Claiming business expenses for work clothes

Claiming business expenses for work clothes

Claiming business expenses for work clothes

beekeeper with protective suit and gloves

There are specific rules around claiming for work clothes as a tax-deductible expense. Any clothes which you could use for ‘everyday’ or ‘personal’ use are not an allowable expense.

Uniform

If you wear a uniform for work purposes for example you’re in the beauty industry and wear a uniform for hygiene reasons then this would be classed as a tax-deductible expense. Work wear which has your logo displayed can also be claimed against your tax as this is classed as advertising your business.

Protective Clothing

In some industries it may be essential to wear protective clothing such as a hard hat, safety goggles or safety boots for instance. The cost of these items would be allowable.

Costumes

If you work in theatre production for example then the costume’s which are worn by the actors would be tax deductible. This is also applicable for other industries such as entertainment.

Taxable Benefit

Any clothing provided to your staff, and cleaning or repair bills which are incurred are reportable on a P11D every year and may be subject to tax and NI.  This includes protective clothing as well as a uniform.

If you’re not sure about what is classed as a tax-deductible expense, always seek advice from your bookkeeper. If you make a claim which isn’t eligible for tax deduction you could be fined. You also don’t want to be missing out on vital expenses which you’re not aware of either. It’s always best to ask the question first for reassurance.

Clothing if you are a Sole Trader

The same rules apply as set out above.  Clothing which is not classed as protective, is not a uniform and is without a company logo is not a business expense.

 

 

ABOUT SUE

Sue Haynes is the founder of Cactus Bookkeeping and helps business owners
with all aspects of Bookkeeping to save them time so they can concentrate on running their
business. Sue is licensed, regulated and supported by the Institute of Certified Bookkeepers (ICB)

 

 

 

Should I have a business bank account?

Should I have a business bank account?

Should I have a business bank account?

Stack of coins, clock in the background

This is a question I get asked a lot and the answer is always yes! Here’s why!

 By law as a sole trader you don’t have to have a business bank account as your finances belong to you. If you’re a limited company, then by law you must have a business bank account as the money belongs to the business and not yourself. Therefore, you must keep personal and business finances separate.

 The good thing about keeping your business and personal finances separate means there is no confusion when it comes to your spending. Everything in your business account is strictly for business and everything in your personal account is for personal use. This makes it much easier to reconcile your accounts. Whether you’re doing your bookkeeping yourself or you have a bookkeeper looking after your finances it will mean much less work for you keeping it all separate.

 You may also find that your bank’s terms and conditions specify that your personal account must not be used for business use. So, make sure you check as they have the right to close your account at any time and without notice if they think you are in breach of their terms and conditions.

 By having a business account for your business, it means you will build a credit rating for the business. This will come in handy if you need financial support further down the line or require grants or investments.

 To open a business account your bank may charge you fees, but they should be very minimal. Make sure you shop around for the best rates. It’s worth paying the small fee to keep your personal and business finances separate and it also shows your clients that you are professional and reputable by having a dedicated business account.

 Making the right choices when it comes to your business finances can make a huge difference to your business success.

 

 

ABOUT SUE

Sue Haynes is the founder of Cactus Bookkeeping and helps business owners
with all aspects of Bookkeeping to save them time so they can concentrate on running their
business. Sue is licensed, regulated and supported by the Institute of Certified Bookkeepers (ICB)

 

 

 

Payroll rates and thresholds for 2023-24

Payroll rates and thresholds for 2023-24

Payroll rates and thresholds for 2023-24

pen, calculator, payroll

It can get quite overwhelming trying to keep up with all the updates when it comes to payroll rates and thresholds for your employees.

We can of course try our best to keep you in the loop with regular updates but if it does get too much as a busy business owner, you can outsource your payroll function. This way you won’t be worried about paying your staff the incorrect rates or stressing that they won’t be paid on time. 

But for now here’s the latest information for you to absorb.

Minimum Wage

The minimum wage rate has increased for all brackets this year. Varying from a 40p to £1 increase. The following rates will be applicable from 1st April 2023.

It’s important you take note of these rates and apply them to your employees payroll from 1st April 2023.

Minimum wage table

It’s important you take note of these rates and apply them to your employees payroll from 1st April 2023.

Income Tax

The amount of tax you need to deduct from your employees wages depends on how much they earn. These are the brackets set by the government along with the rates of tax that they must pay.

Taxable income table

Emergency tax codes from April 2023 are as follows:

  • 1257L W1
  • 1257L M1
  • 1257L X

National Insurance

Here are the National Insurance thresholds from April 2023

Table of national insurance thresholds

The amount you should deduct from your employees depends on the above thresholds. If an employee is at or below the lower earning limits then no national insurance should be deducted. If they fall in any of the other categories the following rates apply form April:

Employee Contributions

Employee national insurance thresholds

As well as remembering how much and when to pay your employees, you’ve also got to remember to pay HMRC your employer contributions.

As an employer you also need to make contributions as per below, please note if an employee is at or below the lower earning limit no contributions are required.

Employer Contributions

Employer national insurance thresholds

For further information about payroll rates for 2023-2024 visit the government website – Rates and thresholds for employers 2023 to 2024 – GOV.UK.

Running your own payroll can be tricky, especially as you have to be sure you’re paying both your employees and HMRC the correct amount. If you’re worried about running payroll, why not outsource? We can take the stress away of payment deadlines and you can be sure you’re paying both your employees and HMRC correctly.

