Author: Jade Donno

Hello May

1 Accounts May Update

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MAY UPDATE

May disappeared before our eyes, with tax returns, accounts and quarterly reviews in full swing. The sunshine has been fleeting but our smiles have stayed all month long. Here is what we got up to this month:

Clever Grace

Grace got a whopping 86% on her exam on Management accounting and budgeting. She is studying hard for her level 4 AAT and will be fully qualified in no time. Her next exam is on Management accounting: Decision and control.

Outsourcing our IT

When there is a problem with IT it can be detrimental, especially to 1 Accounts as we need our computers in order to do our work. It can take hours for us to figure out how to fix a problem and so when starting 1 Accounts Paul decided to outsource our IT and take the hassle away. We have just changed providers to Platform 365. We can’t wait for them to start!

Jade Singing

Jade had her busiest month ever with her singing. She sung love songs, jazz songs, pop songs & rock & roll songs. She also had her first gig in her duo The Blue Jays at Nine Jars. Be sure to keep an eye on her Facebook Page for more events!

https://www.facebook.com/jadedonnosinger/

Mind mapping for marketing

Marketing For Business

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Marketing For Business

Marketing hasn’t changed. But the approach towards it has become far more relational. You used to explain the services you offer and told people to contact you. Now its about sharing helpful information. Advice and ideas. Tips and hints. Great stories.

Your prospective client consumes this content over a period of time and when they are ready they come to your because you’re top of mind. Or when they’re referred to you they come to your content, consume it quickly and make a faster quicker decision.

It’s called content marketing. There are a variety of formats (video, blog, social post, events) and at it’s core is your client. Its all about them: who they are, what they struggle with,, how you approach it.

There’s a 12 step process to generate the very best content (bringing you the very best clients), and It goes like this:

  1. Niche
  2. Issues
  3. Content
  4. Brand
  5. Design
  6. Website
  7. Email
  8. Follow up
  9. Blog
  10. Events
  11. Campaigns
  12. Social Media

Each one builds on the one before. If you tried to start at the end, with social media, you’d have to back up to create a campaign, you need to know your audience, their issues, the content you’re sharing. You need to be clear about your brand and how you design things and have a website and email platform …. And it all comes together!

(Written by Karen Reyburn)

Toy house with a key

POSSIBLE CHANGES TO CGT PRIVATE RESIDENCE RELIEF

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POSSIBLE CHANGES TO CGT PRIVATE RESIDENCE RELIEF

The government is currently consulting on important changes to private residence relief that are likely to be introduced from 6 April 2020.

The two possible changes, announced in the Autumn 2018 Budget are:

  • Firstly to limit to just 9 months the period prior to disposal that counts as a period of deemed occupation.
  • The second is to limit “letting relief” to periods where the taxpayer is in shared occupation with the tenant.

Final period exemption to be reduced

The final period exemption was for many years three years and was always intended cover situations where the taxpayer was “bridging” and waiting to sell their previous residence. However, 36 months was felt to be too generous and was allegedly being abused by a strategy known as “second home flipping”. As a result the final period relief was restricted to the current 18 month period of deemed occupation a couple of years ago. The latest proposal is to restrict still further to 9 months although it will remain at 36 months for those with a disability, and those in or moving into care.

Possible Lettings Relief Changes

Lettings relief currently provides a further exemption for capital gains of up to £40,000 per property owner. The additional relief was introduced in 1980 to ensure people could let out spare rooms within their property on a casual basis without losing the benefit of PRR, for example where there are a number of lodgers sharing the property with the owner.

In practice lettings relief extends much further than the original policy intention and also benefits those who let out a whole dwelling that has at some stage been their main residence. It is those situations that the government appear to be attacking under the proposed changes.

Note that those who are renting their property temporarily whilst working elsewhere in the UK or working abroad are unlikely to be affected by this change as there are alternative reliefs available under those circumstances.

