General Archives - Emma Stevens Accountancy

Did you know? …. Marriage Allowance

09/11/2017 By Emma Stevens

Marriage allowance allows you to transfer £1,150 of your personal allowance to your husband, wife or civil partner, reducing their tax by £230.

Who will benefit? If you earn less than £11,500 a year and your partner earns between £11,501 and £45,000 you could be better off by applying for marriage allowance. You need to be married or in a civil partnership to apply.

You can apply for the marriage allowance online via www.gov.uk/apply-marriage-allowance If successful the change will be backdated to the beginning of the tax year (6 April) and the change will be reflected in your tax code.

If you complete a tax return you can opt for marriage allowance for 2016/17 via your personal tax return which is due for filing by 31^st January 2018.

If your circumstances change you, such as your partner earning more than £45,000 or you earning more than £11,500 then you can apply to cancel your marriage allowance online.

If you need any advice on tax please get in touch with Emma Stevens at Emma Stevens Accountancy.

All data and information provided in this advert is for informational purposes only and is not intended to substitute for obtaining accounting, tax, or financial advice from a professional accountant. Emma Stevens Accountancy Ltd makes no representations as to accuracy, completeness, correctness, suitability, or validity of any information in this ad and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. All information is provided on an as-is basis.

Self Assessment Tax Return

14/08/2017 By Emma Stevens

A Self-assessment tax return is the form an individual completes to report to HMRC their income for the year and to calculate how much tax is due on that income. In the UK, the tax year runs from 6^th April to 5^th April the following year. So, for 2016-17 the period covered is 6^th April 2016 to 5^th April 2017. Not all UK residents are required to do a tax return. If your only income is as an employee you don’t need to worry about it. However, there are some situations which do require the completion of a return and this article should guide you through them.

Do I need to do one?

You are required to complete a Self-assessment tax return if you come under the following categories:

· Self employed.

· Have untaxed income such as rental income exceeding £2,500

· Your income from shares, savings or investments exceeds £10,000

· You’re a company director

· You made a chargeable gain such as selling a 2^nd home

· Your income is over £100,000 (or £50,000 and you/your partner claims child benefit)

· You have income from abroad or you live abroad and have UK income

What do I need to do?

If you fall into one of the above categories you must complete a tax return each year by 31 January. So, for tax year ending 5 Apr 2017, your tax return must be completed and sent to HMRC, online, by 31^st January 2018 (paper versions must be filed by 31^st October).

You need to include all your income on your tax return, not just the income which hasn’t been taxed

When do I pay

HMRC must be paid the balance of tax due by 31^st January following the end of the tax year (31^st January 2018 for the tax year ending 5 April 2017).

If you owe under £3,000 in tax and pay tax through the PAYE scheme you can ask HMRC to collect the tax owed through your pay code, as long as you submit your tax return by 31^st December following the end of the tax year. HMRC will only apply this if you have enough PAYE income for it to be collected.

You will be required to make a payment on account towards your tax bill for the following year if your self-assessment bill is more than £1,000. Each payment on account is half your previous year’s tax bill. These payments are due on 31^st January and 31^st July. If you still have tax to pay after you’ve made your payments on account this balancing payment is also due by 31^st January.

I need to do a tax return how do I tell HMRC

How you register depends on the reason you are registering. If you are registering because you are self-employed you need to complete the form CWF1 online. If you’re not self-employed you need to complete the form SA1. You must register by 5^th October if you need to complete a tax return for the last tax year (5^th October 2017 for the tax year ending 5^th April 2017).

How can an accountant help me?

An accountant can help you in many ways with your tax return. Firstly, they will save you the time and hassle of doing it yourself. A good accountant will also know what you can and can’t claim against your taxable income and they will advise you accordingly. An accountant will register as your agent and can speak to HMRC on your behalf, saving you hours of waiting on hold if you have a problem! To find out more contact Emma Stevens

All data and information provided in this advert is for informational purposes only and is not intended to substitute for obtaining accounting, tax, or financial advice from a professional accountant. Emma Stevens Accountancy Ltd makes no representations as to accuracy, completeness, correctness, suitability, or validity of any information in this ad and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. All information is provided on an as-is basis.

