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03 May

Posted at 12:53h in Uncategorized
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Accounting can be a daunting subject for many adults, let alone kids. However, it is a fundamental aspect of managing money and understanding finances. That is why we felt the need to have Accounting explained in a simple manner In this guide, we will aim to simplify accounting concepts and explain them in a way that is accessible and engaging for kids. What Is Accounting? Accounting is the process of keeping track of money, including how much is coming in and going out. Furthermore, it involves recording and organizing financial information to help individuals and organizations make informed decisions about their finances. Why Is Accounting Important? Accounting is important because it helps us understand how much money we have, how much we owe, and how much we are spending. It is essential for businesses to keep track of their finances, so they know how much money they are making and can plan for the future. Accounting is also important for individuals, as it helps us budget and make wise financial decisions. Types of Accounting There are two main types of accounting: financial accounting and management accounting. Financial accounting involves recording and reporting financial information to external stakeholders, such as investors and creditors. Management accounting, on the other hand, involves using financial information to make internal business decisions, such as pricing strategies and cost analysis. Accounting Terms To have Accounting explained in a simple manner for kids and adults we need to know some basic terms. Therefore, here are some of the basic Accounting terms. 1. Definition of Accounting When a company makes money, it has to keep track of where that money came from and where it goes. So, this is called Accounting. 2. Accrual Accounting A method of accounting that records transactions when they happen, not when the money is received or paid. 3. Cash Basis Accounting A method of accounting that records transactions when the money is received or paid, not when they happen. 4. Income The money you earn from doing work or selling something. 5. Expenses The money you spend on things you need to run your business. 6. Profit The money you have left over after you subtract your expenses from your income. 7. Loss When your expenses are more than your income. 8. Assets Things you own that have value. 9. Liabilities The money you owe to others. 10. Equity The difference between your assets and liabilities. 11. Revenue The total amount of money coming into your business. 12. Accounts Payable The money you owe to others for goods or services you’ve received but haven’t paid for yet. 13. Accounts Receivable Money others owe you for goods or services you’ve provided but haven’t been paid for yet. 14. Debits and Credits These marks are called debits and credits, and they help the company make sure it has the right amount of money and things. 15. Income Statement A financial statement that shows your revenue, expenses, and net income over a period of time. 16. Statement of Cash Flows A financial statement that shows your revenue, expenses, and net income over a period of time. 17. General Ledger When the company buys or sells something, or pays or gets paid, it has to make two marks in its special book called the general ledger. 18. Balance Sheet It shows how much a company has, how much it owes, and how much is left for the owner of the company. 19. Charts of Accounts The company also has a list of all the things it can put in its special book, and each thing has its own special number. So, this is called the chart of accounts. 20. Cost Of Goods Sold The cost of the materials used to make what you’re selling. 21. Operating Expenses The costs of running your business, not including the cost of goods sold. 22. Gross Profit The amount of money you have left over after subtracting the cost of goods sold from revenue. 23. Net Income The amount of money you have left over after subtracting operating expenses from gross profit. 24. Depreciation The decrease in the value of an asset over time. 25. Tax Tax is money you pay to help the government do things like build roads, and schools, and keep people safe. The Bottom Line – Importance of Having Accounting Explained in A Simple Manner for Everyone In conclusion, accounting is a crucial aspect of managing money and understanding finances. Therefore, by having accounting explained in a simple manner and simplifying accounting concepts and explaining them in an engaging way, kids can start to develop an understanding of how money works and how to make wise financial decisions. Remember, the earlier kids start learning about accounting, the better equipped they will be to manage their finances in the future. Finally, If you want to receive more finance tips like this, feel free to call us: +44 121 212 0101 Caroline Street, Birmingham, United Kingdom, B3 1UF...

