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Tax & Accounting Guides

Key Guides

In this concise guide, we look at the taxes you will encounter if you start your own business as a sole trader, and other things you should bear in mind before taking the plunge and becoming self employed.
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National Insurance is a deduction from earnings, set up originally to fund various State benefits such as the NHS, the State pension and other welfare-related schemes.

In reality, it is just another tax. In fact, as standard income tax rates have remained constant for many years, NI rates have soared.

In this guide we look at how National Insurance works, and what your National Insurance Contributions (NICs) will be as a small business person. The guide has been updated with the NIC rates for the 2016/17 tax year. Continue…

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If you are dealing with a new customer or supplier and want to check whether the VAT registration number (VRN) they have supplied is valid, there are two ways you can do so.

One method is to call the HMRC VAT Helpline, the other is to use the online VAT Information Exchange System (VIES) run by the European Commission.
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Your business should register for VAT if your “taxable supplies” over the past 12 months has exceeded the VAT registration threshold. From April 2016, the VAT registration threshold is £83,000 (previously it was £82,000).
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One of the first things new business owners often say to me is how bewildering it can be getting their heads around all the different aspects of running a business.

From marketing and IT to tax and finance, it’s a case of having to quickly get up to speed on a huge range of things. For many small businesses the only way to make sure that everything gets done right is to outsource some of the tasks.

The type of functions that are frequently outsourced by small businesses are ones that either don’t add any value, or require specialist skills and knowledge that are not viable to employ someone to conduct in-house.

The administration of the company’s payroll is one such function. With a variety of outsourcing options available, from large established payroll providers to smaller competitors, outsourcing your payroll can offer a number of short-term and long-term benefits.

In this article, we look at some of the benefits of outsourcing your business’s payroll function and when is the best time to take the plunge. Continue…

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At 1.30pm on Wednesday 16 March, 2016, George Osborne delivered his eighth Budget as Chancellor of the Exchequer.

The overall headlines include the introduction of a sugar tax on soft drinks from 2017, extra funding for schools to have longer days and a downward revision of growth forecasts for the UK, but what did Budget 2016 bring for small businesses?

Here are the main points that affect business owners, both self-employed and limited company directors; Continue…

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From 6 April 2016, the way dividend income is taxed will change significantly. The changes will affect hundreds of thousands of small business owners, many of whom will see a big jump in the amount of tax they will have to pay.

At present, company dividends are treated as ‘tax paid’ in the hands of shareholders. However, from April 2016 the tax treatment of dividends will be altered dramatically, and as you can imagine, this isn’t going to result in limited company directors paying less tax! Continue…

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Small businesses, and the individuals who run them, are subject to a wide array of taxes – from Corporation Tax to National Insurance. Here is an overview of the main UK business taxes you will encounter as a business owner, together with links to our more in-depth guides.
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With the plethora of tax rates, thresholds and allowances changing every year, here is ByteStart’s summary of the main tax rates, tax bands, and allowances for the 2014/2015 tax year. We focus on the figures that are of relevance to business owners.
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If you need to submit a Self-Assessment Tax Return (SATR) it’s imperative you get it in on time and free of any mistakes.

There are penalties for not submitting your tax return on time and you may have to pay a fine if HMRC deem you have not taken enough care in completing it.

With regard to the deadlines, paper tax returns need to be filed with HMRC by 31 October and tax returns submitted online by 31 January. So, if you complete your tax return online, you get a few extra months.

This article explains how to get started with your tax return, and how to avoid common mistakes that people make on their self assessment tax return.
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The area of tax for small businesses is not straightforward, in fact it can be a real minefield for the unwary. However, if you take a little time, and work with your accountant, it’s usually possible to find ways to save some tax.

To help you think about ways you and your business could pay less tax, we’ve asked Simon Cox of Forbes Watson Accountants to share 10 of the best ways small business owners can look to pay less tax. They are designed to make you stop and think. Are you doing everything you can do to save tax? Is your advisor helping you to do so?
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Every limited company must submit their accounts to Companies House each financial year. In this article, we look at how you work out the deadline for your first annual accounts.

If you are a limited company director, one of your legal obligations is to ensure that your company’s annual accounts are submitted to Companies House accurately and on time.
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Accurate bookkeeping is a necessary evil when you run your own business.

There are three reasons you need to be on top of the money coming in and going out. HMRC will need information from you at some point (whether you are a sole trader or run a limited company); you need to know if you have enough cash to get you through the month (cash flow); and finally it’s good to know whether or not you are actually making a profit!
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Small business accounting software has changed massively in recent years. Thankfully, the advent of cloud computing has consigned the days of buying book-keeping software in a box and installing it on your own computer to history.

Nowadays, start-ups and small business can choose from a whole host of online accounts software packages. The technology helps to ease the pain of book-keeping and accounts for small business owners and provides a range of other benefits too.

