Wellden Turnbull's blog offers expert advice and tips on how to improve the performance and profitability of your business. There's a wealth of information for start-ups and SME's, as well as established corporates, on a whole range of business accounting, tax and legislative issues. It's business made easy and a useful resource for anyone serious about keeping their business on track.
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In March 2021, the European Commission set out proposals for a new procedure whereby persons not established in the EU can register in an EU country and account centrally for VAT on any supplies made within the EU: https://ec.europa.eu/taxation_customs/sites/taxation/files/oss_guidelines_en.pdf To remind readers of the background, EU rules provide that: goods that are supplied in a […] The post New EU proposals on non-EU established: businesses making supplies in the EU: a new...
In March 2021, the European Commission set out proposals for a new procedure whereby persons not established in the EU can register in an EU country and account centrally for VAT on any supplies made within the EU:
To remind readers of the background, EU rules provide that:
Services supplied to a person outside the EU would not be subject to VAT.
Post Brexit, the UK is covered by the “non-EU rules”, which means that any services provided by a UK based business to a person based outside the UK is not subject to VAT.
What is, and has always been the case, is that services provided to an EU resident that is not a business from somebody based outside the EU are subject to VAT in the country in which the customer is based. Now that the UK is not in the EU, any services provided by a UK business to a non-business customer in the EU, or services provided to a non-business customer in the UK by a person based outside the UK, is subject to VAT in the country of supply.
For example, a solicitor in the UK providing legal services to a non-business individual in France should charge French VAT.
This could be a problem for people supplying services and goods to non-business customers based in a number of different EU countries. To deal with this problem, (and in practice to increase compliance), the EU intends, with effect from 1 July 2021, to introduce a procedure whereby suppliers can register for VAT in one country, as a non-resident supplier, and make one VAT return in that country to cover the VAT on supplies throughout the EU. This is similar to the “MOSS” scheme that has some years successfully applied to electronically delivered services.
The procedure can be used by various people, including, which is likely to be of most interest to persons with no EU presence, persons who:
If a person is using the import scheme, he must appoint an intermediary in the EU in order to use the scheme, although it is possible this may not be necessary where the EU has agreement with the country of residence for the recovery of unpaid tax.
Records must be kept for at least 10 years from the date the transaction.
If a person registers, he gets a VAT number which is prefixed “EU”.
For UK company, it is likely that the easiest place to register will be the Irish Republic, because the paperwork will be in English and the Irish tax authorities are relatively efficient.
This note is intended for guidance only. Specific advice should be taken on individual circumstances.
Being a property landlord can be a stable source of income for many people across the UK, as they provide a service to renters. But earning money from being a landlord is a business like any other, and they are liable to pay tax on any form of income they generate. If you are a […] The post Tax saving ideas for landlords appeared first on Wellden Turnbull...
Being a property landlord can be a stable source of income for many people across the UK, as they provide a service to renters. But earning money from being a landlord is a business like any other, and they are liable to pay tax on any form of income they generate. If you are a UK citizen and you own and rent a property somewhere across the UK, you will have to pay a category of landlord tax; this is unavoidable.
It can be easy to be confused by the rules around the taxation of landlords, and it may well be the case that, as a landlord, you are paying too much. Tax management is a really important aspect of being a great landlord, as small changes can be the difference between a healthy profit and just scraping by.
Here we take a look at some important ideas for saving on tax and better tax management for landlords in the UK.
The first thing to say is that if you want to manage your tax as easily as possible, one option is to form a limited company that you use as a landlord. This can really help by first being able to separate your personal life and finances from those of your landlord finances. But it also has some important tax considerations.
Being a company allows you to offset your expenses against your profit, and it also gives you the option to have someone else manage elements of the property management. It’s a solution that might not be right for everyone, so it is worth discussing it with an accountant experienced in working with landlords.
It is the case that Capital Gains Tax is not usually paid when assets are transferred between spouses. This means that you may well be able to reduce your tax liability by moving some of your assets into the name of your spouse – this could allow you to make use of a lower tax band.
If your spouse’s tax bracket is lower than yours, you may also be able to pay less tax on your rental income as well. And, as long as the property doesn’t have a mortgage and you aren’t taking financial gain from it, you won’t need to pay stamp duty.
Landlords are sometimes criticised by tenants for failing to put enough investment into the upkeep of a property. In truth, investing in the properties can be extremely useful from a tax perspective –
not only in terms of renovating and refreshing the property, but also looking into the possibility of extending it.
