CHARTERED ACCOUNTANTS (ICAEW)

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5 ways to overcome economic uncertainty

5 ways to overcome economic uncertaintyEconomic uncertainty is an ongoing worry for any business owner.You can control your own financial management, but you don’t have any direct control over the wider macro-economy. And in the first few years of the 2020s, there have certainly been plenty of tricky ups and downs for your business to navigate.Current economic uncertainty stems from a number of factors, including:Fluctuating marketsGeopolitical tensionsPandemic recoveryThe impact of climate ch...

Plain English guide to depreciation

Plain English guide to depreciationGetting to grips with the basics of accounting, financial management and business strategy can be a challenge. To make things easier, we've created a plan-english guide to depreciation and the impact this accounting term can have on your assets, tax, cashflow and company accounts.What is depreciation?Depreciation is an accounting term that you’ll hear us talking about when we run your accounts.In basic terms, depreciation is about allocating the cost of a tan...

What’s an Employee Ownership Trust?

What’s an Employee Ownership Trust?As a business owner, you probably want to leave a lasting legacy behind when you finally get to the end of the journey and decide to exit the business. One way to achieve this is by disposing of all, or part, of the company to an Employee Ownership Trust (EOT).This EOT structure is available to trading companies, or the holding company of a trading group.Apart from ensuring the continuity of your ‘business baby’, there are also some tax advantages of...

What makes you a good entrepreneur?

What makes you a good entrepreneur?Do you dream about starting our own business? And, can anyone become an entrepreneur?When you look at the research, there are certain aptitudes, personality traits and business skills that tend to make you a more successful entrepreneur. But can you learn these skills? Or are these innate abilities that some entrepreneurial people are just born with?Let's take a look at what makes a good entrepreneur.What drives someone to become an entrepreneur?There are upwar...

Back to Tax Basics: How capital allowances reduce your tax bill

Back to Tax Basics: How capital allowances reduce your tax billGenerally speaking, the business expenses you incur are allowable against your profits. But when it comes to fixed asset purchases (things like machinery, equipment or vehicles), these purchases are treated slightly differently.To reduce your tax bill when purchasing fixed assets, it’s important to know what capital allowances are available and how you can use them to enhance your tax planning.In the next part of our Back to Tax Ba...

Plain English guide to cashflow

Plain English guide to cashflowWhy is cashflow so central to good financial management? Here's our plain english guide.What is cashflow?Cashflow refers to the movement of money into and out of your business over a specific period.In the most basic terms, cashflow is the process of cash moving out of the business (cash outflows), and cash coming into the business (cash inflows). The ideal scenario is to be in a ‘positive cashflow position’. This means that your inflows outweigh your outflows ...

5 tips for running good performance reviews

5 tips for running good performance reviewsWhen times get tough, it can be easy to let some of your people processes fall away as you concentrate on the basics of the business.Take the performance review. They can be unpopular, sucking up a lot of time and making employees and managers stressed. So why not skip them?Because good performance reviews work. They’re an effective way to track people's progress, provide feedback, gain insight, support development, and align individual performance wi...

Plain English guide to corporation tax

Plain English guide to corporation taxGetting to grips with the basics of accounting, financial management and business strategy can be a challenge. To make things easier, here is our plain english guide to corporation tax, one of the key business taxes you’ll need to understand as a limited company.What is corporation tax?Corporation tax (CT) is a direct business tax that’s levied on your company’s profits.The CT you pay is based on the company's taxable profits. This will include revenue...

Understanding Your Profit and Loss Statement

Understanding Your Profit and Loss StatementYour profit and loss statement (P&L) helps you understand your business performance and profitability over time. It’s sometimes called an Income statement and its main purpose is to list income and expenditure.Whereas a balance sheet is a snapshot in time, the P&L shows transactions over a specific period of time. This can be a month, quarter, financial year or any other period, and it can be a stand-alone report or a comparative period repor...

Plain English guide to VAT for businesses

Plain English guide to VAT for businesses Getting to grips with the basics of accounting, financial management and business strategy can be a challenge. To make things easier, we’re starting a new Plain English guide to business.This time, we’ll be looking at Value-Added Tax, or VAT as it’s generally known.What is Value-Added Tax (VAT)?Value-added tax (VAT) is a consumption tax. VAT is imposed on the value added at each stage of the production and distribution of many goods and servic...

How running a lean business model improves your cashflow and efficiency

How running a lean business model improves your cashflow and efficiencyKeeping your operational expenses under control, while also remaining efficient and meeting customer demand can be a challenge – one that can catch out many new business owners.This is why running your enterprise using a lean business model is such a good idea. By keeping operations, stock and processes to a minimum, you reduce your outgoings, speed up efficiency and improve your cash position. But how does the lean model w...

It's tough at the top (and that's why you need a business coach)

It's tough at the top (and that's why you need a business coach)Being a business owner can be immensely rewarding. But it's also a highly pressurised and stressful vocation to choose. The business journey can be full of pitfalls and challenges that make it more difficult to meet your goals and turn your enterprise into a success.The good news is that you don't have to travel this road alone. A business coach is your companion on the journey. A coach will help to shoulder some of the load, so you...

