Small Business Accounting Support

PAYE

RTI late filing will incur a monthly penalty of £100, depending on the number of employees you have.

Self Assessment

A late filing penalty of £100 is imposed if your tax return is up to three months late. The penalty increases if you're later than three months, or if you pay your tax bill late. Additionally, interest will be charged on late payments.

VAT

You may be required to pay a surcharge if you submit a late return. Surcharges for late payments or VAT return filings are indicated on the HMRC website.

Corporation Tax

HMRC's penalties are as follows:

• 1 day late: £100
• 3 months late: An additional £100
• 6 months late: Your total corporation tax bill will be estimated, after which a penalty of 10% of unpaid tax will be imposed.
• 12 months late: An additional penalty of 10% of unpaid tax will be imposed.

Company accounts

The following penalties for private limited companies will be imposed if you fail to file your accounts with Companies House on time:

• Up to 1 month late: £150
• 1 - 3 months late: £375
• 3 - 6 months late: £750
• More than 6 months late: £1,500

Here's a brief overview of the VAT changes occurring after Brexit:

Exporting goods to the EU:

• EC Sales List: Previously, UK VAT-registered businesses that met specific conditions and were supplying goods to VAT-registered customers in the EU had to complete an EC Sales List. This is no longer required.
• Distance selling threshold: Starting from 1 January 2021, UK sellers can no longer take advantage of the distance selling thresholds.

Importing goods from the EU to the UK:

• Abolition of Low Value Consignment Relief (LVCR): The LVCR, which relieves import VAT on goods valued at £15 or less will no longer apply to goods imported into the UK, or for goods supplied to Northern Ireland from outside the UK and EU.
• Postponed VAT accounting: Starting from 1 January 2021, UK VAT registered businesses importing goods from locations worldwide into the UK can use a new system known as postponed VAT accounting.
• The £135 threshold: Starting 1 January 2021, the point at which VAT is collected on imported goods valued at up to £135 is moved from the point of importation to the point of sale. UK supply VAT-not import VAT-will be charged at the point of sale.

EU VAT Registration Number Validation service:

• UK businesses will be able to continue to use the EU VAT number validation service to check the validity of EU businesses, but UK VAT registrations will cease to be included.

VAT flat rate scheme:

• The scheme no longer applies to any sales a seller makes through an online marketplace, where the OMP is liable to account for VAT.

EU VAT refund system:

• UK businesses can no longer reclaim VAT incurred in other EU countries using the electronic EU VAT refund system.

Further details on the above mentioned changes can be found in our VAT guide for ecommerce businesses.

There are additional VAT changes implemented that do not apply to ecommerce merchants. These include:

• The VAT treatment of the supply of services to the EU
• The abolition of the £8,818 annual threshold for cross borders sales of digital services to EU consumers
• Businesses are no longer able to use the UK's MOSS scheme to report and pay VAT on sales of digital services to consumers in the EU. The new rules regarding the registration for the VAT MOSS non-union scheme in an EU member state will impact UK and non-UK businesses.

Brexit has created a significant impact on imports, exports and shipping:

• Ecommerce businesses will be affected by post-Brexit VAT changes, which includes the abolition of the distance selling threshold and Low Value Consignment Relief (LVCR), the introduction of the postponed VAT accounting system and more.
• Businesses will have to abide by the new import and export rules, which may mean dealing with additional paperwork and customs checks.
• The above mentioned changes will further impact other aspects of your business, such as your supply chain, fulfillment process and pricing. Additional checks may create shipping delays, while the new VAT changes will lead to a rise in costs.

Here's a brief summary of the ways in which ecommerce businesses will be impacted:

• Businesses will have to abide by the new import and export rules. We've covered the VAT changes impacting ecommerce businesses in greater detail in our guide.
• Businesses may face additional paperwork and customs checks.
• These changes will impact other aspects of your business, such as your supply chain, fulfillment process and pricing. Additional checks may mean a delay in shipping, while the new VAT changes will lead to a rise in costs. As such, businesses may need to decide who will bear the burden of the increased costs, and to assess if revising their prices is necessary.
• UK citizens and companies established solely in the UK will no longer be eligible to hold .eu domains. This will likely result in additional costs incurred, as business purchase new domains or undertake the necessary measures to demonstrate compliance with the .eu regulatory framework.

Xero connects with most banks in the UK, including Barclays, HSBC, NatWest, RBS and more. You may view the full list of banks here.

Presently, FreeAgent supports over 40 feeds from banks worldwide. You may refer to their resource to see which banks are listed, or search for your bank using the search tool in the Banking area of FreeAgent.

Yes, FreeAgent offers a mobile accounting app.

You can do so using FreeAgent's ‚Find an Accountant' resource.

As a limited company director, you may pay yourself through taking a salary and drawing dividends.

Salaries are typically paid out monthly. While dividends can be drawn at any frequency across the year-as long as there are sufficient distributable profits-payments are typically made on a monthly or quarterly basis.

As a limited company director, you can pay yourself through:

1. Taking a salary

As the director of a limited company, you're also considered an employee. As such, you can set up a salary which will then be paid through the PAYE scheme-similar to how other employees of a company will receive their pay.

You'll run a payroll, report to HMRC and receive your salary (after taxes have been deducted at source).

2. Dividends

A dividend is a payment of profit that a limited company distributes to its shareholders based on the share split.

While dividends can be drawn at any frequency across the year, as long as there are sufficient distributable profits, payments are typically made on a monthly or quarterly basis.

You can use your VAT online account to set up a Direct Debit payment.

Do note that Direct Debit payments take at least three working days to clear. As such, you should set up the Direct Debit at least three working days before submitting your online VAT return, or the payment won't be processed in time.

The term ‚"debtor" refers to an individual or company that owes money, or is in debt to an individual or organisation. An example would be a customer that has purchased a product or service from your business. In the balance sheet, debtors are listed under the current assets section.

An invoice number is a unique number that is assigned to each invoice. This number is one of the most important elements of every invoice. Its role is to identify transactions, so it needs to be unique. Invoice number can contain only numbers or letters and numbers. It may contain date of issue, name of project or task.

Yes, you can claim the purchase of computers as a deductible expense.

For further information on allowable business expenses, refer to our guide on allowable limited company expenses and the self-employed.

Tangible assets are physical assets or property owned by a company, such as equipment, buildings, and inventory.

What are Tangible Assets?

Tangible assets are physical items that have value and can be owned or controlled to produce value. They are also known as ‘real assets’ or ‘hard assets’ and are a key component of any business. Tangible assets are important for businesses in the UK as they provide a source of income and can be used to secure loans or investments.

Tangible assets can be divided into two main categories: fixed assets and current assets. Fixed assets are those that are used for long-term purposes, such as buildings, land, and equipment. Current assets are those that are used for short-term purposes, such as inventory, accounts receivable, and cash.

Fixed assets are typically used to provide the infrastructure necessary for a business to operate. These assets are usually long-term investments that are not easily converted into cash. Examples of fixed assets include buildings, land, and equipment.

Current assets are those that are used to generate revenue and are usually converted into cash within a year. Examples of current assets include inventory, accounts receivable, and cash.

When starting a business in the UK, it is important to consider the tangible assets that you will need. This will help you to determine the type of business you will be running and the amount of capital you will need to invest.

When looking at tangible assets, it is important to consider the cost of acquiring and maintaining them. For example, the cost of purchasing a building or land will be higher than the cost of purchasing equipment. It is also important to consider the depreciation of tangible assets over time.

It is also important to consider the liquidity of the tangible assets. Liquidity refers to the ability to convert the asset into cash quickly and easily. For example, inventory is a highly liquid asset, while buildings and land are not.

When starting a business in the UK, it is important to consider the tangible assets that you will need. This will help you to determine the type of business you will be running and the amount of capital you will need to invest.

It is also important to consider the tax implications of owning tangible assets. In the UK, businesses are taxed on the profits they make from their tangible assets. This means that businesses need to consider the tax implications of owning tangible assets when making decisions about their investments.

Finally, it is important to consider the insurance implications of owning tangible assets. In the UK, businesses need to insure their tangible assets in order to protect them from damage, theft, or other losses.

