Business Advice

A Change In VAT Charges As A Result Of Brexit | VAT Help Brexit | VAT Advice
A change in VAT charges as a result of Brexit 758 513 Stepping Stones Accountancy

A change in VAT charges as a result of Brexit

As we prepare for the impact of Brexit, our European Union customers could be entitled to some VAT-free services.

Any business that is expecting their taxable supplies to be less than £83,000 (which is the deregistration threshold) for 2021 can deregister from VAT on 31st December 2020. Alongside this there are other scenarios of non-chargeable VAT.

If you are a business supplying to a consumer (B2C) that is a resident outside of the EU then no VAT needs to be charged. As an example, if you provide accountancy services to an EU country then prices will need to include the 20% VAT but if the customer is outside the EU (for example in Johannesburg) then no VAT is charged. 

As of 1st January 2021, legislation is being changed so that services provided to customers who are not in the UK, but who still remain in the EU, will not be charged VAT. This means that outside of the UK no VAT charges will apply for the direct business sales of items to consumers. Full details can be found via this link – https://www.legislation.gov.uk/ukpga/1994/23/schedule/4A.   

Although companies can deregister for the VAT scheme if they will be solely working with clients outside of the UK, it is their choice, and they can still remain part of the scheme. This then means that any work within the UK which they receive from a supplier, classed as input tax, enables them to claim back as UK expenses.

In summary the new regulations coming in to force on 1st January 2021 will provide some VAT saving opportunities for UK suppliers of business-2-consumer products dealing with any company outside of the UK. The key benefit will be a decrease in tax yield from the HMRC.

If you have any questions or need some help in regard to VAT charges please call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk.

Adapting Diversification & Your Accountant | Managing Company Data | Proactive Accountants Bristol
Adapting, diversification and your accountant 758 513 Stepping Stones Accountancy

Adapting, diversification and your accountant

The word adapt has never been so important. In today’s unusual landscape, the impact of the Covid-19 pandemic has affected everybody. Every business has had challenges to overcome and virtually all have had to adapt. The key element for most businesses was the need to embrace the digital world and implement key changes to stay connected with staff, clients and suppliers.

In the world of accountancy, the perception is of a behind-the-scenes company specialising in crunching numbers, completing mundane tax returns and taking care of payroll. However, modern accountancy practices are becoming a far more valuable asset, especially with the introduction of new technologies. Adapting to becoming people focussed and data-led is a must for any proactive accountancy firm. Where the use of technology allows for virtual conversations, managing data, creating automation and much, much more.

Real-Time Data

Having management data on hand that provides accurate and real-time information along with key insights is vital for any business. An accountant will process a lot of data and often will know much more about a business than its employees. Providing real-time data allows a business to effectively plan and manage both finances and business objectives.

Accurate Data

Remaining one step ahead is vitally important. Having accurate data on hand so immediate decisions can be made is crucial. Gone are the days of taking months to process business receipts and then manually checking figures for inaccuracies. Robust data is at hand for any business to use for making informed business decisions such as salary reviews, profit and loss analysis or payroll benchmarking.

Cloud Accountancy

One of the most effective accountancy solutions for a business is the switch to cloud accountancy. Utilising solutions such as Xero, QuickBooks or Clearbooks can be game changing and will help to tackle pain points. For example, late payments can be flagged immediately so that cash flow planning can be effectively managed.

A New Style of Business Coach

The role of an accountant is so important to any business. Over the past couple of years with advances in technology, the ever-changing business landscape and market demand, a business must have immediate access to all of their financial data. In fact, gone are the days where you don’t have any interaction with your accountant until the obligatory end of year accounts, they now form a vital part of a business. Building personal relationships of trust, advice and guidance is critical for an accountant to be recognised as an important cog in the business wheel. Today’s accountancy role can be seen as more of a business coach where advice can be given on data analysis, strategic growth guidance and diversification.

Should you have any questions or need some support please call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk.

Gifts To Clients 150 150 Stepping Stones Accountancy

Gifts To Clients

Do you know what you can purchase in order to say thanks to your clients for their support in 2020? This animated video provides full details one what options you can select along with the money you can spend.

Top Tips for Farming Accountancy | Accountancy Help for Farm | Farmers Accountant | Accountant Specialising in Farming
Top Tips for Farming Accountancy 758 513 Stepping Stones Accountancy

Top Tips for Farming Accountancy

The farming industry is unique. It is one that supports the entire country through produce, crops and livestock. When you envisage a farm as a business then you realise quite how many variables there are to it and what a complex operating structure it has. Key areas that have to be constantly monitored are government subsidies, changes in use of land and environmental impacts. All of which can have an impact on both profit and loss.

