CHARTERED ACCOUNTANTS (ICAEW)

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Mileage allowances – What can you pay tax-free?

Mileage allowances – What can you pay tax-free?Employees often need to undertake business trips and it is common practice to reimburse the employee’s fuel costs by means of a mileage allowance. The tax rules allow mileage payments to be made tax-free up to certain limits. However, the rules are different depending on whether the employee is driving their own car or a company car.Employees using their own carsIf an employee uses their own car for business, you can pay mileage allowances tax-f...

Pension changes

Pension changesIn his March Budget, the Chancellor announced a number of changes to the pension tax rules, including an increase in the annual allowance and the abolition of the lifetime allowance.Annual allowanceThe annual allowance places a cap on tax-relieved pension savings. Individuals can obtain tax relief on contributions to a registered pension scheme of up to 100% of their earnings or, if greater, £3,600 as long as their available annual allowance is sufficient to cover their contribut...

Business costs and the increase to the National Living Wage and Minimum Wage

Business costs and the increase to the National Living Wage and Minimum WageRising business costs are still a worry in 2023. Supply chain costs are high, energy prices are still expensive and labour costs are on the rise. These increasing costs mean higher expenditure and lower margins on your products and/or services. If left unchecked, that could mean a dip in your predicted profits for the quarter.The good news is that by acting now to manage these increases you can stay on top of these costs...

4 considerations when buying property through your business

4 considerations when buying property through your businessThere are multiple reasons why you might want to buy a property through your business. You may need a bigger workspace to expand your business operations. You might want to own your current rented property. Or you may be thinking about starting a property investment portfolio.Whatever your reasons, buying a property through the company is a significant step. Before you take the big leap, here are four of the main considerations to think ...

5 business expenses that you can claim back

5 business expenses that you can claim backIncurring expenses is an unavoidable fact of running a business. But there are ways to reduce the impact of these expenses, by claiming the relevant costs against your tax bill.Here’s our lowdown of which common expenses are tax deductible, and the advantages of claiming these costs to cut down your operational and personal expenses.1. Expenses for staff parties and social eventsStaff events, like your end-of-year party or your summer barbecue, are ta...

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...

Cash flow forecasting puts you back in control

Cash flow forecasting puts you back in controlWe all know that positive cashflow is the beating heart of any successful business. And with so many external pressures on your cash right now, it’s important to have one eye on the future.Cashflow forecasting is an increasingly important tool for any finance team. With a better view of your future cashflow position, you can make well-informed decisions about your finances.But how does cashflow forecasting work? And how does it help you maintain a ...

What are the main changes to R&D tax relief?

What are the main changes to R&D tax relief?The tax relief scheme for research and development (R&D) is an important way to cut the costs of investing in R&D, development projects and innovation across your business.However, the Spring Budget 2023 has brought in several changes to the R&D tax relief scheme that will affect small and medium enterprises. These changes affect both the scope and administration of the R&D scheme.Here’s our update on the changes and how they may ...

Discounts for employees – A taxable benefit in kind?

Discounts for employees – A taxable benefit in kind?Pre-pandemic, giving discounts to employees was invariably only offered by the larger companies. However, because employee benefit schemes save the employer money, many SMEs are looking to provide such schemes. The discounts need not relate to the company's products – there are schemes available that give employees access to a wide range of deals with other companies via a points system, allowing them to shop and save all year round on item...

Business entertaining – The tax position

Business entertaining – The tax positionMany businesses view entertaining clients and customers to be an important part of their marketing budgets, whether as a networking opportunity, a thank you for business or an incentive to attract more business – but what is the tax position?The tax rules are clear. HMRC define entertainment expenses as those costs incurred when providing subsidised or free hospitality to clients or staff. Whether payment for lunch with a customer or tickets for a spor...

When is a VAT invoice not a VAT invoice?

When is a VAT invoice not a VAT invoice?·         When should a business leave a VAT scheme?·         HMRC are currently taking an inordinately long time to issue VAT registration numbers. You used to be able to get a VAT number within 24 hours but HMRC now advise a delay of up to three months.·         The delay is because HMRC have updated the registration process, requiri...

SDLT, LBTT and LTT hit of buying an investment property

SDLT, LBTT and LTT hit of buying an investment propertyWhere a property is purchased in England or Northern Ireland and the consideration exceeds the relevant threshold, stamp duty land tax will be payable. However, where the property is an additional residential property, a supplement applies. For properties in Scotland, the charge is to Land and Buildings Transaction Tax (LBTT) and in Wales, the charge is to Land Transaction Tax(LTT). As in England and Northern Ireland, a supplement applies to...

Furnished holiday lettings and business rates

Furnished holiday lettings and business ratesFurnished holiday lettings are generally liable to business rates rather than council tax. This can be very beneficial, particularly where the landlord only has one business property and is eligible for 100% small business rate relief, meaning that there is nothing to pay. However, new eligibility rules are being introduced from 1 April 2023 for self-catering properties and to remain within business rates furnished holiday lets must meet the new eligi...

