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Self Employed: 5 Steps To Help You Set Up

Self Employed: 5 Steps To Help You Set Up

Self Employed?

If you’ve made the decision to move towards working for yourself, you should consider if you want to be a sole trader, a shareholding director of a limited company, or trade as a partnership. Once you’ve decided, you will need to inform HMRC. So, if you choose to go self employed or enter into a partnership, you will need to advise HMRC, so they can register you to receive a self assessment tax return.  In addition, you will also need to tell them if you form a limited company. And, as a self employed person (including a partner), you will likely be required to pay income tax and Class 2 and 4 National Insurance contributions, under self assessment.

1.     Self employed start up costs

Starting up a new business can be a costly exercise, and you’ll need to open a new business bank account for all your future work-related expenditure. It is vital you always keep records of accounts, to help you ensure you report the correct taxable profit to HMRC, after the end of any tax year.

Budgeting and forecasting

When you’re writing your financial forecast for your business, you should consider the following:

  • Do you have access to funds you can use to start up your business?
  •  Do you have savings to carry you through periods of no income or unexpected expenses?
  • Are there any life changing events on the horizon, such as moving to a new house or having a new baby?
  • When employing staff, have you considered sick pay and annual leave?

2.     Are there any self employed credits or grants available?

You also have to understand if you’re eligible to claim any self employed benefits, tax credits or even grants. You can check this easily by accessing organisations like the Citizens Advice Bureau or Gov.UK websites, to establish what you might be eligible for.

 

3.     What about Location?

If you go self employed, you’ll need to decide where to locate your new business. You could run it from the comfort of your own home, or you may need to rent or purchase another property, as your place of work. If you decide to rent business premises, it is vital you check if there are any rules in place, restricting business activity. What’s more, you also need to check if the environment is suitable for the type of work to take place. If you are renting an office space, you must ensure you know your monthly costs, outside of your initial rental payments. Costs such as services, or any upcoming upgrades to the building, which may increase the rental costs in the future. In addition, don’t forget that, if you convert part of your home into businesses premises, you may be required to pay business rates, on top of any existing council tax commitment. You will also be asked to pay these rates, if you convert any part of your property into a shop/workshop. This will also be the case if client visits become a daily occurrence and you have dedicated rooms in your home, solely for business purposes. 

 

4.     Insurance

Check your insurance policy and, if in any doubt, call your broker to see if you need to take out additional cover for any business activity within your household. This isn’t an expensive addition, and most companies will combine additional cover into one domestic and business policy. If your business requires clients to enter your property, you may be advised to take out public liability insurance, another inexpensive addition to your insurance policy. You may also be required to hold a licence, depending on the nature of your business.

 

5.     Business name

When deciding if you’re going to use a trading name for your business, you’ll need to be aware of any restrictions in place. If you’re thinking of forming a company, you can check if your proposed company name is already in use by using the Companies House name availability checkerIf your business is to have a website, you’ll need to check if there are suitable domains available for your business name. Once everything’s in place, you can get to work on your new business, and enjoy working for yourself.

 

Lotuswise Chartered Accountants and Business Consultants can help you and your business, setting up as self employed, forming a limited company, and selecting the right cloud accounting solutions, such as QuickBooks. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.

 

 

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Google Search Results: How To Keep Your Website Relevant

Google Search Results: How To Keep Your Website Relevant

Google Search: When it comes to online search, Google is still the world’s most popular search engine. Google’s search engine algorithm is continuously being updated, so how do you keep your firm’s website up to date, so that you show up in online searches?

 

More than 2.3 million Google searches are conducted every single minute. The top 5 search results on Google get over 70% of the click through traffic. There is no point your business being on the second or third page of search results – people don’t tend to look that far. Your firm needs to be in the top half of the first page in order to allow potential customers to find your business online.

 

Mobile Search

Mobile search is also on the rise – 88% of smart-phone users are searching on Google. As such, you should make sure that your firm’s website is optimised for smart-phone screens as well as computers and tablets.

 

Google Search Console

Google offers a free service called Google Search Console, which allows you to submit your website to Google for indexing.  And, you can also use the tool to identify any potential search related errors on your site, view the kinds of search queries that are driving traffic to your site, etc.

 

Google My Business

You can also link your firm’s website to Google My Business. As this can help your website to appear in relevant geographic search results.  Google will then send a postcard, to verify your business’s physical address, and your firm will show up if people are searching for a business like yours in their local area.

 

Your Website Speed

The speed at which your website loads also affects the way it is ranked by Google. That’s why Google ranks faster loading sites higher than slow websites.  So, you can make your site load faster by minimising the size of image files and using fast hosting services.

 

Keywords, keywords and keywords

Finally, ensure that you use relevant keywords in your page titles, meta descriptions, URLs and throughout your actual content. And make sure you don’t use too many keywords as this can actually have a negative effect on your site’s Google ranking. If in doubt, consider hiring in an external consultant to help you. 

 

Lotuswise Chartered Accountants and Business Consultants can help you and your business succeed. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.

 

 

 

 

 

 

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This Is What Really Motivates Employees

This Is What Really Motivates Employees

We all work to get paid but is money alone enough to motivate your employees?

Regardless of the type of business you run, you need to pay your employees fairly and in line with your competitors. If you don’t pay your people in line with the market, it can act as a de-motivator. However, once your pay scales are in line with industry norms, money alone isn’t really enough to keep your employees performing at a high level… 

Pay, Freedom and flexible working

Paying in line with the market tends to achieve a rather neutral position, where there is no dissatisfaction among your employees, but this does not translate into them being more motivated. In fact, various studies have shown that employees place a high value on freedom. Indeed, they value flexible working, the opportunity to work from home when they want to, and they want to work for businesses that invest in the technology that allows them to do this.

Business is 24/7 when you take full advantage of flexible working!

Business is not just 9 to 5 anymore – it’s 24/7. So why should your employees be tied to a 9 to 5 work day? Businesses can benefit from this flexibility – projects led by agile workers tend to be completed quicker. Progress doesn’t just happen between 9am and 5pm. When the pressure is on, your flexible employees will stay late and get the job done. Conversely when things are quiet, they want the flexibility to go to the gym or do the school run. Modern professionals may well choose to work for an employer that has embraced agile working over and above a business that pays a little bit higher than market rate, but doesn’t offer flexible working.

Flexible working and purpose

Assuming your firms pay is in line with the market, your employees will be focused on job satisfaction. Again, various research studies have shown that high performing employees are motivated by purpose. They want to understand how their work contributes to the overall success of the business.

Flexible working, purpose and job satisfaction

They also want to get involved in projects and take responsibility for delivering their objectives. If you give people the opportunity to work on meaningful projects in a way that makes them feel they are contributing to the success of the firm, they will be more motivated. As far as recruitment is concerned, we are in the midst of a war for talent. The best people will stay with the businesses that offer them job satisfaction.

So, does money really motivate employees?

