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Archive for the ‘How to Pay Less Tax’ Category

xero certified advisor

Transform Accounting  – the accountants for small business, are now offering the option of cloud based on line accounting systems to our existing and future clients.

Transform Accounting have a wide variety of clients who require different things from their accountants;
– A sole trader or an individual with rental properties may require once a year assistance with tax planning, tax return preparation and HMRC filing.
– A contractor or consultant with a vat registered limited company in addition to the requirements of a sole trader will also usually require book keeping, payroll, quarterly vat returns, statutory accounts filing and advice regarding dividend payments and keeping tax bills to a minimum.
– Other clients require Transform Accounting to take over their back office functions entirely to provide services including invoicing, credit control, accounts payable and cashbook management in addition to those services provided for contractor/consultant limited companies.
– Small business owners of all types will often also require regular management accounts, tax position updates and profitability analyses.

In order to satisfy these clients, Transform Accounting have assessed the various cloud based accounting systems available in the UK and after a successful pilot have chosen Xero accounting as their preferred cloud accounting partner.

Transform Accounting will now be offering the option of cloud based on line accounting systems to our existing and future clients.Both partners of Transform Accounting have recently earned Certified Advisor status from Xero accounting.

We will publish more details in later posts, but if the idea of being able to share access to your company accounts by either a web browser, ipad, iphone or android phone app appeals then this could be ideal for you.

Other great benefits can include ;

– using your phone or tablet to take a photograph of invoices/receipts and have it immediately sent to your accountant for processing
– raising expense claims on your phone or tablet,
– raising invoices on your phone or tablet
– having access to your most up to date accounts allowing you to immediately see how your business is performing.

As a measure of confidence in Xero, Transform Accounting Ltd have already moved their own company accounts to this platform and have started to migrate existing customers and new clients alike and all have been delighted with the results.

If you would like to know any more about how cloud based accounting could help your business, or if your old accountant does not offer this option, please get in touch with Transform Accounting.

Transform Accounting are Chartered Management Accountants and Tax Technicians able to assist with personal tax returns, sole traders and company payroll whilst specialising in limited companies, consultants, contractors and business start-ups. Fixed fee packages are available as are free initial consultations. Customer references are available on request.

See www.transformaccounting.co.uk or contact by telephone on 01277 365447 or by e mail at info@transformaccounting.co.uk

Epping Accountant – Transform Accounting – Essex Accountant

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Did you know that 30th May is also known as “Tax Freedom Day” for UK residents?

According to the Adam Smith Inistitute, it has been calculated that for the average UK taxpayer, the 30th May is the first day when your 2013 earnings go into your own pocket.
Up until this date, all your earnings have effectively gone to the government in the form of various taxes.

This year, tax freedom day is a day later than last year, a sign that the tax burden for UK citizens continues to increase.

This date is calculated by measuring taxes and national insurance contributions as a proportion of the UK’s national income. This results in a figure of 41.5 percent, which in turn gives 150 days as a share of the year.

Tax freedom day varies depending on where you live. In Australia and the US it comes much earlier in mid April, but for citizens of France it isnt until July.

Transform Accounting are Chartered Management Accountants and Tax Technicians able to assist with personal tax returns, sole traders and company payroll whilst specialising in limited companies, consultants, contractors and business start-ups.
We can also help with interim financial controllers for small and medium sized businesses.
Fixed fee packages are available as are free initial consultations. Customer references are available on request.

See www.transformaccounting.co.uk or telephone on 01277 365447

Accountant BrentwoodTransform AccountingEssex Accountants

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Payslips

The Employments Rights Act sets out the requirements of producing payslips for employees.

The requirements are that you need to supply an employee with a payslip on or before their pay day. This requirement covers both full time and part time employees.

The minimum information that a payslip must contain is;

  • Gross Pay
  • Net Pay
  • Amounts and types of all fixed and variable deductions
  • Method of payment
  • Deductions for stakeholder pensions

Whilst not a requirement under the Employment Rights Acts, most employees payslips also show the following;

  • Time period covered by the payment
  • Date of payment
  • Basic Pay
  • Overtime
  • Bonus or Commissions
  • Sick Pay ( including Statutory Sick Pay)
  • Holiday Pay

It is also wise to print an employee’s National Insurance (NI) number and PAYE Tax code on each payslip to reduce future queries.

If in doubt, always ask a qualified accountant such as Transform Accounting who will often be able to perform the payroll function and production of payslips on your behalf.

Loughton Accountant Transform Accounting  – Essex Accountants

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tax briefcase

When a UK business makes sales to overseas customers, it can be a little confusing at first when deciding how to treat VAT.  Here are a few tips for preparing invoices for export sales of goods from a UK supplier’s perspective. Be sure to check out our other guide for how to invoice for services which are slightly different.

The following applies to a UK trader who is VAT registered.

  • If a customer is a business based in a country within the EU, and is also VAT registered, then the invoice should not contain UK VAT as the sale is considered to be Zero rated.Note: to qualify for zero rate, the customers VAT number must be quoted on the sales invoice in addition to the suppliers VAT number which should be quoted on all sales invoices.
  • If the customer is a small business in an EU country, and is not VAT registered, or alternatively is an end consumer, then UK VAT must be charged as normal on the invoice.
  • If the customer is outside of the EU, then no VAT should be charged. The customers VAT number is not required.

