Are SMEs equipped to deal with HMRC’s Making Tax Digital initiative?

Are SMEs equipped to deal with HMRC’s Making Tax Digital initiative?, accountancy advice, UK tax advice, free tax advice, free company advice, changing from sole trader to limited company, how do I change from sole trader to limited company, limited company advice, forming a limited company, changing from sole trader, sole trader advice, Omni Chartered Accountants, Chartered Accountant Wolverhampton, Tax Advice Wolverhampton, Payroll Services Wolverhampton, CIS Accountant Wolverhampton, Accountant WolverhamptonOne of the keys to HMRC’s “Making Tax Digital” initiatives is the assumption that small businesses will have access to, and be competent with, digital tools such as software or apps to keep records of their trading, income and expenditure.

It is also a fact that many small businesses lack the time or skills to use digital accounting systems. If you are a small business owner, does the work associated with maintaining Digital Tax Accounts concern you?

Bankstream recently surveyed around 200 accountants and found that:

  • Most small businesses don’t use digital accounting systems now
  • Accountants don’t expect this to change over the next 2 years
  • Most accountants are unsure how they will service clients who are unable to use digital accounting systems, but many expect this work to end up on their desk

These results reveal the extent of a common misconception in Whitehall – that most small businesses use (or could use) accounting software to keep their books.

In contrast, Accountants understand that despite an ever-expanding range of small business accounting software, apps and online systems, most small business owners lack the time and/or skills to use such systems. From a business perspective, quite correctly it is about “fit for purpose” and cost.

With the wheels of change now rolling towards the introduction of Digital Tax Accounts and quarterly tax updates, accountants are considering how to equip their practices to cope with increased workload.

Automation of manual tasks such as transaction collection and data entry is a common priority so, while it might be out of reach for many of their clients, accountants are turning to technology as a solution to their current and mounting workload issues.

Are SMEs equipped to deal with HMRC’s Making Tax Digital initiative?

As a business what are your plans and concerns? Talk to us on Twitter @OmnitasTax and let us know your thoughts – remember that Omni Chartered Accountants are here to provide free, impartial advice. Call us today on 01902 837 408 or request a free of charge call-back from our website.


Are you claiming all of the Tax Relief that your business is entitled to?

Are you claiming all of the Tax Relief that your business is entitled to?, accountancy advice, UK tax advice, free tax advice, free company advice, changing from sole trader to limited company, how do I change from sole trader to limited company, limited company advice, forming a limited company, changing from sole trader, sole trader advice, Omni Chartered Accountants, Chartered Accountant Wolverhampton, Tax Advice Wolverhampton, Payroll Services Wolverhampton, CIS Accountant Wolverhampton, Accountant Wolverhampton Following a recent survey by cloud accounting software provider “FreeAgent”, it has been revealed that sole traders and micro business owners are missing out on millions of pounds each year by not claiming tax relief on minor day-to-day expenditure.

Just thirty nine percent of small business owners surveyed were confident that they claimed tax relief on all their allowable expenses with only one in five neglecting to claim back the cost of any expenses at all!

The survey revealed that across the whole of the UK economy, almost £250m worth of expenses with individual values of less than £10 are being disregarded by freelancers. Even if all of these entrepreneurs were basic rate taxpayers, this would equate to £50m of foregone tax relief – of course, this total could be much greater.

Ed Molyneux, CEO and co-founder of FreeAgent, said;

“Whether it’s £5 or £500, that’s all money which you can claim tax relief on, and in the case of the smaller expenses, it’s also money that quickly adds up. We found that nearly one in four micro business owners wouldn’t claim expenses worth £10 or less – presumably because they’re too small to bother with or it takes too much time to log them.

“Even for a freelance business or small agency, those little expenses can end up being worth hundreds, or thousands, of pounds when they’re all combined – so it’s strange that people seem to think it’s too much hassle or not worth the effort to claim these back.”

Research carried out by another Company on behalf of HMRC a few years ago found that claiming for expenses was seen as the most difficult aspect of tax returns by small business owners.

Are you claiming all of the Tax Relief that your business is entitled to?

Half of micro firm owners were uncertain about what was and was not allowed as a claimable expense. One in five believed they couldn’t deduct any of the cost of expenditure used for both personal and business use, when in fact HMRC guidance states that such costs should be allocated to the business on “fair and reasonable” basis.

If you need help understanding what you can and can’t claim, call Omni Chartered Accountants today on 01902 837 408 for free of charge, impartial advice. Our mission is to save you money!


