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Life Insurance isn’t as expensive as you might think – especially if your company pays for it with Relevant Life Expert.

Coat and bag hanging on a hook
The perception of how much life insurance costs is nearly 400% above the actual cost, according to a survey from Critical Research.
From a poll of 1,011 people, 48% cited affordability as the main reason for not obtaining life insurance. On average, those surveyed thought £100,000 of life cover would cost £50.98 per month, and 47% said they had no idea how much life insurance really costs… Life insurance can start from as little as £6 per month and is an important consideration if you are self-employed and the main breadwinner.
This research highlights that people are not protecting themselves with life cover because they’re not aware of the actual costs involved. As a result, it is vital that this misconception is addressed in order to inform people that there is such a thing as cost-effective life insurance. This is where Relevant Life Expert steps in.
We made it our mission to deliver more accessible and affordable life insurance for both Contractors and Directors of small companies. With Relevant Life Expert, life insurance really isn’t as expensive as you might think. The benefits are clear and simple:
·  Place 100% of the cost of your life cover on company expenses (even if you have existing plans in place to protect your mortgage or income – swap and save)
·  Benefit from 20% corporation tax relief on the cost of the premium
·  No alteration to your P11D status
·  The policy is written into trust from outset
·  Life cover and terminal illness benefit included
·  The policy can be moved between businesses or converted into a policy paid from your personal account if circumstances change
·  The average we save our clients is £15,000 over the lifetime of their plan simply by swapping to a Relevant Life Plan 

So, whether you are already paying for life insurance out of taxed income or you have not yet got around to putting vital life insurance in place, a Relevant Life policy could be the most tax-efficient solution. 

For more information, contact Relevant Life Expert on 01202 700053 or request your free impartial quote herehttp://rlp.relevantlifeexpert.co.uk/relevant-life-expert/

You’ll also be able to see how much you can save on the link above with our Relevant Life Calculator.

“LIFE COVER WAS NOT SOMETHING I HAVE EVER THOUGHT ABOUT UNTIL I HAD CHILDREN. AS THE MAIN EARNER IN OUR FAMILY, I WAS CONSCIOUS THAT IF SOMETHING SHOULD HAPPEN TO ME, MY FAMILY WOULD BE LEFT IN A TRICKY FINANCIAL POSITION. WHEN I DISCOVERED I COULD ACCESS LIFE COVER IN SUCH A TAX-EFFICIENT WAY THROUGH RELEVANT LIFE EXPERT, I WAS SOLD!”

                       ABIGAIL WHITE 

Are you ready for the changes to employee expenses?

 

Pay for woman.

From April 2016 all employee expense Dispensations agreed with HMRC will cease to apply!

You will need new systems for checking expenses, HMRC will be supply examples.

Expenses which are not covered by benchmark scale rates are likely to paid and taxed via the payroll with the employee claiming relief through P87 and Self Assessment SA100.

Expenses

Are you ready for the new regime?

steve@bicknells.net

What are the tax implications if a company pays a Directors personal expenses?

Businessman struggling with large Expenses

It’s not uncommon for Directors personal expenses to get mixed up with business expenses, for example the director is out buying things for the company and picks up some items for themselves at the same time and it goes on the same bill.

In a perfect world the Director would just repay the cost of personal purchases to the company, but we don’t live in  perfect world, so what are the options?

Directors Loan Account

You could post the cost to the Directors Loan Account. These accounts are normally repaid when the Director is paid either salary or dividends.

If the loan is not cleared by year end then the company will have to pay a temporary corporation tax charge of 25% and reclaim the tax when the loan is repaid using form L2P

There may also be a notional amount of interest (4%) charged as a benefit in kind on the loan.