Of course, it is important to take into account the maximum rental yield you are going to get from a property in the area. Overspending might result in a better tax situation, but you won’t be able to make up for it in terms of the cost of the project.
You might be used to managing long-term lets, and this can work for many landlords. But you may not have considered the potential benefits of short-term lets.
One of the major advantages of short-term lets is that it gives you the chance to regularly evaluate the value of the property. That means you can always get a rental yield that is sensible for the area. If you are locked into a long-term contract and the local area rises in popularity, this can mean that you are missing out on income.
Every landlord has different tax needs, and possibly the most valuable thing that you can do is speak to an accountant who has specific experience dealing with landlords and helping them to manage their taxes.
If you would like to learn more about the possibilities of reducing your tax as a landlord, get in contact with the team at Wellden Turnbull today. We would be happy to provide you with more information.
Under our Probate licence, we are required by the ICAEW to complete a diversity data survey and to publish a summary of results on our website. We have just completed our 2021 survey and are pleased to confirm the results of the survey reflect our company policy on equality and diversity. We do not discriminate […] The post Equality and Diversity appeared first on Wellden Turnbull...
Under our Probate licence, we are required by the ICAEW to complete a diversity data survey and to publish a summary of results on our website.
We have just completed our 2021 survey and are pleased to confirm the results of the survey reflect our company policy on equality and diversity.
We do not discriminate against anyone of the grounds of age, colour, race, ethnic or national origin, sex, sexual orientation, religion or disability.
Wellden Turnbull always aims to treat everyone with respect, consideration and for each employee to feel respected and able to give their best.
We are also committed against unlawful discrimination of clients.
You might not be aware that it wasn’t until 1920 that women were allowed to be recognised as Chartered Accountants. The very first woman to take that mantle was Mary Harris Smith; this is her story. Destined to be a great accountant Mary Harris Smith was born in 1844 in London, and it was apparent […] The post Mary Harris Smith: the world’s first female Chartered Accountant appeared first on Wellden Turnbull...
You might not be aware that it wasn’t until 1920 that women were allowed to be recognised as Chartered Accountants. The very first woman to take that mantle was Mary Harris Smith; this is her story.
Mary Harris Smith was born in 1844 in London, and it was apparent from very early in her life that she was a gifted mathematician. Her father, a clerk to a navy agent and a banker, recognised her abilities and encouraged her. At 16, she was studying with a Master of King’s College School, before taking bookkeeping classes.
In 1887, Mary set up her own accountancy firm trading as a M. Harris Smith, Public Accountant. She had huge success and made a good living. It was said that her reputation was such that she was regularly requested to audit the accounts of organisations.
While she had success as an accountant and was living comfortably, she yearned for the status and prestige of being a Chartered Accountant. She first applied for membership of the Institute of Chartered Accounts in England and Wales (ICAEW) in 1891, believing herself to be fully qualified to do so.
She was turned away on the basis that women could not be recognised as Chartered Accountants. This decision unsurprisingly rankled her. In 1895, she was quoted saying “require of me what you would require of a man and I will fulfil it.”
She made multiple further attempts to become a member, but was turned down each time. Despite her years of accountancy expertise and stellar reputation, it was against the rules. However, thankfully, change was on the horizon.
The Sex Disqualification (Removal) Act was passed in 1919 which made it illegal for ICAEW to refuse to admit accountants based on their sex. Mary applied to ICAEW again and this time she was recognised as the first female Chartered Accountant.
It clearly meant a lot to Mary to be recognised in this way. She was 75 when she was finally admitted as a Chartered Accountant, and she continued working into the late 1920s until her health started to deteriorate.
It was in May 2020 that the City of London chose to honour Mary’s life – it was the 100th anniversary of her being accepted by the ICAEW as a Chartered Accountant. A blue plaque was commissioned to be placed in the City – one of just three plaques (out of 182) that celebrate the life of an individual woman.
The plaque will stand at the corner of Queen Victoria Street and Bucklersbury, which is close to where Mary’s office was situated when she was awarded her Chartered status.
As well as being the first female Chartered Accountant, Mary was a vociferous campaigner for progressive women’s rights and feminism. She was a proud supporter of the famous campaign for women’s suffrage and was also involved in movements such as the Society for Promoting the Employment of Women, and the National Union of Women Workers.
