September 15, 2022 By Katie Business Advice • Business News 0 Comments

New Prime Minister: How will it affect your business?

The new Prime Minister: what changes are taking place?

The first announcement of the new Prime Minister, Liz Truss, was a plan to freeze energy prices for two years at £2500 for the average home. With the £400 rebate previously announced, takes this to £2100. There will be equivalent help for Northern Ireland. The amount saved by each family will depend on how much energy they use. Households have been urged to reduce their overall usage if they can. This is because of the serious Europe-wide shortage of the natural gas which powers much of the heating and electricity network.

Liz Truss also said that a fund will be created to support those who are not covered by the cap. More details are expected in the next two weeks.

How will changes made by the new Prime Minister changes affect your business?

The reality for many small businesses and households has taken a turn for the worse recently as prices continue to surge.

Unlike domestic customers, energy bills for businesses are not capped. The rising cost is proving critical for many companies, especially smaller firms. Liz Truss announced that businesses will get an “equivalent support” for a six-month period. However, the UK government have not yet published the unit cost per unit of gas and electricity. After the six-month period, further support will be targeted at “vulnerable industries”. We will update you when further information is available.

The recession

The new Prime Minister also has a recession to deal with. The Bank of England has warned that little can be done to stop the UK falling into a recession as the war in Ukraine continues. Its governor, Andrew Bailey, said it would “overwhelmingly be caused by the actions of Russia and the impact on energy prices”. The Bank expects the economy to shrink in the last three months of 2022. This will keep shrinking until the end of 2023.

What does the recession mean for businesses?

To address the recession, a taxation policy could be designed by the new prime minister. This will increase economic growth by putting more money in our pockets and allowing businesses headroom to invest. We will keep you informed over the coming weeks if taxation policy changes.

As with any downturn in the economy, some types of business are more likely to run into cash flow problems, while other types appear to be more resilient. If you are a business owner, you might be wondering which category your business falls into. No matter how inventive or simple your business model is, you can still have problems with cash flow.

To understand and predict how cash flows in your business, start by performing a health check on your accounts. Look at your latest profit and loss statement and check that your income is sufficient to cover your expenses. If your profit is falling behind your expenses and cash flow is slowing down you might need to take action.

Talk to us about preparing a cash flow statement and budget so that we can work with you to maximise your business’s resilience over the next two years.

Need more information?

We offer a wide range of services which are unique to your business. Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

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September 8, 2022 By Katie Business News • Tax News 0 Comments

Diary of main tax events September / October 2022

Please see below for the diary of main tax events for September/October 2022. If you have any further questions, please do not hesitate to speak to us. The team are on hand to help ensure you meet these deadlines.

Date	What’s Due
1 September	Corporation tax for year to 30/11/21 unless pay by quarterly instalments
19 September	PAYE & NIC deductions, and CIS return and tax, for month to 5/9/22 (due 22 September if you pay electronically)
1 October	Corporation tax for year to 31/12/21 unless pay by quarterly instalments
5 October	Deadline for notifying HMRC of chargeability for 2021/22 if not within Self-Assessment and receive income or gains on which tax is due
19 October	PAYE & NIC deductions, and CIS return and tax, for month to 5/10/22 (due 22 October if you pay electronically)

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We offer a wide range of services which are unique to your businesses who are just getting going! Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

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September 7, 2022 By Katie Tax Advice • Tax News 0 Comments

Capital Gains Tax – proposed divorce changes

Capital Gains Tax – proposed divorce changes

In response to a recommendation by the Office of Tax Simplification the Government have introduced draft legislation for inclusion in Finance Bill 2023. That extends the no gain/no loss rule when a couple separate.

Under the current rules, the no gain/no loss rule that means that there is no CGT on transfers of assets between spouses or civil partners. This applies up to the end of the tax year in which they separate. The divorce settlement or court order that transfers assets between the couple, often takes place many months after the separation. This may lead to CGT being payable.

No gain/no loss treatment

The main change proposed is that separating spouses or civil partners will be given up to three years after the year they cease to live together. In this time they can make no gain/no loss transfers. Most divorces would be concluded within this period.

No gain/no loss treatment will also apply to assets transferred as part of a formal divorce agreement.

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We offer a wide range of services which are unique to your business. Do you need further guidance on Capital Gains Tax?

Our team of chartered accountants have a wealth of experience in a broad range of sectors. Our team work hard to ensure they create smart and effective tax-efficient solutions. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

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September 6, 2022 By Katie Tax Advice • Tax News 0 Comments

Advisory fuel rate for company cars – September 2022

Advisory fuel rate for company cars – September 2022

The figures in the table below are the HMRC suggested reimbursement rates for employees’ private mileage using their company car from 1 September 2022. Remember that provided all private fuel is fully reimbursed the fuel benefit does not apply.