Toy house and hands

“RENT A ROOM” RELIEF TO CONTINUE FOR AIR BNB LANDLORDS

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“RENT A ROOM” RELIEF TO CONTINUE FOR AIR BNB LANDLORDS

Last year HMRC carried out a review of rent a room relief and it was proposed that the availability of this generous relief would be restricted to situations where the taxpayer was resident for at least part of the time when the “lodger” was paying rent. The scheme currently exempts from tax gross rents up to £7,500 where rooms within the taxpayers’ main residence are rented out.

HMRC were concerned that the relief was being “abused” by letting out the entire property using websites such as Airbnb and living elsewhere temporarily whilst the tenants were in the property. An example would be renting out a house in south London during Wimbledon fortnight and potentially receiving up to £7,500 tax free.

Note that the Autumn Budget announced that the proposed restriction was not now being introduced.

April Showers

1 Accounts April Update

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April Update

With the start of a new tax year, lots of bank holidays and new starters 1 Accounts have well and truly stepped into spring!

Start of the Tax Year

The 6th of April marked the beginning of the next tax year. With this brought some changes to personal allowance, minimum wage, student loans and auto-enrolment. To find out more about these changes please read our blog ‘Happy New Year’.

https://www.1accountsonline.co.uk/2019/04/12/happy-new-year/

Automation, Automation, Automation

This year we have introduced client checklists. All our clients will notice that they have received a checklist from Jade to complete their self assessment tax return. These are sent automatically via Karbon so that we can spend more time helping our clients. We will also be automating emails on company year ends to request accounts information in order for us to get accounts completed as soon as we can. We love this new level of automation as we can provide a higher level of service.

A proper family business

We now have all the Donno’s onboard! Katie has now joined us to help us with our sales. Anyone who knows Katie will know that she can sell ice to eskimos and will look great doing it! We now have Paul, Jenni, Jade and Katie (the whole family) working for 1 Accounts. Paul won’t know what’s hit him!

Happy Birthday James

James turned 20! We all went out for a lunch at Nine Jars to celebrate his birthday. We also decorated the office especially! No birthday gets missed here at 1 Accounts!!

Paul went to prison

After Jade went to the prison last month, Paul decided he wanted to go. Unfortunately they let him out too. Paul spoke to the offenders about starting & running their own business. He was given lots of questions that he was happy to answer. He also gave them all a copy of his book, which they asked him to sign. We are not sure Paul’s head fit out of the prison doors on the way out!

Donation

If a client refers us we always send a gift to say thank you! We asked one of our clients for their home address to send our special thank you gift. They asked for us to donate to charity instead, which is an amazing gesture. We donated to Little People UK as it is a charity close to the company’s heart.  We love how amazing our clients are!!

Family eating a picnic in a clearing in the woods

Extracting Profit From Your Family Company

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EXTRACTING PROFIT FROM YOUR FAMILY COMPANY

The start of the new tax year means that shareholder/ directors may want to review the salary and dividend mix for 2019/20. The £3,000 employment allowance continues to be available to set against the employers national insurance contribution (NIC) liability which means that where the company has not used this allowance it may be set against the employers NIC on directors’ salaries.

Thus, where the only employees are husband and wife there would generally be no PAYE or employers NIC on a salary up to the £12,500 personal allowance.

There would however still be employees NIC at 12% on the excess over £8,632 (£166 per week) which would be £464 on a £12,500 salary, leaving £12,036 net.

Taxation of Dividend Payments in 2019/20

Traditional advice would then be to extract any additional profits from the company in the form of dividends. Where dividends fall within the basic rate band (now £37,500) the rate continues to be 7.5% after the £2,000 dividend allowance has been used. Thus where husband and wife are 50:50 shareholders they would each pay £2,663 tax on dividends of £37,500 assuming they have no income other than a £12,500 salary, leaving £34,837 net of tax.

So a combination of £12,500 salary and £37,500 in dividends would result in £46,873 (93.7%) net of income tax and NICs.

Ensure dividend payments are legal

The Companies Act requires that companies may only pay dividends out of distributable profits. This means that in the absence of brought forward reserves the company would need to provide for 19% corporation tax in order to pay the dividends and thus there would need to be profits of £92,593 in order to pay dividends of £75,000 (after providing corporation tax of £17,593).

