What does a 1100l tax code mean?

What does a 1100l tax code mean?

A 1100L tax code means that your tax-free personal allowance is £11000. Simply put, that means £11000 of your earnings will be paid untaxed throughout the year, in equal increments over 12 months. The “L” refers to your status as a regular employee who is eligible for that tax-free personal allowance. Any income above £11000 will be taxed at the standard rates, and, if you make over £100000, your tax-free personal allowance may be smaller than £11000. Any income over this tax-free personal allowance, but below £33000, will be taxed at the basic rate of 20%.

What affects my tax code?

Many factors affect your tax code, including the aforementioned tax-free personal allowance. First, your tax-free personal allowance will be calculated; next, any untaxed income or job benefits with monetary value are added up, and that amount is deducted from your previously determined personal allowance. The last digit of this number is removed–hence, £11000 becomes 1100. The ending letter (L, for example) refers to any situation which may affect your personal allowance, such as the Marriage Allowance, or being taxed at Scottish rates.

tax code 1100l

Benefits in kind

“Benefits in kind” is the term for those job benefits with monetary value which are not included in your salary, such as childcare or a company car. As mentioned earlier, while these benefits are not included in your salary, their value will be deducted from your personal allowance.

Expenses

Claiming tax relief for expenses is one way to ensure you are paying only as much as you truly owe in taxes. “Expenses” in this context refers to items or travel purchased solely for work use, such as business travel. It is important to note that you cannot claim tax relief for expenses your employer has reimbursed you for, or for items purchased despite your employer providing an adequate alternative. To claim this tax relief, use your Self Assessment tax return if that is already your usual practice, or use form P87 if you do not file a tax return for any claim below £2500. If you wish to claim an amount over £2500, you must use the Self Assessment tax return.

What is the the tax code for 2017-2018?

The 2017-2018 tax code is 1150L, meaning your tax-free personal allowance has been raised! Additionally, the “basic rate limit,” or the amount of your income taxed at the basic rate of 20%, has been raised to £33500 from £33000

What if I have two jobs?

If you have two jobs, one job will be classed as your “main employment,” and you will receive your tax-free personal allowance in full. For your second job, all of your income will be taxed at the standard rate of 20% up to £33,500. This job will be considered your “secondary” job. If your income at your “main” job is less than your tax-free personal allowance, then you may request your personal allowance be distributed between both your incomes, or you might request a refund at the end of the year (when you file your tax return, if you do so).

How to choose the best CPA online – 5 Things To Consider

How to choose the best CPA online – 5 Things To Consider

It is always a challenging task to choose a CPA for your business from the

How to choose the best CPA online - 5 Things To Consider
How to choose the best CPA online – 5 Things To Consider

deluge of accountants available online. There are around 76,000 qualified accountants in UK and this will add to the dilemma of choosing the right one. London has some of the most renowned accountancy agencies but you need to be aware of certain steps in order to hire the right CPA for your company.

1. Experience

If you want to ensure that you are getting the correct tax advice, do not forget to check the experience of the accountant. It is important that the CPA has worked with similar sized companies and had job responsibilities that were at par with the job role offered. Accountants will also be only valuable to the company if they have worked in similar industries and can provide expert advice on the tax system. CPA’s have to also keep abreast with the latest tax laws running in the country and have to report periodically to accountancy associations about their development.

2. Trust

You will not always depend on employees but this is not an option where it comes to choosing an accountant for your firm. You need to trust your CPA inside out to be able to confidently grow your business. Accountancy embezzlement is not totally unheard of and needs to be paid attention to. You should perform a thorough background check via Google or yellow pages etc. Be extremely wary and alert when you are interviewing the person. You need to establish beyond doubt whether he is going to be with your company for the long term.

3. Qualification

Anyone can call themselves an expert in the UK tax system but you will not hire them unless they possess technical qualifications in accountancy. Usually everyone starts with the AAT qualification and then gains experience. While they climb the career ladder, accountants can get higher qualifications to expand their job roles in bigger companies. Once the CPA has a basic qualification, they can register into a training contract with an ICAS authorised employer to become a chartered accountant. It is highly prestigious for a chartered accountant to follow this route.

