Hitting the VAT threshold

Do you know when your business needs to register for VAT? It may seem obvious, but many business owners find they have hit the VAT threshold without even realising it, leaving them with a hefty VAT bill that they can’t recoup from their customers. ,

A business must register for VAT when it is expected to hit a VAT turnover over £85,000.00 in the next 30 day period, or the business had a VAT taxable turnover of more than £85,000 over the last 12 months. If you are late in registering, you must pay what you owe when you should have registered.

There are other reasons you may need to register but it is best to speak to your bookkeeper or accountant to check you do not fall into one of these other categories.

So what changes once you register?

Say you are a business owner who has just reached the VAT threshold and must now submit VAT returns on a quarterly basis. You currently keep note of all of your sales and purchases in Excel, however due to how busy you are you often leave transactions unrecorded, figuring your accountant will deal with them at the financial year end. Now, you realise, these transactions must all be recorded and reported on a quarterly basis in order to complete your VAT return. What’s more, you are suddenly hit with a deluge of new terms (MTD anyone?) and rules you must follow. You also have to find a software program that is MTD compatible.

Furthermore, once you’ve chosen a new software program you then need to transfer your data off Excel and onto the new system. Then, you are hit with a whole new set of terms when trying to set it up – opening journals, trade debtors, trade creditors, the list goes on….

Rather than try and muddle your way through, now would be a good time to hire a bookkeeper, saving you time and allowing you to focus on the tasks you enjoy doing. Your bookkeeper will ensure your data is transferred seamlessly, your VAT returns are accurate and submitted on time and your paperwork is organised and filed correctly, should there ever be a VAT investigation by HMRC.

If you’d like to find out more about how Nine Ashes Bookkeeping can help your business with your bookkeeping needs, get in touch to arrange a free consultation. Based in Essex, we provide small businesses bespoke, affordable bookkeeping and payroll services.

Deadline looms for VAT Deferral New Payment Scheme

Businesses that deferred VAT payments last year have until 21 June 2021 to join the new online payment scheme, allowing them to pay in monthly installments.

Over half a million businesses deferred VAT payments due between March and December 2020 under the VAT Payment Deferral Scheme.

Businesses that sign up for the scheme can pay their deferred VAT in two to eight consecutive instalments without adding interest, if they join online by the 21 June 2021. The first payment due would be made at the time of joining.

There are some requirements for joining (ie ensuring VAT returns are up-to-date). If you need help getting your VAT returns completed and filed, get in touch to arrange a free consultation to see how we can help with your bookkeeping needs. Based in Essex, we provide small businesses bespoke, affordable bookkeeping and payroll services.

Source: GOV.UK

Budget 2021: Key Announcements

Chancellor Rishi Sunak announced this week his March budget, confirming the extension of the Coronavirus Job Retention Scheme (CJRS) until the end of September as well outlining the government’s tax and spending plans for the upcoming year.

Coronavirus Support

As expected, the furlough scheme will be extended until the end of September, however employers will be required to contribute 10% of furloughed wages in July and 20% in August and September. To help combat fraud, it was announced HMRC will be recruiting an additional  1,265 staff to investigate CJRS fraud and error.

Support to the self-employed will also continue, with 600,000 more self-employed people eligible to access the grant. Those self-employed will receive 80% of their average trading profits, capped at £2,500 per month. The average profit calculation will include four tax years’ worth of profits, from 2016/2017 to 2019/2020.  The grant will  now be available for those who became self-employed in 2019/2020.

In the final fifth grant, those businesses where turnover has fallen by at least 30% will get the full grant at 80%. Other businesses whose turnover has fallen by less than 30% will receive a grant based on 30% of average profits, capped at £2,850.

Other support measures announced include the extension of the business rate holiday until 30 June 2021. The business rate holiday will then go through a transitional period from July until the end of March 2022.

A £5bn grant scheme to help the high street and hospitality sector was also announced.

Business announcements

In the March budget it was announced that from 1 April 2023 corporation tax will increase to 25%, but companies with profits up to £50,000 will not be affected by the rate increase and a tapered rate will apply to profits up to £250,000.

In VAT news, the temporary rate of VAT for the tourist and hospitality sector will remain at 5% until 30 September 2021. It will then raise to 12.5% until 31 March 2022 when it will then revert back to the normal 20%.

