.

How do I get a UTR number as self employed?

By submitting an online application and registering as a self employed individual, you can obtain a UTR number quite quickly. This can be possible through the HMRC website. A UTR number will immediately be assigned to you after you register for Self Assessment or create a limited company.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham

What Is a CIS Refund?

Subcontractors who are employed within the construction field do not always have to sign up for CIS. In spite of that, they have to complete and send CIS tax forms for all tax years. If you make the decision to avoid CIS registration for any reason, you’ll receive a 30 percent income tax straight from the government.

If you decide to go forward with subcontractor registration, the HMRC will request 20 percent payment taxes from you. It doesn’t actually matter which choice you make. You’ll overpay a substantial sum of tax money annually no matter what. You’ll pay more than standard employees who are part of the PAYE system. These individuals have the convenience of individual allowances that are available to them via the government.

How Do I Get My CIS Refund?

If you want to receive your tax refund, you can begin by completing and sending out your return promptly. This has to go to HMRC. You can accomplish this through the completion of a Self-Assessment tax return. This return enables people to list the tax payments they’ve given to HMRC during the year. It includes a thorough expenses list as well. Assessing this list can help with deduction calculations.

Once you’re due to file your return, you have to establish an HMRC account. You can verify things there using your national insurance and UTR numbers. If you’re classified as a CIS limited business, you have to include your business’ specific taxpayer reference number.

You can opt to receive your refund electronically. If that option appeals to you, you have to give out your bank information. You can do this as you file. You can also opt to request a paper check. Note, though, that this option generally isn’t as rapid.

Find out more

How Long Does a CIS Refund Take?

The HMRC generally takes between 10 and 14 days in total to complete tax return processing matters. That’s because they have to perform extra security checks as a means of guaranteeing that things are all in line with designated CIS regulations. It isn’t out of the question, though, for some refunds to complete processing in merely six days or so.

If a refund includes suitable information, tax specialists can finish filing within one to two days. Durations differ based on seasons and other factors. People for the most part can get their rebates back within a couple of weeks.

Can HMRC Check CIS?

You cannot give subcontractors payments prior to verifying their statuses with the HM Revenue and Customs team. The team will let you know if the subcontractor has signed up for the CIS or “Construction Industry Scheme.” They’ll inform you about deduction rates. They’ll even let you know if you can complete payments that do not include deductions at all.

How Often Do CIS Returns Have to Be Submitted?

It’s imperative to send HMRC returns each month by the 19th. This corresponds with the tax month before.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham.

What is my first VAT return period end date?

If you are submitting VAT returns, you should be clear on the following dates:

1. The deadline for submitting your online VAT return to HMRC
2. The due date for any VAT payments you owe to HMRC

The deadlines for filing online VAT returns vary from business to business, but they are always at the end of a month. The only exception is when you are filing your last return while deregistering. There are 12 months in your VAT accounting period. You can decide which month you want to report your VAT payments when registering.

See the VAT calculator below to determine when your VAT return is expected.

How to Check Your HMRC VAT Quarters

When logging into your HMRC Government Gateway Business account, you will be presented with a summary dashboard. This will show you your VAT account and records for the year and quarter. The amount owed as well as details about past and upcoming payments will all be shown.

Find out more

What Dates are VAT Returns Due?

The VAT scheme you have selected to enrol in and the VAT period you choose when registering will determine the filing deadline for your return. Quarterly, monthly, or yearly returns for VAT are required. Quarterly VAT return dates are due for submission 1 month and 7 days after the end of a VAT quarter. Annual VAT returns are due two months after the end of your VAT period.

On What Date Does HMRC Take the VAT Payment?

Payments for monthly and quarterly VAT returns are due on the same day as the submission deadline. Therefore, one month and seven days following the end of the VAT period, both the VAT return and the VAT payment are due.

There are monthly VAT payment deadlines for annual accounting that are established by HMRC upon joining the program. At the end of the VAT period, a final VAT payment is then due, along with the VAT return, and any under- or overpayments are then determined by HMRC.

What Months Are VAT Quarters?

The most common set of quarterly VAT return dates are:

January 1st to March 31st

April 1st to June 30th

July 1st to September 30th

How Long Does It Take for HMRC To Pay a VAT Return?

Returns are typically made 30 days after HMRC receives your VAT return. If HMRC has your bank information, your repayment will be sent directly to your bank account. If not, HMRC will mail you a cheque which is often referred to as a “payable order.”

What Happens If the VAT Return is Submitted One Day Late?

Currently, there is no penalty for submitting a VAT return after the deadline; however, there is a 10% fine for paying VAT after the cut-off date.

Do HMRC VAT Accounts Accept Same Day Payments?

Even on weekends and bank holidays, Faster Payments (online or telephone banking) payments typically arrive at HMRC the same day or the next. If you pay through CHAPS during your bank’s processing hours, your payment will often reach HMRC the same working day. Typically, BACS payments take up to three business days.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham.

How To Register for VAT?

Tax is a lifeblood of the government as this is needed for the implementation of projects, salaries of public workers, and the betterment of a country. One source of tax imposed by any government is the value-added tax or VAT which is a tax charged on any good and service bought by the consumers. That’s why it is important for business establishments to register for VAT and this article helps you with the process and what are the documents required for registering for VAT with HMRC.

You can register for VAT online or through paper form by using an agent. If you will register online, you will create a gateway account or VAT online account. This is needed for you to submit your VAT returns to HMRC or HM Revenue and Customs. if you’ll be using an agent, you will need to appoint an agent or an accountant to work on your behalf to submit VAT returns and make deals with HMRC. This process will still require you to finish your registration online even if you start with a paper form.

How Much Does It Cost?

There is no registration cost and it is free for the whole process if you register for VAT using the HMRC website. But when you file for your VAT return, there are options for doing it that may add to your costs. One optional way is if you have an accountant who will work and complete your return, there’s a fee as payment for their rendered professional services. But if you want to file a VAT return on your own, one online helpful tool is to use quality accounting software. These two options will make sure that you are following the rules or compliant with MTD or Making Tax Digital legislation wherein compels all businesses in the UK to keep their digital records of VAT accounting that was released last April 2022.

Find out more

What Are the Needed Documents and Records?

These are the following important documents you will be needed for you to register for VAT:

• Incorporation certificate (incorporation details)
• Business bank account details
• Associated business details within the last 2 years
• Business details that have been transferred or acquired, if needed.

Can You Register for VAT with a Paper Form?

Yes, there are various instances that you may register VAT using the form (VAT1) that is downloadable online from the official website of HMRC. These instances include:

• if you need to apply for a registration exception
• you are registering various business or division units under different VAT numbers
• you are joining the AFRS or Agricultural Flat Rate Scheme

However, if you start registering for VAT with a paper form, still you need to complete this process online.

VAT Online Registration

All VAT-registered new businesses are required to pass or submit their VAT payments and VAT returns electronically as HMRC is now paperless in this regard. All business owners in the UK can register online for VAT using the HMRC website unless they are trading internationally or in other unusual circumstances. If you’re in a partnership business or as a business group, the nominated partner can use the online system of HMRC to register your business as long as your using a single or one VAT number. For you to have an access to their online services, you need to register for a government gateway account first at the HMRC site.

Is It Possible To Register for VAT Without a UTR Number?

To register for VAT, an NI or National Insurance number or your tax identifier UTR or Unique Taxpayer Reference business details you owned within the past 2 years.

Is It Possible To Register for VAT Without a Bank Account?

Once you have hit the £85,000 vat threshold, you will have to register for vat and must have a separate bank account.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham.

What is an employer’s PAYE Reference number?

The HMRC or Her Majesty’s Revenue and Customs designates a Pay As You Earn (PAYE) reference number for every employer with a business that’s registered with the HMRC. It is a unique set of numbers and letters that’s composed of a three-digit HMRC office number as well as a unique set of numbers as a reference to the registered business. The PAYE reference number will look similar to 123/A56789 or 123/AB56789 but may come with minor differences.

The PAYE is HMRC’s income tax collection system that will aid in the funding of basic services such as education and healthcare. It also aids in funding the National Insurance which delivers certain benefits including the State Pension of employees. As an employer, you will need your PAYE reference number for various reasons, and completing your end-of-year PAYE Returns is one of your obligations to support the system that you’re part of. It is also expected that you will have employees asking for the PAYE reference number as they may need it as a requirement in tax credits application and in applying for student loans.

Find out more

Where can I find my PAYE reference without my P60?

If you’re an old employee, then you can easily find your PAYE reference number on your P60 (End of Year Certificate). It is an annual statement given to taxpayers who have successfully completed a tax year. For those who have already resigned from their jobs, their PAYE reference number can also be found in the P45 which is a form given by their employers upon resignation.

If you’re an employer, you will find the PAYE reference number on the welcome pack provided by HMRC after you register your business with them. In case you can’t find your welcome pack. you may always go back to the emails sent by HMRC as it will also include your PAYE reference number.

If all else fails, employers can always contact HMRC by phone or in writing to request the PAYE reference number.

Where can I find PAYE reference number on my payslip?

Search for your name and payroll number in the payslip and you will easily see the PAYE reference number.

Is PAYE reference number same as payroll number?

The PAYE reference is different from your payroll number because the former is used for the deduction that has to be made to pay your income tax while the latter is used to document the total calculation of your pay.

How long does it take to get a PAYE reference number?

A PAYE reference number can take up to five (5) working days to be processed. If you need to pay your employees before your PAYE reference number was released, you may do so via payroll then simply submit the documents to HMRC.

Is my tax reference my PAYE number?

Yes, both the tax office reference as well as the PAYE reference are one and the same.

Is PAYE reference number same for all employers?

No, the PAYE reference is a combination of numbers and letters that is unique to each employer.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham.

How do I pay taxes as a self-employed driver?

Signing up as an Uber Eats Driver means that you do not primarily work for the company but you work with the company by yourself. This is not similar to regular full-time employment where you get payslips and benefits. Working by yourself and for yourself comes with these aspects:

You are responsible to find your own servicing gig and clients. Uber is just the sole platform where you can look for work opportunities.

You can decline or accept a job or an order according to your availability with regard to time, distance, or costs.

As an Uber Eats Driver, you are required to have your own vehicle, delivery equipment, and mobile phone to operate the application and transact with customers.

As you are not fully employed with the company, you can decide anytime when you want to work, and you are not entitled to sick pay, holiday pay, or leave pay.

You must be physically, mentally, and emotionally qualified to do the job scope

Uber Eats does not give its freelancers insurance, so you need to purchase it on your own.

What is a Self-Assessment?

The HMRC-created self-assessment enables anyone who gets untaxed income must file a government report and settle any tax liability.

Since you work for yourself as an Uber Eats Driver, no taxes are taken out from any payments you receive from customers and all of the orders. However, you are obliged to inform or report your earnings to HRMC of all the transactions to calculate your tax liability and make the necessary payments. In order to complete a tax return, you may accomplish this by signing up for self-assessment.

Find out more

What is a Tax Return?

An HMRC form is known as a Tax Return or SA100. You must submit several filled-out various sections of the form to indicate and report your profits and income. Following the completion, HMRC determines the tax dues so that you may pay them.

Tax Returns should be filled and filed on or before January 31st of the year, containing the summary of your earnings for the previous year period which runs from April 6th to April 5th of the following year. Therefore, if your file on January 31st, 2023, your tax return should include the summary of your earnings from April 6, 2021, to April 5, 2022.

How Much Tax You Pay On Uber Earnings

You pay taxes even when you are self-employed. These taxes are in a form of income taxes under the categories Class 2 and Class 4 national insurance of the profits for drivers. You can claim a tax deduction which is equivalent to the amount you get when you deduct your expenses from the sum of your all profit amount.

Meanwhile, tax calculations are about 20% of your total income including your income from UBER Eats and other income sources you have. At least 20% for those who have an income threshold of over 12,570.00 while 40% for those who earn more than 50,720.00. When your Uber income exceeds 6,5725.00, Class 2 National Insurance is paid as a fixed weekly sum, and Class 4 National Insurance is calculated as 4% if your earnings are over 9,880.00.

In this article, you can learn more about self-employed tax and find examples of how to calculate and when to pay it according to your current employment status.

How to Register as a Self-Employed Uber Driver

When your income from UBER Eats exceeds 1,000 within a tax year, you can register as an employed individual with HMRC as a self-employed. The registration deadline is the fifth of October after the end of the tax year in which you began working as a driver or the date on which your earnings are over 1,000.00.

There are several companies that offer tax assistance and tax savings if you work with companies like UBER Eats. Somehow, it may also depend on how much your earnings amount is. You can find out some popular UK business structures by reading these guides

Do Uber drivers need an accountant?

Accounting for Uber Drivers to keep them Stress-free

Do UBER Drivers need accountants for their tax files?

Yes, after working unbelievably stressful hours and times of the day, UBER Drivers should get an accountant to handle their finances and tax files to make sure they file the self-assessments correctly on time, and with technicalities.

What accounting method should be used for UBER Driver self-assessment?

Tax calculation can be done between the Cash method or the Accrual Method. The Cash Method is implied when you immediately report your income amount upon receiving and your expenses upon paying.

Hence, these are the following expenses that are allowed for UBER Drivers’ vehicles expenses to claim for their tax deductions:

• Car or vehicle-related purchases
• Car lease/ monthly payments
• Business mileage
• Uber commissions and service charges
• Any costs incurred as part of the Uber application process
• Tolls and Parking charges
• Mobile phone & data
• Car cleaning and valeting

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham.

What exactly is a Taxpayer Identification Number?

When dealing with tax authorities, it will be necessary to provide a 10-digit number known as a Unique Taxpayer Reference, or UTR for short.

It’s like having a passport or Social Security number; it helps you stand out from the crowd, or in this instance, other companies, inside a certain system.

HMRC issues a UTR number to everyone who signs up for Self-Assessment. If you’re running your business as a sole proprietor, you only need one UTR, but if you’re in a partnership, each partner needs their UTR, and the business itself needs one, too. A director’s UTR number is distinct from the company’s and is used for filing individual Self-Assessment tax returns.

Click here to assess if you meet the criteria for self-employment and require registration with HMRC.

Find out more

Do you need a UTR to issue invoices?

Invoices shouldn’t include your UTR number. UTR, CRN (Company Registration Number), and VAT Registration Number are often used interchangeably, leading to misunderstandings.

UTRs are very private bits of information, in contrast to your physical address and phone number, which must be shown on all correspondence and your website. That’s why sensitive information like that has no place on an invoice.

Although some contractors who work independently mistakenly assume they must provide their UTR number in place of a firm registration number do so nevertheless, this is not the case. Never think of them as synonyms since they aren’t.

Remember that your Unique Taxpayer Reference is optional information for your clients and consumers. It would be best if you gave careful consideration to anyone you want access to your UTR since it contains sensitive information regarding your tax returns.

Should I tell anybody else about my UTR?

Aside from your accountant, financial adviser, or HMRC, no one else has to know your UTR number. If you are a subcontractor, your UTR must be made available to the prime contractor (so they can deduct tax at the correct rate under the Construction Industry Scheme).

There are only a few situations where you would be required to provide your UTR number; before doing so, you should give it some serious thought. The loss of control over your UTR raises the risk of becoming a victim of identity theft or fraudulent activity.

Factors to consider while making an invoice

There is little doubt that you have already been sending out bills for some time now, but hey, a quick review of best practice never hurts anybody, so why not give it a shot? Therefore, let’s make the most of this occasion to go through the necessary details that must be included in each invoice.

Things that must always be included on invoices:

• The name(s) of your organization(s)
• Legal contact info, including a physical location and phone
• The organization or person you send an invoice to and their mailing address.
• Invoice Date As of
• Individually numbered invoices
• The customer’s purchase order or work order number(s) a detailed explanation of the services rendered and their associated fees (the work that has been carried out)
• Costs and a detailed itemization of purchases (e.g., days and day rate)
• Amount due and instructions for depositing the funds
• Terms of payment typically take 30 days unless otherwise agreed with the customer.

Can you trade without UTR?

You may not need need a unique tax reference number,  those who complete self assessments on an annual basis will need a unique tax reference number which is sent once you are registered as self employed

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham.

Who needs to apply for a UTR Number?

Everybody with an income is required to register for a UK UTR number to enable HMRC to identify your identity alongside details concerning your income and tax returns. It further shows whether you should start paying taxes. The UTR number relates to the National Insurance number that shows the government your contributions and entitlements to stuff like the state pension.

As a full-time employee, the employer handles all taxes on your behalf. Thus you do not need to go through the UTR application process. You can have a look at your tax deductions on the pay slip. All taxes are reduced from your salary through the company.

Nevertheless, if you have another source of untaxed earnings, which are acquired from side hustles or self-employment, you should register with HMRC to disclose the extra earnings. Failure to report to HMRC about extra earnings can lead to penalties and interests. Afterward, the tax you owe for the years you have been making extra earnings will be calculated, and you will be expected to pay within a given period.

Students are also required to get the UTR number since every employed person is subjected to the rule of tax payments, regardless of age or being in school. The National Insurance is subjected to anyone over 16 years.

Do you need to register for self assessment, Complete the form below to determine if you need to file a self-assessment tax return.

Find out more

How Long Does Registration Take?

HMRC takes a week to a month to approve your UTR application and gives you a tax number. The period between which you get the UTR number depends on how busy HMRC is when you apply.

What happens once you are registered with HMRC?

After registering with HMRC, you are then registered for Self-Assessment, and you are required to fill in tax once per year by 31 January and work on your taxes. You are supposed to keep your earnings and expenses, commonly known as bookkeeping and tax records. The records will indicate what you have declared to HMRC concerning your tax returns. Apart from declaring your income on your tax return, you must pay all the taxes you owe by 31 January or 31 July annually.

How to get a temporary UTR number

In UTR applications, temporary UTR numbers do not exist, unlike in pay slips, where you can acquire an emergency tax code. The online application process means that the period it takes to get a temporary UTR number is similar to the waiting time for a permanent UTR number, which brings up a lot of confusion for HMRC.

Is my UTR number the same for my limited company?

A company has its UTR number for serving the purpose of corporation tax. Therefore if you have a business or planning to start one or from a limited company, you are required to get a separate UTR number for the company apart from your UTR number. A limited company is treated as a single entity, and so are you. If you are a director in a Limited Company, you are responsible for registering self-assessment and getting their UTR number simultaneously.

Can you apply for a UTR number online?

To sign in online, you will require a Government Gateway user ID and password. If you need a user ID for a business tax account, you can create one online. Afterward, a letter with your Unique Taxpayer Reference (UTR) is sent to you within ten days of the application. The letter is sent within 21 days after application if you are abroad.

How do I get a first-time UTR?

How do you receive a UTR number? To get the UTR number as fast as possible, you can make an online application and register as self-employed. The services are offered on HMRC’s website. After completing the self-assessment application, or set-up a limited company, your UTR number is automatically issued.

Can I apply for a UTR number by phone?

How can I get my UTR number via phone? It is possible to apply and get your UTR number via phone. You are required to call HMRC directly at 0300 200 3310. During the phone call and registration process, HMRC will ask about your details to fill out the application form. A national insurance number is also required to help them validate your identity. Afterward, wait approximately seven days when HMRC will post your UTR number.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham.

Letter Received from HMRC regarding under declared income

Is there an exception when it comes to paying taxes in the UK? Well, the answer is no. This means that everyone involved in either large or small businesses like private driver services should pay tax. In this case, all people registered with online driver services apps like Uber, bolt, and any other found in the UK are obliged to pay tax as they are under the ISBN.

This is a rule outlined by HMRC in a letter sent to over 4000 app drivers.

The purpose of the letter

Well, online private driver apps have been available for many years, and throughout these years, there needed to be a system or method to track these drivers paying taxes. Therefore, HMRC developed a plan to track drivers’ tax activities. If you have been in the Uber/Bolt business and haven’t spent any tax for long as you have been in the industry,

HMRC can quickly tell you this. If you have been dishonest about your earning patterns through the online drivers’ apps, HMRC can also tell this and calculate how much tax you owe. Note that the letter’s purpose is not to threaten or scare the app drivers but rather to remind them of their duties of paying taxes.

When was the letter launched?

The first claim was broadcasted live on 4th April 2022. Hence, it is a new project that the HMRC is working on to ensure all drivers or small business owners comply with tax payment rules.

How does it work?

This is like a tracking system that detects how many private drivers are registered in the UK. They usually track through the driver’s license. The system can identify if the driver is under the taxi brackets, registered under the online apps, or even both.

This is accessible once the driver applies for a driving license or even renews it.

Where is the ISBC rule on private drivers applied?

Considering it is a new system that allows drivers to pay tax, it has yet to be imposed in many states in the UK. It is still a new check established in April 2022, but the target is to reach other regions like Scotland and Northern Ireland by 2023.

What is in the letter?

This letter is easy to understand and direct to the point for all drivers. It was set to be launched and issued by September 2022. It states that; the HMRC has information that shows these private drivers have been earning money transporting people from a particular time to date and the online drivers’ app(s) the drivers are registered with.

If the driver still needs to provide information about their earnings and tax payment for the period they have been in the business, the letter also outlines these details. It also states that HMRC knows whether the driver has been keeping earnings information anonymous.

Call for action.

What are drivers expected to do?

This letter comes with a 30 days call for action to every driver who receives it. The letter requires the drivers to fill in a tax position document enclosed with the letter and send it back to HMRC within the stated time. The document is meant to update their tax payment information from when they started their online and private driver services.

Find out more

How to update details about your work?

It is easier, and HMRC has created a platform where the drivers can provide the necessary information hustle free.

For those who may need to give information about their earnings (which helps to gauge the driver’s tax bracket), the enclosed document has a part that allows you to choose this option by ticking. Then visit the Digital Disclosure Service on GOV.UK to fill in your details.

About the procedure

• Just go to GOV.UK and login to the site using the Government Gateway user ID and password. Register for one if you still need it.
• On the page, click on voluntary disclosure, and you will receive an email that gives you time to calculate and pay the taxes you owe.
• Note that the payment is done through the Digital Disclosure Service.

For people who may need a stable income or any income, provide this information on the documents. Tick the boxes that highlight your circumstances.

Other details on the letter document

There is an assistance option for people who may find it hard to navigate through the registration process.

People who have health and personal issues should contact HMRC offices directly.

Why does HMRC send letters?

The purpose of the letters is to remind the drivers about the payments and benefits of paying their taxes.

How does one receive a letter of confirmation from HMRC?

Once a driver confirms their payment status, the letter is sent via email within 15 working days of providing the needed information.

Does Uber work under HMRC?

Uber drivers also register under HMRC to provide their earnings information in the current tax year. This works as of 5th October 2022. Once you do that, you will receive a Unique Taxpayer Reference (UTR) number.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham.

What will corporation tax be in 2023?

A corporation’s profits are subject to a profit tax. A company must pay taxes on its tax liability, which is its revenue minus its cost of items sold, general and administrative expenses, selling and marketing expenses, research and development expenses, depreciation, and other operating expenses.

Corporate tax rates in states vary a lot, and some states with low rates are known as “tax havens.” The effective corporation tax rate, or the rate a firm pays, is often lower than the statutory rate, which is the amount declared before any deductions because corporate taxes can be reduced by several deductions, government subsidies, and tax loopholes.

Subscribe Now

Subscribe to our channel for the latest updates.

What are the tax deadlines for my company?

This is a summary of the filing and payment dates for corporate tax, self-assessment, payroll, and VAT year 2022. There are numerous deadlines to remember while filing tax returns and making payments. The return or payment is due on the due date, regardless of whether it falls on a weekend or holiday.

Find out more

Corporation tax and Companies House

The corporation tax rate for limited liability firms is 19% of taxable profits.

The accounting period utilized by a company impacts the due dates for tax returns and financial statements. The accounting period refers to the period that the financial statements cover. When you launch a business, it typically lasts 12 months, but it could last up to 18 months.

Twelve months is the longest time covered by a corporation’s tax return. More extended periods necessitate filing two tax returns for the same accounting period.

Here are the key milestones:

• The accounts must be presented to Companies House nine months after the completion of the accounting period.
• The corporate tax payment deadline is nine months and one day after the completion of the accounting period.
• The deadline for a corporation’s tax return is one year after the close of its accounting period.

The corporation tax must be paid before the return is due; however, you should prepare the return to be aware of the amount required.

Companies must submit their annual reports to Companies House by nine months after the end of their fiscal year. Companies House and HMRC will advise you of the several filing deadlines within the first year.

Most people opt for simplicity by utilizing the same year end for statutory accounts and company tax.

Corporation tax filing and payment deadlines

Accounting year end date: 31/12/2021

Accounts to Companies House: 30/09/2022

Corporation Tax: 01/10/2022

Tax return due: 31/12/2022

What is the deadline for UK corporate tax return?

Within a year after the accounting period it covers conclusion, your tax return must be filed. If you didn’t meet the filing deadline, you would be required to pay a late filing charge. Your Corporation Tax bill must be paid by a particular deadline. Typically, it occurs nine months and one day after the end of a fiscal quarter.

What is the deadline for CT600?

Companies are required to file their tax returns with the HMRC, and the deadline for doing so is one year following the close of the accounting period that the return covers.

How many months after year end is Corporation Tax due?

In most cases, the payment of corporation tax is due nine months following the close of your corporation’s accounting period, when corporation tax returns are required to be filed.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham.

Calculating Capital Gains Tax on a Sale of a Foreign Property

When an asset is sold or otherwise likely in the United Kingdom, a UK Capital Gains Tax tax must be paid on the monetary gain, sometimes known as profit. Payment is determined by deducting the selling price from the initial investment.

When selling a home, for instance, the sale price or, in certain situations, the market value at which the property may reasonably be anticipated to barter in an open market will often constitute the sale value.

In cases when the property is transferred to an associated party, such as via a gift, a sale below market value, or a bequest, the market value is used instead of the fair market value, such as a family member. Assets purchased before March 31, 1982, will be valued at their fair market value on that date.

Expenses incurred to upgrade the property while you own it may also be deductible. Legal and professional fees and the cost of general improvements but not specific repairs or upkeep may be included.

After deducting any tax credits or exemptions from the total gain, the Capital Gains Tax may be calculated using the rate in effect at the time. If you are a non-domiciled foreign national or annex-part, not a citizen of the UK residing in the UK, you should read our guide to the tax regulations for NDMFNs and ex-pats.

An explanation of the 5-year rule for Capital Gains Tax in the United Kingdom, applicable to both residents and non-residents. If you leave the UK for an entire tax year and subsequently sell any lucrative assets, although separate rules have always applied for the property, you will no longer have to pay Capital Gains Tax on those profits.

However, more than one year is required, and a person must be a non-resident for at least five full UK tax years before they may take benefit from this regulation. Due to the potentially massive impact that time might have on your tax bill, it is abundantly evident that careful preparation is crucial in these circumstances.

For capital gains tax reasons, you are considered a temporary non-resident for up to five years, even if you are a non-resident for income tax purposes. If you come back to the UK within five years, you’ll have to pay taxes on some of your earnings from that period in the year you go back.

However, if you bought the asset, not real estate after you left the UK, any gain realized is not liable to UK Capital Gains Tax if you are a non-UK resident. With double taxation treaties in mind, your capital gains are free from tax in the UK but subject to tax in the nation where you live.

Find out more

Assets liable for UK Capital Gain Tax

All property savings for exempt types, some gifts, the sale of inherited property, the transfer of shares and assets upon divorce or the dissolution of a civil partnership, and the sale of certain other types of property are subject to Capital Gains Tax.

UK Capital Gains Tax rates

The top Capital Gains Tax rate in the United Kingdom applies to residential property where total taxable gains and income are more than the basic rate band for income tax.

The rate drops to 18% below that threshold. The rate for executors and trustees of estates is 28%. Individuals pay 10% on non-primary residences and 20% on all other assets.

