Business Advice

Should Office Parties Get A Tax Break | Business Tax Advice | Tax Savings for Business
Should office parties get a tax break? 758 513 Stepping Stones Accountancy

Should office parties get a tax break?

As the festive season is fast approaching many companies have finalised their plans for a little fun and laughter choosing to bring back the traditional office party. The key question many are asking is, can they get a tax break?

It appears that the simple reason for asking is that companies want to further encourage staff members to return to the office and funding a Christmas party is seen as a positive step towards that. It will also further boost the hospitality sector, who have been one of the most heavily impacted industries by COVID-19.

Requests are being made of the Government to aid in this by relaxing some of the rules around Christmas parties (or similar events). It is also believed that there is a growing interest for the Government to increase the “tax-free” allowance per employee from £150 per person to £300 per person.

Key reasons for proposing the increase are:

  1. Companies can use this increase to offer thanks to their employees without having to worry about tax implications through the benefit-in-kind restrictions.
  2. Rather than a bonus scheme, a business can thank all its employees as a united team, rewarding everybody in the same way.
  3. As previously mentioned, it boosts the desire to encourage more people to start working back in the office which also results in more activity in town centres and urban areas.
  4. Finally, it gives confidence to people who might previously have been reluctant to get back to working in an office.

As a reminder, and as it currently stands, the tax-free allowance applies to any event in a calendar tax year. It is possible to hold more than 1 event but the total cost cannot be any more than £150 per head (with the hope of this increasing to £300 per head).

If you have any questions around tax and benefit-in-kind, please call us on 01173 700 079 or email hello@steppingstonesaccountancy.co.uk.

What Happens Behind The Closed Doors Of An Accountancy Practice | Why Use An Accountant | Accountant in Bristol
What happens behind the closed doors of an accountancy practice 758 513 Stepping Stones Accountancy

What happens behind the closed doors of an accountancy practice

Most businesses only think about hiring an accountant once a year when it is time to complete their tax return and they’re struggling. But an accountant can add so much more value to your business. Naturally, they can help with your tax return, but their knowledge and skills can be a true asset to your business if you work with them throughout the year.

Here are our 6 jam packed points you may have not known about.

ONE – Accountants have a license to practice and that doesn’t happen over night. Years of studying is behind it. They have to prove they have the correct qualifications, are committed to programme of continual learning and have completed an anti-money laundering course. Vitally important is the professional development, which helps when HMRC/Government makes announcements. Accountants do NOT even get a month notice from the government about changes so they must be prepared for when the change actually happens.

TWO – Accountants have a plethora of tools designed to accurately record and process data along with making it readily available and easy to access for all customers. This makes analysis much more simplified and saves customers a huge amount of time when providing all relevant data.

THREE – Communications are streamlined thanks to the use of systems such as QuickBooks, Receipt Bank, Sage or Xero. Both the client and the accountant can feed data directly into these systems. They can also be automatically updated with all necessary changes implemented by the Government. Of course, these systems are also 100% compliant to all GDPR requirements.

FOUR – Time is being saved by an accountant completing a tax return. By completing your own tax return your focus is taken away from your day job meaning a loss of revenue. It could cost just £300 for an accountant to complete a tax return, in reality it could be double or triple that with the time a solopreneur takes to complete a return and therefore loosing revenue as their focus is away from their day-to-day business.

FIVE – An accountant knows exactly what is required for a tax return, they will look at many areas that individuals just wouldn’t event consider such as allowable expenses & claiming for working from home/mileage/telephone, profit from equipment sales, donations to charity, VAT charges, tax planning and pension contributions…

SIX – Finally an accountant will also ensure you know exactly what is happening. They will keep you up to date with reminders, e-mails and when payments need to be made. Alongside this they are also available to answer any questions or offer guidance as and when you need it.

Remember YOU DON’T KNOW WHAT YOU DON’T KNOW – that is when we come into the picture.

If you have any questions or need help with a tax return, please call us on 01173 700 079 or email hello@steppingstonesaccountancy.co.uk.

Capital Gains 150 150 Stepping Stones Accountancy

Capital Gains

In the animated video we provide some key facts as to what you need to know in relation to Capital Gains.

