Business Archives - Page 10 of 11

News,May 2018

What is Equity? Definition, Formula & Importance

George20/09/2021Accounting , Business , Finance , Limited Company

A company balance sheet contains the term “equity.” But this term is also common in personal finances, accounting, and amongst investors. This blog will inform you about what is equity, its different forms, and why it is essential for businesses and shareholders? So, let’s start to explore more! Our accountants at CruseBurke are qualified and cost-effective! We save your time, money, and stress by handling all your finances and business problems in no time! So, allow us to do this at an affordable package! What is Equity? The amount of money that can be returned to the shareholders of a company at the time when all the assets are liquidated, and all the debts of a company are paid off is known as equity. In a publicly listed company, equity belongs to every shareholder, and if the company is limited, it belongs to the owner(s). What are Different Types of Equity? A degree of ownership found in any asset after subtracting all the liabilities is generally known as equity. Following are its different types: Private Equity – It is any stock or additional securities that shows ownership in a limited company. Stockholders’ Equity – It is the number of funds that are contributed by the shareholders (including profits or losses) on all company balance sheets. Ownership Equity – It is the amount of money that remains after paying all the debts to its creditors by a company (when it is proclaimed bankrupt and goes into liquidation). How to Work Out Equity? The utilisation of shareholder equity usually occurs in the balance sheet and accounting, such as Total Liabilities + Shareholder’s Equity = Total Assets The analyst often utilises equity to determine the financial position of a company. You can rearrange the formula as mentioned earlier to calculate the equity. Shareholder’s Equity = Total Assets – Total Liabilities Unable to calculate equity? Let us handle this! Why is Equity Essential for Businesses? Equity is the most valuable bit of a business that is remained from the total assets once all the liabilities are subtracted. A business is considered more valuable if it contains more equity. They can often use this as leverage for investment. You also possess equity and a share of the profits when you possess shares in a business. It means that if your business performs well, your profits increase, and so does the value of equity. So, a private company that needs to raise funds can consider selling shares (equities) within the company. What are the Equity Risks for Businesses and Shareholders? Some equity risks are involved for both businesses and shareholders. Those risks are as follows: 1) Investing is a Risk Purchasing shares in exchange for equity involves risk, like any investment. The businesses may not perform as they planned; therefore, the equity’s value may decrease. 2) It Changes the Business The selling of equities (shares) means that the original owner (s) of a company must share the profits with other shareholders. It also means that the ownership of a company is shared too. For example, if you as a business owner want to sell your business equity (share), the other shareholders also have to agree to this. Therefore, sharing ownership can make it more complex to make changes or decisions in the future. Conclusion We hope now you have understood the basic concept of what is equity and why it is essential for businesses and shareholders. Equity is important as it represents a company’s financial position, and a business is considered more valuable if it contains more equity. A company can sell the equity to raise its funds, but it must be aware of its risks. Talk to one of our chartered accountants in Croydon about the online accountancy services we provide. We are just a click away! If you are confused about selling equity, then feel free to contact us! We have the best solutions to all your business problems! Disclaimer: This blog contains general information about what is equity.

