Can I ask Simmers & Co to take on some of my
administrative work?
Definitely, and here are some reasons why we think you should:
- Access to accurate information
- Timely production of management information that will allow you to make
well informed decisions.
- Timely information for bankers and other institutions.
- We will review all information you send to us to ensure that it is
consistent with our understanding of your business and it appears complete.
- We will give you access to new technology without the cost of purchase and
training.
- Value for money compared to in-house finance and admin functions.
- Your finance and admin function grows and shrinks with you, without
additional investment or lay-offs
- Gives you time to do what you do best - running your business.
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Can I decline an employee request to change their
hours of work?
Yes you can, but, you
must be able to state a sound business reason behind the refusal. However, if the employee is making the request to enable them to care for
a child under the age of six, or under the age of 18 in the case of a disabled
child, you must carefully consider the request.
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Can you recommend a good accounting
package for my computer?
Yes we can. We have specialists who can discuss and evaluate
your requirements, make recommendations and come up with an implementation plan.
We can train you to use the package and control your data so that the results
are meaningful.
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Do I need to provide an employee with a written
statement of Terms and Conditions of employment?
Yes, you must provide this within the first two months of employment.
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How can I ensure that my business will survive if I am
not there to run it?
Faced with the demands of running a business and managing personal and family
finances, few of us take time out to consider what we should be doing to protect
ourselves, our families and our businesses from the effects of ‘disaster’ -
illness, injury or death. Any of the three could permanently remove you from
your active role.
Every business owner needs to look at the various ways of preventing a
collapse in the business, should the worst happen. An enduring power of attorney
is one key to smooth running of your affairs if you are unable to manage them
yourself, while insurance offers another part of the answer. Traditional life
assurance, critical illness insurance, key-man insurance and even holiday travel
insurance can all provide cash at the critical moment.
However, only some form of succession plan can really create a structure to
pass the management of your business into one or more safe pairs of hands.
Your succession plan can involve bringing other family members into the
business, but also ensuring that key staff members are retained and empowered to
run the business - working to secure their own future as well as those of your
family. If the business cannot survive without you, there are steps you can take
to maximise any value which still remains. If you are a co-owner of a business,
the same basic principles arise, though you will perhaps have the advantage of
your fellow owners’ self-interest in continuing a successful business in your
absence.
An essential element in the successful formulation and implementation of a
business personal disaster plan is that key people need to know in advance what
will be expected of them, and be comfortable with it. Once you have a clear idea
how you see matters develop, talk your plans through with family members,
colleagues and advisers who will have a role. Some people may feel unable to
take a formal role - others may show hidden strengths.
Planning for the worst is essential.
Please contact us now to help
you ensure a safe financial future for you and your business
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How can I stop working such long hours?
Firstly, you need to look at what you do and decide what tasks
you can delegate. This will free up some of your time and will provide your
staff with the opportunity to develop their skills. Even if they do it
differently from you, don't interfere and let them get on with it.
Secondly, make sure you have good business systems and
procedures and that they are understood and used by all members of your staff.
If you have established what is the best way to do the various elements in all
areas of your business, it will run more smoothly.
You won't then need to be around to make all the decisions.
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How much money can I give my children
without paying inheritance tax?
Currently inheritance tax is only an issue if your entire estate
is valued at more than £275,000.
Each year, you can make gifts of up to £3,000 in total without
worrying about inheritance tax. Gifts totalling no more than £250 per annum are
ignored. More substantial gifts to your children may be made when they get
married.
Above these limits, inheritance tax will not be payable when you
make the gift, but may be payable if you were to die within 7 years of making
the gift.
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How much time is an employee entitled to
take off for paternity leave?
An employee can take 2 weeks leave and this can either be taken
as two entirely separate weeks or as two consecutive weeks. The leave must be
taken within 56 days of the birth. To be entitled to this leave, the employee
must have worked for you for not less than 26 weeks.
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I have just started a new business. What
expenses can I claim?
Expenditure can generally be split into two categories - Capital
Expenditure and Revenue Expenditure.
Capital expenditure may be defined as "an expense made not
only once and for all, but with a view to bringing into existence an asset or an
advantage for the enduring benefit of the business". There are many
examples of capital expenditure such as :
 the
purchase or alteration of business premises.
the
purchase of plant, machinery or vehicles.
the
initial costs of tools.
Capital expenditure cannot be deducted when calculating your profits, although
for many forms of capital expenditure you can claim Capital Allowances against
your profits.
Revenue expenditure is an allowable expense in calculating your
taxable profit unless it is specifically disallowed in the tax legislation (such
as business entertainment). Generally, allowable revenue expenditure relates to
the day to day running costs of your business. Examples of revenue expenditure
are as follows:
Wages
and other staffing costs.
Rent,
rates, lighting and heating costs.
Purchase
of goods for resale.
Replacement
of tools.
Running
costs of vehicles.
It can often be difficult to distinguish between capital and
revenue costs and this has led to many disputes between the taxpayer and the
Inland revenue which have had to be settled in the courts.
If unsure whether expenditure is of a
Capital or a Revenue nature or whether it can all (or only partly) be claimed
against income, professional advice should be sought.
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I have my own business and pay tax at
40%. Can I make my wife a partner and give her a share of the profits?
