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Should I buy a property through a company?

The last few years we have witnessed an unprecedented wave of legislation against buy to let landlords. First there was the 3% rise in stamp duty for second or more properties. Then there was the removal of tax relief on interest payments for higher rate taxpayers. If that wasn't enough, the wear and tear allowance worth 10% of rents on furnished was also abolished.Tax bills for landlords holding property in their own name will undoubtedly have risen substantially - and keep rising until 20...

October 10, 2018

The most powerful lever in the profit equation

You can’t manage profit. Profit is simply an end result. It’s the end result of a series of processes.It’s the business model.Numbers drive that business model. When you fully understand your business model and how the numbers work you will be able manage and improve the drivers of profit.Every business is different and will have its own unique business model and profit drivers. Nevertheless, for most businesses there is a generic model. This model has 9 drivers, s...

September 25, 2018

Why do businesses fail?

There are many reasons why businesses struggle, and in some cases, ultimately fail. It happens for both Start Up businesses and established businesses. Here are some of the common causes. Starting out in business According to research more than half of new businesses don’t survive beyond 5 years. Here are some of the reasons for such high failure rates: An inability to build a profitable business model with proven revenue streams, Failure to create and communicate value propositions in a clear...

September 25, 2018

Should my accountant be helping me to grow my business?

Running a business can be a lonely experience. You have people to manage, customers to keep happy, bills to pay and mouths to feed. And the buck always stops with you.  Having someone to lean on, to help you navigate through the rough seas that business can bring, to act as a sounding board and to just be there when you need them, can work wonders.  This someone needs to be someone you can trust. Someone who understands your business. Someone who appreciates the challenges and pain you...

August 22, 2018

Why do I have to make a tax payment in July

There's always a confusion around the July tax 'payment on account' for income tax under the self assessment regime.If you are business owner, chances are you're under the self assessment regime and have to submit a tax return every year. One of the advantages of being self-employed or a company director is that you do not have to pay income tax monthly under PAYE like normal employees. Given that you are in control of how you pay yourself - mainly via dividends - you can also control to some ex...

July 30, 2018

What's the best way to run my car through the business?

This is a question we get asked a lot here. The answer as with most things in tax is, it depends! It depends on what kind of car you have for a start. The tax rules these days are based on the CO2 emissions of the car i.e the higher the CO2 emissions, the greater the potential tax charge. By contrast, there are tax incentives available for cleaner electric and hybrid cars such as being able to write off 100% of the cost of the car against profits if Co2 emissions are less than 75g/km e.g Tesla e...

July 19, 2018

How can I use my children's tax allowances to reduce my tax bill?

It's that time of the year when the kids are about to break up for the holidays - which means that the bank of mum and dad is set for an assault yet again! Whether it is activities during the school holidays, childcare, tuition fees and related university living costs or private school fees needing to be paid, there is a way to make the paying of these a little less painful. You see, the tax-free earning allowance (currently £11,500) applies to everyone from birth. This means you if you can fi...

July 12, 2018

Top 5 ways to super-charge your business

Running a business can be highly rewarding but it can also be highly stressful. Whilst most business owners enjoy the freedom and flexibility of being your own boss, it also means that that you are in charge of everything and when something goes wrong, it is ultimately your problem to fix it. Below are five areas to focus on to super charge your business, make it more enjoyable and ultimately reap the rewards that you hoped for when you first started in business... 1. Systems, systems, systems A...

July 5, 2018

So what else can I put through the business?

If you're a business owner, no doubt you have asked yourself - and maybe your accountant - this question. The correct answer is - anything that is 'wholly and exclusively' for the purposes of your business can be 'put through' and therefore qualify as a tax deduction. The obvious ones you are probably already capturing, however there's a few outlined below which you may not be fully claiming: Your home expenses - as business owners we have a hard time switching off. That means there will in...

July 2, 2018

Investing (tax efficiently) in a new business

A friend has an idea for a small business startup and wants you to help fund it. You’re interested, but is it more tax efficient to do it through your company or use your own cash?  What is tax efficiency? Putting money into a new company is nearly always risky, but doing it tax efficiently can mean that at least you’ll get something out of the deal if things go wrong. The trouble is, you need to decide what form your investment will take from the start, but because of the way the rules...

February 1, 2018

Maximising VAT recovery on motoring costs

It’s not well known, but employers can reclaim VAT on more than just the fuel element of the mileage allowances paid to their workers. What’s involved?  Mileage rates  For a long time, companies have been allowed to pay employees flat rate tax-free mileage allowances for business travel: 45p for the first 10,000 miles and 25p thereafter. Since April 2013 partnerships and self-employed individuals can claim similar flat rate tax deductions. HMRC would have you believe this simplifie...

January 5, 2018

Do two directorships mean double the NI?

If you’re a serial entrepreneur you might have two or more directorships, each of which pay a salary. This sometimes results in excessive NI charges. Is there a legitimate way to dodge this?  NI - the hidden tax It’s easy to think about NI contributions as a minor cost, but nothing could be further from the truth. For example, in 2017/18 someone with a salary of £25,000 will pay tax of £3,000 while the total NI bill for them and their employer will be £4,344. In reality, NI is simply...

November 30, 2017

When is the right time to make a tax-efficient gift?

Most tax exemptions are capped for each tax year, but the inheritance tax gifts-out-of-income exemption is different. How can you make the most of it?  IHT exemptions Compared to income tax and capital gains tax, inheritance tax (IHT) has a rather meagre annual exemption of just £3,000. This is the maximum you can give away without eating into your nil rate band. Perhaps that’s why some people turn to complex IHT saving schemes, but if you go down that path, you should consider an IHT ex...

