The date on which the tax has to be paid (it is generally filed by a tax accountant from a professional tax preparation service is determined by the tax accounting period of the company in question. Corporation tax is due 9 months plus one day from the day the tax accounting period ends. In other words, company directors have three months from the date of trading to register with HMRC for corporation tax. Failure to do so results in legal actions.

Consequences of irregular cash flow due to loss

The annual tax payment is due in four instalments for enterprises with profits over £1.5 million and in one instalment for those with income under that amount. Naturally, companies need to have a steady cash flow in their accounts to be able to pay the corporation tax in time. Any hiccup in the cash flow is a red flag and has to be rectified immediately.

If a company faces a downturn in its trade and a dwindling cash flow, the last thing it will like to witness is a substantial corporation tax (CT) bill. Unfortunately, the point is that this might very well be the outcome, because of the manner in which the CT bills are timed. That’s why every professional tax consultant would suggest paying the CT in time.

The rules, however, give the enterprises the leverage to reduce the CT payable on current profits in case they have suffered losses in preceding year(s). However, losses that have been incurred in the current year can’t be set against the CT bill of the previous year, till the accounts for the loss-making period have been prepared and a corresponding claim for the tax relief has been made.

How do Improve the Cash flow? 

It might be helpful for businesses to know whether they can pay their expenses or whether they need to discover methods to bring in more money by considering the payables and receivables.

Therefore, by conducting a comprehensive cash flow analysis, they can determine

the times during which the cash flow will be negative. Also, they can identify strategies to accelerate the inflow of funds that will help pay CT bills on time.

Let us discuss ways to improve cash flow.

Offering discounts as rewards for early payments

If consumers pay their invoices before the specified deadline, a reward in the form of a discount or an incentive can be provided to them. It is a win-win situation for the business as well as the consumers, as they can save money on their purchase, and the business can have a steady cash flow.

Sending invoices at the earliest

A professional tax advisor in Barkham may also suggest businesses consider sending invoices at the earliest. A considerable number of consumers are solvent enough to pay the bill. However, they cannot do so till the invoices are sent. Delay in sending invoices to these clients will needlessly block a certain amount of cash flow. So sending these invoices at the earliest will remove that blockage considerably.

Making a chart of accounts

As an expert tax advisor in Riseley, I know that failure to prepare a chart of accounts may cost the cash flow dearly. A Chart of Accounts (COA) is a detailed list of financial accounts put up that gives businesses an insight of where the company is spending and making money effectively. Once that is prepared, it becomes easier to restructure the accounts to incorporate more efficiency and give the cash flow a shot in the arm.

Forecasting Cash Flow

Often, a tax advisor in Grazeley suggests forecasting cash flow. Enterprises should take some time to project the amount of money that will come into and go out of their coffers on a weekly and monthly basis before diving into their day-to-day duties.

This should be set for a three-month period, but to provide a better overview, businesses may wish to set it for six or twelve months in the long term. In any case, an accurate forecast of cash flow will make it easier for companies to manage and increase it.

Some other means of improving cash flow may include increasing prices, selling of redundant or old stocks, checking the accounts payable terms, opting for second hand purchases of assets, considering leasing our properties, highlighting late payment penalties, eliminating needless expenses, and running credit checks periodically.

A reputable accounting firm will help you in all these. Biz Accounting Solutions Ltd is one of the best names to turn to for that. Call us to book an appointment with our experts to let us know and discuss your needs. You can also write to us for more information.

The post Improving Cash Flow to Help Pay Corporation Tax Bill appeared first on BIZ Accounting Solutions.

Sub-postmasters cannot apply to a single compensation scheme since there is none. The compensation will entirely depend on the eligibility of the individual and the circumstances of his or her case.

There are a few schemes that have been rolled out for the victims affected by the scandal.