Registered Office Address and a Business Address – Basic Guide

George17/09/2021Business , Limited Company

Knowing the difference between a registered office address and a business address can be confusing if you establish a limited company in the United Kingdom. Many individuals use addresses interchangeably, but each address has different purposes. Therefore, when it comes to the rules of the company address, you must follow them strictly when using, locating, and disclosing these addresses. So, in this article, we’ll look at both addresses and how they are different? Reduce your business burden by allowing our accountants to establish your company within 3 hours! Contact us now! What is a Registered Office Address? A registered address is a legal requirement for a company that is registered with the Companies House and publically visible on the company register. This address is required by limited company owners throughout the formation process. It is your company’s contact address for correspondence with government organisations such as HM Revenue & Customs and Companies House. Furthermore, this is where all important mails are delivered. A limited company owner or director must submit a registered address when founding a limited business. This address must be a physical address in the United Kingdom where the business is registered. This address can be found in the following places: England and Wales Scotland Only in Wales Northern Ireland Remember that this address does not essentially have to be the location where you conduct your daily business operations. If you meet the legalities of the registered address, you can use the home address, office of your solicitor or accountant, your trading address, and any other address that is permitted as a registered address. No, Post Office Boxes (PO Boxes) are not acceptable as registered office addresses for companies. This is because the Economic Crime and Corporate Transparency Act 2023 requires companies to use an “appropriate address” that is easily traceable and verifiable, which a PO Box does not meet. What Documents are Required by a Company to Change its Registered Address? If you want to change your address while staying in the same country, you must notify Companies House and modify it on other official documents such as: Emails Cheques Publications Order forms Letterheads Invoices Money orders Websites Faxes Bills Receipts What is a Business Address? A business address is also known as a trading address. It can be a registered address, but it’s not required. It is the address where a corporation is located and runs its business operations. This address is also used to communicate with clients, banks, and suppliers. Companies House and HM Revenue & Customs do not require it, unlike a registered address. Furthermore, unless it serves as a registered office, it is not included in public records. Some businesses only have one trading address, which might or might not be the location of their trading activity. Moreover, some businesses have various business addresses in different countries. Although a trading address differs from a registered one, many companies utilise the same address for business and registration. Because every company is unique, the location of each one differs as well. Registered Office Address and a Business Address – What is the Difference? Following are the dissimilarities between a registered address and a business address. Quick Sum Up We hope this blog will help you to understand both terms better “registered office address” and “business address”. So, we will conclude our blog by saying that a registered address is required by law to receive all legal documents from government authorities. In contrast, a trading address is not an official address for correspondence with HM Revenue & Customs or Companies House. A business address is required to contact non-government entities such as clients, banks, and customers. You can, however, use your registration address as a trading address for day-to-day activities. CruseBurke offers all-inclusive business creation services at a low price with a registered office address in Croydon. We’ll quickly register your self-employed business in no time! Disclaimer: This blog is written to inform you about your Registered Office Address and a Business Address.

Benefits In Kind – A Basic Guide!

George16/09/2021Business , Finance

In addition to your salary, if you are receiving any other benefits as part of your job, you may receive benefits in kind (BIK). Some BIK perks are tax-free, and some incur tax. In this blog, you will come to know about what BIK is, it is taxable, what tax you need to pay on your company car, and how to report a BIK. So, Let’s start! Tired of taxation problems? Take your break and let Our Experts handle the rest! What are the Benefits in Kind? The fringe benefits or perks given by employers but excluded from employees’ salary are known as BIK. These benefits in kind perks can include child care vouchers, private medical insurance, and company cars. There are some BIK perks, such as in-house sports facilities, free meals, work-related training, certain cost of travel (work bus service), and work and safety clothes that are tax-free. But, you need to pay tax for the other perks. BIK simply means that if any vehicle is provided to you by your employer, then you will pay tax on it. The significant amount of this tax will depend on the vehicle you choose or receive. Are Benefits in Kind Perks Taxable? Yes, benefits in kind perks are taxable. HM Revenue & Customs defines the amount of BIK tax that you must pay. It is determined by certain rules or can either be the money equivalent of the goods or services. For example, the utilisation of a company car is one of the most common taxable BIK perks. There are certain ways to reduce BIK tax if you think it is too high. You have the option to change the vehicle so you can choose it to reduce your tax bill. If you choose a more modern or less expensive vehicle with lower carbon dioxide emissions, your tax can be reduced. Unable to calculate your BIK tax? Let us handle this! BIK and Electric Vehicles in 2025 In 2025, electric and ultra-low emission vehicles (ULEVs) remain highly tax-efficient. If your employer gives you a fully electric car: The BIK rate is 2% (frozen until April 2025) This can significantly reduce your tax bill compared to petrol or diesel cars Tip: Opting for a low-emission or electric vehicle can lower your BIK tax considerably. What tax do I need to Pay on my Company Car? If you are allowed to use the car owned by a business or employer (company car), and if you can use it for both private and business purposes, you have to pay tax on the value of the benefit. The benefit to you depends on the following: Car list price and any attachments Car registration date and the type of fuel it uses Carbon dioxide emissions of the car Registration date Your tax liability increases with higher CO₂ emissions and luxury add-ons. How to Report a BIK? To report a BIK, you need a P11D form. There may be NICs to be paid on them as these perks increase your salary. Remember that the company will pay for these NICs instead of an individual. All P11D forms must be submitted to HMRC by the 6th of July following the end of the relevant tax year. If any taxable benefit is provided to you by your employer, it must be included on your P11D. Conclusion We hope with the highlighted details; you will understand better about BIK. So, we will conclude our blog by saying that the rules limiting the benefits in kind are complicated. Each example of taxable BIK perks must be examined individually whether any tax is due by the employee or the employer. Therefore, it requires a professional advice. Looking for a professional to help you calculate how much benefits in kind tax you’ll need to submit annually to HMRC? Then, Look no other than CruseBurke! We will calculate your BIK tax in no time and at an affordable rate! Contact us now! Disclaimer: This blog contains general information about BIK.

