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Archives for May 2016

Networking – love it or hate it?

Does the thought of attending a networking event fill you with excitement or dread?  Do you look forward to events as a chance to meet new people and promote your business, or put it in your diary and then find an excuse not to go?

Not everyone loves networking but for a small business I see it as an invaluable way to raise your profile and get yourself known locally.

Here are the main benefits I have gained from networking locally:

  1. New Business and Referrals– probably the most obvious benefit in financial terms but it takes time.  Don’t expect to turn up a couple of times and the work to flow in.  I firmly believe that people buy from people, and it takes time to get to know someone, find out what they are about and how they run their business.  You’ll gravitate to people on the same wavelength as you, and hopefully they start referring you and vice-versa.
  2. Connections – following on from above, its so true that “Its not what you know, but who you know!”  You may think you have nothing in common with someone, but they will know a whole group of other people who may be your ideal customer.  I met a manager of a Care home at an event – part of a National establishment who was never going to need my services.  We got on well though over a period of months, so when several of their self employed health care assistants needed help, she asked me to go in, as someone local and approachable, to talk to them.  As a result, I now do 6 monthly bookkeeping workshops for their care workers, and do personal tax returns for several of them.
  3. Confidence – ask me to have stood up and talk to a group of people 2 years ago, I wouldn’t have slept for a week beforehand!  Im still no public speaker, but I can manage a minute or 2 without turning into a jibbering wreck (outwardly anyway!)  Different networking groups have different levels of “formal” interaction – so if you don’t want to stand up and be in the spotlight, pick one that is very informal.
  4. Raising my Profile – if you are a local business, networking is a great way to get yourself known in your community. Regular attendance and talking to a mix of people will build your reputation as a local expert in your field.  Help people out when you can – I ofen get “ can I just pick your brain about xxx” at networking events, and while you have to be careful about giving specific advice, helping someone understand something a bit better will probably mean they come back to you when they need some real advice that they are willing to pay for.  There’s also a real sense of satisfaction from helping other people, and I come away from most events having been able to answer a question, or connected 2 people together etc.
  5. Friendship – a personal benefit as well as a business one.  Ive made some great friends through networking who I know will always support both me and my business.

So with so many local events to chose from – how do you decide which one to go to?

I could network constantly within a 10 mile radius so first pick your time of day.  Breakfast meetings don’t work for me with 2 kids to get to school, so morning or lunch time events suit me.  Then look to see what’s involved – is it a very informal set up where you grab a coffee and mingle, or a sit down structure with a formal presentation from someone in the group?
I now help run High Wycombe Business Biscotti which is an informal group meeting on the first Thursday of every month at Wycombe Heights Golf Club, and I am a member of Marlow Athena and Maidenhead Business Girls.  Each group is different but all help me build my profile in the community – and all are fun! So give one a go, and starting building your connections.

Athena networking

Maidenhead Business Girls

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VAT and extra profit? Look at the Flat Rate VAT Scheme

Mention VAT and most people either panic or switch off!!

But small businesses can use a special scheme called the Flat Rate scheme which takes a lot of the hard work out of VAT and gives small businesses a cash flow advantage.  Got your attention back?  Good!

Normally when you register for VAT you calculate the vat you charge on your sales, deduct the vat you have been charged on your purchases and pay over the difference to HMRC once a quarter.

Under the flat rate scheme, when you register you are given a percentage based on your industry sector (


This is then how the scheme works:

You invoice your client as normal say £1000, plus VAT of 20% making a total of £1200.

You then ignore any purchases that you have made in the period, and just calculate vat based on your gross sales at your percentage.  As an accountant, my percentage is 14.5% so 14.5% of £1200 = £174

I have therefore got in £200 in vat from my customer and only paid out £174.

The scheme is only advantageous if you have business where you don’t buy in a lot of items with VAT on – ie if your main cost is time!
To be eligible to join the scheme, your net turnover must be under £150,000.  If you have just registered for VAT then you get an initial year discount of 1% as well, adding to your cashflow advantage for 12 months.
Although under the scheme, you don’t reclaim the vat on purchases used in the business, if you invest in capital items (computers etc) and the vat-inclusive cost of a single purchase is over £2,000 – then you are allowed to claim back the VAT.
So although you do still need to complete quarterly returns, the flat rate scheme is a much simplified scheme and one most small businesses should definitely consider if thinking about / or having to register for VAT.
For more information please contact Rosie Forsyth at Wilkins & Co.

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Surely I can claim childcare as a business cost?

“I can’t run my business unless I have childcare – I must be able to claim it against my business?” is something I hear all the time – but at the moment if you are self-employed, childcare is not a tax deductible expense.

Agreed – totally unfair, as it can be so expensive, sometimes you wonder if its worth working!
If you are an employee, or have a limited company then childcare vouchers exist and you can use these to get some tax savings.

