Marden & Co Accountants Blog

Self-Assessment Tax Returns

Thu, 17 Feb 2022 00:05:57 GMT

Self-assessment tax returns are used to calculate how much of your annual earnings are owed to HMRC as income tax. This usually applies if you are a business owner, self-employed, or a landlord.

Knowing how and when to file a self-assessment tax return for the first time can seem complicated; Marden & Co have answered some of the most important questions about tax returns in this simple guide.

Who Needs to do a Tax Return

The most common reasons for needing to file a self-assessment tax return are if you are self-employed, or a business owner.

There are other circumstances that require self-assessment tax returns, and different rules that apply to each.

Sole Trader

You qualify as a sole trader if you own your own business or are self-employed, and will need to pay income tax on earnings over £1000 in the last tax year.

Limited Company

If you own a private limited company, you must file a Company Tax Return 12 months after your accounting period for Corporation Tax ends. This also applies if you are a shared company director.

Renting Out Your Property

Whether being a landlord is your main source of income, or you’re renting out a couple of holiday homes, you will be eligible to complete a tax return.

You do not have to pay tax on the first £1000 of your property income. This is known as ‘property allowance’.

You must complete a self assessment tax return on property income if it is:

£2,500 to £9,999 after allowable expenses
£10,000 or more before allowable expenses

Foreign Income

If you’re a UK resident with foreign income, you might have to complete a self-assessment tax return. You will not have to complete a self-assessment tax return if your only foreign income is dividends, and your total dividends are less than £2000.

Dividends

Dividend tax only applies to income that is outside your dividend allowance of £2000 per year.

From the 2022-2023 tax year, the basic dividend tax rate is as follows:

Basic-rate taxpayers: 8.75%
Higher-rate taxpayers: 33.75%
Additional -rate taxpayers: 39.35%

If you’re still not sure whether you need to file a self-assessment tax return, you can use the form created by gov.uk .

Register for Self-Assessment

If you are filing a tax return for the first time, or did not file a tax return the previous tax year, you will need to register for self-assessment. Registration can take up to 20 working days, so you should allow extra time to avoid missing the deadline.

Deadline for Self-Assessment Tax Returns

It is your legal responsibility to alert HMRC of any new sources of taxable income and expenditure, and file your self-assessment before 31st October for paper filing, and 31st January if completing an online form.

HMRC must receive your completed form and the money you owe by the deadline, otherwise late payments will be subject to interest, and penalties will be added to your payable tax.

Penalties include :

£100 fine if you file your tax return up to 3 months late.
After 3 months, a £10 penalty will be added for each following day.
After 6 months, a further £300 penalty will be applied.
All partners of a business being charged for a late payment

If HMRC sends you a notice to complete last year’s tax return, you have 3 months from the date you receive the notice to file, and return a self-assessment tax return.

Appealing Against Penalties

You can appeal against late fee penalties if you have a reasonable excuse. These include uncontrollable circumstances such as death of a partner or a close relative, serious or life threatening illness, software failure, or a home emergency such as a fire or a flood.

You can also appeal against a penalty if you think HMRC have miscalculated your tax return, and this will extend the deadline.

Late Tax Returns (what to do if it's late)

In some cases, alerting HMRC that your tax return will be late before the deadline can entitle you to reduced penalties or an extended deadline. This is subject to having a reasonable excuse.

Budget Payment Plan

You can choose to make monthly or weekly payments towards your next tax bill if you would rather not pay it in full by setting up a Budget Payment Plan with HMRC. This scheme allows you to pay your tax bill in instalments using a direct debit. You are able to pause payments for up to 6 months.

It is also possible to set up a Budget Payment Plan if you are unable to pay your full tax bill on time.

How to Submit a Tax Return

You can submit your tax return by printing out a paper form or filing an online form.

To file your self-assessment tax return, you will need:

Evidence of your taxed and untaxed income for the previous tax year, which runs from the 6th of April to the 5th of April. You may wish to keep bank statements to make this easier.
Evidence of government benefits that you received in this time, including high income child benefits.
All details regarding state, or private pensions including deductions made, and payments you are entitled to receive.
Student loan repayments
Marriage allowance
Any charitable donations that have been made from your account.

Marden & Co Accountants offer Self-Assessment Assistance with Personal Tax and Returns to individuals in Epsom , Sutton , Reigate and Surrey . If you require any assistance or advice regarding your self-assessment tax return, please feel free to get in touch .

Why do I need a bookkeeper?

Wed, 10 Mar 2021 22:26:34 GMT

The question of why do you need a bookkeeper is in fact quite a simple one; to efficiently track all of your business activity. Regardless of the type, size or industry your business comes under, in some way you will need to keep a track, and record of business activity.

