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Making Tax Digital – Are You Ready to get Started?

Making Tax Digital starts 1 April 2019 for all VAT Registered Businesses. Are you ready to get started?

In our latest Making Tax Digital blog we can announce that Xero’s Making Tax Digital Pilot is now live, so you can jump onboard!

Find out more about MTD here, how much it’ll cost you here, and what the benefits are to you here.

Who can join the Making Tax Digital Pilot?

Any business with up to date VAT returns and VAT payments, with turnover over £85,000 (the current VAT threshold).

What do you need to do first?

  1. Make sure you’re a client of ours (at the moment you need to sign up to the HMRC/Xero Pilot through your Xero Accountant
  2. Give us the nod to say you want to join the pilot.
  3. Make sure you’re using MTD compliant online accounting software (for us it’s Xero, beautiful accounting software)
  4. Get a clean bill of health from us to say you’re Xero is nice and tidy.
  5. What happens next?

  6. We’ll make sure that you’re signed up properly with HMRC for the MTD pilot.
  7. We’ll also make sure we switch you over to the new MTD VAT return experience in Xero.
  8. Anything else?

  9. Yes! Make sure you keep an eye out from emails from us as we move you over to the HMRC and Xero MTD Pilot.
  10. Get excited!
  11. Feel smug that you’re ahead of the game, and won’t be panicking on 1 April 2019!
  12. And do keep asking questions. We’ve got this, and we’ve got you, but it’s important that you have no worries or concerns, so questions are good.
  13. There’s no such thing as a stupid question!

That’s it!

All you need to do now is have a chuckle at Xero’s new MTD Mascot Dexter! Making Tax Less Taxing.

Thank you for reading. Email Sharon if you’d like to sign up to the HMRC / Xero MTD Pilot.

Sharon

 

 

 

 

Professional Services Business of the Year

Kinder Pocock are an approachable cloud-savvy firm of accountants based in Herefordshire but supporting businesses on the move.

We specialise in Security, Design and Indie Hospitality businesses.

@KinderPocock

01432 273400

Contact Us to see how we can help

 

 


Budget 2018 – The Business Bits

Today saw the Budget announced.  It can be a fairly dull affair, so we’re bring it to you in manageable chunks!  Here’s The Budget 2018 – the Business Bits!

So that we do make this a manageable read, we’re just bringing you the highlights, and we’re aiming to keep it snappy. If you’d like more detailed info please get in touch!  Please also have a read of our blog:  Budget 2018 – It’s Personal! for personal tax changes.

Business Rates Relief

Business rates will be cut by 1/3 for small retailers for 2 years, for businesses with a rateable value (rent) of £51k or less.

Quick example:

If you’re rateable value is £51k, this could mean as much as £8k saved in business rates!

Weird announcement alert:

There will be business rates relief for public lavatories!

High Street Retail Boost

There will be a £675 mllion “Future High Streets” fund, in recognition of the decline of high street retail. The fund can be used to regenerate our high streets, including change of use to residential for some retail premises.

Annual Investment Allowance Increase

This is currently £200k, but will increase to £1 million in April.  What does it mean? You can currently spend up to £200k on allowable business assets (think equipment, vans, kitting out your shop premises) and all of this comes off your profit before we work out your tax.

£200k already sounds a lot, and in some cases means everything you spend is allowable.  However, for businesses growing fast, the increase is a major advantage.

Quick example:

If you have profits of £30k, and buy a van for £20k, this will reduce your taxable profits to £10k. If you’re a limited company this will reduce your corporation tax by £3,800. If you’re a sole trader it’ll reduce your tax and NIC by £5,800! Tidy!

VAT Threshold Stays the Same

For the 2nd year running the VAT threshold hasn’t increased, so it’s still £85k.  This means that if your sales for any 12 month period are over £85k, you need to register for VAT within 30 days.

Quick example:

If you go over £85k in one month, say October, you’ve got til 30 November to register, then you must start charging VAT from 1 December (and start claiming VAT).

National Living Wage and Minimum Wage Increase

Make sure you’re paying your employees the right amounts:

National Living Wage increases from £7.83 to £8.21 from April 2019 for over 25s

National Minumum Wage increases from £7.34 to £7.70 per hour for 21s to 24s

Apprentice Rate increases from £3.70 to £3.90

Alcohol Duties

This is an important one if you’re business is in hospitality:

Beer, cider and spirits duty frozen again

RPI increases on wine duty will continue

White ciders will be taxed at a higher rate

New Digital Services Tax

This has been introduced to tax big business, like Amazon and Google, and will apply to businesses with sales over £500k. More detail to be announced.

Summary

This budget was delivered with many references to “the end of austerity”.  It’s a welcome budget for help with business rates, and support for our high street, that is suffering badly.

If you’d like more detail on any of the above points, please get in touch!

Thank you for reading!

