This week Rishi Sunak announced that the Coronavirus task Retention Scheme is to be prolonged until September 2021.

Which means that by the point the CJRS ends on the stop of September, the concept of “furlough” will have been with us for over 18 months, even though it did no longer even exist inside the united kingdom this time last 12 months.

Right now, employers are capable of furlough employees and follow for a grant below the CJRS to cover monthly salary charges for employees who are not able to work due to the impact of coronavirus for as much as a most of £2,500 according to month. This consists of ‘flexible furlough’ whereby employers can furlough employees flexibly for any amount of time, and declare a grant under the CJRS for the hours no longer labored as a result of the pandemic.

The CJRS was previously set to stay open until 30 April 2021 (having previously been extended on more than one activities). This has now been extended to the end of September 2021.

 

New year, new rules, but what does the free trade deal between the UK and EU mean and what do the new rules mean for your business?

The United Kingdom and the European Union have agreed to a 100% tariff. This means there will be no tariffs or quotas on the movement of goods we produce between the UK and the EU. This is the first time the EU has agreed a zero tariff zero quota deal with any other trading partner

The aim of any free trade deal is essentially to encourage trade by making it cheaper. This is often achieved by reducing or eliminating tariffs (taxes or charges by governments for trading goods across borders). Trade agreements also strive to remove any limits set on the number of goods that can be traded. Trade between countries can be made simpler if everyone plays by the same rules, that way the less likely it will be that goods need to be checked. After Brexit happened, it was important that the UK decided and agreed on the rules for our future trading relationship with our largest and closest trading partner, the EU, to ensure no tariffs or quotas would be introduced. Without a deal, some goods would have become more expensive.

M J Smith are a proactive Exeter based Accountants, offering competitive accounting solutions, we believe the client comes first, we support your every business need and we work for you to always get the best possible result.

Find a complete list of our accounts services on our services page. Contact us for an initial FREE consultation and don’t forget to ask about our FIXED FEE options and free telephone and email support. enquiries@mjsmith.co.uk

2020 has been the year of disruption. For the accounting and finance sector, it’s dramatically shifted how firms manage their teams, how they interact with their clients and how they plan for the future.

But despite the challenges the pandemic has caused, smart organisations and future-looking leaders are embracing the disruption and using it to their advantage.

In addition to government-mandated rules around social distancing, proper hygiene and even mandatory wearing of masks in shops, businesses have had their traditional environments turned upside down due to COVID-19.

The accounting sector, while not as heavily impacted as solely customer-facing industries like retail and hospitality, has still had to take steps to abide by these restrictions. The largest of which is office closures – or at the very least, only a certain number of people allowed in a building at any one time.

That means firms have had to navigate the murky world of remote working with only a negligible amount of time to prepare. Some have thrived, others have struggled. But the reality is that for the foreseeable future, this way of working is now the norm.

If there’s one thing mandatory remote work has shown organisations, it’s that staff need to be given the right tools in order to transition to work-from-home. Not only that, but they need to be supported by their leaders.

If there’s any winner to come out of this pandemic, it’s the internet. Businesses are accelerating their digital transformations just to stay competitive, and they are looking to online-based workflow solutions to help them.

To find out how we can help and advise you, please contact our expert team today. 

Small businesses across England can apply for government grants to cover the cost of specialist professional advice, including accountancy services. 

The new £20 million grant, confirmed in July, will give small businesses immediate cash grants of between £1,000 and £5,000 to cover the cost of essential services during the post-lockdown recovery. 

The funds will not only cover routine accountancy support it will pay for legal, HR and IT assistance too. 

The grants are underpinned by the England European Regional Development Fund and can also be used to pay for the installation of new technologies to improve the agility of small firms, enabling them to diversify and thrive in the post-COVID-19 economy. 

Business owners must apply for these grants via the local growth hubs in their respective Local Enterprise Partnership (LEP) regions. Each LEP has at least £250,000 to invest in small businesses, with its growth hubs situated in all four corners of the country, supported by the Federation for Small Businesses (FSB) and regional Chambers of Commerce. 

Simon Clarke MP, Minister for Regional Growth and Local Government, said: “Small and medium-sized businesses are the beating heart of communities; they provide employment and contribute significantly to local economies and we are determined to give them the support they need to continue to thrive.” 

All grants must be awarded by 28th February 2021 and all relevant activity must be completed by 31st March 2021.

If you’ve received a grant from your LEP and you need professional guidance and support with a range of tax and accounting issues facing your business, our nationwide network of accountants is here for you. 

