Do you want to join a forward thinking leading accountancy practice as one of their team - we have a position available for part qualified ACCA or newly qualified within our accounts team.
Main responsibilities will include preparation of accounts and management accounts. Other responsibilities will include bookkeeping, vat returns, tax and audit.
Audit experience preferable but not essential as training will be provided.
Regular client contact will be involved and some work will be client based so a full driving licence and own car are required.
Team management, organisational and communication skills are essential in the role.
If you are interested in becoming a part of a great team please contact Anne Parkinson - email@example.com - 01254 300050
Welcome to our monthly newswire. In this edition we focus on the Chancellor’s Autumn Budget announcements. Please contact us if you wish to discuss any matters in this newsletter.
MORE MONEY FOR NHS AND AN END TO AUSTERITY?
As previously announced, these were the main themes of the Chancellor Phillip Hammond’s third budget but what we were waiting to hear was where the extra money was going to come from? Had he found a “Magic Money Tree”, or would tax and borrowing have to increase?
We now know that the extra money will come from better than expected economic growth and consequential increased tax revenues. But there may have to be a Spring 2019 Budget if Brexit negotiations don’t go to plan….
PERSONAL ALLOWANCE AND HIGHER RATE LIMIT INCREASED EARLY
The Government’s manifesto pledge back in 2015 was that the personal allowance would rise to £12,500 in 2020 and the higher rate tax threshold to £50,000. However, the Chancellor has decided to bring forward these increases one year early from 2019/20, taking an estimated 1 million taxpayers out of higher rate tax.
Note that up to 10% of the personal allowance (£1,250 from 6 April 2019) may be transferred from one spouse or civil partner to the other if unused and the transferee is a basic rate taxpayer. As announced last year, this transfer is now available on behalf of deceased spouses and civil partners.
NO CHANGES IN TAX RATES
The basic rate of income tax and higher rate remain at 20% and 40% respectively, and the 45% additional rate continues to apply to income over £150,000.
There had been rumours that the dividend rate might be increased, but dividends continue to be taxed at 7.5%, 32.5% and then 38.1% depending upon whether the dividends fall into the basic rate band, higher rate band or the additional rate. Note that only the first £2,000 of dividend income is now tax free.
The annual ISA investment limit increased to £20,000 from 6 April 2017 and remains at that level for 2019/20. Dividends on shares held within an ISA continue to be tax free.
The much rumoured further restriction in pension tax relief failed to materialise.
IR35 “OFF-PAYROLL” RULES TO BE EXTENDED TO PRIVATE SECTOR
Very controversially, the Government have decided to extend the rules for personal service companies in the public sector to workers in the private sector from April 2020.
This follows a consultation in Summer 2018 on how to tackle non-compliance with the intermediaries legislation (commonly known as IR35) in the private sector. The legislation which has applied in the public sector since April 2017 seeks to ensure that individuals who effectively work as employees are taxed as employees, even if they choose to structure their work through a company. There will be further consultation on the detailed operation of the rules, and small businesses (yet to be defined) engaging such workers will be excluded.
This will represent a significant administrative burden on large and medium-sized businesses who will be required to decide whether the rules apply to payments to such workers and deduct tax and NICs.
CAPITAL GAINS ENTREPRENEURS’ RELIEF CHANGES
The Chancellor has announced that the minimum qualifying period for CGT entrepreneurs’ relief will be increased from 12 months to 24 months for disposals on or after 6 April 2019.
There are further changes affecting shareholdings in personal companies. In addition to the individual holding 5% or more of the ordinary share capital and voting control they will also now be required to be entitled to 5% or more of the company’s distributable profits and assets in a winding up. As now the individual must also be an officer or employee of the company concerned; and the company must be a trading company or the holding company of a trading group.
COMPANY TAX TO REDUCE TO 17%
As previously announced the current 19% rate is scheduled to reduce to 17% from 1 April 2020.
ANNUAL INVESTMENT ALLOWANCE INCREASED TO £1 m
The Annual Investment Allowance (AIA) which provides businesses with a 100% write off against profits when they acquire plant and machinery has been temporarily increased from £200,000 to £1 million for two years from 1 January 2019. This will again mean that the timing of expenditure will be critical. It may be advantageous to delay expenditure until after 1 January 2019 to get full benefit in certain circumstances.
However, the current enhanced capital allowance for energy efficient plant will be abolished from April 2020. A further change is that the writing down allowance for special rate pool equipment, broadly long-life assets and fixtures in buildings, is being reduced from 8% to 6% from April 2019.
