What small business owners need to know about the new Digital Personal Tax Accounts

For millions of UK small businesses, ‘tax season’ represents a costly, time-consuming inconvenience. But Britain’s tax landscape is transforming: in March 2015, HMRC announced its plan to update the self assessment tax payment process – moving away from annual paper returns, and towards a digitized, online system.

The government’s new digital tax accounts system introduces a fundamental shift in the way small business owners – both those working as self employed and those operating as limited companies – report and pay their tax liabilities.

The introduction of digital tax accounts will, within a few years, make the annual self assessment tax return obsolete – so how exactly will the changes affect Britain’s small businesses? (more…)

A Guide to HMRC’s Time to Pay Arrangements

If you are having problems paying HMRC your business taxes, you may be able to agree a Time to Pay arrangement so you can pay the tax over a longer period of time.

In this concise guide, we walk you through HMRC’s Time to Pay Arrangements, explain what you should understand before contacting HMRC, and share some practical tips on how to make the most of Time to Pay;

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A Guide to Bookkeeping for New Business Owners

Guide to bookkeeping for new business owners

If you’re in the midst of starting a new business, then the bookkeeping requirements are unlikely to be at the forefront of your mind. At this stage there can be far more pressing things for you to think about.

However, once your business is taking shape, you will need to start thinking about keeping up-to-date and accurate accounting records of your income and expenses. More than just a legal requirement, basic bookkeeping is an essential part of your ability to manage your business effectively.

But what kind of details are you going to need? (more…)

When should you outsource your payroll and what are the benefits of doing so?

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. (more…)

Budget 2016 – Key points for small businesses

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; (more…)

Dividend tax changes from April 2016 – A summary of the financial effects for small business owners

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! (more…)

Business Taxation – What are the main taxes?

Review of business taxes

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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Tax rates for small business owners – 2014/15

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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Staying on top of your company accounts – Book-keeping Dos and Don’ts

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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Capital Allowances – A review of the various schemes available for businesses

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. (more…)

Corporation Tax – How to reduce your bill

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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How switching from spreadsheets to cloud accounting can help small business owners

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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Travel and accommodation expenses for the self-employed

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. (more…)

Book-Keeping Basics Every Small Business Owner Must Know

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. Being disorganised and putting off paperwork just isn’t an option. HMRC will fine you if you’re late getting essential information to them. And the longer you leave it, the worse the problem gets. So here’s what every small business owner needs to know about book keeping.
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Running a home office – can you claim on expenses?

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.
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Top 10 tax tips for small businesses

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, and from our own personal experience at the ByteStart team.
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What is a balance sheet and how do you create one?

If you choose to set up a limited company when you start your business, there’s a lot more paperwork involved.

It’s one the downsides of going limited (the biggest upside of course being that you limit your liability should the business go under).

One of the many pieces of paperwork you will have to generate on at least an annual basis is a balance sheet.
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Are you affected by the new Child Benefit rules?

Controversial changes to the Child Benefit regime went live on 7th January 2013. The benefit is no longer universal, and will be reduced when one parent earns over £50,000 per year, and scrapped entirely when earnings reach £60,000.
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