General News

Increases to Minimum Wage
Increases to minimum wage 758 513 Stepping Stones Accountancy

Increases to minimum wage

April has bought a change in the national living wage; it has risen from £10.42 to £11.44 per hour. This applies to anyone who is 21 and over. The changes were announced during the Autumn statement and have now been introduced. Anybody who holds a full-time contract and is on minimum wage will now see an increase of £1,800 per annum.

A summary of these changes are as follows:

  • Apprentice: £6.40 (increase from £5.28)
  • Under 18: £6.40 (increase from £5.28)
  • 18 to 20: £8.60 (increase from £7.49)
  • 21+: £11.44 (increase from £10.18 for 21 to 22 and £10.42 for 23+)

The UK is stringent about the national living wage, and for the minimum amount a worker can be paid is set in law. No matter what the size of the business an employer cannot pay less than the minimum wage.

According to government figures, and thanks to ongoing rises, an employed person is earning more than £9,000 per annum compared to the same time in 2010.

Often people are unsure about the difference between national living wage and minimum wage. There is no difference, they both refer to the same thing. The confusion simply occurred with a change in name from minimum wage to national living wage.

Working out the rate of what the minimum wage should be is achieved through a simple process. Firstly, an independent organisation called the Low Pay Commission (LPC) will evaluate and then provide their recommendations on what they feel should be the minimum wage. In November the LPC will present their recommendations to the Government who will then review and decide on what the rate of minimum wage should be. When agreed the new rate is introduced in the following April. For anybody wanting to know more about minimum wage the Government have an excellent calculator that can be used – simply follow this link to find out more.

Finally, it is important to note that differences in the minimum wage might be likely if an employer is providing accommodation for its staff. When this occurs there is an accommodation offset that needs to be taken into consideration. In line with the recent increases in the minimum wage, there is also a change to the accommodation offset. It has risen this month to £9.99 per day (from £9.10 per day) or £69.93 per week. There are no other company benefits (e.g. company car, subsistence or childcare vouchers) that will have an impact on minimum wage.

If you have any questions regarding minimum wage or in fact any aspects of business accountancy, then our team can offer both help and support. Please call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk.

You can also book a free 20-minute call with Yarka – https://calendly.com/yarka-ssa/20min

Is Outsourcing Really A Sensible Option
Is outsourcing really a sensible option? 758 513 Stepping Stones Accountancy

Is outsourcing really a sensible option?

Businesses are continually looking at ways to implement initiatives which save both time and reduce costs. If we look solely at accountancy firms, over the past 3 years there has been a major push towards outsourcing, using third parties to complete many of the day-to-day tasks required. Often this will be to individuals or companies located overseas, who can provide very low service costs and often will turn the work around with 24 hours.

However, is outsourcing really a sensible option?

One of the key benefits associated with outsourcing is that an accountancy firm can take on extra clients without having to employ more staff. Often utilising companies located overseas where fees are very competitive. Companies can access skilled staff who are readily available to work on projects resulting in speed and efficiency, whilst also lowering costs and increasing profits.

Day-to-day activities that can be outsourced include bookkeeping, VAT returns, accounts payable, accounts receivable and preparation of financial statements.

So, if outsourcing can seem so advantageous why is it not a model adopted by all?

Upon initial review this model may seem to hold many advantages, but the negatives are far more apparent.

  • Loss of control – outsourcing overseas means less visibility of day-to-day activities which could lead to basic errors being made where these mistakes are then passed on to the end client.
  • Communications – using outsourced workers where English might not necessarily be the first language can bring issues. Combine this with different working time zones and reliance on virtual meetings where work is assigned, again errors can quickly arise. Translating what work needs to be completed can turn into a problem where misunderstanding and incorrect work delivery is experienced.
  • Security – by using a third-party company a business has little control over what they do with very sensitive client data, if data is compromised then the UK accountancy firm will be at risk of investigation and potential regulatory fines.

As an accountancy firm do we outsource?

