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News,May 2018

How to Read Company Accounts?

How to Read Company Accounts?

13/07/2021Limited Company , Tax Issues

Whether you want to establish a company, want to do research, or just trying to understand the financial terminologies of the accounts. Reading and understanding those accounts can be daunting if you lack a financial background. For this reason, we’re here to explore how to read company accounts as a beginner. The details and terminologies on the accounts might not be as straightforward as you think. This information is necessary to know how we’ll business is performing at a certain time. By reading this post till the end, you’ll be able to read and understand these complex terminologies to assess the performance of your business. Let’s delve into it! It is advisable to get the help of an accountant to prepare, manage and maintain your accounts properly. Get in touch with us now! Understanding the Company’s Annual Account? The company’s accounts are the overview of the financial activities of an organisation over one year. These accounts are made for HMRC and Companies House in a tax year. They comprise: Balance Sheet Profit and Loss Statement Cash Flow Statement What is a Balance sheet? A balance sheet is a financial statement that will provide quick details of your business’s assets, liabilities and the shareholder’s equity at a single point in time. It shows the financial health of your company in a particular period. Moreover, it compares what is possessed and what is owed. It deals with assets and liabilities. An asset is something that is owned by business to generate profit. Typically, they can be divided into two types: fixed assets, current assets. Fixed assets are the long term assets like land, factories, vehicles etc. Whereas, current assets are the things that have a limited lifespan like stock items, petty cash, and cash in the bank, etc. Liability is the obligation, often as a debt that needs to be repaid. There are two common types of liabilities. A current liability is some that are due to be repaid within the timeframe of one year. On the other hand, long term liabilities are not de to be repaid within the timeframe of one year. Liquidity Ratio It is a ratio that determines the ability of a business to pay its short term liabilities. This metric helps companies to determine whether they can use their current assets to cover their current liabilities. We can calculate it as: Liquidity ratio = Current Assets / Current Liabilities If this ratio is less than one, then it could be bad news for your business. Curious to know the value of your business? Find out its net asset value. Net Asset Value Net asset value represents the net value of a company and you can calculate it by subtracting the company’s total assets from its total liabilities. Net Asset Value = (Fixed and Current assets) – (Total liabilities)   On the lookout for accountants for limited companies? Reach out to us today! We provide a wide range of tailored accounting and taxation services to solo entrepreneurs all the way to small and medium-sized businesses. Profit and Loss Statement The P & L statement records a performance of a company in a certain period. In fact, this statement provides the total revenue and expenses of the business in a financial year. How to calculate P & L statement? You can easily work out the gross profit of a company. The turnover figure of this statement shows the value of your sales. You need to subtract the cost of sales from the total turnover to find out the profit and loss statement. Gross profit = turnover – cost of sales To get a better view of your business profit, you can compare this figure with the previous year’s gross profit. Right below this statement you’ll find earnings before interest, tax, depreciation and amortisation (EBITDA). To work out EBITDA, you need to subtract administrative expenses from the gross profit. Administrative expenses include: Building’s rent The cost of utilities Employees’ salaries A positive figure will provide you with a fair picture of your company’s future. EBITDA = gross profit – administrative expenses   Depreciation and Amortisation Depreciation is the decreasing value of the fixed assets like machinery, equipment and buildings. In accounting, it provides an estimate of how much asset’s value is used in a certain time. Whereas amortisation works the same as depreciation but it’s applied on intangible assets like copyright, patents, intellectual property, etc. The Cash Flow Statement A cash flow statement shows the movement of the cash that goes and comes in your business in a certain period. This statement breaks cash into three categories: Operating activities show how much cash comes from selling goods and services less than the amount required to manufacture and sell the product or services. Investing activities indicate how cash has been used on capital expenditures like buying new machinery. Financing activities shows the spending of outside financing activities like cash generated through selling stock etc. If a company is making a lot of cash, it’s favourable. However, negative cash flow isn’t always a bad thing but if your company is showing a bad cash flow for a consecutive time period, you need to go for an investigation. Quick Wrap Up To sum up, after reading this post you’ve got a clear idea of how to read company accounts. With the help of this information, you can better comprehend your company’s account to determine where your business stands. Moreover, this information will let you know how a business is performing. Finally, this will help you make tailored business decisions for the long-term success of your business. Looking for professional help? CruseBurke is there to handle all of your financial worries. We provide you with professional advice for the growth of your business. Moreover, you can get accounting and taxation services for your business at an affordable rate. Need further guidance Contact us today! Disclaimer: This blog provides general information on the above topic, how-to-read-company-accounts.