24 Jul

Posted at 11:26h in Uncategorized
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Be sure to meet your accountant in person before engaging their services. You will be working closely together, so a personal connection is important. Ask about their range of services to ensure that they can meet all your needs. This is also a good time to talk about their qualifications and experience. It is not a legal requirement for an accountant to hold any qualifications, but you should ensure that yours is qualified through one of the recognised UK bodies, e.g. ICAEW, ICAS, CIMA or ACCA. Also find out if they are a chartered accountant – chartered status is an internationally recognised level of professional standing. Most accountants will display their certificates in their offices. You can also double-check by contacting the relevant organisation. You should also discuss your accountant’s fees. An accountant’s job is to save you money overall (while protecting you from certain risks), so ask them to explain the ways in which their services will deliver value. How much you pay your accountant will depend on the extent of the services they provide you with. Your method of paying may also vary. Some services (such as annual accounts and bookkeeping) will involve a regular monthly fee, while others (such as tax planning advice) may be charged by the hour. The size of your business is also a factor, with larger businesses paying more. Find out more about the costs of accounting services. One-person band, small firm or larger firm? Consider carefully if the size of your accounting firm is right for your needs. Broadly speaking, you should match like with like. Therefore, if you are a contractor or sole trader then a small firm will probably suit you best, but if you are a fast-growing startup with a big vision, you will be looking for a medium-sized firm to match. Reviews, testimonials and reputation Sites such as Google, Facebook and Trustpilot will let you see ratings and reviews for accounting firms listed there. Look for reviews by businesses of a similar size to yours - if the reviewer is much larger or smaller, their assessment may not be very helpful. An accountants should also have testimonials from their clients that they are willing to share with you. Does the location of your accountant matter? Technically it doesn't matter too much where your accountant is based, since most of their work can be conducted remotely. However, regular face-to-face meetings are still valuable, and can be much more productive in terms of getting added value from your accountant. In a face-to-face meeting it is easier to discuss your business in broader terms and benefit from general business advice. Therefore, if you want more than basic accounting services, it's good to be within easily travelling distance so your accountant can visit in person. Questions to ask an accountant 1. What do you charge? Fees are an obvious place to start. However, it’s important to weigh them against what services are included, and what value these might add. 2. What services are included in your fees? Getting an itemised quote from your accountant will make it easier to compare them with other firms. 3. Why should I choose you rather than another accountant? Most accounting firms will of course try to persuade you to choose them. But compare their various answers to this question to see who responds with something more than marketing spiel. 4. Will you assign a dedicated accountant / contact person to me? Generally it is better to have one point of contact with your accounting firm, even if more than one accountant is involved in the work. This provides continuity, builds a relationship and reduces the risk of errors or missed deadlines. 5. How will we keep in touch? A good accounting firm should be very rigorous about communicating with clients. Decide together how often is it necessary to communicate, and what forms this can take – e.g. face-to-face meetings, phone calls, video conferencing. The firm should be open to regular meetings even if there seems to be nothing particular to discuss, as issues may go unnoticed until raised in conversation. 6. What issues should we discuss regularly? Following on from point 5, it is a good idea to get your accountant’s views on the matters that you should be considering on an ongoing basis. Issues might include financial reporting, tax planning, credit control and cash flow management. 7. Are there any special considerations for my type of business? Asking this question will help you find out how much industry knowledge your accountant has, as well as being useful in itself. Ideally, you want an accountant with lots of experience of very similar types of business, so they are well versed in the risks and opportunities. 8. What additional services do you provide? As your business grows, you may want to expand the range of services you receive from your accountants (e.g. funding for growth, R&D tax claims, . Find out in advance whether your chosen firm offers the necessary expertise, so you don’t have to move firms when you scale up. It’s also good to find out how your accountants will add value on a day-to-day basis. 9. What are the most common mistakes your clients make? This is a good way to benefit from your accountant’s experience of similar businesses, so you can avoid those pitfalls. Conversely, if they don’t give you much of an answer, it could be that they don’t have the level of experience you’re looking for. 10. How will you make sure I don’t miss deadlines? Helping you stay on the right side of HMRC is one of your accountant’s most important roles. An accountant who is on the ball will be ready and eager to remind you of all your obligations, rather than expect you to remember. If you need help, just call us and we will take care of things for you. Call SKEH Accountants Birmingham. We are Tax Accountants in Birmingham. Find us in Caroline St, Jewellery Quarter Birmingham https://www.skehaccountants.com/ ...