Having lived almost her whole life in London, Mary enjoyed retirement in St Leonard’s on Sea in East Sussex, and died there in 1934.
We hope you enjoyed learning about Mary Harris Smith, the world’s first female Chartered Accountant. If you are interested in working with a Chartered Accountant on any issue, please don’t hesitate to get in contact with our experienced team today.
The post Mary Harris Smith: the world’s first female Chartered Accountant appeared first on Wellden Turnbull Accountants.
Many people prefer to work for themselves rather than as an employee. But being your own boss not only comes with more freedom to work as you choose, it also comes with added responsibility. Sorting out your own accounts is definitely one of them. As a freelancer, you are a business owner, and one of […] The post 10 accounting tips for freelancers appeared first on Wellden Turnbull...
Many people prefer to work for themselves rather than as an employee. But being your own boss not only comes with more freedom to work as you choose, it also comes with added responsibility. Sorting out your own accounts is definitely one of them. As a freelancer, you are a business owner, and one of the key determinants of your commercial success is how you manage your finances and business accounts.
At Wellden Turnbull, we work with businesses of all shapes and sizes, with a comprehensive range of services that are targeted to each client’s business need. Over the years, our team has helped to grow and develop many start-ups and sole traders with valuable advice on tax, accounting and financial planning. We thought it might be useful to share some of our experience, so we’ve put together some accounting tips for freelancers.
Many creatives such as designers, writers or artists shy away from engaging with the commercial side of their business, preferring to immerse themselves in their chosen passion. Then, when the tax deadline beckons, it’s panic stations. If this sounds like you, some mental attitude shifts may need to occur. You are as much a business owner as the shopkeeper down the road, and if you are planning to make a living from your creative output, effective accounting and financial management is part of your job.
Your business revenue is not the same as your personal income. It makes life (and by that we mean your business accounts and tax returns) a lot easier if you don’t get the two muddled up. Have a separate business bank account so you can track your cash flow. Online banking is highly recommended, and many accounts are free to create, with no minimum balance requirements or bank charges, unlike some of the more traditional high street banks.
Creating a budget will give you a clear financial framework in which to operate and grow month by month, year by year. It will help you plan your business income and expenses on a monthly basis, providing an overview of where your money is going, including any areas of overspend and underspend that need tweaking. Managing your budget is a simple yet smart way to stay on top of your finances and know how much you have available to invest in business growth. It also allows you to allocate regular sums to a savings ‘pot’.
For any freelancer, it is absolutely vital that you know how much money is coming in and going out. Decide on how much you are going to charge for your products or services, and record your income either as you receive it (cash basis) or record impending payments (accrual). Track your expenses too – many are tax deductible and in order to take full advantage, you need to have a record of your costs. Make sure you keep all receipts in a safe place, so when it comes to the annual tax paperwork, you’re fully prepared.
Taxes are one of life’s necessities, and as a freelancer there’s no way of ignoring them. Many small business owners feel supremely uncomfortable about this area, but it doesn’t have to be this way as long as you’re prepared. Set aside a percentage (at least 25%) of your profits for taxes in a separate account. If you do this on an ongoing basis every month, it’s there when you need to pay it at the end of the year – no drama.
Unlike employment where you know how much your monthly earnings are going to be, freelance work can be unpredictable. Your income will go up and down, even with a solid client base. Leaner periods are inevitable and they can last for weeks or even months. Getting into the habit of saving is one of the most important things you can do to protect yourself. Reaching out to former clients is another way to generate more business, and don’t underestimate the power of networking to engage with potential new clients.
While it may be tempting to put off bookkeeping in favour of more interesting business activities, leaving it too long just makes more work at the end of the year. Get organised and stay organised, with an easy-to-use filing system for all your appropriate business documents. UK tax laws require business owners to keep transaction records for at least 5 years. Set aside at least an hour per week to check on incoming payments, outstanding invoices and expenses to calculate your income, so you always know exactly where you are. There are lots of user friendly softwares now, such as Xero or FreeAgent that can help you stay on track.
Get into the healthy habit of carrying out regular audits, comparing the budget you set to your actual cash flow. Notice if there is a rise and fall, or specific pattern, in your income and expenses through the year that needs to be taken into account. Is Christmas a busy time of year? Does everything go quiet in August? Did you have an extended period of illness? Be open to amending your budget to help your business operations, including in case of unforeseen circumstances.
