AIMS Accountants for Business

Are you one of the more than 80% of UK businesses hosting a Christmas party for employees? Don’t fall foul of the HMRC rules about parties and events for employees.

It’s easy to get caught out with this one, because there is a limit of what you can spend on employee hospitality, but it applies across the tax year, not per event as people often think.

Tax tips for Christmas

• The spend per employee must be less than £150 per head so there is no taxable benefit for the employee.
• If it’s over £150 per head, then the employee needs to be taxed on the full cost.
• The £150 per head is per tax year so it’s important to factor in any other “annual ” events you might have done in that tax year.
• The tax year started on 6 April 2023 and ends on 5 April 2024.

Remember, even though client entertaining is generally not an allowable expense for corporation tax purposes, the cost of employee entertaining is an allowable expense. This means 𝙩𝙝𝙚 𝙘𝙤𝙨𝙩 𝙤𝙛 𝙩𝙝𝙚 𝙨𝙩𝙖𝙛𝙛 𝘾𝙝𝙧𝙞𝙨𝙩𝙢𝙖𝙨 𝙥𝙖𝙧𝙩𝙮 𝙘𝙖𝙣 𝙗𝙚 𝙙𝙚𝙙𝙪𝙘𝙩𝙚𝙙!
As always, things might not be quite this simple with HMRC, so contact your local AIMS Accountant if you want further clarification about your Christmas party or tax in general.

Are you looking at buying an Electric Vehicle (EV) through your business? There are some seriously impressive benefits to doing so, assuming that an EV is the right choice for you.

If you buy a brand new, fully electric EV through your limited company, you can claim a First Year Allowance of 100% against your corporation tax bill. This means that you can reduce your corporation tax liability while enjoying a brand new car. If you are thinking of purchasing one that is 2nd hand, the writing down allowance is 18%, which is still better than most combustion engine cars.

You can also get corporation tax relief on the costs of maintaining and insuring your EV.

You cannot have a company car, without paying income tax on the benefit, which is normally quite high. Thankfully, there are income tax advantages to opting for an EV, which mean employees with an EV as a company car pay far less tax on the benefit. The benefit in kind value is just 2% of the list price, when comparing this option to normal cars, where the value lies between 15 and 37 percent there is quite a saving to be made.

As always, you may want to discuss how the numbers will impact your business, so please talk it through with your accountant. For more help in managing the tax liabilities of your business, please talk to your AIMS accountant.

You can find our team here: https://www.aims.co.uk/find-your-local-aims-accountant/

First day of December and the festive season begins in earnest. However you plan to spend Christmas, let’s take a look at some practical suggestions to make Christmas more of a gift for business owners.

With the continued shift to online shopping, if you’re not online in some way, you will lose revenue to those that are. Approximately a quarter of items are bought online (26.5% in 2022) and that continues to grow.

Look at your payment platforms to see if you can get a better deal elsewhere; saving on fees will increase your bottom line.

For helpful support with your business, please talk to AIMS - we're here to help!

How can you make your business more tax efficient as we approach the end of the year and that dreaded tax return looms closer? We’ve been sharing some tips on how you could make the most of our tax system to minimise your tax bill.

Tip Number Four: Claim for all expenses

Expenses are what you spend to keep your business operating and they are tax deductable. This is one time when spending money can actually save you money on taxes!

Read the full article here: https://www.aims.co.uk/what-expenses-can-be-claimed/

Are you contributing into a pension plan? Companies can deduct pension contributions on behalf of employees or directors from their profits, making paying into a pension plan even more appealing. This is a good way to reduce corporation tax, as well as helping making retirement a more appealing prospect.

If you need some advice, please talk to us. You can find your nearest AIMS accountant here:

https://www.aims.co.uk/find-your-local-aims-accountant/

As we move closer to the deadline for tax returns, we have been looking at how business owners can make their businesses more tax efficient.

Tip Number Three: Invest in your business.