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how to avoid paying tax on rental income

How to Avoid Paying Tax on Rental Income?

16/04/2021Landlord , Tax Issues

Many of our customers (especially landlords) often ask this question. The answer of which is quite simple, there is no way to avoid paying tax on rental income. Yet you can reduce your income tax on the amount you received as rent.  To boost your net rental income there are multiple ways to save taxes. Here in this blog, we’ll talk about how to avoid paying tax on rental income. You should first know the process of calculating your rental income. As commercial premises have different tax rates and residential areas have different.  In addition, you should also consider the capital gains in your property.   What is Rental Income? Rental income is one of the most attractive types of income for real estate investors. Contrary to other incomes that fluctuate with time, rental income hikes with each passing day. That’s the reason, there are fewer buyers and fewer sellers of rental property.   How to Avoid Capital Gains Tax on Property? Though real estate is a great option for investment, Capital Gains Tax eats away the increased amount of your asset at the time of its sale. Capital gain is the increased amount you get while selling a property or home. If the value of your property has increased from its date of purchase, you’re liable to pay capital gains tax on it.  While selling you need to authorize it to the government. You may get tax exemptions on capital gains tax on the following factors: Sold property is your primary residence You do not use a part of a home for business Your property size is less than 5000 square meters Invest your entire capital gain into another asset Do indexation to decrease capital gains Use some other items for saving tax Are you a landlord struggling to reduce your Capital Gains Tax, we’d love to help, do let us know!   How to Avoid Paying Tax on Rental Income? You can minimize your rental tax through the following ways:   1. Own a property Jointly: You can jointly own property to divide your rental income. Thus the tax on this income is also divided.  You can benefit from the lower tax slab if your wife is a working woman.   2. Municipal Taxes: Municipal taxes reduce your rental earnings and tax respectively.   3. Standard Deductions: You can claim up to 30% as a Standard Deduction without considering its renovation and maintenance.   4. Furnished Property: Ask your tenants to pay small bills of wifi, capable, newspaper, gas, etc to reduce the amount of rent and rental liabilities. Key TakeAway:  The current threshold of property allowance is £ 1,000. If you’re looking for an expert to reduce your tax liabilities, feel free to contact us.   Quick Sum Up: Hopefully, you have got some information on how to avoid paying tax on rental income. This is not financial advice you should rush for, it is always advisable to avail the services of an accountant before taking any decision. The best way to reduce your capital gains tax is to offset the earning received through declaring a house in the loss. Secondly, do the tax-loss deductions to bring down the risk of taxes levied on the gained amount. By doing proper accounting for both gain and loss, a trader can reduce the capital profit they are taxed for. CruseBurke is a team of certified chartered accountants who’re willing to minimize your tax burden. So reach out anytime!   Disclaimer:  This blog provides a general understanding on avoiding tax on rental income.

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how to get sa302

How to Get SA302 from HMRC If you’re Applying for a Mortgage?

