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News,May 2018

how much can i claim for laundry expenses

How Much Can I Claim for Laundry Expenses in the UK

26/02/2024Accountants , Budgets & Other , Business , Business Growth Ideas

Are you wondering how much can i claim for laundry expenses? Laundry expenses can be a legitimate business expense for self-employed individuals and certain types of businesses in the UK. However, the rules and regulations surrounding the deductible cost of these expenses can be complex and confusing. The purpose of this discussion is to provide an overview of the basics of claiming laundry expenses as a tax deduction. Including the types of clothing that can be considered, the extent to which cleaning and maintenance costs can be deducted, and the specific record-keeping requirements that must be met. We’ll discuss some of the potential limitations and drawbacks of claiming these expenses. By the end of this discussion, readers should have a solid understanding of the basic principles of claiming laundry expenses as a tax deduction in the UK. Also, be able to make informed decisions about whether or not to claim these expenses on their tax returns.   Reach out to one of our professionals to get to know about claiming laundry expenses in the UK. Get in touch and you will be provided instant professional help!   Which Industries Claim Laundry Expenses? In the UK, businesses can claim laundry expenses if they have an ordinary business need for clothes washing. Or even dry cleaning in the normal course of their business activities. 1. Healthcare and Social Care Healthcare and social care workers commonly need to wash uniforms, linens, and other items that come into contact with customers. 2. Hospitality and Retail Workers in restaurants, hotels, and retail stores often require professional laundry services to clean uniforms and other clothing required for their jobs. 3. Construction and Manufacturing Construction and manufacturing workers often need to wash or dry clean protective clothing, such as hard hats, coveralls, and safety boots. 4. Maintenance and Cleaning Maintenance and cleaning staff members may also require laundry services to clean uniforms and other work clothing. It’s worth noting that claiming laundry expenses can be complicated and requires specific record-keeping to ensure compliance with tax laws.   What Type of Clothing is it? The type of clothing that can be claimed as a business expense regarding laundry expenses would typically be items of clothing that are required for employment. Such as uniforms, workwear, and protective clothing. In some cases, laundry expenses can also include items such as hotel linens, restaurant tablecloths, and other non-clothing items that are used for business purposes. In general, any item that is used primarily for business purposes and is not considered to be personal can be claimed as a business expense for tax purposes.   What About Laundry Specifically? While there are a variety of items that can be claimed as deductible business expenses, laundry expenses specifically typically refer to the costs of cleaning. Also maintaining work-related clothing or uniforms. This may include the cost of dry cleaning, washing, steaming, or ironing professional attire, uniforms, or work-specific clothing items for employees or contractors. The exact rules around laundry expenses and other business-related deductions can vary greatly depending on your specific situation and location.   How Much Can I Claim for Laundry Expenses? Well, how much can I claim for laundry expenses? The amount that you can claim for laundry expenses as a self-employed individual in the UK will depend on a variety of factors. Including the extent to which your laundry expenses are related to your self-employed trade, and the nature of your work. Whether you are claiming the expenses as a capital allowance or as a tax deduction. As a self-employed individual, you can claim laundry expenses as a tax deduction. If you can show that the costs are wholly and exclusively for your self-employed trade. The amount you can claim will depend on the proportion of your clothing. That is used exclusively for work-related purposes, as well as the overall cost of your laundry expenses. If you use specific uniforms or clothing that you purchased for your self-employed work, you may be able to claim the cost of purchasing. Also, the cost of maintaining these items is a capital allowance. In general, it’s important to keep detailed records of your laundry expenses, including receipts and other documentation. You may also want to contact a tax advisor or qualified professional who can help you determine the specific rules and amounts that apply to your situation.   Can I Claim for These Costs if I am PAYE? As an employee or PAYE (Pay-As-You-Earn) worker in the UK, you generally cannot claim laundry expenses as a tax deduction. This is because your employment or PAYE status means that your employment income is subject to payroll taxes. You do not necessarily have a direct business profit or loss to deduct costs from. That being said, there are some circumstances where laundry expenses may be deductible for employees or PAYE workers. For example, if you are required to purchase and maintain uniforms or other work-related clothing as part of your employment. You may be able to claim the cost of these items as a tax deduction. However, the rules around deducting work-related laundry expenses as an employee or PAYE worker can be complex. This may vary depending on your specific circumstances.   The Bottom Line To conclude the discussion based on how much can I claim for laundry expenses, we can say that laundry expenses can be legitimate.  Business expenses for self-employed individuals and certain types of businesses in the UK. However, the exact amount that can be claimed, and the rules around deducting these expenses. It can vary greatly depending on the nature of the business and the specifics of the claim. If you are self-employed or a business owner in the UK, it is important to understand the tax rules and regulations surrounding deductible expenses. Including laundry expenses, and keeping detailed records of your expenses and claims to support your tax filings. If you are unsure about the rules or the amount that you can claim, it may be helpful to consult …

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what is bacs payment

What is BACS Payment?