If your company is not publicly traded, you can take advantage of a similar program called Entrepreneurs’ Relief, which reduces the capital gains tax you owe from 20% to 10%. Nonetheless, there has been a recent adjustment, so we will not discuss it here.

Capital Gains Tax relief

Several different types of tax reliefs may lower the taxable gain, including the following:

• CGT on the gain from the disposal of a business asset can be postponed if the support is replaced with another business asset within four years, beginning one year before the removal and ending three years after the disposal through the rollover/holdover relief on replacement of business assets.
• The formation of a firm may provide tax benefits, such as the release of personal liability in return for shares.
• If some donations of company assets or gifts are put into trusts, the recipient or the trustee is not liable for tax on the estate until the asset is sold or otherwise disposed of.
• For sales made after April 5, 2008, business owners are eligible for a tax break. It reduces the CGT rate to 10% if you sell off a significant portion of your firm or the whole thing. Beginning on April 6, 2020, there will be a one million lifetime cap which has only recently been reduced from 10 million.

Absorption of Capital losses

Any capital losses from a deductible transaction must be subtracted from any capital gains for the same year to calculate taxable income. These deductions come into play before the yearly exemption.

Any capital losses that aren’t used immediately may be used for future capital profits. Capital losses may only be deducted if they are reported to the IRS no later than five years and ten months after the end of the tax year in which they were incurred.

Can you avoid Capital gain tax on the sale of foreign property in the UK?

If you are a UK resident and ‘dispose of’ a foreign asset, you will be subject to Capital Gains Tax. If you have a permanent residence outside of the United Kingdom, you may be subject to different regulations than British citizens. Gains may also be subject to taxation in the nation in which they were realized.

Do I need to pay tax on money transfers from India to the UK?

Whether or not you have to make a payment depends on whether or not you are considered a resident of the United Kingdom for tax purposes. Foreign income earned by a non-UK resident is not subject to taxation in the United Kingdom. There is a standard rate of taxation on overseas earnings for UK residents.

Do I pay UK Capital gains tax if I live abroad?

Away from home

Gains from the sale of UK real estate or property are subject to taxation even if the seller is not a UK tax resident. If you move back to the UK within five years of leaving, you won’t have to pay Capital Gains Tax on other UK assets, such as shares in UK firms.

Can I sell My UK property abroad?

When selling or otherwise disposing of a property in the United Kingdom, you may be subject to capital gains tax even though you are not a UK tax resident. Even if no tax is due on the conveyance, you must notify HMRC of the transaction within 60 days of the transfer of ownership.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham.

Why Would a Company Be Struck Off?

What could be the reason for a company being removed from the Companies House Register against its will? In a procedure characterized as “compulsory strike-off,” a foreign entity, including Companies House, will petition or request for the firm to be withdrawn from the register, usually on grounds of non-compliance.

This might comprise:

• Failure to submit your annual basis confirmation letter (Form CS01).
• Failure or not submitting accounts on schedule.
• Failure to notify Company House when your registered office address changes.

In order to quickly and cheaply shut down a business that has ceased operations, the directors may permit it to be forcefully struck off the registry.

Directors of companies that have experienced a slump or are on the verge of bankruptcy may neglect to file annual financial statements as a sign of the overall deterioration of the business.

That can result in the start of the forced layoff process. The directors cannot be eligible to receive severance packages or other benefits if they do nothing and allow the faltering company to be struck off the registry. Additionally, they can experience severe repercussions like director dismissal and problems with personal accountability.

Find out more

Companies House Compulsory Strike off Process

The Companies Registrar must notify the company via at least two written communications that its inability to submit its annual accounting reports and/or verification report would result in its elimination from the Companies House Register as the first stage in the mandatory strike-off procedure.

These notices might not reach the directors if the corporation’s registered address changes. Before a business may be declared off-line, Companies House would have to have “legitimate grounds” to conclude it is no longer in operation.

First Gazette Notice for Company Strike Off

In the event that Companies House does not hear back from its communications, it will then issue a first strike-off written notification in the Gazette, which is the recognized periodical of official information. It will state that the firm will be removed from the Companies House Register and no longer be considered legitimate after two months, and is referred to as the “First Gazette Notice for Company Strike Off.” As a result, the petition has a two-month opportunity for objection from the company’s board of directors, stockholders, and third-party creditors like subcontractors and HMRC. The firm will be struck off the register and cease to exist in the absence of complaints from a third party, the administrators, or the shareholders.

It is advantageous to exercise caution if you are a shareholder or corporate director of one or more controlled corporations. We advise signing up for the Gazette’s notification services so you won’t miss a strike-off order that is published against your company. You can buy yourself the opportunity you need to avoid having your business suspended if you move immediately.

Subscribe Now

Subscribe to our channel for the latest updates.

Timeframe

It is most likely going to take four months from the time you receive the initial letter from Companies House until the business is terminated. Directors only have two months to rescue their firm if they fail to respond to the initial cease and desist letters from Companies House before the first strike-off warning is printed in the Gazette. 2016 saw an acceleration of this procedure. Directors used to be granted three months to protest the strike after the strike-off notice was published. Directors must now submit their yearly statements and account declarations on time because of the shorter window to avoid being struck off. It is now critical that directors submit their financial statements and confirmation reports promptly due to the shorter window for avoiding a strike.

What are the Consequences of Compulsory Strike Off?

A company may be removed from the Companies House Register regardless of whether it is still operating if you ignore warnings from the organization. That could lead to negative outcomes, such as:

• As a legal institution, the business will no longer exist.
• The industry’s remaining holdings, including any cash, would become bona vacantia, or ownerless property, and the Crown would immediately acquire ownership.
• The company won’t be able to get the money it needs to get out of this jam.
• There will be a risk associated with upcoming contracts with clients and suppliers.
• Directors will be subject to inquiries into their behavior, and the results of the investigations could result in a 15-year ban on their serving as corporate directors.
• The directors and creditors will be operating the business alone without the benefit of limited liability, which may subject them to personal accountability for the obligations of the corporation if it persists in operation.

Can you strike off a company with overdue accounts?

Then that doesn’t add up to avoiding payment because “accounts are overdue for payment.”

There will always be a sizable number of companies with filing shortcomings, and those inadequacies may lead to the filing of strike-off actions against a business.

Can I strike off a company with an overdue confirmation statement?

Directors are subject to disqualifying decisions, which effectively bar them from serving as company officers for a specified period of time. The business may also be removed from the register. Directors may be personally penalized in criminal courts for failing to file verification declarations, which is a criminal violation.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham.

What time is the first HMRC CT600 due?

A company’s incorporation date is the day it was registered with Companies House, which is when it becomes incorporated. You have a maximum of 18 months to extend your first year. But if you don’t choose to extend your first year, Companies House will set the expiration date to twelve months + days until the end of the anniversary unless you start your business on the first of the month.

Before the return is due, the company tax must be paid. However, you should complete the return, so you are aware of the amount that is owed.

Limited firms must file their annual reports with Companies House nine months following the conclusion of the financial period. The filing deadlines are varied in the first year, and Companies House and HMRC will notify you of this.

Most people decide to keep things simple by using the same year-end for statutory accounts and company tax.

For instance, if your company was founded on July 7, 2021, Companies House will change your termination date to July 31, 2022. After that, this will serve as your accounting-specified date and time (ARD).

Find out more

This brings up a reporting anomaly. HMRC requires a Corporation Tax return following the conclusion of the accounting period. However, since a CT600 can only be reported for a maximum of 12 months, you must submit two CT600s. However, Companies House just needs one set of condensed accounts that spans the entire (extended) period.

In the example mentioned above year, you would need to submit an (HMRC) IXBRL Company Accounts filing for July 7, 2020, to July 31, 2021, as well as a CT600 for July 7, 2020, to July 6, 2021, and a second CT600 for July 7, 2021, to July 31, 2021. With each CT600 filings, you must include the accounts that span the extended time.

What is the CT600 submission deadline?

The date by which to submit CT600 to HMRC

Companies have a year after the end of the accounting period they cover to send their tax returns to HMRC.

Is this the first year of corporation tax payment?

Corporation tax is levied in the first year of operation.

The maximum length of a corporation’s accounting period for tax purposes is twelve months.

Due to the existence of 2 corporation tax accounting periods, the business is required to file two company tax returns in its first year of operation.

When do I know when to pay Corporation Tax?

Subscribe Now

Subscribe to our channel for the latest updates.

When is business tax due?

• You must pay corporation tax before submitting your business tax return.

• If your accounting period finishes on March 31, your corporation tax deadline is January 1; otherwise, it is nine months & one day after the end of the accounting period for the prior fiscal year.

When is business tax due? The Guide to rates and payment deadlines

When is the UK corporation tax return deadline?

Your tax return must be submitted within 12 months just after the completion of the accounting period it covers. You must pay a late filing fee if you fail to meet the deadline. Your corporation tax bill has a specific due date. It usually happens 9 months and 1 day after the accounting quarter ends.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham.

How is capital gains calculated?

The government implemented reporting requirements for UK citizens selling residential property starting on or after April 6, 2020.

Beginning on this day, taxpayers must disclose any sales of residential property in the UK and pay any anticipated capital gains tax (CGT) obligations. Taxpayers were expected to file reports and make payments within 30 days of completion from April 6, 2020, to October 26, 2021. As stated in the Autumn Budget 2021, the time frame was extended to sixty days for completions on or after October 27, 2021.

The property disposal must also be disclosed on the self-assessment tax return for persons subject to self-assessment. The guidelines have no bearing on the reporting and taxes of sales of non-residential property or property situated outside the UK. The following should be read with the understanding that the disposal occurs on or after October 27, 2021.

Find out more

Who do the regulations apply to?

The 60-day CGT regulations apply to the following UK tax residents:

Individuals, Trustees, Personal Representatives, Partners in Limited Liability Partnerships, and Joint Property Owners are examples of these categories.

What if I am not a resident in the UK?

For the sale of both residential & non-residential property, there are identical regulations for non-UK citizens. These are not addressed in this briefing. Therefore you should, as necessary, seek expert counsel.

Which disposals are subject to the 60-day CGT regulations?

The regulations are applicable to home sales in the UK when the date of sale (date of exchange of contracts) occurs on or after October 27, 2021, and a CGT obligation results from the sale.

Only direct interests in residential property, such as those acquired via the sale or gift of a home, are subject to the 60-day regulations. Dispositions of indirect interests, such as stock in a business that owns residential real estate in the UK, are exempt.

Any property that is appropriate for use as a residence or that is being built or modified for such use falls within the concept of residential property. Only the residential portion of the gain and the related CGT are required to be declared in accordance with the 60-day requirements if there has been mixed usage throughout the ownership period.

Taxpayers may be required to file a 60-day return under the following circumstances:

• A home they have never lived in or have only partially occupied during their ownership tenure;

• Vacation residences; and

• Rental properties.

Where no tax is due on the disposal, there is no 60-day reporting obligation. Where this applies, for example:

• The transfer is between spouses or civil partners and is a “no gain, no loss” disposition;

• Exemptions, such as the yearly exemption or the Private Residence Relief, will completely cover any gain resulting from the disposition; or

• The sale of the property results in a loss or no gain.

When selling their primary or only residence, taxpayers shouldn’t be subject to the sixty-day rules if they have resided in the property for the entirety of their ownership.

Additionally, the disposal will not be subject to the 60-day reporting obligation if it falls under one of the following categories:

• The donation of a lease with commercial conditions to a stranger for no additional cost;

• Charitable donations;

• Sales of investments in pension plans;

or

• The sale of the property is subject to income tax.

When did the 60-day CGT reporting period begin?

October 27, 2021

Taxpayers were expected to file reports and make payments within 30 days of the completion date from April 6, 2020 – October 26, 2021. As stated in the Autumn Budget 2021, the time frame was extended to sixty days for completions on or after October 27, 2021. March 9, 2022

Does the foreign property have to comply with 60-day CGT reporting?

Only for the direct sale of residential properties in the UK when there has been a capital gain is the 60-day CGT return rule applicable.

Do I have 30 days to report CGT?

“Clients selling residential real estate in the UK who owe CGT obligations must file and pay the tax within 30 days after completion.

October 5, 2022

How did HMRC know that I sold my home?

HMRC can learn about property transactions through land registration data, advertisements, modifications to the way rental income is reported, reports for stamp duty and land tax (SDLT), returns for capital gains tax (CGT), bank transfers, and other sources.

How long must a property be held in order to avoid UK capital gains tax?

FYI: Fortunately, CGT DOES NOT apply to the sale of most homeowners’ homes. Only properties that aren’t your primary house, or your main home where you’ve resided for at least two years, are subject to CGT.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham.

What is capital gains tax CGT UK?

If you inherit a house or any other type of property, the value of your property can rise significantly, but you might also be required to pay extra taxes as a result. You may be subject to capital gains tax if you decide to sell the house you inherited, and its value has increased since you acquired it. There are several strategies to avoid paying capital gains tax on inherited property, as described below. However, if the sale price increases enough, this could result in hefty tax payments.

When an investment is sold for more than it cost to buy it, capital gains tax (CGT) is due. Although selling stocks from a portfolio of investments typically comes to mind when thinking of capital gains tax, other types of investments, including real estate or tangible goods, are also subject to this tax.

Capital gains tax is levied on the profits or “gains” made from the sale, rather than the total amount received. Assume you purchased a piece of art for £6,000 and sold it for £36,000, resulting in a £30,000 profit. This is the amount that the CGT will pay.

The amount of CGT you pay depends on whether you are a high-rate taxpayer, a supplementary taxpayer (your annual income is more than £50,270), or the main taxpayer (your annual income is less than £50,270). If you fall into the latter category, your tax rate will depend on the size of your income, your taxable income, and whether your gain comes from a home or other assets. If your bonus doesn’t take you to a higher income level, you usually pay 18% of the house bonus and 10% of the other bonuses. At the same time, higher and supplementary taxpayers (or primary taxpayers who, combined with income, pay all or part of the scope of primary tax).

Find out more

What happens when two siblings inherit a house?

Unless specified in a will, when siblings inherit a home they each inherit an equal share. Siblings can agree to do one of three things: They can sell the house and divide any profits amount all siblings involved, they can buy each other’s shares, and lastly, they can continue to have joint ownership of the property, keeping it in the family.

Will I have to pay capital gains when I sell my parent’s house?

Whether you use a portion of your property to make money relies on whether you’ve used it as your primary residence during the time you’ve owned it. If your house was and remains your primary residence, you don’t have to pay capital gains tax when you sell it.

Subscribe Now

Subscribe to our channel for the latest updates.

How much Capital Gains Tax will I have to pay when selling an inherited property?

The capital gain will be considered short-term and subject to normal income tax if you own the inherited home for less than a year before selling it. Depending on your income category, the long-term capital gains tax rate would be 0%, 15%, or 20% if you kept the property for more than a year.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham.

Sole Trader

Selling as a sole trader in the UK is pretty straightforward and is a very simple way to trade by FBA in this country. If you run your Amazon FBA business alone, you can run it as a sole trader.

To sell as a sole trader, you must register taxes and pay the duties through self-assessment annually. In other words, you will need to pay on your profits the income tax, plus Class 2 and Class 4 National Insurance contributions. Good bookkeeping will help you save all the hassles, so keep good records of all your sales and expenses.

You may use a business name or your own to do business as a sole trader. However, on Amazon FBA, you must trade under your name to sell as a sole trader. But do not worry because you can choose a different name for your storefront. Yet if you still want a business name, there are some rules to follow for it. Trademark infringement would be the biggest problem, so do your research thoroughly.

Subscribe Now

Subscribe to our channel for the latest updates.

The Policies

To start selling on FBA UK as a sole trader, you must first register for self-assessment with HMRC. They will get back to you via email with a 10-digit Unique Taxpayer Reference (UTR).

The following are prerequisites to set up your professional Amazon FBA account in the UK:

• UTR number
• the registered address of your business – usually your home address, as you are a sole trader
• UK bank account details

Additionally, you may need to provide other documents, like some form of ID (copy of passport page or driver’s license) or the letter that HMRC sent to your registered contact address (tax return notice letter).

There is an advantage in selling as a sole trader, not just because it is a simpler form but also because only one self-assessment tax return is due in a tax year.

For the 2021/2022 tax year, a typical sole trader will need to pay the basic tax rate of 20% for profits in the range of £12,571 – £50,270. For instance, if you make £25,570 in profit, you must pay 20% tax on the earnings above £12,571. Thus, the tax amount you must settle is £2600 (20% tax on £13,000).

Find out more

Do you have to file taxes for Amazon FBA?

Any money you make on Amazon FBA must be reported as income on your taxes, just like any other income stream. That explains why tax season does not fall on the time you need to put everything together for your Amazon FBA business.

Does Amazon report to HMRC?

Online marketplaces such as Amazon, Airbnb, Deliveroo, eBay and Uber will need to declare the income that sellers create through their websites and apps to HMRC starting from January 2023, according to the Financial Times. This move will greatly affect gig workers, freelancers, and self-employed people.

Do I need to pay tax on Amazon sales UK?

If you are an Amazon seller in the UK, you must pay tax on sales income, just like with any other self-employed income. Meanwhile, you should first evaluate how you are viewed in the eyes of HMRC.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham.

What Is a Company Tax Return?

A company tax return—or the CT600 Form—is filed with supporting documents by companies or associations in order to report their profits, expenses, and corporation tax figures to HMRC upon receipt of a Notice to Deliver a Company Tax Return letter.

Companies must file a CT600 Form yearly, and the deadline for submission depends on your company’s accounting period rather than the deadline for personal income tax or a universal due date.

Find out more

Who Needs To File a Company Tax Return?

Only limited companies must file company tax returns following registration for corporation tax.

If a company status is a sole trader or partnership, Self Assessment tax return must be filed.

Upon setup of a limited company, registration is filed with the UK’s companies registrar, Companies House. At this time, companies can also register for corporation tax and PAYE for payroll as an employer, unless registration is filed via post. If registering with Companies House is done by post, an agent, or third-party software, corporation tax will be a separate registration process.

The deadline for registration with Companies House is within three months of doing business, which includes hiring employees, renting or buying business premises, buying or selling products or services, and even advertising.

If HMRC anticipates that your company will owe corporation tax, you may receive a Notice to Deliver a Company Tax Return letter—and you must send a company tax return, whether you owe anything or not, including if you suffer losses.

If you do not receive this tax return letter and you owe tax, you should contact HMRC to avoid being prosecuted for undeclared tax.

Subscribe to our channel for the latest updates.

Subscribe Now

How To File a Company Tax Return

Prepare to file your company’s tax return online by gathering the following items:

• The figure for your company’s taxable profit with supporting documentation—this is the total company income minus any tax allowances and business expenses.

• Your Government Gateway user ID and password. If this is your first time filing a company tax return, you will create these login credentials upon visiting the service page for the first time.

• Your Companies House password and authentication code (if you’re filing your accounts at the same time).

HMRC has a list of circumstances in which a paper CT600 Form may be filled out—or in the event you want to file in Welsh. In these cases, a WT1 Form must accompany the CT600 Form giving an explanation of the qualifying circumstance for using the paper form.

How Long Does HMRC Have To Inquire Into a Corporation Tax Return?

HMRC has four years from the end of the tax year in question to issue a discovery assessment.

Why Have I Received a Notice To Deliver a Company Tax Return?

If you have received a Notice to Deliver a Company Tax Return letter, HMRC anticipates that you will owe tax—and you must send a company tax return, whether you owe anything or not, including if you suffer losses.

If you do not receive this tax return letter and you owe tax, you should contact HMRC to avoid being prosecuted for undeclared tax.

When Must I File My Corporation Tax Return?

Corporation tax is due at the end of the company’s 12-month accounting period.

How Far Back Can HMRC Investigate Corporation Tax?

The amount of time HMRC can go back and do an investigation depends on the circumstance and taking into consideration the severity of the case. For suspected deliberate tax evasion, HMRC may go back up to 20 years. If HMRC is investigating careless tax returns, they can go back up to 6 years. And investigations concerning innocent errors can go up to 4 years.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham.

Filing Annual accounts to Companies House as a Amazon FBA Limited Company

One of the filing requirements for limited companies is to put together and send annual accounts to the Companies House yearly. Even dormant companies must do this as well. And the purpose of this obligation is to report your company’s financial activities within the financial year. Depending on your business’s size or trading status, the types of accounts you need to sort out and submit shall differ.

• For larger companies, full statutory accounts must be submitted.
• For small companies, small company accounts (the simple, abridged ones) would do.
• For micro entities, the requirements are only micro-entity accounts, even simpler than those of small companies.
• For dormant companies, dormant accounts, which are pretty basic, are enough.

You must send your accounts to Companies House within nine months after your company’s financial year ends. However, if it’s your first set of accounts after incorporation, the due date shall be within 21 months from your date of incorporation.

Find out more

Limited company filing requirements for HMRC

Once your business starts trading, it turns active for Corporation Tax, and you must pay this tax for all your taxable profit. Thus you must register for Corporation Tax online and file your Company Tax Returns and statutory accounts to HMRC.

Register for Corporation Tax

You must complete the Corporation Tax registration within 3 months from the day you start trading. This day shall be your incorporated day if you start trading immediately or later if you stay dormant for some time after registering your business.

Registering for Corporation Tax is done online, and you must prepare the following information for HMRC:

• Company registration number
• The date your business started trading
• The date that your annual accounts conform to

Do I need to register with HMRC to sell on Amazon?

If you are full-time employed and sell products on the Amazon site, the good news is that the Trading Allowance has covered you for the first £1,000 in profit. If your profit exceeds this threshold, you must declare it to HMRC.

Subscribe to our channel for the latest updates.

Subscribe Now

Does Amazon report to HMRC?

According to the Financial Times, online marketplaces such as Amazon, Airbnb, Deliveroo, eBay and Uber will need to report the income generated by sellers through their websites and apps to HMRC starting from January of 2023.

When Should accounts be submitted to Companies House?

Businesses must deliver their accounts to Companies House no later than 9 months from the end of their accounting period.

Does Companies House update HMRC?

Companies House will update HM Revenue and Customs (HMRC) if you change your registered office address.

Do all limited companies have to submit accounts to Companies House?

Yes, all limited companies must send their accounts to Companies House. And this is obligatory whether your business is flying high, breaking even, or dormant. If you should have any enquires about HMRC accounts or tax-related matters, then you had better contact HMRC directly for answers.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham.

How Much Tax Should You Expect to Pay on Cryptocurrency Gains?

Income tax

This tax applies to anyone that deals in cryptocurrency through a trade of any form. A day trader is a typical example of someone that purchases and sells cryptocurrency assets to make a profit in the short term. Someone currently running trades on their account is also not likely to fit our description since they are more likely under capital gains tax.

To make yourself more familiar with the concept of trading, you would have to buy and sell crypto resources with the intention, frequency, sophistication, and level of organization that makes the whole activity a trade in the financial sense.

Once you have met the threshold allowed for trading, all your net profits will be taxed at 20%, 40%, and 45%. Usually, the percentage will vary on the tax bracket you are in. additionally, there is additional insurance at 12% and 2%.

All money made from cryptocurrency in the form of an income will be considered part of your income tax. Based on your tax band, this usually falls between 0% and 45%.

Capital Gains Tax

Often, anyone purchasing, holding, and selling crypto in their account is defined as undertaking investment activities. As such, they will be required to pay what is popularly known as the capital gains tax.

The disposal of such assets usually incurs a taxable incidence where the value of the proceeds is matched against buys made in a certain arrangement:

1. Cryptocurrency assets that have been purchased on the same day.

2. Cryptocurrency assets purchased in the next 30 days.

3. Mean cost of unmatched cryptocurrency assets.

Anyone paying capital gains tax on their returns above a yearly allowance of 12,300 will be taxed at the rate of 10% till the appropriate tax band. These rates will increase beyond the basic rate, going as high as 20% on any profits made at the higher tax rates.

Can I Be Exempt from Paying Taxes on Cryptocurrency?

A few special exceptions exist where individuals are not required to pay cryptocurrency tax. These include:-

– Airdrops: No tax will be incurred if nothing is being done in exchange for the crypto. However, you should also note that if the airdrops are being received for a service, they will be taxed. Usually, they are regarded to be miscellaneous taxes or profits from your trading. Businesses receiving airdrops will have to pay for income tax and NICs, but individuals that receive an airdrop are required to pay their capital gains tax during disposal.

These cryptocurrency transactions will not be required to pay any capital gains tax or income tax in the UK.

– Holding cryptocurrency: You can hold cryptocurrency for as long as you like and not have to incur additional taxes. Holding without selling does not attract any taxes, which means that cryptocurrency traders can hold on to cryptocurrency without getting taxed.

– Transferring cryptocurrency between your wallet will not be subject to taxes.

– Buying cryptocurrency with fiat currency.

– Sending cryptocurrency to a loved one as a gift

How much tax do you pay on cryptocurrency UK?

The tax-free allowance ends at 12,300, and you will be required to pay 10% or 20% tax for any additional capital gains. Any additional income over your allowance attracts a 20% and 45% taxation rate.

Can HMRC find out about Cryptocurrency?

There is always the likelihood that HMRC will investigate your tax affairs if you are invested in crypto assets, cryptocurrency, and virtual currency like ETH, BTC, LTC, MXR, ZEC, and XRP.

Does HMRC Have Access to Coinbase?

In addition to guidance released previously, HMRC agreed with Coinbase to release information about its users who have more than $5,000 worth of crypto assets on their cryptocurrency platform during the 2019-20 taxation year.

How Does HMRC Find Out About Capital Gains?

Usually, an investigation is started when the HMRC notices irregularities in the information being supplied via a Self Assessment Tax Return. The taxpayer will receive a letter from the HMRC informing them that there is an investigation about their tax affairs, and they will be required to provide more information to help shed light on this matter.

How to submit a tax return as a Landlord?

If you make a sizable sum of money from renting out a home, you must submit a landlord tax return by the 31st of January every year.

This is accomplished by self-assessment, which first may appear intimidating. In order to help you comprehend the many steps of the landlord self-assessment process and determine what you must do, we have produced this guide.

• What landlords should know about forming a property company is provided below.
• The definitive handbook for creating a property portfolio in the UK
• How have tenants and landlords been impacted by COVID-19?
• Free rental yield calculator and instructions for calculating rental yield
• What distinguishes contents insurance from buildings insurance?

There are six steps to completing a landlord Self Assessment tax return.

• Sign up for Self-Assessment
• Keep track of landlord tax deadlines.
• Organize your data
• Determine landlord tax deductions.
• Complete the landlord tax return
• Pay the landlord tax.

Download

Download your free in-depth guide on filling out your landlord tax return. With the touch of a few buttons, you’ll have instant access to expert suggestions and tips.

Simply Business will use your email address to keep you up to date on the latest news, offers, and tips. You have the option to unsubscribe from these emails at any time. Simply Business’s Privacy Statement.

What landlord tax do I need to pay?

While you may not consider landlords to be self-employed, because you receive income that is not taxed at source (via PAYE), you must complete and submit a Self Assessment tax return to HMRC.

There are several sorts of landlord taxes to be aware of:

• tax on rental income (income tax) (income tax)
• Contributions to National Insurance (NICs)
• Land tax stamp duty
• Capital gains taxation

Not all of these are covered by Self Assessment. When buying or selling a property, for example, you simply need to pay stamp duty land tax and capital gains tax – you can learn more about these taxes in our guide to rental property tax.

Revenue tax and national insurance contributions are paid on an annual basis and are based on the income you earn from renting out your homes. To pay your income tax and National Insurance contributions, you must register for Self Assessment and file a tax return each year.

You can use HMRC’s tool to determine whether you need to file a Self Assessment tax return. Also, take a look at our Self Assessment and tax resources.

When do I have to pay self-assessment landlord income tax?

