Having registered your payoll you will get a pack in the post from HMRC which will include a CD ‘Basic PAYE Tools’ this CD has everything you need to run your own payroll for free, as an alternative you can download ‘Basic PAYE Tools’
IR35 came into existance in 1999, it was created to prevent workers previously employed from creating a limited company and then benefiting from lower taxes and national insurance through the use of dividends and expenses.
HMRC believed that it would generate £220 million a year in National Insurance Contributions and £80 million in Income Tax, but it has actually only generated around £1.5 million a year and HMRC have brought a number of cases before the courts, the latest being MBF Design Services Ltd v Revenue and Customs (2011) and ECR Conculting Ltd v Revenue and Customs, the taxpayer was successful in both cases.
I was reading an article in Accounting Practice about the MBF Design case and HMRC assisted a Foreign Airbus UK employee to prepare his statement but apparently because the employee struggled to read the statement or be examined on it the tribunal were unconvinced.
I have always found QDOS to be an invaluable source of help in the field of IR35 and you can download free guides and contracts using this link
I recently registered to use the HMRC Corporation Tax online services and my activation codes arrived today, so far I am impressed.
Obviously you need to know how to correctly do your Tax Computations first, nothing can remove the complicated tax calculations for Capital Allowances, Loans to Participators, Small Company Relief etc, you need skill for that part. But from reading the manual it seems that you can enter your accounts, computations and complete the CT600 and file it without needing to spend a fortune on specialist software to produce the iXBRL tagging now required.
Let’s see if I am still impressed when I try to enter the information.
Lack of cashflow is the main reason for business failure.
Bartercard can help because they can provide an interest fee credit facility to buy goods and services from their members, Bartercard have 4000 UK business members including solicitors and debt collectors (which can help collect your cash)
Contact me for more details email@example.com
To join bartercard there is a “once only initial investment” so how can we quantify our return on investment?
Every business has had to make an investment in their business to get it started, for example a hairdresser would need to fit out her shop with fixtures, fittings and equipment, so in accounting terms how can we evaluate the investment that we make when we join bartercard?
1. Pay Back Period – how many years does it take to get back our initial investment in profits – for normal investments anything less than 3 years is considered good – because Bartercard specialise in selling spare capacity and as such only product replacement costs are relevant, its likely that the profit on each sale will be around 70% profit (as used in our hairdresser/accountant trading story) – as Bartercard guarantee to get more than the joining fee in sales in the first year, the payback period is likely to be less than 2 years – so thats an excellent return on investment
2. Average Rate of Return (ARR) – this method of appraisal takes the average of the profits made over say a 3 year period (or the life of an asset) and shows the result as a % of the initial investment I estimate a 70% ARR, obviously this will vary from business to business, but I am sure you will quickly be able to work out the return for your business
3. Net Present Value/Discounted Cash Flow – this method of appraisal takes into account the time value of returns, its often considered the best and most precise way to assess returns, to calculate the Net Present Value you create a cash flow table year 0, shows the investment as a cost, then the net profits are shown in the subsequent years and a factor is applied to remove the effect of inflation, the higher the NPV the better the investment
4. Internal Rate of Return – this is also described as the effectie interest rate, to calculate this we increase the Discount Rate in the DCF (3 above) until the NPV equals zero and that produces the return rate
If you need help doing this analysis for your business drop me an e mail
Enterprise Resource Planning systems such as Microsoft Dynamics can be configured in many ways.
Prior to Order, you will probably have issued an RFP (Request for Proposal) and had a bid process. Typically a Dynamics system might start from £200k with probably half the cost or more being for consultancy.
Once you have selected your supplier, the first stage is Systems Design, I have worked on many of these, basically, you gather information on how the business works now, right down to fine detail such as how control accounts are used and what reports are currently used, then you consider what is possible with the new ERP system, what is the best way to perform tasks, how are results reported, some of the information will be flowcharted and a route map drawn up to get from where the business is now to the new ERP system. It is a highly detailed process, my reports were typically 200 pages long and the supplier and client sign off the report before configuration work starts.
Next the system experts get to work and make a mock up of the system and then workshops are done with senior management and directors to makesure the clients instructions have been correctly intrepreted, this process is then signed off.
The next stage is Training, normally immediately before the system goes live.
For anyone running a large networking or membership organisation coping with thousands of transactions of the same value is a challenge. In the case of 4Networking, Tuesday to Friday thousands of members are booking breakfasts online for £10 each (they all need a VAT receipt), so what information do they analyse, well they need to know, which member or visitor, which group/venue, which area leader, for visitors they need to know the number of visits (so that they can charge when the maximum is reached), when membership renewals are due. Thats a lot of information and to run an efficient network you need to quickly see the results and take action if attendees drop.
The solution that we used was to have a description made up of numbers separated with a # so that you could quickly extract results for any data group or multiple groups.
The other challenge faced is that Memberships cover a future period and to comply with revenue recognition rules the revenue must be phased over the period to which it relates.
The recent press has been full of details of HMRC investigations into small businesses and individuals to try to get more tax in and penalties, the taxman is trying to recover £3.8bn in PAYE. Current figures (quoted in the Sunday Telegraph today) show that 25000 people have had their debt written off by citing the Extra Statutory Concession A19.
The Low Income Tax Reform Group has some excellent guidance on A19 and template letters, check out this link for details