Author: Jade Donno

Don’t let the Christmas period get in the way of the Self-Assessment deadline!

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Don’t let the Christmas period get in the way of the self-assessment deadline!

Christmas is always a busy time of year, but for us it doesn’t stop after the festivities are over. With the Self-Assessment tax return deadline on January 31st, January is our busiest time of year.

A self-assessment tax return is required if you are a sole trader earning over the personal tax allowance, the director of a company who receives dividends, or if you have additional income which is not taxed through PAYE. If you are a client of ours on our Young Business service, Growing Business service, Rapid Growth service, or a sole trader then we take can care of this for you.

Send us your information early to avoid missing the deadline

Our clients on these services have the stress of completing their tax return taken away as we do a calculation to work out how much tax they owe and complete all the HMRC forms on their behalf. Once the tax return is approved by the client, we make sure it is filed with HMRC before the deadline.

As a firm, we try to prepare early by requesting all the information we need to complete your tax return at the end of the tax year on April 5th. This allows us to avoid the rush and get many tax returns in well ahead of the deadline. Our tax return clients will have received an email from us asking them to upload their documents to our secure platform. This platform is fully compliant with GDPR and data protection regulations, so there is no need to worry about your personal information!

We also send regular reminder emails throughout the year to make sure that all our clients don’t forget to send their documents to us on time. It is important to send us this information as early as possible as you can face a penalty from HMRC if you do not get us the required information in time for us to complete and file your tax return.

By sending us all the information we need before Christmas, you can relax over the festive period knowing that your self-assessment will be taken care of!

No one wants a Tax Investigation.

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No one wants a Tax Investigation.

It is true that as business owners we don’t want HMRC asking awkward questions and taking up our precious time by visiting us on a routine (or not!) compliance visit.

This week two of our clients have been subject to compliance visits from HMRC, one for PAYE and CIS, and the other for VAT. Understandably, our clients in both cases were worried by a visit from HMRC and needed our support from start to finish.

PAYE Investigation

In the case of the PAYE compliance, which included CIS, we were able to speak to our client before the meeting, attend the meeting along with our client, and reply to HMRC’s request in order to close the enquiry. We dealt with the issues and questions raised in the meeting successfully and HMRC could see that we had a good handle on our client’s business. They have now closed the case without penalty or further tax charge.  Our client was very happy that we were able to attend and support them at the meeting as it gave them extra peace of mind.

VAT Investigation

The VAT visit was very similar. We briefed our client before the meeting and attended the meeting with the VAT officer. One item was picked up by HMRC and a small adjustment will be made on the next return. In this case HMRC were complimentary about our business set up and the service that we provide our client, especially in understanding the business from the client’s point of view. This client is also really pleased with the service and were reassured by the fact that we were able to attend the meeting and deal with any questions that came up.

We have you covered

We insure ALL of our clients to cover our fees for dealing with HMRC from start to finish in these situations.  We often have clients tell us that they are covered by The Chamber of Commerce or The Federation for Small Businesses, however the cover from both organisations does not allow us to deal with any investigation that may occur, and so our support is limited. It is for this reason that we took the decision to fully cover our clients for no additional charge.

We appreciate that no one wants a Tax Investigation, however if a client does have an investigation it is really important that we are there, as we can help the client to deal with HMRC effectively. In both cases this week HMRC didn’t find anything of significance and both of our clients were very happy with our service. They were especially happy that our fees for assisting with the visits are covered by the insurance policy benefit that we have taken on their behalf and that there was no extra cost to them.

An inbox showing 6 emails

Instant Response Time

Posted on | by Jade Donno

INSTANT RESPONSE TIME

Growth in technology has lead to the need for instant gratification. With everything available at the click of a button our patience is dwindling. As a result of this emails can be hard to manage as people often expect an instant response.

The development in technology has been astounding, just 20 years ago iPhones didn’t exist and Spotify was just an idea. Air BnB and Uber were not even considered as possible. Technology has made our lives easier, but also for businesses it has made expectations higher. This is especially true for responding to emails. Here are our top tips for email management:

Instant responses

Instant responses are an unrealistic expectation. You are not a robot. Setting those expectations can be difficult, after all you want to keep your clients happy. Work emails on your phone can then stretch this expectation to be 24/7 rather than just in work time. Think of the effects this may have on yourself and your team. Put yourself first, emails can wait until the morning.