 

Sharon

Professional Services Business of the Year

Kinder Pocock are an approachable cloud-savvy firm of accountants based in Herefordshire but supporting businesses on the move.

We specialise in Security, Design and Indie Hospitality businesses.

@KinderPocock

01432 273400

Contact Us to see how we can help


Why Are Mileage Claims Such a Bore?

We get it, we speak to lots of our clients, so we know that mileage claims are such a bore!

It’s difficult to keep up to date, and no fun at all, but we have a solution!

 

Do you leave your Mileage Claims to the end of the year?

You’re not the only one.  But how much time does that take?  Longer than it needs to, that’s for sure. You’ve got to go back to your diary or online calendar, then probably go to Google Maps or something similar to work out the number of miles. Oh and before that you’ve got to dig out the correct address.

There is a Better Way!

What if I told you you’d look forward to recording your mileage on every journey? With the Tripcatcher app you can use their GPS tracking feature to record your actual journey, live! You can go back and record a journey you’ve finished, with only a few fields to complete, and you can even save favourite or repeating journeys. So quick and easy!

Claim more expenses and VAT

Because you’ll now be recording all your journeys, and Tripcatcher also records the VAT on each journey, you’ll get more cash back from your business, and more VAT back from HMRC! Tripcatcher pushes your mileage claims to Xero whenever you’re ready, and whatever dates you choose.

You can even record passengers, bicycle and motorcycle mileage – it’s all claimable!

What are you waiting for?

Get in touch right now to see how easy it is to use, and to get set up.

 

Thank you for reading! Please do get in touch if you’d like to know more about our online apps.

Sharon

Professional Services Business of the Year

 

Kinder Pocock are an approachable cloud-savvy firm of accountants based in Herefordshire but supporting businesses on the move.

We specialise in Security, Design and Indie Hospitality businesses.

@KinderPocock

01432 273400

Contact Us to see how we can help


Making Tax Digital – What’s in it for me?

We’re Counting Down to Making Tax Digital day on 1 April 2019. It’s something HMRC need us to do, but it’s only human to ask “What’s in it for me?”

Making Tax Digital is compulsory for all VAT registered businesses, and comes into force from 1 April 2019. Read more about the details here, and how much it’s likely to cost here.

So we know it’s a royal pain, but we have to do it, so what are the benefits I hear you say?  Well there are many, so let’s go through them one at a time:

Your Finger on your Business Pulse

The first step in getting ready for Making Tax Digital is to get you set up on Xero Beautiful Accounting Software. The immediate benefit is having all your business finances at your fingertips. The browser’s super easy to use, but Xero’s app let’s you invoice and receive payments on the fly, check and reconcile your bank balance, check who owes you, and access contact details. All from your phone or tablet, wherever you are! Awesome!

You’ll also have the right info from which to make the right decisions. No more guesswork. You can see with a couple of clicks how you’re doing, and we can use this data to guide you on your business journey, looking forwards not backwards. Our blog explains more about our Strategy Sessions.

We have been 100% Xero since 2012, and consider ourselves specialists. We’ll set you up and train you free of charge!

Never Miss another Expense Claim!

Using apps like Receipt Bank means that you’ll never miss an expense claim again. So any business expenses that you pay cash, or out of your own pocket can very easily be claimed against your profits, and means you get paid back too! Most importantly as you take a  photo as soon as you get a receipt, it also means that you’ll claim more VAT back from HMRC. It’s a win win!

Mileage Claims become a Joy and not a Nightmare!

Tripcatcher is our new favourite app, have a look at our blog here on claiming mileage easier, but safe to say mileage claims will no longer be the pain in the **** that they have always been.

Use GPS to track business journeys, save favourites for regular business trips, and push your mileage claims straight to Xero.

More Cash in the Bank

Once you are up and running on Xero, you can start to really work with the data you have. Connecting apps like Chaser and GoCardless mean that you’ll get paid quicker. You’ll also get more money back from expense claims and claiming all the VAT you’re owed!  I know right, it does sound too good to be true! Have a look at our blog on Getting Cash in the Bank Quicker

More You Time!

Whether this is more time to plan your business, more time with the family, more time at Zumba (oh, that’s me, what would you rather be doing?)  More time learning a new skill, these online apps will provide more time in spades (or hours!).

Sound Good?

Hopefully my blog is giving you some idea as to how Making Tax Digital is the tiny first step on a more streamlined and powerful way of doing business. Actually Making Tax Digital is not the pain it’s made out to be, it’s a bonus to start you on your online journey!

Thank you for reading! Please do get in touch if you’d like to know more about our online apps, and how easy we can Make Tax Digital for you.

Sharon

Professional Services Business of the Year

 

Kinder Pocock are an approachable cloud-savvy firm of accountants based in Herefordshire but supporting businesses on the move.

We specialise in Security, Design and Indie Hospitality businesses.

