Author: Paul Cooper

January 31st Is Looming – Last Call To File Online And Pay Your Taxes

Paul Cooper News , , ,

Christmas and New Year have come and gone and January 31st 2020 will soon be here. Here at Caroline Streatfield Bookkeeping based in Eastbourne with clients throughout Sussex, we’ve been helping you with Self Assessment including articles about Allowable Business Expenses and Capital Expenses and in our latest blog, we’re going to clarify a few more points including, who needs to file, how you register and send, some helpful tips for filling out the form and the penalties that you might incur if you don’t file and pay.

Who Needs To Send A Tax Return?

You are required to send a tax return if during the last tax year, 6th April 2018 to April 5th 2019, you find yourself in the following categories:

  • You are self-employed as a ‘sole trader’ and you have earned more than £1,000
  • You are a partner in a business partnership

You may also need to send in a self assessment form if you have any other income that is not taxed including:

  • Monies received for renting out a property
  • Tips and commission
  • Income from savings, investments and dividends
  • Foreign income

Registering and Sending

The online service is available so that you can fill out and send your tax return to HM revenue and Customs (HMRC) and if you don’t finish it, don’t worry as you can go back to it at anytime. You’ll also be able to check all of your details, view your return and print your tax calculation.

If you haven’t filed before, you will need to register and once you have done this, you will be sent your Unique Taxpayer Reference (UTR). Once you have set up your account, you will receive an activation code in the post.

 

Filling Out The Form

This can be somewhat daunting and there is certain information that you will need. The HMRC does provide help sheets and supplementary pages or you can contact your bookkeeper for help.

  • 10 digit UTR
  • National Insurance number
  • Untaxed income details
  • Records of expenses relating to your self employment
  • P60
  • Any contributions to pensions or charities that might be eligible for tax relief

Penalties

Let’s face it, nobody wants to be hit with a penalty and you will get one if you miss the deadline for submitting your self assessment form or you fail to pay the tax you owe. The penalty is £100 if your tax return is up to 3 months late or your payment is not received in time and you will also be charged interest on late payments.

Conclusion

There really isn’t long to go and if you haven’t done it yet, this is your last urgent call. If you are filing online you need to submit your return by midnight on 31st January 2020 and you must pay any tax that you owe by this date as well.

What To Do Next

If you’re not sure, please do get in touch with Caroline Streatfield Bookkeeping in Eastbourne. Call us on 07982 682746 or email to find out how we can help you. We will visit your home or workplace within East Sussex and can also work remotely to cover other locations, which are further afield.

Keep looking at our website for future tax changes that will be coming into force in 2020.

 

 

Self Assessment – A Guide To Capital Allowances

Paul Cooper News

Do you know what capital allowances are? If you don’t, you could be paying more tax than you need to. In the latest blog from Caroline Streatfield Bookkeeping, based in Eastbourne with clients throughout Sussex, we continue with our helpful guides to self assessment and explain what capital allowances are as well as what they are not, the types of capital allowance and how you can claim for them. Time is running out for you to file your online Self Assessment for the year ending April 2019, as it has to be filed and paid by midnight on 31st January 2020.

 What Are Capital Allowances

A capital allowance is an expenditure that may be claimed against your taxable profit and relates to most assets that are purchased for use in your business. These could include machinery, equipment and business vehicles as well as research costs and monies paid out for building renovations. The classification of these assets determines whether you can claim the full or partial value and also whether it is deductible in one year or over several. In essence some or all of the value of this type of business expense can be deducted from your profits before you pay tax and thus reduce your taxable profit.

Most Common Assets

  • Cars and vans
  • Computers and printers
  • Tools including lawnmowers
  • Specialist machinery

 

Items That Are Not Classified As Capital Allowances

Leased items are not regarded as capital allowances and this includes buildings and their doors, windows, gates and utility systems. Land and structures such as roads and bridges are not included and any items that are used for business entertainment such as yacht or a karaoke machine. It is also worth noting that expenditure on non-durable items such as office stationery and supplies is also not eligible.

Types Of Capital Allowance

There are basically 2 types:

  • Annual Investment Allowance (AIA)
  • First Year Allowance

AIA

With this you will be able to deduct the full value of the items that you have purchased solely for your business in the same taxation year, although there is an annual limit of £1m.

First-Year Allowance

This is also known as ‘enhanced capital allowance’ and is available as well as the AIA. Categories of eligible items include energy or water-efficient equipment, which could include certain cars with low CO2 emissions or goods vehicles with zero-emissions. It’s worth stressing here that as the name suggests, these allowances are available in the first year that you are operating your business.

