Minerva Accountants Bristol and Somerset
Fully digital Xero accountants taking the hassle out of your business
Do you know how many units (and the mix of units) that you need to sell in order to cover your costs and break even?
This is an important figure for every business.
Now you can work out how many units you need to sell to make a particular level of profit.
And finally, you can work out your marketing and sales plan to actually sell that number of units. (Okay, there’s a bit more to it than just working out the numbers but at least you know what you’re aiming for)
6 July is the deadline for employers (or their accountants) to submit P11D benefit in kind information to HMRC. Unfortunately we’ve spotted some benefits due on company vans that could have been avoided.
The van is exempt if it is only used for business journeys which are trips made as part of work or to a temporary workplace. As a surprisingly generous move ‘insignificant’ private journeys are exempt, for example making a slight detour to pick up a newspaper on the way to work.
What is NOT exempt is journeys between home and a permanent workplace such as a builder’s yard. Vans should be left in the yard overnight to avoid a benefit in kind.
Similarly company vans do not need to be declared if they are pool vans. In order to be classed as a pool van ALL of the following conditions must be met:
• available for use and used by more than 1 employee
• available to each employee because they need it to do their job
• not ordinarily used by 1 employee to the exclusion of others
• not normally kept at or near employees’ homes (this is the one that catches people out)
• used only for business journeys – limited private use is allowed, but only if it’s incidental to a business journey, for example driving home to allow an early start the next morning
Entertaining your employees is quite common at Christmas and other times of the year. It’s another tax free benefit for your team provided that certain conditions are met.
• It must be open to all employees
• It must be an annual event, such as a Christmas party or Summer barbecue
• It must cost less than £150 per person. If the cost is over £150 then the FULL AMOUNT becomes taxable and not just the part above £150.
• You can have more than one event per year to make up the £150 as long as the combined cost stays below this limit
This is such an odd date and so here is the story dating back to 1582.
Prior to this time the tax year started on Lady Day, 25 March. Rents etc were all payable on a quarterly basis and some still are (I had to learn them all as part of my chartered accountancy training and I’m still waiting for them to come up in a pub quiz one day).
In 1582 Pope Gregory XIII moved the rest of Europe from the Julian calendar to the Gregorian calendar. However the British decided to do their own thing and stuck with the old calendar which left them 10 days behind the rest of Europe.
By 1752 this difference has increased to 11 days due to a difference in how leap years were recognised. Britain decided to make the change just 170 after their European counterparts. Keeping a 365 day tax year moved the start of the tax year to 6 April so the tax year has ended on 5 April ever since
I’ve been busy this week judging accountancy awards.
I always love doing this as I like to learn what the best businesses are doing. But some entries are easier to judge than others.
Entrants are asked to submit facts and figures to support their entry. As most of the judges are accountants you can expect that we will focus on these. And yet too many entries are clearly written by a marketing person with eloquent prose. Judge what your judges will be looking for. (This is even easier when you know who the judges are.)
Awards entries are like CVs, imagine me saying “so what?” or “prove it” to every sentence on your CV. Facts, figures and evidence are import in any awards entry but even more so when your judges are accountants.
The company must pay tax on overdrawn loan accounts if not repaid within 9 months of the year end (and there are clauses that stop you repaying and immediately withdrawing!)
If the amount is over £10,000 then the individual director will have to pay a tax on the ‘benefit in kind’ of a beneficial loan
So please check your management accounts before taking money out of the company and ensure that you leave enough in to pay VAT, corporation tax, and any other bills.
As an athletics coach for endurance events, I’m used to planning training loads that include elements of fast work, long slogs, technique work and recovery.
In your business life this would equate to sprinting for deadlines, putting in sustained effort for maintenance, improving your skills and automation, and resting.
Business owners always seem to forget the resting bit but, if it’s good enough for top athletes, it’s good enough for you too.
Personality profiling is often criticised as it is not an exact science. However, as long as you understand the limitations, it can be very helpful.
We use DiSC profiling but there are other systems based around colours or you could use Myers-Briggs.
This helps us to understand our preferred communication style and also how our colleagues and clients like to communicate. For instance, my brief bullet points are probably great for somebody who likes to get straight to the point but there are other personality types that would prefer something longer with more descriptions and examples.
So here’s an example of how we use it in practice:
In my previous practice we had an art gallery as a client. The owner was a business person who liked direct communication (like me). However many of their artists joined us and preferred a gentler style. I had to adapt my communications and use a more verbose style to get my message across. It is up to us to speak to clients in plain English and also in a way that they can understand.
On the other hand we had another wonderful client who was even more direct than me which intimidated one of our junior staff. Fortunately I was able to explain that this was just the client’s usual style and not a criticism of the work and their professional relationship flourished from there.
If you have put money into your limited company that has not yet been repaid then you can pay yourself interest on this loan. This can be a tax efficient way to take money out of the company BUT you would need a CT61 form completed for HMRC each quarter.
If you’re interested then please contact us for further information.
If, on the other hand, you have borrowed money from your company then you may face a higher tax charge and even a personal tax charge. We have software to help you plan your dividends.
Paying your spouse a salary can be a good way to save tax if they are not using all of their personal allowance.
BUT you need a credible job description and they must be paid at least minimum wage. We’re happy to make suggestions of how they can assist you in your business.