A social gathering at work can be an ideal time for team members to get to know each other better but it can be expensive. That’s why it pays to know about Trivial Benefits and tax relief on the annual office party.
These days everyone recognises the value of effective business networking and HB Accountants take an active role in helping to make introductions within the business community. Here are details of upcoming dates for events in Hoddesdon, Ware and Hertford which we regularly host or attend. Please take the opportunity to join us and raise your profile amongst local business people.
Karen Robbins is a Chartered Accountant and Accounts Manager who has worked at HB Accountants in Hoddesdon for 23 years. Karen is highly organised and enjoys helping clients to keep control over the accounting side of their businesses, so they can make better financial decisions. We asked her to explain how she reached her current role, from beginning her studies to helping today’s businesses in Hoddesdon and Hertfordshire to prepare for the government’s latest requirements for Making Tax Digital for VAT.
HB Accountants enjoyed a successful fundraising day last month as part of the 100/100 Christmas Corporate Challenge for Isabel Hospice. We’d like to offer a big vote of thanks
to our many clients, friends and colleagues who took the time to support us.
When you’re working from home, your bills are bound to rise. You’ll be using electricity, your own broadband and phone line, as well as making more use of your electricity, water and heating (especially in the winter).
If you are self-employed
The Government has published detailed guidelines for business people working from home. The trickiest element of this is that most things will be used for both business and personal use.
HMRC guidance is that you can claim for the cost of business calls made on a private telephone line and also an appropriate proportion of the line rental. You may, therefore, need to provide an explanation for the proportion of the total telephone bill you are claiming. This will also apply to broadband.
You can also claim for other costs of using a room at your home for business purposes (typically for office work). The sort of costs involved could include council tax, rent or mortgage interest, heat, light, water, insurance and cleaning. These can be apportioned on the basis of floor area, usage or time, or a combination of these. Typically, you will use one room as a part-time office (using it full-time is not recommended as this would cause capital gains tax problems on a sale of the property). If this is one of (say) six available usable rooms (excluding common areas, toilets, bathrooms etc), your starting point will be to claim one-sixth of the overall costs. You then need to consider the proportion of business use of that room to private use and reduce the claim accordingly.
If you are an employee
There are allowances you can claim if you’re an employee of a company, but these are dependent on whether or not this is specified as part of your job, or whether you’re doing it voluntarily. If it is your choice to work at home, you will not be eligible to claim any expenses at all.
However, if your employer has specified that you work from home as part of your job, or you have a homeworking agreement, your company can contribute £4 a week, tax-free, to help towards your extra costs.
The allowance only applies for regular working hours – you cannot claim if you occasionally work from home, or do work in the evenings or at weekends.
As an employee, you also have to show that the expense was necessary, and this is a very difficult obligation. If you decide to make this claim it will be restricted to the extra cost of heat, light etc and no claim will be available for council tax, mortgage interest or rent, insurance, or the cost of broadband or telephone lines. That is because those expenses would have been incurred anyway in your private capacity as a homeowner.
If you are a director
If you own your own company, you can set up an agreement between you and that company requiring you to work from home for certain periods of time; you can also set up a licence agreement under which the company will pay you a rent for use of your room as an office. This would enable you to make a claim which is closer to the self-employed rules. You will need to include the rental income on your personal tax return and claim the expenses against that rental. In practice, you will set the rent amount to more or less cover the claimable expenses, because if you set the rent too high you may end up paying personal tax (perhaps at 40%) and only getting corporation tax relief (at 19%)!
If you would like help working out what expenses you are entitled to when working from home, contact us to arrange an appointment.
Small business owners and entrepreneurs spend their time learning new skills. Whilst people generally set up their own company in order to concentrate on doing what they love, they also have to diversify their talents in order to do other tasks, from networking to cleaning, posting online content to submitting tax returns.
But unless your specialism is accounting, how do you know you’re getting your accounts right? It comes down to the fact that you don’t know what you don’t know. Whilst you may think you’ve got a handle on things, you may not realise that hiring an accountant could bring you business benefits you haven’t thought of. In terms of tax savings, growth plans and avoiding errors the money you save by hiring an accountant may well end up being more than the cost of the accountant themselves.
Here’s our guide to knowing when it’s time to hire expert help?
Growth
You’ve done brilliantly and people love your products and services. So much so that you can’t keep up with demand and need to take on staff, move to bigger premises and keep a close eye on your spending and future plans. But if you’re nervous about spending the money, think of it in terms of your own time. Work out how much per hour your time is worth, then multiply that by the amount of time you spend doing the accounts – including all that head scratching, crossings out and lying awake at night wondering if you’ve got it right.