No, it is not an operating model which we feel comfortable with. For us it is very important that all our team members are located in the same location, that they fully understand what is expected of them and that our clients are provided with continuity, no matter who they speak with. We have full operational transparency and every staff member is fully trained to ensure that they uphold our core business values with everything they do. We all understand and appreciate everybody’s role in the business, we all use the same technology and business processes, we are all focussed on providing an elite customer experience. We feel none of this is possible with an outsourced business model.

Should you have any questions regarding any aspects of business accountancy then our team can offer both help and support. Please call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk.

You can also book a free 20-minute call with Yarka – https://calendly.com/yarka-ssa/20min

Don't Fall For The Fake Tax Refund Messages
Don’t fall for the fake tax refund messages 758 513 Stepping Stones Accountancy

Don’t fall for the fake tax refund messages

The HMRC (HM Revenue and Customs) are taking a very proactive approach in highlighting a spam campaign currently on the rise which relates to false tax refund claims. Although it has been around for a number of years, it has again started to build moment with estimated figures rising by over 15% in the last 12 months.

So, what is the scam?

An email is sent which has been branded to look as though it has been issued by the HMRC, it can be very deceptive, recipients will need to carefully check the actual e-mail address used by the sender. The content of the message will be something like the following:

HM Revenue and Customs (HMRC) has sent you this notification as your eligibility has been checked. We owe you 843.78 GBP.

GOV.UK HM Revenue and Customs Gateway Claims (this will show in blue as a hyperlink)

Your reference is GHS-W3K5-OB8.

By clicking on the links in the e-mail and entering details the scammers can capture vital information when asking for bank details which they will then use for fraudulent purposes.

Why is there such a high interest now?

This time of year, is when the scam hits its peaks as more and more people are filing their self-assessment tax returns. Whilst the example above relates to an e-mail, scammers are also using both phone calls and text messages to offer fake tax refunds.

What are HMRC saying?

The warnings from HMRC are very simple, they will NOT issue any form of communication (e-mail, text or telephone) to let a taxpayer know that they are due a refund. They are also very clear that at no stage will individuals be encouraged to request a refund. If a person is entitled to money back, then this will be clearly shown on their HMRC account and payment can be made directly in to the bank account held on file. At no stage will HMRC issue a communication asking for bank details.

The HMRC are requesting that if any suspicious communications are received then they should be forwarded on e-mail to phishing@hmrc.gov.uk or if text messages received, they should be forwarded to 60599.

Should you have any questions or concerns then the Stepping Stones Accountancy team can offer both help and support. Please call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk.

You can also book a free 20-minute call with Yarka – https://calendly.com/yarka-ssa/20min

Are You Aware Of What Form 17 Is?
Are you aware of what Form 17 is? 758 513 Stepping Stones Accountancy

Are you aware of what Form 17 is?

Form 17 is an official HMRC document used to declare what the income split will be on a property, which is jointly owned, so that the correct tax payments can be calculated.

This applies to couples who are married or in a civil partnership and both own a share in land or property. However, it is only required if a split is different to the normal 50/50 percentages.

Typically, a property which is jointly owned is split evenly, however if circumstances change or for some reason this does not work for a couple then HMRC must be notified through the completion of the Form 17. This form will outline the agreed structure and will be used to take in to account the tax liabilities required by each person. It is important to note that a Form 17 is required if both parties are UK residents or if the owners are living overseas and renting the property to tenants.

Many homeowners are confused as to what is exactly needed by HMRC, so let’s provide an example. If a property is jointly owned, e.g. the deeds of ownership are in the name of 2 individuals, but the ownership is 70:30 then a declaration is needed to ensure tax liabilities are evenly accounted for. The completion of a Form 17 will officially announce to the HMRC of the property split and the tax required to be paid by each of the homeowners.

If 2 people own a property but the shares are uneven then you must complete a Landlord Form 17. 

How do I complete a Form 17?

A Form 17 is available via this link – https://www.gov.uk/government/publications/income-tax-declaration-of-beneficial-interests-in-joint-property-and-income-17. The form will need to be completed online and then printed. The printed copy will need to be submitted directly to the HMRC, so we recommend you also print a second copy for your files. When completing the form you will be asked:

  • Details on both property owners to include full name, address, national insurance and tax reference numbers
  • Full address of the property which this form relates to
  • The beneficial interest applicable to both property owners
  • A final declaration signed by both parties

Once a declaration is made to the HMRC the Form 17 needs to be submitted within 60 days, if it is not received within this period then HMRC will consider it as invalid.