08 Jul

Posted at 14:46h in Uncategorized
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Welcome to our monthly newswire designed to keep you informed of the latest business and tax issues. Please contact us if you have any questions. Remember, we're here to help. MTD for income tax pilot extended HMRC is extending the pilot for Making Tax Digital for Income Tax Self Assessment (MTD ITSA) to more self-employed workers and landlords. Click here for the full story HMRC criticised over IR35 implementation HMRC needs to demonstrate that off-payroll working rules, commonly known as IR35, can operate effectively and fairly in the real world, according to a report by the Public Accounts Committee (PAC). Click here for the full story Inflation hits 40-year high UK inflation rose to 9.1% in May from 9% in April as the cost-of-living crisis continues, according to data from the Office of National Statistics (ONS). Click here for the full story Bank of England raises UK interest rates to 13-year high The Bank of England (BoE) has raised UK interest rates to a 13-year high of 1.25% and is now predicting inflation will hit 11% this autumn, when energy bills are set to rise again. Click here for the full story NICs increase has immediate impact on businesses Four out of five employers stated that they were immediately impacted by the increase in national insurance contributions (NICs), according to research by the British Chambers of Commerce (BCC). Click here for the full story Manufacturers call for support package Manufacturing trade body Make UK is calling for an emergency, pre-recess package of business support measures. Click here for the full story Latest guidance for employers HMRC has published the latest issue of the Employer Bulletin. Click here for the full story New homeowners warned over tax refund claims New homeowners are being warned about cold calls from rogue tax repayment agents advising them to make speculative Stamp Duty Land Tax (SDLT) refund claims, which could leave them with large tax bills. Click here for the full story If you need help, just call us and we will take care of things for you. Call SKEH Accountants Birmingham. We are Tax Accountants in Birmingham. Find us in Caroline St, Jewellery Quarter Birmingham https://www.skehaccountants.com/...