To find out how we can help and advise you, please contact our expert team today. 

Although the announcement from the UK Government may not have been what everyone was expecting for those who are Self-Employed, there are still a lot of avenues available to help and ensure cash is continuing to flow to both you and your business.

The government recently announced support to help self-employed people during the current COVID-19 pandemic.

To help you understand which support might be available to you and how you can access it, we have compiled this guide.

Self-Employed Income Support Scheme (SEISS)

If self-employment was your main source of income between April 2018 and April 2019, you could be eligible for a grant through this scheme.  The scheme will allow you to claim a taxable grant worth 80% of your trading profits up to a maximum of £2,500 per month for the next 3 months.  This may be extended if needed.

How it works:

HMRC will contact you directly if you are eligible.  You will then be invited to apply online.  After you have applied, HMRC will contact you to let you know how much you will get and how it will be paid.  If you claim tax credits, you will need to include this in your claim as income.

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Employment Support Allowance (ESA)

If you are unable to work because of COVID-19, if you have a disability or health condition that affects how much you can work, possibly if you are looking after an unwell child, or self-isolating yourself and you are under state pension age and if you have paid enough National Insurance contributions in the last 2-3 years, you may be eligible for Employment Support Allowance (ESA).

However, you cannot get an ESA if you are getting statutory sick pay (SSP) from an employer.

ESA gives you money to help with living costs if you are unable to work and also support to get back into work if you’re able to.  You can apply for ESA if you’re employed, self-employed or unemployed.

How it works:

If you are already receiving Universal credit, sign in to your Universal credit account.

If you are not receiving Universal credit, call 0800 3285644 (option 2) or textphone 0800 328 1344 (option 2).

You will then receive a text, phone call or letter within 10 working days to invite you to a telephone interview.  You will then make an agreement to look for work and will be advised how much you will receive.

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Universal Credit

If you’re unable to work or you are working on a reduced income due to COVID-19, you may be able to claim Universal Credit or receive more money from an existing Universal Credit claim.

You can apply if the following applies to you:

• On a low income or out of work
• 18 or over
• You or your partner are under State Pension age
• You reside in the UK
• Your household has less than £16,000 in savings

If you can work, your universal credit will decrease by 63p for every £1 that you earn.

How it works:

Once you apply online, you will then be given a number to call to book an appointment for a telephone interview. 

If you need help completing the online form, you can call the helpline on 0800 328 5644, Monday-Friday between 08:00-18:00.

HM Revenue and Customs (HMRC) has highlighted five money-saving tips to help boost your finances.

First-Time Buyers’ Relief

If you are a first-time buyer you can claim First-Time Buyers Relief on your property purchase made on or after 22 November 2017.

This means that you will not pay any stamp duty on properties up to the value of £300,000 outside of London or £500,000 in London.

Tax-Free Childcare

If you are a parent or guardian of a child under the age of 12 (or under 17 with a disability), you could receive tax-free childcare.

For every £8 that you pay in, the Government will make a top-up payment of an additional £2, up to a maximum of £2,000 per child per year (or £4,000 for disabled children).

Marriage Allowance

Those who are married or in a civil partnership can save up to £250 a year if they have applied for a Marriage Allowance.

A Marriage Allowance lets you transfer £1,250 of your personal allowance to your husband, wife or civil partner – if they earn less than you, this will then reduce the amount of tax you pay for that year.

Help to Save

The Government has introduced a new savings scheme to help those who find it hard to save on a low income.

The Help to Save scheme rewards savers with an extra 50p for every £1 saved. In total, you can save a maximum of £2,400 over four years, which would result in an overall bonus of £1,200.

Work-Related Expenses

Hairdressers, nurses, construction workers and millions of other employees can claim tax relief on work-related expenses.

Workers can claim money they have spent on items such as work uniform, tools, business travel, professional fees and subscriptions.

To find out how we can help and advise you, please contact our expert team today. 

You do not need an accountant for a small business, legally speaking – small business owners can take care of their finances themselves. However, it is very beneficial for many small businesses to work with an accountant; time is money for entrepreneurs. When an accountant takes care of bookkeeping, taxes, VAT etc., owners have more time to grow businesses.

Having an accountant on board can be the boost that many small businesses need to get them off the ground. And it will give you full confidence that you are meeting your financial obligations and submitting the correct information to Her Majesty’s Revenue and Customs (HMRC). Find out your obligations as a small business and decide whether you need an accountant to support you.

