Why it’s good to be an accountant in Bournemouth Reply

Bournemouth Beach Dorset

Bournemouth is a fantastic place, 7 miles of lovely beaches, the UK’s largest shopping park – Castlepoint, close to Poole Harbour, the New Forest and Purbeck, what more could you want.

I love Bournemouth, I have lived here all my live.

According to the 2011 census, the town has a population of 183,491 making it the largest settlement in Dorset. The mid-2014 estimate was 191,400. It is predicted to reach 225,000 by 2037, according to the Office for National Statistics’ 2012 (ONS) projections.

It has quite a few accountants too, if you search for Accountant Bournemouth on Google you get a list of 80 practices to choose from, but there are probably many more. There are also hundreds who work in Businesses.

According to Manta there are 5,433 companies based in Bournemouth, there will be many more businesses when you include Sole Traders and Partnerships.

The Local Economy is dominated by

Finance

Banking, Finance and Insurance are the most valuable sectors in Bournemouth’s economy.

JP Morgan established their Global Technology Hub in Bournemouth in the 1980’s and during the late 1980’s I worked as an Assistant Management Accountant in their Financial Management Group. RIAS, McCarthy & Stone and Liverpool Victoria all have their Head Quarters in Bournemouth.

Creative & Digital

According to the Telegraph

Bournemouth, coming from a very low base, has become the UK’s fastest-growing city in the digital economy

 

Digital Companies

Bournemouth Council states that there are over 400 digital agencies across Bournemouth

These business are among the most suited to use Cloud Based Accounting for example Sage One and Debitoor.

Service Sector

Since 1991 there has been major growth in services up 25.6% in Public Administration, Education and Health.

Tourism

Bournemouth is famous as a seaside resort and 6.88 million visitors came to Bournemouth last year and spend £501 million in the town.

We also have the Bournemouth International Centre – BIC – run by BH Live – BH Live also runs a range of leisure facilities in Bournemouth.

With over 2.5 million visits a year and over £31 million turnover, BH Live is changing lives – placing it at the heart of the UK’s growing social economy. Last year, BH Live hosted 423 shows, sold over half a million cultural, sporting and entertainment tickets, clocked up 1.8 million leisure centre visits and welcomed 88,000 conference and exhibition delegates which contributed over £45 million to the local economy.

Bournemouth Airport

Over 600,000 people use our Airport which has flights to over 35 destinations

Bournemouth University

The University has 18,000 students and 2,000 staff

It’s great place for accountants to study and their courses are accredited by the relevant accounting professional bodies – Chartered Institute of Management Accountants (CIMA), Association of Chartered Certified Accountants (ACCA), Institute of Chartered Accountants in England and Wales (ICAEW), Association of International Accountants (AIA), Chartered Institute of Taxation (CIOT)

According to the local Recruitment Agencies, for example CMA, demand for accountants is high and so are salary levels, take a look at the 2014 CMA Salary Survey

So why is it good to be an accountant in Bournemouth?

Bournemouth is a dynamic and growing business hub, with a high demand for accountants, it’s a fantastic place to live and has endless opportunities for accountants both in business and practice.

Can you think of a reason why you wouldn’t want to be an accountant in Bournemouth?

Do you know an accountant like this one…

 

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www.bicknells.net

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Is your business ready for Black Friday & Cyber Monday? Reply

Cyber monday 2015 - Monday 30th November

This year Black Friday will be on 27th November and Cyber Monday will be on 30th November 2015.

Shopify explain what Black Friday and Cyber Monday are….

Black Friday

This one you’ve probably heard of before… it’s the day after American Thanksgiving. It marks the beginning of the Christmas shopping season. Many brick-and-mortar stores open up early and offer wild deals that are similar to, or even bigger than “Boxing Day” sales which you may be familiar with.

An estimated £810 MILLION was splashed out on Black Friday in the UK last year – more than double the year before – as websites crashed and people fought in the aisles to grab deals, so as you plan your shopping spree we have all the information you need. (mirror)

This year Black Friday will happen on Friday 27th November. However, some retailers will start their week of deals on Monday 23th November.