Loaning Money to Your Own Company as a Director

George14/09/2021Business , Finance , Limited Company

When you set up your business, there are many initial costs, like accountancy fees, insurance premiums, stationery, and website packages. To pay for all these costs, loaning money to your own company is a good idea while you are waiting for payment from your first client. Through a director’s loan, you can support your business. It means to provide your own money to a limited company to support numerous projects and objectives. Though it is a helpful approach to provide funds, it is also a decision that must be properly examined and planned out. Therefore, you should be aware of the following things if you consider lending money to your limited company. Tired of taxation problems? Take your break and let Our Experts handle the rest! Why would your Own Company require a Loan? Your limited company would require a loan because of the following reasons: You are setting up your new company, maybe with the other directors, and you would like to provide some funding for the initial costs. Your company currently is not making a profit, and you want to invest some operating capital into it. You don’t have enough funds to pay for any asset or equipment right now, and you want to buy it through the company. Check Legal Aspects Before Loaning Money to Your Own Company Before loaning money to your own company, double ensure that the company’s Articles of Association permits the company to take money from the directors and whether there are any restrictions on these loans imposed by the Articles. If you are unclear about what is allowed for your company by the Articles of Association, you should be aware of it before proceeding. The next step is to make a loan agreement after ensuring that the loan is allowed. The loan agreement should specify the repayment schedule, size and date of the loan, and the agreed rate of interest. It is usually advisable to record a loan agreement properly! Our professionals at CruseBurke provide affordable solutions for all your business problems! Contact us now! What is a Director Loan Account? The director can make a loan to the company in other forms, along with making in the form of cash. For instance, in case a director purchases goods, services, or equipment on behalf of a company, or if he forgoes payments of salary for a certain time, then this will also depict a loan to the company and must be documented in the DLA (Director’s Loan Account). Can a Director Lend Money to a Limited Company? Yes, a director can lend money to a limited company. It is preferable rather than taking a commercial loan from your bank. All loans are recorded in the director’s (loan) accounts. If a director borrows money from a limited company, it will also be recorded for accounting purposes in the director’s account. Furthermore, it is useful to record all kinds of loans such as deferred salary payments, payments for goods or services, or cash loans directors make to the company. All these loans are documented in DLA as credits, and when the company files its annual legal accounts, they will be stated as current liabilities on BS (Balance Sheet). The Key Point to Consider When Lending Money to a Limited Company Following are the key points that need to be considered when lending money to a limited company. By making a director’s loan to your company, the amount (as a creditor) will be included on a company’s balance sheet. Your company can pay off the loan at any time if the director decides. Until the amount shown on the company’s balance sheet is fully paid, it will decrease. Ensure that there are enough funds in the company to encounter its current liabilities, e.g. tax, if you want the company to pay off the loan at any time. When thinking about any aspect of loaning money to your company and how you execute loan transactions, remember that limited company directors are required to always behave in the company’s maximum interests. Wrapping Up We will conclude our blog by saying that loaning money to your own company is preferable rather than taking a loan from the bank. There are several rules to consider while lending or borrowing money to your company. However, keeping in mind those rules, we can say that the director’s loan is a complex area and requires strict accounting and bookkeeping. So, make sure you have a professional for dealing with all the aspects of a director’s loan. Our cost-effective Chartered Accountants in Croydon are experienced in dealing with all aspects of directors and company loans! So, reach us now for customized packages! Disclaimer: This blog contains general information about lending money to your own company.

