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News,May 2018

simplified expenses for self-employed

Simplified Expenses – A Guide For Self-Employed Individuals!

25/04/2022Accounting Issues , Business , Business Growth Ideas , Finance

Do you wish to turn the pain of tax returns and accounting into ease? There is actually an easy and useful way known as simplified expenses for self-employed individuals. We all can relate to the complications of reporting and bookkeeping when we are self-employed. In order to ensure the good management of small businesses, HMRC has introduced simplified expenses. It is used with a set flat rate and this ends up making the claiming process swift and easier than it ever was. Furthermore, you can use simplified expenses only when it suits your business requirements. Before we delve further into the discussion, let’s have a look at points of discussion in today’s article.   Coffee, cookies, and taxes. What a perfect match. Get in the car, and reach our office today. Call us or email us to book your initial free one-hour basic consultation to discuss your requirements. We’ll make sure that we get all your documents submitted on time. Talk to our guys today!   Introduction to Simplified Expenses Simplified expenses allowed the self-employed individuals to make accurate calculations of the allowable business expenses. Also, HMRC has set a flat rate for doing so. We all know that calculations of the exact expenditures in other traditional ways is a complicated process. This is to further bring to your knowledge that simplified expenses are purely for small businesses and self-employed individuals. The limited companies and business partnership companies are not allowed to use any of them. The list of allowable expenses for self-employed includes the cost in case you happen to live on your business premises, working from home, and the cost involves the vehicle used for business needs. Simplified expenses can be most suitable for people with straightforward tax affairs. As well as the individuals who carry out small businesses with a few business expenses. Several businessmen happen to travel a lot for their business demands. So, simplified expenses can be useful for such business travellers as well. Moreover, not everyone who belongs to the business world can get benefit from simplified expenses. In the following, there is a list of who actually can use simplified expenses. Business partners with the condition of no partner exist as a company. Sole traders   Types Of Expenses The types of expenses that are allowable under the flat rates include the following: Working from home If you are living on the business premises Vehicle cost that is used for business traveling   Get in touch, explain your requirements, or sign up online for customised services just like your business requires.   Learn The Way to Use Simplified Expenses You might be wondering how to use the simplified expenses for your business needs. To make it a seamless working process, be vigilant about the following: 1- Record Keeping: A clear record maintaining for the hours of working from home, use of a vehicle for business travelling, and how people lived at the business premises. This will help to get the most benefit and ease down the processing. 2- Work Out Your Business Expenses: As the tax year ends, you can work out your expenses by using the flat rates for work from home hours, living at business premises, and vehicle mileage. 3- Self Assessment Tax Return: All the above-mentioned amounts should be included in the self-assessment tax returns.   Simplified Expenses for Self-Employed Individuals You are self-employed and working from home, here is what you are required to do. You need to make accurate calculations for your allowable expenses and use the flat rate. The first need is to calculate the working hours from home every month. This further means that you are free from calculations of the proportion of business and personal use from the home. Internet and telephone bills are not added to the flat rates. Some other salient features at a glance include the following: Simplifies expenses are only allowable if your working hours are 25 hours or more in a month from home. The flat rate per month is £10 if the hours of business use per month are 25 to 50. The flat rate per month is £18 if the hours of business use per month are 51 to 100. The flat rate per month is £26 if the hours of business use per month are 101 or more.   Stuck with your accounts and looking for a helping hand? How about you get our guys on a quick call. We love talking about taxes, payroll management and any opportunities that help you expand your prospects. Call us on 020 8686 8876 or email us today.   Conclusion Now that you have developed a better understanding of Simplified Expenses for Self-Employed people, we can sum up the discussion by saying that this process can bring ease to accounting complications only if handled vigilantly. We hope these few minutes of reading will help you to make the right business decisions.   Disclaimer: The information about Simplified Expenses for Self-Employed individuals provided in this article is general in nature and does not intend to disregard any professional advice.

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What does a Financial Controller Do

What Does a Financial Controller Do and How Can One Help Your Business?

