BEWARE: THREATS TO YOUR COMPUTER AND PERSONAL DATA

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

Like many other businesses, the government also faces the problem of uncollected debts. Their current amount of uncollected debts is an estimated £22.6 billion and they have announced plans to reduce this with the help of the private sector.

‘Integrated Debt Services Limited’ (IDSL) is a company which is jointly owned by the government and TDX group. It has been set up to provide a single point of access for debt management and collection services across government departments. The service will initially launch with: HM Revenue & Customs, the Department for Work and Pensions, the Student Loan Company, Legal Aid Agency and the Driver and Vehicle Licencing Agency.

In the past, the use of private sector organisations to assist in the collection of government debts has helped to improve debt recovery rates for government departments. With this cross departmental approach and access to private sector knowledge and expertise, it is hoped that this will improve recovery rates.

The government has announced that from October 2015 the minimum level of debt for which someone owed money can force a person into bankruptcy from £750 to £5000. These limits were last revised in 1986. It is likely to be a controversial measure as the increase is significant and the evidence collected by the government on the subject demonstrates that a number of interested parties has called for a more modest increase.

This change will take place as respondent’s thoughts that the debt that can trigger bankruptcy through the courts were disproportionate as people can be put through the most serious of debt recovery action for a debt as small as £750. There are also other ways for those owed money to recover their debts such as action in the small claims court.

It is well known that the courts bankruptcy jurisdiction is often used by creditors to put pressure on debtors to pay. However the Courts position that this is an abuse of process is clear and it may be that the increase is partially intended to put an end to this practice.

Also announced recently is the plan that will allow approximately 3600 more people a year with a debt problem to enter into a Debt Relief Order (DRO). This is a low cost alternative to bankruptcy for those with very low assets and income and debt which they’re unable to pay. The maximum amount of debt that can be covered by these plans will increase from £15,000 to £20,000.

Related changes also include the DRO asset limits raised to £1000 plus a vehicle worth no more than £1000. The maximum surplus income a person can have to qualify for a DRO will remain at £50 per month.

Business Minister Jo Swinson said ‘Struggling with unresolvable debt can cause immense stress for families. These changes will ensure that our debt relief schemes are updated so that they still meet their original goal of providing access to those who need them. They also ensure that bankruptcy, which has the most significant consequences, is reserved for those with sizeable debts.’

Evidence suggests that DRO’s help some of the poorest and most vulnerable people in society make a new start and improve their mental wellbeing. The new changes will allow more people to get a resolution when faces with debts they can’t afford to pay.

If you are struggling with debts you can call the National Debtline (0808 808 4000).

If you need advice on how to save money to avoid facing debt problems and bankruptcy contact us on 0113 2864486.

VAT registered companies can claim the VAT back on certain fuel costs and vehicle cost. Here is an outline of what you can and cannot claim.

• When buying a new car you may be able to reclaim all the VAT on a new car if you use it for the sole purpose of business. The car must not be available for ‘private use’, and you must have proof that it isn’t – for example it is specified in your employees contract. ‘Private use’ includes travelling between home and work unless it is a temporary place of work.  You may also be able to claim all the VAT on a new car if it is mainly used: as a taxi, for driving instruction, for self-drive hire.
• If you hire a car to replace a company car that is off of the road, you can usually claim 50% of the VAT if all the following apply:
  • You hire it for no more than 10 days
  • It is used only for business
  • Not available for private use
• If you lease a car you can usually claim 50% of the VAT. You may be able to reclaim all the VAT if the car is used only for business and is not available for private use or is mainly used as a taxi or for driving instruction.
• In most cases you can reclaim the VAT for buying a commercial vehicle (van, lorry or tractor) if you use it for business:
  • Motorcycles
  • Motor home and motor caravans
  • Vans with rear seats (Combi vans)
  • Car- derived vans
• If you don’t pay a fixed rate of VAT under the flat rate scheme you can reclaim all the VAT on fuel if your vehicle is used only for business. There are 3 ways of handing VAT if you use the vehicle for business and personal use.
  • Only reclaim the VAT on fuel for business trips and keep a record of the mileage.
  • Choose not reclaim any VAT- if your business mileage is so low that the fuel scale charge would be higher than the VAT you can reclaim.
  • Reclaim all the VAT and pay the right fuel scale charge for your vehicle according to your vehicle’s CO2 emissions by following this link: https://www.gov.uk/fuel-scale-charge
• If you choose not to reclaim VAT on fuel for one vehicle you can’t reclaim VAT on any fuel for vehicles used by your business.
• You can usually reclaim the VAT for all business related running and maintenance costs for example repairs or off street parking or any accessories you’ve fitted for business use. You can claim these additional costs even if you can’t reclaim VAT on the vehicle itself.
• In the case of used vehicles you can only reclaim the VAT on the purchase of these if the VAT is detailed on your purchase invoice or receipt.