Yes and no. There is an expectation that they should be paid in line with the market. Beyond that, they will focus on job satisfaction, flexible working, etc. 

 

Lotuswise Chartered Accountants and Business Consultants can help you and your business succeed. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.

Watch the video here.

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Brexit Uncertainty: How To Manage In These Worrying Times

Brexit Uncertainty: How To Manage In These Worrying Times

Managing Brexit Uncertainty

Due to Brexit, 2019 looks set to be a year filled with uncertainty for businesses. The future is always unknown, but this year managers will need to navigate some particularly choppy waters, due to market uncertainty and global political turmoil.

Focus on what you can control

As a manager, you can always control your response, attitude, behaviour, actions and words. You can choose to be proactive and inquisitive rather than paralysed. In these times of Brexit uncertainty, the best managers step up and embrace their authority. When times are uncertain, your team wants you to lead the way. Bring your team with you on the journey, ask them for their opinion, include them in your planning conversations and challenge them to come up with new solutions.

Cash is king

In uncertain times, the old adage that “cash is king” carries even more weight. Cash is the lifeblood of your business, and poor cash flow management kills businesses during tough economic times. Market volatility also creates opportunities. If you have cash or credit available to take advantage of these opportunities when they present themselves, you may be able to move quickly and move your business forward. As such, good cash flow management can allow you to cash in and manage Brexit uncertainty effectively.

Embrace change and adapt

As your particular market changes, there will be opportunities for you to adapt. For example, if your customers have less budget to spend on buying products and services in your sector, it might be an opportunity for you to introduce a lower priced “value offering.” You could even go one step further and change your pricing model. For example, you could move clients to monthly retainers, rather than charging a once-off annual fee. Hence capitalising on Brexit uncertainty.

Diversify

If you depend on one big client to keep your business going, you should consider how to diversify your client base. Sometimes even giant businesses fail during tough times. If your biggest client goes out of business, you don’t want to be collateral damage. Just like in investing, the key is to have a diversified portfolio. Precisely because of Brexit uncertainty, now could be a good time to look at trying to win some new clients in order to make your business more resilient.

Lotuswise Chartered Accountants and Business Consultants can help you make sense out of Brexit uncertainty and potentially worrying times and also help your business succeed. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.

Watch the video here.

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MTD for VAT Pilot: This Is What You Should Know

MTD for VAT Pilot: This Is What You Should Know

MTD for VAT Pilot is Now… Open to All

You may have heard that, on 10 January 2019, HMRC announced that their Making Tax Digital for VAT (MTDfV) pilot was now open. As such, it is accessible to all those mandated to keep digitally compliant records and to file MTD-compatible VAT returns, for return periods commencing after 31 March 2019. Plus, in an email issued, HMRC stated that: “this marks a significant milestone towards our ambition to become one of the most digitally advanced tax administrations in the world.” And, HMRC boasts that over one hundred VAT-registered businesses, of which you may well be one, are now signing up to the scheme on a daily basis, with more than 3,500 having already joined.

Testing time

Even though,  like the majority, you may not need to file up your first MTD-complaint return until early August, the department wants you and “as many eligible businesses as possible to join the pilot ahead of the mandation of the service in April”, as it will provide assurance that the service works for you and all types of customers.

What does it mean?

This means that, if you are a VAT-registered entity, with an annual VAT-able turnover in excess of the £85,000 compulsory registration threshold – i.e. you are mandated to onboard from April – you will now have the chance to test your accounting system, prior to April. If you are in the minority of compulsory registered businesses – i.e. with the most complex VAT affairs – you would have had your mandation date deferred to your first return period, starting on or after 1 October 2019.

VAT groups now able to join the pilot  

In addition, HMRC has also opened its MTDfV pilot to VAT groups with immediate effect. What that means is that if you are within a VAT group, you are now able to start testing the service – even though you are not mandated to join until October. The department stated that it “will continue to update you as we open up the pilot to the remainder of the population who are mandated to join from October.”

Want to know more?

You can find further details in HMRC’s updated guidance for businesses, updated guidance for agents, and the stakeholder partner packs on GOV.UK.

 

Lotuswise Chartered Accountants and Business Consultants can help you make sense out of the MTD for VAT scheme and also help your business succeed. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.

   

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How To Overcome Your Fear Of Failure

How To Overcome Your Fear Of Failure

One of the most common things holding us back from achieving our potential in business is our fear of failure.

 

Fear of failure is often linked to our human nature: to fear the unknown. When we push ourselves outside of our comfort zones, whether in business or in our personal lives, it is pretty normal to feel some degree of stress and anxiety.

We Are What We Do

In business, many of us consider our work to be representative of who we are as a person. As such, we can often view a failure in the workplace as a personal failure. This fear can often manifest itself in such a way that, we avoid reaching for new targets or striving towards new goals, in case we fail. We fear that such a failure, in such a public way, could change the way others view us, and indeed how we view ourselves. This can result in us holding ourselves back, because we fear failure.

No such thing as failure, only learning opportunities

It can be helpful to refocus and see “failures” as “learning opportunities”. Some of the world’s greatest entrepreneurs, including the likes of Richard Branson, have failed several times in business. However, they view these failures as learning opportunities. Each time you fall over, you must learn how to get back up and apply that learning next time around.

Change the way you think

Change the way you think about your goals and objectives. Don’t frame each business objective in order to avoid a potential failure. This is setting the objective in a negative context. Instead, set your objectives in a positive context. For example, set an objective to explore a new potential business case in order to learn about that opportunity. The goal is to learn, rather than to create, a new part of the business.

Visualisation is key

Finally, it can be helpful to visualise obstacles. Think of a situation in which you are afraid of failure.  Visualise yourself hitting an obstacle, allow yourself to feel the fear, and then see yourself moving forward. Next, spend a few minutes planning how to overcome whatever obstacles may stand in your way. Then see yourself succeeding despite these obstacles. You need to train your brain to focus on the solution, rather than the fact that there is an obstacle in your way!

Lotuswise Chartered Accountants and Business Consultants can help you and your business succeed. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.

 

Watch the video here.

 

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Marketing Trends 2019: This Is What You Should Know

Marketing Trends 2019: This Is What You Should Know

Marketing Trends To Watch Out For 2019

As we leave 2018 behind, it’s worth taking stock of this period of increased regulation on customer data protection and privacy – in parallel with its acceleration in marketing technology capabilities. Here, we give you an overview of what to consider in terms of the evolving expectations, demands on customer journeys, and the impact they may have on the marketing aspect of your business. Here are the top three marketing trends and strategies for you to consider for 2019.

 1. Evolving customer experience and journeys

2018 brought us more paths through which customers can satisfy their ideal approach to buying. As such, you need to take into account the onset of conversational user interfaces, through voice search and recognition, from the likes of Apple Siri and Amazon Alexa. Have you then considered how this is adding a key customer touchpoint your marketing approach needs to adopt and adapt to? Such examples help fuel the customer need for convenience, being able to request what they want, when they want it, and how.