If you have any questions regarding the completion of Form 17 or need some help with any aspect of business accountancy our team would be happy to help. Please call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk. You can also book a free 20-minute call with Yarka – https://calendly.com/yarka-ssa/20min

Simplifying the capital gains tax on a property when a couple separate
Simplifying the capital gains tax on a property when a couple separate 758 513 Stepping Stones Accountancy

Simplifying the capital gains tax on a property when a couple separate

Many people are still not fully aware of the changes that took place on 6th April 2023 in regards to capital gains tax (CGT) on a property when a couple separate. Previously the old rules were very inflexible where the no gain / no loss treatment could only apply for a short period of time. Whilst it is almost a year since these changes were introduced many people are still unaware of what they mean.

This blog post will explore the details further.

It goes without saying that when a couple goes through a separation it can be a very stressful period. On top of that agreeing on what happens with the assets and associated property can only add to the problems. With the introduction of these CGT changes the following rules will apply:

  • Those involved in the separation can take up to 3 years from the date of the split to issue a no gain no loss transfer on all relevant assets thus minimising any capital gains tax.
  • Any timeframes previously in place for the transferring of assets following a formal split such as a divorce have been removed.
  • If any partner has remained in the shared home then they are entitled to claim private residence relief once the property is sold.

Another major positive with this change is that all parties involved in the separation can take their time and organise all their financial matters without worry or concern that they will face liabilities in relation to CGT. The process of transferring assets is a simple one and any previous issues around dates for separation are removed.

Although on the whole these changes see a number of benefits there are still some areas to be aware of:

  • Some fees around CGT could apply if there are cash agreements in place as part of any separation.
  • If any oversees assets are involved then the no gain no loss rule will not apply, meaning tax payments could occur.
  • If assets are transferred but then later sold there is a high probability that future tax charges will be incurred.
  • Anything in relation to income tax should be treated separately. For example if a family company exists between all parties and dividends are taken then liabilities could be applied.

To conclude when a civil or marital partnership breaks up and there is the requirement for a split of assets it is very important to consider the tax positions for each party. It can be a minefield for individuals to understand especially at a time which is incredibly stressful and emotionally draining. This is why it is recommended that specialist help is sought to assist with the entire process.

For anybody that does has any questions in regards to CGT or in need of any form of accountancy help, please call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk. You can also book a free 20-minute call with Yarka – https://calendly.com/yarka-ssa/20min

Reflecting on 2023
Reflecting on 2023 758 513 Stepping Stones Accountancy

Reflecting on 2023

December is always an exciting month; businesses start to slow down and everybody looks forward to a much needed break spending time with friends and family. It is also a perfect time for reflection.

For us here at Stepping Stones it has been another enjoyable year supporting the small business community with all their accountancy needs. We have further cemented relationships with existing clients and have introduced a number of new clients working with them as their in-house accountancy department offering standard compliance services of:

  • Payroll
  • Tax returns
  • Tax planning
  • Bookkeeping
  • VAT returns
  • Year end

We have also seen growth in our management accountancy services, offering more strategic advice within areas of:

  • Business advisory
  • Compliance and incorporation

With so many areas to be positive about we are excited to see what happens in 2024.

Of course, first though we are looking forward to putting our feet up and relaxing. Our offices will be closing on Friday 22nd December 2023 and we will be back open again on Tuesday 2nd January 2024.

Finally, thank you to all our staff, suppliers and clients for their support this year.

We wish you all a Merry Christmas and Happy New Year.

For anybody that does need some accountancy help, please call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk. You can also book a free 20-minute call with Yarka – https://calendly.com/yarka-ssa/20min

What is invoice fraud?
What is invoice fraud? 758 513 Stepping Stones Accountancy

What is invoice fraud?

