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.

Need more information?

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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    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

    Need more information?

    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.

    Our fantastic team at A&C Chartered Accountants are here to help.

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      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!

      Need more information?

      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.

      Our fantastic team at A&C Chartered Accountants are here to help.

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        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?

        1. 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.

        1. 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.

        1. 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.

        1. 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.

        1. 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.

        Our fantastic team at A&C Chartered Accountants are here to help.

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          By Katie Business Advice • Business News 0 Comments

          Beware of “Rogue” Research & Development Consultants

          Beware of “Rogue” Research & Development Consultants:

          In recent years HMRC have identified and successfully challenged a number of spurious claims for Research and Development (R&D) tax credit relief made by purported ‘R&D Consultants’.

          Many of these claims have been for projects that did not satisfy the criteria for the tax relief and some included overstated expenditure and consequently have been abusing the scheme.

          The R&D rules offer legitimate claims generous tax breaks. For a company that is a Small or Medium-sized Entity (SME), qualifying expenditure attracts a tax deduction of 230% of the amount spent which can then be traded in for a tax refund of 14.5% if the company is loss making. Thus £100,000 of qualifying R&D expenditure would potentially result in a tax refund to a loss-making company of £33,350. Most R&D consultants charge a fee based on the amount of the claim.

          To qualify for R&D relief, the expenditure must be incurred as part of a specific project to make an advance in science or technology. The project must relate to the company’s trade – either an existing one, or one that the directors intend to start up, based on the results of the R&D.

          Further, the company must be able to explain how a project:

          • looked for an advance in science and technology;
          • had to overcome uncertainty;
          • tried to overcome this uncertainty; and
          • could not be easily worked out by a professional in the field.

          In summary, R&D claims are often very worthwhile, but a number of strict requirements must first be met. If you are approached by an R&D Consultant or otherwise believe you may be incurring eligible R&D expenditure, please talk to us and we will help you file a compliant claim.

          Need more information?

          Do you need a trusted Research & Development Consultant for your business? We offer a wide range of services which are unique to you. 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.

          Our fantastic team at A&C Chartered Accountants are here to help.

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            By Katie Business Advice • Tax Advice 0 Comments

            How to attract and retain key staff with shares

            How to attract and retain key staff with shares:

            In the increasingly competitive jobs market, it is important that employers are able to attract and retain talented people to help them grow their business. Within certain sectors, the opportunity to participate in the equity of the organisation that they work for is something that more employees are seeking and those employers that do not offer such opportunities could put themselves at a disadvantage when looking to retain and recruit.

            For corporate employers, there are currently four HMRC ‘tax-advantaged’ schemes that provide employees and employers with income tax and National Insurance Contribution (NIC) advantages. The four tax-advantaged schemes are currently:

            • Share Incentive Plan (SIP) and Save As You Earn (SAYE or Sharesave) schemes, which generally need to be made available to all employees after a qualifying period.
            • Probably more appropriate for SMEs are the Company Share Option Plan (CSOP), and the Enterprise Management Incentives (EMI) share option scheme as these are discretionary schemes which allow the management to award options to selected employees and directors that the organisation is looking to incentivise.

            Shares acquired under these four schemes are generally free from income tax and NICs if correctly structured. Depending on the scheme used, the employer may also qualify for a corporation tax deduction for the difference between the price paid by the employee for their shares and the market value.

            The scheme of first choice, provided the employer company qualifies, is currently the EMI share option scheme as it allows the employee or director to hold options over up to £250,000 of the employing company’s shares based on the market value when the option was granted. The shares, once acquired, potentially qualify for Capital Gains Tax business asset disposal relief when sold and thus the first £1million of gains would be taxed at just 10%.

            The acquisition of shares and securities in connection with an employment other than through one of the four schemes outlined above are commonly referred to as ‘unapproved’ or ‘taxed’ schemes. This means that neither the employee nor the employer benefit from any income tax or NIC advantages. This could result in a significant income tax and NIC charge.

            Please contact us if you would like to discuss introducing a share incentive scheme to help you attract and retain talented staff.

            Need more information?

            Do you want to learn more about how you and your business can attract and retain key staff with shares? 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.

            Our fantastic team at A&C Chartered Accountants are here to help.

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              By Katie Business Advice • Tax Advice 0 Comments

              Plastic Packaging Tax update

              The Plastic Packaging Tax (PPT) was introduced on 1 April 2022. If you manufacture or import plastic packaging into the UK, you may need to register for PPT, submit a PPT return and pay any tax due.

              As the end of the first quarterly accounting period for PPT approaches, HMRC shared some key reminders on completing PPT returns and payments.

              • If you are liable to register or have already registered for PPT, from 1 July 2022 you must submit your PPT return and pay any tax due no later than 29 July 2022.
              • Your PPT return needs to cover plastic packaging your business manufactured or imported into the UK, from when you became liable to 30 June 2022.
              • You must keep accounts and recordsto support the information provided when you complete your quarterly PPT return.
              • Your accounts must show how you have worked out the figures you submit on your PPT return, and your records must show the evidence to support these figures.
              • You must keep your accounts and records for at least 6 years from the end of the accounting period, and record weight in tonnes, kilograms, and grams.
              • You will need to pay any tax due through your online PPT account. You can pay via Direct Debit, BACS, CHAPS, Debit/Corporate credit card or Faster Payments.
              • For a reminder of these steps and all return and payment dates for 2022-23, download the PPT flyer.

              See: Plastic Packaging Tax – GOV.UK (www.gov.uk)

              Need more information?

              Do you need further support on the Plastic Packaging Tax? 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.

              Our fantastic team at A&C Chartered Accountants are here to help.

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                By Katie Business Advice • Tax Advice • Tax News 0 Comments

                VAT – Charging the correct rate

                The VAT rules are becoming increasingly complex and businesses need to ensure that the correct rate is applied to the goods and services they supply.

                HMRC have recently updated their guidance on VAT rates. It provides a list of goods and services which you can check to determine which rates of VAT apply and which items are exempt or outside the scope of VAT: VAT rates on different goods and services – GOV.UK (www.gov.uk)

                The guide is not a comprehensive list, and you may need to check the appropriate VAT Notices that deal with certain supplies in more detail. We can of course assist you if you are unclear on the correct rate to apply.

                Need more information?

                Do you need further support on VAT rates? 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.

                Our fantastic team at A&C Chartered Accountants are here to help.

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                  By Katie Business Advice 0 Comments

                  Fraud and scam protection for your business

                  Fraud and scam protection for your business

                  Companies House incorporate and dissolve limited companies. They register company information and make it available to the public. They have recently updated their guidance on how to protect your company from fraud and scams and how to report it:

                  See: Companies House – GOV.UK (www.gov.uk)

                  Need more information?

                  Do you need further guidance on fraud and scam protection? 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.

                  Our fantastic team at A&C Chartered Accountants are here to help.

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