Cyber Monday

This is the Monday immediately following Black Friday. Cyber Monday works on the same principle as Black Friday, except that it occurs online only.

In 2005, Shop.org coined the term “Cyber Monday” after analyzing increased Internet traffic and sales on the first day that most people return to work after the holiday weekend.

Since its inception, online consumers have started to spread the word about Cyber Monday. Between 2006 and 2011, online sales doubled to over 1.2 billion dollars on Cyber Monday. The success of Cyber Monday has made itself known all around the world, including Canada, the United Kingdom, and all over Europe.

Last year in the UK

  • £1.5 billion was spent online
  • Over £600 million to be spent on Cyber Monday alone
  • 125 million website hits predicted in 24 hours

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VAT on Tampons but not Jaffa Cakes! Reply

Woman hygiene protection

I have always been amazed by VAT, there are so many odd rules that just seem crazy!

Last week MP’s voted to continue to charge 5% VAT – Tampon Tax – on Women’s Sanitary products.

The motion, brought by Labour, was defeated by 305 votes to 287 with just three Conservative MPs rebelling against the whips – and they were all men.

Women will continue to pay 5% VAT on their Lil-Lets because they’re apparently ‘non-essential, luxury’ items. You know, like private jets and exotic meats.

VAT can be very complicated as highlighted in the case of Jaffa Cakes – Cakes or Biscuits?

The leading case on the borderline is that concerning Jaffa cakes: United Biscuits(LON/91/0160). Customs and Excise had accepted since the start of VAT that Jaffa cakes were zero-rated as cakes, but always had misgivings about whether this was correct. Following a review, the department reversed its view of the liability. Jaffa cakes were then ruled to be biscuits partly covered in chocolate and standard-rated: United Biscuits (as McVities, one of the largest manufacturers of Jaffa cakes) appealed against this decision. The Tribunal listed the factors it considered in coming to a decision as follows.

  • The product’s name was a minor consideration.
  • Ingredients:Cake can be made of widely differing ingredients, but Jaffa cakes were made of an egg, flour, and sugar mixture which was aerated on cooking and was the same as a traditional sponge cake. It was a thin batter rather than the thicker dough expected for a biscuit texture.
  • Cake would be expected to be soft and friable; biscuit would be expected to be crisp and able to be snapped. Jaffa cakes had the texture of sponge cake.
  • Size: Jaffa cakes were in size more like biscuits than cakes.
  • Packaging: Jaffa cakes were sold in packages more similar to biscuits than cakes.
  • Marketing: Jaffa cakes were generally displayed for sale with biscuits rather than cakes.
  • On going stale, a Jaffa cake goes hard like a cake rather than soft like a biscuit.
  • Jaffa cakes are presented as a snack, eaten with the fingers, whereas a cake may be more often expected to be eaten with a fork. They also appeal to children, who could eat one in a few mouthfuls rather like a sweet.
  • The sponge part of a Jaffa cake is a substantial part of the product in terms of bulk and texture when eaten.

Taking all these factors into account, Jaffa cakes had characteristics of both cakes and biscuits, but the tribunal thought they had enough characteristics of cakes to be accepted as such, and they were therefore zero-rated.

http://www.hmrc.gov.uk/manuals/vfoodmanual/vfood6260.htm

Surely there must be a way to simplify the rules?

steve@bicknells.net

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5 million paid the wrong tax last year – is your tax code right? Reply

Tax Refund Green Blue Horizontal

As reported last year by the Telegraph

Five million people may have been billed incorrectly by HMRC.

You’ll find your tax code on:

  • your pay slip
  • your PAYE Coding Notice – you usually get this a couple of months before the start of the tax year and you may also get one if something has changed but not everyone needs to get one
  • form P60 – you get this at the end of each tax year
  • form P45 – you get this when you leave a job

Among those most likely to be affected are veterans who have taken a civilian job after leaving the Armed Forces, but who also draw a military pension. Pensioners with two pensions and those who have continued to work part-time after retirement are also more likely to be hit.

Taxpayers, who must complete their self-assessment tax returns before Jan 31, are being warned to check their paperwork again to make sure they are not affected.