4. CPA reviews

When trying to find an accountant online, you can always check the reviews that they have acquired from various firms/individuals they have worked for. There are many dedicated websites that review the accountants and you can find valuable information in these reviews. There is of course an option to choose an agency instead of an individual and there are again review websites for them. Glassdoor.co.uk, yell.com, ukaccountancyfirms.co.uk/reviews etc. are websites that will help you to choose a high calibre CPA. The reviews will contain a lot of polarised content so be alert in making your decision.

5. References

Always request the CPA whom you have shortlisted to provide the necessary references of people. You can then conduct a thorough investigation into the previous employers of the CPA. Prevention is always better than cure so it is important to interview the references provided and check for consistency in their information. References can be a good judge of one’s character because you can always tell a person by the company he/she keeps. Also, in the event of a mishap, you can always contact the references for more details.

It will definitely be to your benefit to keep in mind the above factors while you search online on search engines like Google, Bing etc. for the right CPA for your business.

THIS IS WHY YOUR SUBWAY SANDWICH WILL COST YOU A LITTLE MORE THANKS TO NEW TAX

THIS IS WHY YOUR SUBWAY SANDWICH WILL COST YOU A LITTLE MORE THANKS TO NEW TAX

Subway has been hit by the new taxation laws in UK, where any hot and toasted subs will be imposed a 20% VAT. Everybody knows that Subway is one of the favourite stopovers for
quality, fresh, well-wrapped and hot fast food that now goes for an extra cost thanks to new VAT law that was proposed by George Osborne in 2012.

Vat Accountants in London

Subway’s effort to protest the new imposed charges has been in vain, even after trying to re-brand their toasted subs to “hot bread sandwiches’ in order to protect the interest of their customers without increasing the price. A spokesman from subway said: “We have been trying to challenge this VAT law since 2012 in order to protect our customers. Subway franchisees have been absorbing the VAT cost, charging a single price for food, whether hot or cold or eat-in or take-away.”

A standard 6 inch sub could cost as much as £3.69 before the introduction of “pasty tax” on VAT. This means that as per now, the customer who wants their sub to be heated up should
add a 20% (equivalent to 69p) which sums up to £4.18 for a single sandwich. Having a sandwich toasted has become a standard procedure to many customers who expressed their unhappy thoughts about the new prices on social media. “Absolutely ridiculous that Subway now charge for toasted bread.” a customer pointed out on twitter. “What next? Charging us to use the bathroom? #subway”, another one expressed his anger. It should not be a surprise that some customers have not noticed about the price changes, saying that they are just consuming their subs. “Has there been a recent change in VAT law I’m not aware or are Subway just taking the ****?”.

A customer on HotUKDeals said: “Just saw a sign in my local Subway saying they’ll
shortly start charging 20% VAT if you ask for your sandwich to be heated
up,”.

“Am never going again” said a fuming customer concerning the new tax rules.

Another one commented “What is this all about? Bold strategy from them. It’s the quickest way to annoy people.”

The rise of charges on heated subs has forced subway to lower the prices of products that do not attract VAT. “Currently Subway stores in the West Midlands are testing a different structure for menu-pricing. The dual-pricing menu is similar to what customers see on other high-street chain menus, which ensures that customers pay the lowest price for products which do not attract VAT.” Subway spokesman said in a statement.

This new tax rules which were made effective as from 9th August 2017 are said to be
politically affiliated. It came as a surprise to the Subway customers across all the cities in the UK who are in need to refuel when lunchtime approaches. Since there is nobody has the will of taking a cold meal deal, they perhaps have no option than to have their sandwich or sausage roll toasted and warmed. The pasty tax (2012) also indicated that you have to pay some extra cost if you have to eat in. in contrast to this cold food are not taxed. This could have an advantage to only those who have their sub as a take away to warm in their
homes.

The introduction of the new VAT rules on hot and toasted sandwiches is just an indication that customers will lower their demand on the product and some will even look for other substitute products. An alternative idea that subway can opt to do in order to retain their customers is to improve the quality of their sandwiches and introduce some offers. It is clear that this pasty tax is against the will of people.

