Our 5th Birthday

We celebrated our 5th Birthday last night. We invited all our clients for an informal evening of wine and canapés in the wonderful setting of Cameron Contemporary Art.

We kicked off with a few glasses of wine, before Danni said ‘a few words':

“A big thank you to all of you here and those who couldn’t make. We’ve only lost one client in 5 years, which is amazing. So thank you for your loyalty, referrals to new business and for being so enjoyable to work with”.

She then went onto embarrass Jenny, whose been with the firm for nearly 3 years, by signing her praises.

And thanking Fiona and Julie our wonderful payroll specialists, who couldn’t make it due to a payroll emergency – such is the world of payroll.

And introducing Jane, who has recently joined the team as an experienced bookkeeper.

After the ‘few words’ food was bought out in the form of tarts, sausage rolls and breads from Sugardough a local bakery. Delicious.

Then if there was room left handmade chocolates from a Hove institution: Audreys.

One attendee was heard saying, pies, chocolate, wine and art, a perfect evening.

Here’s the the next 5 years!

photo 4photo 1-1

 

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Green website hosting – an update

I wrote a post, what seems like a long time ago about choosing my website hosting provider.

You can read the original post Environmental Impact of Website Hosting here.

I’ve never had any problems with my provider EcoWebHosting and think the package I have is very competitive for what I get.

I’ve heard lots of people talking about green web hosting and for me it seems a no brainer – especially for smaller sites where the cost differential isn’t high compared to non green providers.

I wanted to share with you a recent article I was sent which can help you to migrate to a green host and gives you some more options of host providers to choose from:

Supporting Green Web Hosting.

You can also do a quick search and you’ll be able to find info on companies such as EcoHosting or AcornHost.

I’m excited to see there are a lot more options since I first explored green web hosting back in early 2010.  But remember as always to check their credentials before signing up.

 

 

 

 

Posted in Environment, Ethical, Green, sustainable, Uncategorized

Budget 2014 Update

This was a political budget aimed at appeasing sectors of the voting public whose votes are needed. Most of the changes won’t take effect until just before the general election – so they are then fresh in the memories of the voting public! Clever.

Much was predicted with a few surprises.

Some key highlights are set out below which may impact the types of clients we work with:

Impacting everyday people;

A much cheered for penny off the pint – again. A cancellation of the fuel duty escalator. A reduction in bingo duty. All small giveaways aimed at raising popularity.

Then some surprises.

The creation of a new ISA with a higher limit of £15,000 a year and no distinction between cash or stocks and shares ISAs. Some much needed simplicity. Expect to see new products on the market in July. Also the new NS&I bond – again aimed at encouraging savings, and winning the votes of savers who’ve seen their income drop due to low interest rates.

Then as George Osborne put it; ‘the biggest reforms to pensions since the 1920s’. Applies initially to defined contribution schemes – which are the most common pensions nowadays.

Removing the requirement to buy an annuity, increasing flexibility on pension drawdowns and reducing the tax rate on unauthorised payments from pensions from 55% to in most cases 20%.  These are welcome changes with some changes applying from tomorrow, 27 March, and others from April 2015.

And the other predicted change, an increase in the personal allowance for 15-16 to £10,500. The rate for 14-15 will be £10,000.

And for those paying higher rate tax, the threshold will increase slightly for 14-15 and 15-16, a move to appease middle earners.

And if you’re selling a property over £500,000 it will now be subject to the higher rate of SDLT of 15% (the threshold has dropped from £2m).

Lastly, the tax free child care scheme is expanded to up to 12 year olds and increased annual limit of up to £2000 per year. The Scheme will start in Autumn 2015.

 

For businesses:

 

The Annual Investment Allowance – which allows businesses to get tax relief for investment in assets such as plant and machinery, computers etc in the year they invest (rather than spread over a number of years) has been increased to £500,000 per year from its current £250,000.  This increase in the limit will assist medium and larger companies, with the ability to invest over £250,000 a year in assets.

The cash credit for qualifying R&D for loss making businesses will increase from 11% to 14.5% of qualifying expenditure for SMEs. This will be of benefit to businesses seeking to achieve scientific or technological advances.

