Business Advice

Keeping on Top of your Accounts 150 150 Stepping Stones Accountancy

Keeping on Top of your Accounts

In our latest animated video we give an example of how Stepping Stones can helping you stay on top of your accounts.

Cashflow Forecasting | Business Support with Cashflow | Accountancy Help Bristol | Help Planning Cashflow
Cashflow Forecasting 758 513 Stepping Stones Accountancy

Cashflow Forecasting

Cashflow has never been more important for businesses than in 2020. The Coronavirus pandemic has shaken businesses to the core and with the potential of a second wave a potential second wave, company owners are left wondering if their business can survive another lockdown.

With government support tapering and uncertainty about what the next few months hold, cashflow forecasting is vital to understand the position of the business. Historically, many owners have worked this out in their heads or in convoluted spreadsheets but the danger is that something gets forgotten and a large, unaccounted for, outgoing could cripple the business.

Now, more than ever, accounting software is vital. A simple, easy to understand, forecasting tool that helps businesses understand their financial position and identify areas for concern, before they become overwhelming, is something that can help businesses navigate the turbulent months ahead. By understanding the business needs in advance, company owners can try to mitigate any risks identified, putting them in a stronger position to survive any further lockdowns that may come.

Our job is to guide you through the implementation and interpretation of the data in order to provide accurate cashflow forecasting. Making the process as simple and easy to manage as possible will ensure that you have real time data, providing accurate updates at any time to help underpin any vital business decisions that need to be made.

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

Flexible Furlough Planning | Accountancy Help with Furlough Scheme | Advice on Coronavirus Job Retention Scheme
Flexible Furlough Planning 758 513 Stepping Stones Accountancy

Flexible Furlough Planning

The Flexible Furlough Scheme was launched by the Government on the 1st July as the next stage of the coronavirus job retention scheme. It was designed to replace the initial furlough scheme and provide employers with more flexibility with regards to bringing staff back to work on a part-time basis.

Full details of the scheme can be found on the GOV.UK website however, the following provides a useful summary of the key points:

  • The scheme is operational from 1st July 2020 until 31st October 2020.
  • Claims can only be made for an employee under the new scheme if they were furloughed under the old scheme for 3 consecutive weeks between 1st March 2020 and 30th June 2020. This means that the 10th June 2020 was the latest date by which an employee must have been furloughed for the first time.
  • There are exceptions to this rule which include military reservists and employees returning from statutory parental leave.
  • All employees who were part of the old furlough scheme are eligible for the new flexible scheme.
  • From 1st August employers must start paying NI and pension contributions again.
  • From 1st September employers must contribute towards the cost of employees’ wages again. The amount of government support available will be tapered until the end of October.
  • Employers are able to decide the working hours and shift patterns of their employees. This provides companies with the flexibility to utilise staff as much, or as little, as needed.
  • Working patterns will need to be confirmed weekly in order to make a claim under the scheme.
  • Working patterns must be notified to employees in writing.
  • There is no minimum furlough period.

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

Difference Between a Grant & A Loan 150 150 Stepping Stones Accountancy

Difference Between a Grant & A Loan

In our latest animated video we answer popular question of what is the difference between a grant and a loan.

State Aid & Covid-19 | Accountancy Support for Business in Bristol | What is State Aid | Can State Aid Help Me
State Aid & COVID-19 758 513 Stepping Stones Accountancy

State Aid & COVID-19

With the current COVID-19 crisis many businesses continue to seek government support to help them with the uncertainty of the months ahead. Whilst this aid is undoubtedly a lifeline for many, it could lead to potential problems in the future as businesses that benefit from such schemes can be said to be benefitting from State Aid.

Under EU legislation, a business can be said to be benefitting from State Aid if it receives aid from an EU member state which could distort competition and trade within the EU. This aid can be in the form of grants, tax breaks or loans and if it is deemed to be only available to certain sectors or industries, then it falls within this remit.

However, schemes that are universally available and not restricted to designated sectors or business size, such as the job retention scheme and deferral of VAT and income tax payments, are not classed as State Aid. Further, the business rates relief available for retail, leisure, hospitality and childcare nurseries are also not classed as State Aid, due to the colossal impact that COVID-19 has had on these sectors.

Monies received under the small business grants fund (SBGF) are classed as de minimis State Aid, providing that they fall under the ceiling of €200,000 over a rolling 3-year period, and as a result do not need EU approval. Though all companies benefitting from the SBGF are required to complete a declaration confirming that the aid does not exceed the threshold, including any previous non-COVID-19 related de minimis aid claims.

In order to support businesses in this tumultuous time, the EU have established a temporary framework within which several State Aid measures can be approved rapidly, whilst still being compatible with the EU’s internal market. The UK State Aid that sits under this temporary framework includes:

  • Retail, hospitality and leisure grant fund (RHLGF)
  • COVID-19 business interruption loan scheme (CBILS), interest and other direct payments
  • Bounce back loans
  • Statutory sick pay (SSP) reclaims
  • SBGF claims that exceed the de minimis cap (see below)

All of these measures are subject to a combined overall cap of €800,000 apart from the CBILS and Self-Employed Income Support Scheme.

If you have any questions on state aid feel free to call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk

How do I Register my Accountant as my HMRC Agent? 1024 541 Stepping Stones Accountancy

How do I Register my Accountant as my HMRC Agent?

We regualrly get asked, “how do I regsiter my accountant as my HMRC agent?”. You will find all the answers in our fun animated video.

Adjusting a CJRS claim for Employment Allowance | CJRS Advice Bristol | Covid-19 Business Support Bristol
Adjusting a CJRS Claim for Employment Allowance 758 513 Stepping Stones Accountancy

Adjusting a CJRS Claim for Employment Allowance

The Coronavirus Job Retention Scheme (CJRS) has been set-up by the Government to enable companies to claim up to 80% of an employee’s wages plus any National Insurance or pension contributions during the coronavirus crisis. However, many companies have been left wondering what impact this new scheme might have on their ability to claim Employment Allowance (EA).

