September 16, 2019

What is your company doing for its employees this Christmas?

If you are taking them out for Christmas dinner, you can claim up to £150 including VAT without having to declare it as a benefit. However, if you wanted to give them cash, or something they could exchange for cash, you would need to put it through the payroll and pay tax and NI on the amount.

 

So, if it a Christmas bonus they get, I am sure they will appreciate it especially if you pay the tax and NI due. If you simply want to but them a small gift, that is fine – especially if it is a turkey. That is definitely tax allowable.

Can we help ?

If you send your employees and clients Christmas cards, this is another allowable expense – so is the work’s Christmas tree. If you find some of the shopping is combined with personal shopping, this is not a problem. Ask the shop to prepare a receipt for your business. If this is too much hassle and you have a till receipt for combined personal and business items, just circle and claim for the business costs and keep the receipt. The business then owes you the money by way of an expense claim or payment out of the business funds. This type of split shopping trip is not just true at Christmas. If you buy you office milk and paper from Tescos with the week’s shopping, keep the receipt and mark what is business and make sure you claim.

 

If you are a very small limited company, i.e. just you with help from the family, don’t forget you are an employee and entitled to your Christmas lunch. Have a good one.

When did you last claim expenses ?

There are 3 good reasons why you should put in an expense claim:

1. You have paid out money on behalf of the firm so they owe it to you
2. The firm needs to know what it has paid out/costs it has incurred otherwise it is working with an incomplete picture
3. If expenses are to be recharged to the customers. They should be included before the customer forgets they agreed to pay for them.

Whether you work for someone else, or yourself the same three rules still apply. The sooner you put the expenses in, the sooner you can be paid and the firm knows it has a liability.

You might trade as a sole trader and the concept of expenses seem strange. The same rules apply. If you pay parking of, on average, £2 per day and record it for 45 weeks of the year that amounts to £450 worth of costs. So, if you pay 20% tax and 9% NIC that is £130.50 extra you would need to pay in taxes if you didn’t make the claim.

For many small expenses such as parking, you cannot always get a receipt. HMRC understand this providing you are making notes and claims as you go rather than inventing a lump at the end of the year. It may be that your bank statements show when you had to park to go to the bank. As well as the parking, don’t forget to claim the mileage unless the business owns the car and pays for your petrol.

Other amounts often overlooked are postage, paper (when bought from Tesco’s with the week’s shopping), car washes and charity donations. All are allowable and some do have receipts, others don’t. If some of the items on the receipt are business and some not, then include the receipt and just mark which you are claiming for – at least you have proof that the money was spent.

The important thing is to do it while you still remember – Happy to chat things through with you if I can be of help

What if the unexpected happens?

Contingency planning is not just for large firms. Over the last week I have been working with several clients who had exactly this.

For one I am working with the loss adjustor for loss of earnings following a fire. Another client currently has a compensation claim progressing for loss of business following their road being closed for new water pipes to be laid. The third is a breakup of a partnership. Could any of these happen to you?

Disaster recovery I can helpThe easiest and cheapest one to guard against is the partnership breakup. A simple partnership agreement which sets out how the profits are to be split during the partnership, what should happen if one partner is ill and unable to fully contribute, how the business is to be valued if a partner wants to leave – or a new one join, how a partner leaving is to be paid out to list a few points. All these can be covered and agreed at the start. It makes any breakup much less painful. My client did have the good grace to admit I had suggested it when they started and they now wish they had spent the time creating one.

If you are a limited company, the same applies. If there is another director, or you choose to take one on, what are there powers, are they to have a contract of employment? If you are looking for investors, have you got a shareholders agreement? This can cover the same things as the partnership agreement mentioned above.

If you are a sole trader or sole director you may feel this doesn’t apply to you. If something did happen, who is going to wind up your business affairs? Just because you are not able to continue does not mean that your suppliers and customers will go away. These matters would all need sorting out.

When you next have five minutes, have a review of what would happen if … put something in place and with luck it will never happen!

Like some help with planning your unthinkable contact me

Are you paying your Staff enough ?

Are you paying your staff enough?

How much do you pay your staff? As from 1st October the national minimum wage changes for those aged 21 and over to £6.19 and the apprentice rate rises to £2.65. Rates for younger staff remains unchanged.

Did you know that agricultural workers will get a different minimum wage, depending on what they are being asked to do, and are entitled to a higher rate for overtime? If you are in this sector, you probably know all this but I have had clients who have been caught out and ignorance is no excuse.

When did you last pay your part time workers holiday pay? The common reason that staff are underpaid is when they work on a zero hours contract and therefore don’t book their holiday, they are just not available to be put on the rota. Where the hours vary from one week to another, the calculation for holiday is then based on 12.07% of time worked. When looking at the cost of employing staff, this should be taken into account – and the employer’s national insurance.

Lastly, the most important member of staff is you. Without you the business could not function. How many hours do you do, how much do you get paid per hour? When did you last take a holiday?

 

Do you need help with ensuring that you are the right side of the law ? Contact Penny for more advice