16/01/2024Accountants , Accounting , Budgets & Other

If you are seeking What is BACS Payment? In this guide, we will focus on BACS payment which is a widely used electronic transfer system in the UK that allows individuals and businesses to make recurring payments, such as utility bills, mortgage and loan payments, and membership fees. With BACS payment, the customer’s bank account details are sent to the service provider, who then sets up a regular payment schedule with the customer. With BACS payment, customers can easily manage their payments without the need to remember to make payments. However, like any other electronic payment method, BACS payment is not without its risks, and customers should be aware of potential security risks and take appropriate measures to protect their personal and financial information. Overall, it’s important to know what is bacs payment and that BACS payment is a fast, reliable, and convenient way to transfer funds between bank accounts in the UK, but it is important to be aware of the risks associated with any electronic payment method.   Reach out to our smart and clever-minded guys to get an understanding of the tax set of rules in the UK queries answered quickly. We will help to understand your queries instantly.   What is BACS Payment? What is BACS payment, BACS is a popular payment method because it is fast, reliable, and secure. Most wage and salary payments in the UK are made using the BACS system. When making a BACS payment, the sender’s bank sends the payment instructions to BACS, and BACS then forwards these instructions to the recipient’s bank. The recipient’s bank then debits the recipient’s bank account and credits the sender’s bank account. This happens in real-time, and the payment is processed and settled overnight. The BACS system is used by hundreds of banks in the UK, and it is a highly efficient and cost-effective way of making electronic payments. It can often be faster and cheaper than traditional paper-based payment methods, allowing individuals and organisations to make electronic payments without having to visit a bank physically.   Which Banks Use Bacs? As of January 2023, several banks in the UK use the BACS system for electronic payments. These banks include all four major high street banks – Barclays, HSBC, Lloyds, and NatWest. Additionally, thousands of smaller and specialist banks and building societies also use BACS for electronic payments. Almost all UK banks and building societies use BACS, and it is the most widely used payment system in the UK. This means that individuals and businesses can make electronic payments to almost anyone in the UK who has a bank account using the BACS system. When making a BACS payment, the sender must have a bank account a valid account number and a sort code for the recipient. The sender can then make a BACS payment by logging into their online banking service, entering the recipient’s details, and typing in the amount they want to send. The payment is then processed and settled overnight, and the funds are transferred from the sender’s account to the recipient’s account.   How Long Does a BACS Payment Take? The time it takes to make a BACS payments in the UK can vary depending on several factors, including the time of day, the number of payments being processed, and the bank or building society processing the payment. However, BACS payments are generally processed overnight, which means that they are usually completed within 24 hours after the payment is made. This means that if someone makes a payment using the BACS system on a weekday, the payment is likely to be processed and settled within 24 hours. Most payments made using the BACS system are completed overnight, and the funds are usually available in the recipient’s account by the end of the next working day.   What is BACS Payment and How to Make a BACS Payment? Several ways to make BACS payments. Here is a step-by-step guide on how to make a BACS payment in the UK: 1. Determine the payment amount: First, determine how much you want to pay to the recipient. 2. Gather the recipient’s payment details: To make a BACS payment, you will need the recipient’s bank account number and sort code, which can be found on a cheque, bank statement, or by contacting the recipient’s bank. 3. Determine the payment method: There are several ways to make a BACS payment, including online banking, mobile banking, telephone banking, or at a local branch or ATM. 4. Complete the BACS payment: If you choose to make the payment online, you will need to log in to your online banking service and follow the instructions provided to make the payment. This may involve entering the payment details, selecting the payment amount, and verifying the payment. If you are making the payment using a mobile app, the process may be similar to the online banking process. If you are making the payment by telephone, you will need to contact your bank’s telephone banking service and follow their instructions to make the payment. 5. Confirmation of payment: Once the payment is made, you will receive a confirmation from your bank that the payment has been processed and sent to the recipient’s account. The payment will then be processed and settled by the BACS system automatically.   Is Bacs the Same as a Bank Transfer? BACS payments and traditional bank payments in the UK are similar in some ways, but they also have some key differences. Both types of payments allow individuals and businesses to transfer funds between bank accounts, but they differ in terms of how they are made, how long they take to process, and how they are settled. Traditional bank payments in the UK, such as direct debit and standing orders, are usually processed manually by bank staff. This means that the payment process can take several days to complete, as it needs to be manually authorised and cleared by the bank’s systems. Traditional bank payments are also …