There is no reason why your wife cannot become a partner in the
business, provided there is a genuine partnership. You should, therefore, ensure
that you have documentation which will satisfy the Inland Revenue that this is
the case as they may dispute any arrangements that are not commercial.
Even if you choose to make your wife a partner and give her a
profit share, the Inland Revenue may treat the income as yours and tax it
accordingly, thus saving you no tax.
This situation needs careful thought
prior to any action and we will be pleased to assist you in achieving your
desired outcome.
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In my spare time, as a hobby, I make
models and then sell them. Do I need to pay tax?
It will depend whether the activity is a trade. If you make the
models with the intention of selling them at a profit, this will constitute a
trade and any profits will be taxable. If it is a trade you will also need to
consider national insurance and, possibly, VAT.
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I want to set up in business - must it be
a limited company?
The structure of your business is a very important decision and
advice must be taken to ensure that your chosen vehicle suits your needs now and
in the future.
The business itself may well determine the form it takes: sole
trader, partnership, limited company or limited liability partnership.
The tax regime for small companies (excluding personal service
companies) is presently favourable. A company also has flexibility on how profits may be
extracted. In addition, a number of reliefs have been introduced over the last
few years which are only available to companies.
However, there are also many advantages in not being a limited
company. Also, companies generally have higher administration costs and
your accounts will be available for everyone to see.
We will be happy to discuss this with
you to ensure you make an informed decision.
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Is the VAT Flat Rate
Scheme for Small Businesses worthwhile?
This scheme is only available if your annual Turnover ( net of
VAT) is less than £150,000. Instead of accounting for VAT on all your income
and expenditure and paying (or having refunded) the difference, there is a set
flat rate percentage calculated on the Turnover for each quarter.
The flat rate percentage varies depending on the type of
business. There are also allowances for Capital Expenditure of over £2,000.
Whether it is advantageous or not depends on your type of
business and how it is run. Generally, however, there is no real saving in
book-keeping if you are keeping your accounting records up to date.
If unsure whether to adopt the scheme,
you should seek professional assistance.
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My business is in profit but where did
all the cash go?
There are a number of reasons why a business may be profitable
but has no cash assets.
-
Money could be invested in fixed assets such
as buildings or plant and machinery.
-
Stock levels may have increased and money is
therefore invested therein.
-
Customers may be slow payers and funds are
locked up in debtors.
-
Liabilities may have been paid off earlier.
There are other reasons for the
apparent lack of cash. If this is a worry to you, don't hesitate to contact us
to discuss matters.
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Should I register for
VAT?
This question could mean two things: "Do I HAVE to register
for VAT" or "Should I CHOOSE to register for VAT".
-
You must register for VAT of your annual turnover is in
excess of £60,000. This means that if, in ANY 12 month period your turnover
exceeds this figure, you have little choice and must register for VAT.
(There are some circumstances, however, where this is not so and, if you are
in doubt, you should seek professional help.) If you are not registered for
VAT you must, therefore, keep a note of your turnover on a rolling 12
month period and register when you feel you may exceed £60,000. There are
time limits in force and you should check these with your VAT office or seek
professional help.
-
If your turnover is below the limit for registration
(£60,000), you may, if you feel it is beneficial, apply to register for VAT. This is known
as Voluntary Registration. Whether you should do so or not depends on many
things, but you should decide with care (in fact we feel you should seek
professional assistance to make your decision). You could end up with less profit if you get it wrong
as the ability to "get back" the VAT on your purchase of allowable
goods, might be more than offset by the part of your sales income which
needs to be paid over to Customs and Excise.
VAT is a tax collected and paid over to Customs and Excise by
those who are VAT registered. If you are registered for VAT, part of your
invoiced sales is VAT which you are collecting to pay, usually every quarter, to
government. You may deduct the VAT you pay on your purchases, of
qualifying goods, from the amount collected from your sales - the balance
is then paid over.
Some type of businesses are not able to register for VAT,
whether or not they exceed to registration limit. Your accountant or Customs and
Excise can help you find out if you come into this category.
This could be an expensive exercise if
you get it wrong so it could be worth your while to seek professional advice.
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We live in the UK and are buying a
holiday home abroad. If we charge our friends a modest fee to use it, do we have
to pay tax on the income?
For UK purposes, any income you receive from the property will
be taxable. However, you will be able to offset some expenses against the
income, including some of the interest on the loan used to purchase the
property. It is possible that the allowable expenses will be more than the
actual income you receive.
When you sell the property, any profit you make on the sale will
be subject to capital gains tax. There are various reliefs available which will
help reduce the amount payable.
You will also need to consider the tax position of the country
where the property is situated.
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What are the deadlines for reporting to
Companies House?
You need to check, but in general, for filing accounts these
are:
For a private company - 10 months after the accounting reference
period.
For a public company - 7 months after the accounting period.
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Why should I have a business plan?
A business plan will give your business direction and goals,
identify the resources needed to meet them, and let management monitor actual
achievements against targets. They are also often prepared to support
fundraising efforts.
Business plans focus management attention to:
analyse the underlying business concept.
analyse and research each aspect of the business.
set targets to guide the development of the business.
convince potential investors of the worth of the business.
convince potential investors that management is capable.
illustrates the potential returns on investment.
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