Align your business with a charity

As a business, it’s very important to give back. There are many ways you can support charities and projects through your business which can be beneficial to your business as well as knowing you are helping others.

The pandemic has caused a massive decrease in fundraising because so many events were cancelled. Now is the time to get involved and help Charites to replace that lost revenue they so badly need. Here are some ideas you could implement.

Who do you want to support?

Consider carefully the type of charity you want to support and the best way to get the most out of the relationship between you and the charity. What kind of charity would be best aligned with your business?

  • For example – an optician might support the RNIB
  • A wealth and retirement planning company might support AGE UK

If you are a UK wide company or a business serving customers internationally you will want to think carefully about a charity which has that coverage.

If you are based in a local geographical area, getting involved with a local charity or project gives you the opportunity to give something back into your local community. It also raises your profile in the area.

We have chosen a few local charities to support and these include – Level Trust, Keech Hospice Care, DLDD Trust ( Don’t Let Dunstable Die) and Mary Seacole Housing Association. We have organised quiz nights, bingo nights, cheese and wine evening, pancake races and coffee mornings. We also support events as much as possible by attending or sponsoring or both. Our staff are also encouraged to engage and support our chosen charities.

Building your business into the community

Community life as we used to know it is dwindling and businesses whatever their size can make a big difference to a charity or projects by getting involved.

Your business is part of the community and being part of a community is vital for any business. We live in a world which seems so materialistic at times. With so many small shops and business closing all the time it feels as if the community spirit has begun to close too. Through supporting local events, projects and charities, you will understand the needs of the community and be able to find ways to meet them.

It’s hard to buy that kind of market research anywhere, but almost impossible for many businesses. Customers are more likely to support businesses they feel are engaged and understand the needs of others.

It can be difficult to sustain a business but being involved with a charity is one way to ensure that your business thrives in your community as you are helping and doing something to build a community!

You could either give ad-hoc support to several or one charity or choose one charity per year and any fundraising or support goes to that charity and then change it annually.

The amount of time will depend on how much you have!

Being involved provides you with additional marketing opportunities.

Examples of how your business can support charities or local projects and how to maximise the publicity.

Take part or organise an event

For example – a race, abseil, skydive or organise a quiz, race night or party this will provide you with additional marketing and PR opportunities. Plus, brand awareness of your company. This could be an online event or a face to face event.

Publicity for you and the charity

Include your charitable involvement in newsletters, brochures, signs, displays and adverts, press releases and inform local radio.

Mention it on your website, profile the charity and the reason for your support add their logo (you must get permission first) and a link to their website. Ask them to reciprocate.

Add to your social media sites and use this as a way of spreading the word about the cause.

Getting involved in high profile causes might attract additional media attention. You might want the charity to add your company name to a project you support or sponsor if the donation is significant.

Ask the charity to add your details in their literature. You can make offers to the charity staff and their users if this is applicable with your business.

Donate a percentage of sales or raffle prizes.

Donating a percentage of sales to a charity often works well – maybe certain months of the year. For example, if you are in health and beauty you might want to donate during Breast Cancer awareness month. Or if you have a business aimed at men you could choose Prostrate Cancer. Consider donating to charities that have an audience aligned with your business. Create a club of people who support the charity and your business. Donating raffle or auction prizes.

Organise an annual event.

Arrange an annual event promoting your company where all the profits from the event go to a local charity- could be a product or service launch or a company birthday or Christmas event.

Create seasonal offers

Create special packages at key times of the year Christmas, Easter that either you sell, or the charity sell on your behalf with profits all or part donated.

Work with charities to find out what support they need.

Charities want to grow their support as much as you do so brainstorm ways with them you can support each other. They expect to give support to businesses in return for their support.

 

Posted in Website Blog | Tagged accountant dunstable, corporate social responsibility, CSR

Increase your profits by building your profile

As accountants, we are always suggesting ways in which you could improve your turnover and profits.

One of the major ways you can do this is by really building your business profile both locally and nationally. Even an online business can benefit from doing this. As a business, we have worked hard to elevate our business in our local area of Dunstable and Luton, throughout the county of Bedfordshire and nationally. Here are some ideas of some of the things you can do to make your business more prominent. We have shared some of the things we have implemented which have worked for us.

Networking

Being part of networking groups and attending events regularly has been beneficial. We have been able to build our brand in this area and we are a known face at events.

For the past 5 years, Suzanne Spicer has been part of the Women in Business (WIBN) Network. This is a networking group for women which meets for a monthly lunch and has one person per business type per group. The advantage is she is the only accountant in the room and has been able to gain referrals from other members for the practice. She is also a member of The Athena Network which works on the same principles.

Spicer and Co are also a member of the Bedfordshire Chamber Of Commerce. This helps support our business in the Bedfordshire area and we have made some meaningful connections through their events.