Turnover vs Revenue – Top 8 Differences

George13/09/2021Business , Finance , Limited Company

Turnover and revenue – are they the same or do they differ? If you’ve ever been confused by this, you’re not the only one. Many people use these terms as if they’re the same. People often use these terms interchangeably. But there’s a small difference in both the terms, and that matters in business. Let’s break it down! Contact our professionals at CruseBurke to grow your business revenue & turnover! Reduce your business burden and stress by letting us handle your financial worries! What is Revenue? Revenue is the total amount of money a business earns from its primary activities such as selling goods or providing services. It is also known as sales or income. Revenue doesn’t include any costs, taxes, or deductions. It’s the full amount before anything is subtracted. What is Turnover? Turnover is the total money received from selling goods and services after deducting trade discounts, VAT, and other taxes. Turnover also includes things like compensating travel expenses when clients visit for consultations, which will appear on your expense report. Turnover is not your profit; however, to achieve it, you need to pay out your general business expenses and production costs. What is Turnover in the UK vs US? The UK and US define turnover differently in various contexts. This table will give you a better view of how turnover and revenue are used in the UK and US. Aspects United Kingdom (UK) United States (US) Meaning Referring to revenue (total sales generated from goods/services) Referring to Efficiency metrics (how inventory and fast assets are cycled) Use Tax Filings, Annual Reports, Financial Statements HR Reports, Efficiency Ratios, Managerial Analysis Accounting Treatment Appears as the top-line figure on the Income Statement Rarely shown in financial statements, but can appear in management ratios (inventory turnover, asset turnover) Is Revenue the Same as Turnover? Revenue and turnover both show how much money a business makes, but they are used in different ways. Revenue is the total income from selling goods or services and is the term used worldwide. Turnover is the UK term for the same thing, especially when referring to income after returns and discounts. While revenue is the formal accounting term, turnover is more common in the UK for business and tax purposes. What is the Difference Between Turnover and Profit? When you are working in a business, it is important to understand financial aspects and terminologies. Sometimes people use turnover and profit interchangeably but they refer to different things. Like turnover refers to ‘the net sales of a company’, while profit refers to ‘the net residual earnings after deduction of all expenses’. Turnover vs Profit The following are the key differences between Turnover and Profit: Aspects Turnover Profit Meaning Total sales/revenue earned before costs Financial gain or benefit after costs and expenses are deducted from revenue Focus Measures business activity/scale of operations Measures business success/ financial health Impact Higher turnover does not always guarantee profitability. Profitability basically shows how well a company generates returns after covering all expenses. Usefulness Helps measure market demand, growth, and size. Helps measure efficiency, sustainability and investor’s value. What is the Difference Between Turnover and Revenue? As described previously, revenue is the income which is generated by a business through performing normal operations. Turnover is the measure of how quickly a business is selling its inventory and replacing it with new one. Here is a detailed comparison: Aspects Revenue Turnover Definition It refers to the amount a company makes by selling its products or services. It refers to the amount of income generated through trading products and services. Effects It has a strong effect on the profitability of the company. It has a strong effect on the efficiency of the company. Importance It is important to understand, as its primary factors affect the growth of your business. It is important for managing production levels, and ensuring nothing is left for a delayed inventory period. Reporting It is mandatory to report revenue as it is the first item on the income statement. It is vital to report turnover, as it is calculated to understand financial statements better. Turnover vs Revenue vs Profit Turnover is the total money a business makes from selling its products or services, before any expenses are taken out. Revenue is pretty much the same, but can also include things like royalties or interest. Profit, on the other hand, is what’s left after all expenses are deducted. It’s the real “bottom line” that shows how well a business is doing financially. What are the Types of Revenue? There are many types of revenue. But in business, you’ll mostly hear about these four: Operating vs Non-Operating Revenue The earnings generated by a company from its internal business’s main core activities before taking into account interest and taxes is known as Operating Revenue. This is the money that comes in from sales of goods or services, and it’s the top line number on a company’s income statement. The earnings generated by a company from its outside activities is known as Non-Operating Revenue. This can include interest income, dividends and gains or losses from investments. Nonoperating revenue appears at the bottom of a company’s income statement. Gross vs Net Revenue Gross revenue is the total amount of money earned from the sale of goods or services before a company deducts any expenses. It shows the total sales performance and the overall demand for a company’s goods and services Net revenue is the amount earned after a business deducts all expenses. It shows the actual earnings which a company generates after accounting for the direct expenses related to sales. What are the Different Types of Turnover? The following are the different types of Turnover: Inventory Turnover It indicates how often a company replaces and sells its inventory during a given time period. Formula: Inventory Turnover = Cost of Goods Sold(COGS)/Average Inventory Asset Turnover It measures how efficiently a company utilizes its assets to generate revenue. Formula: Asset Turnover = Net Sales/Average Total Assets …

