an accountant's perspective

the pay it forward concept


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Pay it Forward

The results of the General Election have given some people the feeling that we are heading into hard times – with austerity measures reaching new heights. If this is the case there is very little anyone can do about financial hardship…

…unless…

Unless we start acting more like a community and supporting each other instead of relying on a government to act in the best interests of its people. In many ways this feels like a long shot but I am not sure why that is the case. There was a film produced in the year 2000 and I have never forgotten watching it but perhaps now is the time to watch it again. I will warn you that tissues may be necessary.

The film introduces a concept but before I go into that here is a clip where Kevin Spacey is giving his students a task to complete in class – essentially to change the world:

I am sure we can all remember that one teacher who made us think differently. They were maybe that little bit more fun than others or perhaps they engaged the class as adults rather than children. Sometimes you remember one sentence spoken to you at your most impressionable moment and you can say for certain that it helped shape who you are. That is the thrill for teachers I am sure. These moments can happen as adults as well if we are receptive to them and do not fall into the trap of assuming we know all there is to know before we have even got started in life.

‘Pay it Forward’ is a somewhat utopian take on a simple flaw in society which has perhaps been highlighted even more recently by our addictions to phones, video games, IPads, social media and TV series. I will let a clip from the film introduce the concept of ‘Pay if Forward’ and then you can decide whether it is feasible:

Since the age of mobile phones arrived in many cases people struggle to talk to the person sat next to them – never mind do something selfless for them. But, what if they did? What if they picked their head up and looked around and considered how the people around them were coping with life. Just stopped to see if they could help anyone simply because they could. It is not a matter of giving people money but offering your skills to help others in a deliberate manner.

What if we lived in a society where this was common place?

You can call me a dreamer but isn’t the antidote to a heavily indebted society, a ridiculous deficit, with a greedy capitalist elite as its driving force, going to have to come from a different source entirely. Didn’t we once as a society borrow cups of sugar, watch next doors kids for them while they popped to the shops, donate food to street parties, check on elderly neighbours to see if they needed anything, and do things as a community?

The thought process behind this blog was sparked by ABC’s director, Belinda Darley. In her role as a local fitness studio owner she has set up a scholarship for young dancers wanting to pursue their dreams by going on to a dance academy of their choosing. She did it because a friend of the family, Jack Dargan, desperately wanted to go to Urdang Academy, had passed the assessment process but didn’t have the finances to go. So she paid for him to attend and he is now completing that course. Enabling someone to pursue their dreams is something she wanted to replicate so the scholarship programme was born and all the fundraising that goes along with it. Gainsborough dance students of all backgrounds now have a chance to take their passions further than before.

Belinda did that not because of a conscious decision to do something good but in response to someone needing her help. I know lots of people who have helped out others in different ways because they are goodhearted individuals. It makes a massive difference to people’s lives.

And we can do more because sometimes it is just as simple as putting the bins out for your neighbours, cutting someone else’s grass when you do yours, making lunch for someone at work who always forgets theirs, offering to pick someone up who usually has to walk everywhere. These are small things that will make others smile. If you can do that three times you will have had a positive impact.

But what if we dreamed bigger than that? What if we accepted responsibility for the state of society and decided to make it better – make the world better?

Could you change three people’s lives if you put your mind to it?

There are plenty of things in this world that we cannot change and dwelling on those will ultimately lead to frustration, anger and disillusionment. Let’s look closer to home at the things we can change and start making our mark on society from within society.


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Key Budget Takeaways 2015

George Osborne promised no giveaways or gimmicks in his 2015 Budget which is a bold statement given that this was his last chance to impress voters. Whether you believe his words or not matters little when you consider this simple fact: if you vote conservative in May you will wish to believe that this Budget shows no bias. If you vote for another party in May then you only stand to benefit from this Budget if it was intended as a sweetener. So either way the Budget before an election is often beneficial to the masses, delivered as unbiased by the standing political party, and hotly contested by opposing parties – business as usual then!

There have been tax cuts – what a huge surprise! And here are the rest of the predictably small Budget announcements.