There are daily occurrences of spam related issues impacting people and businesses. It could be via e-mail or a telephone call and usually involve a person trying to impersonate somebody else. Their ultimate goal is to access confidential information and extract as much money as possible.

If we put this into a business context, there is currently a very popular scam running focussed on invoices. Invoice scams are common and can have a serious impact on a business’s cashflow. Often the impact of this type of fraud will mean more than £10,000 being exploited from a business from just one single invoice.

Invoice fraud occurs when a business is tricked into changing the bank details displayed on an invoice. Criminals will target businesses by impersonating suppliers. They will look to contact accounts departments and request that records on account need to be updated so that future payments are swiftly paid.

When the criminals are successful, they get paid substantial amounts which in turn means that suppliers remain unpaid and businesses have to swiftly provide a resolution. Often having to pay the cost of the invoices twice will have a serious impact on the businesses cashflow.

There are several steps that a business can take to protect themselves from invoice fraud:

  1. Carefully scan all e-mail communications, if a request for changing payment terms is made, make sure you speak to the company requesting the changes to ensure that it is legitimate. 
  2. If there are any requests for urgent payments, check their validity. It will be very unusual for a supplier to suddenly change their payment terms so a red flag should immediately be recognised.
  3. Make sure that all staff working in accounts are aware of these scams and are given the correct training in all aspects of fraud.
  4. Always be careful with e-mail attachments. Deploy security software that can quickly identify spam messages.
  5. Don’t give too much information away, for example only display the most important business information on a website and make sure any data collection is accurate and secure.
  6. When paying new suppliers, complete due diligence and only make payment when everything is 100% legitimate.

If you have any questions in regard to invoice fraud or need some help with any aspect of business accountancy our team would be happy to help. Please call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk. You can also book a free 20-minute call with Yarka – https://calendly.com/yarka-ssa/20min

How to get a mortgage if you are self-employed
How to get a mortgage if you are self-employed 758 513 Stepping Stones Accountancy

How to get a mortgage if you are self-employed

At various times in our working life, we may all have a desire to do something for ourselves and step into the world of business ownership. However, it is only a very small percentage of people that take the plunge and become self-employed. Those that do take the required steps benefit from total independence, a true love for what they do, flexibility in working hours and potentially unlimited earnings.

There are a number of excellent benefits of being self-employed. However, the one problem that can arise is with trying to secure a mortgage. Historically securing a mortgage when you are self-employed can be a challenge as lenders are concerned about the lack of evidence when demonstrating income. To help with this process there are several steps that can be taken to put a self-employed professional in a positive position when applying for a new mortgage.

  1. Preparation

Keep excellent bookkeeping records of income and expenditure, look to use an accounting system which, when populated, can prepare reports of accurate and meaningful data. Always ensure you have a positive credit score and if possible, have a good level of savings.

  1. Speak to the experts

There are several excellent mortgage advisors that specialise in self-employed mortgages. Seek their professional advice and guidance as they can complete an initial fact find, check on affordability scales and match you to the right lenders.

  1. Seek financial accounting help

Use a professional accountant to prepare all financial information. A lender will look more favourably on the application if the accounts have been prepared by experts. The credibility of providing accurate information gives a lender lots of confidence.

  1. Credit history

Try to maintain a positive credit score and if there are any negative connotations then work to address these and allow time before completing the mortgage application. It goes without saying the better your credit score, the better the chances of securing a mortgage.

  1. Positive cash flow

Try to ensure you have a positive cash flow which demonstrates that any bank accounts have a healthy credit. Where possible also have good levels of personal savings which, should income one month be slow, demonstrates that the repayment of mortgage fees will always be covered.

  1. Present the right documentation

Copies of trading history (for the previous two years), HMRC documents such as an SA302 and evidence of upcoming contractual agreements will be required when any mortgage applications are made.

Other personal information used for evidence will also be required these can include passport or driving licence, utility bills, council tax bills and bank statements.

Finally, being on the electoral register with the right to vote is also advantageous as a lender can research this and use it as verification for identification purposes and proof of address.