Writing Down Allowance

This comes into play when you have already claimed AIA on items worth a total of more than the AIA amount or the item doesn’t qualify for AIA such as cars, gifts or perhaps things you owned before you started your business. You will then be able to deduct a percentage of the item from your profits each year.

Conclusion

You will need to claim for your capital allowances on your tax return and we hope our short summary guide has given you a good idea of what is considered a capital expense. For more information on calculating your allowances, click here, or get in touch with Caroline Streatfield Bookkeeping.

What To Do Next

We want to ensure that you are claiming for all that you are entitled to. If you are struggling with filing your online assessment form, Caroline Streatfield Bookkeeping, based in Eastbourne in East Sussex offers a Self Assessment tax service. Call us on 07982 682746 or email info@bookkeepereastbourne.co.uk to find out how we can help you. We will visit your home or workplace within East Sussex and can also work remotely to cover other locations, which are further afield.

Self Assessment – Time Is Running Out – A Guide To Allowable Business Expenses

Paul Cooper News , , ,

 

Think back to January 2019 – were you rushing around and panicing because you hadn’t filed your Self Assessment form? Here, at Caroline Streatfield Bookkeeping, we are giving you a bit more time. The tax return deadline for filing your online Self Assessment for the tax year ending April 2019 is midnight on 31st January 2020 and your bill has to be paid by then as well. Unfortunately, if you wanted to file a paper return, you’ve missed the deadline of 31st October 2019.

What Are Allowable Expenses?

In the latest blog from Caroline Streatfield Bookkeeping, based in Eastbourne in East Sussex, we are able to help you file online and we’re also going to try and explain your general allowable expenses. Some people think that everything you spend is an allowable expense, but it doesn’t quite work like that, although knowing what is allowable is extremely important, as deducting this from your business income will determine how much profit you have made from your business. It’s quite expected that your business will have various running costs but of course allowable expenses do not include monies you take from your business to buy personal items.

What HMRC Says

We’ve gone straight to the HMRC website for the following:

  • The expense must have been for the sole purpose of earning business profits called the ‘wholly and exclusively rule’.
  • Some items bought for your business might also be used for private reasons and here you can only claim the business part of the costs.

Items Used For Business And Privately

In a nutshell, there are 3 items that immediately spring to mind, your mobile phone, your home and your mode of transport. You will have to find a reasonable method of calculating how much of the costs are incurred by your business and by you personally. Other costs which you can claim as allowable expenses are office stationery, which will include postage, printing, ink cartridges, computer software etc. You might also have clothing expenses such as uniforms, staff costs, advertising and marketing fees such as website costs and training courses.

Phones

With reference to your phone, it’s going to quite simple to work out if you have a monthly contract and itemised bill, but if you are on “Pay as you Go”, you will have to make a fair assessment.

Your Home As An Allowable Expense

This will come into play if you have a room which is set aside for business use and here you will be able to claim a proportion of household costs including heating, lighting, insurance, rent or mortgage interest. There are also other considerations including the number of rooms excluding halls, toilets and bathrooms and how many days of the week and hours per day you spend in the dedicated business room.

 

Vehicle And Travel Expenses

 This is a broad field and in relation to your vehicle will include insurance, repairs, servicing, fuel, parking charges, licence fees and breakdown cover. Travel incorporates train, bus, air and taxi fares, hotel rooms and meals on stays while you are away. It’s worth noting that allowable business expenses do not include travel between home and work and any vehicle fines you may incur.

What To Do Next

If you are struggling with filing your online assessment form, Caroline Streatfield Bookkeeping, based in Eastbourne in East Sussex offers a Self Assessment tax service. Call us on 07982 682746 or email info@bookkeepereastbourne.co.uk to find out how we can help you. We will visit your home or workplace within East Sussex and can also work remotely to cover other locations, which are further afield.

Next time, we’ll be talking about capital allowances, so be sure to stay tuned to our blog.

 

 

 

Pension Automatic Enrolment – Are You Providing Pensions For Your Employees?

Paul Cooper News , ,

Automatic Enrolment began in 2012 and since then it has been introduced in stages having started with the largest employers. Since February 2018, every employer, irrespective of the size of their business in the UK has had to provide a pension for their employees. In the latest article from Caroline Streatfield Bookkeeping based in Eastbourne, we look at staff who are eligible for automatic enrolment, what employers need to do, and NEST, which is the workplace pension established by the government for the scheme.

Automatic Enrolment Criteria

 Eligible staff will be automatically enrolled into the workplace pension scheme although employees who do not want to join can opt out for a period of 3 years.