According to Gov.uk, you are entitled to a £1,000 tax-free rental income tax allowance each year, which you can claim on your tax return.

A landlord’s rental income, on the other hand, will almost definitely exceed £1,000 per year, and you cannot claim any further expenditures if you use the property allowance. This means that the allowance is only useful if your rental expenses are less than £1,000 per year.

If your annual property income is between £1,000 and £2,500, you must notify HMRC.

Rental income is reported on a Self Assessment if it is:

• £2,500 to £9,999 after allowable expenses
• £10,000 or more before allowable expenses

How do HMRC know if you rent out a property?

Rental income from residential and commercial properties is typically taxed annually through the submission of a self-assessment tax return/company accounts. Landlords are required by law to declare their net profit from rental portfolios/businesses to HMRC on an annual basis.

Do I need to register with HMRC as a landlord?

You must register as a Landlord with HMRC in order to declare and pay tax on rental income. Fill out a self assessment tax return form to indicate your rental income.

How far back can HMRC investigate rental income?

HMRC may look back up to 20 years under the law, and in serious circumstances, HMRC may conduct a criminal investigation.

Do I need to tell HMRC about rental income?

Property you personally own

If your annual rental income is between £1,000 and £2,500, you should contact HMRC. If it is between £2,500 and £9,999 after permitted costs, you must record it on your Self Assessment tax return. More than £10,000 before allowed expenses

What happens if you do not declare your rental income in the UK?

What if I don’t declare my rental income? If HMRC accuses a landlord of evading tax, it can collect up to 20 years’ worth of payments. They can also levy fines of up to the complete amount of any overdue tax plus the underpaid tax.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham.

This is Amazon Accountants for beginners.

If you have an e-commerce business, you will be grateful that we introduced to you user friendly Amazon Accounting that is appropriate for your type of business.

What can it do to your business?

It will initiate an accounting system framework that will scale the financial numbers that you require for your operations. Thereby, it will nurture and sustain the continuity and success of your business.

Subscribe to our channel for the latest updates.

Subscribe Now

What are its components?

It holds within amazing and updated accounting software plus the added support of an Amazon accounting specialist. It is a tried and tested accounting digital machine plus the invaluable support of a real flesh and blood accounting professional. He or she will help you set up and give you technical support full time.

The tips and the techniques which the professional will share with you will be invaluable in ensuring the continuous growth of your Amazon store.

Amazon accountants don’t just keep and maintain your books. They will also give you advise, share strategies for the store’s growth and work with you throughout all the ups and downs of operations. This is why an accounting system with long term effectivity and efficiency is so essential for your Amazon store to survive and to outgrow those first infancy years.

What is Amazon Seller Bookkeeping?

It is enhanced seller bookkeeping that records and stores your Amazon store’s daily financial transactions. These includes common activities like purchases, sales, shipping expenses and overhead expenses paid to your suppliers. There are also entries for your loan payments and for advertising and promotional expenditures.

What are the accounting procedures expected when you let Amazon handle them?

Data that are extracted from your Amazon payment reports will be the basis of your Sales Order Inventory Accounting Purchase Orders. Simply explained, after a specific product is sold and money is remitted to you from Amazon, you will utilize the inbuilt Payment Statement to be able to create your own invoice from the sales order.

How Can I be registered on Amazon in order to sell?

You can sell merchandise on Amazon without the prerequisite of being registered as a business entity. It’s just that, you can’t sell anything noted as new. As a matter of fact, there are multitudes of sellers on Amazon who sell used merchandise such as clothes, books, games and others for a profit.

As a merchant on Amazon, do I need a UTR number?

Firstly, be acquainted with a UTR number. It is a 10 digit number which will be indicated on documents coming from the HMRC such as tax returns. If you still don’t have a UTR number, you can acquire one here through a registration for a self assessment.

Why does Amazon require a UTR number?

If you have an intention to be a seller on Amazon, you will need a UTR because of your dealings with the government with regards to your revenues. You have to be familiarized with terms like arbitrage. As a self employed business, you will need the UTR so that it can be recognized that your sales are appropriately taxed.

Is your UTR similar to a Company Registration Number (CRN)?

An HMRC issued UTR is different from a CRN. They have completely different functions. A UTR which means Unique Taxpayer Reference, is a code used by the HMRC to be able to distinguish you as a self employed person and also at the same time, identity your business, for tax purposes.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham.

Do I have to pay Capital Gains tax on crypto gains UK?

The taxman will come calling when you decide to sell off or exchange your cryptocurrency.

Crypto is defined as a capital asset by His Majesty’s Revenue and Customs, and therefore, it’s subject to Capital Gains Tax.

The tax will apply in a number of cases, including:

• cashing out crypto on services and goods

• exchanging crypto for another flat currency or GBP

• gifting crypto, with the exception of giving to your spouse or civil partner

• the trade of crypt0, including stablecoins

So prepare to see Capital Gains Tax anytime you spend, sell, gift, or trade crypto in the UK.

The good news is the tax won’t be applied to the entire amount of crypto involved in the transaction, just the amount that you make money on, or in other words, the profit you make.

Meanwhile, there’s more clarity surrounding tax and DeFi transactions, especially in terms of lending and staking. However, the new guidance from HMRC is still a little murky. According to HMRC, Capital Gains Tax or Income Tax may apply to DeFi transactions based on their nature, including whether capital or income was involved. To boil it down: a capital transaction takes place when you discard your crypto, whether you have the right to reclaim it or not.

Find out more

Examples of such transactions are:

• You benefit from adding or removing crypto in a liquidity pool (the DeFi protocol stands to benefit from the change).

• You’ve locked crypto assets into a smart contract to receive passive income or rewards (staking your crypto through a DeFi protocol). You may face Income Tax charges as a result.

Do you pay tax on all crypto gains? Let’s explore how much you’ll have to pay on Capital Gains Tax for your crypto.

You don’t pay tax on all crypto gains. In fact, every UK taxpayer is eligible for a Capital Gains Tax Allowance in the 2020-21 tax year of £12,300. We’ll break down what this means later, but the bare bones of it are you’ll only face Capital Gains Tax on gains over the £12,300 benchmark.

Subscribe to our channel for the latest updates.

Subscribe Now

Does HMRC know about my crypto?

You may come under an HMRC audit if your investments include cryptocurrency or crypto assets, or such virtual currencies as Ethereum (ETH), Bitcoin (BTC), Litecoin (LTC), Zcash (ZEC), Monero (XMR), and Ripple (XRP).

How to Legally Avoid Crypto Taxes in the UK

There are a number of ways to help you minimize the tax load on your crypto assets. These include:

• Explore and utilize tax-free thresholds.

• Employ the trading and property tax break if you make more than £1,000 through annual property income or gross trading

• Place crypto assets in a pension fund.

• Place investments in an opportunity-zone fund.

• Change your assets’ tax rate.

• Donate some of your crypto assets.

• Make a gift of crypto to your spouse.

How does HMRC find out?

HMRC can uncover information about your investments through a number of different avenues. They include simple and basic ones like an online search or data from other departments. However, HMRC also employs numerous other tactics such as reports from the public or relatives, investigations into other businesses, and even door-to-door inquiries. Sophisticated software, named Connect, is also used by HMRC for fact-finding.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham.

What is the deadline for filing accounts with Companies House 2022/2023?

Annual accounts are still a legal requirement that all limited liability companies must fulfil on a yearly basis. Your accounting records will include an income statement, financial statements, remarks about the transactions, a director’s report, an auditor’s report, as well as the contact information of the relevant company directors (you may not also be required to include everyone on this ranking if you are qualified for exclusions given the size of your corporation or for other purposes).

Whenever you integrate a business, the financial year-end for that business is immediately established by Companies House. This is the last day of the month that your business was registered. The deadline for submitting your financial statement is typically nine months after the close of your accounting period, excluding the first year.

Find out more

Here’s an example illustration of the annual account due dates:

• On July 16, 2020, you officially incorporated your business.
• Your first statutes accounting entries must be filed with Companies House no later than 21 months after the date of inclusion, which means the closing date for these filings will be April 15, 2022.
• After your initial filing, the 31st of July will serve as your financial reporting specified date and time for each subsequent year. Your extended filing deadline is the 30th of April, which is nine months, just after the financial reporting period commences.
• Although if you make the decision to switch the accounting cycle, the closing date for your 2nd submission will be on the 30th of April 2023, and it will proceed to be on the 30th of April each other year.

In the circumstance that it is necessary, you have the option of changing the accounting period. You are free to bring for it by any number of months that you choose, and you can do so as commonly as you want to. You are, however, only permitted to push back the end of your fiscal year by an absolute max of 18 months but only once every five years.

If you ever do not submit your financial statement by the specified date, you will be subject to a penalty that can range anywhere from £150 to £1,500, contingent as to how close you are.

Subscribe to our channel for the latest updates.

Subscribe Now

Is there an extension for submitting annual reports to Companies House?

Users can request an extension from Companies House if individuals are unable to submit their accounts due to circumstances beyond their supervision, such as if a fire devastated your firm’s records just before the time limit. Individuals must request an extension prior to the submission deadline.

When must annual accounts be submitted?

Typically, private corporations are obligated to document their accounts nine months just after the completion of the fiscal year. For instance, if your industry’s fiscal year ends on March 31, the accounting entries must be submitted to Companies House by December 31.

What takes place if the Companies House final date is missed?

If the accounts are documented just after the closing date, you will automatically receive a penalty notification. Submitting accounts late for the second time in a row will lead to the penalty being multiplied. If you fail to submit your account balances or affirmation statement to Companies House, you may be penalized, and your business may be struck off the register.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham.

First Accounting period and Corporation Tax 2021/2022

The time span encompassed by your Company Tax Return is your “accounting period” for Corporation Tax. It is frequently identical to the financial period included by your business’s or institution’s annual accounting reports and cannot be more than twelve months. It can be different in the year that your business is established. The dates for submitting (or “filing”) a Company Tax Return and paying Corporation Tax are impacted by your accounting period.

Find out more

Check your accounting period

To verify the periods of your accounting period, log in to your business tax account through HM Revenue and Customs’ (HMRC’s) online platform.

Subscribe to our channel for the latest updates.

Subscribe Now

Your first accounting period

Whenever you register your business for Corporation Tax, you will receive a letter from HMRC with the details of the dates for your accounting period. If you believe the dates are off, let HMRC know.

If your accounting period and financial year are different

Find out how to proceed whether your financial year and accounting period diverge:

• within the first year of operation

• if you launch your company again

• if you cease doing business and go inactive

Your accounting period may diverge from your financial year if your records encompass the following:

• more than a year, for instance, following the extension of your business’ fiscal period

• shorter than a year, for instance, following the closure of your company or the reduction of its fiscal year

If your accounts cover more than 12 months

You must file 2 returns because your accounting period can’t be longer than 12 months.

If your accounts cover less than 12 months

Considering that your accounting cycle often finishes on the same day, it will be less than a full year. Before submitting your company tax return employing HMRC’s online tool, get in touch with them to change the dates of your accounting cycle. If you are using an accounting information system to submit your business’s tax return, incorporate the revised dates for your accounting period prior to actually filing your return.

Do I pay corporation tax in the first year?

Corporation Tax for 1st year of trading

The length of a corporation tax accounting period is limited to 12 months. Due to the fact that there will be two corporation tax accounting periods, your business must submit two company tax returns during your first year of operation.

What is the return period for corporation tax?

Within 12 months

Following the conclusion of the applicable corporation tax accounting period, each company tax return must be submitted within twelve months. Prior to the filing date for your corporation tax return, corporation tax payments are predominantly due nine months after the conclusion of your corporate income tax accounting period.

How long is first accounting period?

Between six and eighteen months

Both six and eighteen months should pass during the first accounting cycle. It is customary for subsequent periods to still be twelve months, although they can also be altered to encompass anything from one day to eighteen months. Accounting terms can be abbreviated as much as they want, but they can only be lengthened once every five years.

Can you shorten first accounting period?

First accounting reference date

While there is no cap on shortening, you can only prolong it once every 5 years. One can alter the present or preceding accounting period (except where specifically stated).

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham.

Should I set up my business as a limited company?

The formation of a limited liability corporation offers various advantages over other business structures, including favorable tax treatment and decreased exposure to risk. This post will provide you with a deeper comprehension of limited corporations as well as the obligations that come along with establishing one.

Find out more

What is a limited company?

You can choose to conduct your firm using a structure known as a limited (or limited liability) company. This type of company is accountable in its own right for all that it does, and its financial matters are kept separate from your personal financial matters.

Due to the fact that it is a distinct legal entity, it is able to sign contracts under its own name. Rather than on behalf of the firm’s owners, business decisions are made on behalf of the company. The owners are shielded from legal responsibility thanks to limited liability. This indicates that they are only liable for the obligations of the company up to the value of the money that they invested in the company.

Once it has paid the necessary taxes, the corporation is entitled to keep all of the profits it generates. The earnings of the corporation, after taxes, are available to be distributed among the shareholders in the form of dividends.

The company is required to have at least one director who will be in charge of managing the company’s operations, as well as a company secretary who will be in charge of ensuring that all of the regulations are adhered to and official documents are kept.

Can I begin trading before I have set up a limited company?

Once you have received confirmation from Companies House that your application has been accepted, you are free to begin conducting business through your newly formed company. The registration process for a limited company that is formed through 1st Formations typically takes between three and six hours of actual labor time (subject to Companies House workload).

Subscribe to our channel for the latest updates.

Subscribe Now

Do I need an accountant for limited company?

There is no legal obligation for limited firms to engage an accountant; yet, there are several benefits to doing so. Some of these benefits include having someone complete your yearly accounts and your company’s tax return. They are also able to handle the process of registering new businesses for tax purposes.

Can one person own a limited company?

It is possible for a single person to start a limited company and serve as both the business’s only shareholder and director, or a limited company might have several shareholders. Creating a limited liability corporation has several benefits, including the following: The firm is solely responsible for any liabilities that may arise, such as debts or legal action.

How long does it take to set up a limited company?

How much time is needed to get a limited corporation up and running? The online registration process with Companies House is quick and doesn’t take any time at all. You may complete the process in a matter of minutes if you have everything prepared, and you will often be registered within twenty-four hours after starting it.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham.

No Corporation Tax payment due

Regardless of whether it states that there is no corporation tax owed and as long as your business is still active, you still need to file a company tax return. Therefore, you must inform HMRC as soon as possible if you do not owe corporation tax for a specified accounting period. Failure to inform HRMC promptly will mean that they will send you a payment reminder.

If your company has no tax owed, fill out the following online form to notify HMRC that there is no corporation tax payment due:

Online notification of no payment due

It is advised to refresh your browser between submissions when reporting nil payments, especially if you are using multiple Corporation Tax reference numbers. As a result, the correct reference number will be employed.

Fill out the box below with your Corporation Tax payment reference number.

TIP: You can view the payment reference number in either of the following:

• On your notice to file
• On any reminders that HMRC sent you, or
• By accessing your company’s HMRC online account
• Select “View account” followed by “Accounting period”

To ensure that it is correct, keep in mind that the reference is 17 characters long and is specific to an accounting period.

How do I file a zero corporate tax return?

A professional accountant is familiar with the necessary information and can properly prepare all documents pertaining to your corporate tax return. By employing an accountant to complete the nil corporate tax return for you, you will be able to file it easily and securely.

Find out more

How do you let HMRC know company is dormant?

The date the company became or will become dormant must be specified in writing to your local Corporation Tax Office so that HMRC can verify the information. Following that, the correspondence from HMRC will provide you with their contact information.

Do I need to tell HMRC My company is dormant?

When the business has been idle for too long, especially if it has ceased operations and has no other sources of revenue, you may need to inform HMRC that your company is dormant for Corporation Tax. Informing them will exempt your dormant company from paying corporation tax and filing a company tax return.

How long can a company be dormant?

If you purchase a company to safeguard your enterprise, the company can remain dormant for as long as you like. What other business owners usually do is that they purchase a company and keep it inactive. That way, no one will take an interest in purchasing the company they bought, and they can start its operations later on.

Does a dormant company need to pay Corporation Tax?

The good thing about a dormant company is that it does not need to file a company tax return, and it is not required to pay corporation tax. This is simply because there was no income being generated for a long time to file for a tax return or pay corporation tax.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham.

Providing services abroad.

The majority of services rendered to clients who are located outside of the UK are to be regarded as exempt from UK VAT. In this case, the sale is “VAT free,” so the value of the sale in Box 6 [Box 6] is the only input required on the UK VAT return.A corporate client, especially those in the EU in particular, may need to use the reverse charge to account for VAT in their own country. A UK supplier is no longer obligated to add wording like “customer may have to apply the reverse fee” on their sales invoice. Additionally, beginning January 1, 2021, services provided to VAT-registered consumers residing in other EU countries do not require an EC Sales List (but there is an exception for suppliers based in Northern Ireland). Selling services abroad is quite similar to exporting things, with the exception that in this situation, you are selling your skills rather than stuff.

Purchasing products from a different EU nation

The VAT regulations for imports now apply to purchases made by enterprises located in Great Britain that will be delivered to Great Britain. The provider does not impose any VAT on exports from the EU as long as the necessary requirements are satisfied. To release the products into Great Britain, businesses importing items from the EU must file customs declarations, pay import VAT, or use postponed import VAT accounting. Customs duties can also be due. For Northern Ireland, which is to be viewed as staying in the EU when doing business with EU companies, there are various restrictions. Therefore, the buyer accounts for purchase tax in Box 2 of the return when enterprises import items into Northern Ireland. Additionally, entries will be made in Box 4, Box 7, and Box 9 (the quantity depends on how much you are eligible to claim).

Purchasing products from a non-EU nation

Apart from the fact that the regulations now also apply to commerce with EU nations, there is no change to this procedure as a result of Brexit. Businesses must pay import VAT when products enter the UK, and the VAT can theoretically be recovered if the importer is the legal owner of the items and has the necessary documentation for input VAT recovery. The importer may also decide to use Postponed Import VAT Accounting to apply the UK import VAT that is owed. Keep in mind that when the products are imported, customs duties may also be required.

When you purchase a good from a non-EU nation, you effectively become an importer and are responsible for paying Customs and Excise Duty as well as Value Added Tax (VAT). The items would usually be held by the Customs Authority at the border until the duty and tax are paid, unless the terms of the transaction indicate something different.

Find out more

Import VAT accounting was postponed (PIVA).

The importer of record has the option of using PIVA to record import VAT. As a result, the importer is not required to pay import VAT when the products are discharged into the UK; rather, the import VAT is reported on the VAT return as both payable VAT (sales) & receivable VAT (purchases), with the amount of recovery based on the company’s recovery status.

An improved cash flow situation is the effect of this.

This is how entries will be made:

Box 1 (Output tax)

The amount of postponed import VAT is based on the PIVA declaration from HMRC. This firm has delayed the import VAT. Box 4 (Input tax) includes the same amount of postponed import VAT from Box 1 as it does (if all the import VAT is recoverable) Box 7 (Purchases) The net import VAT amount should be shown as the purchase invoice amount plus any importation fees paid into the UK.

If an importer chooses not to use PIVA, they must pay the import VAT at the time the items are imported and are then given a C79 certificate to support the recovery of the VAT. For input VAT entries, fill out Box 4 (the amount depending on how much you are allowed to claim), and for purchase entries, fill out Box 7.

Providing products to an EU company with a VAT number

After Brexit, sales of products from the UK (except Northern Ireland) to an EU VAT registered firm are considered exports (formerly known as dispatches), i.e. zero-rated, provided that the seller can provide proof of the export documentation they have on hand. Box 6 should be used to record the sales amount. Intrastat disclosures and EC Sales Lists are no longer necessary. In accordance with the rules governing intra-EU trade (i.e., dispatches or sales of products between EU countries), Northern Ireland will continue to do business with EU countries. The transaction is zero-rated and should be reported in Boxes 6 & 8. Depending on the number of transactions, both Intrastat statements and EC Sales Lists will be required.

Selling products for export outside of the EU

In certain situations, the transaction is often not taxed at all, and this is noted in Box 6.

Purchasing international services

The reverse charge is applied to the majority of services provided by both EU & non-EU businesses. There are certain exceptions to this rule, such as the cost of entry to events, services tied to the property, and long-term rentals of goods. If you get an international invoice for a service that excludes VAT, you will often need to account for the VAT on a reverse charge basis. The reverse charge’s core tenet is that the client manages the VAT rather than the supplier. The services are seen as both a cost and revenue by the client.

The necessity to use the reverse charge is unchanged as a result of Brexit.

The following entries will be included in the VAT return:

Box 1 (Output tax)

combined with amounts for delayed import VAT and multiplied by the VAT rate for the service in the UK.

Box 4 (Input tax)

The same amount as Box 1, but with any import VAT payments that were delayed and any requirements for partial exemption taken into account.

Box 6 (Sales)

Enter the net amount less the invoice value.

Box 7 (Purchases)

Enter the net amount less the invoice value.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham.

Penalties for Late Filing

Company Tax Return, like other taxes also has its deadline for filing. Meaning, if you fail to pay your tax return within the prescribed period, corresponding penalties shall apply, and as time passes by after the deadline, the fine gets higher and higher. That is the reason why it is important for you to be mindful/always keep reminded on these crucial dates to pay or file such taxes.

The HM Revenue and Customs (HMRC) will estimate your Corporation Tax Bill and will be responsible in adding penalty for unpaid taxes as much as £100 up to 10% of the unpaid tax for 12 months. To fully understand, hereunder is the breakdown of the penalties you will pay if you fail to meet the deadline:

• 1 day after the deadline- £100

• 3 months after the deadline- another £100

• 6 months after the deadline- HMRC will add penalty of 10% from the unpaid Corporation Tax Bill. The HMRC will send you a letter requiring you to pay the unpaid tax. It is called by the term “tax determination. If your company already received this notice/letter, you cannot appeal against it unless otherwise, there is a reasonable justification for the late filing.

• 12 months after the deadline- another 10% of any unpaid tax

Remember: The later you file after the deadline, the bigger penalties are charged. If you don’t pay your tax return on time three times in a row, penalties will increase up to £500 each. It is therefore important to pay your Corporation Tax due and file your tax return because the later the payment, the higher the penalties will be charged against you.

Find out more

Appeals

As mentioned above, a company can still file its appeal against the penalty for late filing unless otherwise a justifiable reason is presented. All you need to do is to call the Corporation Tax helpline, or better yet, write to your company’s Corporation Tax Office.

However, the HMRC does not accept all types of justifications as there are only certain excuses that their office considers why you were not able to pay your obligation. Some justifiable reasons that the HMRC will accept are those life-threatening illnesses or situations (disasters, fire, etc.), death of a close family member before the deadline, postal delays, system/software failure of HMRC and others. Since the whole world is affected with the COVID-19, HRMC also considers this reason as long as you can explain clearly how this pandemic affected the filing.

For more inquiries, the HMRC helpline is open from 8 AM to 6 PM from Mondays to Friday and their customer care personnel are more than willing to provide assistance.

How do I get out of HMRC fines?

Filing your appeal to HMRC is the only way to save yourself from paying penalties due to late filing of taxes, however, this is not always 100% guaranteed since the HMRC has their own standards and requirements in order for them to grant the appeal of a certain company. In filing your appeal, you have to make sure that you provide the necessary information, such as the date the penalty is issued, the date you filed your Self-Assessment Tax Return and the exact details of your reasons for late filing.

Are HMRC penalties criminal?

Tax evasion can be penalized as financial, criminal or both depending on the severity of the and based on the civil procedures of the HMRC. Prior to the issuance of penalties, the HMRC will conduct thorough investigation in order to determine whether there is an absolute ground to order penalties for unpaid taxes. But as long as the underpaid tax is settled, there is unlikely to be a penalty for tax evasion.

How long do I have to pay HMRC penalty?

You will be given 30 days to pay the HMRC penalty from the date of the PAYE late penalty notice to pay. You can pay the penalties in different paying channels, except at the Post Office. If the deadline falls on Holidays and Weekends, make sure to pay the penalty on the last working days before these dates.

What happens if you ignore HMRC?

HMRC is considerate as long as you provide justifiable reasons for filing your tax return late, however, if you ignore their notices and won’t respond, you will face a penalty and worse, it could lead to the forced closure of your company. That is why it is very important to settle unpaid taxes and be mindful in the deadline of filing.

Can HMRC look at my bank account?

Yes. HMRC is authorized to issue a “third party notice” during an investigation for tax evasion. Said notice will be sent to banks, financial institutions and even to the taxpayer’s lawyers and accountant in order to request information about the financial status of a company.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham.

Changing your company year-end

The cut-off date for accounting periods is usually the end of the financial year. However, companies can extend their accounting period by up to nine months. This can be done for several reasons, such as if the company is in the process of selling assets or taking on new debts. Extending the accounting period gives the company more time to prepare its accounts and ensures they are up to date.

A business may reduce its accounting period as much as it likes, but there are rules about increasing it. It can do so only once every 5 years and for up to 18 months.

To change your company’s accounting period, you must:

> Give notice to HM Revenue and Customs (HMRC). You can do this online.

> Change your company’s articles of association if they state when the accounting period should be.

> Inform Companies House of the change. You can do this by filing your annual return.

> include a copy of your last annual accounts – unless you’re exempt from sending them

> have written approval from all shareholders

Subscribe to our channel for the latest updates.

Subscribe Now

Normal company year-end

The normal year of a company commences on the day after the anniversary of its incorporation or (if it was formed by re-registration) on the day after that on which it was first registered. For example, if a company was incorporated on 1 January 2010, its first financial year would have ended on 31 December 2010.

The company’s next financial year would start on 1 January 2011 and end on 31 December 2011. However, a company may adopt an accounting reference period (ARP) different from its financial year.

The company’s first set of accounts will be due to be filed at Companies House 9 months after the end of its first financial year. Going by the example above, the deadline for filing the company’s first accounts would be 31 September 2011.

However, if a company has an ARP different from its financial year, the deadline for filing accounts at Companies House will be 6 months after the end of the ARP.

Can you extend the accounting period?

As mentioned earlier, a company may shorten its financial year as much as it likes. It can only extend its financial year once every 5 years. However, it is impossible to change the accounting period when the deadline for filing accounts at Companies House has passed.

Find out more

Can I extend my Companies House filing deadline?

Companies House deadlines are statutory and cannot be extended. This is because the information in company accounts gives valuable insights into a company’s financial health. However, if there are extenuating circumstances, such as the company being in administration, or a disaster that destroys the company records, it may be possible to apply for an extension.

If you cannot file your accounts on time, you should contact Companies House as soon as possible. You must explain why you cannot file on time and provide evidence to support your case.

How long can a company accounting period be?

Your accounting period for Corporation Tax can be up to 12 months, but no longer. This is because your tax return must cover 12 months.

You can use the same accounting period for Corporation Tax and Self Assessment, but you don’t have to. For example, if your company’s accounting period ends on 31 March, you could use the same period for Self Assessment. This would mean your Self Assessment tax return would be due on 31.

What are the consequences of not filing accounts on time?

If you do not file your accounts on time, you will be liable for a late filing penalty. The penalty amount depends on the company’s size and how late the accounts are filed.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham.

1 Prepare

You will never like that feeling of sudden rush and paranoia as you realise how days run faster than before. So, there you are, and voila! It’s time to prepare your year-end accounts. And they are going to haunt you up to the last minute. As we all know businesses in the UK are required to submit year-end accounts and everyone should comply. So, if you are planning to go on this smoothly, here are the 7 tips to prepare your year-end accounts for 2022.

If you want to approach the end of the year with sufficient resources and necessary tactics to overcome future challenges, preparation not only for you but for your team and the business is a must. No one wants to go to war unprepared. Be prepared for at least a few months before tightening your expenses and catching up on your P.O.s and invoices. Ensure that your records are all processed and put through the system.

