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.

Capital Gains Tax

04/09/2017 By Emma Stevens

If you sell something (such as a property, painting or land), for more than you brought it for, you pay a tax called Capital Gains Tax on the increased value.

What assets do I need to pay capital gains tax on?

Capital gains tax is paid on the gain when you sell:

A property which isn’t your main home
Your main home if you’ve ever let it out, it’s very large or used it for business.
Shares
Business assets
Personal possessions worth more than £6,000 such as jewellery, paintings, antiques and sets of things such as matching vases

What assets are not liable to capital gains tax?

You don’t have to pay capital gains tax on:

your car, unless you used it for business.
your main home, except in the instances above.
anything with a limited lifespan of less than 50 years
gifts to your husband, wife, civil partner or a charity
ISAs or PEPs
UK government gilts and premium bonds
Betting, lottery or pools wins
Gains under your annual tax free allowance (£11,300 for 2017-18)

How do I report a gain to HMRC?

If you are registered for self assessment you complete the capital gains tax pages. You will then need to pay the tax due on the gain by 31^st January (2018 for gains in the tax year 2016-17). If you don’t complete a self assessment return you will need to report your gain to HMRC through the government gateway online portal.

How much capital gains tax will I pay?

Higher rate tax payer pay 20% capital gains (28% on residential properties). If you’re a basic rate tax payer you will pay 10% (18% on residential properties) if the amount is within your basic income tax band. If the amount means you go into the higher rate tax band you will pay the higher rates on the part which is in the higher rate band.

Reliefs against capital gains tax

There are some reliefs against capital gains tax which may be available in some circumstance such as selling a rental property which you previously lived in. It’s always best to consult a tax expert to ensure you don’t over pay your tax.

For More Information 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.

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.

Rental income – what expenses can I offset?

24/04/2017 By Emma Stevens

The budget of summer 2015 announced changes to the tax relief that buy-to-let landlords can claim that may well affect your rental income long term. Until 2017, landlords can claim back all of their ‘financial costs’ incurred in renting out a property. This even includes mortgage interest.

In 2017, however, changes will come into effect that mean landlords can only claim relief at the basic income tax rate of 20 per cent, even if they are higher rate taxpayers. If you’re a landlord in one of the higher tax brackets, you could lose over 50 per cent of your tax relief by 2020, when the changes will be completely in effect.

Although it’s tempting to panic about losing rental income, it’s also wise to make sure that you are actually claiming everything you’re entitled to before the changes come in. That way, when the reductions in tax relief hit, there’s some extra income to soften the blow.

Mortgage Interest

From April 2017 over a four-year period implementation of the new claims on relief for finance costs (e.g. mortgage interest rates) incurred on the property of all landlords of residential property in or outside the UK will be phased in as follows:

2017/2018: the deduction from property income will be restricted to 75% of finance costs with the remaining 25% available at the basic rate.
2018/2019: 50% of finance costs available for full tax relief and the remaining 50% available at the basic rate.
2019/2020: 25% of finance costs available for full tax relief and the remaining 75% available at the basic rate.
2020/2021: all financing costs incurred by a landlord will be given as basic rate tax reduction.

The restrictions being imposed on the finance costs are likely to affect landlords of residential properties paying tax at the higher and additional rates, however excluding those with qualifying furnished holiday lets.

Letting agent fees

These are tax-deductible – considering you could be looking at fees of 10-15 per cent of your rental charges for a traditional letting agent, that’s something you need to add into your tax return as an expense.

The costs of

advertising
drafting tenancy agreements
credit checking and referencing tenants
deposit protection fees and
inventory costs,

can also be offset if you’re not letting through an agent.

Maintenance and repairs

You can’t claim for home improvements or renovation but you can offset the cost of fixing any problems and general maintenance of the property. The type of repairs you can claim for are:

interior and exterior painting and decorating
treating damp and rot
mending broken doors, windows, lifts, furniture and appliances.
re-pointing
stone cleaning
replacing roof slates, flashing and gutters
Wear and tear

From April 2016, a new system is replacing the wear and tear allowance. This new system will affect all landlords of furnished residential properties. In the past, the wear and tear allowance allowed landlords to claim back broadly 10 per cent of the annual rent. The new allowance will be a system allowing for landlords of residential property to deduct only the actual costs incurred of replacing furnishings in the tax year. Capital allowances for furnished holiday lets will not be affected.

Council tax and utility bills

If you pay any of the property’s utility bills on the tenant’s behalf, you can claim the whole cost of this back.

You can also claim back one-off costs like the cost of travelling between properties.

If you’re not sure about which expenses you can claim back against tax, ask an accountant’s advice – it’s also tax-deductible!

Spring Budget 2017

09/03/2017 By Emma Stevens

The Chancellor’s first – and last – Spring Budget

The Spring Budget 2017 will be the last of its type. Probably.