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Tax On Second Job

Tax On Second Job – A Beginner’s Guide!

20/04/2022Budgets & Other , Tax Issues , Tax Saving Tips , Taxation

Wondering about the second job tax and how it might affect your income? It is important for you to manage the tax payments in a way that does not make you pay too much if you are doing a second job. There should be a balance for tax payments as paying too little or too extra will have negative impacts on your pocket. We have got some points covered in today’s article by keeping the advice into serious consideration. The first important factor to learn is about being crystal clear if it is allowed to opt for a second job. Let’s keep first things first. Say that if the second job is a good viable option, you must go for it. After this ensure that the current job contract does not have any clause that can stop you from taking a second job. There could be a conflict in the contract that says something about the prevention of a second job. Talking to the employer would be a great idea if this is the case. However, if the contract says otherwise, you are good to move ahead and opt for the second job. The Basics Second Job Tax – How Much Do I Pay? Learn to Avoid Under and Overpaying Tax Final Thoughts   Our accountant will be responsible for preparing and reviewing the financial reports of your company, including data management, review and consulting, production of financial statements, and ensuring that the company’s accounting practices comply with regulations. Get in touch now!   The Basics Before you decide to practically start the second job, consider a few basics. In the following, we have listed a few of them: There will be impacts on taking both roles of the jobs, consider them with a clear head before you start. The terms and conditions about work in the contract are clearly understood by you. Each job can pay you minimum wage or more than that, not less. Moreover, have you thought of the tax system as yet? How do they view your both jobs? It is to inform you that one of the jobs is considered your main income by the tax system. The amount of personal allowance of £12,570 is also given on the main job. This allowance is given to you before the tax payment. You will not receive any personal allowance for your second job.   Second Job Tax – How Much Do I Pay? The amount of tax payments is directly linked with your income on both jobs. This means that the tax you pay will depend on the salary you are getting from each job. Sometimes, the position at first job comes down and even goes below than personal allowance. In such a case, the tax for a second job will be set at a standard rate of 20%. For instance, if an individual receives an amount of £150 from his first job and an amount of £1oo from his second job every week, there will not be any tax on the first job because it is under the personal allowance. However, the standard 20% will be taxed for the second job. Normally, the second job tax is paid by using the BR tax code. BR is the abbreviation of the basic rate that is 20% as mentioned above. Moreover, if the extra income put you in the higher tax bracket, you might have to pay more tax.   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.   Learn to Avoid Under and Overpaying Tax It is important to get a starter from the new employer when you start a new job. As HMRC will require your other job details and this will be sent to HMRC for the purpose. One should know the tax codes. The second job tax code is normally after the BR code number. Now consider the following to avoid paying too little or too extra amount of tax. You get a second personal allowance as you have not informed HMRC about your second job, you are paying too little in this situation. Because of the second job, you are now under a higher tax bracket but you choose to pay the basic tax. You are paying too little in this case as well. If the salaries you withdraw from both jobs are less than your personal allowance, you are paying too much tax.   Final Thoughts Now that you have developed an understanding of second job tax, you know clearly when to inform HMRC. As well as how to avoid paying too much tax or too little tax. You are the best judge to make the right decision according to your situation. We hope these few minutes of reading will help you to make the right choice and save you from paying an extra amount of the tax.   We advise on personal tax and prepare tax returns for sole traders and company directors. Get in touch with us to get the services that will your business grow.   Disclaimer: The information about the Second Job Tax provided in this article including the text, images and graphics is general in nature and does not intend to disregard any professional advice.  