Special Exemption: The government has confirmed that postmasters need not pay income tax, capital gains tax, NI contributions, corporation tax or inheritance tax as part of the compensation payment. However, the exemption will apply to postmasters whose convictions are overturned or those who will receive the £75,000 fixed sum payment under the Horizon shortfall scheme.

New Legislation for the Exemption: Despite the exemption, there will be new legislation that will not change the existing compensation rules for employees or other workers. These can be outside the scope of tax and NI but might be taxable depending on the reason for the payment and how it’s paid. So, employers need to follow the current rules and guidance.

Overturned Convictions Scheme: People who have their convictions quashed can apply to the Overturned Convictions Scheme. In this scheme, they can choose to take a £600,000 settlement price. However, if they feel that they are entitled to more than the mentioned sum, they can enter into negotiations.

Interim Payment: Those who are eligible are entitled to the interim payment during the process of their final settlements. Now, the interim payments have been increased from £163,000 to £450,000.

According to sources, more than 4,000 people are eligible for one of the three main schemes. The government has informed that new potential victims are also coming forward.

Get More Updates or Contact Us for accounting Services

Biz Accounting Solutions Ltd will update you on more useful information from time to time. On the other hand, if you require our accounting or bookkeeping services, call us now. For queries, you can send us an email.

The post Post Office Compensation – What’s the Latest? appeared first on BIZ Accounting Solutions.

The complex procedures for these returns are what make businesses suffer from confusion and other complexities. However, before you get started with the process, you should be aware that output VAT is charged on the sale of your business’s goods and services, and input VAT is something that you can claim on your purchases and the expenses that you have made for your business.

To ensure that there are no complexities during your VAT returns, it is recommended that you hire VAT return experts. But before you get to that part, wouldn’t you like to discover how to do it yourself? If yes, continue reading to gather some knowledge about the same.

How Can You Properly File a VAT Return?

To file VAT returns, you need to be prepared with a VAT number and a VAT online account. At the same time, you will need to use MTD-compliant commercial accounting software like QuickBooks or Xero. If you think that you can make good use of any of this software and get the returns filed in the right way, you can proceed further. But if you are confident about it, you might need to hire a specialised team of accountants. In this case, it’s better for you to avoid doing it all by yourself since you are not experienced, don’t have the expertise, and are not familiar with the software.

Three Schemes of VAT You Should Be Aware of

Choosing the right VAT schemes for your business’s good cash flow is what you should do as a responsible businessperson. But to do so, you need to learn about the schemes in detail. So, read the following pointers now:

• • Standard VAT Accounting

This is the scheme where all your VAT is recorded based on when the payment or invoice for sale is issued. Through this scheme, you can file your VAT returns every quarter.

• • Flat Rate VAT

This scheme is meant to provide you with incentives in order to simplify taxes. This way, it allows your business to charge 20% VAT on sales while paying HMRC at a lower rate.

• • Cash Accounting

If your business has a turnover of more than 1.35 million euros in VAT-able revenue, you cannot use this scheme for your VAT returns. If you have purchased goods for your company but haven’t paid for them yet, you cannot claim VAT on them.

How Can an Accountant Help Successfully File VAT Returns?

There are higher chances of you making mistakes in filing VAT returns. So, if you do so, HMRC may send an investigation notice to you. If you want to avoid this, you should hire a specialised team of accountants for the job. They can help you reduce the rate of errors or mistakes when filing the returns. Simultaneously, they will make sure that your business is compliant with MTD and make use of efficient accounting software for the procedure.

In order to acquire the best team of accountants or VAT return professionals, you need to find the best VAT return service at all costs. This way, you can successfully submit your VAT returns and enjoy the biggest benefits down the line for your business.

VAT Returns Made Easier with Biz Accounting Solutions Ltd!

Our team of specialised accountants can undoubtedly be your ideal companion on your journey to successfully filing VAT returns. So, call us now at 0787 722 4964 to bring them on board without any further delay!

