What does your accountant know about property investment and tax? 3

To Let

Property Investment is probably one of the most complicated tax and accounting activities that exists, it can involve:

  • Stamp Duty (SDLT)
  • Income Tax
  • Corporation Tax
  • ATED
  • Capital Gains

And some activities also involve Pensions, Capital Allowances, VAT, CIS…. the list goes on and on

The internet is full of experts but often their advice is conflicting and some of the advice is actually wrong!

Experience gained from working with investors is the key to knowledge and continuous training and updating is vital. We have written hundreds of blogs on tax and accounting.

One of the biggest recent changes is Section 24 restricting interest relief

Landlords will no longer be able to deduct all of their finance costs from their property income to arrive at their property profits. They will instead receive a basic rate reduction from their income tax liability for their finance costs.

Landlords will be able to obtain relief as follows:

  • in 2017 to 2018 the deduction from property income (as is currently allowed) will be restricted to 75% of finance costs, with the remaining 25% being available as a basic rate tax reduction
  • in 2018 to 2019, 50% finance costs deduction and 50% given as a basic rate tax reduction
  • in 2019 to 2020, 25% finance costs deduction and 75% given as a basic rate tax reduction
  • from 2020 to 2021 all financing costs incurred by a landlord will be given as a basic rate tax reduction

The rules don’t apply to companies

I also think that having actual property and construction experience is beneficial.

Back in 2003, we started investing in property with a group of friends and colleagues.

We started by forming a limited company and our first purchase was 3 shops (eastern Eye, Maximum and LMJ) with 8 HMO’s above, there is a picture below

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We then went on to buy 6 shops with flats above on long leaseholds, we did a title split and put 3 of the shops into SIPP Pensions

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We then formed another company and purchased a block or 7 HMO’s.

We also bought an Office Block, Industrial Unit and Shops into SIPP and SSAS pensions.

We sold our investment in the companies and focused on commercial property investments in pensions.

steve@bicknells.net

How would you implement a new accounting system? Reply

methodology

Implementing a major accounting system is big undertaking which needs a lot of planning.

Top Tips for System Implementations:

  1. Start by drawing up a specification of your requirements – what do you want to achieve with the new system, what is the scope of the system, where will cost savings be made, how could more information lead to better decision making?
  2. Get Buy In – its really important that the system gets the support of the Senior Management Team and that key staff are given the chance to put forward their ideas and are involved in the project. People are often resistant to change and getting them involved early will breakdown barriers to change.
  3. Rationalise – changing systems is an ideal chance to look at how can you do things differently and stop doing things that don’t add value, this will also reduce potential customisation requirements
  4. Allocate time to the project – If you don’t allocate time to the implementation project you will regret it later but that doesn’t mean you need to do everything yourself, budget to bring in temps and consultants to help
  5. Measure the savings and benefits – make sure you achieve your goals

By using simple project management processes, tools and techniques you can achieve the best results.

Formal methods of project management offer a framework to manage this process, providing a series of elements to manage the project through its life cycle. The key elements consist of:

• Defining the project accurately, systematically clarifying objectives
• Planning the project by splitting it up into manageable tasks and stages
• Executing the project by carrying out actions
• Controlling the project through its stages using project definition as a baseline
• Closing/Handing Over the Project

steve@bicknells.net

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How do you switch over to Sage One? 1

An overworked office worker

So you’ve made the decision, its time to move to Cloud Accounting and you’ve choosen Sage One, what do you need to do to move your accounts to Sage One?

You need to start by deciding the best time to move, it could be your Year End or the end of VAT Quarter, but its likely to be on the 1st of a month.

Get some help, why not find a Sage One accountant and ask them to help you set up your Sage One, they might even offer you a deal and include your other accounting and tax needs.

Then you need to create your Contacts – Customers & Suppliers.

Then you enter opening balances – for example unpaid supplier invoices.

You also need to set up your Bank Feeds

http://uk.sageone.com/bank-feeds/
http://help.sageone.com/en_uk/accounts/extra-bank-feeds.html

To set up bank feeds

1. Banking > click the required bank account.
2. Manage Bank Account > Connect to Bank.

You enter your closing Trial Balance from your old accounting system on the last day of the month before your Sage One start date.

