2015 Autumn Statement from an SME perspective: Smoke and Mirrors?

Accountancy advice, Accountant, accounting, accounting directive, accounts, affordable accounting, Blog, bookkeeping business, Businesses, business owners, chartered accountant, chartered accountants, companies house, company law, EU accounting, financial reporting, general election, HMRC, HMRC online system, HM Revenue & Customs, Income Tax, limited company structure, majority shareholder, minority shareholder, Omni, Omni Chartered Accountants, partnerships, PAYE, self-employed, self assessment, self employment, shareholder, agreement shareholder, rights small business, small business accountant, small business owners, small company accounts, SME, SMEs, tax, tax advice, tax affairs, tax return, VAT, Omni Chartered Accountants, Chartered Accountant Wolverhampton, Tax Advice Wolverhampton, Payroll Services Wolverhampton, CIS Accountant Wolverhampton, Accountant Wolverhampton

Mercurial Chancellor’s Autumn Statement treads fine line between smoke, mirrors and political sleight of hand.

 Chancellor George Osborne’s smiling face delivered a customary, skillful declaration of Government intent unveiling mouth-opening surprise in a ‘rabbits out of the hat’ delivery designed to trample over the critics of his financial and political aspirations.

 Determined to maintain his battle with Austerity the chancellor unveiled headline grabbing measures fuelled by a reduction of £8 billion in Government borrowing; robust growth forecasts for the next four years reducing Government debt as a share of GDP.

Opposition voices complained the ‘less generous’ Universal Credit benefit system introduced in stages between 2013 and 2017 but, as ever, the engine driving Treasury optimism is the performance of business, generating sufficient revenues to enable measures protecting front line budgets such as defence, policing, health and international aid.

 Yet small businesses continue to gnash their teeth about liquidity or rather the lack of it. Orders and production satisfactory, but getting paid?

 The old adage Cash is King never truer than today.

2015 Autumn Statement from an SME perspective: Smoke and Mirrors?


Timing bad debt relief

Timing bad debt relief, Accountancy advice, Accountant, accounting, accounting directive, accounts, affordable accounting, Blog, bookkeeping business, Businesses, business owners, chartered accountant, chartered accountants, companies house, company law, EU accounting, financial reporting, general election, HMRC, HMRC online system, HM Revenue & Customs, Income Tax, limited company structure, majority shareholder, minority shareholder, Omni, Omni Chartered Accountants, partnerships, PAYE, self-employed, self assessment, self employment, shareholder, agreement shareholder, rights small business, small business accountant, small business owners, small company accounts, SME, SMEs, tax, tax advice, tax affairs, tax return, VAT, Omni Chartered Accountants, Chartered Accountant Wolverhampton, Tax Advice Wolverhampton, Payroll Services Wolverhampton, CIS Accountant Wolverhampton, Accountant Wolverhampton Whatever accounting method your company uses, its profits have to be calculated on a “true and fair” basis.

That means including the value of invoices issued even where they won’t be paid until the following accounting period – or perhaps not at all. Accounting rules get around this apparent unfairness by allowing a deduction for the value of invoices you think won’t be paid i.e. Bad debts.

Bad debt relief

HMRC allows you to make a deduction from taxable profits for bad debts. However, it takes a tougher approach to it than accounting rules on what is classed as bad debt.

It isn’t just a case of estimating the value of debts you don’t expect to be paid, even if it’s a virtual certainty based on what’s happened historically; you have to carry out a review of each and every specific debt.

Chasing your debts

HMRC will expect you to have made a reasonable and proportioned effort to recover money you are owed.

This will be relevant to the amount of debt of course, e.g. if you are claiming a tax deduction for a £15,000. HMRC expects you to have been very thorough in your attempts to recover it, by using debt collection services for example, or taking court action.

Timing bad debt relief

You should claim relief for the accounting period in which you decide the debt has become irrecoverable.

If you suspect a debt may ‘go bad’, try to establish this in the same accounting period. This ensures that you won’t be taxed on unpaid bills. It is essential that you review your debts regularly – not just when the end of an accounting period is looming!

Post-accounting period

If the status of a debt you thought was bad at the end of your financial year changes, and before you sign your company’s accounts it is paid, HMRC will not accept a claim for bad debt relief.

This works both ways and if a good debt turns bad you can claim relief. Given this, it is well worth reviewing the debts during this period before signing and filing your accounts.

Seeking help

If you would like to talk about your bad debt situation, we would be delighted to hear from you – we are happy to provide expert advice that is totally free of charge. Simply request a call-back from our website, call on 01902 837 408 or click here to contact Omni Chartered Accounts.


HMRC Personal Tax Account

HMRC has taken the first step towards an automated tax assessment system by launchings its new Personal Tax Account

HMRC Personal Tax Account

It allows you to view your personal information, access HMRC’s tax forms and to estimate your PAYE bill; more functions will be added in the New Year.