Our business development director Steve Spicer attends a wide range of events from local lunches to events in London.  Business development is his role. He loves to engage with new clients by building relationships. Attending events has helped to build our brand with the local community.

Where can you find networking events near you?

You can find out about events in your area by checking Google, Find Networking events, Meet Up or Eventbrite. There will be breakfast meetings, coffee morning events, lunch and evening events so decide the time that suits you best and your budget. Also, consider the amount of time you can commit. Many events have now moved online so it is much easier than ever to network and build connections.

Build relationships

Networking is about building relationships. You need to attend regularly to build your business name in your area. Arranging 121’s is really important as this is where you can learn so much about the other person and their business.

Being part of a networking group builds vital support around your business and means you have people to call on when you need help. Over a period of time people get to know you, they then might refer customers to you who need your business.

Start your own event

You might decide to start your own networking event or maybe a professional group that targets your client base or industry.

You will need to source a suitable venue and then market the event. There might be costs involved so consider partnering with other businesses in your area to reduce the costs and share the workload.

You might also decide to run some events to bring your clients together. We do this a few times each year. We find it’s a great way to catch up with clients and thank them for their business.

Speaking at Networking Events

Suzanne has spoken at events organised by Metro Bank and Santander. Events like this provide you with an opportunity to share your knowledge and expertise. Talk to networking event organisers and try and secure a slot. This isn’t about promoting your business but demonstrating what you know about your industry.

Business Exhibitions

We love attending business exhibitions. This allows us to showcase our business and connect with new potential clients. We often see people we know as well and it’s a great chance to catch up. With a mix of networking, guest speakers and other exhibitors these events are a great way of meeting several new people in one place in one day!

Check out The 3 Counties Expo which covers Herts, Beds and Bucks. Make a point of researching regional expos, industry-specific expos and London shows. Entry is usually free for visitors. Check them out and decide which ones will work best for your business.

Business Awards

Suzanne F Entrepreneur

This gives your business a chance to shine! There are local awards, industry awards and national awards. Over the past few years, we have entered them all and been a finalist and a winner!

Awards give your business credibility as they are independently judged. Most awards have a gala final which means you are creating more awareness and publicity about your business.

Suzanne was a finalist in The Best Businesswomen Awards in 2019 and 2020, a UK wide competition. We were also finalists in the FSB awards and SME Bedfordshire awards this year. Suzanne was also selected as one of the top 100 #ialso f:Entrepreneurs for 2020.

This has resulted in publicity in the press. 

In 2018 we were a finalist in The British Accountancy Marketing Awards and The Accountancy Excellence Awards.  We also won SME Bedfordshire Awards – Dunstable Business of the Year 2018

Accounting Excellence

We have also been a sponsor of local awards including the Pride of Houghton.

Whether you are a finalist or a winner awards do help raise your profile. Awards give you lots of PR opportunities plus it is also great for staff morale!

Bronze Winner SME Beds 2020

 Join your industry or governing body

Suzanne Spicer is a member of the Practice Committee of The Institute of Chartered Accountants in England and Wales. Being part of your industry body gives you a voice. It is another way to raise your business profile.

Write a book or start a podcast!

Writing a book is a great way to raise your profile. One of our clients Bina Briggs has recently written a book ‘The Red Thread’ which shares her family experiences – so it doesn’t have to be about your industry or profession.  Podcasting is also a great way of gaining exposure and sharing your knowledge and if starting one isn’t for you investigate being a guest.

 Take action!

Work through this list and add your ideas into your business plan. Just promoting your business on social media isn’t enough to increase your profits. It is important to get out there and build a network, meet people face to face and be part of the local community.

 

 

How to change accountants

Changing accountants can be a very difficult decision.

Every year make a point of reviewing your relationship with your accountant. Your relationship with your accountant is integral to the success of your business.

Consider the following-

Is your accountant proactive?

You need an accountant that can advise you on the best way to progress your business, increase profits and expand. Are they proactive in ensuring you are paying the right tax and making savings where possible?

Are you being supported to use a cloud accounting platform?

With Making Tax Digital now implemented for VAT registered business and the full roll out on the horizon its vitally important you are using an online platform for your accounts.

There is nothing worse than calling up your accountant with questions and being made to feel you should already know the answer! Ideally you need an accountant that is happy to answer any questions you may have and reassure you. You also want phone calls returned and emails answered within a sensible time limit!

If you feel you are not getting the service you require then it might be time for a change. You might feel it’s a very daunting but here are some tips to help you transition from one accountant to another without too much pain!

Find a recommended accountant.

The best place to start is among your network of connections and ask for a recommendation. If you don’t have a network, check out the trusted accountants listed at Handpicked Accountants. Or you can use Google to find an accountant in your area. Look for companies with recommendations online or check other social media platforms such as Facebook or LinkedIn and see what testimonials they have.

Arrange a meeting with a prospective new accountant

Before making a final decision arrange a meeting to discuss your accounts. Find out the costs, which online platform they are using and what support they can offer you.