But with so many different web-based accounting solutions out there, how do you choose the right system for you and your business?

That’s where this guide comes in. If you follow the advice, and ask these questions, you should be able to quickly narrow down the field, and ultimately choose the best online accounting software for your needs.

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ByteStart has teamed up with Crunch Accounting to bring you a very special offer.
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When you buy certain new equipment, invest in buildings or research and development, you can deduct a proportion of the cost from your taxable profits and reduce your business tax bill, through Capital Allowances.

Capital Allowances take the place of commercial depreciation, which is not allowed for tax. Using them effectively can be a huge boost to your business, especially if you need to invest to fund growth.

Here’s a look at the main elements of the various capital allowances schemes and how your business can qualify to take advantage of them. Continue…

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Running your own business sometimes seems to be a series of successes followed by setbacks.

You win a big client, then lose an existing client. You hire the perfect employee and their current employer offers them more money to stay. You make a nice fat profit, and the taxman comes along and takes 20 per cent of it! Talk about three steps forward, two steps back.
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A staple of business life for decades, the spreadsheet was adopted on a mass scale in the late 1980s and 90s alongside desktop computers. The fact that it is still used today is testament to the fact that it really was one of the killer apps of its time.

Increasingly, however, in the age of cloud-based software and connected devices, the spreadsheet and PC-reliant tools like it are being rapidly overtaken by advances in technology, leaving legacy business users at a competitive disadvantage.

Switching from spreadsheets to cloud accounting software allows small business owners to access more up-to-date figures for sales and cashflow, and view analysis and reports on a broad selection of other essential business performance indicators.

With a wider range, and more current information to-hand, cloud accounting can help business owners to make quicker and better-informed decisions.
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Are you a self-employed individual? Do you have to travel on business, and does that travel ever entail an overnight stay away from your home?

Do you know exactly which of the travel and accommodation expenses you can legitimately claim back? If you get it wrong, you could pay too much tax, or worse still find yourself in trouble with HMRC for paying too little tax!

To help you get it right, here’s an explanation of the rules regarding travel and accommodation expenses for sole traders. It explains what you can, and can’t, include as legitimate costs in your business accounts. Continue…

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If you are a limited company shareholder, you may have to pay personal tax on any dividend income you receive. This article outlines how company dividends are taxed.
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Using Research & Development tax relief to reduce your corporation tax bill

January 8, 2015

Cash flow is arguably one of the most important parts of managing your small business. So any tax incentives, or potential tax relief opportunities which are available should always be grabbed with both hands. But then, you often hear stories about how great these incentives and reliefs are, only to find that there are lots […]

Top 10 tips on choosing an accountant for your start-up or small business

September 27, 2014

Most small business owners say that their accountant is their most valuable advisor – a good accountant will keep your books in order, help with tax planning, and will ensure that you meet all your tax deadlines. Here are some tips from the ByteStart team to help you choose the best accountant:

Book-keeping basics every new business owner must know

July 8, 2014

Few people start a new business so they can do paperwork. Spending time adding up receipts or pushing invoices around a desk is nobody’s idea of fun – unless you’re starting up as a book-keeper or accountant! Unfortunately it’s a necessary evil and something you need to stay on top of in your new business. […]

VatChat 3 – Special VAT schemes available to UK firms

May 1, 2014

HMRC have provided a range of special schemes that apply to smaller businesses. They are designed to reduce administration, but also (in some cases) to assist cash flow.

VatChat 2 – How to pay and reclaim VAT

May 1, 2014

This second guide in ByteStart’s 3-Part VATChat series; outlines how VAT registered businesses should charge VAT on their goods and services, and how to reclaim VAT on purchases and costs.

VatChat 1 – An introduction to VAT

April 30, 2014

In the first in a short series of Value Added Tax bulletins for small businesses, Les Howard looks at what VAT is, and when you must register your business.

ByteStart’s 60-second guide to Value Added Tax (VAT) for start-ups and small businesses

April 1, 2014

Value Added Tax (VAT) is a tax on the final consumption of certain goods and services in the home market but is collected at every stage of production and distribution. Most business-related goods and services will therefore be subject to VAT.

Budget 2014 – Summary of main points of interest for small business owners

March 20, 2014

Following George Osborne’s delivery of the 2014 Budget, here is a summary of the main tax changes and announcements that will be of interest to those that own and run small businesses:

Running a home office – can you claim on expenses?

January 29, 2014

As more and more people choose to work from home, the question of how you can reclaim any home office expenses is frequently asked. The general HMRC rule for claiming tax relief on business expenses is that you can only reclaim costs that have been ‘wholly and exclusively’ incurred in connection with your trade.

Top 10 tax tips for small businesses

January 15, 2014

Tax isn’t the most exciting part of running your own business, but it is an issue that you will have to tackle at some point. To help you to quickly get to grips with the subject, here are some handy tax tips based on our findings of working with small businesses over the past decade, […]