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VAT Annual Accounting Scheme


Over the years HMRC has introduced a number of VAT schemes helping small businesses reduce the burden of administrative duties. The annual accounting scheme means companies are only producing one VAT return a year, in comparison to the usual four. Instalments still need to be paid throughout the year based on the businesses annual liability.

Application to join the scheme must be made on form 600(AA) which can be found at the back of VAT Notice 732. Eligibility for the scheme must be considered because certain stipulations apply. Firstly, a company cannot apply if their taxable supplies will exceed £1,350,000 within the next 12 months. Following this, businesses current VAT returns must be kept up to date and it is not possible to register as a group of companies. For further help with the term and conditions, please contact us for specialist advice.

The amount required for the instalments needed to be paid will be advised by the HMRC but there are several payment options. Businesses that have been registered for 12 months or more will pay their VAT in nine monthly instalments of 10%, of their previous year’s liability. An alternative choice would be to pay their VAT in three quarterly instalments of 25% of their previous year’s liability, falling due at the end of months 4, 7 and 10. Get in touch so we can help you make the appropriate selection for your business.

The scheme can help your business with budgeting and cash flow, and reduce the amount of paperwork, although, a possible disadvantage is interim payments being higher than needed because they are based on your previous year.

For further information on the annual accounting scheme please follow this link: http://www.kingandtaylor.co.uk/wp-content/uploads/2012/01/VAT_Annual_Accounting.pdf. Also please contact us via are website, so we can help you plan your VAT administration and help you decide whether the annual accounting scheme would be beneficial for your business

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Recent Posts

The Autumn Statement 2013 – Preview

| 22nd October 2018 | Blogging

The Autumn Statement 2013 – Preview The Government’s plans to secure the economic recovery are set to be revealed at the Autumn Statement 2013 on Thursday 5th December by Chancellor of the Exchequer, George Osborne. Whilst in Washington attending the International Monetary Fund’s annual meeting, Osborne told reporters: “I still sit round that table at the G-20 with one of the highest budget deficits. Britain continues to have some very serious public finance challenges that need to be addressed, and although we’ve brought the deficit down by a third it’s still too high. Where we’ve got resources available we’ve got to make sure we’re doing what we can to reduce the deficit.” The Office for Budget Responsibility’s forecasts in March this year, used as a basis of the plans, showed a prediction of 0.6% economy growth in 2013, prompting Osborne to say he will announce revised budget forecasts and details of new measures at the Autumn Statement. He also stated: “We have a clear economic plan; we’ve stuck to that plan. I’m very far from feeling the job is done. We’re still in the very early stages of the recovery.” Surveys suggest actual growth figures for 2013 were better than expected, seeing expansion of around 1.4% as opposed to the OBR’s prediction of 0.6%. Common preconceptions of what the Autumn Statement may reveal include further cuts to the annual pension allowance, a rise in personal allowance, a 5% drop in income tax for those earning over £150,000, an increase in National Insurance Contributions for the self-employed, and introducing the recognition of marriage within the tax system. What plans would you like to see revealed? Let us know on Facebook or Twitter!...

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| 22nd October 2018 | Blogging

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Construction Industry Scheme

| 22nd October 2018 | Blogging

Construction Industry Scheme The Construction Industry Scheme (CIS) sets out special rules for tax and national insurance (NI) for those working in the construction industry. For those contractors and subcontractors it is important to understand and comply with the regulations set out by the HMRC. The deadline for submission is 14 days after the end of the tax month. A key reminder for contractors: even if no subcontractors have been paid during a month, they still have to make a nil return. Employed or self-employed? Contractors must make a monthly declaration showing they have considered whether an employee is employed or self-employed. It is vital as the HMRC can be strict and impose a penalty of up to £3000, if they consider that negligent or incorrect information has been provided. It can be hard to declare which option title is correct, as many factors and stipulations apply, so please contact us for specialist advice: http://www.kingandtaylor.co.uk/contact-us/ Verifying with the HMRC The contractor has to contact HMRC to check whether to pay a subcontractor gross or net, not every subcontractor will need verifying. HMRC will give the contractor a verification number for the subcontractors which will be matched with HMRC’s own records. These numbers are a fundamental part of the system and it is important there is a fool proof system in place for obtaining and retaining them. Payslips Contractors have to provide a monthly payslip to all subcontractors paid, showing the total amount of the payments and how much tax, if any, has been deducted from those payments. It is a necessary requirement that the contractors include certain specific information on the payslip, for more details on this and any other details regarding CIS please follow this link to see the full document:http://www.kingandtaylor.co.uk/wpcontent/uploads/2012/01/Construction_Industry.pdf or alternatively contact us via our website for expert advice....