Give notice to you existing accountant

Once you have decided send and email to your existing accountant advising them you are changing and give them the details of your new accountant.

Notify HMRC

You will need to notify HMRC of the change, some accountants will do this for you. Just check.

Register with your new accountant

They will require proof of I.D which is part of the law surrounding money laundering. They will also ask you to sign a form to allow them to deal with HMRC on your behalf. Your new accountant will also write to your existing accountant and ask them for any existing records and information. This is called professional clearance and they will also ask if there is any reason, they should not work with you! Sometimes accountants will charge a small fee for compiling the paperwork. An hour’s rate is reasonable.

If you experience problems

Changing accountants should be seamless. Problems can arise. This can be when fees are not paid which you may be disputing or consider unreasonable. If you cannot resolve this then you can contact the body your accountant is registered with.  Or you contact the fee arbitration officer at the the Institute of Chartered Accountants (ICAEW) who can help you settle a dispute.

If there are believed to be any accounting irregularities, you may also find problems switching accountants. Your existing accountant may discuss this with your new accountants.

There shouldn’t be any issues changing accountants if you are running your business correctly and have complied with all the relevant HMRC tax laws.

Speak to Spicer and Co!

We pride ourselves on ensuring our new clients have a seamless and stress free experience.

Part of our onboarding process is an initial meeting to discuss your requirements. Once you have decided that we are the right accountants for you we can arrange a further meeting if required. Our team will send you all the relevant paperwork and we will send you a welcome pack.

 

Get your tax return done!

Now is the time to get your tax return done. Gather your accounts information and start your 2020/21 tax return now!

Many businesses have had a tough 12 months. Your company might have been quiet and seen a downturn in trading, or your business may have been busier than ever. Whatever your circumstances, it’s essential to bring your accounts up to date and get the tax return off your to-do list!

Where to start with your tax return

If you have never filed a tax return before, this may seem daunting. You must have registered to file a self-assessment tax return with HMRC, and you will need your UTR and Government Gateway login. This comes in the post so make sure you apply if you haven’t done this already.

If you are used to doing this annually, then make a point of getting this completed as soon as possible. If you are due a refund, the sooner you finish and submit your return, the sooner you get the refund!

The information you glean from working through your accounts will provide you with valuable data you can use for business planning.

Get your paperwork straight!

Are your receipts in a box or carrier bag waiting to be sorted!

Gather all the information you need to submit your tax return. This will be much easier for you if you have been using an online accounting system such as Xero. All the information will be there, and all you need to do is ensure it is up to date. Talk to us about moving onto Xero. We are Gold Partners for Xero and are committed to supporting small businesses use cloud accounting software. For more information on Xero, CLICK HERE 

If you have been using excel spreadsheets, you will need to ensure you have entered all your income and expenditure.

Make sure you have paid close attention to your record keeping. Check your bank records against your income and expenses and that you have all relevant receipts. Reconcile your bank statement to ensure your figures are correct.

Frequently asked questions about Tax Returns.

I haven’t made a profit. Do I still need to do a tax return?

HMRC says that you need to send a tax return and pay your tax bill through Self Assessment if, in the last tax year, you were:

· a self-employed sole trader earning more than £1,000

HMRC have a helpful tool that you can use to check if you need to a tax return – click here 

Is there any other income or expenses I must include? 

Here is a list of additional incomes you may have, and you must include 

  • Property rental income – find out more info here.
  • Any savings interest or dividends
  • Payments from tips/commission
  • Income from overseas 
  • Pension contributions
  • Benefits including State Pension, Child Benefit and Blind Person’s Allowance
  • Profit from Crypto Currency – read our blog on this here. 

What are the allowable expenses for small businesses?

You incur several costs when running your business that you can claim back against your Self-Assessment tax bill.

Here is a list of the main items small businesses can claim:

  • Office rent & utilities, including business rates 
  • Insurance 
  • Marketing costs including advertising, networking, website and IT 
  • Stationery
  • Phone Bills
  • Uniforms
  • Staff salaries or freelancer/subcontractors
  • Anything you need to buy to sell on -e.g. stock or raw materials
  • Bank charges 
  • If you are working from home, you can claim a percentage of business premises costs. This would include utilities, council tax, mortgage interest or rent, telephone and internet. You must find a ‘reasonable method’ of dividing the costs between personal and business use. They suggest using the number of rooms used for business purposes, or the time spent working from home.

Please read our blog on tax deductibles here.

Every person/business has a unique set of circumstances, and having an accountant who understands the tax system will benefit you by removing any worry or concerns you have. For example, filing a tax return incorrectly could result in a fine or a repayment later. Therefore, you want to ensure you are paying the right amount of tax. 

If you decide to file this without speaking to an accountant check, check and check again!!

We are, of course, happy to help you and advise you! Just call us.