 

Legitimate Ways to Beat the Taxman In The UK

Legitimate Ways to Beat the Taxman In The UK

Although paying less tax is the desire of every tax payer, it remains a dream to most of the taxpayers in the UK because tax avoidance has been limited to multi-national corporations; not small businesses. Besides, findi

Legitimate Ways to Beat the Taxman In The UK
Legitimate Ways to Beat the Taxman In The UK

ng information on how to reduce your tax bill may be tricky. However, all is not lost as far as saving tax is concerned as there are various practical ways for individuals and small businesses to minimise tax. One way to get information on how to save your taxes is to consult tax experts such as tax accountants. The following are applicable tax saving mechanisms you can apply:

i). Top Up Your Pension

This involves contributing more into your pension scheme. This should be done by your employer, who should be responsible for deducting the pension from your salary before it is taxed. For instance, if your yearly earnings amount to £50,000 and
your yearly pension contribution is £3,000, then your taxable income will only
be £47,000. However, if you decided to contribute only £1000 a year towards
your pension, your taxable income would be £49,000, meaning you would pay
more tax.

ii). Trust A Spouse

Trust is a major building block of your relationship with your spouse or civil partner. Likewise, trust can be handy when it comes to saving your taxes. All you need to do is to determine who pays lower tax between the two of you. Moving your savings into the name of the spouse or civil partner with the lower tax rate helps you to save a great deal. For instance, if one of you is under high tax rate and the other is a basic taxpayer, it would be economical to move your savings into the name of the spouse or partner that pays taxes on the basic rate to reduce your tax bill.

iii). Dividend Allowance

Dividend allowance refers to a certain amount of dividends that may otherwise be taxed as an income. To be precise, it is tax exemption for up to a certain amount of dividend income. Dividend tax allowance policy in the UK came into effect in April 2016 to replace the previous dividend tax credit. Each taxpayer in the UK who gets dividend income is entitled to this tax exemption. This exemption is not in any way dependent on the amount of non-dividend income you get. Worthy noting is the fact that your first £5,000 dividends from stocks and shares is not taxed. This simply means that you can be exempted from paying tax on up to £10,000 per year as a couple.

iv) Claim Expenses

Claiming expenses helps you to lower your tax bill if you are either a private landlord or a self-employed individual with small businesses. In this case, you have the liberty to deduct expenses from your income before paying tax. While your expenses as a self-employed income earner may include office service, stationery, equipment repair and car services; mortgage interests and property maintenance may constitute part of your expenses as a private landlord.

Saving tax may prove crucial if you are to reduce your annual expenses and maximise your income. Whether you run big or small businesses, or you are an employee, getting it right at all times is of paramount importance. It is therefore safe to take full advantage of these tax saving tips and apply them to the a tee. Additionally, professionals like tax accountants are handy when you are in need tax saving information- make use of them too.

What are Statutory Accounts

UK Statutory Accounts

As necessitated by the Companies House and the HMRC, all limited companies registered in the UK are required to arrange financial accounts to be submitted annually by their ARD, or accounting reference date. The ARD is the ending date of the 12-month financial year for the limited company. The HMRC uses the annual accounts to determine the company must pay in Corporation tax in relation to their taxable profits. What are Statutory Accounts? A statutory account is a series required accounting documentation that is submitted yearly for the purpose of corporate taxation by the HMRC. Furthermore, it is often used to confer to shareholders the health and profitability of the company, or indeed, lack thereof. A statutory account is comprised of a number of elements including a balance sheet, a profit and loss ledger, a cashflow statements, notes, and a director’s report. Below, we go into a bit more depth regarding each of these elements.

The Difference Between Management and Statutory Accounts To the unfamiliar eye, management and statutory accounts may conflate. The primary and most important difference is that Statutory accounts (as indicated by its name) are mandatory. Management accounts, while useful and a key aspect of running a well-maintained and profitable business, can be used (or not) in any way one sees fit. Statutory accounts, on the other hand statutory accounts must conform to strict guidelines set forth by the relevant authorities.

