Taxation

Directors and Their Taxes

Looking at the interface of Personal Tax and Company Tax for small owner Managed Business and year 1 of a Company. There are many elements involved in tax planning in this way and we have lots of options we can discuss with you for what is best. Please feel free to contact us to discuss on 01905 691994 or email us at info@am-accounting.co.uk

About Us

Payroll

Written by M Beech FMAAT CIMA Dip MA Managing Partner

Payroll is something that can be a distraction for some businesses.

Would it be more cost effective to pay a Payroll Bureau (like AMA) to do the Payroll for you? So you can earn more money doing other things?

If you think how much time you spend on Payroll, how much Sales or Turnover could you bring in, doing your Core Activity in your Business?

We at AMA offer Payroll Solutions and this is a comprehensive service.

  • Pensions – we can run Pensions for you linked to your Payroll Software and assist you in your obligations with the Pensions Regulator here in the UK. We also provide the Software as part of the fee.
  • The Payroll itself, we have Software and work closely with you to Administer your Payroll.
  • Payroll Month runs from 6th of current month to the 5th of the next month.
  • We run Payrolls on the last day of each month.
  • We Email payslips to you.
  • We notify you about your PAYE NI tax to pay by the 19th of the following month to HMRC.
  • We can help with HMRC Queries or troubleshoot with Payroll / Payroll + Pensions links problems.
That all important Payday ! Take the Strain & Stress out of your Payroll Function = concentrate on what you do best!
  • Prices to Run Payroll Administration including Software =
    • 1 Employee * = £10 per month;
    • 2 Employees *= £13 per month;
    • 3 Employees = £15 per month;
    • 4 employees = £20 per month.
    • 5 employees or more = £3.75 per payslip.
  • Prices for Pension (separate)=
    • Set Up Initial Pension Configuration and Software = £300.
    • Run Pension monthly per employee = £3 per Employee

*= We at AMA often have small Owner Managed Businesses (1 or 2 Directors) where we incorporate Payroll alongside Dividends for tax planning for Limited Companies.

Let us Know if you would like to book a meeting to discuss this.

Our numbers: 01905 691994 / 07518 546810

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Gift Aid

Written by Ali Jaw ACCA FMAAT

Managing Partner AMA


Gift Aid & Gift Aid Small Donations Scheme (GASDS)….. changes that happened at 6 Apr 2017 onwards for Charities….

This is a key aspect for Charities and we at AMA work closely with Charities via our Practising License from the AAT.

We deliver services for Charities in Worcestershire & the Midlands.

We are open to possible National working too using modern synergies and the power of virtual working together.

The first thing to consider as a Charity is What Can be Gift Aided?

A variety of fundraising sources qualify for Gift Aid, although in all cases the funds must have been received from individual UK taxpayers making suitable declarations allowing the reclaim.

Common sources are as follows:

● Monetary donations, any size

● Events with donations only

● Volunteer expenses

● Sales of goods on behalf of an individual

So, the next thing is who are Eligible and Acceptable Donors?

Gift Aid Donors must:

● Be individual UK taxpayers (Donations from companies, for example, do not qualify).

● Pay enough Income Tax or Capital Gains Tax to cover all their donations to charity

● Have made a Gift Aid declaration

The next stage once it is decided that the funds can be Gift Aided is to compile & complete the Gift Aid Declarations Forms

The form needs to include the following information:

● Name of the charity.

● Name of the donor (minimum requirement first initial and surname).

● Donor’s home address (minimum requirement house number, name or postcode).

You may question within your Charity: How long does the declaration last for?

The declaration wording normally covers present, future and past donations. This can be back-claimed for up to four years.

So now we move on to explain how Tax relief for the donor & the charity works…..

A donor who is a basic rate taxpayer (20%) will receive no further tax relief as a result of making a donation. However, a donor who is a higher (40%) / or additional rate (45% and above) taxpayer will be able to claim tax relief on the difference between the higher/additional rate tax and basic rate on the grossed-up donation.

Let’s look at this special scenario for Higher Rate rate taxpayers now…..

Taxpayer
Rate
Donation
to Charity
Charity claims Individual can claim
40% £100 £25 £25
45% £100 £25 £31.50

● An individual taxpayer donates £100, the charity can Reclaim an additional £25, giving a total donation of £125

● A higher rate 40% taxpayer, the individual can personally reclaim £25 …..as a 40% taxpayer (40%-20% x £125).  Means effectively for a £100 donation to a charity after claiming tax relief a 40% taxpayer actually donates £75.

● Where the taxpayer is a 45% taxpayer, the individual can personally reclaim £31.50 (45%-20% x £125) . Means effectively for a £100 donation to a charity after claiming tax relief a 45% taxpayer actually donates £68.50

An important thing to look out for is the GASDS and how it could apply to you on smaller donations of £20 or under.

