Are you VAT registered and not currently using Xero accounting software?
We started talking about Making Tax Digital (MTD) a few years ago now and yet for VAT registered businesses the commencement date is almost upon us.
Starting April 2019 all VAT registered businesses will be required by law to submit their VAT returns every quarter via a digital source only. There will cease to be paper forms and even HMRCs current free VAT filing software is being discontinued.
We are encouraging all such businesses to talk to us about moving o Xero software as soon as possible in order to ensure complete fluency and accuracy in time for the MTD deadlines.
For those not registered for VAT, you will be required to go digital in time for quarterly accounts and tax filing from April 2020, so speak to us sooner rather than later.
To see what Xero cloud accounting can do for you request our brochure or follow the link to Xero online.
Succession planning is often seen as solely for when a company director-shareholder retires. However, if a sole director-shareholder dies and no plans have been made for the company's future, it can leave the company in a very vulnerable position. Whilst acting as a sole director-shareholder of a limited company has its benefits it also has its risks.
In order to avoid any difficulties or uncertainty in the event of the death of a sole director-shareholder, you should review your company's Articles of Association as soon as possible and make any necessary amendments, to ensure your company could continue to operate in such circumstances.
The good news is that this issue was addressed in the new model Articles of Association for companies incorporated after 1st October 2009. However, if your company was incorporation before this date then, as qualified Chartered Company Governance advisors, we can assist you in amending your company documents accordingly.
One important case in point shows how the High Court had to step in to take emergency action to save a business.
Mr P was a sole director-shareholder of Lancashire Cleaning Services. Whilst he appointed executors for his estate in his Will he did not update the company's Articles of Association to allow the executors to make decisions on behalf of the company, such as appointing a new director. When Mr P passed away, the company's assets were frozen and employees could not be paid, and the executors were powerless to help.
The situation in this case was considered an emergency, calling for the High Court to step in and rectify the register of members (shareholders) with the executors, so that they could pass a resolution to appoint a new director. Although the court usually requires a Grant of Probate before allowing this, the urgency in this case was sufficient for the court to proceed without, as it was thought the company would not otherwise survive.
Directors of small limited companies have generally always withdrawn money from their companies on a monthly basis to ensure they have enough money to live on. This is usually done on in the form of a small salary topped up with dividends.
At the end of the financial year your accountant then calculates how much dividend can be declared and hopes it's enough to cover the amounts withdrawn throughout the year!
This isn't really the true nature of dividends. They are financial rewards which can only be declared if there are profits available after the calculation of estimated corporation tax. There are also compliance issues to be dealt with too.
With the advent of the new dividend tax allowance it has meant that interim as well as final dividends may need to be declared, if your financial year end falls outside of the tax year.
HMRC are clamping down on these procedures and with digital technology can now prove if dividends are taken and then declared retrospectively.
Read more here on how to protect yourselves:
- Ensuring a proper paper trail for HMRC such as printing out a trial balance to show the company has made enough profit to declare an interim dividend;
- Recording both interim and final declarations in the minutes of board and annual general meetings;
- Completing dividend vouchers and distributing to each shareholder
These compliance procedures can often be overlooked by small companies but with recent case law where HMRC are reclassifying payments as employment it is essential you are covered or you could be looking at a large tax bill.
As we are also qualified Chartered Company Secretaries we can undertake these procedures for you to ensure you remain 100% compliant, so please just give us a call.
We have been nominated for the expert business and financial advice we provide to our clients when they have aspirations to grow their businesses.
The high growth programme that we deliver has meant we've helped clients in the following ways:
- helped grow one start up client to be a million pound company;
- a client who was on the brink of collapse to have achieved 30% growth;
- a stagnant client ready to close it's door through frustration, to adapt it's business in a different direction and achieve great success .
Please contact us if you would like to know more about our high growth programme.
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Setting your goals for 2018
The New Year is always a great time to start thinking about what you'd like to achieve in the next 12 months, either personally, in your business or both.
However, many of us like to think about our goals for the year ahead but unless we put in place a short term plan of how we're going to achieve them, then the chance of pulling them off is very slim.
Your short term goals can take many forms such as:
- Increasing turnover;
- Making cost efficiencies;
- Entering a new market;
- Recruiting new staff.
- Starting a new hobby;
- Thinking about retirement;
- Buying a new house;
- Planning a holiday.
Once you've decided on your goals you must then work out a plan of how to achieve these.
At Brooks Accountants we help you set strategic plans that ensure you realise your dreams.
Give us a call to discuss your ideas 01253 731791.
Suzie Brooks of Brooks Accountants has won the Women in Business Award for “Financial Advisor of the Year” in the Downtown Lancashire in Business Awards.
Established in 2003 by Suzie, Brooks Accountants offers a forward thinking approach to accounting to a range of corporate businesses and SMEs across the UK. Utilising her vast experience in the business world, Suzie’s business offers much more than your standard accountancy practice, including business advice that help clients grow their organisations through strategic planning and the use of simple tools in key business areas.
Suzie commented, “I’m thrilled to have won this prestigious award. It is testament to our innovative approach with clients. We don’t just communicate with clients when tax returns are due, we work together on a regular basis to ensure clients have up to date information with which to make valuable business decisions. We take the time to get to know each client, where their business currently sits in their market sector, where they want to be in the next few years and then consider how this can be achieved. A range of clients have significantly grown their businesses over the years with our support.”
Another of Brooks Accountants services includes business support webinars. This has proved extremely popular with clients and prospects who have found the advice extremely beneficial. These cover a wide variety of topics including:
- Understanding the numbers – What your accounts really mean and how to use them
- How to set budgets and cash flow forecasts
- Putting together business plans and projections
- How to access finance
Suzie concluded, “I hope this accolade will enable organisations to see the value we can add to their business and how we can help them succeed through strategic financial planning and management.”
It’s not exactly a riveting subject, but there are new data protection rules coming into effect that could affect many businesses.
You’ve probably already seen plenty of ‘stuff’ about GDPR, which stands for General Data Protection Regulation.
The new legislation comes into effect in May 2018 and it’s relevant to any UK business, small or large, that holds customer data. In other words, most businesses.
To help Britain’s smallest firms get their house in order, the Information Commissioner’s Office (ICO) has confirmed that its GDPR helpline will go live on November 1 2017.
The VAT man often gets a very bad press and most people would expect him to be totally bah humbug when it comes to having a wild time at the Christmas party, but hang on, this isn’t necessarily the case.
Providing entertainment for employees to reward them for good work or to help maintain staff morale should help your business and therefore it can be argued that you are spending the money for a business purpose.
VAT is reclaimable when it is incurred for a business purpose, so you can see how it is possible to claim the VAT back on your party, but there’s more to it.
HM Revenue are actively targeting small businesses
We’re all aware of the multi-national companies that seem to be able to avoid paying a fair amount of tax, but we don’t often hear of the other corporates who manage to be able to negotiate cushy arrangements with the tax man.
Large corporates have exceedingly deep pockets to pay for specialist legal and financial teams and are often more than a match for the Inland Revenue. Unfortunately this means that the softer target of small businesses are now beginning to experience the uncomfortable attentions of the tax man.Read More