What is Depreciation and How to work out Depreciation in the UK?

George10/09/2021Accounting , Business , Limited Company

The value of the company’s assets, like machinery, computers, and office furniture, diminishes with time. Depreciation is an accounting term which means as an asset moves through its productive life, its value gradually decreases from the original price. This blog will inform you about what depreciation is, how to work out depreciation, and why it should be important to you as an owner of a business. So, let’s start! Feel free to contact our professionals if you are worried about calculating depreciation! We will work out your depreciation in no time and at a reasonable price! What is Depreciation? Depreciation is the process by which the value of your company’s assets decreases over time. As a result, depreciation affects the book value of your assets on the balance sheet. When an asset depreciates, you won’t be able to sell it for the original price. Moreover, because the business uses its value for sales and profit, depreciation is considered a day-to-day operating expenditure on the profit and loss sheet. A computer, for example, depreciates over time and eventually becomes unusable, reducing its original price to zero. What are Depreciable Assets? Depreciable assets are tangible assets that gradually deteriorate, decrease in value, or become useless over time by use and wear and tear. The term used for the diminishing value of intangible assets is known as amortisation. Fixed assets are classified into two categories: Tangible (Fixed Assets) – The assets that can be touched are tangible assets such as buildings, machinery, computers, cars, desks, etc. Intangible (Fixed Assets) – The assets that can not be touched are intangible assets such as Intellectual property, goodwill, software, copyright trademarks, patents, etc. How Does Depreciation Apply in Accounting? Depreciation is a non-cash cost. It is categorised in the two following perspectives: Income Statement – The decrease in the original value of an asset is treated as an expense. Balance Sheet – Same as in the income statement, depreciation affects the book value of your assets. How to work out Depreciation in the UK? You need to calculate depreciation to see how an asset’s value depreciates over time and how quickly this happens. There are many methods for calculating depreciation in the United Kingdom, such as: 1) Straight Line Method According to this method, the value of assets depreciates at the same rate every year until they become obsolete (useless). An asset with a three-year lifespan, for example, would lose one-third of its value each year. The formula of this method is as follows: Depreciation = Purchase Cost of Fixed Asset / Useful Life of Fixed Asset 2) Diminishing Value Depreciation The asset depreciates at a higher rate in the first few years under this method. And, over time, the rate of depreciation decreases. This formula can be used to compute depreciation using this method: Depreciation = Purchase Cost of Fixed Assets * Reducing Balance Percentage / Projected Lifespan In Years 3) Units of Production Depreciation Some products have a longer lifespan when measured in terms of their work rather than their time. An automobile, for example, may operate for a certain miles, or a packing machine may pack a given number of products. Therefore, rather than being depreciable based on their age, these assets are depreciable based on their functioning capabilities. Depreciation = (Cost – Residual/Salvage Value) * (Number Of Units Produced / Life In A Number Of Units) Depreciation vs Capital Allowances (UK Tax Treatment) In accounting, depreciation is the process of spreading the cost of a fixed asset—such as machinery, vehicles, or office equipment—over its useful life. This helps present a more accurate view of profit in the financial statements. However, HMRC does not allow depreciation as a tax-deductible expense. When preparing your company’s Corporation Tax return, any depreciation charged in the accounts must be added back to your profits. Instead, tax relief on qualifying capital expenditure is provided through capital allowances. These are specific deductions that reduce your taxable profits, and they follow rules set out by HMRC. Main Types of Capital Allowances (2025/26) Annual Investment Allowance (AIA): Gives 100% tax relief on qualifying plant and machinery purchases, up to £1 million per year. Full Expensing – Available until at least March 2026, allowing companies to claim a 100% first-year deduction for most new plant and machinery. Writing-Down Allowances (WDA): Apply when expenditure exceeds the AIA limit or for certain assets that don’t qualify for full expensing. Rates are generally 18% (main pool) or 6% (special rate pool) per year. First-Year Allowances (FYA): Available for specific energy-efficient or environmentally beneficial assets. Depreciation for Small Businesses Depreciation will help you better understand your expenses and lower your tax bill ( which are positive outcomes). At first, it will appear to be complicated, but there’s not too much to worry about. Many businesses consider the schedule of depreciation, which is provided by HM Revenue & Customs. Once the depreciation is set in the accounting application (software), the calculation is performed automatically. An accountant or bookkeeper, as usual, can help you along the route. Final Thoughts We hope you now understand the basic information about what depreciation is, depreciable assets, how depreciation applies in accounting, and how to work out depreciation in the UK. This information will assist you in better understanding the worth of your assets, lower your tax burden, and increase your company’s value. Moreover, suppose you don’t want to work out manually. In that case, you can use your accounting software to implement HM Revenue & Customs’ depreciation schedule and submit accurate data immediately to your tax return. Are you looking for a tax accountant to file your tax return? Then contact our Chartered Accountants in Croydon! We provide the best payroll and taxation services at affordable prices! Disclaimer: This blog contains general information about depreciation.

