Making Tax Digital – Quickbooks Cloud Accounting

We recommend QuickBooks cloud accounting. If you want help or advice relating to Cloud Accounting then get in touch and we’ll advise the best solution for you. Under the ‘Making Tax Digital’ programme, the government are planning that all businesses must keep digital tax / accounting records commencing as soon as March 2018 so it makes sense to set up a compliant accounting system as soon as possible.

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New VAT Flat Rate scheme rules announced 23 November 2016

The most notable announcement in the Autumn Statement was the introduction of a new VAT Flat Rate of 16.5% for businesses with limited costs. This is a link to the new rules

If a business is using the Flat rate scheme and the purchases of goods (not services) is less than 2% of annual turnover then it must use the new 16.5% flat rate. Options for businesses that this affects are

  1. Deregister from VAT (if sales are less than £83,000 p.a.)
  2. Leave the Flat Rate Scheme and account for VAT on a normal basis.


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Tax efficient salary and dividends 2016-17 for one man company

In 2016-17 for most one man companies, the tax efficient salary will be £8,060 per year (£671.67 per month) as, at this level there is no National Insurance to pay. After paying this the tax efficient level of dividend to take you up to the 2016-17 higher rate tax threshold of £43,000 is £34,940 (£2,911 per month).

There are exceptions to the above if the company qualifies for employment allowance then it may be worthwhile paying a little extra salary. If you have other taxable income then this needs to be taken into account when calculating the maximum dividend.

You should be aware that dividend tax is payable in 2016-17. This is 7.5% on dividends over £5,000. In the above example this would be calculated as follows

Dividends £34,940, less those within the personal allowance (£2,940), less £5,000 allowance = £27,000

Dividends liable to Dividend tax £27,000 x 7.5% = £2,025 tax liability to be paid personally under self assessment (31 January 2018).

This is written before the budget announcements on 16 March 2016.



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New website

We’re freshening up the website this week – so a few things may go missing – should all be finished next week

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Auto Enrolment update

We’ve been preparing recently for the forthcoming requirement for all employers to have an auto enrolment pension scheme. We’ve decided to go with ‘The People’s Pension’ for several reasons.

1. There is no charge to the employers

2. The charge to employees is only 0.5% per annum

3. Our payroll software is compatible with this provider

4. There are a choice of funds for the employees to invest in

There seem to be a lot of Financial Advisors trying to get involved with this with corresponding high professional charges. We’re hoping to keep the costs down by not using any Independent Financial Advisors. There will be charges for our work in setting these pensions schemes up and submitting returns as don’t receive any commissions from The People’s Pension.

To find your staging date go to

This is The People’s Pension website    

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