CHANGES TO NON-GEOGRAPHIC NUMBERS

From the 1^st of July Ofcom are changing the price of calls to non-geographic numbers. At Business Works we focus on helping our clients keep more of the money they earn so here are some tips to save you receiving unexpectedly expensive phone bills.

Calls to numbers beginning 080 will soon be free for mobile as well as landline callers. If you operate a 0800 number you will know that charges are levied to receive calls, however there will be no changes to your current forwarding costs as these are factored into your existing call forwarding plans.

To ensure clarity to consumers, Ofcom have split the cost into two parts; a service charge and an access charge, this also impacts other ranges such as 09 and 118 numbers. This change is being made to help clarify call charges and promotion of numbers must include both the service charge and access charge.

The Access Charge is the part of the charge that goes to your phone company, in example calls charges as price per minute. Your contract provider will inform you of how much the access charge will be on bills and contracts.

The service charge is the rest of the call charge which is decided by the organisation who will tell you how much this will be.

For instance if an organisation stated that ‘calls cost 15p per minute plus your phone company’s access charge’ and your access charge was 10p per minute, the service charge would be the 15p per minute and the total cost of the call would be 25p per minute.

The new rules will apply to all consumer calls to 084, 087, 09 and 118 numbers across the UK ensuring clearer call rates for everyone.

The advisory fuel rates should only be used in the following circumstances:

• reimburse employees for business travel in their company cars
• require employees to repay the cost of fuel for private travel

Advisory fuel rates from the 1 June 2015 are (per business mile):

Hybrid cars are treated as either petrol or diesel cars for this purpose.

These are not to be confused with the mileage payments for business travel.

The current rate per business mile for a car is as follows:

• For Tax purposes-45pence for the first 10,000 business miles in a tax year, then 25 pence for each subsequent mile.
• For National Insurance Contribution (NIC’s) purposes- 45 pence for all business miles.
• The current rate per business mile for a motorcycle is 24 pence for both tax and NIC’s purposes and for all business miles.

If you travel ?as a result of running your business (other than home to work) and:

• Are unsure on what you can claim
• Are considering your options regarding the company purchasing a vehicle
• Want to understand the rules around company car benefits in kind
• Are unsure whether to lease or buy a vehicle

Or anything else associated with business travel. Please contact business works so that we can ensure the advice you are given is specific to your circumstances.

We have received notification from North Yorkshire police about a scam doing the rounds.  Please be careful.

“Trading Standards have been made aware of a letter being sent to local businesses entitled “Publication of Companies and Vat Registration Numbers in the UK Corporate Portal 2015” which gives a return address in Germany. The letter invites recipients to update their VAT registration details as required by changes to the EU Economic Package. The small print of this letter states by filling in their details they are agreeing to a three year advertising contract for £797 per year. There is no such requirement and this is a scam to get companies to sign up to advertising they do not want or need. This is a scam which has been reported throughout the country and small businesses are asked to be vigilant and report any occurrences to Trading Standards on 03454 04 05 06.”

There is a significant increase in people receiving emails with highly developed malware and ransomware infections threatening computers and networks at the moment. Highly sophisticated infections are affecting home users, small and large business without discrimination.

The latest attacks on software

Encryptowall is a virus that is used by criminals to gain access to personal data by locking down and encrypting your files until a ransom is paid. If you pay the ransom there is no guarantee that it will be unlocked or what else your payment details will be used for.

The latest attack is an email with a zip attachment often claiming to be a ‘resume’. If this file is opened the ransomware will install and infect your PC and network.

Act now before it’s too late

Do not open suspicious emails or attachments that you don’t trust. If the attachment is from a person you trust but it looks suspicious contact them before opening it.

Ensure that your PC, laptop or tablet device has an antivirus software installed. This should be used regularly to scan files and updates as soon as any updates are required.

Always shut down your computer after use allowing for updates to run.

Do not store passwords on your computer. Use a strict password policy with a variety of characters (e.g. numbers, letters and symbols) and change password on a regular basis.

Back up your data on either a computer server or shared space.

Changes to the National insurance contributions (NIC) system will come into place from the 6^th of April 2015. Every employer with employees under the age of 21 will no longer be required to pay class 1 secondary NIC’s on earnings up to the upper earning limit for those employees. The Upper earnings limit for Class 1 Secondary National Insurance is anything equal to or above £815 per week, £3532 per month or £42,385 per year. This is aimed to reduce youth unemployment by encouraging employers to recruit those aged under 21.