The post Do You Really Need an Accountant to Make Your Vat Returns a Success? appeared first on BIZ Accounting Solutions.

Naturally, the norms of tax and the basis of calculation of tax will be different from the regular properties. With the tax-related norms varying, the VAT on these mixes is also supposed to be different from the other ‘regular’ properties. It is the responsibility of the professional accountants in Reading or elsewhere in the UK to guide their clients on this subject. 

Payment of Tax on mixed properties

Supply of property, for instance, letting, is generally exempted from VAT. However, when you opt to tax the said property, that move will by default change the scenario. In other words, if you are the landlord, it is compulsory for you to charge VAT on the rent. More importantly, when seen from your perspective (i.e. the landlord’s perspective), it will allow you to reclaim the VAT that has been paid on the expenses that you have incurred in regards to the property. 

It is true that paying taxes and notifying HMRC about the same Is pretty simple and straightforward, but there are certain complications that may arise here and there. However, when you have professional accountants in Wokingham advising you, these problems should not bother you any longer. These professionals will help to go through the complications while filing the property tax and the subsequent complications wherein your property is being used for both non business as well as business purpose.  

Now there is a catch. The option of tax cannot be applicable to any part of your property that is used for dwelling or residential purpose. For instance, a living accommodation located just above the commercial section of property. In these cases, the property remains exempted, regardless of the treatment of VAT that is charged on the rent, if any.   

In these situations, the professional accountants in Reading will come in handy. These professionals would suggest that you notify the same to the tenant beforehand, and help them with the date the option is applicable from. Once that is done, your accountant would advise you to provide the tenants with the copy of the letter, which the HMRC will give you, acknowledging your option.

NO VAT Recovery

When you are not entitled to reclaim VAT that is paid on the expenses exclusively relating to the exempted portion of the property, for the expenses that relate to both the commercial and residential portions, i.e. maintenance and repairing of roof, and the likes, a certain quantity of the VAT can be reclaimed. This particular rule would permit you to work out the reclaimable VAT with the use of reasonable and fair methodology. Again, a professional tax advisor in Reading will help you in this. 

Thus you see, professional accountants and tax advisors of reputed firms like Biz Accounting Solutions Ltd will go all the way to help you out in these tricky situations. Call us at 07877 224964 or 01183 671854 during our business hours.

The post A Brief Account of VAT charged on a Mixed Property in the UK appeared first on BIZ Accounting Solutions.

• How the Private Residence Relief Works

To get private residence relief, you need to consider a few important factors.

Firstly, if you live in the house, it will be regarded as a ‘dwelling house’ and you are eligible for the relief. Also, if you have a garden or a garage, those will be counted. However, if you are living in the property for a few weeks only, you might not become eligible for the relief. But in these cases, the HMRC will assess whether you can apply for the PRR.

Apart from only ‘living’ in your property, you will need to cook, sleep and spend your time in leisure if you want it to be considered as a ‘dwelling house’ and get relief from CGT. On the other hand, if you use your property for business purposes, you will not be entitled to the relief. Also, if you have more than one property, you will need to notify the HMRC about the one that you consider to be your main residence. But if you are facing difficulties in the process, hiring a tax advisor in Reading & Wokingham in Berkshire County will be required to simplify it.

• PRR When You Are Married

If you are married, you and your spouse can only have one residential property if you want to become eligible for the PRR. However, if you and your spouse own individual properties and are still using them post-marriage, a joint nomination will be required to consider only one of these two properties to be eligible for the relief. But you and your partner can decide which of the properties should be considered for relief.

You will need to keep in mind that after the nomination, the other property will be liable for capital gains tax. To know more details on this topic, it’s best to consult a tax advisor in Hurst, in Berkshire County.

• Periods of Absence Considered When Calculating the Relief

If you are not residing in your property for a certain duration, you are still eligible for PRR.

When it comes to your absence in the property, it should not exceed three years. Also, you will not be eligible for the relief if you are employed outside of the UK. But if you are in the UK and need to move to a different country as required by your employer, it should not exceed four years.

