Are you ready for when lockdown ends?

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Well, the announcement has been made and most of the restrictions are due to end on 19th July, as a business owner are you ready?

It is of course likely to depend on many factors, such as; have you been open and trading at full capacity? Have you been able to open but with restricted availability? Have you been busier than ever? Are you struggling to fill vacancies? You may even have members of staff or even customers that are still very nervous about going back to normal.

If you work in the trades industry, especially anything related to housing, you have likely been very busy for quite some time now. You may actually find yourself short on time, I know the bathroom fitters I have booked are stacked out and working all sorts of hours to keep up with demand. It’s a very lucky place to be in.

Your struggles might actually be more to do with getting all of the materials you need? Supply has been much tougher than demand in a lot of cases.

If, on the other hand, you own and run a business in the hospitality sector, you have likely had to change the way you operate to stay afloat or maybe even had to close for some time. Hopefully that is all about to get easier, just the opening up to deal with now right?

Whatever your troubles have been over the last 18 months, now is the time to really focus on getting your business to move forwards. Did you know that around 80 per cent of UK companies fail within their first year? According to figures from the Office for National Statistics, only 42.4 per cent of businesses started in 2013 were still trading five years later. A primary reason why small businesses fail is a lack of funding or working capital, make sure you are on top of your finances so your business can stay on top. Running a small business isn’t easy at the best of times, but if you’ve got this far, you can do the rest, it’s onwards and upwards from here.

Whether you are stacked out with work load, struggling to hire staff in the hospitality sector or taking down those social distancing signs in your shop. Now more than ever is the time to be focussing on your business and your customers.

Outsourcing your bookkeeping is a very cost-effective way of helping yourself and your business. Having a good bookkeeper means you can save the time by leaving the bookkeeping to them and working on your business instead.

A good bookkeeper will be able to provide you with monthly reports so you can see exactly how your business is doing financially. This means you can make informed decisions about your business when you really need to, not when your accountant is finished with your books.

It’s going to be a busy time for any business owner, so why not put yourself ahead? Outsourcing to a bookkeeper means:

  • Your books are done regularly (so you can see what is going on in your business)
  • You don’t have to spend your valuable time doing the books (so you can do things more beneficial to your financial income)
  • A bookkeeper is cheaper than an accountant (who doesn’t like to be cost effective?)
  • Outsourcing means no additional staff (you only pay for the work done)
  • You don’t have to do a job you loath (seriously… do you enjoy doing your books?)

If you think it’s time to outsource your bookkeeping, get in touch with Rosemary Bookkeeping, it’s what we do best.

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What are Capital Allowances?

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Capital allowances can grant you tax relief for the reduction in the value of assets by letting you write off their cost against the taxable income of your business.

What is Capital Allowance?

You may be able to claim a capital allowance after buying an asset such as a car, machinery or other equipment that is brought for use in your business.

They are also available for certain building-related capital spending, like qualifying capital spent on research and development and donations of any used business assets to charity.

Capital allowances are available to the self-employed, sole traders as well as larger organisations liable for Corporation Tax.

What can you claim Capital Allowances for?

You can claim capital allowance for certain assets that are purchased for business use, providing the required conditions are met. The main condition is that you cannot claim capital allowances for the cost of items that your business buys and sells as part of its trade.

Equipment purchased and used in your business – tools, machinery, vehicles, computers, office equipment, plant and factory equipment should qualify for plant and machinery allowances.

Research and development (R&D) expenditure – you may qualify for allowances if any R&D relates to your business’ trade, including equipment used for R&D also.

Gifting equipment to charity – if any assets are donated to a qualifying charity that have originally qualified for plant and machinery allowances then you may be able to claim on any leftover written down value.

Integral features and certain fixtures in business buildings – any expenditure on fitted kitchens, sanitary ware and a few other fixtures in a building can sometimes qualify for plant and machinery allowances. Certain integral features expenditure of the building, such as electrical wiring, heating and air conditioning systems, cold water systems and lifts may also qualify.

Business premises renovation – renovations on business premises in designated ‘disadvantaged areas’ may qualify for Business Premises Renovation Allowance.

Other allowances available:

  • Mineral Extraction Allowance
  • Know-How Allowance
  • Patent Allowance
  • Contributions Allowance
  • Assured Tenancy Allowance
  • Dredging Allowance

First-Year Allowances

You can claim First-Year Capital Allowances to give you tax relief for the value of assets purchased for business use by letting you write off any cost against the taxable income of your business.

For example, plant and machinery first your allowances allow you to make a claim for up to 100% of the cost of any qualifying items against business profits within the year of purchase.

The current 100% first-year allowances are:

  • Energy-saving and water-efficient equipment – but only if on the list of qualifying equipment
  • Any new car purchase with low carbon dioxide emissions
  • Certain vehicle refuelling equipment also

For further details on first-year capital allowances head to the HMRC website

How to claim capital allowances

Claiming capital allowances is different depending on if you’re self-employed, a partnership, or a company or organisation that must pay corporation tax.

Self Employed

If you’re self-employed you need to claim any capital allowances within your self-assessment income tax return, these should be made within 12 months after the 31st January filing deadline.

Partnerships

As a partnership business, you need to claim your capital allowances on any assets owned by the partnership mutually in your partnership return, and not in returns for any individual partners. Again, these claims need to be made within 12 months after the 31st January filing deadline.

Companies or organisations that pay Corporation Tax

If your company or organisation pays Corporation Tax then you must claim capital allowances on your company tax return, but you must include a separate claim showing your capital allowances calculations.

What your calculation must show:

  • What specific allowance are you claiming for?
  • How did you calculate your claim?
  • How much are you claiming for?

Here to help with your bookkeeping

For any help with your bookkeeping, you can find your nearest Rosemary Bookkeeper and they can give you more time to grow your business by taking all aspects of your bookkeeping off your hands.

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Rosemary Bookkeeping Checklist

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We’ve put together a bookkeeping checklist for you to follow and make sure you’ve got your books together.

Have a read to learn what is involved for your bookkeeping 👇👇

Bookkeeping Checklist

Bookkeeping Checklist by Rosemary Bookkeeping

Do you want to download the checklist to print it out to stick on your wall? Click here – Download

  1. Enter sales invoices
  2. Enter purchase invoices
  3. Enter cheque payments
  4. Enter bank receipts
  5. Enter petty cash receipts
  6. Reconcile bank accounts
  7. Reconcile credit card accounts
  8. Enter prepayments and accruals journals
  9. Enter depreciation journals
  10. Enter payroll journals (if required)
  11. Enter stock journals (if required)
  12. Run VAT return (if required)
  13. Run aged debtor and aged creditor reports
  14. Run Profit & Loss statement
  15. Run Balance Sheet
  16. Check all reports for accuracy

Confused over this Checklist?

If you’re not confident in your bookkeeping ability then this checklist may just look like a lot of words and not make any sense.

There is no need to worry, that is what we do on a daily basis and we’re always here to help in any way we can.

 

Find your local bookkeeping expert here

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