NEW CAPITAL ALLOWANCE FOR COMMERCIAL BUILDINGS
A new 2% straight line tax deduction is being introduced for the cost of construction or renovation of commercial buildings and structures.
This tax break will apply to eligible construction costs incurred on or after budget day and will be available to commercial property landlords as well as trading businesses. The cost of the land is specifically excluded.
R&D TAX CREDIT RESTRICTED
The amount of repayable R&D tax credit for Small and Medium Sized Enterprises (SMEs) will again be restricted by the amount of the claimant company’s PAYE and NIC liability from April 2020.
The new limit will be set at three times the company’s total PAYE and National Insurance contribution (NICs) payment for the period.
VAT REGISTRATION LIMIT CONTINUES TO BE FROZEN
The VAT registration limit normally increases in line with inflation each year. However, It was announced last year that the limit would be frozen at £85,000 until 1 April 2020. It has now been announced that the limit will now remain at the same level until 2022. The deregistration limit will remain at £83,000.
MORE RATES RELIEF FOR SMALL BUSINESSES
There has been much lobbying from the small business sector to reduce business rates to enable traditional retailers in particular to compete with internet traders.
The Chancellor has announced a one third reduction in business rates for small businesses with premises with a rateable value up to £51,000.
DIARY OF MAIN TAX EVENTS - NOVEMBER/ DECEMBER 2018
Corporation tax for year to 31/03/2018 unless quarterly instalments apply
PAYE & NIC deductions, and CIS return and tax, for month to 5/11/18 (due 22/11 if you pay electronically)
Corporation tax for year to 30/04/2018 unless quarterly instalments apply
PAYE & NIC deductions, and CIS return and tax, for month to 5/12/18 (due 22/12 if you pay electronically)
Deadline for filing 2017/18 tax return online in order to request that HMRC collect outstanding tax via the 2018/19 PAYE code
If you've been following our blog series over the last few weeks you will have seen that we've explored Making Tax Digital (MTD), "Cloud" accounting and how the 2 interact.
What I wanted to look at in this blog is how using a cloud accounting package can help you to run your business more efficiently, whether or not you fall under the initial MTD legislation (because ultimately all businesses will eventually fall within it).
Why the need for cloud accounting?
Since the turn of the century or, even more so, the last decade the technologies around us have evolved and we are now more data rich than at any other time in human history. In turn this has meant that the community in which businesses operate has inevitably had to change and adapt and unless those businesses change with it then they risk falling into obscurity or worst still failing because they haven't adapted.
What are the benefits of cloud accounting?
As the world has become so much more fast paced so to has the need to get things done quickly. These days there are a myriad of things that demand your attention at any one time, be that dealing with customers, suppliers or spending time with the family. Everything is demanding more and more of our time and as an entrepreneur the very last thing you got into business for (unless you are an accountant) was to deal with your accounts, and that's why it always gets left until last.
This is where cloud accounting can help.
Cloud accounting can help you to efficiently capture data, quickly categorise data and see just how the business is performing at the click of a button.
This will save you both time and money through increased efficiency.
Let's look at the ways that cloud accounting helps:
Why should you implement cloud accounting?
For those out there that will fall into MTD (VAT registered over the VAT threshold) then there is a need to make the move and to make it quickly, there is only 6 months until the legislation comes in and you can be subject to penalties from HMRC if you don't file your returns using their recommended software solutions.
For the rest of you, there is real benefit in joining the cloud accounting revolution, access to real time information, less data entry and better collaboration amongst your team are all things that will make your business run more efficiently.
Either way you can look forward to an increased knowledge of your business and more time to do what you love.
For more information on how we can help you with the move to the cloud give us a call on 01254 300 050 to speak to a member of our team.
Over the last 2 blogs we have looked at " What is Making Tax Digital" and also "What is Cloud Accounting".
Now let's look at the interaction of both, is MTD's introduction really a good thing for your business?And how should we be embracing the change?
How will MTD benefit me?
HMRC's MTD compatible solutions are mainly cloud based accounting solutions, such as Xero and QuickBooks Online, which are capable of importing bank feeds and linking to 3rd party software capable of capturing your expense receipts without you needing to input them, this will make your bookkeeping process much more efficient if used correctly.
Secondary to the efficiency gains mentioned above is the ability for us, as your accountants, to access your data, in real time, at the same time as you without the need to send backups between each other.
This will lead to a smoother process when we both need to access the information at the same time, such as with Year End Accounts.
Ordinarily when using standard, desktop based, software the process for accountants to prepare anything on your behalf was either:
1. We come to your offices and "take over" your system to prepare the information that we need, or
2. You send us a backup which we then install on our system, make the changes that we need and then send the data back to you.