Investing in your business can be very tax efficient, and can also help you with growth, efficiency and recruitment depending on what you are investing in.

When you invest, you are in effect spending money which is then offset against your profits, thereby reducing your tax liabilities. Of course, there’s no point spending money on things that aren’t going to benefit your business, allowing you to grow and increase your profits in the lonbger term.

Investments you could consider:

• Office equipment
• New software and technology
• Staff Training and development
• New product development
• Additional staff

If sorting out your tax return is something you dread, we are here to help. We understand tax and will help you get your finances into shape ready to file.

Please talk to our team of accountants for practical advice for business owners.

Read more: https://www.aims.co.uk/is-investing-in-your-business-a-tax-efficient-tactic/

Tax scams remain popular, with HRMC receiving over 120,000 reports about tax scams in the last 12 months. Impersonating HRMS is a common approach taken by fraudsters, who know that people are likely to be submitting tax returns around this time of year.

Emails or phone calls purporting to be from HRMC should be treated with caution, especially if they are offering a tax refund. You can report suspected fraud to https://www.facebook.com/actionfraud and they have a live assistant on the website: https://www.actionfraud.police.uk/

If you have any doubts, please get in touch with our AIMS accountants for fresh, professional and practical advice on your tax return.

Alex is one of the accountants who has just celebrated a year with AIMS. Here he shares some reflections on his first year.

What made you decide to start a practice with AIMS?
I had spent around 30 years in management accounting in the corporate world – including the last five years as Finance Director for an Italian company. When my MD was transferred back to Italy, I decided it was time for a change too. I started to look for similar roles in industry, then took a call from Phil at AIMS asking if I’d considered working for myself.

Phil put me in touch with some existing AIMS franchisees with similar backgrounds to mine and I soon decided that the AIMS business model offered an opportunity that I really wanted to try.

How has the first year been?
I have loved every minute.. I’m still looking after finances and explaining accounting technicalities to people whose first love is not finance. I really enjoy interacting with people. Building relationships underpins everything I do. I suppose the main difference now is that I’m not reporting to a board of directors. I decide on my own objectives and use my business growth to support my family. It’s been a busy first year.

How have you found it being part of the AIMS family?
I know I wouldn’t have done this without AIMS – they really gave me the confidence and support I needed to launch my own practice. For me, having that support network in place really helped to mitigate the fear of the unknown. I’ve also appreciated the marketing support – not just in terms of introducing new leads, but also helping me to develop the skills I need to successfully sell myself and my business to new clients. I know there’s a team behind me and advice is only ever a phone call away.

What were the biggest challenges?
For me, it was difficult getting to grips with new software packages and having to go out and market myself. Also, there can be quite a time lag between having your first introductory meeting with a client and actually starting to do paid work. But thanks to AIMS, I was well prepared and I have more time for my family, so it was the right move for me.

What comes next for you?
I need to really focus on growing the business and somehow achieve a balance between marketing and actually doing the accountancy work. I will be talking to the AIMS team very soon about how to approach my year two growth plans.

Any advice for people considering setting up a practice with AIMS?
Don’t be frightened to take that leap – or as the saying goes, feel the fear and do it anyway! There’s plenty of work out there and the team at AIMS provide clear processes and protocols with a great support network. Be honest with yourself and your clients and If you’re prepared to work hard, there’s a great living to be had.

In April 2023, the rate of corporation tax in the UK increased to 25% for companies with profits over £250,000 . The rate remains 19% for businesses with taxable profits of less than £50,000 and for everyone else, marginal tax relief will be applied, reducing the main corporation rate.

There are a number of tax efficient strategies for business owners to include, and we’ll be looking at each of these over the next few weeks.

Tip Number Two: Use the correct structure for your business

Using the correct structure can have significant impact on your tax liabilities. The four main options are sole trader, partnership and limited company or limited liability partnership. In the UK, the majority of start ups opt for sole trader as the simplest way of starting a business, then they review the structure as they grow.

