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TSA Accountants Bristol
NEWSLETTER SEPTEMBER 2022
Small Businesses offered help with Energy bills
Finally, some help is in sight for SME’s. The new Prime Minister announced in the last week that help would be made available to hard pressed families facing rocketing energy prices, with the price cap (set at £2500). A typical family will save around £1,000 annually on their energy bills. Of the £1,000 saving, £150 will be saved by temporarily saving green levies. This is in addition to the £400 Energy Support Scheme which will be paid in 6 instalments from October. The most vulnerable households will also continue to receive £1,200 of support provided in instalments over the year.
Announced at the same time was help for businesses. Unfortunately, not many details have been published, but this is what we can tell you. Firstly, a six-month scheme for businesses and non-domestic energy users including charities and schools etc. Initial thoughts are this will be provided on a similar basis to the consumer scheme. After six months help will be given to vulnerable industries. There will be a review in 3 months’ time to consider where this help should be targeted.
We’ve seen businesses with £12k electricity bills facing increases to £64k. Energy costs are a huge problem for businesses, so this help is very welcome. For some businesses on the back of Covid and having had large diesel bills for their vehicles, it’s not being dramatic to say that some businesses were only days away from closing their doors for good. The question is will government support be sufficient? Few details have been published and as always, the devil is in the detail.
Time to pay
Given the sky-high energy bills we thought it worth keeping this section in, so if you’re having difficulties paying an HMRC bill, don’t ignore it. HMRC are now starting to get back to normal where it comes to chasing debt. However, they’re still amenable to longer payment plans. Give them a call, explain the circumstances, and agree a plan. They’ll want a direct debit put in place, but once agreed, no more sleepless nights worrying about the dreaded brown envelope or a knock on the door.
Pension Versus Property for retirement
In recent years property has been a very popular option for investing for retirement but is it better than a pension scheme?
This article won’t focus on commercial property as there is only so much, we can cover in one small article. If you’d like to discuss commercial property investment, or indeed anything else in this newsletter, please don’t hesitate to contact us to arrange an appointment.
Annuity rates have been quite poor in recent years. A pension annuity is a product that pays you a regular income for the rest of your life, no matter how long you live. One option is to convert the pension pot you've built up into a regular income. You can do this by buying what is called a pension annuity or an 'annuity'. With a pension annuity, you'll know exactly how much you're getting, come rain or shine. So typically, workers pay into a pension scheme which invests their money and at retirement the pension pot is converted to an annuity.
Corporation Tax good news
Liz Truss has been on record saying that she will scrap the planned increase in corporation tax which would see successful firms face a tax hike from 19% up to 25% depending on the profits of the company. This seems like a firm commitment, not like typical politician’s promises. If she sticks to this now let’s see if her chancellor follows through on it.
Property prices have seen enormous growth in the last 20 years and even allowing for the financial crash, didn’t take much of a hit. Property also gives flexibility, in terms of borrowing against the property, renting it out or selling. Property can generally be used for early retirement, where pensions can’t.
Tax considerations for each option are quite different and changes to tax on mortgage interest mean that careful consideration should be given to both options. Pension contributions very often come with a boost by the government (depending on the taxpayers’ effective tax rate, and the type of scheme). Employers often match contributions, so a £100 pension contribution could be worth £220 in the pension pot. Tax on mortgage interest means that instead of the mortgage interest being tax deductible, the interest is restricted to 20% tax relief, meaning 40% taxpayers will be disadvantaged. Income from property is also taxable.
In summary, with interest rates rising, take professional advice before choosing one route or the other to see what your best option is. You may be surprised.
National Insurance More good news
Liz Truss wasn’t content with reversing the planned increase in corporation tax, she’s also announced the reversal of the national insurance increase. This alongside the corporation tax increase being scrapped will be welcome news to business up and down the country. This is expected to include the reversal of the increase in dividend tax. Let’s hope she doesn’t go back on this one.
A very sad and historic week
In the last week we’ve waved goodbye to one Prime Minister and welcomed in the UK’s third female Prime Minister, and very sadly said goodbye to the UK’s longest serving monarch and the worlds longest serving female monarch. And now we have welcomed in our new King, Charles III. It’s been a pretty sad and unique week in history by anyone standards.
The Queen has served the country tirelessly and like many people around the country, all of us here at TSA are deeply saddened by the loss of our queen.
I’ve had a few queries on what happens next with a lot of things, from changes to currency and stamps to, public holidays. So, I will do my best to answer these questions below.
Rest in peace Her Majesty Queen Elizabeth
Currency & Stamps
The face of the new King Charles III will begin to appear on coins and banknotes in the U.K. and other countries around the world, replacing the profile of Queen Elizabeth II. Current banknotes featuring the image of Her Majesty the Queen will continue to be legal tender. A further announcement regarding existing Bank of England banknotes will be made by the Bank of England once the period of mourning has been observed.
His effigy will also appear on several other currencies used in the Eastern Caribbean, Canada, Australia and New Zealand.
The face of Elizabeth II also appears on the stamps, while the letters EIIR, for Elizabeth II Regina, are affixed to the post boxes, so this will need to be changed. The insignia on police helmets will also change.
Wording on the inside cover of U.K. passports, issued in the name of the crown, will need to be updated, as will similar text that appears inside Australian, Canadian and New Zealand passports.
TSA Accountants are members of the Association of Chartered Certified Accountants, that has a Royal Charter. As such we wish to extend our condolences to the Royal family at this difficult time. The 19th of September is the date that’s been set for Her Majesty Queen Elizabeth II’s State Funeral and will be a public holiday. Very often TSA staff will work out of hours, but on this day in particular, as a mark of respect we will not be working at all on the 19th of September.
Important Dates
•7th October - Deadline for VAT returns and payments of Accounting Quarter period ending 30th June.
•19th September– Monthly deadline for postal payments of CIS, NICs and PAYE to HMRC
•22nd September – Monthly deadline for electronic payment of CIS, NICs and PAYE to HMRC
•30th September – Due date for payment of Corporation Tax for period ended 30th June 2021
Referral Scheme
We’re always looking for new clients at TSA and we’re always happy to give a commission for any new business we get from existing clients. If you know any business contacts who could benefit from our services, please put them in touch. If they become a client, there might be a nice bottle of wine (or crate of thatchers) on its way to you.
That’s it for this month. Enjoy the fine weather!
FAQ’s
Q I’ve had a letter from an HMRC debt collector what should I do?
A These letters are neve nice to receive. But before picking up the phone in a panic, take a deep breath. If this is a debt collector and not a bailiff, then there is no need to panic. Do you owe the money? If the answer is yes but you can’t afford to pay it, then speak to HMRC about a payment plan. If you don’t owe the money, or it’s in dispute, either in full or in part, inform them you won’t be making any payment and contact HMRC. There is no point discussing issues with the debt collection company as they will have very limited information, simply that you owe the money on a specific tax. They won’t have details and won’t really want to engage you with any queries. They are employed to simply collect the debt.