Overall the combination of salary and dividends suggested above would result in net of tax take home cash of £93,746 for the couple out of profits before salaries and corporation tax of £117,593 (20.3% overall tax). This still compares very favorably with the amount of tax and NIC payable if the couple were trading as a partnership.

Our Advice

Make sure that your SageOne or Xero is up to date so that we can assess your distributable reserves and complete your Dividend vouchers and board minutes.

Where we complete your payroll we will have changed your payroll to suit your business and maximise your tax reliefs.

 

Automation Cog

Automate, Automate, Automate

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Automate, Automate, Automate

The 21st century brings a new kind of technology that has not been around for past businesses. Online tools can help make business more streamlined, efficient and productive. 1 Accounts strive to adapt these new technologies to not only help our business but to help our clients too. With this blog I will talk you through how we have automated our processes to allow us extra time to help our clients.

Karbon

When we receive a new enquiry we start our process on Karbon. Karbon is a work flow program that helps our team work together and not miss any important deadlines. We assign an on boarding template to the enquiry. This includes pre-written emails that can be sent with just a click of a button. We have also used Jot Form to create secure forms for our clients to fill out with all the information we need. The links to these forms are included in our pre-written email. This leaves out any need for unnecessary work.

Practice Ignition

Once a prospect decides they would like to sign up with 1 Accounts, we then create a proposal in Practice Ignition. We love this piece of software. Our proposals are already set up, we just fill in any specific details and send to the client. Once signed Practice ignition automatically sets up the direct debit for our client.

Go Cardless

All our clients are on a monthly fee which is taken via direct debit in Go Cardless. This is set up through Practice Ignition and takes the monthly fee. Go Cardless means that we are no longer chasing payments and our ‘getting paid’ process is completely automated. Go Cardless will then generate an invoice into Xero automatically.

Xero

Once the direct debit has been taken Go Cardless prompts Xero to create an invoice to be emailed to the client. Our whole process is automated, eliminating the need for manual work.

We are working on ways to automate even more of our processes. Information requests for year end accounts and tax returns are now becoming automated so that we can receive information earlier to enable us to complete the work quicker. We are always looking for new ways to help automate our clients business’s. If you need help with this please contact jade@1accounts.co.uk and she will be sure to help.

happy new year typewriter

Happy New Year

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Happy New Year

The 6th of April marked the first day of the financial year. This brings a few changes to individuals and businesses.

The Personal Allowance 

The personal allowance (the amount you can earn before paying Income Tax) has increased from £11850 to £12500. This will lead to a small reduction in tax. For higher rate tax payers the allowance will increase from £46,350 to £50,000.

The National Minimum Wage

The national minimum wage has changed on the 1st of April 19.

  • For 25 years and older the minimum wage has changed from £7.83 to £8.21
  • For 21-24 years the minimum wage has changed from £7.38 to £7.70
  • For 18-20 years the minimum wage has changed from £5.90 to £6.15
  • For under 18 year the minimum wage has changed from £4.20 to £4.35
  • For an Apprentice the minimum wage has change from £3.70 to £3.90

Student Loans 

The earnings threshold has also increased for paying back students loans.

  • Plan 1 loans will rise from £18,330 to £18,935.
  • Plan 2 loans will rise from £25,000 to £25,725.

This will apply to all current and future student loans where employers make student loan deductions.

Auto-Enrolment 

The minimum amount for auto-enrolment has also increased. Employers now must contribute a minimum of 3% of the employees qualifying earnings (an increase of 1%). Employees must pay 5%. The total minimum contribution is now 8% (from 5%)

Preparation 

In preparation for the influx of personal tax returns we are preparing early this year. Our clients would have received an automatic email from Jade requesting information to complete their self assessment. This is not due to be submitted until January 2020, however we are aiming to have all tax returns completed by the end of the year!

Daisys for a march update

March Update

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1 Accounts March Update

We have stepped into spring with March, the clocks have changed meaning lighter evenings leaving the office very cheery.Here are just a few of the things we got up to in March.