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Top Business Takeaways from the Autumn Statement

George Osborne delivered the Autumn statement today and besides comparing Ed Miliband to Wallace or Gromit (I choose to forget the details) he also managed to deliver some adult subject matter too!

Here is our roundup of the key business takeaways. Enjoy!

Just click the link to go to our PDF summary: TOP TAKEAWAYS OF THE AUTUMN STATEMENT. (1)

Or, browse the images below:

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10 great resources to help you start your own business

 


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  1. We are completely bias but without hesitation on this account. You usually get a free consultation with an accountant – a try before you buy deal. This gives you a fantastic resource to talk with an expert about what you need to get your business started and what they know from their years of experience about businesses like yours. Grab a cup of tea/coffee and talk to an accountant about what they could do for you and what they would advise you to do for yourself. Yes you can come to us for a free consultation and a chat if you like: abc-accounting-services.co.uk
  2. One of my favourite resources is The Start Up Donut because it is such an accessible and content rich site that covers every element of starting a business in depth: http://www.startupdonut.co.uk
  3. Do not let the Sage sponsorship put you off there is some very useful tools on Startups with some industry specific content to boot. Take a look at: http://startups.co.uk
  4. For a blog rich site take a look at smallbusiness.co.uk. They have in-depth articles about all sort of subjects from ‘how to run a business around your family’ to ‘making a connection’ which is a guide on communication technology: http://www.smallbusiness.co.uk
  5. NBV Enterprise Solutions offers free start-up seminars and there is tons of useful information on their site to get you going. Just go to: http://www.nbv.co.uk/?gclid=CjwKEAjw68ufBRDt0Zmrn4W_8AwSJADcjp1cxntSras9p19SnaoGw__xvBkgMaBxmypMK252JqgcGxoCup_w_wcB#/i-am-starting-a-business/4574476849
  6. No list of start-up resources would be complete without Gov.uk. A comprehensive and trusted resource on all business matters: https://www.gov.uk/starting-up-a-business/start-with-an-idea
  7. Unfortunately, no list would be complete without HM Revenue and Custom’s (HMRC) site either. However, handle this one with care. HMRC have a habit of confusing simple subjects and presenting their information in the driest, yawn inducing format known to man/woman! Enter at your own risk but do consult for deadlines and for trusted lists of employers/employees responsibilities:  http://www.hmrc.gov.uk/
  8. For inspiration alone visit the BBC’s page on start-up stories. This will also help you recover from HMRC’s sombre tone: http://www.bbc.co.uk/news/business-11629784
  9. Start Up Britain is a great site created this year with fresh and in some cases live content being added as the Start Up Tour navigates the country: http://www.startupbritain.co/inspiration
  10. To finish off this modest list of resources let’s throw in a bit of Richard Branson. When it comes to business there is always room for Branson and his engaging insights. This piece is called ‘ 8 tips to evolve a start-up into a successful business’: http://www.virgin.com/richard-branson/8-tips-to-evolve-a-start-up-into-a-successful-company

 

One of Richard Branson’s favourite bits of advice is:

“Screw it, let’s do it!”

So, shall we?

If that isn’t enough to satisfy your hunger for information then we also have our own book out, written by our marketing manager with sections of insight from ABC Accounting Service’s director Belinda Darley.

This book has the perfect blend of tried and tested formula with a straight talking delivery so you will have a great grasp of the basics and own a resource that you can keep dipping into. To purchase a copy go to: Starting Up Your Own Business: An Accountant’s Perspective 

You can also visit our downloads page for more free resources: www.abc-accounting-services.co.uk/downloads.php

Or arrange a free consultation at our offices in Gainsborough, Lincolnshire: info@abc-accounting-services.co.uk


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Accountancy Basics Q & A

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There are a range of questions accountancy firms get asked on a regular basis from serious stuff like ‘my turnover exceeded £81,000 one month but this was a freak occurrence – what do I do?’ to ‘can I call my business Froggy Feet Footwear or do you think that has been taken already?’

