Compared with the old days when many business owners would put all of their invoices, receipts, and bank statements in a bag once a year and send it to their accountants, today’s business owners have a wealth of financial and operational information available to them thanks to the increasing popularity of business accounting software. Why […]
Sole Trader Vs Limited Company
What you want to know is whether you should set up as a sole trader or a limited company. On most occasions, we recommend a limited company. And in this article, we’re going to explore why. Setting up a limited company doesn’t offer all the advantages it did ten years ago. However, for us, the […]
Dividend Tax
Dividend tax, for many company directors a favoured way of extracting cash in a tax efficient manner from their business, has become a much worse deal in the last few years. Dividend tax 2015/2016 Dividends are payments distributed by companies in order to return a proportion of their company profits back to its shareholders. Traditionally, […]
How to register for VAT
If you want to know how to register for VAT, this is the article for you. It’s a straightforward process so let’s go through the steps together. What is VAT? VAT is something you need to register for if your business is already or is expecting to be turning over more than £85,000 (around £1,635 […]
Personal Tax Rates and Allowances 2020
Personal tax rates and allowances for 2019/2020 are available online via the HMRC’s website. In this article, we’ll look at when you start paying taxes, how much you’ll pay, and what you’re able to keep for yourself and away from the clutches of the taxman. Personal allowance 2019/2020 2019-2020 2018-2019 2017-2018 2016-2017 Annual personal allowance […]
Corporation Tax Rates 2020
Corporation tax is payable by companies on the profits they make. Corporation tax is only paid by limited companies. If you’re doing business as a sole trader or a partnership, this guide doesn’t apply to you. Corporation tax rates Corporation tax is currently at 19%. The government has set a target for corporation tax to […]
Capital allowances for 2020
Using capital allowances is a great way of reducing the amount of corporation tax your business has to pay. There are lots of different ways to do it as well. Capital allowances 2020 In this article, we look the breaks that are open to business which allow them to keep more of the money they make […]
2020/2021 PAYE tax codes
2020/2021 PAYE tax codes – your guide. All employees (including directors with shareholding) receive a tax code from HMRC which helps employers understand how much tax and National Insurance to deduct from their wages. What should my PAYE tax code be? Tax codes are issued by HM Revenue and Customs (HMRC) soon after an employee […]
Use of Home As Your Office
Use of home as an office is an increasingly popular trend among the 600,000 new businesses starting up every year in the UK. On the surface of it, there’s lots to like about using your home as your office. There’s no commute, there’s no office rent, there’s no business rates, and there are no business-only […]
HMRC penalties 2020
Up to 1,000,000 taxpayers missed the deadline on January 31st this year, according to MoneySavingExpert, making late penalty fees an indisputable goldmine for the Treasury. Last year, HMRC wrote off a total of £23million in late self-assessment fines. Accountants and professional bodies across the country are calling for the system to be scrapped but, so […]
Directors’ loans accounts
A directors’ loan account can be in credit or it can be in debit. If the directors’ loan account is in credit, the company owes you money. If it’s in debit, you owe your company money. Companies borrowing money from their directors happens all the time, particularly when a business is being started or a […]
What is IR35?
IR35 is the name of a particular part of the Finance Act 2000 designed to prevent people from avoiding tax by describing themselves as self-employed or freelance when they are, to all intents and purposes, an employee of the company they’re doing contract work for. If you are found to be operating “within the scope […]
Umbrella company
Want to go freelance but want someone else to take care of your taxes, paperwork, and allowances? You need to find out about umbrella companies. What is an umbrella company? Think of being a contractor/freelancer using an umbrella company as being in a half-way house between: • being an employee, • and being a contractor/freelancer […]
Contractor mortgages
Mortgages for contractors, although still more difficult to obtain than standard mortgages, are available in greater numbers now than they have been for many years. How hard is it to get a contractor mortgage? It is harder – sorry, there’s no way around that. But it’s not just contractors that have difficulties in securing mortgages, […]
Limited company expenses
Limited company expenses are used to reduce the level of profitability in your company accounts. That means your corporation tax bill to HMRC goes down. For many new business owners, there can be a lot of confusion about what qualifies and what doesn’t as expenses. Here is the Wise Accountant’s look at the expenses your […]