Jointly-owned property – Joint tenants v tenants in common

Jointly-owned property – Joint tenants v tenants in commonUnder English law, there are two ways in which property can be owned jointly – as joint tenants or as tenants in common. The way in which a joint property is owned can have tax implications.Joint tenantsWhere a property is owned by two or more people as joint tenants, they collectively own the whole property, rather than each individual owning a particular share. If one of the joint owners dies, their share automatically passes to the...

Spring Budget 2023 – the key points for business owners

Spring Budget 2023 – the key points for business ownersThe Chancellor, Jeremy Hunt, delivered his first Spring Budget on 15 March 2023. Unlike the September 2022 ‘mini budget’, this budget won’t cause many ripples in the worlds of business and finance. In fact, it was a relatively dull affair, with few headline announcements for the average business owner.However, there were some incentives regarding capital allowances on equipment and investment in research and development (R&D), to...

Your Q2 2023 deadlines for the diary

Your Q2 2023 deadlines for the diaryAs ever we want to keep you on the ball with the latest dates and deadlines for your business diary. Get your online calendar fired up and highlight some of the upcoming dead lines and cut-off points for Q2 of 2023Affected companiesTaskDeadlineExampleCompanies formed between 1July 2021 and 30 September 2021File your first year accounts with Companies House.No later than 1 year and 9 months(to the specific day) after your company's incorporation date.• &...

Companies House changes – A reason for disincorporation?

Companies House changes –A reason for disincorporation?In March last year, the government published a White Paper setting out its final position on reforming Companies House ahead of introducing legislation. The big headline from the reforms is that micro and small companies will have to report profit and loss statements i.e. the option to file ‘filleted’ accounts is to be removed. Some smaller ‘one-man band’ companies may not be happy to see their profit figures displayed on the Compa...

Overpayment relief claim – How long do you have?

Overpayment relief claim – How long do you have?Tax repayment claims are usually made via the submission of a tax return. The time limit for amending a return (whether individual or company) is usually one year from the deadline for submitting the tax return. If that date has passed, a claim can only be made via an overpayment relief claim. Under this relief, the general rule is that a refund or repayment cannot be claimed more than four years after the end of the tax year to which the claim r...

When should a business leave a VAT scheme?

When should a business leave a VAT scheme?Post-pandemic, many businesses are finding that their trading circumstances have changed such that the non-standard VAT scheme under which the business is registered is no longer appropriate. The turnover may have increased so they are no longer eligible.VAT schemes are designed to simplify how some VAT-registered businesses calculate and account for VAT and are voluntary to join. By choosing the most suitable VAT scheme a business can have better contro...

Which is more important? Cashflow or profit?

Which is more important? Cashflow or profit? Cashflow and profit are two of the most important financial metrics for any business. But while they’re both related to the financial performance of a company, they measure different things.Knowing the difference – and how cash and profit contribute to your success story – is a vital skill if you want your business to have the best possible financial health.The difference between cashflow and profitUnderstanding the technicalities of financial r...

How to apply for a business loan

How to apply for a business loanNeed some extra cash to take your business to the next level, but daunted by the loan process? You're not alone. There's a lot of paperwork and number-crunching involved.Before you get started, remember that banks wants your application to succeed as the interest you pay is a vital revenue stream. So it’s up to you to make their job easy by turning up with a good business case.Connect the dots for them. While banks are experts in money, they’re not necessarily...

7 ways to get more from your personal finances

7  Ways to get more from your personal financesThere’s plenty of advice available to help you manage your business finances. But what about the tips and hacks you need to get fully in control of your personal finances?Managing your personal finances can be challenging, especially when it comes to making sound and sensible financial decisions. But with the right tips and strategies, you can make smart investments, grow your wealth and secure your financial future.We’ve outlined seven ess...

Understanding Your Breakeven Point

Understanding Your Breakeven PointYour breakeven point is the income, or sales, needed to cover all of your business costs. Any earnings above this point generate profit. So, in a nutshell, your breakeven point tells you the minimum sales needed to keep your business profitable and viable.Combining your understanding of the breakeven point with detailed financial reporting from your accounting software is invaluable. You’ll get valuable data to analyse your fixed and variable costs. You can al...

What's the difference between financial accounting and management accounting?

What's the difference between financial accounting and management accounting? You’re running a business, so you know the legal requirements around producing accounts and submitting tax returns. But do you truly know WHY you’ve engaged an accountant? And do you understand the value that a good accountant and business adviser can add to your company?As a business owner, managing director or CEO, there are three main areas of the accounting proposition that you’re probably most interested in:...

Keeping your cashflow strong in tough times

Keeping your cashflow strong in tough timesSmall businesses are particularly vulnerable in tough economic times.When sales are slow, there are still overheads and salaries that need to be sorted. Pre-planning and being proactive can help you weather tighter economic periods and allow you to continue to thrive.Make sure you have a clear picture of your payroll, and any other planned expenses that will need to be accounted for.If there’s even a possibility that there could be a shortfall, it’s...