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Gold Plated Retirement
Defined benefit pension schemes have always been regarded as a top hat pension arrangement available to only a fortunate select few. The massive employer costs associated with these pension schemes means that 9 out of 10 private sector schemes have now been closed and there are now no FTSE 100 companies offering them to new recruits. They have now become the preserve of the public sector and a select range of long serving private sector employees. Quite how precious a commodity they are was highlighted this week by some staggering figures produced by risk management group the Pension Corporation. [...]
What Is Income Tax?
History The first income tax was introduced in Great Britain was first introduced in 1799, in order to fund the war against the French forces under Napolean. Income Tax is a “temporary tax” and expires every 5 April and Parliament has to reapply it by an annual Finance Act. The PAYE (Pay As You Earn) system was introduced in 1944 as it was thought to be a more efficient tax collection system. What do I have to pay income tax on? Income tax is applicable to taxable income which includes the following: Earnings from employment Earnings from self-employment Most [...]
Small Business Taxes
When starting a new business you may feel overwhelmed by the amount of different taxes that you need to be aware of, report on and pay. The following is a brief introduction to the main taxes that you will encounter and need to have a working knowledge of when running a business. VAT – Value Added Tax For most businesses it is compulsory to register for VAT if the turnover of the business is more than the VAT threshold (currently £77,000). However, there are some exemptions to this, for example health providers, insurance providers, rental of domestic property. We [...]
Sage vs QuickBooks
The two most popular accounting software packages for small businesses are Sage and QuickBooks, although there are many other packages on the market that are competing for market share including Xero, KashFlow and MYOB. This blog focuses upon the differences and pros and cons of choosing between Sage and QuickBooks. Overview Sage is designed more for the professional bookkeeper or accountant in mind; however, many of our clients do successfully use Sage themselves. QuickBooks is designed using a process flow so can be more attractive for the business person with no accounts experience. However, this can still look a [...]
Painless Tax Returns
Do you dread preparing your personal tax return? Here are some top tips to decrease the pain and stress of preparing it. Keep all the information you need for your tax return in a safe place. The following are some of the most common items you will need for your tax return: If you have a salaried job, keep the following PAYE (pay as your earn) documents, P60 (confirmation of the full year salary and tax deducted) and P11D (Benefits in kind statement). If you are a CIS contractor, keep all your CIS payslips with deductions, invoices, purchases and [...]
Extracting Money Tax Efficiently
If you are an owner director of a company there are various ways that you can extract money from your company. Sensible planning of how you are going to take out money and a little tax planning is essential to find the best mix for you. The following are the four main ways to take out money from your business. [1] Salary Assuming you have no other source of income it is sensible for the company to pay an owner director a salary. If the director has an employment contract with the company, the national minimum wage (NMW) should [...]
ISA Early Bird
By the time you read this article the deadline to make your 2011/12 ISA investment will have already passed and if you didn’t take advantage of your tax free allowance then that opportunity has gone forever. There are a whole host of reasons why, without fail, this happens each year. It could be the bewildering choice of ISA providers all vying for your attention, having the funds available to invest, or perhaps you just clean forgot. One thing it does highlight is that when presented with a time limit our natural tendency is leave everything to the last minute [...]
What Are Abbreviated Accounts
If you run a limited company you will be required to submit various reports to Companies House and HMRC. The following is a brief overview of the main reports required and what they should contain. Abbreviated Accounts If you are a small limited company you may be entitled to file abbreviated accounts to Companies House. The current criteria (from 6th April 2008) for a small company is that you must meet at least two of the following conditions: Annual turnover must be no more than £6.5 million Balance sheet total must be no more than £3.26 million Average number [...]
Pension Tax Breaks
Use It Or Lose It In these times of low interest rates and volatile markets it is important to gain every last advantage you can, but incredibly British tax payers are failing to take advantage of the tax breaks available to them. In the past 10 years almost £89bn in tax relief has been wasted in the UK with an estimated £12.6bn due to go unclaimed in 2012. The Unbiased 2012 Tax Action Report showed that, after unclaimed tax credits, the biggest area of waste this year will be tax relief on pensions. Most people appreciate that tax relief [...]
Why Should I Go Networking?
Following our second quarterly networking event, I thought I would try to answer this question, “why should I go networking”. Many small business owners have never attended a networking event and feel intimated about attending or don’t understand what they would gain from attending. As per my Attending Networking Events blog there are many reasons why they should attend networking events, but one of the most compelling reasons is that it is a great opportunity to meet potential new clients and referrers. There isn’t any predictability to how many leads you will receive from an event, however, by being [...]

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