In order to provide clarity to the situation, HMRC have recently confirmed that the rules for claiming and applying for EA WILL NOT change as a result of a claim under the new CJRS for Class 1 National Insurance (NI) costs.

Those employers who are eligible can continue to utilise the EA scheme to pay a reduced amount of NIC until their allowance runs out or until the end of the tax year, whichever is soonest. (Currently the employment allowance scheme enables eligible employers to reduce their annual NI liability by up to £4,000). Eligibility applies to a business or charity where their NI liabilities were less than £100,000 in the previous tax year.

In order to calculate how much National Insurance Contributions an employer can claim back through the scheme, they simply need to subtract any EA that is used in a specific pay period. If the employer finds that the amount of EA being claimed will not cover the total employer NIC which is due, then grants are available.

If an employer chooses to delay their EA claim and as such they have employment allowance that is unused at the end of a tax year, then they can use it to reduce other tax costs.

It is important to note that any business needs to make sure they are not receiving relief for the same costs twice, as this can be considered as fraud and may result in claims being investigated. This is where it is best to consult with full qualified accountant who will be able to provide advice, guidance and support for such matters.

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

Getting Disincorporation Right | Change Business From Limited | Accountancy Help Changing Business Status
Getting Disincorporation Right 758 513 Stepping Stones Accountancy

Getting Disincorporation Right

Sadly, the COVID-19 pandemic has had a huge impact on the small business community, some will need to close their doors and others will need to find new ways to adapt.

The word “disincorporation” is something that will be on the lips of many business owners. It is the process which enables the transformation from a limited company to a sole trader, partnership or limited liability partnership (LLP). A business owner will take this decision because they want to move away from the stresses of running a limited business, where specific rules and obligations have to be adhered to.

Whilst there are broad benefits in trading as a limited company, especially with tax efficiency measures that can be employed, it can also prove stressful and difficult to justify the additional costs and operational constraints which have to be adhered to.

Moving away from a limited business will provide more flexibility and less complicated methods of withdrawing money. The one downside though, if you do opt for the disincorporation, is that it can be quite a complicated process. If you would like to discuss the advantages and benefits, please feel free to call out team on 01173 700 079.

Subcontractors and the Construction Industry Scheme | Payment Advice for Subcontractors | HMRC Advice & Guidance
Subcontractors and the Construction Industry Scheme 758 513 Stepping Stones Accountancy

Subcontractors and the Construction Industry Scheme

The Construction Industry Scheme (CIS), in its present form, has been around since 2004 but not everybody is clear on what is required and who it applies to. In essence the scheme means that when subcontractors are working for a contractor, that contractor must deduct money from their pay on behalf of the HMRC as an advance payment towards the subcontractor’s tax and National Insurance.

Whilst Subcontractors are not legally required to register with the scheme, they are technically penalised if they do not. Instead of the designated 20% deduction for those that are registered, the contractor is required to deduct 30%.

Anyone who does construction work for a contractor, as either a sole trader or limited company contractor, can register as a subcontractor on the scheme, this includes:

  • preparing the site, e.g. laying foundations and providing access works
  • demolition and dismantling
  • building work
  • alterations, repairs and decorating
  • installing systems for heating, lighting, power, water and ventilation
  • cleaning the inside of buildings after construction work

However, there are a number of exceptions from the scheme:

  • architecture and surveying
  • scaffolding hire (with no labour)
  • carpet fitting
  • making materials used in construction including plant and machinery
  • delivering materials
  • work on construction sites that’s clearly not construction, e.g. running a canteen or site facilities

Under certain circumstances it is possible for subcontractors to make a request to the HMRC to receive their gross earnings and pay their tax and National Insurance themselves at the end of the tax year. However, there are a number of criteria that subcontractors must meet in order to be eligible for this. More information is available from GOV.UK

At Stepping Stones we work with many companies within the construction industry and as such are well placed to provide advice and guidance to both contractors and subcontractors. Why not give us a call and see how we can help you, we would be delighted to work with you.

VAT Oddities | UK VAT Rules | VAT Advice Bristol
VAT Oddities 758 513 Stepping Stones Accountancy

VAT Oddities

VAT rules are known for their complexities and the headaches that they can cause businesses around the UK. But it’s the peculiarities of the system that can have people scratching their heads, particularly in the world of food!

Recently, the case of Nesquik flavoured milk has been highlighted. Bizarrely chocolate flavoured milk is already VAT exempt, however, strawberry and banana are classed as standard rated and so 20% VAT is applied. Nesquik tried, and lost, to argue that all three flavours should be exempt

Fancy a biscuit with your milkshake? Depending on whether or not it has chocolate on can make all the difference when it comes to VAT. A plain biscuit, traditionally a zero-rated product, when coated in chocolate, a standard rated item, suddenly becomes a luxury item and has 20% VAT added.

Sounds fairly straight forward? Think again. If the chocolate is included inside the biscuit, in the case of chocolate chip cookies, it is back to being zero rated. This is also the case where the chocolate is sandwiched between two biscuits.

Think that is peculiar? Spare a thought for the poor gingerbread man. If he just has two chocolate eyes there is no VAT charged, but as soon as he starts to put on any clothing made from chocolate, such as trousers or a nice smart bow tie, he suddenly has VAT added.

And don’t even mention Jaffa Cakes….. McVities have very cleverly argued that they are classed as a cake not a biscuit and so no VAT is not applied despite being coated in chocolate.

VAT rules – they really take the biscuit!

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