A New VAT Threshold for the Hospitality Sector | New VAT Threshold | What is VAT Threshold | Are the Different VAT Rates
A new VAT threshold for the hospitality sector 758 513 Stepping Stones Accountancy

A new VAT threshold for the hospitality sector

On 1st October a new VAT rate of 12.5% was introduced for the hospitality industry, this temporary rate now means certain businesses will have to deal with four different rates of VAT. These consist of 0%, 5%, 12.5% and 20%. Fortunately, this will only be for a short period of time as the 12.5% scheme will only run until 31st March 2022.

Who is affected by the new rate?

Those impacted with this new rate are suppliers to the hospitality sector. Since July 2020 they would have been charging VAT at the rate of 5% but will now have to charge VAT at the rate of 12.5%.

What happens to any invoices not yet paid?

For any invoices that were raised at the original 5% VAT rate and providing they were issued before 1st October 2021 nothing changes. Alongside this, if for some reason these invoices need to be adjusted, such as a drop in price or a cancelation, then changes can still be made with the 5% rate also still applying.

Changes also to the flat rate scheme

Further changes which should be highlighted are the new percentage rates applicable from 1st October, as part of the flat rate scheme (FRS).

  • Catering (which includes restaurants, café’s, food outlets and takeaways) – The 4.5% rate has increased to 8.5%
  • Hotels (including all types of accommodation) – The 0% rate has increased to 5.5%
  • Public Houses – The 1% rate has increased to 4% 

It should be noted that a business may need to account for the 2 different flat rate charges. For example, if you are in the Catering field and complete a VAT return for August, September and October then you will need to account for VAT charges of 4.5% for 2 months and then 8.5% for the third month.

Staying on top of the changes

Of course, when any new changes are implemented, there can be confusion as to what VAT charges should be made. The most reliable solution will be to make sure your online accounting software is able to adapt to the 4 different rates. Failing that seek professional help and speak to your account who can advise you.

If you are looking for some help, then feel free to call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk.

 

Why do we need quarterly updates with Making Tax Digital (MTD) | Tax Advice MTD | Advice on Making Tax Digital
Why do we need quarterly updates with Making Tax Digital (MTD)? 758 513 Stepping Stones Accountancy

Why do we need quarterly updates with Making Tax Digital (MTD)?

As the Making Tax Digital (MTD) scheme continues to gather momentum there are many business owners still unsure of their commitments. However, the requirements can be broken down into 4 key measures which determine why taxpayers (even those who may have a small turnover as little as £10k) are required to provide a breakdown of income and expenses. This needs to be done via an online accounting platform which is approved by MTD and submitted every quarter.

Keeping up to date

By submitting a quarterly return, a business is keeping up to date with their returns and complying with their commitments to MTD. The regulations state that a quarterly filing deadline needs to be submitted online.

More accurate provision for tax payments

Any profit which is reported within the quarterly updates will allow the HMRC to provide an estimate of the tax payments a business might have to make during the tax year. The clear benefit of this is that a business will know how much tax they need to pay and when they will need to pay it, thus allowing for accurate budgeting.

Vital business analysis

Whilst a small business might think their quarterly tax return is only important to them, it is also a very useful tool for the HMRC. Being able to evaluate the data received from tax returns enables them to provide some informed and critical business analysis in relation the state of the economy.

Penalties for late submissions

To ensure businesses recognise the importance of quarterly submissions, HMRC will be implementing penalties to anybody who fails to comply. Penalties will be based around a points system, where any late submission means points added to an account. When a designated number of points are accrued a fine will be issued. Points will stay on record for 24-months after which they will be wiped from the record. To find our more please follow this link – https://www.gov.uk/government/publications/penalties-for-late-submission/penalties-for-late-submission

If you have any questions in relation to Making Tax Digital our team would be happy to help. Please call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk.

Bounce Back Loan & What To Expect 150 150 Stepping Stones Accountancy

Bounce Back Loan & What To Expect

This animated video provides details on what options are available now that Bounce Back loans are due to be repaid.

Struggling to Repay Your Bounce Back Loan | Advice on Bounce Back Loan | Help with Bounce Back Loan Repayments
Struggling to repay your Bounce Back Loan? 758 513 Stepping Stones Accountancy

Struggling to repay your Bounce Back Loan?

