Tax Return Deadline

 

Are you stressing about the tax return deadline? These four tips could make things easier for you.

New year, new me. New year’s resolutions are how we try to change for the better, so our year doesn’t seem so bleak. Resolutions like, to lose weight, live life to the fullest, be more organised…making sure you do your tax returns early (Hint Hint). Shohaib Shafiq, principal accountant at Integrity Accountancy Services Limited says, “The people who leave it to last minute usually end up missing things, getting calculations wrong, and making error on the tax return just to get it submitted in time”.

Yes, it’s not the most looked forward to resolution but we at Integrity Accountancy say that by preparing your tax return early, in a relaxed manner, you are likely to end up paying less tax. This is because you are less stressed, and more focused with your calculations and the deadline- January 31^st. However, if you have an accountant the only stress you have is getting any information sent over, which can simply be done online at any point after the end of the tax year.

If your dreading the thought of where to begin completing your tax return, here are some tips to help, so you don’t end up paying more than you have to.

 

EARLY PREPARATION

In recent years a growing number of self-employed individuals have filed their tax returns online. To submit tax return online, a unique identification code and password are required. Problems can arise from this however, as if you do not have access to this information, the process of HMRC resending this information to you can cause further delays in the completion of your tax return. It is crucial that you complete your self assessment before January, as this is when their self-assessment helpline is the busiest. Also, if you complete your tax return early during the year and it shows you are due a tax refund, this will be paid before 31 January deadline, unlike your tax owed due by this date.

 

BE THOROUGH WITH YOUR EXPENSES

Most commonly forgotten expenses are mileage and professional subscriptions. These small expenses can add up and reduce your tax bill considerably. If you use your car for business and your employer pays you less than the HMRC maximum approved mileage rate (45p for the first 10,000 and 25p above this), you can claim the excess but often this is forgotten have misplaced the paper work.  This all comes down to your organisation, sorting your expenses in date order making sure you have the VAT receipt and it is applicable for your tax return, which can be over whelming and time consuming.  That’s why having Integrity accountancy services is helpful by getting your bookkeeping records to us promptly, enables us to do the hard work for you. This gives you peace of mind, everything has been accounted for on your tax return.

 

BECOME MORE ORGANISED

Organisation is hard to achieve when you don’t always know what to organise. Nothing is more frustrating when you start to fill an online form, only to find you are missing half the information required. Start off by gathering relevant forms which will include your P60/P45/P11D also PAYE coding notices and tax certificates for investment, self employed income will also mean you need any relevant bank statements and sale invoices.  If you received income from letting property, you need letting agreements, mortgage interest statements and bills for expenses and management fees. Having a folder with this information might be a handy way to keep track of all the paperwork.

 

GET SOME HELP AND GUIDANCE

HMRC website is a great way to find out crucial information and advice, navigating through it all can be a little overwhelming so if you prefer the visuals there is always YouTube. There are a lot of videos offering tips to save you time and money but not all are specific to your tax return so be careful to know what you can and can’t include in your tax return. If that seems to technical and advanced, then you know its time to call Integrity Accountancy Services.  You will need to act sooner, rather than later.

What is the Right Company Structure for my Business?

Choosing the right company structure for your business can be a confusing decision to make as a startup. The choice you make can have lasting legal and tax implications for your business, so it is important that you have all the knowledge and advice you need to help you to make the best-informed decision for you.

There are several different company structures to choose from: Sole Trader, Partnership, Limited Liability Partnership, Community Interest Company and Limited Company, to name but a few. Each structure has its own benefits and disadvantages, so it’s all about finding the right structure to suit your needs.

Sole Traders and Partnerships
A sole trader is someone who works for themselves and is the exclusive owner of a business, entitled to keep all profits after tax. Sole traders do not have a separate legal existence from their owner – in effect, you are your business. Partnerships are similar to Sole Traders, only they have more than one owner. Some advantages of setting up in this way are:
• Exemption from filing Companies House forms
There are no registration fees as there is no need to register with Companies House – all a Sole Trader needs to do is register as self-employed with HMRC.
• Profit Retention
Sole Traders keep all the profits they make, and personally own all of the business’ assets, rather than having to leave them in the business. Also, owners are able to withdraw cash from the business without tax effect (as if it is a personal bank account).
• Simplified accounting
While a Sole Trader must complete an annual Self-Assessment, there is no requirement for formal annual accounts, or a Corporation Tax Return.
Fewer accounting obligations means lower accountancy costs

There are some important disadvantages that also need to be considered such as:
• High personal financial risk:
An important disadvantage to be aware of when choosing to set-up as a Sole Trader is that the owner is personally liable for business debt. In the worst case, this may mean they risk their home, personal savings and any other business or personal assets.
• Can be harder to expand
Sole traders often struggle with expanding their business because there is less information available in the public domain about their business.
• More difficult to sell
Because it is difficult to separate the business from its owner, Sole Traders can be more difficult to sell.

