Solid Accounting,Bookkeeping, Consultancy...

Happy Holidays!

2012-12-20T17:21:30+00:00

This Christmas we gave 100 people in need a nourishing meal.

Instead of sending cards this year we gave 100 people in need a nourishing meal through our partnership with the Global Giving Initiative Buy1GIVE1 (B1G1).

Here we believe that every business has the power to change lives by integrating giving into its everyday business activities.

Are you ready for the payroll year end?

2012-04-17T12:12:36+01:00

One of the most important things to get right first time is your yearly payroll returns to HMRC, so planning ahead can ensure that you don’t end up paying a fine for a late or incorrect submission.

You are required by law to submit returns by May 20th, to enable HMRC to monitor National Insurance and PAYE deductions from your employee’s wages. This is to ensure that your calculations conform to all current government taxation legislation. As the legislation changes every year, it is crucial that you are up to date on the latest specifications for businesses, regardless of size.

By setting aside time early to complete P14/60s and ensure that your payroll details contain the correct PAYE information will help you to avoid a fine for incorrect submissions. Ensure that your P11 figures are correct by using accredited payroll software and ensure that you have not made any processing errors.

If in doubt, ask…

You can submit your returns on time by utilising the HMRC online submission facility. You do need to register with HMRC for online submissions and your payroll software has to be accredited by the Inland Revenue. Remember it is compulsory to submit all documents online. Paper returns are no longer accepted.

However, your first point of contact should be your company accountant, as the vast majority of accountancy firms also deal with payroll issues. Alternatively, contact a payroll services company to take care of your end of year payroll issues – it costs from as little as £15 a month for up to five employees.

Outsourcing the payroll is one of the best things you can do for your business.

Sole Trader v Limited Company

2012-02-01T13:25:07+00:00

One of the most important decisions a business owner has to make is whether to operate as a sole trader/partnership or via a Limited Company. Company tax rates have fallen in recent years and this has made the Company route more attractive even to those posting relatively low levels of profits. However, any decision on incorporation should not be taken on tax grounds alone. The nature of the business, its trading methods and even the personal circumstances of the owners need to be taken into consideration before a conclusion is reached and it is therefore essential that you take advice from your accountant before making your decision.

Ignoring the nuances which will colour individual decisions, there are a few areas which apply to all decision processes. These include:

Who owns the business? A limited company is a separate legal entity and this means that the directors have to act in the best interests of the company rather than their own best interests whilst a sole trader has a lot more freedom to make changes within the business structure. However, business debts run up by a limited company stay as the debts of that company whilst those of a sole trader fall on the business owner themselves.
The ongoing tax and legal implications. Not only are the tax structures different, limited companies have legal obligations to file company accounts and publish documents such as board minutes and resolutions. This can result in additional costs as well as a loss of privacy. However, given the current corporation tax rate and the flexibility of remunerating “owners” via salary or dividend these costs are usually outweighed by tax savings.
What happens on sale or transfer of business? Limited companies tend to be viewed as more professional and therefore can often command a higher price on sale. In addition the ability to buy, sell or transfer shares can make the transfer of ownership of a company a relatively simple matter as well as potentially assisting with IHT planning.
Special considerations for existing businesses. Switching from sole trader to limited company or back again can be a minefield with financial, tax, contractual and legal issues all requiring careful planning. For example, contracts with suppliers may need to be renegotiated whilst the timing of the transaction can have a profound effect on available tax reliefs.

Businesses which are considering switching between sole trader and limited company or are starting up for the first time are encouraged to take advantage of the Solid Limited start up service. We’ll guide you through the decision making process and assist with the legal requirements such as company payroll, corporation tax and VAT registration; helping you to get your business on a sound footing.

Submitting your self assessment tax return

2012-01-09T12:11:24+00:00

With Christmas and the New Year out of the way, our thoughts turn to the first milestone of the year, submitting our self assessment tax returns. When the original paper return forms arrived last April there seemed to be so much time to return the forms that it was easy to put them aside for a short while. Now the deadline is a few weeks away and there is no time to loose.

So, who has to complete a self assessment tax return? For a start, everyone who received a return form from HMRC last year will have to submit a return whether they think tax is due or not. In addition, anyone who has fallen within the tax return sphere during the tax year ended 5 April 2010 will need to file a return for that year. In general, self assessment returns are required from all those who are self employed, company directors, ministers, names at Lloyds, together with those whose income or capital gains have exceeded a certain level. Guidance is available on the HMRC website at http://www.hmrc.gov.uk/sa/n eed-tax-return.htm.

If you have to complete a self assessment return then the first step is to compile all the necessary records. This is much easier done as you go along through the year so if you haven’t already got a tax return file, start one now for future returns. These records will include bank statements, records of investments and investment transactions, and employment records including payroll and expenses. If you are self employed then you will also need your business accounts.

Why we all need accounting software

2012-01-03T11:00:00+00:00

There are many reasons why businesses decide not to install special accounting software. These include perceived costs, worries about complexity, and the gut feeling that piling receipts into a shoebox and handing them to an accountant at the end of each year should be sufficient.

The truth is that whilst all these reasons may have been valid in the past, times have changed and there are now some extremely persuasive arguments as to why accounting software is a must for all businesses. Let’s start with cost. While accounting software used to be pricy, with costs escalating for each additional user, it is now possible to get hold of a decent accounting package which won’t cost a penny. For example, we provide all our clients with an online accounting system called KashFlow. Normally costing in excess of £200 per year, Solid Limited clients receive KashFlow for FREE.

For those of our clients who may prefer to look at alternative systems, there are a few ideas on the Solid Limited website at free accounting software page. This link includes details both of free on line accounting software and desktop software. However, we do prefer clients to use KashFlow as it enhances the service which we are able to offer to our clients.

The second reason why businesses may shy away from accounting software relates to worries over complexity. We must admit that over the years we have seen some extremely complex accounting systems, some of which seemed to require users to have a degree in lateral thinking. Whilst unfortunately there are still some complex dinosaur systems around they are gradually becoming extinct as software houses realise the need to be competitive on design as well as price. One of the reasons why we recommend Kashflow to our clients is that it is simple to use. For those who have not used KashFlow before we are also happy to provide training and will set the system up for you on your desktop.

The final reason why businesses may not consider using accounting software is the perception that preparation of accounts is a once a year exercise best left to accountants. There are several reasons why this is no longer the case, if it ever was. For a start, leaving accounts to the year end means that for 364 days of the year the business owner has no idea of the true position of their business. This can lead to a delay in collecting payments, missed opportunities in being able to negotiate for credit facilities and the potential for bounced cheques and high bank charges.

Using accounting software enables businesses to:

Keep on top of the bank balance
Monitor receipts and payments
Quickly chase outstanding debts
Plan cash flow and monitor actual against forecast positions
Interpret business and trading conditions
Provide business information to back up requests for finance

In short, the business with accounting software can be a proactive business. However, there is one further prime argument for maintaining regular accounts. That reason is HMRC. In the last year the Revenue have embarked on a mission to carry out interim reviews of businesses where they suspect them of failing to pay sufficient tax. The business review teams have given out strong signals that whereas in the past they only expected accounts to be up to date at year end, now they are looking to business to maintain good accounting records throughout the year. For HMRC, inadequate records equates to potential tax evasion so maintaining accounting software can help to avoid a costly and time consuming HMRC review.