Tangible assets are an important part of any business in the UK. They provide a source of income and can be used to secure loans or investments. When starting a business, it is important to consider the cost of acquiring and maintaining tangible assets, their liquidity, and the tax and insurance implications of owning them. By doing so, businesses can ensure that they have the right tangible assets to support their operations and help them to achieve their goals.

An asset is any resource that is owned by a company. There are two main types of assets: current assets and non-current assets. Current assets are expected to be consumed within a year, while non-current assets are expected to be held for longer than a year.

To hire a new employee, you need to:

• Check if your business is ready to hire a new staff
• Kickstart your recruitment efforts. You can recruit employees on your own, or by using a recruitment agency.
• Check that the candidate has the right to work in the UK
• Find out if they require a DBS check
• Check if you need to enrol the employee into a workplace pension scheme. Here's a guide for first-time employers. If you've already hired employees previously, refer to this resource instead.
• Before carrying out salary negotiations, you need to check the National Minimum Wage for different ages and types of jobs. You'll also need to finalise the employment contract, and provide a written statement of employment particulars within 2 months of the start of employment.
• Notify HMRC that you've hired a new employee. Make sure you're aware of the steps you need to take when you start paying your employee.

If you're hiring staff for the first time, refer to HMRC's guide on the steps you need to take.

Statutory Sick Pay (SSP) is the amount of money mandated by law that every employee must be paid if they are too sick to work. Employees have to meet certain eligibility criteria to qualify for SSP.

Statutory Sick Pay (SSP) is a type of government-funded financial support available to employees in the UK who are unable to work due to illness or injury. It is paid to employees who meet the eligibility criteria and is paid at a flat rate for up to 28 weeks. It is designed to help employees who are unable to work due to illness or injury to cover their basic living costs.

SSP is a legal requirement for all employers in the UK who have employees who are eligible for the scheme. It is important for employers to be aware of their legal obligations when it comes to SSP, as failure to comply with the legislation can result in hefty fines.

Who is Eligible for SSP?

In order to be eligible for SSP, an employee must meet the following criteria:

• They must be employed and have done some work for their employer.
• They must have been ill or injured for at least four days in a row (including non-working days).
• They must earn at least the Lower Earnings Limit (LEL) for National Insurance contributions, which is currently £120 per week.
• They must have been employed by their employer for at least two weeks.
• They must have provided their employer with a fit note from their doctor.

If an employee meets all of these criteria, then they will be eligible to receive SSP.

How Much is SSP?

SSP is paid at a flat rate of £95.85 per week for up to 28 weeks. This rate is reviewed each year in April and is subject to change.

What are the Employer’s Obligations?

It is the employer’s responsibility to ensure that they are aware of their legal obligations when it comes to SSP. Employers must keep records of any SSP payments they make and must ensure that employees are aware of their rights to SSP.

Employers must also inform HMRC of any SSP payments they make and must pay the SSP to their employees within three days of the start of the employee’s period of illness or injury.

Employers must also ensure that they are paying the correct amount of SSP. If an employee is eligible for SSP, but the employer is not paying the correct amount, then the employee can make a complaint to HMRC.

What is the Process for Claiming SSP?

If an employee is unable to work due to illness or injury, then they must inform their employer as soon as possible. The employee must then provide their employer with a fit note from their doctor, which confirms that they are unable to work due to their illness or injury.

The employer must then assess the employee’s eligibility for SSP and must inform HMRC of any payments they make. The employee must then be paid the SSP within three days of the start of their period of illness or injury.

Conclusion

Statutory Sick Pay (SSP) is a type of government-funded financial support available to employees in the UK who are unable to work due to illness or injury. It is important for employers to be aware of their legal obligations when it comes to SSP, as failure to comply with the legislation can result in hefty fines. In order to be eligible for SSP, an employee must meet certain criteria and SSP is paid at a flat rate of £95.85 per week for up to 28 weeks. Employers must keep records of any SSP payments they make and must ensure that employees are aware of their rights to SSP. If an employee is unable to work due to illness or injury, then they must inform their employer and provide them with a fit note from their doctor. The employer must then assess the employee’s eligibility for SSP and must inform HMRC of any payments they make.

If you're self-employed, HMRC will work out your loan repayment amount from your tax return. You make your repayment the same time you pay your tax.

If you're an employee and your salary is above the minimum amount, your loan repayments will be deducted from your salary by your employer.

Additional repayments can be made through your online repayment account and by card, bank transfer or cheque.

A bank deposit involves placing money into an account with a banking institution. Depositing a cheque is one way to make a deposit. You can also deposit cash or make a funds transfer.

You can pay an independent contractor by an hourly or daily rate, or by the project through the contractor's preferred payment method. You won't need to withhold taxes, as they are responsible for paying their own income and National Insurance contributions.

A trial balance is a report that lists the balances of all general ledger accounts of a company at a certain point in time.

What is a Trial Balance?

A trial balance is a financial statement used by businesses to ensure that the total debits equal the total credits in the company’s general ledger. It is a useful tool for businesses to identify any errors in their bookkeeping and to ensure that the accounting records are accurate.

A trial balance is a simple but important step in the accounting process. It is used to check that all the transactions in the general ledger have been recorded accurately and that the debits and credits are balanced. It is also used to prepare financial statements such as balance sheets and income statements.

The trial balance is usually prepared at the end of an accounting period, such as the end of the month or the end of the financial year, and it is a key part of the financial reporting process.

The trial balance is a list of all the accounts in the general ledger, with the total debits and total credits for each account. If the total debits and credits are equal, then the trial balance is said to be in balance. If the debits and credits are not equal, then an error has been made in the bookkeeping process and must be corrected.

In the UK, businesses must prepare a trial balance in order to comply with the Companies Act 2006. The Companies Act states that all companies must prepare financial statements, including a balance sheet and an income statement, which must be based on the trial balance.

For businesses that are just starting up, or those that are looking to set up a business, it is important to understand the concept of a trial balance and how to prepare one.

The first step in preparing a trial balance is to list all the accounts in the general ledger, and to record the total debits and total credits for each account. This can be done manually or using accounting software.

Once the accounts have been listed, the total debits and total credits must be calculated. This can be done by adding up all the debits and credits for each account. The total debits and total credits should match, and if they don’t, then an error has been made in the bookkeeping process and must be corrected.

The trial balance is an important tool for businesses to ensure that their bookkeeping is accurate and that their financial statements are prepared correctly. It is also a requirement of the Companies Act 2006, so it is important for businesses to understand the concept and how to prepare a trial balance.

You can submit the P11D form via HMRC's PAYE online service, HMRC's Online End of Year Expenses and Benefits service or through a commercial payroll software. If you're unable to use the online methods above, you can also download the forms P11D and P11D(b) and send it to the P11D Support Team via post.

Current liabilities, otherwise known as short-term liabilities are due within a year.

It is the amount of money that must by law, be paid to an adoptive parent when he or she takes time off to adopt a child, or have a child through a surrogacy arrangement.

Statutory Adoption Pay (SAP) is a payment made to employees who are adopting a child in the UK. It is available to employees who have been employed for at least 26 weeks prior to the date of the adoption and who meet the other eligibility criteria. The payment is made to the employee from their employer and is intended to provide financial support during the period of adoption.

SAP is a form of statutory pay, which means it is a legal requirement for employers to provide it. The payment is made for up to 39 weeks and is based on the employee’s normal weekly earnings. The payment is made up of two parts: the basic rate, which is 90% of the employee’s normal weekly earnings, and the additional rate, which is a flat rate of £151.20 per week.

SAP is intended to help employees meet the costs associated with adopting a child, such as legal fees and travel expenses. It is also intended to provide financial security during the period of adoption, as the employee may have to take time off work to attend appointments and meetings related to the adoption process.

For those who are setting up a business or have only just started a business, it is important to understand the requirements of SAP and how it applies to your employees. Employers are legally required to provide SAP to eligible employees and failure to do so could lead to legal action.

It is important to note that SAP is not the same as maternity pay and is not available to employees who are pregnant, or who are adopting a child on behalf of someone else. The payment is also not available to employees who are adopting a child from abroad.