Tax saving for company loans

Tax saving for company loans, accountancy advice, UK tax advice, free tax advice, free company advice, changing from sole trader to limited company, how do I change from sole trader to limited company, limited company advice, forming a limited company, changing from sole trader, sole trader advice, Omni Chartered Accountants, Chartered Accountant Wolverhampton, Tax Advice Wolverhampton, Payroll Services Wolverhampton, CIS Accountant Wolverhampton, Accountant Wolverhampton The personal tax cost of borrowing from your company is currently quite low.

Taxable benefit

If you borrow from your company, you can be taxed on a benefit in kind (BIK) basis; however, relatively small loans are exempt.
Only when the balance owed exceeds £10,000 in the tax year does the charge apply. In the tax year in which you intend to repay the loan is left a small balance which is repaid after the tax year ends.
Because of the way in which HMRC’s standard calculation works, this reduces the taxable benefit. While HMRC can opt to use a different method of calculation, it’s very unlikely that they will.

Tax saving for company loans

For any tax or accounting advice, call Omni Chartered Accountants on 01902 837 408 or click here for a free of charge call back from our website!


Self-employed figures continue to grow – but not for men…

Self-employed figures continue to growThe latest figures show the rate of self-employment in the UK is continuing to grow year-on-year.

Since 2008, the number of freelancers and self-employed workers has risen by around 700,000, currently standing at 4.5 million. Furthermore, in the period from September to November 2015, 98,000 more people became self-employed compared to the same three-month period in 2014.

Self-employed women

These figures mean that one in seven people who are in employment in the UK now work for themselves. Interestingly, but perhaps not surprisingly, the rise has been particularly noticeable amongst women who are keen to juggle having a family with maintaining their career.

Self-employed over 65s

There has also been a rise in the number of over-65s becoming self-employed. This is possibly because those in the older age bracket have accumulated more knowledge and experience and therefore feel more confident starting their own business. Or maybe through a financial need?

Self-employed men

Whilst these sectors have seen growth, the number of men doing freelance work or working for themselves has remained static.

The benefits of self-employment and free advice

Many people enjoy the flexibility of working for themselves and the freedom of being their own boss. The self-employed can choose their working hours, the clients they work with and how they market their business.

Regardless of far down the self-employed route you are, if you would like any help or assistance at all, more information about self-employment or advice on setting up a new business, please feel free to contact Omni Chartered Accountants on 01902 837 408 and we will be more than happy to help.


HMRC Digital Accounts Push Causes Major Concerns

HMRC Digital Accounts Push Causes Major Concerns, accountancy advice, UK tax advice, free tax advice, free company advice, changing from sole trader to limited company, how do I change from sole trader to limited company, limited company advice, forming a limited company, changing from sole trader, sole trader advice, Omni Chartered Accountants, Chartered Accountant Wolverhampton, Tax Advice Wolverhampton, Payroll Services Wolverhampton, CIS Accountant Wolverhampton, Accountant Wolverhampton HMRC’s push for digital accounts continues to raise concerns in many sectors and also amongst business professionals.

Accountants, privacy experts, politicians and charities are voicing growing worries about HMRC’s ambitions to “fully digitise” the tax return system.

They claim that vulnerable groups will be penalised for not wanting to use the internet, that the quantity of data and information sought by HMRC will increase administrative burden and costs, and that the trend to push everything online will result in far more tax investigations without necessarily raising extra revenue.

They also predict that – whatever it says to the contrary – HMRC’s ultimate intention is to obtain highly detailed data “equivalent to the individual entries on a bank statement”. This is most likely to result in more frequent and earlier demands for payment.

HMRC Digital Accounts Push Causes Major Concerns

There are two prongs to HMRC’s push to “create the most digitally advanced tax system in the world”. One is the introduction of “personal tax accounts” for all individuals, aimed at the majority of people whose tax affairs are relatively simple and who don’t necessarily have accountants.

Here, individuals’ online tax accounts will be updated automatically by HMRC with information it has obtained from other sources. You would log on, for instance, and see those entries relating to your wages or pension, any taxable benefits you receive, such as the state pension, and any interest earned on your savings in bank or building society accounts.

The second digital drive relates to small businesses, landlords and the self-employed: these groups will now have to report information to HMRC on a quarterly basis.

This has already caused a storm of controversy, with 150,000 small business owners petitioning against the change. They argue that quarterly reporting would cost time and money for no gain to the business or HMRC.

