Archive for 2014

From time to time you use your personal bank account for company business. Your bookkeeper says that this is illegal or at least breaks the terms and conditions of the account. Are they right and what are the consequences if they are? Legalities The rights and wrongs of directors using their own bank accounts for […]

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Salary aside, most limited company directors (and shareholders) typically draw down most of their income in the form of dividends. Dividends are distributed by companies of all types in order to return a proportion of company profits back to their shareholders. The limited company structure is an attractive way for most business owners to work, […]

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A shareholders’ agreement is exactly what the name suggests; an agreement between the shareholders of a company. The articles of association of a company also govern the relationship between the shareholders, but a properly drafted shareholders’ agreement can have many benefits over the articles of association. Most importantly, it is a private contract and therefore […]

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Here are some tax and finance tips which could help you save money as a limited company owner. Dividends are not subject to National Insurance Contributions, which represents a significant tax saving compared to the sole trader route, where NICs are payable on all income. As a limited company director, you may consider paying yourself […]

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Limited companies can distribute profits they generate via dividends to company shareholders. However, you must ensure that all dividend distributions are legitimate, otherwise you could fall foul of HMRC. In order to declare a dividend legitimately, you must firstly ensure that the money exists in the company’s books to accommodate the amount being distributed, and […]

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If you set up a limited company, is appointing an accountant to look after your affairs a statutory requirement, or can you take care of your accounting duties yourself? Despite what you might expect, there is no legal requirement for small companies to use an accountant, and companies are entirely exempt from being audited if […]

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If you’re a sole trader, or running a business as a partnership, and turn over £81,000 or less per year, your business could take advantage of the new ‘cash basis’ accounting scheme, potentially saving you time and money. Cash basis accounting The scheme, which is open to all unincorporated businesses with income below this threshold […]

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The Annual Investment Allowance (AIA) is a 100 per cent allowance for tools and equipment capped at an annual amount. This means that all expenditure within this capped amount can be written off against the taxable profits for the same period. Expenditure over that amount is subject to the normal writing down allowances of 18 […]

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The new employment allowance could cut your bills by £2,000. But are all businesses eligible and what effect does this measure have on remuneration planning for a one-man company? The employment allowance (EA) became available to employers from 6 April 2014 to set against their secondary (employer) Class 1 NI liability (National Insurance Contributions Act […]

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Your company is acquiring the business of an unincorporated competitor. This business has previously prepared its accounts using the cash basis – how should you bring it into line with standard accruals accounting? Cash basis of accounting What is it? Under cash basis accounting transactions are recorded when the cash related to them is paid […]

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