Accounts and tax advice for small businesses
The cash basis is a simpler way of working out taxable profits compared to the traditional accruals method. The cash basis takes account only of money in and money out – income is recognised when received and expenses are recognised when paid. By contrast, the accruals basis matches income and expenditure to the period to…
A popular profits extraction strategy for personal and family companies is to pay yourself a small salary, taking further profits as dividends. Where this strategy is pursued for 2019/20, what level should the salary be set at to ensure it remains tax efficient? Salary As well as being tax effective, taking a small salary is…
Employees often incur expenses in doing their job – this may be the cost of a train ticket or petrol to visit a supplier, or purchasing stationery or small tools which are used in their job. Employers will frequently reimburse the employee for any expenses that they incur, but where such a reimbursement is not…
The marriage allowance can be beneficial to married couples and civil partners on lower incomes. Claiming the marriage allowance is worth up to £238 in 2018/19 and £250 in 2019/20. How it works The marriage allowance allows one spouse of civil partner to transfer 10% of their personal allowance (rounded up to the nearest £10)…
Beware a potential SDLT charge There are a number of scenarios in which a couple may decide to put a property which was previously in sole name into joint names. This may happen when the couple start to live together, get married or enter a civil partnership. Alternatively, it may occur if the couple take…
Employer childcare vouchers v Government scheme Employees who joined their employer’s childcare voucher or employer-supported childcare scheme before 4 October 2018 can remain in that scheme and benefit from the associated tax relief for as long as the employer continues to offer it. However, this may not always be the best option for the employee…
As the end of the 2018/19 tax year approaches, it is worthwhile taking time for some last-minute tax planning. Here are some simple tips that may save you money. Preserve your personal allowance: the personal allowance is reduced by £1 for every £2 by which income exceeds £100,000. For 2018/19, the personal tax allowance is…
Making Tax Digital (MTD) is the biggest change to tax compliance in a generation, although initially it applies only to VAT. For VAT quarter beginning 1 April onwards, VAT registered businesses with a turnover of more than £85,000 will have to keep digital records and send returns using MTD-compatible software. Businesses with a taxable turnover…