Corporation Tax » Happy Accountant: Accounting Blog & Online Accountant

Choosing Bookkeeping/Accounts Software
* Choosing bookkeeping or accounting software for your business or organisation is a big step. There is so much available on the market, with new vendors and products coming out all the time. So, how do you decide which is the best for you? How much you are prepared to pay? There is such range of [read more]
The Consequences of Being Inside IR35
*The financial consequences of being inside IR35 are mainly (there are other consequences) you lose the tax-avoidance facility of dividends. Essentially, if you are within IR35, you must calculate a “deemed payment” and pay NICs and PAYE (tax) on that deemed payment. The tax-deductible amounts that you can claim in travel and expenses will also [read more]
When to Register as an Employer
*As soon as you take anyone on where any of the following conditions apply, you need to register with HMRC as an employee. the employee already has another job the employee receives a pension (state or occupational) the employee will earn at or over the PAYE (tax) threshold the employee will earn at or over [read more]
SAGE VAT codes
*Sage uses the following codes for VAT: T0 – zero rate VAT T1 – standard rate VAT T2 – exempt (eg. stamps, insurance, aire fares, bank charges, financial services T4 – EC Sales T5 – lower rate VAT (eg. electricity, gas, women’s sanitary products) T9 – not involving VAT/outside scope of VAT (eg. suppliers that [read more]
Registering for VAT and Keeping VAT records
*You must register for VAT with HMRC. This can be done using a paper form or online. Once registered, you generally have to keep reocrds of: the VAT you charge on your sales (output VAT) the VAT you have paid on your purchases (input VAT) the total amount of sales excluding VAT the total amount [read more]
Using Excel for Accounts and Bookkeeping
*The great thing about MS Excel (and others say it’s greatest downfall) is that it is so adaptable and because it normally comes bundled with the PC you bought for your business, it’s cheaper than buying accounting software. For start ups and possibly for the sole trader or small limited company, it’s a very easy way of keeping track [read more]
Why have an Accountant?
*Because… Doing the accounts takes you away from your real business An accountant could do the job quicker and more accurately An accountant could save you money in the form of tax-savings as well as sometimes finding other areas for savings and efficiencies. Professionally produced year end accounts will be taken more seriously by banks and [read more]
What is the Difference between Bookkeeping and Accounting?
*The two really overlap: Bookkeeping is part of accounting. It is the recording of the day to day transactions of a business – either in “manual” books, or on computer software or spreadsheets. Therefore, bookkeeping can play an important role in the efficient running of a business: Purchase Ledger – A business needs to pay [read more]
Simple Bookkeeping
*You need three basic “books” (or ledgers): – a cashbook to record all cash/cheques/bank transfers going in and out of your business – a purchase ledger, to record details of all the purchases that you make – a sales ledger to record details of all the sales that you make (if you are a retail outlet, [read more]
Advantages of a limited company
*Obviously, the main attraction of forming a limited company is the “limited liability” of its owners, the shareholders, as it protects the personal assets of the owners. Should the company fail, the company is liable without limit for its own debts, but its shareholders’ liability is limited to the amount oustanding (if any) on their [read more]
What do you need to set up a company
*Essentially, before you begin, you need: a company name, which can be almost any name that has not previously been registered. a Director a Company Secretary (which cannot be the sole director) (or you could have two directors, one of whom could also act as Company Secretary) a shareholder (which can be either the director [read more]
Choosing Your Accountant
* Speak to your prospective accountant on the phone first and then, if you are still happy, set up an initial meeting – which should be free of charge. Ensure that they are professionally qualified and are current members of a professional body (Chartered Accountant (ICAEW/ICAS/ICAI), Chartered Management Accountant (CIMA), Chartered Certified Accountant (ACCA) for [read more]

Use of Home – Pitfalls 29/07/2010 Use of Home – Pitfalls Posted by Happy Accountant at 9:00 am No Responses Accounting, Corporation Tax, Personal Tax, Tax Some pitfalls in calculating “use of home” costs: not ensuring that the calculation results in a reasonable figure. not using a reasonable basis of apportionment not being able to substantiate claims greater than £3/week with bills/receipts. not having a licence agreement in place (directors/limited companies) Full Article	Directors – Use of Home 28/07/2010 Directors – Use of Home Posted by Happy Accountant at 9:00 am No Responses Accounting, Corporation Tax, Limited Company, Saving Money, Tax *The situation of use of home is slightly different for directors than for sole traders. In this instance, it may be more straightforward and advantageous for the company to pay rent to the director for the use of their home. (Make sure that there is a licence agreement in place to cover the rental agreement.) The [read more] Full Article
Use of Home 26/07/2010 Use of Home Posted by Happy Accountant at 9:00 am No Responses Corporation Tax, Limited Company, Personal Tax, Saving Money, Sole Traders, Tax * Many self-employed people/sole traders and company directors work from home some of the time and many, if not most of these people can claim a tax-deduction for some of the expenses incurred in working from home ,having a home office or “use of home“. The law says that an expense is only tax-deductible if it [read more] Full Article	Changes in Corporation Tax 23/06/2010 Changes in Corporation Tax Posted by Happy Accountant at 9:15 am No Responses Corporation Tax As part of the Budget, it has been announced that the Corporation Tax rates will change from 1 April 2011: Main rate of Corporation Tax will fall to 27% (from 28%) Small Companies Rate of Corporation Tax will fall to 20% (from 21%) Full Article
What is IR35 07/04/2008 What is IR35 Posted by Happy Accountant at 9:00 am No Responses Corporation Tax, Limited Company, PAYE&NIC, Personal Tax, Tax *IR35 was first propsed in 1999 and was introduced into UK legislation in 2000. The primary aim has been to prevent the avoidance of tax and national insurance by trading through an intermediary (commonly a limited company) rather than being an employee. Prior to IR35, individuals could form a limited company and invoice their “client”/”employer” [read more] Full Article	Investment, Tax and Extraordinary Items 24/05/2007 Investment, Tax and Extraordinary Items Posted by Happy Accountant at 9:25 am No Responses Accounting, Corporation Tax *Investment Income The various types of investment income can be broken down into three main headings: Income from shares Income from other fixed assets (for example, property) Interest If there are any losses or interest payable, these are then deducted (but they are shown separately on the face of the Profit and Loss Account as opposed to being hidden [read more] Full Article
Disadvantages of a limited company 16/04/2007 Disadvantages of a limited company Posted by Happy Accountant at 9:25 am No Responses Corporation Tax, Limited Company *It’s more costly both in terms of time and money to trade as a limited company. First up, you have to pay to form your limited company. If you do it yourself, it can be as low as £20, but if you get someone to do it on your behalf, it can be as much more. [read more] Full Article