  • Normally work in the UK
  • Earn more than £10,000 per year
  • Not already in a suitable workplace pension scheme
  • Are at least 22 years old but under the State Pension age

You can look at the term ‘automatic’ like this, as it is automatic for your staff but not for employers. If you have at least 1 member of staff, you have automatic enrolment duties.

Employer Pension Obligations

If you have employees, you are obligated to do the following:

  • Set up a workplace pension scheme
  • Automatically enrol staff who meet the earnings and age criteria
  • Pay contributions
  • Enrol workers if they ask to join
  • Make a minimum level of contributions

It’s important that your employees know how the government reforms affect them, and whether they have been automatically enrolled, details of the scheme that you have selected and that they do have the right to opt in.

Minimum Level Of Contributions

It’s currently set at 8% of an employee’s earnings made up of 5% from the employee, including tax relief and 3% from the employer. These figures are reviewed every year by the government and they apply to anything that employees earn over £6,136 up to a maximum limit of £50,000, which applies to the tax year 2018-19. As an employer, you will have to let your employees know how much of their earnings they will need to contribute.

NEST For Auto Enrolment

National Employment Savings Trust (NEST) has been set up by the government to make the process of auto enrolment easier for employers with employees paying a percentage of their salary into the NEST pension scheme. It’s worth noting that there are no charges for transferring pension pots into or out of NEST and family members and friends can also contribute to the NEST fund.

Conclusion

Once you are registered as an employer you will need to provide a pension to certain employees as outlined, with minimum percentages of contributions with NEST recommended as a provider.

What To Do Next

The experienced and expert staff at Caroline Streatfield Bookkeeping can help you as an employer set up pensions for your employees and guide you through automatic enrolment. As an employer you have to make a declaration to the Pensions Regulator, so we are here to make sure that you comply with your duties and avoid any nasty penalties. We can also provide on going payroll and bookkeeping services. For more information and a without obligation chat, please call Caroline on 07982 682746 or email info@bookkeepereastbourne.co.uk

 

 

 

Making Tax Digital – Are You And Your Business Ready?

Paul Cooper Quickbooks, Xero , , , , ,

Do you know what Making Tax Digital is? If you don’t, no need to worry, as here at Caroline Streatfield Bookkeeping, the leading bookkeepers in Eastbourne, we’re going to give you a quick run through. If you do know about it – are you confused? Perhaps, you don’t know quite what your next steps are? In our latest blog, we give a quick overview of what MTD is, the key points, those that should have already started filing out their returns, the software you can use and what you should do next to ensure that you and your business are MTD compliant.

What Is Making Tax Digital?

It has been years in the making and has been designed by the government for individuals and businesses to make it easier to get their tax right and to keep on top of things. Tax administration is transforming, making it more effective, more efficient and easier for taxpayers. We live in a digital age and hence MTD is a digital tax reporting system whereby business accounts will have to be submitted in this way seeing an end of paper records. HMRC is going ‘paperless’, which is not a bad thing.

Key Points of the Digital Tax System

  • No more bureaucratic form-filling
  • No repetition of information
  • A faster and more efficient service
  • Taxpayers have access to their digital accounts
  • Information automatically uploaded

Deadline Day Has Arrived

MTD has already come into effect for some businesses and since 1 April 2019, companies with a taxable turnover of £85,000, have been required to keep digital VAT records using software such as QuickBooks, Xero or FreeAgent. June 7th saw the first submission deadline for monthly filers whilst August 7th was the first deadline for quarterly (April to June stagger) filers. Those on the May to July stagger have a filing deadline of 7th September. One million businesses are now in the service with 900,000 VAT submissions having been filed.

Conclusion

All businesses, which are affected by MTD must sign themselves up or get an agent to sign upon their behalf. HMRC are running 4 webinars throughout September, which you can sign up for. Your choice of software is up to you as HMRC does not recommend or endorse any products although a software choices selection tool is available.

What To Do Next

Caroline Streatfield Bookkeeping is a registered HMRC agent and can help ensure your business is MTD compliant. We will be able to help and to advise you on which software will be the most suitable for your business and provide training if required. Alternatively we offer a complete bookkeeping and VAT service. There really is no reason to struggle any longer. For more information and a without obligation chat, please call Caroline on 07982 682746 or email info@bookkeepereastbourne.co.uk

Making Tax Digital Going Live

Paul Cooper News

After months or even years of planning Making Tax Digital for VAT has come into effect for those businesses with a turnover over £83000.

This means that all VAT returns will need to be submitted via software such as Quickbooks, Xero or Freeagent

to ensure a digital flow of information to HMRC.