Whether you’re already a business owner, or looking to start your own business, here at Marden & Co Accountants we have put together an easy to read guide exploring the benefits and reasons why you should consider a bookkeeper.

Why you need a bookkeeper

Here are a few very good reasons you need a bookkeeper :

Record and monitor day-to-day transactions
Track expenses and sales
File required government remittances within time and correctly
Record capital gains
Record capital losses
Record purchases and sales
Track finances
Track vendors
File and payroll taxes, CPP, El, etc.

Can you do your own bookkeeping?

In short, yes you can. However, keeping track of your financial activities throughout the year can be very time consuming, and tedious. There are Government rules in place, and it gets harder when you need to track multiple streams of income, assets, investments, payroll, accounts receivable, accounts payable etc…

It is likely you will need to take a few days, at least, per month to take care of your bookkeeping. That time is cutting into your money making, or leisure time.

Depending on the type of business you own, or plan to own, you will also need to adhere to Government deadlines. This is the case for GST, payroll, PST, income tax and more, and the CRA charges large penalties for late remittances.

What can I gain from using a bookkeeper?

Here at Marden & Co Accountants , we can provide a service to meet every business requirement, and this service allows our clients in Surrey to:

Have access to up to date information on their business
Free up time to grow the business
Ensure the year end fees are minimised
Calculate the VAT and ensure they are compliant with deadlines
Access summaries of customer and supplier balances due, to assist cash flow.

Marden & Co's in-house bookkeeping and VAT return service provide an outsourcing solution to enable our clients to focus on running their business and creating profits and growth.

Save time, money and pay less tax

At Marden & Co , we can help you save time, money and pay less tax too, with our professional bookkeeping services. Quality bookkeeping services will help you build a successful business and keep your financial records in order, whether you are a sole trader, limited company or partnership, we can help.

Boasting a personal and reputable service, make us your point of contact if ever you have any questions or need hands-on support.

If you require more information about any aspect of bookkeeping, from payroll administration to VAT returns, bank reconciliations or annual accounts, please get in touch, and a member of our supportive team will be on-hand to guide you.

Accountancy Basics: Your Questions Answered

Tue, 19 Jan 2021 18:16:37 GMT

Here at Marden & Co, we understand some accounting processes’ can be difficult to get your head around, and some jargon hard to digest.

That’s why we’ve rounded up your frequently asked questions here in one easy-to-read space.

So, let’s get started…

Financial Accounting Vs Management Accounting?

Financial Accounting - Focuses on financial statements distributed by lenders, stakeholders, financial analysts and stockholders, and others outside a corporation or organisation.

Managerial Accounting - Focuses on assisting management in the operation of the company. This includes managing company’s costs, assisting with financial decisions, profit planning, capital budgeting and break-even points.

What is a general ledger account?

A general ledger account is an account, or record used to store, sort and summarise a company's transactions. These accounts are then arranged in the general ledger, with the balance sheet accounts, followed by the income statement accounts.

Some general ledger accounts can become a summary of records which can sometimes be referred to as control accounts. In this case, all details that support the summary amounts in one control account will be available in what’s called a subsidiary ledger.

What is the difference between accounts payable and accounts receivable?

Accounts payable is a current liability account. This is where a company records what they owe to suppliers for goods or services they received on credit.

Accounts receivable is a current asset account in which a company records the amounts they hold a right to collect from customers who have received services or goods on credit.

What are accruals?

The accounting term accruals, refers to adjustments that must be made before a financial statement is issued.

These can include:

Expenses, liabilities and losses that have incurred but not yet recorded in the accounts.
Assets and revenues that have been earned but not yet recorded in the accounts.

What is equity?

Equity can mean:

Indicate an ownership interest in a business (stockholders/owners equity).
Be a combination of liabilities and owner’s equity.
An owner’s interest in a personal asset, for example a house.

What is owner’s equity?

Owner’s equity is one of the three main sections of a sole proprietorship’s balance sheet.

Assets = Liabilities + Owner’s Equity.

It represents the owner’s investment in the business, miners the owner’s draws and withdrawals from the business. Plus the net income or loss, since the business began.

What is a creditor?

A creditor could be a supplier, person or bank that has provided money, services or goods to a company, yet expects to be paid at a later date.

What is GAAP?

GAAP - G enerally A ccepted A ccounting P rinciples.

GAAP consists of:

Basic accounting principles, concepts and assumptions. These could be cost principle, full disclosure principle, time period assumption, monetary unit assumption and more.
Generally accepted industry practices.
Detailed reporting standards and other rules established by the Financial Accounting Standards Board (FASB).

What is the difference between assets and fixed assets?

Assets are resources owned by a company as a result of transactions.

