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How are dividends taxed?

by mike tombs
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Dividends received from shares held in UK companies form part of a tax-payers self-assessment. The payments are made by the paying company without any deduction of tax and therefore the amount received is the sum that needs to be declared. Dividends are paid out of the company’s retained profits – these are profits after any corporation tax has been paid – once these reserves are exhausted, it is illegal to declare or pay any further dividends. Tax payable on dividends received by shareholders is not payable at income rates (20%, 40% or 45%), but as hybrid rates. The rates for [...]

As easy as 1, 2, 3…

by mike tombs
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Well maybe not quite, but you should have your important figures at your fingertips and as ready to slip off your tongue as 1, 2, 3. The world of business can be a difficult place in these times, so arming yourself with data will give you a head start. We know that knowledge equals power, but it is the quality of the knowledge that is important. How much use is there in knowing last year’s profit margin? Not much, when you trying to make a decision based on events unfolding before your eyes. But knowing the current profit margin on [...]

I want more money!

by mike tombs
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Prepare, prepare, prepare and if in doubt, prepare some more. If you are looking for someone else to put money into your business, it is your job to convince them. There will always be other businesses after their investment, so you need to make it crystal clear why they should pick yours. The most important factor to your investor will be your figures. These must be correct and must agree. Far too often people approach potential investors with incorrect figures that contradict each other. You need to understand what you are showing your investor. Your management accountant will help you [...]

Where is all my money going?

by mike tombs
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So, you have sorted your pricing out correctly. You are winning the right customers at the right rate, everything is brilliant…but your costs have spiralled out of control and they are eroding your profit margin. You need to act fast. Having a cloud-based accounting system and a management accountant will help you to keep your costs under control and prevent them sabotaging your profit. Taking the time to regularly check your costs is an investment in the future of your financial health. The first step is to review all processes and procedures. Many of the things that we do every [...]

Don’t let the tail wag the dog.

by mike tombs
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You need to be in control of your cash, otherwise your cash will end up being in control of you. A good cash flow is a great indicator of a healthy business. But do you know what your cash is doing? Obviously, you can see from your bank balance whether you have money or not, but that is a mere snapshot in time, a fleeting glance. Depending upon the circumstances that surrounds that moment, the picture may look utterly different the next day, or even a few hours later. But without access to good quality reports it can be hard [...]

Are you on the cloud?

by mike tombs
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Making Tax Digital (MTD) comes into force on the 1st April 2019 (no – it’s not an April Fools!) If you are VAT registered and, your turnover exceeds £85000 you will need to follow the rules for MTD as laid out by HMRC. Essentially MTD means that you will need to keep and file your VAT records and returns electronically; you can no longer just use spreadsheets and manually upload the information. In practice this means you will have to be using some form of cloud accounting. Regardless of whether you want to or not, you will have to do [...]

How do we prepare for Brexit when so much is undecided?

by mike tombs
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It is hardly surprising that Brexit is fast becoming as big a turnoff as tax. How on earth are we supposed to react or adapt to such far-reaching changes when the exact details of our exit are still undecided just a few weeks before the March 2019 deadline? Businesses that buy or sell goods to the EU must be pulling their corporate hair out – just how will their supply lines be affected? A new government website covering possible Brexit consequences The government has already published a bunch of documentation setting out the consequences of a no-deal outcome and they [...]

Travelling to the EU after Brexit

by mike tombs
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The following guidance was published on the GOV.UK website 20 December 2018. Much of the guidance has been updated on the basis of a no-deal Brexit.   UK citizens planning a trip to the EU and EEA before 29 March 2019 are not affected by Brexit changes.   The following comments assume a no-deal Brexit and would apply from 29 March 2019   Flying to the EU from the UK Flights should continue as today. Both the UK and EU want flights to continue without any disruption. There will be no impact to direct flights to non-EU countries. Before you [...]

Proposals for consumer protections when companies collapse

by mike tombs
in news
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The government is to consider new laws to protect consumers who have prepaid for products when a business becomes insolvent.   Government to consider new laws to protect consumers who have prepaid for products when a business becomes insolvent proposed measures will include guaranteeing consumer schemes like Christmas savings clubs can safeguard customers’ money reforms are part of the government’s modern Industrial Strategy to ensure markets work in the interests of consumers   New laws to protect consumers who have already paid for products but not received them when businesses go bust will be considered by the government, it was [...]

Brexit may be in limbo, but Making Tax Digital is not

by mike tombs
in VAT
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As we have highlighted in many posts to this blog, from 1 April 2019, ALL VAT registered businesses with turnover above the £85,000 VAT registration threshold will have to submit their VAT returns from within software that can link with HMRC’s networks. In techno- speak, your data will need to be transferred using a designated API (HMRC’s application programming interface).   The fact that you have always prepared your VAT returns electronically, for example, by using a spreadsheet to record transactions and create the data for your VAT returns, will not be enough. Your spreadsheet will not have the functionality [...]