Would your business benefit from monthly or quarterly management accounts?

Having quality management accounts can be beneficial to your business as they can help you to grow by making it more efficient and hopefully more profitable.

Management accounts are a set of detailed accounts prepared to illustrate the company’s   performance. The goals of the accounts are to provide key financial information which will help with short term financial decisions and in planning for long term development. 

The main advantage of having management accounts is being able to control the business. If you want to make projections, cash flows or be able to be accepted for finance, management accounts are an essential starting point. They will provide you with the up to date information throughout the year to give you accurate feedback of performance. If you find that your business is growing rapidly and want to be able to plan for the future, we recommend that you put in the controls and ways of reporting now to help guide the growth.

Typically, the accounts are prepared on a quarterly basis; it is not uncommon however to have monthly reports supplied to the business.

If you feel that additional guidance is needed as your business starts to grow, then please get in contact with us so we can help you make the right the decisions. Please visit our website for a complete list of our support services Click Here. 

Or contact us on 0116 2423400 or info@torrwaterfield.co.uk 

Eoghan Macilwraith, Accounts & Tax 

 

Why has my tax code changed?

“How do I know if my tax code is correct?”

Your tax code is used by your employer to calculate how much tax needs to be deducted from your pay. HMRC tells your employer which code to use to collect the right amount of tax from you. You can check your income tax online to see what your tax code is, how your tax code has been worked out and how much tax you have paid and are likely to pay in the coming months.

“What does my tax code actually mean?”

Your tax code represents how much tax free income you have for that tax year, for example the standard tax code for the 2018/19 tax year is 1185L and this means you have a tax free income of £11,850.

“What does the letter in my tax code mean?”

The letter in your tax code represents your situation and how that affects your tax free income, for example:

  • L = You’re entitled to the standard tax free allowance.
  • M & N = Marriage Allowance, this means you have either transferred or received personal allowance to or from your partner.
  • 0T = Your personal allowance has been used up or you’ve started a new job and your employer doesn’t have all of your starter details.

To see the full list on the HMRC website please click here.

“Why is there a W1/M1 at the end of my tax code?”

The W1/M1 means that the tax code is non-cumulative; in these cases tax will be calculated purely based on the taxable pay for that pay period. Each pay day is treated as if it is the first week or month of the tax year. All previous pay and tax are ignored.

There are a few reasons you may have been put on this type of code, for example:

  • Started a new job
  • Getting Company benefits or state pension
  • Becoming employed after being self employed

These tax codes are generally temporary and you or your employer can update this.

“How do I change my tax code?”

 You can use the HMRC online services to tell HMRC about any missing or incorrect information. They will then update this by sending you and your employer a P6 tax coding notice. If you can’t use the online services you can call HMRC on 0300 200 3300 and they will help guide you through and get your tax code updated.

If you would like to discuss this further then please get in touch on 0116 242 3400.

Polly Dennis, Payroll Assistant 

14 Days left to submit your 2016/17 self assessment return

The following Tax Events are due on 31st January 2018:

Personal Tax Events

Deadline for submitting your 2016/17 self assessment return (£100 automatic penalty if your return is late) and the balance of your 2016/17 liability together with the first payment on account for 2017/18 are also due.

This deadline is relevant to individuals who need to complete a self assessment tax return and make direct payments to HMRC in respect of their income tax, Classes 2 and 4 NI, capital gains tax and High Income Child Benefit Charge liabilities. 

There is a penalty of £100 if your return is not submitted on time, even if there is no tax due or your return shows that you are due a tax refund.

The balance of any outstanding income tax, Classes 2 and 4 NI, capital gains tax and High Income Child Benefit Charge for the year ended 5th April 2017 is due for payment by 31st January 2018.  Where the payment is made late interest will be charged.

The first payment on account for 2017/18 in respect of income tax and any Class 4 NI or High Income Child Benefit Charge is also due for payment by 31st January 2018.

If we have already dealt with your self assessment return on your behalf you need take no action.

If you haven’t completed your self assessment return yet please contact us, we can help. 0116 2423400 or send us an email info@torrwaterfield.co.uk

Why do I need to keep my bookkeeping up to date?

Happy New Year! This is the 1st post of the year & hopefully it will help you to start thinking about how to organise your business over the next 12 months. 

As we are all aware, Making Tax Digital is fast approaching meaning you need to have bookkeeping software in place for your business that you like! 

It may take quite some time to find bookkeeping software that you get along with and understand. There are many out there including: Xero, Sage One and Iris Kashflow.

Keeping your bookkeeping up to date can be good for many reasons:

  • You can have an up to date profit and loss account to see how your business is doing and compare it to other periods
  • Review your VAT return to look at liabilities
  • You can make your own sales invoices on most bookkeeping software which can save a lot of time
  • You can also keep track of your creditors and debtors which will lead to better cash control and more reliable forecasting

In my experience the bookkeeping software that I have personally found best, and clients who have no bookkeeping experience have seemed to like the most, is Xero. This is for many reasons, some of them being the following:

  • Bank feeds – We all know that typing up your bank can be very time consuming and then you come to reconcile it you’re 1p out! This is why I love bank feeds. Everything is pulled through from your online banking, meaning you do not need to worry about that 1p; all you have to do is match the bank receipts against sales invoices and payments to purchase invoices. Xero also has the function of ‘rules’ meaning if you have a standing order set up for example £25.00 to Vodafone every month, you can create a rule to routinely post this bank payment to telephone expenses with the specified VAT treatment.

 

  • Submitting your VAT return online. Once you are happy with your VAT return on Xero you can ‘File it now’ meaning you just need to put your government gateway login information on to Xero and it will be submitted for you – unfortunately you still have to make the payment to HMRC!

 

  • Paperless record keeping – How many of us have an office full of the past 6 years of records? Everyone I’m hoping! This is a really handy feature with Xero, especially if you like a tidy office.  With Xero you can attach a pdf copy of the invoice online meaning there will always be a copy of that invoice and you will not have to keep a paper version of it.

 

If you are looking into starting your bookkeeping with online software and would like some advice on which one is best for your specific  needs, or would like some training, please get in touch with us on 0116 242 3400.

Georginda Hare, Bookkeeper