Examples:

Cash
Accounts receivable
Inventory
Prepaid insurance
Land
Buildings
Equipment
Trade marks
Customer lists from another company

Fixed assets generally refer to long-term assets, tangible assets used in a business that are classified as equipment, plant or property.

Examples:

Land
Buildings
Manufacturing equipment
Office equipment
Furniture
Fixtures
Vehicles

We hope you found our Q&A valuable, if you’ve got more questions, feel free to call us today, on 01737 851 761 , or fill in our online form . Here at Marden & Co , we pride ourselves on being a team of professional, fully qualified accountants based in Banstead, serving Epsom, Sutton, Reigate, Kingston upon Thames, Dorking and across Surrey. We are fully MTD compliant and a Xero approved partner .

HMRC’s tax calculations - warning, may contain errors!

Mon, 24 Sep 2018 15:32:28 GMT

HMRC may well have got your tax calculations wrong - please check!!

HMRC has recently sent out its tax calculation Forms P800 and PA302 for 2017/18. According to reports, a higher than usual number of these contain errors. If you’ve received a tax calculation what should you be checking?
If you’ve submitted a self-assessment for 2017/18 and receive a PA302 or P800, you need to ask HMRC to cancel one. Check all figures against your records but pay special attention to interest, dividends and rental income, plus outgoings for pension contributions and job expenses, as all these are likely to be estimated. Call Marden and Co on 01737851761 for help.

Accountants focus on all things tekkie - like iPhone, iPad, iCloud

Tue, 07 Aug 2018 11:04:26 GMT

Accountants focus on all things tekkie like iPhone, iPad, AppleiCloud, Dropbox

As Accountants we are pretty savvy with most things technical but appreciate it’s not every ones bag, so what’s out there to help with the every day stuff that’s not difficult to use and actually is pretty cool –

Forgive me if you already know about these, but if you do then maybe your mum dad, or grandparents might find them useful if perhaps you had forgotten about them?

OK for starters, lets start with Dropbox, Pros: Dropbox will automatically sync any fields you put in the dedicated Dropbox folder on your pc or any other computer that has access to that folder, whether it’s a laptop, phone or tablet giving instant access. It’s widely used so sharing with others is easy and you can also set up the phone app to automatically save your picture to the service Cons: With only 2 GB free storage there are other services that offer more space before you have to start paying

Apple iCloud Pros: It also used for storing a backup of your iPhone or iPad, and helping you find your phone if you lose it. With iOS 8 expected around now (sept) Apple is also adding iCloud Drive a service that will let you treat it much more like a connected folder between your devices. Probably the easiest to use out of the box as you don’t have to do anything to set it up – just work out how much extra storage you want to pay for? Cons: Currently it only works with Apple devices and it can sometimes be slow to sync between devices

One thought – 7GB is plenty for a couple of years worth of phone pictures – sorry couldn’t resist…

Although he does look seriously cool, do you think he does yoga? I digress – back to techno stuff

Microsoft OneDrive Pros: Once called SkyDrive, Microsoft’s OneDrive is built into windows 8 and windows phone 8 making it quick and easy to share files between your devices. You get 7GB free to start with, which should be plenty for a couple of years worth of phone pictures, unless you get a new baby or puppy! Like Dropbox, you can set it to back up your phones automatically even if you’re using Android or iOS Cons: There are limits to the size of the files you can save 2GB but unless you’re storing big video files you should be fine & a song is normally around 4MB

I’ve got some more information I’d like to share, but for now and especially as the weather is so fantastic, it’s a Friday afternoon and there is a beer with my name on it, I ‘ll leave it with you and look forward to sharing some more every day tekkie stuff on the next blog….

Blog | Marden & Co Accountants: Tips of the week

Tue, 07 Aug 2018 11:03:36 GMT

If you follow me and Bertie the Dog on twitter, you may have seen we have had a tips week. I am often asked for advice on how to manage accounts, or even how you can manage your accountant! So I thought, why not sum up five of our tips of the week and put them together for you to access with ease.

There are many accountants out there, and I know that for some, this can be daunting. How on earth do you choose the right one for YOUR business? What may work for someone else may not work for you. Nightmare, if I am correct?

Do not fear. Hear are a few and simple questions to ask yourself, and your accountants.

Tip 1: Do not be afraid to ask your accountants questions. If you are unsure of something, or how they have done your accounts, ask them. As strange as we may seem, we are actually human and many don’t bite.

Tip 2: Does your accountant have the right experience? Do they have clients that are in the same sector as you? Can they deal with your unique needs? You are allowed to ask to see our qualifications, just be warned, we may go on about them!