If you have any questions or need some help with any aspect of self-employment and accountancy support then would be happy to help. Please call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk. You can also book a free call with Yarka – https://calendly.com/yarka-ssa/20min

Explaining Sustainable Finance | What is Sustainable Finance | Understanding Sustainable Finance
Explaining sustainable finance 758 513 Stepping Stones Accountancy

Explaining sustainable finance

The word sustainable is one of the more common “buzz” words being used currently. In essence it refers to the ability of being maintained at a reliable rate without causing damage. Typically, it will be associated with a social or environmental goal.

It is also being introduced into the area of finance under the heading of sustainable finance. Sustainable finance will take into consideration areas of environmental, social and governance. The money made available under this remit is as a result of longer-term investments in sustainable and economic projects.

With the government focused on transitioning to a sustainable economy, more and more businesses are dedicating time and resources to adopt processes which carefully consider these factors. With a target of net zero, the SME sector will play an important role in social and environmental best practices.

Sustainable finance has been introduced to help businesses with their commitment in reducing the carbon footprint. Funding initiatives like this help in 5 key areas:

  • Developing financial solutions which bring broad benefits and help deliver positive action in climate change.
  • Increasing awareness of sustainability and how it should be applied in a business scenario. At times this could also highlight areas or skills needed to complete these transitions.
  • Building knowledge across all areas so that when new purchases are made, they can be undertaken with sustainability in mind.
  • When employees are made more aware of their sustainable responsibilities they can be upskilled and retrained to help embed new initiatives and processes into the business.
  • Better access to products and services that are sustainably focussed and designed with helping protect the environment.

One final point, businesses need to start to recognise the importance of sustainability and adopt best practices. There are several great resources that can help successfully navigate through the changes needed.

If you have questions or need some help with any aspect of sustainable finance our team would be happy to help. Please call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk. You can also book a free 30-minute call with Yarka – https://calendly.com/yarka-ssa/30min

The Benefit of a Commercial Mortgage | Commercial Mortgages Explained | Commercial Mortgage Advice
The benefit of a commercial mortgage 758 513 Stepping Stones Accountancy

The benefit of a commercial mortgage

Business stability is incredibly important, especially when trying to ensure the long-term future of an organisation. An area that is often overlooked, but which is immensely important, is with the ownership of a commercial property. A business in a rented location has nothing in return for their payments whereas a monthly fee towards the ownership of a property will help to increase the equity of the business.

Of course, taking the decision to purchase a commercial property is the easy step the biggest issue will be finding the right finance option to fund the purchase. It will be very rare for a business to have the funds available to outright purchase a property, instead they will need financial help and the perfect solution is a commercial mortgage.

There are several commercial mortgage options available:

  1. Owner occupied commercial mortgage – used by the business for its day-to-day operations.
  2. Investment commercial mortgage – the financing of a property which is then leased out to business tenants.
  3. Buy-to-let mortgages – a business will purchase residential properties and then let-out to residential tenants.
  4. Mixed-use mortgages – ideal for when the property has both commercial and residential aspects for example a flat above a retail outlet.
  5. Property development mortgages – utilised to finance the construction of commercial and/or residential properties

Once a decision is made on the type of commercial mortgage required the next step is to identify who can help with this. There are again several options available:

  1. High street bank – historically the most popular choice as they can secure the best rates and terms for a business, however the application process and turnaround can be time consuming
  2. Specialist banks – often established to assist with more complex solutions such as commercial mortgages which results in them having more options available.
  3. Finance brokers – independent finance companies who adopt a whole of market approach and can match a business with a specific lender.

Having determined the best commercial mortgage option and the best funding choice the final stage is the application process. The steps are as follows:

  1. Identify the best funding option
  2. Make an offer for the commercial property
  3. Instruct professionals to undertake a valuation
  4. Agree the loan requirements
  5. Source and instruct solicitors to complete the deal 

In conclusion there are broad benefits to purchasing a commercial property but make sure that you source the right mortgage.

If you have any questions or need some help with any aspect of business finance or accountancy our team would be happy to help. Please call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk. You can also book a free 30-minute call with Yarka – https://calendly.com/yarka-ssa/30min

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