As the 31^st January tax return deadline is looming, many business focus their attention on their year-end accounts. Throughout January we have been contact by a number of businesses in and around the London area enquiring about the pro’s and con’s of a remote/online accountant. In short, a remote accountancy practice has a number of benefits:

• Save a business time - Reduced travel costs for meetings
• Constant telephone access allows issues to be solved immediately
• Lower costs - This is not always the case but without the need for face to face meetings, remote accountants can generally maintain lower costs with fixed fee pricing.

Is this method right for every business? Of course the answer is no. The main obstacle we face is that certain businesses like the thought of visiting their local accountant, so they can build up a relationship. If you are happy with your accountant, the trust you build up is important, so sometimes this will outweigh any additional fee. We often make the point that each business has completely different circumstances. Certain companies want to save both money and time and are happy to ‘take a leap of faith’ with a remote/online accountant. Other businesses prefer face to face meetings to build up a rapport with their accountant. At the end of the day it comes down to the individual or business, as no two companies are ever the same.

Don’t just take our word for it; here is what our London based clients think:

“I started using TWD because I wanted to file my tax return online and needed a time and cost-effective method of coping with CGT: you needed then, (maybe you still do), specialist software to submit CGT data online. TWD did this for me and also checked over my whole return at very reasonable cost so I’ve been more than happy to keep using them.”

Mr. Bob Howell, London

“Over the past five years my tax affairs/returns and subsequent letters were a headache, never seemed to get it right. Not any more. Your questionnaire was easy to understand and complete…I commend the polite, professional response experienced each occasion I have contacted TWD Accountants.”

Mr Irvine, Essex

Finally a few stats about us:

• We prepare accounts for over 3,000 clients per tax year.
• In 2010/11 we filed in excess of 7,500 tax returns.
• 40% of our accountancy clients are based in London or the South East.
• In our latest customer survey 97% of our clients stated they are either satisfied or very satisfied with the support they receive.

As this is my first blog of 2012, a belated Happy New Year is in order.

We have just returned back from exhibiting at the 2012 SWPP Photographic Convention in Hammersmith. The convention was a resounding success and it was great to meet up with so many of our clients.

For those photography clients who could not make it, here are a few pictures from the convention.

For more details regarding self employed tax and accounts for photographers please click here.

Here is a picture of Harpreet from Magenta Photography, who was our competition winner.

Chancellor George Osborne vowed that the Government would stick to its strict programme to protect against ‘the sovereign debt storm’.

The Chancellor announced a reduction in the UK’s economic growth forecasts, with the 2011 figure revised downwards from 1.7% to 0.9%. Alongside this was an increase in Government borrowing, with the forecast for 2011/12 rising to £127bn, and total additional borrowing amounting to £112bn over the next four years.

Mr Osborne was quick to deny recent reports that the UK is set to slip back into recession in the coming months.

Key announcements for business

• Introduction of further credit easing: Up to £20bn is being made available to small and medium-sized businesses through the National Loan Guarantee Scheme.

• The business rate relief ‘holiday’ for small firms will be extended to April 2013, and a new Seed Enterprise Investment Scheme for small businesses will offer 50% income tax relief for those investing up to £100,000 in new start-ups, together with a one year freeze on capital gains tax.

• A £940m ‘Youth Contract’ will also aim to boost employment by means of subsidised work placements for young workers.

For full details of the report visit: Autumn Statement 2011

At TWD we regularly update our tax advice section with the replies to questions submitted by both clients and non-clients.
We have recently had 2 questions submitted by someone in the entertainment industry, both of which are becoming more and more frequent.

• “Can I claim back my gym membership”; and
• “Is cosmetic surgery a business expense?”

Whilst these questions have been added to our FAQ page, given the frequency with which they are asked I thought they would benefit from a blog posting.

Can I claim back my gym membership?

If you are self employed you can claim for any expense as long as it is “wholly and exclusively” for business.

However, gym expenses are generally regarded as maintaining or restoring good health and as such are not allowable expenses. HMRC will try and treat gym expenses in the same manner as they do medical expenses.

Unfortunately this view is backed up by case law. A self-employed writer suffered an illness that prevented him from working.  Claiming his illness was a direct result of working in unfavourable conditions he made a claim for his medical bills on the basis they were connected with his professional work.  His claim was rejected by HMRC and on appeal the judge held that it was impossible to argue that medical bills represent expenses incurred wholly and exclusively for the purposes of his business as there was undeniably a personal element to his treatment.