HMRC New Website 2015

HMRC launched a test version in July of this year and it will soon be available to everyone who is taxed under the PAYE system.

Currently, it only allows you to:

  • View your personal details – name, NI number and address
  • Use HMRC’s Tax estimate Service, which tells you how much tax you’ll pay through PAYE, and to check the information your estimate is based upon
  • Use links to income tax related forms at GOV.UK

Keep an eye on the developments through the HMRC site and of course, our blogs. By following us om Twitter @OmnitasTax or liking our Facebook page, you will always be kept up to date with the latest tax and accountancy news!

HMRC Personal Tax Account

If you would like any advice regarding your tax affairs or would like to speak with us about our competitive accountancy services, call 01902 837 408 or click here and we will get back to you as soon as possible.


HMRC denies new business VAT refunds

HMRC denies new business VAT refundsHMRC has changed its interpretation of a key VAT rule – newly registered businesses are now being denied VAT refunds.

HMRC hasn’t publicly announced this change in practice, so tax advisers and taxpayers have been potentially over-claiming input VAT on new VAT registrations.

What’s changed?

When an established business registers for VAT, it may already hold some stock and assets which will be used after the registration date in connection with its ‘VATable’ sales.

For over 40 years, traders have been able to reclaim all the input VAT paid on those goods on their first VAT return, as long as the following conditions were met:

  • Goods were acquired in the four years before the date of registration
  • Items were still held at the date of registration

However, if you ring the VAT helpline you may now be told that you are unable to reclaim all of the input VAT paid on those goods.

HMRC says the input VAT should be reduced to take into account the use that has been made of the goods before the VAT registration date. There has been no change in practice for VAT reclaims on services, which must be provided in the six months before registration.

HMRC denies new business VAT refunds

If you would like to find out more information, or would like general business accounting advice, give Omni Chartered Accountants a call today! Our number is 01902 837408 or of you can request a free of charge call-back from our website!


Why Budget Tempers Optimism

Confidence among small businesses is cooling, according to the latest Federation of Small Business Index that was published in September.

Why Budget Tempers Optimism

While confidence levels remain firmly in positive territory, SMEs appear more cautious about their prospects than in recent quarters.

After an initial boost given by the clear outcome of the General Election, these results reflect the impact of recent changes announced at the Summer Budget, notably increased taxes on dividends and steep rises in the national living wage.

The number of businesses expecting to grow has also cooled but remains positive, with almost 6 in 10 small businesses (58.7%) anticipating expansion in the next 12 months.

Why Budget Tempers Optimism

How are you feeling about the future? If you need help or advice to ensure your business is as tax efficient that it can be, Omni Chartered Accountants can help!

Request a free of charge call back from our website or click here and we will get straight back to you!


Taking early action on debt for SMEs

Small business owners that are struggling to make ends meet should seek early advice from the Business Debtline while they still have a chance to turn things around.

Taking early action on debt for SMEs

The Business Debtline is a free, Government-backed service run by the Money Advice Trust, which offers one-to-one advice sessions for those struggling to cope, helping them produce an action plan that could prevent insolvency.

If your company is struggling with cash-flow due to debts, it makes sense talk to them first before you go down the slope that could lead to bankruptcy. If you have debts and/or owe HMRC monies then give them a call – you can visit their site at www.moneyadvicetrust.org

Taking early action on debt for SMEs!

Omni Chartered Accountants also offer free impartial advice to UK SMEs and our competitive pricing plans are designed to help your business stay right on track.

For an initial chat, call us today on 01902 837 408 or click here and we will come straight back to you!


How to gain referrals for your business

Relying on word of mouth, and gaining business through referrals from others is a sure-fire and cost-effective way of keeping advertising overheads down and work flowing.

But have you ever actively gone out of your way to ask for referrals?

Do your clients even know that you are seeking referrals?

It may seem an unnatural thing to do at first – asking others to recommend your services to friends, colleagues and acquaintances. But once you’ve cracked it, there should be no stopping you! At Omni Chartered Accountants, a large part of our client-base is referrals – here’s some hints and tips from us!

Top 10 Tips on how to gain referrals for your business

  1. Gain a referral attitude
  2. Set a referral vision
  3. Create your perfect client profile
  4. Who are your best clients?
  5. What characteristics do they have?
  6. What sector do you like to work with?
  7. What professions do you like to work with?
  8. What needs wants and challenges do they have that you can solve?
  9. Until you feel comfortable in asking for referrals you are missing out on ‘Grade A’ clients!
  10. Try different approaches – what about putting “by referral only” on your marketing literature or business cards for example?

Referral self-development cycle

How to gain referrals for your business

How to gain referrals for your business

 

For more information about our services, call Andy Coleyshaw today on 07812 988065 or click here and we will get straight back to you!

p.s. If you like what you’ve read, don’t keep Omni Chartered Accountants a secret!


