This confirms my decision to abandon Taxfiler as a potential software supplier.
Leaving aside the fact that their accounts are overdue at Companies House, I emailed them with a query saying I was looking at using their software as I'm setting up on my own. Their reply was to ask what email I use to log on the system with.
Can see your point here.... (and there often is no logic or link between the employment and self employment approaches...)
Given that they are outer wear, and are specialist materials etc, I'd suggest claiming them, but using the white space to say exactly what you have done and the basis on which you have done it.
You might like to suggest that the client gets it branded, then you might also claim it as uniform..... (easier said than done I know).
As you know, running an office from home does incur expense and as such it is perfectly legitimate to charge for this, although that can be done in a number of ways. Naturally, if the client receives money from the business in this way it is declarable as income, but then gets offset by the expenses incurred.
So:
1. Easy way. HMRC allow directors £3 per week for use of home as office where that is a necessary part of their role, and accept that this reflects the expenses incurred. Deduction for company in year =£156. Additional 'income' to company director £156, against which is offset expenses of providing the office of £156, i.e. net effect is nil for income tax purposes but achieves a corporation tax deduction of £156, saving (at the small companies rate) £32.76 tax.
2. Harder way. Base it on 'actual'. So the director adds together mortgage interest/rent, utilities, rates, maintenance, etc. Then adjusts for space used. Then adjusts for time worked. Then adjusts for personal use. That then creates a figure that the director can claim from the company (tax deductable to the company), which then goes on the land and property supplement as rental income, against which is offset the costs of providing that rented space (i.e. the amount just calculated). Net effect on personal tax nil.
3 Further way - do the same as 2 above, but charge a higher rate, so generating a rental profit. (HMRC likely to challenge this if rental charged is excessive to market consitions). Creates tax deductable expense to the company at (currently 21%), creates profit to the director, taxed at marginal tax rate but no NI. For basic rate taxpayers it creates a marginal reduction in tax (but it will soon have no net benefit given the reduction in the small companies tax rate proposed by the government).Higher rate taxpayers may find this a useful way of extracting money from the company as opposed to dividends depending on shareholdings/living arrangements/etc and as a way of mitigating some potential challenge under income splitting. Maybe.
1 or 2 certainly worth doing. 3 maybe depending on client's personal circumstances
I've been using VT for 5 years now, and VT transaction Plus since it was first released in Beta Version. Absolutely superb bit of kit. Their accounts production software link from their book-keeping package is also excellent. For the accounting professional, I wouldnt suggest anything else. http://www.vtsoftware.co.uk/tranplus/index.htm
(Oh, and I've found them really helpful on the phone too - and you don't get trapped in interminable bleedin' menu options, none of which are any help, only to finally find a Sage 'rep' who wont answer your question without a huge fee).
Cant do more than echo previous correspondents. Sage is a pig, a nightmare - and I wouldnt recommend it if it was the only accounting software on the market....
I'll happily use almost anything before Sage (even the dreaded Quickbooks, which is bad but way better than Sage).
Personally, if you understand Double Entry Bookkeeping (and it is frightening how many so-called book-keepers don't) then VT Transaction Plus is simply brilliant. Easy to use, easy to interrogate, I run businesses from nothing up to a couple of million turnover off this software. If you previously used the 'old' VT Transaction and havent upgraded to VT Transaction Plus, do so! http://www.vtsoftware.co.uk/tranplus/index.htm
If a more 'hand holding' approach is needed, then for small businesses I quite like Solar Accounts. http://www.solaraccounts.co.uk/
protection from what? Given that some of the worst work I have seen on picking up new clients has been from Chartereds, as opposed to 'unqualifieds', I can't see that the argument has been made especially as the term 'chartered accountant' is already protected.
The engineers have been pushing the same boat for years and have had no luck, and their work is arguably much more 'important' from a public protection point of view.
This is simply the main chartered bodies wasting members money when they should be spending it making the case FOR Chartereds rather than against people they dont like (most of whom, as far as I have seen, do a good job for their customers).
My answers
This confirms my decision to abandon Taxfiler as a potential software supplier.
Leaving aside the fact that their accounts are overdue at Companies House, I emailed them with a query saying I was looking at using their software as I'm setting up on my own. Their reply was to ask what email I use to log on the system with.
I've looked at this discussion with interest as I'm looking at software and was thinking seriously about Taxfiler.