Marketing Data

As data becomes richer in terms of what we understand about customer behaviour, the personalisation of the customer experience can become deeper – albeit at a time when the use of data is being re-evaluated by companies, such as Facebook. If you are continuing with the over-used approach of marketing to “millennials”, this will limit how your brand or customer experience connects with twenty- to thirty-year olds today – as building your marketing approach will be subject to change in observing this consumer group. There is a huge opportunity in blending customer data from silos, such as combining what you know from your business data on your customers, with that which is coming from social data. Your marketing teams will need to best balance the careful use of client data, segmenting based on specific personas, and on a personalised experience on how your customers wish to interact. 

2. Be more than a service. Be a trusted brand with values

“Your brand is what people say about you when you’re not in the room” (Jeff Bezos)

If you have not yet positioned your brand to a set of values, you should do so in 2019. The majority of today’s customers are belief-driven buyers, harnessing their brand loyalty to what the company stands for. Whether that is helping others, trust, quality, innovation etc. Although there maybe a danger of alienating some of your customers, your brand values can deepen your customer-company relationship at an emotional level. 

3. Manage your reputation; be prepared for a crisis

“It takes twenty years to build a reputation and five minutes to ruin it” (Warren Buffett)

With Google, if a result is based on an established view, it will find its way on to the first page. Taking this approach, if the sentiment about your brand is a bad one, intentionally or accidentally, then this may cause significant collateral damage for a long time – if a suitable response is not deployed. With the depth of opportunity for brands to advertise on nearly every website and platform consumers use, negative reviews can proliferate rapidly. And it is essential you’re able to respond to help mitigate, correct, or address the perception. For example, you might be listening to what people are saying online and making adjustments accordingly. No company is safe from reputation or brand crises and, as such, you should have a dedicated team owner to manage such an unfortunate event.

 

Lotuswise Chartered Accountants and Business Consultants can help you and your business succeed. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores

 

Watch the video here.

 

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Why choosing the right location for your business matters

Why choosing the right location for your business matters

How Do You Choose The Right Location For Your Business?

When you consider Amazon’s recent decision on the new location for their business, it makes you think about some aspects to consider, when making a similar investment of your own. Your location should be consistent with your particular style and image. If your business is retailing, do you want a traditional store, for example? Or maybe you’d like to operate from a kiosk or a cart you can move from place to place? Let’s look into a few aspects of business location and why they matter so much…

 

1. Who Are Your Customers?

Demographics play an important part in your choice of location. So, consider who your customers are, and, how important their proximity might be to you. If you are a retailer or some service provider, this is a critical consideration. But if you are any other types of businesses, however, this might not be as important. Research and review the community in which you want to establish your business and ask yourself: is  there a sufficient percentage of that population that matches your customer profile? But you should also look into communities that are largely dependent on a particular industry for their economy, as a downturn could be bad for business. In addition, consider any of the work force skills required. Are there people with these skills in the community? With sufficient housing, schools, recreational opportunities, and culture?

 

2. What Is The Footfall, Traffic And Parking like?

If you are a retail business, then consider where shoppers are likely to pass by, rather than being hidden away. Try monitoring traffic outside of the location at various times throughout the day. Then assess how accessible the facility will be for customers, employees and suppliers. If requiring deliverables, try to establish whether suppliers are able to easily and efficiently courier. You also need to make sure there is convenient parking for both customers and employees. As with foot traffic, you also need to monitor the facility at various times and days, and see how demand for parking fluctuates.

 

3. Are There Any Competitors / Other Services?

Another important factor you need to take into account is: are competing companies located nearby? As this could sometimes be good. Like for example for industries where comparison shopping is popular, as you can catch the overflow from existing businesses. If a nearby competitor is only going to make your marketing job tougher, look elsewhere. In addition, consider what other businesses and services are in the vicinity: is there any benefit from customer traffic, is there a suitable range of places and restaurants for employees? You might also want to think about the location of other facilities nearby, such as child care, convenient shops, etc.

 

4. What About The Infrastructure, Utilities And Costs?

You really want to check the building you’re interested in, has the actual infrastructure you need – adequate electrical, air conditioning, and telecommunications services – to support your business requirements and meet your present and future needs. For utilities, check what’s actually included in your rent, as this can be a major part of your expenses. Lastly, verify the medium-to-long-term rental expectations and commitments, so you can mitigate any potential rental rise.

 

 

Lotuswise Chartered Accountants and Business Consultants can help you and your business succeed. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.

 

 

Watch the video here.

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Gifts…7 things you should know about Gifts… And Taxes

Gifts…7 things you should know about Gifts… And Taxes

‘Tis The Season for Gifts… And Taxes…

Christmas Is The Time For Giving

If you are thinking about making gifts this Christmas, you should take advantage of the various inheritance tax (IHT) exemptions and reliefs available to you. But you should also bear in mind that certain gifts can also have capital gains tax (CGT) implications.

The IHT Annual Exemption – Use It Or Lose It!

Although not particularly generous at £3,000 per donor per annum, if your annual IHT exemption is not used by 5 April, it is lost, although it is possible to carry your allowance forward one year if unused. This means that if your annual allowance for 2017/18 was not used, you may make gifts of up to £6,000 in 2018/19. So, where gifts to individuals exceed your annual exemption, there may still be no inheritance tax to pay, if they survive for 7 years following the gift or the gift falls within the £325,000 nil rate band.

Gifts Out of Income Are Not Taken Into Account For IHT

A more generous inheritance tax exemption might apply to you if, as a donor, you can prove that you are not transferring capital, but making gifts out of your income. In fact, there are detailed conditions for this exemption to apply, requiring that you keep records of your income and expenditure, to prove that you have sufficient surplus income each year, to make regular gifts to beneficiaries. 

Certain Gifts Can Have Capital Gains Tax Consequences 

Although you may not have to pay any CGT on gifts of cash, you may well have to pay it where gifts include shares or other assets. This is because the transaction will generally be deemed to take place at market value, between connected persons, even though no money changes hands. The amount of the gain would normally be determined by comparing the market value, with the original cost of the asset gifted. Where the amount of this gain is within the annual CGT allowance (currently £11,700), then you wouldn’t have to pay any CGT. Where your gift comprises shares in a trading company, or other business assets, it may be possible for you, as a donor and recipient to sign an election, to hold over the gain, so that no CGT is payable by the donor, at the time of the gift. The effect of such an election, is that if you are the recipient of the asset, you will take over the donor’s original cost for subsequent disposal. 