Q Do I need to register for PAYE?
A You do not need to register if none of your employees are earning £123 or less per week. If you are self-employed then what you take from the business personally is not subject to PAYE.
TSA Accountants Bristol
NEWSLETTER AUGUST 2022
SMALL BUSINESSES FEARING THE WORST
TIME TO PAY
Given the sky-high energy bills we thought it worth keeping this section in, so
if you’re having difficulties paying an HMRC bill, don’t ignore it. HMRC is now starting to get back to normal when it comes to chasing debt. However, they’re still amenable to longer payment plans. Give them a call, explain the circumstances, and agree on a plan. They’ll want a direct debit put in place, but once agreed, no more sleepless nights worrying about the dreaded brown envelope or a knock on the door.
0117 923 5394
A recent survey has shown that over 50% of small and medium-sized companies are concerned that brutally high energy bills could force them out of business this year. Business energy prices have been going up for the past 15 months and another steep increase is on the cards in October when new contracts come into place on the 1st. Unlike domestic supplies, there is no cap. Meaning there is no limit to how high prices can go.
During the first year of the Covid lockdowns, almost 390,000 SME’s folded. Reports suggest many more clung on by the skin of their teeth. Many businesses are not yet back to normal, and many have taken on significant debt. These kinds of sky-high prices affect everyone as almost all SME’s will have to pass these increased costs on.
In the last week representatives of the hospitality sector have written to the government asking for help. Without government intervention, pubs, restaurants, and hotels will start going to the wall in significant numbers. The hospitality trade was particularly impacted by two years of lockdowns and will take years to recover. Rising energy costs and a slump in consumer confidence as higher mortgage rates and record levels of inflation start to bite leave this sector of the economy extremely vulnerable.
SMEs employ approximately 60% of the UK’s workforce and account for 50% of the country’s private sector revenue each year. Some experts are predicting that the energy crisis could take a bigger toll on SMEs than Covid. This isn’t surprising when you consider that the Covid restrictions have left the sector a lot more vulnerable and less resilient to economic shocks.
ELECTRIC CARS
Did you know that aside from being cheaper to run than diesel or a petrol and being better for the environment, there are also some very good tax incentives for electric cars?
If you’d like to find out more, give us a call we’d be more than happy to help.
HMRC DEBT COLLECTION PROCESS
It’s fair to say that recent years have been tough on many small businesses. For some, the choices have been stark. Pay the VAT bill or pay the wages for example. When something like this happens, firms enter HMRC’s debt collection process.
It should be noted that HMRC have no desire to bankrupt businesses, they would much rather work out a payment plan, so it’s important to speak to them at an early stage to arrange a time to pay plan. Historically HMRC has been reluctant to consider plans over more than 12 months, but changes to legislation brought about by Covid have seen them consider much longer terms.
HMRC have been under a lot of pressure to collect unpaid taxes and to pursue those who try to avoid paying their taxes. As a result they have adopted a more aggressive strategy in the last few years.
Whereas businesses will appoint debt collectors quite late in their debt collection process, HMRC will normally send one reminder and then pass the debt to a debt collection agency.
When they do this, they don’t pass agent authorization on, meaning your accountant or tax agent won’t be able to deal with the debt collector without written authorization from the debtor.
HMRC uses a variety of debt collection firms. Here are a few of the more common ones:
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1st Locate (trading as LCS)
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Advantis Credit Ltd
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CCS Collect
What powers do debt collection agencies have? It is important to note that debt collection agencies are not bailiffs and have very limited powers (though of course, they won’t tell you that. For example, debt collection agencies can’t force their way onto your property (whether business or private) and can only enter when invited.
HMRC ADMIT “SERVICE LEVELS AREN’T WHERE WE WANT THEM”
Yes, you have read it correctly. HMRC has finally admitted that service levels aren’t where they should be.
Not quite the apology that they should be making to the taxpayers, accountants, and agents that they continue to let down, but at least it’s a start!
Debt Collection agencies also have no power to seize goods when they are inside the property. HMRC has much more wide-reaching powers, but these are not transferred to the debt collection agency.
Another important point to note, is that often HMRC get it wrong, and are months behind on their work, so it’s not unusual for a disputed debt to be passed to a debt collection agency. The debt collection agency will not know it’s in dispute and will have very few details other than HMRC have told them an amount is unpaid. This means it’s futile to try and explain the circumstances behind the debt. If it’s in dispute, tell the debt collection agency so and make clear you won’t be bullied into paying. This should get it passed back to HMRC without delay.
If the debt has been passed to a bailiff, then that’s a much more serious matter. A debt collector doesn’t have any special powers. Don’t be fooled by body armour and cameras. This is to make them look official and intimidating. A bailiff, however, does have special legal powers. A bailiff (nowadays called an enforcement agent) can normally only be sent to your premises after court action, either magistrate's court or high court. The exception is HMRC who can use bailiffs without taking you to court first.
A debt collector will write and call several times, but eventually will pass the case back to HMRC. It’s at this stage that things become a little bit more serious and HMRC will contact you again to chase the debt themselves, eventually escalating to court and/or bailiffs.
In summary then, if a debt is in dispute, ensure that you or your agent have notified HMRC that you dispute the amount. If they pass it to debt collection anyway (automated systems are working fine at HMRC, even if they are behind on other things) tell the debt collector it’s in dispute. Don’t ignore HMRC debt. If you haven’t paid a legitimate bill, contact HMRC to arrange a payment plan.
REFERRAL SCHEME
We’re always looking for new clients at TSA and we’re always
happy to give a commission for any new business we get from existing clients. If you know any business contacts who could benefit from our services, please put them in touch. If they become a client, there might be a nice bottle of wine (or crate of thatchers) on its way to you.
That’s it for this month.
Finally, if you are unsure, get advice from your accountant or adviser.
We’ll always be happy to help.
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7th September - Deadline for VAT returns and payments of Accounting Quarter period ending 31st May.
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19th September– Monthly deadline for postal payments of CIS, NICs, and PAYE to HMRC
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22nd September – Monthly deadline for electronic payment of CIS, NICs, and PAYE to HMRC
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31st August – Due date for payment of Corporation Tax for the period ended 30th September 2021
FAQ’s
- Q: I’m still waiting on a refund from HMRC, when will I get it, and can you chase it for me?
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A: Ok, so we had this question last month, but HMRC has admitted they are behind with refunds. They say that they’ve had very high levels of refund claims this year and so if you put your claim in during April or May to give them a call, but if you are waiting for a refund from June onwards, they are asking for you to be a
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Q: Do I need to be VAT registered?
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A: You are required by law to register for VAT if your business turnover exceeds the annual registration threshold (currently £85k). There are sometimes compelling reasons to register voluntarily if your turnover is less than 85k.
TSA Accountants July Newsletter
MONTHLY NEWSLETTER
Tax investigations insurance
Time to pay
If you’re having difficulties paying an HMRC bill, don’t ignore it.