Businesses who maintain their records on spreadsheets can continue to use these but will need to invest in bridging software to enable the VAT return to be MTD compliant.

The first businesses having to submit their VAT returns via MTD is those whose VAT quarter runs April,May and June , so hopefully with their software already in place they will just need to register on HMRC for Making Tax Digital and link the software by following the providers on line instructions.Subsequent quarters will follow, therefore systems will need to be in place.

Agents can register clients on their behalf.We are a registered  HMRC agent and can assist with any part of ensuring your business is MTD compliant.We can  advise on the best software to choose for your business and and provide training or offer a complete bookkeeping and VAT service.

Please call Caroline on 07982682746 to arrange a free initial meeting.

What tax changes will effect me April 19 ?

Paul Cooper News

As time flies by and we reach the start of a new tax year on 6 April what changes might make a difference to how much of your hard earned cash you get to keep ?

Firstly the personal allowance-the amount you can earn before you start to pay tax rises from 11850 to 12500 per year.

The threshold at which higher rate tax is charged increases from 46350 to 50000 per year.

If you are employed and a member of an automatic enrolment pension the statutory minimum  contributions increase to 8 % with a minimum of 3% from the employer.

Minimum wages increase according to age as follows;

apprentices £3.90 ph

16-17 £4.35 ph

18-20 £6.15 ph

21-24 7.20 ph

25 and over £8.21ph

 

For those who have property income the amount of mortgage interest relief that can be claimed is reduced to 25% with 20% basic tax relief on the balance. However the capital gains tax allowance rises slightly  from 11700 to 12000 per year.

And finally the largest change to VAT registered businesses whose turnover is at least £85000 comes in to force with Making Tax Digital. All records for VAT returns must be submitted digitally.

We offer bookkeeping, Payroll ,and VAT  services to help your business stay compliant with any of the above and am happy to talk over the options with no obligation to sign up to anything !

 

Also Self assessment tax returns for the year 18/19 can be submitted from 6 April  and we can help you apply for any refund which may be due.

Ring for an appointment at a time to suit you including Saturdays 07982682746

Paying Too Much For Company Annual Accounts ?

Paul Cooper News

Are you paying too much in accountancy fees ?

Getting lost in a large practice who pay more attention to their larger clients ?

All Limited companies are required to submit statutory accounts to companies house and complete a company tax return each year. In many cases the bookkeeping has been entered on spreadsheets or online software such as QuickBooks or Xero and is ready for review and preparation. Accountancy fees for this service are still high.Whilst Accountants can also provide business advise ,clients tell me that this rarely happens and they don’t seem to receive good service or value for the fees charged.

We have experience in working with different sectors and can offer an Annual Accounts preparation and submission service for an annual fee of £400 where figures are available from spreadsheets or online software. Should further bookkeeping be required this will be charge at £25ph.Alternatively why not let us take care of the bookkeeping on a monthly basis and also submit the annual accounts for a complete solution.

Should your company require audit we can prepare the accounts for the auditor.

We can also cover the PAYE for Director only schemes  and charity accounts.

Sole Traders and Partnerships

Sole traders and partnerships are not legally required to submit a set of accounts, and for many the self assessment tax return maybe all they need.

There are however benefits to having a full set of accounts prepared.

It provides  more in depth details as to how the business is performing and including assets and liabilities.

Investors will ask for a set of accounts when deciding on finance.

They may be required when looking at personal financial details such as a mortgage.

We can offer an Annual Accounts preparation service for sole traders and partnerships from £400 which can be discounted if we have prepared your self assessment tax return.

So it may be the time to review the service your are receiving from your accountant and the fees paid.

To find out more please contact Caroline on 07982682746

Or use the contact form on this site.

 

Last Call for Tax Returns !

Paul Cooper News
Last Call for Tax Returns !

Do you need to submit a self assessment tax return? Its not something you want to think about whilst your’e still  finishing off the last of the Christmas cake but  its important to ensure your tax return is received by 31 January to avoid automatic  penalties.

This year the number of clients I have assisted in  completing their self assessment tax returns has grown rapidly.

Some clients are completing their first tax return while others may have completed their own returns previously but would now like professional backup.Some clients are moving from a previous Accountant as they prefer the more personal approach that I offer ,meeting in person whether that be in my office at Archer House or a home visit

I have worked with a variety of professions including construction,hospitality and care and have seen a large increase in the number of Landlords  needing assistance with self assessment returns.

So if you have been putting off the inevitable the down time between Christmas and new year maybe a good time to dig out that paperwork, whilst finishing off the cake too !