Not All Shares Qualify For CGT Entrepreneurs’ Relief Now

As the result of changes announced in the Autumn Budget, and now incorporated into the latest Finance Bill, if you have any shares, not all ordinary shares necessarily qualify for the 10% CGT entrepreneurs’ relief rate on disposal. As mentioned in our last month’s Autumn Budget Special post, the definition of a personal company was tightened up. So, from 29 October, if you are a shareholder, you must have entitlement to at least 5% of the company’s ordinary share capital, voting rights, profits available for distribution, and assets available on the winding up of the company. As a shareholder, as before, you will also need to be an officer or employee of the company. Subsequently, this change means that certain “alphabet” and other shares with limited rights, may no longer qualify for CGT entrepreneurs’ relief when disposed of. 

Gifts Of Up To £50 To Employees

From April 2016, new rules were introduced to allow you, as an employer, to provide your directors and employees with certain “trivial” benefits in kind, tax free.

The new rules were brought in as a simplification measure, so that, if you are considering certain benefits in kind, they now do not need to be reported to HMRC, as well as being tax free for your employee. You must of course meet a number of conditions to qualify for the exemption.

Conditions for the exemption to apply:
•    The cost of providing the benefit does not exceed £50
•    The benefit is not cash or a cash voucher
•    The employee is not entitled to the benefit as part of any contractual obligation, such as a salary
sacrifice scheme
•    The benefit is not provided in recognition of particular services performed by the employee, as part of their employment duties (or in anticipation of such services)

So this exemption will generally apply to your small gifts to staff at Christmas, on their birthday, or other occasions and includes gifts of food, wine, or store vouchers. Note that as an employer, if you are a “close” company, and you are providing the benefit to an individual who is a director or other office holder of the company, the exemption is capped at a total cost of £300 in the tax year. 

Gifts To Charity

Where possible, if you are a higher rate taxpayer, you should “Gift Aid” any payments to charity, to provide them with an additional benefit and for you, as an individual, to obtain additional tax relief on the payment. For example, where you make a £20 cash donation to charity, the charity is able to reclaim a further £5 from HMRC, making a gross gift of £25. Where you are a 40% higher rate taxpayer, you are able to claim a further £5 tax relief under self-assessment, reducing your net cost to £15. Note that you, as a donor are required to make a declaration that you are a UK taxpayer, and those that have not suffered sufficient UK tax to support the Gift Aid amount, will be taxed on the shortfall. Remember that Gift Aid does not just apply to gifts of cash. Many charity shops will now sell your donated items on your behalf, and are able to treat the sale proceeds as Gift Aided donations. It is also possible to gift quoted securities, land and buildings, to charity and claim Gift Aid on the market value of those assets.

Collecting Unpaid Tax For 2017/2018 Through Your PAYE Coding

Under certain circumstances, you can arrange the collection of unpaid tax through your PAYE coding, rather than making a balancing payment on 31 January. This will depend upon the amount outstanding, and the amount of income taxable under PAYE. But you must submit your return to HMRC, online, before 30 December 2018, for the 2017/18 tax to be collected, by amending the 2019/20 PAYE coding. 

Diary Of Main Tax Events – December 2018 / January 2019

Date

What’s Due

01/12/2018 Corporation tax for year to 28/02/2018 unless quarterly instalments apply
19/12/2018 PAYE & NIC deductions, and CIS return and tax, for month to 5/12/18 (due 22/12 if you pay electronically)
30/12/2018 Deadline for filing 2017/18 tax return online in order to request that HMRC collect outstanding tax via the 2018/19 PAYE code
01/01/2019 Corporation tax for year to 31/03/2018
Unless quarterly instalments apply
19/01/2019 PAYE & NIC deductions, and CIS return and tax, for month to 5/1/19 (due 22/1 if you pay electronically)
31/01/2019 Deadline for filing 2017/18 self-assessment tax return online and paying your outstanding tax for 2017/18
01/02/2019 Corporation tax for year to 30/04/2018
Unless quarterly instalments apply

 

Lotuswise Chartered Accountants and Business Consultants can support your business with the complexities of these tax and payment rules and help you succeed. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.

Watch the video here.

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Making Tax Digital for VAT – Don’t join until you read this!

Making Tax Digital for VAT – Don’t join until you read this!

Making Tax Digital – Growing confidence 

It’s official! If you are a Sole trader or a company with up-to-date VAT affairs, you are now able to join HMRC’s test phase for VAT Making Tax Digital (MTD). While testing of VAT-MTD started last April, until now, it has been on a limited, controlled, invitation-only basis.  In what can be taken as a clear indication of the department’s confidence, the VAT MTD pilot has now been opened to accept everyone.
 

New Guidance

In support of the public test phase, you can now consult a suite of new and updated guidance, available to help you, VAT-registered businesses and their agents, get to grips with the new requirements. The newly published guidance covers:

HMRC has also published a series of videos on its Help and Support page:

Can everyone join?

As of last month, provided you haven’t incurred a default surcharge in the last two years, you and just over 40% of the approximate 1.1 million VAT-registered entities, who are required to keep digital records and file MTD-compliant VAT returns from April next year, will be able to apply to onboard early. A further 100,000 will be able to join the public pilot by the end of this month.  

What if you can’t join?

There’s a small but significant list of VAT registered entities who, as of yet, remain unable to join the pilot. You can’t join if:

  • Trade with the EU
  • Are based overseas
  • Submit VAT returns annually
  • Make payments on accounts
  • Use the flat rate scheme
  • Are newly registered and have not yet filed a return
  • Are members of VAT groups or VAT divisions
  • Have received a Default Surcharge notice in the last 24 months. However, they will be allowed in by the end of this month.
  • Are unincorporated not-for profit organisations
  • Are trusts
  • Are Local Authorities who complete VAT form 21
  • Are Public Corporations

Timetable

To help you plan, HMRC has published a timetable indicating when each of the embargoed cohorts will be able to join the pilot.

3.5% to get a deferral

HMRC has reported that 3.5% of those mandated will not be able to onboard before the end of December. This cohort will have their mandation date pushed back to October 2019. You are affected if you are / have:

  • VAT groups or VAT divisions
  • Overseas traders registered for VAT
  • Trusts
  • Local Authorities
  • Public Corporations

If you are in the deferral group, HMRC will contact you in writing.

What is Making Tax Digital?

Making Tax Digital is a key part of the government’s plans to make it easier for you, individuals and businesses, to get your tax right and to keep on top of your affairs. This will ultimately result, for you and millions of people, in the end of the annual tax return. As the first stage of a wider roll-out process, if you are a VAT-registered business with VAT-able turnover above the compulsory £85,000, your registration threshold will be mandated to join the VAT Making Tax Digital for Business regime. To meet your VAT return obligations, this will apply to all return periods commencing April 2019. As a minimum, you will be required to maintain your VAT records digitally and to file MTD-compliant VAT returns, using third party software. If you are mandated to join, you will no longer be able to log on to HMRC’s portal to complete and file your online return. If your business is voluntarily registered for VAT, with a VAT-able turnover under £85,000, you will not be required to use the system, although you can choose to do so voluntarily.
 

 

Lotuswise Chartered Accountants and Business Consultants can help you with Making Tax Digital and help your business succeed. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.

