Christmas is coming and it’s likely to have been a tough year for many people, their business if they operate one and their teams. As normality returns, there are still some ongoing challenges such as social distancing, masks, lateral flow tests and more. So, you may be wondering about how you can reward your employees with Christmas gifts as a thank-you for their hard work throughout the year.
This blog post will tell you lots about Christmas gifts for employees and what you need to know. If you have any further queries about your festive finances or Christmas treats for your team, just drop us a line. We will happily give you more personalised or in-depth advice.
If you were to give your employees a Christmas present in the form of cash, then this would be taxable as earnings in the normal way. This means it would be subject to both tax and national insurance. This also applies to vouchers that can be exchanged for cash. The employee will be taxed on the full value of the voucher.
Non-cash vouchers that are exchangeable for goods and services only will also be taxable. They must be reported on the employees P11D form. Class 1 National Insurance will normally be needed to be deducted through payroll. It is essential your payroll manager or accountant is aware of this so it can be reported correctly to HMRC.
If you choose to give your employees a seasonal present such as a bottle of bubbly, a box of chocolates or similar, then this needs to be below the value of £50 per employee. It is then classed as ‘trivial’, and the employee will not be taxed. If the Christmas gift was to exceed this amount, then it will be taxable and HMRC will need to know.
If your employees do a great job, they may be given a gift from a third party. As long as the value of the Christmas gift does not exceed £250 in cost, then this is not taxable for the employee. If it is over this amount, then it is taxable and HMRC should be aware.
Staff entertaining can be an allowable business cost where this solely relates to your employee’s. The expenditure must be wholly and exclusively for the purposes of your business and does not necessarily need reporting to HMRC if the event is open to all your employees, be annual, such as a Christmas party (or Summer BBQ for example) and cost £150 or less per person. The allowance can be split across a number of events, as long as the combined costs does not exceed £150 per head.
A close company is one that is run by 5 or less shareholders. As a director you can receive trivial benefits up to a value of £300 in a tax year without the necessity to report these to HMRC or pay additional income tax or National Insurance on the benefit.
Remember receipts should be kept for all trivial benefits and the annual allowance can cover benefits provided to a family member or a member of your household and still be exempt.
If the exempt limits are exceeded, even by a small amount, the total value of the benefit – and not just the excess – will have to be taxed through the payroll or reported on a form P11D.
Are you still unsure of the best way to thank your employees for their hard work this Christmas? Give our team a call. We can talk through some options with you that offer the best outcome for you and your employees.
The payroll process has a major impact on your business. It seriously impacts the success of your business in both the accounts side of the business and the HR side of the business too. In this blog post we look at the impact payroll has on a business and why you might want to consider outsourcing your payroll to our professional payroll team in Peterborough.
Payroll affects the accounts side of the business as each year you need to report the net profit of the business. To do this correctly, you need to pay your employees correctly and report it correctly too. If you report your net profits late or wrongly this can result in charges, late fees or inspections from the HMRC.
Your payroll processes your business on the HR side of things. Every business wants happy employees. For this to happen you need to treat your employees and this means paying them on time and with the correct amount. If there are errors in your payroll this could mean that employees are paid too much or not enough. They could be paid later than expected or pay too much or too little tax on their wages.
If your employees pay the wrong amount of tax, they could be left short of money. Alternatively, they might not pay enough tax, and this could mean they have to pay a bulk amount at a later date. This is something your employees might not be prepared for and it could result in them having some serious money problems.
When employees aren’t happy with how they get paid or the mistakes in the payroll they will become annoyed. This will affect their productivity at work and the overall team morale too. Making sure that your employees are paid correctly is one of the most basic requirements for ensuring your team feel valued and safe within your business and their job.
Research shows that around 50% of employees leaving their job do so because they feel their employer doesn’t care about them. Employees that are paid late or incorrectly will definitely fall into this category!
For these reasons alone, we are sure you can see why a working payroll system is so important to businesses. Risking your payroll means risking your entire business. If you want to make sure your payroll doesn’t let your employees or your business, call us now about outsourcing your payroll in Peterborough.