13/04/2022Accountants , Accounting , Accounting Issues , accounting software

You are associated with the business world as a small business owner or you might carry out business on a large scale? There are several hats that an owner tends to wear which might include the sales associate hat, customer service hat, and the manager hat. Moreover, the more your business grows, the more responsibilities it will add. It becomes challenging to maintain balance among all the responsibilities hats at the same moment. Do you wonder how to lighten this burden with surety that the business success is not compromised? Here comes the need for a financial controller. But what is a financial controller?  How they might help to lighten business responsibilities? Here is a fine roadmap to make you understand how advantageous it is to consider hiring a financial controller. This article will cover the regular responsibilities, special skills, and everything that you need to know as a business owner. This includes the following: An Introduction to What is a Financial Controller and His Roles How is Hiring A Financial Controller Beneficial? Final Thoughts   Is financial management giving you chills? Take a back seat. Our team of expert chartered accountants help you build long-term strategies. Do reach out now.   An Introduction to What is A Financial Controller and His Roles To ensure the effectiveness and efficacy of a business, a financial controller is responsible to see all the accounting matters. The financial controller is also considered the lead accounting executive. It will not be wrong to say that financial controllers are the human version of accounting software. The language of numbers is their prominent skill. In order to make just the accurate financial reports and budgets, they are your go-to person who will handle data interpretation and understand it accurately. The internal weaknesses of a business can turn into growth opportunities in the right hands of a financial controller. The financial terminologies that might sound fancy to you can be handy to them. Moreover, it depends on what size your business scale is, however, mostly their responsibilities include the following: Ensuring financial records in an organised manner Management of accounting staff Budget making Financial statements on a monthly basis To publically post legal reports with financial regulations Coordination with tax accountants Have look at the internal weaknesses of the business Development of accounting policy to ensure seamless working An eye on debt collection and cash flow Management of billing, ledger, cost accounting and revenue etc   Stuck with your accounts and looking for a helping hand? How about you get our guys on a quick call. We love talking about taxes, payroll management and any opportunities that help you expand your prospects. Call us on 020 8686 8876 or email us today.   How is Hiring A Financial Controller Beneficial? Apart from the most prominent benefit guidance of in making business decisions,  hiring a financial controller will help to save the amount of money because of the accuracy factor in the accounting affairs. Because when it is about the company’s finance, there must be zero tolerance for accounting errors. The experience and accounting background of a financial controller is what exactly are needed to maintain accurate records. This will further help to stay on top when it comes to business transactions. This will make you less worried about the slipping of incoming and outgoing payment activities that might get you stuck in debt, penalties or late fees. Moreover, another call from an external auditor for your financial documents will not sound like a nightmare. While you are stress-free from the above-mentioned problems, you can now focus more on business scaling and other such responsibilities that might include the following: Ideas to expand the market Management of regular operations and responsibilities Training and hiring of new employees Good quality products High standard services Working on a healthy relationship with the customers Partnership with other business owners   Final Thoughts Now that you have developed a basic understanding of what is a financial controller and its responsibilities and benefits, we can sum up the discussion by saying that hiring one will actually lighten your business burden. This will set you free and let you focus on other factors that will take your business to the next level of growth. If you are a business owner, you must have analysed your suitability according to your business size and make unmatchable business decisions to flourish and rise better than before.   Our accountants can help with preparing and reviewing the financial reports of a company, including data management, review and consulting, production of financial statements, and ensuring that the company’s accounting practices comply with regulations. Contact us now!   Disclaimer: The information about what is a Financial Controller provided in this article including text, graphics and images is general in nature and does not intend to disregard any professional advice.

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Self Employed or Limited Company

Self Employed or Limited Company: What’s the Difference?

