Frequently Asked Questions ACE Accounts & Tax Ltd
How easy it is to change accountants?
Switching accountants is easy and straight-forward. It’s usually a case of simply writing to your current accountant, telling them the name of your new accountants and advising them that the new firm will be contacting them shortly to collect your records.
When you decide to switch to us, we will fully manage the transition and ensure that the handover is seamless. We will take care of everything including contacting your current accountant and explaining you are moving away, drafting a brief note confirming the move, arranging for the transfer of records, obtaining copies of your accounts and tax computations, and notifying HMRC and other government offices that we are looking after your business affairs.
What information is needed to receive a quote and advice?
Firstly, to get a feel of the amount of work involved, we’d need a very brief review of your books and records. Additionally, we’d need a copy of your last financial accounts prepared by your current accountant to provide relevant advice. If there's anything you need help with and think it’s relevant for us to know, please mention it in the quote request.
What are the deadlines for Personal Tax /Self-assessment return filing?
Under self-assessment, a paper return must reach HMRC by 31st October and an online return by 31st January. If you fail to file the return, you automatically receive a £100 fine - even if you don’t owe any tax or have paid the tax you owe. If, for whatever reason, you miss the deadline, the longer you delay the more you pay.
We examine every client’s individual circumstances closely and suggest planning well in advance so that you pay only as much as you have to and don’t incur a fine.
What are the deadlines for Corporation Tax return filing?
The deadline for filing your corporation tax return is within 12 months of the end of your company’s corporation tax accounting period. Yearly filing would include the submission of your company tax return form and other supporting documentation. If you fail to file your return on time your company will be charged an automatic penalty, even if it does not owe any corporation tax.
Keeping the above in mind, your actual payment deadline can vary depending on how much taxable profit your company or organisation makes. This is determined by many factors including the amount of your taxable profits and whether you operate a group of companies. It pays to complete your tax return well in advance. We recommend that you contact our offices so that we can examine and plan your return in plenty of time.
How long do I have before I register with HMRC once I start trading?
You must notify HMRC within 3 months to avoid a £100 penalty. If you’re approaching this deadline then contact us and we will help you get the form in on time.
What is the current national minimum wage?
The current national minimum wage (NMW) rate per hour depends upon your age and whether you are an apprentice. The current rates (1st April 2016) are as follows. Please follow the link to take you to the latest updates on NMW
This sounds straightforward but many employers will face problems when trying to comply with the law. Since any business can be subjected to a NMW compliance review by HMRC on the complaint of a worker (or ex-worker), it is important to fulfil proper NMW record keeping requirements to disprove any claims made. If you wish to establish robust systems and processes to comply with NMW legislation please get in touch with us.
What is the VAT registration threshold?
The VAT registration threshold tends to be set each year in the budget; for the 2016-17 tax year it is set at £83,000. It is compulsory for you to register for VAT if your VAT taxable turnover is more than the threshold amount for the previous 12 months or if you expect it to reach or exceed that amount in the next 30 days. You must also register for VAT if you take over a VAT-registered business as a going concern. However, as you will be able to reclaim some or all of the VAT you pay on purchases, we recommend registering for VAT even if your turnover is below the threshold.
However, as you will be able to reclaim some or all of the VAT you pay on purchases, we recommend registering for VAT even if your turnover is below the threshold.
For updates on VAT registration threshold please follow the link below:
I am late on my annual return and I received a letter from Companies House warning of criminal proceedings and removal from the registrar. What are the penalties and how do I appeal?
Failure to file your annual return even after receiving reminders can move Companies House to either prosecute you for criminal proceedings or strike your company off after a month or so for an outstanding Annual Return. All companies irrespective of size or status, including dormant, flat management and charitable companies get penalised for not filing their annual accounts on time.
It would be best to get in touch with us. We will co-ordinate with Companies House on your behalf and set out an appeal process to postpone any action while we get you up-to-date on your annual returns. You might have to pay the financial penalty but an early submission should lead them to drop any legal action.
