Business Advice

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.

Accountancy Advice When Starting A New Business | Accountants for Start Up | Accountancy Help for Business Start-Up
Accountancy advice when starting a business 758 513 Stepping Stones Accountancy

Accountancy advice when starting a business

The COVID Pandemic has seen many changes to the world of employment across the world. From remote working whilst home-schooling to zoom meetings from makeshift home offices, the workplace landscape has changed dramatically. Many businesses were forced to scale back their workforce and many industries had to shut completely. Indeed, 16 months ago many of us had not even heard of the word furlough!

They say though necessity is the mother of invention and never has this been truer than over the last year. Indeed in 2020 Companies House saw a significant surge in first-time entrepreneurs seizing the opportunity to turn an idea into a reality. Whether it was new business ideas as a result of life with COVID or those that had been dreaming of being their own boss for a long time, many individuals decided it was the right time to take the plunge.

As an accountancy firm we recommend that for those just starting out, there are a few basic steps which need to be covered to ensure a successful start.

Firstly, ensure that you have a business bank account. Many sole traders try to make do with using their personal bank account but having a separate business account makes it easier to separate personal and business transactions and simplify tax returns.

Secondly, good cashflow is vital. Monitoring income and expenditure enables you to make informed business decisions, pay your suppliers and keep on top of outstanding payments. This can be done easily with one of the many software programmes available, which your accountants can then use to assist you with your end of year accounts.

Knowing where to go to access funding is vital for any growing businesses. Whether it is your bank, invoice and asset financing or peer-to-peer lending making sense of all the options can be tricky and something which your accountant can help you navigate.

Lastly, setting up in business can sometimes feel like quite a lonely place to be, particularly if you have come from a busy office environment to being a sole trader. Long hours and long to do lists can be all consuming. This is where meeting like-minded individuals can really help. Your accountant will know others in the same boat as you and the local business networks which will be good to join. Never be afraid to ask for advice or recommendations, having someone to talk to can make a big difference when you are starting out.

If you have any questions or are in need of any help please feel free to call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk.

Flexible Working | Advice on Flexible Working | Accountancy Support | Proactive Accountants Bristol
Flexible working 758 513 Stepping Stones Accountancy

Flexible working

The way we work has fundamentally changed over the last 16 months. Technology has allowed businesses to adopt flexible working practices to enable employees to safely work from home during the Pandemic.

As life slowly begins to return to ‘normal’ many businesses have recognised the benefits not only for their employees, but also their businesses, when staff are permitted to work flexibly. Staff are happier, work-life balance is improved and as a result productivity is increased.

More and more companies, both large and small, have decided that the changes that we have all experienced in our working lives since last March should be adopted permanently. There are, as would be expected, a number of different approaches from employers across all sectors and all sizes. From allowing staff to choose how and when and where they would like to work 100% of the time to those dictating that a minimum percentage of time should be spent in the office. Whatever the approach, advances in technology and software packages mean that it is easier than ever to work remotely but with a joined-up approach.

One thing is for sure, for many, the days on Monday to Friday 9-5pm in an office are now considered old fashioned and counterproductive. The business world, along with many other parts of society, have adapted and changed their practices, leading to a more flexible way of earning a living whilst maintaining high standards of work and enabling quality time to be spent with our families and friends.

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

5 Tips To A Smooth Tax Return 150 150 Stepping Stones Accountancy

5 Tips To A Smooth Tax Return

If you apply our simple tips you can be assured that your tax return will be a lot easier to complete.

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