Frequently Asked Questions
How can Sherwood Accountancy Limited help with my bookkeeping?
Bookkeeping is the systematic recording and organising of financial transactions for a business and provides the information from which accounts are prepared. Accurately done it can provide the business owner with up-to-date information on the business’s performance. Sherwood can provide a full service from organising all your receipts on a monthly, quarterly or annual basis to assisting you with your own software solutions.
What is Cloud Accounting?
Technological advances away from paper and spreadsheets to desktop-based systems have led to 100% online applications backed up in the cloud with unlimited storage. Some of the more common applications are Sage, Xero and Quickbooks, which can be managed from your phone allowing you to manage your accounting on the go whilst keeping you Making Tax Digital (see below) compliant. If Sage is your preferred software package please contact us for information on discounted packages.
What is Making Tax Digital (MTD) and who does it affect?
Making Tax Digital is part of the government’s plans to make it easier for individuals and businesses to get their tax right by using software to record and submit their accounts and tax information. VAT-registered businesses are already required to follow the MTD rules by keeping digital records and using software to submit their VAT returns. The self-employed and landlords with combined annual business or property income above £50,000 will need to follow the rules for Making Tax Digital for Income Tax from 6 April 2026 and those with income above £30,000 from April 2027.
What is basis period reform?
Currently sole traders and partners are taxed on 12 months profit arising to an accounting date in a tax year. E.g. accounts ending 30th June 2022 will be taxed during the tax year ending 5th April 2023. From April 2024 profits will be taxed in the year they arise, businesses with year ends that are not between 31st March and 5th April will be subject to a transition year in 2023/2024 in which they will be taxed on more than 12 months profit to bring them into line with the tax year. If you are in this position please call us for further information.
What are Capital Allowance claims?
The purchase of a new business asset does not reduce the profit shown in the accounts, assets are show on the balance sheet. Capital allowances can be claimed on qualifying business assets effectively writing them off for tax purposes, reducing the tax payable.
What can I claim Capital Allowances on?
Qualifying assets include, but are not limited to vehicles, plant and machinery, office equipment and furniture, integral features and fixtures in a trading property (lifts, heating systems, air-conditioning, electrical systems including lighting, fitted kitchens, fire alarms and security systems). Capital Allowances are usually claimed on the completion of the tax return for the year of purchase but can be made at a later date if items have been overlooked. This can be the case particularly for integral features when a commercial property is built, purchased or renovated.
What is Capital Gains Tax (CGT) and when do I have to pay it?
Capital Gains tax is due on the profit made on investment assets. This can include personal possessions such as jewellery, paintings, antiques or even a stamp collection. CGT is more commonly due on the disposal of a business, shareholding or property, including land, commercial property, second homes, overseas holiday homes and rental properties. An estimate of the CGT due on the disposal of a UK residential property is due for payment within 60 days of the sale. The CGT on disposal of all other assets and the adjustment of CGT due on UK residential property disposals is included on the tax return prepared following the end of the tax year on 5th April. Any CGT liability is due for payment by 31st January following . A property that has always been your main home is not subject to CGT.
What is the Construction Industry Scheme (CIS) and how can Sherwood Accountancy Limited help me?
Under the CIS scheme, contractors deduct tax from payments made to subcontractors. The deductions are reported and paid to HMRC monthly and count as an advance payment towards the subcontractors tax and national insurance liability for the year. A contractor is usually defined as a business that pays a subcontractor for civil engineering works or work on permanent or temporary buildings or structures. Construction work includes, site preparation including access works, demolition, building work, alterations, repairs and decoration, plus installation of heating, lighting, power, water and ventilation systems and internal cleaning after construction work. The responsibility for making the correct deductions lies with the contractor. At Sherwood Accountancy Limited we have many years’ experience providing advice and dealing with the monthly submission for contractors. We are also experienced with the end of year tax returns subcontractors need to submit.
What is the CIS domestic reverse charge?
From 1st March 2021 HMRC introduced rules to move the VAT liability up the construction industry supply chain. These rules apply to invoices that are raised by a VAT registered subcontractor to a VAT registered contractor, are reported the HMRC under the CIS scheme, and are subject to VAT at the standard or reduced rate of VAT (currently 20% and 5%). If this scheme affects you please call for further information.
What is Corporation Tax?
Corporation Tax is payable on profits made by Companies, from large PLC’s to single director companies. The current tax rate is 19%, but from 1st April 2023 this will increase to 25% for companies with profits in excess of £250,000 per year. Companies with profits below £50,000 will continue to pay 19%, those with profits between the two thresholds will be charged at a marginal rate between 19% and 25%.
Why should I move my business to Sherwood Accountancy Limited?
If you are not receiving the customer service you expect, deadlines not being met, unexpected fees, enquiries not being answered, it is time to move accountants. We pride ourselves on being pro-active, competitive and experienced. Communication is an essential part of our ethos and we aim to answer queries on the same day where possible.
How do I move my business to you?
Take advantage of our free no obligation chat, either in person or on the phone and once you have decided we are right for you and your business we do the rest. We will contact your current accountant and request your records.
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Registered Office : Room 30, The Turbine, Shireoaks Triangle Business Park, Coach Close, Worksop, Nottinghamshire S81 8AP
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