Choosing an accountant

15/05/2017 By Emma Stevens

Finding the right accountant is a big decision for any business, and one of the most important decisions you make. If you find a good one, it saves you time and money – a not so good one might potentially do the opposite.

When you’re looking for someone to help you with your accountancy, it’s important to find a good fit, someone you think you’ll be able to work with almost as a business partner. Someone who has experience working with small businesses like your own will be an asset, understanding the way you run the business and the issues you face.

It’s worth speaking to three or more potential accountants before you make a final decision. Ask what qualifications they have and whether they are industry regulated; an ICAEW member, for example, will have professional indemnity insurance, protecting you from any decisions you make on bad advice from them.

Talk to other businesses in your area and see if you can get recommendations for them. Testimonials from existing clients are also good.

Could your money work harder?

A good accountant does more than just take care of your tax return and make sure that your accounts are up to date. If you’re looking for capital, they should be knowledgeable about sources of funding such as grants and tax relief schemes. If there’s anything your business is entitled to, they should be getting it for you.

Don’t be timid when it comes to asking about the fees either, you might be able to arrange package deals, monthly payments or easy payment terms if money is an issue.

Is your accountant going to be a good fit?

It’s absolutely vital that whoever you choose to work with understands the needs of your business, and can give you advice and insight that actually helps. If you can find an accountancy firm that has expertise in your sector, with plenty of background in working with small businesses, they are more likely to understand your challenges, and their prices are likely to fit too. Ask if they have worked with similar firms at the same stage in business as you.

What sort of engagement do you need from them? Some are more distant than others and if it’s important to you that your chosen accountant will be involved in your day to day business development, make that clear from the outset to avoid shocks when it comes to bill payment time. It can be cheaper to use a firm that don’t really have much contact with you but if you have any issues it can make you feel as if you’re imposing, not to mention worrying about the cost.

If you opt for a bigger firm, make sure that you know which member of the company will be dealing with your day to day accounts, and meet them if possible.

Finally, look for an accountant who seems approachable and friendly, and who you can talk to honestly about your business and its issues. You need to find someone who you can trust and relate to when you’re talking about issues that affect your finances.

All data and information provided in this advert is for informational purposes only and is not intended to substitute for obtaining accounting, tax, or financial advice from a professional accountant. Emma Stevens Accountancy Ltd makes no representations as to accuracy, completeness, correctness, suitability, or validity of any information in this ad and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. All information is provided on an as-is basis.

The importance of knowing your financial situation – all the time!

10/08/2016 By Emma Stevens

Did you know that according to research from the Forum of Private Business (FPB) in 2012, around 50 per cent of accountants surveyed by ABN AMRO Commercial Finance believed that small businesses aren’t really in control of their finances? The survey revealed that many small businesses appear to plan only for the short term and weren’t prepared for emergencies and cash flow problems. This survey really highlighted the need for all business owners, however small, to keep an eye on how their business is doing on a regular basis. If you don’t know what’s going on, how can you deal with problems?

It doesn’t take a lot of effort to get your business finances under control, and spot any issues before they crop up.

All in the plan

Do you have a plan for your business? A well set out business plan with clear financial targets will help you stay on track, and you can measure your progress against the goals you set yourself over the course of six months, a year, and five years.

Planning also helps you deal with issues as they come up instead of having to fire-fight when something goes wrong. Make a record of all your business’s financial targets, budgets, profit and loss and cash flow forecasts and review them regularly against progress.

Know where you are – right now

It’s so vitally important that you always know the financial health of your small business. Make a habit of checking your business bank account often, daily if possible, and the same with sales and stock records. Review your results against your targets on a monthly basis and see how you’re performing.

Is there enough in the account to cover rent, payroll and bills? Do you have a minimum amount that you need available in the bank to cover the essentials? Have you got enough for stock? Work out exactly what your business needs to survive, including a bit extra for unexpected expenses, and never let what’s in the bank account fall below that level.

Don’t neglect the paperwork – it’s not just a case of keeping receipts and tracking expenses but invoicing needs to be carried out regularly, and if you miss an invoice that’s money you’ve wasted through not being on top of the accounts.

