Solutions

See how we can specifically help your business type

startups-top.jpg

Start Up Businesses

Starting up in business is never easy, which is why you need the right help from before 'day one'.

Get in touch

Some of the services we offer include:

compliance-icon.png

Compliance

Annual accounts • Statutory audits • Corporation tax • Self-Assessment Tax Returns • Company Secretarial work • Registered Office Address • Tax Investigation Insurance

tax-icon.png

Tax Planning

Annual key improvement possibility report • Personal tax • Business tax • Company car • Tax efficient remuneration • R&D tax credit claims • Capital Allowances claims for commercial properties • Annual TaxAbility pre-year end tax planning • Inheritance Tax • Company Formation • Incorporation • Capital gains Tax

business-advice-icon.png

Business Advice

Forecasts and Budgets • Actual Monthly performance • How your performance compares to previous years • How your performance compares to your industry • How much is your business worth • Improvement Potential


Key Questions In This Area

There are three common types of business structure:

  • Sole trader
    This is the simplest form of business since it can be established without legal formality. However, the business of a sole trader is not distinguished from the proprietor's personal affairs.
  • Partnership
    A partnership is similar in nature to a sole trader but because more people are involved it is advisable to draw up a written agreement and for all partners to be aware of the terms of the partnership. Again the business and personal affairs of the partners are not legally separate. A further possibility is to use what is known as a Limited Liability Partnership (LLP).
  • Company
    The business affairs are separate from the personal affairs of the owners, but there are legal regulations to comply with.

The appropriate structure will depend on a number of factors, including consideration of taxation implications, the legal entity, ownership and liability.

There is no longer a requirement for all companies to appoint a company secretary. Private companies (whose name ends in ltd) do not generally need to appoint a company secretary to deal with this paperwork, unless they either wish to do so or their Articles of Association (their governing document) requires them to do so.

Public limited companies (whose name ends in plc) must still have a company secretary who must have specialist, up to date knowledge of company law.

The company secretary is an officer of the company. This means that they may be criminally liable for company defaults, for example, failing to file a document in the time allowed or to submit the company’s annual return.

The High Income Child Benefit charge is payable by a taxpayer who has ‘adjusted net income’ (explained later) in excess of £50,000 where either they or their partner, if they have one, are in receipt of Child Benefit. Where there is a partner and both partners have adjusted net income in excess of £50,000 the charge only applies to the partner with the higher income.

Generally, HMRC will accept a reasonable proportion of costs such as council tax, mortgage interest, insurance, water rates, general repairs and rent, as well as cleaning, heat and light and metered water.

Other allowable costs may include the cost of business calls on the home telephone and a proportion of the line rental, in addition to expenditure on internet connections to the extent that the connection is used for business purposes.

Employers’ liability insurance is the only compulsory cover and only relevant if you have employees. By law you must have at least £5 million of cover although a minimum of £10 million is now provided by most policies. You must display the certificate of insurance in the workplace. If your business is not a limited company, and you are the only employee or you only employ close family members, you do not need compulsory employers’ liability insurance. Limited companies with only one employee, where that employee also owns 50% or more of the company’s shares, have also been exempt from compulsory employers’ liability insurance.

Preparing a business plan will help you to set clear objectives for your business and clarify your thinking. It will also help to set targets for future performance and monitor finances and profitability. It should help to provide early warning for when you might need to reconsider the plan.

There is no right answer to this but there is a vast number to choose from. First you must decide whether you want the software to be desktop based or the more modern online/cloud based software. We can help ensure you make the right decision for your business.

From the company’s point of view timing of the payment is not critical, but from the individual shareholder’s perspective, timing can be an important issue. If the shareholder is a higher/additional rate taxpayer, a dividend payment which is delayed until after the tax year ending on 5 April may give the shareholder an extra year to pay any further tax due.

The deferral of tax liabilities on the shareholder will be dependent on a number of factors. Please contact us for detailed advice.

Cash accounting enables a business to account for and pay VAT on the basis of cash received and paid rather than on the basis of invoices issued and received.

