Reduce your NI bill by £50,000 5

Yes £50,000, thats how much you could save in employers NI if your business qualifies for the regional employers NICs Holiday.

http://www.businesslink.gov.uk/bdotg/action/detail?type=ONEOFFPAGE&&itemId=1085763708&&r.s=p&&r.pp=12&&r.l1=1073858808&&r.lc=en&&r.li=1085814941

Under this scheme, for a limited period and subject to meeting certain conditions, new businesses may qualify for a deduction of up to £5,000 from the employer NICs that would normally be due – for each of the first ten employees they take on.

The National Insurance contributions (NICs) holiday is available to new businesses that start up during the period from 22 June 2010 to 5 September 2013.

The types of business that may be able to apply for the holiday are:

  • a sole trader, company or partnership that begins to carry on a trade, profession or vocation
  • a property business or investment business
  • a new trading charity whether or not it is carrying out activities with a view to profit

Managed Service Companies do not qualify for the holiday.

If you have recently started a new business its well worth finding out if it will qualify.

steve@bicknells.net

Salary v’s Dividend – how much money could I save? Reply

This has to be one of the most popular questions business owners ask their accountants, purely looking at it from a financial perspective I would recommend trying out these free calculators:

http://listentotaxman.com/index.php

This allows you to calculate the Tax and NI payable on Salaries

http://www.contractorcalculator.co.uk/Dividend_Tax_Summary.aspx?uid=0&logon=False&psalary=50000&div=1&status=OutsideIR35&pyt=LimitedCompany&expenses=3000&other=0&pension=0&tc=747L&age=30&salary=12000&rate=25&rt=Hourly&rt2=Hourly&weeks=44&dwpw=5&dwpw2=5&hours=37.5&dni=3000&tty=2011&rate2=25&weeks2=44&hours2=37.5&status2=OutsideIR35&psalary2=50000&mir=0.05&ma=200000&mp=25&cid=0&vat=1&vi=False&cby=1&ar=1&gs1=0&gs2=0&gs3=0&gs4=0&nd=80000&pbt=1&dpo=16-Jul-2011&dop=01-Jan-0001&inv=1&hpd=11&me=150&vt=Car&mpw=0&mpc=0&pt=Monthly&ace=500&mt=Parasol&wl=InsideLondon&uds=Basic&Host=LOCAL

This link calculates the tax on dividends (Dividends are paid after the company has paid Corporation Tax which is 21% for small companies)

steve@bicknells.net

 

 

Can I make a suggestion? £5000 tax free 10

In the current economic climate every business needs to look for new ways to improve but few businesses take advantage of the HMRC approved schemes

http://www.hmrc.gov.uk/paye/exb/a-z/s/suggestion-schemes.htm

Basically there are 2 types of award:

Encouragement Awards where the employer can pay £25 tax and NI free

Financial Benefit Awards where employees can be paid up to £5000 tax and NI free

Financial benefit awards are exempt from tax and NICs up to the greater of the following, subject to an overall limit of £5,000:

  • 50 per cent of the financial benefit you reasonably expect the suggestion to lead to in the first year following its adoption
  • 10 per cent of the financial benefit you reasonably expect in the first five years following adoption

Sounds like a win win to me

steve@bicknells.net

Free Payroll! with free updates! 3

If you have a business, the chances are you will need to operate a payroll.

When you set up in business the easiest and quickest way to register a payroll is on line

http://www.hmrc.gov.uk/paye/intro/register-email.htm

Once your payroll is registered its worth obtaining dispensations to hopefully avoid or at least reduce the need for P11D’s

http://www.hmrc.gov.uk/paye/exb/schemes/dispensation.htm

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’

http://www.businesslink.gov.uk/bdotg/action/detail?itemId=1086949246&r.l1=1073858808&r.l2=1083106843&r.l3=1083106693&r.l4=1086857322&r.s=sc&type=RESOURCES

Its a great bit of software and you can set up multiple business and create employee databases.

The only thing it doesn’t do is produce payslips, but you can do that easily yourself  by creating your own template in Word or Excel.

steve@bicknells.net

 

Consultants beware of IR35 – use the QDOS Model Contract (Free) 2

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

http://www.qdosconsulting.com/freelancer-contractor/free-guides-templates

steve@bicknells.net

Free Accounting Software – forever 2

I love free things, don’t you?

I discovered TAS books basics a while ago

http://www.tassoftware.co.uk/site/tas_accounts_software/basics

It is absolutely totally free and for a small business its ideal, its much better than trying to create your own system using spreadsheets. If you are a new business starting out why not give it go.

steve@bicknells.net

Who is next on taxman’s hit list? are you prepared… Reply

It seems the taxman has got bored with chasing the self employed and moved on to the middle classes and white-collar professionals as highlight in this article in the Sunday Express today

http://www.express.co.uk/posts/view/269055/Taxmen-target-middle-classes-Crackdown-on-tax-cheats

Doctors and Dentists are now top of the hit list.

Chancellor George Osborne has branded tax-evaders “leeches”, convictions for tax evasion have jumped 38% over the past year to 148 for the year to March 2011.

Sometimes tax issues can arise from simple mistakes and misunderstandings, if your accounts and records need to be reviewed now is the perfect time to seek help from your accountant.

steve@bicknells.net

If the taxman comes knocking…….try ESC A19 Reply

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

http://www.litrg.org.uk/Resources/LITRG/LITRG_ESC_A19_Guide_Oct2010.pdf

steve@bicknells.net