Is it possible to convert a company limited by guarantee to limited by shares?
It is not possible to re-register a company limited by guarantee to limited by shares. However, it is possible to incorporate a new company limited by shares under the same name and then to transfer the business and assets from the company limited by guarantee to the new one. The newly formed company will become a separate legal entity, with a different company number from the previously existing company. It will still need a new VAT registration, and existing long-term contracts such as bank arrangements, leases, etc. will have to be transferred to the new company.
From an accounting point of view the most convenient date for the transfer will be at the end of the existing company's financial year so that accounts can be drawn up for the whole year. You should consult us on this matter.
What are the legalities regarding the death of a director?
To notify the death you should submit form 288B at Companies House, and form 288A for the appointment of any new directors. The only things that don’t have to be notified at the time are transfers of shares; these are reported on the Annual Return. Since time is of essence in such situations, it’s advisable to consult a solicitor as things could get tricky.
In terms of the bank account, whoever is the executor of the will should be able to co-sign anything for the bank. The company should therefore be able to run as normal.
What do I have to pay in taxes this year?
For personal tax the amount you need to pay will depend upon how much you earn and whether you're employed or self-employed. The amount is calculated using different tax rates and a series of tax bands. To work out how much corporation tax your company or organisation must pay for each accounting period will depend upon your company or organisation’s taxable profit. It can easily be calculated by filing a corporation tax return. At the moment, you can pay and file your company tax return online or on paper.
Before we delve deeper into the world of taxes, it is worth pointing out that trying to calculate your taxes can be complicated, challenging and time-consuming; it is certainly one of those areas where using an accountant is well worth the money.
We can discuss your total tax payment and whether you owe additional taxes this year or if you need to get a refund. Most importantly, we will work out how your income and expenses affect the total tax you pay and the steps necessary to minimize them in the future.
How much can I take home as a contractor?
Firstly, how much you earn as a contractor depends on how you decide to trade, either as a limited or an umbrella company. Limited company contractors take home around 75-80% of their contract value when compared to umbrella company contractors who are entitled to around 60-65% of their take home pay. The take home pay is higher through a Limited company only because contractors working through an umbrella company are seen more as an employee of the umbrella.
The take home pay further varies depending on which industry you are working in, the company you work for and your skill set.
Which working option is best for me - Limited company or Umbrella company?
Both options have their advantages. However what’s best for you will depend upon your personal circumstances. For instance, it would be better to work through a limited company if your income is more than £25,000 each year or if your contract lasts more than 3 months. However, running a limited company will bring in complex paperwork, legal administrative duties and adherence to strict government deadlines. With a limited company you’d have to ensure that you comply with administrative and financial deadlines demanded by both Companies House and HMRC.
This might seem a bit of a bother at first but despite these problems; working through your own limited company would put you in an advantageous position in the longer run. Contractors working through limited companies tend to increase the amount they take home, get better opportunities to plan taxes than through a PAYE umbrella, can claim back a wider range of expenses and even have access to a VAT scheme known as the flat rate scheme.
Contrary to popular belief running a limited company is not very difficult and with the assistance of a good accountant, it is the most tax efficient way of operating. If you need help deciding whether an umbrella company or a limited company is best for you, please get in touch. We’ll also make sure that you take home more of your hard-earned pay.
In contrast, the only form you’ll ever fill when working through an umbrella company will be your timesheet. The umbrella company will do everything else for you. Running an umbrella company is cheaper than running your own limited company and requires significantly less input from you.
If you need help deciding whether an umbrella company or a limited company is best for you, please get in touch.
How to switch from umbrella to limited?
Switching from umbrella to limited is quick and simple. All you need to do is inform the umbrella company that you don’t need their services anymore, and then form a limited company. This doesn’t take more than 5 minutes and is a relatively inexpensive. As soon as you’ve formed the company you can stop working through the umbrella company and start trading via a limited company.
