Accountancy Edge App update

Free tools and resources

Accountancy Edge App updated – new features and tools

As you may already know, Accountancy Edge is constantly looking for ways to improve the service we offer our customers. And we are proud to announce that the Accountancy Edge App has recently been updated with a number of new features and iOS7 compatibility.

If you already have the App, then simply download the next update that will be available from the Apple or Android store – as always it’s free!

If you have not yet downloaded the App then you can do that today here.

What does the App do?

It puts our practice into your pocket. So, the next time you need to look up a tax rate or work out a VAT calculation our new App can help. It provides you with up to date important accountancy data at your fingertips.

Plus:

Photo Receipt Management, Email and Store

Never lose a receipt again! Using the latest app you can track receipts and expenses literally at the touch of a button. With minimal effort you can take a picture of any receipt and save it to your App. Any additional information can be added later and receipts stored by amount, category, and date.

It can help you track all your expenses with ease and enable us to interact electronically with you.

GPS Mileage Tracking and Management tool | iOS only

When it comes to mileage half the battle is keeping an accurate tab on your journeys. Using the built-in GPS in your device, it will automatically help you to track mileage. Helping you to record every single trip at the touch of a button. Plus it also manages trips as well, storing them and allowing them to view, edit or email with complete ease.

Keeping in touch via ‘push notifications’

As a firm we are committed to finding ways to communicate and interact with clients in the most efficient possible way. The new App enables us to send push notifications to all App users. We will be using this feature to share with you important news, deadline reminders and financial updates.

We hope you enjoy the update and the Accountancy Edge App.

You can download the App completely free of charge using the links or QR code below:

What is the best VAT scheme for your business?

Am I using the right VAT scheme?

Many business owners should be asking themselves this question, otherwise they may not be using the best VAT scheme for their business.

Do you know if you are on the right VAT scheme?

Is the one you use benefiting your business’s cash flow and saving you time and money?

VAT is a tax charged on most goods and services and is administered and collected by businesses on behalf of HM Revenue & Customs (“HMRC”). Most businesses will use the standard VAT scheme because it is the default scheme for any newly registered business.

It’s important to determine whether this is the right VAT scheme for your business. The VAT scheme you use determines how much, and when you pay HMRC. The chosen scheme may also cause administrative burdens that could be simplified with VAT planning.

Below is a quick guide to some of those schemes which may help the business’ main goals, your cash flow and save you time.

Cash accounting scheme

Most businesses will account for VAT using the standard scheme. This means the date of the sales or purchase invoice determines in which quarterly VAT return it is declared – not when you have paid or been paid for an invoice. If you invoice your customers well in advance of being paid, in addition to financing the sale amount you will have to also finance the vat on the invoice. However, under the cash accounting scheme, VAT is not paid over to HMRC until invoices have been paid. This obviously has a cash flow advantage as you do not pay the VAT to HMRC until your customers has paid you. Being able to legitimately delay paying over VAT to HMRC by 3 months may help overall business funding requirements and interest costs too. To qualify for this scheme the business’ VAT taxable turnover (basically sales) must not exceed £1.35m.

Flat rate scheme

This scheme was introduced by HMRC to help reduce the administrative burden imposed on many small entrepreneurial businesses by VAT registration. Under the scheme, the VAT paid over to HMRC is calculated simply as a flat rate percentage of the businesses gross sales, e.g 12%. The exact percentage depends on the industry the business operates in. Although you cannot reclaim VAT on purchases – it should be taken into account in HMRC’s advised flat rate percentage for the industry you are in.

It would need to be checked, but in addition to the administration benefit of not having to split the VAT element out of every expense, you could also end up paying less VAT overall. This scheme is available to smaller businesses with VAT exclusive turnover less than £150k. Once in, you can stay in until your VAT exclusive turnover reaches £230k.

Annual or monthly reporting

It is possible to prepare and submit your VAT returns on a annual or monthly basis rather than every three months (the standard). If you are a business that regularly reclaims VAT from HMRC, then cash flow may be significantly improved if the rebate payment arrives monthly rather than quarterly. For businesses of a certain size there is also the option of submitting VAT returns on an annual basis, however, HMRC will want monthly payments on account, so any cash flow advantage may likely be minimal.

