Minerva Accountants Bristol and Somerset
Fully digital Xero accountants taking the hassle out of your business
Client gifts are not usually tax deductible. Here are a few simple rules to ensure that you can claim them
Free samples of your products are usually acceptable
No VAT invoice = no VAT reclaim so it is important to request a VAT invoice (which shows the VAT number along with other necessary information) and not just the receipt from the card machine.
Don’t forget that you can claim some of the costs if your use your home for business.
You can claim £6 per week even if you just use the corner of the kitchen table to do your bookkeeping each week. If you use your home for more than this then contact us for a spreadsheet to see how much you can claim.
Cash is king and most small businesses fail due to lack of cashflow. Even if you have a relatively small business you can use accounting software like Xero to:
Get your tax return done early so that you have more time to save the tax due. The deadline for payment is still 31 January 2025. If your income has reduced this year then we may also be able to reduce your July payments on account.
Company cars are not really tax efficient and we often advise clients to buy the car privately and just charge the company for mileage. For one client with expensive taste in cars we even recommended staying as a sole trader rather than a limited company.
This is because cars are treated as benefits in kind and taxed as if you have additional salary. The value of this benefit is based on a percentage of list price (including accessories). The employee pays tax and national insurance and the employer also pays national insurance.
The percentage used for electric vehicles is much lower than for others although this is increasing each year.
As well as the vehicle and fuel for personal use is taxed at a flat rate for the year so work out how much you use to see if it is tax efficient.
Seven reasons to get your tax return done early. (It always amazes me why people leave this until the last 2-3 months)
If your turnover exceeds, or is expected to exceed, £85,000 in any twelve month period you will need to register for VAT from the following month.
Please note that this is a rolling 12 month period, NOT your financial year. It is a common mistake so, each month, you need to keep an eye on your sales in the previous 12 months.
We’ve had a few clients go over the VAT limit in the middle of their financial year and only find out when we do their year end accounts some time later. This means that they may end up having to pay the VAT themselves so it is worth keeping an eye on your invoicing.
Payments on account can add a large chunk onto the amount of tax that you have to pay. If your income is likely to be lower next year than this year then it may be worth reducing your payments on account and we sometimes do this for clients who are winding up their sole trader business or who are going through a hard time. But BEWARE! If you reduce your payments too low and the final tax bill comes out higher then you will have to pay interest on the shortfall. This is to discourage people from reducing their payments too far.
Till systems have changed since I had a little cash register as a child. These days they usually run on a tablet. They may include an integral card payment system or have a small palm sized device attached. The local Clover salesman did a good job in the area and we help clients to keep their VAT and stock records using the software. It integrates into Xero and other bookkeeping apps to save time and minimise errors by typing numbers from one system into another.