Benefit In Kind

You could have the expenses as a benefit in kind, some benefits may even be tax free, here is a list of my favourite tax free benefits

  1. Pensions – Up to £40k can be paid in to you pension scheme by your employer (2015/16)  and you can use carry forward to pay in even more
  2. Childcare – Up to £55 per week but check the rules to makesure your childcare complies (HMRC Leaflet IR115) – new rules coming soon
  3. Mobile Phone – One per employee
  4. Lunch – Tax Free Lunch Blog
  5. Cycle Schemes – Cycle to Work Blog
  6. Fitness – Fitness Blog
  7. Parties and Gifts – Christmas Blog
  8. Parking – Parking Blog
  9. Business Mileage Allowance – 45p for the first 10,000 miles then 25p
  10. Long Service Award – A bit restrictive as you need 20 years service, the tax free amount is £50 x the number of years
  11. Eye Tests and Spectacles – The Eye Test must be needed under the Health & Safety at Work Act
  12. Suggestion Schemes – Suggestion Scheme Blog
  13. Insurance such and Death in Service and Income Protection – Medical Insurance Blog
  14. Travel Expenses – Travel Blog
  15. Working From Home – Working from Home Blog

Private Use of Company Assets

It may also be worth considering private use of company assets.

  • The cost of the asset is allowed against Corporation Tax and you can claim Capital Allowances and the Annual Investment Allowance.
  • The Assets could be purchased from the Director but they must be transferred at Market Value.
  • The Benefit In Kind is generally 20% of the market value

steve@bicknells.net

Can you Zero Rate Charity adverts?

Gruppe junge Leute People multikulturell halten Wort Marketing

The supply of advertising to a charity is zero-rated. The zero-rating covers advertisements on any subject, including staff recruitment. A charity can also purchase pre-printed collecting boxes, envelopes and appeal letters at the zero rate. Low cost lapel stickers, emblems and badges that a charity gives in acknowledgement of a donation can also be zero-rated. More information can be found in Notice 701/58 Charity advertising and goods connected with collecting donations.

In what media can charities advertise VAT free?

Any medium which communicates with the public. This includes all the conventional advertising media such as television, cinema, billboards, the sides of vehicles, newspapers and printed publications. The important factor is whether the advertisement is placed on someone else’s time or space. If it is not there will be no scope for zero-rating.

If space is sold to a charity for advertising on other items, such as beer mats, calendars, or the reverse of till rolls, this will also be covered by the zero rate. The sale of the items themselves will not be VAT free, unless they qualify for other reliefs for example as books or children’s clothing.

Recently I was asked if a website would be able to zero rated, but its specifically excluded under UK Law VCHAR11000

10B None of items 8 to 8C includes a supply used to create, or contribute to, a website that is the charity’s own.For this purpose a website is a charity’s own even though hosted by another person. 10C Neither of items 8 to 8C includes a supply to a charity that is used directly by the charity to design or produce an advertisement.

steve@bicknells.net

It’s a Pool Car isn’t it?

Car racer

Yet again, we have another case on Pool Cars which could have been prevented had the right procedures been put in place.

The Case was decided in May 2015 and involved Mark and Trudie Holmes and their company KMS Logistics (UK) Ltd. The company owned 7 prestige cars which were used assist in maintaining and attracting clients.

There was no prohibition (not even a verbal one) on the private use of the vehicles, mileage logs showed that the cars were mainly used by Mr & Mrs Holmes. Until 2003/4 they had been declared as a benefit in kind but then the stopped being declared! There even seemed to be confusion over who owned the cars.

So not surprising Mr & Mrs Holmes lost the case.

Read the full details by clicking here

So what should you do to prove there is no private use:

  1. Keep the car on the company’s business premises
  2. Keep the keys at the company’s business premises
  3. Prepare a Board Minute
  4. Make sure your contract of employment bans private use
  5. Keep a mileage log
  6. Insure the car principally for business use

HMRC have specific rules on keeping vehicles at home in EIM23465

Even if you do meet the 60% rule you still have to prove ‘no private use’

steve@bicknells.net

What is relevant life insurance?