Engine Size	Petrol	Diesel	LPG
1400cc or less	15p (14p)		9p
1600cc or less		14p (13p)
1401cc to 2000cc	18p (17p)		11p
1601 to 2000cc		17p (16p)
Over 2000cc	27p (25p)	22p (19p)	17p (16p)

Where the employer does not pay for any fuel for the company car these are the amounts that can be reimbursed in respect of business journeys tax free.

Where there has been a change the previous rate is shown in brackets.

Note that for hybrid cars you must use the petrol or diesel rate. You can continue to use the previous rates for up to 1 month from the date the new rates apply.

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September 5, 2022 By Katie Business Advice • Tax Advice 0 Comments

Self-employed – plan for big tax bills in 2023/24

Self-employed – plan for big tax bills in 2023/24

The changes to the basis of assessment of self-employed profits are scheduled to change from 6 April 2024. The new rules mean that profits (and losses) will be assessed based on the amounts arising between 6 April and 5 April instead of the profit/loss of an accounting period ending in the tax year. This means that where the business accounts do not coincide with tax year the profits or losses will need to be apportioned. This is intended to coincide with the start of Making Tax Digital for income tax.

Transitional rules proposed for the previous 2023/24 tax year could result in large tax bills for some sole traders and partners, particularly those with an existing 30 April year end. The profits of year ended 30 April 2022 would be taxed in 2022/23 under the current rules with 2024/25 taxing profits arising between 6 April 2024 and 5 April 2025 under the new rules. But what about 2023/24?

The profits taxed in 2023/24 would be those for year ended 30 April 2023 plus the period 1 May 2023 to 5 April 2024 – in total 23 months profits!

The good news is that there would be a deduction for “overlap relief” (as much as11 months) which typically arose when profits were taxed twice at the start of the business – but those will often be much lower than the extra 11 months being taxed in 2023/24.

The transitional provisions provide for the “excess” profits to be spread over the next 5 tax years to smooth out the excessive tax bill.

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Are you self-employed? We offer a wide range of services which are unique to your businesses and our team of chartered accountants have a wealth of experience in a broad range of sectors. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

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September 1, 2022 By Katie Tax Advice • Tax News 0 Comments

Government support – Tax free childcare account or childcare vouchers?

There continues to be poor take-up of the Government’s Tax free Childcare Accounts which provide a 25% subsidy towards the cost of childcare.

The system operates by topping up savings of up to £8,000 per child by 25%, potentially an extra £2,000 from the Government to spend on qualifying childcare. The scheme applies to children under 12 and the account can be used to pay nursery fees, breakfast clubs, after school clubs and registered childminders. In contrast childcare vouchers may be used to pay for childcare up to age 16. Despite the PAYE and NIC advantages not all employers provided childcare vouchers.

Tax free childcare accounts are available to both employees and the self-employed. To be eligible the parent generally needs to be working and earning at least the National Minimum Wage or Living Wage for 16 hours a week on average. For a 3 months period they need to earn at least £1,976 and they are not eligible if their adjusted net income is more than £100,000 a year.

INTERACTION WITH CHILDCARE VOUCHER SCHEMES

Tax-free childcare accounts will gradually replace childcare voucher schemes as no new schemes could be set up after 4 October 2018. Those within voucher schemes continue to be eligible until their child is aged 16, provided the employer is willing to continue operating the scheme. Many organisations provided the vouchers by way of salary sacrifice and there were tax and NIC advantages. However, with many employees working from home during the pandemic and the move to hybrid working many families found that they were not using all of their vouchers and chose to leave the scheme.

Note that the two schemes are mutually exclusive, and employers must stop giving their employees childcare vouchers with income tax and NIC relief if the employee informs them that they’ve started using the Tax-Free Childcare scheme.

The employer may need to stop or change the employee’s salary sacrifice arrangement and must also update the employee’s contract and their payroll software.

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August 26, 2022 By Katie Business Advice 0 Comments

Protecting pregnant workers and new mothers

Protecting pregnant workers and new mothers

The Health and Safety Executive (HSE) advice has recently changed, and employers must now carry out an individual risk assessment for pregnant workers and new mothers.

There will be little practical change as you must already consider risks to women of childbearing age in any general health and safety risk assessment.

The difference is that you must also carry out an individual risk assessment that covers a worker’s specific needs when they inform you in writing that they:

are pregnant;
have given birth in the last 6 months; or
are breastfeeding.

See: Protecting pregnant workers and new mothers – Overview – HSE

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Do you need further guidance on this for your own workforce? We offer a wide range of services which are unique to your business. Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

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August 25, 2022 By Katie Business Advice 0 Comments

Business cash flow in tough times

Business cash flow in tough times:

With ever-increasing supplier prices, a rise in interest rates and a looming recession, managing your business’s cash and understanding the flow are now vital tools in maintaining resilience and being able to adopt flexible strategies for success.

Cash flows are a reflection of all the cash that is flowing in and out of a business. Owners can look at the direction of the cash flows for insights into the health of specific products or services and overall market patterns.