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Self Employed: 5 Steps To Help You Set Up

Self Employed: 5 Steps To Help You Set Up

Self Employed?

If you’ve made the decision to move towards working for yourself, you should consider if you want to be a sole trader, a shareholding director of a limited company, or trade as a partnership. Once you’ve decided, you will need to inform HMRC. So, if you choose to go self employed or enter into a partnership, you will need to advise HMRC, so they can register you to receive a self assessment tax return.  In addition, you will also need to tell them if you form a limited company. And, as a self employed person (including a partner), you will likely be required to pay income tax and Class 2 and 4 National Insurance contributions, under self assessment.

1.     Self employed start up costs

Starting up a new business can be a costly exercise, and you’ll need to open a new business bank account for all your future work-related expenditure. It is vital you always keep records of accounts, to help you ensure you report the correct taxable profit to HMRC, after the end of any tax year.

Budgeting and forecasting

When you’re writing your financial forecast for your business, you should consider the following:

  • Do you have access to funds you can use to start up your business?
  •  Do you have savings to carry you through periods of no income or unexpected expenses?
  • Are there any life changing events on the horizon, such as moving to a new house or having a new baby?
  • When employing staff, have you considered sick pay and annual leave?

2.     Are there any self employed credits or grants available?

You also have to understand if you’re eligible to claim any self employed benefits, tax credits or even grants. You can check this easily by accessing organisations like the Citizens Advice Bureau or Gov.UK websites, to establish what you might be eligible for.

 

3.     What about Location?

If you go self employed, you’ll need to decide where to locate your new business. You could run it from the comfort of your own home, or you may need to rent or purchase another property, as your place of work. If you decide to rent business premises, it is vital you check if there are any rules in place, restricting business activity. What’s more, you also need to check if the environment is suitable for the type of work to take place. If you are renting an office space, you must ensure you know your monthly costs, outside of your initial rental payments. Costs such as services, or any upcoming upgrades to the building, which may increase the rental costs in the future. In addition, don’t forget that, if you convert part of your home into businesses premises, you may be required to pay business rates, on top of any existing council tax commitment. You will also be asked to pay these rates, if you convert any part of your property into a shop/workshop. This will also be the case if client visits become a daily occurrence and you have dedicated rooms in your home, solely for business purposes. 

 

4.     Insurance

Check your insurance policy and, if in any doubt, call your broker to see if you need to take out additional cover for any business activity within your household. This isn’t an expensive addition, and most companies will combine additional cover into one domestic and business policy. If your business requires clients to enter your property, you may be advised to take out public liability insurance, another inexpensive addition to your insurance policy. You may also be required to hold a licence, depending on the nature of your business.

 

5.     Business name

When deciding if you’re going to use a trading name for your business, you’ll need to be aware of any restrictions in place. If you’re thinking of forming a company, you can check if your proposed company name is already in use by using the Companies House name availability checkerIf your business is to have a website, you’ll need to check if there are suitable domains available for your business name. Once everything’s in place, you can get to work on your new business, and enjoy working for yourself.

 

Lotuswise Chartered Accountants and Business Consultants can help you and your business, setting up as self employed, forming a limited company, and selecting the right cloud accounting solutions, such as QuickBooks. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.

 

 

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Google Search Results: How To Keep Your Website Relevant

Google Search Results: How To Keep Your Website Relevant

Google Search: When it comes to online search, Google is still the world’s most popular search engine. Google’s search engine algorithm is continuously being updated, so how do you keep your firm’s website up to date, so that you show up in online searches?

 

More than 2.3 million Google searches are conducted every single minute. The top 5 search results on Google get over 70% of the click through traffic. There is no point your business being on the second or third page of search results – people don’t tend to look that far. Your firm needs to be in the top half of the first page in order to allow potential customers to find your business online.

 

Mobile Search

Mobile search is also on the rise – 88% of smart-phone users are searching on Google. As such, you should make sure that your firm’s website is optimised for smart-phone screens as well as computers and tablets.

 

Google Search Console

Google offers a free service called Google Search Console, which allows you to submit your website to Google for indexing.  And, you can also use the tool to identify any potential search related errors on your site, view the kinds of search queries that are driving traffic to your site, etc.

 

Google My Business

You can also link your firm’s website to Google My Business. As this can help your website to appear in relevant geographic search results.  Google will then send a postcard, to verify your business’s physical address, and your firm will show up if people are searching for a business like yours in their local area.

 

Your Website Speed

The speed at which your website loads also affects the way it is ranked by Google. That’s why Google ranks faster loading sites higher than slow websites.  So, you can make your site load faster by minimising the size of image files and using fast hosting services.

 

Keywords, keywords and keywords

Finally, ensure that you use relevant keywords in your page titles, meta descriptions, URLs and throughout your actual content. And make sure you don’t use too many keywords as this can actually have a negative effect on your site’s Google ranking. If in doubt, consider hiring in an external consultant to help you. 

 

Lotuswise Chartered Accountants and Business Consultants can help you and your business succeed. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.

 

 

 

 

 

 

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This Is What Really Motivates Employees

This Is What Really Motivates Employees

We all work to get paid but is money alone enough to motivate your employees?

Regardless of the type of business you run, you need to pay your employees fairly and in line with your competitors. If you don’t pay your people in line with the market, it can act as a de-motivator. However, once your pay scales are in line with industry norms, money alone isn’t really enough to keep your employees performing at a high level… 

Pay, Freedom and flexible working

Paying in line with the market tends to achieve a rather neutral position, where there is no dissatisfaction among your employees, but this does not translate into them being more motivated. In fact, various studies have shown that employees place a high value on freedom. Indeed, they value flexible working, the opportunity to work from home when they want to, and they want to work for businesses that invest in the technology that allows them to do this.

Business is 24/7 when you take full advantage of flexible working!

Business is not just 9 to 5 anymore – it’s 24/7. So why should your employees be tied to a 9 to 5 work day? Businesses can benefit from this flexibility – projects led by agile workers tend to be completed quicker. Progress doesn’t just happen between 9am and 5pm. When the pressure is on, your flexible employees will stay late and get the job done. Conversely when things are quiet, they want the flexibility to go to the gym or do the school run. Modern professionals may well choose to work for an employer that has embraced agile working over and above a business that pays a little bit higher than market rate, but doesn’t offer flexible working.

Flexible working and purpose

Assuming your firms pay is in line with the market, your employees will be focused on job satisfaction. Again, various research studies have shown that high performing employees are motivated by purpose. They want to understand how their work contributes to the overall success of the business.

Flexible working, purpose and job satisfaction

They also want to get involved in projects and take responsibility for delivering their objectives. If you give people the opportunity to work on meaningful projects in a way that makes them feel they are contributing to the success of the firm, they will be more motivated. As far as recruitment is concerned, we are in the midst of a war for talent. The best people will stay with the businesses that offer them job satisfaction.