03 Jul

Posted at 12:02h in Uncategorized
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Hiring an accountant to look after your business finances can be a savvy move. DIY finances aren’t for everyone, especially when your accounts start looking rather complicated. Whether you’re just starting out, or if you’re up and running but looking to expand, here are some ideas why you need an accountant helping your business develop. SAVES YOU TIME The majority of people start businesses doing what they love, and what they’ve always dreamt of doing. For most people, this unbridled enthusiasm generally doesn’t extend to spending hours on financial records and paying taxes. Accountants can help you focus your business efforts on the really important (money making) stuff, whilst they take care of the other important (tax paying) stuff. It’s a win-win; you don’t get to waste time crunching numbers, and you get to spend time making more money. THEY’RE UP-TO-SPEED Tax deadlines, limits and amounts due have an annoying habit of changing on a semi-regular basis. Overlook one critical change, and you could end up massively underestimating your next tax bill. Using an accountant guarantees that deadlines are met, and that you’ll be paying the correct proportion of tax at the right time (and to the right people). Understanding how the system works can be a bit of a minefield; an accountant will help you tread carefully. YOU COULD SAVE MONEY Think hiring an accountant is expensive? Think again. A good accountant will be able to highlight any areas where you could be saving money (such as claiming for all of the expenses you’re entitled to), which means that not only could they drastically cut your tax bill, but they could even end up paying for themselves. Hiring an accountant has never been cheaper; check out our services – from a simple tax return to comprehensive account management. Alternatively why not check out our infographic on how much an accountant could save you. BUSINESS SUPPORT AND ADVICE It might be that being a sole trader isn’t very financially efficient any more, and that you’d be better off running as a Limited Company of operating through an Umbrella company. Accountants aren’t there just to help with finances; their support can improve your whole business setup. If you’re just starting out, they can cast a beady eye over your projections and financial plans. As your business grows, they’ll be able to run you through the various options available and point you in the right direction if you decide to change the structure of your business. FULL ACCOUNT MANAGEMENT Although you’ll still be legally responsible for their accuracy, you can handover full management of your accounts to your accountant. This means they’ll be able to do everything on your behalf, from completing your tax return, managing PAYE to filing your accounts with Companies House. You could even nominate them to manage your communication with HMRC. No more wasted hours listening to dreary hold music? Yes please. YOU MIGHT NEED INVESTMENT At some point, most businesses will need an investment. Whether it comes in the form of a bank loan, business angels or investors, you’ll need a solid plan detailing your both your forecasts and your accounts to-date. An accountant will be able to offer guidance and ensure you’ve thought of everything, and provide reassurance to those looking to invest that your figures are accurate and realistic. IT MAKES LIFE EASY Spreadsheets, invoices and tax returns aren’t for everyone. If the thought of just opening up your accounts gives you a spreadsheet-induced migraine, hiring an accountant would be a good shout – and some may even give you access to software so you get a hands on picture of your finances (here’s a guide to the different types of accountant you can use). Not only will an accountant keep your accounts in order, you’ll also have the added assurance that you won’t be penalised for late payments. Plus, you’ll get to spend January feeling smug about having a hassle-free tax return; now, who said you can’t buy happiness? If you require further advice, please call SKEH Accountants Birmingham. We are Tax Accountants in Birmingham. Find us in Caroline St, Jewellery Quarter Birmingham https://www.skehaccountants.com/...

05 May

Posted at 12:58h in Uncategorized
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The following Tax Events are due on 19th May 2022: PAYE, Student loan and CIS deductions are due for the month to 5th May 2022 This deadline is relevant to employers who have made PAYE deductions from their employees' salaries and to contractors who have paid subcontractors under the CIS. Employers are required to make payment to HMRC of the income tax, national insurance and student loan deductions. Contractors are required to make payment to HMRC of the tax deductions made from subcontractors under the CIS. Where the payment is made electronically the deadline for receipt of cleared payment is Friday 20th May 2022 unless you are able to arrange a 'Faster Payment' to clear on or by Sunday 22nd May 2022. Interest will be charged if payment is made late. Penalties also apply.   If you require further advice, please call SKEH Accountants Birmingham. We are Tax Accountants in Birmingham. Find us in Caroline St, Jewellery Quarter Birmingham https://www.skehaccountants.com/   ...