 

Limited Companies
A Limited Company is a separate legal entity to the business owner and has its own responsibilities, with its finances separate to its owner’s personal finances. Limited Companies also come with a whole host of benefits including:
• Lower personal financial risk:
Because the business is a separate legal entity, the owners are protected from the threat of personal financial losses if things go wrong
• Higher take-home pay
Tax efficiencies surrounding Limited Companies may mean you can take home more pay than other structures
• Tax planning
Various tax planning opportunities exist which can be tailored to your circumstances where applicable, to deliver significant tax savings

Setting up a Limited Company also has some disadvantages:
• Administration
There are greater statutory obligations, such as submission of Annual Accounts, Corporation Tax Returns and VAT Returns. And the company must be registered with Companies House.
• Costs
Because of the range of statutory obligations, there are usually higher accountancy costs if you don’t get things right, higher financial penalties

 

Limited Liability Partnerships (LLPs)
In an LLP, business profits are shared between partners, and each partner pays tax on their share of the profits. Members are protected and are not personally liable for any of the business’ debts. Advantages include:
• Less Liability
Liability is spread over the partners, and each limited partner is only liable up to the amount the initially invested in the business.

• Tax Benefits
While each individual partner must file taxes, the business itself doesn’t have to, which provides great tax breaks for the company.

• Great Flexibility
Each partner in the business can decide how much they want to contribute and how much of a partner they truly want to be in the business. There are no requirements for board or general meetings or decision-making by resolution.

Some disadvantages are:
• Member Restrictions
An LLP is required to have at least two members. If a member decides to leave the partnership the LLP may have to be dissolved.

• Disclosure to Companies House
Annual accounts must be submitted to Companies House for the public record.

 

Community Interest Companies (CICs)
A Community Interest Company (CIC) is a limited company designed to benefit a community rather than private shareholders. Business assets are “locked” and can only be used for the community purpose. Some advantages of CICs are:
• Less Regulation
Unlike charities, CICs do not have to have their accounts audited (unless the company’s annual turnover exceeds £5.6m). This makes it perfect for companies that want to identify themselves as ‘not for profit’ to attract funding, but want to start small.

• Limited Liability
Like Limited Companies and LLPs, CICs benefit from limited liability, so directors are protected from personal financial losses.

Disadvantages of a CIC structure are:
• No Tax Benefits
Unlike with charities, there are no tax concessions for CICs.

• Restrictive
The assets in the CIC can only be used for the community’s benefit, which can be restrictive.

 

We hope this article has shed some light on some of the different structure options available for your business. If you would like more information, and a recommendation of the right business structure for you personally, contact us for a free, no obligation meeting. We can talk you through the intricate details of the different structures, and help you to compare the tax efficiencies and legal benefits of each, so that we can help you to find the perfect solution for you.

An Accountant with Integrity, and one of an exclusive group invited to Downing Street to discuss issues of the small business community

 

Birmingham businessman Shohaib Shafiq was one of an exclusive group of businessmen and women invited to Downing Street to celebrate Small Business Saturday.

 

There, Mr Shafiq, of Hall Green based Integrity Accountancy Services, was able to discuss issues relevant to the small business sector with representatives of the Government, including the Economic Secretary to the Treasury, Stephen Barclay MP, the Minister of State at the Department for International Trade Baroness Fairhead, Minister of State at the Department for Business, Energy and Industrial Strategy, Claire Perry MP, and Caroline Nokes MP, the Minister for Government Resilience and Efficiency.

 

Mr Shafiq was one of just a hundred business representatives invited to the Downing Street meeting, from over six-thousand who originally applied. And he described the experience as ‘extremely useful and thoroughly worthwhile’.

 

“It was an honour to be among the select few chosen, and a fantastic opportunity to get to mingle, network, and share my thoughts about issues currently facing the small business community, and indeed, the small-to-medium businesses, and the bigger ones, too.

 

 

“As an accountant whose clients include businesses of all sizes, I am always listening to the what’s good, and what’s not good, or helpful to their wellbeing, and this was a wonderful opportunity to share that with a Government Minister.???

 

Mr Shafiq said three main issues were raised: the impact of Brexit on the UK economy, business rates, and apprenticeships.

“Apprenticeships is an issue I have a vested interest in, because I have taken one on,??? he said. “Recent changes to a Government scheme mean that businesses, going forward, will be expected to contribute 10 per cent towards training costs, which has already had a negative impact – it means less companies will be inclined to sign up for the scheme, than did so initially.

 

“The Government representatives tried to put a positive spin on this, but it does worry me because it was not what I was sold originally, nor what I signed up to, and it would make me think twice about taking an apprentice on in the future, as I know it would many of my clients, who have discussed this with me.

 

“I got the impression they won’t compromise on that one, but overall I came away thinking that the Government is very supportive of small business, they’re aware of the issues that face them, and listen to the feedback, though we’ll have to wait for changes to filter through, but I’ve no doubt changes will be made for the better.???

 

Small Business Saturday UK is a grassroots, non-commercial campaign, which highlights small business success. and encourages consumers to ‘shop local’ and support small businesses in their communities.

 

For further information, contact Shohaib Shafiq, Integrity Accountancy Services, on 0121 777 5361, or on 07970 832090.

 

For more information about Integrity Accountancy Services, visit the website: https://integrityaccountancy.com/