Find out more

2 Get Your Accounts Up-to-Date

List down all the figures that have been spent on and the unpaid balance from the debtors and all other financial records necessary. You’ve got to track the important figures such as the bills, invoices, and bank statements.

3 Keep Your Employee Data Accurate

Always secure accurate data of your employees and the expenses they have made during the year-end. The HMRC always checks the payroll and the expenditures to make sure that everything is synchronized when getting audited. If there are discrepancies found in the records, then your employee shall be held questionable and it will be difficult to trace back where it started. Double check their submitted expenditure reports before the year ends.

4 Organise Your Space

You get things done easily when you are surrounded by clarity and clutter-free. Segregate your files in order. Make a different partition for different paper files like receipts, invoices, and other files. This is not just about your office space but you can declutter and organise your space on your computer. If necessary, you can download apps to clear up the expense management process. This way, you can access the details easily when you are queried on any part of the accounts you are working on.

5 – Check Your Chart of Accounts

Check your Profit-and-Loss Report that is a part of your Balance Sheet. At the end of the year, the COA (Charts of Account) identifies and controls which accounts should be cleared down. So, you need to double-check and ensure everything is correct and updated.

6 – Check Your Data and Create a Backup

You can survive any catastrophic events only if you have a contingency plan. You’ve got to have plenty of options and backup plans if all other plans don’t work. This applies to year-end accounts too. For instance, by having an ERP system such as Dynamics GP, then you can back your financial data up. There will be no worries even when things go awry since you have a backup file.

7 – Don’t Panic

Everything is stressful during the year-end since all establishments are heading towards a new year. It is not shameful to admit that everyone gets much pressure and a high level of stress every year-and. So, if you are feeling that pressure and rush right now, just take a deep breath, declutter your mind, take things slowly at first, and organise your thoughts in the first place. Whenever you encounter problems whilst preparing your report, take a step back and evaluate everything and then resolve it.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham.

Does a sole trader need a company registration number?

No. Some sole traders believe they need to register with Companies House but a sole trader business is not a corporation and therefore doesn’t require a company number. The business and the owner are one in the same, so no registration number is required.

Do self-employed need to register with Companies House?

Sole traders need to register with HMRC and fill out an annual Self Assessment tax return. A sole trader does not need to register with Companies House unless they become a limited liability partnership (LLP), a limited company, or a corporation, in which case you need to register with Companies House.

Do sole traders have a company registration number UK?

Only businesses registered or incorporated at Companies House require a company registration number. This includes limited liability partnerships and limited companies. Sole traders do not need a company registration number because they are not a corporation, a limited liability partnerships or a limited company.

Do I need a UTR number as a sole trader?

All sole trader that fill out an annual Self Assessment tax return, and register with the government, will be given a Unique Taxpayers Reference (UTR) number. All sole traders need this UTR number to be able to pay their annual tax bill.

Subscribe to our channel for the latest updates.

Subscribe Now

Is sole trader a business?

A sole trader is a sole proprietorship meaning it is a simplified business structure in which one individual owns and is in charge of everything. Unlike a corporation, a limited liability partnership, or a limited company, a sole trader is liable for all losses incurred but is also the lone recipient of any profits.

How much can a sole trader earn before paying tax UK?

Each sole trader is entitled to a personal allowance equal to £12,570 tax free for the 2021/22 tax year. This allowance is the same for sole traders and for those employed through P.A.Y.E.

Find out more

Do sole traders have a certificate of incorporation?

Sole traders are sole proprietorships. Unlike a limited company, a limited liability partnership, or a corporation, when you start up as a sole trader there is no need for a company number or a certificate of incorporation.

How long can you run a business before registering?

After you start trading, you should consider registering at least six months before the next tax year which begins in April. However, there’s no law regarding how much time you take before registering.

Do you need a business bank account as a sole trader?

There’s no law requiring sole traders to have a business bank account. A sole trader may use their personal banking or set up a second personal account to separate business and personal use. Business bank accounts are not required.

How much does it cost to register as a sole trader UK?

A sole trader does not need to register. The only cost to register applies when forming a limited company, limited liability partnerships or corporations. There is no cost to register as a sole trader.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham.

How long does an insolvency case take?

Liquidation can be a long and harrowing process but that doesn’t mean that you have to go at it uninformed.

An insolvency case can range from one to two years but it’s not unheard of for them to last longer. The rule of thumb is, that the size of the liquidation is a good barometer for the length of said liquidation. In the case of compulsory liquidation, three months seems to be the general average between the initial threat and the end-of-court proceedings. Although in either case, all time frames presented are just the time it takes for liquidation approval.

Subscribe to our channel for the latest updates.

Subscribe Now

What do insolvency companies do?

An insolvent company is a company whose assets are not enough to handle its debts and liabilities. It is a common occurrence for an insolvent company to be unable to pay off its debts.

What happens when you go into insolvency?

When one goes into insolvency, the company is forced to close down due to being able to pay off its debts and liabilities. There are two forms of insolvency: compulsory liquidation and voluntary liquidation.

What is the difference between liquidation and insolvency?

Insolvency is the state of being unable to pay your bills and debts. Liquidation is the process a company must go through once they have been deemed insolvent.

Can I liquidate my company myself?

Only a licensed insolvency practitioner can liquidate a company. As a result, you are unable to liquidate your own company unless you have been licensed for such a task.

Can an accountant do liquidation?

While only a licensed insolvency practitioner can handle the liquidation process of a company, your accountant can definitely offer some guidance and assistance as the process takes place. Though this is up to your discretion only. Whether or not you allow your accountant to help is up to the position your company is currently in.

Find out more

How much does insolvency cost the UK?

In the UK, the insolvency fee falls within the range of four thousand to five thousand pounds but keep in mind that the size of the corporation will affect these prices. Not to mention that any small limited companies will have to contend with the price of VAT.

Can a company be struck off with a bounce-back loan?

Unfortunately, you can not strike your company off unless you have paid back your bounce-back loan. in situations such as these, your best course of action is to liquidate your company.

What happens to a bounce-back loan if a company closes?

During the process of liquidation, a bounce-back loan becomes unsecured debt as it is not secured against the company’s assets. Fortunately, this means that the lender must pursue the government for repayment in full.

Can I close my business with a BBL?

While it is certainly possible for a company with an outstanding bounce-back loan to be liquidated through a dissolution process, there exists a strong possibility that such a dissolution would invoke objections due to the debt being an unsecured one.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham.

What does it mean to be informed to file a tax return?

A “board officer” sends a “notice to file,” which tells the taxpayer that they need to file a tax return for 2022.

Some taxpayers get a paper tax return with a reminder to file in the mail. This depends on what the taxpayer needs based on how they have filed in the past.

The deadline is written on the letter, and action is necessary.

Do you get reminders from HMRC to file a tax return?

You might not even receive any paper correspondence from HMRC informing you that you need to file a return. You may instead receive an email reminder that you must file a tax return. If you joined up for HMRC’s digital self-assessment email reminders service, this should only happen to you.

What is the purpose of the self-assessment letter I received?

Subscribe to our channel for the latest updates.

|

Subscribe Now

Is it necessary for everyone to file a self-assessment tax return?

Every year in April/May, HM Revenue and Customs distribute Tax Returns – or a notice to file online – to everybody in the Self-Assessment system. You must complete a tax return & submit it to HMRC if you get a tax return or a notification to file online.

Under Self Assessment, some taxpayers are required to file an annual tax return (often referred to as a form SA100) detailing their dividends and capital gains, as well as claiming any applicable allowances & reliefs.

Unless their trading income is exempt under the trading allowance, self-employed individuals were required to file a yearly Self Assessment tax return. It is irrelevant whether you earn a capital gain from your self-employment or whether you start trading as a self-employed individual later registering.

Find out more

What if I don’t complete my self-assessment?

You’ll incur fines if you don’t file your return and pay any taxes owed on time – and there may be further penalties. So don’t put off filing your tax return until the last minute, and pay whatever taxes you owe with whatever information you have – even if you need to modify it later.

How do I opt-out of self-evaluation?

When you stop being self-employed, you have two options for notifying HMRC. Calling HMRC at 0300 200 3310 is one of them.

If you work in the construction industry (CIS), you can phone 0300 200 3210 instead.

If I’m on PAYE, why do I have to conduct a self-assessment?

You may be required to file an additional Self Assessment tax return if you are a director of the company, generate money that is not taxed under PAYE, or have untaxed income. This could include interest that has not been taxed before being given to you or rental income.

Must I file taxes if my income is less than £1,000?

You don’t have to tell HMRC if your yearly gross income from these is £1,000 or even less unless you can’t use the allowances. You must register for Self Assessment and file a tax return to report your income.

How can I tell if I’ve signed up for self-assessment?

If you’re unsure whether or not you’ve registered, you can call HMRC with your National Insurance number to find out.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham.

Tax return filing for relief on Luna Cryptocurrency losses.

We released an article some years ago that examined how cryptocurrency revenues may be taxed. However, you may have lost money when the market crashed. As a result, this post will go over your choices for seeking tax relief on cryptocurrency losses.

The latest guideline from HM Revenue now provides some insight into obtaining tax relief on cryptocurrency losses – but only for individuals. HM Revenue has yet to issue their business and company guidelines. Despite the appointment of a cryptoassets task force by the chancellor, no special tax law for cryptocurrency transactions has been implemented.

How do I declare crypto losses on my taxes?

Individuals investing in cryptocurrencies are most likely subject to capital gains taxation. As a result, requesting tax relief on cryptocurrency losses will be subject to capital gains tax laws.

Subscribe Now

Subscribe to our channel for the latest updates

What expenses can be deducted when calculating a loss?

Certain expenses are deductible when computing your loss, and these are as follows:

• The first payment in money for the cryptocurrency.
• Transaction fees paid prior to a transaction being posted to a blockchain.
• The initial ‘expense’ of exchanging one cryptocurrency for another.
• Any advertising spent on behalf of a buyer or a vendor
• The expenses of valuing or apportioning assets or liabilities in order to determine profits or losses. This might include the cost of a software subscription to calculate gains or losses.
• Professional expenses for establishing a contract for the purchase or sale of cryptocurrency

In these cases, however, you cannot claim for the costs of mining activities (such as equipment).

How much of a loss can you claim on crypto?

If you still possess cryptocurrency and it has become worthless or of minor value, you can crystallize capital losses. Simply put, a negligible value claim considers the cryptocurrency to have been disposed of and reacquired at the sum mentioned on the claim.

Because bitcoin is pooled like shares, the insignificant value assertion must be made in relation to the whole pool, rather than the individual cryptocurrency units/tokens.

Find out more

Making a claim of minimal worth

To make an insignificant value claim, the following conditions must be met:

• The cryptocurrency must be owned at the time the claim is submitted.
• You must indicate the cryptocurrency’s value at the time of the claim. There is no formal definition, however according to HM Revenue, an asset has minimal value if it is worth next to nothing.

Reversing a claim

You can backdate an insignificant value claim if the following requirements are met:

• You possessed the coin at the period mentioned previously.
• At the time, the cryptocurrency had lost its value. The earlier time must be no more than two years prior to the start of the tax year in which the claim is submitted.

For example, you may file a claim on April 5, 2020, and it would be carried back to April 6, 2017.

This might be beneficial if you haven’t generated any capital gains in the current tax year but have in the prior two. Because your cryptocurrency must have already lost value at the time the claim is being backdated, this will be relevant only if the prospect of a negligible value claim was previously disregarded.

Tax on lost or stolen crypto in the UK

You may misplace your private key, rendering you unable to access your cryptocurrency. The private key still exists, but you no longer have access to it. Likewise, the coin is still there on the distributed ledger. As a result, losing your key does not constitute as a disposal for Capital Gains Tax purposes, and no loss may be claimed.

However, if you can demonstrate that there is no chance of retrieving the private key or accessing the cryptocurrency stored in the related wallet, you may be able to make an insignificant value claim (see above).

There is always the possibility of being a victim of theft or fraud if you invest in cryptocurrency. Because the individual retains ownership of the assets, HM Revenue does not consider theft to constitute a disposition. They have the right to retrieve them as well. This implies that victims of theft cannot claim a capital gains tax loss.

Furthermore, if you do not get the cryptocurrency for which you paid, you may be unable to claim a capital loss.

If you pay for and get cryptocurrencies, you may be able to make an insignificant value claim if it later proves to be worthless.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham.

Changing Accounting Software using an accountant. 

Can I change my account system mid-financial year? Yes. Sometimes it’s necessary to rethink your options. There are several reasons why you might be forced to change your accounting software, including:

• Your inventory has become huge and more complex
• The need for more structured financial data that can be effectively managed.
• The need for more financial modeling and forecasting
• Increased regulatory requirements
• The need to manage multiple currencies or multiple business entities

However, how easy is it to use a new accounting system mid-year? Well, you will have two software programs, one with the old information covering certain months and the new one. Sometimes this may lead to confusion since your customers might use different accounting software from the one you used to raise invoices.

Additionally, your chances of making errors are extremely high if you use two software packages simultaneously. This way, you can conveniently use your accounting data as training material.

Find out more

Changing an accounting software is sometimes necessary. But don’t think you will just get a new software program and pick it up from where you left your old software. This is a challenging process, and here are some of the problems you are likely to encounter:

Mismatching features

Your new software might not have the same accounting features as your old one and vice-versa. This can be challenging, especially when you still want to store all the data from your old software. But it’s possible to find a way around this by doing research.

Delay in using your opening balances

Moving your accounting systems before completing your financial year means going back and forth several times before you finally get everything right. For instance, if you will use Xero, you will simply start with the opening balance. So, make sure you finalize everything in the previous financial year.

You are not used to the new software

It will take time before finally get used to the new software. Meanwhile, you might not initially like it, and with the lack of familiarity, you might get a couple of things wrong, and everything might take longer. So, you need to have a learning mindset and be ready to make mistakes since the new features might have different names and reports stored in different places.

To avoid these challenges, should you consider moving your old accounting information to the new software? Well, it’s not necessary.

Generally, every accounting software will require that you enter your opening balance during the setup process. This includes information such as whom you owe money, who owes you, and your bank balance during the last financial year.

All these are important in ensuring that you have the correct customer payments and bank balances. Your invoices will also be correctly allocated to avoid losses. To effectively obtain an opening balance, first, get a trial balance from the current software and use it.

The downside of using a trial balance is that you won’t be able to see the sales invoices list raised or even click into the sales. You will simply have a total figure and the correct information on the balance sheet.

For a better balance sheet detail and if you are moving your accounting information to Xero, then consider using Move My Books – a service that will efficiently transfer your QuickBooks and SAGE accounting information without replicating your previous financial year’s accounting information.

If you are not going to use Xero, then ensure that you download all the important reports from the old software.

Conclusion

While changing accounting systems might be necessary, it’s challenging, costly, and time-consuming. However, people and business organizations are sometimes forced to do it because change is inevitable.

Even though there is a wide range of accounting software, Xero and FreeAgent are currently the top-rated on the market. If you manage a complex business, Xero would be a great solution since it has dynamic features. You can conveniently integrate it with 3rd-party payment applications.

Meanwhile, FreeAgent is suitable for individuals who need to frequently invoice their clients or have regular direct debits. If you plan to change your account system, do your research and be ready to learn because the whole process can be challenging. Plan for the new financial year a couple of months earlier to make the right adjustments without pressure.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham.

Is it a requirement for Ltd companies to file their accounts with Companies House?

Every limited company must submit its accounts to the Companies House, regardless of whether it has been successful, operational, non-operational, or breaking even. For more information pertaining to HMRC accounts or tax-connected matters, you will need to reach out to HMRC in person.

Subscribe Now

Subscribe to our channel for the latest updates

How long will it take for accounts to appear on Companies House?

The Companies House strives to process all accounts filed online within 24 hours. Paper documents delivered by POST can take a week or more to process; therefore, it will take time before you can discover whether they have been accepted or declined.

Does Companies House accept the late filing of accounts due to Covid 19?

The Companies House grants extension to qualified companies provided they explicitly state how the issues surrounding COVID-19 are derailing filing in their application. Late filing of accounts attracts hefty penalties, so it is necessary to get it done on time. In order to avoid missing the set deadline, get in touch with Companies House Service (CHS) to learn of your filing deadlines.

When Must accounts be delivered at Companies House?

For example, business accounts running from 1st January 2020 to 31st December 2020 are ripe for submission. These accounts must be delivered at the Companies House no later than 30th September 2021 if a company is to escape a penalty.

Regardless of the status of your company, you must file your accounts. You will need to supply us with a single copy of your company’s accounts.

We advise filing of accounts in advance as some of our employees have been forced to proceed to leave in a bid to comply with the government coronavirus (COVID-19) directive. For this reason, it might take time to process documents conveyed to us by POST.

Filing online saves most companies money and time

Settle on an option that works best for your company

To file your accounts online, you need to have a company number and authentication code. Companies are issued with the authentication code, which is a six-digit alphanumeric code by the Companies House. To find out more about this, visit https://www.gov.uk/guidance/company-authentication-codes-for-online-filing

For companies filing their accounts through an agent or account, contact them and request them to file online.

Find out more

What happens if you fail to file your accounts with Companies House?

If the deadline passes and you have not filed your accounts with Companies House, brace yourself for hefty penalties. Failure to file your accounts on time for two consecutive years attracts a double penalty. You can be penalized, and your company gets de-registered if you fail to file your accounts with Companies or fail to send a confirmation statement.

Is it a requirement for a dormant company to file accounts

It’s normal for directors of a dormant company to pay little to no attention to the operations of their business, but this doesn’t mean they should not file their accounts with the Companies House. Failure to do so would attract hefty penalties to their ailing company, which would prove more costly. Companies House recommends owners of dormant companies file their annual accounts with it and also share with them annual confirmation statements. This should be the routine until the company resumes or ends its operations.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham.

Who must submit a confirmation statement to companies house?

Each year, all limited liability firms must submit a confirmation statement. We’ll go over some of the ramifications of failing to provide a confirmation statement in this blog post. Let us first go over what a confirmation statement is for.

Find out more

What is the purpose of submitting a confirmation statement by a company?

Director’s affirmation that the information Companies House has on a company is accurate and up-to-date is the essence of a confirmation statement. Confirmation statements must be filed by all companies, even if they are no longer active or dormant.

Directors are required to provide a confirmation statement every 12 months, even if all the material is the same. A review period occurs every 12 months. Many issues can arise for the corporation and its directors if the submission date is missed.

Subscribe Now

Subscribe to our channel for the latest updates.

What happens if you don’t submit a confirmation statement?

Under section 853A of the Companies Act 2006, company directors are legally required to file confirmation statements. Failure to do so might result in personal culpability, penalties, prosecutions, and possibly the removal of the company from the register.

Section 853L of the Companies Act 2006 deals with the issue of failing to file a confirmation statement. It is an infraction under this section if a company fails to provide a confirmation statement on time by

• The organization

• Every firm director (including shadow directors),

• Whether it’s a privately held corporation or a publicly-traded one, every secretary and

• All of the company’s other indebted officers

It is possible to be prosecuted for failing to file a confirmation statement under the Companies Act 2006 if a company fails to comply with this requirement. Each of the company’s officers faces a fine of up to £5,000. Disqualification orders can be issued to directors, barring them from serving as company officers for a predetermined period. Strike the company of the list is another option.

Confirmation statements are a criminal offense and directors can be penalized in criminal courts if they fail to file them. Any criminal prosecutions for failing to file confirmation statements are distinct from and in addition to any penalties imposed by Companies House on the limited company for a late submission.

How late can you submit a confirmation statement?

If a confirmation statement is submitted late, it will not be penalized for being filed late. If you miss the deadline, you won’t be fined, but the firm could be removed from the public register if legal procedures are brought against you.

Can you resubmit a statement of confirmation?

Re-filing with the updated confirmation statement and the revised version of the form RP04 should be used if an incorrect confirmation statement is accidentally submitted with your application. Delivering a second file can be done in a variety of ways. Using the Web Filing service.

Is a dormant company required to provide a confirmation statement?

Companies House requires a confirmation statement to be supplied. Annual accounts for dormant businesses should be sent to Companies House. Although dormant corporations are required to file financial statements, their accounts are far easier to read and understand than those of active businesses.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham.

Defining the VAT Default Surcharge notice

HMRC imposes a Default Surcharge as a civil penalty to “encourage” firms to file their VAT forms and pay the tax owing on time.

By law, VAT-registered firms must file their returns and make the necessary VAT payments by the due date.

If HMRC does not receive your return and all of the VAT owed by the due date, you will be in default.

The relevant date is when cleared monies are received in HMRC’s bank account. Payment must be paid on the previous working day if the due date is not a working day.

Find out more

Is it true that a VAT surcharge is a penalty?

There is presently no separate penalty for late VAT filing. Instead, the Default Surcharge, which is a combination of late submission & late payment penalties, is applied. The taxpayer receives a Surcharge Liability Notice for the first late return, which is valid for a year.

What happens if you fail to file your VAT return?

You’ll face more than a late payment penalty if you don’t file your VAT return to HMRC on time. You’ll have to pay interest on it until it’s paid off.

You may, however, get a Surcharge Liability Notice based on your prior VAT payment history (SLN)

Subscribe Now

Subscribe to our channel for the latest updates.

What is the penalty for paying VAT late?

If your VAT Return is incorrect, HMRC can levy you a penalty (ranging from 15% to 100% of the outstanding amount owing).

How do I write an HMRC dispute letter?

Write to HMRC and explain why you believe the amount you must pay should be revised, as well as how the additional evidence supports your position. Send your message to the address on the letter from HMRC stating that your repayment will not be changed. Any new evidence should be photocopied.

Is it possible to submit my VAT return late?

If you file a late return and pay your VAT in full by the deadline, you will not be charged a penalty. I don’t have to pay any taxes.

are owed a VAT refund

What does “fair excuse” imply?

You will not be charged a fee if you have a reasonable justification for not paying on time and correct the problem before the excuse expires.

Because there is no legal term of reasonable excuse, the facts of your case will decide it.

A reasonable excuse is anything that prevented you from completing a tax obligation on time, notwithstanding your best efforts.

The existence of a valid justification is determined by the specific circumstances surrounding the failure.

Reconsiderations and appeals

If you disagree with our conclusion that you are subject to a surcharge or the method used to compute the fee, you may:

• Request a review of your case from us.

• Have your case considered by a tax tribunal that is independent of the IRS

If you want us to look into your case, you must write to us within 30 days after receiving the Surcharge Liability Notice Extension, explaining why you disagree with our judgment.

You are not required to write to us. An accountant or adviser can do this for you if you have permitted us to act on your behalf.

You might, for example, request that we examine the default if you believe that:

• We applied the erroneous rate of surcharge.

• The wrong amount of VAT was utilized when computing the surcharge.

• There are extraordinary circumstances that warrant the default being removed.

If you disagree with the conclusion of our review, you can still appeal to the tribunal.

Corporation Tax Registration

The vast majority of companies apply as an employer both for PAYE and Corporation Tax time as they register with Companies House.

To submit your firm’s payment or return of taxes, log in to HMRC online services if you haven’t previously done so. You can set up an account if you don’t already have one.

If you registered your firm, you’ll have to apply for Corporation Tax individually by:

• post
• through an agent
• third-party software

Within three months of launching a business, you should register. Buying, selling, marketing, renting a place, and recruiting someone are all examples of this. If you’re not sure what qualifies as starting a business, you can look it up.

If you are late to register, you may receive a penalty.

Find out more

How to Register

To register, log into your firm tax account and simply follow the instructions found in your account.

To sign in, prepare your Government Gateway user ID and password. You can create one right after you sign in if you don’t have one.

You also need the 10 digits number or Unique Taxpayer Reference (UTR) of your business. The HMRC (HM Revenue and Customs) mails this to your business address registered to Companies House in a span of 14 days.

If you haven’t received your UTR when you registered, you can acquire one online.

What you should inform HMRC

You should tell HMRC the following information when registering:

• registration number of your company
• the date that your was business launched (the first accounting period for your company will begin on this date)
• the due date of your annual accounts

Subscribe to our channel for the latest updates.

Subscribe Now

What will happen next?

HMRC will notify you of the Corporation Tax payment deadline.

Even if you suffer losses or doesn’t have a Corporation Tax to pay, you should still submit a file of your Company Tax Return.

In the future, you’ll be able to find your UTR.

Your UTR then appears on all HMRC correspondence and online services: Take note of it as you will need it:

• to submit a Corporation Tax inquiry to HMRC

• to use commercial software to send your company’s tax return

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham.

Why have I Received a First Gazette notice for Compulsory Strike Off

If you receive such a Gazette notice, that means that your company is going to be removed from the Companies House, and that will also mean that your company will cease to exist as a legal entity. This strike-off notice allows three months of leeway before it’s removed from the official register due to non-payment of tax or failure to file the company accounts.

Generally, there are two ways for a company to be struck off from the Companies House registry. One way is through voluntary dissolution because the company directors decided the company has no further use. The second way is because a third-party petitioned for compulsory dissolution.

However, when it comes to the compulsory strike-off, this event is typically initiated by the Companies house because of the non-filing of the annual confirmation statement or company accounts. The strike-off will be published in the Gazette. From then on, there will be a two-month period in which anyone can object to the strike-off. Otherwise, the company is going to be removed from the official registry.

Find out more

My company has been served with a first Gazette notice for compulsory strike-off – what should I do?

The first thing you should do is to assess what your plans are for the company. If the company is of no further use to you, then just allow the process to run its full course. Keep in mind that the strike-off application can still be objected to if your company has outstanding liabilities or debts.

On the other hand, if you want your company to continue, you will have to contact the Companies House and lodge a suspension application to request that the strike-off application be shelved. You also need to know the primary reason for the strike-off application so you can rectify it.

In most cases, you need to bring the company accounts up to do. This typically involves filing confirmation statements or missing accounts. It’s imperative that you all do this before the ‘grace’ period expires. Otherwise, you’ll end up with a huge mess in your hands.

Subscribe Now

Subscribe to our channel for the latest updates.

About the compulsory strike-off, can you choose not to stop it?

You have the option of allowing the company to be formally and officially closed and be removed from the registry. If there are outstanding liabilities and/or debts, then you will need to follow the route of Company Liquidation.

What are the consequences you will be facing with a compulsory strike-off?

Generally, any assets of the company (e.g., buildings, stocks, cash) will become the crown’s property. For the directors, they will be barred from becoming a director for the next 15 years because they have failed to act properly and effectively.

If a company is compulsory struck-off, what happens?

If that happens, the company does not exist legally and officially. Hence, it will cease all trades, and the crown will acquire the company assets. Keep in mind that only solvent companies can undergo a process of dissolving. As mentioned above, if the company still has debts and liabilities, the company must undergo a different route. Usually, that route is through legal dissolution through the office of Company Liquidation.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham.

Receiving A Corporation Tax Reminder Letter From HMRC

When the due date for your Corporation Tax bill is approaching, you will receive this letter as a reminder to send in payment for it. Take note that this is payable nine months and a day after your filing date, so if your accounting period finishes on the 31st of March, the payment is due on the 1st of January the following year. You may use the payslip to send along with your cheque to HMRC and file the letter with them.

Find out more

Tell HMRC no payment is due.

You should notify the HMRC if you have no outstanding debts to the government. If you do not make your payments on time, HMRC will issue payment reminders.

Subscribe Now

Subscribe to our channel for the latest updates.

Does HMRC send Corporation Tax reminders?

You can inform HMRC in one of two ways:

• completing the ‘no obligation to pay’ form

• returning the payslip with the note ‘NIL due’ that HMRC gives you on the reminder letter.

You are still required to file your company’s tax return.

What happens if you pay Corporation Tax late?

HMRC will charge your corporation interest if you pay your Corporation Tax late, do not pay enough, or do not pay at all. Interest is assessed from the day after the tax.