When an employee is eligible for SAP, the employer must notify them in writing within 7 days. The employee must then provide the employer with a copy of the adoption certificate within 28 days of the date of the adoption. The employee must also provide the employer with proof of their earnings for the 8 weeks prior to the date of the adoption.

Once the employee has provided all the necessary documentation, the employer must make the payment within 14 days of the date of the adoption. The payment must be made for up to 39 weeks, depending on the employee’s normal weekly earnings.

For those setting up a business or who have only just started a business, it is important to understand the requirements of SAP and how it applies to your employees. Employers must provide SAP to eligible employees and failure to do so could lead to legal action. It is also important to ensure that the necessary documentation is provided to the employer in a timely manner, as this will ensure that the payment is made on time.

By understanding the requirements of SAP, employers can help ensure that their employees are provided with the financial support they need during the period of adoption. This can help to ensure that the adoption process is as smooth as possible and that the employee is able to take the necessary time off work to attend appointments and meetings related to the adoption process.

As a limited company director, you pay yourself through drawing a salary and receiving dividends from your company.

Drawing a salary from your company is fairly similar to how you'll be paid if you were employed elsewhere-you'll run payroll, submit the required information to HMRC each month and receive your salary (after income tax and NIC have been accounted for).

Depreciation is the measurement of the decline in the worth of an asset. Common methods of depreciation include: straight line, units of production, sum-of-years-digits and double-declining balance.

Fixed assets are property or equipment that a company owns, and uses in its day-to-day operations for income generating activities. These include machinery, equipment, buildings and land.

What Are Fixed Assets?

Fixed assets are tangible items that a business owns and uses in its operations. These assets are usually long-term investments and are considered to be the backbone of any business. They are also referred to as capital assets, plant assets, or property, plant and equipment (PP&E).

Fixed assets are important for businesses because they provide the necessary resources to produce goods and services. They can also be used as collateral for loans and investments, and they can help generate income.

Fixed assets can include items such as land, buildings, machinery, vehicles, furniture, and computer equipment. They can also include intangible items such as patents, copyrights, and trademarks.

In the UK, fixed assets are typically defined as those that are held for more than one year. This is because the tax system in the UK is based on the accrual basis of accounting, which means that expenses and income are recorded when they occur, rather than when they are paid or received.

When setting up a business, it is important to consider the types of fixed assets that will be required. For example, if you are starting a manufacturing business, you will need to purchase machinery, tools, and other equipment. If you are setting up an office, you will need to purchase furniture, computers, and other office supplies.

It is also important to consider the cost of the fixed assets. This will depend on the type of asset and the quality of the item. For example, the cost of a new computer will be higher than the cost of a used one.

When purchasing fixed assets, it is important to consider the depreciation of the asset. This is the amount of the cost that is written off each year due to the asset’s age and wear and tear. The depreciation rate of an asset can be determined by the type of asset and its useful life.

It is also important to consider the maintenance of fixed assets. This is the cost of repairs and maintenance that are required to keep the asset in good condition.

Finally, it is important to consider the insurance of fixed assets. This is the cost of insurance that is required to protect the asset from damage or theft.

Fixed assets are an important part of any business, and it is important to consider all of the costs associated with them. By understanding the types of fixed assets that are required, the costs associated with them, and the maintenance and insurance costs, you can ensure that your business has the necessary resources to succeed.

An annual return (AR01) is a document that all businesses are required to submit to Companies House each year. It details general information about a company, such as its ownership, capital position and management. The annual return has been replaced by the confirmation statement (CS01) since 30 June 2016.

Current assets are assets that are convertible to cash in less than a year.

Retained profits, or retained earnings are profits that a firm has earned to date (after deducting dividends or other distributions paid out to investors) and are retained in the company's accounts. In a balance sheet, retained profits are included under the owner's equity section.

Retained profits, or retained earnings are profits that a firm has earned to date (after deducting dividends or other distributions paid out to investors) and are retained in the company's accounts. In a balance sheet, retained profits are included under the owner's equity section.

If you're the director of a limited company, you're also considered an employee. As such, you may pay yourself a salary through the PAYE scheme-which is similar to how other employees of the company receive their pay.

You'll need to register as an employer with HMRC (even if you're only employing yourself as the sole director of a limited company), set up and run payroll, report to HMRC and abide by HMRC's record keeping requirements.

The P45 is a tax form that provides your new employer with details of how much taxable salary you've paid over the course of the current tax year, along with how much has been deducted, and your tax code at the time of leaving your last job.

A P46 is a form that takes the place of a P45 if you don't have one from a previous employer. It ensures you pay the correct amount of income tax from your pay.

The common methods of depreciation are straight line, units of production, sum-of-years-digits and double-declining balance.

In business accounting, amortisation is a method of calculating the value of a business asset over time. It is the process of spreading out the cost of an asset over its useful life.

In relation to loans, amortisation refers to the spreading out of loans into a series of fixed monthly installments.

Through the agent authorisation process, a client is able to authorise an agent to deal with HMRC on their behalf. Further information is available on the HMRC website.

The portability of a laptop brings in a layer of complexity, as they tend to be purchased for both business and personal use. You can claim it as an expense, but you will need to apportion between business and personal use.

For further information on allowable business expenses, refer to our expenses and allowances guides for limited company directors and the self-employed.

Unallocated payments are where the client has given you more money than they owe.

Unallocated payments are payments made to a business that are not allocated to a specific purpose or account. These payments are often used to cover a variety of expenses, such as payroll, taxes, rent, utilities, and other general expenses. Unallocated payments are a common practice in the UK, and are used by many businesses to ensure that their finances remain in order.

For those who are just starting a business, or have recently started a business, understanding what unallocated payments are and how they work is essential. Unallocated payments are an important part of managing a business’s finances and can help to keep the business running smoothly.

What is an Unallocated Payment?

An unallocated payment is a payment made to a business that is not allocated to a specific purpose or account. This type of payment is often used to cover a variety of expenses, such as payroll, taxes, rent, utilities, and other general expenses. Unallocated payments are a common practice in the UK, and are used by many businesses to ensure that their finances remain in order.

Unallocated payments are made from a business’s bank account and are not allocated to any specific account or purpose. This means that the payment can be used to cover a variety of expenses, such as payroll, taxes, rent, utilities, and other general expenses. The payment is also not allocated to any specific account or purpose, meaning that the business can use the payment to cover whatever expenses it needs to.

Advantages of Unallocated Payments

Unallocated payments offer a number of advantages for businesses. One of the main advantages is that they provide a business with flexibility in how they manage their finances. As the payment is not allocated to any specific purpose or account, the business can use the payment to cover whatever expenses it needs to. This means that the business can use the payment to cover unexpected expenses, or to cover expenses that may not have been budgeted for.

Another advantage of unallocated payments is that they can help to ensure that the business’s finances remain in order. As the payment is not allocated to any specific purpose or account, the business can use the payment to cover any expenses it needs to. This means that the business can use the payment to cover any unexpected expenses, or to cover expenses that may not have been budgeted for.

Finally, unallocated payments can help to ensure that the business’s finances remain in order. As the payment is not allocated to any specific purpose or account, the business can use the payment to cover any expenses it needs to. This means that the business can use the payment to cover any unexpected expenses, or to cover expenses that may not have been budgeted for.

Disadvantages of Unallocated Payments

While unallocated payments offer a number of advantages, there are also some potential disadvantages. One of the main disadvantages is that it can be difficult to track how the payment is being used. As the payment is not allocated to any specific purpose or account, it can be difficult to track how the payment is being used. This can make it difficult to ensure that the payment is being used for the intended purpose.

Another potential disadvantage of unallocated payments is that they can be difficult to manage. As the payment is not allocated to any specific purpose or account, it can be difficult to manage the payment. This can make it difficult to ensure that the payment is being used for the intended purpose.

Finally, unallocated payments can also be difficult to manage. As the payment is not allocated to any specific purpose or account, it can be difficult to manage the payment. This can make it difficult to ensure that the payment is being used for the intended purpose.