Read more: https://www.aims.co.uk/what-structure-is-most-tax-efficient-for-my-business/

Have you thought of investing in other companies? It can be a tax efficient tactic and there are a number of venture capital schemes to encourage investors, and to help businesses start up or grow.

It’s a complex area to understand but there is a lot of information on the Government website,

The Enterprise Investment Scheme for example, is available to businesses with no more than £15 million is gross assets, has less than 250 employees and has not been actively trading for more than seven years.

Talk to AIMS about the tax implications of any investment options for your business. You can find your closest accountant here:

https://www.aims.co.uk/find-your-local-aims-accountant/

Meet Daniel Frampton, who joined AIMS two years and 10 months ago to set up his practice near Crawley, West Sussex. ‘At the time, it was a big move and it felt scary. We’d just found out we were expecting our first child, and here I was, leaving a large corporate organisation in favour of starting from scratch.’ Daniel says.

Although it was a major change, Daniel found that he settled into his new business very quickly and has in fact grown his business so strongly through referrals that he won the AIMS ‘Fastest growing new practice through Organic Growth’ Award in 2022/2023.

When Daniel worked in larger organisations, most of the roles were working with other departments, to help them to track financial performance and provide financial information, forecasting and analysis to help guide decision making and set strategy.

That partnership mindset has benefited his clients at AIMS too. ‘I believe in a partnership approach; working together to ensure we can find the most effective way to improve and grow their business. I take on one or two clients at a time, so I can get to know them and understand what they want or need from me. They are often amazingly good at what they do, and I admire that expertise. But they also really value what I can do for them, and because I understand their business and challenges, I can give them sound actionable tax advice, as well as the more expected aspects of accountancy for SMEs. After all, they are working hard to make a profit and I’d like to help them be tax-efficient so they can keep as much of that profit as they can, working within our tax legislation of course.’

Daniel works with several bookkeepers, but he also has another invaluable member of his team sharing his office. Bonnie is a three year-old miniature schnauzer who has her own chair in Daniel’s office. ‘She’s my Specialist Tax Advisor. Whenever I have a more complex bit of tax advice, and I’d like a second opinion, I run it past the main AIMS tax support team, who are brilliant, but I also tell Bonnie about it too 😊!’

Reflecting on the first years with AIMS, Daniel feels that running his own business is a lot more fulfilling and rewarding than working for large corporate organisations. He looks forward to the challenges of his working day, as every day is different to the next. Work life balance has really improved, with no commuting, meaning more time with his young family, which is important.

If you’d like to talk to Daniel about your business or would like to find out more about the team of AIMS accountants around the UK, we’d love to hear from you.

https://www.aims.co.uk/accountants/daniel-frampton/

In April 2023, the rate of corporation tax in the UK increased to 25% for companies with profits over £250,000 . The rate remains 19% for businesses with taxable profits of less than £50,000 and for everyone else, marginal tax relief will be applied, reducing the main corporation rate.. For many business owners, they are likely to be paying more in taxes when their tax return is completed. So how can you make sure your business is tax efficient?

There are a number of tax efficient strategies for business owners to include, and we’ll be looking at each of these over the next few weeks.

Tip Number One: Claim for all deductions and relief

To minimise your corporation tax liability, the first step is to make sure you are claiming for all the reliefs and deductions that you can, and you are accurately recording your expenses. There are lots of options available on reliefs and deductions so please do consult with your accountant to choose wisely. Three of the most common deductions and reliefs are:

Capital Allowances:

Capital allowances can be claimed on the cost of assets used for your business. Depending on the asset, you might be able to claim this as a one-off payment or you may need to spread the cost of the asset over several years. Some examples of capital assets would be office equipment and computers, or work vehicles.

Research & Development tax relief:

To encourage Research and Development the UK Government introduced R&D Tax Credits in 2000.