What do you think of this approach? Will it benefit or hinder the SME and individuals? Let us know your thoughts on Twitter @OmnitasTax – call us if you have any concerns about the new system and would like free, impartial accountancy advice from our expert team on 01902 837408.


HMRC Changes to Dividends from April 2016

HMRC Changes to Dividends from April 2016

HMRC has clarified the way in which it expects the taxation of dividends and there is no doubt that many people will be affected.

What is changing with dividends?

We are all used to seeing dividend vouchers showing the net dividend that we receive together with a tax credit, and we understand that tax will be charged on the gross figure, with relief for the tax credit.

From April 2016, this system is being fundamentally changed in a way that is likely to mean higher taxes will be payable for anyone with significant dividend income outside the shelter of an ISA or pension fund.

HMRC Dividend Changes from April 2016:

  • The tax credit that is attached to dividends will be abolished so you will be taxed on what you receive, with no grossing up
  • There will be a £5,000 dividend tax allowance so that dividends below this level will be tax free, regardless of your other income
  • Tax rates on dividends will be changed to 7.5%, 32.5% and 38.1% for basic, higher and additional rate taxpayers respectively, a rise at each tax level of 7.5% in the effective rate

Who will be affected by the HMRC Dividend Changes in April 2016?

For investors with modest dividend income, the changes will be limited in their impact. Basic rate taxpayers, used to having their tax liability covered by the tax credit, will be worse off if their dividends exceed £5,000 as they will pay 7.5% on the excess.

Higher rate taxpayers will be better off under the new rules, until their dividend income exceeds £21,667 as the availability of the £5,000 dividend allowance outweighs the loss of tax credit until this point. The break-even point for additional rate taxpayers is £25,400.

However, those most likely to feel the impact of the new regime are directors and shareholders of small companies. For them, it has historically been tax efficient to extract funds from a company using a combination of modest salary and the balance in dividends; the effective rate on dividends extracted is currently 0% / 25% / 30.56% for basic, higher and additional rate taxpayers respectively. Each of these income bandings is likely to experience higher levels of tax on their business income.

For more information on the HMRC Changes to Dividends from April 2016, contact Omni Chartered Accountants on 01902 837 408 for free of charge, practical advice.


Bank of England February 2016 Inflation Report Summary

Bank of England February 2016 Inflation Report Summary , accountancy advice, UK tax advice, free tax advice, free company advice, changing from sole trader to limited company, how do I change from sole trader to limited company, limited company advice, forming a limited company, changing from sole trader, sole trader advice
This report is courtesy of the Black Country Chamber of Commerce.

Bank of England February Report significant points:

  • There has been a softening of UK growth forecasts from 2.5% to 2.2%
  • Spare capacity in UK is 0.3% of GDP and unemployment is below 5%, which leaves little room for manoeuvre within the current downturn – this may lead to price pressure
  • A corporate cash balances are high (lessons learned from the recession) and because lending from the non-banking sector has grown, any issues within the financial sector are not expected to have a catastrophic effect on a globally resilient UK
  • Global growth outlooks are fuelling the 7% drop in equity; growth expectations amongst emerging economies have dropped significantly as a result of the drop in commodity prices (Less investment and bank lending tightening). Growth expectations in advanced economies has risen (where 75% of our exports go to)
  • Oversupply is the reason why the oil prices are dropping. Some commentators are expecting prices to drop to $10 a barrel
  • Productivity in the UK is rising but more business investment is required to consolidate

Click here to view the full Bank of England February 2016 Inflation Report.

We will continue to keep you updated with all of the latest financial and accounting news and hope that you have found our Bank of England February 2016 Inflation Report Summary useful.

Follow us on Twitter @OmnitasTax and like our Facebook page – we are happy to help with any queries that you may have.

If you require any tax or general accounting advice, feel free to call us on 01902 837 408 or you can request a free of charge call-back from our website.


Will UK Consumers Reject Technology in 2016?

Will UK Consumers Reject Technology in 2016?

I recently read a report – 2016 predictions – that UK consumers will increasingly reject tech in favour of a more traditional in the year ahead, creating new opportunity for businesses.

For Britons, 2016 will increasingly be about balancing the technological with the human element. We’ll continue to enjoy technology that gives us greater control over entertainment, purchasing, consumption, our work and personal lives.

We’ll use technology to learn; to sidestep traditional rules and behaviours and to speed up our lives using all the wearables, smart technology and internet led services that will be available in the year ahead.

But 2016 will see a growing reaction against the omnipresence of technology. More and more of us will want to balance our tech use with romance, relaxation, creativity, tradition, sensuality, rawness and honesty.