This interest will be paid until the tax is paid in full (i.e., usually nine months and one day after the end of your accounting period).

How do I work out my corporation tax payment reference?

The 17-digit reference is comprised of the ten-digit UTR + the sequence “A001” + a two-digit number (indicating the year in which the company’s year-end occurs) + the letter “A.

The UTR is the first digit of the reference. The 17-digit reference is issued to the firm, and the notification to produce a return (Form CT603) is delivered immediately after an accounting period concludes.

Can you delay the corporation tax payment?

Payment of corporation tax has been delayed. Generally, you will be required to pay your company’s tax bill nine months and one day after the end of your accounting period has passed in the majority of circumstances. If your payment is received late or incorrectly, HMRC may charge you a late payment interest rate of three percent (3% per month). This will be deducted from your corporation’s tax bill later in the year.

What happens if company accounts are overdue?

You will be subject to financial penalties if you fail to file your accounts with Companies House by the deadline. The penalty will be quadrupled the second year,  if you are late on your accounts for two years in a row.

Furthermore, suppose you fail to submit your reports or confirmation statement to Companies House on time, In addition to facing a penalty. In that case, your company may be forced to close its doors permanently.

Is your Corporation Tax payment reference the same every year?

You will require a pay reference with 17 digits to pay company tax. HMRC utilizes this information to determine how the money should be distributed. The first ten numbers are the company’s unique tax identification number (a UTR). The last seven digits of the number refer to the current tax year.

Is Corporation Tax reference the same as UTR?

Unique Transaction Reference (UTR) is a 10-digit number is sometimes referred to as a ‘tax reference’ or a ‘Corporation Tax reference’ by the corporation.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham.

Self assessment tax return deadline extended in the UK February 2022

Paying tax on time is very important. A taxpayer must know and remember that failing to pay owed taxes on time or having late tax returns will result in extra charges. To avoid paying these late penalties, you need to make sure that you submit your Self Assessment Tax return within the set deadlines by HMRC or HM Revenue and Customs.

In the UK, the tax year runs from April of the current year until April next year. For this year, the tax year had started last April 6, 2021, and will end on April 5, 2022. You can submit your Self Assessment tax return by paper or via HMRC online. The deadline for you to register for Self Assessment if you are a self-employed or a sole trader (not self-employed), or registering a partner or a partnership is last October 5, 2021. For paper tax returns, midnight of October 31st is the deadline while the deadline for online 2020/2021 tax returns is on the midnight of January 31st but you can still submit up to the 28th of February 2022 without having a late filing penalty as filing tax return of the year 2021 has been extended on that day.

The deadline for paying tax owed for the previous year 2020/2021 is on midnight on the 31st of January, 2022. The only time that the deadline of the tax return in the UK may change is when you received a notice from HMRC informing you to submit an online tax return after the 31st of October, 2021. With that scenario, you will still have 3 months to pass your tax return starting from the notice date.

Find out more

What Will Happen If You Miss The Deadline?

If you are paying late or paying a day after the deadline, the charge is 100 pounds. Paying 3 months after the deadline will result in a penalty up to 1,000 pounds. If you will pay your tax bill between 6 to 12 months after the deadline, you will have to pay an additional 300 pounds aside from the earlier fines being mentioned. Some cases include paying 5% of your tax bill which is a bit expensive for any taxpayer. For worst cases like paying more than 12 months late, there will be a fine of 300 pounds including all the other penalties. If you can’t pay within 1 year, you can be penalized as high as 100% of the tax you owed on top of your original tax bill.

Penalty Waivers

HMRC has the authority to waive late penalties or charges of taxpayers for 1 month for them to have more time in paying their taxes. Penalty waivers are applicable only for those who can’t file their online return on the 31st of January if they will file online on February 28, and those taxpayers who can’t pay their tax on the deadline if they will pay their tax in full or set up a time to make arrangement and pay by April 1st. If you can pay your tax on time, then that’s the best thing to do to avoid asking for penalty waivers or paying late fees.

Gm professional accountants have offices located in London Canary wharf, Wimbledon  , Birmingham and Essex.

EIS Income tax relief declaration (30% relief) Tax return declaration.

Let’s be honest. If you are not willing to deal with high risk, you’re better off not investing in small companies. Some small companies will succeed and make their investors a lot of money shortly. However, others will have a hard time getting there – or worse yet, will declare bankruptcy.

Now, the government is aware of this issue and provides Enterprise Investment Scheme (EIS) investors with tax incentives. Said taxes reduce the negative impact of those investments that go wrong and increase the positive outcome of those that succeed.

Bear in mind, as a disclaimer, that tax rules may vary at any time given, and benefits rely on circumstances.

Contact Us Now

What is EIS Tax Relief?

Up to 30% of income tax relief

Provided that you invest £100,000, you can get up to a £30,000 tax reduction on your annual income tax bill. However, you must hold the shares for a minimum of three years to be eligible for this. Also, as expected, you need enough income tax liability from the beginning.

Generous contribution allowance

If an amount above £1 million gets invested in knowledge-intensive companies, you invest up to £2 million per tax year. A knowledge-intensive company refers to innovative and fresh businesses that spend on research and development.

Carry back

Provided that you hold the tax allowance, you’re eligible to carry it back. You can set off the tax relief to the previous year’s tax bill, which could result in receiving back the tax you already paid.

Tax-free growth

Considering you have claimed tax relief and companies qualify, there’s commonly no need for you to pay CGT during the realization of EIS shares.

Deferral of capital gains

If you acquire a taxable gain and invest it in an EIS-qualifying investment, you can defer the capital gain as long as the money remains invested and the EIS rules are met. You may earn a taxable gain by selling a property, for instance.

Profits generated up to three years before the EIS investment and one year after can be deferred. Yes, even if you have already paid the tax, you can postpone the gain.

Once you withdraw your funds, the gain reverts to you, and you must pay CGT at the current rate. Nevertheless, you might continue deferring said gain by investing in another EIS.

Inheritance tax relief

Provided that an investment in an EIS-qualifying firm is held for two years and at the time of death, it should be eligible for 100 percent inheritance tax relief.

Loss relief

Let’s say things don’t go as intended. You might choose to deduct any losses from your income tax bill, excluding the income tax relief obtained. Do you know what this means? It means that up to a loss of £1-£38.5 can be reduced.

It reduces losses and increases gains. How?

Say you invest £100,000 in an EIS. Due to the income tax relief of up to 30%, the effective net cost could be around £70,000. Along with loss relief, it can affect your ROI, regardless of your investment is successful or not, as shown in the table.

Loss relief permits you to compose off any misfortunes against income tax. In the event that your investment falls to zero, you could subtract the £70,000 loss from your taxable income.

This gives a potential duty saving of £31,500 and means the greatest viable misfortune loss could be just £38,500 (viable expense of £70,000 less misfortune help of £31,500). In the meantime, on the off chance that your investment grew by half, because of the duty help, you could be checking out a viable gain of 80%.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham.

What is the meaning of the 1257L Tax Code – 

It is predicted that, not only will the 1257L Tax Code not suffer any changes until around 2026, but that it will be the most common form of tax between 2021 and 2023. Considering its replacement of the 1250L tax code, the most popular tax code between 2019 and 2021, it only makes sense that there will only be any talk of change after the same amount of time is given.

Find out more

No matter what happens, the majority of taxpayers will receive an update notice to the tax code either in February or March by the HMRC. This is the time taxpayers will be fully aware of how they should calculate and determine how much they will pay out in taxes that year.

What is tax code 1257L M1

This is an emergency tax code , and means you have been provided the allowance from the month that you have commended your employment. This will not take into account your previous months. This is a measure taken if your tax code cannot be obtained from your previous employer. This should be corrected.

What Is Tax Code 1257L?

Subscribe Now

Subscribe to our channel for the latest updates.

It may seem complex or confusing, but the tax code in the UK has always been fairly simplistic, and tax code 1257L is no different.

Each tax year, there is an agreed-upon personal allowance that is granted to UK’s taxpayer. This personal allowance essentially determines how much a person can earn before paying taxes on their income. During the tax year ranging between 2021 and 2022, the personal allowance was increased to £12,570.

The HMRC then converts the personal allowance number (£12,570) into a tax code. In this case, that tax code is 1257. From there, an “L” is added, which makes the tax code 1257L.

Put simply, for the majority of taxpayers, Tax Code 1257L means that you will only be taxed on earnings that exceed £12,570.

How Much Will I Pay With Tax Code 1257L?

The 1257L tax code essentially offers an annual rebate of £12,570. This is spread out over a year. This means you’d receive a weekly allowance of £241 and a monthly allowance of £1,047.

Any income earned over this, ranging between £12,571 and £50,270, is taxed at a rate of 20%. From there, income earned between £50,271 and £150,000 is taxed at a 40% rate. Finally, for those that earn over £150,001 annually, they are taxed at a 45% rate.

Scotland has a slightly altered tax rate that is only slightly different from the numbers listed above.

Is My Tax Code Wrong?

For the vast majority of employees, the tax code should be correct. Generally, those with only a single employer and no benefits or tax-deductible allowances will be in the correct tax code setting.

Those that run the risk of being placed in the wrong tax code can typically include:

• Those that regularly shift jobs; have multiple jobs at one time; or have started, left, or are retiring from a job within that year
• Those with multiple sources of income (eg., a second job or a pension plan)
• Those with tax-deductible allowances
• Any changes to their taxable benefits (such as being given a company van for private use)

How Can I Correct My Tax Code?

If you are under the impression that you may have an incorrect tax code, immediately contact HMRC on 0300 200 3300. Speaking with them as soon as possible can reduce any potential tax errors.

Other methods of contacting HMRC about a potentially incorrect tax code is available by following the link below here – Contact HMRC.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham.

Accountants For private Tutors self employed or Limited Company 

While it’s true throughout the school year, the tutoring business is at its most profitable during exam season. For many, this can be just as much a time of stress as it is a time of celebration. After all, as profitable as it is during this period, it’s also going to be a hectic one. Going from student to student while also trying to keep track of your finances can wear at even the sharpest minds.

Instead, it may be better to let a skilled professional give you a hand.

If you’ve ever felt you’ve left your finances and accounting go by the wayside while focusing exclusively on ensuring your students put out good work, this is worth your time. If you’ve ever felt that you could use some help of your structuring your cash flow, this is worth your time. Simply put, if you’ve ever felt you just had too much on your hands at once, this is worth your time.

Get A Quote Now

Self-Assessment / Tax Return / Deadlines

What Is A Self-Assessment Tax Return?

Required by the HMRC, a Self Assessment Tax Return is an overview of your full income as well as a way to determine whether you have properly paid out your income tax for the year. The HMRC does this by going over your income as a PAYE (pay as you earn) employee. This ensures that they have a complete picture of how much income you’ve made from all sources throughout the year.

As a result of this tracking, you’ll want to make sure you list out any additional forms of income you’ve earned, provided you meet the criteria (see below).

Potential Tax Refunds

It may seem like you are only opening yourself up to a larger portion of your income being taken, but that isn’t entirely true. Depending on your situation, you may also have the option of getting a few tax refunds as well.

Tax Deadlines

The deadline for each annual tax year (for individual persons) goes from the 6th of April to the 5th of April the following year.

As an example, for the tax year of 2o2o/2021, all income accrued between the 6th of April 2020 to the 5th of April 2021 is counted as income that you’ve personally received, and thus must be declared on your tax returns.

As we are currently still inside of 2021/2022’s tax year frame, while everything made until the 5th of April 2022 will be a part of that year’s return form, your following tax return won’t be due until the 5th of April in 2023.

Allowable Expenses For Tutors

Office & Stationary Costs

While filling out your self-assessment tax return form, you can claim expenses on several things, including:

• Any and all Office & Stationery Costs
• Printing
• Printer Ink & Cartridge Costs
• Postage
• Computer Software
• Phone, Mobile, Fax, & Internet Fees, Costs, and Bills
• All Learning Materials, e.g., Books

[To claim computer hardware equipment, look over ‘Capital Allowances’ section below]

Working From Home

If, as a tutor, you do a considerable amount of work from home, you may be able to claim a certain portion of your costs on your tax returns. This can include things like:

• Heating
• Electricity
• Mortgage Interest / Rent Costs
• Internet & Phone Use
• Council Tax

You will want to have an accountant on hand to help effectively divide out your costs based on the amount of time spent working from home. Our accountants are especially skilled in this, and, with only a few questions, can get you a realistic number for how much you can put on your returns.

Gm professional accountants have offices located in London Canary wharf, Wimbledon  , Birmingham and Essex.

HMRC Self Assessment Penalties

Paper self-assessment tax returns were due on October 31st, and online self-assessment tax returns are due on January 31, 2022, to pay what is owed. Failure to complete a return by the due date can result in a penalty. Automated penalties are sent to those failing to complete a return, and can be sent in error.

With a reasonable excuse, a late tax return penalty can be challenged, but when you fail to submit your return the HMRC will demand payment.

Find out more

What Are Some Reasonable Excuses For Filing Your Tax Return Late?

A reasonable excuse is required to challenge a tax return penalty. Don’t ignore the tax department, as they are not going to forget about you.

Common reasons why people are late in submitting a return are:

• You may not be eligible for self-assessment.
• Postal delays
• Illness or death of a loved one.
• Software meltdown
• Acrimonious divorce proceedings

The penalty incurred is usually 5% of the amount owed, and if the return is three months late you will pay a penalty of 100 pounds, so it is important not to delay, and get help to make a valid appeal.

Subscribe Now

Subscribe to our channel for the latest updates.

Employment Rights

Employment law does not usually cover self-employed people, as they are considered their own boss. However, they still have protection for health safety and discrimination. Their rights are set out by a contract signed with their client.

HM Revenue and Customs (HMRC) May regard someone as self-employed for tax purposes and often need to check whether they are exempt from PAYE or whether they have employee’s rights.

If the employment status is proven to be wrong. Both individuals and their employees may have to pay the unpaid tax or lose entitlements.

Checking Employment Rights

A person is considered self-employed and does not have the rights of an employee when they submit invoices for the work done and are not under direct supervision when working. They use terms like consultant or independent contractor to describe themselves.

Excuses For Late Filing of Tax Return

If you failed to file a return by October 31, you are not alone, as the deadline is missed by over 800,000 people a year. It is obviously a huge waste of HMRC time to process all these excuses. So in 2015, a press release from the HMRC revealed that the standard 100 pound fine for failing to submit a return on time, would be waived without inquiry for those offering a reasonable excuse for lateness.

Your Appeal

If you are feeling anxious about your ability to successfully appeal to HM Revenue and HMRC, it may be for the following reasons.

• Late return
• An inaccurate return
• Late payment
• Incomplete records

When you do appeal an HMRC expert who was not involved with your penalty decision will conduct a review.

You may be appealing over customs duty incurred, and if you are offered a review, you can accept it to state your case. Alternatively, you can appeal to the tax tribunal, and if your excuse is reasonable your penalty may be canceled.

Procedure to Appeal

If the HMRC issues you with a penalty letter, use the form that accompanies it to appeal.

There may be some extra documentation to fill in for Self Assessment, VAT, PAYE, and Corporation Tax.

You can get your penalty canceled if you failed to send a tax return because you no longer need to. So if you are no longer working, you can probably explain this online. If you are going ahead with the appeal you will need.

• Date of penalty
• Date of filing your Self Assessment
• Excuse for late filing

If you are appealing the 100-pound late penalty you can do your appeal online by setting up a Government Gateway Account.

Otherwise, submit your written appeal:

Self Assessment

HM Revenue and Customs

BX9 1AS

United Kingdom

When appealing on behalf of a partnership for a late return, submit your appeal by post using the SA371, The nominated partner must make the appeal. Do not pay the fine before checking if you can appeal as there are penalties of 1600 pounds or more for one year.

How much do you get fined for late tax return in 2021 and 2022? or Will I get fined for late tax return?

Conclusion

As you can see, the HMRC assessment is complicated, if you don’t feel able to meet the requirements and deadlines, employ the services of a tax expert.

What is Companies House Authentication Code?

Every time a new company is established and registered in the United Kingdom, they are given a special authentication code. This authentication code is known as a Companies House WebFiling code, containing a mixture of numbers and letters. This code is unique to your specific company and is a total of six alphanumeric characters. It is a very important security measure for authorized individuals for the purpose of updating/changing company details. In fact, this code is equal to a company officer’s signature.

Subscribe Now

Subscribe to our channel for the latest updates.

Why Is the Authentication Code Important?

This code is vital to your company because it is required for all online Companies House tasks. The code is needed for the following…

1.File annual accounts for your company

2.File directors and secretaries for your company

3.File the annual return and/or conformation statement for your company File documents in order to appoint a new director

4.File documents to resign a current director File documents to update the registered office File to add new shares

5.File to change the accounting reference date

6.Update Companies House with any relevant information

When you register a new company with Companies House, it will take approximately five days to receive your authentication code. If you need to request a new code or replacement code, it will be sent to your company’s office address.

Your code should be kept safe and treated with the same care as a PIN. If an individual gains access to your code, they can alter your company’s details. If someone you do not trust has access to the code, change it immediately.

What Happens If You Lose Your Authentication Code?

If you have misplaced or lost your Companies House code, there are a few ways to retrieve it. The way in which you retrieve your code is dependent upon how you formed your company. You should request a new code right away. Do not wait until you are required to file.

If your company was formed through Companies House, these are your options for retrieval…

Assuming the company was formed via postal service or online web, request a new code by signing up online.

If you already have an online WebFiling account, log in. Next, select “request authentication code.”

Ensure to correctly enter the company name and where it was registered. Once displayed information is correct, select the option “request code.”

A new code will automatically be sent to your company’s office via post. You will receive it in 3 to 5 business days.

For security purposes, Companies House is unable to send an authentication code through email or speak it over the phone

If your company was formed through a company formation agent, these are your options for retrieval…

Request a new code by logging into the customer portal on your formation agent’s website. Once you log in, you will be able to see your company details and authentication code.

If web access is not an option, you can also email or call your formation agent to request the authentication code.

Gm professional accountants are small business accountants based in , Wimbledon, Birmingham, Canary Wharf (London)

Are books zero-rated for vat or Standard rated in the UK?

What are the ramifications of these adjustments?

First of all and foremost, if you provide electronic publications, the VAT rate on those goods must be reduced to 0% with effect immediately and retroactive to May 1, 2020. Electronic versions of children’s picture and painting books, as well as e-books, e-booklets, e-brochures, e-pamphlets, e-leaflets, e-newspapers, e-journals, e-magazines, and e-periodicals, will be subject to the new zero-rating guidelines.

Find out more

Audiobooks and any e-publication with more than 50% of its content dedicated to advertising, audio, and/or video material, however, are exempt and will remain standard rated (20 percent ).

What If We Included Anything Extra With E-Books?

When a zero-rated publication is sent with something else, HMRC has issued the following guidance:

1. If a firm makes a single supply of an e-publication, it is exempt from tax, but only if it is the primary element and everything else is secondary. In other words,

1. the products/package have a single price;
2. the source is marketed as a package;
3. the other investments cannot be bought separately from the e-publication;
4. some other products would’ve been useless without e-publication and are simply supplementary.
5. your customers see the sale as only one supply of an e-publication with the new offerings as simply extra features.

The 0% VAT rate is applied to the whole supply if the other items are assessed to be supplementary to the e-publication for VAT purposes. A company produces a variety of products, each of which is different and self-contained, i.e. the things have the following characteristics:

They are offered separately and not as a package; they are available for purchase separately and not as a package; there is a time difference between components of the supply; and/or the supply’s pieces are not interdependent or interrelated.

As a result, only the e-publication is zero-rated, and the other supply is subject to the usual 20% VAT rate or VAT exemption, as applicable. According to government regulations, all firms must charge VAT on their customers’ purchases.

Rates of VAT

What are all the VAT Rules for Print Products? | What are the VAT Rates?

The UK government has introduced three sorts of VAT rates: Zero Rate, Reduced Rate or 5% Rate, and Standard Rate or 20% Rate. It’s worth noting that all print items are the same rating. There is either a Standard Rate or a Zero Rate for them. So, which goods are VAT-free and which aren’t?

Subscribe to our channel for the latest updates.

Subscribe Now

Printing Services at No Cost

The term “zero-rated” are goods and services that are charged at no cost. These items are, in certain ways, VAT-free however, you must keep track of them in your books and disclose them in your VAT return. There are examples of zero rated print products listed below:

Image books for youngsters, art books, picture books, and recipe books are among the books available.

• Brochures and leaflets
• Bulletins
• Catalogs
• Circulars \Directories
• materials for the election
• Distributed Leaflets and flyers.
• Journals
• Magazines
• Manuals
• Topographical plans, maps, and charts
• Menus \Newspapers
• Pamphlets
• Periodicals
• Publications
• Price listings in full color
• Reproduced/printed music
• Programs on sports
• Rate of Interest Products to Print

The standard rate is a 20% deduction from the selling price of goods and services. Unless the commodities are classed as Reduced Fee or Zero Rate, the majority of products and services have a regular rate. The following print products are standard rated:

There are two types of cards that may be used to make an announcement, Acceptance Announcement Cards and Appointment Cards .

• Calendars and Certificates Business Cards
• Slips of Appreciation
• Coupons
• Notes on Shipping
• Diaries
• Tickets for the lottery/draw
• Envelopes\Folders
• Forms
• Completed Publications Greeting Cards
• Invoices & Invitation Cards
• Labels
• Letterheads
• Notebooks
• Formats for Menus (Self Completion)
• Book Orders
• Photocopies
• Postcards
• Posters
• Questionnaires
• Books with Receipts
• Stationery
• Stickers
• Tags \Tickets
• Card of Visit

Exceptions To The General Rules

What are the VAT rules for printed goods? | Exceptions and Special Rules

There are a few exceptions to both the zero- and standard-rated product listings. Leaflets, flyers, and pamphlets are all examples of printed materials. Flyers, brochures, and pamphlets are zero rated unless they meet the criteria for being classified as such.

Brochures, pamphlets, and other printed materials.

Brochures and pamphlets aren’t legally defined, according to VAT Notice 701/10. This indicates that it’s “a question of fact and impression” whether a print output is a brochure or pamphlet. Single-sheet brochures and “pocket” brochures with a flap, on the other hand, maybe zero-rated if they meet the following criteria:

Transmit information contain a significant quantity of text, with some indication of contents or of the sending organization are not primarily meant to carry other things are sent fully assembled

Leaflets are needed.

They, too, are not defined by law, like brochures and pamphlets however, if the print goods are utilized for any of the following, they will not be considered leaflets and VAT will be charged:

• as a calendar
• in order to get access
• to a location
• to receive a discount on products
• or services as reference material for completion
• or return For Items with Completion Areas

Leaflets, brochures, and booklets are normally zero-rated unless they contain the following in less than 25% of their overall area:

•  Unfilled Areas and waiting to be filled
• Detachable and returnable parts
• Standard-rated publications are those that are intended to be returned after completion.

GM Professional Accountants have offices Located in wimbledon London, Birmingham and Essex.

Advantages and Disadvantages: Limited Company Vs. Sole Proprietorship

Functioning as a sole trader may be a great way to work for a small business and often very effective for many people running a small company. But they have another option to operate their business as a limited company.

However, operating as a limited company is not necessarily the perfect choice for most because they will have to deal with several issues in the process. It can be pretty complex to start a new limited company. Of course, you get rewarded with benefits like getting a more professional appearance and a more favorable tax situation.

Let us now learn about the advantages and disadvantages of setting up a limited company than a sole proprietorship, allowing us to understand if we will benefit from opening a limited company and whether it is going to be a perfect choice or not.

The Advantages

The decision can be beneficial to you for several reasons. A few significant positives of becoming a limited company are as follows:

Tax Efficiency

Getting additional tax benefits can be the first primary reason for becoming a limited company in place of being a sole trader. You can generally take maximum tax-free income as a director of your limited company. As of 2022, you may claim an allowance of 12,570 as your salary and balance income in the form of dividends.

It benefits you a lot because you do not have to pay any national insurance contribution on dividends. Moreover, you will be paying only 19% of your company profits as corporation tax than 20%-45% as income tax if you operate as a sole trader.

Limited Liability

Choosing to become a limited company limits your liability, and you will not be liable for the business as you will be as a sole trader. It implies that all your assets and finances are protected if the company incurs debts and goes bankrupt.

Separate Entity

Sole traders have total liability for their business actions and are responsible for entering into legal contracts. On the other hand, limited companies allow much greater flexibility to the management and are hugely beneficial because they are separate legal entities.

Professional Image

When you operate as a limited company, you get a more professional appearance. Even if you are a single individual involved, it appears more significant and more professional to others. Although it may seem a little less unimportant advantage, it can make a tremendous difference in how customers and other businesses perceive you. It will get you considered for assignments that may not come to you as a sole proprietor.

The Disadvantages

A sole trader business has several inherent pros and cons. Similarly, besides the benefits mentioned above, a limited company also comes with a few significant disadvantages as follows:

Complex Setup

You undoubtedly get a wide range of benefits with becoming a limited company, but it is pretty complex to set it up. In contrast, it is relatively easy to set up a sole trader business by simply registering with HMRC. On the other hand, you will have to register as a limited company with companies house and pay fees. For the first-timers, it can be a daunting process.

Complicated Accounting

Unlike the Sole trader business, you will face a range of additional challenges to manage the accounts of a limited company. According to specialists of small businesses, limited companies may have to deal with tax planning, book-keeping, payroll, not to mention keeping company accounts up to date, managing business expenses, and addressing tax return issues. Moreover, if you fail to submit tax returns correctly, you may have to pay fines and face other punishments.

Ownership Issues

Sole traders make all of their decisions in isolation, and they have to justify their choices only to themselves. But it is not so simple for limited companies with multiple shareholders. Those shareholders will have a say in how the business will be run, and you have to appease all of them to run the business smoothly, complicating matters significantly.

Reduced Privacy

Limited companies have to register with Companies House, and they share information about company accounts, their shareholders, names and addresses of directors, etc. It means that such financial records and personal details are available to anyone who can access them.

Are you contemplating starting a business online? We live in the digital age where many people spend time online. Setting up an online business is a good way to tap into this pool of potential customers. As it stands, over 2.14 billion people shop online, representing about 27.6% of the total population in the world. This statistic shows the growing adoption of online shopping by various people. Therefore, starting a business on a well-known platform is a wise and profitable investment decision. Amazon is such a platform. According to Forbes, 89% of people are more likely to purchase items from Amazon than other online shopping sites. In this post, we will focus on starting an Amazon business.

Starting an Amazon business

What makes Amazon great is that there are various ways of starting a business on the platform. On Amazon, there are many ways to succeed. However, they begin with choosing a business model and the products that you plan on selling. Regardless of your business model or your chosen type of product, setting up and running an Amazon Business remain the same. Below are the steps to set up and run an amazon business:

1. Choose a business model

There are many business models that you may use for your Amazon business. Settling on a business model plays a critical role in improving sales. Below are some models that you can use:

Private label: This refers to the process in which a retailer renames/rebrands a product that they have manufactured.

Wholesale: A retailer may buy goods at a discounted price or a low cost and then sell the individual units for profit in a retail market.

Dropshipping: This is a business model by which a seller transfers the customer orders directly to a supplier or a manufacturer instead of keeping their inventory.

Handmade: You can make your products like accessories, jewelry, home décor by hand and put them up for sale on the Amazon marketplace.

Retail and/or Online Arbitrage: Arbitrage refers to a method that retailers find a discount or low-cost goods on eCommerce sites and resell them on the internet.

2. Choose the fulfillment method

You can choose between;

Fulfillment by Amazon (FBA)

Amazon has among the most advanced networks for order fulfillment in the world. With FBA, you store products in an Amazon fulfillment center. Workers pick, package, ship, and offer customer service for your products.