In other VAT news, the VAT threshold of £85,000 will remain in place for at least 3 more years.

Looking at payroll news, the planned increase in personal allowance to £12,570 and the 20% tax band will go ahead, however it will then be frozen until 05 April 2026.  It was also confirmed the National Living wage will increase to £8.91 from April. Finally, employment allowance will remain at £4,000 for 2021/2022.

Not sure how any of the above, or any other announcements made this week, affect you or your business? Get in touch to see how we can help with your bookkeeping and payroll needs. Based in Essex, we provide small to medium size businesses bespoke, affordable bookkeeping and payroll services.

Scam emails from ‘HM Revenue & Customs’

SCAM EmailsWe’ve had numerous clients contact us to ask about recent emails from ‘HMRC’ notifying them they are due a tax refund. Beware: these are not from HM Revenue & Customs and are a scam.

For example here is a recent one a client was sent:

 Dear Customer,

We have detected that you have paid too much in the past, due to an official error. Therefore, HMRC applied ESC B41 to issue a repayment to tax years which are now out of date under the strict statute.

Tax refund : £395,61

Please click here to access the secure web form.

Completed return amounts take 1 to 2 days to appear on your account.

From HMRC

As such we are doing a two part series on how to recognise legitimate communications from HMRC versus phishing/bogus emails and text messages.

In part one we will focus on how to tell if an email is fraudulent.

Firstly, always remember that HMRC will never ask you to provide personal or financial information. Additionally, HMRC emails will never:

  • notify you of a tax rebate
  • offer you a repayment
  • ask you to disclose personal information such as your full address, postcode, Unique Taxpayer Reference or details of your bank account
  • give a non HMRC personal email address to send a response to
  • ask for financial information unless you’ve given us prior consent and you have formally accepted the risks
  • have attachments, unless you have given prior consent and you have formally accepted the risks
  • provide a link to a secure log-in page or a form asking for information – instead we will ask you to log on to your online account to check for information
  • Say urgent action required.

Recognising a Bogus Email

Fraudulent emails may often contain spelling mistakes and poor grammar. Additionally, there are a number of things you can look out for to help you recognise a phishing/bogus email.

Incorrect ‘From’ address

Look out for a sender’s email address that is similar to, but not the same as, HMRC’s email addresses. Fraudsters often have email accounts with HMRC or revenue names in them (such as ‘refunds@hmrc.org.uk’). These email addresses are used to mislead you.

However be aware, fraudsters can falsify (spoof) the ‘from’ address to look like a legitimate HMRC address (for example ‘@hmrc.gov.uk’). If you’re not 100% sure that the message has come from us don’t open it. If you do open the email and you’re in doubt don’t click on any links or downloads.

Bogus websites

Fraudsters often include links to webpages that look like the homepage of the HMRC website. This is to trick you into disclosing personal/confidential information.  Bogus webpages often contain links to banks/building societies, or display fields and boxes requesting your personal information such as passwords, credit card or bank account details.

You should be aware that fraudsters sometimes include genuine links to HMRC web pages in their emails, this is to try and make their emails appear genuine.

Common greeting

Fraudsters often send high volumes of phishing emails in one go so even though they may have your email address, they seldom have your name. Be cautious of emails sent with a generic greeting such as ‘Dear Customer’.

Emails from HMRC will always use the name you’ve provided to us and include information on how to report phishing emails to HMRC.

Attachments

Be cautious of attachments as these could contain viruses designed to steal your personal information.

More Information

If you have received a phishing/bogus email related to HMRC, or you’re not sure if it’s genuine, you can read about how to report internet scams and phishing to HMRC using this link:

https://www.gov.uk/report-suspicious-emails-websites-phishing

 

Source:GOV.UK Daily Digest Bulletin, June 15, 2016

Help and Support from HMRC for Sole Traders

Help for sole tradersDid you know that HMRC provides lots of help and information online to help sole traders run their business successfully? Their online support includes webinars, e-learning, emails and videos for the self-employed.

Topics covered include

  • Getting started in business
  • Business expenses
  • Capital allowances

The live webinars last for an hour. You can ask questions during the presentation and get answers from the HMRC host.

You can see the full list of webinars with descriptions, dates, and links here.

