Tag Archive for Accounts & tax

Hot Business News Today

What is Making Tax Digital and why should you care?

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By Dan Matthews on Small Business – Advice and Ideas for UK Small Businesses and SMEs
Making Tax Digital explained
Making Tax Digital (MTD) is a government plan to shift paper-based tax reporting online, spelling the end of form-filling for millions of UK businesses. Changes affecting value added tax (VAT), income tax and corporation tax are being introduced over time, meaning a growing number of small firms are falling under MTD’s scope.
Businesses with turnovers higher than £85,000 are already required file quarterly VAT submissions digitally under MTD rules, records for which must be kept online and submitted via software. Those with a turnover lower than the £85,000 threshold will have to comply by April 2022.
Next in line for digitisation is income tax: individuals with a self employed or property income over £10,000 per year must adopt digital filing from 6 April 2023, while corporation tax will shift online sometime after 2026 following a pilot period, according to the latest plans.
What businesses must do under MTD rules:

Keep digital records
Submit summary information to HMRC once a quarter
File an end of period statement to make any adjustments and a final declaration by 31st January each year.

Why is tax going digital?
There are many reasons for the

Read more...

Hot Business News Today

What is Making Tax Digital and why should you care?

by  •  • 0 Comments

By Dan Matthews on Small Business – Advice and Ideas for UK Small Businesses and SMEs
Making Tax Digital explained
Making Tax Digital (MTD) is a government plan to shift paper-based tax reporting online, spelling the end of form-filling for millions of UK businesses. Changes affecting value added tax (VAT), income tax and corporation tax are being introduced over time, meaning a growing number of small firms are falling under MTD’s scope.
Businesses with turnovers higher than £85,000 are already required file quarterly VAT submissions digitally under MTD rules, records for which must be kept online and submitted via software. Those with a turnover lower than the £85,000 threshold will have to comply by April 2022.
Next in line for digitisation is income tax: individuals with a self employed or property income over £10,000 per year must adopt digital filing from 6 April 2023, while corporation tax will shift online sometime after 2026 following a pilot period, according to the latest plans.
What businesses must do under MTD rules:

Keep digital records
Submit summary information to HMRC once a quarter
File an end of period statement to make any adjustments and a final declaration by 31st January each year.

Why is tax going digital?
There are many reasons for the

Read more...

Hot Business News Today

5 steps to bolster your business finances

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By Mark Wright on Small Business – Advice and Ideas for UK Small Businesses and SMEs

In recent years, a number of large businesses have gone into administration, and this hasn’t resulted from lack of sales or custom, but rather a lack of control over finances, such as cashflow.

In fact, pre-pandemic, one in seven UK small business owners have been left unable to pay their employees on time due to finance and cashflow problems, while earlier this year 31 per cent of B2C firms reported that they will run out of cash within the next three months.

As we begin to emerge from Covid-19 restrictions, there are a number of key changes business owners can make to improve their business finances, and quickly.

#1 – Calculate your costs

It is vital to know your costs and one of the best cost-saving exercises is to regularly review your suppliers. As the famous 1980s story goes, Robert Crandall, the then head of America Airlines, calculated that if he just removed one olive from every salad served to passengers, no-one would notice and they would generate an annual cost saving of $100,000.

So, as a business owner, ask yourself this question: what is your one olive? We all

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Hot Business News Today

5 steps to bolster your business finances

by  •  • 0 Comments

By Mark Wright on Small Business – Advice and Ideas for UK Small Businesses and SMEs

In recent years, a number of large businesses have gone into administration, and this hasn’t resulted from lack of sales or custom, but rather a lack of control over finances, such as cashflow.

In fact, pre-pandemic, one in seven UK small business owners have been left unable to pay their employees on time due to finance and cashflow problems, while earlier this year 31 per cent of B2C firms reported that they will run out of cash within the next three months.

As we begin to emerge from Covid-19 restrictions, there are a number of key changes business owners can make to improve their business finances, and quickly.

#1 – Calculate your costs

It is vital to know your costs and one of the best cost-saving exercises is to regularly review your suppliers. As the famous 1980s story goes, Robert Crandall, the then head of America Airlines, calculated that if he just removed one olive from every salad served to passengers, no-one would notice and they would generate an annual cost saving of $100,000.

So, as a business owner, ask yourself this question: what is your one olive? We all

Read more...

Hot Business News Today

National Payroll Week: How HR professionals can adapt for the future

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By Dan Matthews on Small Business – Advice and Ideas for UK Small Businesses and SMEs
It’s National Payroll Week, a chance to celebrate the unsung heroes who ensure the workforce gets paid the correct amount, on time. Most employees only give thought to the processes behind their payslips when there’s a mistake, here’s a chance to show them there’s more to payroll than that.
It’s a particularly appropriate time, given the great return to work as organisations continue to adjust in light of the pandemic and the many changes taking place, not just in payroll departments, but across the HR function.
A brave new world of business
In smaller businesses, the pressures of workplace transformation will be particularly acute, according to Joanne Pringle, payroll product manager at Sage.
“As we return to the new normal, managers may struggle to pack everything into their working day with the many tasks required. We might be accustomed to change management, but there has been an awful lot of change in the last 18 months.
“As with any large changes but even more so in Payroll; you sometimes ask yourself have I got it right, have I understood and checked everything correctly? So it’s important to manage changes in

Read more...