Dealing with a tax investigation

HMRC has the right to check your financial affairs including your business and personal accounts at any time. You will receive an official letter, so be sure to double check this is genuine to avoid any scams.

There are 3 different types of enquiry

  • A random check – this is activated just from a random selection of businesses.
  • An enquiry – usually trigged by an inconsistency in your reporting
  • A full investigation – they believe there has been a potential serious issue in your reporting and they will investigate all your affairs in full.

Many investigation are minor and more of a ‘compliance check’. Many taxpayers will face this at some point. Being investigated by HMRC is not an inference that you have done something wrong within your accounts or tax affairs. You may have been randomly selected or work with a person or organisation involved with a tax investigation.

Tax investigations can feel intrusive and unsettling. However common sense, honesty and following these tips can lower the stress and complexity involved…

6 Tax investigation Tips

 

1. Keep Calm and Quiet

It’s easy to panic when the brown envelope arrives. Remember – if you have not done anything wrong, you should have nothing to worry about. It’s also best to restrict the people you tell to your adviser (such as your accountant) and maybe close family. This avoids the myriad of well-intentioned but often inaccurate advice that will be confusing and distracting.

2.  Be 100% Honest

Always be completely honest and transparent with HMRC. If you’re unsure of the answer to a question, say “I don’t know” rather than guess or tell a half-truth. Thanks to a vast array of systems and information, comprehensive material about you and your business will be accessed as an investigation begins.

3. Take Professional Advice

It’s important to know your rights during a tax investigation. For example, do you know that the HMRC cannot insist that you meet with its representative? (If you go ahead with a meeting, insist upon seeing an agenda in advance.) Appropriate advice from a tax expert will save time and anxiety during the investigation.

4. Keep Accurate Records

Make sure that your accounting information is readily available. This is made much easier by using online accounting systems such as Xero.  You are obliged to keep financial records for six years from the end of the last financial year (companies) or last tax year (individuals) that they relate to. If there are any gaps, HMRC will use its own calculations. Without accurate records, these figures cannot be disputed.

5. Cooperate

Being obstructive will not help the investigation. It’s best to cooperate and follow the guidance of your advisor, who will have experience of working with other clients going through tax investigation. If a mistake is spotted, pay any monies owed as soon as possible. This demonstrates complete cooperation and reduces any penalties involved.

6. Learn

If you have done something wrong, even as a genuine mistake, HMRC is likely to revisit your affairs in the future. Make sure that you learn from your mistakes.

“We understand that being involved with a tax investigation can be worrying,” says Suzanne Spicer of Spicer & Co Chartered Accountants. “Discrepancies are not always intentional. Mistakes happen. It’s important to be open and honest with HMRC… and with the professional who is giving you guidance.

“Plus, we offer a Tax Investigation Service for our clients which means that you won’t incur any additional accountancy fees should HMRC investigate you and/or your business. This is available to all our clients and offers fantastic peace of mind.”

Would you like reassurance that you’re ‘squeaky clean’ should a tax investigation take place?

Would you want to avoid additional fees should an investigation happen?

Contact the friendly team at Spicer & Co – we love to talk about tax! We’ll put the kettle on and have a chat without obligation. There’s no need to dread the arrival of a brown envelope from HMRC.

Is it time to switch your company cars to electric?

Research by the UN Development Programme has found that two-thirds of us believe Climate Change is a global emergency. To address this, the Committee for Climate Change has set the target of Net-Zero emissions for the UK by 2050.

To meet this aim, the organisation has outlined a need to reduce emissions by 80% by 2035. All car and van manufacturers are to sell zero-emission vehicles only by 2030 and a small proportion of hybrids until 2035.

Low Emission Zones

Transport for London introduced its Ultra Low Emission Zone (ULEZ) in April 2019. This charges a daily rate for entering the zone for any vehicle that does not meet the latest emission standards. Other Clean Air Zones (CAZ) have been introduced in Bath and will be introduced in Birmingham, Leeds and Oxford later this year. Over 50 authorities are now reviewing schemes across their towns and cities.

Electric vehicles are a key contributor in achieving net-zero. The UK’s new car market fell by around a third in the UK last year, yet sales for electric cars and hybrids rose sharply, equating to 10% of UK car sales.

Concerns about Electric Cars

There have been concerns for drivers considering a move to electric vehicles. Until recently, the battery range has barely reached more than 100 miles. Charging points have not been widely available across the country. And costs have been high. Battery range has now increased to an average of 250 miles, and charging points are becoming more increasingly accessible.

To incentivise company car drivers to go electric, the Government offers extremely attractive benefit-in-kind (BIK) tax rates.

What are the tax benefits of electric vehicles?

Company cars are taxed based on a percentage of their total P11d value. This percentage is based on the car’s published CO2 emissions to calculate how much tax you pay. This is also affected by whether you are a 20% or 40% taxpayer.