24 Apr

Posted at 11:11h in Uncategorized
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Have you ever wondered what does an accountant do for a small business?’ Have you tried managing your own bookkeeping but your workload is just too much to handle? Hiring an accountant is one of the best business decisions you can make in terms of managing a steady and healthy small business.   Accountants can help small business owners in several important ways, but what is it that an accountant can do? An accountant can assist a business owner by managing the entire financial system of a small business. Accountants can help with financial analysis, accounting software integration, and compliance, as well as provide advice on revenue loss or growth and how to improve upon the financial health of the business.   Accountants can do so much more than just manage your business’s finances, they can also advise, suggest, and even implement systems and software that can free up your time to focus on what you do best.   In this guide, we will tell you everything you need to know as a business owner about accounting. Read on to find out why you should consider Smooth Accounting to help grow your small business.   What Is the Role of an Accountant in a Small Business? Whether you have a large company or a small sole trader, an accountant can become one of the strongest assets to your team.   If you do not have a grasp on basic bookkeeping or your business is growing at a rapid rate, an accountant can help you by easing up the strain that comes from managing the finances of a business. It’s an entire job in and of itself, and your priorities need to be focused elsewhere if you want your business to succeed and thrive.   Accounting software can do a lot now, but you will still have to analyse your cash flow and keep in mind how your revenue is affecting your business plan.   For small businesses, accountants are the chief organisers and operators of the entire cash flow function of the business.   This is essentially what an accountant is, but how exactly do they do all of this?   How can accountants help your business? One of the jobs an accountant can help with is bookkeeping. Bookkeeping is needed to keep track of your business’s overall revenue and how the money coming in is then compared to the costs you must pay out typically on a monthly basis.   This alone can be a time-consuming job, and a good accountant will dedicate a large part of their efforts to keeping meticulous track of the finances of your small business. A great accountant will let you know every step of the way what your revenue is; if you are making a profit or a loss; and what you need to do to turn a loss into a profit.   Additionally, an accountant will also handle all of the year-end reports for a business as well as all of the many reports needed for tax season. They can also prepare a concise overview of your business’s finances for you to allow you to make accurate business decisions.   At Skeh Accountants Birmingham, we strive to be approachable because we understand that accounting can be intimidating and daunting, but our friendly team is always on hand to offer advice and peace of mind.   With many years of general practice experience, there’s no query we can’t handle. We’re cost-effective and can save you money, but we also believe in offering excellent service at an excellent price.   Focussing on Small Business Owners All of our accountants have a general philosophy that not only provides superior accounting services but that also offers help and full integration with a small business.   We help a business owner by preparing financial statements that not only ensure you comply with company regulations, but we will also arrange to meet with you to discuss the impact of the financials. As a business owner you want to understand what you are signing and why.   We believe that this process helps clients foster more productive and essential business relations with their accountant that goes beyond just the preparation of financial statements.   The finances of a small business are frequently fluctuating, and when you add in payroll costs, taxes, HMRC, and compliance with all financial regulations including VAT, having a business advisor of sorts on your team is a great way to help you manage the financial aspects of your business.   What other services might your business need? We have talked a bit about bookkeeping, and taxes, but there are many more services that an accountant can provide.   One of the most beneficial is the creation of financial reports, which includes management accounts. A financial report typically comes in three different forms: cash flow overview, profit and loss statement, and a balance sheet.   Small business owners should regularly look at financial statements to have an up-to-date report of the revenue coming into their business, the costs going out. These reports are very helpful during tax season and can also allow you to see variances at certain times of the year or other trends that can impact your company’s profitability.   When you hire an accountant, you can also get regular cash flow analysis that shows the cash flow of your business at specific points in time, and what is available that then determines how much money can be withdrawn or put back into the business through upgrades or additions.   A balance sheet is also a useful tool that an accountant can provide. The balance sheet allows you to see exactly how your company and your bank account are working together at a specific point in time. This sheet shows what you own and what you have owe and can offer an easy-to-read overview of the success of your business.   An accountant can also be on hand to offer advice such as if another business bank account is needed, if payroll procedures need to be improved, how to increase sales, how to maintain financial growth, how to remain compliant with HMRC, how to analyse data, the list goes on.   We offer all of these services and ensure that our accountants are not just on hand to keep your books and leave for the day.   How Much Should I Pay an Accountant For My Small Business? An accountant should be worth the cost associated. If an accountant doesn’t help you save time, money, and stress, then there is no difference between an accountant and a random accounting software system.   At Skeh Accounting, all our company clients are charged based on the work involved. For instance, Bookkeeping is charged depending on the number of transactions through the bank and the number of purchase invoices/receipts per month. In terms of your company accounts and tax return, our fees are bespoke so please get in touch so we can go through exactly what you need.   We can discuss pricing in more detail through a consultation. We want to ensure you have everything you need in terms of accounting, and that you are not saddled with features that you do not need.   Is Accounting Important For Overall Cash Flow? An accountant can help a business save money, even with the added expense of paying for an accountant. It doesn’t matter if you are a small business owner, a sole trader, or anything in between; an accountant who understands your business will enable you, the business owner, to focus on the important thing, being the business itself.   Bookkeeping is one of the tasks that can keep you from developing your business or building your client base. By outsourcing your bookkeeping to an accountant, you can free up your time and rest assured that your financials are all in order. It will also ensure you have adequate accounting records should you get an HMRC inspection.   Essentially, you have to have competent and accurate accounting for your small business if you want to have exact data to see all the aspects of your business’s cash flow.   The accounting process is so crucial to the overall success of your business that you will want to ensure it is 100% correct in every tiny detail concerning profit and loss. The cash flow of a small business can change at a moment’s notice, and by having a competent and inquisitive accountant on your team, you can fully grasp these changes and have guidance on how best to move forward.   Anybody can input data into a software system, but only a specialised accountant can truly analyse what they are seeing and then compare the numbers to the exact nature of the business.   How Can Skeh Accountants Birmingham Help Your Small Business? At Skeh Accountants, we will work closely with your company, whatever stage it is at, to prepare and file your statutory accounts.   Our experienced accountancy team can help with setting up internal systems that will help generate management information. Taking the next step, we can interpret the figures that the system produces and then work with you to create new strategies for your business.   Call: SKEH - Tax Accountants Birmingham. Find us in Caroline St, Jewellery Quarter Birmingham https://www.skehaccountants.com/ ...