Keep the records and prints from your old accounting system for reference.

Then you are ready to get started, its all very easy and straightforward, nothing to worry about.

infographic-a-business-without-limits

steve@bicknells.net

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4 Tips for Choosing Cloud Accounting Software Reply

Tablet

There are lots of brilliant accounting solutions on the market, so how can you decide which one will work best for your business?

Features

The first thing you need to decide is what features you need:

  • Projects
  • Stock
  • Construction Industry
  • Payroll
  • Invoicing
  • Automated payments – PayPal etc
  • Bank Feeds
  • Quotes
  • VAT Schemes
  • Document Storage
  • Accountant Access
  • Access – Apps, Devices, Mac’s
  • Contact Management
  • Reports

Don’t pay for things you don’t need!

Future Proof

As your business grows, will the software grow with you

  • Can you add users
  • Can you set access levels
  • Are there upgrade products
  • Can you add in other products (Apps) such as scanned receipts

Cost

How much does it cost? Normally working with an accountant will reduce the overall cost and provide a package deal

  • Monthly Software Subscription
  • Accountancy Fees
  • Book Keeping Costs

Ask for Help

Just because you have cloud based software it doesn’t mean you won’t need an accountant! you might think you don’t need help but an accountant will help you choose the right VAT Scheme, claim tax reliefs and comply with reporting requirements.

Accounting Clients

Cloud Checklist

 

steve@bicknells.net

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10 reasons why 9,966 people read this blog last month? Reply

Blog Technical Squares

I have been blogging regularly for a few years now and last week http://www.stevejbicknell.com reached a staggering 200,000 hits and its growing in popularity every day, here are the Statistics for 2015, these are monthly numbers of views and the number that came to blog via a search engine.

Blog Stats

I think its impressive that most of the hits are driven by being found in search engines, thank you Google!

I also have a large base of followers who get my blogs by e mail or follow the blog on wordpress.

So why do people read my blog?

  1. Useful Content – I learned a long time ago that if you want followers and readers you have to write about things that will interest as wider audience as possible. My blog is about Accounting and Tax, which you might think is boring but it does affect everyone, we all pay tax! and there is plenty to blog about.
  2. Accurate Content – Its important to get the content right but even if you do make a mistake you can bet your life someone will tell you. Fortunately most readers are very helpful and will also contribute suggestions.
  3. Regular Posts – you have to post regularly, I post 2 or 3 times a week, I prepare them in advance and schedule them
  4. Variety – I try cover a wide variety of topics and my audience appreciate it, I even get special requests
  5. Pictures – Blogs without pictures, charts and graphics are boring
  6. Share – Post your blogs every where on Social Media and encourage others to do the same
  7. Pick a good title – The title will be found by search engines so try to think about what someone might search for
  8. Video – You Tube has plenty and most people would love you to link to their video as it will increase their hits as well as yours
  9. Infographics – I love infographics and I try to create my own when I have time
  10. Keep it simple – Lets face it Tax is complicated, so I try not to make the blogs too complicated otherwise I will lose followers

steve@bicknells.net

BBA-small

 

Putting your accounts on Debitoor Reply

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I have just signed up to the Premium Pro Debitoor Account, I wanted to have online access and did a comparison to Xero, Sage, Kashflow and Free Agent. I thought Debitoor was excellent value for money (£9/mth for Premium Pro) and I have long been a fan of their online invoicing.

Debitoor is an easy-to-use invoicing and accounting software which helps freelancers and small businesses produce nice-looking, professional invoices in a matter of seconds and assists them in their accounting.

Debitoor is designed for straight forward businesses so if your business is complicated then its probably not the best option for you.

