Accounting you can understand

Dividends are payments that can be taken from the profits of your limited company and paid to the shareholders once the profits have been taxed. While you have the option to take all available profit as dividends, it may not always be the most tax-efficient approach. Our goal is to ensure that you receive the most tax-efficient advice regarding dividend payouts. By optimising dividend payments, we can help you minimise your tax burden while maximising your income.

There are many tax-deductible expenses that a director can offset; this depends on the nature of your business but can typically include:

• Travel, Accommodation and Mileage costs can all be included provided you are travelling to a ‘temporary workplace’
• Computer Hardware and Software: Expenses for IT equipment are deductible if purchased exclusively for business purposes. This includes computers, laptops, software licences, and peripherals necessary for your business operations.
• Business Phones and Broadband:
• Mobile Phones: You can claim expenses for one mobile phone per employee if it’s used for business purposes. Even if the phone is occasionally used for personal calls, the entire cost can be claimed as a business expense if both the phone and the contract are in the company’s name.
• Broadband Costs: Expenses for broadband services used for business purposes are deductible. Whether it’s for email communication, web browsing, or video conferencing, the broadband expenses incurred for your business can be claimed.
• You can claim back membership fees for professional memberships and subscriptions to recognized professional bodies approved by HMRC. These memberships are essential for maintaining professional qualifications and staying updated within your industry. By claiming these expenses, you can reduce your taxable income.
  HMRC provides a list of recognized professional bodies, and you can check whether your membership qualifies for tax relief. It’s important to keep records of your membership fees and receipts for claiming expenses during tax filing.
• Salary, Pension Contributions and Subcontractor costs will all reduce Corporation Tax. Contributing into a pension is a very tax efficient way of operating.

If your turnover falls below the current threshold of £90,000 within any 12-month period, VAT registration is not mandatory. However, voluntary registration could still be beneficial for your business. Additionally, being registered for VAT grants you access to the Flat Rate Scheme, potentially increasing your business’s profitability.

Once registered for VAT, you’ll be required to submit VAT returns quarterly, with specific VAT quarters assigned to you upon registration. At Accrue Accounting, our team will handle the preparation and submission of your VAT returns on your behalf. All you need to do is settle any VAT liability due, which can conveniently be arranged through HMRC’s Direct Debit payment option, offering you one less concern to manage.

So, most stuff you buy comes with a 20% VAT tag. But there are exceptions – some things have a different amount of VAT applied, like a 5% or even 0% rate.

Now, here’s the deal: when you charge VAT to your customers, they’re the ones who end up paying for it. You just tack on that extra 20% to your usual price.If you’re selling to other businesses (B2B), signing up for VAT right away is usually a smart move. Why? Because those businesses can claim back the VAT you charge them, so it doesn’t really cost them anything extra.

But if you’re selling directly to consumers or small businesses that aren’t VAT registered (B2C), it’s a bit different. Charging them that extra 20% might not go down too well, because they can’t claim it back. So, you might want to hold off on registering for VAT until you’re sure it’s the right time. But hey, every situation is unique, so it’s always best to chat with your accountant to figure out the best plan for dealing with VAT.

The thought of changing your accountant might seem daunting, but in reality it is a relatively straight forward process. At Accrue Accounting we make switching accountants as easy as possible. We would just need the contact details of your previous accountant to obtain professional clearance, along with the photo ID and proof of address we would need for any new client to do our Anti Money Laundering checks. Once you are all on boarded our side we would then handle the switch over process, so you can then put your feet up and be worry free.

Predominantly, we deal with our clients via google meet (or alternative web calls), telephone, WhatsApp or email. But we are always happy to accommodate face to face meetings, if you are local or fancy a visit down to the south coast of England, in Poole, Dorset. 

This, although a simple question, has a more complicated answer, we have written a blog on this subject which can be found here.

It is always best to get professional advice on this so please do reach out to us and we will be happy to discuss what is best for you and your goals.

Pension advice is a regulated area. We work alongside expert partners for more specific advice and support on pensions.