New Beginnings

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Spring is here, the clocks have gone forward, lambing is under way, and the new tax year is upon us!

Here are some of the changes to expect upon the start of the new tax year 2014/15:

1) Basic personal allowance tax band increase to £10,000.

2) The basic rate tax band has reduced to £31,865 (therefore any income earned   above this limit will be subject to 40% income tax).

3) The limit for the small loans exemption has doubled to £10,000 from April 2014.

4) The Capital gains exemption limit for individuals, estates, etc has increased to £11,000 and the exemption limit for trusts has increased to £5,500.

5) ISA Subscription limits will increase to £11,880 for stocks and shares ISA’s and £5,940 for cash ISA’s (Junior ISA and Child Trust fund maximum subscription is £3,840). However, these limits relate only to the period 6th April to 30th June 2014.

From the 1st July 2014, the new ISA subscription will be simplified with the creation of the ‘NEW ISA’ and the overall subscription for the year will be £15,000 for stocks, shares and cash – full transferability in both directions! The Junior ISA and child trust fund will increase to £4,000.

6) The annual investment allowance (AIA) has doubled to £500,000 for qualifying investment in plant and machinery made on or after 1st April 2014 (up until 31 December 2015!).

7) The main rate of corporation tax has reduced to 21% from April 2014.

8) The VAT registration threshold will rise to £81,000 and the VAT deregistration threshold will increase to £79,000, effective from 1st April 2014.

9) National Insurance contributions changes have been summarised in the table below:

14/15 Employee Employer
NICs  rate 12% 13.8%
No NICs on the first £153 pw £153 pw
NICs charged up to £805 pw No Limit
2% NICs on earnings over £805 pw N/A

With Additional Changes:

  • Self-Employed Class 2 : Flat rate £2.75 per week (£143 pa)
  • Self-Employed Small earnings exception £5,885 pa
  • Self Employed Class 4: £7,956-£41,865 pa – 9%; Over £41,865 pa – 2%
  • Class 3 Voluntary Flat rate £13.90 per week (£722.80 pa)

If you would like further details of the expected changes briefly outlined above, please contact Green and co on 01633 871122 or visit our website.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

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HMRC Business Record Checks

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HMRC have recently announced they are exploring new ways of conducting their business record checks to target those who are likely to have inadequate business records.

According to HMRC, it is important for businesses to keep records in order to complete their tax returns correctly, and to ensure they pay the correct amount of tax at the right time to avoid any interest or penalties.

Good record keeping could also:

  • help bids to obtain finance (eg. loans, mortgages)
  • give you the information you need to manage your business and plan for the future
  • help you budget for future plans and tax payments
  • reduce accountancy fees if you provide your accountants with well organised information
  • support your claims to some reliefs or capital allowances
  • help you keep track of amounts you owe to suppliers, or that customers owe you.

Three simple steps to bookkeeping:

1.    Set up a system – whether it be a manual book or computerised package. It helps to have all the information kept together.

2.    Keep records throughout the year – only keeping some of your records is as bad as keeping none at all. Keep your records updated regularly, rather that letting it pile up

3.    Keep your records for as long as required – certain records must be kept for a minimum period, for example 6 years for VAT or 5 years for Self Assessment.

Failure to keep proper records could result in penalties from HMRC if you are subject to a business record check, and could prove detrimental if you are subject to an investigation from them.

If you would like any help with your bookkeeping, Green & Co has a dedicated VAT and bookkeeping department, who specialise in Sage. If you would like any further information, please contact Green & Co.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

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Prize Draw Winner – March 2014

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The winner of the feedback prize draw for March 2014 is Forrestford Engineering Ltd. A bottle of champagne is on its way to them.

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Auto-Enrolment – Are You Ready For It?

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It has been hard to miss all the recent coverage about auto-enrolment for employers. The new law means that every employer must automatically enrol workers into a workplace pension scheme on their ‘staging date,’ if they:

  • are aged between 22 and State Pension age
  • earn more than £9,440 a year
  • work in the UK

To find out your staging date follow this link (you will need your PAYE reference number handy!). Generally speaking, for employers with less than 30 employees, or for new employers, your staging date will be between 1st November 2015 to 1st February 2018.

