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.
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.
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.
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.
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:
Incorporating tax in bookkeeping on the income, payroll, employment as well as in tax deductions for small business.
Budget planning to enable the company to sustain its growth
Gathering financial statements for stakeholders to explore! They include an income statement, balance sheets, cash flow, and equity changes.
Bookkeeping is not only about mastering numbers but also what the law requires from businesses. Provided you run a business that maintains regular auditing, considers ensuring that you have legally binding records together with deductions.
2.Monitor everyone’s activities especially spending
The time that goes into financial bookkeeping processes when it comes to ensuring that various financial transactions are accurate is worth mentioning. Besides, as a bookkeeper, you have to balance the books every day while tracking every payment that enters or leaves via employees.
The implication, therefore, is that in order to better equip yourself with bookkeeping and accounting know-how, your communication proficiency and organisation aptitude should be apt. This is necessary because your job description among other things involves collecting receipts from employees, handling travel expenses and reimbursements. This entails creating an easy-to-follow submission and reimbursement system to help record every transaction without missing any. That will assist you to bookkeep sustainably, accurately and in an up-to-date manner.
Comparing Double-entry bookkeeping with single-entry
In bookkeeping, the single-entry method involves recording business transactions whenever you deposit money or pay bills into the account of your company. Just think of how a check register is kept! This is a method that suits smaller businesses more, considering that their transactions are in small amounts.
With double-entry bookkeeping, all sizes of businesses and complexity are applicable. It is a method that involves making an entry into an account and in return, an equivalent and opposite entry is made to another account. Take for instance if you recorded a £100 income, then you will have to make two entries: (1) £100 of debit entry to raise your cash balance sheet and £100 of credit entry to raise the income statement of the revenue account.
FAQ on Bookkeeping
What does a bookkeeper do?
A bookkeeper is an individual who records and manages your company accounts and documents for all financial transactions. With bookkeeping, you can see the financial position of your business at any given time. Bookkeepers’ work is the reason accountants and auditors can easily see the financial health of your business.
How is bookkeeping different from accounting?
Bookkeeping involves making records of financial transactions whereas accounting includes not only recording financial data, but also categorizing, analyzing, reporting, and summarising it.
E commerce Drop shipping Accountants for Sole traders Guide
Operating your company as a sole trader is perhaps the easiest company structure to run in the UK. This type of company does not involve a lot of requirements when it comes to the filing and accounting requirements to operate it. This implies that a sole trader has less administrative obligations to fulfil in comparison with other company structures like a limited company.
A sole trader uses their own identity to run the business and makes all their business liabilities their personal responsibilities. They are taxed personally for the profits they make in the business. A good example of a sole trader operated business is a market stall trader. They do not operate as a limited company as a limited company operates as a separate legal identity from those running it and therefore is liable and responsible for every business liability.
Another difference is that a sole trader considers the business profits theirs, personally unlike a limited company that owns its profits by itself. A sole trader has the right to access the profits the business makes at any time but a limited company’s profits may be used for paying salaries and dividends of its directors and shareholders.
Sole Trader Taxes
Unlike other company structures, a sole trader pays taxes on every business profit they make and these tax transactions take place through the personal self-assessment tax return of the sole traders. In the sole trader self-assessment tax return, the business owner completes the Self Employed sections. This puts the correct meaning of self employed in use. Instead of taxing their business profit, they tax it as their income. So, sole traders pay income tax and national insurance also applies to them.
Note that a sole trader is free to make a withdrawal of cash from their business and no tax will be due as a result. The reason is simple! The withdrawn money is already owned by the sole trader and they pay taxes on the entire profit or loss that the business makes.
Regarding National Insurance contributions, both Class 2 and Class 4 are applicable to a sole trader. The general charges for Class 2 NI are 2.85 per week meanwhile for Class 4 Nis, they go at 9% of profits from 8,164 and 45,000 at a 2% rate (applicable to 45,000 profits and above.)
Accounts guide for sole trader in an E-commerce business
We can produce accounts out of your books every year-end. Our speciality is dealing with every statutory account and financial statement for any company and that includes:
Balance Sheet: It is a report of what belongs to you and debts you have to be pay or be paid at the close of the financial year. It is your Profit and Loss Account per year, containing the year’s sales and expenditure.
We are the go-to team to help you organise your books using the best in-house methods possible to help make your business finances crystal clear and easily manageable.
With all the vast experience in accounting and bookkeeping, we will process your data accurately and promptly to enable you to access the monthly reports and information we provide not only at year-end but throughout the year.
Apart from endorsing the use of Xero for your account management, our team is also proficient in Xero. However large or small your business is, we provide professional advice on how to explore the advantages it system offers.
Our package also involves providing up-to-date advice to prepare you to be able to give the right report on Tax and VAT as per your business requirements. This will enable your business VAT return results to be a reflection of your respect for the relevant laws businesses within and without the UK follow.
E commerce Accountants for Sole traders operating as drop shipper
When operating as a sole trader and conducting a drop shipping business, it is important to register for self-assessment, the latest to date to register is the 05th October of the second tax year. It is also important to consider VAT, as this is important and the place of supply of goods needs to be reviewed. What needs to be determined here is, who is the importer and liable to VAT.
Frequently Asked Questions
UK VAT: When is the right registration time for me?
Your right time to register for UK VAT is when:
As a UK business, the sales you have made on VAT have reached 85,000 in the past 12 calendar months
As a UK business, you have in the past calendar year surpassed any of the distance selling thresholds
As a non-UK EU business, you have surpassed the distance selling threshold for the UK
As a non-UK business, you aim to embark in selling products including drop shipping from a warehouse within the UK.
What should I do to optimise my tax bill?
There are several factors tied to the right answer to this question. So, reserve it for when you are set to use some cash from your business.
In brief, be sure to:
Claim every allowable expense
Claim every business allowance such as home working
Make the most of business expenses with benefits such as business mobile phones
And let your personal income determine how you optimise your pay
Gm Professional Accountants specialise in the E commerce sector and we have office in London, Manchester and Birmingham.
In 2016, the regulations changed such that you now have to submit the Annual Return rather than the Confirmation Statement though the difference in the two is not that great.
The annual accounts include a Balance Sheet, Profit & Loss account, Directors’ Report and some explanatory notes. These have to be finalized and receive directors’ approval and then filed at Companies House nine months before the end of the financial year. You will also have to submit the corporation tax return alongside the annual accounts to the HMRC.
Small companies (usually anything with sales less than £10.2 million, although other criteria may also apply) can file abridged accounts. These are often easier to make, though directors will still have to get shareholder approval every year if they intend to file such accounts.
Whether they file abridged or full accounts, small companies can decide not to file the Profit & Loss Account or the Directors’ Report at Companies House.
Probably something that could be more relevant to many companies – Micro-Companies (any businesses with sales less than 632 thousand pounds though other criteria may apply) can prepare and file simpler accounts that meet the minimum legal requirements.
We recommend that any company with revenues less than 600 thousand pounds prepare Micro accounts as these are cheaper and simpler to prepare.
There are no fees for account filing and for the most part, small companies will file the minimum information required by the authorities.
However late filing fees are charged at 150 pounds if you are late for less than a month and £375 if you are late for anything less than three months. You will have to pay up to £1500 in fines for later payments that may even double if you are late for two consecutive years.
Learn more about micro-entities, small companies, and late filing fines from the Companies House Website.
Since 2016 the Confirmation Statement (CS01) replaced the old Annual Return. Data that needs to be submitted with the statement include:
• Directors’ names
• Registered office
• People that has Significant Control
The most significant change that came with the changes in 2016 is that businesses now have to keep a record of Persons that have Significant Control. In most private companies, such people would be the largest shareholders but, in the instance, where the constitution of the business vests trustee shareholders or non-shareholders significant influence over the decision making of the company, such people need to be listed on the PSC register. They also have to be recorded when the company files the Confirmation Statement.
A person that has significant control is an individual that:
• Indirectly or directly has more than 25 percent of all shareholding;
• Indirectly or directly has the prerogative to get rid of or hire a majority of directors;
• Indirectly or directly has more than 25 percent of the voting rights;
• Exercises or has the prerogative to exercise considerable control or influence over the company;
• Exercises or has the prerogative to exercise significant control or influence over the activities of an organization or trust that is not a legal person. The members or trustees of the organization or trust would also need to qualify under any of the conditions set out above.
The confirmation statement has to be prepared on the same date every year, typically close to the date of the formation of the company and does not have to necessarily have anything to do with the company’s financial year-end.
While a company will not be penalized or fined for filing their statement a little late, Companies House may threaten to levy charges of up to £5000 or threaten to wind up the company of the company in presenting the Confirmation Statement.
You will typically pay £13 for the online filing of the Confirmation Statement and £40 for paper submissions.
Ad hoc filing of Companies House forms
The confirmation Statement and the Annual Accounts are the two documents that need to be filed yearly.
Nonetheless, when there are critical changes to a company, there will be other documents that will have to be filed too. For instance, documents have to be filed where there is a charge on company assets, when the company borrows money and when directors resign or are appointed. Even changing the name of the company will require the filing of new documents.
As such, it is critical to be up to date with all important filings.
How Filing is Done
When you need to file, you can go to the Companies House website which has a list of forms to be filed online and the paper versions. You can usually fill in the PDF versions, print them and post them to Companies House.
Nonetheless, Companies House encourages companies to make their filings online given the different fees it charges for the paper and online filings. In this regard, it has launched the Protected Online Filing service to encourage online filing.
Protected Online Filing (PROOF Service)
Companies House provides the service to reduce fraud and to make it easier for companies to file online. Signing up to PROOF means that you have to submit some of your forms online, which works to prevent the submission of fraudulent papers.
This is alright though in some instances, particularly where there must be evidence that the person signed a form, a physical form that has to be completed and submitted in the post may be more appropriate.
According to regulations filing a form online requires an Authentication Code and Security Code that can be obtained from Companies House. With these codes, one can then get into the online filing system of Companies House and then file their documents. Fee payments can be done either by credit card or if that is not preferable, one can open an account with Companies House and then use direct debut to settle any fees every month.
Filing of Annual accounts
If your accounts have not been audited you are allowed to log into the Companies House website and file your annual accounts.
However, it will typically be much simpler to get an accountant to file it for you. We have accounts preparation software that makes for a clean and quick process of filing once we receive the physically signed copy. Our process is error-free and will make your filings more efficient.
VAT Margin schemes are calculated by taxing the difference between the purchase price of an item and the price at which you later sell it for. Note that it is never charged on the full selling price. For instance a VAT 16% will be charged on the difference between the two prices.
You can decide on a margin scheme if you are selling:
Second hand goods
Works of art
You cannot use a margin scheme if you are selling:
You can shift to a margin scheme at any time as long as you are keeping accurate records that are then reported on the VAT return. There is no need to register for the scheme and you will not be required to inform the tax authorities unless requested to do so.
Standard VAT and Margin Schemes
If some of the items you deal in do not qualify for a margin scheme, you will be required to charge and pay VAT for those items in the standard way.
The following cannot be included in any margin scheme calculations:
Accessories or parts
Instead you can claim these on the standard VAT returns
How to Calculate the Margin
Using the margin scheme, you are only required to declare VAT if you sell goods for a profit. You do not have to account for VAT if you make losses.
To calculate VAT on each sale follow the following example:
(a) Purchase price
(b) Selling price
(c) Gross Margin (b – a)
(d) VAT payable (c x 1/6)
The vat fraction makes it possible to know the exact amount of VAT payable for any positive margins.
A standard rate of 20% VAT is 1/6. Once you have calculated the gross margin, it is then a matter of multiplying the answer by 1 and dividing it by 6.
Guidance for Stock Books
Stock Books need to be updated and should have all the pertinent information as set out in the table below. This will also include all vehicles purchased under the margin scheme for resale. If you wish you may provide more information that may be useful for your contractor accounting needs. For instance reporting vehicle:
Date of procurement
Date of sale
Margin on sale (sales price less purchase price)
Purchase invoice number
Sales invoice number
Stock number in numerical sequence
Vehicle registration number
Vehicle Description (for example, make and model)
Sales price, or way of disposal
Name of vendor
Name of purchaser
VAT due (margin x VAT fraction – 1/6)
You have to include the margin scheme calculations in the stock book under the suitable headings. If the price you bought the goods at happens to be greater than or the same as what you sold them for, you will not have to pay any VAT. In such an instance, the stock book entry should indicate ‘Nil’.
You are not allowed to offset any losses on goods sold against VAT owed on vehicles that have been moved on for positive margins.
How to Fill the VAT Return
At the end of each tax period, you will be required to file your VAT returns. The following are some of the specific rules to be adhered to when selling or buying vehicle during the tax period under the Margin Scheme:
Box 1, Insert the output tax due on all items on the scheme sold within the period.
Box 6, Insert the price sold on eligible items sold less the VAT due entered in Box 1
Box 7, Insert the gross total purchase price of all items bought
Boxes 8 and 9 of your VAT return are not required to be filled in.
Copies of sales and purchase invoices for all items
A stock book that tracks all individual items that you are selling under the margin scheme
You will also be required to maintain a 6 year record of VAT. The records need to be kept until the item that is intended to be sold under the margin scheme is sold even if the item was purchased more than six years ago.
Contact GM Professional accountants if you need assistance in the vat margin scheme. We have specialists that can assist you in the cloud based bookkeeping systems such Xero cloud.
Starting April 6, 2020, UK resident s that sell residential properties inside the United Kingdom will have a grace period of 30 days to inform the HMRC of the transaction and submit any Capital Gains Tax that accrues.
Residents that do not inform the HMRC of Capital Gains Tax within 30 days of the closing of a transaction may be liable to penalties as well as interest on any amounts the tax authorities determine to be owed. As such, it is critical for every person that is involved in a residential property sale transaction to understand the changes as they affect both UK and non-UK residents.
Capital Gains Tax
Capital Gains Tax refers to a tax on any profits made when one disposes of or sells an asset or anything whose value has increased.
It is critical to get a good understanding of Capital Gains Tax,particularly when you are required to report such gains in 30 days.
If you reside in the UK, you may be required to pay Capital Gains Tax when you dispose of or sell:
• A property that is not used as the main residence
• A property that is not the main residence that has been inherited
• A property that belongs to you that has been let out to other people
• A holiday home
But you will not be required to report Capital Gains Tax and make payment to the HMRC when:
• A lawfully binding contract of sale was entered into beforeApril 6, 2020
• The property is outside the United Kingdom
• You qualify for full Private Residence Relief
• The property was sold for a loss
• The disposal or sale was made to a civil partner or a spouse
• The gains (in addition to any other residential property gains that may attract tax in the same tax year) fall in the tax-freeallowance (usually known as the Annual Exempt Amount)
Newly updated guidance and online service
The HMRC intends to set up a new online service which will make it possible to pay and report any owed Capital Gains Tax.
Full guidance is expected to be given in April 2020 and will include information on accessing and using the online service.
For non-UK residents, disposals or sales of any interest in land or property in the UK still have to be reported. This applies regardless of Capital Gains liability within the thirty day periodfollowing the completion of the disposal of said asset.
It will no longer be possible to use Self-Assessment returns to defer the payment of Capital Gains Tax as all taxes due need to be submitted within the 30-day payment and reporting period.
This includes the disposal of nonresidential properties, residential properties, and indirect disposals.
Starting April 6, 2020, non-UK residents will have access to the new online reporting service that will replace the old legacy reporting system.
Capital Gains Tax refers to a tax charged on any profits realized upon the sale or disposal of an asset that has increased in value.
The tax usually applies to the gains rather than on the entire amount received from the sale.
For instance, if one bought artwork for £5,000 then proceeded to sell it for £25,000 at a later date, the profit/gain would be £20,000 (the selling price of £25,000 less the purchase price of £5,000).
Some assets do not attract a tax and if all gains in a given tax year fall under the bracket, Capital Gains Tax will not be owed on such increases in the value of a property.
Disposing of an asset
This typically includes:
• Selling it
• Getting compensation for it – for instance getting an insurance settlement when it is destroyed or lost
• Gifting or transferring it to another person or organization
Paying Monthly for an accountants can be a wise option for new startups. This could be an E-commerce business, or any small business with cashflow concerns. The first thing you will need to examine in your business is which services you will need. Every individual has different circumstances and this will impact on the type of services that will be required.
The common type of services that are required for a limited company are the following:
Self assessment tax return
CT600 (corporation tax return)
These are some of the common types of services that are required. Payroll is an optional service based your circumstances. This will affect your monthly payment package with an accountant.
3. Selecting an accountant with experience and exposure to your sector is vitally important, as this will ensure that you are getting the best service and maximising on your disposable income. Here at GM Professional accountants we specialise in multiple sectors and have a diverse team that handles different aspects of your business.
Finally, to summarise, paying monthly for an accountant has many benefits and if you know the type of services that are required then this will ensure you are getting the best value for your money. This will prevent overpaying for a service that you may not need.
Paying monthly can help you plan and project your finances so that you can do more with your cash. Here at GM Professional accountants we have tailor made solutions to suit your needs.
We have monthly packages that you can select and ensure that you are getting a high quality service. Our packages for Limited companies start from £70 plus vat and include the services listed above.
Blogging and Vlogging You tube tax return accountants guide
Blogging and vlogging are relatively new professions though there bloggers and vloggers are earning an income from a variety of sources including appearance, advertising, and royalties. With so many diverse sources, you need a professional accountant which is where we come in to ensure that the tax you pay to the taxman is no more than what you should be paying.
The first critical question – are you self-employed or do you work for the man? Our experience is that most bloggers and vloggers are working home in some kind of self-employment.
Tax professionals will determine whether your self-employment income needs to be classified as trading income.
If you are in employment as a vlogger or blogger, a tax professional will make sure that your employer deducts the correct tax before you get your wages/salary.
A dedicated tax accountant is vital who will work with you in the instance that you are working several contracts in the UK and overseas. Experts will help with optimising your taxes so that you can be compliant while paying only what is due. A HMRC investigation is not a pleasant experience but given how complex UK tax regulation can be, it is easy to get into trouble. This is where we come in to ensure our clients have the peace of mind to work in peace.
When are Vloggers and bloggers required to submit their Taxes?
Depending on whether you are a sole trader or a company, you will be expected to file returns on a set date. As a sole trader, whether you run or own the business or have employees, the authorities expect you to file the returns no later than 31st January. If you have a company selling e-commerce products the authorities expect returns to be filed no later than nine months after the accounting period.
Allowable Expenses, What can you Claim?
You are required to keep records of all expenses about sales in your eCommerce business.
Ecommerce fees, postage costs, PayPal fees, and bank fees
Accounting Expenses – Whether you make use of accounting software or have hired a professional account, you can claim tax filing deduction and tax preparation expenses.
Damaged or Returned Items – It is critical to have beginning and ending inventory if you intend to claim deductions for returned or damaged items.
Home Office Deduction – , you can claim deductions if this is done from the home office that is used exclusively for running the business.
Travel Expenses – If you have to travel to deliver eCommerce goods or to source your products, the costs may be claimed as travel expenses.
Taxes and shipping costs associated with the product
Manufacturing costs of materials, tools, and supplies
Office Equipment Expenses – You can claim expenses for things like office computers, furniture, internet services among many other services and supplies you need.
The Different Accounting Services You Require as an E-commerce Trader
Some of the services your limited company needs include:
As a small business owner, it’s very likely to get overwhelmed by too many tasks at a time. When you have to tick off every item on your list in a day, accounting tasks may get neglected. But, to ensure the smooth running of your business, you should give these tasks priority. Because, even though these may not seem very important at first and delaying them till the end of the month may not seem like a big deal, they indeed are very crucial for the survival and profitability of your business. By performing these accounting tasks on daily basis, you can fix issues like cash or inventory shortages, payment and receipt of invoices, tax issues, etc. Moreover, it also becomes easier to find who was involved and why such situation occurred in the first place so that, you can save your business from such troubles in the future.
Another important thing that small business owners fail to realize is how they are losing the insight of the business, when they don’t perform the accounting tasks in timely manner. As sales receipts, payment invoices, bank statements, quotations, customer and vendor queries, etc. start to pile up on your desk, you lose focus on the bigger picture, i.e. the financial health and growth of your business.
In a blog post for Bench, Bryce Warnes writes, “When you look at your books, you want to know they reflect reality. If your bank account and your books don’t match up, you could end up spending money you don’t really have – or holding on to the money you could be investing in your business.”
Here are the 8 Accounting tasks that you should perform every day to keep your business updated:
1. Refresh your Data
Usually, the accounting software automatically syncs the sales data, bank and card feeds into your accounting system daily. However, you have to do this manually each day if your system doesn’t have this option. This provides you with the up-to-date information about your cash flows so you can a better look at your accounts.
2. Reconcile Cash against Receipts
If your business accepts cash, you should reconcile it daily against the receipts to avoid cash discrepancies. In this way, you can find out any cash shortages or excess cash. It will also help you to track where the cash is coming from and where it is going. So that, not only you can identify any theft but also take action in timely manner.
3. Reconcile Bank Transactions
Most businesses reconcile bank transactions with their ledger on monthly basis. However, as a small business owner it is ideal for you to reconcile transactions each day. Most accounting software assist you by providing matches against check numbers and dates but they aren’t always accurate. That’s why human judgment is necessary. By reconciling your bank accounts daily, it becomes easy for you to identify any errors or abnormalities and resolve the issue promptly instead of waiting till the end of the month and it also helps in making your balance sheet.
4. Deposit Cash and Checks. Record Payments
It is always a good idea to deposit cash or checks in the bank at the end of the day. You don’t need extra cash sitting around in your office. Not only there is a greater risk of theft but you can also lose the track of the cash or checks you received. However, your business should prefer electronic receipts because there is less paperwork and it will save you some trips to the bank.