Financial Planning Tips for High Net Worth Individuals

George09/09/2021Accounting , Business , Finance

The financial planning requirements of high net-worth individuals are different and more complicated than those of regular investors. HNWIs (High net-worth individuals) generally depend on the cash flow and persistent flow of revenue to cover future costs. In this blog, you will come to know about the financial planning tips for high-net-worth individuals to maintain their finances. Although earning more money and assets sounds good, managing it puts you in greater danger of financial difficulties. You must maintain a consistent cash flow from many sources of income. The more money you have, the more cautious you must be with your financial decisions. Are you looking for a professional to meet your accounting and taxation needs? Then at CruseBurke, we have a team of skilled accountants and tax experts who provide solutions to all your business problems! Financial Planning Tips for High-Net-Worth Individuals Following are the tips for high-net-worth individuals. 1. Consider Strategic Wealth Management As an HNWI, it’s crucial to work with a wealth manager who understands your current stage of life, financial goals, and risk appetite. Someone planning for early retirement or intergenerational wealth transfer will require different strategies from someone actively growing their wealth. In 2025, with updated rules around non-dom tax status, capital gains tax (CGT), and pension lifetime allowances, a strategic and tailored plan is more important than ever. A qualified advisor can help you structure your wealth efficiently using tools such as family investment companies, trusts, and tax-efficient pensions. 2. Risk Management High-net-worth individuals face increased exposure to legal, business, and market risks. In 2025, litigation, cyber security threats, and estate disputes remain some of the top concerns. Work with professionals to: Ensure you have adequate insurance cover Establish asset protection structures (e.g. trusts or holding companies) Regularly review your investment diversification Protect digital assets and online banking systems A solid risk management strategy helps preserve wealth and reduce exposure to unnecessary losses or legal complications. 3. Financial Plan as per your Financial Requirements HNWIs need a comprehensive financial plan tailored to their unique needs. In 2025, that means: Planning for inheritance tax (IHT) relief (especially after new HMRC guidelines) Maximising your ISA and pension allowances Reviewing your international holdings, especially if you’re impacted by post-Brexit or non-dom status reforms Begin by identifying your values and long-term goals. Whether you’re focused on legacy planning, philanthropy, or retirement income, your strategy should reflect your priorities. Partnering with a financial adviser or wealth management firm ensures your plan stays aligned with the latest financial, legal, and tax regulations. Final Thoughts We hope these financial planning tips for high-net-worth individuals prove to be beneficial for you. Many people believe that owning many homes and cars is a dream come true, but managing a high net worth can be complex. The wealth you’ve worked so hard for over the years can vanish in a short period in case you don’t have comprehensive and customised financial planning and asset management techniques. Therefore, consider these suggestions to protect your future and consider working with accountants and tax advisors to help you maintain your high net worth. Want expert guidance tailored to your accounting goals? Contact CruseBurke team of chartered accountants and tax planners for high-net-worth clients today. Disclaimer: This blog provides general tips for High Net Worth Individuals.