So, does money really motivate employees?

Yes and no. There is an expectation that they should be paid in line with the market. Beyond that, they will focus on job satisfaction, flexible working, etc. 

 

Lotuswise Chartered Accountants and Business Consultants can help you and your business succeed. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.

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Brexit Uncertainty: How To Manage In These Worrying Times

Brexit Uncertainty: How To Manage In These Worrying Times

Managing Brexit Uncertainty

Due to Brexit, 2019 looks set to be a year filled with uncertainty for businesses. The future is always unknown, but this year managers will need to navigate some particularly choppy waters, due to market uncertainty and global political turmoil.

Focus on what you can control

As a manager, you can always control your response, attitude, behaviour, actions and words. You can choose to be proactive and inquisitive rather than paralysed. In these times of Brexit uncertainty, the best managers step up and embrace their authority. When times are uncertain, your team wants you to lead the way. Bring your team with you on the journey, ask them for their opinion, include them in your planning conversations and challenge them to come up with new solutions.

Cash is king

In uncertain times, the old adage that “cash is king” carries even more weight. Cash is the lifeblood of your business, and poor cash flow management kills businesses during tough economic times. Market volatility also creates opportunities. If you have cash or credit available to take advantage of these opportunities when they present themselves, you may be able to move quickly and move your business forward. As such, good cash flow management can allow you to cash in and manage Brexit uncertainty effectively.

Embrace change and adapt

As your particular market changes, there will be opportunities for you to adapt. For example, if your customers have less budget to spend on buying products and services in your sector, it might be an opportunity for you to introduce a lower priced “value offering.” You could even go one step further and change your pricing model. For example, you could move clients to monthly retainers, rather than charging a once-off annual fee. Hence capitalising on Brexit uncertainty.

Diversify

If you depend on one big client to keep your business going, you should consider how to diversify your client base. Sometimes even giant businesses fail during tough times. If your biggest client goes out of business, you don’t want to be collateral damage. Just like in investing, the key is to have a diversified portfolio. Precisely because of Brexit uncertainty, now could be a good time to look at trying to win some new clients in order to make your business more resilient.

Lotuswise Chartered Accountants and Business Consultants can help you make sense out of Brexit uncertainty and potentially worrying times and also help your business succeed. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.

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MTD for VAT Pilot: This Is What You Should Know

MTD for VAT Pilot: This Is What You Should Know

MTD for VAT Pilot is Now… Open to All

You may have heard that, on 10 January 2019, HMRC announced that their Making Tax Digital for VAT (MTDfV) pilot was now open. As such, it is accessible to all those mandated to keep digitally compliant records and to file MTD-compatible VAT returns, for return periods commencing after 31 March 2019. Plus, in an email issued, HMRC stated that: “this marks a significant milestone towards our ambition to become one of the most digitally advanced tax administrations in the world.” And, HMRC boasts that over one hundred VAT-registered businesses, of which you may well be one, are now signing up to the scheme on a daily basis, with more than 3,500 having already joined.

Testing time

Even though,  like the majority, you may not need to file up your first MTD-complaint return until early August, the department wants you and “as many eligible businesses as possible to join the pilot ahead of the mandation of the service in April”, as it will provide assurance that the service works for you and all types of customers.

What does it mean?

This means that, if you are a VAT-registered entity, with an annual VAT-able turnover in excess of the £85,000 compulsory registration threshold – i.e. you are mandated to onboard from April – you will now have the chance to test your accounting system, prior to April. If you are in the minority of compulsory registered businesses – i.e. with the most complex VAT affairs – you would have had your mandation date deferred to your first return period, starting on or after 1 October 2019.

VAT groups now able to join the pilot  

In addition, HMRC has also opened its MTDfV pilot to VAT groups with immediate effect. What that means is that if you are within a VAT group, you are now able to start testing the service – even though you are not mandated to join until October. The department stated that it “will continue to update you as we open up the pilot to the remainder of the population who are mandated to join from October.”

Want to know more?

You can find further details in HMRC’s updated guidance for businesses, updated guidance for agents, and the stakeholder partner packs on GOV.UK.

 

Lotuswise Chartered Accountants and Business Consultants can help you make sense out of the MTD for VAT scheme and also help your business succeed. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.

   

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How To Overcome Your Fear Of Failure

How To Overcome Your Fear Of Failure

One of the most common things holding us back from achieving our potential in business is our fear of failure.

 

Fear of failure is often linked to our human nature: to fear the unknown. When we push ourselves outside of our comfort zones, whether in business or in our personal lives, it is pretty normal to feel some degree of stress and anxiety.

We Are What We Do

In business, many of us consider our work to be representative of who we are as a person. As such, we can often view a failure in the workplace as a personal failure. This fear can often manifest itself in such a way that, we avoid reaching for new targets or striving towards new goals, in case we fail. We fear that such a failure, in such a public way, could change the way others view us, and indeed how we view ourselves. This can result in us holding ourselves back, because we fear failure.

No such thing as failure, only learning opportunities

It can be helpful to refocus and see “failures” as “learning opportunities”. Some of the world’s greatest entrepreneurs, including the likes of Richard Branson, have failed several times in business. However, they view these failures as learning opportunities. Each time you fall over, you must learn how to get back up and apply that learning next time around.

Change the way you think

Change the way you think about your goals and objectives. Don’t frame each business objective in order to avoid a potential failure. This is setting the objective in a negative context. Instead, set your objectives in a positive context. For example, set an objective to explore a new potential business case in order to learn about that opportunity. The goal is to learn, rather than to create, a new part of the business.

Visualisation is key

Finally, it can be helpful to visualise obstacles. Think of a situation in which you are afraid of failure.  Visualise yourself hitting an obstacle, allow yourself to feel the fear, and then see yourself moving forward. Next, spend a few minutes planning how to overcome whatever obstacles may stand in your way. Then see yourself succeeding despite these obstacles. You need to train your brain to focus on the solution, rather than the fact that there is an obstacle in your way!

Lotuswise Chartered Accountants and Business Consultants can help you and your business succeed. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.

 

Watch the video here.

 

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Marketing Trends 2019: This Is What You Should Know

Marketing Trends 2019: This Is What You Should Know

Marketing Trends To Watch Out For 2019

As we leave 2018 behind, it’s worth taking stock of this period of increased regulation on customer data protection and privacy – in parallel with its acceleration in marketing technology capabilities. Here, we give you an overview of what to consider in terms of the evolving expectations, demands on customer journeys, and the impact they may have on the marketing aspect of your business. Here are the top three marketing trends and strategies for you to consider for 2019.

 1. Evolving customer experience and journeys

2018 brought us more paths through which customers can satisfy their ideal approach to buying. As such, you need to take into account the onset of conversational user interfaces, through voice search and recognition, from the likes of Apple Siri and Amazon Alexa. Have you then considered how this is adding a key customer touchpoint your marketing approach needs to adopt and adapt to? Such examples help fuel the customer need for convenience, being able to request what they want, when they want it, and how.