13/04/2021Tax Issues

Nowadays, almost every lender will demand the SA302 form to find out your income and tax you have submitted in the past years. In this blog, we’d be exploring why lenders are asking for an SA302 form, and how to get SA302 from HMRC while applying for a mortgage. But before moving forward, you should first understand what is SA302?   Looking for affordable accounting and taxation services, approach CruseBurke!   What is the SA302 Form? It is also called Tax calculation form. It is an official statement provided by HMRC that acts as evidence of your earning and tax for the last four years. It is issued after sending your self-assessment tax returns and shows how much tax you have overpaid or owe. It also shows the summary of your self-assessment. You might need this form as a self-employed person for availing mortgage. We assist self-employed persons to achieve the best mortgage deal!   Why Lenders Need this Form? Lenders need this form to verify the earning of the person who’s asking for a loan. As in past, people used to declare more income than they earn, this practice is known as mortgage fraud. This statement shows the accurate income of a person. So it is advisable to ask for this form from HMRC during the initial stage of a mortgage application.   How to Get SA302 from HMRC? If you registered to HMRC as self-employed and submitted your (or your accountant) self-assessment tax returns. The SA302 form can be easily received online. Through this form, you get the calculation details of the tax and SA302 details, which are sufficient to satisfy your lender.   If you’re unable to get the SA302 form, just ask our accountant to solve your issue.   How to Get SA302 Form Online? Log in to HMRC online account Open Self Assessment Go to more Self Assessment details Select get your SA302 tax calculation Print your full calculation Choose the year you need from the menu of tax return Open view your calculation See and print your calculations After 2017, HMRC no longer issues this form. Now you have to ask or call HMRC for getting the SA302 form.   How We Can Help? Hopefully, now, you have got a clear idea of how to get the SA302 form while applying for a mortgage. Still, if SA302 is troubling you, your accountant can do this task on your behalf. If you’re looking for an accountant, just let us know to avail the cheap accounting services in the UK. Our accountants use the best accounting software whereby they can generate an SA302 form. Therefore, it’s worth investing to take help of an accountant.   Can’t find what you are looking for? why not speak to one of our expert’s accountants in London and see how we can help you are looking for.   It’s time to say bye to your accounting worries with CruseBurke.   Disclaimer: This blog provides basic guidelines to get the SA302 form.

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How to Register as Self-Employed

How to Register as Self-Employed in the UK?

03/04/2021self-employed accountant , Tax Issues , Uncategorised

So you have decided to start your own business. That’s great. Now, you would earn some extra cash aside from your regular job.  But now a few extra responsibilities are here on your head than before. Therefore, to get rid of legal issues, you should register yourself as self-employed to HMRC. In this blog, we’d provide a step-by-step guide on how to register as self-employed in the UK. Don’t worry the process is quite simple and easy. Are you worried about the taxes as self-employed, check out, how we can help!   Step by Step Guide – Register as Self employed with HMRC:  Let’s see how to register as a self-employed with HMRC: Using the Employment Status indicator check your eligibility for self-employed Register to HMRC online account with your e-mail address You’d provided with details by post including 10-digit Unique Taxpayer Reference (UTR) Complete your registration with Government Gateway details and add your business information including name, contact, etc After successfully registering as self-employed, you’d have to abide by the obligations and responsibilities as per the law. It includes completing your annual Self-Assessment tax returns.   Why Should I Register? You should register as self-employed because HMRC needs to collect self-assessment tax and National insurance from your earnings as self-employed. But how can you know that you’re self employed and you need to register for it? You can check your employment status through the Employment Status indicator to know which category you fall. Typically, you’re classified as self employed if: You operate a business for yourself You are having two customers at a time You decide when and how to work You can hire other people You can provide the tools needed for work You take responsibility to do a work within the time You charge a fixed price for projects Sell services and goods to earn profit Still unable to find out your employment status, reach out to us!   When should I Register? You should register as soon as possible before 5 October of the tax year, when you became self-employed. You’d be charged a penalty if you register after the deadline.   Responsibilities after Registration: You’d keep a record of your business incomings and outgoings. Secondly, you’d file your Self Assessment tax return online before 31st January.  Thirdly, you should pay HMRC from 31 January and 31 July. You may delay the payment as long as HMRC agrees. Moreover, you have to pay income tax along with class 2 and class 4 National Insurance contributions. If your annual income is above £85,000, then you need to register for VAT.   Quick Sum Up: Now that you know how to register as self-employed in the UK, it is important to follow the guidelines provided by HMRC.  You are not required to pay any fees while registering for it. These steps are quite simple, but some cases might be special that can’t be handled easily by a non-expert. So, it is better to take the help of an accountant. CruseBurke is providing free consultation services for you. Contact us anytime! Disclaimer: This blog is written for informational purposes.