Problems arise because various tax offices around Britain are failing to share information about taxpayers’ incomes on a central database.

People with more than one income, whether from pensions, PAYE employment or a mixture of the two, are being allocated their personal tax-free allowance multiple times. It means the tax codes issued for their various income sources are incorrect, so not enough tax is taken. Often the mistakes are discovered by HMRC years later, leading to unexpected tax demands. Telegraph

If you think your Tax Code is wrong you should tell HMRC as soon as possible using online form P2

https://online.hmrc.gov.uk/shortforms/form/P2

You can check how your tax using this HMRC link

https://www.gov.uk/check-income-tax

The most common tax code for tax year 2015 to 2016 is 1060L (£10,600 being the annual income tax free allowance for 2015/16) – in 2014 to 2015 it was 1000L. It’s used for most people born after 5 April 1938 with one job and no untaxed income, unpaid tax or taxable benefits (eg company car).

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10 ways to pay less VAT 1

3D Vat button block cube text

Here are my top 10 ways to pay less VAT

1 Choose the best VAT Scheme for your business

Standard VAT Scheme – on this scheme the VAT is based on tax points from invoices

Flat Rate Scheme – try our calculator

Flat Rate Calculator 2

VAT Cash Accounting Scheme – if your turnover is below £1.35m you can account for VAT on a Cash basis, this is particularly helpful if your customers pay you on slower terms than you pay your suppliers

Annual Accounting Scheme for VAT – if your turnover is below £1.35m you could join the Annual Scheme and complete one return for the year but you make either 9 interim payments or 3 quarterly interim payments

Retail VAT Schemes – These are specific schemes aimed at mainly at shops and help to overcome the issues of mixed vat rate goods

VAT Margin Scheme – The margin scheme relates to second hand goods and accounts for VAT on the margin, for example on the sale of cars

2 Claim Pre-registration VAT

When you register for VAT, there’s a time limit for backdating claims for VAT paid before registration. From your date of registration the time limit is:

  • 4 years for goods you still have, or that were used to make other goods you still have
  • 6 months for services

Be careful not to over claim – see this blog for details https://stevejbicknell.com/2015/06/24/preregistration-vat-confusion/

3 Property Investors might benefit from a Development Company

Property Development is a trade, where as Property Investment isn’t – renting out a residential property is a VAT exempt supply.

If you are planning significant building work, setting up a Development Company or using a building contractor might save VAT.

Assuming you employ a builder…

The VAT Rules are in VAT Notice 708 Buildings & Construction

Your builder may be able to charge you VAT at the reduced rate of 5 per cent if you are converting premises into:

  • a ‘single household dwelling’
  • a different number of ‘single household dwellings’
  • a ‘multiple occupancy dwelling’, such as bed-sits, or
  • premises intended for use solely for a ‘relevant residential purpose’

As your builder will be VAT registered, they reclaim the VAT they are charged and then charge you VAT at 5%.

If your business is property rental and you do the work yourself, you can’t take advantage of the 5% rate.

If your Development Company is VAT registered you can reclaim all the VAT.

4 Do you need to charge VAT on Intercompany Charges

There are situations where one company is VAT registered and other related companies are either partially exempt or not registered for VAT, so in these circumstances not charging VAT is an advantage.

The following are not Taxable supplies for VAT:

Common Directors – Notice 700/34 (May 2012)

Joint Employment – Notice 700/34 (May 2012)

Paying a Bill on behalf of an associated business

Insurance

5 Use VAT Groups for Business Acquisition Costs

Basically HMRC disallow Input VAT relating to Investments.

The most well known example of this was when BAA purchased Airport Development Investments Limited in June 2006, the decision was upheld by the Court of Appeal in February 2013.

The BAA VAT group sought to recover the VAT (£6.7m) incurred on the acquisition costs but recovery was refused by HMRC on the basis that they considered ADIL had not made onward taxable supplies, had not demonstrated any intention to make taxable supplies and was not a member of the VAT group at the time costs were incurred.

BAA used an SPV (Ferrovial) to purchase ADIL but did not bring the SPV into the BAA VAT Group until September 2006, 3 months after the acquisition.