However, if you are staying at your residence for the last 18 months, for instance, and want to sell it, you will be eligible for the PRR. Still, if you want to know more on the topic and stay in north Bedfordshire, you will need to hire a tax advisor in Riseley for detailed guidance.

• New rules when it comes to PRR

With effect from 6^th April, 2015 the PRR rules were amended and the new rules are applicable for both UK and non-UK residents.

Here, to get the tax relief, you have to be a tax resident and have to spend 90 nights on your property in the tax year. But there are other regulations too which a professional tax advisor can provide you with.

Qualified Accountants Ready to Assist You with PRR and CGT

If you are searching for chartered certified accountants in Reading and other areas of Berkshire County, Biz Accounting Solutions Ltd is here to meet your needs. So, call us if you want to book an appointment with our accountants.

The post How Private Residence Relief Can Exempt The Capital Gains Tax? appeared first on BIZ Accounting Solutions.

The Tax Exemptions on Company Car

Company tax does not apply on every company car. There are exceptions and when you hire us our accountants in Reading would guide you in this. As per HMRC rules, businesses enjoy exemption, if and when:

• They are one of the partners in  a partnership venture 
• They are a partner of any Limited Liability Partnership (LLP)
• They are the proprietor of their own business 
• The car has been adapted for mobility purpose 
• The car is NOT used for any personal purpose that has nothing to do with the business. 

In fact, when the company car is used exclusively for the purpose of business, the companies enjoy exemption from HMRC tax. In other words, if the car is left at the business premise overnight or during the weekends and is solely used for commuting for the purpose of meetings, business activities etc. tax is exempted. However, commuting for personal reasons is NOT exempted by the HMRC. 

Again, if the vehicle is a pool car, tax is exempted. Our tax advisor in Reading will explain that since such a pool car is shared by the employees for business purpose, and is retained at the business premise, tax is exempted.

The Clauses in regards to Vans

The HMRC tax exemption rules regarding vans are pretty much the same.. Tax is exempted if the van is used as a pool van and solely for business purposes. The use of the van for business purposes includes travelling to appointments and to temporary workplaces. However, the professional accounts in Wokingham have to notify their clients about a few more exemptions. In case of vans, tax is exempted in case of insignificant private journeys. In other words, minor detours for picking up a newspaper on the way to the business or a short stopover for a cup of coffee are exempted from the HMRC tax. 

How to minimise the tax on shared company cars? 

The HMRC tax rules for a company car, which is meant for more than a single employee for private use, are definitive. However, in case the business involves members of the same family, for example two siblings or husband and wife, things can get a bit tricky. Again, it is the responsibility of the professional accountants in Wokingham to guide their clients through these confusions. 

It is advisable that the car is made ‘available’ to both the partners in these cases, as it will reduce the tax to some extent and keep away from the attention of HMRC. 

Thus, when a company car is being ‘shared’ between two, the taxable amount will be divided in a reasonable and justified proportion between the two. 

Reducing the company car tax

As per the professional accountants in Woosehill, the easiest way of reducing company car tax is getting a low emission vehicle. The tax is calculated on the basis of the following: 

• The amount of CO2 emitted by the car 
• The P11d value
• The tax bracket

Thus, one has to get the P11 value as low as it can be and a low CO2  emission to reduce the tax. For those who are wondering what the P11 value is, it is: 

• The list price of the manufacturer including the factory option 
• VAT and delivery 
• Number plates and other options of expenses

Therefore you see, there are so many clauses in regards to HMRC company car tax and so many ways to reduce it. It is the responsibility of the professional accountants in Hurst to guide their clients all the way through. 

This is where we at Biz Accounting Solutions Ltd make the difference. Our expert accounts and tax advisors are there to guide you through. So dial 44 07877 224964 or 01183 671854 to fix an appointment. 