So this is how you get started:

  1. Create your contacts – Clients and Suppliers
  2. Create your Products
  3. Enter the opening balances on the balance sheet (reports) – Debitoor currently only works in calendar years (Jan to Dec) so if like me your year end falls on a different date you will need to enter the balances in the previous year, in my case my year end is March so I entered the balances in 2014 I will then do a year end and they will become the 2015 opening balances and I started entering invoices and expenses in April. I know that’s not ideal and Debitoor are constantly working on improvements, so its compromise for now.
  4. I then created multiple bank accounts – Lloyds, Directors, PayPal
  5. For expenses that I had an invoice for I uploaded the PDF of the expense
  6. I then uploaded the bank statements for Lloyds and PayPal and reconciled and posted them

I think the priority for all businesses should be issuing and tracking sales invoices and that’s what Debitoor does best.

steve@bicknells.net

 

New Company Reporting Thresholds now in place Reply

Business Diagram

The new regulations came into force on 6th April 2015 setting the following thresholds for small companies

Turnover  £10,200,000
Total assets  £5,100,000
Average no. of employees 50

Medium Company thresholds will now be

Turnover  £36,000,000
Total assets  £18,000,000
Average no. of employees 250

Micro Entities thresholds are unchanged

Turnover  £316,000
Total assets  £632,000
Average no. of employees 10

As before its a  2 out of 3 test. The Audit thresholds are unchanged.

Micro entities are no longer required to produce a directors report.

The new thresholds will apply to financial years beginning on or after 1 January 2016. However, early adoption is permitted.

Further details in SI2015/980

steve@bicknells.net

 

 

 

 

 

Why working with accounting is about to get so much better Reply

Business Accountant

Entrepreneur startup business model????????????????????????

Anyone who works with businesses is fully aware of how important accounting is for the success of a company. Yet many business owners have a negative attitude towards accounting. A high percentage of entrepreneurs see accounting as a necessary evil and often a hindrance to starting a new company.

How is that possible? Wasn’t accounting invented to help companies manage their business?

The IT industry has brought us computers and the ability to create software to automate bookkeeping. While there is no doubt that accounting software has been a great help, when we look at the usage of it, something is wrong. More than half of the businesses in the UK keep track of their finances by using a combination of spreadsheets and word processors rather than using accounting software. In an age where computing power is ubiquitous and virtually never too far from our pocket, we should be able…

View original post 1,135 more words

Is your accountant qualified? 1

Accounting Standards

The ACCA issued a warning in May after research from cloud accounting software provider ClearBooks showed just 8 per cent of small businesses considered an accountant’s qualifications when choosing one. There is no law preventing anyone from calling themselves an accountant, and that as a result small businesses could be unknowingly paying someone without the necessary skills to handle their finances and help their business grow, who isn’t regulated or insured against risk.

CIMA (Chartered Institute of Management Accountants) Members in Practice are monitored by CIMA for:

  1. Continuous Professional Development
  2. Anti Money Laundering Compliance
  3. Professional Indemnity Insurance
  4. Continuity Agreements
  5. Letters of engagement
  6. Ethical conduct

CIMA operates a Masters degree standard scheme of qualifying examinations for prospective members. It is active in promoting local education, training and management development operations, the promotion of new techniques through its research foundation and the dissemination of management accounting practices through publications and other media related activities. WIKIPEDIA

You can find out more at www.business-accountant.com and www.cimaglobal.com

Why is it that small businesses do not check that their accountant is qualified?

steve@bicknells.net

10 surprising accountancy facts Reply

Looking at phone

Here are some surprising, strange and unusual facts about accountancy…

  1. Franciscan friar Luca Bartolomeo de Pacioli is known has the father of accounting, although double entry had been around for centuries, he was the first to write a book on it (27 pages).
  2. It was FBI accountants that brought down Al Capone in 1931, FBI now employees 1,400 Accountants as Special Agents
  3. Mick Jagger and  Janet Jackson trained as accountants before becoming singers
  4. 60% of taxpayer hire an accountant to help them do their tax returns
  5. Bookkeeper and Bookkeeping are the only word in the English Language to have 3 consecutive double letters
  6. Monty Python frequently poked fun at the accounting profession.  One possible reason for their targeting of the accounting profession is that John Cleese’s father wanted him to become an accountant.  He was to work for Grace, Derbyshire and Todd Chartered Accountants on Whiteladies Rd, Bristol. (strange accounting facts)
  7. J. P. Morgan got his first Wall Street job as a junior accountant. Five years later he founded his own company.
  8. Erin Brady who won Miss USA 2013 is an accountant.
  9. St Matthew the Evangelist, author of the first of the Gospels, is the patron saint of accountants.  He is also the patron saint of tax collectors, bookkeepers, stock brokers and bankers.
  10. Compter was the original word of accounting. It was a derived from a French language.

steve@bicknells.net