Likewise, you should prefer electronic payments over the cash or checks. See if your vendor is okay with it and talk to your bank to see your monthly or daily limit. Whether its check, cash or e-transfer, record every payment you make in a day to keep your cash flow healthy.
5. Record Expenses & Divide them into Categories
To have a better track of your expenses, you should record them every day as they occur. You don’t want to be buried in receipts at the end of month trying to remember what each expense is and how much you paid for it. Most accounting software have option to record expense with a snap of receipt and a note to describe the expense for reference purposes. It makes your work so much easier and shorter.
You should also categorize all your expenses. For instance, it could be an administrative expense or a marketing expense. In this way, you know how much budget you should allocate to a particular head of expense.
6. Record Inventory
To keep your system updated and have an accurate count, you must record inventory that you receive and sell every day. If you don’t do it, you won’t be able to keep up with the customers’ orders. You may lose sales because of shortage of stock because your system was not up-to-date. On the other hand, you may order extra inventory even though there was plenty of stock available in your warehouse.
7. Bill your Clients
Timely invoicing your clients will save you from cash flow difficulties. Because, the product or service you just sold to your client is still fresh in their mind. And if there is any error in invoicing, it will be easier to communicate rather than waiting till the end of the month. Because it will only result in further delays and the chances of you getting paid on time will be lower.
8. Pay Vendors
Paying vendors in time not only keeps your cash flows in healthy condition but it is also essential in building a good business relationship with them. As you receive invoices for payment, review them for any change of terms or errors. If your vendor allows any early payment discounts, try to avail them. Moreover, set a reminder for payment of bills you won’t be able to process that day to avoid late payment fee.
Contractors working with IR35 or those that may not have a definite date when they intend to spend contracting may be best suited going for a PAYE umbrella company option as opposed to a limited company. While contractor limited companies tend to be more tax-efficient, top-rated umbrella companies can make available convenient contracting solutions for businesses that are uncertain if contracting is something they intend to do for the long term.
But just what do umbrella companies provide to contracting companies and how do you determine what type of company is the best fit for your needs. Here are ten guidelines on how to select your umbrella company solutions provider:
Determine if the company provides trading solutions that are a good fit
Umbrella or limited company – what should you use? Ensure that when you are going through the options, you opt for something that offers what your business needs. One of the best way to do this is to explain your needs and situation to a contractor accountant and the umbrella company, who will then offer advice on the best structure.
Do Your Research on the Umbrella Company
Even if you determine that your company would be best served under an umbrella structure, it is critical to dig into the background of the company providing the solutions, including the duration for which it has been in operations and how good its credit rating is. Ask if the company will move your company’s money out of the country at any stage of the process. If it will, then that means the company may be an offshore tax solution provider rather than a true PAYE umbrella company.
Ensure you Understand the Fees Involved
Many umbrella solution providers are not upfront on the costs and fees involved and hence it is important to get that information so that you are aware of what you will be expected to pay every month or every week. Prior to signing on to a contractor umbrella arrangement, determine if the fees charged are all-encompassing or if you will need to pay add-ons such as processing fees, filing tax forms, and expenses processing fees. If a service is offered free, ask why and how the company is able to do that.
Make sure you Sign a Full Employment Contract
As a contractor under an umbrella company, you will be deemed an employee of the company providing the solution. As such, you will need to sign a full employment contract offered by the company so that you get to enjoy all the legal benefits and rights that all employees in the UK have a right to. Check prior to signing up that the company provides a full contract of employment.
Determine how Claiming Expenses Works with the Company
Research and find out how claiming expenses works since there are companies that will make exaggerated claims asserting that you could save a lot of money on taxes through applying for contracting overheads without receipts. If the solutions provider advocates for such, do further investigation since if the company promotes or runs fraudulent expenses, there could be other aspects of its operations that may be non-compliant too. Note that it is possible for an umbrella company to claim a dispensation but this is not enough evidence of compliance. All it means is that the company is not obligated to submit a P11D form for every single contractor signed up with them.
When and how you get paid
Check to ensure that the umbrella company typically pays on time after the submission of timesheets. You will also need to confirm that the contract does not have any “pay when paid” clauses. This is because such clauses are inappropriate for you as an employee. As an employee, you are qualified for statutory sick and holiday pay and minimum wage.
Confirm that Tax Paperwork is Included in the Solution
You may have to submit tax returns and if the solution provider does not include a dispensation, you may be required to file a P11D annually to account for business expenses. Moreover, the umbrella company provider should provide a yearly P60 and as such you should confirm that these are not charged extra but are included in the monthly or weekly fee charged.
Expense Free Exit
You are an employee of the company and hence you should never have to pay when you decide to leave. However, you should ensure that you understand the conditions and terms of employment and adhere to things such as termination clauses and notice periods just to be on the safe side. In some instances, you may find that the company has withheld some of your money for sick or holiday pay. In case there is any surplus, insist on it being paid when you get the final payment from the umbrella company.
Find out what kind of Support and Help is provided
It is highly likely that you will have a prosperous and long relationship with your clients. However, things can go wrong and you will need the umbrella company to provide support and help at such times. For instance, if you are accused of misconduct and umbrella company should have a human resources department that will offer advice and support and if possible offer representation at tribunal hearings.
Frequently Asked questions
What is the meaning of umbrella pay?
When you sign up as a contractor to an umbrella company, you become an employee of the company. Given this relationship, the agency pays the Umbrella Company which will deduct national insurance and PAYE contributions among other deductions and then pay you a salary just like any other employee.
What is the legal Status of Umbrella Companies? The umbrella company is the third party and acts as a bridge between the employee and the agency. The contractor outsources some functions with regard to payrolls such as tax deductions and contributions which are then handled by the Umbrella Company. The outsourcing of such functions to umbrella companies is lawful.
Are Umbrella Companies Responsible for Paying Your Tax?
The agency pays your money to the umbrella company including any expenses and then the company will deduct National Insurance and tax before paying the contractor through the established PAYE system. As a contractor, you will receive your salary from the umbrella company after the necessary deductions have been made. The company will also deduct their fee before paying you.
Are Umbrella Companies a Rip Off?
It can be a massive rip off for agencies to employ staff under umbrella companies. They provide higher rates that will in no way compensate for the employers NI and holiday pay you will be required to pay.
Do Umbrella Companies Offer Holiday Pay?
It is critical to dig through the regulations and only then approach the agency with evidence of entitlement to holiday pay. You as the contractor is not employed by the agency but rather the solutions provider is. As such, the agency does not have to pay any holiday pay as they do not have a contract with you. However, the umbrella company owes you holiday pay since you are their employee.
While accounting firms like GM Professional Accountants only hire experienced, pedigree experts to make up our accounting team, we know that many of our clients are not in a position to hire such levels of expertise.
As a result, we thought it would be helpful to turn the spotlight on financial skills testing.
If you are a software company hiring a computer programmer, you’d validate that he or she could code. If you are running a hospital, you’d validate that the next surgeon you hire knows his or her way around a scalpel. Well, the same should be true for any team members you hire for your finance team.
There are a host of suppliers of online accounting tests, and a number of these provide specific skills tests to evaluate the abilities of a future hire to your finance team. If you are hiring an entry level position, then your focus might be on basic numeracy skills. If you are seeking a bookkeeper, you will need to ensure that your successful candidate knows a little more. For more senior positions, you may want someone who knows Sage Line 50.
All of these skills can be tested. Professional skills testing vendors provide assessments to validate candidate skills across a variety of roles, and accountancy skills testing is no different.
Hiring the right employee for your finance team, however, is not just about “hard” or technical accounting skills. You’ll also need to evaluate how well the candidate will fit into your broader team. There’s no point hiring someone who supports your financial balance sheet but damages your team balance sheet (and I apologise for the truly awful pun). This is where psychometric testing can begin to play a part. Again, mainstream skills testing vendors provide validated psychometric assessments that can be used to evaluate how well a potential hire will fit into your team.
The cost of a bad hire in the financial department can be huge – particularly for smaller firms. Validating the ability of your potential hire before signing on the employment contract is an excellent way to maximise your chance of avoiding this!
It is vital for your small business to get the company structure, share classes, shareholding, and articles of association accurate during the setting up stage at companies house.
At GM Professional Accountants, we pride ourselves in providing the most ample advice on the setup of new limited companies. We have offices based in London, Manchester and Essex.
During the setting up of a Limited Company, Company Formation is just the first step of many. You will need to consider start-up activities such as registration with HMRC business taxes, which is a service most conventional company agencies do not provide.
We provide comprehensive services that include tax and accounting compliance registration that include:
Registration of Business addresses including Mail Forwarding Services
Registration for PAYE
What to Expect from Our Company Set Up Services for your small business
Online company formation in only three hours
Company name availability search
Documents by post or email
Registration of the company for Corporation Tax, PAYE and VAT
Business startup pack
Recommendation on the most optimal business structure
Accountants’ letter to help in the opening of a business bank account
Articles and memorandum of association
The Different Types of a Limited Company
Private Limited Company by Shares – Most Popular
This is the most popular type of limited company and is the favourite for freelancers, small businesses and contractors. The limited company typically issues profits and shares via dividends.
If you are a member of a business that is limited by shares, the obligation that is owed is limited to the number of unpaid member shares if any.
If the company becomes insolvent, the shareholder is not legally required to make any contributions to offset any debts of the business.
Company Limited by Guarantee
This business structure is mainly favoured by charities.
If the company is dissolved, it is the shareholders responsibility to contribute to the total sum of money they agreed to guarantee for it.
If a company that is limited by guarantee is liquidated or wound up, then every member will need to contribute to the amount they guaranteed. This is to offset the debts the company owes while they were a shareholder. The amounts involved are typically relatively small.
Setting up Fast
If you have ever tried to set up a company, you know that it can be a frustrating experience as there is a lot if paperwork to fill in and forms to submit.
GM Professional Accountants Do It All for You
We can complete the paperwork and submit the forms so that you are set up for trading as soon as possible.
Filling out the Forms
We will take charge of all the paperwork. This will include the compliance requirements of the company formation such as Memorandum of Articles and Articles of Association.
Some of the businesses that favour this type of company formation include freelancers, small businesses and contractors. The limited company will typically issue their profits and shares via dividends.
Shareholders of companies limited by shares are limited to the amount unpaid if any on the members’ shares. Once the member pays their shares in full, the shareholder does not have any liability for the debts of the company.
Virtual accounting refers to a system where a qualified accounting expert offers their accounting expertise and services to businesses and individuals virtually instead of physically working at the business premises of the client.
Virtual accounting provides all the benefits you would get if you hired a professional that would physically work from the office. However, given that the virtual accountant is a contractor and telecommuter, the service will often be cheaper.
Virtual services make this possible as they provide greater flexibility for the accounting professional and for the client.
Advantages of Virtual Accounting Services For Your Business
With virtual accounting services, a business can get its accounting handled by a professional accountant rather than having to contract a full-time accountant. This helps companies cut costs as they can pay for services only when they need accounting work done.
It is an excellent solution particularly for small businesses that may not have the budget to engage a full-time accountant yet need a professional to do their accounting.
Virtual accounting may also prove cost-effective for big businesses that may need extra assistance even if they have their own internal accounting department. Virtual accountants can work alongside company accountants to offer their services to reduce the workload for as long as the business needs them.
It provides a unique combination for companies that may not have the funds to hire extra accounting staff but still need additional help.
A small business that cannot afford a knowledgeable and experienced accountant full time or does not have the need to hire one will benefit a lot from engaging the services of a virtual accountant.
Many small businesses run into trouble and fail within three years for a number of reasons. These include an inability to hit upon a business model that produces enough revenue, and failure to differentiate themselves from other businesses in the space. With a virtual accountant providing critical accounting services, they will be able to be in touch with the realities of the marketplace while keeping their financial goals in sight.
Instead of hiring a full time accounting professional getting a virtual accountant can be huge as the professional will provide services that include:
1. Filing and preparation of CT600 and Accounts for small business Limited Company services
2. Tax return services for Personal Self-Assessment
4. VAT advise and VAT returns
5. Tax return services for Self-Assessment
6. Pensions and payroll auto-enrolment services
GM Professional accountants have offices located in London, Manchester and Essex.
The EU VAT guidelines are intended to make it possible for small businesses to trade in the EU area short of needing VAT registration in all EU nations. While the regulations tend to be complex, the alternate scenario would be more bureaucracy and work.
At its core VAT is a consumption tax. A business registered for VAT will have to pay VAT whenever it makes a purchase and then claim it back when they make their VAT returns, which includes all the purchases made. VAT registered businesses doing businesses with each other can shift the VAT to subsequent purchasers. As such, it is the final consumer who has to pay the VAT as they cannot pass it on or reclaim it. Since the consumer eventually pays the VAT, it is called the consumption tax.
EU VAT is intended to have the same effect and hence businesses registered for VAT and doing businesses with each other within the EU can transfer VAT to subsequent purchasers up to the consumer and never have to deal with the complex regulations of each country.
There are several critical distinctions to take into account though:
Business versus Consumer
EU VAT differs depending on whether the purchaser is a business or a consumer. For the purposes of VAT, it will also be dependent on their VAT registration status. Overall, a purchaser with no VAT number means they are a consumer and one with a VAT number means they are a business. As such, any business not registered for VAT will be deemed a consumer.
Services versus Goods
If you are selling or buying only in the UK then services and goods receive the same treatment on VAT returns. Any trading done outside the United Kingdom whether it be for goods or services will mean that VAT will default to place of supply VAT rules.
It is very straightforward for goods. Goods exported from the UK to other EU countries are subject to VAT rules in the UK, while goods exported from Germany to other EU countries are subject to German VAT rules. Therefore, goods will be subject to the VAT regulations of the country of the seller.
The assumption when you are providing services such as training or consulting is that these will be delivered in person. As such, the VAT rules are inverted with the place of supply being the location of the customer. For instance, a British company consulting for a French company will have the VAT rules of France applied since the place of supply is assumed to be France. UK VAT rules will not apply as the sale is deemed out of its scope given the location of the customer.
Sales to EU consumer (not registered for VAT)
Any consumer that is not registered for VAT will have to pay the final VAT either in the EU or the UK. For all intents and purposes, sales will be treated as a sale to a United Kingdom consumer. Normal practice is to add the UK VAT of 20% to the total amount.
Box 1 (VAT payable in the period on sales)
Box 6 (Total value of sales not including VAT)
Excluded on EC Sales list
This is good if only a small part of your sales are done outside the UK. But once you start making huge volumes of these sales or a significant increase in the value of such sales, you may need to register for VAT in the given EU state and be subject to the relevant country’s VAT. Each country has different thresholds.
If your EU sales value is more than £250,000 a year, you will be required to fill an Intrastate Supplementary Declaration.
Digital Sales to EU consumer
There are different processes and rules if you are selling digital services to consumers not registered for VAT within the EU. In such an instance, VAT needs to be charged using the local rate with returns made using VAT MOSS.
Sales to EU business (registered for VAT)
You need to have the VAT number of the customer for the transaction to be deemed a business transaction. If you do not have the number, then the transaction is a consumer sale. Both the customer’s VAT and the business’s VAT number have to be indicated in the sales invoice.
Any sales made by a business in the EU also needs to be indicated on the EC Sales List. The EC is a distinct quarterly or monthly return that may not necessarily conform to the schedule of your normal VAT returns. You can get this produced automatically in various accountancy packages so that all you need to do is submit.
Goods to EU business (Registered for VAT)
If you happen to be trading goods to an EU business that is registered for VAT, then you can get zero-rated for VAT, if you do not add any VAT on top of the net value. Most accounting systems will include a specific VAT specification for this. If you are selling goods, the UK is the place of supply and hence UK VAT applies but it is zero-rated. This means that the sale has to be included in the EC sales list.
VAT zero-rated – show VAT as £0.00 and charge net value
Box 6 – Total value of sales not including VAT
Box 8 – Total value EC sales exclusive of VAT
Include in EC Sales List
Services to EU business (Registered for VAT)
If you are selling your services in the EU, the obligation of charging VAT rests with the customer. If it is a service you are selling, UK VAT will not apply since the customer location is the place of supply. Goods are zero-rated for VAT, meaning that you do not add any value to the net value of goods. You will still need to include your sales of services in the EC Sales List. Most accounting software includes a category that makes this possible.
0% VAT – show VAT as £0.00 and charge net value
Box 6 – Full value of sales not including VAT
Do not indicate in Box 8
Indicate in EC Sales list
The flat rate VAT?
If you qualify for the flat rate arrangement, then input VAT will not apply. The obligation for VAT will be determined as a percentage of the gross sales turnover over the tax period. To get your gross sales add in the 20% of VAT, which means that the owed VAT is a percentage of the total, for instance, an IT consultant will have to pay 14.5%. The percentage is intended to act as cover for VAT on acquisitions but excluding the tedium of having to go through all transactions.
If you are exporting services or goods to an EU business registered for VAT, you can avoid VAT by zero-rating the sale. But how does this influence the flat rate turnover determination?
Selling goods to the EU – Add them in the EC Sales list
Selling services to the EU – Add them in the EC Sales list but since UK VAT does not apply, exclude them from the flat rate turnover.
Buying services or goods from the EU – Sales turnover is the basis for the calculation of VAT and hence it does not matter whether EU purchases have VAT or not.
What if you are buying services or goods from the EU? The same rules are applicable though now in reverse.
For imports greater than £260,000 of merchandise in a given year from the EU, an Intratat Supplementary Declaration will have to be submitted.
Consumer Purchases (VAT registration not provided to the supplier)
If a business does not give the seller their VAT number, then the business is deemed a consumer. Just like on the sales side the seller’s rate includes VAT and forms part of the final price.
As a consumer, the final VAT lies with you and you cannot pass it down the line. The item will be treated like it had been bought from the United Kingdom without any VAT applied.
Box 7 – Total value of acquisitions
Procurement of Goods from a Business in the EU (Registered for VAT)
You need to give your VAT registration to the seller who also needs to have a VAT number in their country for the purchase to be deemed a business transaction.
Buying of EU goods typically gets VAT charged just as if you made the purchase from the UK from a British supplier. As such, the 20% charged in sterling will apply. You can either use the published rate or find the exchange rate published by the HMRC to calculate how much is owed.
It might seem strange that the seller gets to charge 0% while you get to claim a VAT rate of 20%. But what you need to know is that the VAT rate of 20% is included in BOX 2 when you are submitting returns on EC acquisitions. Box 2 makes up the input VAT total. Therefore the VAT amount on the sales side cancels out the VAT on the purchases side, which results in a net effect of zero VAT. Overall, you should get a fair deal as the overall transaction will have a zero VAT impact just like that of the seller.
Box 2 – VAT owing on EC purchases during this period
Box 4 – VAT reclaimed on acquisitions during this period
Box 7 – Total value of acquisitions
Box 9 – Aggregate value of EC acquisitions plus VAT
Buying of Services from a Business in the EU (Registered for VAT)
This is the reverse of the sale of EU services as discussed previously. The place of supply for services from the EU is the customer location. Regardless of the country from which the service is bought from, UK VAT applies and you are responsible for filing VAT and not the seller.
The reverse charge is what is used to deal with such purchases. It does sound complex given that transactions are treated as both purchases and sales on the VAT return. It does look as if you are buying the service from yourself. The item is included in the VAT on purchases total and the purchases total as well as the VAT on sales total and the sales total. This will result in zero VAT except for a situation when not all purchases may be included.
The seller should have furnished an invoice excluding any VAT. Include the total amount paid in addition to the 20% VAT. The VAT amount includes the purchases (input) total and the sales (output) total, which will result in zero effect on VAT owed.
Box 1 – VAT owing on sales in this period
Box 4 – VAT reclaimed on acquisitions in this period
Box 6 – Aggregate value of sales without VAT
Box 7 – Total value of acquisitions
Excluded in boxes 2 or 9
This article is targeted at small companies with few transactions within the EU. If you run a more complicated business or are planning on large volumes or regular trade with the EU, getting specialized advice is critical.
Sale to EU (not registered for VAT) – treat as UK sale. Exclude on EC Sales list. Add 20% VAT.
Sale of merchandise to EU (registered for VAT) – zero rate VAT. Include on EC Sales list. EC sales section on the VAT return.
Sale of Services to EU (registered for VAT) – Zero rate VAT. Include on EC Sales list. Not on the EC sales section.
Buying of Goods from EU (registered for VAT) – Include on EC Acquisitions in the returns. Add 20% VAT.
Buying of Services from EU (registered for VAT) – Exclude from EC Acquisitions. Include in purchases.
GM Professional accountants have offices located in London, Manchester and Essex.
The introduction of the Capital Goods Scheme (CGS) is intended to help adjust the input tax recoverable from the purchase of particular capital items that may not be fully employed in the production of taxable supplies.
The good thing about the scheme is that it acknowledges that a business may use some assets over several years and there may be differences over the years on how the capital items are employed in the making of taxable supplies. It thus offers a mechanism through which a business may adjust the original input tax claimable over a period of up to a decade.
Assets that may be adjusted on the scheme include:
Computer hardware worth at least £50,000
Civil engineering works, fitting out works, refurbishments, buildings, and land worth at least £250,000
Aircraft and ships worth £50,000 or greater
VAT is not included in the valuation.
The scheme is not applicable to expenditure or assets a business acquires with the intention of resale. Nonetheless, the CGS may come into play if the business uses the asset before selling it on. On the other hand, the item will not be deemed an item of capital if it is traded before it can be used.
The acquisition of a capital item that qualifies for the scheme means that all the rules for input tax are applicable. These include:
Input tax has to be recovered in full for all items used fully in the production of taxable supplies
Input tax is not recoverable if the item is used in full to make tax-exempt supplies
A business may claim a percentage of the input tax according to the partial exemption regulations, if the capital item is used to produce a mixture of exempt and taxable supplies.