HMRC are now starting to get back to normal where it comes to chasing debt. However, they’re still amenable to longer payment plans. Give them a call, explain the circumstances, and agree a plan.
They’ll want a direct debit put in place, but once agreed, no more sleepless nights worrying about the dreaded brown envelope or a knock on the door.
In last month’s newsletter we talked about HMRC investigations. Just to re-cap, HMRC hired 1500 new tax inspectors in 2021 and accountants are seeing an increase in the number of tax investigations by HMRC. So, this month we thought it would be a good idea to include a section on tax investigation insurance, a service we don’t currently provide but are considering adding to our services.
You may well think If we weren’t selling this before, why now? The simple answer is that with 1500 more inspectors, HMRC trying to recover fraudulent furlough claims etc. and a rising number of investigations, it’s not only high risk organizations (from HMRC’s perspective businesses that take a lot of cash payments for example), but any organization that’s had a furlough claim, a grant, bounceback loan etc. So that means all businesses are at increased risk.
In a nutshell this is insurance for our time. It’s not an insurance against HMRC penalties, interest or tax. It’s insurance for us to deal with HMRC on your behalf in an investigation. The average cost of an investigation in accountants’ fees is typically around £4,000. It can be significantly more depending on how many years HMRC investigate, and the size and complexity of the business. Having an accountant deal with HMRC investigation means that:
1. We ensure HMRC play by the rules. It may surprise you, but they often don’t. They don’t have endless powers.
2. We’ll ensure any tax and penalties arising are kept to a minimum and that HMRC apply the criteria correctly.
3. Although we will inevitably need some of the tax-payers time, we will respond and answer any queries from HMRC.
I keep my affairs in good order, do I need it I hear you ask. Well, as much as anything else, an HMRC investigation is time consuming and intrusive. If it takes up many hours of our time, dealing with it yourself will almost certainly cost you many more hours. Hours when you could be making a profit.
And finally, how much does it cost? Well, we’ll have to see how many clients want it, but it could be as little as £15-20 per month. If you’d like to discuss this or wish to express an interest, please drop us an e-mail or give us a call. If enough clients want to take out insurance, we’ll look to get some quotes and look to get some bulk discount that we can pass on.
The end of recovery loan
The government implemented several schemes to help during the Covid-19 pandemic. From furlough to bounceback and one of these was the recovery loan scheme. This scheme was designed to help businesses re-open and expand following the lifting of Covid restrictions. Like bounceback loans, they had very favorable terms. The deadline to apply for one passed on the 30th of June
Examples of MTD for having VAT issues
Having to re-register aft 18 months. Quite simply, why? This is more secure than internet banking. It has also created issues with some VAT returns being filed late
It’s impossible to file a return unless HMRC’s software says one is due. Therefore, errors on HMRC prevent the filing of returns. There should be a method to file and resolve issues later.
Taxpayers are not ready for making tax digital
The reason for the low uptake in businesses and accountants taking part in the trial, may be the arrogance of certain staff who ignore these trials or simply make an excuse for the findings or pay lip service and do their own thing anyway. Certainly, the last time I was on a panel looking at MTD for VAT, I was part of a group of accountants on a webinar type meeting.
It was billed as a discussion but was really HMRC presenting it as a fait accompli much to the horror of us all. There was so much that hadn’t been considered it would have been laughable if not so serious. So just maybe professionals and software engineers aren’t working too much on it because they know HMRC will never have it ready for 2024.
Questions from agents on practical matters. He added that HMRC should publish more detailed guidance about MTD to improve awareness about the scheme.
In our view, HMRC’s first foray into MTD with VAT had issues that were fundamental and many. Most agents, including us, are of the view that HMRC will inevitably push the 2024 deadline back. HMRC aren’t publishing much guidance because in our view, they don’t have the guidance to publish.
There have long been concerns in the profession over competency, level of service and quality of staff, particularly at the higher levels of management of HMRC. And the reason for the low uptake in businesses and accountants.
People are unprepared and unenthusiastic for Making Tax Digital. Surprise, surprise I hear you say and we’re with you on that one. Global market research group Ipsos recently released data suggesting “awareness of MTD in general, and MTD for income tax self-assessment (ITSA) specifically was low”.
MTD ITSA will require people with annual business or property income above £10,000 to keep their records and file their returns with specialist software from April 2024. HMRC claims MTD ITSA will make it easier for people to file their taxes without making mistakes that cost the Treasury billions in lost tax revenue. But only 38% of respondents agreed that using MTD-compatible software would be easy, compared to 35% who disagreed. A large minority (almost 40%) said it would be more difficult.
Andrew Jackson, representing both the Association of Taxation Technicians and Chartered Institute of Taxation, said: “The survey results suggest the lack of understanding among affected people of what the changes mean in practice. “The survey results show an alarming lack of readiness and enthusiasm for MTD, fueled largely by a lack of awareness that MTD for ITSA begins in less than two years’ time. “The survey adds to our concerns about the lack of available and affordable Making Tax Digital software and the low numbers of businesspeople and landlords signing up to take part in the Making Tax Digital for Income Tax pilot. “This taxpayer skepticism and overall lack of readiness is combined with a lack of certainty and continuing questions from agents on practical matters.” He added that HMRC should publish more detailed guidance about MTD to improve awareness about the scheme.
In our view, HMRC’s first foray into MTD with VAT had issues that were fundamental and many. Most agents, including us, are of the view that HMRC will inevitably push the 2024 deadline back. HMRC aren’t publishing much guidance because in our view, they don’t have the guidance to publish. There have long been concerns in the profession over competency, level of service and quality of staff, particularly at the higher levels of management of HMRC.
The Government have increased the threshold at which employees pay National Insurance. Having increased the NI rates in April, these are staying the same, but the point at which workers start to pay National Insurance has changed. It’s now in line with the Income Tax threshold of £12,570.
This means employees can earn an extra £2,690 before they pay national insurance. According to the treasury this equates to a saving of over £330 for a “typical employee” and benefits almost 30 million working people. Most individuals will now pay less National Insurance, despite the increase in rates in the spring shake up by 1.25%.
Increase in NI threshold
Important changes for landlords
Other issues for landlords
Other issues for landlords
Do you have or know someone with multiple properties owned personally and spend significant time managing them?
You may have heard that putting them into a Limited company would be costly.
If you answered yes above, it may not be so. Give us a call to arrange an appointment and see if we can save you some money.
The UK Government has promised to deliver a “new deal” to renters. When we read what this entailed it made our blood run cold when we considered the implications for our landlord clients. This was announced in May, but a lot of government announcements don’t end up going anywhere, so we thought we’d let the dust settle first.
The Renters Reform Bill has in its press release the following:
Renters Reform Bill will provide the biggest change to renter’s law in a generation – improving conditions and rights for millions in private and socially rented sector
Legislation will drive up quality for private renters, extending the Decent Homes Standard to the sector for the first time and giving all renters the legal right to a safe and warm home.