30/12/2021Accounting , Accounting Issues , Limited Company , Sole Proprietorship

While setting up your business, one of the most crucial decisions to make is to choose a business structure. There are a lot of business structures to choose from. Limited liability partnership is the less popular business structure used by professionals. The majority of the business structures in the UK are either self employed or limited company. According to the latest reports of Statista, there are around 4.3 million self-employed workers in the UK. On the other hand, there are over 4 million limited companies registered in the UK. Let’s dig deep into both to know what are they, are taxed the same, and what cost and administration is involved. Let’s kick off with what is self-employed and what is a limited company?   We save your time, money, and stress by handling all your finances and business problems in no time! Call us on 020 8686 8876 or email us today.   Self Employed or Limited Company: Differences Let’s have a quick glimpse at self-employed and limited companies.   What is a Self Employment? Self-employed persons work for themselves as sole traders. There are no shareholders or officers and the self-employed person has total control over his business and is liable for all the profits and losses personally. The losses made by a sole trader directly impact the personal finances of a sole trader. Income tax is payable on the profit earned and needs to pay Class 2 and 4 National Insurance as a self-employed individual.   What is a Limited Company? A limited company is a separate entity with its own identity and it is separate from shareholders and directors. The personal finances of directors of the limited company are kept separate from the company until there’s fraudulence or any breach. A limited company has to pay corporation tax on the taxable profit and they need to deduct income tax and NI from the employees’ salary through PAYE.   Tax Implications Let’s see how self-employed persons and limited companies are taxed.   Self Employed Tax Self-employed persons need to pay income tax through Self-Assessment.  They need to register for VAT if reached the threshold of £85,000 (2021/22). Here are the tax rates and threshold that a self-employed person should know: Band Taxable income Tax rate Personal Allowance Up to £12,570 0% Basic rate £12,571 to £50,270 20% Higher rate £50,271 to £150,000 40% Additional rate over £150,000 45% The deadline for online tax return is Midnight 31 January 2022. Moreover, self-employed persons need to pay Class 2  National insurance if the profits are £6,515 or more a year and Class 4 NI on profits over £9,569. Here is the rate of NI rate you need to remember: Class Rate for tax year 2021 to 2022  Class 2  £3.05 a week  Class 4 9% on profits between £9,569 and £50,270 2% on profits over £50,270 We can register you as self-employed to HMRC on your behalf!  Fill out this form and let us handle everything!    Limited Company Tax Instead of income tax, limited companies need to pay 19% Corporation tax on the annual profits. Company directors are levied tax based on the salary they earn from a limited company. Dividend tax is paid on dividends received from a company. In addition, income tax and Class 1 NI is payable on any salaries paid by the company. And companies need to pay Class 1 Employers’ NICs on salaries paid to employees.   Want to incorporate a company? Get in touch with one of our professionals. Check out our company formation package!   Administration and Costs A limited company needs more administration and management tasks compared to self-employed.   Limited Company Administration All the limited companies of the UK need to register with Companies House. It must make sure to inform the registrar of companies informed of any changes made, need to file confirmation statement and PSC each year along with the company accounts. The cost of forming a limited company is affordable and the accountants are responsible to manage the accounting tasks along with dealing with HMRC and Companies House.   Self Employed Requirements There are fewer legal responsibilities and administrative tasks in forming a limited company. You just need to register for self-assessment and pay the due tax and NI on time.   Quick Sum Up So after giving this blog a read, you have now understood which business structure to choose: self employed or limited company. As a self-employed, you are your own boss and liable to pay tax and NI 2 & 4 on your earnings. Whereas, limited companies need to pay corporation tax and Class 1 NI on salaries paid to employees. Bear in mind that there is less hassle to work as a self-employed, but with limited companies, you have to meet administrative and legal responsibilities.   Turn to us if you need any help with accounting, tax payroll, and other finance-related problems. We will solve your tax issues in no time and at an affordable price! So, contact us now!   Disclaimer: This blog contains general information about the topic.

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How Much Does an Accountant Cost

How Much Does an Accountant Cost?