I shall be working hard in January to ensure those penalties are avoided.

Merry Christmas to all my clients and here’s to a prosperous 2019

 

 

 

 

How Do I Track Stock on Xero?

Paul Cooper Xero

Accounting for stock is one of the less interesting parts of running your business – that dreaded stock take dragging on until the early hours can be a real pain! But by using the tracked inventory function on Xero you can save a lot of time and keep track with real time information about stock movements.

Keeping on top of your stock figures is essential to determine accurate profit figures and to know which products are your best sellers. So, let’s get to it and take a look at Xero’s tracked inventory function…

Is Xero tracked inventory right for my business ?

The tracked inventory function on Xero is suitable for any business buying and selling finished goods, so if you use raw materials to manufacture a product it may not be suitable for you.

You must also:

  • Have items in stock before you sell them (Xero will not work with negative balances)
  • Want to track quantities on hand (untracked inventory can be used if the quantity function is not necessary)
  • Only need to track less than 4000 items (to track more than 4000 items you may wish to use an inventory app to integrate into Xero such as Vend – take a look at inventory apps here.)

What accounts do I need to set up in Xero ?

Firstly you need to check that the Chart of Accounts contains the following accounts. If you are using the default layout they should be already set up, but it’s worth checking.

  • Inventory Asset Account
  • Cost of Goods Sold Account

If they are not set up you can add them by going to Settings-General Settings-Reports-Chart of Account-Add Account.

How do I enter my stock items ?

You are now ready to set up stock items, there are two options to add tracked inventory – manual or bulk import.

Manual

To add individual items manually go to Accounts-Inventory and click on + new item.

This takes you to the input screen where you enter a code, name, sales and purchase prices, tax rates and select the accounts Xero needs to use to track stock movements for purchases – usually this should be the Cost of Goods Sold account and Sales (as the income account).

Tick “I track this item” if you want to track quantities. There is also an option to upload an image of the product.

Bulk

To add items in bulk by uploading data, go to Accounts-Inventory and click on Import-Items. You are then able to download the Items template CSV file (basically a spreadsheet). Fill in the details under the columns provided and do not change the column headings – Xero need these to upload the file correctly.

Make sure you save the file to your computer.

You can then import the file back in by clicking accounts-Inventory-Import-Items-Browse and select the CSV file.

Xero will then check for errors and ask you to confirm the import. You should end up with a product card which looks like this:

Image courtesy of Xero.

What about adding stock in hand ?

If you are an existing business and moving your bookkeeping to Xero you may have quantities of stock in hand you need to bring in. This can also be done via a downloadable template once you have entered the main details for each item using the Manual or Bulk options above.

To add quantities or stock in hand go to Accounts-Inventory-Import-Opening Balances – click on Opening Balances and download your template, which will contain all the items you have created.

Now enter the quantity and balances, save the template to your computer and then upload the updated template back into Xero using the import button.

You are now all set to use tracked inventory.

What postings are made in Xero when you buy and sell items of Stock ?

When you buy a tracked inventory item and select the product code on the purchase invoice the accounts field is pre populated to the Inventory Asset account.

  • The Product card will be automatically be updated with quantity on hand (increased), average cost and total value
  • The Inventory Asset account on the balance sheet will increase by the value of the purchase.

When you sell a tracked inventory item and select the product code on the sales invoice the quantity on hand will be amended (decreased) on the product card.

The items total cost will be transferred from Inventory asset account to the Cost of goods sold account.

When you run your profit and loss and balance sheet reports the cost of sales and inventory figure will be accurate to what has been entered. There is an option to manually adjust inventory after a physical stock take at year end if required.

What reports will Xero give me about stock ?

It is all well and good being able to track stock items in real time but how is the information reported and used in planning future sales ?

Go to Reports-All Reports and under the Inventory section there are several useful reports:

  • Inventory Item Details: gives you the movement in quantity and value of each stock item.
  • Inventory Item Summary – Report Settings: enables customised reports for each item including profit by item so any less profitable lines can be reviewed
  • Sale By Item: gives sales for items with an option to add  summary notes for explanations for such things as seasonal variations.

All inventory reports can be customised by date and exported to Excel or Google sheets.

Once you try using tracked inventory you will wonder why you didn’t do it sooner!

If you get stuck feel free to get in touch.

I find that many of my clients are open to taking advantage of new software to automate tasks but are unsure on how to set them up or which is most suitable for the way they trade. Should you need advice on establishing an online accounting system I can provide training on Quickbooks and Xero or of course provide a full bookkeeping service for you. Call Caroline on 07982682746.