Subsequently, an input tax modification needs to be made if there are any changes to the degree of taxable use during the adjustment period. If the taxable use goes higher, the business may claim more input tax and if it goes down, it may have to repay a portion of the input tax that had been claimed.
The scheme will also take into considerations the degree to which the item that qualifies for the scheme is employed for non-business or business ends.
The typical adjustment period is:
Ten consecutive intervals in the instance of part of a building, land, civil engineering or part of civil engineering works.
Five consecutive intervals if the item is a boat, ship, aircraft or other vessel or computer or related computer equipment.
Nonetheless, the intervals may vary, for instance if a business owned an asset before registration then registers for VAT, the first interval will be deemed to have started on the day of first use of the capital item and will end before the beginning of the following tax year. The tax year typically ends on 31st March, 31st May or 30th April and is 12 months long. The HMRC will allocate the VAT periods as it sees fit for each business. First interval VAT is computed according to the typical partial exemption regulations.
Subsequent intervals will typically run for a year. Where the degree to which the item may have been employed in the production of taxable supplies in a succeeding interval goes lower or higher, from the degree to which it was employed at the time of the original claim of the input tax was calculated using partial exemption regulations, the tax would have to be adjusted. For instance:
The acquisition of property results in VAT of £300,000 and 10 years is the adjustment period. According to the partial exemption recoverable ratio, 60% of the VAT will be recovered in the first year, and hence the recovered VAT is (£300,000 x 60%) = £180,000.
The business will then have to work the VAT for each subsequent interval using the initial VAT amount of £300,000. They will then use the difference between 60% which is the initial recovery rate and the subsequent recovery rate. For instance, subsequent recovery in the second year is 70% which means that the business may reclaim £300,000 ÷ (10 x 10%) which comes to £3,000. In the instance of the percentage in year two being lower than the initial 60%, the business would have had to pay more VAT rather than recover amounts paid.
If you have children and have been getting Child Benefit tax breaks, you may have to pay back some of the benefits. The good thing is that there are morally acceptable and legitimate ways to reduce tax liability.
Child Benefit if you are Earning More than 50,000
If you or your spouse are earning an income of 50,000 or more in a year before tax, then the HMRC will expect that you pay back a portion or in some instances all of the Child Benefit that has to be declared in the form of Extra Income Tax.
What Happens when you and your Spouse are Making Less than 50,000 Annually?
In the instance that you and your spouse each make less than 50,000 annually, you will be eligible for Child Benefit and will not have to remit or pay back anything to the HMRC.
What Happens when either you or your Spouse is Making between 50,000 and 60,000 Annually
If either you or your spouse is earning between 50,000 and 60,000 annually, you will be expected to declare and pay back part of the Child Benefit you got which will now be deemed extra Income Tax.
What Happens of either you or your spouse is making more than 60,000 per year
If one or both of you are making more than 60,000 a year, then you will need to pay back the Child Benefits as Income Tax.
What Happens When a Spouse Moves In If you move in with a spouse that is earning more than 50,000, the tax situation will change. If you are earning more than 50,000 and your income is higher than that of your spouse, you will have to pay the tax charge. If their income is higher they will pay the tax charge.
How does it work?
Top tip One of the biggest benefits of claiming Child Benefits is the effect on your State Pension. This works if you are currently unemployed and happen to be at home looking after your child or children. Since you may not be making payments to National Insurance, the Child Benefits will be credited to your State Pension. You can always call 0300 200 3100 and talk to a Child Benefit Office representative if you need more information on how this works.
If you are being paid on a weekly basis the full amount of Child Benefits will still be paid to you every single month. However, this is only applicable if the amount of money you are making is below the 50,000 income mark.
However, things will typically change if either you or your spouse start making more income. For instance,
if either of you starts getting more than 50,000 a month, the HMRC will expect that you pay more Income Tax. The reasoning for this is that you will need to repay part of the Child Benefit that you are no longer eligible for.
The HM Revenue and Customs authority (HMRC) requires that you file a Self-Assessment tax return. This makes it possible for the HMRC to determine how much in extra Income Tax you should pay.
How to choose an Accountant for your small business
Selecting an Accountant for Your Business
Business and tax affairs are sometimes complicated and hence the choice of an accountant is critical, whether you are an established company or a new business. The best accountants will typically have the necessary qualifications, and be members of a regulatory and professional body. Such accountants is good for your business since they have not only the practical experience but also the technical expertise in the field.
A good account is one that is suitable for your business and also for your individual needs. As such, whether you are seeking qualified accountants in London or any other location in the United Kingdom, it is absolutely critical to be very careful. Take your time rather than engage in the last-minute rush when the deadline for filing your returns is imminent. When selecting accountants, ensure that the firm has the necessary skills and experience in your industry. The best way to determine their experience is if they have clients that are of the same size and are in the same industry. Such a firm will understand the types of issues the business is likely to face. GM professional accountants work in a number of sectors and are awarded the tree best rated accountants.
Why Get a Licensed Accountant for Your Business
1. They will handle the tedious activities of account preparation so that you can have time to take care of other important activities. 2. Help you to be more efficient in structuring your tax obligations 3. They offer specialized tax saving advice 4. Help you secure funding and loans critical for the growth of the business
Where to Hire a Highly Qualified Licensed Accountant in London
You can always start with asking other people for recommendations though you will still need to ensure that your recommendations are a proper fit. A friend of a friend in your locale might have been great at helping file individual tax returns but they will not cut it if you are a fast-growing business in London.
You should also take into account the benefits of hiring an accounting firm. You will always have someone to step into the gap and take care of all your accounting needs whenever an urgent matter comes up or when your dedicated accountant is on holiday or otherwise incapacitated. A firm will also have accountants with a range of specializations and experience should you need it. However, you should find a firm that is not too large that it is impossible to speak to the same person whenever you email or call in. In an ideal situation, you want a firm that gets you a dedicated accountant that will come to learn how your business works and also build a working relationship with you. Since they will have an intimate understanding of your business they will be able to give highly relevant advice to you.
Critical Things to Take Into Account for When Choosing an Accounting Firm
1. Dedicated accountant for your business 2. Fixed fee options so that you can control costs 3. Have clients of similar size and industry 4. Local accountants that you can meet for one on one meetings
Having fixed fees is particularly critical especially if you are just starting out and need to know the exact costs of accounting services. GM Accountants are located in Ilford and central London and provide fixed price accounting services if you need such services. You get a range of pricing option for anything from basic service to one on one meetings or regular phone support depending on your needs and budget.
GM Professional accountants have offices located in London, Manchester and Essex.
For some professionals, working overseas is a critical component for the growth of their careers. This means that such persons may over the years accumulate significant retirement savings abroad. The big question is “How will these retirement benefits and pensions be taxed once they come back home to the UK to retire?”
The tax obligations could vary depending on how much a person accrued in retirement benefits and savings during that time and the country where they accumulated such savings, the type of retirement provisions employed and the manner of distribution of such benefits. You may have pensions in the US or Europe and its important to assess the tax and look at tax planning solutions before making that choice.
Combined with the fact that there have been changes made to the tax obligations for persons with non-UK retirement benefits, things have become more complicated.
Determining the Nature of Payments
Before providing any advice, the first thing the adviser needs to do is to determine that nature of the client’s benefits. This article analyzes the treatment of pension earnings made while a professional is working abroad. However, it is possible that such a professional might also have other income while they are in retirement.
Different jurisdictions have different ways of encouraging people to save for retirement and not all of such schemes may have the structure or characteristics of what would be considered a pension scheme in the UK.
In some countries, the benefits may include end of service awards, savings schemes or deferment of receipt of employment income. All of these may be treated differently in the UK when they are declared as pension benefits.
The second part of this article makes the assumption that any of the retirement benefits the professional is earning come from a regime that may be regarded as a pension scheme in the UK, even if it is not registered.
Taxation of Lump Sums from a Foreign Pension Scheme
Generally, a person resident in the UK would have to pay income tax on any lump sum payments they get from their foreign pension scheme.
By and large, such lump sums will be fully subjected to income tax regulations.
While the basic premise is that the lump sum will be subjected to income tax, there is need to take into account exemptions that may reduce obligations, given that the professional accumulated the benefits when they were not living in the United Kingdom.
Reduction of Obligation for Foreign Service You could get a partial reduction or complete exemption of income tax obligations for pension savings that a person might have accrued while working abroad in the Foreign Service.
The FA of 2017 made recent changes to relief for Foreign Service workers and the details of these changes are set out below.
Getting Relief through Invoking a Double Taxation Agreement
The United Kingdom has many Double Taxation Agreements (DTAs) with many countries and these DTAs have articles governing how pension income will be taxed. The pension article in a DTA will typically grant taxation rights to one country and exclude the other. As such, it will be critical to establish when and where the individual was resident in when the pension benefits were accumulated, and what the DTA stipulations say regarding the tax obligations on their pensions.
As we are now moving towards digital technology, people can now operate tasks from home. With Video recording and digital signatures , the need to go the accountant has become less popular. There are still benefits of face to face meeting as this form of communication is far superior and better for undertaking.
GM professional provide accounting and tax services in selected areas and can also assist you with the latest technology to provide you with the same experience. We provide Self assessment tax returns services, Limited company accounting services and tax advisory services.
Communication is the key when you have an accountants that is virtual. Here at GM, we have the systems and the software, this allows you review information an d sign the necessary forms online via software. This all can be done from your home without visiting our offices. We have robust email service that you can rely on.
GM professional accountants provide these services around the London and Essex area, we have a specialist team that has the experience and expertise to take care of your tax affairs.
Where a non-domiciled individual has not been UK resident in previous tax years (or, if UK resident, has been resident for no more than the previous two tax years), general earnings arising in the following tax year which are not in respect of UK duties of the employment, are taxed on the remittance basis only.
Remittance basis generally
For non-domiciled individuals who are not ‘long-term’ residents of the UK (that is, they have been resident for less than seven out of the previous nine tax years), the remittance basis of taxation is available with respect to their other overseas income and their overseas gains, and this can be enjoyed without having to pay the ‘remittance basis charge’ (a sum of £30,000 upwards per tax year).
Where the remittance basis applies, such foreign income and gains are charged for a tax year only on so much of such income or gains as are remitted to the UK in that tax year. The meaning of ‘remitted to the UK’ was significantly tightened up in 2008.
In most cases, the individual has to make a claim for the remittance basis to apply.
There are certain exemptions or reliefs available, in particular ‘Business investment relief’ which was introduced from 2012. This permits monies to be brought into the UK for the purposes of acquiring qualifying business assets, without such amounts counting as ‘remittances’ for tax purposes.
GM Professional Accountants have office in London, Manchester and Essex.
Starting an Amazon FBA business can be challenging. It’s import to assess whether you will need to register for vat. This is an important stage and the correct decisions will need to be made. The best vat scheme will need to be selected and you will need to keep records in MTD format and software.
This will depend on your location. UK companies have a threshold of 85,000 on a cumulative basis. This threshold does not apply to businesses outside the UK. You may need to register for vat on the onset.
There are few schemes for vat. This will depend on your purchases. You have the standard rate vat scheme and the flat rate vat. With the flat rate vat scheme, there is the limited cost trader rule which will negate the benefit of the vat scheme
Amazon business owners will need to also differentiate between customers, Businesses to business and business to consumers . As the vat treatment can be different if you are selling outside the Uk.
An EC sales will also need to be done with the vat returns.
GM professional accountants specialise in the E-commerce sector. This ensures you are compliant and up to date with latest changes. Our experts help you select the schemes that benefit your business. We help you understand you obligations and fulfil them in a timely manner.
GM Professional accountants have offices located in London, Manchester and Essex.
More often than not, a divorce will result in assets being transferred from one spouse to another. Read on for a better understanding of the application of CGT, including how and when it is used. You may need to produce a capital gains tax report for the court.
When a marriage breaks down, no one ever thinks of the tax obligations that may arise from subsequent happenings. However, it is important to do some tax planning as this can have some significant benefits for both parties.
Taxation of Chargeable Gains Act 1992 Section 58 has the provision asserting that if civil partners or spouses that happen to be living together transfer assets in a tax year, the transfers are deemed to be made on a no loss/no gain basis.
The implication is that the person who receives the asset will be treated like they paid an amount equivalent to the total of the original cost of acquisition.
Transfers between Spouses in the Year of Separation The no loss/no gain treatment is also applicable to transfers between civil partners and spouses for the remainder of the year that the separation is reported, even if the civil partners or spouses may not be living together when the transfers are made.
If dissolution of a civil partnership or a divorce happens in the same year in which the separation was reported, the no loss/no gain treatment is applicable to all asset transfers made after the dissolution or divorce as long as they happen before the end of the tax year.
The ICTA 1988/S 282 defines living together. A woman is deemed to be living together with the husband unless she can show that (a) she separated in circumstances that are likely to make the separation permanent (b) she has a formal deed of separation (c) she separated under a court order.
According to the ruling in Holmes v Mitchell STC 25, a couple may be deemed separated even if they still share a residence. For instance, when financial considerations make it impossible for one civil partner or spouse to move out or when the parties desire to minimize the initial harm that could be inflicted on the children.
Conclusion In conclusion, capital gains tax on transfers between civil partners or spouses is not payable in a year in which they still live together. This will still be applicable for the entire year in which they got separated. You may have to pay capital gains tax if the asset transfer is done in the year following the separation. The assumption made in such an instance is that the transfer is made at market value. The reasoning for this is that the spouses are still connected to each other until the provisional decree of divorce is proclaimed.
In an ideal situation, the asset transfers if they may attract chargeable tax should be conducted before the end of the tax year of separation. In an instance in which asset transfers could result in tax liability on capital gains, a transfer made in different years may be the best option. The reason for this is that you can reduce the
total payable amount since you get to enjoy two annual exemptions. If the transferor civil partner’s or spouses capital gains tax are likely to be lower in a given tax year as compared to another, then delaying, accelerating or asset transfers could be one way of improving their capital gains tax position.
GM Professional accountants have offices locates in Manchester, London, and Essex.
If you intend to be away for a few months or even just a few weeks and intend to work while abroad, then you typically will not have to deal with issues with regard to tax.
But if you intend to move for a period of three years or more or even permanently, you are going to be treated as a non-resident person right from the day you leave the UK. Once you are no longer deemed a resident of the UK, you will not have any tax obligations.
Things get more complex if you intend to visit the UK frequently while living abroad. If you have such intentions, the HMRC will deem you a resident expected to pay tax unless it is determined that your visits to the UK are less than:
1) 183 days of a tax year 2) An average of 91 days every tax year over a four year period
In addition to this, the HMRC will take into consideration several other factors such as:
1) Your ties to family 2) Memberships to UK societies and clubs which can prove social ties 3) If you still maintain a house in the UK 4) Whether you still retain work ties such as directorship of your limited company
It is important to note that the 91-day residency test can also be determined through qualitative analysis. These may include aspects such as whether or not you purchased properties in the foreign country you currently live in. If this is deemed insufficient as proof of change of residency, you will be treated as a UK resident for at least three years before your circumstances are reviewed again.
The implication of this is that you may have to pay taxes on capital gains and income on an adjusted basis if you spent a significant number of days in the UK. This is what is referred to as split year treatment.
This can be a particularly significant thing to note, especially if you also have to pay tax in your current country of residence. Given that each country has its own laws on tax and residency, it is advisable to always find a professional tax accountant to give you advice on how tax in your country works.
You also need to remember that you have to apply for the relevant visas if you are residing in a non-EU country. This is usually so if you are on a tourist visa and you intend to stay for more than the typical 90 days allowed.
Residency laws tend to be very complex and hence if you are not sure if you are classified as a UK resident or not, you need to speak with a specialist who knows these things. “Am I a UK Tax Resident” is an
excellent piece that should get you up to speed on how tax and residency in the UK works.
Finally, you will have to take into account your expenses and how the implications of these on your options. If you are going abroad as part of the fulfilment of a contract, then you can claim from your limited company expenses such as hotels, flights among other things.
Nonetheless, if you are just doing a little work while on holiday, you cannot claim any expenses for that.
The tax status of expatriates is one very complex issue. If you are not meticulous with your tax planning, you may find yourself subjected to punitive tax obligations. In addition to having changed your UK tax status, you will also need to take into account the tax laws of the country where you now live.
Statutory Residence Test
First, you will have to take into account the new expatriate benchmarks as set out in the New Statutory Residence Test, as set out by the tax authorities.
A good understanding of how it works will be helpful to help you determine:
1) How any income from your investments in the UK will be treated 2) The Capital Gains and Inheritance Tax rules 3) The consequences of selling any of your assets in the UK (such as stocks)
As such, you need to have an expert review your contracts to determine what aspects of your income are impacted by the change in tax status.
Expatriate Tax Advice if you are leaving the UK
Once your tax status is established, the professionals will assist you with planning your financial affairs so that you can minimize your tax obligations. Areas that would need to be taken into consideration include:
1) Advise on how tax would be treated in your new overseas resident country and in the UK. 2) Inheritance Tax planning 3) Taking into account efficient asset disposal 4) How to deal with investments
Tax Returns as a Non Resident
In addition to tax planning, you also need to know your filing obligations for both your new residence country and the UK. We can help you stay compliant and avoid any liability by making sure that: 1) All tax returns and obligations are documented and, 2) Filled out accurately and 3) Filed in a timely manner so that you do not have to pay any late filing fees
Tax Planning when you come back to the UK
This will be the complement to tax planning when you are leaving the UK. You need to take care of similar issues to make sure you avoid any pitfalls and lessen the amount of tax you have to pay.
Expat Tax Extenuation Professionals
We have specialist tax professionals who provide advice to expatriates on how to perform efficient tax planning and on tax mitigation.
GM Professional Accountants have offices located in London, Essex and Manchester.
Will Shu the founder and also the CEO of the Deliveroo received motivation after his amazing journey to a great city that was endowed with rich restaurants but they only had one shortcoming! most of these rich restaurants could not really do the food delivery. Will Shu decided to initiate the best local restaurants that could deliver foods to the client s doors.
Deliveroo has since seen a greater growth that’s is approximated at 650% following its convenient and the most reliable food deliveries! Customers can really get their full supply by just making a call. The restaurants partnering with this amazing company has also seen the growth of over 30% and has really done great in creating job opportunities for the people.
Independent self-employed drivers sometimes find it difficult handling issues of the tax. Some drivers are really not educated on the bookkeeping and also the taxes and sometimes they pay the excess or even subjected to some penalties.
All these issues can be really sorted out when a proper accountant who understands s the tax mechanism is employed. You can always contact us for assistance.
Four major bookkeeping requirements for efficient Tax management;
1. The deliveroo driver must have the register with HMRC using there website as self-employed
2. The second step is to ensure that business transactions documents such as the receipts and the expenses are just kept for the year end.
3. The Deliveroo driver should also ensure that they do the self-assessmen tax return which consists of the income and expenses before 31st January of every year.
4. Other liabilities such as the pending tax or the national insurance must be paid before the 31st January every year.
Drivers of the Deliveroo are entitled to some allowable expenses which have really done a lot in reducing their tax bill. Taxes are always paid on the amount that is left after subtracting the allowable business expenses. They include;
Mileage claim is always entitled to the drivers who own a car. When the claim is made, the eligibility to claim for the cost of the car, servicing and also the insurance is canceled. The first 10,000 miles attracts the rates of 45p and then after which it attracts 25p thereafter.
Purchasing a new vehicle will actually make you liable to claim all the cost in a few years with the following rates; up to 130g/KM will entitle you to an 18% capital allowances while those that exceed 131/KM will entitle you to an 8% capital allowance.
Car Lease payments
There is also an allowable deduction for the car lease at whilst working as a Deliveroo driver. You can always deduct the amount that is obtained from the cost of the lease, insurance and also the repair cost every month!
Service charges and commission at Deliveroo
Deliveroo drivers can claim deductions for the following services; Tolls and parking charges, insurance, the bank charges, car cleaning, accountants fees vehicle and public liability fee.
Finding a good accountant for your business
Finding the best accounting firm has always been an easy task following the large variety of accounting firms that really offer the same service. They offer the accounting services to the Deliveroo drivers who find the accounting work tedious. GM professional accountants has played an important role in providing deliveroo drivers with mobile apps that enables them recording of the daily transactions.
Among the key roles played by the firms are;
1. Create a Self assessment record with HMRC 2. Are responsible for the bookkeeping and accounts to judge the real profit of the driver. 3. Provision of the mobile Apps that will enable the drivers to do record keep 4. Keep track of all the business expenses and also the income. 5. Keep a record of all the vehicle details such as the mileage. 6. They also provide the preparation of accounts for filling to HMRC
Other roles are the bits of advice on the importance of the record keeping and also they do help in issues that prevent a tax investigations.
For the individual accountant, it can go up to 250 GBP while companies may cost more than 600 GBP. It’s always advisable to check the ratings of any accountant before hiring.
Income tax can be payable on foreign income, the common types of income that are taxable in the UK are foreign interest on savings, employed or trading income from abroad, rental income on properties located outside the UK and income from overseas pensions.
Foreign income is considered to be anything from outside Scotland,England Northern Ireland and Wales.
How to calculate what you need to pay
The first thing that you need to identify is whether you are resident in the UK. If you are not considered resident in the UK then that means you do not have to pay tax on foreign income. There is also double taxation treaties between the UK and some countries , this ensures that you are not taxed again for the same income. If you have already paid income tax or capital gains tax on overseas employment inc0me or gains, then you may apply for foreign tax credit relief if there is a double taxation treaty. you will still pay up to the UK limit and will not receive a refund if you have overpaid.