Know your tax situation

You absolutely must make sure that you’re on top of the tax situation at all times, so file your accounts regularly and as early as you possibly can so that you know well in advance that your return is filed, how much you have to pay and when you need to pay it by. That way, there will be no nasty surprises. If you miss a deadline for filing returns or payments you’ll incur fines and interest on those fines, all of which can easily be avoided.

Follow up late payments

It’s a bind but if you manage your invoicing you should be able to spot late payments early on, and deal with them accordingly. Don’t feel bad about chasing late invoices, it’s your money, and you have every right to expect invoices to be paid promptly. Keeping a close eye on when your invoices are due to be paid gives you a head start in spotting problem payers and hopefully enables you to get your payment sooner rather than later.

Control your stock

If you have stock as part of your business, managing it effectively and keeping a close eye on what you have can do a lot to improve your cash flow. Look at what’s selling and what isn’t. Don’t over stock, get into the habit of buying in only what you need so that your business capital isn’t tied up in stock you might not be able to sell. Shop around for good deals and look out for discounts and special offers from wholesalers to make the most of your money.

Do you need help managing your finances?

A good accountant can support you in knowing your financial position at all times. Knowledge is power and having control of your business finances allows you to make the right decisions to drive your business forward. Check out our Gold package for all your business needs.

Pension auto enrolment for small companies

01/03/2016 By Emma Stevens

If you’re worried about the new legislation that’s recently made it compulsory to set up a workplace pension scheme for your staff, and have been putting it off – stop worrying and take action now. It’s actually a reasonably straightforward process, but if you don’t take action soon you could find that you’re in receipt of a hefty fine.

If you employ even one member of staff, you’re now responsible for enrolling them, if they are eligible, onto a pension scheme, and contributing towards it, depending on their salary. The legislation has been in place since 2012 for larger firms, but since 2015 it applies to all employers, however small.

Auto Enrolment

Although the law calls this ‘automatic enrolment’ it’s only automatic for your staff members, it’s not automatically done for you. As an employer, you’ll need to get organised and take the steps necessary to make sure that anyone employed by you is enrolled onto the scheme, if they are eligible.

If you’re already ahead of the game and have been paying into a pension scheme for your employees, you’ll now have to check that it’s suitable for the automatic enrolment scheme.

What do you need to do?

The first thing you need to do is find out your staging date. This is the date your pension duties come into force and it depends on how many employees you had on 1 April 2012. You can find this information out from the Pensions Regulator website.

Your next task is to assess your staff and work out who needs to be enrolled. This table shows you who has to be enrolled and who has the right to opt in.

Monthly gross earnings	Age			Weekly gross earnings
	From 16 to 21	From 22 to SPA*	From SPA to 74
£486 and below	Has a right to join a pension scheme ¹			£112 and below
Over £486 up to £833	Has a right to opt in ²			Over £112 up to £192
Over £833	Has a right to opt in	Must be enrolled ³	Has a right to opt in	Over £192

Figures correct as of 2015/2016. *SPA = state pension age

¹ Has a right to join a pension scheme If they ask, the employer must provide a pension scheme for them, but the employer doesn’t have to pay contributions into a pension scheme.

² Has a right to opt in If they ask to be put into a pension scheme, the employer must put them in a pension scheme that can be used for automatic enrolment and pay regular contributions.

³ Must be enrolled The employer must put these members of staff into a pension scheme that can be used for automatic enrolment and pay regular contributions. The employer doesn’t need to ask their permission. If a member of staff gives notice, or the employer gives them notice, to leave employment before the employer has completed this process, the employer has a choice whether to enrol them or not.

Make sure that all of your staff records are accurate so that you have the right information to start with; National Insurance numbers, dates of birth and salary details are all essential for working out contributions and eligibility.

Provide the Pensions Regulator with contact details for the person in charge of auto-enrolment for your business. This can be you, someone in your company, or your financial adviser/accountant.

If any of your staff members want to opt out of the scheme, they can do so, but you must give them the option to enrol and the onus is upon them to opt out of they choose to do so.

The Pensions Regulator should write to you and let you know when your staging date is; or you can work it out for yourself using the calculator tool on their website. Generally, the fewer employees you had in April 2012, the longer you have to set up your scheme, but it pays to be well prepared.