This being the case, statutory accounts are follow a generalised template which make it easier for both shareholders and the HMRC to understand. These statutory accounts are not particularly useful for internal use within the company as they are produced for the purpose of general understanding of financial standings by third parties (as opposed to problem driven, detailed internal measurements of a management account). Another typical difference between management accounts and statutory accounts is frequency of which they are produced. A once a year statutory account is typically not enough for a director or management team to glean insights into the ongoing financial health of a company. Management accounts are typically created quarterly or sometimes monthly, depending on the size of the company. Management accounts allow you to adjust the current inner workings of the company and plan strategies for future financial success.

how to prepare statutory accountsUK Statutory accounts

Components of a Statutory Account As mentioned previously, a statutory account must contain all information required by the HMRC. Firstly, basic company information must be detailed. This basic information is relayed in the Cover Page, Contents Page, and Company Information page, before the separate accounts sections. 1) The cover page includes the name of the company, registration number, and the company’s year-end date 2) The contents page, as the name implies lists the section and page numbers of the separate sections of the statutory reports 3) The company information page will list the directors, accountant, lawyers, bankers and registered of the company. Once these formalities are taken care of, the following accounting documentation should be included. Balance sheet- A balance sheet is a ledger that indicates all of a company’s assets and debts up until the last day of the fiscal year. The balance sheet must have the name and signature of the director in order to be accepted. Profit and Loss Account-

 

The profit and loss account, in the simplest terms, expresses profits by deducting costs all revenue for the financial year. It is often subdivided into categories such as revenue my category or expenses for travel (for example) for easy analysis. The number at the very bottom is the most important, indicated net profit for the year. This is typically the earnings before interest, tax, depreciation and amortization (often shortened to the acronym EBITDA). Cashflow Statement- As indicated by its name, a cashflow statement is indented to document the flow of money into and out of a company. This can include returns on investment, money from operating activities, taxes, capital spending, and dividends. Notes- Notes may accompany many of the figures in the various accounting documents. The notes are intended to provide context to the otherwise static numbers. Director’s Report- The Director’s Report is the director’s opportunity to address management and shareholders and explain the numbers included in the Statutory Accounts. The director may take the opportunity to reflect on successes, shortcomings, and layout the vision for the upcoming financial year. Small, Dormant, and Micro-Sized Companies’ Account Exemptions Though all companies are required to file statutory accounts as a component of the Company tax return, the size and type of your company may offer some exceptions. For small companies with a turnover of less than £10.2 million, less than 50 employees, or £5.1 million or less on their balance sheet, an abbreviate version of the accounts can be filed to Companies House.

Micro entity accounts template

These abbreviated statutory accounts are comprised of only the balance sheet accompanied by notes. The directors report is optional and an exemption can be filed to prevent the auditing of company accounts. If the company has a turnover of less than £632,000, £316,000 or less on its balance sheet, or fewer than 10 workers, it qualifies as a micro-entity. Micro-entities are able to prepare even simpler accounts, send only balance sheets with even less information, and benefit from the same exceptions as small businesses. Dormant companies also qualify for exceptions. A company is considered dormant if it has not completed any significant transactions during the financial year, not including filing fees paid to Companies House, fees resulting from penalties incurred for late filing, or money paid for shares during the incorporation of the company.

If the company is both dormant and small, only abbreviated accounts need to be filed and accounts are not required to be audited. Limited company accounts template and statutory Accounts Example Using the internet, it is possible to find pre-made accounting templates to assist with the creation of your Statutory Accounts. One free and useful site can be found here. A comprehensive example of how a well drafted statutory account filing should look like can be found here. Limited Company Accountants for Small Business Although the process is generalised, filing annual accounts for a limited company can be time consuming and costly. Many companies opt to utilize the services of limited company accountants to ease the process. For a small fee, a qualified specialist can aid your limited company with comprehensive knowledge of accounts processes. This also shields you and your company from costly common mistakes that may cost you in both precious time and avoidable fees.

How to Open a Limited Company Bank Account

How to Open a Limited Company Bank Account

Why a Limited Company Account?

Though it is not mandatory to open a separate limited company bank account for your organization, it makes the bank transactions a lot easier in the long run. Using a different business account allows you to distinguish personal finances from the company’s. Otherwise, different problems may arise. For example, since having company money in your account is taken as borrowing from the company, the account will be in credit; this can cause increased tax liabilities. It may even be illegal to borrow money from the company. Certain tax benefits intended for businesses may not be provided for such accounts as it may be said that the money (and the charges paid for it) is not in the company’s name. Another potential hazard may occur if the company becomes insolvent and had an overdraft that could fall onto the shoulders of the person whose account is being used.

Steps to Opening a Business Account

• Let’s start at the very beginning and assume that you are thinking of creating a limited company. The first step would be to open the company.

• Next, you will have to get the Certificate of Incorporation, which is a license granted by the government and allows you to form the organization officially. This certificate is issued after the company is active and may take a while to obtain.

