National Insurance Contributions for under 21s

If you employ anyone under 21 years of age (and over 16) please be aware that you use the correct National Insurance category letter to benefit from the new initiative. Since 6 April 2015, employers with employees under 21 years of age are no longer required to pay Class 1 NICs on earnings up to the Upper Secondary Threshold (UST) for those employees.

 
Class 1 secondary NICs will apply if the employee is earning above the UST. Employees will continue to pay the standard rate of primary Class 1 NICs through their salary. Please note that the zero rate does not apply to Class 1A or Class 1B NICs.

 
When assessing your employees’ secondary NICs, please note that there are seven National Insurance categories:
• M – not contracted-out standard rate contributions
• Z – not contracted-out deferred rate contributions
• Y – mariners not contracted-out standard rate contributions
• P – mariners not contracted-out deferred rate contributions
• V – mariners contracted-out salary related contributions
• I – contracted-out salary related standard rate contributions
• K – contracted-out salary related deferred rate contributions

 

Three of the new letters (V, I and K) will be removed in April 2016 in line with the ending of ‘contracted-out’ status in relation to salary-related occupational pension schemes.

 

As an employer, it is your responsibility to ensure the correct category letter has been applied based on the age and circumstances of the employee. The categories will also need to be monitored for age and salary changes.

 

Should you have any queries or wish to talk to me in further detail about it, I can be contacted on joannes@clayshawthomas.com or 01656 867167.

 

Source: HM Revenue & Customs 24/09/2015

New functionalities in Sage 50 Accounts

The latest version of Sage 50 Accounts includes major new functionalities in the features you use on a daily basis as well as access to a growing catalogue of brand new add-ons, so you can truly customise your accounting software to the needs of your business.

 

  1. Bank Feeds

This is a new and exclusive feature of Sage 50 Accounts and makes reconciling accounts and bank balances simple and error free.

 

  1. Get paid faster

A ‘pay now’ function on invoices enables your customers to pay you instantly, easily and securely.

 

  1. Improved error corrections

You can edit journals quickly and easily; you can un-allocate credits and payments from an incorrect invoice and track which users have edited transactions.

 

  1. Surfacing information

 

New columns and fields mean more efficient data analysis and reduced frustration.

 

  1. Drill down on aged debtors and creditors

 

A more streamlined process makes it easier to get insight into their cashflow at the click of a button.

 

  1. Streamlined dialogue boxes

 

The dialogue boxes make it clearer, simpler and more intuitive than before to find information quickly.

 

  1. Customise what you want to see

It is possible to customise exactly what you want to see when using the programme so that it will be remembered when you log out.

 

If you would like to talk to me about Sage 50 Accounts or would like to meet up to discuss your accounting requirements then please email me on lauaras@clayshawthomas.com or call 01656 867167.

Benefits of outsourcing your payroll

Processing salaries can sometimes feel complex and stressful and with the introduction of auto-enrolment for workplace pensions, this can often add to the stress.

Building your business is what you’re good at and want to keep doing. A dedicated payroll service will give you peace of mind, allowing you to carry on building your business.

Clay Shaw Thomas’ payroll team can provide you with an efficient and tailor-made payroll management service from time sheet through to payment, taking care of any complications regarding taxation, employment legislation and pension legislation so you don’t have to.

 

The benefits of outsourcing your payroll include:

  • Professional and experienced specialists who will manage the entire process.
  • Fully trained staff to provide a service in line with auto enrolment legislation, employment legislation, pension legislation and taxation.
  • Technical support.
  • Processed on time, every time.
  • Wealth of experience across a variety of types of business and size: sole trader, small business, large corporates.
  • No requirement to invest in specialist software and updates or train staff.
  • We manage the administration of PAYE, national insurance, statutory sick pay and maternity pay, customised payslips, completion of statutory forms for issue to employees and Inland Revenue, year-end returns, including P14, P60 and P35 and P11d.
  • Access to ePayslips, an electronic version of the traditional paper payslip which is accessible online from a secure website whenever an employee needs to access it.

 

If you would like to discuss your payroll requirements and find out how we can help you, please send me an email or you can contact me on 01656 867167.

Will dividend tax keep rising?

The Treasury revealed in July that the dividend tax credit would be replaced with a new tax-free allowance of £5,000 of dividend income for all taxpayers, which takes effect from April 2016. The Chancellor said at the time that the move would “simplify the taxation of dividends”. But is this just the start of increased dividend taxation? Smaller firms will already probably need to review how they pay directors, but will the need for these reviews increase in the future?