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VAT on Fuel

There are a number of businesses that tend to reclaim VAT on the fuel that they procure for business purposes. However, while doing so, they do not restrict the proportion to the fuel that is used exclusively for business purposes. As per the HMRC norms, it is imperative to show the detailed mileage records that will support such claims. While these minute mileage logs are pretty labourious and arduous to maintain, businesses have to pay a scale charge as an output tax, to keep an account of the fuel that was purchased for personal use. This is where the majority of mistakes are made, wherein the accountant makes mistakes while calculating the personal usage amount of the fuel. Here is where our accountants in Reading or elsewherewould make the difference with their skill and expertise.

VAT on Vehicles

The HMRC does not permit recovery of VAT on the purchase of a vehicle for the use of business unless it is shown and confirmed that the car is, and can be used exclusively for the business purpose. HMRC allows reclaiming of VAT only when the strict conditions in regards to its use are met. This is another area where the accountants make an error while calculating the VAT. Another very common error is a charge of 100% of VAT as input tax, in the case of vehicles that are used only for business purposes. The input tax recovery, in this case, should be limited to 50% – something that our tax advisor in Wokingham or other locations will always follow.

Claim of VAT on Non-vatable Items

At times, businesses will end up claiming VAT on non-vatable items like air and train fares, cabs, and taxi fares. This is a mistake, as passenger transport expenses are zero-rated as per HMRC rules. This is another mistake that our experts will save you from.

Error in Regards to VAT on Deposits

Often businesses would receive deposits from their customers while accepting the order of goods or services from them but would fail to charge for VAT on these payments till they receive the balancing payment. This is an error that our accounting professionals will never indulge in.

Missing our VAT Charge on nonstandard supplies

Businesses generally never commit any mistakes while charging VAT on their core supplies. However, when it comes to charging VAT on something out of the box, there is every chance of committing mistakes. This is where our Accountants in Barkham and in other cities would make a difference with all their experience and skill.

Reclaiming Input Tax Without any Supporting Invoice

For recovering the VAT that is incurred on expenses, businesses have to provide supporting VAT invoices as evidence for the expenditure. However, they would fail to do so and still claim the VAT, leading to refusal. This is another area, where our accounting experts will make a difference.

Charging VAT on Reverse Charge Receipts

With a large number of business activities getting international, notwithstanding the pandemic constraints, more and more businesses in the UK are now getting supplies from overseas.  Thus, invoices that are received from overseas businesses will not be included in UK VAT. But then, they are at times included by the accountants. So that’s a mistake and our accountants in Hurst and elsewhere will never commit and will adhere to the reverse charge procedure.

Charging VAT on Entertainment

HMRC would never allow charging VAT on entertainment. Many businesses would not appreciate that and will consider charging VAT on it, arguing and considering that to be a business expense. As an example, they would often show the instance of taking a client for lunch. However, the rule is that any practice of entertainment is excluded from input tax recovery, and accountants looking after VAT have to be strict on this. This is something our accountants will always have a strict vigil on.

Import VAT errors

Our accountants would never commit any mistake while importing VAT following the receipt of the official documentation from the HMRC as evidence of the import, called the C79 certificate. It is generally received almost 3 weeks following the month-end during which the goods reach the company in the UK.

Errors while dealing with aged creditors

A number of businesses have to deal with bad debt relief rules days in and days out for applying to claim VAT on the unpaid debt. However, most of these businesses do not understand that they have to repay the input tax to the HMC on the invoices which have been recovered from the suppliers, with their payments still remaining outstanding for over 6 months. This is what our tax advisors in Mortimer Common or elsewhere will keep a close eye on the same.

Final Words: Liabilities on VAT

Mistakes do take place in the accounting world and tax and VATs are no exception. Indeed, to avoid mistakes, HMRC has come up with dictums and has a dedicated regime that deals with mistakes and their consequences. VAT, by its very nature, is unique and any mistake in the calculation and claims will directly affect the customer at the end of the day and the business that has charged the VAT amount wrongly.  That is why, you need to be indeed very cautious in calculating the VAT and that is also the reason, why you need to put stakes on the very best.