When Bounce Back Loans were introduced in March 2020, they were hailed as a lifeline for many businesses whilst the growing pandemic crisis was impacting their business. The loans enabled businesses to secure funding of up to £50,000 without providing a personal guarantee and in addition there was nothing to pay for 12 months. Many businesses took these out in good faith expecting life to return to normal in the foreseeable future. Who could have predicted though that all this time later, many businesses are still to return to pre-pandemic operating levels?

As increasing numbers of businesses approach that 12-month anniversary and are faced with the prospect of having to start repayments, the reality is that many of them are unable to afford them. So, what are the options if you find yourself in this situation?

Firstly, the government has thankfully recognised that this situation is faced by many businesses and that they still require help. As a result, they have introduced the Pay as You Grow (PAYG) Bounce Back Loan Scheme which provides three options:

  1. Delay payments for a further 6 months even if you have not made any repayments yet.
  2. Lengthen the term of your loan from 6 to 10 years, effectively halving your repayments.
  3. Make interest only payments for 6 months, ensuring you are not accumulating more interest as you would with a payment holiday.

However, unfortunately this is still not enough for some companies as they may have several other loans which are due for repayment.

One of the advantages of the Bounce Back Loan was that it was guaranteed by the government so that in the event of a business being unable to repay the loan, the bank could seek repayment from the government. However, this can only happen if your business is declared insolvent.

If your business is still viable and making profit though then restructuring and refinancing the loan may be a better option. Discussions with your creditors to lower your outgoings may also be feasible.

For those with numerous debts it may be possible to enter into a Company Voluntary Arrangement (CVA) with the agreement of all your creditors, this will enable you to make one monthly payment towards your debt over a set number of years with a portion allocated to each creditor.

If none of this is possible and you intend to liquidate your business, then your bounce back loan would be included in the process. You can be forced into liquidation by a creditor, which is a lengthy and complicated process or you can initiate the liquidation yourself, known as Creditors Voluntary Liquidation. Following liquidation, the company will cease to exist and all loans, including the Bounce Bank Loan, will be written off. You will not be held liable for the Bounce Back Loan if you have used them in the appropriate manner as dictated by the government in the terms. This means that the funds must benefit the business and not be used for personal reasons. If you are in any doubt as to whether you may have misused the funds, then you must seek expert guidance as soon as possible.

If you have any questions or would like to discuss this further please feel free to call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk.

Claiming VAT on Mileage | Advice on Business Mileage VAT | Help with VAT Claims on Business Mileage
Claiming VAT on mileage 758 513 Stepping Stones Accountancy

Claiming VAT on mileage

Those drivers who utilise their own vehicle for work purposes, excluding their normal commute, can claim money back against the approved mileage allowance payment rate (AMAP).

The eligible amount is dependent on several factors which are dictated by HMRC. For example, an employee using a private vehicle such as a van or car for work purposes can claim up to 45p per mile for the first 10,000 miles and 25p per mile after that. The higher 45p rate considers both fuel and wear and tear on your vehicle.

Employers can also claim an additional 5p per mile for each passenger that they take with them on the nominated journey.

In order to make a claim the following information is needed:

  • Date of the trip
  • Full address of tart and end destinations
  • Milage travelled
  • Reason for the journey
  • Any passengers travelling with you (must be employed by the same company)
  • Fuel receipts

As an employer you may only claim the VAT on your employee’s mileage if:

  • The driver is directly employed by you, not contracted or freelance
  • You are paying them milage allowance for utilising their own vehicle for work purposes
  • You can only claim for the fuel part of the allowance
  • The amount you pay is equal to the fuel portion of the claim you make

For the most up to date regulations and advisory fuel rates per mile please refer to the gov.uk website. Or if you need some accountancy help please call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk.

Employing or Outsourcing? 150 150 Stepping Stones Accountancy

Employing or Outsourcing?

In our latest animated video we explore what the pro’s and con’s of employing or outsourcing new staff are.

Key accountancy dates to remember 150 150 Stepping Stones Accountancy

Key accountancy dates to remember

In this latest animated video we provide some of the key accountancy dates that everybody should be aware of.

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