Conclusion

Unallocated payments are a common practice in the UK, and are used by many businesses to ensure that their finances remain in order. Unallocated payments offer a number of advantages, such as providing businesses with flexibility in how they manage their finances, and helping to ensure that the business’s finances remain in order. However, there are also some potential disadvantages, such as it can be difficult to track how the payment is being used, and it can be difficult to manage the payment. It is important for businesses to understand what unallocated payments are and how they work in order to ensure that their finances remain in order.

Payment terms indicate when payments should be made and how. These terms are usually included in the invoices generated by companies and sent to customers.

What are Payment Terms?

Payment terms are the conditions under which a business agrees to accept payment from its customers. They are an important part of any business’s financial operations, as they determine how and when customers will pay for goods and services. As such, it is essential for business owners to understand what payment terms are and how to set them up correctly.

Payment terms are the conditions of payment that a business agrees to accept from its customers. This includes the payment method, such as cash, credit card or bank transfer, as well as the time frame within which payment must be made. Payment terms also include any discounts or incentives that may be offered to customers for paying early or in full.

When setting up payment terms, it is important to consider the needs of both the business and its customers. For example, some businesses may require payment upfront, while others may allow customers to pay over time. It is also important to consider the customer’s ability to pay, as well as the business’s own cash flow needs.

The most common payment terms in the UK are 30 days, 60 days and 90 days. This means that customers have 30, 60 or 90 days to pay for goods or services. However, some businesses may offer different payment terms, such as 7 days, 14 days or 28 days.

When setting up payment terms, it is important to consider the customer’s ability to pay. This is especially important for businesses that offer goods or services on credit. In this case, it is important to consider the customer’s creditworthiness and the potential risk of non-payment.

It is also important to consider the business’s own cash flow needs. For example, if a business needs to pay suppliers or staff, it may need to receive payment from customers more quickly. In this case, the business may need to set up shorter payment terms.

In addition to setting up payment terms, it is important to ensure that customers are aware of them. This can be done through invoices, statements and other forms of communication. It is also important to ensure that customers are aware of any late payment penalties or interest charges that may apply.

Finally, it is important to ensure that payment terms are enforced. This can be done through regular communication with customers, as well as by using automated systems such as direct debit or credit card processing.

Payment terms are an important part of any business’s financial operations. As such, it is essential for business owners to understand what payment terms are and how to set them up correctly. By considering the needs of both the business and its customers, and by ensuring that customers are aware of payment terms and that they are enforced, businesses can ensure that their payment terms are effective and efficient.

If you're paying an employee for the first time, you'll need to set up payroll. You need to take the following steps:

1. Register as an employer with HM Revenue and Customs (HMRC) and get a login for PAYE Online.
2. Choose payroll software to record employee's details, calculate pay and deductions, and report to HMRC.
3. Collect and keep records.
4. Tell HMRC about your employees.
5. Record pay, make deductions and report to HMRC on or before the first payday.
6. Pay HMRC the tax and National Insurance you owe.

As a limited company director, there are three ways in which you can withdraw money from your company:

• Drawing a salary
• Issuing dividends
• Taking out a director's loan

To pay a dividend, you need to:

• Hold a directors' meeting to‚ declare' the dividend.
• Keep minutes of the meeting, even if you're the only director. For smaller companies, this may often be just a case of getting the paperwork completed.
• Issue dividend vouchers.

The profit and loss account (P&L) is a financial report that shows the revenue, expenses and profit or loss of your company over a specific accounting period.

This period can be a month, a quarter or a year. A P&L is also commonly referred to by other terms, such as the income statement, statement of operations, financial results statement and earnings statement.

The cost of sales is the accumulated total of all costs used to create a product or service, which has been sold. The cost of sales is a key part of the performance metrics of a company, since it measures the ability of an entity to design, source, and manufacture goods at a reasonable cost.

To pay a dividend, you need to:

• Hold a directors' meeting to‚ declare' the dividend.

• Keep minutes of the meeting, even if you're the only director. For smaller companies, this may often be just a case of getting the paperwork completed.
• Issue dividend vouchers

1. HMRC - Companies must register with HMRC to file online and obtain a user ID and password.

2. Companies House ‚- To file online companies must obtain an authentication code from Companies House

Alternatively, the accounts can be posted to Companies House.

The first accounting year end date for a new company is the last day of the month in which the first anniversary falls on. For example, if your company was incorporated on 15 January 2021, the first accounting year end date will be 31 January 2022.

Starting a business is an exciting time, but it can also be a daunting one. One of the most important aspects of any business is accounting, and one of the first things you need to be aware of is your first accounting year end date. This is the date that marks the end of your first accounting period and is used to calculate your business’s profits and losses.

In the UK, the accounting year end date is usually the 5th of April. This is the same for all businesses, regardless of when they started trading. It is important to note that this date cannot be changed, and it is the same for all businesses in the UK.

The first accounting year end date is used to calculate your business’s profits and losses for the period. This is done by looking at your business’s income and expenditure during the period from the start of the accounting year to the end of it. This helps you to understand how much money your business has made or lost during the period, and it also helps you to plan for the future.

Your first accounting year end date is also used to calculate your tax liability. This is the amount of tax you need to pay to HMRC for the period. It is important to understand your tax liability so that you can plan for it and ensure that you have enough money set aside to pay it.

Your first accounting year end date is also used to prepare your accounts. This is the process of preparing financial statements such as a balance sheet and income statement. These statements are used to show your business’s financial position at the end of the accounting period and are used to help you make decisions about the future of your business.

Your first accounting year end date is also used to file your annual tax return. This is the form you need to fill in and submit to HMRC to declare your business’s profits and losses for the period. It is important to ensure that you submit your tax return on time as failure to do so may result in a penalty.

Finally, your first accounting year end date is also used to calculate any other taxes you may need to pay such as VAT or corporation tax. It is important to understand these taxes and make sure that you are paying them correctly.

Overall, your first accounting year end date is an important date to be aware of when you are setting up a business or have only just started a business. It is used to calculate your business’s profits and losses, your tax liability, prepare your accounts and file your annual tax return. It is important to ensure that you understand and comply with all the requirements associated with this date in order to ensure the success of your business.

Here are a few strategies to better cash flow management:

Be rigorous about updating your cash flow: It can be helpful to update your cash flow whenever there is new information-such as when you've made a payment, or when a client informs you that a payment is coming in late. You'll need to have a system for managing your cash flow, whether that's a spreadsheet or cash flow management tool.

Carry out an in-depth analysis on a regular basis: Carve out a block of time each quarter to carry out an in-depth review of your cash flow. You'll want to assess your overall financial position, and look ahead at your cash flow projection for the next quarter.

Implement milestone payments for extended projects: If you're working on an extended project, consider structuring your payments by milestones-rather than receiving a single payment at the end of the project.

A taxable supply is any supply made in the UK which is not exempt from VAT.

What are Taxable Supplies?

If you are setting up or have just started a business in the UK, it is important to understand what taxable supplies are and how they affect your business. Taxable supplies are goods and services that are subject to VAT (Value Added Tax) when they are sold in the UK. This means that you must charge your customers the current rate of VAT on any goods or services you provide, and then pay the VAT to HMRC (Her Majesty’s Revenue and Customs).

In order to understand what taxable supplies are, it is important to understand the concept of VAT. VAT is a tax that is applied to goods and services that are sold in the UK. It is a type of indirect tax that is collected by the government from businesses and consumers. VAT is charged at different rates depending on the type of goods or services that are being sold. The standard rate of VAT is currently 20%, but there are also reduced rates of 5% and 0% for certain goods and services.

When it comes to taxable supplies, the main thing to remember is that any goods or services that you provide must be subject to VAT. This means that you must charge your customers the current rate of VAT on any goods or services you provide, and then pay the VAT to HMRC. It is important to note that there are some goods and services that are exempt from VAT, such as certain food items, books, and health services.

In order to ensure that you are correctly charging and paying the correct amount of VAT, it is important to understand what counts as a taxable supply. Generally speaking, any goods or services that you provide in exchange for money are considered to be taxable supplies. This includes goods that you sell, services that you provide, and even digital services such as website design and software development.

It is also important to note that some goods and services are subject to different rates of VAT. For example, the standard rate of VAT is 20%, but some goods and services such as energy-saving materials and children’s clothing are subject to a reduced rate of 5%. It is important to be aware of the different rates of VAT and to ensure that you are charging the correct rate to your customers.