It will ban Section 21 ‘no fault’ evictions, protecting tenants from unscrupulous landlords, while strengthening landlords’ legitimate grounds for taking back their property
Government outlines new legislation for social renters, with regular rigorous inspections and stronger powers to tackle failings by social housing landlords
Banning section 21 means unscrupulous tenants that play the system, will be almost untouchable from a landlord’s perspective.
One other key measure that if enforced will be a nightmare for landlords is the banning of landlords for refusing a tenant because they are on benefits. So, adverts like “no DSS” will have to stop.
Of course, the irony is in promoting good quality homes, it’s been well publicised and on television, that it is the council in many cases putting health at risk and offering below standard accommodation.
Important dates this month
Referral Scheme
We’re always looking for new clients at TSA and we’re always happy to give a commission for any new business we get from existing clients.
If you know any business contacts who could benefit from our services, please put them in touch.
If they become a client, there might be a nice bottle of wine (or crate of thatchers) on its way to you.
That’s it for this month.
Enjoy the fine weather!
Refferral Scheme
We’re always looking for new clients at TSA and we’re always happy to give a commission for any new business we get from existing clients.
If you know any business contacts who could benefit from our services, please put them in touch.
If they become a client, there might be a nice bottle of wine (or crate of Thatchers) on its way to you.
That’s it for this month.
Enjoy the fine weather!
19th July– Monthly deadline for postal payments of CIS, NICs and PAYE to HMRC
22nd July – Monthly deadline for electronic payment of CIS, NICs and PAYE to HMRC
31st July – Due date for payment of Corporation Tax for period ended 30th September 2021
7th August - Deadline for VAT returns and payments of Accounting Quarter period ending 31st May.
FAQ’s
Q: I’m still waiting on a refund from HMRC, when will I get it, and can you chase it for me?
A: HMRC owe money but aren’t as quick to pay it as they are to chase it if you owe them. Service levels in this area are shocking see here for further details (at the bottom of the page it also tells you how to make a complaint). So, the short answer is we are happy to request a refund, but to keep chasing HMRC we will charge a fee to cover our costs. As you can appreciate, we can’t take any responsibility for how long HMRC take to process a request. Our recommendation, as frustrating as it is, wait a reasonable length of time (and we mean weeks or months) and if you’ve still not had it, chase them yourselves and copy in your local MP and use the complaints procedures. HMRC claim an 80% customer satisfaction rating. To be blunt, I don’t know how they said it with a straight face. Certainly, no adviser I know would agree with a number anywhere near that.
Q: If I do my own book-keeping will it save me money
A: Maybe. To clarify, book-keeping is a skilled job. If you think the software (QuickBooks, Xero etc.) will do it all for you with a few simple rules set up, then you are probably on the road to increasing your fees when we charge you to find and put right all of the errors. However, it you take the time to learn book-keeping properly, then we won’t charge you for book-keeping.
Meet this Month's TSA Client
![Felina logo[1].jpg](https://static.wixstatic.com/media/29ac7b_9568d5fbd0814d5eac909bca13d4ba90~mv2.jpg/v1/fill/w_352,h_174,al_c,q_80,usm_0.66_1.00_0.01,enc_auto/Felina%20logo%5B1%5D.jpg)
Felina Contract Cleaning is an established local business, fully insured and staffed by friendly and caring people. We offer a professional and comprehensive service, providing general cleaning for homes and offices, and post-occupancy sparkle cleans.
Housekeeping
Felina provides all equipment, materials and branded cleaning products. We also carry a full range of Eco-friendly products for those who prefer it. We generally assume a key-holding position for our clients, allowing us the flexibility we require to attend for duty at any time between 08.30 and 17.00 on the regular day chosen for cleaning.
Our general home cleaning service may be carried out on a weekly or fortnightly basis, and includes the following:
TSA Accountants June Newsletter
MONTHLY NEWSLETTER
Number of HMRC investigations rising
Inside this Month's Newsletter
Important Dates Coming Up
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Number of HMRC Investigations increasing
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I've got QuickBooks, that does all the accounting, right?
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Client Zone
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7th July - Deadline for VAT returns and payments of Accounting Quarter period ending 31st May.
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19th June– Monthly deadline for postal payments of CIS, NICs and PAYE to HMRC
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22nd June – Monthly deadline for electronic payment of CIS, NICs and PAYE to HMRC
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30th June – Due date for payment of Corporation Tax for period ended 30th September 2021
The Number of HMRC investigations is increasing
Ok, the title is a little alarmist, so let’s look at the numbers before we go any further. In the first quarter of 2021, HMRC opened 102,000 investigations into taxpayers, up 36% from the previous quarter which was 75,000. The second half of 2021 saw that rise to 137,000 active investigations. Up 9% from the same year previously, and quadruple the number from q1 of 2020. Therefore there is no question that the numbers are increasing. This is to be expected given the amount of financial support given during covid, and the susceptibility of that support to fraud. During the pandemic, HMRC pulled operatives from various departments to be able to deliver the furlough scheme. It’s no coincidence that as that scheme has come to an end, more investigations have been opened.
The numbers
What happens during an investigation?
In the first instance, HMRC should write to you or your agent or they may contact you by telephone. Please be aware there are a lot of scams. They will not for example leave messages telling you to call them right away or the police will be coming! They will not threaten you if you don’t pay a figure immediately. They will telephone or write to explain what they want to look into and may request you provide records to them. It is vital at this early stage to speak to your accountant before you do anything, and no inspector should have an issue with that so don’t feel pressured to provide information and/or explanations until you speak to them.
There are two basic types of investigation.
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Aspect enquiries – These are launched to look at a particular aspect of your accounts, where HMRC suspects an error. Keep in mind the word suspects. It doesn’t mean that there is one, just that HMRC want to double check the figures. Honest mistakes happen by taxpayers (and accountants!), so even if there is an error this isn’t a cause to panic.
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Full enquiries – These take a broader look at your accounts, usually because there is evidence or suspicion of a significant error. These can typically be much more involved and time consuming.
Whilst an investigation takes place, HMRC may ask to conduct a meeting in person. It is strongly recommended that you have an accountant present. It’s not unheard of for HMRC to bring an inspector for another tax that you weren’t expecting, or to over-reach their powers with an unwitting taxpayer.
Dependent on what tax is being investigated, and whether or not HMRC believes the mistake is deliberate, there are different limits into how far back into your records they can go. For innocent errors they may go back 4 years for example, whereas if HMRC feels you’ve deliberately evaded tax, HMRC can go back up to 20 years.
Penalties
Should I be worried?
Penalties vary from tax to tax and on a number of factors, such as whether the mistake was deliberate and how co-operative the taxpayer has been. Tax investigations can be time consuming and expensive, without penalties, so our advice is very simple. Involve your accountant as early as possible. If a mistake has been made, nothing is gained by not being co-operative and hiding information or giving misleading explanations. All of these things will only delay matters, increase costs and mean any penalties are likely to be higher than they otherwise would have been. Even if you have committed fraud, it is better to give HMRC full disclosure as you might be able admit it through the contractual disclosure facility which offers immunity from legal proceedings in exchange for full disclosure. Whatever your situation, your accountant can advise you throughout the investigation and communicate with HMRC on your behalf.