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Autumn Budget 2021

Autumn Budget 2021: Key Points at-a-glance

27/10/2021Budgets & Other

Welcome to this special newswire. In this edition we focus on the Chancellor’s Autumn Budget. Please contact us if you wish to discuss any matters in this newsletter in more detail.   Budget and Spending Review On 27 October 2021, the Chancellor delivered his third Budget in conjunction with the Public Spending Review. Many of the spending announcements had already been leaked to the Press prior to Budget Day and arguably a lot of it was not new money. The Chancellor did however manage to keep a few surprises back for Budget Day. Low paid workers will welcome the increases in the National Living Wage (NLW) that take effect from April 2022 and the 8% reduction in the Universal Credit income taper. However, the increase in the NLW in conjunction with the 1.25% increase in National Insurance Contributions (NICs) will be additional costs for employers and are likely to add to inflation. Rishi Sunak continues to have to tread a fine line between raising taxes to start paying down the massive Government borrowings but at the same time stimulate economic recovery and save jobs. The changes to tonnage tax and air passenger duty appear to be inconsistent with the goal of reducing CO2 emissions.   National Living Wage Increased to £9.50 an Hour Among the announcements leaked before Budget Day was an  increase in the hourly rate for the National Living Wage (NLW) which was greater than inflation for those aged 23 or over, to £9.50 an hour. For an employee working a 35-hour week that would mean £17,290 a year. With the 1.25% increase in employers NIC to 15.05% on earnings over £9,100 a year would mean £1,233 on top, the cost to the employer would be £18,523 a year before pension costs.   No Chances to Income Tax Rates and Personal Allowance Frozen The basic rate of income tax and higher rate remain at 20% and 40% respectively, and the 45% additional rate continues to apply to income over £150,000. As previously announced in the March Budget, the personal allowance and higher rate threshold have been frozen at £12,570 and £50,270 until 2025/26. As announced on 7 September, from 6 April 2022 dividend income will be taxed at 8.75%, 33.75% and then 39.35%, depending upon whether the dividends fall into the basic rate band, higher rate band or the additional rate band. The first £2,000 of dividend income continues to be tax-free. The summary of the economic impact published on Budget Day suggests that these rates will remain in place until 2025/26.   Some National Insurance Thresholds are Changing The 1.25% increase in the rate of National Insurance Contributions (NICs) paid by workers and employers announced on 7 September to provide extra funds for Health and Social care will go ahead from 6 April 2022. This will become a new Health and Social Care Levy from 2023/24 onwards. Although the income tax personal allowance and thresholds are frozen until 2025/26, certain NIC thresholds have been increased In line with inflation. For 2022/23, employees and the self-employed will start paying NICs at £9,880 and pay at 10.25% (self-employed) and 13.25% (employees) up to £50,270. Note that the Upper Limit is frozen in line with the income tax higher rate threshold and that the new 3.25% rate will apply to earnings or self-employed profits in excess of £50,270. Employer contributions at 15.05% will apply to earnings in excess of £9,100 a year for 2022/23.   “Temporary” £1 Million Annual Investment Allowance Extended Businesses investing in plant and machinery will welcome yet another extension in the 100% Annual Investment Allowance (AIA) until 31 March 2023. The 100% relief was scheduled to revert to £200,000 on 1 January 2022. This deduction is available to unincorporated businesses as well as limited companies and the equipment does not have to be new. This tax allowance is not as generous as the 130% super-deduction announced in the March 2021 Budget which is available when new plant and machinery is acquired by limited companies between 1 April 2021 and 31 March 2023.   Business Rates to be Made “Fairer” and 50% Discount for the Retail and Hospitality Sector The Government continue to promise a fairer system of Business Rates and will provide new reliefs for investment and improvements to business premises.  In order to support businesses and jobs in the retail, hospitality and leisure sectors, the chancellor announced a 50% discount in business rates up to £110,000. High Street businesses still operate at a significant disadvantage to online retailers who generally pay lower Business Rates, and some pay a lot less corporation tax. The Government will consult shortly on an Online Sales Tax which may help level the playing field.   Changes to R&D Tax Relief As announced in the Budget R&D, tax relief will be reformed from April 2023 to support modern research methods by expanding qualifying expenditure to include data and cloud costs, and to focus tax relief on innovation carried out in the UK. HMRC will continue to target abuse of this generous tax relief and improve compliance.   Group Relief for European Company Losses to End With effect from 27 October 2021, group relief for losses of 75% subsidiary companies resident in the European Economic Area and companies trading in the UK through permanent establishments will end.   Cultural Tax Reliefs Doubled Eligible companies engaged in the production of qualifying theatrical productions, orchestral concerts, and museum and gallery exhibitions are currently able to claim an additional deduction in arriving at their profits. Where that additional deduction results in a loss, the company may surrender those losses for a payable tax credit similar to R&D tax relief. The doubling of the relief is available for the costs of the production/performance incurred between 27 October 2021 and 31 March 2023.   New Residential Developer Tax From 1 April 2022 the Government will introduce a new tax on company profits derived from larger UK residential property developers. The tax will be charged at 4% …