Do you even need to be VAT registered?

If you are, but your annual turnover is below £77,000 you should be able to deregister your business for VAT. This may be of particular help if your end customers are unable to reclaim the VAT they are being charged (i.e. retail customers). At this point you have a choice to either reduce your selling price or keep it the same and make the VAT you would have charged become extra profit for you.

These are just a few of the VAT schemes available and some of the points to note. You need to carefully consider your VAT planning options and particular circumstances is essential. If you have any VAT queries or would like a help determining the best VAT scheme for you then please contact us today.

Four ways your business could benefit from cloud accounting

Could moving your accounting to the cloud benefit your business?

At Accountancy Edge, we have been using cloud based accounting software packages to help our clients keep their records efficiently and use them to help maximise profits.

Here are just a few of the things we’ve found our clients have really benefitted from:

1. No more waiting for bank statements to arrive

You used to have to wait for your bank statements to come through the post each month before you or your bookkeeper could either reconcile the bank on Sage or QuickBooks, or make sure everything was entered in your cashbook. Now technology has given us access to an easier way. Cloud accounting packages offer two simple alternatives that put an end to all that data entry. Some packages, such as Xero, have an automated bank feed that means they can import all of your bank transactions every day. Most high street banks will now accommodate this function. Other packages may not have an automated bank feed, but let you import your online statements as a csv or ofx file easily available from your online bank account. Obviously, this saves a lot of processing time and the software will also try and match the items on the electronic bank statements to the invoices showing as unpaid in your records.

2. Getting a computer to process your invoices

Add on services are available for most cloud accounting packages that mean you can simply scan your purchase invoices into your computer and allow software to read the information on the invoices and add to your bookkeeping records. You may need to help the software identify the information on the invoices the first few times but after that, sophisticated software will read your invoices and extract the key information. The Accountancy Edge App contains a receipt bank facility that lets you use your smartphone to turn receipts into a csv file you import into your accounting software. The benefits here are not only the obvious processing hours saved but also the risk of human error is significantly reduced with a computer doing the work.

3. Records are kept online and can be shared

When software is cloud based the records can be accessed online by authorised users. This means you can share up to date financial data with their accountants instantly, who can then review results quickly and give you timely advice. This is invaluable for those looking to grow their businesses. It means you can have a more productive relationship with your accountant, who can tell you how your business is doing now, rather than how it was doing nine months ago.

Budgets and cash flow can also be monitored using these online software packages. It cannot be stressed enough how important these are for successful business planning.

4. Sales invoices can be raised away from your desk

Branded sales invoices can be raised on the software and emailed directly to customers. They can even be raised from smart phones and tablets allowing invoices to be produced when on the move or at customers’ premises. This is efficient as it does away with the need to keep a sales ledger that is later used by a bookkeeper to update the accounting software.

In summary it is not just important to keep accounting records on a software package, but it is also highly recommended that a cloud package be adopted. The benefits in time saving, and in many cases costs too, are simply too significant to ignore.

At Accountancy Edge we help our entrepreneurial clients find the right software to allow them and us to monitor their financial data. Should you wish to discuss how we could help you, please contact us today.

Five top VAT saving tips

Top 5 VAT tips

Lots of business owners prepare their own VAT returns. This can take up a lot of time that they would rather use to do something else. It is therefore important you make sure to claim back all you can and reduce the risk of error at the same time. Here are our top five vat tips for making your tax position more efficient:

1 Remember to claim VAT on mileage

Many business owner’s, especially those who own limited companies, will claim mileage to cover their business motor expenses, typically at a rate of 45 pence or 20 pence a mile. It is possible to claim VAT back on the fuel element of these mileage claims. The fuel element is determined according to HM Revenue & Customs’ advisory fuel rates, which can be found here. Find the relevant fuel rate per mile, multiply by the number of miles done, and then apply the VAT fraction of 1/6 and hey presto, that’s how much you can claim back.