Tip 3: Do they provide advice & strategies to support and protect your business? It isn’t just about sorting out last years books, it’s also about planning for next years and years to come. A great accountant won’t just look at where you’ve been, they will help you with where you want to go.

Tip 4: What added services does your accountant offer? Business health checks? Benchmarking reports? Tax saving strategies?

Tip 5: Are they the right sized business? If you are a small business, the last thing you need is your accounts to be given to the new guy in the corner.

Remember, it doesn’t matter what others are doing, only what YOU are doing and that you are happy. After all, you’re the only one who has to deal with you 24/7!

So there you have it, our 5 tips of the week. Bertie and I are often tweeting tips, so feel free to follow us: @mardenandco

Don’t forget our new APP, it really is there to help you:

https://itunes.apple.com/us/app/marden-and-co/id883977325?ls=1&mt=8

https://play.google.com/store/apps/details?id=uk.co.myfirmsapp.marden

Blog | Marden & Co Accountants | Christmas Deals

Thu, 03 May 2018 13:28:55 GMT

If you are anything like myself, I am rather last minute when it comes to getting all the Christmas presents together. Not to mention all the food that comes with it. However, other the years I have strived to find bargains and savings where possible. Who wants to pay more than they have to?

Moneysavingexpert is a fantastic website that gives you tons of tips and heads up on where you can save money. Currently it has a great post on predictions on who will be having certain offers this Christmas.

http://www.moneysavingexpert.com/deals/christmas-deals-predictor/

With the battle of the supermarkets this year, there are plenty of deals to be had if you are money savvy. If you aren’t, don’t worry. Here are a few deals you might want to scoop up.

Morrisons are offering 2 for £20 on selected beers and ales, £6.95 a kilo on turkey crowns and £25 for a bottle of taittinger Champagne.

http://your.morrisons.com/Offers/

Tesco’s have got a large joint of beef for half price – perfect if you aren’t one for a roast turkey!

http://www.tesco.com/

Sainsbury’s are currently offering all sorts of little deals, from gravy to custard.

http://www.sainsburys.co.uk/shop/gb/groceries/great-offers

Amazon always has some sort of deal, so keep your eyes peeled! They have four more days on delivery before christmas…

Now I don’t know what your opinion on Black Friday was, but if you are like me I will only go so far for a bargain. Know what you are buying, and how much you are apparently saving. It seemed an awful lot of people were fooled into thinking they were going to get fantastic bargains, only to find out they were saving just a few pennies. For me, that’s not worth jumping out of bed and fighting the crowd for at 9am.

I do try and buy from local stores and independent shops. I am in the frame of mind, that if I am saving a few pounds in the super market, I can spend a bit more supporting my local café, hairdressers or retail shop. It is easy whilst you are saving to forget that most independent shops can’t afford to match these global monster businesses.

Bottom line is if you look around there are plenty of Christmas deals to be had, you just have to do a bit of planning before hand – something as an accountant I have to be good at, it just doesn’t always seem to continue into Christmas shopping often enough!

Marden & Co Accountants: Pension Myths

Thu, 03 May 2018 13:28:55 GMT

It has been a while since I last blogged, mainly because this time of year is one of the busiest for an accountancy firm.

However, I came across a few Pension Myths that I really wanted to share with you, that you might not be aware of.

The Government has promised us that from April 2015 we will get free financial advice one to one. Many firms will skirt round this issue of ‘one to one’ advice by installing more interactive tools on their websites, so as to avoid any complaint of poor advice. The best advice I can give you, go see an independent financial adviser. They won’t be biased or avoid giving you advice! Loads can be found online at around £150 an hour, so keep in mind £450 for a comprehensive consultation. www.unbiased.co.uk is a great site.

Now I have in the past given relationship advice, I would like to add it is only to do with financial matters! I am often asked about who is entitled to what after a divorce occurs. For example the ex-husbands pension: if the wife gets the family home the husband is often allowed to keep his pension as a trade-off. This is usually when the man has bought an annuity from their existing pension provider to get a single-life annuity, as it gives them a higher income. However, when they die, so does the pension. So make sure you have your own pension provision, or that your husband provides for you with the annuity he takes.

Who actually qualifies for a pension? If you are self-employed you won’t be covered, and if you are employed but you earn under £10,000 a year, due to maybe being part time, you also don’t qualify. Make sure when you do start a new job, that you ask your employer what your pension options are. By 2018 contributions will rise, employees will be paying in around 4%, your employer 3%, whilst the tax relief will pay just 1%. So do consider topping up your scheme. If you are self employed or earn under £10,000 it is really worth your while going to speak with a finical advisor to see what you can be doing with your money for when you retire.

I am keeping it short but sweet this week, or at least as sweet as it can get with a pension! Enjoy the weekend!