Simply put – place personal life cover on company expenses.
 
If you currently pay for your life cover from your own bank account you will be paying out of post-tax income, and if you pay for it from your business account you will probably be taxed on the payment as if it were income. 
 
Relevant Life Plan offers some very special advantages to directors and employees of small businesses, most notably tax efficiency. While the cover is personal to you and your employees, the policy counts as a business expense so it’s tax deductible. It’s also a cost-effective way to offer life cover to your employees if your business is not eligible for a group life scheme.
 
 Relevant life policy tax benefits are available to both the employers and employees:
 
    • You will save Tax by having the company pay the premium
    • The premium will not be included as a P11D benefit
    • Premiums are not subject to National Insurance payments for employer or employee
    • Your company can claim Corporation Tax Relief on the premiums
    • Benefits are payable tax free
    • Benefits do not count towards your lifetime allowance for pension purposes
 
The Opportunity
 
The Relevant Life Expert (a trading style of Broadbench Ltd, authorised by the FCA) can assign your own ‘Relevant Life’ page to market to your clients/members/affiliates and for good reason. It offers great tax savings to your clients/referrals, and can generate income for you.
      • You will be assigned your own personalised website link that tracks any client referrals for Relevant Life – www.relevant-life-policy.net (you’ll get your own URL)
      • Market/educate/discuss with your clients/members/affiliates and recommend the product along with your personal website link.
      • Those interested will then visit the site, watch the video, use the calculator and quickly see the great benefits that Relevant Life offers.
      • Referrals can call in or email for a quote or advice. A trained qualified adviser will then aim to book an appointment, complete a recommendation and ultimately make a sale. We’ll also try our best to recommend Health Care/Key Persons Cover and Income Protection, as you’ll receive referral fees on those sales too.
      • For each referral you will receive 10% of commissions we receive paid monthly in arrears.  If you want to sign up other affiliates to this opportunity (with their own client bank) you’ll receive 5% of the value of any referrals they generate (above and beyond their 10%).
      • You’ll benefit from a partner login to your own portal to see the value and stage of the campaign for each client.
      • You’ll be assigned an account manager, product literature, and marketing pack (complete with emails and a guide) so that you can start creating your own referrals with minimal effort.
      • What can you expect in referral fees? Our newest introducer referred eight clients last month and has generated £2500 from a small campaign on LinkedIn. 
 The Next steps:
      1. Contact Tom Hitchcock (Director at Broadbench) to discuss the opportunity on 01202 700053 or email tom.hitchcock@broadbench.co.uk
      2. We can then setup the website and marketing campaign
      3. Get referring
 
In summary, Relevant Life offers a huge opportunity to offer a simple, tax efficient life insurance product that provides real value to Directors and staff of Limited Companies. The benefits of cost saving, tax efficiency and writing the policy proceeds into trust really make this a compelling proposition.
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Is it time to get a lodger?

Woman working on laptop while man vacuums

Renting out a Room is a great way to earn some tax free cash and in the Summer Budget an increase in the tax free allowance was announced…

The government will increase the Rent-a-Room relief from £4,250 to £7,500 a year from April 2016. The value of this relief has been frozen since 1997, so this increase will allow individuals who rent a room in their main residence to do so tax free on income up to £7,500 to reflect increases in rent.

You can use the scheme if:

  • you let a furnished room to a lodger
  • your letting activity amounts to a trade, for example, if you run a guest house or bed and breakfast business, or provide services, such as meals and cleaning

You can’t use the scheme if the accommodation is:

  • not part of your main home when you let it
  • not furnished
  • used as an office or for any business – you can use the scheme if your lodger works in your home in the evening or at weekends or is a student who is provided with study facilities
  • in your UK home and is let while you live abroad
  • the whole of your home, rather than a part of it

You can get further details in HS223

Finding a lodger shouldn’t be too difficult and websites like Spare Room can help.

steve@bicknells.net

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