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5 Steps to Improve your Cash Flow


In this tough economic climate it is more important than ever to ensure that cash flow is a priority in your business.

Here we explain 5 steps to ensure you keep control of your cash flow and keep your business solvent:

1.        Understand your cash flow:

Just like forecasting sales, dedicating time to analysing and forecasting your cash flow will give you powerful insight into the current and future status of your business, which will allow you time to plan and repair emergent problems. One of the easiest ways to monitor your business’ cash flow is to compare the total unpaid purchases to the total sales due at the end of each month. If the total unpaid purchases are greater than the total sales due, you are in negative cash flow.

2.        Plan your cash income and outgoings with your team

Systematic financial planning is vital to a company remaining solvent. You must ensure that each Manager and department within your business is in line with the same financial plan. Set out clear financial guidelines and sign off procedures with all departmental Managers. You should construct a budget, at least annually, which will help detail the potential future cash flow problems or pinch points, and then allow the business to react to these instead of reacting to the needs of the business.

3.        Take steps to shorten your cash flow conversion period

Examples of steps that could be taken:

  • Preparing customer invoices immediately upon delivery of your goods or services to the customer – this helps ensure a quick receipt of payment
  • Monitoring your customers’ use of credit and adjusting their credit limits accordingly.
  • Offering customers a discount for paying their invoices early, this is known as early settlement.

4.        Decide who is vital to your business’s success

Receiving discounts for early payment is one thing; but paying suppliers that aren’t as vital to your business before those who are is simply counter-productive. Likewise, giving better payment terms to customers just to secure a sale could in the long run be self-defeating.  Segmenting suppliers and customers in terms of their strategic importance to your organisation will guarantee that the best care is taken over those that will help your business the most.

5.        Work together to improve cash flow

As a decision maker you can’t solely improve cash flow as an individual – use your team. Rewarding employees for actively improving cash flow is proven to have a great impact on organisations. As mentioned in point two, cash flow objectives set from tactical planning can provide a benchmark for departments to be measured against.  A result of incentivising employees to meet objectives is cash flow becoming more streamlined.

There is no single right answer to cash flow management but those who have invested time into adopting a cash flow management structure have seen dramatic positive effects. A regular stream of revenue is imperative to maintaining an adequate cash flow for your business, not just endlessly pouring out. Monitoring your cash flow and taking steps to shorten your cash flow conversion period will go a long ways towards eliminating those dangerous cash flow gaps.

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Recent Posts

The Autumn Statement 2013 – Preview

| 22nd October 2018 | Blogging

The Autumn Statement 2013 – Preview The Government’s plans to secure the economic recovery are set to be revealed at the Autumn Statement 2013 on Thursday 5th December by Chancellor of the Exchequer, George Osborne. Whilst in Washington attending the International Monetary Fund’s annual meeting, Osborne told reporters: “I still sit round that table at the G-20 with one of the highest budget deficits. Britain continues to have some very serious public finance challenges that need to be addressed, and although we’ve brought the deficit down by a third it’s still too high. Where we’ve got resources available we’ve got to make sure we’re doing what we can to reduce the deficit.” The Office for Budget Responsibility’s forecasts in March this year, used as a basis of the plans, showed a prediction of 0.6% economy growth in 2013, prompting Osborne to say he will announce revised budget forecasts and details of new measures at the Autumn Statement. He also stated: “We have a clear economic plan; we’ve stuck to that plan. I’m very far from feeling the job is done. We’re still in the very early stages of the recovery.” Surveys suggest actual growth figures for 2013 were better than expected, seeing expansion of around 1.4% as opposed to the OBR’s prediction of 0.6%. Common preconceptions of what the Autumn Statement may reveal include further cuts to the annual pension allowance, a rise in personal allowance, a 5% drop in income tax for those earning over £150,000, an increase in National Insurance Contributions for the self-employed, and introducing the recognition of marriage within the tax system. What plans would you like to see revealed? Let us know on Facebook or Twitter!...