As a business owner, corporate tax issues will be part and parcel of your routine and one of the main tasks that your accountant will have. If you are a director of a limited company, the tax issues responsibility falls on you. You have to make sure that the business’s tax issues are in order and that the tax liability is accurate. This also includes ensuring that HMRC is paid on time.
Corporation tax is based on limited companies and their taxable income or the profits they make. As the owner of one you need to calculate this yourself and you need to pay the amount to the Inland Revenue without an assessment beforehand. The payment date is 9 months and 1 day after the due date of the business and this is usually the very last day of the accounting period itself.
The good news is that this tax rate will be cut from 20% to 17% come 2020 according to the government. The accounting period cannot be more than 12 months for this tax and it is usually the same financial year that your business’s annual accounts fall under. The duration also has an effect on your deadlines and filing your tax returns.
You can check your accounting period by logging onto the online service for HMRC and by checking the dates there. Once your business is registered for Corporation Tax, the HMRC will send you a letter for your exact accounting period.
What is Value Added Tax?
Value Added Tax or VAT is tax that is based on the consumption of certain services and goods that are accumulated through each stage of distribution and production. In other words, most services and products that come from a business will be accountable for this tax. The standard VAT rate is 20% but this can change according to the business you have. You should register for VAT if:
The amount includes not only the profits you gain but also the amount that is being spent on the business and going through it. The returns have to be submitted online and the good news is that any and all liabilities can be settled electronically.
AK Book-keeping can help you with all of that and more. We are based in Peterborough and have been in the book-keeping business for decades.
If your paperwork is taking you away from things that should have your undivided attention, then you know who to turn to. Allow us to manage your books so that you can manage your business with little or no distractions. Satisfaction guaranteed!
Call Les’ Hotline: 07732090847
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The greatest asset for any organisation is its personnel or staff. This makes payroll management the most important task for Human Resources. However, it is also quite complex since it has to be completely accurate and efficient at the same time.
Besides ensuring each employee gets the exact amount they earned, payroll generation should also comply with employment regulations and help maintain morale at the same time. In order to ensure it is rolled out with minimum disruption, the following best practices should be considered:
Examine timekeeping protocols regularly
Paying employees overtime accurately is a legal obligation making classification crucial. In order to ensure no well-deserving worker is left out, you need to assign positions to all active employees as well as contractors and consultants, if applicable. These will help you manage payrolls efficiently, and that includes tax requirements.
This is necessary if your company gets audited in the future. If your employees are not classified properly or they were not paid the amount they were due, your business can incur costly financial penalties that may also land you in court. You can prevent this by ensuring that all of your employees account for the time they work and ensure changing job duties are also accounted for. Plus, if audits are not held regularly, you might end up overpaying some and underpaying other employees.
If you do not have the time or resources to take care of payroll matters yourself, engage someone who will. Rather than assigning it to someone in-house, you can offload all of that work by outsourcing it. That includes processing the pay period data and signing and printing paychecks, among other payroll tasks, all without disregarding taxes.
A payroll service that is outsourced keeps regular tabs on government rules and regulations that go into the payroll process. This includes keeping abreast of changes which a growing business might overlook for other, more important matters.
Prevent employee time theft and hold regular audits
Even if you think that your employees are loyal, chances are some will try to fool the system by misusing work hours. An integrated attendance system that keeps track of their breaks and when they sign in or out at the end of the day can help prevent this. It will also calculate all of the hours worked for each employee and provide an accurate payroll.
All manual and automated processes such as the payroll management should also be audited on a regular basis, or at least once a year, to check for errors. Even a minor one can make your payroll askew and compromise final payments. Promotions and salary increments may also not be provided on time which can have a serious effect on employee morale.
The best way to ensure all of the best practices are observed during payroll preparation is to hire professionals who have years of experience in the matter. AK Book-keeping can guide you better and assign an accountant for you who will ensure your payroll is accurate and is deployed on time.
Call Les’ Hotline: 07732090847
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What is the final straw for business owners to seek bookkeeping services?
Businesses require book keeping services for a variety of reasons. They start managing their accounts at home until they realise they need outside help.
Here are some reasons why businesses finally decide to give the responsibility of managing their books and payroll to a bookkeeping service:
Do your books close on time?
Do your books close on the same date each month?
Would you know what to do if your in-house bookkeeper handed in his/her resignation?