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capital gains tax entrepreneurs relief

Entrepreneurs’ Tax Relief: Everything You Need To Know

25/03/2021Tax Issues , Tax Saving Tips

Establishing a new business is never easy, you need to face a lot of problems while starting a new business.  Being a smart entrepreneur, you should try to reduce your expenses and increase your earnings by opting for efficient strategies. This is where you need to know about Entrepreneurs’ Tax Relief. You can use this relief to lower down your Capital Gains Tax (CGT) at the rate of 10% for the business assets that are sold or disposed of.   Entrepreneurs’ Tax Relief- An Overview: As a business owner, you might wish to sell or dispose of your business due to your hectic routine and many other reasons. In this case, you can claim an allowance to receive a reduced tax rate on your sold assets. This allowance is known as Entrepreneurs’ Tax Relief. This relief can help you to boost your financial gains by reducing the charges of CGT on the profit you made out while selling your business assets. Nowadays it is renamed by HMRC as Business Asset Disposal Relief.   Whether you’re a freelancer or sole trader, we can fix your all tax issues within a minimum time. Just click here to get an instant quote!   How to Claim and How much to claim? If you’re a business owner, this relief is one of the most captivating tax benefits for you. You can claim Entrepreneurs’ Tax Relief, which is now known as Business Asset Disposal Relief up to £1 million in your lifetime. If your claim is within the threshold of  £1 million, you can claim it multiple times until you reach the limit. You can claim this relief in two ways: Self Assessment tax return Completing the Section A form of the Helpsheet Business Asset Disposal Relief Key Takeaway: If you have disposed of your business in 2010/20, the deadline to claim for this relief is 31 January 2022.   Eligibility for ER: Individuals are eligible for Entrepreneurs’ Tax Relief. This relief is not available for companies. To qualify for this relief, you need to sell qualifying assets, along with fulfilling other requirements. You are given a two years qualification period to qualify for this tax relief. For qualification you must follow the below criteria: You’re a sole trader and an employee You own 5% share and voting rights You have not crossed the £1 million lifetime limit This criterion differs if you sold out your shares or you’re selling your whole/ part of your business. Though, both cases qualify for the EU, you should know the difference.   Seems difficult? We can make it easy! We have a team of professional tax experts for your assistance.   How Does ER Work? The process is quite simple and easy. Whenever you sell an asset, you are liable to pay tax on it. This tax relief minimizes the amount of tax you pay in terms of Capital Gains Tax (CGT).   Assets that qualify for Entrepreneurs’ Tax Relief: Including the tangible assets that you sold or disposed of, your shares and securities are also eligible for this relief. However, your investment and personal assets are not eligible for this relief.   How can You work out Entrepreneurs’ Relief? You can calculate this tax relief by following the below steps:   Add all your capital gains and calculate your CGT Subtract it with your tax-free allowance of CGT Pay 10% from the remaining amount and the rest is yours   Quick Wrap Up: We hope you have got enough information about Entrepreneurs’ Tax Relief. You should keep in your mind that the rules and regulations may vary as they change with each passing year. Therefore, you must be up to date with the latest policies and legislation by HMRC.  As this will be saving you thousands of pounds.   For further help and assistance, don’t hesitate to contact us for getting expert advice from our qualified chartered accountants in Croydon. 