• Select a bank where you will open the limited company account and book a meeting with them.

• The meeting requires you to show documentation proving your identity and address, where you have to fulfill the bank’s requirements in order to be able to open the account.

 

Bank Requirements

Banks will ask you to provide the following documents: (Note that people applying from other countries to the UK will have to give notarized translations of their national ID, and other documents)

• Passport, national ID, or a driver’s license with photo – this proves identity and will be required of all the named company directors

• A recent bank statement, council tax statement, or a recent utility bill – this provides proof of address

• Company details such as the complete business address (with postcode), contact details, Companies House registration number, and estimated annual turnover are needed

• Personal financial documents may be asked for as proof of clean credit and banking history (Un-discharged, bankrupt, or disqualified directors cannot open a limited company account)

Which Bank?

Though you may prefer to stick to the bank you are already using, you should consider several before you go ahead. You can try the Big Four that dominates UK – HSBC, Barclays, Lloyds, and the Royal Bank of Scotland. Look carefully at the fine print and, before choosing, take into account the following factors:

• Banking fees and charges

• Competitiveness of interest rates

• Availability of mobile or telephone banking services

• Availability of online banking services

• Incentive offerings


An overwhelming majority of UK businesses fall into the small and medium enterprise category (SME), i.e. they employ less than 250 people. If you’re thinking of joining them, you should open a limited company bank account. Not only is it similar to opening a personal account, it will help you, and the company, avoid the pitfalls of mingling business and personal finances. Also, choose the bank that works best for you.

GM Professional Accountants are small business accountants in London and Essex

Call us now on 0208 396 6128 for a free consultation.

How to find accountants in Ilford Lane

Searching for accountants in Ilford lane

Run your business in a lucrative and hassle-free way by hiring the accountants from GM professional accountantsAccountants in Ilford

Are you wondering, “How can I find skilled accountants in Ilford near me?”  GM professional accountants is near you. Yes, ours is a leading Accountancy firm in Ilford, London. Since the start of our firm, we have been offering individualised service to local businesses of all sizes. This means that if you are the owner of a small business, you can also get our professional services at the best prices and find expert accountants near Ilford lane.

Why does choosing our Accountancy firm your best option?

Finding small business accountants in your area is not all a difficult task. They are always available to offer you a variety of services, including accounting and tax return services. Our skilled accountants will make sure that you will get a quality, competent service at a competitive price. GM professional accountants is always ready to advise you for the growth of your business.

You can completely count on our professional accounting services. This is because we have vast expertise, as well as experience in the Bookkeeping and Tax industry. At GM professional accountants, we focus on your business accounts as well as on offering you a practical solution to aid you as well as your businesses and we specialise in capital gains tax.

Our firm has a well-organized team of highly qualified tax accountants near Ilford. All of them have vast years of combined experience in the industry. They will suitably advise you on the way to make your business accounts keep simple. They have the required skills to cut your tax bills. Thus, you can rest guaranteed that you could save a considerable amount of dollars during your tax return. This will allow you to save your hard-earned money as well as your time.

At our firm, all our qualified accountants near Ilford are well versed in accounts practices as well as in tax laws. They will steer you in the right way to develop your business. They will also suggest you the ways to improve profitability, growth rate, cash flow, as well as to boost your business value. Thus, you can rest be confident that you could develop your business effectively.

Furthermore, we can assist your business to develop at a fast pace by practically offering suitable tax suggestion in a timely way. We are the only service providers in Ilford, offering all sorts of tax-associated services. Our knowledgeable accountants will offer you a tailored service, which you cannot find anywhere in the Ilford area.

Our variety of accounting services

As one of the leading accountants in Ilford, we will do our level best to incorporate our expertise and experience for the welfare of your business. Our courteous, professional accountants will do their best to aid you greatly in saving your time as well as your cash through their hands-on business suggestion. We can assist you in finding the easiest way to reduce the overheads and costs. This, in turn, will allow you to charge your valuable customers less. It will also allow you to compete capably with your business competitors.