More and more of us will lose our “fear of missing out” and actually gain some pleasure from missing out. We’ll find time to switch off gadgets and seek out older, quieter, less urban environments in which to enjoy some ‘me time’. Or even take some tech-free we time with our closest friends and family.

More employers will embrace relaxation, digital detoxing and mindfulness.

The year ahead will see the “Slow Living” movement gain momentum, as more young people embrace old fashioned, inefficient ways to do things.

Many will start enjoying the traditionalist lifestyles and “Olde England” attitudes of village life and good neighbours, feeling a call of duty and encouraging others rather than making fun of them.

Reacting against the logic and ‘perfection’ of technology, some Britons will start championing flaws, randomness and a sense of danger. As with the trends we’ve seen in 2015, will all of the above have implications for business community?

Well maybe, but I think this is a utopian and perhaps unrealistic dream – technology will continue to be a massive part of our lives and our businesses and it’s up to us to stay in control: use it and don’t let it use us. How do you see 2016?

Will UK Consumers Reject Technology in 2016?

Written by: Andy Coleyshaw, Partner at Omni Tax & Accountancy Solutions Ltd


Tax relief restricted for many contractors from April 2016

Are HMRC digital tax accounts a good or bad thing?

HMRC has confirmed that people working through umbrella companies will no longer be able to claim tax relief on travel expenses.

Only those who can pass a test of being genuinely self-employed will be allowed to set these costs against expenditure in their accounts.

From April 2016, tax relief will be stopped if an individual is employed by an intermediary but is under the “supervision, direction and control” of an end user.

In addition, tax relief will be stopped if services are provided through a personal service company (PCS) and the engagement is caught by the Intermediaries Legislation (IRS35).

Once the definition and further guidance has been issued on the term, “supervision, direction and control” has been published by the HMRC, businesses will need to review the way they use temporary labour and all or any existing documentation that may be in-situ between them and employment intermediaries.

Contractors will need to take appropriate advice and make their decisions about which supply model to use.

Could you be affected by these new changes? Will your business have to take a look at how you manage your temporary labourers? Omni Chartered Accountants are here to provide advice and guidance and welcome any queries that you may have on this topic.

Tax relief restricted for many contractors from April 2016

You can request a free of charge call-back from our website www.taxandaccountancysolutions.co.uk or call us today for a chat about your circumstances on 01902 837 408 – we will be happy to help!

 


Are HMRC digital tax accounts a good or bad thing?

Are HMRC digital tax accounts a good or bad thing?

Taxpayers will start to be able to manage their tax affairs online with the formal launch of personal tax accounts by HM Revenue and Customs (HMRC).

By mid-December 2015, more than one million taxpayers completing their self-assessment will have been directed to their online personal tax account, HMRC has said.

These personal tax accounts, which will work in a similar way to online banking, promise to give people a “clear and joined-up view” of the tax they pay and enable them to update their tax details, supposedly removing the need to resubmit information.

Personal tax accounts

The launch of personal tax accounts is part of a drive towards a fully digital tax service. Two million businesses are already using their digital accounts and by April 2016, all of the UK’s five million small businesses will have access to their own digital account.

Every individual taxpayer will also have access to their own digital account by April 2016.

HMRC have said that by 2020 businesses and individual taxpayers will be able to register, file, pay and update their information at any time of the day, and at any point in the year, to suit them. For the vast majority, there will be no need to fill in an annual tax return. This will make it hugely important that you take the right advice from a professional or firm of Accountants.

At the moment, the information that HMRC receives from a range of sources is held on separate systems. This can mean taxpayers being asked to give information to the taxman that it already holds on another system.

The new digital tax accounts will join up the information HMRC holds in one place.

HMRC additional information and control

However some see it as not only being unable to cope but as an ulterior way of gleaning additional information and control.

One such quote from a tax blog;

“The real objective is to spy on your financial affairs 365 days a year and take what they think is the tax you owe directly from your bank account whenever they feel like it. After all these years, the present on-line system is a hopelessly unreliable mess.”

This may be an extreme view, but it is certain that the current systems and advice lines are struggling to cope with demand, wait times are increasing and historic legacy systems have not delivered as promised.

So, do you know what this means to you? Are you concerned, and if so by what?

Are HMRC digital tax accounts a good or bad thing?

Let us have your comments, views and concerns @OmnitasTax – we would love to hear your thoughts! Of course, if you require any tax or general accounting advice, feel free to call us on 01902 837 408 today!