Should I get insurance?
Our opinion on this has changed in recent years. Prior to the pandemic, we would have advised that it wasn’t value for money unless your business was a business at high risk of an inspection. These are typically businesses that are heavily cash based. But circumstances have changed quite substantially.
HMRC set up a task force to combat fraud in 2016. This triggered a rise in the number of firms offering HMRC investigation insurance.
The thing to remember is the insurance will NOT pay any tax owing. What it will do is pay the advisers fee. So let's say at the end of an investigation, you have a £10k tax bill, and a £4k accountants bill. Well, best case without insurance is that the accountant is successful in getting the 10k quashed (only possible if HMRC have it wrong, it can’t be negotiated down if it’s a genuine 10k bill) but the £4k accountant's bill is payable (research shows most investigations cost £4000 - £5000 in professional fees). The worst case is £10k tax bill AND £4k accountants bill. With insurance in either case, the professional fees will be covered by the insurance premium.
In 2021 HMRC hired another 1500 compliance officers, and the government have created a new covid task force to get back overclaimed furlough claims and fraudulently claimed grants and loans. So given the increasing likelihood of investigations and the cost of these (furlough investigations will not be cheap) we’ve come to the conclusion that good insurance is something we should offer. So, to that end we have sent information on this with this newsletter.
It's also our opinion that in recent years HMRC have moved away from ensuring the correct amount of tax has been collected, to maximizing returns. With all of the support handed out by the government, it’s our view that inspectors will be more aggressive in their strategies and be less understanding as they were in during the pandemic. So, amongst rising taxes, rising costs, increased inspections and inspectors looking to maximize returns, prudent insurance against the costs of an investigation are ever more a sensible option.
Remember, any business can be investigated, but in our view if you’ve had any of the following then you may be at increased risk:
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Furlough payments
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SEISS grants
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Bounce Back Loans
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CBILS loans
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Recovery Loan
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Covid Related Sick Pay
In summary then, dealing with or worrying about an investigation can be extremely stressful but things are rarely as bad as they seem. So if you have had the dreaded letter from HMRC saying they want to investigate your or your business, or if you are worried about an investigation, give us a call to discuss your concerns or to arrange insurance cover.
Unless you’ve been deliberately acting fraudulently, the simple answer is no. It’s not possible to say how likely a taxpayer is to be investigated. HMRC keep this information very close to their chests but it’s a risk to all taxpayers.
Providing you are keeping good records and acting in good faith, it’s unlikely that an investigation will lead to significant penalties if you provide information promptly and answer queries in a timely fashion. If you are concerned, maybe that you’ve made mistakes, or haven’t declared all your income, then speak to an accountant. There are not many things more stressful than worrying about a visit from HMRC.
I’ve got QuickBooks, that does all the accounting right?
Well, sorry to disappoint but the short answer is, uh no. If only the reality was as good as the marketing.
There are several reasons why you might choose QuickBooks. It’s one of the leading online accounts software solutions, works with making tax digital and links to your bank account.
However, there is one very, very good reason why QuickBooks marketing is at best misleading. Book-keeping is a skilled job. Yes, book-keepers aren’t accountants, but it’s a skilled job. Would you consider a bit of DIY nursing because a nurse isn’t a doctor, so it can’t be that hard? But for some reason, some people think that picking up a calculator makes them a book-keeper.
Well then no wonder we are sometimes left scratching our heads at some of the truly tragic sets of books we’re given access to, with the client proudly proclaiming we’ve only got to fill in the boxes on their tax return, because they’ve done their own book-keeping and it’s all up to date. If only.
So why is it that clients with no admin skills suddenly fancy themselves as book-keepers? Well, the answer is QuickBooks marketing, who tell us all we need to do is take pictures of our invoices and upload them. That we can set up rules to post transactions.
Many of the features can be time saving and useful in the right hands, such as setting up rules. The error checking of VAT returns feature is great. However, if you have made mistakes on the coding of transactions, you likely won’t spot them on the VAT error report.
Mistakes in QuickBooks only come to light at year end, when the books are passed to the accountant. At this stage it could be hundreds or even over a thousand pounds to correct the QuickBooks file, with VAT return corrections necessary too.
Currently, there is no software to take the place of the accountant or book-keeper. If you feel competent enough to attempt the book-keeping, please remember it’s a skilled job, so at least get some training on the subject. It is very unlikely that with no training you have correctly processed your book-keeping, and this could be a very expensive lesson to learn.
Rules in QuickBooks can be useful, it can code your accountancy invoices straight to accountancy. However, putting all Texaco receipts to motor expenses may not always be correct. QuickBooks won’t know it was £50 of diesel, 20 benson & hedges and a ginsters pasty. But it will merrily code it all to motor if that’s the rule that’s set up.
So, what about other software like Xero or Sage? Well, the short answer again is no. there’s no software that can be a substitute for a good accountant and good bookkeeper. Xero is more user friendly yes, and sage much less so, but they are tools for accountants and bookkeepers, not substitutes.
Our advice? Keep good records, upload invoices and expenses, then pass it to your accountant or bookkeeper unless you undertake some training.
TSA Accountants May Newsletter
MONTHLY NEWSLETTER
The Cost of Living Crisis
Inside this Month's Newsletter
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The Cost of Living Crisis
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Why you need a Will
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Client Zone
Important Date Coming Up
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7th June - Deadline for VAT returns and payments of Accounting Quarter period ending 30th April.
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19th May– Monthly deadline for postal payments of CIS, NICs and PAYE to HMRC
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22nd May – Monthly deadline for electronic payment of CIS, NICs and PAYE to HMRC
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31st May – Due date for payment of Corporation Tax for period ended 31st August 2021
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31st May – Deadline for employers to give employees their P60’s
The Cost of Living Crisis
There has been much made of the cost of living crisis in the news recently. Many people are finding household bills rising as well as double-digit inflation and rising interest rates. The question in the media is what is the government doing about it and help it can help hard-pressed families? Without wishing to be political about this, looking at the facts they seem to be at least adding to these problems. The chancellor has frozen the tax-free allowance which amounts to a massive tax grab that will undoubtedly drag more people into the higher rate tax brackets. The increase in national insurance means at least until July some people (and employers) will be facing a national insurance increase of around 10%. Another 1.25% tax on dividends will see the tax on dividends increase by over 16%. The government has seen tax receipts increase with rising fuel prices.