  • For the tax year 2021 – 22, the BIK tax rate has increased to 1% and will rise again to 2% in 2022. The same rate will apply for any hybrid vehicle with net emissions of less than 50g/km2 and a battery range of at least 130 miles.
  • Plug-in hybrid vehicles (PHEV) are being incentivised. These cars have a battery charged externally with a current range of between 20-30 miles and a petrol or diesel engine. PHEVs will be taxed at 13% in the BIK scheme for 2021/22, rising to 14% for 2022/23. Compared to a typical diesel company car with emissions between 110-114g/km2, taxed at 32%, the savings are considerable.

Electric vehicle running costs

Running costs are much lower than the traditional combustion engine cars. Electric vehicles cost between 2-3p per mile, a typical diesel company car 9-12p per mile, three to four times more. Servicing is much cheaper. With far fewer moving parts, servicing and repair is less than half of what you will spend on petrol or diesel.

Additional benefits for leasing an Electric Car

If you lease your cars, there are additional benefits. Whilst the purchase price of an electric vehicle is generally higher than standard vehicles, residual values (the projected value of the vehicle at the end of its contract) are increasing all the time. This makes leasing deals competitive against standard cars, made even more attractive because you can offset 100% of your lease against taxable profits for an electric vehicle or qualifying hybrid.

No congestion charge!

Electric vehicles are not subject to the congestion charge in London, ULEZ, or CAZ charges as described above.

What are electric vehicle models available?

  • The number of models in the electric market has been low, with Nissan, Renault, BMW and Tesla the only manufacturers who have really embraced the sector. Volkswagen is leading the way, launching the ID.3 model in 2019 and now the ID.4 later this year. The ID.3 sold more than 212,000 electric cars in 2020.
  • There is an ever-increasing number of desirable electric vehicles available with ranges of 250 miles or more. Look at the Tesla Model 3, Jaguar I-Pace, Audi e-Tron, Mercedes EQC, BMW i3, Nissan Leaf, Renault Zoe or the Kia e-Niro, to name a few.

What do I need to consider when buying an electric vehicle?

The Office of Low Emission Vehicles (OLEV) offers a £3500 grant to reduce electric vehicles’ cost. This narrows the gap compared to standard cars. For example, the current VW e-Golf costs including a grant of £27,575, whilst a 1.5TSi GT equivalent costs £26,635.

Running out of battery charge used to be the biggest worry with electric vehicles. But ranges are extending as battery technology improves. Now, the bigger concern is where to charge. If you can do so, it is worth installing chargers at your workplace. The OLEV Workplace Charging Scheme can subsidise the costs – see more.

You can also help employees install home charging points. Many businesses are offering interest-free loans to their staff, whilst others pay the cost, again enjoying a grant of up to £500 for installation.

There is still concern about the number of charging points available when out and about. There has been rapid growth, with over 40,000 connectors and 23,000 devices available across the country. Coverage is strong in London, Scotland and the South West and is increasing elsewhere.

It is essential to know that batteries are warrantied for eight years and 100,000 miles, so unless you drive huge distances or intend to keep your cars for longer than that, you have little to worry about.

By going electric, your company can shout loud your green credentials. Do not underestimate how important this will be in years to come.

Need more help?

We are here to help you. So, if you think now is the time to consider an electric company car, let us do the maths to ensure it adds up financially. Of course, you may think saving the planet is worth a few more pounds anyway!

 

 

Posted in Website Blog | Tagged electric car, electric car tax, electric cars, tax and electric cars

Demystifying the Domestic Reverse Charge VAT

From 1 March 2021 the domestic VAT reverse charge must be used for most supplies of building and construction services.

The charge applies to standard and reduced-rate VAT services:

  • for individuals or businesses who are registered for VAT in the UK
  • reported within the Construction Industry Scheme

Check when you must use the reverse charge on your sales, purchases or both.

  1. Find out how the charge works if you supply services.
  2. Find out how the charge works if you buy services.
  3. Read more detailed guidance about the reverse charge.

There will also be an amendment to the original legislation, which was laid in April 2019, to make it a requirement that for businesses to be excluded from the reverse charge because they are end users or intermediary suppliers, they must inform their sub-contractors in writing that they are end users or intermediary suppliers.

The Domestic Reverse Charge VAT  is a big change being implemented in the way VAT is being collected in the building and construction industry.

This has been set up to tackle fraud. This will mean that fraudsters will no longer be able to set up a construction business, charge VAT to customer then disappear before paying the VAT to HMRC. This practice is known as missing trader fraud and the change means that the customer receiving the service will have to pay the VAT due to HMRC instead of paying the supplier. It will only apply to individuals or businesses registered for VAT in the UK (although it will not apply to consumers).
This will affect you if you supply or receive specified services that are reported under the Construction Industry Scheme (CIS).