Finally, it is important to remember that you must also register for VAT if your business’s taxable supplies exceed a certain threshold. This threshold is currently £85,000, so if your business’s taxable supplies exceed this amount then you must register for VAT and start charging the correct rate of VAT on all of your taxable supplies.

In summary, taxable supplies are goods and services that are subject to VAT when they are sold in the UK. It is important to understand what taxable supplies are and how they affect your business, as you must charge your customers the current rate of VAT on any goods or services you provide and then pay the VAT to HMRC. There are also different rates of VAT for certain goods and services, and you must also register for VAT if your business’s taxable supplies exceed a certain threshold.

A balance sheet is a financial statement that provides a snapshot of the financial condition of a company, showing how much it owns (assets), owes (liabilities) and the amount that is left over for its owners (owners' equity) at a specific point in time. It is typically completed at the end of a month or a financial year.

There are various ways to pay your suppliers. Common payment methods include bank transfers, credit card payments and Letters of Credit.

A supplier reference (or trade reference) refers to a report detailing the payment history between a business customer and its supplier or vendor. It enables a supplier to check your creditworthiness and find out if you're a reliable customer before they offer you credit.

The P35 is an annual tax return completed by employers. The form indicates the total tax and National Insurance contributions for each employee during the previous financial year.

With the introduction of the Real Time Information reporting (RTI), the P35 is no longer required.

Written-down value, otherwise known as the book value or net book value is the value of an asset after accounting for depreciation or amortisation. It represents the present worth of an asset from an accounting perspective.

What are Written Down Values?

Written down values (WDV) are values that are written down and documented by a business or organisation. These values are often referred to as the ‘core values’ of an organisation and are used to inform the decisions and behaviours of those within the organisation. Written down values are important for businesses and organisations of all sizes, as they help to define the culture, mission, and goals of the organisation.

For businesses and organisations that are just starting out, it is important to have a clear set of written down values. These values will act as a guide for the decisions and behaviours of those within the organisation, and will help to ensure that everyone is working towards the same goals. By having a clear set of written down values, organisations can ensure that their employees are working towards the same objectives and that the organisation is on track to achieving its goals.

One of the most important aspects of written down values is that they should be communicated to everyone within the organisation. This means that everyone should be aware of the values and be able to refer to them when making decisions or taking action. This will ensure that everyone is working towards the same objectives and that the organisation is able to achieve its goals.

When setting up a business or organisation, it is important to consider the values that will be written down. These values should be based on the mission and goals of the organisation, and should be communicated to all employees. It is also important to ensure that the values are regularly reviewed and updated to ensure that they are still relevant to the organisation.

Once the written down values have been established, it is important to ensure that they are communicated to all employees. This can be done through regular meetings, emails, or other forms of communication. It is also important to ensure that the values are regularly reviewed and updated to ensure that they are still relevant to the organisation.

Written down values are an important part of setting up a business or organisation. They provide a guide for the decisions and behaviours of those within the organisation, and help to ensure that everyone is working towards the same goals. By having a clear set of written down values, organisations can ensure that their employees are working towards the same objectives and that the organisation is on track to achieving its goals.

Statutory Paternity Pay is the amount of money that must by law be paid to the father of a new baby while he is away from his job.

Statutory Paternity Pay (SPP) is a payment made by employers to employees who are taking time off work to care for a new baby. It is a legal requirement for employers in the United Kingdom to provide SPP to eligible employees, and it is designed to help new parents financially during the period of parental leave.

The purpose of Statutory Paternity Pay is to provide financial support to new parents during the period of parental leave. This is to help them cover the costs of childcare, medical expenses, and other costs associated with having a new baby. It is also designed to help new parents adjust to their new roles as parents and to provide them with the time they need to bond with their new baby.

To be eligible for SPP, an employee must have been employed by their employer for at least 26 weeks by the 15th week before the baby is due. The employee must also have earned an average of at least £120 a week in the 8 weeks leading up to the 15th week before the baby is due.

The amount of SPP that an employee is entitled to depends on their average weekly earnings. The amount of SPP is paid at the rate of 90% of the employee’s average weekly earnings, up to a maximum of £151.20 per week. This amount is paid for up to two weeks, and is paid in the same way as the employee’s normal wages.

Employers are responsible for paying the SPP to their employees, and the payment must be made within 14 days of the employee’s leave commencing. Employers can claim back the cost of SPP from HMRC.

For businesses that are just starting out, it is important to be aware of the legal requirements around SPP. Employers should ensure that they are aware of the eligibility criteria and the amount of SPP that they are required to pay. It is also important to ensure that the payment is made on time, as failure to do so could result in a penalty from HMRC.

In conclusion, Statutory Paternity Pay is a payment made by employers to employees who are taking time off work to care for a new baby. It is a legal requirement for employers in the United Kingdom to provide SPP to eligible employees, and it is designed to help new parents financially during the period of parental leave. Employers should ensure that they are aware of the eligibility criteria and the amount of SPP that they are required to pay, and that the payment is made on time.

Accruals refer to revenue that have been earned, or expenses that have been incurred but aren't yet recorded in a company's accounts.

Examples of accrued expenses include wages payable, bonuses, interest on loan and goods received.

One example of accrued revenue is accrued interest.

On the balance sheet, accrued expenses are recorded under the current liabilities section, while accrued revenue are recorded under the current assets section.

There are different forms associated with PAYE. These are:

P45: A P45 form is issued to an employee when he or she stops working for you. It shows how much the employee has paid in tax and NICs throughout the tax year.

P60: A P60 form is an official form issued to employees at the end of the tax year. The form indicates how much the employee has earned over the tax year, as well as the amount they've paid in PAYE income tax and NICs. You need to issue the P60 to your employees by 31st May each year.

If you're a limited company director, you're considered both an employer and employee. As such, you'll have to issue yourself a P60 form.

P11D: The P11D is a tax form that records employment benefits that the employees and directors of a company have received across the year.

A copy of the P11D is to be issued to employees who've received certain benefits by 6 July each year. You should also submit the form online by the same date. If you're paying tax on all their benefits through your payroll, submitting a P11D isn't required.

Rechargeable expenses are expenses that are incurred during the performance of your work that you can recharge or recover from your client or agency.

Rechargeable expenses are an important part of running a business, as they can help to keep costs down and ensure that the business is running as efficiently as possible. Rechargeable expenses are expenses that are incurred by a business and then passed on to the customer or client. This can be done in a variety of ways, such as through a chargeable fee or through a direct billing system.

In the UK, there are a number of different ways in which businesses can recharge their expenses to their customers or clients. One of the most common is to add a chargeable fee to the customer's invoice. This fee can be calculated in a variety of ways, such as a percentage of the total cost, a flat fee, or a combination of both. This fee is then passed on to the customer or client and is used to cover the expenses incurred by the business.

Another way in which businesses can recharge their expenses is through a direct billing system. This is where the customer or client is billed directly for the expenses incurred by the business. This can be done either through a physical invoice or through an online system. This method is often used when the customer or client is not able to pay the full amount upfront, as it allows them to pay the expenses in instalments.

When it comes to charging customers or clients for rechargeable expenses, it is important to make sure that the fees are reasonable and that the customer or client is aware of what they are being charged for. It is also important to ensure that the fees are clearly stated on the invoice and that the customer or client is aware of the terms and conditions of the transaction.

When it comes to expensing a client for rechargeable expenses, it is important to ensure that the client is aware of the fees that are being charged. This can be done by providing them with a detailed invoice, which outlines the charges and the terms and conditions of the transaction. It is also important to ensure that the client is aware of any additional fees that may be charged, such as taxes or other fees.

When it comes to expensing a client for rechargeable expenses, it is important to ensure that the client is aware of the fees that are being charged. This can be done by providing them with a detailed invoice, which outlines the charges and the terms and conditions of the transaction. It is also important to ensure that the client is aware of any additional fees that may be charged, such as taxes or other fees.