This has proved highly popular with almost 90,000 companies claiming back £6.6bn in tax relief in 2021. R&D Tax Credits could bring your company thousands of pounds in tax relief but are quite specialised so again, please talk to AIMS about your situation. If you’re eligible, you can include staff wages, contractor costs, software licenses and energy costs.

Patent Box

This scheme is administered by HMRC and is designed to reward innovative UK companies. Patent Box incentivises a company to keep their IP within the UK and rewards them for doing so by reducing the corporation tax on profits resulting from qualifying IP income to 10%.

Even if the patented element of the product or process is minor, 100% of a company’s worldwide profits arising from qualifying IP income should qualify for the 10% Patent Box corporation tax relief.

Our accountants are business owners just like you – so they understand what you’re going through. Talk to us and let’s see if we can help.

https://www.aims.co.uk/tax-efficient-strategies-for-business-owners/

Do you donate to charity?

In 2022, the UK public donated around £12.7 billion in donations making it the most generous year on record – although volunteer numbers are down significantly compared with 5 years ago. If you’re thinking of volunteering, now might be the perfect time. 💰

For business owners, donating to charities is a win-win. You’re not only helping causes close to your heart but you also incur tax relief on your donations when you use Gift Aid.

All a company must do is include the amount donated in their corporation tax self assessment.

For more help in managing the tax liabilities of your business, please talk to your AIMS accountant. You can find our team here.

https://www.aims.co.uk/find-your-local-aims-accountant/

Costs versus Expenses. Is there a difference?

These terms are often used inter-changeably but to give you a more accurate financial picture, it’s worth understanding the difference.

Costs refer to fixed or variable costs that you pay to acquire an asset, for example a vehicle. Variable costs would include materials needed to produce your goods, or any commissions paid. Costs are reflected on the balance sheet.

Expenses are regular payments made to ensure you can operate your business. They are not related to assets in the same way as costs. Expenses might include salaries, rent, energy bills, insurance or bank charges.

Expenses have a direct impact on your income tax bill as they are deductible on your tax return.

For helpful support with your business, please talk to AIMS. We have a team around the UK:
https://www.aims.co.uk/find-your-local-aims-accountant/

What is a benefit in kind, and what does it mean for the small business owner?

Essentially, a benefit in kind is a non-cash benefit received from an employer and which has a taxable value.

Common examples are a company car, fuel for personal use, accommodation provided for personal use, vouchers, medical insurance. If you’re wondering about mobile phones, the use of a mobile phone by an employee is not a taxable benefit provided the contract is with the employer and the employee is only given one mobile.
It’s worth understanding the tax implications of the benefits on offer to employees and making sure that business owners are providing details to HRMC through payroll or a P11D.

If you need some advice, please talk to us. You can find your nearest AIMS accountant here:

https://www.aims.co.uk/find-your-local-aims-accountant/

As a new business owner, it’s important to prioritize financial management and planning in order to ensure the long-term success of your business. While some start-ups or new business owners will start off using an Excel spreadsheet, it’s a good idea to talk to an accountant about your priorities. AIMS accountants work with SMEs all over the UK and we’d love to help you make your business a success.

There are some key financial priorities for a new business owner - for example, these two:

1. Establish a budget: A budget will help you track your expenses and manage your cash flow effectively. It will also help you make informed decisions about your spending priorities.

2. Manage your cash flow: Cash flow is critical for the survival of any business. It’s important to keep track of your incoming and outgoing cash to ensure that you have enough to pay your bills and expenses on time.

Our Top 7 Priorities for a new Business Owner are in the article: https://www.aims.co.uk/priorities-for-new-business-owner/

Are you one of the 600,000 taxpayers who missed the January 31st 2023 deadline for self-assessment? HRMC was expecting 12.1m tax returns to be filed, of which 11.4m were submitted on time. But, 600,000 people missed it!

So how can you avoid being late?

https://bit.ly/496sFve

One of the most effective scams is also the simplest.

