2013/14 Personal Tax Tips

Need help with personal tax in Bexhill, Hastings and Vauxhall? Look no further!
Here are some recent personal tax changes that you may be interested in.

CHILD BENEFIT
From January 2013, when an individual is earning more than £50,000, their entitlement to Child Benefit is reduced by 1% for every £100 over this limit. At £60,000 and above, it is completely withdrawn. However, it is not always the best action to stop the benefit, as the non-working partner could lose many years of state pension contributions as a result. Do NOT just stop it! Speak to a tax advisor first!

PERSONAL ALLOWANCE
The personal allowance was increased in the budget this year to £9,440. This is the amount you can earn before you have to pay income tax and applies whether you are employed or self employed. The increase means that each basic rate taxpayer will pay £267 less tax each year. If you are employed, it is advisable to check your tax code on your payslip to ensure you are receiving this increased allowance. Your tax code should be 944L (unless there are any other deductions or additional allowances you know of).
If you are a higher rate tax payer, it is important to note that married couples/civil partners can utilise both allowances by transferring income-producing assets to your spouse to benefit from their lower taxable income.

ISA ALLOWANCE
Every year, everyone in the UK receives an ISA allowance. For this year, the allowance is £11,520 (£5,760 in cash). To reap the greatest rewards from this, you should take advantage of it as soon as possible in the tax year to earn tax free interest on your savings.

LATE TAX RETURN PENALTIES
HMRC are now issuing automatic penalties for late self-assessment returns. The deadline is 31st January for online returns. The penalty is £100 plus further daily penalties. This can amount to a significant penalty of at least £1300 for a return that is 6 months late!

CAPITAL GAINS TAX
The annual tax-free allowance allows you to make a certain amount of gains each year before you have to pay tax. For individuals, personal representatives and trustees for disabled people, this amount is £10,900 for 2013/14. See our October issue for more on Capital Gains Tax.

DON’T GET STRESSED, GET ADVICE FROM AN ACCOUNTANT/TAX ADVISOR! – This is the most effective way of finding the best solution for you.

DISCLAIMER This feature aims to give some informal hints and tips. McPhersons Chartered Accountants will not be held responsible for any inaccuracies. For detailed advice, please contact McPhersons to arrange a consultation.

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Basic Bookkeeping

Need help with bookkeeping in Bexhill, Hastings, Vauxhall? Look no further!
Basic Bookkeeping

WHY IS GOOD BOOKKEEPING IMPORTANT?

There are three main reasons to keep good records; to meet tax requirements, to keep your accountancy fees down and to manage and control your business effectively.

HOW WILL GOOD BOOKKEEPING HELP ME MANAGE AND CONTROL MY BUSINESS?

Accurate bookkeeping will help you identify:

Your cashflow position in order to help you plan ahead and meet your obligations;
Whether your expenses are in proportion to your income;
Which products/clients are most/least profitable;
Whether your business is growing or shrinking!

WHAT ARE THE MAIN TAX REQUIREMENTS TO BE AWARE OF?

You will need to complete an annual tax return which is a summary of your income and expenditure over the tax year. In order to do this, you must have accurate records. These records must be kept for five years after the tax return deadline of 31st January.

You will also want to make sure that you are claiming all you can in terms of expenses. Accurate and well kept records will assist with this.

WHAT DIFFERENT METHODS ARE THERE TO KEEP BOOKS?

At McPhersons in Bexhill, Hastings and Vauxhall, we spend time with our clients to set up a robust system. This free service makes our work more efficient and gives our clients peace of mind.
The options are:

Manual bookkeeping. This is the way many small businesses start. It is cheap and generally easy to maintain. With a little help, you can save time and keep excellent manual records;
Spreadsheets. We can show you how to set up and manage your record keeping using a spreadsheet. This way, data can be extracted and we can set up some key reports to allow you to keep a close eye on your business;
Accountancy software such as Sage, Xero or Quickbooks. Your accountant can advise which program is best for you;
Outsource it. An accountant or freelance bookkeeper can do it for you. Make sure you choose carefully and are getting a good value, prompt, efficient service.

WHAT ARE THE BASIC THINGS I HAVE TO RECORD?

Some key transactions you need to record are:
Sales and Purchases;
VAT input and output (if VAT registered)
Payroll;
Establishment costs (if you have a business establishment);
Bank and cash accounts (many transactions are now paperless e.g. bank transfers);
Administration costs such as; telephone, stationery, advertising, motor, computer;
Capital expenditure on equipment;
Petty Cash.

This list is not exhaustive so please speak to us for advice.
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