We’re also here to help with any questions you might have about being a sole trader. Nine Ashes Bookkeeping is an independent accounting and bookkeeping firm based in Essex. We serve in and around the Brentwood, Chelmsford, Epping, Harlow, Ongar and Billericay areas.We specialise in providing accounting, bookkeeping and payroll services to small businesses.

To learn more about us and the services we provide please get in touch.

Employment allowance changes

TaxThe start of the 2016/2017 tax year brings with it new changes to employment allowance rules that will affect those companies where the only person on the payroll is a director.

Previously, ‘single director employee’ limited companies were eligible for employment allowance (enabling them not to pay the first £2,000 of employers national insurance). From April 2016 however all single director employee companies are no longer eligible for employment allowance.

What about two directors?

For now, if you have a second director on the payroll you will still be eligible for employment allowance should you meet the other qualifying conditions.

Rate changes

Those who are eligible for employment allowance will be happy to hear the rate has risen from £2,000 to £3,000 for the 2016/2017 tax year.

Tax planning

If you are a ‘single director employee’ limited company and need help with your tax planning for the 2016/2017 tax year, get in touch with us. We will be able to review your situation and provide tax planning ideas to help reduce the impact of not only the employment allowance changes but also the dividend tax changes that come into effect in the 2016/2017 tax year.

Bookkeeping and Accounting in Essex

Nine Ashes Bookkeeping is a local, independent bookkeeping and accounting firm which specialises in bookkeeping and accounts for small businesses. Based in Ingatestone, we have clients from across Essex and can help with a wide range of services including tax advice, bookkeeping, payroll and year end accounts production.

European Court Rules Travel Time to Work is Work

regulationThe European Court of Justice (ECJ) has ruled that time spent travelling to and from first and last appointments by workers without fixed offices should count as working time. Presently this is not the case.

It could mean companies employing workers such as electricians, gas fitters, care workers and sales reps could be in breach of EU working time regulations.

You can read more about the ruling and the affect it could have on you as an employer on the BBC website: http://www.bbc.co.uk/news/uk-34210002

Payroll Services

Nine Ashes Bookkeeping provides payroll services to small businesses across Essex, focusing on areas such as Brentwood and Chelmsford. We offer a personalised, friendly service at affordable prices. We ensure your payroll complies with the ever changing regulations and all RTI submissions are submitted correctly and on time.

If you are looking for a payroll services provider located near Brentwood or Chelmsford in Essex, give Emily a call to find out more about our payroll services and how we can help you with your business.

National Living Wage: New Penalties to be Introduced

payrollThe Government announced this week a new package of measures to ensure employers pay their workers the National Minimum Wage the new National Living Wage. These include tougher penalties and disqualifying employers from being a company director for up to 15 years.

From April 2016, under the new Government plan, penalties for non-payment of the National Minimum Wage and the new National Living Wage will double from 100% of the amount owed to 200%, unless the arrears are paid within 14 days.

The maximum fine for non-payment will remain at £20,000 per worker. Anyone found guilty of deliberately not complying could be disqualified from being a company director for up to 15 years.

Business Secretary Sajid Javid said:

“There is no excuse for employers flouting minimum wage rules and these announcements will ensure those who do try and cheat staff out of pay will feel the full force of the law.”

Currently the National Minimum Wage for adults (21 years and older) is £6.50, but this is set to raise to £6.70 in October 2015. Under the new system, workers aged 25 and over will be entitled to receive £7.20 an hour, rising to £9 an hour by the end of the decade.

Payroll Services in Essex

Worried about how this will affect your business?

Nine Ashes Bookkeeping provides payroll services to small businesses across Essex, focusing on areas such as Brentwood and Chelmsford. We offer a personalised, friendly service at affordable prices. We ensure your payroll complies with the ever changing regulations and all RTI submissions are submitted correctly and on time.

If you are looking for a payroll services provider located near Brentwood or Chelmsford in Essex, give Emily a call to find out more about our payroll services and how we can help you with your business.