Cloud Based Accounting – Why It is Good for Small Businesses

George08/09/2021Accounting , accounting software , Business

Many businesses and accountants are shifting towards cloud-based accounting. They are requesting cloud based solutions, and the trend of using this technological innovation is increasing at a rapid pace. The cloud is making your data and information all times available, and you can access it anytime, anywhere from any smart device. However, there are still some SMEs who are reluctant to move towards cloud accounting. So, in this blog, we will inform you about the advantages of preferring cloud accounting. Allow us to move all your business finances to the cloud with the best-suit accounting software at reasonable prices! What is Cloud Based Accounting and How it Works? In cloud accounting, you keep your company’s records such as revenues, expenses, assets, and liabilities available on the internet. It is secure and reliable as data is encrypted and can only be accessed by the person who has a valid password. In addition, there are many free software accounting apps available for managing bills, invoicing, etc. Click here to know more about the best small business accounting applications. You can move your business books to the cloud by subscribing to online accounting software. After that, you can access your data anytime, anywhere, on any web browser, and with any available smart device. You can also save yourself from a lot of data entry by connecting the software with your business bank account as the banking operations proceed systematically (from the bank to the books). Advantages of Cloud-Based Accounting? There are many advantages of using cloud accounting, which are as follows: 1. Accuracy With the technologies like AI (Artificial Intelligence) and OCR ( Optical Character Recognition) developing capabilities, accuracy levels are increasing. It eliminates the risk of inaccuracy and the need for human re-entering by automatically generating data to other relevant fields. 2. Accessibility You can access your finances anywhere, at any time, and from any smart device. It provides you the freedom to access and manage your business finances on the go. 3. Up-to-date Data and Saves Money When you input your financial information, it will be instantly available to all of your company team members no matter where they are, and data will always remain up to date. Cloud accounting can save your money as it does not require any IT staff for maintenance, and you only pay the subscription fee. There are no extra costs for the updates and upgrades. 4. Useful for Making Tax Digital (MTD) To digitally provide updates to HM Revenue & Customs monthly and to keep records of the business finances, many SMEs above the VAT threshold will be obliged to move towards cloud accounting. So to save yourself from any panic situation in the future, you should move your business data into the cloud now. 5. Security The software companies make sure that the privacy of your data and security is always airtight. In addition, your data is systematically backed up and stored offsite (to keep it secure from cybercrime). Final Thoughts We hope now you are well aware of the advantages of moving towards cloud-based accounting. You can run your business remotely and be sure that the finances of your company are accurate and up-to-date. Cloud and accounting software are the best matches because they provide you with the flexibility to enjoy endless possibilities as data is accessible 24/7. In addition, it helps the owner of a company stay connected with their accountants and business finances. CruseBurke has a team of professionals that manage your finances with the best cloud-based accounting software! Contact us now! Disclaimer: This blog contains general information about cloud based accounting.

Trading Name vs Company Name UK: Which One should I Use?