20 Jan

Posted at 16:52h in Uncategorized
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The following Tax Events are due on 2nd February 2022: Business Tax Events Deadline for submitting P46(car) for employees whose car/fuel benefits changed during the quarter to 5th January 2022 This deadline is relevant to employers who provide any employees with the use of a car. The form P46 (car) only needs to be completed where a car is first provided or an additional car is provided, or an employee ceases to have the use of a car without replacement. The completion of the form enables HMRC to amend the individual’s coding notice to reflect the change in benefit. This notification may be made by completing and printing off the relevant by paper or online forms. Where one car is merely replaced with another, this may be notified online. A change in car for car benefits which are being 'payrolled' should not be reported on a P46(car). Kind regards, SKEH Accountants Birmingham For when you need a good Tax Accountant in Birmingham. Call: SKEH - Tax Accountants Birmingham. Find us in Caroline St, Jewellery Quarter Birmingham https://www.skehaccountants.com/...

10 Jan

Posted at 10:44h in Uncategorized
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Another helpful tax update from HMRC: Chancellor announces £1 billion fund for businesses On 21 December 2021, Chancellor of the Exchequer, Rishi Sunak, unveiled a £1 billion COVID-19 fund, including cash grants of up to £6,000 per premises for each eligible firm. Self assessment taxpayers must declare COVID grants on tax returns HMRC has reminded self assessment taxpayers to declare any COVID-19 grant payments on their 2020/21 tax return. HMRC waives self assessment penalties for one month to ease COVID-19 pressures HMRC is waiving late filing and late payment penalties for self assessment taxpayers for one month. FCA to introduce new consumer duty The Financial Conduct Authority (FCA) is set to introduce a new consumer duty to better protect users of financial services. HMRC latest guidance for employers HMRC has published the latest edition of the Employer Bulletin. Over 440,000 small firms at risk due to late payment crisis More than 440,000 small firms could be forced out of business by the late payment crisis, according to the Federation of Small Businesses (FSB). Need a good Tax Accountant Birmingham? Please call: SKEH - Tax Accountants Birmingham. Find us in Caroline St, Jewellery Quarter Birmingham https://www.skehaccountants.com/...