15/11/2021Accountants , Accounting , Accounting Issues , Startup accountants

Wondering how much does an accountant cost in the UK? There is no fixed cost, it depends on a lot of factors. A fee of an accountant can differ based on the business’s nature, size, and turnover. It also varies as per the service and its scale. In addition, the charges of an accountant may be different as per the location, experience, and expertise of your accountant. After knowing these things, you can gauge the fee of your accountant easily. Let’s find out the average fees of an accountant as per the services!   Talk to one of our chartered accountants in Croydon to know what they charge! Feel free to contact us!    What Accounting Services Do Small Businesses Need? If you are a sole trader, contractor or a limited company with up to 50 employees or below, these are the typical accounting services that you might need: Bookkeeping Annual accounts Tax returns VAT returns Company Formation Preparing Financial Statements Preparing and Filing Business taxes Monthly & annual payroll returns Advice on tax avoidance legislation (IR35) Day-to-day advice from your accountant   What services you are looking for? Let us know! We have a special offer for you. Get in touch now!   Price Guide for Accountants Cost Here are the average fees of an accountant. However, these may vary based on multiple factors like your business size, the complexity of your finances, etc. The cost of an accountant as per the industry for the following services is: Individual tax return –£75 to £400+vat a year Self-employed tax return and accounts – £250 to £1,000+vat a year Limited company – £40 to £250+vat per month for accounts, tax returns and payroll   How Much Does an Accountant Cost for Small Businesses? The services of an accountant vary based on the below-mentioned factors: The country you are based in Services you need Size and nature of your business For a small business (below 50 employees) looking for services like tax advice, bookkeeping, monthly and annual payroll, the average fee of an accountant can be anywhere between £60 to £250. Most self-employed people need an accountant for one-time service, like to do tax returns. There would be a one-off fee for it that will be around £150 to £400. Bear in mind that this is the average fee. This may vary as per your circumstances, complications and other factors. For additional services, the self-employed person needs to pay more. Self-employed people can save a lot of tax by hiring an accountant. So even after paying the fee of an accountant, you can save money. For VAT returns, this fee can be between £100-£250, and business accounts can range from £150-£700, as per the turnover of the business.   Do Accountants Charge on an Hourly Basis? Some accountants charge on an hourly basis. An accountant who is offering basic accounting services will cost you around £25 and £35 per hour. If you need complex services like tax planning and business advice, the charges can go up to £125 to £150 per hour.   Accounting Fees Per Service Some businesses pay accountants based on the services they want. It may include year-end accounts, VAT returns or payroll etc. Here is the one-time fee for the following services: Doing accounts of a business with a turnover of £20,000 to £30,000, the cost will be around £150 (businesses with high turnover need to pay more) The typical fee for payroll services with 50 employees can be £200 (per month) A business, having a £100,000 turnover, looking for VAT returns will pay, typically, around £100 (the fee will be higher as per the turnover)   Quick Sum Up So you have now got a fair idea of how much does an accountant costs in the UK. Bear in mind that the accountant’s fee varies based on multiple factors. But as a general rule of thumb, the higher your turnover or income, the greater your accounting fee is likely to be. Remember that the charges mentioned in this blog are just for your general guidance. You may talk to our accountants to discuss the fee, they charge. Moreover, you can minimise your accounting fee by maintaining your records and by using accounting software.   At CruseBurke, we have a team of skilled accountants who provide solutions to all your business problems! Reach out to us today!   Get an instant quote from our accountants for the services you’re looking for!   Disclaimer: This blog provides general guidance on the cost of hiring an accountant.  

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What is Bank Reconciliation

What is Bank Reconciliation and How to Do it?

07/06/2021Accounting Issues

In this digital banking system, many people overlook the importance of bank reconciliation. However, you need to remember that banks can also make mistakes. To find those mistakes, bank reconciliation is needed. So let’s explore what is bank reconciliation and how to do it? Bank reconciliation means matching the balances of your bank statement to your accounting records. This process helps us to correct errors, identify fraudulence, and locate missing funds. Though connecting an accounting software with the bank is a great option to boost the reconciliation process. However, this process is not parallel to do bank reconciliation each month. In this blog, we’ll explain what is bank reconciliation, why it is important, and what are the steps to do it. What is Bank Reconciliation? It is the process of comparing your bank statement and your general ledger account in balance. You need to know that the transition of cash and bank accounts in your general ledger should show the same activity that is in the bank statement. In case if they are not matched, you need to find out the missing entries from the balances of the bank statement and general ledger. Then, reconcile them both. So now that you know what is bank reconciliation. Let’s see how to do it. Need an efficient bookkeeper to record and manage your business transactions. Get in touch with us for the best bookkeeping services you are looking for! Step by Step Bank Reconciliation Process It is done for verifying the accounting records of the bank and the business. You can follow these steps for bank reconciliation:   1) Get Bank and Business Records You need to have a detailed list of transaction made by the bank through a bank statement, you can get it online or by your accounting software. Besides, you need to get your ledger account of your business outgoings and incomings. You can also get it from a spreadsheet, a logbook or accounting software. 2) Find a Point to Start Find and compare the last time balance of your business books with the balance of your bank account. And begin reconciliation. 3) Go through your Bank Deposits and Withdrawal Make sure all of your banking transactions are accurately recorded in your bank statement. Add the missing entries and categorize them into interest, sale, refund etc. 4) Go through the Expenses and Income on your Books Check and match the entries of your books with the bank statement. If something is missing find it out. It can be something that you forget to account on your book or it can be a payment that is yet to be cleared. 5) Check the Bank Statement Sometimes, bank statement doesn’t show the accurate records as per the business’s transactions. You might face troubles with bank errors or deposit, outstanding checks. So, you should do the changes to the bank statement. 6) Check the Cash Balance You need to check and correct your business records accurately to match with the bank statement. You need to ensure that you have recorded all charges and deposits are in the cash account of the business. 7) Match the End Balances After comparing and adjusting the entries, you need to make sure that your bank balance is matching your business accounts. If they are equal, it means the reconciliation process has completed. if not, you need to record the process again. If you’re busy with your business, save your time and energy by letting us know. Feel free to contact us! Why Bank Reconciliation Is Important It is used for multiple purposes. Here are some of the important advantages of bank reconciliation. It is used: To accurately record the transactions To detect fraud To prevent administrative errors To find out the delayed payments To know the actual position of the bank balance Quick Sum Up: To sum up, we have discussed what is bank reconciliation, how to do it and why it is important. It used to be tough a decade ago but nowadays you can easily do bank reconciliation using accounting software that makes it faster and error-free. You can automatically import the bank transactions and can match and categorize transactions with a click of a button. However, if you are totally new to it or you are running a large business, it might be complex for you. Don’t worry, just contact us for affordable bookkeeping services. We have a team of expert bookkeepers and accountants for your help. Feel free to reach out and get an instant quote right away. Disclaimer: This blog is intended for general information on bank reconciliation.