2 Let us help you choose the right VAT scheme for your business

There are several VAT schemes that your business could benefit from. For example, depending on the relevant industry sector, you may benefit by being on the flat rate VAT scheme. On the flat rate scheme, VAT is simply calculated as a percentage of your gross sales (e.g 12.5% for catering businesses). As well as being simple to calculate you may also pay less to HM Revenue & Customs as the VAT calculated using this method could be less than the standard method.

3 Claim VAT back on bad debts.

When a customer’s debt has been outstanding for more than six months, and you are unlikely to receive payment, you can reclaim any sales VAT previously paid to HM Revenue & Customs. Regular review of who owes you money is essential. One way to avoid having to reclaim the VAT on bad debts would be to use the VAT cash accounting scheme. This is where you do not include VAT from a sale on your VAT returns until your customers have paid you (or the VAT from purchases until you have paid for them).

4 Have a separate bank account for VAT

VAT is effectively a tax that business owners collect on behalf of HM Revenue & Customs. It’s important to manage your cash flow and it’s easy to fall into the trap of accidently spending the VAT as if its your own working capital. The result being that the cash is not available when the quarterly payment to HM Revenue & Customs is due. A good way to stop this problem arising is to set up a separate bank account so you can set aside your VAT each month. That way you won’t have a nasty surprise at the end of the quarter.

5 Use good software

Reduce the risk of errors by adopting user friendly accounting software. Good accounting software will record when invoices have been included on a particular VAT return. This should eliminate the risk of VAT being declared twice and VAT on late received invoices not being claimed at all. Using cloud based software would make it much easier for your accountant to review your VAT returns prior to filing. If you are interested, we can advise on whether Xero, Kashflow or FreeAgent would be the right package for your business.

For more advice regarding different VAT schemes please see our earlier blogs. Should you wish to discuss how we can help you with VAT matters, please contact us today.

Employment allowance: up to £2,000 off your Class 1 NICs

Employment Allowance

The Government has announced details of the Employer’s National Insurance relief being introduced from April 2014.

This will allow most employers to save the first £2,000 of Employer’s National Insurance Contributions their business incurs each year.

How will the Employment Allowance Work?

Simple.

If you use payroll software or HMRC’s Basic PAYE Tools, you will be able to reduce your employer Class 1 NICs payment by an amount of Employment Allowance equal to the employer Class 1 NICs due, but not more than £2,000 per year.

Example

If you owed £700 in Employer’s NIC in April, May and June, you would reduce the April and May payments by £700 each and the June payment by £600. That’s your £2,000 saved!

If you outsource your payroll to Accountancy Edge, we’ll make sure it’s all done for you.

Who won’t it help?

Yes, there’s a catch or two.

Obviously if you work for your own limited company and don’t draw a salary large enough to generate an Employer’s NIC liability, then there’s nothing for you to save.

If you trade through a company caught by IR35, again there’ll be no allowance because you aren’t paying Employer NIC’s.

If more than 50% of your work is in the public sector, it won’t apply.

And you can’t use it to subsidise the cost of having a nanny, an au pair or chauffer. Sorry.

There’s a full list of exclusions here.

Do you need help with your payroll?

If you don’t want the stress and hassle of running your own payroll, then Accountancy Edge can lift that burden. We offer a full payroll service. Contact us today for more information.

Growth vouchers are open for business

What are Growth Vouchers?

In January, the government launched the Growth Vouchers initiative. This has been designed to help small and growing businesses get the professional advice they need, but other wise may not have been able to afford.

You can apply for up to £2,000 in matched funding to pay for advice in the following areas:

finance and cash flow
recruiting and developing staff
improving leadership and management skills
marketing, attracting and keeping customers
making the most of digital technology.

You can find details of what can be financed here.

Where can you apply for Growth Vouchers?

The Growth Voucher scheme is being administered by Enterprise Nation.

If your application for growth vouchers is accepted, you find an accredited supplier on the Enterprise Nation marketplace.

Suppliers are listed by category so you can find the adviser who is right for you.

How can we help?

Accountancy Edge is an accredited adviser under the Growth Vouchers scheme.

We can advise on areas such as cash flow management, credit control, or developing financial strategies for growth.

So, if you’re looking for help with the financial health of your business, then get in touch today.