Have you heard of HMRC’s Making Tax Digital (MTD) project?
Starting in April 2019 all VAT Registered businesses will be compelled to submit their VAT Returns through approved software as HMRC will switch off the VAT submission section of their website in order to ensure that they can capture more business information and a full audit trail of the data behind the VAT Return.
A year later will see all Limited Companies and Sole Traders with a turnover in excess of £10,000 per annum having to make quarterly profit returns to HMRC.
This is now a great time to get involved with this project and to use it as a launch pad for improving the information that you have available to help you to run your business and achieve your goals.
React Accountancy have all the tools and experience that you need to help you on this journey and our mission is to help our clients grow, become more efficient, more profitable and more successful.
Don’t worry about the changes that are coming – we are happy to offer you a free consultation to fully explain MTD and the opportunities that it represents.
Get in touch – we love to talk & love it even more when we’re helping businesses to thrive!
- August 22nd, 2015/
Mortgage Interest Relief:
Under current arrangements, interest paid on a loan or mortgage used to purchase a property which is let can be deducted from the rental income from the letting before calculating any income tax due. The Government is to change this longstanding rule and replace it with an income tax deduction at the basic rate (20%) on the interest paid.
As this is a major change for landlords the change will be phased in from 2017/18 with the amount of the tax deduction from rents reducing and the amount of basic rate tax relief given increasing. In the transition years landlords will be able to claim:
- 2017/18 – 75% of the interest against rents, basic rate tax relief on 25% of the interest
- 2018/19 – 50% of the interest against rents, basic rate tax relief on 50% of the interest
- 2019/20 – 25% of the interest against rents, basic rate tax relief on 75% of the interest
- 2020/21 – only basic rate relief will be given on the interest
Wear & tear allowance:
Existing arrangements for furnished lettings allow a fixed annual deduction for wear & tear on soft furnishings and moveable furniture of 10% of the rents – this is to end from April 2016. From 2016/17 onwards, landlords will instead claim only for expenses actually incurred during the year.
Rent a room scheme:
The annual tax free amount that landlords can receive from letting a room in their own home is to increase from £4,250 to £7,500 from April 2016 onwards.
Individuals letting a number of properties may to see an overall reduction in the tax relief they obtain on the financing element of their letting business. The Government’s stated intention is to “make the tax system fairer” however, it is perhaps inevitable that higher financing costs will be passed on by landlords to their tenants through higher rents. As regards the changes to the wear & tear allowance, additional record-keeping will be necessary in future years to ensure that all replaced items can be claimed.
Contact us for more details
I was sad to hear of the demise of the company that I worked for before setting up React Accountancy four years ago. Up until a management buyout at the end of 2011 the company had been successful and an enlightened employer with an easy going approach and very high staff morale – in my career of 25 years at that time Turney Wylde Construction were the best employer that I had worked for.
So it is sad to see that the business failed under different management and particularly sad for the many long-serving employees, subcontractors and suppliers who have lost out.
However, shortly after the company went into Administration I was contacted by Sandra who reported to me at Turney Wylde and she asked politely whether I would mind providing her with a Reference. I replied that I would be more than happy to do so due to the respect I have for her work but, as React Accountancy is expanding, perhaps we should talk about whether she could join our staff.
So, the loss of Turney Wylde has turned out to be React Accountancy’s gain & Sandra Lockey joins the company officially on 10th August.
Welcome aboard Sandra!
- August 18th, 2014/
It gives all of us at React Accountancy great pleasure that Ian Brodie has agreed to be our guest blogger.
Ian specialises in helping consultants, coaches and other professionals to attract and win more clients. He was recently named one of the Top 50 Global Thought leaders in Marketing and Sales by Top Sales World Magazine and one of the Top 25 Global Influencers in Sales and Sales Management by Openview Labs.
He’s the author of the Amazon #1 bestseller Email Persuasion, which teaches business owners and professionals how to build authority and generate more sales through email marketing.
You can get a free copy of his report “5 Simple Tweaks That Will Get You More Clients” here: www.ianbrodie.com/5tweaks
Here’s what he has to say about using content campaigns to boost your marketing:
Recently I was a guest speaker at “Event Camp 2014″ in Abu Dhabi. The focus of the conference was on “hybrid events” – a new breed of conference where many speakers and delegates attend remotely.
True to the spirit of the event, I did my session from the comfort of my own home in Cheshire.
My slot was on “Content Campaigns” – using targeted marketing campaigns (in particular, using email marketing) to boost the effectiveness of events (attendance, engagement at sessions and post-event “buzz”).
Although the focus was on marketing events, the concept of content campaigns is equally applicable to marketing webinars, products or services generally.
You can watch a recording of the session here:
On the 1st August the price for accounting software staple Sage 50 is set to skyrocket, seeing costs for users almost doubling:
Sage 50 Accounts up from £315 to £536
Sage 50 Accounts Plus up from £455 to £819
Sage 50 Accounts Professional up from £600 to £1,140
At React, this leaves us with some crucial questions when recommending platforms for our clients: What will they be getting for their money? Will there be increased customer support? New features? Will it come with a complimentary tin-opener and sing to us the entire collected works of Gilbert and Sullivan? It is safe to assume there will be some new features, but will the undoubted benefits and bug-fixes outweigh the significant additional cost when much of what they receive will in essence represent a like-for-like upgrade.
Perhaps it is time to take stock and consider the alternatives? Sage has long dominated the traditional desktop accountancy software market with what is perceived as a robust and (in its day) revolutionary platform. However, increasingly the World is turning towards cloud-based solutions and in this arena we believe Xero provides a fine alternative. The shift in mind-set required is one where clients need to move beyond the belief that they “own” a copy of their desktop accountancy package and that it has been bought outright as this scenario plays against the subscription model required for cloud-based accounting. This simple cost comparison may however ignore many other benefits such as the fact that the accounting data is constantly backed-up remotely, there is no longer a need for a server-based IT infrastructure and the software is updated in excess of 12 times a year with no disruption or involvement from the user.
Xero’s user friendly interface uses plain English instead on “accountancy-speak” & is rapidly becoming the figurehead for this cloud accounting revolution. With many competitive features, including mobile access, free automatic updates, and unlimited free customer support, Xero is superb value for money. It also enables access to a plethora of extremely helpful third-party add-ons to enhance your accounting experience and to help run your day-to-day business. You can check Xero out here
In business we all have competitors, but can you afford to keep them at arm’s length?
For us, cooperating with other Accountants brings untold benefits. It allows us to share knowledge with others, create an environment of trust, build up many really useful contacts and sometimes just enabling us to have someone to bounce ideas off.
Arthur Kay at the Guardian has published a balanced article where he illustrates some of the benefits and pitfalls of collaboration. He questions whether or not the numerous potential benefits of working with others outweighs the possibility of distractions and time wasters, while discussing if it’s possible to bridge the gap between smaller companies and much larger ones, and describes the necessity to organise yourself appropriately to hold up your end of the bargain.
Our approach at React Accountancy has always been a collaborative one and as we discovered at an event hosted by our friends at Xero last week we’re not alone. The overwhelming feeling was that extending an olive branch is always the best practice and the Partner Panel of 5 fellow accountants happily shared some of their most tried and tested business tips and experience with us. All in attendance although technically rivals, were particularly friendly and helpful to each other.
We think there’s enough business for everyone, but what’s your opinion and how do you collaborate in your industry?