Allocate Time

Allocate time for your emails. At 1 Accounts we get a huge volume of emails with Paul and Jade opening their inbox in the morning to occasionally near 100 emails. These can be overwhelming at times especially when you have planned your day to complete other work. That is why we now allocate specific time to deal with them. We have an hour in the morning, 30mins after lunch and then an hour at the end of the day. Emails then get shut down for the time in-between allowing the team to focus.

Focus

Email notifications can be a huge distraction. To allow for ‘deep work’ these distractions need to be turned off. This means, turning off the push notifications on you phone and computer. This will allow you to focus on the job in hand, probably resulting in a better job and quicker result. You have allocated time for your emails so you won’t miss anything important and your clients will still be happy.

Sort

Sorting your emails is important. We use Karbon as our workflow system, that really helps us with our email management. To sort we scan through the inbox to see if there is any ‘junk’ that can be deleted straight away. This will clear more than you think and make the inbox less overwhelming. We then go through and answer any emails that we know will only take 1-5mins or that you can delegate. If there is an email regarding work that you know a team member is working on, pass it on, you don’t need to deal with it. Anything that will take longer than 1-5mins that you have to deal with gets scheduled into ‘deep work’ as it will require time and focus. Using this method will give your emails structure and efficiency.

So after reading this blog, turn off your push notifications, allocate time for your emails and allow time for ‘deep work’ and focus this should result in a happier team and a happier you.

1 Accounts Piggy Bank on books

The Ultimate Guide to the Different Types of Business Financing

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The Ultimate Guide to the Different Types of Business Financing

Small business loans are being approved at an unusually high rate, making this the perfect time to increase your company’s cash flow via business financing. There are different kinds of business loans available, and it’s important to know the differences between them in order to make a fully informed decision.

This article will cover some of the most common types of small business loans, such as term loans, and help you understand the benefits and disadvantages of each. From there, you’ll be able to find the perfect financing option for your company’s short and long-term goals.

1 Accounts finance laptop piggy bank

Business Term Loans

Business term loans are one of the most common varieties, giving borrowers a fixed sum of money to be paid back over a given term. You’ll need to meet certain requirements to receive a business loan depending on your location and lender.

Business term loans don’t require any collateral, and they can be used for any business-related purpose. Your interest rate will be based on a variety of factors related to your company, including financial health, monthly or yearly revenue, and your business credit score.

Small Business Administration Loans

SBA loans are backed in part by the government, allowing lenders to charge lower interest rates and have assurance that they’ll receive payment. Depending on the size of your loan, the maximum interest rate for an SBA loan ranges from 7.75% to 10.25%.

Like business term loans, Small Business Administration loans work for essentially any business purpose. it’s important to note that you’ll need a strong credit history to qualify for and receive an SBA loan.

Business Line of Credit

Unlike a conventional loan, a business line of credit works more like a personal credit card. You’ll be able to use your new line of credit at any time up to your credit limit, and you can continue to withdraw again once you’re caught up with your existing payments.

It’s generally easier to qualify for a business line of credit than for a more traditional form of business financing, but there are some other factors to consider. Missed payments carry a heavy penalty, for example, and lenders may ask for collateral.

Invoice Factoring

Invoice factoring is a quick way to free up cash flow for your business, and it’s especially effective for companies dealing with late payments. It involves selling off unpaid invoices to a factoring company who then takes on the responsibility for collecting the cash.

Depending on the terms you arrange for your own invoice factoring, you may receive an advance of anywhere from 60 to 100 percent of the total value. It’s important to note that unlike the other items on this list, the amount you can gain from invoice factoring is limited by your current pending invoices.

Equipment Financing

You can use any kind of business loan to finance more equipment, but equipment financing makes this process much cheaper by using the equipment itself as the loan’s collateral. You’ll get a significantly lower interest rate with equipment financing, even if your business has a poor credit score.

In general, you can use equipment financing to take out a loan of any amount up to the cost of the equipment you’re receiving. This equipment is yours to use as soon as you sign onto the loan, making it an immediate solution for companies with growing equipment needs.