Accounting giant Baker Tilley analysed any potential forthcoming changes and said that there could be ‘unpleasant knock-on effects – especially for high-earners’ caused by these changes. They went on to say that:

“The Chancellor clearly wants to remove the tax advantages currently enjoyed by those operating their small businesses through a company – these changes won’t completely remove those advantages, but I would expect that over the next few years the dividend tax will be increased until it starts to be more expensive to operate through a company. The dividend changes will have an adverse effect on those family companies who have hitherto extracted profits by way of dividends. Next year they will almost certainly face a tax hike. This is no accident.”

The Government has set the dividend tax rates at 7.5% for basic rate taxpayers, 32.5% for higher rate taxpayers and 38.1% for additional rate taxpayers but there will be no tax credit. There will be an increase of 7.5% where dividend income exceeds £5,000.

Previously, individuals in receipt of dividends benefited from a 10% tax credit which for basic rate taxpayers meant they could enjoy their dividend tax free. Higher rate taxpayers paid an effective 25% tax rate.

Officials at HMRC said in an update that the £5,000 tax-free allowance would still be taken into account when assessing someone’s overall income for tax purposes.
The report said:

“The dividend allowance will not reduce your total income for tax purposes. However, it will mean that you don’t have any tax to pay on the first £5,000 of dividend income you receive. Dividends within your allowance will still count towards your basic or higher rate bands, and may therefore affect the rate of tax that you pay on dividends you receive in excess of the £5,000.”

National Minimum Wage

From Thursday 1 October 2015, the adult rate of the National Minimum Wage will rise by 20 pence from £6.50 to £6.70 per hour. The new apprenticeship rate will be set at £3.30 and represents a rise of 57 pence, the largest increase in the National Minimum Wage for apprentices.

From 1 October 2015:

  • the adult rate will increase by 20p to £6.70 per hour
  • the rate for 18 to 20 year olds will increase by 17p to £5.30 per hour
  • the rate for 16 to 17 year olds will increase by 8p to £3.87 per hour
  • the apprentice rate will increase by 57p to £3.30 per hour
  • the accommodation offset increases by 27p to £5.35

Employers must ensure all employees entitled to be paid national minimum wage are paid correctly from 1 October 2015.

Should you want to discuss this in further detail or need help with your company payroll please contact me on joannes@clayshawthomas.com or 01656 867167.

Advisory fuel rates – changes

Please note that HMRC have announced that it has changed the Advisory Fuel rates once again (this is the third change in this tax year so far).

The rates below* apply from 1 September 2015.

You can use the previous rates for up to 1 month from the date the new rates apply.

 

Engine size Petrol – amount per mile LPG – amount per mile
1400cc or less 11 pence 7 pence
1401cc to 2000cc 14 pence 9 pence
Over 2000cc 21 pence 14 pence

 

Engine size Diesel – amount per mile
1600cc or less 9 pence
1601cc to 2000cc 11 pence
Over 2000cc 13 pence

 

Hybrid cars are treated as either petrol or diesel cars for this purpose.

Should you wish to speak to me or any of the team please get in touch on tellmemore@clayshawthomas.com or 01656 867167.

*Source: HM Revenue & Customs

Getting ready for University

Your son/daughter will have had their A-level results and are now looking forward to starting University in September. You, as parents, however, might be gloomily looking at your bank account and taking a rather different view.

The cost of University differs depending on where your child studies and what sort of lifestyle they lead. It is estimated that fees can be up to £9,000 and accommodation costs of around, £5,000 per year, a student starting at university this September could graduate with a debt approaching £50,000!!.

Avoiding this is probably one of your most important tasks over the coming years.

Taking on board some simple financial planning steps will allow you and your child (children) to relish in the glory of good A level results and avoid over-worrying about the possibility of financial strife later down the line.

Of course, there are the short term items that need to be bought such as a laptop or a deposit for accommodation.

Long-term saving will help you pay for these so that when they do arise, often unexpectedly, you will have the funds to pay for them without having to worry about where you will get the money from.

All is not lost. If you’ve not already started saving then there is still time to save a little each month to pay for items during years 1-3 or longer.

Don’t forget that your son or daughter can help fund their time at University too!

 

Handling money and budgeting

Explain to them about splitting their money into weeks and months and keeping a tally of their spend, maybe in a spreadsheet. It may seem onerous but they will thank you in the end. It will set them up for budgeting for things after studying, appreciating the actual value of money as well as not having spent their grant in the first week and living off baked beans for the rest of their time!

 

Bank account

Whilst they may have had a bank account for some years, it may not be the best one now they’re going to university. Shopping around may well pay dividends.