Reduction in ‘green taxes’ to reduce manufacturing energy bills. This could be said to incentivise manufacturers to use more energy and increase carbon emissions. Lets hope manufacturers are also looking at reducing energy use too. Recent Ecomomia article stated that as energy costs are still only 1-3% of turnover, most CFOs aren’t focusing on reducing energy use even though prices are increasing and will continue to do so.

Great news that SEIS investment scheme will continue – the scheme allows tax relief of 50% of amounts invested in qualifying companies – usually small start up businesses and other capital gains reliefs. If you’re a small business looking for equity investment SEIS and its big brother EIS are definitely worth considering.

But EIS and SEIS will no longer be available for companies who also receive Renewable Heat Incentive RHI or Renewable Obligation Certificates ROCs. A warning to community energy groups who may have wanted to expand their activities away from FITs – if they do so their investors may not get such attractive tax breaks. The Guardians recent article has more.

A small bit of simplification for the self employed. Class 2 NICs which currently are paid monthly or quarterly, will now be collected through the self assessment system with Class 4 NICs and Income Tax. A small simplification which will apply in 2016.

And one worrying thought for the future – HMRC could be given powers to take tax owed from bank accounts without the tax payer agreeing! A consultation will be launched before this power is put in place. I’m sure there will be lots of safe guards – but is it necessary – HMRC can already take a tax payer to court to pursue payment of unpaid taxes. What if HMRC took money out of your bank which you’d earmarked to pay your staff or a vital supplier or to pay your electricity bill before you were cut off.  Or what if HMRC made a mistake…

 

Overall it was a political budget with some good incentives for savers, beer drinkers, drivers and those about to retire. But for the average small business, the impact is negligible. It’s the Employment Allowance (from 6th April 2014), which was announced in the previous Budget, that is still the most significant benefit for small businesses who employ staff.

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From April 2014 Employers can save up to £2,000 on their Employers NIC bill

From 6 April 2014, if you’re an employer who pays Employer NIC then you will save money. Here’s how it works:

Poppy, is employed by Brighton Planet Savers Ltd (BPS).

At the end of each month BPS’s accountant runs the payroll and tells them how much to pay Poppy and how much to pay HMRC.

The amount to pay Poppy is her Net Pay. Net pay is worked out as her Gross Pay, less, Income Tax and Employee NIC deductions.

The amount to pay HMRC consists of:

  • Deductions made to Poppy’s gross pay of Income Tax and Employee’s NIC, and;
  • BPS’s Employer NIC (aka Employer Class 1 NIC).

The Employment Allowance entitles an employer to save up to £2,000 of Employers NIC from 6 April 2014 to 5 April 2015.

Its important to remember its only the Employers NIC which is saved not the Employees NIC.

If you pay an employee over £7,956 gross per year then you’ll be paying Employers NIC – so you can save.

HMRC has published new guidance on how the scheme will work.

The £2,000 allowance is set against the Employers NIC liability each month until the £2,000 is used up.  HMRC are notified of this during the normal payroll reporting to HMRC (often monthly for most employers).

All businesses can claim the allowance, with the exception of a few excluded organisations, such as NHS trusts, public authorities etc. There is one more exception which may impact some employers. The allowance is not available for Employers of individuals for personal, household or domestic work, such as a nanny, au pair, chauffeur or gardener or care support worker.  Those on an IR35 scheme are also unlikely to gain from the allowance.

So for many businesses with employees they will save money.  

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Autumn Statement 2013

“The best way to help small business is by lowering the burden of tax” said George Osborne in the Autumn Statement.

 

I whole heartily agree. Here are the benefits businesses can expect:

George Osborne confirmed the Employment Allowance will come into effect from April, 2014. This will give employers £2,000 off their employers National Insurance bill for that year.

As a further break for employers, he offered from April, 2015 that employers will pay no employers national insurance for employees under the age of 21 who earn less than £42,285. Aiming to reduce youth unemployment by decreasing the cost to employers of employing under 21s.

Business rates have been capped and there has been an extension to April 2014 of business rate relief. In addition for retail premises with a rateable value less than £50,000 there is a £1,000 reduction in their business rates. Plus there’s a proposed new occupancy relief which will halve rates for new occupants of retail premises. Overall these business rate measures will help small retailers and hopefully the many small independent retailers that make Brighton the place it is.

