Childcare – 3 Part Report for Childcare Providers and Parents

We have prepared a report made up of 3 blogs written by Steve Bicknell and Whitney Highum

The blogs cover childcare vouchers, salary sacrifice, the new 2017 scheme, and tax allowable expenses for childcare professionals. Click here to download

10 crazy Christmas accounting facts

It’s nearly Christmas, but did you know….

While millions of people are exchanging presents, feasting on turkey, and nodding off in front of the television, 1,600 people are expected to take time out from the yuletide festivities and do their tax return online
If your employer spent more than £150 per head on parties you could be facing a tax bill in the new year
If you are given third party gifts (suppliers) worth more than £250, then you could he taxed on them
An employer may provide employees with a seasonal gift, such as a turkey, an ordinary bottle of wine or a box of chocolates at Christmas. All of these gifts can be treated as trivial benefits.
Shoppers spent £1.2bn on ‘Panic Saturday’ (20th December 2014)
Christmas Shoppers will spend £74bn in 2014 and of this £17.4bn will be spent online
From 2016, employers will be able to give employees tax-free “benefits” – not cash – of up to £50 a year.
HMRC will not be holding any Christmas Parties for its staff according to the Telegraph
Many people think Scrooge was an accountant but he was actually a moneylender
There is no VAT on purchased gift vouchers as they are treated as cash equivalents, its only when they are used to purchase items that VAT needs to be accounted for.

Have a great Christmas

steve@bicknells.net

The Extreme Coupon frenzy, is it good for business?

I was watching BBC news this morning and saw Jordon Cox, 16, from Brentwood in Essex, he scours newspapers and magazines for coupons and vouchers that offer special deals on food and household products.He bought £105 of groceries for £1.62, follow this link to see his interview http://www.bbc.co.uk/news/uk-22418225

So lets start by learning the lingo

Bogo: Buy One Get One
Peelie: A coupon stuck to a product
Blinkie: A coupon station in a store
Stacking: Using a store coupon with a manufacturers coupon – not all stores allow this
Catalinas:Coupons printed at the cash register when you pay for your items
Rebate: Mailing a receipt to a company to get a refund
Overage: When the value of a coupon exceeds the purchase price of the item

Everyone loves a freebie or money off, but there seem to be so many sites offering vouchers its hard to keep track of what is on offer, for example I get e mailed deals from:

Groupon
KGB
Wowcher

I have apps for:

Voucher Cloud
O2 Moments
Vouchercodes
Quidco
Top Cash Back

Then there are websites like http://www.freebiesiteuk.co.uk/

That’s before you start cutting coupons out of magazines.

Pitney Bowes have produced a white paper on Coupons – April 2013:

The whitepaper, entitled ‘The Coupon Renaissance’, revealed that 76% of consumers would buy more from local businesses if they offered coupon incentives. With many small local businesses struggling in today’s economic climate, the figures offer a positive outlook that SMEs should capitalise on.

The surge in coupon redemptions is a relatively new phenomenon; with the current economic climate increasing popularity, the UK has witnessed a sharp 14.7% spike in usage since 2008**. The research also showed that an impressive 80% of consumers have redeemed a coupon in the last year, and half (49%) of customers redeem them as frequently as one per month.

The trend by consumers to use coupons to cut costs are likely to increase based on a report from Which:

More than half of Britons cannot cope on their current salaries with one in five forced to borrow money to buy groceries and other household essentials because of the soaring cost of living, a new survey revealed today.

One in four people revealed they’ve had to use their savings to buy food or other daily essentials while one in five have gone into debt to do this.

Another 10 per cent said they could envisage needing to borrow buy food in the future.
Read more: http://www.thisismoney.co.uk/money/news/article-2110009/Which-report-reveals-millions-Britons-forced-borrow-buy-groceries.html#ixzz2SS0GEVyd

steve@bicknells.net

How do I calculate the VAT on a Sales Promotion?

Now Christmas is over the shops are full of sales promotions, discounts, double counts, 50% off but how much VAT should be charged? And what type of business promotion would be best for your business?

Here are some to consider:

Discounts

Provided you aren’t connected to the person you are selling to, VAT is only payable on the discounted price. If you offer a retrospective discount or volume discount a credit note can be issued when the target is achieved.

Buy one get one free

Sounds simple but needs to be handled carefully as for VAT purposes the default assumption would be that one item is at full price and the other item is a gift, the gift would be subject to VAT (if it’s over £50 in value). So for accounting and VAT purposes you should sell both items at 50% of their value.

Money-Off Coupons

These work in similar way to Discounts but in some cases the retailer will be able to recover the value of the Coupon from their supplier.

Cash-Back

The purchaser pays the full price and gets cash back. Often the manufacturer gives the cash back rather than the retailer, so the retailer accounts for VAT on the full price. The manufacturer pays the Cash Back to purchaser. The Manufacturer can then reduce their output tax for the Cash Back.

Gift Vouchers and Face Value Vouchers

There is no VAT on purchased gift vouchers as they are treated as cash equivalents, its only when they are used to purchase items that VAT needs to be accounted for.

It’s also common for Gift Vouchers to be lost and never used, which is great for the retailers.

If the voucher is sold for more than its cash equivalent then part of the value will be vatable.

Reward Cards

There are several ways to handle these let’s assume the points operator pays the retailer the value of the points, the operator will then reclaim input tax. Alternatives could follow the Discount rules or Voucher rules.

steve@bicknells.net