This perhaps tells you why we at Biz Accounting Solutions Ltd are so famous for our experience, skills, and perfectionist approach. Call us at 44 7877224964 or 01183 671854 during our business hours.

The post What are the Top 10 VAT Inspection Errors that Seasoned Accountants Avoid? appeared first on BIZ Accounting Solutions.

NIC comes in 6 different varieties or classes. The type of NIC that fits in you will depend upon the situation you are in. In these cases, your accountant has a pivotal role to play in deciding upon the type of NIC that will apply to you and take steps to ensure you can benefit from it in your hour of need. That is the reason it is always advisable to be in touch with a reputed accounts service provider so it can help you out in these cases. Take, for instance, Biz Accounting Solutions Ltd. Our accountants in Reading or elsewhere will be able to service you in these emergencies, helping you to make the most out of the NIC scheme. 

Now, let us discuss Her Majesty’s Revenue and Customs (HMRC) warning over Class 2 NI. For individuals who have deferred their self-assessment tax bills, the latest Class 2 NI norms might pose a lot of problems. 

Persons with Deferred tax bills: 

For those who are self-employed or a partner in any business, paying Class 2 NI contributions is considered a part of the self-assessment bill. Now, in case the payment is deferred, that will affect the NI record and it will not be updated. Generally, this should not pose that much of a problem. However, this year things are different. Many have taken the advantage of the COVID 19 self-assessment tax deferral scheme of the HMRC and hence, this might lead to some discrepancies. 

The Class 2 NI contributions are generally considered as a part of the balancing payment of your self-assessment tax bill. Now the problem starts if and when you are not able to pay all three amounts by the deadline and if you have appealed to the HMRC to set another date for your payment – be it in person or through an online application. 

What happens if and when you miss your deadline? 

In that case, you might have to make a higher payment, to fill in the gap in your NI record. In that case, HMRC will send a mail to you, stating how much you will have to pay to fill in that gap. 

It is, therefore, our tax advisor in Reading will take up the responsibility to come up with able guidance and help you to pay the tax bills in time. 

Allocation of Payment: 

Taking into account the scheme HMRC follows in allocating the payments against the tax bills, your deferred payment on account will be cleared first of all. This is actually beneficial for you, as it will minimise your rate of interest. 

However, in that case, there is an underlying risk that your Class 2 National Insurance Contributions will not be entirely paid and as a result, you might miss out on some of the state benefits, which you would have otherwise qualified for. 

In these cases, our tax advisor in Wokingham working for you will contact HMRC at the earliest to see if some of the payments that have already been done, could be reallocated against any Class 2 NI to prevent your loss of the right to the benefits. 

The Time Frame it needs:  

Hence you should ensure that your payment reaches the HMRC by the deadline. The time needed will depend upon what methods you choose to pay. You can make same-day or next-day payments by…

• Telephonic or online banking, which makes the payment faster 
• By Clearing House Automated Payment System (CHAPS)
• Through your building or banking society
• By Bankers Automated Clearing Services (BACS) within 3 days 
• By Direct Debit (within 21 days)

Do not worry! When you have hired us, our tax advisor in Whistley Green or elsewhere will do all the needful on your behalf. 

A point to note: If your deadline falls on any weekend any national or bank holiday, ensure that your pay by the last preceding working day (provided you are not paying through Faster Payment). 

Thus you see, there are so many clauses and complexities related to payment of HMRC Class 2 NIC. Only a professional and qualified tax consultant will be able to help you with the payment and related issues. Hence, putting stakes on us at Biz Accounting Solutions Ltd will be immensely beneficial. For further details, call us at 44 7877224964 or 01183 671854 during our operation hours. 

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