Things can get a bit complicated if you decide to switch mid-contract or if the terms and conditions of your umbrella company demand a notice period. We advise you to discuss this with us before switching business structures as there might be a few considerations you’d need to make which we could advise you on.
What expenses can I claim?
When you are self-employed you will incur both business and personal expenses. We recommend that you should operate a business bank account for transactions you make on behalf of the business as it is easier to claim expenses. The following expenses can easily be claimed if your contract is not caught by IR35:
• Your gross salary
• Your spouse’s salary
• Accountancy costs
• Motor and travel expenses
• Accommodation and subsistence
• Business telephone calls
• Business related books, magazines, subscriptions and courses
• Bank charges and interest on company bank account
• Pension scheme
• Business insurances like professional indemnity
• VAT on expenses if your company is VAT registered
• Computer costs
• Use of home as office
• Postage, office consumables and stationery
In case your contract is caught by IR35 then you can claim only the following expenses:
• Administration expenses which are fixed at 5% of your contract income
• Motor and travel expenses
• Accommodation expenses
• Pension contributions
• Certain professional subscriptions
ACE Accounts & Tax FAQs
Why should I choose ACE for my accounting and tax needs?
The answer is simple. All of us here at ACE work hard to deliver the best possible service to our clients. As an ACCA qualified accounting firm we provide the highest quality advisory services and our relationship with our clients is based on trust, integrity and open communication. We stay up to date on tax laws and associated legislation and ensure you receive all of the tax benefits possible for your circumstances.
You should choose us because we can help you:
• select the most appropriate structure for your business (if you are a start-up or a contractor)
• identify goals and developing strategies to achieve them
• plan for change and adapt for survival and growth
• maintain an independent view of your business situation
• keep up-to-date with government legislation
• improve business through optimum financial management
What can you do for me?
If you are just looking for assistance with your tax returns – then that is what we will do. But we will also put reminders in place for you so that next year we can ensure we gather the information in plenty of time.
Or if you have a company that you want to have more time to focus on, then we can work through your accounting processes and provide a package of services designed with your company in mind such as financial planning, advice, auditing, record-keeping, business structure advice, cost and pricing analysis, taxation, cash flow management, payroll and government compliance. To find our more please visit our services section.
What are your qualifications? What professional certifications do you have?
It is a rather concerning fact that anyone can call themselves an accountant. We, on the other hand, are rather proud of the fact that we are an ACCA quality checked firm. The ACCA (the Association of Chartered Certified Accountants) is a professional body that examines and regulates accountants on a global basis. They set high professional and ethical standards which they expect their members to follow in their work, and regulate their compliance with those standards and the Law. It confirms that we have achieved and maintained a standard of excellence that enables us to offer the best available service to clients.
Does ACE provide any guarantees?
We don’t want our clients to have any concern about our service, our charges or our delivery timescales. We work very hard to provide, what we hope, is the perfect service. So much so that we offer you the following guarantees:
• Fixed fee agreed in advance
• Delivery date agreed in advance
• Response within 24-hours to phone calls and emails
• A named accountant to look after you
• Newsletters, briefings and advice to keep you ahead of the game
• Secure client area for easy access to your accounts
• In our office or your office or home, we are available to help and advise
How long has the practice been operating?
ACE Accountants is an established firm of Chartered Certified Accountants with a history that spans more than 11 years.
If like most other business owners you are strapped for time please get in touch with us and we will be more than happy to assist you with this.
Running your own business can at times be stressful. We understand that time can be a constraint it can be challenging to maintain accurate book-keeping records when you are more involved in running your own business.s
At ACE we provide a complete online book-keeping solution by our in house certified bookkeepers helping you with your monthly and or quarterly book-keeping, VAT and management reports. Depending on our client preference we work on major online accounting software such as Sage Online 50, Quick Books, Kashflow and Xero. (Please find below our client testimonial on how we have helped him manage his books).
If you're looking for a good bookkeeper or you need advice and information on our bookkeeping service then please get in touch
Call us on 01908 424365 for an informal chat or contact us on email@example.com