Jade Went To Prision…

… but unfortunately they let her out!

Jade went to Highpoint Prision to see how rehabilitation is helping the ex-offenders. She was taken on a tour of the prison and then networked with the ex-offenders. Here at 1 Accounts we support Highpoints mission to help educate the ex-offenders so they can leave the prison and not re-offend. Jade learnt that many of the ex-offenders would like to leave and start their own business as employment is hard to find with a criminal record. Paul is due to speak at Highpoint in April to discuss how to become self-employed.

Katie turned 20

This month was Katie’s birthday! Although she works for Fiscale Ltd and not 1 Accounts Online due to accessibility she works from our offices and is part of the team. She was very grateful for all the birthday messages she received from clients! For her birthday she went to Prezzo and got loads of make-up, making her a very happy girl!

Great review

1 Accounts Cambridge got a great review from personal fitness trainer Joe Mitton:

” HIGHLY RECOMMEND!!!!!!!! I have known Mark for years and he has been nothing short of incredible in helping with my taxes, end of year accounts and a whole host of other issues. Accountancy isn’t my area at all yet Mark made it a seamless processes for me enabling me to get on top of and stay on top of my accounts.He always goes above and beyond and I recommend him to everyone!!!! Can’t thank you enough for everything you’ve done for me!”

James went to Paris

James went away to the city of love with his girlfriend. He came back with stories of climbing up the Eiffel Tower, eating French food and river cruises. He had such a great time he brought the office back tasty treats and keyrings!

Good Job Kerry

Our star bookkeeper is also the queen of payroll. She spent March preparing us for the payroll year ends. If anyone completing their own payroll is struggling please let Kerry know and she will be happy to help – Kerry@1accounts.co.uk

Lloyds Cyber Fraud

Jade went to the Jocky Club in Newmarket to hear Lloyds Bank speak about cyber fraud and how it is affecting business. She learnt the following tips:

  • If you get an email stating that bank details have changed always ring the person to find out if it is correct, also check the numbers over the phone! This is the same for internal emails as these can also be intercepted.
  • Use a £ sign in your password as many international keyboards do not include this symbol
  • Never give your bank log in details over the phone! No bank would ever need these details, no matter how convincing they sound.
  • Never click a link on an email from an unknown source (even the unsubscribe button)
  • Fraudsters are clever, it is easy to be fooled so be extra vigilant.

They also showed us this video about how easy it is for people to find out your passwords, make sure your password isn’t too obvious:

 

Accumulator Challange

In March we announced that we are sponsoring this years Accumulator Challenge. The challenge involves receiving a £50 note and having to make as much profit from it as possible. All of this is in aid of St Nicholas Hospice. For more information on how to sign up please email jade@1accounts.co.uk

Staff Only

Keeping up with the Employees!

Posted on | by Jade Donno

Keeping up with the Employees

Unlike the Kardashians it can be extremely hard to keep up with your employees hours, especially if your business is not office based. Here is our simple solution on how we can help you ‘keep up with the employees’.

The Problem: 

Many employees are paid by the hour and quite often employers have not invested in a clocking in system. This means employees are responsible for keeping their own paper timesheets. These are then given the the team member in charge of payroll to be inputted into the system. There are a number of things that could go wrong with this way of working:

  • The employee doesn’t meet the deadline
  • The hours are inputted incorrectly onto the system
  • The handwritten hours are hard to read and so takes extra time to decipher
  • The employee is away from the office and unable to bring in their payslip before the deadline.

All these things can create unnecessary nightmares for business. But it’s okay, we have a solution.

The Solution: 

These days most people own a smart phone. With Xero Payroll our clients have access to the Xero Me app.  With this app employees can fill out their timesheets on the go. This is then fired off to the office for approval. Once approved the hours are automatically put in the payroll ready for the next pay run. Employees can also view all their payslips and download them. It is a great tool and if you already have Xero Payroll, this app is free to use.

No errors, no delays and always on time!