However - their accounts are now overdue with Companies House.
That worries me enormously.
Think I might have to go elsewhere.
Hmmm
Can see your point here.... (and there often is no logic or link between the employment and self employment approaches...)
Given that they are outer wear, and are specialist materials etc, I'd suggest claiming them, but using the white space to say exactly what you have done and the basis on which you have done it.
You might like to suggest that the client gets it branded, then you might also claim it as uniform..... (easier said than done I know).
Use of home as office etc
Hi AMy.
As you know, running an office from home does incur expense and as such it is perfectly legitimate to charge for this, although that can be done in a number of ways. Naturally, if the client receives money from the business in this way it is declarable as income, but then gets offset by the expenses incurred.
So:
1. Easy way. HMRC allow directors £3 per week for use of home as office where that is a necessary part of their role, and accept that this reflects the expenses incurred. Deduction for company in year =£156. Additional 'income' to company director £156, against which is offset expenses of providing the office of £156, i.e. net effect is nil for income tax purposes but achieves a corporation tax deduction of £156, saving (at the small companies rate) £32.76 tax.
2. Harder way. Base it on 'actual'. So the director adds together mortgage interest/rent, utilities, rates, maintenance, etc. Then adjusts for space used. Then adjusts for time worked. Then adjusts for personal use. That then creates a figure that the director can claim from the company (tax deductable to the company), which then goes on the land and property supplement as rental income, against which is offset the costs of providing that rented space (i.e. the amount just calculated). Net effect on personal tax nil.
3 Further way - do the same as 2 above, but charge a higher rate, so generating a rental profit. (HMRC likely to challenge this if rental charged is excessive to market consitions). Creates tax deductable expense to the company at (currently 21%), creates profit to the director, taxed at marginal tax rate but no NI. For basic rate taxpayers it creates a marginal reduction in tax (but it will soon have no net benefit given the reduction in the small companies tax rate proposed by the government).Higher rate taxpayers may find this a useful way of extracting money from the company as opposed to dividends depending on shareholdings/living arrangements/etc and as a way of mitigating some potential challenge under income splitting. Maybe.
1 or 2 certainly worth doing. 3 maybe depending on client's personal circumstances
detailed P&L
I tend to have it in the detailed P&L and leave it at that -. never had an issue as a result of this, either positive or negative
VT
I've been using VT for 5 years now, and VT transaction Plus since it was first released in Beta Version. Absolutely superb bit of kit. Their accounts production software link from their book-keeping package is also excellent. For the accounting professional, I wouldnt suggest anything else. http://www.vtsoftware.co.uk/tranplus/index.htm
(Oh, and I've found them really helpful on the phone too - and you don't get trapped in interminable bleedin' menu options, none of which are any help, only to finally find a Sage 'rep' who wont answer your question without a huge fee).
Anything but Sage...
Cant do more than echo previous correspondents. Sage is a pig, a nightmare - and I wouldnt recommend it if it was the only accounting software on the market....
I'll happily use almost anything before Sage (even the dreaded Quickbooks, which is bad but way better than Sage).
Personally, if you understand Double Entry Bookkeeping (and it is frightening how many so-called book-keepers don't) then VT Transaction Plus is simply brilliant. Easy to use, easy to interrogate, I run businesses from nothing up to a couple of million turnover off this software. If you previously used the 'old' VT Transaction and havent upgraded to VT Transaction Plus, do so! http://www.vtsoftware.co.uk/tranplus/index.htm
If a more 'hand holding' approach is needed, then for small businesses I quite like Solar Accounts. http://www.solaraccounts.co.uk/
Yup
Hi
I run a CerTax Accounting franchise in Rugby. Very happy with it and running very successfully. Feel free to contact me if you want to chat.
Kind regards
David Nicoll
Sale contract
Hi
I would just do a contract for the sale of the business rather than separating out the goodwill into a specific contract of its own.
protection from what?
Given that some of the worst work I have seen on picking up new clients has been from Chartereds, as opposed to 'unqualifieds', I can't see that the argument has been made especially as the term 'chartered accountant' is already protected.
The engineers have been pushing the same boat for years and have had no luck, and their work is arguably much more 'important' from a public protection point of view.
This is simply the main chartered bodies wasting members money when they should be spending it making the case FOR Chartereds rather than against people they dont like (most of whom, as far as I have seen, do a good job for their customers).