In March The government issued a policy factsheet detailing the details of the help the UK government are providing to ease the cost of living increase. Details can be found here https://www.gov.uk/government/publications/government-support-for-the-cost-of-living-factsheet/government-support-for-the-cost-of-living-factsheet. Looking at a couple of the measures I can’t help but think the help is a little thin on the ground. For example, a cut of 5p per litre in fuel duty is welcome on the face of it, but cynical fuel companies have not passed this cut on in full, not only that but the government has seen tax revenues increase by over 6p per litre thanks to VAT they charge. The government has frozen alcohol duties. Given that the duty on a bottle of wine (regardless of whether it’s a £5 bottle or a £500 bottle) is £2.23 for a 75cl bottle. That’s aside from VAT. Given that freezing, the duty equates to a 14p saving, if you’ll excuse the pun it is small beer. So with the government offering very little in the way of help and hitting hard-pressed families with tax increases, it’s easy to forget that businesses too will be facing the same issues. So what does it all mean and what can we do about it?
Fuel Prices
Fuel prices have been talked about extensively in the press. Fuel costs are at record levels and forecast to go higher. This is having a massive impact on families and businesses alike. With petrol prices over £1.60 and Diesel over £1.70 per litre, a reduction in fuel duties would provide some welcome relief. Aside from that congestion charging zones are springing up around the UK too.
So what can we do as businesses and consumers? In the first instance meeting clients via video conferencing such as Zoom Teams instead of meeting in person will not only save fuel but travelling time too. This became more prevalent during lockdown but there’s no reason not to continue this now.
If you are looking at replacing your car, whether personal or company, consider electric. Although generally more expensive to buy or lease, the running costs are significantly lower than the equivalent petrol or diesel and the range between charges is reaching levels that make electric vehicles a much more practical alternative. Savings can well be in the thousands per annum and with benefit in kind rates being very low, at least into 2025, there’s never been a better time to buy an electric-powered car.
It was announced in the autumn budget that NI would be increased by 1.25% to fund the NHS. Of course, this was a little disingenuous. Not only will it not initially all go to the NHS, but the increase from 12% to 13.25% for individuals may well be an increase in the rate of 1.25%, but in reality, is more than a 10% increase in real terms. This is also true for employers who were paying NI at 13.8% and will now pay 15.05%. NI for the self-employed has increased to 10.25% from 9%.
As employees, there’s not a lot we can do, however, as employers and business owners, there are a couple of things we can do. Firstly owner-manager limited companies should consider whether salaries for directors above the NI threshold are appropriate. It’s long been a tax-saving strategy to pay low directors' salaries and higher dividends. Secondly, if you are recruiting, consider using part-time staff instead of full-time staff as there may be no NI to pay or at least a lot less.
Rising Interest Rates
The Bank of England has raised interest rates four times in the last four months and this is forecast to continue. When the Bank of England raises interest rates, this increases the rate at which the major high street banks can borrow, which ultimately has to be passed on to the customer. The government-backed Recovery Loan Scheme has preferential interest rates and is only available until the end of June so if you are considering borrowing over the coming months, now might be a good time to borrow, even if you won’t need the money for several months as you might beat any further interest rate increases and save money.
Inflation
Anyone who remembers the last time we had high inflation rates will remember mortgage rates once hitting more than 16%. No one is predicting interest rates at those levels but it’s clear that the bank of England will keep raising rates to tackle inflation. Rising interest rates could have a devastating effect on the property market (though falling house prices will help first-time buyers) and make borrowing less affordable for individuals and businesses, so why take such harmful action? The reason is that increasing interest rates is the main tool for tackling inflation that the Bank of England has to hand. This gives an indication as to just how harmful high rates of inflation can be. Given that we have had benign economic conditions prior to covid for over 20 years, inflation has barely gone above 2%.
The consequence of inflation is higher prices for both businesses and consumers alike. Rising inflation is why we are now paying more for everything from fuel to groceries to luxury goods. It can have a devastating impact. So what can we do about it? While there’s no doubt that until recently we’ve never had it so good, with most families enjoying more disposable income than their parents or grandparents ever had, there have been some warning signs that this couldn’t continue. The affordability of housing with rising rents and property prices leading to what’s been dubbed “generation rent”. There are things we can do though to soften the impact of inflation. The average person spends £641 per annum on takeaways according to 2021 figures. That’s an increase of 42%. So simply going back to 2020 levels would save £189. The branded coffee shop market is worth £4.4 Billion per year. So perhaps making our own in the office rather than buying that morning cappuccino on the way to work might be a pretty painless way to save some money. Ultimately though, the only way to survive rising inflation is to accept that we will have less purchasing power for our buck and cut back on discretionary spending. This holds true for businesses too. Businesses should also consider price increases. There is always a fear that large increases will cost business, but with annual inflation at over 8% and as high as 10% by some measures, not putting up prices will be very costly. If inflation continues at these rates, it will be even harder to put prices up next year where businesses could be looking at 17% increases to keep pace. So it’s worth taking a look at pricing now and if others in your industry are putting there’s up then put yours up too.
National Insurance Increases
Many celebrities have died intestate (not having made a will before they died), including Rik Mayall and Prince. This will more than likely have caused problems for their estate and beneficiaries.
There are several reasons why you might want to consider a will, even if you are young.
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A will is a legal document that sets out your wishes regarding the distribution of your property and the care of minor children.
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Though no single document can take care of every issue that arises after death, a will, known as a last will and testament can go a long way to achieve this, particularly with a letter of wishes.
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It will make matters easier for your family when processing your estate.
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You can ensure that your estate goes where you want it to go. Laws of intestacy are very inflexible.
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By planning ahead you can make plans to reduce, gift, or spend part of your estate if you know that your estate may be liable to pay inheritance tax. Inheritance tax, surveys have shown is one of the most unpopular taxes, so planning now may save inheritance tax later.
Meet this Month's TSA Client
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Not having a will can have many unintended consequences, including higher taxes through IHT, but also it can make an upsetting time for loved ones worse if there is disagreement over your intentions for say items with sentimental value as well of course as arguments over money and assets.
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You can write a will yourself, but we’d recommend using a suitably qualified professional, such as a solicitor or will writer.
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Generally speaking, a will costs between £100 and £750.
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If you haven’t looked at your estate planning, why not give us a call and arrange an appointment? Starting at £200 plus VAT, our Inheritance Tax Review will give you peace of mind that you’ll have an idea of how much inheritance tax your estate may have to pay, and a list of recommendations and a plan to help reduce it. We’ll happily work with other professionals such as will writers and financial advisers to help ensure that your legacy goes where you want it to and out of the hands of the taxman. We pay enough taxes whilst we are alive without giving the taxman another big payday after we’ve gone.
Bradley Stoke Radio is our local Community Radio Station based in studios off Brookway in Bradley Stoke.
We have been a part of the community for over 10 years, bringing people together with interviews, current affairs, news, music and more - to homes, offices, building sites, cars, anywhere with a radio!
Broadcasting across the North Bristol area on 103.4fm, online and on DAB, we broadcast 24 hours a day and have a wide range of music and community interest programmes.
We also attend events in the community, providing PA, music and live linked broadcasts.