There are a few other items which are also important when preparing documentation for exports.

  • Proof of export must be obtained within three months of the sale and must be retained for potential inspection.
  • Zero rated VAT is later dealt with on the UK suppliers VAT return using the reverse charge mechanism.
  • All of the above applies only to UK companies who are VAT registered.
  • Sole Traders who are not VAT registered must not charge VAT under any circumstances.

Transform Accounting are Chartered Management Accountants and Tax Technicians able to assist with personal tax returns, sole traders and company payroll whilst specialising in limited companies, consultants, contractors and business start-ups. Fixed fee packages are available as are free initial consultations. Customer references are available on request.

See www.transformaccounting.co.uk or contact Jacinta Smith on 01277 365447

Accountant BrentwoodTransform AccountingEssex Accountants

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car

It is common practice for employees to be reimbursed a reasonable rate per mile for using their own car whilst on company business.

HMRC issue a system of Approved Mileage Allowance Payments (AMAP) which applies to employees using their own vehicle for business journeys.

These rates are as follows;

  • Cars and Vans (first 10,000 miles pa) – 45p per mile
  • Cars and Vans (additional mileage above 10,000) – 25p per mile
  • Motorbikes – 24p per mile
  • Bicycles – 20p per mile

Whilst HMRC issue the above rates, it is still up to the employer to decide their own reimbursement rates.

If the employer pays more than the AMAP rates, then a benefit in kind has occurred and the benefit needs to be declared on an annual P11D form.

If the employer pays less than the AMAP rates, then the employee is entitled to claim tax relief for the shortfall (Mileage allowance relief).  This relief is also applicable to employees who are paid a company car cash allowance.

This tax relief is the difference between the AMAP rate and the company rate, multiplied by the number of miles claimed. For a higher rate tax payer who completes a large number of business miles, this recovery can often generate a significant tax reduction.

EG – An employee who completes 15,000 business miles and who is paid 14p per mile from his employer will collect;

15,000 miles at 14p per mile =   £2,100

However, HMRC allow this tax relief to be calculated at AMAP rates ;

10,000 miles at 45p per mile = £4,500, plus
5,000 miles at 25p per mile = £1,250 = £5,750

Therefore, an additional tax relief on £3,650 (£5,750 minus £2,100) can be claimed on your annual tax return.

For a higher rate tax payer, this results in a saving of £1,460

Bookkeeper HarlowTransform AccountingBookkeeper Essex

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tax briefcase

When a UK business makes sales to overseas customers, it can be a little confusing at first when deciding how to treat VAT.  Here are a few tips for preparing invoices for export sales of services from a UK supplier’s perspective. Be sure to check out our other guide for how to invoice for goods which are slightly different.

The following applies to a UK trader who is VAT registered.

  • If the customer is in a country within the European Union, then the invoice should not contain VAT as the sale is considered to be zero rated. Note: Unlike the supply of goods, for the supply of services to be zero rated, the customer must merely be a business and does not have to be a VAT registered business.
  • If the customer is in the European Union and is not a business ( ie – is a consumer), then the sales invoice should be prepared including VAT
  • If the customer is outside the European Union, the invoice should be treated as zero rated regardless of whether the customer is either a business or a consumer. The customers VAT number is not required.

There are a few other items which are also important when preparing documentation for exports;

  • The basic rule for establishing where a services transaction is deemed to have taken place is usually the location of the customer.
  • Zero rated VAT is later dealt with on the UK suppliers VAT return using the reverse charge mechanism.
  • All of the above applies only to UK companies who are VAT registered.
  • Sole Traders who are not VAT registered must not charge VAT under any circumstances.

Transform Accounting are Chartered Management Accountants and Tax Technicians able to assist with personal tax returns, sole traders and company payroll whilst specialising in limited companies, consultants, contractors and business start-ups. Fixed fee packages are available as are free initial consultations. Customer references are available on request.

See www.transformaccounting.co.uk or contact Jacinta Smith on 01277 365447

Writtle AccountantTransform AccountingEssex Accountants

 

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tax briefcase

The normal rules for sales to consumers in the UK from a supplier outside the European Union (eg – Jersey or the USA) are that the UK VAT must be paid by the consumer when the goods are collected.

For example, an item with a value of £100 imported from the USA would incur a £20 VAT charge when collected by the end consumer.

However, there is an exception to this rule

An item with a value up to £18 has historically been allowed to be imported into the UK VAT free. This arrangement was historically put in place to allow perishable foodstuffs through with no delay, but in more recent times this has been used by importers of CD’s and DVD’s (often based in Jersey) to give a competitive edge over UK retailers who have to charge 20% more in the form of VAT.

From the 1st Nov 2011, the UK government reduced this amount to £15 and is continuing to review this situation so watch out for further changes.

Transform Accounting are Chartered Management Accountants and Tax Technicians able to assist with personal tax returns, sole traders and company payroll whilst specialising in limited companies, consultants, contractors and business start-ups. Fixed fee packages are available as are free initial consultations. Customer references are available on request.

See www.transformaccounting.co.uk or contact Jacinta Smith on 01277 365447

Accountant RomfordTransform AccountingEssex Accountants

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