Choosing a Pension Scheme

Once you have all the information, you can find a suitable pension scheme, if you don’t already have one in place. You should do this at least six months before your staging date, and if you already have a pension scheme, ensure it’s eligible beforehand. You can check eligibility on the Pensions Regulator website:

Once you have a scheme set up, you should write to all your employees and let them know about auto-enrolment and what it means for them

How much will it cost?

To begin with, your contribution towards the scheme is 1 per cent, but this will rise over the next few years, and from October 2018 you can expect to be contributing a minimum of 3 per cent for every employee.

The exact amounts can be calculated with another tool on the Pensions Regulator website.

There are different types of pension schemes and providers available – look for a scheme run by a specialist provider and make sure that it’s compatible with any accounting/payroll software you’re using.

After the staging date

You’ll need to make sure that your records are kept updated to keep track of new staff members, salaries and contributions. You might want to invest in payroll software to help with this. Within five months of your staging date you must complete a declaration of compliance – don’t forget to do this or you could be fined.

Every three years you’ll have to go through the auto-enrolment process again, with a re-declaration of compliance – but if you’ve kept everything up to date this should be relatively easy to do.

PAYE Responsibilities – Becoming an Employer for the First Time

09/11/2015 By Emma Stevens

It’s a big step, taking on your first employee. If you’ve only ever worked for yourself in the past, or even been employed by other people, the rules and regulations surrounding PAYE, NIC and other important aspects of employment law may be new to you, so make sure that you know exactly what you need to do.

The basics

As an employer, you’ll be responsible for calculating and deducting PAYE and National Insurance contributions from your employees, and making sure it’s paid to HMRC on time. You’ll also have to pay any statutory payments like Statutory Sick Pay and Maternity Pay.

You need to ensure you keep accurate records of all payments you make. These can be requested at any time by HMRC for inspection.

Registering with HMRC

The first thing to do if you’re taking on staff is to register as an employer with HMRC. If you have already registered yourself and/or your business for self-assessment, PAYE, corporation tax or VAT you should already have a government gateway account, so registration should be fairly easy. The HMRC website has a Business Tax Dashboard which is handy for bringing together all the information from the services you use online, and you can nominate someone else to handle it for you if you prefer, whether it’s a business partner, accountant or financial adviser. All you need to do is inform HMRC of your chosen person.

You register with HMRC for PAYE up to four weeks before you have to pay your new staff members.

You do not need to register with HMRC if you pay your new staff member under £112 a week provided your new employee does not have a second job, receive any benefits or have a pension income. You still need to keep accurate payroll records and you will need to register with HMRC as soon as you pay your employee more than £112 a week even if it is a one off.

Setting up a payroll

It’s your responsibility as a new employer to set up a payroll. You’ll need software that is compatible with HMRC if you’re running the payroll for your company yourself, so that you can send the information across in real time, every time an employee is paid.

There is free payroll software available from HMRC for businesses employing fewer than nine people, or you can use commercial software. You might prefer to hand everything over to a specialist payroll bureau or an accountant if that’s easier. As long as someone is giving the correct information to HMRC, it’s fine, but as the employer, it’s legally your responsibility to make sure the information is sent, whichever method you choose.

You’ll also have to decide how much you intend to pay employees – and make sure it’s at least the current National Minimum Wage.

Employed or self-employed?

Before you take someone on, check whether the new employee will actually count as ‘employed.’ Some people, such as freelance contractors, are responsible for their own tax and National Insurance so you don’t need to include them in any PAYE calculations.

There’s a useful interactive employment status indicator on the HMRC website.

Checking up on your employees

It’s important to make sure that your intended employee(s) are legally entitled to work in the UK, and if the position they are applying for is one the requires a Disclosure Barring Service (DBS) Check, formerly known as a CRB check, make sure this is done before he or she is formally employed.

Get Insured

All employers need to have employers’ liability insurance before they can become an employer. If you already have professional indemnity or third party liability insurance check with your insurer to see if you are covered.

Paying HMRC

You are legally responsible for making all the correct deductions from your employees pay and paying them to HMRC on time. There are monthly deadlines for paying deductions, as well as Student Loan repayments or tax that has been deducted from payments you’ve made to subcontractors.

Need help with your payroll responsibilities?

Emma Stevens Accountancy offer a payroll service to customers. You can check our rates here.