You cannot claim VAT that is incurred on the provision of business entertainment. However you can claim VAT for employee entertainment.

Entertainment is classed as ‘Business Entertainment’ when all of the following conditions are met:

• It is provided to persons who are not employees of your business. For the purposes of VAT an employee could be a person employed by you, a director or partner who is engaged in the management of business, a self-employed person who is treated by you in the same way as an employee. People who are not employees include pensioners or former employees, job applicants and interviewees and shareholders who are not employees.
• It is provided for free.
• Entertainment is provided. Entertainment is when any kind of hospitality is provided such as: provision of food, drink, accommodation, theatre & concert tickets, sporting events, entry to clubs or night clubs, the use of capital assets for the purpose of entertaining.

Employee Entertainment is defined as an employer providing entertainment for the benefit of employees to reward them for good work or to maintain and improve staff morale, so long as this is done so wholly for business purposes. VAT incurred on Employee Entertainment can be claimed on your VAT return, such as staff parties, staff outings or team building exercises.

If you wish to claim VAT on items that are both business entertainment and non-business entertainment you can claim the portion that is not business entertainment in your VAT return.

Should you have any questions concerning VAT and would like us to help with your VAT matters please do not hesitate to contact us.

As recommended by the Low Pay Commission, the government will raise the National minimum wage in October from £6.50 to £6.70 per hour for adults. This increase will also alter the following rates of low pay:

• The rate for 18 to 20 year olds will increase by 17p to £5.30 per hour
• 16 to 17 year olds will see a rise of 8 pence to £3.87 per hour
• The rate for apprentices has seen a significant rise of 57p to £3.30 per hour

This is the largest real terms increase in National Minimum wage rates since 2007 and more than £1.4 million of Britain’s lowest paid workers are set to benefit.

Announcing the changes, Mr Cameron said: “At the heart of our long-term economic plan for Britain is a simple idea – that those who put in, should get out, that hard work is really rewarded, that the benefits of recovery are truly national.”

Business Secretary Vince Cable has also planned to launch the National Minimum Wage Accelerator. This online tool will allow people to compare rates across regions, sectors and occupations. It will use data from the annual survey of hours and earnings.

You can also check if your employer is paying you correctly by using the National Minimum Wage Calculator. https://www.gov.uk/am-i-getting-minimum-wage

VAT registered businesses must charge VAT on taxable supplies of goods or services that they make. Supplies include day to day sales, free samples, part exchanges and barter transactions.

Tax Point – A tax point is when a transaction takes place for VAT purposes. If any part exchanges, barters or contras occur you will need to check that you’re using the right tax point so each transaction is on the right VAT return.

Exchanges – There are various circumstances when you might receive goods from your customers for supplying them with goods or services. The VAT treatment can differ depending on the nature of the transaction.

Reconditioned unit – if your business provides a reconditioning service and supplies reconditioned units in exchange for unserviceable ones, then you must charge VAT on the full amount you charge for the reconditioned unit.

If in part exchange for the reconditioned goods your customer gives you an unserviceable unit you can either:

• Issue a credit note
• Agree with the customer to leave the original VAT charge as it is.

One off exchanges – You might exchange 1 item for another, or exchange goods for other goods at a reduced price, on a one off basis. For example a car salesman might sell a car for £1500 plus the customer’s old car. You should treat this sort of transaction as a part exchange.

Part exchanges – If you supply goods or services and receive other goods or services in exchange (or part exchange) you must account for VAT on the amount the customer would have paid you if they had given you money instead.

Barter transactions – If you supply services or goods and receive other goods or services in return two separate transactions occur:

• The supply from you to your customer
• The supply from your customer to you

If you and your customer are VAT registered you both must account for VAT. The VAT treatment is the same as part exchanges. You must both account for VAT on the amounts you would each have paid for the goods or services if there had been no barter and they had been paid for with money.

If you need help with your VAT calculation or would like us to do your VAT return contact us on 0113 2864486 or admin@businessworksuk.co.uk

Simplified expenses can be used by sole traders or partnerships that have no companies as partners. They cannot be used by limited companies or business partnerships involving limited companies.