The publication of the Finance Bill in the spring/summer of this year will presage a change in Parliamentary proceedings. A second Budget in autumn 2017 followed by a Spring Statement in 2018 marks the start of a process enabling Parliament to scrutinise tax changes well before the tax year where most will take effect.

As if the domestic ‘flip-flopping’ of a long-standing timetable wasn’t enough, the Chancellor, Philip Hammond, delivered his first Budget speech against a backdrop of Brexit uncertainty.

Before he stood up, punters could have obtained long odds about witnessing a wise-cracking ‘Spreadsheet Phil’, as he has become known, standing at the despatch box (the joke-o-meter registered seven during his hour-long address).

But beyond the laughs from the government benches combined with Opposition scowls, the Chancellor sent out some fairly serious messages.

Fairness?

For starters, as part of a fiscally-tight Budget there was the Chancellor’s decision to target the self-employed, company owners and investors in a bid to raise billions of pounds and provide a “strong and stable platform” for the UK’s negotiations as it navigates a path away from the EU.

He also proposed to enhance the fairness in the UK’s tax system with a view to transforming the economy into one that works for everyone.

With ISA allowances set to be worth £20,000 from April 2017 and a reduction from £5,000 to £2,000 in the tax-free dividend allowance from April 2018, here are two opportunities offering professional advisers the chance to demonstrate their expertise admirably to clients.

Throw in the need for businesses to seek out rates advice on their premises following the impending changes to the system, combined with the relief measures announced by the Chancellor, and the Spring Budget could prove a Spring-board to the forging of robust relationships between advisers and clients.

And that’s before the Chancellor even deigns to delve back into his joke book to help buff up his Autumn Budget announcements…

BUDGET HIGHLIGHTS

A reduction in the dividend allowance from the current £5,000 to £2,000 from 2018/19.
A 1% increase in the main Class 4 NIC rate to 10% for 2018/19 and a further 1% addition to 11% for 2019/20.
A one year deferral in the start date for Making Tax Digital (MTD) for unincorporated businesses and landlords whose turnover is below the VAT threshold (£85,000 from 1 April 2017).
An increase in the personal allowance for 2017/18 to £11,500 and a corresponding rise in the higher rate threshold to £45,000, although in Scotland the latter figure will only apply to savings and dividend income.
A new 25% tax charge on transfers to qualifying recognised overseas pension schemes (QROPS), other than for those who have ‘a genuine need’ to transfer.
Three measures to help small businesses cope with the changes to business rates, due to take effect in April 2017, starting with a new £50 a month cap (in 2017/18 only) for businesses that lose Small Business Rate Relief.
The publication later in the year of a green paper examining the funding of social care, although the Chancellor ruled out the rumoured ‘death tax’. In the interim an additional £1bn is to be made available for social care funding in 2017/18.

Download the full budget guide

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.

A great review of Emma Stevens Accountancy!

25/07/2016 By Emma Stevens

Wesley Clark of Ktchns Limited (www.ktchns.co.uk) gave Emma Stevens Accountancy a great review this week! Its been a pleasure to work with Wesley over the last 18 months helping him to set up his business and watching it grow into a very successful small business! Keep up the good work Wes!

Wesley wrote:

After 10 years in the Kitchen industry I decided to look into the possibilities of setting up my own kitchen business. After extensive research and planning, one of the main things stopping me from ‘making the move’ was the accounting side of things. I have always been a bit scared of Tax, VAT, and HMRC in general and this was the main delay in my decision. I had heard of Emma Stevens locally and thought I’d drop her an email to find out what she could do to help. During our meeting Emma gave me some very helpful information and tips on how to get everything up and running. This was before we’d even discussed me using Emma as my accountant. The advice she gave made me so much more confident about what I was doing and she could see that I could be onto something good. After leaving the meeting with Emma I decided to go ahead and make that big move. Emma has made it all so very simple. She now manages my PAYE, my VAT and TAX Returns so I don’t have to worry. Every time I have had a question, she replies within a few minutes. I am now running what I would call a growing successful business. I wouldn’t be enjoying it half as much if I didn’t have Emma there to back me up and help where needed.

Can we help you too?

This is the reason I love what I do. It is so wonderful to be able to support small businesses to grow and expand. So if you have a great business idea but you don’t know what to do next why not get in touch and see what we can do to help you.

Emma Stevens Accountancy

01442 831462

info@emmastevensaccountancy.co.uk

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.

Tax Rates and Allowances for 2015-16

23/11/2015 By Emma Stevens

Explaining the complete list of tax rates and allowances for 2015-16, plus any changes to the rules in this year would take more than a blog post – that’s what accountants are for, after all. We’ve put together a quick guide to some of the most important taxes that affect you as an individual and as small business owner.

Your actual income will be affected not only by the tax rates, but also by changes in personal allowances. For help with tax and any other financial issues, feel free to contact Emma Stevens Accountancy.