Along side our ‘ON AIR’ programming, we have an active social media presence and a listen again service through our website and mixcloud – you never need to miss your favourite programme from Bradley Stoke Radio 103.4fm.
As a community radio station, we are run by volunteers who love our local area and are passionate about radio. We are supported by BSTC and South Gloucestershire Council along with opportunities for local businesses to sponsor or advertise with us – if you would like to join our regular advertisers, please do get in touch with us at admin@bradleystokeradio.com. In the meantime, 103.4fm, online and on DAB – please do turn that dial and tune in!
Why you need a Will
Meet this Month's TSA Client
Ernest Till South West & Co Ltd replaced Ernest S Till (South West) & Co Ltd when the previous owner retired, and Stephen took ownership in 2015. Over the past 7 years, our young and dynamic Managing Director, Stephen, has driven the company forward, thriving through what have been challenging economic times.
Here at Ernest Till South West & Co Ltd, Electrical Contractors we do our very best to meet all electrical needs whether it be residential or commercial electrical services. No job is too large or too small. Our staff are friendly, professional, and knowledgeable so you know you're in good hands. All our engineers are fully trained to the 18th edition of the Electrical Regulations with many holding their 2391 to inspect and test. Office staff have also received training in their relevant fields enabling them to assist with your requirements in a friendly and timely manner.
We are proud to have established long standing working relationships with many large clients in Bristol and the surrounding area such as: Clifton Catholic Diocese, Patchway Community College, Southmead Development Trust at the Greenway Centre and The Ranch Adventure Playground, Rybrook and Brimsham Green School and many more.
Ernest Till South West & Co Ltd have been a longstanding client of ours. We can certainly vouch for them being friendly, professional and knowledgeable.
So now you know you can contact Ernest Till with confidence. Contact details are:
0117 9145400
FAQ`s
I’ve been house hunting and my wife and I have found the house of our dreams. We’ve had an offer accepted and all we need is the accounts completed. Can you get them to me tomorrow, please?
This is a question that comes up more and more lately and leaves us baffled at times at TSA. It’s not unusual for a set of year-end accounts and tax returns to cost several thousands of pounds and take several days to complete. Work is booked weeks in advance too, so it’s simply not possible to drop everything else for 3 days with no notice. Not only that but mortgage affordability is determined by the financial results of your business. So the best advice is if you are considering buying a new house or remortgaging, let us know asap so we can book the work in as soon as possible to avoid disappointment.
I’m VAT registered, can I claim VAT on all my expenses, and do I have to charge it on everything?
Ok, so two questions so you get two for the price of one, you lucky things! Once you are VAT registered you must charge vat on all of your Vatable sales, you can’t pick and choose. When it comes to reclaiming VAT, you can only reclaim it if you have been charged it. If your supplier is not VAT registered or hasn’t charged you VAT then no, you cannot claim the VAT. In particular, be careful with insurance. Insurance is subject to IPT (Insurance Premium Tax) which isn’t reclaimable and is not the same as VAT.
Well, that’s pretty much it for this newsletter. I hope it’s been useful and informative. We are out of lockdown, still working, and looking for new clients! Enjoy the sunshine, they haven’t put a tax on that yet!
We do run a reward scheme, a bottle of wine when your recommended client pays our first invoice!
MONTHLY NEWSLETTER
Spring Statement Special
TSA Accountants March Newsletter
Important Dates this month
7th April - Deadline for VAT
returns and payments of
Accounting Quarter period
ending 28th February.
19th April – Monthly deadline for
postal payments of CIS, NICs
and PAYE to HMRC
22nd April – Monthly deadline for
electronic payment of CIS, NICs
and PAYE to HMRC
30th April – Due date
for payment of
Corporation Tax for period ended
30th June 2021
Cover
Spring Statement – free pullout. Find
out what this means for you and your
business.
Pages 2 – 4 Spring Statement
pullout
Page 5 Cloud Accounting
Page 4 – Client Zone
Meet this months’ TSA client
FAQ's this month
Spring Statement – What does this mean for me? (And what was in the small print?)
There were several points to note in thisspring statement, bit it’s fair to say this isn’t so much about the small print but more about the smoke and mirrors. Make no mistake, we are not getting tax cuts, but token gestures to slightly reduce the tax grab that’s currently in process. There’s absolutely no question at all that we will be poorer going forward than we are now.
Fuel Duty
Fuel prices have been talked about extensively in the press. I’m not going to rehash all of that commentary here, but fuel costs are at record levels and forecast to go higher. This is having a massive impact on families and businesses alike. With prices as high as £1.67
per litre, a reduction in fuel duties would provide some welcome relief.
There is a good case to reduce the government’s take from fuel. Estimates vary but given that the government gets VAT as well as fuel duties from every litre sold, it’s clear the government has profited massively from rising fuel prices. The chancellor has promised a reduction in fuel duty of 5p. Whilst
welcome, the government is profiting to the tune of 7p a litre based on current prices, and if fuel continues to rise in price, the government take will only increase. Compared with some of our European neighbours who have reduced their taxes by at least double the 5p the UK government has we can’t help but feel he could and should have gone much further. The other issue is that given past form, the petrol companies are unlikely to pass the fuel duty cut on in full, so we’ll still be punished at the pump. A reduction in VAT would have been much better. It wouldn’t have been diluted by any increase in price and the saving would have found its way to the customer.
National insurance increase
It was announced in the autumn budget that NI would be increased by 1.25% to fund the NHS. Of course this was more smoke and mirrors. Not only will it not initially all go to the NHS, but the increase from 12% to13.25% for individuals may well be an increase in the rate of 1.25%, but in reality, is more than a 10% increase in real terms. There have been calls from all sides of the house of commons and business groups to scrap or postpone the increase. The chancellor has resisted those calls and ploughed ahead with the planned increase from April. The increase also applies to employers NI which will rise from 13.8% to 15.05%. A further 1.25% will be added to tax on dividends, marking a 16.7% increase. This is not a 1.25% tax hike. This is an enormous tax hike. So,what was announced today? Well, these increases will still be going ahead, but from July the point at which employees pay NI will be raised in line with the tax -free allowance. Of course, the chancellor is trumpeting that this is the largest tax cut in history. But it’s not. It’s been brought in to offset the massive tax grab that he announced in the autumn. So, as much as it is welcome it’s not what it’s being dressed up to be and once taxpayers see their pay packets, they will surely see through this. The good news for employers is that the NI Employment Allowance will be increased from £4,000 to £5,000 meaning the first £5,000 of employers NI won’t be payable. So, could Rishi Sunak have done more? Absolutely. With the increased tax take from other areas, he could have scrapped the NI increase altogether. The increase in NI threshold has been long overdue and is welcome.
0% Green initiatives
The chancellor promised to scrap VAT on energy efficiency measures such as solar panels and heat pumps.
He said “We'll also reverse the EU's decision to take wind and water turbines out of scope - and zero rate them as well. And we'll abolish all the red tape imposed by the EU. A family having a solar panel installed will see tax savings worth over £1,000. And savings on their energy bill of over £300 per year.”. The policy will not apply immediately to Northern Ireland. This is another welcome measure but is really just tinkering.