 

The big changes in personal tax is the increase in the personal allowance to £10,000 for 2014-15. The additional £560 that can be earned by basic rate tax payers will save them £112 of income tax. Looks like the Lib Dems lost out on their call to increase the personal allowance to £10,500.

It’s important to note that going forward the rise in personal allowance will be by CPI (inflation) but the threshold at which you start to pay higher rate tax is only going to increase by 1%. So as the years roll by more people will be higher rate taxpayers. But they’ll be another election by then so that could change.

The other big change was to allow married couples and civil partnerships to transfer a £1,000 of their personal allowance to their partner. This could save couples £200 in income tax. But there maybe an impact on benefit entitlements which will need exploring.

There was one more change which could impact home owners who move out of their home before it’s sold. Previously there was a period of 36 months where you could have moved out of your home before it was sold but it was still deemed to be your principal private residence and hence the sale exempt from capital gains tax. This was to prevent homeowners whose house took a while to sell after they moved out being penalised. From April 2014 the period will reduce to 18 months which could catch people unaware with a nice capital gains tax bill on sale of their property.

 

Lastly do you remember the government telling us they’d be the greenest government ever? I think they’re hoping you’ll forget what they said as they announced further tax breaks for shale gas and a roll back of green levies.

A good day for small business, a sad day for the environment.

Posted in accountant, Green, tax

Cash Basis for Small Business

We’ve mentioned before in our Newsletters about the proposed Cash Accounting Scheme, now called the Simpler Income Tax: Cash Basis scheme. It became effective from 6 April 2013.

Previously tax was calculated on adjusted accounting profits. I.e. you calculate your profits based on accounting rules and then adjust them for tax rules. The Cash Basis scheme removes the need to calculate accounting profits and instead use cash data as a basis for calculating tax due.

The Office for Tax Simplification suggested such a scheme for businesses with turnover up to £30,000, i.e. small micro businesses, who probably do most of the bookkeeping and tax returns themselves. The Government decided to expand the reach of the scheme. Therefore, the Cash Basis scheme can be used by self-employed businesses (including partnerships) if their income is £79,000 or less.

There have been improvements from the original scheme proposed after responses to the consultation from bodies such as the FSB and the ICAEW.

One of the criticisms of the scheme was that businesses using the scheme would have to use flat rate expense claims for some items of expenditure rather than using what they’d actually paid.   This could have penalised many businesses. The updated scheme does not require use of a flat rate mileage claim for example, which may have penalised those businesses who use their cars a lot for their business.

The updated scheme also removes the problem of switching between cash and accrual schemes on an annual basis, which would prove complicated. Once you’re on the scheme you can stay on it until your income reaches £158,000.

The scheme is optional, and I am sure many small businesses will want to explore if it’s a benefit to them. How will they know if it’s of benefit? By calculating their profits the old way and also the new way – I wonder how much time that will take!

To find out more HMRC guidance can be found here.

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Work Place Pensions – what does a small business employer need to do?

We’ve all started to see the adverts on the TV about work place pensions and auto enrolment.

As an employer you maybe starting to get questions from your staff.

This blog helps to give a small business employer some basic guidance and links to find out more.

If you have staff who earn over £9,440 a year and who are aged 22 to 74 then you must automatically enroll those staff in a pension scheme. When you must do so depends on your staging date.

HMRC have determined staging dates for every employer based on information they held at 1 April 2012. You can find out your staging date here: http://www.thepensionsregulator.gov.uk/employers/tools/staging-date.aspx

For the typical small employers I work with this is in the region of late 2016 to early 2017.

Once you know your staging date, you can start to plan.

 

The most common question a client will ask, is:

“How much will it cost me?”

The minimum amount that must be paid into the pension scheme is 8% of the staff’s gross earnings (up to £41,450 of earnings).

Of the 8%, the employer must put in a minimum of 3%. In that instance the staff member puts in 5%.

If the employer chooses to put in 5% for example, then the staff member must put in 3%.

These are the minimum contribution levels, but the employer and staff member can pay more in if they chose to. These minimum levels also only apply from 1 October 2018, and are being phased in, so in your first year the contributions maybe less.

