Minerva Accountants Bristol and Somerset
Fully digital Xero accountants taking the hassle out of your business
Company cars used to be an expensive perk but electric vehicles are now worth considering. For the 2023/24 tax year the P11D benefit in kind is just 2% of the taxable list price.
This means that you will pay tax on just 2% of the list price of the car.
If you have a penchant for expensive, less environmentally friendly, vehicles you might benefit from operating as a sole trader or a partnership.
I’m starting an initiative for business owners to do their bookkeeping in FIVE MINUTES PER DAY rather than leaving it all to the end of the year.
If you’re on Xero or similar software this would be:
All this can be done through apps on your phone. When bookkeeping is this simple it’s not just kids who will be glued to their phones.
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)
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.
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.
As from 1 April corporation tax rates increased for companies with taxable profits above £50,000. The new rate is 25% for companies with taxable profits above £250,000 with a hybrid rate of 26.5% for profits between the two limits.
If your profits are close to the £50,000 you may wish to consider:
1. Are all your costs allowable for tax?
2. Paying into a company pension for yourself or your employees
3. Paying interest on any directors’ loan accounts that are in credit.