Fulfillment by Merchant (FBM)

This refers to when retailers put their products on Amazon, but they handle the fulfillment of orders and customer service.

Each method has its advantages and disadvantages. Therefore, closely examine each before settling on either of them.

3. Settle on the products that you will sell

The next step is deciding which products you will be selling. You can sell fashion products, food products, handmade items, among many other categories. If you plan to sell handcrafted items, this process may be already sorted, although you still have ensured that there is a demand for the product on Amazon. Tools like Jungle Scout are essential for finding the highly demanded products.

4. Apply to become a seller

We will discuss the process of registration to become a seller in the next section.

5. Sourcing your products

Once your registration has been approved and verified, you can start sourcing for the product(s) that you will be selling. If you use a private label business model, you can find a manufacturer using the supplier database on Jungle Scout or Alibaba.

6. Creating your product listing

Finally, you can create your listing and use it as a basis for growing your Amazon sales.

Creating an account as a seller on Amazon

After figuring out the product(s) that you intend to sell on the platform, complete the process of registration as a seller. The process is as below:

1) Head to https://services.amazon.com

2) Next, scroll the page that is below the link showing how you can become a seller on amazon

You will see a link labeled “see pricing->”, click on it.

(With the “See pricing->” link, you can see the difference between professional and individual accounts. Thus, you can choose what registration to use”.)

3) Choose between professional or individual accounts

You have two options for seller plans on Amazon, Individual and professional plans.

Are you going to sell over 40 products per month? Then a professional plan is your best option. Whether you do not consider yourself a professional or sell as a hobby, the plan helps you save money. However, if you plan on selling less than 40 units a month, select an individual plan.

4) Key in your details and click “Create a new account”

After selecting a seller plan, a form will appear for you to enter your seller account’s credentials. Click “Next” when you are done.

You will see another screen requesting you to enter a Time Password (OTP) sent to your email by Amazon. It verifies your email. After entering the OTP, click on the “Create Your Amazon account” button.

5) Choose the location and type of your business.

Business Location

In which country is your business located? You must get this right because Amazon will verify it.

Business type

Amazon lets you choose from the following business types; Charity, Privately owned business, publicly owned business, state-owned business, or none (if you are an individual). You then have to enter all your three names. After this, click on the “Agree and continue” button.

6) Provide your personal information

After selecting the type of business, Amazon will ask for your details. To validate them, Amazon will ask you to give identification. It may be a driving license or a passport. For verification, they may ask you to provide your phone number.

7) Select your marketplace

After filling in the personal details, check the box below to select the marketplace(s). A marketplace, in this case, is the location of an Amazon store, amazon.co.uk, amazon.ca, amazon.in, among others. Click “next”.

8) Provide your billing information

This is a way for Amazon to verify your identity and ensure that your credit card information is valid. Amazon requests the credit card number, the name as it appears on the card, and the date of the credit card’s expiry. Click “next” at the bottom of the page when done.

9) Adding the Amazon store and the product information

After your credit card information is validated, Amazon will ask you several questions about the products you intend to sell and your amazon store. They include;

• What is the name of your Amazon store?
• Do you have UPC codes for your product(s)?
• Are you the manufacturer? Who is your product’s brand owner?
• Do you have registered trademarks for your products?

After answering these questions, click “next”.

10) Validation of the address

After completing the steps above, Amazon requests you to confirm the business address you had provided earlier (in the “personal information” screen).

If the displayed address is correct, click on the “confirm” button. A message appears showing that Amazon will send a postcard to that address. It also includes a verification code. When the postcard arrives, enter the code into the “enter the code” field. To finish the process of verification, click “next”. You are now in. All you have to do is log into https://sellercentral.amazon.com. To get started.

Conclusion

To ensure increased security, set up two-step verification on your Amazon account. However, note that there has been a change registration process for a seller on Amazon. It is primarily to help in verifying the seller’s details. To be prepared with the documents, read our article on “Amazon seller verification”.

GM Professional Accountants have offices Located in London, Birmingham and Essex.

Advantages and Disadvantages: Limited Company Vs. Sole trader

Functioning as a sole trader may be a great way to work for a small business. It is often very effective for many people running a small company. But they have another option to operate their business as a limited company.

However, operating as a limited company is not necessarily the perfect choice for most. This is because they will have to deal with several issues in the process. It can be pretty complex to start a new limited company. However, you will get rewarded with benefits like receiving a more professional appearance and a more favourable tax situation.

Let us now learn about the advantages and disadvantages of setting up a limited company rather than a sole proprietorship. This will allow us to understand if we will benefit from opening a limited company and whether it is going to be a perfect choice.

Subscribe to our channel for the latest updates.

The Advantages

The decision can be beneficial to you for several reasons. A few significant positives of becoming a limited company are as follows:

Tax Efficiency

Getting additional tax benefits can be the first primary reason for becoming a limited company rather than a sole trader. You can generally take maximum tax-free income as a director of your limited company. As of 2022, you may claim an allowance of 12,570 as your salary and balance income in the form of dividends.

It benefits you a lot because you do not have to pay any national insurance contribution on dividends. Moreover, you will be paying only 19% of your company profits as corporation tax than 20%-45% as income tax if you operate as a sole trader.

Limited Liability

Choosing to become a limited company limits your liability. You will not be liable for the business as you will be as a sole trader. This means that all assets and finances are protected if the company incurs debts and goes bankrupt.

Separate Entity

Sole traders have total liability for their business actions and are responsible for entering into legal contracts. On the other hand, limited companies allow much greater flexibility to the management. They are also hugely beneficial because they are separate legal entities.

Professional Image

When you operate as a limited company, you get a more professional appearance. Even as a single individual, it appears more significant and more professional to others. Although it may seem a little less unimportant advantage, it can make a tremendous difference in how customers and other businesses perceive you. You may be considered for assignments that you may have not received as a sole proprietor.

The Disadvantages

A sole trader business has several inherent pros and cons. Similarly, besides the benefits mentioned above, a limited company also comes with a few significant disadvantages as follows:

Complex Setup

You undoubtedly get a wide range of benefits with becoming a limited company, however it is pretty complex to set it up. In contrast, it is relatively easy to set up a sole trader business by simply registering with HMRC. On the other hand, you will have to register as a limited company with companies house and pay fees. For the first-timers, it can be a daunting process.

Complicated Accounting

Unlike the Sole trader business, you will face a range of additional challenges to manage the accounts of a limited company. According to specialists of small businesses, limited companies may have to deal with tax planning, book-keeping, payroll, not to mention keeping company accounts up to date, managing business expenses, and addressing tax return issues. Moreover, if you fail to submit tax returns correctly, you may have to pay fines and face other punishments.

Ownership Issues

Sole traders make all of their decisions in isolation, and they have to justify their choices only to themselves. But it is not so simple for limited companies with multiple shareholders. Those shareholders will have a say in how the business will be run. You will have to appease all of them to run the business smoothly which complicates matters significantly.

Reduced Privacy

Limited companies have to register with Companies House, and they share information about company accounts, their shareholders, names and addresses of directors, etc. It means that such financial records and personal details are available to anyone who can access them.

Gm Professional accountants have office located in Canary wharf London, Birmingham, Wimbledon and Ilford Essex.

All About Group Structure Company

Businesses that owners manage come in numerous forms. There are partnerships, sole or individual and
multinational companies. However, as usual, there is not an actual size that fits every kind of approach.

Find out more
Group Structure is?

Group structures are established as a group of companies or companies that are indirectly or directly
occupied by an individual company called the Parent. You can say that all of the organizations in a group
structure format are hence under the leading ownership and supervision of the top or Parent company.

Kinds of Group Structure

Group structures of companies take an assortment of forms, such as vertical group structure, horizontal
group structure, and even the various forms offered of cross structures.

Below are some illustrated examples

for you to know more about group structure. The diagram portrays the three categories of group structures
which are vertical, hybrid, and horizontal.

Forming another option is to construct separate individual organizations or corporations, which are often
established by identical individuals or groups of shareholders or companies.

In that kind of case, the corporations are correlated with each other as periodically pertained to as a term
called sister companies, which are under the overall supervision of one or many individuals but still do not
form any group. Aside from that, one more option is to reorganize the said industry into separations of
departments.

Subscribe to our channel for the latest updates.

Why Forming A Group Is An Alternative?

You may ask why forming a group is a good alternative as contradicted to solely establishing a sector or
arranging a separate commodity?

That’s because a spectrum of probable commercials, advertisements, regulatory, tax, and legal benefits can
exist in constructing an organization. However, conceivably the most accepted explanation for doing that is
the excellent supervision of risk.

Advantages of a Group Structure

There are four main explanations why it is reasonable to form a group: It includes Ring-fencing investments
and drawbacks; The regulatory advantages; The centralized processes & assets; And Tax benefits as well.

Ring Fencing – Properties and liabilities can be fencing by choosing the subsidiary company to be used in
ring-fencing the possessions or drawbacks of each potential company inside the organization with a bit of
penalty. For example, suppose you prefer to broaden your company or business into a unique product. In that
case, you can do it by using a deputy to assure that the properties of those in the actual industry are protected
and are safeguarded from any detriments that may occur concerning the recent investment.

A separated structure can never have the capacity to provide such safety as well as ring-fencing financial
drawbacks.

So, the only use of separating groups and companies is to encourage diversification and enable
the new venture to assemble its name or status. Though, with such assistance, an existing company may be
required.

You can see that the group configuration can thus also support safeguarding against commercial
and reputational danger.

The use of an organizational structure can constantly fence all commercial dangers and penalties as, from an
empirical viewpoint, this could not be feasible.

For example, loans and mortgages may instruct the prominent or Parent firm to ensure or finance the
subsidiaries and liabilities.

Nonetheless, straight in those situations, the harms and detriments are still
generally limited and countable.

Thus, whenever shifting assets around inside a group, the unfavourable for
acquiring new investments can be amassed promptly into the related holding company. As a parent company
and a familial unity, care is required to ensure that borrowers are not accused and prejudiced.

Assets that are comprehensible in importance, such as IP and property, can commonly be transported to a
new group corporation.

However, only to a group at their value relatively than demand value. Suppose they
were not transmitted at the market price, and the substituting company rides into financial complications. In
that case, the transfer will be surveyed, and the request could probably be set aside by officials and
liquidators.

Reasons include because there may be a selection that may assist in ensuring against such bankruptcy risks.
A deal of the purchases at market price and value can be leased back to a trading company.

So, in short, forming an organization and shifting properties such as IP and property from out of trading into a different
carrying company can be very helpful in protecting and ring-fencing the properties that are going ahead but
expects comprehensive planning and guidance.

Regulatory Benefits – is the usage of different deputy companies who will accomplish various activities or
hold certain assets.

For example, intellectual property. They can also assist from an executive or regulatory
viewpoint. Some distinct regulatory relations can extend to enclose other group partners. Many times, the
procedure for performing has become either spontaneous or shortened to indicate that there’s widespread
custody and the organization from a financial standpoint effectively constructs one strengthened entirety.

Centralized Functions and Assets – faction structures intend to give the foremost holding step for distinct
functions or assets. For example, if the industry inhabits several stations or properties – an organization of a
corporation can be constructed to carry all the estate assets. Moreover, to rent out or license as expected to
the other related committee members.

Similarly, when the industry involves some exploitation regarding the IP across and from a spectrum of
demands or commodities, the company in charge can be utilized to grant the IP licenses to the group
companies. Please take note that this is prohibited as crucial to the related commodity of the market.

This way, it guarantees that a business likes to alleviate any specific division/product, and it’s well-organized in
the structure of a group so it can be relatively simple and cost-efficient rationale by eliminating the relevant
helper which is holding out only the IP privileges that it can benefit from. The rest of the IP privileges are
maintained within a conserved organization.

Tax Benefits – this is one crucial benefit of an organization arrangement as rejected by operations is the
design of the sister companies. It is accountable to distinct circumstances that are being met. Some
corporations are paid for some tax liberties and assistance in connection to agreements between every group
member.

You can say that specific tax misfortunes solaces can be across the institution rather than just in one
company that they originate on. In comparison, this assistance does not mainly pertain to related companies.
The transfers of substantial assets between every company in the same group, such as for UK equity profits
tax objectives, are also considered to happen on an impartial tax rationale.

The susceptible transferring of purchases between-group corporations is allowed because of it. Also, captive
to certain circumstances being met, the immunities from UK company tax in connection to earnings from the
removal of interests in the deputy and assistance from the stamp tariffs on the move shares and possessions
between every group partners.

How to Calculate Amazon Sales

Amazon is a huge platform focused on giving e-commerce entrepreneurs a central place to establish their businesses. However, some start-up company owners have yet to learn about their various protocols, as well as acquire some tips and tricks to further elevate their negotiating skills. One of the vital competencies needed to last long in this field is to handle various monetary requirements, such as the calculation of value added tax (VAT) on Amazon Sales.

A feature in Amazon which business owners should know, especially when they are interested in selling their products in different countries, is the Fulfillment by Amazon (FBA). This program allows business owners to post their products, with Amazon shipping them at an agreeable rate. Knowing the VAT on Amazon Sales is a great way to kickstart your journey into achieving your global domination of product selling.

Find out more

Amazon VAT

As a known channel for different brands, Amazon has established its dominance in being one of the best e-commerce companies to date. And like all businesses, they also add a consumption tax to all products listed under their system. This allows the company to earn and continue serving as an online business channel.

Amazon has a certain feature that aids in calculating the value added tax which helps sellers on the platform identify not only their sales price but also the consumption rates added on the products’ overall costs. The Amazon Vat Calculation Service (VCS) is a convenient way for small business owners in the platform to calculate their products vat-free while still sending an invoice with consumption costs included to transaction partners.

Half of the products and services offered on Amazon usually have a twenty percent VAT charge, but some businesses are an exception. Health products have a reduction rate of five percent, while books and goods that are sold in non-EU countries get zero vat rates.

Amazon Selling Plans

This enterprise which established its root on the internet, currently offers two types of selling plans:

• Individual Plan – If a business has just started and sells less than 40 products a month, they are obligated to pay only $0.99 for every product sold on Amazon.
• Professional Plan – Those availing of this plan are usually bigwigs in online selling. They usually have to pay six to twenty-five percent fees on closing and referral. They pay $39.99 monthly; however, they do not have a VAT charge per item sold.

Amazon Charges to Consider

Aside from VAT, Amazon also has various tariffs to be paid depending on product type and services offered. These are:

• Fulfillment Charge – This Amazon rate depends on the product specifications, such as dimension and weight. Ranging from $2.41 to $10, they usually increase depending on product size.
• Referral Cost – This is mainly based on the item category. Amazon asks for a per-item minimum charge of referral. This may be taken as a part of the sales price and ranges from six to twenty percent of product sales. Another way to get referral cost is by taking it on a minimum charged from pieces of jewelry and has a rate of $2.

• Variable Closing Cost – This type of charge Amazon applies to music, books, video games, and BMVD items. They fluctuate depending on the category, shipping location, and preferred shipping services.

VAT Calculators Settings

Some businesses are under the flat rate scheme and sell products not listed on Amazon’s standard charge. In these cases, the internet can offer a list of VAT calculators free of charge. One example is http://www.vatcalculator.co.uk/ which is accessible and easy to understand. It gives an overview of various monetary aspects of sales, such as net and VAT costs.

GM Professional Accountants have offices Located in London, Birmingham and Essex.

When will Companies House strike off a Limited company, CAN I STOP IT? ?

What Is a Company Strike Off?

A company strike off ceases a business completely. All operational businesses are taken a record of within the Companies House registry. Once the company has been removed from this list, they stop any kind of existence. This is a company strike off. There are two variations of a company strike off, one that is voluntary and one that is compulsory.

A voluntary strike off is a decision made by the company. The owner of that company applies for the business to be dissolved. This tends to be a result of the business no longer having a purpose. This could be down to the owner of the business wanting to retire. Another reason could be that they want to focus on other aspects of their lives.

A compulsory strike off is when the business is deemed unfit for further endeavours. Usually, a second party petitions that the business is taken off the list. This is often the Companies House that does this if the business has failed to file in their accounts.

When a company strike off request is made, there is a notice made in The Gazette newspaper. The notice is to inform other companies or parties that they can contest against the strike off. The people who wish to object have two months to respond to the notice. If there are no objections after this period, they then strike the business off the registry.

What Does It Mean When Your Customer Is on the Strike Off List?

When a company is struck off, it no longer exists. Any further use of that company is illegal. It must stop any trade it might have, and all assets left over will be handed over to the Crown.

The owner of any business that ends up on the strike off list should notify all relevant parties. Unfortunately, on some occasions, not all parties are informed. This can lead to creditors overlooking the information of the strike off altogether. This also means that creditors may miss the notice posted in The Gazette and miss their chance to appeal.

It will be much harder to recover any debts once the company has been struck off and dissolved. Before the strike off is implemented, the company should ensure that they have dealt with all business. They need to ensure that nothing is outstanding. This includes any further work that needs to be done and paying any outstanding bills.

What Happens If You Object to a Strike Off?
Sometimes, there have been companies that have requested to be struck off but still owe money. Here, the person or party can immediately object to the strike off as soon as it happens. To do this, they will have to contact the Companies House.

It is also possible to appeal the strike off once it is implemented if you were not informed. In this incident, you will need to have proof that the debt exists and be able to provide it to the Companies House.

Why Did My Customer Receive a Company Strike Off Notice?

Sometimes, a company will receive a strike off notice when they didn’t intend in dissolving. This notice will be sent from the Companies House. It is usually because of a business failing to file its account by the deadline set. They can organise an extension, but this has to be done in advance.

If a business files its accounts late and receives a strike off notice, it could signify that the company is suffering from financial difficulties. This is quite a common occurrence, with some big companies, such as BuzzFeed UK, receiving a notice in this way.

If you are doing business with a company that has received a strike off notice, assess their company’s situation. If you think that the company may find difficulties in paying you, protect yourself. There are steps you can take to achieve this.

• You can negotiate and agree upon better payment terms. The agreement could involve being paid upfront or giving them a reduced payment time. You can also decrease the amount the company owes you if you see fit.

• You can renegotiate contracts with the business. Some clauses will help cover your work from being unpaid. The Retention of Title clause is good to implement. It will allow you to repossess any unpaid goods if the company becomes struck off.

• You can cut your losses. If you feel it is definite that the company cannot pay anything back to you, you can immediately stop doing business with them.

Gm Professional Accountants have offices in London, Birmingham and Essex.

Domestic reverse charge Guide

Earlier this year, the government introduced a new legislation bill that sought to tackle and deal with fraudulent building and construction activity. This bill, known as the Domestic Reverse Charge Bill was officially put into place earlier this year on March 1st, of 2021.

Find out more

What is the DRC and what does it do?

Known simply as the DRC, the Domestic Reverse Charge is a new piece of legislation that states certain construction businesses may no longer be required to charge the supply of materials and services to VAT. In order to qualify, the materials must be required to be reported under the CIS. Those that aren’t will still have to account for their own VAT and what they would normally pay the supplier to the HMRC.

Subscribe Now

The reason for this legislation is due to the increase in fraud opportunities observed for micro-businesses. Smaller and sub-contractors, due to their micro-status, have been able to avoid paying their collected VAT.

VAT (also known as Value-Added Tax) is a consumption tax that is put onto products as the value of the product increases throughout its production and ultimate point of sale. Users pay an amount of VAT that is on the product’s cost, less the material costs that may have already been taxed individually.

The CIS (also known as Construction Industry Scheme) is used to collect VAT as well as Income Tax from those involved in the construction world. This includes subcontractors and other self-employed or independent builders as well. This is done in place of them paying Income Tax or making National Insurance contributions. This is done by way of the HMRC using the CIS to collect taxes from said contractors.

In the construction industry, in particular, the DRC for VAT will specifically apply for any construction-based services that are supplied at standard rates or reduced rates. The services must also need to be reported under CIS and relates to both materials used as well as labour.

If a construction or business does not make onward supplies regarding their services, reverse charges will not apply. Because of this development, it is important that all customers that are currently registered for VAT and CIS ensure that their suppliers do not apply a reverse charge for services supplied to them.

As there will often be times a person does and does not pay the VAT reverse charge, it is important that everyone involved in the construction based industry have a full understanding of the new system. This may likely require working with an experienced accountant to ensure everything is properly in order.

In the below section, we have broken down and listed many possible and potential issues that may arise depending on the company’s business type. It is important to keep in mind, however, that there are no absolute rules, and that there will certainly be a fair bit of “grey area” involved. Reviewing this with an experienced accountant will ensure you and your company do not run into any issues later on in the construction process.

EU Vat return accountants guide

In 2021, there were major changes in the European Union(EU) Value added tax (VAT) rules for ecommerce businesses. The major change was the introduction of the single One stop shop (OSS) EU VAT return and the thresholds for distance selling were removed.

The other reforms were ending the VAT exemption for low value imports, and the new IOS return and making marketplaces the deemed supplier for VAT purposes.

Find out more

After July 1, 2021, businesses selling to consumers , and dispatching their goods from only one country, will not have to register for VAT in the foreign country and file VAT in the different countries.

Instead the business can complete the OSS form and file it along with their regular VAT return which will list their sales across the EU. The seller has to remit the VAT amount for items sold to the home country’s VAT authorities, which will then forward the taxes to the relevant countries based on sales.

Non-EU sellers can also apply for OSS regime, and specify the single EU state for registering, filing returns . The EU VAT reform package was to be implemented from January 1, 2021, but was postponed.

The new reforms are based on the success of the single VAT return, MOSS return for businesses offering services like digital, broadcast and telecom services to customers in 2015.

In addition to businesses selling products to customers, event organisers and service providers can also use OSS.

Distance selling rules ending

The existing EU VAT rules specify that the seller should charge VAT at the rate of the country, where the customer is residing, called the ‘destination principle’.

So for EU sales in different countries, sellers have to register in each country, where they sell goods. So to reduce the compliance burden for small sellers, a VAT registration simplification called the thresholds for distance selling, where sellers did not have to register if the amount was less than the specified amount. In Netherlands. Luxembourg and Germany it is Euro 100,000 and for other EU members Euro 35000 annually.

This simplification will be withdrawn from July 1, 2021, and charge the VAT at the applicable rate in the country where the customer is residing, so that it can remitted to the tax authorities

Single OSS EU VAT return

EU is extending the single VAT return to eCommerce business selling goods in different countries. These sellers are usually selling from stocks in their home state. Earlier the businesses were forced to register in every EU country, and this was extremely inconvenient for the sellers, reducing their sales.

However, the sellers having stock in multiple countries will not benefit, since they must register in every country where their stock is located. This is also applicable for sellers who are part of the FBA program of Amazon. Sellers who already have VAT registrations in other EU countries and are selling stock only from the country where they reside, can close the non-resident VAT registrations from 1 July 2021 to use the OSS report.

The sellers can declare the sales to customers within the same country in their VAT domestic returns

In addition to goods, OSS will report cross border services, specific domestic sales through marketplaces. The OSS return is filed by using the delivery address to identify the country where the customer is residing.

Then based on how the goods are classified, and the applicable rate in the customers country, VAT is charged, which may be lower or nil. The OSS should be filed quarterly. It is a simple form which specifies the VAT which the seller has to pay the country where his customer resides. For uniformity, the OSS return is standardized in all the member states of the EU.

Effect of Brexit on UK, EU sellers
The United Kingdom (UK) left the EU on 31 december, 2020 and Brexit is no longer applicable. UK sellers are treated as as non-EU sellers. If they wish to file a OSS return for ‘non-Union’ country sellers, they can register in any of the EU states.

The UK sellers are able to close their existing EU VAT registration in any country where they do not have a stock. UK sellers had to consider appoint a fiscal representative in the EU countries where they were registered. This will no longer be necessary from July 1, 2021, since they can use the OSS returns for non-EU countries.

Gm Professional Accountants have offices located in London. Contact us now for registration.

This article is for ecommerce business owners and provides a review of the most important changes to the UK VAT system from 1 January 2021 onward.

Find out more

Introduction

As of 1 January 2021 amendments are being made to the way in which the UK VAT system operates. The alterations relating to ecommerce businesses have been years in the making and were agreed upon prior to the outcome of the Brexit referendum was known.

View our packages

The intention had been for the changes to be made on New Year’s day 2021, but in light of the coronavirus pandemic the EU has moved its implementation to 1 July. That the UK did not impose any delay has meant there will be six months’ difference in approach.

To ensure this does not cause undue difficulty to the online businesses affected by the changes, we cover everything of which ecommerce owners need be aware.

Ecommerce VAT Changes: an overview

Here we provide detail on the four major changes to the UK VAT system introduced by the government from the start of 2021.

1. Withdrawal of Low Value Consignment Relief (LVCR)

LVCR previously meant that goods valued at £15 and lower were exempt from import VAT. As of the shift in rules on 1 January, vendors or postal services will have to declare and pay VAT to HMRC on any goods sold at £135 and below. This new regime will have a significant impact on the way in which dropshippers account for VAT.

2. Postponement of Import VAT

Private sellers are also considerably affected. Prior to 2021, import VAT was placed on goods passing through customs and then reclaimed on VAT returns. The changes introduced a new procedure. Now, import VAT needs to be declared on businesses’ UK VAT returns with nothing being paid on imported goods as they arrive.

3. UK sales no longer subject to EU Distance Selling Thresholds (DSTs)

Up until 30June the goods UK ecommerce businesses export to EU customers will move from being classified as distance sales to being UK exports and zero rated. Businesses located in the EU are now required to register for UK VAT. If you are in this position, get in contact and we can help you.

From 1 July 2021 onward, the VAT MOSS framework will encompass digital as well as physical products. Once this happens UK businesses will be relieved of the need to register in each EU jurisdiction separately and will instead be permitted to export to the EU via VAT MOSS.

4. EC Sales Lists (ECSLs) no longer apply to UK businesses

Since 1 January 2021 UK businesses have not been allowed to make EC Sales and so have no further requirement to complete and submit ECSLs.

We will now examine the consequences of each of these four major changes in greater detail.

Withdrawal of Low Value Consignment Relief (LVCR)

Low Value Consignment Relief was in effect prior to 2021 and meant: i) any imported goods with a value of £15 or less were not subject to either Customs Duty or import VAT, and ii) imported goods valued above £15 and below £135 drew import VAT but not Customs Duty.

The withdrawal of LVCR on 1 January 2021 means VAT is now collected at the point of sale – the online market place (OMP) – rather than the point of importation. All imported products valued below £135 will be subject to domestic, not import, VAT.

Vendors offering goods at a cost of up to £135 through their own website rather than an online marketplace such as Amazon are now required to account for, and register, UK VAT. As domestic VAT has expanded to include the import of goods from the EU and sales of products under £15 previously exempted by LVCR, it is no longer the responsibility of delivery agents to collect import VAT from customers.

There are no changes for sales on online marketplaces within the United Kingdom. This means that a vendor operating on eBay or Amazon and sending a product from a location within the UK to a customer within the country has no need to change any of their practices with respect to VAT calculations.

Consequences for vendors operating from their own online store

Traders directly importing goods to customers within the UK and selling through an online store such as Wix, Shopify or Squarespace are now tasked with accounting for UK VAT on each of those transactions.

Customers only see the price they end up paying. For the majority of businesses it means they now lose 1/6 of their profit margin to VAT. For example, a product selling for £24 now includes VAT of 20%, so based on final selling price the charges break down as £20 +£4 VAT because 1/6 of £24 is £4. For the trader to retain their pre-2021 profit margin, their new prices will have to have been increased by 20%.

The good news is that we provide a comprehensive service for all matters related to VAT registration. So if you are a dropshipper selling products from outside the European Union and importing them into the UK, get in touch with us now and we’ll be able to help you put everything in order.