05 Jan

Posted at 14:25h in Uncategorized
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Business Tax Events PAYE quarterly payments are due for small employers for the pay periods 6th October 2021to 5th January 2021 This deadline is relevant to small employers and contractors only. As a small employer with income tax, national insurance and student loan deductions of less than £1,500 a month you are required to make payment to HMRC of the income tax, national insurance and student loan deductions on a quarterly basis. Where the payment is made electronically the deadline for receipt of cleared payment is Friday 21st January 2022. In year interest will be charged if payment is made late. Penalties also apply. PAYE, Student loan and CIS deductions are due for the month to 5th January 2022 This deadline is relevant to employers who have made PAYE deductions from their employees’ salaries and to contractors who have paid subcontractors under the CIS. Employers are required to make payment to HMRC of the income tax, national insurance and student loan deductions. Contractors are required to make payment to HMRC of the tax deductions made from subcontractors under the CIS. Where the payment is made electronically the deadline for receipt of cleared payment is Friday 21st January 2022. In year interest will be charged if payment is made late. Need a good Tax Accountant Birmingham? Please call:SKEH - Tax Accountants Birmingham. Find us in Caroline St, Jewellery Quarter Birmingham https://www.skehaccountants.com/ ...

30 Dec

Posted at 13:30h in Uncategorized
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Our tax news blog explores the things that matters to your organisation. This month we focus on a couple of tax planning opportunities that were not blocked in the Budget including Changes to Inheritance Tax, Charitable Donations, Trust Planning, Christmas Party Tax Incentives, Employee Gifts, Furlough Grants on Tax Returns, Fuel Rate for Company Cars and a Diary of Main Tax Events. We hope you enjoy reading our Tax News update and find it useful. Tax News Blog courtesy of : https://harrisonsaccountancy.co.uk/tax-news-blog-december-2021/ Please get in touch if you would like to know more about any of the issues discussed in this tax news blog post. Best wishes for the festive season and 2022!   Tax news blog content accurate as at 30.11.21 CHRISTMAS IS THE TIME FOR GIVING REGULAR GIFTS OUT OF YOUR INCOME IS TAX EFFICIENT TRUST PLANNING OPPORTUNITY STILL AVAILABLE GIFTS TO CHARITY LET’S HAVE A REAL CHRISTMAS PARTY THIS YEAR! CHRISTMAS GIFTS OF UP TO £50 PER EMPLOYEE IS ALSO TAX FREE REPORT CJRS FURLOUGH GRANTS ON CORPORATION TAX RETURNS ADVISORY FUEL RATE FOR COMPANY CARS DIARY OF MAIN TAX EVENTS   CHRISTMAS IS THE TIME FOR GIVING Many were expecting the chancellor to announce changes to inheritance tax (IHT) in his Autumn Budget, However, like capital gains tax (CGT), the rules have remained broadly the same as last year. That means that each tax year individuals may make gifts of up to £3,000 in total and that amount is not included in their cumulative total of gifts for IHT. Even if the £3,000 annual exempt amount is exceeded, provided it is an outright gift to an individual, there would be no inheritance tax payable provided the donor survives for 7 years. Note that the gift of an asset other than cash may also give rise to a capital gain and CGT may be payable where the asset has increased in value. However if you give away a business asset such as shares in your trading company it is possible to make a claim to hold over the gain so that no CGT is payable. We can of course advise you on the procedure to follow. REGULAR GIFTS OUT OF YOUR INCOME IS TAX EFFICIENT One tax planning opportunity that many thought the chancellor might restrict was the exemption from inheritance tax for regular gifts out of an individual’s income. Inheritance tax is designed to tax transfers of capital so if the donor can demonstrate that the gifts are made out of surplus income then the transfers are not taken into consideration for IHT. The exemption applies where there is a regularity to the payments, such as a standing order to pay school fees. HMRC will also require proof that the payments are paid out of post-tax income and do not limit the donor’s normal lifestyle. Detailed records are required, and we can help you with a suitable spreadsheet. TRUST PLANNING OPPORTUNITY STILL AVAILABLE Another tax planning strategy that is still available despite rumours that it would be closed in the Budget was the CGT hold over relief when assets are transferred into or out of a