Household support fund
This fund will be doubled from £500 Million to £1 Billion. This is a fund made available to local authorities to help those in most need. So is again a welcome measure.
Income Tax
The chancellor saved his best for last with an announcement that by the end of the parliament he would
reduce the basic rate of income tax from 20% to 19%.
Our View
As always with budgets and statements such as this, it’s often what’s said in the small print or what’s not said at all that has the biggest impact. This time it is a little different. The conservatives like to present themselves as the low tax party, but this time around they will be the party that raises taxes to their highest post-war level. After all the giveaways and rampant fraud through the pandemic, the last budget was a budget to claw back some of what was spent. This spring statement was an opportunity for the government to ease the burden on
hard-pressed families and businesses. Politicians of all parties are often accused of being out of touch and this statement will do little to dissuade that. This is a statement that ensures that tax increases announced in the budget will go ahead, whilst the chancellor is trying some slight of had by trying to convince us that this is in fact a giveaway, we aren’t fooled, and we don’t think our clients and the public
will be fooled either. Things are going to get bumpy. With inflation running at over 6% and in some quarters forecast to hit double digits for the first time since the1970’s, income tax-free allowances are going to be frozen for four years so more taxpayers will be dragged into the 40% band and some lower-paid employees will be dragged into the tax system that don’t pay income tax now. Arguably one of the successes of the coalition government was taking lower paid earners out of taxation altogether. Leaving the tax threshold at
£12,700 until 2026 will draw many lower paid earners back into paying income tax.
We warned of bumpy times ahead in our autumn budget review and our view has not changed, this Spring Statement only confirms and reinforces it. This was a great opportunity for this government to ease the pressure on hard-pressed taxpayerers and they’ve squandered it.
If you’d like to explore tax planning options for you and your business, give us a call to arrange an appointment. Prices start at £200 + VAT
and we might save you thousands. In the meantime, feel free to check our Spring
statement guide sent with this newsletter
Welcome to this month's Newsletter
Cloud Accounting, what is it ,and is it for me?
Cloud accounting (or online accounting) has all the same functionality as desktop accounting but moves the whole process to the cloud and expands upon it. There's no
desktop application – you log in to an always - up-to-date online solution and all data is safely stored on a cloud server. In this article we’ll look at the different suppliers, how it can help your business and bust some of the myths.
There are several reasons why you might
want to consider a switch to cloud based
accounting.
• Data about your sales or income and purchases can flow straight from your bank to your books so you don’t spend
hours transcribing them
• You can see your current financial position at any time
• Multi-user access makes it easy to collaborate online with your team and advisors
• It’s online software so there’s nothing to install or update, and all your data is backed up automatically.
• You can set up a dashboard showing important financial information like who owes you money, what bills are due, and how your cash flow is looking
• Compliance with Making Tax Digital (MTD)
Meet This month's TSA Client
There are several providers, but we’ve listed what we think are the best ones.
Xero –our cloud-based software of choice, the one we recommend. This can be available for as little as £12 per month plus VAT. Easy to use, very intuitive with great online video tutorials and excellent support.
Quickbooks - The biggest cloud-based provider.
Excellent value for money with lots of functionality. Not as intuitive as Xero and overhyped in their advertising.
Freeagent – Not really free unless you have a Natwest business account, then it is. Not as many features as Xero or Quickbooks, but relatively easy to use with good support.
5 cloud accounting myths
• It’s less secure than desktop software – wrong, it’s actually more secure and
data is backed up
• Migrating data is complex. For a good bookkeeper or accountant, this should be a straightforward process.
• I’ll have less control – wrong. You’ll actually have more with access to real
time information.
• Cloud software can replace my bookkeeper or accountant. – no, wrong again.
Despite Quickbooksadvertising it’s easy to get a lot wrong and have to pay to put it right. Cloud software should mean less bookkeeping hours
meaning less on book -keeping fees.
• It’s expensive – wrong again. It can be free if you have a Natwest account, or
from as little as £12 per month + VAT.
If you are still unsure whether cloud-based accounting is for you, give us a
call and we can go through the best options for you.
AB Marketing Specialist in
Lead Generation and Marketing
AB Marketing is our choice for lead generation. Abby runs the business and her passion for what she does, as well as her knowledge is evident from your very first contact with her. Abby and her team get results but are also gentle in their approach too, so you know your potential customers are in safe hands. We’ve used Abby and her team for a number of years and can’t praise them highly enough. Every month we receive feedback on our campaigns so we can hone them where necessary and monitor performance. Here is what Abby has to say about AB Telemarketing
.
AB Marketing Ltd undertake lead generation, direct sales or appointment setting for clients depending on individual requirements.
All the while building relationships with potential new clients and building pipelines for the future.
We are now around year 12 of trading and I have gone from just me on my own to a home-based team of 18 agents. We
work across many sectors including, M&E, Training, Construction, Finance, Film, Publishing, Merchant Services, Commercial cleaning and several Software companies to name a few.
We work as extension of our clients’ teams and we can offer data cleansing, data building, customer satisfaction calls, customer re-engagement (lapsed customers), appointment setting, event invitations, online demo bookings and research too.
So now you know you can contact
AB Marketing with confidence.
Contact details are:
0845 570 8725
abby@abmarketingservices.co.uk
FAQ`s
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I work in the construction industry and normally receive a tax rebate because CIS is deducted before I’m paid. Why haven’t I received a refund this year?
There are several reasons why you may not have had a refund this year. Covid grants were given to the self-employed and these are taxable income, so when calculating a refund. CIS is deducted from every £1 of labour at the rate of £20 per £1 if you are a verified subcontractor. The refund arises because no allowance is made for the tax free allowance of £12,570. However, once earnings are over £12570, the deduction of 20% is not enough as tax plus NI will total 30.25%. So the higher your earnings the lower your tax rebate until you reach a tipping point where Income tax is payable because not enough tax is payable
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My mate claims a lot more expenses than me and he’s never had a problem so why are you saying I can’t claim the same?
This is a question we get a lot. When tax rates go up, as they have recently, the inclination is to put through more expenses to compensate. This isn’t a great idea however. Not every self-assessment is checked. HMRC’s approach is to accept now and check later. This means that yes your mate may have claimed more expenses, but if HMRC single him out for investigation, they may well go back six years for underpaid tax and possibly penalties. There are a lot of legitimate ways to reduce tax bills, but not eliminate them If you’d like to discuss ways to reduce your tax bill please feel free to contact us to arrange an appointment.
Well, that’s pretty much it for this newsletter. I hope it’s been useful and informative. We are out of lockdown, still working and looking for new clients! Enjoy the sunshine, they haven’t put a tax on that yet!
We do run a reward scheme, a bottle of wine when your recommended client pays our first invoice!
TSA Accountants - 0117 923 5394 - enquiries@tsabusinessadvisors.co.uk