Marketing Data

As data becomes richer in terms of what we understand about customer behaviour, the personalisation of the customer experience can become deeper – albeit at a time when the use of data is being re-evaluated by companies, such as Facebook. If you are continuing with the over-used approach of marketing to “millennials”, this will limit how your brand or customer experience connects with twenty- to thirty-year olds today – as building your marketing approach will be subject to change in observing this consumer group. There is a huge opportunity in blending customer data from silos, such as combining what you know from your business data on your customers, with that which is coming from social data. Your marketing teams will need to best balance the careful use of client data, segmenting based on specific personas, and on a personalised experience on how your customers wish to interact. 

2. Be more than a service. Be a trusted brand with values

“Your brand is what people say about you when you’re not in the room” (Jeff Bezos)

If you have not yet positioned your brand to a set of values, you should do so in 2019. The majority of today’s customers are belief-driven buyers, harnessing their brand loyalty to what the company stands for. Whether that is helping others, trust, quality, innovation etc. Although there maybe a danger of alienating some of your customers, your brand values can deepen your customer-company relationship at an emotional level. 

3. Manage your reputation; be prepared for a crisis

“It takes twenty years to build a reputation and five minutes to ruin it” (Warren Buffett)

With Google, if a result is based on an established view, it will find its way on to the first page. Taking this approach, if the sentiment about your brand is a bad one, intentionally or accidentally, then this may cause significant collateral damage for a long time – if a suitable response is not deployed. With the depth of opportunity for brands to advertise on nearly every website and platform consumers use, negative reviews can proliferate rapidly. And it is essential you’re able to respond to help mitigate, correct, or address the perception. For example, you might be listening to what people are saying online and making adjustments accordingly. No company is safe from reputation or brand crises and, as such, you should have a dedicated team owner to manage such an unfortunate event.

 

Lotuswise Chartered Accountants and Business Consultants can help you and your business succeed. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores

 

Watch the video here.

 

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Why choosing the right location for your business matters

Why choosing the right location for your business matters

How Do You Choose The Right Location For Your Business?

When you consider Amazon’s recent decision on the new location for their business, it makes you think about some aspects to consider, when making a similar investment of your own. Your location should be consistent with your particular style and image. If your business is retailing, do you want a traditional store, for example? Or maybe you’d like to operate from a kiosk or a cart you can move from place to place? Let’s look into a few aspects of business location and why they matter so much…

 

1. Who Are Your Customers?

Demographics play an important part in your choice of location. So, consider who your customers are, and, how important their proximity might be to you. If you are a retailer or some service provider, this is a critical consideration. But if you are any other types of businesses, however, this might not be as important. Research and review the community in which you want to establish your business and ask yourself: is  there a sufficient percentage of that population that matches your customer profile? But you should also look into communities that are largely dependent on a particular industry for their economy, as a downturn could be bad for business. In addition, consider any of the work force skills required. Are there people with these skills in the community? With sufficient housing, schools, recreational opportunities, and culture?

 

2. What Is The Footfall, Traffic And Parking like?

If you are a retail business, then consider where shoppers are likely to pass by, rather than being hidden away. Try monitoring traffic outside of the location at various times throughout the day. Then assess how accessible the facility will be for customers, employees and suppliers. If requiring deliverables, try to establish whether suppliers are able to easily and efficiently courier. You also need to make sure there is convenient parking for both customers and employees. As with foot traffic, you also need to monitor the facility at various times and days, and see how demand for parking fluctuates.

 

3. Are There Any Competitors / Other Services?

Another important factor you need to take into account is: are competing companies located nearby? As this could sometimes be good. Like for example for industries where comparison shopping is popular, as you can catch the overflow from existing businesses. If a nearby competitor is only going to make your marketing job tougher, look elsewhere. In addition, consider what other businesses and services are in the vicinity: is there any benefit from customer traffic, is there a suitable range of places and restaurants for employees? You might also want to think about the location of other facilities nearby, such as child care, convenient shops, etc.

 

4. What About The Infrastructure, Utilities And Costs?

You really want to check the building you’re interested in, has the actual infrastructure you need – adequate electrical, air conditioning, and telecommunications services – to support your business requirements and meet your present and future needs. For utilities, check what’s actually included in your rent, as this can be a major part of your expenses. Lastly, verify the medium-to-long-term rental expectations and commitments, so you can mitigate any potential rental rise.

 

 

Lotuswise Chartered Accountants and Business Consultants can help you and your business succeed. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.

 

 

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Gifts…7 things you should know about Gifts… And Taxes

Gifts…7 things you should know about Gifts… And Taxes

‘Tis The Season for Gifts… And Taxes…

Christmas Is The Time For Giving

If you are thinking about making gifts this Christmas, you should take advantage of the various inheritance tax (IHT) exemptions and reliefs available to you. But you should also bear in mind that certain gifts can also have capital gains tax (CGT) implications.

The IHT Annual Exemption – Use It Or Lose It!

Although not particularly generous at £3,000 per donor per annum, if your annual IHT exemption is not used by 5 April, it is lost, although it is possible to carry your allowance forward one year if unused. This means that if your annual allowance for 2017/18 was not used, you may make gifts of up to £6,000 in 2018/19. So, where gifts to individuals exceed your annual exemption, there may still be no inheritance tax to pay, if they survive for 7 years following the gift or the gift falls within the £325,000 nil rate band.

Gifts Out of Income Are Not Taken Into Account For IHT

A more generous inheritance tax exemption might apply to you if, as a donor, you can prove that you are not transferring capital, but making gifts out of your income. In fact, there are detailed conditions for this exemption to apply, requiring that you keep records of your income and expenditure, to prove that you have sufficient surplus income each year, to make regular gifts to beneficiaries. 

Certain Gifts Can Have Capital Gains Tax Consequences 

Although you may not have to pay any CGT on gifts of cash, you may well have to pay it where gifts include shares or other assets. This is because the transaction will generally be deemed to take place at market value, between connected persons, even though no money changes hands. The amount of the gain would normally be determined by comparing the market value, with the original cost of the asset gifted. Where the amount of this gain is within the annual CGT allowance (currently £11,700), then you wouldn’t have to pay any CGT. Where your gift comprises shares in a trading company, or other business assets, it may be possible for you, as a donor and recipient to sign an election, to hold over the gain, so that no CGT is payable by the donor, at the time of the gift. The effect of such an election, is that if you are the recipient of the asset, you will take over the donor’s original cost for subsequent disposal. 