trust. This relief currently enables a non-business asset, such as an investment property, to be transferred without paying CGT. The relief applies where the transfer is subject to inheritance tax, but where the value transferred is no more than the £325,000 IHT nil rate band the transfer of the asset can take place without IHT or CGT being payable. For example, Colin, a higher rate taxpayer, wants to gift his adult daughter Liz an investment property worth £300,000. The property cost him £100,000 a number of years ago. If he were to transfer the property to Liz directly there could be up to £56,000 CGT payable on the £200,000 gain. If the property is transferred to a trust for the benefit of Liz then the transaction would be immediately chargeable to IHT but covered by the £325,000 nil rate band. The resulting gain could then be held over so that no CGT is payable. At a later date the property could be transferred from the trustees to Liz providing another opportunity to hold over the capital gain. If this strategy may be of interest to you please get in touch. You will also need to instruct a competent trust lawyer to set up the trust. GIFTS TO CHARITY Where possible taxpayers should “Gift Aid” any payments to charity to provide a further benefit to the charity. Higher rate taxpayers obtain additional tax relief on the grossed-up amount donated. For example, where an individual makes a £20 cash donation to charity the charity is able to reclaim a further £5 from HMRC making a gross gift of £25. Where the individual is a 40% higher rate taxpayer he or she is able to claim a further £5 tax relief under self-assessment, reducing the net cost of their donation to £15. Note that the donor is required to make a declaration that they are a UK taxpayer and those that have not suffered sufficient UK tax to support the Gift Aid amount will taxed on the shortfall. Remember that Gift Aid does not just apply to gifts of cash. Many charity shops will now sell donated items on your behalf and are able to treat the sale proceeds as Gift Aided donations. It is also possible to gift quoted securities and land and buildings to charity and claim Gift Aid on the market value of those assets. LET’S HAVE A REAL CHRISTMAS PARTY THIS YEAR! Last year many businesses put on a “virtual” Christmas party event and HMRC agreed that would be acceptable in order for there to be no taxable benefit for the employees involved. There continues to be no taxable benefit for employees provided that all staff are invited, and the cost does not exceed £150 a head, inclusive of VAT. If you have also had an annual summer event then provided the combined cost of the two events is no more than £150 a head then there would be no taxable benefit in kind. If, however the summer event cost £80 a head and the Christmas party £100 a head only one event would qualify for the exemption. CHRISTMAS GIFTS OF UP TO £50 PER EMPLOYEE IS ALSO TAX FREE Remember that certain gifts to staff at Christmas are also tax free if structured correctly. Employers are allowed to provide their directors and employees with certain “trivial” benefits in kind tax free. This exemption applies to small gifts worth no more than £50 to staff at Christmas, on their birthday, or other occasions and includes gifts of food, wine, or store vouchers. REPORT CJRS FURLOUGH GRANTS ON CORPORATION TAX RETURNS The latest version of the CT600 Corporation Tax Return requires companies to report CJRS furlough payments received and the amounts that the company was entitled to during the period. Where any overpayments have already been disclosed to HMRC that amount should be reported.The total amount overclaimed should then be entered in box 526. This amount will be assessed to income tax not corporation tax and HMRC will provide you with a payment reference. ADVISORY FUEL RATE FOR COMPANY CARS HMRC have again increased the advisory fuel rates that apply for the reimbursement of employees’ private fuel for their company cars. The new rates apply from 1 December 2021, but you can continue to use the previous rates for up to 1 month from the date the new rates apply. Where there has been a change the previous rate is shown in brackets:- Engine Size Petrol Diesel LPG 1400cc or less 13p  (12p)   9p (7p) 1600cc or less 11p  (10p) 1401cc to 2000cc 15p  (14p) 10p  (8p) 1601 to 2000cc 13p  (12p) Over 2000cc 22p  (20p) 16p  (15p) 15p  (12p)   You can continue to use the previous rates for up to 1 month from the date the new rates apply.  For wholly electric cars there is a 5p (was 4p) advisory rate. Note that for hybrid cars use the equivalent petrol or diesel rate. ...