We would like to draw your attention to the details on the HMRC website which states the following –
You need to prepare for the  introduction date by:
• checking whether the reverse charge affects either your sales, purchases or both
• making sure your accounting systems and software are updated to deal with the reverse charge
• considering whether the change will have an impact on your cashflow
• making sure all your staff who are responsible for VAT accounting are familiar with the reverse charge and how it will operate,

What contractors need to do
If you’re a contractor you’ll also need to review all your contracts with sub-contractors, to decide if the reverse charge will apply to the services you receive under your contracts. You’ll need to notify your suppliers if it will.

What sub-contractors need to do
If you’re a sub-contractor you’ll also need to contact your customers to get confirmation from them if the reverse charge will apply, including confirming if the customer is an end user or intermediary supplier.

The reverse charge does not apply to consumers or final customers of building and construction services. Any consumers or final customers who are registered for VAT and Construction Industry Scheme will need to ensure their suppliers do not apply the reverse charge on services supplied to them.

For reverse charge purposes consumers and final customers are called end users. They are businesses, or groups of businesses, that do not make onward supplies of the building and construction services in question, but they are registered for CIS as mainstream or deemed contractors because they carry out construction operations, or because the value of their purchases of building and construction services exceeds the threshold for CIS.

Services affected by the domestic reverse charge
The reverse charge will affect supplies of building and construction services supplied at the standard or reduced rates that also need to be reported under CIS. These are called specified supplies.
There is an important difference between CIS and the reverse charge where materials are included within a service. The reverse charge applies to the whole service whereas CIS payments to net status sub-contractors are apportioned and no deductions are made on the materials content.
The reverse charge does not apply if the service is zero rated for VAT or if the customer is not registered for VAT in the UK.

It also does not apply to some services.

These are those supplied to end users or intermediaries connected with end users. Find out more found in the End users and intermediary supplier businesses section.
Employment businesses who supply staff and who are responsible for paying the temporary workers they supply, are not subject to the reverse charge. Read the Applying the domestic reverse charge for construction services to certain sectors or types of transactions section for more information.

You will have to apply the reverse charge if you supply any of these services:
• constructing, altering, repairing, extending, demolishing or dismantling buildings or structures (whether permanent or not), including offshore installation services
• constructing, altering, repairing, extending, demolishing of any works forming, or planned to form, part of the land, including (in particular) walls, roadworks, power lines, electronic communications equipment, aircraft runways, railways, inland waterways, docks and harbours
• pipelines, reservoirs, water mains, wells, sewers, industrial plant and installations for purposes of land drainage, coast protection or defence
• installing heating, lighting, air-conditioning, ventilation, power supply, drainage, sanitation, water supply or fire protection systems in any building or structure
• internal cleaning of buildings and structures, so far as carried out in the course of their construction, alteration, repair, extension or restoration
• painting or decorating the inside or the external surfaces of any building or structure
• services which form an integral part of, or are part of the preparation or completion of the services described above – including site clearance, earth-moving, excavation, tunnelling and boring, laying of foundations, erection of scaffolding, site restoration, landscaping and the provision of roadways and other access works

For more detailed information please visit the HMRC website or give us a call to check what you need to do if you are affected by this change. Click here

Please also see our graphic below which explains this in simple terms!

Posted in Website Blog | Tagged constructionaccounts, domestic reverse charge vat, vat

The tax rules of Christmas gifts and celebrations

Its the end of year and it has been a tough one! So its important to treat your clients and staff with some festive Christmas treats. But even though its Christmas HMRC still have rules which are applied to giving gifts.  Here we clarify the essential information on the tax rules of Christmas gifts and celebrations. We have detailed below how gifts can be given and the tax implications so you can remain compliant and not get a nasty surprise in your Christmas Stocking!

Christmas Cards

You can send Christmas Cards as a tax-deductible expense. Many companies do not send cards in favour of donating to a charity. Your limited company can pay less Corporation Tax when it gives money to a charity or community amateur sports club (CASC). Deduct the value of the donations from your total business profits before you pay tax. Find more information here on donating to charity.

A £50 gift to yourself and your staff!

If you are a Limited company, then you can give yourself a gift at Christmas as the company is giving the gift and not you! You can also give gifts to your employees. The limit is £50. This counts as a trivial benefit exemption so no Tax or NI is payable. But this does not apply to cash – so it must a gift. Non-cash vouchers up to £50 may be exempt under the trivial benefit rules. Where the voucher exceeds £50, you will need to report these on a P11D form to HMRC.  So, a couple of bottles of wine and some chocolates would count as a trivial benefit. Unfortunately, gifts to employees are not a tax-deductible expense for the business.

If you spend more than £50

Buying a gift that costs more than £50 (and this includes delivery charges) will count as a taxable perk for the employees that receive it. They will then have to pay tax and you as the employer will have to pay National Insurance. For example, if you were to give a £60 gift it will cost you a total of £85 because of the tax and NI due.