November 23, 2017

A change of date can reduce your company’s tax bill

Varying profits can play havoc with cash flow, especially when it’s time to pay corporation tax. Changing your company’s accounting date can help, but when are you allowed to do it? Company law When you form a company Companies House automatically sets the date to which the first accounts must be drawn up. Specifically, it’s one year from the end of the month in which the company was registered, e.g. if the company was formed on 12 March 2017, the first accounting period will run to 31 Mar...

November 14, 2017

Keep your capital and protect your estate from inheritance tax

As your estate grows so does the potential inheritance tax bill. What steps can you take to minimise tax while keeping hold of your underlying wealth?  IHT-effective gifts The simplest way for someone to reduce their estate for IHT purposes is for them to pass their wealth to their beneficiaries by making gifts during their lifetime. However, the maximum that an individual can give away to others entirely exempt from IHT is £3,000 per year. While there are a few other special exemptions, e...

November 7, 2017

Legitimate ways to dodge a self-assessment penalty

Submitting your self-assessment tax return late automatically triggers a penalty. But if you don’t have all the data you need to complete the return by the deadline how can you avoid being fined?  SA statistics According to HMRC, every year around 40% of personal self-assessment returns are submitted in the last month before the deadline. Starting to prepare your return at the eleventh hour is OK, but it does mean that if you then find you haven’t got all the data you’re in risk of mi...

October 27, 2017

Pool cars - avoid basic errors

Pooled company cars are tax and NI free for the employees who drive them. However, HMRC closely scrutinises any claim for pool car treatment. What key conditions should you impose on the use of a car to keep on the right side of HMRC?  Is a pool car a perk? Pooled company cars are often seen as a potential tax and NI-free benefit in kind, but with tricky qualifying conditions. We think that’s the wrong way to look at them. The reason they aren’t taxable is because they must not provide ...

October 20, 2017

When does a house become a residence?

HMRC doesn’t consider all homes to qualify for capital gains tax private residence relief. If you move into in a property which you previously let, what steps can you take to increase your chances of qualifying for relief? Private residence relief A property that has, even for a short while, been your only or main private residence (home) during the time you’ve owned it, qualifies for a period of exemption from capital gains tax (CGT). This is known as private residence relief (PRR). PRR app...

October 10, 2017

Who needs a bookkeeper? You don't anymore.

Recent studies by Oxford University and Deloitte (2015) suggest that about 96% of what bookkeepers currently do will, in the not-too-distant future, become automated. It's been suggested by some that bookkeepers will soon become redundant. Actually, we don't think that's true, but let's look at what is happening... The death of the bookkeeper Technology is moving at a rapid rate and this is impacting on the financial professions in a big way. Data processing, the process of entering your sales i...

October 6, 2017

Home-to-work travel - when is the cost deductible?

As a rule, the cost of travelling to and from your home to a place of work isn’t tax deductible. But where do you stand if your home is also your workplace?  Appeal The Upper Tribunal decision in Samadian v HMRC (on appeal from the First-tier Tribunal) is an important benchmark in respect of travel expenses between home and a place of work.  Case recap Samadian (S) is an employed NHS doctor who also does private (self-employed) work. He has a home office, which both tribuna...

September 22, 2017

The BIG problems with most small business financial accounting systems

Old-fashioned accounting systems are seriously flawed. And that can have dire consequences for small businesses. Until recently there were essentially 3 common types of accounting system: A manual system of books and records, like those big cash books.An Excel or other spreadsheet-based systemDesktop accounting systems such as Sage Line 50 And they're all flawed. For example, with a manual system it simply takes too long to write up the transactions. And your time is too valuable for that. So wh...

June 26, 2017

Great news - you no longer need an accountant!

Recent studies by Oxford University and Deloitte (2015) suggest that about 96% of what accounting firms do will, in the not-too-distant future, become automated. 96%! Surely that means the accountant is soon to be redundant. Why is that?  In recent years advances in technology are automating much of the data processing. Your bank transactions (income and expenses) can now be automatically entered into your financial records with greater accuracy. Invoices can now be scanned (or photographed...

June 23, 2017

The #1 reason businesses fail... and how you can avoid it.

Don't you just hate the old cliché, cash is king. I do. But the fact is, running out of cash is the number one reason businesses fail. Despite the fact that very often they are profitable. But profit and cash are not the same thing. So how do you protect yourself?  There are really two critical things you need to get right: Keeping your finger on the pulse of your business,Collecting money fast. So let's look at each of those and how we can use modern technology to our advantage....

June 14, 2017

Don't you just hate 'doing the books'?!

Every business owner hates bookkeeping and paperwork. Unfortunately it has to be done. And it has to be done in a prescribed format... otherwise the Tax Man will be on your back. It's also difficult. That's why there are bookkeeping exams. That's why there are professional institutes like the Institute of Certified Bookkeepers. I guess you'd much rather be out there making money from your business than doing the books. And because everyone hates bookkeeping, most people end up doing it in the ev...

May 8, 2017

Do you have a pulse on your business in real time?

Every successful business has its finger on the pulse. You need to know the key numbers. Not the numbers in last year’s accounts; they’re out of date. Redundant. You need today’s numbers. And that’s where your cloud accounting system comes in. If you don’t have a cloud accounting system this blog will explain the benefits and how to get started. There are essentially just 4 types of accounting system: Type 1: The Manual System A manual system is cheap; you only...

April 28, 2017 Posts 1-25 of 28 | Page next
 

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