 

Work

Student holidays are long and money earned in the summer is money that doesn’t have to be borrowed – or provided by parents. There is no better job than some of the first you have in your life such as working in a bar, a coffee shop or in a shop. They will help your son/daughter build their people skills, monetary skills, customer care, give them a focus, their own money as well as building their confidence.

Should you need to talk to one of the team about long-term financial planning then please do get in touch on tracey@cstwealth.co.uk or 01656 867167. Your first meeting is at no obligation and free of charge.

 

This article is for information only and does not constitute financial advice. Please contact your usual adviser at CST Wealth Management Ltd if you have any questions relating to your own personal circumstances or if you would like to make an appointment to discuss your financial plan. Contact details can be found on our Meet the Team page or by contacting us via  info@cstwealth.co.uk or 01656 867167.

The Financial Conduct Authority does not regulate tax advice.

CST Wealth is the trading name of CST Wealth Management Ltd which is authorised and regulated by the Financial Conduct Authority.

 

Micro Entity Accounts – Is it worth it?

Most people have heard the term ‘SME’ but have you heard of an ‘ME’ or ‘Micro Entity’. If your company meets two of the following three criteria it is entitled to prepare accounts under the new Micro-Entities Regime.

 

  • Turnover is less than £632,000
  • Net assets are less than £316,000
  • Employ less than 10 staff

 

What does this mean I hear you ask? Well the regime was established in an attempt to reduce bureaucracy and cost for the UK’s smallest businesses.  Companies are now only required to prepare an abridged Profit & loss account and balance sheet with very little disclosure notes.

 

Sounds good? At face value yes, anything that makes things simpler we are all for.  However, is this the right option for you and your business?

 

In my opinion removing this fairly basic information makes the accounts less useful and may undermine peoples confidence in smaller businesses.  Lenders may request further information or may even refuse credit due to there being insufficient information available.  It is also anticipated there will be increased scrutiny from HMRC who are likely to open more enquiries due to there being fewer disclosures in the accounts. The accounts will undoubtedly look much simpler, however, the figures will primarily be the same as in a full set of accounts and therefore take much the same time to prepare.

 

Micro Entity companies can choose to still prepare and file Small Company accounts – and for some clients this will remain the best option. At CST we will give you option of preparing either full or Micro Entity accounts at no additional cost. We believe that as a business owner it is vital for you to have access to financial information that you can reliably use to make business decisions.

 

Please contact me or a member of the team if you would like to know more about Micro Entity accounts.

 

Changes at Companies House

Whilst out on my travels visiting companies, I have noticed that a lot of my clients are unaware of recent changes at Companies House.

Companies House

 

Companies House are currently testing something called “Companies House Beta”, which is a significant update to their old system, allowing users to have free access to public data about any company registered in the UK!

Their website gives you real time access to your company’s register and other companies’ registers. These can be used to inform you of information on potential customers and suppliers:

  • Company overviews
  • Current and resigned officers
  • Mortgage charge data
  • Previous company names
  • Insolvency data
  • Change registered office address

 

They also have other planned changes scheduled for the future.

Have a look on the link below and get searching!

 

https://beta.companieshouse.gov.uk/

 

Redesigned Xero app for Android

XERO has launched a redesigned version of its Touch app for Android as it seeks to meet, what Google describes as their ‘material design standards’. This means that they have created “a visual language for our users that synthesizes the classic principles of good design with the innovation and possibility of technology and science”*.

Google aims to “develop a single underlying system that allows for a unified experience”, and Xero claims its latest iteration of Touch is “simpler” and “more consistent”.

The Touch on Android features are aplenty and include:

  • a dashboard providing a summary of bank account information;
  • invoice management;
  • menu links to items such as invoices, receipts, contacts and files;
  • bank reconciliation on the go; and
  • expense and receipt management using photographs.

 

Xero for Android

 

Copyright Xero

The Android app is proving to be a very popular amongst Xero small business owners and accounting providers worldwide with more than 36% users!

It is a great tool for small business owners as they can manage their finance on the move!

It seems that Xero are doing as much as they can to ensure that their customers are happy by encouraging feedback on its use and functionality. They have, in turn, been making updates to ensure that the app is working to the best of its ability to meet customer needs.

If you are on Xero and have an Android phone or tablet then why not give the app a go?

If you are not on Xero and would like to discuss online business accounting and have a free demonstration as to how it works then please get in touch with me on lauras@clayshawthomas.com or 01656 867167 and I’ll be happy to come to your offices to discuss.

 

*Source: Google