Filing your Tax return on foreign income
You will need to register for self assessment and there are deadlines to register depending on the tax year. Example, if you had income to report on the 01/07/2017 , then you will need to file the 2017/2018 self assessment tax return and the deadline for this is 31/01/2019 (electronic returns). You will need to notify HMRC latest by the 05/10/2018 in this example. once you have registered , you will recieve a Unique tax reference number (this can take up to 4weeks). This number is important, without this number you will not be able to file your tax return. GM professional accountants specialise in foreign income tax returns and have tailer made tax planning solutions. This ensure you are in safe hands and are getting expert advice.
GM Professional accountants have offices located in London, Manchester and Essex.
Key points on how to file your self assessment tax return 2018-2019
Deadline to register
Its important to understand that you will need to notify HMRC before the 5th October if you need to file your tax return 2018-19, Otherwise you may incur a penalty. You can register online or by paper, the online method is usually quicker, the UTR number can take up 4 weeks to arrive in the post. You cannot file your tax return if you have not received your Unique tax reference number.
Information needed to file your tax return
The information you will need will depend on your source of income.
Simple income Tax Tax returns
P60 or P45
Property income Tax return
Rental income Statements
Mortgage interest certificate
Repairs and maintenance costs
Self employed tax returns
Capital Gains property Tax returns
Sales completion statements
Purchase completion statements
The information listed above is what you will need to complete the basic tax return and you may need other information depending on your circumstances.
Other information needed
The deadline to file the electronic tax return 2018-2019 is the 31st Jan 2020. GM professional Accountants can help you in the preparation and filing of your tax return. It is important to complete a tax return if you have been issued with one. If you ignore the filing deadline and do not file by the deadline. you can be looking at fines that can run into the hundreds.
You must submit your tax return by the 30/12/2019 if you would like the tax to be collected from your wages. The UTR number can take up to three weeks to afrrive if you have lost your number. Ensure you order this in time order file your tax return by the deadline. GM professional Accountants are based in London and Ilford.
If you run a limited company, there are a few financial things you need to understand to help you run your company better. One of these things is the director’s loan.
According to Her Majesty’s Revenue and Customs, a director’s loan is any money which you take from your company which is not;
Your wage, expense refunds and dividends.
Funds you have previously loaned or paid for your company.
Even though the money that is in your company’s bank account is not technically yours, you can have access to it through the director’s loan account.
Any time you withdraw money for any other reason, that money ought to be recorded in your DLA. Depending on your activities, when your company’s financial year comes to an end, the company will be owing you money or you owing the company money. This should be noted as a liability or an asset in your company’s annual accounts balance sheet.
The contents of a DLA.
These are the things included in a DLA;
All cash withdrawals that you made from the company as its director.
Individual expenses which you paid using the company’s fund or a credit card.
Business expenses are the type of expenses that might be incurred exclusively, entirely and necessarily during the executions of your employment duties. Anything else that does not fall under this is therefore a personal expense. Your director’s loan account should include evidence of all transactions which involve your finances, together with the company’s as well, to make sure that it will stand up to HMRC’s scrutinies.
Running your own limited company is to some extent risky, and that is the reason why HMRC will keep your director’s loan account under review through the yearly tax returns of the company to make sure that rules and regulations are followed to the latter.
Who is eligible to apply for a director’s loan?
Just as the title suggests, in order to be eligible to take a director’s loan from your company, you first need to be a director. There are several reasons why you would take a loan from your company, the important thing to know is that that loan has not been subjected to the company’s or your personal tax. If you pay the whole loan back 9 months to the year-end of the company, you will not owe any tax. However, if your DLA gets overdrawn at your company’s year-end, then you will be forced to pay tax.
For example, if you get a loan in March 2017, and the year-end for your company is April 2017, then you will have to pay back the loan by February 2019. It is important to know that any overdue director’s loan account will have to pay the tax at 32.5%.
Is it important to record the director’s loans?
When you started your limited company, you established it as a legal entity, so it is essential to remember that your relationship with your company is legally separated. This means that your company has its own statutory duties and responsibilities, that is the reason why any amount withdrawn ought to be recorded.
What if you owe your company money?
The moment you owe your company 10,000 or more, that loan is automatically classified under benefit in kind. Furthermore you will be forced to record it on aP11D since it will be liable to both your company’s and your personal tax. Other than that, you will also pay a Class 1A National Insurance at a 13.8% rate on the whole amount.
A written off loan.
The moment that your company decides to write off your loan you will need to consider taxes and accounting, it is advisable to consult an accountant so that he can help you decide on the next course of action.
Monitoring of the director’s loans by the HMRC.
It is part of HMRC’s job to monitor all the DLA’s which are frequently overdrawn. Sometimes it is possible for them to come to an agreement that the money should stop being a loan and make it your salary instead, therefore it is strongly advised that you regularly monitor your director’s withdrawals to make sure you don’t go beyond the 10,000 thresholds.
The residential property landlords now have the responsibility to comply with the new income declaration scheme. The payment of tax is an obligation that every citizen should meet in the United Kingdom. This noble cause prompts Her Majesty’s Revenue and Customs believe in the need for landlords should get the opportunity rightly disclose their taxes. Let Property campaign fills the gap by providing the necessary knowledge to people with income from property.
The main advantage you get due to voluntary disclosure is the favourable terms in the payment of the tax you owe. Notably, tax evasion results in penalties. Therefore, it is important to undertake a voluntary and full disclosure of the unpaid tax to benefit from the low penalty rates that are associated with it. Meanwhile, if you decide to wait for the HMRC to discover that you are evading tax, you will be dealing with higher penalties. The penalties can be 100% of what you owe. When you add the higher penalties to the likely cost of investigation , voluntary disclosure is far much cost effective to the landlord.
Why it is important to use a professional Tax Adviser
Landlords are susceptible to several tax errors which may be deliberate or due to misunderstanding. Our Tax advisers will help you to know whether the Let Property Campaign applies to you or not. There is an instance when you can be a landlord and you fail to realise. A simple misunderstanding of the rules that occur when you inherit a property or renting out your flat to cover mortgage payment is part of what makes one liable to unpaid tax. In such cases, a professional adviser will be helpful in attaining updated tax affairs.
Additionally, the Let Property Campaign has a wider scope. It varies significantly with the previous disclosure systems. This means you may not have a complete grip of all that is required of you in this regard. The professional adviser becomes handy in guiding you through the steps you need to follow based on your circumstance.
How far back do I need to go with my declaration?
The declaration goes as far as when you started receiving the letting income. It is important to keep a record, especially of the expenses as if you do not have the proof of these, then you will not be allowed a deduction. The Tax adviser will assist you between capital and revenue expenditure.
What happens if I cannot pay the tax?
If you cannot pay what you owe, you must contact HMRC before the submission of your disclosure. The HMRC will make decisions depending on your current financial position to advice accordingly. The Let Property Campaign is something to consider because payment of tax is an obligation to be met by every citizen.
GM Professional accountant are Experts in the Let property campaign procedure and the cost of our services is affordable. Our accountants are experienced in this field and ensure that you maximise on any allowances.
Our Offies are located in London, Manchester and Essex.
A considerable number of businesses will confront a regular tax investigation at any time of normal operation. More serious duty review is likely if HMRC doubts that your tax returns are incorrect. A tax investigation or inquiry is certain to be a very difficult and stressful situation which can be quite costly in the long-term to resolve if it takes a long time to settle. Also, if you find that you are overly distracted by an HMRC tax investigation, it is likely to cause difficulties in being able to properly concentrate on your day-to-day activities of running the business. Be free to take an expert advice where you can`t settle tax audit by your own just after it starts.
Likelihood of a tax investigation
You ought to expect regular tax investigation in case you are enlisted for VAT or other have workers paid via PAYE. The duty audits will inspect your records and frameworks, concentrating on commonly mistaken areas. Routine tax reviews are considerably less likely with regards to income duty or organization tax. Rather, the attention is emphasized on tax audits where HMRC has the motivation to trust you are either committing mistakes or intentionally concealing income. Normally, tax reviews can be done after a period of five years, while just a couple of per cent of wage duty and company tax return are investigated every year. Some of the most noticed reasons for the HMRC to start an investigation include records that differ vastly from similar business in the same industry, using round numbers on all entries and not the exact figures, unexplained or unusual fluctuations in the declared amounts, low-quality record keeping, a tip-off from a tenant or disgruntled employee, and certain high risk areas of business, such as construction or jobs that are likely to involve cash payments. Also, about three per cent of investigations is started on a purely random basis.
Tax investigation notification
The investigation process starts with the arrival of a letter from HMRC, indicating to you that an inquiry has been initiated into your financial affairs. Usually, you will be asked to clarify certain things and submit a few business records and therefore, you will need to take the right action to make certain this situation is resolved as effectively as possible.
On first getting the notification of being investigated you need to avoid getting into a panic and stay calm. Even in those situations where you have made errors on your tax return, you might still find that it is possible to rectify the issues by making any payments due as soon as possible. Unless a tax return features many intentional errors of a significant size, there are very few instances where a case ends with a custodial sentence. You ought to seek guidance soonest possibly after notice of a tax investigation. You might need to request that your bookkeeper checks your records and frameworks. The tax review will be snappier, easier and not most likely to prompt punishments if you can provide precise, updated data when the reviewer visits. It is best for you to get in touch with a tax audit specialist, who can guide you about the proper course of action to be followed from here. Quite often, expert help may lead you to identify oversights or errors on your part that could have given rise to the inquiry. You may attempt disclosing the same to the HMRC and working out a quick settlement with least amount of penalties. In most of the tax investigations, HMRC carries out a complete review of your business matters. They may even delve into private affairs, such as investigating your expensive personal possessions. You will be requested to meet their inspectors for in-depth questioning. They might also ask you to provide comprehensive explanations and records to prove your statements. When it comes to providing any requested information or meeting with an investigator, you really want to remain truthful and provide the necessary information. Lying to the HMRC investigators is just likely to course more problems over the course of the tax review. Also, you want to make certain to be fully prepared for an in-person meeting and offer any evidence requested.
Once a duty audit has begun, it can take a few months or even more. Your bookkeeper can advise you on the way forward if HMRC is demanding too much data, taking a long period of time or generally acting irrationally.
GM Professional accountants offices are located in London , Essex and Manchester.
If you are searching for a skilled and qualified accountant that is able to specialize in a particular field, such as contractor accounting, then there are several key points that need to be fully considered prior to using the services of the right person. Here are several tips to consider for choosing a reliable accountant:
1. Qualification. In the process of searching for the right accountant, you will often come across a range of accountants offering a range of services. It is often the case that contractor accountancy requirements are often unique and specific. It is therefore vital to choose a specialized accountant that is qualified in this particular sector. Many of the larger accountancy practices or high street firms are more likely to focus on dealing with large corporations, personal tax planning, or small businesses which might not be suitable for your specific needs. In an initial interview with an accountant, you should ask whether they are specialized in dealing with matters that relate to contractors and that they are fully qualified on such requirements as the IR35. This is a key consideration and will often drop many of the high street based accountancy firms.
2. CPA Reviews. During your interviews, it is a good idea to have a list of questions ready for the accountants. The most important, and often overlooked, the question is whether they are a licensed CPA. Many people simply assume that all accountants are licensed. You don’t want to hire someone who does accounting on the side and never got around to being licensed. Find out how many accountants work with him at his firm. Having a large number could save you money because you could use the cheaper ones for less important issues. You also have to make sure the firm is used to dealing with a business of your size when choosing an accountant.
3. Trust. Oftentimes, when people are choosing an accountant, the individual’s personality is forgotten. You have to remember that you will be working closely with this person, so make sure you choose someone you and the rest of your employees can trust. Convenience also should play a part in your selection. You may have found the perfect accountant. The only problem is that his firm is located hours away from your company. He no longer is the perfect accountant. Choose someone in your area because these are the people you know well and can trust.
4. Experience. When looking for the contractor accountants it is also good to consider how long they have been in service. A contractor accountant with many years of experience has the capacity to do a good job since he/she has done the same thing over and over again. An accountant with a good experience know the various challenges likely to be encountered and how to deal with them. On the other hand, a contractor with little or no experience at all is most likely not going to give you the desired result. The above are some of the things to look at when choosing a contractor accountant.
GM Professional accountants have offices located in London, Manchester and Essex
Filing your own tax returns can be a daunting experience and getting professional help an expensive ordeal. This is why more and more people are choosing to go online and finding themselves tax accountants online. Choosing tax accountants online not only helps you save time but helps you save money too. A simple Google search will give you access to thousands of tax accountants online but should you always trust them? The answer is no! Calling yourself an accountant doesn’t necessarily make you one too. In order to be an actual accountants, one needs to have the proper certifications. In the UK, you can check a firm’s status by logging on to their Accounting body website.
The following list will tell you all that needs to be checked-
The first thing that you need to check is how experienced your accountant is. Is he/she a beginner? Have they worked with any companies similar to yours? Do they have famous clients? This is because experience matters. The more practice your accountant has had, the better they will be at their job. If you’re filing tax returns for an individual, accountants that are beginners will be able to do the job pretty well too. Qualifications You need to make sure that your accountant has the necessary qualifications for the job they’re doing. In the UK, the most commonly recognized bodies are ICAEW, CIPFA, AAT and ACCA. Stay away from fake websites that lure customers by offering low fees, chances are the accountants aren’t qualified at all.
Choose your tax accountant online wisely. After all, this is the person who will have knowledge of every intimate detail of the finances of your company. The accountant could have loads of experience and be properly qualified but until you feel you can trust them, it is not advisable to hire them. Transparency and Integrity Before you hire a tax accountant online, make sure that you communicate your company’s rules and regulations. This ensures that the accountant is aware of the policies and he doesn’t deviate from them. Make sure that the accountant is following the generally accepted accounting principles. It is very important to have an accountant who has values and has integrity. You can ask for a list of old clients and verify with them.
Why I Should Hire GM professional Accountants to do my taxes
GM professional accountants is a trusted firm comprising of registered tax agents who are experts in their fields. The tax accountants are well qualified individuals who have complete knowledge of the tax laws in the UK. Whether you’re an individual or a business, the accountants at GM are committed to serving their clients and offering them the best financial advice. Not only do you save money but you can be sure that your finances are in good hands.
There are many things one can look for in getting specialists bookkeeper in Amazon field. They are required to set priorities that will meet the bookkeeping and vat requirements, by having an understanding of the vat principles that will help to govern various activities within the Amazon field.
The bookkeeper should understand the current events on overseas VAT regulations and accounting software packages when it comes to technology, be well conversant with the cost of different rates of vat and be ready to assist in these matter when problems arise.
GM Professional Accountants possess recommendable qualities and knowledge which we have attained from years of experience that includes tax planning, and be able to demonstrate those qualities into tax savings. GM Professional Accountants have experiences in the aspects of UK vat and this boosted our reliability and makes our clients feel comfortable to focus on their business.
There will be successful and progressive business when the bookkeeper implements good ledger skills and easily bonds with them by responding to various queries and concerns.
Specialist bookkeepers understand the requirements of the Amazon Company to various services and can come up with strategies to solve business-related problems.
When it comes to finances, they should be knowing how to secure account data, paying attention to every detail in the statutory accounts for accuracy. Find a good bookkeeper from a trusted source for instance, checking our google reviews and our accounting body. Also, consider a bookkeeper who understands the local surrounding within the business area who will provide good detailed services to a customer that is remotely located.
As with any other business, effective bookkeeping for Amazon seller will need to provide current answers to many queries for an incredible financial outcome. First, there should be appropriate ledgers on invoices and expenses of a given period of time then the income and expenses analysed, this should allow you to make informed decisions.
when it comes to tax assessment to avoid over or understatement of taxes, bookkeepers can help strategize for these taxes and many liabilities, giving a good report to the owner and planning for bank loans that will boost the business. It will also, provide a clear picture of how the company finances are progressing without missing out on any detail. Bookkeepers also maintain the aspects of finance intact with the goal of driving forward the business in a rewarding manner.
Gm professional accountants have offices located in Essex, London, Manchester.
Hiring a poor quality accountant in London can cost you dearly. In a city where individuals come to buy their fortune, they start new businesses and, similarly, they fail every day. However, what is the contrast between those who have staying power and those who overlap?
Hypothesize to collect
Only one of each strange business starts with a massive spending plan and, despite those who do, it may be tempting to remove the corners at the beginning. However, investing in great financial planning can get more in the long term.
When a decent accountant can cost you a little more initially, they should deserve at least some respect regarding saving you cash and helping you develop your business.
A decent accountant costs more since they leave out the opportunity to understand your business and the procedures so that they are in a situation that ensures that you are prepared for development and minimises work quotas on the way. For a self employed package, it will cost between £25 to £30.00 per month. For a limited company package this could be between £70 to £80 per month if you are not vat registered.
The most effective method to detect a horrible accountant
Billing per hour is something that many accountants still do. The problem here is that it gives the accountant an incentive to take as much time as necessary and allow the work to expand at the convenient time. It is not clear that this generates a better orientation, but induces a higher bill.
If an accountant forgets to set goals that begin before working or does not know what will be achieved or transmitted due to his work for you at that time, stay away.
On the off chance that things start to appear on your bill that you did not request, or did not become aware of what you required, you are generally correct to address them.
The bad skills of the organisation from time to time disappoint even the most sincere accountants. Be that as it may, losing a deadline will cost you money. In case your accountant consistently exceeds the timescales, it may be an indication that you can fight to meet the HMRC deadlines for your benefit.
A decent accountant
A decent accountant will cover the basics, such as your legal records or self-assessment. However, the best you can hope for is to guide you through your information so that you can take a look at your business dispassionately. GM professional accountants are a highly reputable firm and have won the award by three best rated.co.uk
In addition to complying with the HMRC, you will not get an incentive from an accountant who does not think of freshness. When shopping, make sure you are looking for someone educated and interested in what you are trying to achieve. As your business develops, you will need a lawyer to incorporate your business and VAT enlistment. It is useful to start with an accountant who will stay with you for a considerable period.
Past the balance
At GM professional accountants, we look beyond the balance sheet. Our clear way of dealing with accounting means that we unexpectedly work a bit. And in addition to a group of qualified and reliable accountants, when you hire us, you also get your business manager who is committed to helping you understand your information in a way that allows you to develop your business.
GM Professional accountants have offices located in London , Essex, and Manchester.
While renting out your property to tenants can be a very profitable business, you need to know that you do not get to keep all the income. Legally, you are required to declare the income that you get from your property even if you are just renting out a small unit to a student. Although it’s required by law, many people still decide not to declare their rental income. Not declaring your rental income is not worth the risk since if you get audited by the government you will have to pay the tax on the income. You are also likely to pay penalty on interest on the tax that you were required to pay.
Apart from using very sophisticated computer systems, HMRC has a variety of tools at their disposal with connections to the public databases such as the Electoral Roll and the Land Registry. They also regularly carry out tip-off campaigns and even pay huge rewards when any undeclared tax is finally found. They’ve even put in place tax amnesty that they give to those who come voluntarily.
Another important trick that they use is obtaining information from third parties. For instance, they normally write to letting agents and estate agents instructing them to submit the names and addresses of all the properties on their books. This means many landlords who are not declaring their property income are likely to receive letters from HMRC.
How to declare property income
One method that landlords can use is taking advantage of Let Property Campaign and pre-empting the HMRC correspondence. Let the Property campaign is among the honesty programs that are currently being run by HMRC. According to this campaign, if the landlord comes forward and discloses undeclared income then HMRC will give him a much more lenient penalty. While most penalties are 10% they can even be as low as zero.
However, if the HMRC finds out about the income then the penalties can be between 15% and 100% depending on the conduct of the landlord. Let Property campaign is, therefore, a very important tool that can help the landlord to update their tax information. Since it will not always be there, landlords are advised to take advantage of it while it’s still there.
How to go about it
First, you need to alert them that you want to participate in this program by filling a form and calling their helpline. Once you’ve done this, they will give you 3 months determine and settle what you owe. By doing this, you may not have to pay any penalty but in case you do, it’s likely to be lower than what you would pay if HMRC finds out themselves. Thankfully, HMRC has Let Property Campaign calculator that can greatly help you work out what you owe them. However, if you need to disclose more than 5 years then there is a different calculator.
It’s also advisable to use an accountant so has to ensure that you have someone on your side when you are negotiating with them and make sure you are claiming the right expenses and reliefs. Although it can be tempting not to declare the income, the law requires you to do so.
It is estimated that 1 in 3 people in the UK have overpaid on their taxes but are not even aware of it. This means that you too could be due a tax rebate which could amount to several hundreds or even thousands of pounds. Applying for a tax rebate typically means filling in numerous forms and completing a number of calculations and if you don’t have any experience of dealing with this kind of thing (which very few of us really do) then you may consider it to be too much hard work or your tax rebate claim may be unsuccessful despite having a genuine case.
The actual amount of tax you are required to pay on an annual basis will depend on your personal circumstances as well as how much you earn but it will usually amount to several thousands of pounds and could be anywhere from around one fifth of your total earnings to nearly a half.
If you have overpaid for any reason then you are entitled to claim a tax rebate and receive that money back. After all, it is money that you have worked hard to earn so why shouldn’t you claim it back if you have unknowingly overpaid? Whether you have only worked a part of a year, were made redundant part way through the year, or you are set to leave the UK you may be due some tax back.
The difficult financial situation that many of us find ourselves in means that every penny counts and none of us can really afford to lose an average of nearly 1,000 from our annual salary. You could spend the money on a family holiday, on paying bills, or on updating and upgrading your car. Most of us place our faith in our payslips, our employers, and the Inland Revenue to get taxes right and we don’t even check that we are being charged the correct amount. If you are part of a PAYE scheme then you could be owed several hundred pounds in backdated, overpaid tax and you should consider starting a tax rebate claim in order to try and get this money back.