The employer will also need to pay the pension scheme’s annual management charge and administration charges for setting up and running the scheme. These vary depending on the scheme. Plus, if you use a payroll provider, accountant and/or IFA to set up the scheme then factor in their costs too.

 

Another key question:

“Who do I enroll?”

An employer must enroll everyone who is aged between 22 and state pension age, who works in the UK, for whom you deduct IT and NIC from their wages and who is likely to earn over £9,440 in a year.

Although the £9,440 limit is expected to increase.

For those staff you enroll them in a pension scheme without them needing to do anything. They then have the option to ‘opt out’ within a month, whereby any contributions paid for that month will be refunded.

And a staff member can leave the scheme at any time in the future.

For staff who are aged 16-21 and earning over £9,440 a year, the employer must provide an option to ‘opt in’ to the pension.

For staff earning less than £9,440 a year the employer must provide information to them about opting in. And for staff earning less than £5,668 the employer must provide information to them about their right to join a pension scheme (not the same as opting in).

 

So what should an employer do next:

  1. Check when your staging date is.
  2. Decide who is going to manage the process – your accountant, payroll provider or in-house.
  3. Assess your workforce.
  4. Find a pension provider.
  5. Set up the paperwork and communicate with staff.

 

There’s lots of guidance for employers at The Pensions Regulator and for employees at Workplace Pensions.

 

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Living Wage Campaign

We’ve recently signed up to the living wage campaign and wanted to tell you why.

“Launched in 2012, the Brighton & Hove Living Wage Campaign aims to encourage local businesses to voluntarily pay all employees at least £7.45 per hour.

Set independently and updated annually the Living Wage is calculated according to the basic cost of living in the UK and is the amount that allows a person to live, rather than just survive”.

We believe in paying a fair price for work done. Be it to suppliers or staff.

We also encourage all employees and sub-contractors to work flexible hours and operate a virtual office, with people working from home, coffee shops or on the beach!

I previously worked for a large corporate where flexible working was supposed to be encouraged. But I saw many cases, where ‘being seen’ mattered when it came to promotions and getting the good roles.  Whilst working in Tokyo, I saw first hand an employee being discriminated against because she worked part-time. I felt this was not just unfair, but did nothing for retaining loyal, happy, motivated staff.

Paying a fair wage for work done is a key part to retaining loyal motivated staff. 

We already paid our subcontractors and employees greater than the current living wage.  So at first we thought that we weren’t the type of business the campaign was focusing on. But I was wrong. The campaign needs every business to sign up. As local businesses we want to send out the message that we want to work with skilled motivated people. And in return we’ll pay a fair wage which rewards for work done and enables staff to live – not just survive.

Please sign up your business here:

http://livingwagebrighton.co.uk 

 

 

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Seeking Bookkeeper to join our team

Part time sub-contract bookkeeper required to work across a variety of clients.

Requirements:

  1. Holds recognised qualifications or relevant recent experience of at least 2 years in performing bookkeeping roles across a range of types of clients.
  2. Experience at using a variety of accounting software and excel, evidence they are able to learn and apply bookkeeping principles across different software.
  3. Some experience at using Xero is preferable.
  4. Experienced at completing VAT returns.
  5. Experienced at providing services direct to clients; understanding the importance of customer service.
  6. Experience of working with small businesses including owner managed businesses.
  7. Has the following attributes:
    1. Attention to detail
    2. Strong verbal and written English to a professional business level
    3. Strong time management and organisational skills – is able to work across a number of different projects/clients and managing work to meet deadlines.
    4. Finds it easy to grasp new concepts and is used to generating solutions to problems.
    5. Is a self starter who is highly motivated to do a good job and develop themselves.
    6. Strong interpersonal skills including:
      1. Ability to present ideas coherently
      2. Active listening skills
      3. Is able to hold up a conversation and make small talk with a variety of people
      4. Understands the importance of the environment and communities in which we work and live. Already applies ‘green’ concepts in their personal and work lives and is keen to learn more about sustainable working practices.
      5. Able to provide 2 satisfactory references from previous clients/employers.

Craker Business Solutions will provide training to the right candidate on areas where further experience is required.

The position is ideal for a freelance bookkeeper, who is looking to increase their portfolio of clients.