George07/09/2021Business , Limited Company

Your company’s title is an essential part of your brand and personality. It is shown on signs, printed material and expressed on all of your tax returns and budgetary reports. Limited companies are required to register an official name with the Companies House and also have a choice of operating under another (different) name. But which name is better to be used by the company? In this blog, we will focus on trading name vs company name. Have you established a new business? If you are up for company registration then contact us! What is a Company Name? The name, which you have officially registered with the Companies House, is known as a company name. The companies names are invalid if: They are offensive They are linked with any local authority or an organisation They are identical to the trademark or registered name The company name should end with “Ltd” or “Limited”. What is a Trading Name? It is a name that is used by your business on daily basis and you are not required to register it with the Companies House, but it should meet the same conditions as a company name. Remember that the rules for company names are slightly different for self-employed persons and partnerships. They are not required to register their official company name with the Companies House (and operate under the given name instead of a company name). Trading Name vs. Company Name Trading name vs. company name; which one to choose? It is a key decision to operate under a trading name or adhere to your unique company name. You have to keep these points in mind if you are choosing to use a trading name. Confusion for Customers – Using a trading name (after few years of running your business) instead of a company name can create confusion in your customer’s mind. Therefore, you should be prepared to answer all the queries related to this change, and you should convey to your customers that your company will remain the same, only your name will be changed. Company Reputation – This change can harm your business reputation. Business owners struggle a lot to set up a solid brand and reputation. If individuals can not recognise your brand due to name modification, then it might negatively affect any goodwill you’ve built up over the past years, so do consider these risks while using a trading name instead of the company name. Feasible with both time and money- You have to make sure that is this change is feasible in both time and money? Your expenses will quickly increase because to reflect your new name, you’ll need to get new signs made, stationary, and editing your social media and website. So think almost whether you’ll save the money – and time – you’ll make these changes. In the event that you’re still battling to pay your bills and cover your other costs, it will not be encouraged to change your business name until your accounts are a bit more steady. Quick Sum Up To sum up the discussion of trading name vs. company name, we can say that you should consider all these key points while using a trading name instead of the company name. If you make sure of all the potential risks, then you can change the name confidently. In addition, it is better to consult with the professional before making any decision because they can help you better choose a valid name for your company and check the relevant trademarks registries for you. Are you looking for a chartered accountant for your company? Look no other than CruseBurke! Allow us to help you select a legal name for your business and let us handle all your business problems at affordable prices! Disclaimer: This blog contains general information about trading name vs. company name.

Limited Cost Trader – Basic Guide for Small Businesses

George06/09/2021Business , VAT

The VAT FRS ( Flat Rate Scheme) was created to make it easier for companies to account for Value Added Tax and to minimise the service charges of meeting all the VAT laws. It is open for businesses with a turnover not above £150,000 in the following 12 months. To distinguish a business required to pay a higher rate of VAT on the FRS is known as limited cost trader. If the company meets the given conditions (by HMRC) of a LCT, then the company will be required to pay a 16.5% flat rate. Let’s explore more about LCT. Don’t have time to operate your company’s finances? Then, put your mind at ease and trust CruseBurke to take care of your company’s finances. Do you have a question? Please feel free to contact us right away! Who Qualifies as a Limited Cost Trader? According to HM Revenue & Customs, a LCT is a company that purchases only a few items. The company will need to pay a 16.5% flat rate if it meets the following conditions: The cost of purchasing items (including VAT) is below 2% of your annual turnover The cost of purchasing items (including VAT) is above 2% but below £1000 (per year) of your yearly turnover. You can not find the correct VAT flat rate for your company if your business does not meet these conditions. What are the Responsibilities of a Limited Cost Trader? As a LCT, you are required to check how much money you have spent on purchasing the items each quarter and see how this figure meets the conditions mentioned above. Moreover, you’ll have to utilise the (16.5%) LCT rate to your (VAT-inclusive) deals for that quarter to calculate how much is required to be paid to HM Revenue & Customs. Remember that do not use the regular rate. Contact CruseBurke’s skilled accountants if you require assistance from an accountant or tax specialist. Relevant and Irrelevant Items – Limited Cost Trader First, you need to calculate your annual inclusive amount of purchased items to see whether you meet the conditions of a LCT. All the items that are purchased for business purposes are included except: Capital costs – any items purchased to be utilised throughout an extremely long time, like a PC. Food and refreshments bought for the business or representatives. Anything linked with vehicles such as fuel, vehicle acquisition, parts, and so on except if your business is a taxi company (a transport service) You are an LCT if the annual inclusive amount of all the purchased items except for the ones mentioned above is below 2% or less than £1000. Conclusion We hope with the highlighted details; you understand the concept of limited cost trader better! It is essential for the businesses using the Flat Rate Scheme to check whether they are using the correct flat rate % for each fiscal year. It may be more beneficial for some company’s clients to take off the FRS and account for VAT utilising the general rules. Are you looking for an accountant to manage your business finances? We are a team of professionals that provide incredible accounting and taxation services at affordable prices! Disclaimer: This blog contains general information about limited cost traders.