For the self-employed you will have to wait until 2017 when the new childcare tax relief will be rolled out.

Once launched, working parents will be able to get 20% towards their childcare costs (up to £2,000 a year for each child up to the age of 12).  In order to qualify both parents need to work, and neither can earn more than £100,000 a year.  There is a minimum you need to earn to qualify as well, but HMRC say there will be “start up period” for newly self employed parents whose income may be very low initially.

Parents will set up an online account for childcare, and for every £80 the parents put in HMRC will “top up” with £20, to the maximum of £10,000 per year.  You wont be able to claim tax-fee childcare on top of tax credits, universal credits or existing childcare vouchers.

So there is some help on the way – but in the meantime for many working Mums, we will need to continue to rely on extended family, friends, and CBBC!

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Do I need to file a tax return?

Another frequently asked question is – do I need to file a personal tax return?

If you fell into one of the following categories at any time between 6 April 2015 and 5 April 2016, then YES you do need to complete a 2015/16 tax return.

  1. You were self employed
  2. You were a company director – SEE BELOW
  3. HMRC have sent you notification to complete a return
  4. You had more than £2500 in untaxed income, eg from renting out a property
  5. Your savings or investment income before tax was more than £10,000 (lucky you!!)
  6. You have a Capital Gain – ie you made profit from selling shares, a second home, a business or other chargeable assets
  7. You or your partner’s income was over £50,000 and one of you claimed Child Benefit in the year
  8. You had income from abroad that you need to pay tax on
  9. You lived abroad and had a UK income
  10. You had dividends from shares and you were a higher/additional rate taxpayer
  11. Your income was over £100,000
  12. You had a form P800 send from HMRC saying you didn’t pay enough tax last year and you haven’t either sent them a cheque or arranged to pay it via your tax code


The company director question is an interesting one (oh yes it is!!!)

HMRC’s guidance on their website will tell you that all company directors need to complete a tax return – but that is not strictly true.  If you are going to have a tax liability based on your income, then yes, you need to notify HMRC and complete a return – but if you have no further tax liability, then there is no requirement to register for self-assessment, director or not!

So if in 15/16 like many directors, you had a small salary and dividends up the basic rate threshold, and no other income, it is more than likely that you have no personal tax liability, and therefore if you have not been asked by HMRC to complete a tax return, you do not need to send one in.

If you do fall into one of the categories above, and have not filed self-assessment returns before, you have to notify HMRC by 5 October 2016 that you have a tax liability for the year.  You then have until 31 January 2017 to file your return online.

We act for many small businesses completing tax returns for the first time – and we get that its daunting!  We can help you through the process and make it as stress free as possible– do get it touch for more information.

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Motor expenses – what can you claim from the business if you are self-employed?

A couple of weeks ago I dealt with working from home expenses in my blog.  This week – we move on to your car!

Like working from home, there are 2 main methods of claiming motor expenses – one more complicated than the other!

  1. The Mileage Method (simple method)

This is simple to work out and generally used if you are not doing lots of business mileage in your car.  If you use the family car occasionally for work, then this method would be the one for you to use.

You simply keep a record of the number of business miles you do and then calculate a flat rate of 45p per mile (for the first 10,000 miles) and then 25p per mile on anything over this.

You then do not charge the business for any other car related costs such as insurance, servicing, petrol etc.  These should all be paid for privately.  The actual cost of buying the car is not separately reflected in your accounts either under this method.

You can claim for extra journey costs such as parking, congestion charge and toll roads in addition to the 45p per mile so keep receipts for those.

Obviously you need good record keeping for this method – most people keep a note in their diary or in a notebook in the car of business miles done.

You can only use this method if your turnover is below the VAT registration threshold (currently £83,000) and once you have started using it, you can only change methods if you change your car – you can’t chop and change methods each year.


  1. The Actual Cost Method

This is more complicated to work out, but generally beneficial is you use your car predominantly for work, with little private usage – or you have high repair bills!

Under this method, the business pays for all your motor costs.  You can include fuel, repairs, MOT, servicing, insurance, tax and breakdown cover.  You then work out the percentage of your costs that relates to private use and disallow the private element in your accounts.  So if you use your car 80% for business, and 20% privately, then the business can pay for 80% of the total cost.  In reality, what usually happens is you pay for all the costs from the business and then your accountant will make the adjustment in your accounts at the year end to reflect the private usage of the car.

You will need to keep records to be able to estimate the percentages – if queried, HMRC would really like to see records for about 3 months to give you an idea of the business usage.

The cost of the car can also recorded in the accounts under the actual cost method, and tax relief given via capital allowances but that’s for another blog!!

Under both methods, parking fines, speeding fines and driving awareness courses are never a business expense so don’t try to claim them!!

If you have any queries, then please contact Rosie Forsyth at Wilkins & Co.

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