Small businesses and accountancy – the law

 The law is strict when it comes to small businesses and meeting financial obligations. Whilst it isn’t the law that you need an accountant to take care of your finances, they do need to be in perfect order. And an accountant can help enormously with that. It’s important that you understand your legal obligations when you are making the decision about whether to work with an accountant.

These are just some of the laws, rules and regulations you will have to meet as a small business owner:

• Registering your business. You will need to register your business with Companies House in order to get set up. You must register as a sole trader or a limited company.
• When your VAT taxable turnover reaches £85,000 (correct as of August 2019 – check the government website for up-to-date figures) you will need to register for VAT. You will then need to submit a VAT return quarterly.
• Tax returns. Each financial year, you will need to complete a tax return to ensure you have paid the correct amount of tax. This will need to be filled out accurately and you will need to keep exact records of all income and expenses throughout the year.
• Payroll and pensions. This might not affect you immediately, but as soon as you have employees or sub-contractors working for your business, you need to be aware of your payroll and pension obligations. This is further complicated by the fact that auto-enrolment has now come in, so everyone who is classed as an employee will be enrolled into a pension scheme.
• Balance sheets and bookkeeping. Most people think of bookkeeping as a way of ensuring they submit the right tax information. This is an important function of bookkeeping, but you should also think of it as a way of knowing your net income, giving you a full picture of your outgoings and your profit. You can see all the information you need at a glance and use it to make important business decisions.

Many small business owners struggle with these obligations; why would you know the ins and outs of VAT, tax returns and tax-free allowances? The simple answer is, you wouldn’t – unless you were an accountant or similar financial professional whose job it is to understand them.

An accountant’s job is to understand the financial obligations of businesses. An accountant can tell you about any legalities you need to abide by, and process your accounts to make sure you are within the law. Many accountants, like us, can also help you with business set-up processes and can let you use their business address to register with Companies House. This saves you having to use your personal address, so it won’t be placed on a public register.

Can I really afford an accountant?

Many businesses are put off by perceived expenses, deciding that they won’t payout for an accountant because they aren’t required to by law. But working with an accountant can be more cost-effective than you might think.

Here are some of the factors to take on board when considering your budget and whether you can afford an accountant:

• Accountancy fees are tax-deductible. This means you won’t have to pay tax on the fees you pay to your accountant, in the way that you would have to for other business expenses.
• A good accountant won’t charge by the hour. They will be happy to offer you advice and support as and when you need it, rather than charging you every time you call up or arrange a meeting. Look for inclusive accountancy packages when shopping around.
• You will free up your own time. The more time you have available, the more work you can put into growing and expanding your business. Good business owners value their own time, delegating work wherever they can to make time to prioritise growth.

How can an accountant help your small business thrive?

An accountant can, of course, help you with the legal side of looking after your small business’s finances. They can make sure you are filing the right documents with HMRC, meeting your tax and VAT deadlines – but they can do so much more than that. A good accountant will be more like your business partner, giving you holistic advice and support to ensure that your business has all it needs to succeed.

If you meet the right accountant, they will help you in all areas of your business life. They can help you network with other businesses, give you financial advice (for example, letting you know if it might save you money to become VAT registered) and help you find new business contacts. It’s a win-win situation when you find the right accountant, who looks out for your business and your best interests.

So should I work with an accountant? It’s your decision!

Deciding whether to work with an accountant is an entirely personal process. There will be many factors that will inform your decision, that will be totally unique to you. These are some of the factors that might affect your decision-making process:

• The complexity of your financial situation
• Whether you are looking for investment in your business
• Your marketing strategy and whether a well-connected accountant could help
• The money you are making and whether your business is profitable
• Your business strategy and budget
• The amount of time you need to free up to focus on building your business

‘Do I need an accountant for a small business’? As well-established accountants, we hear this question a lot! We are here to help every business make the right decision for them. We believe in offering personalised, tailored advice, face to face where possible – and there is absolutely no obligation to go ahead if you feel an accountancy service isn’t right for you. Talk to our team, ask for our advice, pick our brains and make use of our knowledge. We’re here to support you on your business journey.

You’d be forgiven for thinking that accountants only concern themselves with filing tax returns, but you’d be wrong.

Accountants are experts in everything from finance to business management, which means their use extends far beyond the data-recording, walking calculator The Simpsons might have you believe.

Our accountants, specialised in UK business support, can help you complete a number of vital tasks. Take a look at our list of what we can do for your business, and see if anything surprises you.