When it comes to setting up a business, it is important to ensure that all of the necessary expenses are taken into account. Rechargeable expenses are an important part of running a business, as they can help to keep costs down and ensure that the business is running as efficiently as possible. By understanding the different ways in which rechargeable expenses can be charged and the terms and conditions of the transaction, businesses can ensure that they are running as efficiently as possible and that their customers or clients are aware of the fees that are being charged.

A credit note is a document that a business issues to its customers. It is used whenever an invoice needs to be changed and re-issued, such as when a customer changes or cancels an order, or is charged an incorrect amount.

A creditor is an individual, company or entity that has provided goods or services to a business and is owed money. In the balance sheet, a creditor may be listed under the current liabilities or long-term liabilities section.

Statutory Paternity Pay is the amount of money that must by law be paid to the mother of a new baby while she is away from her job.

Statutory Maternity Pay (SMP) is a form of financial support provided by the UK government to help working mothers take time off work to have a baby. It is designed to help working mothers cover some of their lost income while they are away from work.

The amount of SMP that a mother is entitled to depends on her income and length of service with her employer. Generally, it is paid for up to 39 weeks, with the first six weeks being paid at 90% of the mother's average weekly earnings. The remaining 33 weeks are paid at a flat rate of £151.20 per week, or 90% of the mother's average weekly earnings, whichever is lower.

In order to be eligible for SMP, a mother must have been employed by the same employer for at least 26 weeks by the end of the 15th week before the expected week of childbirth. She must also have earned an average of at least £118 per week in the eight weeks leading up to the 15th week before the expected week of childbirth.

For those setting up a business or who have only recently started a business, it is important to be aware of the rules and regulations surrounding SMP. Employers must provide SMP to eligible employees, and must pay the SMP to the employee for up to 39 weeks. Employers are also responsible for paying National Insurance contributions on the SMP payments.

It is important to note that SMP is not the same as Maternity Allowance, which is a benefit paid by the Department for Work and Pensions. Maternity Allowance is available to those who do not qualify for SMP, such as the self-employed, or those who have not been employed for long enough to qualify.

For those setting up a business or who have only recently started a business, it is important to be aware of the rules and regulations surrounding SMP. Employers must provide SMP to eligible employees, and must pay the SMP to the employee for up to 39 weeks. Employers are also responsible for paying National Insurance contributions on the SMP payments.

In addition, employers must inform the HMRC of their SMP payments, and must provide the employee with a written statement of their SMP entitlement. Employers must also keep records of all SMP payments, including the date of payment, the amount paid, and the name of the employee.

Finally, employers should be aware that SMP payments are taxable, and should be included in the employee's tax return. Employers must also deduct tax and National Insurance contributions from the SMP payments, and must pay these to the HMRC.

In conclusion, Statutory Maternity Pay is an important form of financial support provided by the UK government to help working mothers take time off work to have a baby. For those setting up a business or who have only recently started a business, it is important to be aware of the rules and regulations surrounding SMP, and to ensure that all payments are made correctly.

If you're operating as a sole trader, you can contribute to a personal pension scheme.

If you're a limited company director, you can make pension contributions as an individual (as an employee), as well as through your company (as an employer). For the latter option, your pension contributions are paid directly from your business bank account.

The Partnership Statement (SA800(PS)) is used to record details of your earnings from sources other than trading and professional income indicated on your SA800 Partnership Tax Return.

To pay an overseas supplier, you need to:

• Decide on a payment currency
• Select a payment method: There are various payment methods and payment service providers available, including bank transfers, credit card payments, PayPal and TransferWise. When you're choosing a payment method or provider, you need to think about the currencies available, fees, exchange rates, speed of international transfers and payment reconciliation capabilities.
• Obtain the information you need to process the payment: You may need to obtain different types of information from your supplier, depending on the payment method you agree on. These may include their full name and address, bank account number, routing number and branch number and address.

An aged debtors report shows a list of customers (debtors) who owe your business money, as well as the amount owed at any given time.

What Are Aged Debtors?

Aged debtors are those customers who have not paid their invoices within the agreed payment terms. This is a common issue for businesses, especially those that are just starting out. Aged debtors can have a serious impact on cash flow and can be difficult to manage if not addressed quickly.

When setting up a business, it is important to establish a clear payment policy and ensure that customers are aware of the terms and conditions. This should include payment terms, such as when invoices are due and the consequences of late payments. It is also important to have a system in place to track and manage aged debtors.

The first step in managing aged debtors is to identify them. This can be done by reviewing the accounts receivable ledger, which lists all outstanding invoices. Aged debtors can be identified by the amount of time since the invoice was issued. For example, if an invoice is more than 30 days overdue, it is considered an aged debtor.

Once aged debtors have been identified, it is important to take action. The first step is to contact the customer and remind them of the overdue payment. This should be done in a professional and polite manner. It is important to be firm but understanding, as the customer may have a genuine reason for not paying.

If the customer does not respond or is unable to pay, the next step is to take legal action. This may involve sending a letter of demand or engaging a debt collection agency. This should only be done as a last resort, as it can be costly and time-consuming.

It is also important to review the payment policy and make any necessary changes. This may include shortening the payment terms or offering incentives for early payment. It is also important to monitor the accounts receivable ledger on a regular basis to ensure that aged debtors are identified and managed quickly.

Aged debtors can have a serious impact on a business’s cash flow. It is important to have a system in place to identify and manage aged debtors. This should include a clear payment policy and a system to track and manage aged debtors. It is also important to take action quickly and review the payment policy to ensure that aged debtors are managed effectively.

Interim accounts are accounts prepared during the tax year to show the current financial position of a company.

What are Interim Accounts?

Interim accounts are financial statements that provide a snapshot of a company’s financial position and performance at a specific point in time. They are typically prepared on a quarterly or half-yearly basis and provide a useful tool for businesses to monitor their progress and make decisions about their future.

Interim accounts are important for businesses of all sizes, but especially for those that are just starting out or have only recently begun trading. By providing a detailed overview of the company’s financial position and performance, interim accounts can help new businesses to identify potential problems and take corrective action before they become too serious.

Interim accounts typically include a balance sheet, income statement, and statement of cash flows. The balance sheet provides an overview of the company’s assets, liabilities, and equity at a given point in time. The income statement shows the company’s revenue and expenses over a certain period of time, while the statement of cash flows provides an overview of the company’s cash inflows and outflows.

Interim accounts are also useful for businesses that are looking to secure financing or investment. By providing a detailed overview of the company’s financial position and performance, interim accounts can help to reassure potential investors that the company is a sound investment.

When preparing interim accounts, it is important to ensure that they are accurate and up to date. This means that the company should ensure that all transactions are correctly recorded and that the accounts are prepared in accordance with generally accepted accounting principles (GAAP). It is also important to ensure that the accounts are presented in a clear and understandable format, as this will help potential investors to understand the company’s financial position and performance.

Finally, it is important to remember that interim accounts are only a snapshot of the company’s financial position and performance at a specific point in time. They should not be used as the sole basis for making decisions about the company’s future. Instead, interim accounts should be used in conjunction with other financial information, such as cash flow projections and budgeting, to ensure that the company is making sound decisions about its future.

In summary, interim accounts are financial statements that provide a snapshot of a company’s financial position and performance at a specific point in time. They are important for businesses of all sizes, but especially for those that are just starting out or have only recently begun trading. Interim accounts can help to reassure potential investors that the company is a sound investment, and should be used in conjunction with other financial information to ensure that the company is making sound decisions about its future.

An aged creditors report shows who your business owes money to, as well as the amount owed at any given time.

What are Aged Creditors?

Aged creditors are suppliers, vendors, or other businesses that you owe money to for goods or services that have been provided to you. This debt is typically tracked in an accounts receivable system which is used to track the amount of money that is owed to a particular creditor. Aged creditors are typically those that have not been paid within a certain period of time, such as 30, 60, or 90 days.

For businesses in the UK, understanding aged creditors is essential. This is because it is important to maintain good relationships with creditors and to ensure that all payments are made on time. If payments are not made on time, creditors may take legal action to collect the debt. This can have a negative impact on a business’s credit rating and can make it difficult to obtain financing in the future.