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How does Crowdfunding work? It is a way to quickly raise large sums of capital from various lenders, customers, or investors, Learn more

What is Crowdfunding and How Does It Work?

14/10/2021Budgets & Other , Business , Finance

The crowdfunding platforms provide small businesses a way to quickly raise large sums of capital from various minority lenders, customers, or investors in a short period of time. This type of fundraising is becoming more popular, and it is being utilised to fund not only businesses but also creative projects, social movements, etc. Therefore, in this blog, you will know how does crowdfunding work and its further details.   Manage your business finances with CruseBurke. Just let us know your need for affordable financial services tailored to your business needs!   What is Crowdfunding & What are its types? It is a way to raise capital. You ask for money from a lot of people at once, often through the internet. You will have to decide on a target amount and pitch your next project or business information to your potential crowd of investors. Then raise the entire amount of money to proceed. Types of Crowdfunding The following are different types of it. 1) Loan-Based Crowdfunding  In this, the amount of money is lent to your company at an interest rate, which is fixed. 2) Investment-Based Crowdfunding  In this type of crowdfunding, people invest in your company for a share in return. 3) Donation-Based Crowdfunding In this, people contribute to your charity in exchange for something promised in return. 4) Reward-Based Crowdfunding   In exchange for a person’s investment, you give a reward generally related to the project you are promoting.   How Does Crowdfunding Work? In order to register your project, you will generally utilise a crowdfunding website online to register your project and start raising the money. Some of the popular websites are stated below.   After choosing the site, you will have to register your project. Keep in mind that along with registering, you are informing your audience about yourself, like what you want to achieve and why does the audience investment is too valuable. Hit Your Target When your campaign is up and running, then it’s time to advertise it on your email list, social media, and anywhere else where you have an interested audience. Tell them details about how their donation is going to assist you in improving your business for them. Keep your audience updated about the ongoing process of fundraising and maintain enthusiasm.   Key takeaway: Most of the platforms or websites take an approach (all-or-nothing), which means no money will be paid to you if you do not hit your target. Therefore it is important to go all out on your other websites 0r platforms in order to raise awareness. Where is the Money?  As long as the campaign is within the time period set from the beginning, your investors can not pledge money at any stage of your campaign. But once it is not within the timeframe, the investors can commit the funds at any point. Once you reach your target and the campaign ends, your crowdfunding website or platform will deduct a percentage from the total amount of money raised. When planning your crowdfunding campaigns, you may also have to consider tax obligations. For instance, investment and reward-based crowdfunding is generally categorised as revenue and can be liable to revenue and sales tax.   CruseBurke has a team of accountants to provide affordable financial services for you. Feel free to reach out!   Do I Need to Payback Crowdfunding? It is based on the type of crowdfunding you are going for. For example, with reward and donation-based crowdfunding, people invest for various reasons, usually through social or personal motivation. But, it is not for heavy financial gain. In loan-based crowdfunding, the investors, often with interest, receive their amount back. And, in investment-based crowdfunding, people generally invest money for your company share. Therefore, they will see the rise and fall of the value of their shares. But, you will not have to pay them back.   Conclusion Now that you know how does crowdfunding works, you must also know the harsh facts of crowdfunding. You have established high public expectations, so missing promised deadlines or failing to meet their expectations will irritate people. In addition to that, you can have bad publicity. The smart strategy is to stay engaged with your audience and share your journey with them. If your audience is aware of your challenges, they will forgive a lot of things.   It is always advisable to get help from a financial advisor to flourish your business. So what’re you waiting for. Contact our financial advisor to skyrocket your business growth!   Disclaimer: This article intends to provide general information on how does crowdfunding work.