The gifts must carry a clear advertisement for the business (e.g. with branding or logo) which must be on the gift itself, not just the wrapping. They can’t be alcohol, food, drink, tobacco (unless they are your business) or vouchers. Non-promotional gifts and larger gifts are classed as entertaining and are not tax-deductible as an expense.

VAT and gifts

If you are not using the Flat Rate Scheme you are able to reclaim the VAT incurred on purchasing the gift.

But you may, however, have to account for VAT on the value of the gifts if the gifts received by the recipient are more than £50 in a year. If a gift is exempt or zero-rated (i.e. a book) you will not have to account for the VAT.

Gifts for your clients – direct tax deductions

The gifts must carry a clear advertisement for the business (e.g. with branding or logo) which must be on the gift itself, not just the wrapping. They can’t be alcohol, food, drink, tobacco (unless they are your business) or vouchers. Non-promotional gifts and larger gifts are classed as entertaining and are not tax-deductible as an expense.

Cash bonus

Any cash you give to employees as a Christmas bonus counts as earnings, so you’ll need to:

-Add the value to your employee’s other earnings

-Deduct and pay’ Pay As You Earn’ (PAYE) tax and Class 1 National Insurance through payroll

Virtual Christmas Party

As work parties have been cancelled this year HMRC will still let you have a virtual Christmas party and you can still have the £150 allowance per employee.

The costs can include food, drink, virtual pantomimes, online entertainment events and postage costs.  The full details are here.

This online event must be made available for all staff to attend. The VAT is reclaimable, but only for the staff costs, not partners.

Salary sacrifice arrangements

You do have to report how much social functions and parties are worth to each employee if they are a part of a salary sacrifice arrangement.

But we have no employees just directors!

If your business does not have employees but just one of more directors, then the rules are different. The cost of providing entertainment only to directors or partners does not qualify for tax relief or VAT deduction

If the event takes place away from the usual place of work and as part of a business trip, for example, to see a client, then the meal would be eligible.

Any VAT suffered on the cost of travel, accommodation and meals can be reclaimed. The rules for tax relief would mirror this, and this also applies to employees, sole traders, partners, and subcontractors who are part of the team and treated as employees.

 Be less Scrooge at Christmas!

As an additional staff benefit which costs nothing and attracts no tax, why not allow an extra half a day’s holiday for Christmas Shopping?

-Consider extra time off to allow parents or grandparent to watch the school play.

-Maybe you could arrange a team- building day with a local charity to help at a Christmas event in your area.

-This all adds to building staff morale and shows you are a caring employer!

 

Needs more help and advice?

Call us to check if your circumstances do not fit what we have discussed in this blog. We are always happy to help.

There are some useful links to the HMRC website here –

Expenses and benefits: gifts to employees

Expenses and benefits: entertainment 

Specific deductions: entertainment: gifts: overview

 

Posted in Website Blog | Tagged christmas gifts and tax, christmas giving, tax at christmas

What’s Involved with Limited Companies?

Business owners choose to create a limited company for two key reasons: limited liability and/or perceived credibility. But what is involved with running a limited company?

This may be the first time that you’ve had to complete a Corporation Tax return – or needed to issue dividends to shareholders. The Spicer & Co team enjoys talking about accountancy issues in plain English. If you have started a limited company – or are thinking about it – we hope that the information below will be helpful…

What roles are needed within a limited company?

Two distinct roles are involved with limited companies:

  1. Directors – are appointed by members (shareholders) to run the business day to day. You need to have at least one company director. This can be a person, or a corporate body. If shareholders would like more directors involved, there is no limit to the number of directors you can have! (Directors do not have to be resident in the UK – they can live anywhere.)

In its simplest form, a limited company can be operated by just one person. This individual would be the sole director and shareholder of the business. Many ‘one man band’ limited companies exist where the sole director is also the sole shareholder. For example – several consultants who use our accountancy services operate in this way.

A director must be:

  • At least 16 years old
  • Not be a discharged bankrupt
  • Not on the Disqualified Directors Register
  • Not the company auditor
  1. Secretaries – it is optional for private limited companies to have a Company Secretary; this role mandatory for public limited companies. Again, the Company Secretary role can be allocated to a person or a corporate body.

A company can change directors/secretary at any time by informing Companies House of the changes.

What do these limited company roles entail?

It is the Director(s)’ job to run the company in accordance with Companies Act and the Articles of Association of the company.  (The Articles of Association is a document that contains the purpose of the company as well as the duties and responsibilities of its members. It is filed at Companies House.)

Directors are responsible for making sure all filing deadlines are met for business tax, payroll, and accounts.  Also, they must ensure that the accounting records and documents are complete and accurate.

These are personal obligations and Directors can be held accountable if responsibilities not met.  You can employ an accountant to carry out these tasks, but the ultimate responsibility lies with the Director(s).

The Company Secretary can assist the Director(s) and help reduce workload involved.