From 1 April 2007 a business can join the scheme if it has reasonable grounds for believing that taxable turnover in the next 12 months will not exceed £1,350,000 provided that it:

  • is up to date with VAT returns
  • has paid over all VAT due or agreed a basis for settling any outstanding amount in instalments

has not in the previous year been convicted of any VAT offences.

Want To Find Out More?

T: 01604 718866
F: 01604 716880
E: info@phm-accountants.co.uk

startups-top.jpg

Established Businesses

Your business has been running a while but you wish to ensure ongoing compliance, obtain on-going support/advice, explore further tax savings and possibly even free up your own time.

Get in touch

Some of the services we offer include:

consultancy-icon.png

Tax Planning

Annual key improvement possibility report • Personal tax • Business tax • Company car • Tax efficient remuneration • R&D tax credit claims • Capital Allowances claims for commercial properties • Annual TaxAbility pre-year end tax planning • Inheritance Tax • Capital gains Tax

bookkeeping-icon.png

Book Keeping & Management Accounts

Bookkeeping (& onsite option) • VAT return preparation/review • Management accounts • Cloud Book keeping setup.

payroll-icon.png

Payroll & Workplace Pensions / Autoenrolment

Payroll – Monthly or Weekly (Auto-enrolment compliant) • Forms P11D • CIS Monthly Contractors Returns.


Key Questions In This Area

A company can claim enhanced deductions against its taxable profits for expenditure which is qualifying R&D expenditure. The amount of the enhancement has increased over the years. The rate was 125% for expenditure incurred before 31 March 2015 and has increased to 130% from 1 April 2015. This amount is in addition to the actual expenditure (ie a 230% total deduction from 1 April 2015). R&D enhanced relief represents an additional corporation tax reduction of 26% of the expenditure incurred.

The Patent Box provides a reduced rate of corporation tax for companies exploiting patented inventions or certain other innovations protected by particular intellectual property (IP) rights.

The reduced rate applies to a proportion of the profits derived from the licensing or sale of the patent rights or from the sale of the patented invention or products which incorporate the patented invention. Profits derived from routine manufacturing, development or exploitation of brands and marketing intangible assets are excluded.

The following websites may help with initial research into grant availability:

The European Union is also a provider of funds, mainly through the European Commission which administers a large number of schemes.

Grants can also be received through Local Enterprise Partnerships (LEPs), local authorities and charitable organisations.

If a close company makes a loan to a participator (for example most shareholders in unquoted companies), the company must make a payment to HMRC if the loan is not repaid within nine months of the end of the accounting period. The amount of the tax is 32.5% of the loan.

Unfortunately there is no straight forward answer to this question and this requires much more detail regarding the type of car, mileage undertaken (personal and business) and running costs. Typically, unless it is a “green car” it is less tax efficient than re-charging mileage, but please contact us for specific advice in this area.

It is quite possible within the VAT system for a business to be in the position of having to pay over VAT to HMRC while not having received payment from their customer.

Bad debt relief allows businesses that have made supplies on which they have accounted for and paid VAT but for which they have not received payment to claim a refund of the VAT by reference to the outstanding amount.

VAT is not reclaimable on many forms of business entertainment but VAT on employee entertainment is recoverable. The definition of business entertainment is broadly interpreted to mean hospitality of any kind which therefore includes the following example situations:

  • travel expenses incurred by non employees but reimbursed by the business, such as self employed workers and consultants
  • hospitality elements of trade shows and public relations events.

A VAT supply takes place whenever goods change hands, so in theory any goods given away result in an amount of VAT due. The rule on business gifts is that no output tax will be due, provided that the VAT exclusive cost of the gifts made does not exceed £50 within any 12 month period to the same person.

Where the limit is exceeded, output tax is due on the full amount. If a trader is giving away bought-in goods, HMRC will usually accept that he can disallow the tax when he buys the goods, which may be more convenient than having to pay output tax every time he gives one away.

Routine commercial transactions which might be affected include such things as:

  • long service awards
  • Christmas gifts
  • Prizes or incentives for sales staff.