When setting up a business or just starting out, it is important to understand the concept of aged creditors and how it can affect your business. Aged creditors are those that have not been paid within a certain period of time, such as 30, 60, or 90 days. This debt is tracked in an accounts receivable system which is used to track the amount of money that is owed to a particular creditor.

It is important to keep track of your aged creditors and ensure that all payments are made on time. If payments are not made on time, creditors may take legal action to collect the debt. This can have a negative impact on a business’s credit rating and can make it difficult to obtain financing in the future.

When setting up a business or just starting out, it is important to create a system to track aged creditors. This can be done by creating an accounts receivable system which will track the amount of money that is owed to a particular creditor. This system should be regularly updated to ensure that all payments are made on time.

It is also important to ensure that all payments are made in full and on time. This is because late payments can lead to interest and penalty charges which can add up quickly. Additionally, late payments may also lead to legal action being taken by the creditor.

Finally, it is important to remember that aged creditors can have a negative impact on a business’s credit rating. This can make it difficult to obtain financing in the future, so it is important to ensure that all payments are made on time.

In conclusion, aged creditors are suppliers, vendors, or other businesses that you owe money to for goods or services that have been provided to you. It is important to understand the concept of aged creditors and how it can affect your business. Aged creditors should be tracked in an accounts receivable system which is used to track the amount of money that is owed to a particular creditor. Additionally, it is important to ensure that all payments are made on time to avoid interest and penalty charges, as well as legal action being taken by the creditor. Finally, it is important to remember that aged creditors can have a negative impact on a business’s credit rating, so it is important to ensure that all payments are made on time.

There may be times when you have no option but to use your personal funds to cover company costs such as paying by cash or if you forget to bring your company card. It's important to keep a copy of the receipt of all expenses but this is especially important when paying for costs and expenses personally. This way, a record of the cost can be kept, logged in your company accounts and then your company can reimburse you for this.

A year end refers to the end of a company's financial year. As such, the year-end accounts are a summary of a company's performance across the financial year, and will typically include a directors' report, balance sheet, profit and loss statement and explanatory notes. These financial statements and reports, along with the company tax return (CT600) must be filed with HMRC.

The optimum salary for a contractor to pay themselves in the current tax year is dependent on their overall income throughout the period.

In the instance there is no other income to be considered, it is generally recommended that salary is paid in line with the Secondary National Insurance threshold which is currently £758 per month (22/23).

In today's times, you can find an accountant pretty much anywhere you go whether that's walking down the high street or browsing the internet. Take a look at our guide on choosing an accountant to get some tips on what to look out for when choosing an accountant.

As a limited company director, you can make pension contributions as an individual (as an employee), as well as through your company (as an employer).

Most directors make pension contributions from their company. This is a tax efficient approach, as employer pension contributions are an allowable business expense, which means that your company doesn't need to pay corporation tax on pension contributions made.

You won't need to pay tax on your contributions, as long as it falls below your annual allowance (capped at £40,000 for 2022/23), and your pension benefits doesn't exceed the lifetime allowance (£1,073,100 for 2022/23).

How you close down your limited company will differ depending on whether your company is solvent or insolvent.

1. Closing down a solvent company

You may apply to strike off your company from the Companies Register or start a Members' Voluntary Liquidation.

2. Closing down an insolvent company

You must arrange the liquidation of your company. In certain circumstances, you may be able to avoid liquidation by applying for a Company Voluntary Arrangement.

Further information is available on our resource on the company closure process.

A director's loan is defined as money taken from your company that isn't either of the following:

• A salary, dividend or expense treatment
• Money that you've previously paid into or loaned the company

A Director's Loan Account (DLA) is a record of all transactions between the company and its directors. It records not just the money owed by the directors, but also the money owed to them.

Director's loans can be used:

• when you need to access money in your company-apart from what you take out as a salary, dividend or expense treatment-for personal reasons.
• for a variety of purposes, such as covering the costs of a home repair bill, travel plans or any unforeseen personal expenses that may arise.

The 24-month rule, also referred to as the two-year rule, enables contractors to claim travel expenses from their home to a client's office, as long as it is classed as a "temporary workplace".

The following conditions must apply for a work location to be classed as a "temporary workplace"

• The period of engagement is less than 24 months
• The contractor should spend less than 40 percent of their time at the workplace

Essentially, if you work at the client's office for more than 24 months, or spend more than 40 percent of your time at the location, it is considered a permanent workplace-and as such, you won't be able to claim travel or subsistence expenses.

Bear in mind that this is subject to the SDC legislation introduced in April 2016. Further elaboration on SDC can be found in our guide to claiming expenses as an umbrella company contractor.

You will obtain a login for HMRC online services when you register for tax online.

You register when you notify HMRC that:

• You need to send a Self Assessment tax return
• You want to set up a personal tax account
• You have set up a limited company or other organisation that needs to pay Corporation Tax
• Your business needs to register for PAYE
• Your business needs to register for VAT

If you need help registering for UK tax, get in touch with one of our accountants for assistance.

You must keep your records for at least 5 years after the 31 January submission deadline of the relevant tax year.

Setting up a business is an exciting time, but it also brings a lot of responsibility. One of the most important responsibilities is keeping accurate and up to date accounting records. Knowing how long to keep accounting records for is essential to ensure you remain compliant with the law.

In the UK, the law states that businesses must keep accounting records for at least six years. This applies to all businesses regardless of size or industry. The six-year period starts from the end of the last accounting period.

The six-year period is important as it allows HMRC to review and audit your accounts. This is to ensure that all taxes due have been paid and that you are not avoiding paying taxes.

It is important to note that the six-year period is a minimum requirement and you may need to keep records for longer. For example, if you are involved in a legal dispute, you may need to keep records for longer than six years.

It is also important to note that the six-year period applies to all accounting records, including invoices, bank statements, and receipts. These records must be kept in an organised and secure manner.

When it comes to digital records, it is important to note that these must be kept for at least six years. However, it is important to ensure that digital records are kept in a secure manner to ensure that they are not lost or corrupted.

When it comes to physical records, it is important to ensure that these are kept in a secure and organised manner. This includes ensuring that they are stored in a dry and secure environment.

It is also important to note that if you are disposing of records, you must do so in a secure manner. This includes shredding or burning the records to ensure that no one can access the information.

In conclusion, it is essential for businesses in the UK to keep accounting records for at least six years. This is to ensure that all taxes due are paid and that you remain compliant with the law. It is also important to ensure that digital and physical records are kept in a secure and organised manner. If you are disposing of records, you must do so in a secure manner to ensure that no one can access the information.

You can file your confirmation statement online. You may view Companies House's video for instructions on how to file your confirmation statement.

As a contractor, freelancer or small business owner, it's important that you make the most of what you can claim-especially as the trips you make can add up over time. Here's an example: if you make a 25-mile round trip twice a week, it adds up to 2,400 miles a year. That's £1,080 that you can as deduction against your business revenue.

To learn more, read our guide on how to claim business mileage.

Yes. You can claim pre-trading expenses of up to seven years before the incorporation date of your limited company, as long as these expenses have been paid for with your own money and were incurred‚ wholly, exclusively and necessarily' for setting up your business.

Examples of pre-trading expenses you can claim for include:

• Internet and domain name fees
• Purchase of computer equipment and software
• Accountancy and other professional fees
• Travel costs
• Insurance
• Stationery

To learn more about allowable business expenses, read our detailed guide on allowable limited company expenses.

You do not need to pay tax on allowable business expenses. These are essential business costs that are incurred "wholly and exclusively" for the purposes of running the business. They can be deducted against your income, thereby reducing the amount of tax that you need to pay.

For further information on the types of expenses you can claim, refer to our guides for sole traders and limited company directors.

Expenses are important as you can claim them against your revenue, which helps to reduce the amount of tax you need to pay.

For further information on the types of expenses you can claim, refer to our guides for sole traders and limited company directors.

You need to keep your receipts for expenses for at least five years after the 31 January submission deadline for the relevant tax year.

It helps to minimise paperwork wherever possible, so we recommend taking a picture of your receipts and storing these images away digitally. You can use cloud storage platforms like Dropbox or an expenses app like Expensify.

Mileage claims are designed to help cover your fuel costs, as well as the running costs of having a vehicle. As such, you can't make separate claims for individual expenses such as fuel, electricity or vehicle repairs.