When you consider the accountancy practices of a farm there are multiple factors to take into account, including assets, liabilities, costs and revenue. This can make it a very complex process, so we have pulled together to key areas to consider:

  • Land – land is an asset and the cost to maintain this should always be considered. Key costs for drainage, irrigation, fertiliser, soil management, weed removal and pest control all need to be accounted for. Also, if your usage in land changes then this needs to be clearly recorded ensuring that your business accounts are kept up to date
  • Government subsidy schemes – farmers can often claim for government subsidies, especially during difficult or lean periods, to ensure the whole country will not run out of food. Keeping track on these subsidies, monitoring when they change and accurately accounting for them is vital
  • Accounting calendar – make sure that your farm accounting calendar is aligned with the Government one. Often if livestock is born early or late, they are classed as out of season and might not fit into the governments specific “definition of age”. Aligning calendars means that you go by the Government’s definition of ages, even if it is not factually correct.
  • Stock – every head has a value and therefore it is important to continually update all stock levels and keep accurate account of your animals.
  • Recognising depreciation – all new equipment can depreciate so make sure that costs are offset against tax. Also, the value of used equipment will continue to depreciate so you should make sure that you continue to monitor the value of your equipment.
  • Loss – farmers are often hit with losses due to the environment and in particular bad weather. Keeping track of all losses is important, it can have an impact on your tax bill and you don’t want to be taxed on something that has been destroyed.
  • Software and profitability – it can be difficult to stay on top of all of your accountancy needs. Implementing specific software will ensure a much simpler process and give you immediate access to critical reports such as profit and loss, forecasting and cashflow.
  • Technology – embracing technology will help with the day-to-day running of the farm and help you easily manage suppliers, partners and resources. It also enables farmers to check on important farming needs such as stock prices, purchasing trends and weather forecast.

If you are looking for some accountancy support for your farm, then our team at Stepping Stones would be delighted to help. Feel free to call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk.

The role of a Management Accountant | Can A Management Accountant Help | Management Accountant Bristol
The Role of a Management Accountant 758 513 Stepping Stones Accountancy

The Role of a Management Accountant

Distractions are a day-to-day occurrence for any business owner. To ensure a business runs smoothly it’s not just about meeting the needs of your clients, you also have to make sure that your staff are OK, your marketing is working and perhaps most importantly that you have the correct accountancy infrastructure in place. Does a business owner really want to commit a large proportion of their time to ensuring that they stay on top of their accountancy needs?

This is where a Management Accountant can really help, saving a business owner both time and money. Aside from taking care of the monthly needs such as payroll and VAT returns, a Management Accountant can really embed themselves into an organisation and become a valuable resource to any business owner. They can assist with:

  • Helping to improve cashflow by exploring payment terms to both customers and suppliers, ensuring that they all are aligned correctly
  • Exploring all overheads to identify if savings can be made and to flag up any unusual or excessive spending
  • Business planning, reporting on interesting trends that could encourage a new focus or the ability to diversify

These are just a couple of examples; the role of a Management Accountant is diverse but ultimately it is to assist with the strategy and direction of a business. Of course, with no two businesses the same, a Management Accountant has to be able to adapt to each and every individual customer. A small business with 3 employees and turnover of £200,000 will clearly need different support to a medium sized business with 100 employees and a turnover of £5 million.

A good Management Accountant will not try to steer their clients into a “one size fits all mentality”, instead they will embed themselves into an organisation and adapt their own processes to suit the requirements of that of the individual client.

Should you have any questions or need some support please call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk.

Help With Self Assessment Deadline 150 150 Stepping Stones Accountancy

Help With Self Assessment Deadline

Do you know what the self-assessment deadline is? Do you know what expenses you can claim? This video will explain all about it.

VAT Reverse Charges for Construction Industry | Help with VAT Reverse Charges | Vat Advice for CIS | Construction Industry Scheme Advice Bristol
VAT Reverse Charges for Construction Industry 758 513 Stepping Stones Accountancy

VAT Reverse Charges for Construction Industry

Individuals operating in the Construction Industry need to be aware that from the 1st March 2021 there will be a change in how VAT will be handled. Originally these changes were due to start in October 2019, but they were delayed initially due to Brexit and then subsequently by the Coronavirus pandemic.

The VAT domestic reverse charges for the construction services is, in essence, an extension to the Construction Industry Scheme (CIS). It will apply to any business transactions between VAT registered contractors and sub-contractors that have to be submitted under CIS.

