Unfortunately, the main saving that's existed for more than a decade has been eroded. In the past, it was common to arrange the structure of a company so that tax was paid at just 20%; whereas sole traders and partners of partnerships below retirement age initially paid tax at 20% as well as National Insurance of 9% - making a total payment of 29% on incomes up to around £40,000. The new dividend tax of 7.5% that applies from 6 April 2016 cancels out much of this saving. However, there are many other reasons why a corporate structure might still be the best option, so please get in touch with us so that we can advise accordingly.
All individuals are now entitled to receive dividend income of £5,000 each year, tax-free. We therefore recommend that our owner-managed clients vote themselves such an annual dividend, provided the company has sufficient reserves to do so. Of course, it's likely to encourage a number of companies to amend their shareholding so that the annual allowance can be enjoyed by more shareholders. It's always worth seeking advice on the tax implications of transferring shares in this way, so please give us a call if you'd like to discuss this.
It sounds like you've arranged your remuneration in the most efficient way and there's probably no reason to change this. Dividends now attract tax of a further 7.5% but the vast majority of a salary attracts Employer's National Insurance of 13.8% and Employee's National Insurance of 12%. Generally, the saving is not as much as it was, but such a structure is almost certainly still the most efficient way to remunerate yourself. For a more precise calculation, please get in touch.
This very much depends on whether you are self-employed or if you have a company. The treatment of cars if you're self-employed can be fairly generous. On the other hand, company car treatment can be very tax-inefficient, particularly if your company also pays for private fuel. Of course, if your company car is electric or has very low emissions, this situation may reverse. Generally, most company directors are better off claiming business mileage. The rate is 45p per mile for the first 10,000 miles in any tax year, then 25p per mile thereafter, and an amount of VAT can also be reclaimed. Because it's a complex area, there's a lot of benefit in discussing it face-to-face.
Until recently, we would have said no. However, there's now some excellent and very simple software available that's suitable for small businesses. We recommend clients use Xero which costs as little as £5 per month. You don't have to be an accountant to use the software, and we guarantee you'll find some of its benefits will make life a lot easier. Whether it's capturing receipts as a photo on your smart phone, the internet banking link making sure all expenses are claimed, or calculating your VAT at the touch of a button, you should be impressed. Please get in touch to arrange a free demonstration tailored to how this software could best work for you.
Generally, if your customers are registered for VAT then you should also register your business for VAT. Your customers shouldn't object to being charged 20% more as they'll be able to reclaim it. At the same time, you'll be able to recover the input VAT you suffer and this will no longer be a cost to you. Many of our clients actually make a significant profit by joining the Flat Rate VAT Scheme. If you don't incur much VAT on your expenses (for example, if your costs are minimal and you are a time-based business), this could be extremely advantageous for you. Why not explore it further with us?
The two qualifications are very similar. In fact, a number of our team hold the Certified qualification. When choosing an accountant, it's important to understand the difference between qualified and unqualified. There's no legal restriction on the word 'Accountant' and anyone can practise as one without necessarily having the proper training or regulation. If you choose an accountant that is Chartered or Certified, you can rest assured that they hold the relevant qualification, have the right experience, stay up to date and, just as importantly, are rigorously regulated.
We like to think that our clients genuinely enjoy dealing with us. At times, and depending on who you talk to, our profession can be described as being a little "dry"! Ultimately though, our clients stay with us for many years because they get on with the people who they speak to on a regular basis.
We're also very transparent about our fees, so once that's been agreed in advance, we can then get on with building a strong business relationship - and hopefully with a few smiles along the way!
All too often, we see people spending longer than they want keeping up with their books instead of actually being able to run their business. Often, the 6 hours that a customer might spend on their bookkeeping might only take us an hour. We're efficient at what we do because we do it day in, day out. Entrusting your bookkeeping to a professional means that you'll be more able to focus on driving your business and increasing your income. And even if you don't want us to take over your bookkeeping full-time, we'll always suggest better ways for you to do things differently in order to save you money.
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6 Newbury Street Wantage Oxfordshire OX12 8BS
01235 77 00 84
Our Witney Office
The Studio Witney Lakes Resort Downs Road Witney Oxfordshire OX29 0SY