In some instances this can lead to your system being unavailable to use whilst we work on it, data being upgraded to an incompatible version or, worse still, data becoming corrupted and unable to be restored.
All of these can be time consuming and costly to, you, the business owner.
Any other benefits?
As well as those identified above, the actual filing of the returns to HMRC will be easier, from the current system of having to manually calculate the figures, log in to HMRC's portal, find the correct VAT period and re-key the details in to the boxes.
Using MTD compatible software should make this process as simple as pressing a single button in the software which will automatically send all the required information to HMRC, in the format that they require, without any need for further human interaction.
This is another efficient saving and will also eliminate the risk of errors from mistyped numbers, which could potentially open you up to penalty charges being imposed by HMRC.
MTD should be embraced by business owners as we move towards the future of tax reporting with HMRC. Rather than being more onerous, your entire bookkeeping process can become more streamlined and easier.
Get in touch on 01254 300 050 to see how our cloud accounting experts can help you with the transition to cloud accounting and identify efficiency gains that can help you.
Of the, currently, nearly 50 providers identified by HMRC of Making Tax Digital (MTD) software most offer "cloud" accounting packages.
Moving to "cloud" accounting can help you run your business more effectively, and efficiently, but first let's explore what "cloud" accounting is.
So what is Cloud Accounting?
In today's day and age we all use the cloud on a daily basis, from storage solutions such as iCloud and Google Drive to streaming services such as Netflix, the cloud is all around us and there is no getting away from it. We use it for the majority of things we do every day.
Cloud accounting is nothing new, in fact it's been around for a few years now. First and foremost it is a bookkeeping software just like you have always been used to as a business owner however it now utilises the cloud to save your data and allow you access from anywhere in the world.
Desktop solutions which have been the norm for so long are quickly being overtaken by the cloud accounting solutions as progressive, forward thinking, businesses have been quick to embrace this method of working.
Companies such as Xero and QuickBooks Online offer solutions that enable you to give access, restricted to the areas that they need, to both your team and your accountant. This enables real time collaboration across multiple members from anywhere in the world.
Usually accessed by a web browser cloud accounting packages can be accessed on different operating systems (MacOS or Windows etc.) across a multitude of devices (Mac, PC, tablet and smartphone) bringing a greater flexibility across how you are able to access your data.
And because everything is stored in the cloud there is no need to create backups of your data and send it to your accountant to do their work, and there is also no need to stop working on the data as has sometimes been the case too. Everyone can keep working, and doing what they need to do, with the system all the time.
How does cloud accounting affect me?
If you fall under the MTD legislation (initially VAT registered businesses above the VAT threshold) then from 1 April you will need to move to one of HMRC's recommended solutions or risk penalties being imposed from HMRC.
The next 6 months, before the introduction of MTD, would be a great time to assess the software and implement the preferred solution in your business. Which would also give you time to receive training, and get familiar with, the cloud solution that you have chosen.
Give us a call on 01254 300 050 for more information.
It is just over 6 months until HMRC shake up the tax reporting landscape with the introduction of the Making Tax Digital (MTD) legislation.
From 1 April 2019, and initially aimed at VAT registered businesses, MTD will require that businesses registered for VAT, maintain and file their VAT returns digitally using one of HMRC's approved solutions.
What does this mean?
HMRC have identified a list of software which is MTD compliant and all VAT returns, with a return period beginning after 1 April 2019, will need to be filed using 1 of these pieces of software.
Anybody that should fall within MTD but fails to do so will leave themselves open to penalties from HMRC.
As yet, there is no recommended HMRC solution for filing returns via spreadsheet.
I'm still keeping paper books and records, what are my options?
Don't worry if you are still keeping paper books and resources, there are still options available to you, although they will involve moving to one of HMRC's solutions.
There are ways to do this that may include continuing to maintain your books and records on paper and paying an accountant to convert these on to one of HMRC's solutions before filing.
We would not recommend this though as it will be costly and time consuming to you.
Our recommendation would be that you speak to a member of our team here, identify which solution would be best for you from HMRC's list and then implement it in to your business well in time for your required date for MTD purposes.
We can even offer guidance and training in our recommended solutions.
If you'd like to explore how we could help you with the switch to MTD then please give us a call on 01254 300 050 to speak to a member of our team.
See the table below for the changes to the National Living Wage and the National Minimum Wage. The rates change every April.
Other important changes from April 2018 are:
If you have any questions or would like any more information on any of the upcoming changes then contact our payroll department on 01254 300050.
22-28 Willow Street, Accrington, Lancashire, BB5 1LP
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