>>>find out more at https://www.cactusbookkeeping.uk or book a discovery call using the link below 

ABOUT SUE

Sue Haynes is the founder of Cactus Bookkeeping and helps business owners
with all aspects of Bookkeeping to save them time so they can concentrate on running their
business. Sue is licensed, regulated and supported by the Institute of Certified Bookkeepers (ICB)

 

 

 

Why bookkeeping isn’t just data entry

Why bookkeeping isn’t just data entry

Why bookkeeping isn’t just data entry

Keyboard, pen, folder entitled bookkeeping, small plant

As a bookkeeper I hear people assuming that my job just involves data entry. This is simply because people don’t necessarily understand what bookkeeping is. In this blog it’s my aim to clarify that bookkeeping is much more than just entering data.

A bookkeeper plays an important part in every business. Not only is it a legal requirement for every business to keep financial records but it’s essential to ensure you keep your cash flow nice and healthy and that your business is heading towards success.

Bookkeeping may be a job which you think you can manage yourself and that may be true to begin with, but it will soon become apparent that there are areas of your business that require your attention more than the accounts. When this happens it’s important to seek professional assistance as your growing business can soon become out of control if you’ve not got the right processes in place.

At Cactus Bookkeeping we help businesses to streamline their bookkeeping, making it more accurate, which then helps you become more efficient as a business owner. We will go above and beyond what you did to manage your books. By this we mean we use the data we have to do cash flow forecasting for your business and produce insightful reports. Without this information, you can’t make important business decisions, and you will never really know your true financial position. This information, we can review together, and we can help you to understand what it means for your business and its future success.

We offer software training and support, so if you do want to do the bookkeeping yourself you will be able to understand exactly what you are doing and what software is right for your business.

We also help our clients to save money by reviewing their business transactions. We can ensure you’re not paying for software you don’t use, subscribed to things you don’t get the most out of and make suggestions to change providers. We can also make sure you have agreements in place with suppliers so you’re getting the best discount possible to make your business more profitable.

 What else can we do for your business?

If you have employees we also offer a payroll service. You no longer need to worry about deadlines and changing legislation as we’re there to make sure you’re compliant. We will keep your employees nice and happy by paying them on time every time. You can find out more about our Payroll services here.

Are you a VAT registered business? We can help you to set budgets in order for you to keep on top of your VAT bill, providing you with monthly updates on your VAT liability. We will prepare and file your VAT return and keep you in the loop when it comes to any payment deadlines. This takes the stress away from you worrying about all the various different deadlines you have to meet with HMRC.

>>>find out more https://www.cactusbookkeeping.uk/vat/

So you see, a bookkeeper’s job is far more than just data entry. If your business is in need of more than just data entry to stay in control and get a better insight into the direction your business is heading then reach out today and book a discovery call.

>>>https://calendly.com/sue-281/15min

 

 

ABOUT SUE

Sue Haynes is the founder of Cactus Bookkeeping and helps business owners
with all aspects of Bookkeeping to save them time so they can concentrate on running their
business. Sue is licensed, regulated and supported by the Institute of Certified Bookkeepers (ICB)

 

 

 

HMRC changes to VAT penalties and interest charges comes into effect 1st January 2023

HMRC changes to VAT penalties and interest charges comes into effect 1st January 2023

HMRC changes to VAT penalties and interest charges comes into effect 1st January 2023

5 stacks of pound coins

For VAT periods starting on or after 1st January 2023, the default surcharge fee for filing late VAT returns has been replaced with a new penalties system.  Note nil or repayment returns will also need to be filed on time to avoid incurring penalties.

What happens if you submit your VAT return late

Late submission penalties will work on a points-based system. For each VAT return you submit late you will receive one late submission penalty point.

Once a penalty threshold is reached, you will receive a £200 penalty and a further £200 penalty for each subsequent late submission.

The late submission penalty points threshold will vary according to your submission frequency:

Submission Frequency Penalty Points Threshold Period of Compliance
Annually 2 24 months
Quarterly 4 12 months
Monthly 5 6 months

You will be able to reset your points back to zero if you:

  • submit your returns on or before the due date for your period of compliance — this will be based on your submission frequency as shown in the above table:
  • make sure all outstanding returns due for the previous 24 months have been received by HMRC

How will late payment penalties be calculated?

Up to 15 days overdue

You will not be charged a penalty if you pay the VAT you owe in full or agree a payment plan up to 15 days after your payment was due.

Between 16 and 30 days overdue

You will receive a first penalty calculated at 2% on the VAT you owe at day 15 if you pay in full or agree a payment plan on or between days 16 and 30.

 31 days or more overdue

From this point on, the penalty will be calculated on a daily rate of 4% per year for the duration of the outstanding balance. This will be calculated when the outstanding balance is paid in full or a payment plan it agreed.

How late payment interest will be charged

HMRC will charge late payment interest from the day your payment is overdue to the day your payment is made in full.

Late payment interest is calculated as the Bank of England base rate plus 2.5%.

How late repayment interest will be calculated

HMRC will pay interest on refunds of VAT based on the latest of the due date or date of submission until the repayment date. The rate will be the Bank of England base rate minus 1%, with a minimum rate of 0.5%.

 Whilst these new penalties and charges come into effect from the first return after 1st January 2023, in order to give you time to get used to the changes, they will not be charging a first late payment penalty during the year to 31st December 2023, if you pay in full within 30 days of your payment due date.

As a business, if you are struggling with making your VAT payment, contact HMRC at the earliest opportunity to enquire about a payment plan and avoid these penalties and charges.

 

 

ABOUT SUE

Sue Haynes is the founder of Cactus Bookkeeping and helps business owners
with all aspects of Bookkeeping to save them time so they can concentrate on running their
business. Sue is licensed, regulated and supported by the Institute of Certified Bookkeepers (ICB)