Your finance team gets an email purporting to be from a supplier you know and trust, asking you to update their bank details for the recent invoice they sent. It’s very easy now to mask the true identity of the sender, so the email looks to be from your supplier.

It’s wise to trust nothing. Don’t call the number on the email, which may well be the scammer’s number. Call the number you have on your system and ask if your supplier has changed banks. This simple policy will protect you from the unscrupulous criminals who exploit the weaknesses in your systems.

For more helpful business advice, please get in touch with our AIMS accountants.

https://www.aims.co.uk/find-your-local-aims-accountant/

James Watson has just celebrated his first anniversary 🎂 of setting up in practice as an AIMS accountant. We caught up with him to find out how he’s found the first year.

How would you sum up your first year?
For me, it’s been great – and pretty much as expected after the AIMS induction. They told me what to expect and they were 100% right, but I can go into that in more detail later. I now have a good range of clients from multi-million pound turnover companies to sole traders looking for help with their self-assessment. I’ve started to get some really good reviews too, both on Google and on the AIMS Trustist page. It now feels like I have an established practice.

What were the biggest challenges?
AIMS were right in warning me to expect that the first three months would be a challenge. It’s nerve-wracking watching your savings dwindle, while all your time is going into marketing and meeting potential clients, rather than servicing actual clients. But with the AIMS knowledge-base behind me, I knew to stick with it, to be confident in my offer and to trust the process.

What benefits have you found in being part of the AIMS family?
I think AIMS adds huge value in a variety of ways. Firstly, as a sole practitioner, it’s really comforting to have access to all the start-up and ongoing marketing support – as well as technical advice, if I want a second opinion. Secondly, being part of a network means I can offer my clients additional value – if they need financial or legal advice, I can point them to an AIMS contact who I know will do a good job for them. I’ve also found it really useful having access to a tailor-made software system that is kept up to date, and as accountants across the AIMS network, we share tips on how to make best use of the resource it offers. Overall, I’d say the AIMS offer has given me the confidence to develop my practice in the knowledge that I’m offering my clients a good service.

What comes next for you?
Well, as I’m about to become a first-time father, I’m not planning any further client growth for the next couple of months. I’ll carry on working at becoming more efficient in my admin, while making sure I offer all my existing clients the best possible service. Then, when we’re settled into a routine as a new family, I’ll be able to focus on attracting and retaining more clients.

Any advice for people considering setting up a practice with AIMS?
I’d say be realistic about what you want to achieve and why you’re doing it. Running your own practice does give you flexibility, but in year one you’re not likely to be out playing golf every Tuesday afternoon. If you’re like me, there will be a huge learning curve while you spend time growing your business. I’d absolutely recommend it though: the satisfaction is immense!

As we move into the Autumn season, it’s a good opportunity to review your finances and tax position. Here are some of the dates and matters we would advise business owners to be thinking about.

Key dates for all business owners:

• 5th October 2023 - if you have untaxed income for 22/23 and you are not already registered for self-assessment, this is the date by which you need to notify HMRC your chargeable to tax. For example sole traders that started to trade in the 22/23 tax year.

• 31st October 2023 - The deadline for submission of tax returns in paper format for the tax year ending 5th April 2023.

• 30th December 2023 - The deadline to submit your online tax return for automatic payment of owed taxes from your pension and wages.

To see more key dates and a few other matters to consider, please read our article: https://www.aims.co.uk/key-dates-for-business-owners/

Why should business owners care about their balance sheet? A balance sheet gives you valuable information about your financial health and can inform decisions you make for the future of your business.

more about balance sheets:

Why does a balance sheet matter to business owners? A balance sheet matters to business owners as it gives a snapshot of the financial health of the business, provides information to investors

Our accountants work with SMEs and business owners to help make their businesses thrive. Here’s some advice given by some of our accountants recently, to help business owners in the form of 5 top tips.