Corporation Tax Returns and more…

There are several documents that all limited companies, regardless of size, must submit annually:

  • Corporate Tax Return – so that corporation tax can be calculated
  • Confirmation Statement – confirming the company information held at Companies House

Accountancy support for limited companies

Many directors choose to use accountants to support their limited companies. Whilst you are not obliged to do so, some people prefer the peace of mind that their accountants will assist them with:

  • Correct collation and presentation of financial information
  • Compilation of year-end accounts
  • Completion and submission of Corporate Tax returns
  • Calculation of Corporate Tax and dividend payments due
  • Submission of information to Companies House, how and where needed
  • Dealing with company-related correspondence (Companies House, hmrc)

Beyond these tasks, the financial planning and tax advice available from accountants helps to optimise your company’s profitability and efficiency.

For more information…

Helpful information can be found at Companies House website, with more details for businesses, the self employed and employers available at: www.gov.uk.

For a tailored, no obligation discussion about your own situation and plans, pop in for a chat with the team at Spicer & Co. Let’s talk.

Rishi Sunak’s Summer statement

Rishi Sunak’s Summer statement

This is a summary of Rishi Sunak’s Summer statement 2020 which details the Government support and changes which will be taking place over the coming months.

Support for businesses

Several support measures have been announced by The Chancellor, Rishi Sunak, to support employers and employees These new measures are designed to support businesses and to protect jobs. There is a drive by the Government to support youth unemployment and give support to the economy.

Job retention bonus

The Government will pay a one-off bonus of £1,000 to employers for each of their furloughed employees who returns to work and remains continuously employed until 31 January 2021.

To be eligible for the bonus, the employee must have been paid an average of £520 per month between November and January.

Full details of the scheme are expected at the end of July.

Furlough Scheme

Coronavirus Job Retention Scheme will finish at the end of October 2020 and will not be extended.

New ‘kickstart’ jobs scheme

To assist with youth unemployment, the Chancellor announced a ‘kickstart’ plan.

Employers will receive funding if they create a new job with a minimum of 25 hours per week for a person aged between 16 and 24-years-old who is at risk of long-term unemployment and claiming Universal Credit.

The available funding will pay for the employee’s National Minimum Wage for 25 hours a week (plus the associated employer National Insurance contributions and employer minimum automatic enrolment contributions) for six months.

Employers will be required to provide training to the new employee and support them in gaining a permanent role. The scheme will run from August 2020 with jobs expected to start in the Autumn.

 Apprenticeships and traineeships

From August 2020 to January 2021, the Government will pay employers to create new apprenticeships.

Employers will be eligible to receive £2,000 for each new apprentice they hire who is under the age of 25 and £1,500 for each new apprentice aged 25 or over. This is in addition to the existing £1,000 payment the government already provides for new 16 – 18-year-old apprentices and those aged under 25 with an Education, Health and Care Plan.

The Government also plans to triple participation in traineeships by funding employers who provide trainees with work experience at a rate of £1,000 per trainee.

Stamp Duty

There has been a temporary change in Stamp Duty to try and ignite the housing market. Until now, in England and Northern Ireland, stamp duty has been paid on land or property sold for £125,000 or more. There are different rates and systems in Scotland and Wales.

Buyers usually pay their duty based on the price on the day the sale is completed and pay HM Revenue and Customs within 14 days. This threshold in England and Northern Ireland will increase – with immediate effect – to £500,000 until 31 March.

Eating out and going away in the UK

The sales tax – VAT – included in the cost of food, accommodation and attractions will be cut until mid-January from 20% to 5%

VAT will be charged at 5% (rather than 20%) from 15 July 2020 to 12 January 2021 on the following supplies:

  • food and non-alcoholic drinks from restaurants, pubs, bars, cafés and similar premises; and
  • accommodation and admission to attractions across the UK.
  • The temporary cut should see prices fall when eating out or going out which it is hoped will encourage people to go out to restaurants.

Further details to be released by HMRC

Introduction of “Eat Out to Help Out” scheme.

In a further measure to encourage consumers back to bars and restaurants this scheme will entitle every diner to a 50% discount on their meal, up to £10 per head (including children). There will be a list of participating restaurants, cafés, pubs or food service establishments. These businesses will be reimbursed fully for the discount applied.

The discount can be used an unlimited amount of times, but it is only available Monday to Wednesday during August. It applies to any eat-in meal and includes non-alcoholic drinks.

Qualifying Business will need to register to reclaim the value of the discount.

Home improvements

A scheme, which starts in September, the government will pay at least two-thirds of the cost of home improvements that save energy. This will be paid as a voucher when the work is approved.

 

We will update when more details become available but do call us if you need any help with your accounting or tax advice. 

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Posted in Website Blog | Tagged Furlough Scheme, Job retention bonus, New ‘kickstart’ jobs scheme, Rishi Sunak's Summer statement, summerstatement