 

If you need any additional Accounting services, pertained to your business, feel free to contact GM professional accountants. As we are always available to help you, you can contact us on 0208 396 6128

How to save tax on Property in the UK and Capital Gains Tax

Property in the UK and Capital Gains Tax

Capital gains tax (CGT) by definition refers to the tax levied on any gains accrued as a sale of any asset. The assets include but not limited to, inheritance, certain gifts, shares, heirloom, sale of business owing to the dissolution of a civil partnership or divorce transfer or even a second property. In this article, we shall focus on the CGT from the perspective of residential property.

CGT – Some preambles:

The CGT levied depends both on the gains from the asset and your income. However, the capital gains below a cut-off limit are exempt from CGT, the current cut-off is positioned at £ 11, 100 or lower per year. The gain is calculated by a simple formula of subtracting the original purchase price of the asset from the Sale price.capital gains tax on property

CGT for Expats:

Our property accountants on capital gains tax have highlighted that Prior to April 6, 2015, British expats and overseas investors were exempt from the CGT in the case of sale of a residential property. However, with a new rule coming into effect, this exemption stands withdrawn. Moreover, this was considered as a loophole in the British taxation system. Overseas investors and British expats were known to have a penchant for investing in buy-to-let properties and generating snug incomes out of the investment.

The new rule implies that any gains made by selling a property in UK post April 6, 2015 may incur a CGT in tune of 28% of the accrued gain. The rate of 28% of the gain is chargeable in case the gain and the income tax are above the minimum cut-off. In case you fall in the category which is below the minimum. GM professional accountants provide expert advice on capital gains tax on uk property.

cut-off, the CGT would be levied on you at the rate of 18%.

CGT on assets acquired through Inheritance:

There are a different set of rules for UK domiciles and non–domicile as far as the Capital Gain Tax on inheritance is concerned. By definition, a person who out of the last 20 years has lived in the UK for a minimum of 17 tax years qualifies to be called a UK domicile.

Inheritance below a cut-off value is exempt from the CGT. Only inheritance evaluated at more than £ 325, 000 or higher attracts CGT. However, to calculate CGT, this cut off amount of £ 325, 000 is deducted from the total evaluated value of the inheritance. Any amount over and above this minimum threshold attracts a CGT at the rate of 40%. Evaluation of the inheritance is inclusive of all the assets (including the assets that are held in trusts), including but not limited to, money, property(ies), any gifts that were given during the period of seven years prior to the death; gifts to trusts or companies over the lifetime (some exceptions are applicable to this particular category).

A non-domicile pays the Capital Gains tax on the assets situated on the UK soil only, in contrast, the domiciles are liable to pay CGT on all assets acquired through inheritance, they may be anywhere in the world.

Private Residence relief and letting relief:

– Private residence relief (PRR): This relief is applicable on the sale of property that has been your principal private residence. In other words, you occupied that property as your own residence. There are a few qualifying conditions for claiming the PRR, starting with the condition that the house was not bought for the purpose of making gains. The house was used as a primary family residence for a stipulated duration during ownership. Inclusive of everything the total area of the house if below 5000 square meters. No part of the house was used for Business or part of the house was sub-let (single lodgers are exempt).

– Letting relief: This relief on Capital Gains Tax is applicable in the case of a property that you used as your private residence for a period of time and then you let it out to someone else at the applicable commercial rate. The foremost requirement whilst claiming the private residence relief is that the onus to prove that you actually lived in that particular house is solely on you. Some investors of buy-to-let category of properties in their quest to prove that the particular house in question was used by them as a private residence, try to adopt dubious means; a practice that shall be avoided at all costs. There exists a list of questionnaire that allows you to prove that the let-out property was also your private residence for a period of time.

UK laws allow you to claim both the private residence relief and letting relief.

Calculating Private Residence Relief and Letting relief:

There is a very simple formula for calculating the PRR. The calculation is done using:

PRR = Total Gain X (period of occupancy / Total period of ownership)

The period of occupancy is calculated by adding 18 months to the time you have actually lived in the house.

 

The letting relief is capped at a maximum of £ 40, 000.

Call our capital gains tax helpline now on 0208 396 6128

 

 

 

Top 3 tips from Limited company accountants

Top 3 tips from Limited company accountants

Making a good profit is one of the biggest motivators for any business owner. Yes, there are various reasons for why people start their own businesses. Money isn’t the only factor, but it is an important factor nonetheless. So imagine this – you have set everything up and it’s going great. You are driving in more and more sales as the days go by, and the earnings graph is through the roof. Now the next and very important thing that you need to consider is income tax. Taxes are an inevitable part of learning. We all have to pay them. It is common knowledge that there is a slab on the amount of tax you pay depending on how much you earn in a year, apart from other factors like the nature of your business/profession, your gender, age, etc. Nobody is ever taxed more than what they are supposed to pay as per the prevailing rules.