1. Make pension contributions to yourself from your business.
2. If you file your tax return before 30 December and the tax you owe is under £3000 it can be added to your 24/25 tax code, so you don’t have to find the cash by 31 January’ 24.
3. If you’re expecting a tax refund, filing early means you’ll receive your money sooner. This can be really useful if you want to use the refund to pay off debts, make investments, or cover other financial needs.
4. From 1st April 2023, the 19% corporation tax rate remains the same for profits below £50,000 but rises to 25% on profits above £250,000. With an even higher marginal rate of corporation tax for profits between £50,000 and £250,000, we can help with these and other recommendations to manage your tax rate.
5. Clients forget about mobile phones, make sure the contract is in the company name and claim the cost.

Our accountants are business owners just like you – so they understand what you’re going through. Talk to us and let’s see if we can help.

UK law stipulates what information must be included by limited companies and sole traders. Invoicing customers can be one of the least enjoyable aspects of life as a small business owner – but prompt, accurate invoicing is essential for your cash flow and there is an art to invoicing!

We’ve explained below the 9 things you need to include on your invoices, and some tips on taking the pain out of invoicing. As always, our team of AIMS accountants are here to help you, so do get in touch if you need a friendly, proactive accountant on your side.

What you must include on an invoice is slightly different for sole traders and limited companies.

Read more:
https://www.aims.co.uk/what-you-must-include-on-an-invoice/

It’s hard to run a business these days without some sort of digital presence, whether it’s your website, LinkedIn or Tiktok. It’s easy to feel pressured into having a profile and a presence on every channel available – but that’s really not necessary.

It’s more important to be clear about how your customers find you, and which channels they prefer.

You can simply ask your customers which social media platforms they use, or use the number of followers and engagement rates on your channels to gauge where you could invest your time. As a rule of thumb, pick one primary channel and one secondary channel, and be very good on those.

Whatever channels you opt for, it’s worth having a Google My Business (GMB) account. It’s free and is a great way of helping customers find your website or business premises. Using GMB will help boost your SEO too, so it’s a win win.

For more help in building your business, talk to AIMS. We have a great team of accountants around the UK who are all business owners too, so they understand the challenges.

Find us here: https://www.aims.co.uk/find-your-local-aims-accountant/

Welcome to Melanie Sedwell BSc FCA!

Melanie recently completed her AIMS induction and is now working with SMEs in the Chester and Wrexham area. Melanie was very sporty in her youth – playing netball for Wales in the under 21s team. Like many athletes she chose to study at Loughborough University, where, unfortunately, a cruciate ligament injury put paid to her sporting career.

Having studied chemistry, Melanie joined Unilever in a laboratory role, however she decided a career in accounting was more to her liking than working day in and day out with chemicals. Melanie moved to Deloitte where she gained her chartered accountancy qualifications. While there, she met the man she was to marry before returning to Unilever in a financial capacity. She held various roles over a period of 20 years, including as European Financial Controller and finally as Project Manager, where she was responsible for a major restructuring project. Having completed that, Melanie decided it was the right time to leave and set up her own practice.

With friends who ran an AIMS practice in Chester, Melanie already knew about the support network that AIMS offer their accountants and was keen to sign up. She said: “As a project manager, I’ve learnt lots of valuable, transferable non-finance skills. I’m very organised with my planning and good at building relationships with people from all walks of life. As well as providing business support and expert technical advice, AIMS offers a learning environment in which I can carry on my CPD alongside my professional practice. I’ve already learnt about a partial VAT scheme that will help one of my clients.”

Being part of the AIMS family also gives Melanie the flexibility she needs to balance work and family life with two young boys … not forgetting Woody, the Golden Doodle! Melanie is taking on clients in Chester and Wrexham – where her father was once the professional football club’s manager.

You can find Melanie, and our other talented accountants here.
https://www.aims.co.uk/find-your-local-aims-accountant/