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Crowdfunding for Business

The Pros and Cons of Crowdfunding for Business

21/06/2021Budgets & Other , Business

With increasing popularity, crowdfunding has become one of the most viable ways to raise capital for your business. The emergence of platforms like Kickstarter and Indiegogo has taken its popularity to its peak by raising funds for startups and medium-scale businesses. The process of getting funds via these platforms seems easy, exciting and simple but it isn’t that easy and simple. While Crowdfunding for businesses can be a great way to generate capital, it’s not the ultimate solution to getting funding. Let’s explore it by discussing its pros and cons. In this blog, we’re going to explore: What is crowdfunding? Types of Crowdfunding Pros and Cons of Crowdfunding Best Crowdfunding Platforms   What is Crowdfunding for Business? To put it simply, crowdfunding is the process of getting a small amount of money (capital) from a lot of individuals (crowd) to kickstart a business venture. Crowdfunding platforms reach a vast number of people through social media or crowdfunding sites where investors and entrepreneurs meet to help new businesses through the pool of investors.   Manage your business finances with CruseBurke. Just let us know your need for affordable financial services tailored to your business needs!   Type of Crowdfunding There are four major types of crowdfunding for businesses, where they can get money from various investors/donors. These are:   1) Donation-Based Crowdfunding In this type of crowdfunding, people provide money for a company, person or campaign without getting anything in return. For example, your company needs machinery for its operation. The investor or donor will provide you with the money as support for your business growth without any other interest.    2) Debt-Based Crowdfunding This is crowd-based lending, where people provide debt-based donations as a loan that is needed to be repaid along with the interest.   3) Reward-Based Crowdfunding Unlike debt-based crowdfunding in reward-based crowdfunding, the lender receives a reward against the money they invested or donated. The rewards vary based on the amount of donation or company. Here lenders get a reward like a t-shirt, service or product against their fund. These gifts are often provided at a discounted rate.   4) Equity-Based Crowdfunding Here the small businesses allow lenders or donors to take a small portion of their business against their funds. These donations are like investments now in which the investors receive shares of the businesses based on their business amount.   Pros and Cons of Crowdfunding No matter what type of crowdfunding you choose, it can be a great place for new businesses. Here are some of the benefits of crowdfunding:   1) Mitigate Financial Risks There are fewer financial risks associated with crowdfunding. It’s one of the best ways to access the viability of your business before making a huge investment.   Reduce your financial risk with our accountants. Reach out today!   2) Validates your Business idea A successful crowdfunding campaign can be great for your business as it is validated by a large number of people. You can eliminate your doubts and can know whether there’s demand for your services or products in the market or not.   3) Great Amount of Money You can kickstart your business venture by getting ample money through crowdfunding   4) Financial Advice and Support Along with financial support, you can get new ideas and feedback from experts and others to boost your business.   5) Great Alternative to Banks Securing bank credit is a daunting task whereas crowdfunding provides your different types of donations, funding, and interest-free loans etc.   6) Business Promotion With crowdfunding, you need to invest in marketing or advertising to promote your business as crowdfunding platforms do it for you without any hassle and free of cost. Along with a lot of benefits, crowdfunding also contains some cons that need to be considered beforehand:   1) Need time and money to invest To make your campaign successful you need to do a lot of efforts. You may also need to invest time and money to build prototypes, videos and content and market it.   2) Chances of Failure There are many chances of failure as there is a lot of competition in the market. Along with the embarrassment, your money and time can be wasted.   3) Administration and Accounting While crowdfunding websites provide many services but still have to keep a record of investors, rewards, contributions and shareholders etc. Moreover, you also need to keep accurate books of your business to provide a fair share of profit to each investor. And it can be a daunting process.   Don’t worry we have the solution. CruseBurke has a team of accountants to provide affordable financial services for you. Feel free to reach out!   4) Theft of Idea You might have got an innovative idea, but it can be stolen by any other person unless it is patented and you have copyrights and trademarks in place. Some people could steal your idea to come up with a better version of it.   5) Not suitable for all businesses Crowdfunding can be a great place only for a business that’s dealing with consumer-facing products like bags, shoes, garments etc but it can not suit for service-based businesses like a salon, catering, etc. Let’s see what are the top crowdfunding platforms of the world.   Best Crowdfunding Platforms Here is the list of some great crowdfunding platforms from where you can fuel up your business: Kickstarter. Indiegogo. Patreon. GoFundMe. Chuffed. ArtistShare. MightyCause. InKind. Crowdfunder. Give. Charitable. Lending Club. AngelList. Ulule. Funding Circle. Seed&Spark. Crowdcube. GoGetFunding. Fundable. Fundrazr. Kiva. Before signing up, you need to read the guidelines of each platform to find out whether you meet their eligibility criteria or not.   Quick Wrap Up To sum up, we can say that crowdfunding for business can be a great way to raise funds for some businesses. However, there are still many businesses that can’t fulfil their fundraising goals through it.   It is always advisable to get help from a financial advisor for …