Simplified expenses are a way of calculating certain business expenses using flat rates rather than working out your actual business costs. You can choose whether or not you would like to use simplified expenses depending on whether they would suit your business.

Types of simplified expenses

Only certain expenses can be simplified using flat rates including working from home, business costs for vehicles, living in your business premises. You must calculate all other expenses by using the actual costs.

Vehicles

You can calculate your car, van or motorcycle expenses using a flat rate for mileage instead of using actual costs of buying and running your vehicle.

For example, if you have driven 12,000 business miles over the year:

10,000 x 45p = £4,500

2000 x 25p = £500

You would there fore claim £5,000 for business mileage.

You don’t have to use flat rates for all vehicles. Although if you use the fat rates for a vehicle you must continue to do so for as long as you use that vehicle for business purposes. You cannot claim simplified expenses for a vehicle you’ve already claimed capital allowance for, or you’ve included as an expense when you worked out your business profits.

Working from Home

Calculate your allowable expenses using a flat rate based on the hours you work from home each month. This means you don’t have to work out the proportion of personal and business use for your home. E.g.) how much of your utility bills are for business. The flat rate cannot include telephone or internet expenses. You can only use simplified expenses if you work for 25 hours or more a month from home.

Living at your busines premises

A minority of business use their business premises as their home including guest homes, Bed and breakfasts or small care homes. You can use simplified expenses instead of calculating the split between your expenses for private and business use of the premises. With Simplified expenses you calculate the total expenses for the premises. Then use the flat rates to subtract an amount for your personal use of the premises, based on the number of people living on the premises and claim the rest as business expenses.

For example, if you and your partner run a bed and breakfast and live there the entire year. Your overall business premises expenses are £15,000.

Calculation:

Flat rate: 12 months x £500 per month = £6,000

You can claim:
£15,000 – £6,000 = £9,000

You can use the simplified expenses checker to compare what you can claim. https://www.gov.uk/simplified-expenses-checker

If you require any help with your expenses, please call our experts on 0113 2864486.

George Osborne set out a pre-election budget, his sixth as chancellor and the last of this current parliament. Check out the Key features of the budget that will affect businesses:

Employment

• Unemployment has today fallen to its lowest on record to 1.86 million. George Osborne announced that ‘The Great County of Yorkshire has created more jobs than the whole of France’.
• Adult, youth and apprenticeship minimum wages are set to rise in October
• Chancellor George Osborne plans to abolish Class 2 National Insurance for the self-employed in the next parliament.
• This April National Insurance will be abolished for those employing under 21’s. From Next April the conservative government plan to abolish it for employing young apprentices.
• The tax-free personal allowance to rise from £10,600 in 2014-5 to £10,800 in 2015-6 and £11,000 in 2016-7. Allowing the low paid to keep more of the money they earn.

Tax Returns

• One of the highlights of this budget is the dramatic change to tax returns.
• By 2020 End of year tax returns will be scrapped and in their place will be real time online accounts. Although people who wish to continue using annual paper returns can continue.
• The switch is expected to start with five million small businesses and the first 10 million individuals in early 2016.
• This online system will allow taxpayers to submit information on a regular basis rather than a rush at the end of January. Individuals and small businesses can submit accounts throughout the year via computer, tablet or smartphone.
• They will then be able to pay their tax at any point throughout the year and spread the costs by paying in instalments. Businesses and individuals will be able to link their own accounting software and their bank account to the digital tax account.

Business

• Farmers will be able to average their income over 5 years for tax purposes.
• In a Fortnight, the government will cut corporation tax to 20% one of the lowest rates of any major economy in the world.
• The review into business rates will take place. The government will implement a £1 billion package to reduce the cost of business rates in 2015-16. Their findings are expected in the 2016 budget.
• There are 5.2 million Small Businesses in the UK and have been described in this year’s budget as ‘The engine of the UK’s Growth’.

Savers

• A new personal savings allowance has been announced. The first £1000 interest on savings income will be tax free.
• The annual savings limit for ISA will be increased to £15,240.
• A new ‘Fully Flexible’ ISA has been introduced allowing savers to withdraw and reintroduce money without losing their tax-free allowance.

Fuel

Fuel duty will remain the same as Septembers planned increase is to be scrapped