@KinderPocock

01432 273400

Contact Us to see how we can help


How to Charge VAT on TakeAway Food

If you’re running a restaurant, bar or cafe, and regularly sell takeaway food, you will need to be up to speed on how to charge VAT on TakeAway Food.

We are going to be running a series of blogs on issues for indie food businesses, so do get in touch if there’s a particular topic or issue you’d like help with, or would like us to feature.

There is very detailed guidance on VAT on takeaway food from HMRC, which you can read here, but make sure you have a few hours spare, and have a degree in HMRC jargon!

Alternatively, read on for a lighter guide:

So firstly, let’s get a few things straight about VAT on TakeAway Food:

Look away now if your business is not registered for VAT. You don’t need to worry about VAT at all at the moment. If you’d like a chat about VAT and whether you should be registered, give us a ring on 01432273400 or get in touch by email.

If you don’t sell takeaway food, you can also look away now!  If you’re thinking about it, then do read on, as it may affect your decision!

What counts as takeaway food?

HMRC’s definition is any food or drink purchased to consume off the premises.

You have premises and sell takeaway food

If you serve food and drink on the premises (not to take away) then you have to charge VAT on everything, simples.

Examples of premises are:

a whole restaurant area

an area with tables and chairs in a retail complex, for the use of customers only

an outdoor area with tables and chairs, for the use of customers only

seating area in a supermarket, providing food and drink

stall in a sports stadium, amusement park etc with facilities for use of customers

Basically any area with tables and chairs specifically for the use of your customers

If in doubt, check with us or HMRC (choose us, every time, let us deal with HMRC for you!)

The easy bits

Hot take away food is most likely to be standard rated for VAT (the current standard rate is 20%) but there are certain tests (more below).

Hot take away drinks are standard rated (20% VAT).

Cold take away food and drink is usually zero rated for VAT. Unless it’s usually standard rated (this includes things like crisps, sweets, bottled water etc). Bottled water is standard rated! Crazy but true!

Tests for 20% VAT on hot take away food

OK so this is the not so fun bit, and I’d strongly suggest you get some advice on this.  The rules are quite long-winded, but here’s the straightforward bits.

Hot food is 20% VAT if one or more of the 5 following tests are met:

1. it’s been heated for the purposes of enabling it to be consumed hot

2. it’s been heated to order

3. it’s been kept hot after being heated

4. it’s provided to a customer in packaging that retains heat or in any other packaging that is specifically designed for hot food

5. it’s advertised or marketed in a way that indicates that it’s supplied hot

So if it’s hot because you’ve just baked it (think sausage rolls, muffins etc) but usually served cold it will be zero rated.

I just don’t get it

It’s not straightforward, is it?  My suggestion would be to apply each of the tests above to your specific takeaway menu, then it will make more sense.  For instance – hot baked potato: think through the 5 tests above, do you think you could say yes to more than one of them?  I think you could say yes to all 5 tests for a baked potato.  Still don’t get it? You need to come and talk to us!

OK how on earth do I make sure I’ve got this right?

To get it right you need to make sure:

a) you’re charging the right amount to your customer and

b) you’re declaring the right amount on your VAT return

We’d always recommending automating this bit, and using EPOS software that links into your accounting software (we love Xero by the way). It would be a nightmare to try to calculate and record every sale as you made it, and would massively slow down your serving times.

How do I get my EPOS/till system to record the correct price and VAT?

Firstly you can add all of the food and drink products that you sell into your EPOS, adding the correct VAT rate where you know it.  You know what I’m going to say – do your research or get advice on the correct VAT rates before entering all your products into your software!

The best EPOS software will allow you to put different prices for products that you serve on the premises or takeaway. That way you can choose the correct one when you sell it.

If your EPOS software doesn’t have a feature to add a different price you will have to add a separate product for each takeaway item, with the correct price and VAT.

At the end of each day, your EPOS will send the correct sales and VAT information to Xero, so that this information is ready and waiting on your next VAT return.

And what are the best EPOS systems?

We’re always reviewing and researching the best apps out there, so stay tuned for a product comparison blog.  In the meantime, the EPOS solutions that offer separate takeaway prices are Kounta, Nobly and IntelligentPOS. However, we are currently checking how these integrate with Xero, as they’re not ideal at the moment. We’re also Vend Partners, which does have a great integration with Xero, but more specifically suited to small shops, not hospitality businesses.

If you’d like more help on EPOS solutions, please get in touch, and keep checking back on our blog for more info.

 

I hope my blog has made a bit more sense to a very confusing VAT issue! We’re always here to help if you need us.

Thank you for reading!

 

Sharon

 

 

 

Awards_Practice-Winner-Client-Service-Firm

Kinder Pocock are an approachable cloud-savvy firm of accountants based in Herefordshire but supporting businesses on the move.

We specialise in Indie Hospitality, Security and Design.

 

@KinderPocock

01432 273400

Contact Us to see how we can help