HMRC's complaints process

HMRC's complaints processMany taxpayers taxed under self assessment may not be aware that HMRC self assessment phone service was closed for three months, opening on 4 September. HMRC has been piloting a new seasonal model for the self-assessment helpline by directing queries to the department’s digital services. The intention was to enable 350 of HMRC's staff to take urgent calls on other lines and answer outstanding customer correspondence. As such, the only method by which to make contact wa...

Alphabet shares

Alphabet sharesDespite dividend tax rates being charged at 33.75% (higher rate taxpayers) or 39.35% (additional rate taxpayers), generally dividends remain the most tax-efficient method of taking profits from a company. On incorporation it is usual for all shares issued to be designated ordinary shares. However, where a company only has one class of share, the right to receive a dividend, to vote and to any proceeds of sale should the company be sold are usually pro-rata which might not be tax e...

The implications of late VAT registration

The implications of late VAT registrationVAT registration is compulsory for any UK established persons who are in business and make or intend to make taxable supplies should either one of the following tests are satisfied:·         Historical testUnder the 'historical test', if taxable sales have exceeded £85,000 in any rolling 12-month period, the business must register within the next month after exceeding the threshold, the effective date of registrat...

Reporting residential property gains

Reporting residential property gainsIf you make a chargeable gain on the sale of a UK residential property, you will need to report the gain to HMRC within 60 days of the completion date and pay tax on the gain within the same time frame. A chargeable gain may arise if the property that you sell has not been your only or main residence throughout the period that you owned it, or if it is a let property, for example a buy-to-let or a holiday let, or a second home. Where the property is jointly-ow...

Make the most of the property allowance

Make the most of the property allowanceThe property allowance is a useful allowance that allows you to earn property income of up to £1,000 tax-free each tax year. If your income from property is more than this, you can deduct the allowance instead of actual costs where it is beneficial to do so. Claiming the allowance is optional and will not always be beneficial; whether it is or not will depend on your circumstances.Annual property income of £1,000 or lessIf your gross annual property incom...

Take advantage of permitted absences for main residence relief

Take advantage of permitted absences for main residence reliefMain residence relief is a valuable relief which prevents a tax charge arising where a gain is realised on the disposal of a property which is your only or main residence. Where a property has been an only or main residence for some but not all of the period of ownership, the gain is sheltered to the extent that it is occupied as an only or main residence or a period of absence was a permitted period of absence. The final nine months ...

Take advantage of the tax exemption for mobile phones

Take advantage of the tax exemption for mobile phonesThe tax legislation contains a number of exemptions which allow benefits in kind to be provided to employees without a tax charge arising. Some of the exemptions are more useful than others. One of the more valuable ones is that for mobile telephones.The exemption enables you to provide one mobile phone to an employee for their use. However, it only applies if there is no transfer of property – you must retain ownership of the phone. The exe...

Are you using the correct tax-free mileage rates?

Are you using the correct tax-free mileage rates?As an employer, you can pay your employees tax-free mileage payments where they use either their own car or a company car for business journeys. However, the rates that you can pay tax-free depend on whether the car is the employee’s own or a company car and, where the employee drives a company car, the engine size of the car and the fuel that it uses. It is important that you use the correct rates to avoid landing the employee with an unwanted ...

Self-serve Time to Pay for VAT

Self-serve Time to Pay for VATFor some time, taxpayers within Self Assessment have been able to set up a TimetoPay arrangement online, allowing them to pay their tax bill in instalments if they cannot pay it in full and on time. The facility to set up their own TimetoPay arrangement has now been extended to VAT-registered businesses.Setting up a VAT payment plan onlineIf you operate a VAT-registered business and you are struggling to pay the VAT that you owe, rather than having to contact HMRC t...

Claiming overlap relief

Claiming overlap reliefIf you are self-employed, the way in which your profits are taxed is changing. As a result of this, you only have a limited window in which to claim relief for any profits which have been taxed twice.Basis period reformFor 2022/23 and earlier tax years, self-employed individuals, whether sole traders or partners in a partnership, were taxed on a current year basis. This meant that you were taxed on the profits for the accounting period that ended in the tax year. However, ...

Should I file my tax return early?

Should I file my tax return early?If you need to file a Self Assessment tax return for 2022/23, you have until midnight on 31 January 2024 in which to do this, as long as you file online. However, HMRC have been encouraging taxpayers to file their tax return early. Is this worthwhile and what are the benefits?Due a tax refund?If you think you might have paid too much tax in 2022/23, filing your tax return early will enable you to claim a refund sooner – you do not need to wait until January 20...

Charging interest on a Directors' Loan Account

Charging interest on a Directors' Loan AccountWhen you’re the director of a business, it’s likely that there will be occasions where you borrow money directly from your company, or inject your own capital into the business.A Directors' Loan Account (DLA) keeps track of this money owed between the company and its directors. In many companies, the account is in credit – i.e. the company owes money to the director. This can be due to directors injecting startup capital into the company, not d...

Employee management is simpler and more accurate with online timesheets

Employee management is simpler and more accurate with online timesheetsAs technology evolves, so does the way we do business. Tech for small businesses is now affordable and accessible.Time tracking and scheduling are great examples – cutting-edge, cloud-based options are now available for businesses of any size.The problem with paperPaper is far from ideal when it comes to effective time tracking and scheduling – it’s inflexible, takes up valuable employee time, and leaves your business o...