Tax bands and thresholds for 2015-16

Tax bands for 2015-16 haven’t changed a great deal, except for the 10 per cent savings band which has been replaced with a £5,000 nil-rate band for people on a low income.

Income Tax Rates

Income tax for self-employed people is only paid on the profits, not the gross income; deduct business expenses, capital allowances and losses to find your profit.

First £31,785 of taxable income 20%
£31,786 to £150,000 40%
Excess over £150,000 45%

Personal Allowances

Individuals born after 5 April 1938 £10,600
Individuals born before 6 April 1938 £10,660

Annual investment allowance

The current annual investment allowance is £500,000 until December 2015, when it will be reduced. You can spend up to £500,000 on business-related capital assets in this tax period, and offset it against your income tax bill.

Expenses you can claim

You can deduct the costs of anything bought for your business when you work out taxable profits and get immediate tax relief for the full amount spent unless it’s an item that counts as a capital asset- such as a computer which is accounted for under different rules.

Running costs of a car or vehicle, including petrol, car tax, insurance, repairs and servicing – depending on the proportion of mileage that was business-related.
Running costs of your business premises – or if you work from home, your home office costs
Salaries and benefits of any employees

National Insurance

National Insurance bands and rates can be confusing because they are different for employees, sole traders and limited company directors. For self-employed business people;

Class 2 National Insurance contributions

For profits up to £8,060 in 2015-16, you have to pay Class 2 contributions at £2.80 a week. You can claim exemption if your annual profits are below £5,965 in 2015-16.

Class 4 National Insurance contributions

If your profits are more than £8,060 in 2015-16, you will have to pay Class 4 contributions. This is calculated at 9% on profits between £8,060 and £42,385 in the 2015-16 tax year.

On profits above £42,385, the rate drops to 2%.

If your business is a limited company, even if you’re the only employee, you are counted as employed and so the employee income tax rules will apply.

Value Added Tax (VAT)

If your turnover is over £82,000 in 2015-16 you also have to register for VAT and pay quarterly. You can also register voluntarily if your turnover is less than £82,000, and it maybe worth doing so if you have to pay VAT on things bought for your business, as you get to claim the VAT back if you’re registered. It depends on your consumer as you will need to add VAT to your sales.

If you charge more VAT on the goods or services you sell than you pay in items you buy for your business, you will have to pay HMRC the balance.

If your turnover is less than £150,000, you could also benefit from using the flat-rate scheme. The scheme calculates your VAT payments as a percentage of your VAT-inclusive turnover, which makes it good value for small businesses as well as simplifying admin.

VAT Rates

The standard rate of VAT is 20%.

There is a list of VAT flat rates available for different types of business on the HMRC website.

Marriage Allowance

This year, married couples and civil partners can transfer up to £1,060 of ‘unused’ tax allowance to each other. If one of your incomes is below their allowance, they can transfer up to £1,060 of the excess, as long as their spouse pays tax at 20% – this can help save up to £212 a year in tax.

For more information and a full list of all personal and business tax allowances and changes, see the HMRC website.

Emma Stevens Accountancy has been my accountant for approximately 5 years and I have always found her very professional in her approach to my business. She carries out all my requirements speedily and efficiently and I have recommended her in the past to some of my friends looking for a similar service.

Mr J Laker, Laker Development Management Limited
Laker Development Management Ltd

Emma Stevens Accountancy has completed my last two years self employment accounts. The service I have received has been exceptional. The company has liaised with both myself and HMRC to submit my accounts. I would highly recommend this company for their personal service, efficiency and professional approach.

A Rooney

Emma has taken a great weight off my shoulders by untangling a mess of several years’ non-submission of tax returns. She even managed to secure me a large rebate in the process and continues to keep my liability to an absolute minimum. Very personable and professional!

I Simpson

Emma is great at keeping tracks of my accounts. She is very efficient and gives great advice. Emma is an experienced accountant, always willing to give advice and guide you to grow. Well done Emma.

F Kernan

After 10 years in the Kitchen industry I decided to look into the possibilities of setting up my own kitchen business. After extensive research and planning, one of the main things stopping me from ‘making the move’ was the accounting side of things. I have always been a bit scared of Tax, VAT, and HMRC in general and this was the main delay in my decision. I had heard of Emma Stevens locally and thought I’d drop her an email to find out what she could do to help. During our meeting Emma gave me some very helpful information and tips on how to get everything up and running. This was before we’d even discussed me using Emma as my accountant. The advice she gave made me so much more confident about what I was doing and she could see that I could be onto something good. After leaving the meeting with Emma I decided to go ahead and make that big move. Emma has made it all so very simple. She now manages my PAYE, my VAT and TAX Returns so I don’t have to worry. Every time I have had a question, she replies within a few minutes. I am now running what I would call a growing successful business. I wouldn’t be enjoying it half as much if I didn’t have Emma there to back me up and help where needed.

Mr W Clark, Ktchns Ltd