How to Calculate Your Tax Rebate Effectively
A number of taxpayers keep a check on all these issues with the help of a professional accountancy services provider. They help them in managing their accounts and keep them updated with such type of news so that they can file all the documents on time. Several tools are also available in the market, which is capable of estimating your amount for a return. These tools demand an input of all the relevant information for computing your return on the income tax that has been paid. These tools are available for free of charge and are very easy to use. If you are not willing to use these tools, you can always opt for professional accountants who will assist you in this task and provide you with refund estimation in advance.
Every nation has different tax policies which depend on various internal factors. Thus, for estimating most accurate amount, you will need to provide certain personal information like marital status, yearly income, number of dependants, age, etc. These factors will define that for what amount of tax refund you are liable. If any exemptions are there, the accountants will consider the factors from above to provide estimations.
Generally, the government decides if any year requires them to provide tax rebate to people who have made more tax due to some erroneous calculations. A rebate is decided for all the eligible tax payers by taking in account their different activities. This figure depends on different policies and from nation to nation. There are different schemes introduced every year in a country based on the current progress. They are provided as a facility to the citizens for cutting down on their taxes. These generally include different forms of investments, donations and various personal factors like if someone has low salary, belongs to armed forces, a widow, etc.
A lot of the above things depend on your accountant’s skill and the way they deal with it. It is always better to file your tax return on time to avoid any penalties which might cost you much more than what you had to pay. While working for your business, you tend to forget these things because of the daily work tasks that require much more attention. If you fail to abide by the deadlines which are set by governing bodies, it will become difficult for you to get any exemptions because of your bad record. This is the reason that putting all this in the hands of professional is a much better option.
GM Professional accountants have offices located in London, Essex, and Manchester.
HOW TO CHOOSE A COMPANY NAME FOUR YOUR BUSINESS STARTUP
One of the greatest challenges of starting a company is choosing the name for the company. It is a process that doesn’t need only dedication but also creativity. One has to be ready to come up with something unique and different from the other names around.
Choosing a Company name?
There are several names one can pick for his company but there is nothing as spectacular as a name that is both unique and unforgettable. Also, do not pick a name which spelling is unusual. Stick with something that customers can spell easily and is also easy to pronounce and remember. The shorter the length of the company name, the better. Also, pick a name that makes some sense. Lots of names have negative connotations in other languages. Try to avoid that embarrassment. Also, try to make sure your name is available. You can do this by checking up your preferred name with your State Incorporation site, Network Solutions for the domain name and the U.S. Patent Office for Trademarks.
Starting the Company Name Search?
When you want to choose a company name, you will have to do a Company Name Search. This is to prevent embarrassments. Having the same name as another company is like infringing on someone’s right because many companies have had their names trademarked. This is to stop callous elements from trying to make a fortune off their name or dupe people. Whichever way, it is good if a name search is done before picking a name for your company. You can do this by searching through the internet, telephone and trade directories. A lot of companies have their domains online and you will definitely see the same name as the name you chose for your company if you search through. This will prompt you to choose a more unique name.
The Law and Your Company Name?
A company name is an important and valuable part of your business. It can be used to reflect what the company does, or the attitudes and ideals that you want your company to embody. A lot of people, complying with their State laws have gone ahead to register their companies with their State. This may prevent someone from using your company’s name within the State but it doesn’t affect the country. What gives you absolute power is the trademarks right. Only federal registration gives you truly comprehensive rights. When this is done, your-company-name-is protected by the law and cannot be used by someone else. It becomes your sole property.
Protecting Your Company Name?
If you have a unique business name and you don’t want someone else picking it and using it as their own company name, you have to take steps to protect it. First you have to register the name of your company either as a sole proprietorship or partnership. The process of incorporating your company comes next. This is done with the Secretary of the State your company is located. This will prevent confusingly similar names from popping up in the future.
Choosing a Company name FAQ
The purpose of an FAQ is to address frequently asked questions about your company. The FAQ is always featured on the site of the company. It can act as a point of contact for customers looking for answers-before they reach out to you directly with your questions. So it is important to choose your FAQ carefully. FAQ featured should be able to alleviate purchasing anxieties that your product page doesn’t address directly. It should also be able to earn trust by demonstrating product expertise and explaining your business model. Customers should be delighted when the page creatively answers their questions.
It is estimated that 1 in 3 people in the UK have overpaid on their taxes but are not even aware of it. This means that you too could be due a tax rebate which could amount to several hundreds or even thousands of pounds. Applying for a tax rebate typically means filling in numerous forms and completing a number of calculations and if you don’t have any experience of dealing with this kind of thing (which very few of us really do) then you may consider it to be too much hard work or your tax rebate claim may be unsuccessful despite having a genuine case.
The actual amount of tax you are required to pay on an annual basis will depend on your personal circumstances as well as how much you earn but it will usually amount to several thousands of pounds and could be anywhere from around one fifth of your total earnings to nearly a half.
If you have overpaid for any reason then you are entitled to claim a tax rebate and receive that money back. After all, it is money that you have worked hard to earn so why shouldn’t you claim it back if you have unknowingly overpaid? Whether you have only worked a part of a year, were made redundant part way through the year, or you are set to leave the UK you may be due some tax back.
The difficult financial situation that many of us find ourselves in means that every penny counts and none of us can really afford to lose an average of nearly 1,000 from our annual salary. You could spend the money on a family holiday, on paying bills, or on updating and upgrading your car.
Most of us place our faith in our payslips, our employers, and the Inland Revenue to get taxes right and we don’t even check that we are being charged the correct amount. If you are part of a PAYE scheme then you could be owed several hundred pounds in backdated, overpaid tax and you should consider starting a tax rebate claim in order to try and get this money back.
How to Calculate Your Tax Rebate Effectively.
A number of taxpayers keep a check on all these issues with the help of a professional accountancy services provider. GM professional accountants help them in managing their accounts and keep them updated with such type of news so that they can file all the documents on time. Several tools are also available in the market, which is capable of estimating your amount for a return. These tools demand an input of all the relevant information for computing your return on the income tax that has been paid. These tools are available for free of charge and are very easy to use.
If you are not willing to use these tools, you can always opt for GM professional accountants who will assist you in this task and provide you with refund estimation in advance. Every nation has different tax policies which depend on various internal factors. Thus, for estimating most accurate amount, you will need to provide certain personal information like marital status, yearly income, number of dependents, age, etc. These factors will define that for what amount of tax refund you are liable. If any exemptions are there, the accountants will consider the factors from above to provide estimations.
Generally, the government decides if any year requires them to provide tax rebate to people who have made more tax due to some erroneous calculations. A rebate is decided for all the eligible tax payers by taking in account their different activities. This figure depends on different policies and from nation to nation. There are different schemes introduced every year in a country based on the current progress. They are provided as a facility to the citizens for cutting down on their taxes. These generally include different forms of investments, donations and various personal factors like if someone has low salary, belongs to armed forces, a widow, etc.
A lot of the above things depend on your accountant’s skill and the way they deal with it. It is always better to file your tax return on time to avoid any penalties which might cost you much more than what you had to pay. While working for your business, you tend to forget these things because of the daily work tasks that require much more attention. If you fail to abide by the deadlines which are set by HMRC, it will become difficult for you to get any exemptions because of your bad record. This is the reason that putting all this in the hands of professional is a much better option.
FreeAgent is a cloud-based bookkeeping solution for freelancers, bookkeepers and also tiny businesses proprietors to handle invoices, costs, pay-roll, income tax return as well as other accounting tasks. FreeAgent additionally uses specialized mobile apps for iphone as well as Android tools.
FreeAgent makes it possible for Tax advisors to prepare up recurring billings which are instantly sent out to clients as suggestions making payments. Consumers can also track costs by uploading the photograph from an expense voucher with the FreeAgent mobile phone app.
The option gives an integrated stopwatch attribute to manage timesheets as well as keep track of employee hours. The user dashboard gives a summary of key organisation metrics from a singular display screen. Company proprietors can easily track billings, price quotes, timetables and venture condition.
Tax timeline functions and additionally offers updates and reminders concerning deadlines and tax dues. FreeAgent utilizes a 256-bit safe and secure outlet level relationship to protect customer records.
Finalising Statutory Accounts in FreeAgent
The FreeAgent software enables you accurately order your companies profit and loss account, notes on the accounts and the directors assessment, your auditors report. With the FreeAgent software we can help you finalise your statutory accounts easily and effectively.
For smaller companies what is needed is the balance sheet and tax returns in order to properly finalise statutory accounts.
Features of FreeAgent Software
Access to Overview FreeAgent is fantastic because that permits you to look at each of your accounting information in one place. The 1st Online control panel is crystal clear, to the point and transparent. When making use of a typical accountant it may be actually tough to gain access to this kind of information without a large volume of email or telephone call back-and-forth.Along with the FreeAgent dash panel, the review is accessible to you whenever you require this.
Fast Access to Information You could quickly track the progress of your service profiles with a glimpse at thedash panel. We assume this simplifies the accountancy process through a very long way. You can find the modifications created to your financial resources on your own.
Choosing an Online Accountant It used to be very important to have your business’s bookkeeper found in a location not far away. Yet today, even more providers are collaborating online, making use of cloud-based innovation to handle their organisation.
This means that place of operation is actually far less from a concern. With cloud accounting, you and also your accountant may look at identical real opportunity data together– despite where you are actually.
The choice regarding where to find your accounting professional definitely comes up to exactly what satisfies your company well. Relying on exactly how you wish to manage the financial resources, your accountant might definitely be located in a different part of the globe. For instance, if you more than happy to collaborate via e-mail, phone calls, video-conferences, or protect. bookkeeping software, then you can be in New York and they might be in London, if your bookkeeper can easily be actually anywhere, you can easily discover someone which truly recognizes the specifics of your service or even market.
Choosing an Online Accountant In London Choosing an online account in London is very essential because it ensures your account, understand the laws of the land and to properly administer your financial records with respect to the national regulations.
GM professional Accountants have offices in Essex, London and Manchester.
How to change my accountant – considering switching?
When it comes to changing service providers especially accountants, most people are often reluctant. Even with poor services and total dissatisfaction, most clients remain loyal to their accountants. This tendency might be as a result of certain perceptions that clients hold with regards to the whole process of changing an accountant.
The notion that changing an accountant is a risky process.
Doubting whether another accountant will be any more effective that the current one.
The notion that changing an accountant is a difficult process.
In this article, I will provide information on how the process is undertaken, offer reasons as to why one should change their accountant and offer a review of GM Professional Accountants.
A clear procedure is provided for within the accounting profession on how one should change their accountant. At this point, I should mention that this process is common and legitimate accountants will take the whole process professionally.
The steps you are to follow as a client when changing you accountant are;
Give your accountant a notice.
This notice is written to the current accountant. It can be in form of an email. It details which companies you would like to move to new accountants. It also provides information on the date in which the move should be completed. In the notice, it is important that you provide information about the new accountant. The notice is important as your current accountant must have a written statement from you before they can move your financial records to another accountant.
Preparation of a professional clearance letter.
After you have provided your current accountant with a notice, your new accountant will usually send a written document to your current accountant in order to request for a professional clearance. The accountant will request for professional clearance as well as any paperwork relevant to you from your outgoing accountant.
As part of due diligence, your new accountant will ask the current one whether there are reasons why they should not take you on as a client. The professional clearance letter also provides an avenue where the current accountant can point out issues they have had with the client. They include issues to do with the client’s honesty with regards to their finances. This serves to point out fraudulent clients.
I should point out that your current accountant may charge you a fee for this service especially when a lot of work is involved.
Transferring records and assignment of authority.
At this point, when everything else is complete and it is all in order, the outgoing accountants will transfer your financial records to the new accountant. This is usually an easy process. After the records have been transferred, you may now assign authority to the new accountants so as to allow them to handle your tax affairs including filing your tax returns.
When should you change your accountant?
In a case where your accountant is not providing tax planning advice, then it is time for a change. An accountant should offer relevant advice on ways to reduce your tax bills. Your accountant should essentially help you pay the least amount of tax you are legally required to pay and not just filing tax returns.
For effective financial administration, communication between you and you accountant is key. Hence, if your accountant fails to pick your calls or takes too long to reply to your emails, then this is a red flag and it is time to look elsewhere.
For a case where your business might have outgrown your accountant, then it is time to get a new accountant. This can be signalled by your accounts becoming too complex for your accountant. It might also be the case that your accountant has outgrown you. This might be the case for a small business in whereby, a very large accounting firm might not offer you the best value for your money and as such you might want to get a different accountant.
Why you should choose GM Professional Accountants firm?
GM Professional Accountants is a well-established accounting firm based in London that offers a variety of financial services to businesses and individuals in various industries. The services include but are not limited to; accounting services and tax management services.
The firm also offers online accounting which increases flexibility for those in far-off areas. Another key aspect of the firm is that it offers adequate small business accounting ensuring that even for a small business, you get the relevant accounting services. The many 5-star reviews on google ratings from satisfied clients portray a well-structured firm where everyone gets the necessary attention ensuring seamless service delivery.
Owning property in the United Kingdom is not easy for first-time buyers. It is important to hire property accountants to offer you insights and advice on your investments. There are many property accountants in the UK. However, selecting the best accountants can be one of the most daunting tasks. It is advisable to compare more than one accountant in the nation before making your final decision. Here is a simple guide to finding a great property accountant in the UK.
It is advisable to read reviews of different property accountants online. Reviews will enable determine whether the services you are about to hire are worth your money. There are different sites that offer reviews on various services including property accounting. Read several reviews in order to make an informed decision. Do not waste time and money hiring an accountant with many negative reviews. If other clients are lamenting about the services they received from the accountant then you are equally not safe. Only hire services of an expert with positive reviews if at all you care about your investment.
Yellow pages offer information on different services across the United Kingdom. The platform has contacts, address and other details of property accountants. You can check the contacts to find property accountants near you. Once you have selected several accountants, you can consult them to find out the kind of services they offer before you make any move as far as property ownership is concerned.
With the growth of technology, property accountants have also opted to create their presence on the internet. Google has an endless number of property accountants who can come to your rescue whenever you want assistance. The accountants offer different services at different costs. However, it is wise to conduct proper research before accepting to work with any of the accountants you will find online. A good number of Google property accountants promise what they do not deliver. Read what others are saying about the accountant you are about to hire before you determine your next move. Failure to conduct research is likely to make you land someone who will fail your investment with poor analysis. If you decide to hire an accountant from Google then you should consider the following aspects
Academic qualification is among the aspects you cannot afford to ignore when hiring a property accountant in the UK. You need to find someone with the right academic qualifications. A good accountant is one who studied in an accredited institution. He or she should also be a member of different chartered accountancy organisations in the UK. The accountant needs knowledge to advice you on capital gains tax and income tax. This will only be possible if he or she is qualified.
Find out how long the accountants have been offering services in the UK. An experienced accountant is better placed to offer high-quality services than a new entrant in the field. This, however, does not mean that new accountants do not offer great services but it is hard to determine the same.
The cost of hiring an accountant varies across the United Kingdom. Find out what you will end up paying in reference to the quality of services before hiring one. You can compare several service providers before you select one for your firm.
GM Professional have offices Located in London, Manchester and Essex.
Top 10 Profitable Businesses to Start From Home in the UK
Starting a business in the United Kingdom these days is not as difficult as it used to be. This is because of the rise of online commerce and all the business tools and resources that are associated with it. And of course, there’s the fact that the capital needed to start a business venture from scratch has significantly gone down. With just a few thousand pounds, you can start a small business and launch it within a short period of time. If you’re planning to start a business anytime soon, below are some venture ideas that you can explore. Also included in the list are the estimated profit percentages associated with the venture.
1. Real Estate Agents (15.19%) – All you need to start a real estate brokerage firm is an agent or a brokerage license. The returns can be very lucrative especially if the economy is doing well and the value of properties go up.
2. Ecommerce Website (15.10%) – The biggest advantage of building an ecommerce website is that you don’t need much to launch it. You can have a complete website built and launched for under 100 pounds. Another benefit of ecommerce is that you can choose to either sell other people’s products through affiliate marketing or you can create your own products and keep most of the profits.
3. Automotive Rental or Leasing (14.55%) – With more people getting disenfranchised by traffic and commuting, now would be the perfect time to offer automotive rental services. You can start with a few cars and when things go well, you can slowly expand your services.
4. Legal Services (14.48%) – This has very low operating costs. And if you’re good, you can accumulate a lot of repeat clients. You can also branch out to notary services.
5. Industrial Machinery and Equipment Rental (12.58%) – This can be very profitable especially if you live in an industrial region where there’s a boom in construction projects. The only drawback of this business is that you are going to need a huge initial capital.
6. Business and Management Consulting (12.05%) – Business consulting is in huge demand these days especially with the rise of online commerce. There are companies and human resource managers out there who badly need advice from business consultants.
7. Design Services (11.4%) – The creative industry caters to a huge market. You can focus your attention on a specific niche like graphic design, industrial design, product design, or illustration.
8. Office Administrative Services (11.3%) – Businesses and companies from all over the world are always looking for third parties to manage their administrative operations. You can offer services like record keeping, billing, or even financial planning.
9. Social Media Management Services (11.2%) – Social media is big business right now. Social media presence is a very important aspect of marketing these days that it has grown into a separate industry. Starting a social media marketing firm is easy and you don’t need a lot of capital.
10. Technical Consulting Services (11%) – Almost all businesses these days are in one way or another in need of technical support. This is where you come in with your technical consulting services.
When it comes to returns on your investment or capital, these are the most profitable business sectors in the country today. Needless to say, you should trail your sight on these sectors if you have plans of starting your own business. You have better chances of achieving success if you focus your attention on these sectors.
Let property campaign helps landlords bring tax affairs up to date
If you are a residential landlord in UK and you want to get your tax records straight and accurate, then the Let Property Campaign is for you. HMRC believes that all people should get an opportunity to pay the right amount of tax and this campaign is for those who have some inaccuracies in their tax records. If you are a landlord and you have some undisclosed income, then you should immediately contact HMRC regarding it. They will give you a time period of 90 days to calculate all your undisclosed income and finally pay what you owe.
Why it’s important to join the campaign?
This is a great opportunity to reveal your undisclosed income even if you have not disclosed it intentionally. The advantage is that HMRC is allowing you to tell what you believe how much you should pay as penalty. In case it was unintentional, then you may not need to pay at all. And don’t worry about the amount of penalty. If your financial position is not strong, HMRC will allow you to pay in instalments.
Tax Advisers on planning and dealing with Capital Gains Tax on Your Home
Capital gains tax or CGT is the tax on profit paid when one disposes of an asset. It is charged on profits made from selling any property that is not your residential home. Fortunately, you can waive this tax, and a London expert on tax matters shows you how.
The amount of CGT charged in the UK on assets differs according to certain categories. For individuals, the capital gains tax rate ranges between 18% and 28% of the amount gained on disposing of an asset. Trustees or representatives of say a deceased person is required to pay 28%of the gains made from disposing of assets they are trusted with or representing.
Any gain that qualifies as Entrepreneurial Relief will be charged 10% on gains. Private companies not based in the UK will be charged 20% on gains for disposing of assets that were owned by the UK. Property whose Annual Tax on Enveloped Dwellings has been paid will be viable for a 28% capital gains tax.
Annual Tax Allowance or Exemption
Residents in the UK are eligible for tax-free allowance on CGT. This tax relief is applied annually and under certain conditions. Individuals who are domiciled in the UK qualify for the annual tax exemption on gains. Trustees or representatives of an estate previously owned by a deceased individual also qualify for tax exemption. Thirdly, trustees of disabled persons also get an annual tax relief on asset gains.
On the other hand, there are individuals or groups that are not eligible for an annual tax-free allowance in the UK. This includes any individual who is not a permanent resident in the UK but owns assets in the UK. Private foreign companies holding assets on UK soil also do not qualify for annual capital gains tax exemption. Anyone who has claimed remittance basis from a foreign country instead of the UK will also not qualify for annual exemption on capital tax gains.
Annual Exempt Amount
The annual exempt amount is a marked amount which qualifies individuals and companies for annual relief on capital tax gains. This amount varies with each year depending on revisions made by the UK government. For the period 2016 to 2017, the annual exempt amount on gains made by individuals was £11,100. This amount has been revised to £11,300 for period 2017 to 2018. For trustees, the annual exempt amount for 2016 to 2017 is £5,500 which will increase to £5,650 for the period 2017 to 2018.
To avoid capital tax on the gain, individuals and trustees must ensure their total annual profit does not exceed the set annual exempt amount.
Other Ways to Avoid Capital Gains Tax
Capital gains tax will only be applicable when an individual or trustees sell property that is not their own residential home. Selling anything else like a business, second home, or shares automatically mandates the paying of capital gains tax.
Capital gains tax on a second home applies where one is selling a buy-to-let home or a resort home. The capital gains tax paid will be high but one can make it lower. Once a profit or gain has been made, deduct expenses like legal fees, stamp duty, real estate fees and any other expense. Secondly, deduce your allowance from the remaining amount. Calculate the gains tax on the net amount using your income tax status; this will likely be between 18% and 28%.
Letting relief is another way to avoid paying capital tax on gains. This relief is offered on any gains made from selling property that has been the taxpayer’s home for a period of time. This relief also applies if the said property was once rented out as residential accommodation. However, capital gains will be charged albeit it will be a smaller amount of what would have been originally charged.
The regulations on capital gains tax keep changing each year. It is important to consult the advice of tax accountants to calculate how much you should pay or whether you qualify for tax relief.
Uber is a leading transportation company, operating in 633 countries worldwide. It has its headquarters in San Francisco in the United States. The company mostly operates via the mobile app and allows users to book vehicles via the application. Also, independent, self-employed drivers can register on the app or website and become a member of Uber community. They allow attractive rates per miles and also flexible timings as per driver preferences. The company has got firm roots even in the United Kingdom.