What if someone told you that there are ways in which you can legitimately minimise the amount of tax that your business pays by investing or diverting it elsewhere? That would mean less tax paid and more money used to push your business forward. So here are the top 3 tips from small and limited company accountants on saving income tax. Salaries to Director and Family Members Director’s salary is one of the most common tax saving methods employed by businesses.

Limited company accountants

It is common knowledge that the director takes a certain portion of the profits at an agreed ratio. Showing this amount as salary, even up to the exempt amount, can help save tax on the same. The same goes for salaries to family members. Most businesses start off with the family members helping out or joining in at key positions. The profits that are paid to them should be shown as their salary for gaining tax benefits on the same. Vehicle Usage Using a company vehicle for private purposes attracts tax under Class 1A National Insurance, which will have to be paid for by the user of the car. On the contrary, using a private car for official purposes helps in getting a tax exemption and furthermore, allows the user to claim certain benefits depending on the extent of the car’s use.

Capital Assets and Capital Allowances on capitalising assets and depreciating them over their useful life offers some tax exemptions on the same. Assets are capitalised instead of being recorded as expenses because they offer some benefit to the company over a period of time. Recording items such as electronics, machinery, furniture, etc. as fixed assets and depreciating their value at a fixed rate every year gives the company long-term tax benefits. There are many ways for you to legitimately reduce the amount of tax that you pay on your business income. It is always a good idea to consult your own accountants or any accounting firm to understand the smaller details so that you can take better decisions. Your accountants will be the best person to advise you on to pay your taxes.

GM professional accountants are local accountants based in London

How Brexit is affecting businesses

How Brexit is affecting businesses

On June 29, 2016, the United Kingdom (UK) voted to leave the European Union (EU). Since then David Cameron resigned as Prime Minister and Theresa May has replaced him. The value of the pound has “dropped twelve percent”, however the “FTSE 100 Index has gone up 17 percent”. (The New York Times). On March 29, 2017, Theresa May invoked Article 50 to start the process of the UK leaving the EU. Since invoking Article 50 the UK will have two years to reach an agreement with the EU on how both parties want to handle trade and the movement of people between countries in the EU and the UK. If no agreement is reached in two years then trade rules set by the World Trade Organization will go into effect which would allow for the UK to impose greater or possible unequal tariffs. This would mean the price of goods and labor that are imported and those that the UK exports would increase.Accountants near me

One of the reasons that UK citizens voted for Brexit was because they want to see a decrease in immigration.  Since the EU allows easy passage between member countries, some fear that it is too easy to enter a country and cause harm. Once one gains citizenship in a country one can easily move between countries without many obstacles, however different countries have different requirements and security checks for becoming a citizen. Easy passage between countries can be beneficial to countries as well; many citizens of EU countries come to work in the UK. These people work in a number of different jobs from farming to finance across the UK. With the UK leaving the EU, many are unsure what will happen to these workers and some have already started to leave the UK. “Official figures reveal that the number of EU-born workers in the UK fell by 50,000 between October and December to 2.3 million” (Kollewe). With people leaving, businesses will have to find a way to make up for this lack of labor. Some businesses have started to move jobs to EU member countries while another option would be for businesses to raise labor rates for jobs that UK citizens have not been willing to do for lower rates.

Increased labor rates is not the only effect of the UK leaving the EU. Depending on the outcome of the upcoming negotiations a multitude of things could happen. Since the UK is the first to exercise article 50, no one knows how this will affect other member countries. If the UK gets a favorable deal other countries may also consider leaving to see if they can get the benefits of the EU without paying into the system. However, if the UK gets a bad deal it could discourage countries from leaving in the future. Another possible effect would be Scotland leaving the UK to join the EU. Since the majority of the Scottish population voted to stay in the EU, some have considered leaving the UK and joining the EU to stay in the single market system. This separation would further decrease the UK’s workforce and hurt their economy.

 

Written By Gm professional accountants, Local Accountants based in london