The lessons to learn from this are:

  1. Once you have successfully made the acquisition join a VAT Group immediately and make it clear in correspondence that the SPV intends to join the VAT Group at the earliest opportunity
  2. Consider not using an SPV
  3. Buy the Assets instead of the Shares
  4. Show that the SPV will make taxable management charges
  5. Consider the scope of the advisors work, HMRC may disallow advice focussed on passively holding shares

6 How Hotels save VAT

Here are some VAT examples for Hotels – HMRC Reference:Notice 709/3 (October 2011) :

The Long Stay Rule

If a guest stays in your establishment for a continuous period of more than 28 days, then from the 29th day of the stay you should charge VAT only on that part of the payment that is not for accommodation.

VAT Exempt Meeting Rooms and Refreshments

Hiring a room for a meeting, or letting of shops and display cases are generally exempt, but you may choose to standard-rate them by opting to tax, see Notice 742A Opting to tax land and buildings.

VAT on Deposits

Most deposits serve as advanced payments, and you must account for VAT in the return period in which you receive the payment. If you have to refund a deposit, you can reclaim any VAT you have accounted for in your next return.

Normally, if you make a cancellation charge to a guest who cancels a booking, VAT is not due, because it is compensation.

7 VAT on Pool Cars

When you buy a car you generally can’t reclaim the VAT. There are some exceptions – for example, when the car is used mainly as one of the following:

  • a taxi
  • for driving instruction
  • for self-drive hire

If you lease a car for business purposes you’ll normally be able to reclaim 50 per cent of the VAT you pay. But you can reclaim 100 per cent of the VAT if the car is used exclusively for a business purpose.

8 Use a Tronc for Tips

Tips are outside the scope of VAT when genuinely freely given. This is so regardless of whether:

• the customer requires the amount to be included on the bill
• payment is made by cheque or credit/debit card
• or not the amount is passed to employees.

Restaurant service charges are part of the consideration for the underlying supply of the meals if customers are required to pay them and are therefore
standard rated.

If customers have a genuine option as to whether to pay the service charges, it is accepted that they are not consideration (even if the amounts appear on the invoice) and therefore fall outside the scope of VAT.

Further information is available from: Notices 700 The VAT guide and 709/1 Catering and takeaway food

9 Get your TOGC right – Transfer of a Going Concern

Normally the sale of the assets of a VAT registered or VAT registerable business will be subject to VAT at the appropriate rate. A transfer of a business as a going concern for VAT purposes (TOGC) however is the sale of a business including assets which must be treated as a matter of law, as ‘neither a supply of goods nor a supply of services’ by virtue of meeting certain conditions. Where the sale meets the conditions then the supply is outside the scope of VAT and therefore VAT is not chargeable.

It is important to be aware that the TOGC rules are mandatory and not optional. So it is important to establish from the outset whether the sale is or is not a TOGC.

The main conditions are:

  • the assets must be sold as part of the transfer of a ‘business’ as a ‘going concern’
  • the assets are to be used by the purchaser with the intention of carrying on the same kind of ‘business’ as the seller (but not necessarily identical)
  • where the seller is a taxable person, the purchaser must be a taxable person already or become one as the result of the transfer
  • in respect of land which would be standard rated if it were supplied, the purchaser must notify HMRC that he has opted to tax the land by the relevant date, and must notify the seller that their option has not been disapplied by the same date
  • where only part of the ‘business’ is sold it must be capable of operating separately
  • there must not be a series of immediately consecutive transfers of ‘business’

The TOGC rules are compulsory. You cannot choose to ‘opt out’. So, it is very important that you establish from the outset whether the business is being sold as a TOGC. Incorrect treatment could result in corrective action by HMRC which may attract a penalty and or interest.

10 Choose the best time to register for VAT

You may decide to voluntarily register to reclaim VAT you have paid out to set up you business or you might decide to wait till you have to register to gain a competitive advantage.

You must register for VAT if:

  • your VAT taxable turnover is more than £82,000 (the ‘threshold’) in a 12 month period
  • you receive goods in the UK from the EU worth more than £82,000
  • you expect to go over the threshold in a single 30 day period

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