Some types of businesses are more likely to run into cash flow problems, while other types appear to be more resilient. If you are a business owner, you might be wondering which category your business falls into. No matter how inventive or straightforward your business model is, you can still have problems with cash flow. Here are our thoughts on managing the flow of cash in your business:

The first stage of understanding and predicting how funds flow is to perform a health check on your accounts. Look at your latest profit and loss statement and check that your income is sufficient to cover your expenses. If your profit is falling behind your expenses and cash flow is slowing down, you might need to take action. Prepare a funds flow statement so you know where the money goes.

Next, create a yearly budget and look where cash could become tight and months where you can save to cover the quieter times. Look at those quieter months and think about flexible work scheduling, new products or services or other activities to tide you over.

Finally, make sure you collect your money from those who owe you quickly. Reward customer loyalty by offering early bird discounts, and set credit limits and payment terms to ensure customers follow the rules. If you take on new customers, make credit checks. Penalise late payers and request upfront deposits or payments.

Talk to us about preparing a funds flow statement and annual budget so that you can work on your business for maximum success!

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Does your business need help with cash flow? We offer a wide range of services which are unique to your business & our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

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August 22, 2022 By Katie Business Advice • COVID-19 • Startups • Tax Advice 0 Comments

Rising inflation: Personal finance tips to manage it

Useful personal finance tips to manage inflation

Households need to brace for a prolonged period of high inflation and further interest rate rises. The Governor of the Bank of England, Andrew Bailey, has warned that he will take forceful action to tackle inflation, already running at 9.4% and forecast to hit double figures later this year. He defended the decision last week to raise interest rates, saying there is a “real risk” of soaring prices becoming “embedded”. Interest rates rose to 1.75% – the biggest rise in 27 years – with inflation now set to hit more than 13%. The UK is forecast to fall into recession this year, with the longest downturn since 2008 predicted. Increasing interest rates is one way to try to control inflation as it raises borrowing costs.

Inflation is a problem for most of us. Savers find that the value of their cash is being rapidly eroded. At 10% inflation, the £100 you save today will only buy £90 worth of goods in a year’s time. Many people find that their household budgets are stressed. And even borrowers, who might be expected to benefit from inflation, suffer when inflation triggers increases in interest rates. So what can you do to protect your finances and combat inflation?

Protect your retirement income.

Inflation has an enormous impact on how long retirement savings will last. The income that seems more than adequate when your start your golden years can look less than generous after 10 years of inflation, and a recipe for misery after 20. A basic level annuity will mean having the buying power of your income eroded every year. An inflation-linked annuity will start off providing a much smaller income, but one that keeps increasing over time. A drawdown pension – where your pension pot remains invested and you draw down an income as you need it – is more flexible. However, you will still need to take care to avoid running out of cash.

Avoid locking your cash savings away.

Savers should benefit when higher inflation leads to the Bank of England increasing the Bank Rate. But beware – although the rates offered by savings providers are rising, they have not yet done so enough to come anywhere near inflation.

However, with the Bank Rate forecast to rise further and with savings deals forecast to follow, there could be better deals to be had over the next few months. Shop around for the best deal and avoid locking your savings into a long-term deal because it could mean missing out on much better rates in the near future.

Look at your investment strategy.

In an inflationary world, investing – where your cash is used to buy something which could appreciate in price – could be more rewarding than saving.

While inflation erodes the value of cash savings, it actually works to boost the value of some investments. But how should you invest? Bond investment becomes less attractive in times of inflation, as the income provided by bonds is subject to inflation.

Investors can protect themselves by buying index-linked bonds, where the interest paid rises in line with inflation. Some business sectors will suffer during inflationary periods. Oil and mining companies, however, tend to do well as rising commodity prices are good for their bottom lines. Utility groups often pay dividends linked to inflation. However, inflation could be bad for others such as retailers and supermarkets, which may lack the ability to increase prices. Luxury goods may be shunned when households tighten their belts.

Secure a low-rate mortgage before rates rise.

Inflation has already triggered rate rises, and mortgages are substantially more expensive than they were last year. This process could continue – the Bank of England has hinted as much. To avoid increasing interest costs, which could mean that buying your home becomes difficult or even impossible, it makes sense to secure the lowest rate you can, fixed for the longest possible period.

Get some expert help.

Managing money in inflationary times can be challenging, but the challenges can be much more manageable if you have an expert to call. Talk to your financial adviser, or if you don’t have one, see: Choosing a financial adviser | MoneyHelper

Need more information?

Did you find on, personal finance tips to manage inflation, useful? We offer a wide range of services which are unique to your business and we understand the risk of rising inflation. Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

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New Prime Minister: How will it affect your business?

The new Prime Minister: what changes are taking place?

How will changes made by the new Prime Minister changes affect your business?

The recession

What does the recession mean for businesses?

Need more information?

Contact us below

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Capital Gains Tax – proposed divorce changes

No gain/no loss treatment

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Advisory fuel rate for company cars – September 2022

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