Seminar in September

| 22nd October 2018 | Blogging

Seminar in September On the 10th September 2013, we will be holding our biannual seminar, this time focusing on Cost Conscious Growth. The event will be held in Gravesend, Kent – featuring a welcome breakfast on arrival, key speakers and the opportunity to network with other industry professionals over drinks. A morning and evening session are available with the three professional speakers presenting at both. The speakers bring a wealth of experience from their different backgrounds: Finance, Marketing and IT. First to take the mic will be Simon Fenech, Sales Manager of Codestone, covering The Benefits of Moving to the Cloud. Then, Dean Spencer, Director of Grapevine Marketing, will show you how to prevail with Zero Cost Marketing. Last but not least, Joanna Trinder from King and Taylor will demonstrate how to keep your finances in order with Online Book Keeping. Increasing revenue is not the only route to profit margins! We want to help our clients reduce their outgoings on necessary business services.  At King and Taylor, we want you to learn from industry experts who can teach you about certain aspects that could be vital to the success of your business. There are many accountants to choose from, so we recognise the need to help our clients on more than just financial matters by interacting with them. This event is held twice a year and features a specific theme every time, if you would like details on the next seminar then contact us here. It’s not too late to attend the upcoming seminar! To view the event details and register your attendance, please follow this link....

Construction Industry Scheme

| 22nd October 2018 | Blogging

Construction Industry Scheme The Construction Industry Scheme (CIS) sets out special rules for tax and national insurance (NI) for those working in the construction industry. For those contractors and subcontractors it is important to understand and comply with the regulations set out by the HMRC. The deadline for submission is 14 days after the end of the tax month. A key reminder for contractors: even if no subcontractors have been paid during a month, they still have to make a nil return. Employed or self-employed? Contractors must make a monthly declaration showing they have considered whether an employee is employed or self-employed. It is vital as the HMRC can be strict and impose a penalty of up to £3000, if they consider that negligent or incorrect information has been provided. It can be hard to declare which option title is correct, as many factors and stipulations apply, so please contact us for specialist advice: http://www.kingandtaylor.co.uk/contact-us/ Verifying with the HMRC The contractor has to contact HMRC to check whether to pay a subcontractor gross or net, not every subcontractor will need verifying. HMRC will give the contractor a verification number for the subcontractors which will be matched with HMRC’s own records. These numbers are a fundamental part of the system and it is important there is a fool proof system in place for obtaining and retaining them. Payslips Contractors have to provide a monthly payslip to all subcontractors paid, showing the total amount of the payments and how much tax, if any, has been deducted from those payments. It is a necessary requirement that the contractors include certain specific information on the payslip, for more details on this and any other details regarding CIS please follow this link to see the full document:http://www.kingandtaylor.co.uk/wpcontent/uploads/2012/01/Construction_Industry.pdf or alternatively contact us via our website for expert advice....

Share Ownership

| 22nd October 2018 | Blogging

Share Ownership The distribution of shares is becoming an increasingly popular incentive which companies are regularly using to recruit or retain staff. It offers an attractive alternative to cash bonuses and according to new research in the UK and USA, it can also increase the productivity of your staff. Employees can obtain shares in their company without necessarily suffering a large tax bill through two routes. The first being Share Incentive Plans but the most popular form of share ownership for employees comes in the form of Enterprise Management Incentives (EMI). The latter allows selected employees to be given the opportunity to acquire a significant number of shares in their employer through the issue of options. Benefits Employees gain a stake in their company which results in increased staff retention and motivation. There is no direct cost to the employer in comparison with wage increases or cash bonuses. Usually there are no NIC charges for the employer when the employee sells their shares. How we can help We can help you decide whether EMI is appropriate for your business and whether the business will qualify. We are also able to help you with the necessary documentation required to establish and operate EMI and advise on the costs so please do contact us....