Although you might sigh with relief that your staging date is far off in the distance, it will still take a while to get prepared. By starting to plan now, employers can budget, mitigate the costs and cause as minimal disruption to the business as possible.

If you already have an existing pension scheme open, do not assume that the scheme will pass as a qualifying scheme. It must be reviewed to ensure that it meets certain criteria.

How much will I have to contribute?

You will have to pay a minimum employer contribution for everyone you automatically enrol and anyone who opts in. The minimum amount is to be phased in, starting at 1% and rising to 3% of the employee’s qualifying earnings.

Setting up a pension scheme

If you don’t have a pension scheme, or don’t want to use an existing scheme, you’ll need to find a provider that can offer an automatic enrolment scheme. You need to ensure the scheme meets certain legal requirements. You could speak to an independent financial adviser or employee benefit consultant about finding a provider.

There are a number of pension scheme providers including the National Employment Savings Trust (NEST) established by the Government. NEST has a public service obligation to accept all employers that apply to join it. The Association of British Insurers has a list of ABI members providing qualifying automatic enrolment schemes.

When you’ve chosen a provider, you’ll need to work with them to get your scheme up and running in plenty of time for your staging date.

Should you have any queries regarding auto-enrolment please contact Green & Co for further advice.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

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Budget 2014 and 2014/15 Tax Tables

If you are interested in the tax allowances for 2014/15, please refer to our Tax Tables: Green & Co 2014/15 Tax Tables

If would like to  read our summary of the 2014 Budget, then please follow this link: Green & Co Budget Summary 2014

The main issues include:

Savings: Reform of ISAs. The current distinction between stocks and shares ISAs and cash ISAs will be simplified with the creation of the New ISA (NISA). The annual contribution limit is also increasing to £15,000, making it possible for a couple to save up to £30,000.

Annual Investment Allowance (AIA): If you are investing in plant and machinery for your business, the amount you can claim capital allowances on has doubled from £250,000 to £500,000. This will run from April 2014 to 31 December 2015.

EISs & VCTs: No change in the rules for EIS and VCTs as you can still claim 30% income tax relief on these investments.

Inheritance Tax (IHT): The IHT threshold will remain at £325,000 until 5 April 2018.

For more tips, refer to the ‘think ahead’ boxes of our guide.

Please contact us if you need more information on these changes, or any other matter.

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Free SAGE Seminar: RTI & Auto Enrolment

 

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Seminar Agenda:

9:00 – 9:30am Registration, coffee and biscuits

9:30 – 9:45am Introduction and welcome

9:45 – 10:45am Presentation by James Sponder of Sage

10:45 – 11am Q&A session

11:00am Finish

Come along and discover how to get the most out of your Sage package. Reserve your place on this free seminar by phoning 01633 871122, or email katie.williams@greenandco.com

For further information relating to the workshop, contact Jane Wootton on 01633 833507, or email jane@greenandco.com

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The Power of Social Media

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When was the last time you watched TV or listened to the radio without hearing the words ‘Facebook’ or ‘Twitter’?

As technology takes over, it’s hard to ignore the internet and the use of social media sites such as Facebook, Twitter, LinkedIn, YouTube, Google + etc.  We hear about these sites on the news, at work, in the pub; we use them to communicate with friends and family…. so why not use them for your business?

Social networking could be advantageous to both your business and your consumers. It is a cheap tool for advertising and getting your business recognised globally. It allows users further insight into your organisation and enables you to promote your products or services.

Using popular network sites such as Facebook and Twitter allows you to share tips, blogs, see upcoming events, reminder deadlines, and so much more. Using LinkedIn can enhance your professional network and is a great place to collect recommendations of products/services. It helps members step out and interact in online discussion groups, and establish an online community. The website YouTube, whereas, can be used for training, careers advice, and is a powerful marketing platform.

Social media is a valuable instrument for developing your customer relations as it forces interaction. Customers are able to keep in touch with your business 24/7, and it is a great way to make your business appear more welcoming and forthcoming. Furthermore, by providing interesting and useful information, you can position yourself as a trusted source of information in your field.

It can also be encouraging and rewarding for both sides. You can inspire others and share the growth and achievement of your members. Gaining regular feedback will be invaluable in improving and developing your services.

Social media offers an opportunity to connect and interact with current and potential customers, promote your brand, and bring more attention to your site. You can also have fun in the process!

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

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