Want To Find Out More?

T: 01604 718866
F: 01604 716880
E: info@phm-accountants.co.uk

contractors-top.jpg

Contractors, Freelancers & Subcontractors

As a contractor/freelancer/subcontractor you are not looking for anything complicated, just straight forward tax efficient advice and ensure you are remaining compliant.

Get in touch

Some of the services we offer include:

compliance-icon.png

Compliance

Annual accounts • Corporation tax • Self-Assessment Tax Returns • Company Secretarial work • Registered Office Address • Tax Investigation Insurance

tax-icon.png

Tax Planning

Personal tax • Business tax • Company car • Tax efficient remuneration • Annual TaxAbility pre-year end tax planning • Inheritance Tax • Company Formation • Incorporation • Capital gains Tax

business-advice-icon.png

Book Keeping & Management Accounts

Bookkeeping (& onsite option) • VAT return preparation/review • Management accounts • Cloud Book keeping setup.


Key Questions In This Area

The contractor has to contact HMRC to check whether to pay a subcontractor gross or net. Not every subcontractor will need verifying.

If a contractor is paying a subcontractor they will not have to verify them if:

  • they have already included them on any monthly return in that tax year; or
  • the two previous tax years.

The 'IR35' rules are designed to prevent the avoidance of tax and national insurance contributions (NICs) through the use of personal service companies and partnerships.

The rules do not stop individuals selling their services through either their own personal companies or a partnership. However, they do seek to remove any possible tax advantages from doing so.

The UK income tax system requires the payer of key sources of income to deduct tax at source which removes the need for many tax payers to submit a tax return or make additional payments. This applies in particular to employment and savings income. However this is not possible for the self-employed or if someone with investment income is a higher rate taxpayer. As a result we have a payment regime in which the payments will usually be made in instalments.

The instalments consist of two payments on account of equal amounts:

  • the first on 31 January during the tax year and
  • the second on 31 July following.

These are set by reference to the previous year's net income tax liability.

A final payment (or repayment) is due on 31 January following the tax year.

In calculating the level of instalments any tax attributable to capital gains is ignored. All capital gains tax is paid as part of the final payment due on 31 January following the end of the tax year.

The Construction Industry Scheme (CIS) sets out special rules for tax and national insurance (NI) for those working in the construction industry. Businesses in the construction industry are known as ‘contractors' and ‘subcontractors'. They may be companies, partnerships or self employed individuals.

The CIS applies to construction work and also jobs such as alterations, repairs, decorating and demolition.

The rules allow the use of a 'simplified' fixed rate deduction instead of actual costs paid or incurred. It is optional, but using fixed rates may reduce the need for some of the detailed record keeping and calculations necessary to support tax deductible expenses. The amount of the overall tax allowable deductions could be greater or smaller compared to an actual cost comparison depending on the business circumstances.

Principally they apply to the following:

  • business mileage
  • deductions for business use of home
  • adjustments for private use of business premises

We consider the rules for calculating the fixed rates and when these are available.

Want To Find Out More?

T: 01604 718866
F: 01604 716880
E: info@phm-accountants.co.uk

Contact Us

T: 01604 718866
F: 01604 716880
E: info@phm-accountants.co.uk

Social

Home | Privacy | Site map | Contact us | Accessibility | Disclaimer | Help | Diversity Report

© 2020 Phipps Henson McAllister. All rights reserved.

powered by totalSOLUTION

We use cookies on this website, you can find more information about cookies here.

Phipps Henson McAllister are registered to carry on audit work in the UK & Ireland and regulated for a range of investment business activities by the Institute of Chartered Accountants in England & Wales.

Details about our audit registration can be viewed at www.auditregister.org.uk for the UK and www.cro.ie/auditorsfor Ireland, under reference number EWC008449569.

This firm is not authorised under the Financial Services and Markets Act 2000 but we are able in certain circumstances to offer a limited range of investment services to clients because we are members of the Institute of Chartered Accountants in England and Wales. We can provide these investment services if they are an incidental part of the professional services we have been engaged to provide.