Reverse charges will apply when:

  • VAT is charged in regard to construction services and materials
  • VAT is paid at a standard or reduced rate
  • A UK project is initiated between a VAT registered supplier and a VAT registered customer
  • Both the supplier and customer are registered for CIS
  • Neither the supplier nor the customer is connected in any way

According to the HMRC, they have introduced this initiative to help combat fraud. There have been many cases where construction businesses charge VAT and then decide to stop trading which ultimately means that they take with them between 5% to 20% of additional profit due to the VAT that they have charged.

Ultimately, as with any change of this nature, a business will need to make some significant changes:

  • Staff will need extra training to recognise CIS projects
  • All accountancy and bookkeeping practices will need to be updated to account for the changes in invoicing and reporting obligations
  • The VAT Flat Rate Scheme can no longer be utilised
  • No cash payments can be accepted
  • The cashflow needs of a business will change and consideration might be needed to file monthly returns

In summary, the construction activities that VAT reverse charges apply to are:

  • A building or structure project that has some form of construction work which includes alterations, repairs, extensions or even demolition
  • Any work on a piece of land that includes construction activities for walls, power lines, electrics, water, pipelines and sewers
  • The installation of lighting, heating, air conditioning, power supplies, drainage, water supply and fire protection
  • Painting and decorating of any internal or external surfaces of a building

Should you have any questions or need any further information in regards to the VAT reverse charge scheme please call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk.

VAT Charges for Online Marketplace | VAT Advice for Selling Online | VAT Help Bristol | VAT Advice Online
VAT Charges for Online Marketplace 758 513 Stepping Stones Accountancy

VAT Charges for Online Marketplace

More and more people are setting up their own businesses as a result of COVID-19, whether it be because of redundancy or just taking a fresh look at life following lockdown and deciding to make a change.

When these businesses start out though they only have a small client base, so for these vendors the quickest route to get their goods or services to a larger market can be via a third-party online marketplace such as Etsy or Amazon.

Whilst this is an attractive and seemingly simple way to reach new customers, there are some considerations that need to be taken into account when selling in this way, such as commission fees, transaction charges and VAT charges. Things to be aware of include:

  • VAT is payable on the full price of the product or service, not the net amount after fees have been paid to the online marketplace.
  • If the online marketplace is based outside of the UK, as is often the case, a UK business that is VAT registered must apply the reverse charge on their VAT return.
  • If the sales are to EU based customers, as of the 31st December 2020 it is important to remember that the transitional deal ends and VAT will be charged at the rate of the customer’s country where applicable.
  • Sales to UK customers will be at standard rate.
  • Sales to customers outside of the EU are not liable for VAT.
  • Where a business is not VAT registered, any payments to overseas suppliers are treated as taxable sales.

The rules can seem somewhat complicated so if you are unsure about how they apply to your business it is important to seek advice from and accountant who will be able to clarify what VAT payments are due.

If you have any questions or need some assistance then please call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk

The Client Journey 150 150 Stepping Stones Accountancy

The Client Journey

In our latest animated video we give an example of how simple it is to outsource all of your accountancy needs to Stepping Stones.

The Power of Diversification | Accountancy Support for Diversification | Helpful Accountant in Bristol
The Power of Diversification 758 513 Stepping Stones Accountancy

The Power of Diversification

In today’s ever-changing landscape many businesses have had to take the approach of adapt or face the harsh reality of closing their doors. This is especially true for the retail sector.

For example, the local fruit and veg supplier with a small shop on the high street will testify that they had to be innovative and resilient in order to survive. With everybody locked down and shops closed nobody was able to call and shop for their fresh fruit and vegetables, instead they had to diversify and accept orders online and via telephone, then deliver door to door.

Very quickly they had to put in place a simple online ordering system which customers could use and then plan a logical delivery route in order to efficiently fulfil the orders. After 1 week the shop had tripled its orders and were asked if they could expand their product range to include other items. So, in order to meet the demand, they were able to introduce an additional 200 products to their range.

The long-term future also looks bright and the shop has opened its doors again which means that not only can it can now offer more products, it provides customers with the choice of purchasing face to face, via telephone or online and can deliver to homes within a 15-mile radius. All of which they had not even considered prior to COVID-19.

The one area that really helped the shop was the role of their accountant. They spoke at great lengths with their accountant who provided advice, recommendations and guidance on what to do and what would be needed in order to meet the demands of a varying client base. Any small business needs to be surrounded by good people and an accountant can become a very valuable business partner both in good times and bad.

If you own a business and are thinking about diversifying, then our team would be delighted to answer any questions. Please call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk

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