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R&D tax relief

Things you Need to Know about Research and Development Tax Relief

22/03/2021Accounting Issues , tax

Research and Development (R&D) Tax Relief is initiated by various governments (including the UK) to encourage and support companies to develop and research for long-term economic growth.  Along with the public sector, the private sector is also receiving benefits from this relief.  Let’s explore, how it can be beneficial for your business. We’ll be discussing the following points in this blog: What is research and development tax relief? Who qualifies for R&D tax relief? Advancements Proof of uncertainties and unsuccessful advances Type of R&D You can avail of tax relief against the cost of R&D stated in Part 13 of the Corporation Tax Act 2009 which provides a range of tax deductions and credits for qualifying costs. You may reach out to us to discuss whether you qualify for this relief or not! What is Research and Development Tax Relief? Research and development tax reliefs ensure to aid businesses who are working on innovative projects in science and technology. Companies that are struggling to research and develop an advance in their field are encouraged to apply for this relief. Even, companies that are unsuccessful in their technological endeavours can also apply for this allowance. Companies can claim Corporation tax relief if a project fulfils the requirement of R&D as per HMRC. Who Qualifies for R&D Tax Relief? To be qualified for R&D, a project should be aimed to achieve advancement in science and technology. The research and advancement in social sciences (Like economics, or pure maths) do not qualify for R&D tax relief. Additionally, the project in which you are making an advancement must be related to your existing business or the one you are willing to start after getting the data from R&D. To qualify for R&D relief, you must make sure to explain how your project: shows the advancement in science and technology. had to control the uncertainties have worked to get over those uncertainties was unable to be carried out by professionals The research project should be aimed at enhancing a new process, service, or item or can improve something that already existed. Advancements: The project you are claiming for R&D relief must be beneficial for the overall field, not just for your own business. This implies that any technology used in your sector for the first time cannot be called an advance for R&D. If an advance by another company in a service, product, or process that is not publicly acknowledged or available, is also accepted for this relief. Proof of Uncertainties and Unsuccessful Advances: A scientific uncertainty means a field professional claims that something is not possible technologically. It also refers to the question of possibility even after getting the required evidence. It means that experts in your field are unaware of advancement or its procedure. Your company should show that a project has been accomplished after overcoming uncertainties through analysis, research, and testing. As evidence, you can show the project details depicting failures and successes during the project. Types of R & D: R & D relief has two types. These types differ based on the size of a company and whether the project is outsourced to you or not. R&D Relief for Small and Medium-sized Enterprises (SME): This relief is for you if: You are running a small or medium-scale business with fewer than 500 employees. Your turnover is less than €100m and your total balance sheet is below €86m. You may be required to mention linked companies and partnerships if you’re an SME. This relief provides companies to: Claim tax credit of 14.5% in case of surrenderable loss. Research and Development Expenditure Credit (RDEC): Large companies can request RDEC for the cost occurring in R&D projects. The works subcontracted by SMEs or RDECs from large companies can also claim this credit. It is a tax credit that has been increased to 20% on 1 April 2024 and onward. Quick Wrap-up: So, if your company is investing in R&D, it is worth spending. There are a lot of incentives and support given by the UK government for companies who want to accelerate in the field of research and development. Ultimately, this relief can help to transform your business. If you’re looking for further support regarding R&D tax claims, we’d love to know more about your business to provide the right solution. You may contact us now! Disclaimer: The information about the R&D tax relief provided in this blog includes text and graphics of general nature. It does not intend to disregard any of the professional advice.

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