Tax Management

Of course, accountants can do a lot more than filing your tax returns, but they will still do it all the same.

From registering your business with HMRC to managing your specific tax obligations — VAT, corporation tax, PAYE — an accountant will expertly execute all tasks relating to business taxation.

This also includes maintaining accurate and up-to-date books and saving throughout the year to meet tax demands. At the end of the year, they will complete your business tax returns, taking all the pressure out of financial management.

Our UK accountants are experienced in the art of tax management. We not only help complete tax tasks but can also help you save tax, too.

 

Payroll and Payment Management

Dealing with tax is not the only financial task an accountant can carry out for you.

Accountants will take responsibility for payments to both employees and businesses, managing the majority of your outgoing expenditure.

By having a dedicated expert complete such tasks, you ensure they are not only dealt with in a timely and efficient manner but that you are also not overpaying suppliers or staff. As financial experts, accountants know when you’re getting a bad deal.

Other tasks included underpayment management are repayments on loans, tax payments and distribution of profits to shareholders, investors and owners.

In simple terms, find an honest and trustworthy accountant and you never need to worry about money management tasks again.

 

Setting up a Limited Company

The process of turning your self-employed, one-person business or partnership into a limited company has an array of benefits, but it also comes with a number of complex tasks to carry out.

You’ll not only need to deal with basic tasks like registration of the business name, address and shareholders, but also drafting up shareholder agreements, company rules, details of rights and ownership, and so on.

As experts in the management of business tasks, our accountants specialising in UK business can help you set up your limited company.

 

Growth and Expansion

Part of running a business is having to grow, expand and adapt, but that isn’t always easy.

Expansion and growth bring into play new tasks and responsibilities, from extra employees and tax obligations to shareholder meetings and advanced marketing strategies.

An accountant may not be a recruiter or a marketer, but they can help you organise and manage such tasks in a way that optimises both financial and time efficiency.

An accountant can be very useful to have around during expansion, as they have no sentimental or emotional attachment to the business, meaning they can help advise on the hard but necessary decisions required for the company to evolve.

 

Advanced Administration Tasks

This one is probably the most surprising for business owners.

Our accountants can help you with some of the more complicated administrative tasks. These include creating documentation for share transfers, registering new company employees, brand names, copyright and more, as well as initiating and carrying out a company closure if you should decide to shut up shop.

 

For advice on your finances, get in touch with us today on 01392 875391.

Plan What You Can Afford

It’s easy to get carried away but spending recklessly for the sake of one day can wreak havoc on personal finances for months afterwards – not a great way to start the new year!

Instead, take stock of your finances and plan accordingly. Every good accountant knows the number one importance of good budgeting.

Be An Early Bird

Supermarkets and stores are already displaying Christmas wares and there are bargains to be had. So stock up on non-perishable food items.

The only question that remains: can you trust yourself with a stockpile of Quality Street?

Shop Around

Instead of relying on a frantic supermarket sweep on December 24th, investigate where the best deals can be found to match your budget.

It’s also worth comparing the price of gifts before buying – the difference in cost between stores can be enormous.

Accountants must always be incredibly organised – having a shopping strategy in mind before hitting the high street will stand you in good stead.

Use Discount Codes

If you’re more of an online shopper, search for discount codes. Many retailers offer web exclusives that can save you a fortune.

Scanning the small print and maximising the benefits of financial bonuses is the purpose of accountancy.

So why not follow suit and reap the benefits?

Don’t Be Tricked

Buy five get one free! Extra 10% off when you spend over £1000! These offers can seem attractive at first but consider the implications. Do you really need five extra boxes of bread sauce? These ‘false economy’ deals can cause financial turmoil. Just like an accountant, make your plan… then stick to it.

 

For advice on your finances, get in touch with us today on 01392 875391.

Inheritance Tax

It can be difficult to know when to start planning for Inheritance Tax and whether it applies to you. That’s why we are here to help.

Inheritance tax is a tax on the estate of someone who has passed away. The tax will not have to be paid if the estate is worth under £325,000. If it is worth over this threshold but is being left with your spouse, civil partner or charity, there is also no Inheritance Tax to pay.

The standard Inheritance Tax rate is 40%, which is only charged on the amount of the estate that is over the threshold. Your tax-free threshold is essentially £325,000, and anything over that amount will be taxed 40%. There are exceptions where Inheritance Tax is less, for example if some of the estate is donated to a charity. Contact us to find out more about Inheritance Tax and how it may affect your family.

