Author Archives: Ship Shape Accounting

HMRC renews warning on contractor loan schemes

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HMRC has issued renewed guidance on contractor loans, emphasising that loans paid to contractors or freelance workers through trusts or umbrella companies are subject to tax in the same way as other income, reports CCH Daily. The guidance states that under a contractor loans scheme individuals are paid in the form of a loan from a trust or company, sometimes… Read more »

Business secretary backs personal tax cuts

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Business secretary Sajid Javid has backed the Chancellor’s plans for a cut in the corporation tax rate, and called for reductions in the personal tax rate, in order to avert a potential downturn following the Brexit decision in the EU referendum vote. Javid said there should be a £1,000 increase in the personal allowance, and indicated his support for proposals… Read more »

Business Expenses

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As a Limited Company contractor costs that are incurred wholly, exclusively and necessarily for your trade can be claimed as business expenses, which means that you will receive tax relief on these costs.  Broadly speaking every £1000 or expenses will save your company £200 in corporation tax. Claiming business expenses correctly will help to reduce the company’s exposure to corporation… Read more »

Income Extraction

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The generally accepted practice for Limited Company Directors to withdraw income from their business is by way of a nominal salary topped up with dividends. We process and declare to HMRC a small salary for you at a rate of £670 per month.  This ensures that while you do not physically pay national insurance that it remains a qualifying year… Read more »

Kingsbridge Insurance

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Business insurance – some FAQs Why is business insurance so crucial? Many professionals who choose to operate as a contractor or freelancer through their own limited companies question the need to buy business insurance.  It may seem an unnecessary expense but it’s vital that you don’t overlook the impact that not being adequately insured could have on both you and… Read more »

Pensions Contributions / Retirement Planning

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Did you know that a Ltd Company can make employer funded pension contributions on behalf of a Director up to £35k per year into a qualifying personal pension scheme? This is particularly attractive given the changes to dividend taxation. It is a triple win.  The contribution is paid into your pension pot, the company enjoys corporation tax relief and it… Read more »

The new tax on share dividends, announced in the Autumn Statement

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On Wednesday 8th July 2015 George Osborne delivered a summer budget and one of the biggest changes announced was how dividends are taxed from April 2016, this is called the Dividend Allowance. How will the new tax work? From April 2016, the first £5,000 of dividend income in each tax year will be tax-free. Sums above that will be taxed… Read more »

Flat Rate VAT: Why register?

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The flat rate VAT scheme is an incentive provided by the government to help simplify taxes and means you charge VAT on your invoices at 20% but only pay back HMRC at a lower rate. The VAT percentage you pay is considerably lower than that of the standard VAT rate, you then keep the difference as your profit. The FRS… Read more »

XERO: Online Accounting Software

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As you may be aware we provide and recommend Xero for use to our clients. Xero is an accounting system hosted entirely in the cloud for small businesses and their advisors. This means that wherever you have an internet connection, you and your advisor has access to your accounts. You can work on your accounts at a time that suits… Read more »

Freelancers: Claim All Of Your Expenses

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As a freelancer or contractor, you will be aware that until April 2016, you can claim expenses such as travel and subsistence costs against your tax. With some legislation changes fast approaching, which will remove the right for workers employed under direction, supervision, or control to claim for travel and food costs from April 2016 it may be useful to… Read more »