Consequences for vendors operating through an online marketplace

Where trading involves the direct importation of goods to customers within the UK through online marketplaces such as eBay, Amazon or Etsy, responsibility for collecting and charging VAT has now passed to that online marketplace. This means it is imposed at the checkout whilst the vendor includes the amount as zero rated on their UK VAT return.

Find out more

Postponement of import VAT

In the past, ecommerce businesses had to pay import VAT when their goods were brought into the UK before subsequently reclaiming it on their VAT return. From 1 January 2021 importers no longer hold a duty to pay VAT upon the arrival of goods. They are now required to declare and recoup import VAT on the same VAT return which results in a NIL cash impact.

Since the changes, postponed accounting is appropriate for use with respect to VAT where:

• Goods are being imported for business use

• The business holds a GB EORI number that is also used on the customs declaration, something that is usually linked with UK VAT numbers

• The business’s VAT number appears on the customs declaration

Those businesses that are not VAT registered in the UK will not be permitted to account for import VAT in this way. They will have to pay import VAT at the moment the goods have been imported.

Where postponed import VAT accounting does not apply

There are different regulations in force for goods in packages below £135. We covered these in the �Withdrawal of Low Value Consignment Relief (LVCR)’ section earlier in this article.

Completing VAT returns under the Postponed Import VAT scheme

For imported products it is now necessary to account for import VAT on the VAT return for the period during which those products were imported.

Import information is now available through a new online account that provides a monthly statement that can be downloaded for record keeping. This is akin to monthly C79 documents and will show the aggregate of import VAT postponed for the previous month, information which needs to be included in VAT returns.

The changes to how VAT returns now need to be filled-in are:

• Box 1 needs to include the VAT that was due during the period on imports accounted for through postponed VAT accounting

• Box 4 needs to include the VAT that was reclaimed during the period on imports accounted for through postponed VAT accounting

• Box 7 needs to include the total importation value, excluding VAT, of all goods included on the monthly online statement

UK sales no longer subject to EU Distance Selling Thresholds (DSTs)

EU Distance Selling Thresholds stopped applying to sales moving from the UK to the EU on 1 January 2021. This has the effect that all sales from the UK are treated as exports and so are zero rated for UK VAT purposes.

At the EU end, such sales are subject to import VAT upon arrival. This may have the unforeseen and unfortunate effect on consumers of their goods being held at customs until import VAT has been paid. Such a state of affairs is not beneficial for ecommerce businesses because customers will be unhappy and post negative are required to pay more

Such a state of affairs is far from ideal because customers are unlikely to be pleased at having to pay an unexpected extra charge for their purchase. Should that come about they may well complain or leave negative reviews, a course of action that will mean ecommerce businesses run the risk of suffering reputational damage for something that is beyond their control.

We will advise on VAT changes due to be introduced by the EU on 1 July 2021 once they have been finalised.

EC Sales Lists (ECSLs) no longer apply to UK businesses

Businesses that have supplied goods or services to businesses in the EU no longer need to submit EC Sales Lists.

Register now

We have compiled a guide on everything you need to know about how to register, including the steps you need to take to do it for yourself. Please contact us if you would like either a copy of that guide or for us to take care of those necessary steps for you.

Find out more

The SEISS Grant

What is SEISS Grant?

SEISS (Self-Employment Income Support Scheme) came as good news for several sole traders in the UK. Chancellor Rishi Sunak extended the scheme on 3 Mar 2021 while presenting the budget. It will now remain in force till Sep 2021. The government introduced this policy in May 2020 as a temporary measure for self-employed people who suffered financially due to the covid 19 pandemic and the first lockdown in the country.

We have already seen three rounds of this grant. The fourth round can grant up to 7500 per sole-trader, accounting for 80% of earning losses in Feb-Apr 2021. Self-employed people can claim the fifth round of grants also in Jul 2021 for covering their losses from May onwards. It would cover 80% of your loss if you suffered a fall in turnover by 30%.

Who Is Eligible for A SEISS Grant?

You can apply subject to the following conditions:

Annual trading profits below 50,000

Most of your income comes from self-employment

Completed self-assessment tax return

An ordinary partnership can claim based on an individual share in profits.

Those who earn income from property cannot apply

The sole trader’s profits reduced significantly due to decreased demand or capacity or inability to trade due to the pandemic

You must declare that you want to continue trading

You can apply for the SEISS grant online, and HMRC will get in touch with you with the claim dates. You can expect the SEISS grant within six working days.

What Is Different in The Fourth Seiss Grant?

Even if you did not qualify in previous rounds, you could still apply provided you have filed the self-assessment tax return by 2 Mar 2021. Remember that late filers are not eligible. Moreover, if you claimed in any of the first three rounds, you cannot apply this time.

The scheme promises to help about 600,000 sole traders who could not get any grant so far. The system will consider the tax return of 2019-20. If you were self-employed in that tax year, you could apply by 31 May 2021.

Reporting In Your Self-Assessment Return

SEISS grant is not a loan, so there is no need to repay it. Nevertheless, it is subject to class 4 national insurance contributions and Income tax.

These grants are taxable in the year of receipt. Hence, if you got the first three grants, you will have to pay tax on them in the 2020-21 taxation year and report in the self-assessment year 2020-21

Similarly, if you are a self-employed person (aka sole trader), your 4^th/5^th SEISS grants will be taxable in 2021-22 tax year, and you must report them in 2021-22 self-assessment.

HMRC has included a specific box to enter the amount received from SEISS grants for self-employed people in tax return forms of these two years.

Other Features Of SEISS Grants

If you received a grant more than you should have or were not entitled to, please notify HMRC within 90 days to return the grant value, failing which HMRC may impose a penalty.

Remember that SEISS does not constitute a part of taxable turnover for the calculation of VAT. Hence, if grant money increases the VAT threshold above 85,000, you still need not register for VAT.

If you could not pay your self-assessment tax due to covid 19, you can pay in affordable instalments, including delayed payments due in Jul 2020.

If you do not fall under the purview of SEISS grants, you can apply for other cash grants, tax reliefs, or govt loans, even if your business is closed.

You may check the GOV.UK website for further information.

Micro-Business

What are Micro-Business Accounts?

Every business must file the statutory company tax return with HMRC. However, small and micro businesses have several options for submitting their returns. You can save money and time by submitting your return in a simple micro-entity account format.

Find out more

According to the Companies Act 2006, we can classify a limited company as a micro business if any two of the following three conditions are true during a particular financial year.

It may not have an annual turnover above £632,000.

The balance sheet total may not exceed £316,000.

It may not have an average of more than ten employees in the financial year.

How Do Micro-Entities Do Accounting?

Microbusinesses can do accounting by:

1. Opening a bank account
2. Tracking their income and expenses
3. Developing a bookkeeping system with digital records
4. Setting up a payroll systems
5. Investigating import tax
6. Determining how they will get paid
7. Establishing VAT procedures
8. Determining their tax obligations
9. Calculating net profit margin
10. Finding good accounting partners

Business Expenses

You can think of any expense as a business expense by determining whether it is for private or business use.

Setup Costs: You can include the pre-trading expenses in the first period of your accounting.

Office Costs: They include printing, stationery, internet, separate landline phone for business.

Clothing Expenses: Protective clothing and uniform except for everyday clothing costs

Insurance and Subscription Expenses: Recognized body relating to business and public Liability insurance

Banking Expenses: Bank charges, annual arrangement fee, credit card expenses

Transport Expenses: Mileage allowances with car parking charges, Specific percentage of motor expenses for business

Using Home for Business: You can use HMRC rates or actual expenses incurred in the period.

Subsistence Costs: You can claim it if you are away for more than five hours.

Hotel Expenses: If you need an overnight stay in a hotel for a business trip

Disallowable Expenses

The taxable profit is different from your accounting profit. The expenses are also disallowable if they are wholly and exclusively not for business purposes.

Drawings for personal use; however, wages are allowable for a limited company

Goods for personal use

Part of landline/ mobile and internet, if you use it for both business and private

Entertaining customers, suppliers, and clients

Repayment of interest on a loan

Business gifting for entertaining

Donation amount

Late filing penalties, motor fines, and similar expenses

An Icing on the Cake

We provide a personal accountant for small businesses to help in:

Giving necessary tax advice whenever required

Managing your salary planning, dividends, taxes, and VAT issues

Filing PAYE, VAT, corporation tax returns, and annual accounts

Why Choose GM Professional Accountants?

We provide accounting software as default in our all-inclusive monthly packages. You can quickly manage your routine bookkeeping activities on your phone app or computer. You need not postpone your work till the end of the day as you can do these activities online on this software. For instance, send invoices and record receipts online.

We take care of complex and time-consuming activities: E.g., Preparing P&L account; Checking business cash flows; Checking if business finances are in a strong position; Filing tax returns, etc. The best part of associating with us is that you need not spend hours together in front of mundane spreadsheets.

We have offices in London, Manchester , Birmingham and Essex.

Tax-Efficiency

Small entities need to keep as much of their earnings as possible to maintain positive cash flows and be profitable in business. We can help you make this possible by advising you about ways to keep your business accounting in line with HMRC rules. You will end up paying as few taxes as legally feasible because we ensure that you retain more of your earnings.

Accountants Guide for Veterinary and Vet business

Today, many professional services are outsourced, we are all so busy that we focus on our own area of expertise and find it impossible to make time for day-to-day financials. So it makes perfect sense as a vet or veterinary nurse to use a specialized firm of accountants to handle business finances, insurance, tax, and all other money-related things. This leaves you totally free to restore the health of our pets and manage other professional challenges.

Find out more

When Planning a Veterinary Practice

The structure of a vet practice is complicated, so it is important to plan it correctly from the beginning to make the most of your deductions. Involve your vet accountant from the start and they will explain the best structure to you.  You can choose from a Limited company, sole trader or a partnership.

Meals and Travel Claims

• When you work back often at night, or on weekends you will be paid an allowance by your employer for meals. Although you can claim meals without receipts, if you show a calculation, it is better to keep the receipts. In fact, keep all work-related receipts and then hand them to the accountants and let them work it out.
• Accommodation and travel to nonlocal conferences are also claimed, as is travel between two different jobs.
• Another claim is transport usage, including driving your own car for work, tolls, taxis and all public transport.
• Home visits to clients’ animals.
• When using your own vehicle, always use a mileage sheet that you keep in your car for work-related travel, then at the end of the year, you can submit the form to the accountants to calculate reimbursement.

Work Clothing

Often a uniform is required for work in a veterinary practice, and you may wear ‘scrubs’ or a white coat! Uniforms are expensive, so if you are required

to wear one as part of a team, by company policy, this will be another tax claim at the end of the year.

A work uniform may have a logo or an identifying emblem on it and is something that can’t be worn away from work.

Uniform Claims Include

• PPE (personal protective equipment). this may include gloves, face shield aprons, and boots.
• Laundry dry cleaning and repairs to your uniform.
• UV skin protection, sunglasses, and a hat if working outdoors.

Training for the Workplace

You will be required to attend work-related training, and to pay for it. You may be the office WH&S (work health and safety), representative and this requires annual retraining with additional modules, often LMS online from home. Any books purchased related to training can also be claimed.

What is not Covered

You cannot claim HECS help fees.

But if you are doing an ongoing University or TAFE work-related course, you can claim the fees for that course, also the books and stationery.

Tools and Equipment in the Workplace

Buying and repairing equipment used at work, like specialized surgical equipment, computers, and phones electronic diary.

Other Expenses related to Work

Any professional membership

Insurances, all professions are required to be fully insured, and to have certain practicing certificates that are renewed annually. These expenses can also be claimed, says you may also be able to claim a deduction for reporting, plus gifts and donations.

Personal superannuation. If you have concerns consult your accountant, as it will be better to hand all this over to him/her.

Telephone and Internet Services

When you are making phone calls from home or your personal mobile keep a diary, for a month and then the accountant can aggregate the figures throughout the year.

You can only claim a proportion of monthly fees that relate to your work perhaps including email and training (LMS).

Other Expenses

There are other deductions that can be claimed by all employees, and your accountant will want to claim some of these as well.

• If you are donating regularly to a charity just give an amount and get a receipt. Don’t buy raffle tickets, as if you receive something in return it negates the deduction.
• Deduct bank fees on investment accounts.
• You probably have income protection insurance and accident insurance. Your accountant can deduct this insurance or a part of it.
• Keep all receipts that may be deductible, and when you have a meeting with the accountant you can ask them.

Tax Changes

Last year in the UK and many other countries there were some interesting changes to taxation rates. Amongst the changes were.

• A married allowance for transfer for basic rate payers
• Changes to Mileage rates.
• Changes to business deductions.
• Corporation tax rise coming in 2023

This type of income relief was bought in to stimulate the economy during the Covid shutdown, and to a larger extent, it seems to have worked.

This was combined with general tax cuts for the public, that were given to all working people.

Advantages of using a GM Professional accountants. 

• We will have a better understanding of your structure and finances.
• We  can monitor the performance of your vet clinic and suggest changes.
• Good advisory services for you and your staff.
• Enforces certain standards

Conclusion

Because everyone in your Vet practice is so busy, there is never enough time to spend monitoring your finances. In fact, they are much better monitored by your specialist accountant who brings a financial perspective to everything he does. This will free you up to do your real work, and if you become bogged down in financial administrative stuff you will lose a day a week, and that is a waste of professional time for you and your team.

Accountants Guide on Cryptocurrency

One of the most common questions we are asked is: What are the taxes on Cryptocurrencys in the UK? and Why?

As more and more investors are dipping their toes in the crypto market, people across the UK are now turning to this market as an exciting opportunity. Whether you are a seasoned investor or a first timer, understanding the potential use of these Coins is important before you consider investing.

#1. Bitcoin (BTC)

Ever since its launch by its mysterious founder Satoshi Nakamoto back in 2009 bitcoin commonly known as the king of currencies as work this way to the top of the pile. it remains to cryptocurrency of choice for investors both in the UK and around the world. Part of its attraction to investors is that it works on a straightforward proof of work algorithm. Traders need to solve complex computational puzzles to create new bitcoins and to verify each transaction. Once these have been solved, they issue a certain number of bitcoins as a reward.

Mining bitcoin is just one way to get it most people simply buy it using their fiat currency on the variety of different cryptocurrency exchanges such as eToro and Bi-nance The fact that bitcoin was the first cryptocurrency in the world probably helps with its popularity many products who get their first 10 to corner the market

Tax Implications 

This depends on the nature of the business, whether it is considered as a trade or a gain. The capital gains tax allowance is £12300.

Subscribe to our channel for the latest updates.

Mining will be considered as income in the tax year. which runs from the 06/04 – 05/04.

Allowable expenses 

If considered as trade there will be more flexibility on the expenses and if considered as a gain then only the incidental expenses are allowed.

#2. Ethereum (ETH)

Currently, priced at nearly $2,000 Ethereum is the world’s second most popular cryptocurrency and has a market capitalization of over 50 billion. And you can only for 17% of people surveyed showed they had heard of Etherium and recent data show it to be the fourth most popular traded currency in the UK. Working on a blockchain platform Ethereum carousel transactions by using smart contracts. Find coding terms of agreements these smart contracts are automatic meaning that the price you’re paying and the price the other person is receiving are always identical. Similar to bitcoin Ethereum can be mined, but it also operates the payment system in an incredibly secure and transparent fashion. Keeps much of his popularity didn’t you to the fact that third-party organizations like it as it avoids having them being dependent on banks.

Tax Implications 

This depends on the nature of the business, whether it is considered as a trade or a gain. The capital gains tax allowance is £12300.

Allowable expenses 

If considered as trade there will be more flexibility on the expenses and if considered as a gain then only the incidental expenses are allowed.

3. Bitcoin Cash (BCH)

Piggybacking on the popularity of bitcoin, it’s hardly surprising that bitcoin cash remains one of the most popular cryptocurrencies in the world and the third most popular in the United Kingdom. First launch back in 2017 based on the back of some concerns surrounding bitcoin and scalability bitcoin, cash has no upward limit. It operates as a peer-to-peer payment system its current market cap. Is nearly 5 billion. Early on many people jump from bitcoin to bitcoin cash as they believe this to be a disruptive competitor.

Tax Implications 

This depends on the nature of the business, whether it is considered as a trade or a gain. The capital gains tax allowance is £12300.

Allowable expenses 

If considered as trade there will be more flexibility on the expenses and if considered as a gain then only the incidental expenses are allowed.

#4 Litecoin (LTC)

One of the earliest old coins litecoin was first launched back in 2011. It operates as a faster and cheaper alternative to bitcoin, as a new block took less than two-and-a-half minutes to process when compared to the 10 minutes that bitcoin took. This speed is primarily the reason that her remains among the most popular coins on the market today and still lists in the top 10 most popular cryptocurrencies in the UK. one of the core benefits of litecoin is its ability to support over 80 million coins it’s roll out of the role-playing game light-bringer that runs on their blockchain has did initially lead to a surge in litecoin transactions even to the stage where 75% of all transactions for one’s caused by the game. This is no longer the case as litecoin continues to go from strength to strength.

Tax Implications 

This depends on the nature of the business, whether it is considered as a trade or a gain. The capital gains tax allowance is £12300.

Allowable expenses 

If considered as trade there will be more flexibility on the expenses and if considered as a gain then only the incidental expenses are allowed.

5. Dash (DASH)

Dash was first launched back in 2014 when it was initially known as X coin and then renamed itself to Darkcoin and eventually it was rebranded to dash coin. Its purpose was to provide a day-to-day cryptocurrency that people could easily use. Currently trading at $220 a share under the market cap of 2.2 billion- as quickly become one of two largest cryptocurrencies in the world. When compared to between cash and Litecoin, Dash actually solve some problems that bitcoin created. Including its inability to deal with multiple transactions, it’s slow speed, and it’s ever increasing transaction fees. Investors in the UK continue to study DASH carefully as many online merchants are already accepting it and dash ATMs are popping up all around London.

Tax Implications 

This depends on the nature of the business, whether it is considered as a trade or a gain. The capital gains tax allowance is £12300.

Allowable expenses 

If considered as trade there will be more flexibility on the expenses and if considered as a gain then only the incidental expenses are allowed.

#6. Stellar (XLM)

Launched by one of ripples co-founders Jed Michaela back in 2014 center is designed to be a decentralized open source payment network. Its currency is known as the lumen and is comparable to how XRP or ripple powers ripple net, ethereum is powered by either. The whole stutter network and its functionalities are powered by lumen. They attract investors to this cryptocurrency because of its impressive list of real-world applications it’s also built a significant number of premier power partnerships ever since it’s released. Two of the most impressive pirates collaboration with Deloitte and IBM. As decentralized finance services are becoming increasingly popular, stellar is going from strength to strength and looks like it has a significant part to play in the future of cryptocurrencies.

Tax Implications 

This depends on the nature of the business, whether it is considered as a trade or a gain. The capital gains tax allowance is £12300.

Allowable expenses 

If considered as trade there will be more flexibility on the expenses and if considered as a gain then only the incidental expenses are allowed.

#7. Ripple (XRP)

Ever since its launch ripple, XRP has remained one of the most traded and popular cryptocurrencies, both in the UK and around the world. It’s been around since 2012 however in recent years it’s nearly tripled in volume. XRP with a market cap of over 12 billion is the fourth largest cryptocurrency in the world. Compared to cryptocurrencies that are completely decentralized, ripple continues to partner with larger institutions as its early purpose was to allow big businesses and Banks to conduct real-time payments across borders. Much effects popularity is because of its backing by major institutions such as the two listed above and others including Santander and JP Morgan. With government regulations inevitable soon, many people believe XRP is ideally placed into provide a control for the sale and use of cryptocurrencies.

Tax Implications 

This depends on the nature of the business, whether it is considered as a trade or a gain. The capital gains tax allowance is £12300.

Allowable expenses 

If considered as trade there will be more flexibility on the expenses and if considered as a gain then only the incidental expenses are allowed.

8. Tezos (XTZ)

Texas despite an early surge after its initial ICO in 2017 when it raised over 200 million dollars breaking many records it had a rocky performance for the past 3 years however an experience a Resurgence in late 2020 and as remain one of the UKs most popular cryptocurrencies among many of his more seasoned traders

As more and more cryptos have been subject to audits, Tezos continues to score highly built on the premise of a model that provides unchained governance it has built-in protections against issues such as chain reorganizations and selfish baking. This high level of security is being one of the primary reasons that it remains one of the most popular League traded cryptocurrencies in the UK

Tax Implications 

This depends on the nature of the business, whether it is considered as a trade or a gain. The capital gains tax allowance is £12300.

Allowable expenses 

If considered as trade there will be more flexibility on the expenses and if considered as a gain then only the incidental expenses are allowed.

9. Cardano (ADA)

Cardano/ADA remains one of the top 10 most popular cryptocurrencies in the world. They base Cardano upon a platform that provides proof state for blockchain. I found it by some Ethereums early co-founders ever since it’s launched it has steadily become one of the most popular cryptocurrencies in the UK. 88 is the term most commonly used to refer to cardano’s native currency and it was founded on the premise that it could be used to both receive and send secure cross-border digital funding. It uses smart contracts similar to those used by ethereum however its primarily focused was to overcoming some problems that people perceive exist with bitcoin and Ethereum which increases its overall popularity in the UK.

Cardinal is a third generation cryptocurrency, meaning it was has had several years to observe its competitors and improve on many of the faults that impeded their growth. This makes Cardano an exceptional investment opportunity for many UK traders. While it’s still a relatively new concept, it quickly jumped into the top 10 and has continued to become more and more popular. Experts believe Cardano will succeed while many first generation offerings rush to market will fail.

Tax Implications 

This depends on the nature of the business, whether it is considered as a trade or a gain. The capital gains tax allowance is £12300.

Allowable expenses 

If considered as trade there will be more flexibility on the expenses and if considered as a gain then only the incidental expenses are allowed.

10. IOTA (MIOTA)

Last but certainly not least the cryptocurrency has quickly become one of the most popularly traded in the UK. IOTA is built as an open source ledger and it was first launched in 2015 it helps facilitate transaction between the internet of things network and computers. Its market cap has reached over 3 billion and it’s currently trading as one dollar and 15 cent. They design the algorithm that provides proof of work for iota to help verify transactions while charging no transfer fees. This makes it hugely attractive for businesses in the IoT industry who have long been suffering because of overly inflated transaction fees. Unfortunately, in the last few years iota has been subject to several hacks this has resulted in severe downtime and rethinks by its founders. However, these hikes have not resulted in its popularity floundering shape or form in the UK. Find that it attracts more experienced investors who have a long and well-developed trading strategy based around a strong risk management makes IOTA and interesting long-term HODL.

Tax Implications 

This depends on the nature of the business, whether it is considered as a trade or a gain. The capital gains tax allowance is £12300.

Allowable expenses 

If considered as trade there will be more flexibility on the expenses and if considered as a gain then only the incidental expenses are allowed.

Buy to Let company accountants guide

HMRC have imposed restrictions on income tax relief on finance costs for buy-to-let properties. You may wonder: Is it now more beneficial to buy personally or via a limited company in the wake of these restrictions?

With effect from 6 Apr 2017 for 2020-21 taxation year, you cannot claim a deduction for finance costs from your income from a property while calculating your taxable profits if you own a buy-to-let property in your name. You will only get a tax reduction at a base rate towards finance costs from your total income tax liability.

Find out more

It has now become a game-changer regulation for landlords. They introduced the new regime phasing in over four years:

Tax Year Finance cost deduction from property income  Basic rate reduction from IT liability

2017-18                75%                                            25%

2018-19                50%                                            50%

2019-20               25%                                            75%

2020-21                0%                                            100%

Therefore, owing to the above changes, it has recently become beneficial to buy a buy-to-let property through an SPV limited company instead of buying as an individual.

Recent research reports suggest that corporate landlords now own about 20% of rental properties. It has become more popular in the capital region. Company landlords now own more than 25% of rental homes in London.

Purchasing under SPV Limited Company

Buy-to-let landlords can now buy the property through an SPV limited company where the shareholder and company directors become the investors.

This route brings instant benefits to landlords. At present limited companies can offset entire mortgage interest expenses against rental income profits. They pay corporate tax only on the balance profits. The corporation tax rate is presently 19%.

Transferring a buy-to-let property to an SPV Ltd. Company

If you own an existing portfolio of properties, it is now possible to transfer the ownership of your portfolio to an SPV limited company.

You will have to consider any such transfer of property at the market price. It implies that you may incur additional costs towards stamp duty, capital gains tax, legal charges, and mortgage/valuation fee.

It is essential to note that maintaining a limited company involves a few costs, including its running expenses and fees towards legal obligations like filing of statutory accounts periodically. But at the same time, you stand to gain in terms of some tax-deductible expenses: mortgage broker fees, accountancy fees, and lender arrangement fees.

The next question is how to draw funds from your company. You can withdraw money by way of dividends and salaries.

Dividends

A business can pay a dividend from profits left after the corporation tax payment. However, the respective recipient shareholder needs to bear a further dividend tax on receipts above a 2,000 tax-free allowance limit for 2019-20. Remember that the limited company has already paid the tax on profits. Besides, the total annual shareholder income will determine the applicable dividend tax rate.

Furthermore, if the landlord does not require income to meet current personal expenditure, the limited company can reinvest retained funds to own other properties whenever any opportunity arises.

Summary

You require careful planning to reap the benefits of this regulation. In the short-term, the cost of transferring a buy-to-let property to a limited company may outweigh the expected benefits. The mortgage interest restriction took four years to reduce to base rate tax relief. Hence, landlords had ample time for planning. If you plan to keep the property for the long-term, it may be more beneficial to buy new buy-to-let properties for tax purposes directly in a company’s name.

If you require rental income for your regular living expenses, you will have to find ways to extract revenue from the company. However, this may partly or wholly nullify tax benefits you made by taking buy-to-let property in the company’s name in the first place.

You also have to consider that the company will pay corporation tax on the gains out of selling a property, whereas as an individual, you get annual capital gains tax free allowance limit of £12300 for 2019-2020.

ACCOUNTANTS FOR GAS ENGINEERS

GM Professional Accountants provide accounting and tax services for Gas Engineers. We have been providing accounting and tax advice for gas experts for several years.

Find out more

Our team of experienced accountants can help you identify the possibilities of tax relief that you can legally claim. It will allow you to take home more of your income while providing you with the confidence that you won’t get hit with a large tax payment at the end of the financial year.

ACCOUNTING & TAX SERVICES

We charge a fixed monthly amount to our clients without any hidden costs for providing a range of accounting and tax-related services. It benefits you with the confidence of optimum tax payments, higher disposable income, and peace of mind due to full and timely compliance.

1. We help you complete your tax returns, tax calculations, and statutory accounting requirements.

2. We provide online access to our portal to invoice and log the expenses for a convenient recording of details.

3. You can update your accounts instantly using online accounting software from the leading brands available out there.

4. Our job is to ensure that you always fulfil your tax obligations in full, thereby maximizing the capital allowances.

5. From time to time, we give structured advice to improve tax efficiency in your professional practice.

6. We always ensure your 100% compliance with relevant legislation and its latest amendments.

7. We provide full assistance in preparing your annual accounts with periodic accounting statements, including the balance sheet and your Profit & Loss account statements.

8. We provide help in installing, managing, and maintaining your payroll and book-keeping systems.

9. You can improve your business cash flow management to suit your business needs.

CLAIM BUSINESS EXPENSES

You may not be aware, but there is a wide range of expenses that you can claim in your accounting and tax returns to optimize tax payments. We have drafted a comprehensive list of all types of possible business expenses that are admissible as an allowable business expense for tax purposes. However, the list is indicative and not exhaustive.