Writing a business plan
An accountant will help you create financial projections on which to base a realistic business plan that’s more likely to benefit your company in the long run.
You need investment
You’ve got some great opportunities on the horizon, but in order to make the most of them, you’ll need to secure financial investment. An accountant can point you in the right direction.
Legal structure
You might be a sole trader now, but as you grow your company, there’ll come a time at which you’ll need to decide whether to make it limited or an LLP.
If you’ve reached the point where you need to hire an accountant, please feel free to contact us to talk about the services we offer and how we can help you take your company forward.
There are legal requirements for companies to undertake regular audits once a company meets certain criteria about its turnover, assets and staffing levels.
Many people see an audit as a massive inconvenience, but it can actually turn out to be a useful business tool. An audit acts as a metaphorical mirror reflecting how well, or otherwise, your company is doing. And because an external auditor will have an objective overview of your company, they can use their review of the accounting information in order to gain insights into your business. They can highlight trends, deficiencies and errors, enabling you to do something about them before they become major problems.
Advantages of using a local auditor
Hiring a local firm to do your auditing has many more advantages than just saving costs on using a big London accountancy. Not least is the fact that you’re much more likely to build up a good working relationship with them and face-to-face meetings, which equates to better support and continuity.
As we are geographically close to the majority of our clients, we are more accessible to them. We are more likely to have meetings with them rather than rely on phone calls, and that kind of personal connection can be really useful. If there is an issue the client is unsure about, the fact that they have a good relationship with us means they’re more likely to get in touch for advice.
The way we work means our clients are more likely to see the same auditor for a number of years, and this continuity can be invaluable. Whilst the audits are lead by experienced managers, the majority of the onsite work is generally undertaken by our trainees – our policy is to take on school leavers who will train with us for seven years. This gives them the chance to get to know your company really well which will enable them to work more quickly and efficiently, as well as getting the chance to work with your team.
If you are based in Hertfordshire and would like to discuss your auditing needs, please contact us to arrange a meeting.
Until recently, an HMRC investigation usually meant one of two things. Either someone, possibly disgruntled business partner or spurned spouse, had tipped off the taxman or you were unlucky enough to have had your tax return picked at random.
All that changed with the advent of HMRC Connect, an £80m software system designed to join billions of dots to create a picture of who may not be entirely honest when it comes to assessing their tax liabilities.
HMRC Connect obtains data from different sources including other government databases such as the Land Registry, DVLA and private sector financial information from credit card issuers and companies such as eBay, PayPal and Airbnb.
Years ago, inspectors and their assistants would take loads and loads of time manually cross-checking all of that information and then comparing it to the returns that came in from taxpayers to determine whether or not there was a risk those taxpayers were not paying the full amount of tax.
Nowadays that cross-checking takes practically no time at all, the preliminary work is done in seconds. What that does is to see if there are anomalies in the information that they’ve got from different places that flag up there is a risk on the taxpayer. The risk department then identifies those with highest risk and then investigates those people.
It quickly establishes links that enable experts to identify suspicious businesses, individuals and transactions for further investigation. It allows HMRC to see more information in one place for a single taxpayer and has the capacity to find anomalies between information such as bank interest, property income and other lifestyle indicators and compare it to what a customer is paying us in tax. Manually interrogating such data would take weeks or even months.
Whilst being extremely happy with Connect’s impressive successes date, HMRC is keen to develop the system further, particularly when it comes to reducing the burden on its staff. ‘Connect is not the sole deciding factor in beginning or deciding the direction of a tax investigation, it is simply a powerful tool that enable lots of different data sources to be brought together that will inform an overall picture. Other factors are brought in, including human insight to make the final judgement’ HMRC says.
Another opportunity for Connect is to use its capabilities for pre-fill tax returns based on data already known about the individual. By confronting taxpayers with information that they are merely asked to check and confirm, HMRC hopes to significantly reduce fraud and increase the tax take, and no doubt the rollout of mandatory Making Tax Digital will be a trigger for even more compliance activity as digital data pours in.
Our insights into the working days of HB staff members continue with a day in the life of our Administrator and Marketing Assistant, Charlotte Nicholson. She chose a slightly unusual day – the day of the launch of Ambition 2018, the one-day sales and marketing conference for SMEs in Hertfordshire. HB Accountants is a sponsor and one of the organisers of the event, and Charlotte is actively involved as a result. The launch was coincidentally held on 24th May – the day before GDPR came into force, so it turned out to be quite a busy one…
7am – The alarm goes off and and I get ready for work. I’m not a morning person so I like to leave it until the last minute before I have to leave my bed!
