Top 5 Accounting Tips

1. Voucher Schemes

Your employees work hard and you want to reward them. Medical insurance schemes can be a bit boring but most people like to shop and eat so what about a Voucher scheme? Relatively easy to operate over other Benefit-in-Kind options, you buy them from shops, gyms, restaurants and just hand them out. Don’t forget to negotiate… a voucher worth £100 might only cost you £90, the employee can spend face value, you only pay ‘tax’ on the cost to you and employees who earn less than £817 per week can save up to 12% NI. Avoid vouchers that can be converted into cash as HMRC will regard these as ‘salary’ not ‘salary sacrifice’. Voucher service companies can offer your employees access to lots of national shops and online retailers but check the charges. Most vouchers will need to be reported on P11D’s as a BiK and Class 1A NI paid by the employer.

2. VAT on Relocation

To attract the right employee you might have to cast a wide net. Offering relocation expenses can be an attractive incentive. Subject to conditions and limits these expenses are free from income tax and NI but what about the VAT? First principle, you can only reclaim VAT on a cost when you have the paperwork and it’s in the company’s name. However, with relocation expenses the VAT-man is ‘happy’ to see this as a supply to you and accept the invoices where you reimburse your new employee. Don’t pay round sums but exact amounts for specific invoices and remember that a relocation of a just a few miles is a personal cost and not a cost to the business.

3. Company Cars

The future of company cars as a tax break is not as orange as it used to be. Budget announcements indicated substantial further ‘hits’ to the system. The new CO2 rates up to April 2016 are now public but they’re not easy to follow. Drivers look set to lose out and company car providers (buyers) look set to lose some of their tax breaks. Leasing companies also look set to lose out as the 85% rule moves down to cars with 130g/km or less. There are still incentives to be had but the car you might have to drive might not be.

4. P35 / P14 Trap

Even aliens from outer space (and some from inner space too) know that the deadline for submitting an online P35/P14 end of year PAYE return to HMRC is May 19. However, let’s hope HMRC didn’t forget to tell our inter-stellar friends that the long-standing concession of not issuing penalties for submissions up to May 26 has been rescinded. That’s another badly notified penalty then.

5. And finally

Apparently, “you can’t have too much of a good thing”. Ah hah, this is clearly not true given that I have just run out of time to write my usual satirical summing up of things. They also say self-praise is no praise...