Do your accounting personnel manually manage data using more than one system without synchronisation and integration?
If you answered “yes” to any of the questions above, you have real problems on your hands. You need to have all of your accounting processes automated, with your books done in a timely manner. If your accounting personnel lacks experience in managing accounting software and processes, your business is in deep trouble.
Is your accounts receivable aging (AR) report not updated?
Do you know what your annual business forecast looks like?
Can you predict what your business’s expected future sales will look like by looking at the revenue data?
If you answered “yes” to the first question and “no” to the subsequent questions, you are standing on thin ice. It is important for businesses to be able to forecast their budget and cash flow without hesitation. If you cannot answer the question with confidence, hiring a bookkeeper is one of the best decisions you could make for your business.
Is your accounting system capable of executing a certain feature, but your team doesn’t know how to execute it?
Do you use Microsoft Excel to perform the majority of your bookkeeping?
Do you use paper to monitor time and expenses?
Do you encounter problems when performing time tracking, expense management, payroll, job costing, etc.?
If you answered “yes” to one or more aforementioned questions, your accounting processes are not synchronized with each other. It takes too much time to draw up reports and perform bookkeeping duties in general. Unsynchronized accounting systems may make you overlook an error.
A way around this is to outsource your business’s bookkeeping services.
Do you know the exact profit margin?
Have you been able to incorporate job costing?
Do you often find several errors on your profit and loss (P&L) statement?
If you answered “yes” to these questions, you need to re-evaluate the direction your business is going in. This is especially true for business owners that do not know why their balance sheet is showing errors.
Did your business fit into any of these categories described above? If it did, you need to seek us out. We provide professional bookkeeping services to businesses in Stamford, Peterborough, Cambridge and Huntington and we can accommodate clients throughout the UK.
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Call Les’ Hotline: 07732090847 for help with sorting out the best system for your accounting and payroll operation.
Are you tired of trying to effectively manage and streamline your payroll process?
Payroll is a complex task for any company, and for many small businesses owners it is probably something that takes up an inordinate amount of their time, yet still isn’t as good as they would like it to be. Here are 5 useful tips to help you deal with your payroll system better,:
Probably one of the smartest things you can do is to invest in good payroll software. This will automate the entire process, and make managing payroll much less complicated for you. From generating pay slips to calculating taxes, these software and apps are smart enough to make your life easier.
Whether you’re doing it manually or using payroll software, when managing payroll, you need to pay special attention to employee details. The process of collecting and recording employee details can be time-consuming and cumbersome – so you obviously want to get everything right in the first place.
From joining dates, to date of birth, and change of address – your record needs to be accurate. Sloppy errors in this process will create further trouble and waste a lot of time too.
Payroll is regulated by law. Any changes in the payroll-related regulations may impact the way you calculate, process, and manage your payroll system. Hence, it is extremely important to stay updated about the major laws governing payroll.
You will also be required to keep abreast of taxation laws. These laws deal with the benefits and employee tax rates that change frequently. You may not have to get into the nitty-gritty of these laws, but it helps to be informed about them when managing payroll.
You can purchase sophisticated payroll software, but it won’t be of much use if your payroll staff don’t know how to use it. Then what do you do? You invest in training your staff. Enroll them for short, flexible training courses that help them become familiar with and learn how to operate the software efficiently. This will save you a lot of time.
For small businesses, it is often difficult to keep the working capital flowing. Hence, it is important for you to stay on top of your credit control system. It becomes inconvenient when you have to chase customers for your payments that are already overdue, because you pay your employees when your customers pay you.
There are times when these things don’t go as planned. Your customers default or the payment gets delayed due to unforeseen circumstances. Save yourself the embarrassment and maintain a surplus fund to pay out salaries on time.
A great solution for small businesses to immediately take control of their disorganised payroll process is to consider outsourcing it to the professionals. They will make sure your payroll is processed timely and the necessary documentation is in place, without hampering the routine operations of the business. It really can be false economy not to call in an experienced outsourcer.
For professional help, get in touch. If you found this information useful, let us know! Feel free to share it so others can benefit too.
We can offer you more guidance on handling your payroll efficiently when you call Les’ Hotline: 07732090847, firstname.lastname@example.org.