What are the allowable expenses for Uber Drivers?
Knowing the list of allowable expenses is important as it will reduce your tax bill. You need to pay tax on the amount earned minus the allowable business expenses. So make sure you keep a note of these.
Mileage claim – You can do this claim if you own the car. The rates are 45p for the first 10k miles and 25p thereafter. If you make this claim you are not eligible to claim for the cost of the car, servicing, and insurance.
Car purchase – If you purchase a new vehicle, you may able to claim it all (depending on the private use) or the cost over a few years. Rates are as follows :
75g/km-130g/km (CO2) you will get 18% capital allowances.
130g/km or more you will get 8% capital allowances
Car lease payments – You can redeem the monthly cost of the lease as well as fuel cost, servicing, insurance, and repair cost.
The four major bookkeeping requirements for tax management of an Uber driver are as follows:
1. You must register yourself as a self-employed individual on the HMRC website,
2. Make sure that you keep the receipts and expenses of all the business transactions handy.
3. Complete self-assessment of the income and expenses must be done prior to 31st January of each year.
4. Any pending tax or National Insurance must be paid before the due date of 31st January.
However, being an independent self-employed driver makes it difficult for some people to handle their taxes. Few drivers are not educated enough about the taxes and other legal guidelines of bookkeeping. Due to this, they may land up in paying extra money or some kind of penalties as well. To avoid such a situation, it is very much important to understand the tax mechanism and hire a proper accountant for your needs.
How to find a good accountant for your business:
There are several accounting firms as well as private accountants that provide accounting services for Uber drivers to manage their accounts in the UK. As there are lots of receipts and expenses on a daily basis, the bookkeeping process is little tedious, but if the driver maintains a proper logs or file of the receipts then it can become very easy.
Many of the accounting firms also provide Mobile apps to the uber drivers to record their transactions in an easy way. Major responsibilities of the firms include:
Helps in creating profile in HMRC
Does auditing to judge the real profit of the driver
Can provide mobile app for the HMRC Self-assessment, Housing benefit applications as well to know your tax credits
Keep track and note of all the business income and expenditure
Register details of the vehicle mileage and other details of the vehicle
Provides accounts that are ready to be submitted for filing HMRC Self-Assessment return
Gives advice on record keeping
Helps in Tax investigations.
The cost of hiring an individual accountant for tax consultation in the UK can be less than 250 GBP, however, for companies; it can vary between 600 to 650 GBP. The services provided may vary as per the pricing. You must research the company or individual over the internet properly and read reviews and ratings before hiring for your tax management.
Determining an accountant for your business is a significant and complex choice. You aren’t just hiring a number cruncher; you’re hiring an essential business partner as well. So, as with any business partner, you must make sure that they understand your business.
Online accountants for self employed play a vital role in the modern day business world, as they offer many vital services such as completing your tax returns, bookkeeping, cash flow projections, payroll, and even online accounting. If you run a small business, making the right choice is particularly important because at the outset your accountant is likely to be your only professional adviser.
Well, don’t worry – this article is all about imparting the key steps towards finding the perfect accountants. You may think it’s as simple as looking one up in the phone book, but the brutal truth is that just about anyone can call themselves an accountant without any real qualifications. Finding a bona fide, experienced accountant takes much more effort.
The following steps are designed to cut through the dross and find you the perfect accountant:
– Ask for referrals to accountants from other business owners.
– The Institute of Chartered Accountants, the Association of Chartered Certified Accountants, AAT, and The Chartered Institute of Management Accountants – these are seals of approval that you should insist on finding. If your accountant can’t produce any of these on demand, then look elsewhere
– Meet your accountants in person for one-to-ones – do this several times before you make a decision. Ideally, you should be able to communicate freely and easily with each other.
– Outline your current and predicted needs of your business so your accountant can meet them and synchronise their efforts.
When it comes to cost – be cautious. The first consultation, where you begin ascertaining whether or not they’re right for you, should be free. Most accountants offer this service, but it’s always good to check, just in case. Also, always decide upon a fee limit early on with your accountant – if they only seem interested in making money for themselves, they aren’t right for you. Also, make sure they are capable networkers, able to provide you with contacts and arrange meetings with integral supporters such as suppliers, bankers, and customers
In addition to your accountant’s financial knowledge, you can also have personalised cash flow projections, have your bookkeeping and payroll managed efficiently and provided important advice. Fuelled with your data, there’s no limit to what your accountant can do – it’s just up to you to find one with the right skills to match your business.
Setting up a day-by-day accounting system, however, should be a priority, whether it’s merely compiling an organised ledger system or a more sophisticated computer programme. Your accountant should be ready to assist and advise in setting this up.
Never underestimate the power of the accountant in your business. Their knowledge of finance and business will no doubt exceed those of the first-time businessperson, so don’t underestimate the power they have. Treat them with respect, but also let them know where their responsibility ends, after all, you’re the boss.
Accountants are a regular benefit to your business – they’re experienced, capable and potentially crucial in the running of your business. Without a proper accountant, your chances of financial survival in an increasingly competitive market drop significantly.
A 1100L tax code means that your tax-free personal allowance is £11000. Simply put, that means £11000 of your earnings will be paid untaxed throughout the year, in equal increments over 12 months. The “L” refers to your status as a regular employee who is eligible for that tax-free personal allowance. Any income above £11000 will be taxed at the standard rates, and, if you make over £100000, your tax-free personal allowance may be smaller than £11000. Any income over this tax-free personal allowance, but below £33000, will be taxed at the basic rate of 20%.
What affects my tax code?
Many factors affect your tax code, including the aforementioned tax-free personal allowance. First, your tax-free personal allowance will be calculated; next, any untaxed income or job benefits with monetary value are added up, and that amount is deducted from your previously determined personal allowance. The last digit of this number is removed–hence, £11000 becomes 1100. The ending letter (L, for example) refers to any situation which may affect your personal allowance, such as the Marriage Allowance, or being taxed at Scottish rates.
Benefits in kind
“Benefits in kind” is the term for those job benefits with monetary value which are not included in your salary, such as childcare or a company car. As mentioned earlier, while these benefits are not included in your salary, their value will be deducted from your personal allowance.
Claiming tax relief for expenses is one way to ensure you are paying only as much as you truly owe in taxes. “Expenses” in this context refers to items or travel purchased solely for work use, such as business travel. It is important to note that you cannot claim tax relief for expenses your employer has reimbursed you for, or for items purchased despite your employer providing an adequate alternative. To claim this tax relief, use your Self Assessment tax return if that is already your usual practice, or use form P87 if you do not file a tax return for any claim below £2500. If you wish to claim an amount over £2500, you must use the Self Assessment tax return.
What is the the tax code for 2017-2018?
The 2017-2018 tax code is 1150L, meaning your tax-free personal allowance has been raised! Additionally, the “basic rate limit,” or the amount of your income taxed at the basic rate of 20%, has been raised to £33500 from £33000
What if I have two jobs?
If you have two jobs, one job will be classed as your “main employment,” and you will receive your tax-free personal allowance in full. For your second job, all of your income will be taxed at the standard rate of 20% up to £33,500. This job will be considered your “secondary” job. If your income at your “main” job is less than your tax-free personal allowance, then you may request your personal allowance be distributed between both your incomes, or you might request a refund at the end of the year (when you file your tax return, if you do so).
How to choose the best CPA online – 5 Things To Consider
It is always a challenging task to choose a CPA for your business from the
deluge of accountants available online. There are around 76,000 qualified accountants in UK and this will add to the dilemma of choosing the right one. London has some of the most renowned accountancy agencies but you need to be aware of certain steps in order to hire the right CPA for your company.
If you want to ensure that you are getting the correct tax advice, do not forget to check the experience of the accountant. It is important that the CPA has worked with similar sized companies and had job responsibilities that were at par with the job role offered. Accountants will also be only valuable to the company if they have worked in similar industries and can provide expert advice on the tax system. CPA’s have to also keep abreast with the latest tax laws running in the country and have to report periodically to accountancy associations about their development.
You will not always depend on employees but this is not an option where it comes to choosing an accountant for your firm. You need to trust your CPA inside out to be able to confidently grow your business. Accountancy embezzlement is not totally unheard of and needs to be paid attention to. You should perform a thorough background check via Google or yellow pages etc. Be extremely wary and alert when you are interviewing the person. You need to establish beyond doubt whether he is going to be with your company for the long term.
Anyone can call themselves an expert in the UK tax system but you will not hire them unless they possess technical qualifications in accountancy. Usually everyone starts with the AAT qualification and then gains experience. While they climb the career ladder, accountants can get higher qualifications to expand their job roles in bigger companies. Once the CPA has a basic qualification, they can register into a training contract with an ICAS authorised employer to become a chartered accountant. It is highly prestigious for a chartered accountant to follow this route.
4. CPA reviews
When trying to find an accountant online, you can always check the reviews that they have acquired from various firms/individuals they have worked for. There are many dedicated websites that review the accountants and you can find valuable information in these reviews. There is of course an option to choose an agency instead of an individual and there are again review websites for them. Glassdoor.co.uk, yell.com, ukaccountancyfirms.co.uk/reviews etc. are websites that will help you to choose a high calibre CPA. The reviews will contain a lot of polarised content so be alert in making your decision.
Always request the CPA whom you have shortlisted to provide the necessary references of people. You can then conduct a thorough investigation into the previous employers of the CPA. Prevention is always better than cure so it is important to interview the references provided and check for consistency in their information. References can be a good judge of one’s character because you can always tell a person by the company he/she keeps. Also, in the event of a mishap, you can always contact the references for more details.
It will definitely be to your benefit to keep in mind the above factors while you search online on search engines like Google, Bing etc. for the right CPA for your business.
THIS IS WHY YOUR SUBWAY SANDWICH WILL COST YOU A LITTLE MORE THANKS TO NEW TAX
Subway has been hit by the new taxation laws in UK, where any hot and toasted subs will be imposed a 20% VAT. Everybody knows that Subway is one of the favourite stopovers for quality, fresh, well-wrapped and hot fast food that now goes for an extra cost thanks to new VAT law that was proposed by George Osborne in 2012.
Subway’s effort to protest the new imposed charges has been in vain, even after trying to re-brand their toasted subs to “hot bread sandwiches’ in order to protect the interest of their customers without increasing the price. A spokesman from subway said: “We have been trying to challenge this VAT law since 2012 in order to protect our customers. Subway franchisees have been absorbing the VAT cost, charging a single price for food, whether hot or cold or eat-in or take-away.”
A standard 6 inch sub could cost as much as £3.69 before the introduction of “pasty tax” on VAT. This means that as per now, the customer who wants their sub to be heated up should add a 20% (equivalent to 69p) which sums up to £4.18 for a single sandwich. Having a sandwich toasted has become a standard procedure to many customers who expressed their unhappy thoughts about the new prices on social media. “Absolutely ridiculous that Subway now charge for toasted bread.” a customer pointed out on twitter. “What next? Charging us to use the bathroom? #subway”, another one expressed his anger. It should not be a surprise that some customers have not noticed about the price changes, saying that they are just consuming their subs. “Has there been a recent change in VAT law I’m not aware or are Subway just taking the ****?”.
A customer on HotUKDeals said: “Just saw a sign in my local Subway saying they’ll shortly start charging 20% VAT if you ask for your sandwich to be heated up,”.
“Am never going again” said a fuming customer concerning the new tax rules.
Another one commented “What is this all about? Bold strategy from them. It’s the quickest way to annoy people.”
The rise of charges on heated subs has forced subway to lower the prices of products that do not attract VAT. “Currently Subway stores in the West Midlands are testing a different structure for menu-pricing. The dual-pricing menu is similar to what customers see on other high-street chain menus, which ensures that customers pay the lowest price for products which do not attract VAT.” Subway spokesman said in a statement.
This new tax rules which were made effective as from 9th August 2017 are said to be politically affiliated. It came as a surprise to the Subway customers across all the cities in the UK who are in need to refuel when lunchtime approaches. Since there is nobody has the will of taking a cold meal deal, they perhaps have no option than to have their sandwich or sausage roll toasted and warmed. The pasty tax (2012) also indicated that you have to pay some extra cost if you have to eat in. in contrast to this cold food are not taxed. This could have an advantage to only those who have their sub as a take away to warm in their homes.
The introduction of the new VAT rules on hot and toasted sandwiches is just an indication that customers will lower their demand on the product and some will even look for other substitute products. An alternative idea that subway can opt to do in order to retain their customers is to improve the quality of their sandwiches and introduce some offers. It is clear that this pasty tax is against the will of people.
Although paying less tax is the desire of every tax payer, it remains a dream to most of the taxpayers in the UK because tax avoidance has been limited to multi-national corporations; not small businesses. Besides, findi
ng information on how to reduce your tax bill may be tricky. However, all is not lost as far as saving tax is concerned as there are various practical ways for individuals and small businesses to minimise tax. One way to get information on how to save your taxes is to consult tax experts such as tax accountants. The following are applicable tax saving mechanisms you can apply:
i). Top Up Your Pension
This involves contributing more into your pension scheme. This should be done by your employer, who should be responsible for deducting the pension from your salary before it is taxed. For instance, if your yearly earnings amount to £50,000 and your yearly pension contribution is £3,000, then your taxable income will only be £47,000. However, if you decided to contribute only £1000 a year towards your pension, your taxable income would be £49,000, meaning you would pay more tax.
ii). Trust A Spouse
Trust is a major building block of your relationship with your spouse or civil partner. Likewise, trust can be handy when it comes to saving your taxes. All you need to do is to determine who pays lower tax between the two of you. Moving your savings into the name of the spouse or civil partner with the lower tax rate helps you to save a great deal. For instance, if one of you is under high tax rate and the other is a basic taxpayer, it would be economical to move your savings into the name of the spouse or partner that pays taxes on the basic rate to reduce your tax bill.
iii). Dividend Allowance
Dividend allowance refers to a certain amount of dividends that may otherwise be taxed as an income. To be precise, it is tax exemption for up to a certain amount of dividend income. Dividend tax allowance policy in the UK came into effect in April 2016 to replace the previous dividend tax credit. Each taxpayer in the UK who gets dividend income is entitled to this tax exemption. This exemption is not in any way dependent on the amount of non-dividend income you get. Worthy noting is the fact that your first £5,000 dividends from stocks and shares is not taxed. This simply means that you can be exempted from paying tax on up to £10,000 per year as a couple.
iv) Claim Expenses
Claiming expenses helps you to lower your tax bill if you are either a private landlord or a self-employed individual with small businesses. In this case, you have the liberty to deduct expenses from your income before paying tax. While your expenses as a self-employed income earner may include office service, stationery, equipment repair and car services; mortgage interests and property maintenance may constitute part of your expenses as a private landlord.
Saving tax may prove crucial if you are to reduce your annual expenses and maximise your income. Whether you run big or small businesses, or you are an employee, getting it right at all times is of paramount importance. It is therefore safe to take full advantage of these tax saving tips and apply them to the a tee. Additionally, professionals like tax accountants are handy when you are in need tax saving information- make use of them too.
As necessitated by the Companies House and the HMRC, all limited companies registered in the UK are required to arrange financial accounts to be submitted annually by their ARD, or accounting reference date. The ARD is the ending date of the 12-month financial year for the limited company. The HMRC uses the annual accounts to determine the company must pay in Corporation tax in relation to their taxable profits. What are Statutory Accounts? A statutory account is a series required accounting documentation that is submitted yearly for the purpose of corporate taxation by the HMRC. Furthermore, it is often used to confer to shareholders the health and profitability of the company, or indeed, lack thereof. A statutory account is comprised of a number of elements including a balance sheet, a profit and loss ledger, a cashflow statements, notes, and a director’s report. Below, we go into a bit more depth regarding each of these elements.
The Difference Between Management and Statutory Accounts To the unfamiliar eye, management and statutory accounts may conflate. The primary and most important difference is that Statutory accounts (as indicated by its name) are mandatory. Management accounts, while useful and a key aspect of running a well-maintained and profitable business, can be used (or not) in any way one sees fit. Statutory accounts, on the other hand statutory accounts must conform to strict guidelines set forth by the relevant authorities.
This being the case, statutory accounts are follow a generalised template which make it easier for both shareholders and the HMRC to understand. These statutory accounts are not particularly useful for internal use within the company as they are produced for the purpose of general understanding of financial standings by third parties (as opposed to problem driven, detailed internal measurements of a management account). Another typical difference between management accounts and statutory accounts is frequency of which they are produced. A once a year statutory account is typically not enough for a director or management team to glean insights into the ongoing financial health of a company. Management accounts are typically created quarterly or sometimes monthly, depending on the size of the company. Management accounts allow you to adjust the current inner workings of the company and plan strategies for future financial success.
how to prepare statutory accounts
Components of a Statutory Account As mentioned previously, a statutory account must contain all information required by the HMRC. Firstly, basic company information must be detailed. This basic information is relayed in the Cover Page, Contents Page, and Company Information page, before the separate accounts sections. 1) The cover page includes the name of the company, registration number, and the company’s year-end date 2) The contents page, as the name implies lists the section and page numbers of the separate sections of the statutory reports 3) The company information page will list the directors, accountant, lawyers, bankers and registered of the company. Once these formalities are taken care of, the following accounting documentation should be included. Balance sheet- A balance sheet is a ledger that indicates all of a company’s assets and debts up until the last day of the fiscal year. The balance sheet must have the name and signature of the director in order to be accepted. Profit and Loss Account-
The profit and loss account, in the simplest terms, expresses profits by deducting costs all revenue for the financial year. It is often subdivided into categories such as revenue my category or expenses for travel (for example) for easy analysis. The number at the very bottom is the most important, indicated net profit for the year. This is typically the earnings before interest, tax, depreciation and amortization (often shortened to the acronym EBITDA). Cashflow Statement- As indicated by its name, a cashflow statement is indented to document the flow of money into and out of a company. This can include returns on investment, money from operating activities, taxes, capital spending, and dividends. Notes- Notes may accompany many of the figures in the various accounting documents. The notes are intended to provide context to the otherwise static numbers. Director’s Report- The Director’s Report is the director’s opportunity to address management and shareholders and explain the numbers included in the Statutory Accounts. The director may take the opportunity to reflect on successes, shortcomings, and layout the vision for the upcoming financial year. Small, Dormant, and Micro-Sized Companies’ Account Exemptions Though all companies are required to file statutory accounts as a component of the Company tax return, the size and type of your company may offer some exceptions. For small companies with a turnover of less than £10.2 million, less than 50 employees, or £5.1 million or less on their balance sheet, an abbreviate version of the accounts can be filed to Companies House.
Micro entity accounts template
These abbreviated statutory accounts are comprised of only the balance sheet accompanied by notes. The directors report is optional and an exemption can be filed to prevent the auditing of company accounts. If the company has a turnover of less than £632,000, £316,000 or less on its balance sheet, or fewer than 10 workers, it qualifies as a micro-entity. Micro-entities are able to prepare even simpler accounts, send only balance sheets with even less information, and benefit from the same exceptions as small businesses. Dormant companies also qualify for exceptions. A company is considered dormant if it has not completed any significant transactions during the financial year, not including filing fees paid to Companies House, fees resulting from penalties incurred for late filing, or money paid for shares during the incorporation of the company.
If the company is both dormant and small, only abbreviated accounts need to be filed and accounts are not required to be audited. Limited company accounts template and statutory Accounts Example Using the internet, it is possible to find pre-made accounting templates to assist with the creation of your Statutory Accounts. One free and useful site can be found here. A comprehensive example of how a well drafted statutory account filing should look like can be found here. Limited Company Accountants for Small Business Although the process is generalised, filing annual accounts for a limited company can be time consuming and costly. Many companies opt to utilize the services of limited company accountants to ease the process. For a small fee, a qualified specialist can aid your limited company with comprehensive knowledge of accounts processes. This also shields you and your company from costly common mistakes that may cost you in both precious time and avoidable fees.
Though it is not mandatory to open a separate limited company bank account for your organization, it makes the bank transactions a lot easier in the long run. Using a different business account allows you to distinguish personal finances from the company’s. Otherwise, different problems may arise. For example, since having company money in your account is taken as borrowing from the company, the account will be in credit; this can cause increased tax liabilities. It may even be illegal to borrow money from the company. Certain tax benefits intended for businesses may not be provided for such accounts as it may be said that the money (and the charges paid for it) is not in the company’s name. Another potential hazard may occur if the company becomes insolvent and had an overdraft that could fall onto the shoulders of the person whose account is being used.
Steps to Opening a Business Account
• Let’s start at the very beginning and assume that you are thinking of creating a limited company. The first step would be to open the company.
• Next, you will have to get the Certificate of Incorporation, which is a license granted by the government and allows you to form the organization officially. This certificate is issued after the company is active and may take a while to obtain.
• Select a bank where you will open the limited company account and book a meeting with them.
• The meeting requires you to show documentation proving your identity and address, where you have to fulfill the bank’s requirements in order to be able to open the account.
Banks will ask you to provide the following documents: (Note that people applying from other countries to the UK will have to give notarized translations of their national ID, and other documents)
• Passport, national ID, or a driver’s license with photo – this proves identity and will be required of all the named company directors
• A recent bank statement, council tax statement, or a recent utility bill – this provides proof of address
• Company details such as the complete business address (with postcode), contact details, Companies House registration number, and estimated annual turnover are needed
• Personal financial documents may be asked for as proof of clean credit and banking history (Un-discharged, bankrupt, or disqualified directors cannot open a limited company account)
Though you may prefer to stick to the bank you are already using, you should consider several before you go ahead. You can try the Big Four that dominates UK – HSBC, Barclays, Lloyds, and the Royal Bank of Scotland. Look carefully at the fine print and, before choosing, take into account the following factors:
• Banking fees and charges
• Competitiveness of interest rates
• Availability of mobile or telephone banking services
• Availability of online banking services
• Incentive offerings
An overwhelming majority of UK businesses fall into the small and medium enterprise category (SME), i.e. they employ less than 250 people. If you’re thinking of joining them, you should open a limited company bank account. Not only is it similar to opening a personal account, it will help you, and the company, avoid the pitfalls of mingling business and personal finances. Also, choose the bank that works best for you.