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HMRC tax payment

Common HMRC Tax Payment Problems and Their Solutions

25/03/2021Accountants , Tax Issues

Many people face HMRC tax payment issues due to which they’re unable to pay taxes on time. Paying taxes in time is crucial as you may end up being bankrupt or may lose a job or even you’d face prison too. The longer you take, the more intense the problem will be. Therefore, you have to deal with it quickly. Whenever you’re in tax debt, you should promptly take action to avoid it. Instead of being in tax debt, you should contact HMRC tax payment whenever you face any problem while paying taxes.   Knowing Tax Payment Problems: If you’re facing any issue while paying tax, simply take action instead of ignoring it. Any delay may cause tax penalties and legal action by HMRC. These problems may be temporary and they may expose the internal problems of your business. The foremost step to counter them is to update the financial forecast and to seek advice from an expert.   CruseBurke is a renowned name uplifting businesses to counter financial distress with the help of certified accountants and tax experts. Just let us know your concern!   On the other side, if your business is sound enough, you should find out the way to pay your tax bills. It may be possible through borrowing, controlling or delaying expenses, and many more. You need to convince HMRC that you’re unable to pay the tax bill for taking extra time for the tax payment.   Negotiating time with HMRC Tax Payment: If you’re a business owner who’s unable to pay his tax dues on time, you should instantly contact HMRC payment support service. You can also contact the HMRC Tax payment office in a case where you have already received a payment demand. For negotiating in terms of time, you need to make an agreement with HMRC allowing it for a direct debit until you pay the full amount.     By doing this, interest will be charged but you can avoid tax penalties if you follow the agreement and do your tax returns on time.   Our accountants and tax specialists can negotiate with HMRC on your behalf for the due tax payments. Reach out to us now!   Improving Cash Flow to Avoid Tax Payments Problems: Cash flow forecasting can save you from the tax payments problems and cash flow problems. In addition, HMRC has also introduced various options to improve your cash flow. Self-employed personnel may face Tax payments problems when they are not making a considerable amount of profits compared to past profits. They can lower their payments on accounts if they feel their taxable income will decline. A budget payment plan can improve tax payments through paying taxes to HMRC in advance. It can almost eliminate all tax payments issues. Secondly, you can make a personal-tax saving account to be saved from this liability and can also earn interest. There are a lot of other options that can protect your business from late tax payments implications: Subcontractors can improve their cash flow through gross payment status under the industry scheme. Regular Importers can avail deferment accounts in warehouses until they’re in demand. Small businesses running in rural areas may receive discounts on their business rates. We can uplift your business by improving your cash flow to fight against financial troubles. Contact us for the ultimate support!

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What are Chargeable Gains?

What are Chargeable Gains?

10/03/2021Tax Issues

The gain in your asset’s value from the time it is purchased till the time it is sold is known as chargeable gains. This process is also called capital gains. A capital gains tax is levied on the chargeable assets. Chargeable loss is the opposite of chargeable gains. Contact us for getting expert advice on capital gains tax. Talk to our best accountants and bookkeepers in the UK at CruseBurke. You will get instant help with your accounting queries. Chargeable Gain for Companies A company can deduct the amount of chargeable gain by subtracting the charges associated with the buying, selling and improving the asset like fees or commission, etc. For instance, if a corporate company in the UK sells a property, office, or security, HMRC will classify it as a chargeable gain. These rules vary for the assets bought before April 2002. Chargeable gains can be reduced against a capital loss when your company’s asset is sold below its actual value. If you are eligible for the capital allowance, your loss can be reduced due to the amount of the capital allowance. For instance, if you have bought a property at £10,000 and sold it at £5000. You can avail an allowance of £3000 on it. In the final calculations, the capital loss would be £2000, as your total loss is subtracted by the capital allowance. Chargeable Gains on Special Items If an asset provided to you is a gift or any special item, its capital gain value would be calculated based on its market value of the time it was received. Chargeable gains also include compensation received against an asset’s damage or destruction. If compensation crosses the total worth of an asset, it’d also be considered a chargeable gain. Chargeable gain excludes an increase in an asset because of income tax, exempt asset, and other types of exemption like personal exemptions, etc. There is a defined limit for the taxes to be levied on chargeable gains generally they are on the initial gain. Capital gains taxes may vary in accordance with the annual tax limits and laws. If chargeable gains exceed the threshold, taxes would be levied on them. Chargeable Gains Tax for Companies Companies have to pay corporation tax on chargeable gains tax. The total capital gains are added to corporation tax returns. Chargeable gains are taxed in accordance with the corporation tax rate, including the business profit. Conclusion You can reduce, eliminate and change your chargeable gains tax through reliefs, allowances and exemptions, but it can be complex due to the tricky rules of the government. So, it’d be better to take professional advice from our chartered accountant in Croydon. Disclaimer: All the information provided in this article on chargeable gains includes all the texts and graphics. It does not intend to disregard any of the professional advice.