 

 

Becoming an Employer: What to do when hiring an employee

Help Wanted SignEmploying staff for the first time can be exciting. However, it’s important employer’s following the following six key steps when hiring their first employee:

  1. Decide how much to pay. Make sure you pay your employee at least the National Minimum Wage.
  2. Check your prospective employee can legally work in the UK. You may have to do other employment checks as well.
  3. Apply for a DBS check (formally known as a CRB check) if you work in a field that requires one.
  4. Get employment insurance. You need employers’ liability insurance as soon as you become an employer.
  5. Send your new employee, in writing, details of the job, including terms and conditions. If you are employing someone for over a month you must give them a written statement of employment.
  6. Tell HMRC by registering as a new employer. You can do this up to four weeks before you pay your new employee.

Payroll Services in Essex

Becoming an employer involves a lot more than just hiring your first employee. PAYE, National Insurance, and RTI rules and regulations are all areas you will need to learn about.

If you rather not deal with the stress of it all, Nine Ashes Bookkeeping provides payroll services across Essex, focusing on the Brentwood, Chelmsford and Billericay areas. We offer a personalised, friendly service at affordable prices. We ensure your payroll complies with the ever changing regulations and all RTI submissions are submitted correctly and on time.

If you are looking for a payroll services provider located near Brentwood or Chelmsford in Essex, give Emily a call on 01277 823688, or email enquiries@nineashesbookkeeping.co.uk to find out more about our payroll services and how we can help you with your business.

 

Dividend Tax Reform: What Small Businesses Need to Know

The word Tax on a cork notice boardThe Chancellor George Osbourne announced in the summer budget a reform of the way dividends are taxed. This will have a direct impact on many small businesses in Essex.

Tax-free Dividend Allowance

From April 2016 the Dividend Tax Credit will be replaced by a new tax-free Dividend Allowance. The Dividend Allowance means that you won’t have to pay tax on the first £5,000 of your dividend income, no matter what non-dividend income you have.

The allowance is available to anyone who has dividend income.

Changes to headline rates 

Headline rates of dividend tax are also changing.

You’ll pay tax on any dividends you receive over £5,000 at the following rates:

  • 7.5% on dividend income within the basic rate band
  • 32.5% on dividend income within the higher rate band
  • 38.1% on dividend income within the additional rate band

This new system will mean that those with significant dividend income will pay more tax. Investors with modest income from shares, will see either a tax cut or no change in the amount of tax owed.

Dividends received by pension funds that are currently exempt from tax, and dividends received on shares held in an Individual Savings Account (ISA), will continue to be tax free.

From April 2016 you have to apply the new headline rates on the amount of dividends you actually receive, where the income is over £5,000 (excluding any dividend income paid within an ISA).

The Dividend Allowance will not reduce your total income for tax purposes. However, it will mean that you don’t have any tax to pay on the first £5,000 of dividend income you receive.

Dividends within your allowance will still count towards your basic or higher rate bands, and may therefore affect the rate of tax that you pay on dividends you receive in excess of the £5,000 allowance.

You can find some good working examples on the HMRC website.

Help for Essex businesses

Are you a small business based near or around the Brentwood, Chelmsford or Billericay areas and have questions on the dividend allowance and how it affects you? Get in touch to speak to our Chartered Accountant who can answer any questions you may have.

About Us

Nine Ashes Bookkeeping is a local, independent bookkeeping and accounting firm which specialises in bookkeeping and accounts for small businesses. Based in Ingatestone, we have clients from across Essex and can help with a wide range of services including tax advice, bookkeeping, payroll and year end accounts production.

Got an Enquiry?

Call us on
01277 823688

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Latest News

17
Jun

Hitting the VAT threshold

Do you know when your business needs to register for VAT? It may seem obvious, but many business owners find they have hit the VAT threshold without even realising it, leaving them with a hefty VAT bill that they can’t recoup from their customers. , A business must register for VAT when it is expected […]

2
Jun

Deadline looms for VAT Deferral New Payment Scheme

Businesses that deferred VAT payments last year have until 21 June 2021 to join the new online payment scheme, allowing them to pay in monthly installments. Over half a million businesses deferred VAT payments due between March and December 2020 under the VAT Payment Deferral Scheme. Businesses that sign up for the scheme can pay […]

4
Mar

Budget 2021: Key Announcements

Chancellor Rishi Sunak announced this week his March budget, confirming the extension of the Coronavirus Job Retention Scheme (CJRS) until the end of September as well outlining the government’s tax and spending plans for the upcoming year. Coronavirus Support As expected, the furlough scheme will be extended until the end of September, however employers will […]