Run your business in a lucrative and hassle-free way by hiring the accountants from GM professional accountants
Are you wondering, “How can I find skilled accountants in Ilford near me?” GM professional accountants is near you. Yes, ours is a leading Accountancy firm in Ilford, London. Since the start of our firm, we have been offering individualised service to local businesses of all sizes. This means that if you are the owner of a small business, you can also get our professional services at the best prices and find expert accountants near Ilford lane.
Why does choosing our Accountancy firm your best option?
Finding small business accountants in your area is not all a difficult task. They are always available to offer you a variety of services, including accounting and tax return services. Our skilled accountants will make sure that you will get a quality, competent service at a competitive price. GM professional accountants is always ready to advise you for the growth of your business.
You can completely count on our professional accounting services. This is because we have vast expertise, as well as experience in the Bookkeeping and Tax industry. At GM professional accountants, we focus on your business accounts as well as on offering you a practical solution to aid you as well as your businesses and we specialise in capital gains tax.
Our firm has a well-organized team of highly qualified tax accountants near Ilford. All of them have vast years of combined experience in the industry. They will suitably advise you on the way to make your business accounts keep simple. They have the required skills to cut your tax bills. Thus, you can rest guaranteed that you could save a considerable amount of dollars during your tax return. This will allow you to save your hard-earned money as well as your time.
At our firm, all our qualified accountants near Ilford are well versed in accounts practices as well as in tax laws. They will steer you in the right way to develop your business. They will also suggest you the ways to improve profitability, growth rate, cash flow, as well as to boost your business value. Thus, you can rest be confident that you could develop your business effectively.
Furthermore, we can assist your business to develop at a fast pace by practically offering suitable tax suggestion in a timely way. We are the only service providers in Ilford, offering all sorts of tax-associated services. Our knowledgeable accountants will offer you a tailored service, which you cannot find anywhere in the Ilford area.
Our variety of accounting services
As one of the leading accountants in Ilford, we will do our level best to incorporate our expertise and experience for the welfare of your business. Our courteous, professional accountants will do their best to aid you greatly in saving your time as well as your cash through their hands-on business suggestion. We can assist you in finding the easiest way to reduce the overheads and costs. This, in turn, will allow you to charge your valuable customers less. It will also allow you to compete capably with your business competitors.
If you need any additional Accounting services, pertained to your business, feel free to contact GM professional accountants. As we are always available to help you, you can contact us on 0208 396 6128
Capital gains tax (CGT) by definition refers to the tax levied on any gains accrued as a sale of any asset. The assets include but not limited to, inheritance, certain gifts, shares, heirloom, sale of business owing to the dissolution of a civil partnership or divorce transfer or even a second property. In this article, we shall focus on the CGT from the perspective of residential property.
CGT – Some preambles:
The CGT levied depends both on the gains from the asset and your income. However, the capital gains below a cut-off limit are exempt from CGT, the current cut-off is positioned at £ 11, 100 or lower per year. The gain is calculated by a simple formula of subtracting the original purchase price of the asset from the Sale price.
CGT for Expats:
Our property accountants on capital gains tax have highlighted that Prior to April 6, 2015, British expats and overseas investors were exempt from the CGT in the case of sale of a residential property. However, with a new rule coming into effect, this exemption stands withdrawn. Moreover, this was considered as a loophole in the British taxation system. Overseas investors and British expats were known to have a penchant for investing in buy-to-let properties and generating snug incomes out of the investment.
The new rule implies that any gains made by selling a property in UK post April 6, 2015 may incur a CGT in tune of 28% of the accrued gain. The rate of 28% of the gain is chargeable in case the gain and the income tax are above the minimum cut-off. In case you fall in the category which is below the minimum. GM professional accountants provide expert advice on capital gains tax on uk property.
cut-off, the CGT would be levied on you at the rate of 18%.
CGT on assets acquired through Inheritance:
There are a different set of rules for UK domiciles and non–domicile as far as the Capital Gain Tax on inheritance is concerned. By definition, a person who out of the last 20 years has lived in the UK for a minimum of 17 tax years qualifies to be called a UK domicile.
Inheritance below a cut-off value is exempt from the CGT. Only inheritance evaluated at more than £ 325, 000 or higher attracts CGT. However, to calculate CGT, this cut off amount of £ 325, 000 is deducted from the total evaluated value of the inheritance. Any amount over and above this minimum threshold attracts a CGT at the rate of 40%. Evaluation of the inheritance is inclusive of all the assets (including the assets that are held in trusts), including but not limited to, money, property(ies), any gifts that were given during the period of seven years prior to the death; gifts to trusts or companies over the lifetime (some exceptions are applicable to this particular category).
A non-domicile pays the Capital Gains tax on the assets situated on the UK soil only, in contrast, the domiciles are liable to pay CGT on all assets acquired through inheritance, they may be anywhere in the world.
Private Residence relief and letting relief:
– Private residence relief (PRR): This relief is applicable on the sale of property that has been your principal private residence. In other words, you occupied that property as your own residence. There are a few qualifying conditions for claiming the PRR, starting with the condition that the house was not bought for the purpose of making gains. The house was used as a primary family residence for a stipulated duration during ownership. Inclusive of everything the total area of the house if below 5000 square meters. No part of the house was used for Business or part of the house was sub-let (single lodgers are exempt).
– Letting relief: This relief on Capital Gains Tax is applicable in the case of a property that you used as your private residence for a period of time and then you let it out to someone else at the applicable commercial rate. The foremost requirement whilst claiming the private residence relief is that the onus to prove that you actually lived in that particular house is solely on you. Some investors of buy-to-let category of properties in their quest to prove that the particular house in question was used by them as a private residence, try to adopt dubious means; a practice that shall be avoided at all costs. There exists a list of questionnaire that allows you to prove that the let-out property was also your private residence for a period of time.
UK laws allow you to claim both the private residence relief and letting relief.
Calculating Private Residence Relief and Letting relief:
There is a very simple formula for calculating the PRR. The calculation is done using:
PRR = Total Gain X (period of occupancy / Total period of ownership)
The period of occupancy is calculated by adding 18 months to the time you have actually lived in the house.
The letting relief is capped at a maximum of £ 40, 000.
Making a good profit is one of the biggest motivators for any business owner. Yes, there are various reasons for why people start their own businesses. Money isn’t the only factor, but it is an important factor nonetheless. So imagine this – you have set everything up and it’s going great. You are driving in more and more sales as the days go by, and the earnings graph is through the roof. Now the next and very important thing that you need to consider is income tax. Taxes are an inevitable part of learning. We all have to pay them. It is common knowledge that there is a slab on the amount of tax you pay depending on how much you earn in a year, apart from other factors like the nature of your business/profession, your gender, age, etc. Nobody is ever taxed more than what they are supposed to pay as per the prevailing rules.
What if someone told you that there are ways in which you can legitimately minimise the amount of tax that your business pays by investing or diverting it elsewhere? That would mean less tax paid and more money used to push your business forward. So here are the top 3 tips from small and limited company accountants on saving income tax. Salaries to Director and Family Members Director’s salary is one of the most common tax saving methods employed by businesses.
It is common knowledge that the director takes a certain portion of the profits at an agreed ratio. Showing this amount as salary, even up to the exempt amount, can help save tax on the same. The same goes for salaries to family members. Most businesses start off with the family members helping out or joining in at key positions. The profits that are paid to them should be shown as their salary for gaining tax benefits on the same. Vehicle Usage Using a company vehicle for private purposes attracts tax under Class 1A National Insurance, which will have to be paid for by the user of the car. On the contrary, using a private car for official purposes helps in getting a tax exemption and furthermore, allows the user to claim certain benefits depending on the extent of the car’s use.
Capital Assets and Capital Allowances on capitalising assets and depreciating them over their useful life offers some tax exemptions on the same. Assets are capitalised instead of being recorded as expenses because they offer some benefit to the company over a period of time. Recording items such as electronics, machinery, furniture, etc. as fixed assets and depreciating their value at a fixed rate every year gives the company long-term tax benefits. There are many ways for you to legitimately reduce the amount of tax that you pay on your business income. It is always a good idea to consult your own accountants or any accounting firm to understand the smaller details so that you can take better decisions. Your accountants will be the best person to advise you on to pay your taxes.
GM professional accountants are local accountants based in London, Manchester and Essex.
On June 29, 2016, the United Kingdom (UK) voted to leave the European Union (EU). Since then David Cameron resigned as Prime Minister and Theresa May has replaced him. The value of the pound has “dropped twelve percent”, however the “FTSE 100 Index has gone up 17 percent”. (The New York Times). On March 29, 2017, Theresa May invoked Article 50 to start the process of the UK leaving the EU. Since invoking Article 50 the UK will have two years to reach an agreement with the EU on how both parties want to handle trade and the movement of people between countries in the EU and the UK. If no agreement is reached in two years then trade rules set by the World Trade Organization will go into effect which would allow for the UK to impose greater or possible unequal tariffs. This would mean the price of goods and labor that are imported and those that the UK exports would increase.
One of the reasons that UK citizens voted for Brexit was because they want to see a decrease in immigration. Since the EU allows easy passage between member countries, some fear that it is too easy to enter a country and cause harm. Once one gains citizenship in a country one can easily move between countries without many obstacles, however different countries have different requirements and security checks for becoming a citizen. Easy passage between countries can be beneficial to countries as well; many citizens of EU countries come to work in the UK. These people work in a number of different jobs from farming to finance across the UK. With the UK leaving the EU, many are unsure what will happen to these workers and some have already started to leave the UK. “Official figures reveal that the number of EU-born workers in the UK fell by 50,000 between October and December to 2.3 million” (Kollewe). With people leaving, businesses will have to find a way to make up for this lack of labor. Some businesses have started to move jobs to EU member countries while another option would be for businesses to raise labor rates for jobs that UK citizens have not been willing to do for lower rates.
Increased labor rates is not the only effect of the UK leaving the EU. Depending on the outcome of the upcoming negotiations a multitude of things could happen. Since the UK is the first to exercise article 50, no one knows how this will affect other member countries. If the UK gets a favorable deal other countries may also consider leaving to see if they can get the benefits of the EU without paying into the system. However, if the UK gets a bad deal it could discourage countries from leaving in the future. Another possible effect would be Scotland leaving the UK to join the EU. Since the majority of the Scottish population voted to stay in the EU, some have considered leaving the UK and joining the EU to stay in the single market system. This separation would further decrease the UK’s workforce and hurt their economy.
If you need to hire an accountant near you, your best way to find an experienced, skilled and trustworthy professional is using online reviews on Google and Yell. While everyone is familiar with making a local search for on Google or searching for reviews, using Yell to find accountants might be something of a novelty for you.
Use Yell.com business directory
Yell.com is an online service in the UK that lists local businesses. Searching on Yell.com is a simple and quick way to find a local accounting professional. This business directory is divided on various categories. So, in order to filter your search category, you need to first search for “accountants”.
By entering what you are looking for, the business directory will retrieve listing results from the proper classification. Then, you can take your search one step further by making your search local. Yell will show local matches in the order of your proximity to your location. The business directory aims to always provide the most relevant local results.Check online ratings, testimonials and reviews
In order to select one of the local accounting firms or professionals for your payroll services or tax return, one of the first things to check is their rating among the former clients. Check feedback and reviews in order to evaluate their online reputation.
Read the online testimonials and reviews in detail. If the majority of the online reviews of an accountant or accounting firm are generally positive, this is a good indication that their clients are content with the exceptional services provided. On the other side, if the majority of online reviews are negative, this is a sign that the services provided by the accounting professional or the accounting firm to their clients are not adequate.
You should also read the testimonials from the past clients, apart from online reviews. The quality of the services provided is well reflected in these client testimonials. You can find testimonials on the website of the accounting professional or accounting firm.
You may even ask the accountant you consider hiring to provide a list of previous clients. Then, you can randomly call up some of these clients in order to request them information about the service quality of the accountant.
Getting referrals is another recommended method to ensure you’ll receive high quality accounting service. You can get these referrals from professional associations or from friends. When an accountant firm has been referred to you, they will feel a double obligation to do their job well.
You can trust GM professional accountants
One of the accounting firms with solid reputation is GM professional accountants. This local firm in the South East is providing a complete range of services that cater to small to medium sized limited companies, partnerships and self employed individuals. They offer a pro-active and prompt service that provides good value for your money.
GM professional accountants is practicing a fixed fee that depends on the size of your business. The fee is fixed for the first 2 years of providing you accounting service and agreed in advance. You can even arrange paying in monthly installments. Among the services provided are included accounting, book keeping, payrolls, tax planning and compliance, VAT returns, self assessment tax returns, forecasting and business planning.
Property tax in the UK is highest in the world. Whether you have an own property where you are currently staying or got it is as a gift, or even passed on due to inheritance, you have to pay some or other kind of tax for keeping it in your possession. The value is so much that it contributes almost 37 percent of the total GDP of the United Kingdom. While most of the people express their discomfort at parting with such a high amount, the system continues. There are quite a few contributing factors for the exorbitant amount of tax rate. Let us look into some of the taxes that the landlords, real estate agents, and the owners have to pay to keep the property in their name.
There are basically three types of tax head that require being paid, namely Central Government tax, Developed National Government tax and the Local Government tax. These are then sub-divided into various categories. Some are direct taxes and others are an indirect tax. These can be paid on a monthly or on a yearly basis. The total property tax contributes more than 10 percent of the total tax collected as per Organization for Economic Co-operation and Development.
The property tax is levied on the property owner, landlord and the real estate. Anybody with a recurring income from any of his properties as a rental is liable to pay the taxes. The tax liable to be paid is calculated according to the property type. If someone rents more than one property, every property will be treated as individual property and the amount will be calculated accordingly. The tax is applicable to the government treat the rental as an income source and levies income tax on them. It is calculated on the basis of total profit incurred by the individual after paying off the yearly maintenance. For anyone who is a non-resident of UK but owns a property and provides it for rental, the rules are different.
Another type of tax named as Capital Gain Tax is then levied and is calculated differently. This can be up to 18, or 28 per cent according to the income bracket. This tax is paid annually. The non-residents are generally not liable to pay this tax but are liable if the property is used for professional rentals.
One of the most complex taxes that have to be paid for any real estate owner or landlord is Inheritance Tax, which makes the next successor according to the official will as its owner. Not paying could lead to a tax burden on the subsequent owner. The other types of taxes that need to be paid are in the form of stamp duty. There are various slabs which tabulate the general tax rates and the liability of any individual against buying, selling or inherit different properties in the different region.
When getting your tax done, you want to make sure you get it done right. It’s often a hard and confusing process, but don’t worry, we’re going to take your hand and take you through step by step. If you’re looking for one of the best Tax Advisors in London, you’re at the right place!
When it comes to looking for a good tax advisor at GM PROFESSIONAL ACCOUNTANTS, it can be very hard. Not to mention, very expensive. When it comes to looking for a good tax advisor, you need to take a few variables into consideration.
When you’re hiring a tax advisor, you need to know his or her experience. You want to know that this person has the years of experience needed to be able to help you save money on your taxes. You’d want someone that has the ability to set up bookkeeping services, personal or corporate taxation, audit and report services, setting up and managing accounts, landlord support, tax investigation support, payroll services, and VAT submissions. You also want someone who is constantly updated to the constant changes in the world of taxes.
When ever you’re giving all of your bank account details and information over to someone, what you have to have is tax. Make sure this person is trust-worthy with all of your bank details and other information. You always want someone you feel completely comfortable with. If you feel like that the firm you are working with is not qualified enough to do the jobs they are required, it’s best to find business else where as soon as possible.
When you’re looking for a good tax advisor, it’s probably not a good idea to look up the yellow pages, flip to a page and hope for the best. Since the internet has developed our ability to research companies, it’s best you research what qualifications the Tax Advisor has. If he’s recent, he probably won’t have the experience to stop you from paying as much tax as as possible. That’s what you want to stay away from.
Transparency And Integrity
When you’re looking for someone that you can trust to do your taxes, what you’re looking for is someone that will give you the satisfaction of knowing that all costs and fees have been discussed and agreed to in a professional manner. One thing you need to do as a trusted company is to make sure that all agreements and prices are transparent. This makes it better for you as a client and others to build a healthy relationship. Make sure that you find a firm which has fixed fees so they cannot add or change fees to their advantage when you continue to do business with them.
Why I Should Hire GM PROFESSIONAL ACCOUNTANTS To Do My Taxes
In this section we’re going to give you some advice on why you should get GM PROFESSIONAL ACCOUNTANTS to do your taxes. GM PROFESSIONAL ACCOUNTANTS Provides a service for individuals who are just looking to get their taxes done, as well as sole traders and business owners. The great thing about GM PROFESSIONAL ACCOUNTANTS is that they offer great bookkeeping services that will stop you having to worry about doing the work yourself. They are a respectable and honest company which is built on a foundation of integrity and trust to provide you with their best service possible.
To Finish Up
If you want a good Tax Advisor, there are many ways to go about it. You can cut some corners and end up getting it done by Uncle Harry, but the chances are he’s probably not going to know how to save you from taxes. If you’re willing to invest a bit more in having a quality agent look at your taxes, and sometimes other areas to help you, then that’s the best solution. Just research who you’re going to go with first completely before you hire someone.
The tax year always holds up from 6 April until the 5 April following year. At the end of the tax year (after 5 April) the employees should receive a P60 form from their employer. This form contains the current year income statement, the amount of tax withheld and social security. This must be sent to the HMRC (tax office) by the employer.
If a person leaves his job during the year, the employer must issue a P45 form, which also contains the income, the withheld tax and the social insurance. This form has three copies and the next workplace should transmit copy 2 and 3, that the new workplace may deduct the tax appropriately and return it to the tax authorities.
It is essential that the new workplace receives the data of income from the previous working places, otherwise it will not deduct properly the tax advances, and the person will possibly have tax backlog at the end of the year that he will be required to pay to the tax authority.
But who is obliged to submit it?
• If you are self-employed
• If you had at least £ 2,500 of untaxed income in the current tax year
• If your saving or investing was over £ 10,000 before taxation
• If profit was derived from shares, second homes and the sale of other taxable assets
• You are a director at a company (except if it is a non-profit organization and you weren’t paid for it)
• If your or your partner’s salary exceeded £ 50,000 and you required child support
• You have incomes from abroad, after which you must tax
• You live abroad, but you also gained money from Britain
• Your salary exceeded £ 100,000
If you work as an employee, your employer will arrange this, so you can ease the belly, because you do not have to do anything in this matter. However, the information may be useful for everyone.
According to the British tax authorities (HMRC), tens of thousands of small taxpayers could avoid the lump-sum, simply by an earlier administration of the declaration. Those who administrate before 30 December have the opportunity to pay in installments if their payment obligation is less than 3,000 pounds. Those who owe less than £ 3,000 and want to pay in installments have to return their tax online until the midnight of 30 December and have to request a PAYE (Pay As You Earn) code.
If the tax return is delayed for three months, you need to count another 10 pounds per day late fee, so the 90-day pro-rata late fee and the original 100 pounds fee may climb up to 1,000 pounds.
If the return is delayed for six months, then you have to pay 300 pounds or the 5% of the debt besides the original punishment, depending on which is higher. In case of a 12-month delay another penalty will be added and in severe cases the duty may be even reduplicated.
Contact GM professional Accountants and choose a Local accountant to assist in your tax affairs. Gm professional accountants have offices located in London, Essex and Manchester.
The need has come for Accountants to open on Saturdays. Opening of both private and public firms on normal days in the United Kingdom should run from Monday to Friday, depending on the country’s stipulations in the constitution of the United Kingdom. These are the basic principles for opening days of offices in the country and are required of all firms to suit fin the schedule in order to serve the public better. Any institution bestowed with the responsibility to serve the public be it accountants, the teachers and those in other private businesses should adhere to the common rules that govern us as a nation bound by common principles and way of life.
Accounting firms are bestowed with the responsibility to serve the nation in matters of book keeping, helping businesses in ensuring they do not overlook the tax return deadline on top of the many other responsibilities they are entrusted with. The accountants in the respective institutions work optimally into fulfilling the needs of the clients in the various offices of accounts to ensure that at the end of the day, the clients’ do not exceed the tax return deadline that has huge penalties on going past its threshold.
GM Professional Accountants
Welcome to GM Professional Accountants, where we serve customers in a much better way in consideration of many factors. At GM Professional , we have put it a guarantee to serve our customers six days a week without compromise for we treasure the individual needs of the clients’ in their respective positions. We ensure that the tax return deadline is not exceeded by our customers for we care about the huge and heavy penalties our bookkeeping departments would have to bear on behalf of the client. The clients’ subject to penalties because of exceeding the deadline for our deliberate failure to open on Saturday is one thing we avoid. We open on Saturday on a full time from 9.00 am to 5.30 pm for the many reasons that we thought would be an advantage to our esteemed customers.
GM Professional Accounts believe that most people are busy during the week days and only find time on Saturday to work on attending to their other offside duties like filing their tax returns. It is on Saturday, according to GM Professional accountants, that people have time to go attend on private issues for instance checking on the tax return deadline from their various accountants since during week days they barely leave their places of work for such activities.