5 top tips on managing your payroll

5 top tips on managing your payroll

5 top tips on managing your payroll

Payroll management is a specialist area, it is time consuming and difficult.

So it’s not surprising that few business owners like to do it themselves. If you’re currently considering outsourcing this service, here are a few benefits of doing so that should help you to make the right decision.

 

 

1. Cost

A large company can generally afford a big payroll department. If you’re a small business however, in-house payroll can be very costly. In general terms, if you have fewer than 20 employees, there’s a good chance that you can save a lot of money by outsourcing your payroll operations.

Simply work out your current costs and compare the amount to what an external provider will charge. Remember to factor in all associated expenses like printing, distributing cheques and creating tax documents.

2. Productivity

As mentioned earlier, payroll management is a time-consuming activity.

With this burden removed however, either you can save on employee costs or the employees can focus on doing more productive things that could, in turn, could help bring extra income to the business.

3. Specialist focus

If you outsource this service, you can seek financial restitution from the provider which is something you can’t do with your own employees.

4. Avoiding mistakes

An incorrect pay run can not only anger employees and cause conflict within the business, but a big mistake can have serious consequences with HMRC. Outsourcing your payroll management will avoid any such problems.

5. Knowledge

A good payroll provider will know all the relevant payroll-related tax laws and regulatory mandates. Of course it’s possible for your own employees to achieve this same level of understanding but it would take a considerable amount of investment in time and effort.

Omni Chartered Accountants Payroll Service – 5 top tips on managing your payroll

Omni provides a cost-effective payroll service for SMEs and larger businesses, from just £240 per person – request a free of charge call back from our website or call 01902 837 408 for an initial chat and quotation based on your requirements!


How to avoid cashflow problems

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Here are two startling statistics of start-up businesses:

  • One in four businesses don’t make it through the first year
  • More than half don’t survive past the fifth year of trading

There can many reasons for this, but one of the main reasons for this is down to cashflow – without it, a business simply cannot stay afloat. Below are some of the most common cashflow problems and some advice on preventing them from occurring in the first place.

Keeping accurate company records

Lots of new business owners put off bookkeeping duties as they are so busy with the huge workload that can be involved with setting up a new company.

The longer the books are neglected, the worse the problems will get; records and forecasts are pivotal to you knowing what is happening in your business.

It’s also important to ensure that you keep a proper record of what customers have and haven’t paid you to avoid significant sums of money that may owed to you getting overlooked. An effective accounting system is vital to manage your cashflow.

If you don’t have the time to do this yourself, an accountancy practice or bookkeeper will be able to do this for you.

How to manage company debts

Slow payers or bad debt is money that is owed but not paid.

This can be crippling for any new company but is usually preventable if a proper credit control system is put into place early on. If you discover that a customer has a poor credit record but you still want to take them on as a client, ask them for an upfront deposit or issue partial invoices so they can pay as portions of the work are completed. In other words, understand your customers and manage the risk.

A customer at any cost?

Calculate very carefully if want to offer credit terms – does your business model support it? If it doesn’t work early on don’t do it; you can always introduce credit terms as and when the business can afford it.

If you are currently in this situation then re-negotiate terms with your customers and/or suppliers or consider factoring the debt.

No cashflow forecast

A cashflow forecast is vital for any new business and is something that a qualified accountant can put together for you. This will allow you to forecast the months you can expect to see a cash deficit and the months when you may experience a surplus.

It will allow you to plan ahead as well, as give you a pretty good idea of how much cash your business is going to need over the next 12 months in order to survive. It is a good idea to keep the forecast on a rolling 12 month basis.

Free of charge accounting advice from Chartered Accountants

Omni Chartered Accountants offer totally free of charge advice for any business – new or otherwise – that may be experiencing difficulties. We are also here if you or would like to find out more about our cost-effective solutions that are designed to help your company run smoothly.

How to avoid cashflow problems

Call us now on 01902 837 408 or request a free of charge call back from our website today!


Guide to selling your business

Guide to selling your businessAre you thinking about selling your limited business?

Maybe you’re considering retirement or going back into full time work?

If you want to sell all the assets that you’ve accumulated from a company which is no longer trading, then you may have to pay Capital Gains Tax. This applies when you’ve made a profit on the original price of what you’re selling.

The regular rate of Capital Gains Tax is 18%, or 28% for people paying more than the basic rate of income tax.

However, applying for Entrepreneurs’ Relief allows sellers to only pay a reduced rate of 10% on the sale. This incentive was introduced in 2008 to encourage people to set up and grow businesses, creating jobs and economic growth.

Guide to selling your business

For details regarding eligibility rates etc. take a look at www.gov.uk/entrepreneurs-relief/eligibility or call Omni Chartered Accountants for free of charge, impartial advice on 01902 837 408!