Craker Business Solutions operates flexible and virtual working practices to ensure all staff are able to work around non-work commitments.

Please note, there is a lively dog in our home office, so applicants will need to be ok with dogs.

Please send CVs to Danni Craker at danni.craker@gmail.com before 5pm on 6th May 2013.

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Budget 2013, what it means for small business

“This is a Budget for those who aspire to own their own home; who aspire to get their first job; or start their own business”.

Promising words, but what will be the impact on small business?

The biggest stimulant for growth for business is the reduction of the headline rate of Corporation Tax (CT) to 20% for all businesses.  Unfortunately this is only a direct benefit to those with profits over £300,000.   The only way this will benefit small business is if those Companies that receive the benefit invest the extra cash in small business.

The government will invest an extra £3bn a year from 2015-16 in infrastructure. One beneficiary will be broadband internet, which will benefit many small businesses.

There’s a capital gains tax relief if a business is sold to its employees, which may prove very attractive to owner/managed businesses that are looking to sell.

The government is going to increase the value of procurement budgets spent through the Small Business Research Initiative. This initiative, engages companies in competitions for ideas that result in government development contracts.

£30m is going to be made available over two years in the form of growth vouchers to enable small businesses to obtain external advice to help them expand.

There will now be £42m available in 2013-14 and £60m in 2014-15 to 18-30 year old entrepreneurs in start up loans.

The Business Bank whose aim it is to improve access to capital for small business is being launched shortly, with new details being published in the next few days.

The Help to Buy Scheme for all buyers of newly built homes, which will see home owners put down a 5% deposit and the government loan you 20% for the rest of the deposit, should provide a boost to the Construction industry.

The schemes above may help the average small business, but the only measure to put cash back in small businesses pockets and reduce the burden of taking on employees, is the Employment Allowance. From April 2014, every business will get up to £2,000 off their Employers NIC bill.

Overall – does this budget really help small businesses? Is it fair that big business pays the same rate of Corporation Tax as small business? Wouldn’t we have loved a reduction in the small rate of CT.
Although the Chancellor has called them on more than one occasion the lifeblood of the economy, other than the £2000 Employment Allowance, there is no direct help for small businesses.

A Green Budget?

Mr Osborne stated: “Creating a low carbon economy should be done in a way that creates jobs rather than costing them.”

I completely agree.

But then he went on to say that the granting of planning permis-sion for nuclear was a major step forward. And to make matters worse he introduced a ‘generous new tax regime’ for shale gas. Shale gas and fracking is highly controversial, with large organi-sations campaigning against the use of fracking in the UK, read more about The Co-operative’s campaign.

There is further decommissioning relief for the North Sea to en-courage extraction of every last drop.

On the plus side, there will be further support for manufacture of ultra-low emission vehicles, and support for 2 major carbon capture and storage projects.

I feel saddened that clean energy wasn’t even mentioned, and am very concerned of the potential for fracking to be a reality right here in Sussex. The Argus back in December, highlighted there are 15 licenses to drill in Sussex already.

This is not a green Budget.

“We’re taking a penny off a pint”

The biggest cheer in the House of Commons during the Budget was when George Osborne scrapped the 3p rise in beer duty and went one step further and cut beer duty by 1p.

It’s concerning when cut in beer duty is the budget highlight.

I tweeted ‘sounds like handbags at dawn’ and got back ‘I thought I had tuned into the Archers, sounds like a farmyard!’.

Behind the cheering and jeering, there were some useful policies which will hopefully put more money in our pockets.

The personal allowance will go up to £10,000 from 6 April 2014, a year earlier than expected. For those self-employed businesses, this will mean paying less Income Tax. Unfortunately, the National Insurance thresholds aren’t increasing at the same pace.

If you’re a car driver you’ll be pleased the expected fuel duty increases have been scrapped.

If you pay for childcare, then the Childcare vouchers worth up to £1,200 from autumn 2015 per child will be popular. Parents will operate an online voucher account, where for each 80p they put in the government will add 20p. Vouchers are used to pay for Ofsted registered childcare. Available to families who both earn up to £150k. More detail will come on the exact operation of the scheme.

But if all this doesn’t relieve the gloom then head down to the pub and save yourself that penny.

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