Month: July 2019

Outside of a flower shop

Supporting Local Independent Businesses

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Supporting Local Independent Businesses

1 Accounts Haverhill is based on the top of the high street in Haverhill providing a service to both local and non-local businesses. Where we can we will support Haverhill businesses and we encourage our client to do the same.

The Economy

Not many people realise that shopping locally is great for the local economy. Research shows that £10 spent with a local independent shop results in up to £50 going into the local economy. This is due to local business owners putting the money back into the economy by them shopping, using and spending time and money in other local businesses. 1 Accounts use local Haverhill Bistro Nine Jars to host their company meals therefore putting money back into the Haverhill high street.

More Job Opportunities

Small local businesses are the largest employer nationally. Local employers are more likely to pay a higher than average wage than their commercial chain counterparts. Helping to grow the number of jobs in your area creates a healthy economy for the community. 1 Accounts Haverhill currently employ six members of staff. Four of the employees are Haverhill based and walk to work.

People

The best thing about using local businesses is that they are run by people; not by boards, stockholders or computers. This often mean a much better customer experience. For example; 1 Accounts Haverhill use Kiiwii Clothing and Promotions for anything that needs branding. When ordering their branded notebooks they could pop into their offices on the outskirts of Haverhill and discuss exactly what they wanted with Keith & Amanda. Ordering online, you do not get this level of service or have the trust that you will get exactly what you want.

Innovation

Small businesses can make changes and be innovative without having to jump through hoops. 1 Accounts were at the forefront of online accounting and now other accountancy firms are following suit. Haverhill has a wealth of small business that are leading the way for innovation.

In short, why would you not use a local business? 1 Accounts Haverhill & Cambridge will continue to use local businesses to enhance their local economy.

hands with a car

Is the Jaguar i-Pace a good company car?

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Is the Jaguar i-pace a good company car?

Here at 1 Accounts in Haverhill and Cambridge we are often asked can I buy a car within the company?  The answer is of course yes. However when benefit in kind tax and class 1A National Insurance is explained our clients most likely either buy the car privately or buy a Van.

Things may be about to change with Electric Cars.  One of our clients has just purchased a Jaguar i-Pace and Paul Donno our Director also has his eye on one for next year, although his wife Jenni still needs a little convincing!

There are of course other Electric cars on the market and the bigger luxury brands will be competing hard to get the company car market, with Audi and BMW starting to offer full electric.

Our Favourite 

The i-pace is our favourite at the moment and it is 2019 World Car of the year. Take a look

Our Calculations 

We are expecting a high increase in electric vehicles next year due to the new benefit in kind rates which are very attractive.

Our calculations are based on the advertised basic price of £64,495.

The rate for the tax year 6 April 2019 to 2020 is 16% and this is a Benefit in kind of £10,319.  If you are a basic rate taxpayer the tax payable is £2,064 and higher rate tax payer (40%) £4,128.  Your company will also pay 13.8% in Class 1A National Insurance of £8,900.

However the Benefit in Kind Charge for the tax year 6 April 2020 to 5 April 2021 is just 2% and this is a benefit in kind charge of £1,290.  The tax charge is £258 Basic rate and £516 Higher Rate with a class 1A payment of £178.

As you can see the saving is a huge £12,334 which includes the Class1A NI.

It is also worth considering the Work Place Charging Scheme allowing you to provide charging points for your workforce. Click here to find out more.

Capital Allowance 

The other real benefit is Capital Allowance. Electric cars qualify for First Year allowances which means that the entire purchase price is allowable against Corporation Tax. If you buy the vehicle after 1 April 2020 this rate is 17%.  Based on the Jaguar i-pace that is a Corporation Tax saving of £2,193. Click here to read more. 

Our Recommendation 

We recommend the electric car for your company vehicle from 6 April 2020, make sure that if fits your personal and business needs.  We would expect demand on the popular models to be high and waiting lists long therefore you may want to start looking very soon.

Be careful of any caveat relating to Brexit as we understand that some manufacturers are asking you to sign to accept an increase in duty especially if we have no deal.

We expect to see many electric cars around Haverhill next year. Paul is hopeful on persuading Jenni to have one (on the company of course).

Tax Building Blocks

Making Tax Digital – Are You Ready?

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Making Tax Digital – Are You Ready?

July 2019 marks the period that you have to submit your VAT returns using HMRC’s new Making Tax Digital (MTD) regime. Already Accountants, VAT registered businesses and HMRC are struggling to cope.