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zero-based-budgeting

Zero-Based Budgeting: Importance, Steps, Pros and Cons

26/05/2021Budgets & Other , Business Growth Ideas

Zero Based Budgeting is a technique used in budgeting that involves preparing the budget from zero base. This method helps companies to align their spending with the company’s goals. Management prepares a budget from scratch that only includes essential expenses and operations to verify that all the components of the annual budget are cost-effective, relevant, and helpful to increase savings. This budgeting method is used for providing a purpose for every cent used in a business. Here all expenses must be justified to be placed into the budget. For instance, if a business is expecting £20,000 in wages and salaries, and believes that it is necessary for the smooth operation of the business. Then, it needs to be included in the budget. However, the allotment of salary of each employee needs to be examined and justified for including it into the zero-based budget. Learn more about why budgeting is necessary for your business!   Comparison of Zero Based Budgeting with Traditional Budgeting:   Businesses use budgets to keep track of their expenses and to reduce cost and to increase profit. Generally, budget planning is based on the budget of the previous year, as with traditional budgeting. The traditional budgeting method uses a percentage to meet new goals. This percentage generally lies between 1% to 10%. Sometimes the budget may be affected by the market and other external factors and may show great upper or lower costs. In such a case, you cannot rely on the previous budget due to the significant change. Therefore, you need to make the entire budget from the scratch and it can be done with zero-based budgeting. Here the company analyzes every expense separately from the start and examines all expenses. Whereas, traditional budgeting only uses proposed new expenses.   Advantages:   Here are some of the useful aspects of ZBB: Well-justified output More Accurate and efficient Reduces redundant activities and costs Increases collaboration Need help! Reach out to our professionals!   Disadvantages:   Before implementing ZBB, you need to consider its cons: Time-consuming and costly May harm company’s image Requires more manpower More complex than traditional budgeting   How to do Zero Based Budgeting?   Businesses can apply their own unique approach, however, here are the basis for implementing ZBB: Start from Zero. Prepare a new budget from scratch without using the previous one. Examine your cost areas and reduce unnecessary activities involved Justify all the components involved in the budget. Find cost-effective and relevant areas Streamline what activities your business should perform and how. Automate the processes Execute the activities of implementation. Discuss clear plan and roles   Quick Sum Up:   Now that you know the importance and procedure of zero based budgeting, you can give it a shot. If it doesn’t suit your business needs, you should try another method of budgeting. Still, if you are facing any difficulty, you can get reach out to experts for help.   Contact our qualified accountants to prepare a zero-based budget for you!   Disclaimer: This blog provides general information on ZBB.  

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Early Payment Discount

What is an Early Payment Discount?