8.30am – I leave the house to drive to work. My journey normally takes around 15-20 minutes, depending on whether or not I get stuck at the train lines.
8.50am – I get into work and start up my laptop. Then I rummage around the fridge, to see what I have in the office, that I can eat for breakfast, usually toast.
9am – Today is the launch event for Ambition 2018 which I have been organising and liaising with the venue – Stanborough Conservative Club in Hoddesdon. There are always last minute attendance requests, so I need to speak to the venue and ensure they are able to cater for extra numbers.
9.30am – Now that the launch event is all sorted I can move on to bits of work that I’ve been given by the directors. This includes setting up new clients on our system, sorting out accounts to be sent to clients, filing, answering the telephone and the door, posting on social media and ensuring we have enough relevant articles to go in our newsletter being sent out in a few weeks’ time.
11.30am – I’m now going up to the venue for the launch event. It starts at 12 noon, but I’m going to get there early to ensure the catering is under control, and I can also take payment from each attendee as they enter.
12pm – Everyone has arrived and is networking. The event is for the sponsors, so it consists of talks from the chairman, the marketing team, the charities and there is also more information about the speakers on the day.
2.30pm – I arrive back at the office and we are in panic about sending out our GDPR emails, so I’m on the phone to our Infusionsoft provider, getting it all sorted out, before the deadline tomorrow as I am on annual leave.
4pm – Emails all sent and we can relax!
4.10pm – I sort out the post for the day and get it franked. I often have a little chat with my colleagues, Jane and Amy, while I’m doing this which is really nice.
4.30pm – Fill in my timesheet for the day and ensure that all the things I need to get done urgently are completed.
4.50 – Tidy my desk and pack up my laptop. I leave the office for the day, stopping off at the Post Office, on my way home, to drop off the post.
It’s always interesting to have a peek behind the scenes, so we’ve asked members of the team to let us know what a typical day in the office is like for them. It’ll help you to get to know us better and give you a better understanding of the work we do. This time, we’d like to introduce you to one of our Directors, Karen Chase.
As a Director, my job involves: managing, training and helping the audit/accounts team, overseeing and reviewing audits and accounts, dealing with clients, preparation of accounts, personal and corporate tax returns. I also help to run the office and oversee Charlotte, our business administrator, as well as attending networking meetings and seminars.
A typical day
5.45 am – Woken up by the alarm. I had enough time to get ready before I woke the kids up to get them ready for school. Mum arrived at 7 o’clock to look after my daughter Brooke, then take her to school, and I left with my son Keaton at 7.15. After dropping Keaton off, I got a peaceful half hour drive to work.
7.50am – The first thing I did when I arrived at work was check my emails, then I drew up a list of things I had to do and work I needed to delegate, e.g. analysing figures in a different format for a client with a German parent company. I then reviewed the work our trainee accountants Ryan, Ben and Angelo had done the previous day, and set them new tasks. Our manager Catherine Hill usually helps me with these things, but she’s just started maternity leave – I’m already missing her loads!
When the rest of the team arrived, we discovered that Brad, another trainee accountant, had passed his exam and had brought in cakes to celebrate. However, there were none for me as I’d just started a 12-day detox – Karen with no coffee is not ideal!
9.00am – I had a meeting with one of our accountants, Barrie, about a current audit. They had a new provision in their accounts, so we needed to talk about what the audit approach would be.
9.30am – I then reviewed a client’s audit files and emailed them to arrange a post-audit meeting.
10.45am – I spent a few minutes setting up a new client on our system who I’d had a meeting with the previous day, making sure we had all the correct documentation on file and asking for any we still needed.
11.00am – I reviewed a small accounts file that our manager Karen had done, then passed it back to her so she could send final accounts to the client for signature.
11.30am – I had a quick catch-up with Charlotte about all the events HB Accountants are involved in: the Ambition 2017 sales and marketing conference for SMEs; the Teens Unite stall at Hoddesdon Loves Christmas (25 November); the Hertfordshire Business Awards evening (23 November); and also to check on the progress of our office Christmas lunch and Secret Santa.
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HB Accountants is the trading name of HBAS Limited, a company registered in England with registration number 5085258. The registered office of HBAS Limited is Plumpton House, Plumpton Road, Hoddesdon, Hertfordshire EN11 0LB, England. Registered for VAT number 866062806.