1. Landline phone bills for business use

2. Internet and Mobile phone bills for business use

3. Materials used for your work

4. Repairs and maintenance of equipment

5. Protective clothing, e.g., boots and overalls

6. Laundry & cleaning charges

7. Interest on loans taken for running the business

8. Postage & stationery and Computer consumables

9. Replacement tools

10. Trade Magazines and trade subscriptions

11. Fuel for vehicles

12. Road tax, MOT, and insurance premium

13. Hire Purchase interest on business assets

14. Advertising

15. Bank charges on the business bank account

16. Leasing of plant & equipment

17. Vehicle leasing

18. Accountancy fees

19. Traveling expenses and Fare

20. Parking & Tolls

21. Vehicle running costs

22. Sustenance (if working away from home)

23. Wages 

24. Use of home as your office: work from home 

25. Other miscellaneous items

WHY SHOULD YOU CHOOSE US?

We have provided services related to accounting and tax for many years for Gas Engineers, focusing on their specific needs. We offer unique services to our clients as follows:

1. LOW COST & QUICK

You can choose from two convenient options for fee payment, whichever is best for you. We provide both fee payment options of monthly fee or hourly rates. We are also flexible to offer a comprehensive package for an extended period, covering all sorts of accounting tasks.

2. ACCOUNTING SOFTWARE HELP & ADVICE Our team of skilled accountants can set up all the leading accounting software so that you get the maximum mileage out of it. We offer our services to work with top accounting software brands like Xero.

3. TRUSTED ONLINE ACCOUNTANTS We have provided our trusted services for several years to deliver the best customer service with our years of experience in accounting and tax services. Most recently, our esteemed clients have chosen us as the number one accounting firm on Google Reviews.

SETTING UP A LIMITED COMPANY WHILE IN EMPLOYMENT

Several people aspire to start their own business, but they feel stuck in a full-time job. They intend to break the chains which hold them to employment and prevent them from doing something different.

Besides, it is quite challenging to set up a new business. It is unchartered territory, and you need to consider many factors before venturing into the unknown. In a scenario where you work full-time for a company and plan to set up a new venture, such pressures can be quite intense.

Subscribe to our channel for the latest updates.

REVIEW YOUR EXISTING EMPLOYMENT CONTRACT

Before taking an important decision to start a new business while in employment, we highly recommend going through your job contract to check for unfavourable clauses. You may watch out for any terms and conditions that may prohibit you from starting any business while working for the organization. Moreover, there is a possibility of some conflict of interest too.

CONSULT THE HUMAN RRESOURCES DEPARTMENT

In such a situation, you may consult the HR department of your company. Usually, responsible HR handles such inquiries with the utmost care by ensuring confidentiality. You needed to be extra cautious about finding out that you don’t breach your employment contract inadvertently. It is the last thing that you would like to happen and face unwanted termination notices.

If you don’t have so much time to research all the ifs and buts, we suggest you download our entrepreneurship guide here, which provides several more tips for people like you who intend to begin their freelancing career.

HAVING THE INTEGRITY

Several stealth startup aspirants never discuss their business ideas with their bosses. They quietly keep working on their business ideas. They put in their papers the moment they feel that their new business can support them financially. It may seem to be an attractive way of going about your new business but let me tell you that it is not a correct strategy.

We always recommend aspiring entrepreneurs to discuss with their bosses. Remember that starting a new business can change your employment status. You may not keep your activities confidential for long. If you register yourself as a director of a limited company, it becomes public information. An apprehensive employer can search about you on the Companies House website and find the truth about your new business almost instantly.

But nowadays, employers are becoming supportive of their employees who have business insights. They even help employees in realizing their dreams. It is becoming more of an exception than a rule to support staff running side-projects. You may try to explore your work benefits. Ask your employer if they can allow flexible working hours or reduce the number of working hours. They may agree it will not affect your day to day work.

WHO SHOULD YOU TELL?

It is natural to feel excited about starting your own business, and you would like to share your experiences with someone. It is your individual decision to tell your co-workers or not. They may not be supportive or discourage such behaviour. They may also be jealous of you, and it could lead to conflicts. However, it may be precisely the opposite as well. They may support and encourage you and help out of the way. You need to take a call as per the circumstances.

WORK WITH OBJECTIVITY

You may be super excited to leave your full-time job to devote more time to your business. But don’t forget that you are still working for that company. It would help if you showed full respect to your colleagues and bosses. Never work on your business idea during office hours. Never burn the bridges. Keep good terms with your colleagues and employers. You don’t know what will happen in the future, and you may have to fall back upon the same set of people for support in an emergency.

PLANNING WORK AND LIFE BALANCE

It may be quite challenging to juggle between two jobs. Ensure a balance between work and life by finding time for your loved ones, friends, family members.

If you work overtime, you may damage both your job and business. If you devote more time to one of the two, you are sure to harm the other. If you somehow fail in business and want to rely on the job where you have been underperforming. It will be so stressful. That’s why you should maintain a work-life balance that suits you. You may choose to devote a week a month or evenings or weekends. Whatever it is, ensure to allocate some time for family and yourself to relax and recharge.

GM Professional accountants have offices located in London, Birmingham and Manchester.

Accountants confirmation statement overdue filing tips

WHAT IS A CONFIRMATION STATEMENT?THE DEFINITION OF A CONFIRMATION STATEMENT

The confirmation statement is an annual mandatory submission requirement for all the LLPs and limited companies. They have to file these confirmation statement documents at the Companies House every year.

Find out more

The submission requirements are slightly different for both types of entities, as mentioned above. For instance, if it is a company, the confirmation statement must include its directors’ and shareholders’ required information.

On the other hand, if you talk about LLPs, the confirmation statement must list all its members’ relevant details.

However, for both the LLPs and limited companies, the confirmation statement document also needs to mention the business’s registered office address, in addition to other information.

Earlier, these entities used to file the return at the Companies House annually. Mostly, they used to submit the said return on the anniversary date of the business’ incorporation. Now, the confirmation statement has taken the place of such annual returns.

Confirmation statement at companies house

The confirmation statement also provides critical business leadership statistics like the details they used to provide in their annual returns.

The statement document provides a yearly summary of its management and business owners. The confirmation statement submission requires payment of yearly filing fees along with all the details mentioned above.

Please note that this confirmation statement is a document that is entirely separate from the business accounts.

Similarly, it is also not to be confused with the company’s corporation tax returns.

SUMMARY OF WHAT IT INCLUDES:

* · The details of directors and shareholders (For Companies)

* · The list of members (for LLPs) * · Registered office address (For both companies and LLPs) SUMMARY OF ITS SALIENT FEATURES:

* · The directors or members file it annually, typically on the anniversary date of incorporation

* · Replaces the erstwhile annual return

* · It includes a summary of its management and owners

* · It requires payment of yearly filing charges

* · It is separate from Corporation Tax return or business accounts.

FREQUENTLY ASKED QUESTIONS (FAQS) Here are the two most important frequently asked questions about the mandatory submission of a confirmation statement to the Companies House every year.

Q. WHAT’S THE DIFFERENCE BETWEEN THESE TWO TYPES OF DOCUMENTS: AN ANNUAL RETURN AND A CONFIRMATION STATEMENT? ANS.

There are three critical differences between the earlier system of filing annual returns and the existing system of submitting a confirmation statement document every year.

1. TIME OF FILING THE DOCUMENTS Earlier, the companies used to file the annual returns on the date of incorporation. Now, the directors or members of a limited company or LLP have the flexibility to submit the confirmation document at any time. The only condition applicable is the time limit of 12 months and 14 days. They must submit the confirmation statement to the companies House within the set time frame of a little more than a year.

2. SUBMIT ONLY THE CHANGES DURING THE YEAR It is one of the most important differences between the two. Earlier, it was mandatory to file the annual return every year even if there was no change in the information. The directors or members of listed companies or LLPs had to report the same details every year, even when there was no change.

But in the case of confirmation statement, the company can now submit a simple note stating that there were no effective changes this year. It is now acceptable to present only the changes or a statement of no changes in the said period.

3. PERSONS WITH SIGNIFICANT CONTROL Finally, the confirmation statement stipulates the submission of a PSC list (persons with significant control). The persons in this list are those people who may not be the directors, but they may be having a minimum of one-fourth (25%) stake in the business. Earlier, there was no such requirement in the annual return.

Q. WHAT HAPPENS IF THE COMPANY FAILS TO FILE THE CONFIRMATION STATEMENT IN THE STIPULATED TIME? ANS.

As such, there are no penalties for the late filing of the confirmation statement. Still, if you fail to submit the confirmation statement to the Companies House, it may initiate legal action. The Companies House is free to take such legal action against the directors, and in extreme cases, it can also strike off the company name from its register.

Please note that they take such legal action only if the directors or members do not file the confirmation statement after the due date.

Gm Professional Accountants can help you file your confirmation statement.  We have offices located in London, Manchester  Birmingham and Essex.

ALIEXPRESS DROPSHIPPING GUIDE

If you wish to do an e-commerce business where you don’t have to worry about inventory or shipping issues, then dropshipping is the best way to go.

Find out more

Dropshipping is a straightforward business where you can list the products for online sales and send an email to ask your supplier to directly despatch the product to the customer on your behalf whenever you get the order. It is as simple as that.

Dropshipping may appear to be the easiest way to start an online business on e-commerce sites, but you may find it challenging to search for dependable suppliers. You may have to dig deeper online to find such reliable suppliers. You can choose from millions of items for online sales from the AliExpress site for your dropshipping business.

WHAT IS ALIEXPRESS?

AliExpress is a huge e-commerce portal where you have a choice for millions of different products. The suppliers of these products offer competitive prices on AliExpress because most of them manufacture their products overseas. You can get all the products under one roof. The range of products on AliExpress has a wide variety, including women’s clothing, electronic items, jewelry, home and so on. If you have already decided to sell products through e-commerce, AliExpress is an excellent source for supplying a comprehensive range of products.

WHAT IS ALIEXPRESS DROPSHIPPING?

If you wish to do an online business where you don’t want to worry about inventory or shipping problems, then AliExpress can help find the products you want to sell on your e-store. You can choose the product you wish to sell from the AliExpress site and add them to your store. You are free to decide your sales price by adding your profit margin. As soon as you receive an order, AliExpress immediately despatches the product to your customers, and you will only pay the wholesale price for that product.

WHY ALIEXPRESS FOR DROPSHIPPING? AliExpress can also work as an online retailer, but most sellers on this platform know very well that many of their customers are resellers. Those resellers want to sell products through dropshipping. Secondly, the dropshipping business is relatively more straightforward through the AliExpress platform. Since it does not charge you anything upfront, you can take a calculated risk by choosing any products. The financial commitment, in that case, will not be significant. You can start the dropshipping business today itself with only a view clicks through Oberlo. It helps you quickly find the products you want to sell and add them to your online store.

ACCOUNTING SERVICES FOR DROPSHIPPING

Any company engaged in the online sales of products which is a registered limited company needs accounting services as follows: abbreviated accounting and statutory accounting for the company.

Corporation tax including CT 600

The statement regarding compliance with payroll and pension requirements

A self-assessment return for Director’s tax

Filing of VAT returns along with bookkeeping every quarter

Statement of confirmation

TIPS ON CLAIMING ALLOWABLE EXPENSES FOR E-COMMERCE BUSINESS

Please find below a few of the top tips to claim the expenses incurred for an online e-commerce business:

You should ensure to maintain a proper record of all the costs incurred in the e-commerce business.

You can claim the expenses of hiring a professional accountant or using accounting software as a business expense in these three categories: Tax preparation expenses, tax filing expenses, and accounting expenses.

The claim of travel expenses includes the costs incurred by either the business owner or its staff to travel for sourcing products or deliver the products to the post office or the courier office.

You can include courier charges and taxes for your sales in the shipping cost.

You can claim internet service expenses, computer systems, stationery expenses, furniture, and other such expenses as office expenses.

In the manufacturing of products, you may include all the expenses to manufacture, e.g., raw material, tools, and cost of other supplies.

If you use some portion of your house exclusively as a home office, you can claim a deduction for the home office.

The business owner can also claim damaged or returned products as expenses. For this purpose, the owner needs to maintain the records of opening and closing stocks for the financial year.

The expenses also include e-commerce charges, bank charges, PayPal fee, postage expenses, and reselling related costs

GM Professional Accountants are located in London,  Manchester and Birmingham.

ACCOUNTING SERVICES FOR WRITERS AND AUTHORS,  self employed.

We have specialist accountants who can submit accounts for writers and authors to HMRC. We provide accounting services for full-time writers and even for occasional writers. We do our best to learn about their account status and optimize their tax liabilities.

Find out more

The foremost question to answer is whether you are employed or not. You are most probably self-employed if you are not working for publishers or news companies directly.

Our tax experts team will find out whether they can consider your income from self-employment as a trading income or not. The team handles your account directly to ensure that if any tax payment is due. They pay due taxes two times in a year by choosing the self-assessment system of tax payments.

In case you work as a writer or author for an employer, our team ensures that your employer correctly deducts taxes at the source. Moreover, if you have several income sources, our tax experts help you in declaring them correctly.

If you handle many contracts in the UK and abroad, we depute a dedicated accountant to manage the accounting activities. The team also ensures two essential things: secure payment of due taxes by optimizing the tax payments and ultimately ensuring that you comply with the taxation laws. Nobody would ever like to get into HMRC investigation problems. However, it is quite possible to put yourself into trouble because the UK taxation laws are too complicated. We work intending to provide peace of mind to our clients.

HOW TO WORK OUT YOUR TAXES?

If you are working as a writer, you may have several income sources. They may include the income from writing books or writing ad-hoc articles, or even copywriting, and we account for all of those income sources. It is vital to understand that HMRC wants to classify taxpayers rightly as employed or self-employed. Our tax experts help you register in the correct category since HMRC has clearly defined the precise rules to determine the right position.

In rare cases, some writers and authors fall under the category of “Reserved Trading Income Status,” which they earlier referred to as “Reserved Schedule D Status.” They will be deemed self-employed and will continue to be taxed accordingly to discharge tax payments properly by ensuring no possibility of any employment break.

THE ALLOWABLE EXPENSES FOR WRITERS AND AUTHORS TO CLAIM?

An Expense refers to something essential to operate the business. Below is a list of allowable tax deductions for writers and authors from their tax liabilities.

* · MARKETING COSTS – Business cards, reprints of your work
* · WEBSITE COSTS – Hosting a website and maintaining it to promote your working
* · TRAVELING EXPENSES – Train tickets, petrol costs, etc
* · ACCOMMODATION – Hotel expenses for overnight stays for business purposes
* · COMPUTING EQUIPMENT – Laptops, printers, and editing software
* · INSURANCE FOR THE ABOVE COMPUTING EQUIPMENT – To protect your livelihood
* · COMMISSIONS – Fees paid to literary agents

For a self-employed person who works from home, we can suggest to include household expenses which you can attribute to your business. Those costs include fees for heating, phone service charges, a room used as your office, etc.

DOUBLE TAXATION AGREEMENTS

The UK government has double taxation agreements with several other countries. As a taxpayer, it is your responsibility to optimize the taxes payable in those countries. We provide guidance and assistance to authors and writers for avoiding double taxation. If you do not prevent or reduce your taxes in time, HMRC can refuse to give any relief later. Our expert team ensures that such a situation never arises.

If the other country does not fall under the double taxation ambit, we suggest you ensure full compliance and thereby help you avoid excess tax payments.

THE COMMON PITFALLS

Taxpayers usually make a common mistake of showing income net of VAT or any commission to agents. It is a wring practice. You should always declare gross income and show such commission and VAT expenses separately and claim as a deduction from such income.

Last year, we detected a new type of problem of new cash basis. HMRC referred to it as simplified expenses. If you opt for this, you cannot set-off losses against other income and limit some claims to costs. The earning basis provides more flexibility, which implies that you declare the income as earned instead of received and declare the costs as incurred instead of paid.

VAT Accountants guide for Ecommerce Amazon FBA Sellers

Vat is a specialist area, the Vat accountants guide will provide you with an insight to deal some of the issues your Commerce business.

Find out more

Many businesses online are choosing the FBA Amazon plan. If you have an FBA (fulfilment by Amazon) Amazon business, then you will be well aware that once you hit a certain threshold you will need to register for VAT in the UK. As accountants we understand the varied rules (and yes it can be very complicated for those who have little or no understanding!). We have issued a mini-series of guides to help you through this minefield. This will help you understand the basics in terms you can understand as well as how VAT will apply to you as an Amazon FBA business.

We have been working with businesses on Amazon for a number of years and our clients are all over the world. Our expert knowledge of the VAT system, both in the UK and abroad, will help you wherever you are located. So, if you need a little helping hand or just need to understand a certain aspect of the complicated VAT system, we are here to help.

How Does VAT Apply to Drop Shipping?

There are different VAT rules for drop shipping businesses and they will be covered by a separate article as they are outside the scope of this article.

What is VAT when you are trading as an Amazon FBA Seller?

VAT (value added tax) is a sales tax that is applied in the EU and the UK. The tax is applied to certain commercial goods and services and there are different bands of tax. Not everything is subject to VAT, there are certain exemptions, however, trawling through the long list of what is and what is not applicable can be time consuming and difficult. Therefore, if you are an Amazon seller and you are above the threshold, you will need to charge your customer VAT. One of the issues with VAT as an Amazon FBA seller, is that you have to pay VAT on the price you actually sold an item (or service) for, and not just on the profit you make from the item. This can mean that if you only make a very small profit on an item (once you have paid your fees to bought Amazon for fulfilment), it can be swallowed up in VAT fees, as this tax applies to the actual sales price to the customer and not the profit made.

Do I Have To Register my Ecommerce business for VAT?

If you are in the UK, then you do not need to register for VAT until your turnover for taxable goods reaches £85,000 (in 2020). If you are not UK based, but you are an Amazon FBA business selling in the UK then you need to register for VAT immediately, regardless of turnover. The exception to that rule is if you actually own a UK Limited company, as that then follows the rules of UK based companies in terms of registering for VAT when you reach the threshold of £85,000.

VAT Rules For Non-UK or EU Amazon FBA Sellers (Overseas Businesses)

This is not as straight forward as it would seem. Basically, if you are an overseas business that is based in the EU, but you use the Amazon UK FBA warehouse to store your goods, then you will need to register for VAT immediately. However, if you store your goods in your own EU country rather than the UK warehouse, you will not have to register immediately for VAT but will have to pay tax on the value of sales to the UK. Many FBA Amazon sellers are located overseas in China, USA, etc., and they choose to store their goods in the UK warehouse for distribution to EU countries. This means that the majority of non-UK FBA businesses will need to register for VAT immediately in the UK, but can wait until their sales reach a certain threshold in other EU countries, before registering for paying Vat there. As this is a complicated ara, we will cover it in more depth in another separate post.

VAT Rules For UK Amazon FBA Sellers

UK based businesses do not need to register for VAT until the turnover reaches £85,000.

Voluntary Registration for VAT

If you are a UK based FBA Amazon seller then you can register for VAT on a voluntary basis, before your sales reach £85,000, however, it is not recommended you do this. This important aspect will be outlined in another article.

What is the UK VAT threshold in 2022?

The VAT threshold is £85,000 worth of annual sales in 2022. If your business looks like it will reach or cross this threshold in a 12-month period, then you will have 30 days to register, otherwise the business may be penalised. The moment the business has sales of £85,000 will be the moment VAT is payable, so even if you register a little late the VAT amount will be backdated to the applicable time. Read this article to learn more about VAT penalties.

How To Calculate VAT for your business?

Every business needs to complete a tax return every year detailing profit and loss. VAT returns are completed quarterly to ensure you do not get behind on payments and into a situation where you are unable to pay. The VAT return is sent to the HMRC.

VAT takes account of the following:

Input tax– this is the amount of VAT you are charged by your supplier or wholesalers, or it van be tax charged for importing goods into the country.

Output tax– this is the amount of VAT your customers pay you for each sale or service.

Rebates

It is possible to get a rebate on any VAT that you have overpaid. This can happen when you pay too much output tax (ie when you have made a loss on a product). Usually, FBA Amazon sellers buy goods at a low price and sell for a higher price to make a profit, so you will pay less input tax, meaning you owe money to HMRC. It is important to check your business accounts regularly to ensure you are selling at a profit.

GM Professional accountants have offices located in London, Birmingham and Manchester.

Notice to deliver a company tax return Accountants 

 Company tax return defined

A tax return for a company can also be referred to as the CT600 form. This form is filed by companies and associations to report their expenditure, income, and the tax figures due to the HMRC. Companies are required to file their tax returns annually. However, there doesn’t exist any universal deadline for company tax returns like there exists for self-assessment tax returns for individuals. The reason for this is because companies have different accounting periods and therefore the filing of returns is done at the end of a company’s internal accounting period.

Subscribe to our channel now for the latest updates 

Who needs to file a company tax return?

Anyone who runs a limited company must file for company tax returns at the end of the companies’ financial year. To enable the filing of these returns, one must first register with the HMRC. For sole traders and partnerships, all you need is to register for self-assessment tax. On the other hand, upon setting up a limited company, you must register with the company’s house for you to be able to start filing the returns. It is also at this stage where you will have to register your company for corporation tax and Pay as you Earn(PAYE) tax since your company will have employees who will be liable for PAYE tax. If you register your company through post through the use of third-party software or agent, the requirement is for you to register for corporation tax as a separate thing. Also, you should ensure that you have done the registration within 3 months after you have started doing business. This is determined by the selling, buying, advertising, renting premises, and having an employee. Once the HMRC does an assessment and determines that you are liable for corporation tax, it will send you a notice for the filing of a company tax return. Upon the receipt of this notice, you must send a company tax return regardless of whether you made a profit or a loss. Also, if you do not receive this notice and you are aware that you owe tax, you are expected to reach out to HMRC for tax assessment. Failure to contact HMRC will make you liable for prosecution for failure to declare tax.

How to file a company tax return?

Many people prefer to file their taxes online. To start, you need to have computed your companies’ taxable profits for the period. The taxable profits are computed by deducting tax allowances and business expenses from the total company’s income for the period you are reviewing. When making the company’s first return, you should create a new user ID on the HMRC website and proceed with the prompts. Paper CT600 form is only applicable to Welsh people and for those who have not been able to file their returns online. Also, the HRMC has written down a list of excuses that are reasonable for one to use this form. Once you choose to use this form, you must fill WT1 form which explains why you have chosen to use this form.

When to file a company tax return?

You need to file a return exactly 12 months after the end of your accounting period. In most instances, the company tax period is the same as the company’s financial year. However, in the first year of operations, the financial year may cover slightly more than 12 months and this is allowable. Most companies set up their financial year based on the month in which they were formed. In this instance, your financial year will run from the last day of the month in which the company was formed to the following year were 12 months’ end. If the accounting period covers more than 12 months you will be required to file 2 returns.

Cost of a Company tax return

The cost can vary depending on your activity. If your revenue is below the (85k) vat threshold you can expect to pay between £650 to £840 plus vat. This will include the yearly bookkeeping, Statutory accounts and the CT600. To produce the CT600, you will need to first complete the bookkeeping , accounts and then the CT600.

GM Professional Accountants Specialise is Corporation tax returns, we have offices located in London, Manchester and Birmingham.  

VAT Tax on Dropshipping from China to UK 

What Is Dropshipping?

Dropshipping is a very popular way of running a business if you do not have much capital for startup. By running a dropshipping business you do not have to pay for any stock upfront and you do not have to have large premises to hold the stock.

How Does It Work?

You advertise a product for sale on your website and once someone buys it from you – you head over to the dropshipping wholesale website to purchase it. This third party receives the payment from you and they directly send the item to your customer. In order to profit from dropshipping you need to ensure you factor in the price of postage you will be charged and any vat or taxation.

Subscribe to our channel for the latest updates.

Where are The Dropshipping Companies Located?

There are many companies that specialise in dropshipping and these are all over the world. You can purchased an item in the same country as you want the item shipping to a customer, or you can buy from a foreign country and have the item imported to your customer.

However, bear in mind that if you choose a dropshipping company in the UK there may be vat to pay. Whether there is vat to pay and also the rate of vat to be paid can vary. In fact, vat may also change once Brexit has been completed, although currently the UK is still trying to thrash out an exit deal with the other EU countries.

Import And Export Duty

If you are dropshipping an item from another country, such as China, into the UK those goods may be subject to import tax. Again, not all goods are subject to import taxation. Usually, if there is import tax on an item it is paid by the customer receiving the item, although you can register your business as the importer. If you do this you will be liable for the vat but it can be claimed back at the end of the tax year when you complete your accounts. This is the preferred option as you can be sure your customers are not going to complain at having to pay an extra charge to have the item delivered. You just need to be sure that the price you charge your customer covers all your costs and adds a bit of profit for you.

Customs and excise require a label to be added to the outside of a package with a description of what is inside and the price. This determines whether duty is payable and how much.

Importing Goods From The EU To The UK

All countries have different rates of tax and import duty. Therefore, you will need to educate yourself on the differences before selling to customers otherwise you may find yourself out of pocket.

What If No-one Pays The Import Tax?

If a product is subject to import duty then it will be stored until such time as the tax has been paid, whether that is by the customer or the business selling the item.

Dropshipping from China to the UK

Basic principle

Section 7(6) applies to goods whose supply involves their being imported into the UK from somewhere outside the EU. Effectively the place of supply is determined by who acts as the importer. So if the supplier imports the goods into the UK, the supply to the UK customer is treated as taking place in the UK and so the supplier may be liable to register for VAT here.

However, if the UK customer imports the goods, the supply is treated under section 7(7)(b)as taking place outside the UK.

Chain supplies

Goods imported from a third country may involve a chain of supplies. For example

• A may supply the goods to B
• B then supplies them to C, and
• C in turn supplies them to D.

At some stage the goods are imported into the UK and so the place of each supply will depend on who acted as the importer.

Good Customer Relations

It is important that you make it clear to your customer whether there is any import duty to pay, otherwise your business may suffer.

How To do your Ecommerce bookkeeping Xero and freeagent 

Bookkeeping is a process which involves the recording and management of every company’s financial transaction regarding any services or goods sold, purchased as well as payments made. Bookkeepers are responsible for tracking every cost and income to equip the company with data-based financial decision-making skills. Gm professional Accountants provide bookkeeping services for small businesses.

Depending on your Ecommerce platform, there will reports that you run and export from your admin panel. You will need to review these reports and make decisions on the sales, expenses and balance sheet accounts. Also whilst posting these to the correct nominal accounts , there will the vat liability accounts and these will effect the vat return. This area requires expertise as the rule of the place of supply of goods needs to be determined and the distance selling rules.

The duty of bookkeepers also involves giving your business a holistic financial picture, balancing your accounts, and strategically making your business’ cash flow management better.

The fundamentals of bookkeeping

An account in business bookkeeping refers to all the debit and credit entry records of a particular type, for example, accounts payable or payroll.

Accounts are classified in 5 basic types

Assets: These are transaction-based resources or valuables belonging to a company such as inventory. These will be inserted from your purchase invoices.

Income or Revenues: This is money the company earns by making sales or offering a service. These will be determined for the reports in your admin panel.

Liabilities. They refer to any obligation and debt a company owes suppliers, lenders, banks, as well as any provider that provides goods and services to the said company, for example, loans, accounts payable.

Expenses: It is the cash the company releases for the payment of assets or services, for example, salaries, utilities etc.

Equity: It is the value of the interest of an owner in a company after the subtraction of all liabilities, for example, retained earnings, stock etc.

The ideal way of setting up small business accounting is to start with the setting up of each account individually. This will enable the recording of each transaction on its rightful category.

Your general ledger, as well as bookkeeping processes, will appear pretty different from that of the nearby ecommerce store. After all, common accounting methods differ based on different business needs.

The ideal way to do bookkeeping

1.Ensure that financial records stay maintained and updated: Bookkeeping is numbers-based work that deals largely with basic math and accounting. Differences in the type of bookkeeping work done depend only on your business type but tasks such as settling accounts receivable together with bank statements, financial transaction recordings, billing, invoicing and tracking payroll are more or less the same.

Other financial responsibilities on your duty will also include: