In Britain, where we are often subjected to four seasons in one day, we could all be forgiven for wanting to see the back of clouds for good. However, there’s a new cloud on the scene and it’s one that business owners need to embrace…
Pension Contributions Are Increasing
On April 6th the amount small businesses have to contribute to their employee’s pensions is increasing.
Cottons Chartered Accountants – December News
As always, it’s been a busy month here at Cottons! We’ve been training our employees, raising money for charity and as it’s December there’s been a lot of festive fun!
Charity Accountancy Specialists
There have been recent changes to the requirements of any charity account reports signed on or after the 1st December, therefore some charity accounting obligations have been affected.
VAT on Disbursements – important notice for all conveyancing solicitors
You may already be aware of the recent first-tier tribunal case involving Brabners LLP, in which the firm lost their appeal against an assessment from HMRC for Output VAT not collected on recharged local authority search fees.
Best Way to Pay Yourself from Your Ltd Company
Directors can pay themselves from their limited companies either in the form of dividends or salary but following changes in 2016/17 to the treatment of dividends, they now need to give a bit more upfront consideration and attention to which they pick so that they are able to remunerate themselves within the most tax efficient manner.
Autumn Budget 2017: Key Announcements
After much speculation around what will be announced the Chancellor delivered his Autumn Budget to Parliament on 22nd November 2017.
Here is an overview of the key announcements.
Tide: The Bank Account for Consultants and Freelancers
Sometimes it feels like high street banks don’t care too much about small businesses, consultants or freelancers. However, here at Cottons we do! And we’re always on the hunt to helpful solutions that will help our clients manage their money in a simple, more efficient way.
Autumn Budget 2017: Predictions
Will Smart Rejoins Cottons as Partner
We’re proud to welcome back Will Smart! Will is returning to Cottons as a partner and will be based at the Northampton branch.
Pensions: Updates to Auto-Enrolment
Under the Pensions Act 2008, every employer in the UK must put certain staff into a pension scheme and contribute towards it; this is called ‘automatic enrolment’, or more commonly, ‘auto-enrolment’. If you employ at least one person, then you are an employer and you have certain legal duties in line with this legislation.
The Cottons’ Pack Tackle The Wolf Run
On a chilly November morning ten of our bravest (or craziest…) employees took on the elements as they tackled the Winter Wolf Run; one of the toughest obstacle course races Britain has to offer.
Self-Assessment Deadlines Are Changing
Self Assessment – New Payment Deadlines
HMRC recently announced new payment deadlines for anyone paying their Self Assessment tax liability.
How to Set Up A UK Ltd Company: The Definitive Checklist
Once you have decided a Limited Company is the way forward for your business you need to incorporate the new entity at Companies House.
Naming Your Company
Your business will need a name. Ideally this will be the same as that you trade under but does not have to be. Be careful not to trade under a protected name as this can cause issues.
Company Structure and Shares
Choosing the company structure is important, especially for those with multiple owners. The allocation of shares to a shareholder needs to reflect their value to the company. The person with the ownership over 50% effectively controls the company.
Setting the nominal value of a share is important. Most new limited companies will keep this simple at set the book value of 1 shares as £1 but it is possible to have a share worth £0.0001.
Companies mistakenly set up shares with very high nominal value thinking this is the value of the company but this can have ramifications, for example, if a company is unable to pay its debts the owners of the business are legally required to pay for any unpaid shares immediately.
Company Taxes and Compliance
Once the company is incorporated you will receive a unique tax reference within a few weeks to the registered office you select. It is important to keep this number as this is required to submit the company tax return.
Ensure you have read up on Limited Company obligations.
Limited Company Bank Account
You need a separate bank account for your Ltd Company from which to make and receive payments.
Once you have your company incorporation documents you will be able to have a limited company bank account put in place which will be an asset of your new company.
Approaching the branch you bank with personally can help you keep everything in one place but you should shop around for the best rates. Santander offers excellent business banking rates and Barclays offer brilliant support for small businesses.
Director and Shareholder Obligations
As a shareholder of the company if you have not been in self-assessment, this the processing of announcing and calculating tax on income which has not been taxed at source, aka PAYE.
By registering for self-assessment you will receive a personal unique tax reference number. You have the responsibility to report to HMRC the income you extract from your Limited Company via salary and dividends.
Bookkeeping and Administration
Once the company is formed, the bank is in place you are ready to start invoicing clients, remember you will need to quote the limited company registered number and registered office within the invoices.
Using accounting software such as XERO means that you can keep your invoicing, income and expenditure in one place. This means that you know how your company is performing, what’s outstanding and how much your spending whenever you need to know. Being organised in terms of admin is the key to success.
Finding an Accountant
If you have managed to make your way through company formation and initial administration you may want to hire an accountant to manage your ongoing tax and accounting obligations.
Each year your profit will be subject to tax treatment. An accountant will ensure you are paying the correct rate of tax on the correct amount of profit whilst managing your costs as well as keeping you organised and supporting you as you grow.
We are small business accountants. If you would like to talk to us at Cottons Chartered Accountants about working with you then call us today, we have offices in Northampton, Rugby, Daventry and in London too. We offer a full range of affordable tax and accounting services for businesses of all sizes. It is our business to ensure that your business continues to function once it’s up and running.