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Adjudicator’s Office

The Role of the Adjudicator’s Office

02/03/2021Accounting Issues , Tax Issues

The Adjudicator’s Office (AO) was established in 1993 to provide independent oversight of complaints about HMRC and the Valuation Office Agency (VOA). Since December 2019, its remit has extended to reviewing decisions under the Home Office’s Windrush Compensation Scheme. AO’s Purpose and Limitations The AO does not overturn departmental decisions. Instead, it assesses whether HMRC, VOA, or the Home Office: Handled complaints appropriately and in line with policy Acted with fairness, consistency, and transparency It can only investigate complaints received within six months of the department’s final response. Types of Complaints Covered The AO investigates the following issues: Mistakes or errors Unreasonable delays Misleading or poor advice Inappropriate staff behavior Inconsistent use of discretion Before an AO review, a complaint must go through two internal stages of review by the relevant department. Latest Performance Data (2023–24) According to the AO’s 2023–24 Annual Report: Total complaints received about HMRC rose to 1,046 (from 950 in 2022–23). Complaints about the VOA stayed steady at around 58. HMRC complaint cases closed increased by 34%, totaling 843. Complaints fully or partially upheld were 41%, a slight drop from 47% in 2022–23. Case resolution times: 82% closed within 4 months in 2023–24 Dropped to 76% in 2024–25 with 1,667 of 2,181 cases resolved on time. Compensation Awarded The AO continues to recommend compensation for: Financial loss Anxiety or distress However, payouts remain modest. Specific figures have not been disclosed in the 2023–24 report. As of 2019–20, the highest awarded was around £13,896, which illustrates the typically limited financial remedies. AO’s Emerging Insight and Feedback Service delays remain a significant concern in the 2023–24 cycle, particularly with HMRC’s phone and post service performance. The AO published a Level‑3 insight report (“Applying Customer Circumstances to Decision Making”) aimed at improving how HMRC considers vulnerable individuals in its processes. An ongoing Complaints Insight Board helps to identify strategic improvements across departments.

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Why is record keeping important

Why is record keeping important?

16/02/2021Accounting Issues , Tax Issues

Why is record keeping important? Imagine that one day you decide to file your taxes, and don’t find anything in your records. That’s the worst thing anyone can think of. What if you lose your tax records, and what help can you expect from HMRC in this regard. HMRC may check all the details to make sure you’re paying the right amount of tax. Let’s dig up more scenarios that deal with record keeping, and answer your question ‘why is record keeping important’ in the best possible way. What Happens if your Returns Get Late? What to do if your returns are late? If you’re sending your returns 4 years after the deadline, you need to keep your records for 15 months after you’ve sent in your return. What Action Will HMRC Take if your Records are Stolen or Destroyed If it’s not possible for you to replace your records, you must do every effort to provide relevant figures. Make sure you’re telling HMRC that you file your tax return if you’re using: You give your best guess to HMRC. What are your temporary estimated figures when you’re waiting for the exact ones? If there are any chances that you might get your records back, you need to mention the probability. In case, you don’t find your records, your best guess will do the job. Let’s Dig Into Record Keeping So one question everyone asks is what records do you need to keep? These records include: All income coming in from your sales. The expenses incurred in your business. VAT records if you’ve registered for VAT. PAYE records if you’re employing people. Further details of your personal income. The grant you’ve already claimed through the self-employed income support scheme. We hope we’re pretty clear about what happens when you’re losing your tax records,  what happens if your returns get late and why is record keeping important? Disclaimer: The information about why record keeping is important 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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