07/05/2021Budgets & Other

Early payment discount is also known as prompt payment discount. It is the early settlement discount buyers receive in exchange for paying invoices early. You can calculate it as a percentage of the value of the goods and services purchased. An early payment discount is a process to improve cash flow for suppliers by fast customer payments that reduce the days sales outstanding (DSO). It positively impacts the supplier’s working capital position. It provides reach to the funds required for customer orders or expand the business. If you’re a buyer, early payment discounts mean that you’re going to get a lower cost of goods. These discounts might show an ample return on the company’s cash. Through the early payment discounts, buyers can make better and stronger relationships with their suppliers.   Early Payment Discount – Example: Commonly EPD is written as 2/10 net 30 days. It implies that the invoice contains a 30 days deadline. Here is an advantage for the buyer if he pays the seller early. A 2% discount is provided to you if you pay the invoice within 10 days.  For example, if you were going to pay a $1000 invoice, in normal 30 days your pay the whole amount whereas if you pay it within 10 days you’ll get a $20 discount from the total amount. For a buyer, these savings are considered a favourable return. To calculate the cost of credit here’s the formula: Discount %/(100 – discount %) x 360/(Full allowed payment days – discount days) So for 2/10 net 30 terms, the cost of credit is calculated as follows: 2/(100-2) x 360/(30 – 10) = 2/98 x 360/20 = 36.7% A company buying goods, 2/10 net 30 days shows a great return on cash of 36.7%. At the same time, the discount weights the same as a high funding cost from the supplier’s perspective. Feel free to ask our accountant for any query.   Using Dynamic Discounting for Early Payments Discounts: Unlike traditional discounting, the buyers can benefit from dynamic discounting by making the buying system more flexible. With dynamic discounting, buyers allow their suppliers to take the payments on their invoices against a discount. In this way, buyers receive the discounts any time after the approval of the invoice and maturity date. The value of the discount will depend upon how earlier the buyer pays the invoice. Contact us for affordable accounting services.   Benefits of Dynamic Discounting: EPD achieved by dynamic discounting is beneficial for both buyers and suppliers. The supplier receives the money before the time, hence it enhances their working capital position. While buyers pay less amount than normal circumstances. These are some benefits of dynamic discounting: Benefits (Suppliers): You can get cash whenever you want due to different reasons You can predict cash flows due to the knowledge of accurate payment time Investment opportunities in R&D and for business growth Getting a less costly funding option than other financing options like factoring Benefits (Buyers): Saving options for goods and services Get return without the fear of risks on surplus cash at a higher rate compared to traditional investments A stronger relationship with the supplier Bringing down the risk of supply chain disruption   Quick Wrap Up: Early payment discounts are both beneficial for the buyer and the seller. It’s a win to win game. Early payments discounts not only enhance the process of cash flow, but a business can avoid late payments and make a stronger relationship with its supplier. As a whole, it produces additional working capital for the business progress. You can use accounting software like QuickBooks, Xero to create invoices with early payments discounts. You can make the payment terms flexible for the customers by using the above information.   Get in touch with CruseBurke chartered accountants in London for more detailed information. Drop us a message, give us a call or come meet us. We await to help you with your business.   Contact now!   Disclaimer: This blog is written for general information on EPD.

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What is Money Laundering

What is Money Laundering? Process and Effects

21/04/2021Budgets & Other

Money laundering can adversely affect businesses, countries, and economies. It is a three-sided offense where money is generated illegally, concealed, and turned white. In this blog, we’d discuss what is money laundering, what’s the process of money laundering and we’d briefly talk about the adverse effects of money laundering. What is Money Laundering? It is the process of concealing money received from illegal practices and claiming it to receive from a legal origin. If successful, money laundering protects that dirty money on all legal grounds. It is a serious financial offense that is practiced from small-level street criminals to international level criminals. It badly damages the finance system wherever practiced. However, anti-money laundering policies are implemented in many countries and large organizations to determine the perpetrators and to prevent this heinous crime. Need to know the latest legislation on money laundering, contact us! Process of Money Laundering: Organizations that are involved in criminal practices wish to use illegal money legally. This process is very difficult as launderers need to provide proof to the bank showing them that their money came from legal sources. Typically, it consists of three steps: 1. Placement: The practice of bringing dirty money to the legal financial institution. 2. Layering: It is the process of erasing the money source through the chain of transaction and bookkeeping tricks. 3. Integration: The final process where laundered money is withdrawn from the financial institutions by the criminals.   There are many ways through which the money is laundered. The most commonly used method by criminals is to start a cash-based business. Like getting inflate money on cash receipt of a restaurant, depositing them on the restaurant’s account, and withdrawing them when needed. If you want to combat money laundering within your organization, We can help. Get in touch now! Adverse Effects of Money Laundering: Money laundering drastically affects the financial sectors of a country that are the founding stones of economic growth. Besides, it promotes crimes especially drug trafficking and terrorism. As more drugs mean more health issues, frustration, and violence. Similarly, terrorism disturbs the country’s peace. Moreover, money laundering promotes corruption that dreadfully affects the country’s economy. It reduces the revenue of the government. It has negative social and political effects and affects the business sector. As a whole, money laundering destabilizes a country. Quick Wrap Up: Hopefully, now you have got enough knowledge of what is money laundering, its process, and its consequences. You should remember that the effects of money laundering are far-reaching and intense on businesses, economies, and countries. Currently, digital banking and cryptocurrencies can be easy targets as it is easy to withdraw money, without being detected. Therefore, international organizations and governments should work together to combat this issue. CruseBurke’s serving individuals and businesses on finance, taxation, and accounting. If you need any help, do let us know!   Disclaimer: This blog post provides basic information about money laundering.

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