Hot Business News Today

National Payroll Week: How HR professionals can adapt for the future

by  •  • 0 Comments

By Dan Matthews on Small Business – Advice and Ideas for UK Small Businesses and SMEs
It’s National Payroll Week, a chance to celebrate the unsung heroes who ensure the workforce gets paid the correct amount, on time. Most employees only give thought to the processes behind their payslips when there’s a mistake, here’s a chance to show them there’s more to payroll than that.
It’s a particularly appropriate time, given the great return to work as organisations continue to adjust in light of the pandemic and the many changes taking place, not just in payroll departments, but across the HR function.
A brave new world of business
In smaller businesses, the pressures of workplace transformation will be particularly acute, according to Joanne Pringle, payroll product manager at Sage.
“As we return to the new normal, managers may struggle to pack everything into their working day with the many tasks required. We might be accustomed to change management, but there has been an awful lot of change in the last 18 months.
“As with any large changes but even more so in Payroll; you sometimes ask yourself have I got it right, have I understood and checked everything correctly? So it’s important to manage changes in

Read more...

Hot Business News Today

Taxman could claw back up to 10% of furlough cash

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By Timothy Adler on Small Business – Advice and Ideas for UK Small Businesses and SMEs

The taxman could claw back up to 10 per cent of all furlough cash from small businesses unaware they have overclaimed.

HMRC and the National Audit Office estimate between 5 per cent and 10 per cent of the total furlough money claimed could represent overclaims.

The Government is due to have spent over £70bn on furlough once the scheme ends on 30 September, nearly double the total UK defence spend in 2019/19.

>See also: This change to the furlough scheme could lead to more costly redundancies

At its peak 8.9m people were on furlough; the latest figure is 1.9m.

Nigel Morris, employment tax director at MHA, says innocent errors and incorrect claims will be pursued for many years by HMRC. He advises small businesses check their claims in detail, now that furlough is winding down. They should repay any overclaims through the Government’s own website before HMRC hits them with interest and penalties.

The most common administrative slip-up made by companies has been forgetting to work out claims for flexible furlough on calendar days (365 per annum) and have instead used working days (260 per annum), which they might use for

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Hot Business News Today

Am I eligible for capital allowance?

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By Toby Cotton on Small Business – Advice and Ideas for UK Small Businesses and SMEs
Capital allowances are available on qualifying capital expenditure incurred on the provision of certain assets used in a company or individual’s trade. Not all assets qualify for a capital allowance and the rate of relief will vary. The allowances are deducted from trading profits effectively reducing the tax payable. This would be the income tax for a sole trader or partnership and corporation tax for a company.
In most cases, items purchased which are allocated as “plant and machinery” would achieve 100 per cent relief via the Annual Investment Allowance (AIA). The current AIA limit is £1,000,000 to the 31 December 2021 and then £200,000 from the 1 January 2022.
HMRC is generous in what it considers qualifying expenditure and includes:

Computer equipment and servers
Tractors, lorries, vans
Ladders, drills, cranes
Office chairs and desks
Electric vehicle charge points
Refrigeration units
Compressors

However, certain items, such as cars, and items owned before you started a business and items given to you or your business are ineligible for this AIA claim. You would only be able to claim writing down allowances via the main pool and special rate pool with a lower percentage claimed. The main

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Hot Business News Today

Taxman could claw back up to 10% of furlough cash

by  •  • 0 Comments

By Timothy Adler on Small Business – Advice and Ideas for UK Small Businesses and SMEs

The taxman could claw back up to 10 per cent of all furlough cash from small businesses unaware they have overclaimed.

HMRC and the National Audit Office estimate between 5 per cent and 10 per cent of the total furlough money claimed could represent overclaims.

The Government is due to have spent over £70bn on furlough once the scheme ends on 30 September, nearly double the total UK defence spend in 2019/19.

>See also: This change to the furlough scheme could lead to more costly redundancies

At its peak 8.9m people were on furlough; the latest figure is 1.9m.

Nigel Morris, employment tax director at MHA, says innocent errors and incorrect claims will be pursued for many years by HMRC. He advises small businesses check their claims in detail, now that furlough is winding down. They should repay any overclaims through the Government’s own website before HMRC hits them with interest and penalties.

The most common administrative slip-up made by companies has been forgetting to work out claims for flexible furlough on calendar days (365 per annum) and have instead used working days (260 per annum), which they might use for

Read more...

Hot Business News Today

Working from home tax breaks

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By Timothy Adler on Small Business – Advice and Ideas for UK Small Businesses and SMEs

How much are working from home tax breaks worth?

You can claim the full year’s entitlement of £125 in working from home tax breaks if your employer told you to work from home — even if it was only for one day.

It doesn’t matter if you have returned to the office since early April — you can still get the full amount for the 2021/22 tax year. Working from home for just some of the week still qualifies.

However, you cannot claim tax relief if you choose to work from home. Nor can you claim tax relief if your employer covered your expenses or paid you an allowance.

If you complete an annual tax return, you will be able to apply for the tax relief via your Self Assessment.

How to apply for working from home tax breaks

You can use the HMRC working from home tax relief portal, where you will be asked a series of questions to check if you are eligible or not. To progress with your claim, you will need a Government Gateway user ID and password, which you can create if you don’t already have

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