Take a look at Accounting Web’s report on how HMRC’s systems were already struggling in May – Read report here

If you have not addressed MTD you need to do this NOW!

Your accountant should have been in touch to make sure your systems allows you to send HMRC compatible VAT returns. You may have been offered a bridging software to read from Excel (or other non-compliant accounting products) to then transfer to HMRC. In our opinion this is a sticky plaster over an open wound and not a long term solution. You have probably been given this type of software because your accountant does not understand or is overstretched.

Our recommendation is that you use Xero or SageOne to manage your businesses finances. Both pieces of software are fully compatible with MTD. 1 Accounts are Making Tax Digital certified and can help you transfer your business over to software that will not only be compliant but save you heaps of time to.

You should make sure your accountant can help you through the process of transitioning you to online software, registering you for MTD and maintaining your VAT returns. HMRC have some guidance on their website we recommend reading – Read article here.

If your VAT return (period ending 30th June 2019) is not filed by the 7th of August 2019 you may get a fine from HMRC. It is unknown to us if HMRC’s systems will be able to cope with this months filings. Our advice would be don’t leave it till the last minute.

 

Cloud Accounting Benefits

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Cloud Accounting Benefits

If you want your business to work smarter and faster, cloud accounting software is a wise investment. Working in the cloud will give you a better overview of your finances, and improve collaboration with your team.

Accounting software shouldn’t be a chore to use!

Small business accounting software that’s not available via the cloud can be tedious. Traditionally, it can suck up far too much of your business’ time and effort. This doesn’t add value, and takes the fun out of being in business. Cloud software can save your company time and money.

So what is this thing called the cloud?

Think about when you use internet banking. Every time you access this data, you’re using the cloud. The cloud is a platform to make data and software accessible online anytime, anywhere, from any device. Your hard drive is no longer the central hub.

Problems with traditional accounting software

  • The data in the system isn’t up to date and neither is the software.
  • It only works on one computer and data bounces from place to place. For example, on a USB drive. This is not secure or reliable.
  • Only one person has user access. Key people can’t access financial and customer details.
  • It’s costly and complicated to keep backups (if done at all).
  • It’s expensive, difficult and time consuming to upgrade the software.
  • Customer support is expensive and slow.

Why the cloud and accounting software are the perfect match

You can use cloud-based software from any device with an internet connection. Online accounting means small business owners stay connected to their data and their accountants. The software can integrate with a whole ecosystem of add-ons. It’s scalable, cost effective and easy to use.

In the cloud, there’s no need to install and run applications over a desktop computer. Instead, you pay for the software by monthly subscription.

Cloud security is world class

As a small business owner, you might be concerned about a cloud service provider storing your data. But the cloud is one of the most secure ways to store information. For example, using cloud software, if your laptop is stolen, no one can access your data unless they have a login to the online account. With cloud software, this is where the data lives – as opposed to on your hard drive.

In the event of a natural disaster or fire, being in the cloud means business productivity doesn’t need to be affected because there’s no downtime. All of your information is safely and securely stored off site. As long as you have access to any computer or mobile device connected to the internet, you’re back up and running.

In addition to this, if you invite users to view your data, you can control the level of access. This is much more secure than the old-fashioned way of emailing your files or sending out a USB stick with your data on it.

Cloud-based software companies ensure that the security and privacy of data about you and your organisation is always airtight. If you use online banking, then you’re already primed to use cloud accounting.

Five ways cloud software benefits your business

  1. You have a clear overview of your current financial position, in real-time.
  2. Multi-user access makes it easy to collaborate online with your team

    and advisors.

  3. Automatic updates mean you can spend more time doing what you love.
  4. Everything is run online, so there’s nothing to install and everything is backed up automatically. Updates are free and instantly available.
  5. Upfront business costs are reduced – version upgrades, maintenance, system administration costs and server failures are no longer issues. Instead, they are managed by the cloud service provider.

Work smarter with accessible data in the cloud

The beauty of this software is the flexibility it gives you to run your business from work, home, or on the go. You can be confident that you have an up-to-date picture of how your business is doing, no matter where you are.

Software updates can be developed and delivered faster and more easily in the cloud. This means you don’t need to worry about installing the latest version and you’ll get access to new features instantly. With cloud accounting software, you have the option to run your business remotely, from anywhere in the world. And when data is fluid and accessible, the possibilities are endless.

To read Xero’s original small business guide please follow this link: Xero’s Blog