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Taxing dividends

by mike tombs
in Tax
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To reduce National Insurance costs, shareholders of small privately owned companies, who are also working directors of the company, can presently restructure their remuneration package to reduce their salary and make up the difference as dividend payments. Unless this strategy is affected by the Budget at the end of this month, this remains one of the most useful ways for owner directors of small companies to reduce their overall tax and NIC costs. Dividends are not considered to be a business cost. They don’t reduce the amount of profit assessable to corporation tax. Rather, dividends are a distribution of profits [...]

The rebranding blues

by miketombs
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The rebranding blues It seems I have started something big. At the end of April I wrote to my clients with exciting news about our practice.  I was giving up the old blue livery for the brand new claret and grey of TLA Business Services. I wasn't doing it to start a trend. I just wanted to expand the services we provide and make better use of our skills in business planning and metrics. And I wanted my new business to reflect that change.  I really didn't have anything in particular against the colour blue.  And I certainly didn't expect [...]

VAT Flat Rate Scheme

by miketombs
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When advising clients, one of the areas we examine in some detail is value added tax, not just whether or not they should register (if they have a choice!) but also which of the various schemes available is most suitable. The Flat Rate Scheme is intended to simplify VAT accounting, but in the right circumstances it can also result in improved profits. We have put together this guide to how the scheme operates; if you think it may be beneficial to your business please get in touch (email here or telephone 01905 21411) for a free, no-obligation discussion. VAT Flat [...]

March 2011 Questions and Answers

by miketombs
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This is a round-up of questions that have been raised by clients over the past few weeks. They are being posted here for general information, but please see the disclaimer at the end!!! Bad debt adjustments Q: I have recently found out that one of my customers has been declared bankrupt. Unfortunately, I invoiced them four months ago for £1,000 plus VAT of £175 and as this is still outstanding, there is a good chance I won't receive this and will need to write it off. How do I account for this in my December 2010 year-end accounts and what income [...]

February 2011 Questions and Answers

by miketombs
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This is a round-up of questions that have been raised by clients over the past few weeks. They are being posted here for general information, but please see the disclaimer at the end!!! Tax Point of a Transaction for VAT Q: I have recently registered for VAT and I am getting slightly confused regarding when my supplies and purchases take place in regards to VAT quarters. Could you please explain to me when a transaction takes place for VAT purposes? A: The date when a transaction takes place for VAT is called its tax point. It is not always the date [...]

January 2011 Questions and Answers

by miketombs
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This is a round-up of questions that have been raised by clients over the past few weeks. They are being posted here for general information, but please see the disclaimer at the end!!! Margin Scheme Q: I am a second-hand car dealer who is now approaching the threshold for VAT registration. A friend of mine who also deals in second-hand goods, albeit art and antiques, has informed me that there may be a VAT scheme which I can use to minimise my liability and administration costs. Could you please advise me if such a scheme exists and explain the mechanics [...]

December 2010 Questions and Answers

by miketombs
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This is a round-up of questions that have been raised by clients over the past few weeks. They are being posted here for general information, but please see the disclaimer at the end!!! Meals provided for employees Q: I own a gift shop and we are now opening longer hours in the run up to Christmas.  On certain days this means opening late at night and we are now opening on Sundays too.  I need my staff to do additional hours during this busy period and want to pay for their meals when they are working longer hours than usual.  If I [...]

Christmas Tax Tips

by miketombs
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Guidance on Christmas Parties and Gifts Wit the year-end fast approaching this seems like a good time to remind everyone of the tax surrounding tax and VAT when it comes to Christmas parties and giving gifts to customers and staff. Staff Christmas Parties An employer can pay up to £150 per head per tax year for the provision of a Christmas party or similar annual function, with no liability to income tax arising on the employee. The cost per head must include the cost of the actual party or function (including room hire, food and drinks, entertainment and any other [...]

Bookkeeping Basics

by miketombs
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It is a legal requirement for every business to keep accurate records of its financial transactions. The basic need it to keep track of what the business owes, what the business owns, what its income is and what its outgoings are.   There are lots of inexpensive bookkeeping programmes available designed for non-accounting types, and nowadays most people have some sort of spreadsheet programme which makes it quite straightforward to record money coming in and out of the business.   At its simplest, cash accounting is a system where transactions are only recorded when money is either paid out or [...]

Questions and Answers Bumper Edition

by miketombs
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Each month we prepare a 'Q&A' covering questions raised by clients. Although I will normally post them here monthly, this is a catch-up of the past few months, so happy reading! As always if you want to discuss any of the items as they apply to your particular circumstances please get in touch and we can arrange a suitable time to meet. June 2010 Questions and Answers Cycle To Work and Tax Free Bicycles Q: Due to the increase in fuel prices over recent months, I've now started cycling to work. My employer has suggested that they could offer me [...]