Not All Shares Qualify For CGT Entrepreneurs’ Relief Now

As the result of changes announced in the Autumn Budget, and now incorporated into the latest Finance Bill, if you have any shares, not all ordinary shares necessarily qualify for the 10% CGT entrepreneurs’ relief rate on disposal. As mentioned in our last month’s Autumn Budget Special post, the definition of a personal company was tightened up. So, from 29 October, if you are a shareholder, you must have entitlement to at least 5% of the company’s ordinary share capital, voting rights, profits available for distribution, and assets available on the winding up of the company. As a shareholder, as before, you will also need to be an officer or employee of the company. Subsequently, this change means that certain “alphabet” and other shares with limited rights, may no longer qualify for CGT entrepreneurs’ relief when disposed of. 

Gifts Of Up To £50 To Employees

From April 2016, new rules were introduced to allow you, as an employer, to provide your directors and employees with certain “trivial” benefits in kind, tax free.

The new rules were brought in as a simplification measure, so that, if you are considering certain benefits in kind, they now do not need to be reported to HMRC, as well as being tax free for your employee. You must of course meet a number of conditions to qualify for the exemption.

Conditions for the exemption to apply:
•    The cost of providing the benefit does not exceed £50
•    The benefit is not cash or a cash voucher
•    The employee is not entitled to the benefit as part of any contractual obligation, such as a salary
sacrifice scheme
•    The benefit is not provided in recognition of particular services performed by the employee, as part of their employment duties (or in anticipation of such services)

So this exemption will generally apply to your small gifts to staff at Christmas, on their birthday, or other occasions and includes gifts of food, wine, or store vouchers. Note that as an employer, if you are a “close” company, and you are providing the benefit to an individual who is a director or other office holder of the company, the exemption is capped at a total cost of £300 in the tax year. 

Gifts To Charity

Where possible, if you are a higher rate taxpayer, you should “Gift Aid” any payments to charity, to provide them with an additional benefit and for you, as an individual, to obtain additional tax relief on the payment. For example, where you make a £20 cash donation to charity, the charity is able to reclaim a further £5 from HMRC, making a gross gift of £25. Where you are a 40% higher rate taxpayer, you are able to claim a further £5 tax relief under self-assessment, reducing your net cost to £15. Note that you, as a donor are required to make a declaration that you are a UK taxpayer, and those that have not suffered sufficient UK tax to support the Gift Aid amount, will be taxed on the shortfall. Remember that Gift Aid does not just apply to gifts of cash. Many charity shops will now sell your donated items on your behalf, and are able to treat the sale proceeds as Gift Aided donations. It is also possible to gift quoted securities, land and buildings, to charity and claim Gift Aid on the market value of those assets.

Collecting Unpaid Tax For 2017/2018 Through Your PAYE Coding

Under certain circumstances, you can arrange the collection of unpaid tax through your PAYE coding, rather than making a balancing payment on 31 January. This will depend upon the amount outstanding, and the amount of income taxable under PAYE. But you must submit your return to HMRC, online, before 30 December 2018, for the 2017/18 tax to be collected, by amending the 2019/20 PAYE coding. 

Diary Of Main Tax Events – December 2018 / January 2019

Date

What’s Due

01/12/2018 Corporation tax for year to 28/02/2018 unless quarterly instalments apply
19/12/2018 PAYE & NIC deductions, and CIS return and tax, for month to 5/12/18 (due 22/12 if you pay electronically)
30/12/2018 Deadline for filing 2017/18 tax return online in order to request that HMRC collect outstanding tax via the 2018/19 PAYE code
01/01/2019 Corporation tax for year to 31/03/2018
Unless quarterly instalments apply
19/01/2019 PAYE & NIC deductions, and CIS return and tax, for month to 5/1/19 (due 22/1 if you pay electronically)
31/01/2019 Deadline for filing 2017/18 self-assessment tax return online and paying your outstanding tax for 2017/18
01/02/2019 Corporation tax for year to 30/04/2018
Unless quarterly instalments apply

 

Lotuswise Chartered Accountants and Business Consultants can support your business with the complexities of these tax and payment rules and help you succeed. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.

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Making Tax Digital for VAT – Don’t join until you read this!

Making Tax Digital for VAT – Don’t join until you read this!

Making Tax Digital – Growing confidence 

It’s official! If you are a Sole trader or a company with up-to-date VAT affairs, you are now able to join HMRC’s test phase for VAT Making Tax Digital (MTD). While testing of VAT-MTD started last April, until now, it has been on a limited, controlled, invitation-only basis.  In what can be taken as a clear indication of the department’s confidence, the VAT MTD pilot has now been opened to accept everyone.
 

New Guidance

In support of the public test phase, you can now consult a suite of new and updated guidance, available to help you, VAT-registered businesses and their agents, get to grips with the new requirements. The newly published guidance covers:

HMRC has also published a series of videos on its Help and Support page:

Can everyone join?

As of last month, provided you haven’t incurred a default surcharge in the last two years, you and just over 40% of the approximate 1.1 million VAT-registered entities, who are required to keep digital records and file MTD-compliant VAT returns from April next year, will be able to apply to onboard early. A further 100,000 will be able to join the public pilot by the end of this month.  

What if you can’t join?

There’s a small but significant list of VAT registered entities who, as of yet, remain unable to join the pilot. You can’t join if:

  • Trade with the EU
  • Are based overseas
  • Submit VAT returns annually
  • Make payments on accounts
  • Use the flat rate scheme
  • Are newly registered and have not yet filed a return
  • Are members of VAT groups or VAT divisions
  • Have received a Default Surcharge notice in the last 24 months. However, they will be allowed in by the end of this month.
  • Are unincorporated not-for profit organisations
  • Are trusts
  • Are Local Authorities who complete VAT form 21
  • Are Public Corporations

Timetable

To help you plan, HMRC has published a timetable indicating when each of the embargoed cohorts will be able to join the pilot.

3.5% to get a deferral

HMRC has reported that 3.5% of those mandated will not be able to onboard before the end of December. This cohort will have their mandation date pushed back to October 2019. You are affected if you are / have:

  • VAT groups or VAT divisions
  • Overseas traders registered for VAT
  • Trusts
  • Local Authorities
  • Public Corporations

If you are in the deferral group, HMRC will contact you in writing.

What is Making Tax Digital?

Making Tax Digital is a key part of the government’s plans to make it easier for you, individuals and businesses, to get your tax right and to keep on top of your affairs. This will ultimately result, for you and millions of people, in the end of the annual tax return. As the first stage of a wider roll-out process, if you are a VAT-registered business with VAT-able turnover above the compulsory £85,000, your registration threshold will be mandated to join the VAT Making Tax Digital for Business regime. To meet your VAT return obligations, this will apply to all return periods commencing April 2019. As a minimum, you will be required to maintain your VAT records digitally and to file MTD-compliant VAT returns, using third party software. If you are mandated to join, you will no longer be able to log on to HMRC’s portal to complete and file your online return. If your business is voluntarily registered for VAT, with a VAT-able turnover under £85,000, you will not be required to use the system, although you can choose to do so voluntarily.
 

 

Lotuswise Chartered Accountants and Business Consultants can help you with Making Tax Digital and help your business succeed. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.

Watch the video here.

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