The main downside of equipment financing is its attachment to the equipment itself. If you use this method to acquire a piece of equipment which becomes obsolete quickly, you’ll still be on the hook for the loan without a way to get that money back. Only use equipment financing if you’re confident in the equipment’s viability and longevity.

Merchant Cash Advance

Merchant cash advances are another great option for companies who don’t have the credit score necessary to receive other kinds of financing. A merchant cash advance gives you cash up front which is repaid as a percentage of what you spend on your credit card.

This method of repayment gives merchant cash advances a flexible time period for repayment, so you won’t have to worry about making payments on time each month. That said, interest rates are typically higher than those available with other kinds of financing.

Depending on the specific lender, you should be able to find merchant cash advance opportunities with borrowing limits as high as $250,000. Expect to pay the loan off in roughly six to eighteen months.

Business financing is a crucial aspect of achieving short-term growth and long-term stability for any small business, and there are several options available to immediately increase your cash flow. With more than a few choices, this is a great place to start if you’re looking for a way to help your company expand.

Hands with a house

Thinking of Applying for a Mortgage?

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Are you thinking of getting a mortgage?

This year we have had an abundance of clients applying for mortgages. Applying for a mortgage can be stressful and this is even more true for business owners. Once you have applied everything is suddenly urgent and happens all at once. This can then result in stress, tears and quite possibly a few temper tantrums!

To avoid any strops, here is a list of the best ways you can prepare before applying as a business owner:

  • When you get the lightbulb moment that you want to apply for a mortgage, give us a call or an email. We can then offer you our advice and possibly get you in touch with an appropriate mortgage adviser. It also allows us to plan and prepare to avoid any delays.
  • Mortgage lenders are going to asses your income. They will ask for your SA302/ Tax calculation which will confirm your salary and/or dividends. They will also ask for your company accounts to confirm your salary and net profits after tax but before dividends. Collating this information prior to applying for your mortgage will hopefully make the process run smoother.
  • To even think about applying for a mortgage your business will need to have been trading for at least 12 months but ideally 24 months.
  • The mortgage lender will look into your balance sheet. This will be to check that your assets outweigh your liabilities. If they do not, in the mortgage lenders eyes your company could be in a position that it will not lend against.
  • Some mortgage lenders will average out your salary and/or dividends over the past two years. As a growing business this may not be beneficial. There are some lenders that will just consider your latest year, it is probably best to instruct a mortgage adviser to help choose an appropriate lender.
  • Decreasing profits can be a bit tricky. If your profits are decreasing this also means your income is decreasing. This will result in mortgage lenders asking questions as they will be concerned that this could be a consistent problem. Before applying, it is probably best to be sure you have a strong constant source of income.
  • Mortgage lenders can also ask for an ‘accountants’ certificate’. If asked for we can complete, but there is a charge!
  • If using a mortgage adviser, please give us written permission to talk to them. As due to GDPR we cannot hand over any of your personal data without your permission!

TOP TIP – Plan Plan Plan. We can not stress this enough, even if it is a five year plan let us know as soon as possible so we can help you get your mortgage rather than fighting fire.  Decisions over tax saving or getting your mortgage need to be made at least 12 months in advance in many cases.

 

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

Wine & Cheese night

1 Accounts Wine & Cheese Night

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Wine & Cheese Night

In aid of the St Nicholas Hospice Accumulator Challenge 1 Accounts Online will be holding a Wine & Cheese Tasting evening at Baythorne Hall near Haverhill …. And your all invited. The event will take place on the 9th of August at 7pm.

George from Baythorne Wines will be talking us through his favourite wines from his wine shop. Baythorne Wines was established in the former granary barn at Baythorne Hall in 2014. The shop offers over 400 wines from around the world and George’s knowledge is second to none. We can’t wait to try a selection of the wines. The cheese is from Ben & Ella’s Farm Shop.  These cheeses will pair perfectly with the wine. You will be wanting to come back and create your own wine and cheese night at home!

Jade will be singing at the event to start the night. She will be singing some of her favourite Jazz tunes to get you in the mood for the wine and cheese.