If there is a will, the executor (person dealing with the estate), will ensure that the correct funds are paid to the HMRC.

It is important to get fully clued up with regards to personal tax planning and Inheritance Tax. We offer advice on how you can prepare if the certain taxes apply to you. Just give us a call on 01392 875392 for more information.

Making Tax Digital is a scheme introduced by the HMRC to make tax administration and collection easier, more efficient and more accurate to avoid discrepencies in tax collection. The first MTD deadline has passed and millions of businesses have signed up to the scheme, improving tax collection and administration nationwide.

If you’re a business, self-employed or a landlord, MTD applies to you, requiring you to switch to digital tax administration using an MTD-compatible software such as Xero and QuickBooks (Intuit). For a full list of MTD-compatible software for VAT and Income Tax, visit the GOV website.

The deadlines:

1. 1st April 2019 – If your business has a taxable turnover over £85,000 and is not in the deferral group, your business must have started using a compatible software to keep digital VAT records. It is a legal requirement to have signed up to the scheme if this applies to you. If you haven’t sign up, speak to one of our Accountants as soon as possible by calling 01392 875391.
2. 1st October 2019 – If your taxable turnover is over £85,000 and you are a trust or not for profit organisation, local authority, public corporation, trader based overseas, or are part of a VAT group, then this is the next deadline for signing up to MTD. For a full list of the criteria, visit the GOV website.

If your taxable turnover is less than £85,000, you can sign up to MTD voluntarily or for MTD for Income Tax. This is useful for keeping records and tracking income and expenses on all of your devices.

Due to the fast pace of the change, the government announced that MTD only applies to VAT and will not be applied to other taxes until at least April 2020. Similarly, new businesses will also not have to apply MTD until 2020. If you’re a new business and want to get started early, give us a call on 01392 875391.

Spring Statement 2019

The Spring Statement is an opportunity for the Chancellor to provide up-to-date information and progress regarding the economy since Budget 2018. We’ve picked out a few key points to highlight developments within the economy and what is useful for you to know.

Economy

Efforts to build a stronger economy have been paying off, with 9 consecutive years of economic growth for the UK, resulting in a faster growth rate than Japan, France and Italy since 2010.

The forecast: the Office for Budget Responsibility (OBR) predicts that inflation will stay on or close to the target for the duration of the forecast (until Autumn). Business investment is expected to grow compared to last year, depending on the financial certainty involved.

Employment

The UK has seen its lowest unemployment rate since 1975 with wages increasing at the fastest rate in over 10 years.

The forecast: the number of people in employment is expected to increase by 600,000 by 2023, with unemployment remaining low. Wages are also expected to increase at a faster rate than inflation, resulting in more disposable income.

Public Finances

Borrowing has reduced since 2009/10, with debt seeing its first sustained decrease in a generation. Public finances have also improved since last Autumn.

The forecast: in order to ensure debt continues to decrease, the government are focused on supporting public services, investing in the economy and infrastructure, and keeping taxes low, so as to not put pressure on future generations.

Opening the UK

Since the EU is in the very process of leaving the EU, it is important that members from other countries globally know they can visit our country without too much trouble, which will improve business with the UK.

The forecast: to ensure the UK is more ‘open’, citizens of South Korea, Singapore, Japan, Australia, New Zealand, Canada and the US will be allowed to use e-gates at airport and Eurostar terminals to reduce queues and improve the experience at the UK border – from June 2019. Landing cards will also be abolished from June 2019, reducing complications for visitors and speeding up entry.

The Environment

The commitment: the goverment will aim to meet climate targets by advancing gas supply decarbonisation through increasing the proportion of green gas in the grid. This will reduce the dependence on burning natural gas. By 2025, the government will launch the Future Homes Standard, entailing that new builds are equipped with low-carbon heating and excellent levels of energy efficiency. In an effort to protect critical habitats, the government will support the Ascension Island Council in allocating 443,000 square km of its waters as a Marine Protected Area.

Housing

The government sets out to: “Raise housing supply by the end of this Parliament to its highest level since 1970, on track to reach 300,000 a year on average.” In order to acheive this, £717 million from the Housing Infrastructure Fund will be spent to unlock up to 37,000 homes in various places including the Old Oak Common in London, Cheshire and the Oxford-Cambridge Arc. The government will also secure £3 billion of borrowing by housing associations in England to provide a further 30,000 homes.

To find out if any of these developments and Brexit will affect your business, contact us today.