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Getting ready for Making Tax Digital with Receipt Bank
MJH Accountants are here to help
Making Tax Digital is fast approaching, but have no fear MJH Accountants are here to guide you through the new legislation.
How does MTD affect me?
For those of you unware, Making Tax Digital (MTD) is HMRC’s new approach to online taxes, one of the most important being the new rules for submitting VAT. From 1st April 2019 all VAT returns will have to be submitted digitally through specialised (and approved) software. For our clients, this means you must use a software package such as Xero. We have already contacted those of you who are not yet compliant and provided you with some options. However, if there are any of you who need further information, please do get in touch.
Free Receipt Bank subscription for all affected clients
To make it easier for you on Xero and QuickBooks we have decided to roll out to ALL of our Xero and QuickBooks clients a subscription to Receipt Bank which is complimentary up until your renewal date. With Receipt Bank, you spend less time on manual tasks and more time running your business. You didn’t go into business to do paperwork. Receipt Bank tracks, reads and stores your receipts and invoices on the go, so you can focus on what matters. You can stay up to date with one tap, just take a photo of a receipt, and Receipt Bank extracts the data and sends it over to your bookkeeping software, meaning you no longer need to hold on to receipts. Check out their website here.
How do I get started?
Over the coming weeks, we will provide you with a link to Receipt Bank where you can download the app to your phone and set up a profile. Free training is provided by our team of qualified Receipt Bank advisors in house or over the phone. However, this set of YouTube videos and help-sheets should provide all the information you need to get started.
Deciding on a structure for your business
Choosing how you set up your business is one of the most important decisions of anyone in business. In this article we will discuss the key points you should consider.
Tax impact
| Profits | Sole trader | Limited company | Saving |
| £20,000 | £2,671 | £2,160 | £511 |
| £30,000 | £5,571 | £4,667 | £904 |
| £40,000 | £8,471 | £7,175 | £1,296 |
| £50,000 | £11,371 | £9,682 | £1,689 |
| £60,000 | £15,571 | £12,190 | £3,381 |
| £75,000 | £21,871 | £18,846 | £3,025 |
| £100,000 | £32,371 | £30,177 | £2,194 |
| £125,000 | £47,871 | £41,508 | £6,363 |
Tax calculated on the basis that all profits are drawn from a limited company and under the presumption that no pension contributions are made.
Liability
A limited company is its own legal identity, so as a shareholder your liability is limited. As a sole trader, there is little distinction between you and the business. Any business debts become your debts and your personal assets – including your house – are not protected.
Prestige
An incorporated company, whilst not guaranteeing reliability, gives the impression of a soundly based organisation and may appear more credible. In certain sectors, contractors or agencies may not work with sole traders because of the legal protection a limited company provides.
Administration
As a limited company there is much more administration, therefore accountancy fees are generally about £800 more than as a sole trader. You should factor this in when making a decision about whether you would be better off as a Limited Company.
If you wish to discuss any element of this article do not hesitate to contact us.
Out of this world! – by Cindy Billington
The Space Centre is an out of this world experience for anyone with special needs. From the very, very young to the very, very old. They provide a world of sensory stimulation and enables the assessment of sensory abilities by presenting one stimulus at one time and excluding unnecessary distractions.
I got to experience this amazing place which builds confidence and motivation for those who need to feel comfortable and relaxed in their own skin.
This is why we choose the Space Centre in Preston for our charity to support this year. And with that in mind you can help support them too, with a number of events they are hosting this year from a fashion show to a spring ball. Or if you have any unwanted gifts/items such as small toys, toiletries, accessories, notepads, mugs, gloves etc then please drop them off either at the Space Centre or with us at the office.
Together we can make a difference!
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