A dividend is money that's paid out by limited liability companies to investors, usually on a quarterly or annual basis. These payouts are based on the quarterly profits of your company as well as the amount of stock you own.

Dividend tax therefore refers to the rates by which those dividends are taxed according to HMRC. Each year, these tax rates may differ.

You can locate your Accounts Office Reference number (AORN) on the confirmation letter you receive from HMRC when you first register as an employer. The AORN contains 13 characters, and follows the format 123PA12345678.

If you are setting up a business in the UK, or have just started a business, you may be wondering where you can find your Accounts Office Reference number. This number is an important part of the process of setting up a business, as it is used to identify your business in the eyes of HM Revenue & Customs (HMRC). In this article, we will explain what an Accounts Office Reference number is, how to find it, and why it is important.

What is an Accounts Office Reference Number?

An Accounts Office Reference number (AOR) is a unique number issued by HMRC to identify your business. It is a nine-digit number that is used to identify your business for tax purposes. This number is used in any communication between you and HMRC, such as filing tax returns or paying taxes.

How to Find Your Accounts Office Reference Number

If you are setting up a business in the UK, you will need to register with HMRC for taxes. When you register with HMRC, they will issue you with an Accounts Office Reference number. This number will be sent to you in the post, usually within two weeks of registering your business.

If you have already registered your business with HMRC, you can find your Accounts Office Reference number on the HMRC website. You will need to log in to your HMRC account and click on the ‘My Business’ tab. Here, you will find your Accounts Office Reference number listed.

Alternatively, you can contact HMRC directly and ask them for your Accounts Office Reference number.

Why is an Accounts Office Reference Number Important?

Your Accounts Office Reference number is an important part of the process of setting up a business in the UK. It is used to identify your business in the eyes of HMRC and is used for any communication between you and HMRC. This number is also used to identify your business for tax purposes.

It is important to keep your Accounts Office Reference number safe and secure, as it is used to identify your business. If you lose or forget your number, you can contact HMRC and ask them for a new one.

Conclusion

An Accounts Office Reference number is an important part of the process of setting up a business in the UK. This number is used to identify your business in the eyes of HMRC and is used for any communication between you and HMRC.

If you are setting up a business in the UK, you will need to register with HMRC for taxes. When you register with HMRC, they will issue you with an Accounts Office Reference number. This number will be sent to you in the post, usually within two weeks of registering your business.

If you have already registered your business with HMRC, you can find your Accounts Office Reference number on the HMRC website. Alternatively, you can contact HMRC directly and ask them for your Accounts Office Reference number.

It is important to keep your Accounts Office Reference number safe and secure, as it is used to identify your business. If you lose or forget your number, you can contact HMRC and ask them for a new one.

As a limited company director, you're classed as an office holder. You aren't automatically an employee at your company**-**even if you're the sole director and only person working in the business.

It's isn't mandatory to be set up as an employee at your new company. However, there are benefits to doing so if you aren't employed elsewhere, as you'll be able to take advantage of your tax free allowances.

To pay a dividend, you need to:

• Hold a directors' meeting to declare the dividend.
• Keep minutes of the meeting, even if you're the only director. For smaller companies, this may often be just a case of getting the paperwork completed.
• Issue dividend vouchers.

PAYE-or Pay As You Earn-is a system of income tax withholding by employers.

Tax and National Insurance contributions from your wages or occupational pension and sent to HMRC, before your employer pays you your wage or pension. Student loan repayments may also be deducted in this manner.

A P60 is an official form you obtain at the end of the tax year. It indicates how much you've earned over the tax year (this starts on 6th April, and ends on 5th April of the following year), as well as the amount you've paid in PAYE income tax and National Insurance contributions.

If your tax code is incorrect, you can use HMRC's check your Income Tax service to notify them. If you're not able to use the online service, you may get in touch with HMRC through other contact methods.

For employers, the deadline for paying National Insurance will vary depending on the amount payable.

If the amount payable exceeds £1,500, the deadline will fall on the 22nd of the month (or the 19th if payment is made by post).

If the amount payable falls below £1,500, you can make quarterly payments instead of monthly ones. The quarters end on 5 July, 5 October, 5 January and 5 April, and payments are due on the 22nd of the month (or 19th is payment is made by post). For example, for the quarter ending 5 July, the payment must be made by 22 July.

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A P45 is a form that is issued to an employee when he or she stops working for you. It shows how much the employee has paid in tax and NICs throughout the tax year.

What is a P45?

A P45 is a document that is issued to an employee when they leave their job. It is an important document that outlines the amount of tax that has been paid by the employee in the tax year. It is also used by employers to inform HMRC (Her Majesty’s Revenue and Customs) of the employee’s income and tax payments.

For those setting up or just starting a business in the UK, understanding the importance of a P45 is essential. This document is a key part of the payroll process and is used to ensure that the correct amount of tax is paid by the employee.

What information is included on a P45?

A P45 document includes the following information:

• Employee’s name, address and National Insurance number
• Employer’s name and address
• Start and end date of employment
• Payroll number
• Tax code
• Taxable pay
• Taxable benefits
• Tax paid
• Total tax paid
• Tax year
• Taxable pay for the tax year
• Total tax paid for the tax year
• Total tax deducted from the employee’s pay

When is a P45 issued?
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A P45 is issued to an employee when they leave their job. It is important that the employer issues the P45 to the employee as soon as possible after they leave their job. The employee should then keep the P45 in a safe place as they may need to refer to it in the future.

When starting a new job, the employee will need to provide the P45 to their new employer. This is to ensure that the correct amount of tax is paid to HMRC.

What happens if an employee does not receive a P45?

If an employee does not receive a P45 from their previous employer, they should contact HMRC. HMRC will then contact the previous employer to request the P45.

If the employer is unable to provide the P45, HMRC will issue an emergency tax code to the employee. This code will be used by the new employer to calculate the correct amount of tax to be paid.

How does a P45 affect a business?

A P45 is an important document for businesses in the UK. It is used to ensure that the correct amount of tax is paid by the employee. It also helps to ensure that the business is compliant with HMRC regulations.

By understanding the importance of a P45, businesses can ensure that their payroll process is efficient and compliant. This will help to ensure that the business is not subject to any fines or penalties from HMRC.

Conclusion

A P45 is a document that is issued to an employee when they leave their job. It includes important information such as the employee’s name, address and National Insurance number, the employer’s name and address, the start and end date of employment, the payroll number, the tax code, taxable pay, taxable benefits, tax paid, total tax paid, tax year, taxable pay for the tax year, total tax paid for the tax year and total tax deducted from the employee’s pay.

For those setting up or just starting a business in the UK, understanding the importance of a P45 is essential. It is used to ensure that the correct amount of tax is paid by the employee and to ensure that the business is compliant with HMRC regulations.

A dividend is a payment of profit that a limited company distributes to its shareholders. This is the money remaining after all business expenses and liabilities, as well as outstanding taxes (including VAT and Corporation Tax) have been paid off.

Dividends are important as they are a tax-efficient way to pay yourself from your limited company. Other than drawing dividends as income, you may also consider paying dividends into a pension fund, ISA or to family members.

If you're paying salaries to employees or directors, you need to register for PAYE and pay your PAYE bill to HMRC.

• Monthly payments: Your PAYE bill is due on the 22nd of the next tax month.
• Quarterly payments: Your PAYE bill is due on the 22nd after the end of the quarter.

There are various ways to make your payment.

• Same or next day payments: online or telephone banking, CHAPS
• Payments processed in 3 working days: card payments (online), Bacs, cash or cheque payments at your bank or building society, Direct Debit, by cheque through the post
• Payments processed in 5 working days: Direct Debit (if it's the first time you're setting up a Direct Debit payment)

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Employment Allowance enables eligible employers to reduce their National Insurance bill by up to £4,000 each year.

HMRC's resource provides further details on checking if you're eligible, how and when to make a claim and what to do after you've made a claim.

You can set up a Direct Debit through your HMRC online account (you'll need to use your UTR number). If you're setting up a Direct Debit for the first time, you'll need to allow five working days for the Direct Debit to be set up.