ABC Accounting Services is more than happy to answer any questions you may have whether you are a client or not. To start addressing some of the more common accountancy questions we are going to provide a Q&A blog once a month. Any questions you send in will be addressed in these blogs because usually if one person has a query then there are tons of other people wondering the same thing.

Here are six common questions to get the ball rolling, do not be afraid to speak up, we really have heard everything!

  • When should I register for VAT?

If you are doing business in the UK as an individual, a partnership, a company, an association, a charity, a local authority or any other organisation/group of people acting under a chosen name, then you could need to register for VAT.

If your annual turnover is more than £81,000 (this figure can change on an annual basis) then VAT registration is compulsory. This also applies if you are anticipating your turnover to be higher than that amount in the next 30 days. If you turnover exceeds that amount temporarily then you must apply for an exception from registration.     

If you have received goods from other countries in the EU, registration for VAT is compulsory if the total value of the goods acquired has gone over £81,000 in the current year since 1 January.

For more on VAT: 

  • How do I close my business?

First of all make sure you plan it carefully and have gone through your reasons with our accountant. There may be solutions to problems you have not thought of. The first stage is to inform HMRC of your intent. They will settle matters related tax and National Insurance owing. You should also negotiate with HMRC, or have an accountant do it for you, as sometimes it is possible to extend deadlines for payments or perhaps claim back some tax or National Insurance depending on your circumstances.

The self-employed and business partners will just need to fill out a simple online form. It is more complicated for shareholders who may still have to file Company Tax Returns, pay Corporations Tax while closing the business and account for any capital gains made during the closing process. Employers have to submit a final Full Payment Submission (FPS) with the final payroll, making sure than any due PAYE tax and National Insurance deductions are paid.

Any VAT registered businesses will have to de-register.

  • What is CIS and how do I know if it is relevant to my business?

CIS stands for the Construction Industry Scheme. It regulates the procedures of making payments to subcontractors by contractors in the construction industry. A business that involves construction work and spends much of their funds on construction will also fall under CIS.

CIS encompasses all businesses which are active in the construction industry in the United Kingdom in the form of a partnership, a company, a limited liability partnership (LLP) as well as self-employed sole traders.

As a benchmark, if you spend over £1 million a year on average on constructions within three years, HMRC may consider you a ‘deemed contractor’ and you will have to register with CIS. CIS is also applicable to businesses that are not based in the UK but operate in the UK or UK territorial waters.

  • What is capital gains tax?

Capital Gains Tax is a tax that you pay when you make a profit by way of selling assets (shares or property). Your Capital Gains Tax may be reduced by a tax-free allowance and some additional reliefs. To calculate your Capital Gains Tax work out the gain or loss separately for each asset. Then add everything together to get the overall gain or loss for that tax year.

  • What are the advantages to being a sole trader?

The biggest advantage is that there are no formation costs. They are not legally required by law to have annual accounts or to file accounts for inspection BUT annual accounts are required for tax returns.

Sole Traders are not limited in the amount and purpose of borrowings and losses generated can be set against other income of the year and even carried back to prior years. Tax can be paid in instalments on January 31st in the tax year and July 31st following the tax year.

The down side to being a Sole Trader is that you are personally liable for any debts related to the business so any assets are savings are vulnerable to a claim made against you.

  • What are the advantages of becoming a Limited company?

The biggest advantage is that you literally place a limit on your liability. That limit is the value of the company, including any money you may have invested in, loaned to or are owing to the company. This means that the company has a separate legal identity away from your personal affairs so you are not liable for any claim that exceeds the companies limit as outlined above.

There are a number of advantages to limited companies including:

  • You can give a share of the business to others eg family
  • They tend to attract investments easier than Sole Trader businesses
  • Easier to obtain bank loans
  • No higher rate tax bands
  • Easier to sell the business
  • The business generally has more clout – social standing
  • It can assist in the protection of a name
  • Builds confidence in your business as people can check up on your company on the public records at Companies House

The main disadvantages of becoming a limited company are the extra costs of preparing of annual accounts, formation costs, and the loss of some financial privacy.