The book keeping team at GM Professional Accountants have the pleasure of serving their customers right from 9.00 am to 5.30 pm all the six days of the week Saturday being the last for the week. Accountants at GM Professional are keen into taking into consideration the records of the customers for book keeping for disappointment from the clients is not part of their calling. Saturday in most cases is the day that most people turn up to file returns in order to avoid getting past the tax return deadline. GM Professional Accountants make up part of the firms that keep London City live and meaningful on Saturdays.
While seeking the best Accountants in London, you’ll need a leading and diverse accountant’s firm. Accountants are well versed in managing and keeping all types of accounts and are of great help in managing the finances of the business. They can be of substantial help to every type of business as they will well assist employers in keeping their accounts up to date. The assurance is, if you have the best accountants, you’ll have the best insights and updates in the current business and economic markets. Trusting someone with your money can be a daunting prospect, but with the experienced and innovative accountants, you will always be at peace since your finances are in safe hands.
It is not much difficult to find the best accountants in London. Today, many reputable companies are offering such services to their customers. This article discusses on how to find the most reliable accountants in London.
Check on their Certification
Whether you want to hire full-time or part-time accountants in London, for both jobs, you need to understand what you’ll need to look for in the accountant you will be hiring. Your future accountant should be a member of a given accounting body here in the UK. Whether
they are Certified Public Accountants, Chartered Accountants, AAT Licensed accountants or any others, a license is necessary. Check the expertise of the person you are employing.
Good Working Experience
Furthermore, accountants in London should have a good work experience. Choose for the companies that can offer very diverse services because of their experience with a number of accounting aspects. Consequently, one can hire such firms for bookkeeping services, personal or corporate taxation, audit and report services, setting up and managing accounts, landlord support, tax investigation support, payroll services, VAT submissions and information on account software. Aside from the knowledge they possess regarding all these accounting services, they can offer financial advice based on the latest news in the financial world. By hiring them, you will always be updated with the latest trends in the financial industry, and you will make the most informed decisions.
Accountants in London are not only for the selected few with very high income. While many self-employed individuals consider that it is easy to do their own bookkeeping, they seldom find out what they are missing out on until actually hiring a professional to help out with their calculations and tax returns. When hiring accountants in London, they soon learn that what they saved in terms of money, they lost in terms of time spent preparing the documents and learning how to submit their calculations to HMRC. Please do not make the same mistakes. Accountants are not a luxury. They are beneficial to you and most often are necessary as the system is quite complicated to figure out on one’s own.
The most important aspect when hiring accountants in London is to be able to trust their services. To ensure they get their jobs done well and on time, we recommend you check the way they present their firm, the recommendations they have, their reviews and testimonials. If they are trustworthy, reliable accountants they won’t let any of your clients down and will do their best to earn the confidence of new clients by showing their reputation with pride.
Transparency and Integrity
The best accountant firms in London will ensure that all costs and fees have been explicitly discussed and agreed upon prior to carrying on any financial services. Good companies have to make sure that all prices are transparent since integrity and honesty is an important part of a healthy client relationship. Additionally, such companies ensure that they offer a fixed fee on advice and consultation disregard of the time taken. They do this to cater for surprises or hidden costs that may incur at the end of the month.
5 Simple But Powerful ways On How To save tax for landlords.
If you happen to be a landlord, you fall under the category of people who happen to own a business. And one nagging question that happens to come to the minds of business owners like landlords is the question on how they can save taxes. It is quite challenging as you are required to keep track on how you can take the necessary precautions to save on tax. Here are some of the 5 ways that landlords can consider to save tax on income. Get your tax affairs up-to-date; If you happen to be a landlord, you are fortunate. You need to know the Tax Advantages that come with owning your property for rent and how much they can fetch you. There are some tax exemptions that you can enjoy from this monthly income money that can be turned to your advantage. Taxes keep on changing from time to time and the figures and terminologies like (tax returns) that come with the taxes are very important for you understand. Staying informed about taxes will also help you avoid the HMRC getting over board and manipulating you just because you may happen not to know anything about the changes that were done at a specific time.
Find a good Serious Tax Adviser.
A serious and good tax adviser is essential when it comes to ways on how to save taxes as a landlord on your income. These people can and will save you a lot of time by offering you multiple options when it comes to your taxes. They give suggestions, they follow up and clarify your taxes, and they help in filling of the forms among others.
However it is important to note that you have to look for one who is ready to understand you and your demands and help in taking advantage of what you are already doing and offer additional suggestions that can save you more. It is important to note that most tax advisers will charge you a certain fee for their services. Most will even charge you for each form that they fill which means it better to know some these important issues as they will help you in saving taxes. Narrow your choices when it comes to tax advisers and you need to be curious when dealing with them as many may even lack the experience and knowledge about taxes.
Keep Claiming For all expenses;
This is something that many landlords will forget but the truth is that you have to always make sure that you claim for all your expenses when handing in your tax returns. These should normally include telephone bills, cost of safety documents, any form of bank charges like overdrafts, legal and renovation fees of any kind. Remember to have a separate bank account for all your money that you get from your rentals. This helps in that when tax inspectors happen to ask all these questions about your taxes, it makes it very easy for you answer them as this will take away all the confusion. It’s Better To Find A partner. If your property is being run by one person, transferring that property into a joint ownership will save you on income tax on your yearly profits. If you happen to sell, capital gain tax and allowances will be much easier for both partner as you will be able to set the annual capital gains exemptions against the profits made. Have your own Records Stored: Never forget that any business including that of which you have with tenants is completely in writing and that you have the documents at hand. Record keeping is very essential especially when you happen to have tax areas that you may not know about. If it happens to be in writing this will save you a lot of time and money and thus reducing your taxes as a landlord. If you happen to use an online only bank account, you have to always remember to print out your copy of the statement as often as possible. Remember paying taxes is one the oldest activities in this world that no one will escape. However it would be nice to pay up all your taxes and avoid penalties like paying more of going to jail.
Tax return season is almost upon us. The dreaded deadline looms where we have to get ready to pay up to the tax man. If you are wondering whether you are required to fill out a tax return, wonder no more. Let’s go through in detail about who and why you are required to fill out a tax return. Who needs to fill out a return? If you are self employed, in a partnership or run a limited company, you need to submit a return. It’s quite simple really, if you are an employee, then your boss has the responsibility to liaise with the tax man. However, if you are in charge of your own affairs (for instance, you are registered for self assessment, have your own Unique Tax Reference (UTR) etc) then you are where the buck stops in terms of tax. What if I have stopped being self employed?
If you were self employed, but now hold an employed position or perhaps are taking some time off, you may still need to fill in a return. The tax year runs from April to April, so let’s say for instance you were self employed from from April 2015 until February 2016, then stopped. You will be required to fill out a tax return at the end of January 2017 for the time you were self employed. Make sure you inform HMRC that you are stopping self assessment so you are not liable for any more tax returns. In some cases, you may be entitled to a tax rebate if you have overpaid tax too, which is an extra incentive to get it done! How do I do it?
Filling out a tax return form is very easy. All that is required is your accounts for the year, a computer and 20 minutes of your time. However, some people find the process a little difficult and time consuming, which is why it can always be a good idea to hire an accountant to take care of any of the stress that you may be feeling. Steps1) Get your UTR, and sign in to the government gateway2) Calculate all of your income, and deduct from it all of your employment related expenses (check with an accountant, or HMRC as to what exactly you are allowed to claim)3) Fill out the form as instructed via the online portal4) Submit the form5) Pay your calculated amount of tax What comes next? If you are going to be registered for self assessment for the foreseeable future, then you are going to have to get used to filling out a yearly tax return. If however you are going to be an employee, there is no need to worry about filling out a return regularly. To alleviate yourself from any pressure, it is always good advice to seek the help of an accountant near you. In this way, all the paperwork can be submitted on time and in order so that you are left to pay attention to your business. Nobody likes paying tax, but making sure everything is in the correct order and organized will can lead to great benefits in your business and quality of life!
It sounds like a cheesy phrase rolled out by salesmen of the 1980’s, but is there some truth to it?
Overwhelmingly, all research done on this matter has concluded that yes, dressing can have a direct impact on your success in business. What are some areas that science shows us are directly impacted by how you dress? Let’s take a look.
An experiment that asked people to negotiate the same deal, but the two test groups were made to wear different clothes. One group wore a track suit, the other a smart suit. The difference was astonishing. On average, the group who were dressed smartly would walk away with 4 times more profit that the previous scruffy group. This is not a small amount, and it can show that the skills that you are able to employ when dressed for success can include negotiating a much better deal than you thought was possible.
A large study found that based off who we appear, people will make conclusions about our character that are quite detailed. For instance, whether you look like you are on your way to a promotion, whether you are successful, intelligent, adventurous or trustworthy. This means that making sure that your dress matches the message you want to send is very important. If you an accountants firm that is hoping to attract the business of a small tech firm who all wear hoodies, then maybe a three piece suit will send the wrong message. Dressing for success can depend on the situation. However, in general, a smart, well fitting suit will get you noticed in good ways.
Confidence and Self worth
There are hundreds of studies that confirm a strong correlation between dressing well and your confidence level. If you feel attractive, then it will show on your entire body. Your walk, your voice, your posture, it will all change. This might be exactly the advantage that you need over your competitors. There is a reason why most people walking around London aren’t in jeans, but in suits. This is a good lesson to learn, since your self worth can often become how much you are worth. Think about how you feel after a new haircut, with new shoes, with that new perfume on. You feel unconquerable, you feel like you are walking as a god among men! This feeling, if then applied to your work, can bring in new levels of success.
If you work from home, it can be tempting to just wear whatever you find in your wardrobe, however this isn’t always the best idea. If feel sloppy, untidy and generally unfit for public, how are you going to create something that is fit for public? Your work is always affected by your own perceptions of self worth. This being the case, making sure you are dressed well, even if no one sees you is a very important for your continued success in your business. Your work will most likely improve, your productivity will most likely improve, and as a result, you may be earning more money. All this from putting on a shirt in the morning instead of that coffee stained Batman t-shirt with holes in!
GM professional accountants based in London provide small business accounting and tax services
East Ham is nestled in one of the most prosperous and expensive cities in the World. The area has a rich history, and since the mid 1800s railway arrived, has been a hive of activity. Let’s take a brief look at the history of East Ham. Then, let’s talk about the economy, opportunities, and ways you and your business can be helped. History This place was mentioned in the Domesday book, which gives you an idea as to how ancient the settlement is. As the time wore on, East Ham became a hub for people moving in. There were large amounts of immigration during the 20th century, and that has been a huge effect on the current landscape of East Ham today. Economy The unemployment rate in East Ham is one of the highest in the UK. In addition, the employed positions are mainly low paid. This causes some problems, and opportunities for the locals. The problems are that some poverty rates are high in East Ham, however the government in the past few years have responded. Some successful initiatives were introduced, and the unemployment rate fell. One of the positives that has come out of the relatively tough jobs market is entrepreneurship. Many of the shops and restaurants in the area are independent. The large migrant population set up these jobs several years ago, and as a result, opportunity and job creation have arisen. Opportunities in East Ham Since the above mentioned job creation schemes by the government, the rankings of East Ham have improved. The deprivation rate has fallen from it’s once top spot, and incomes have improved in general. The opportunities are also abundant for those who are local, and want to start a business. Since the property, rents and rates are lower than central London, a chance to make a success out of shops or services exist in the area. Add to this the fact that many new young professionals are moving to the London outskirts, including the east end. These new residents will be looking to shop from local stores, and embrace the local culture. This is a good opportunity that can be capitalized on now. Getting setup, and choosing the right team For many aspiring business owners or service providers in East Ham, finding the right help can be tough. The reason is that many people work in the city, and as a result don’t work with the local businesses. An example can be finding the right accountants in east ham. This addition to your team is an important one. The trick in an area like East Ham is to look for an accountant who knows the culture and the locals. This way, financial guidance and help can be given within the correct context. A city accountant may be used to the types of businesses that flourish in Canary Warf, but have no concept of how things are done in East Ham. These are some ideas for getting yourself setup in East Ham. The times are getting better, and the future looks optimistic. The opportunities for the youth and others in these areas can be taken through hard work and entrepreneurship. Finding the right team to back you up, and give you the right guidance can be a great step to you and your community’s success.
GM Professional Accountants are accountants in East ham that specialize in Small businesses and self assessment tax returns.
You may be thinking of going freelance, and if so, well done. However, there are certain legal obligations and differences in how exactly you are going to do so. In the UK there are two main categories of self-employment, they both achieve different goals, and require different skill sets. Let’s take a look at which one will suit you the best.
This is the simplest option out there. Simply put, you are personally responsible for the company. This means that all of the comings and goings of daily business are under your name. Anything that happens is viewed as your sole responsibility. If for instance you are self-employed and you owe a large amount of business debts, you will be held personally liable. The resultant consequences could be personal bankruptcy. On the positive side, when it comes to the tax man, you only have to pay one lot of taxes, since it is all viewed as your personal income.
The way this is usually explained is thinking of a person. When you create a limited company, in the eyes of the law, the limited company is viewed as a person. Now this doesn’t mean that the company can vote, get married and adopt children, but it performs other roles. For instance, if you are running a limited company and the company has debts it cannot pay, the company will be made bankrupt. However, you as an individual will not, since you are viewed as an employee of the company. These are the essential differences. There are more, and we will discover them in a moment. Let’s first look at which one you should choose?
This will suit you if you are providing a service with little to no liability or risk. For instance, if you are a personal tutor, or a contractor this will suit you. Anything that involves you providing a service, consulting, or freelancing with no buying and selling, most of the time this will be your choice
This is more for creating a business. If you are going to be buying and selling, potentially owing debts, or lending out on credit. If your business model has high overheads, high liabilities or is going to be in negative equity for periods of time, then register as a limited company. This will protect you if things go badly. Another case will be if your business grows to a large size. Even if your overheads are still low, if someone sues your company, or some other action is taken against it, then making it limited protects you.
What are the requirements of both methods? Whatever you choose, it is important to remember what your new responsibilities entail. For instance, both require you to submit yearly tax returns. For self-employed people, it is the self-assessment form that needs to be filled, plus your national insurance contributions. It is often important to get these figures checked by an accountant before you submit, as inaccurate filings can lead to a fine, and you are personally responsible for it.
For a limited company it is more complicated. You will need to take care of corporation tax, staff tax, national insurance and all of this must be recorded in a very particular way. HMRC reserve the right to demand your records from you at any time. Any changes that occur in your company must also be documented and reported to HMRC.
It might sound like a lot, but don’t be put off. Often times, entrepreneurs realise that getting a little help by way of an accountant can alleviate much of the new pressure that is piled on them. In the first few years of your business, you will want to use all your energy to make sure the business succeeds, so getting help with the paperwork is a good idea. So to recap, self employment and limited companies are the two ways to go in freelancing. Both require a little getting used to, so choose which is best for you and get going!
Becoming self-employed is a career-changing decision. The need to conform to an employer’s standards is exchanged to being your own boss at the cost of handling all of the legal and financial aspects of your business. Hence, most business enthusiasts consider teaming up with a few individuals or with a relatively large group of people to ease the responsibility of keeping the business afloat. As a sole trader, you are the business itself. In a limited company, however, the business is an independent body where you are a director and a shareholder holding a portion of the company’s capital. However, success in business is a case-to-case basis. Some may find themselves paying more tax than necessary which is why it is imperative to decide on the best business structure early on and carefully plan out the course you want your business to take.
1. Legal Disputes
Sole traders are personally sued unless they are covered with applicable insurance such as employer’s liability. Limited companies can also be covered by insurance and more often, it is difficult and rarely a case in the UK to directly sue the chief executive of the company. Unless they are proven to have perpetrated fraud (as employers, as service providers or as taxpayers) and have committed offences against the law such as violating environmental acts.
Corporate taxes are considerably lower than income tax. Shareholders and employees are subject to PAYE (pay-as-you-earn) and NICs (National Insurance Contributions) based on their individual earnings where many other benefits may attract tax as well. An income tax based on dividends and other distribution types are rules among shareholders with a £5,000 tax-free allowance.
Sole traders can negate their trading losses against their other means income. However, in 2013-2014 in UK, there has been a restriction on the respite that may be claimed for losses and interest payments. On the other hand, limited companies can still neutralize their losses to other revenue sources but without compensating their income as an individual.
Withdrawing cash from a sole proprietorship include no taxes while any income from a company, be it a dividend, a distribution or personal earnings, are subject to respective tax collection. Employment benefits received by a shareholder or their family and household are also taxable as with the shares and securities.
As a sole owner, you are free to run the funds of your business considering that tax relief and bank charges will be comparably controlled. On the contrary, a director may borrow business funds subject to the limits set by the Companies Act of 2006 where a tax charge of 25% is paid by the company if the loan is not paid within nine months. If the loan is interest-free, an individual tax is charged against the director based on their beneficial loan interest.
There is no requirement to maintain accounts if you are a sole trader (although it is difficult to manage your business without keeping some). But you have the leisure of choosing cash or conventional accounting if you decide to do so. Further, you may need annual accounts to provide your personal tax return even if these accounts are not required by the HMRC (Her Majesty’s Revenue & Customs). Your taxable earnings must also be filed in accordance with the GAAP (Generally Accepted Accounting Practices) where you must hire a business accountant unless you can do the job yourself.
For limited companies, annual accounts are required in accordance with the Companies Act for filing with Companies House and should be in par with UK’s accounting standards. HMRC is imperative on the full accounts for Corporation Tax which should be submitted through the government’s provided format.
7. Selling the Business
Sole traders are personally taxed on any gain from selling the business under the CGT (Capital Gains Tax) while shareholders are taxed twice: corporation tax and dividend tax but may consider selling company shares than selling the trade or business itself.
The sole proprietorship terminates when its owner dies unless they transfer all ownership to another. Limited companies can still continue to operate even when the executive officer dies because the business is an independent legal entity.
9. Personal Earnings
As you hold the funds of the business, a sole trader may withdraw any amount he wishes although paying a family member must be commercially supported for tax purposes. Members of limited companies have no limits on the amount of earnings they can receive. But these are subject to PAYE and NICs where service payment given to family members follow the same tax rules.
10. Expenses in General
Tax reliefs are obtained by declaring expenses exclusively incurred for sole proprietorship operations. The same can be said in a limited company, however, the private expenses of the director can be declared as a company earning, or a distribution if incurred by a shareholder.
With all the items presented above that show the differences between a business run by one person and a company shared by a group. A business enthusiast should be guided on which option to choose to make the best out of their planned business (this can also be a guideline for ongoing businesses that wish to restructure their operations) to maximize profits, minimize tax returns and ultimately, avoid bankruptcy.
GM Professional Accountants are Accountants in London that specialise in small businesses and self employed tax returns.
Accounting is what helps investors, tax authorities, and managers, to know about the financial data of a company. Accounting is all about the recording of financial transactions, journalizing, Sorting, summarizing and reporting the information in different accounts and analyses. Accounting is also considered a profession that many people often opt for. An accountant is an individual who is well versed with the accounting principles and standards. He is a practitioner of accountancy and has proficient knowledge in technical skills. They also their clients in filing the tax returns and hence also known as tax accountants.
In UK a tax accountant is considered to be a practitioner who has specialized knowledge in tax accounting. These accountants can help their clients with the various tax issues. Tax consulting is important for all to know more about the taxes. A tax accountant will gather all the necessary documents and forms required for filing the tax returns. The tax related issues are crucial. Let’s now look at some of the biggest tax issues the tax accountant has to deal with in UK.
The most challenging part of managing a small business in UK is dealing with taxes. Small businesses are the most common group to be targeted by the IRS for various reasons. Many small business owners understand their craft but are unprepared for dealing with the intricacies of tax laws. The lack of tax law knowledge often turns into an audit or even worse from HMRC. Making sure to avoid certain mistakes can drastically reduce the likelihood of an enquiry. Reporting a net loss year after year is sure to trigger a second look from the HMRC.
Another common trigger for an enquiry is using personal expenses as business deductions. Travel, entertainment, and company vehicles can all be deducted but must be used for business purposes. Overstating expenses or declaring 100 percent use of a vehicle that isn’t solely used for business are all carefully watched. Detailed record keeping is another way to protect a company from an enquiry. Having records is even more critical for businesses that deal with regular cash transactions.
One area that HMRC will focus on is evaluations on payroll taxes. Processing proper tax payments for employees can be one of the trickier parts of dealing with taxes. HMRC knows this is a common area of error and will look for mistakes even if they aren’t done intentionally. For any small business, it’s always best to use a qualified tax accountant to prevent problems before they happen. Spending a little upfront can result in huge savings later one.
How can an a qualified Accountant help a small business being audited or harassed?
Running a small business in UK is hectic and stressful. Finding out that HMRC is opening an enquiry can make things much worse in a hurry. Once a company has been targeted, they will constantly be harassed until a resolution has been reached. . If a company finds themselves being audited or facing a demand for payment, it’s best to find a certified tax adviser immediately. Getting a tax adviser early can save a lot of money in the long run. In addition to saving money, it takes a lot of time to go up against HMRC. Experienced tax adviser are experienced and are much better equipped to tackle the issues. Getting a fair settlement worked out will be worth the cost of having a good tax adviser in your corner.
It will be clear that for 2015/16 financial year, those with all or some of their basic rate tax band available will be better off taking dividends rather than salary during the year, as they will pay no further tax on the money they receive. Basic rate taxpayers are treated as having already paid 10% tax on the cash they physically receive. In light of the changes that are happening for the new financial year, it will be beneficial for basic rate tax payers to take advantage of this and pay dividends to yourself by 5th oh April 2016 without paying any tax. Delaying dividends till after 6th April 2016 may mean that you will have to pay an additional 7.5% on any dividends you receive after you exceed the threshold. The dividends tax free threshold for 2016/17 will be £5,000, which is added onto any of your personal allowances, which you may have only used some or none of your allowance. GM Professional accountants are small business accountants in London.
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