Getting paid on time is the lifeblood of all small businesses, which means having an effective invoicing process in place and dealing with it efficiently is top priority. Make sure you agree your payment terms with clients before you start work, and send out invoices immediately upon completion. Have a robust system in place that allows you to send initial invoices, follow up with reminders to clients who haven’t paid, and chase late payments, as this is the cornerstone of a healthy financial habit that will help your business to grow.
Accounting software has come a long way over the years, and it’s really nothing to be afraid of. Platforms such as Xero and FreeAgent are easy to use and not too expensive, with invoicing systems and tax projection features while keeping track of banking accounts. And with HMRC’s drive for Making Tax Digital, it’s easy for freelancers to get their tax right and keep on top of their affairs. We usually recommend Xero cloud accounting software, and can even train you how to use it if you wish.
Freelancers and sole trader businesses can be perfectly capable of managing their own accounts and tax affairs, but if you need professional advice and guidance, Wellden Turnbull are here to help. Why not get in touch for a friendly chat to discuss you requirements for accounting and bookkeeping, tax advice and business planning.
To the general public, there might not be much of an understanding of the difference between an accountant and a chartered accountant. Both fall into the same profession: managing finances and helping individuals and companies with all issues relating to money. And, yes, while there are obvious similarities and overlap, there are some quite specific […] The post What makes an accountant ‘chartered’? appeared first on Wellden Turnbull...
To the general public, there might not be much of an understanding of the difference between an accountant and a chartered accountant. Both fall into the same profession: managing finances and helping individuals and companies with all issues relating to money.
And, yes, while there are obvious similarities and overlap, there are some quite specific differences between accountants and chartered accountants.
Some people assume that an accountant becomes ‘chartered’ when they have completed a specific set of training or degree, or perhaps if they have had a certain number of years of experience. Neither of these suggestions are quite right, and the truth is that it is a little more complicated overall.
Firstly, in theory anyone who has undertaken any kind of accounting course or had any working practice in the field can refer to themselves as an accountant – it is not a protected term and it does not require any specific training or experience. An accountant might often specialise in a particular element of accountancy such as payroll or TAX and VAT submissions.
By law anyone can call themselves an accountant. The title ‘chartered accountant’ and the letters ACA or FCA, however, indicates that the person has undertaken a minimum of three years in-depth training, passed a series of rigorous examinations in financial management, auditing, business strategy and taxation, and committed to continuing professional development to keep their skills up to date.
Crucially, they will also need to have membership of either the Institute of Chartered Accountants (ICAEW) or the Association of Chartered Certified Accountants (ACCA). These organisations will only allow membership after an accountant has the qualifications and experience as outlined above.
Although unqualified accountants are subject to the same laws as chartered accountants, ICAEW Chartered Accountants are bound by our Code of Ethics and subject to our disciplinary procedures. They are required to hold a practising certificate and professional indemnity insurance if they offer professional services to the public.
Ultimately, it can be considered that accountants take on transactional financial roles, whereas Chartered Accountants have broader expertise across a wide range of subjects in both standard accountancy, as well as business and personal finance.
Chartered Accountants are not only capable of providing everyday accountancy services ranging from monthly payroll to help with self-assessment tax returns – they are also perfectly placed to offer in-depth business advice and guidance surrounding finances and a broad range of other issues.
Chartered Accountants are required by businesses for a number of reasons and they could be used for financial reporting, corporate finance, auditing, forensic accounting, taxation, business recovery and insolvency.
Additionally, they can provide services pertaining to business advice and making strategic financial decisions for small and large businesses.
They may additionally have specialisations allowing them to provide insight and guidance in areas such as international tax and property transactions.
Many Chartered Accountants are regulated professionals who have shown themselves to have extensive experience and training across accountancy and finance more broadly. Having a dedicated Chartered Accountancy firm work with your business can provide you with sound financial advice, wide-range experience and the peace of mind that this is a professionally qualified individual who is bound by a code of ethics and professional standards.
Poor accounting can have a hugely negative impact on your business. Of course, accountants play a vital role in the day-to-day running of a company – but Chartered Accountants are qualified and certified to provide advice and guidance to a company.
If you require some form of financial guidance or accounting services and you are not sure whether you need an accountant or a Chartered Accountant, the team at Wellden Turnbull would be happy to help.
We are Chartered Accountants providing a wide range of financial and accountancy services. Contact us for more information.
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