If you’re a charity or charities and community amateur sports club (CASC) you can claim top-up payments on small donations of £20 or less under the Gift Aid Small Donations Scheme (GASDS).

From 6 April 2017, you can claim on donations made using contactless technology, such as a contactless credit or debit card.

Before 6 April 2017, you could only claim top-up payments on small cash donations. Cash donations can be in coins or notes of any currency that have been collected and banked in the UK.

You don’t need to know the identity of the donors or collect Gift Aid Declaration Forms for this scheme.

Check if your charity or CASC can claim top-up payments

To claim top-up payments for donations collected from 6 April 2017, you must:

● have claimed Gift Aid in the same tax year as you want to claim a top-up payment.

● not have incurred a penalty on a Gift Aid or Gif

To claim top-up payments for donations collected before 6 April 2017, you must:

● have claimed Gift Aid in the same tax year as you want to claim a GASDS top-up payment

● not have incurred a penalty on a Gift Aid or GASDS claim in this or the last tax year

● have existed for at least 2 complete tax years, unless your charity or CASC has recently merged with another

You can’t claim for:

● donations that come with a valid Gift Aid declaration

● membership fees

● a £20 portion of a larger gift

How GASDS claims are worked out

GASDS claims are worked out in the same way as Gift Aid.

If the Basic Rate of Income Tax is 20%, you can claim a GASDS top-up payment of £2,000 on £8,000 worth of small donations.

Example, if the donor gives £20, you can claim a GASDS top-up payment of £5.

Maximum top-up payments from 6 April 2017

From 6 April 2017, the maximum amount of small donation top-up payments the lower of:

● £8,000

● 10 times the amount you receive in Gift Aid donations.

This is known as the matching rule:

For example, if you receive £100 in Gift Aid donations, you can claim top-up payments on £1,000 worth of small donations under the matching rule. This works out as £250 in top-up payments

(£1000 x 25%)

Next Steps

If your charity is looking for guidance on some of the issues raised in this blog around Gift Aid or the Gift Aid Small Donations Scheme…….

Or simply looking for partnership with local Accountants here in Worcestershire & The Midlands, simply get in contact with AMA

You and Your Charity, are most welcome for a free initial consultation to see how we can help you.

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Working with your Tax Adviser

Whether you are a small business, Sole trader or Medium size business, no one wants to pay more tax than necessary, but it takes careful tax planning to ensure you pay the correct amount. It also takes unique skills and knowledge. It is important for your Accountant to understand all aspects of your business operations.

AM-Accounting and Business Advisors Ltd are constantly working to identify opportunities to reduce the tax burden for our clients. We are continuously monitoring tax law revisions and new regulations with your circumstances in mind. AM-Accounting and Business Advisors Ltd combines the latest knowledge of tax law changes with practical experience to give you the best possible results.

We will prepare and review your tax returns in a timely and efficient manner. More importantly, we put your interests first on all tax matters. We will develop tax strategies for you and your business. Furthermore, we will remain attentive to future opportunities for you to reduce your tax liability. We will ensure that you are compliant with current tax laws and regulations, and we will ensure you understand any future changes that may affect your business.

One of our core policies at AM-Accounting and Business Advisors Ltd, is to help you, the small to medium sized enterprises (SMEs) achieve your full growth potential. We do this by team working with you, to allow you to focus on what they do best – run your business. If you are looking for support for your business, you can trust us to effectively and proactively care for your Accountancy and Bookkeeping requirements.

Whether you are a self-employed (sole trader), a small (owner-managed) entrepreneur, or a small to medium sized business, AM-Accounting and Business Advisors Ltd will give you an efficient, timely, and professional service, tailored to meet your individual needs. If you are a small start-up poised to expand, or simply looking for clearer and more manageable financial support, AM-Accounting and Business Advisors Ltd can help.

At AM-Accounting and Business Advisors Ltd, we are committed to providing a friendly, professional service at a very competitive rate. A fair price for the best quality service.

Making Tax Digital (sometimes referred to as “MTD”)

AM-Accounting are geared up, and ready to serve all our clients, to make sure they meet their compliancy with HMRC for Making Tax Digital. This comes in 1st April 2019 for VAT .

We currently partner with two of the UK’s most trusted and respected firms when it comes to Cloud Accounting – Quickbooks and Sage.

Therefore, be rest assured, you will be in safe hands with our Accountancy Practice, should you choose our excellent quality MTD Complaint Accountancy services.

All staff are Advanced Quickbooks Proadvisor and Sage One Certified Advisor Accredited.