“Can I claim for Cosmetic Surgery?”

Strangely different considerations may apply where an individual pays for cosmetic surgery. Where a person in the public eye pays for cosmetic surgery then HMRC will examine the reasons for surgery.

If the surgery is for vanity reasons no deduction will be due. Only in exceptional circumstances will an operation to change personal appearance by reversing or masking the advancing of the years not have a private purpose.

As you can see tax law does not always make sense. Always seek professional advice when dealing with your tax affairs as you can see nothing is straightforward!

If you have any questions please feel free to email us via our free online tax advice form.

At TWD we always want to help our clients stay one step ahead of the taxman.

Our small business guide is full of useful tips and information for the coming winter months.

This months winter guide includes the following articles:

Could your business benefit from R&D? Corporation Tax relief is now available on research and development revenue expenditure at varying rates.

Countdown to retirement: are you still on track? If you have ten years until you retire, or just six months, there are some simple steps that you can take to get your retirement planning on track.

Planning for a prosperous 2012: Useful guide that could make a difference to your business profits.

Other information includes:

• PAYE: Collecting Real Time Information.
• Changes to business link services
• Junior ISA limit is raised
• The move to online VAT filing
• Business Reminders for Winter - Key dates

To download our Winter Guide visit our: Limited company page.

EIGHT free tax calculators are now available for you to download for free from the Apple App store. They have been designed to help you easily calculate if you are paying the right amount of tax. The calculators include:

• Car & Fuel Benefits
• Car Mileage Allowance
• Salary Checker
• Age Related Allowances
• Working From Home Expenses
• VAT
• Redundancy
• Miles Per Gallon
  

To download visit - http://itunes.apple.com/gb/app/uk-tax-calculators/id429416790?mt=8

Our app also includes a news feed bringing you the latest tax news updates from the UK.

The calculators can also be found on our website on the following link: http://twdaccounts.co.uk/clinic/online-tax-calculator.html

Here at TWD we are constantly being asked tax related questions, via our Free online tax advice section.  As a high number have been relating to driving instructors over the last few weeks, I thought I would post some answers.

Q.  What are the most tax efficient cars?

A. There are quite a few types of car which have CO2 emissions of no more than 110g/km; including certain models of the Mini Cooper, Toyota Prius, Smart, and Fiat 500. If your company buys one of these low emissions cars new (not second hand), it can claim a tax deduction for the full cost in the year of purchase and for all its running costs.

Where the car is provided to a director or employee of the company for their own private use, or for the use of a member of their family (perhaps for son or daughter), the director/ employee will be taxed on 10% of the list price of the car.

For example a Mini Cooper 1.6D has CO2 emissions of 104g/km and a list price of £15,730. The director/employee will be taxed on £1,573 per year, and if their top tax rate is 40% this will give in an annual tax bill of £629.30. The company will also have to pay class 1A NICs of £217 per year, but that cost is tax allowable for the company. The company can also pick up the full cost of all servicing and insurance for the car with no extra tax charges.

Q. I currently pay a business subscription to Linkedin, the business networking site, to promote my driving school. It allows me to make business contacts that generate work for me. Is the Linkedin subscription a tax allowable expense for my company?

A. The Linkedin subscription is tax allowable for your company as it is a means to generate work for the business. However, there may be a benefit in kind charge for you if the Linkedin subscription is raised in your name rather than in the name of your company. If this is the case the company is paying your personal liability (the subscription fee). As Linkedin does not appear on the list of approved professional organisations whose subscriptions are tax allowable for employees, there will be a personal tax charge.

Q. I have just passed my training and started to give lessons.
What expenses can I claim against my tax?

A. There are many expenses that can be claimed against taxable income. Everyone runs their business in a different way and they will usually incur some expenditure that is particular to them.
The following list is not exhaustive but gives an indication of the general expenses that can be claimed by a MSA franchisee:
•    Motor fuel.
•    Parking and tolls.
•    Car cleaning.
•    Franchise fee
•    Postage & stationary.
•    Computer consumables.
•    Continuing professional education (not initial training costs*).
•    Bank charges on a business account.
•    Telephone/mobile phone charges.
•    Accountancy charges.

If you have expenses that are not on this list it you may be able to claim them.
Keep a full record of ALL expenses and discuss them with your accountant. They may be tax deductible
*Unfortunately the costs of training to become a driving instructor cannot be claimed against your tax.

Q. I have just bought some new clothes for work. Can I put this cost through my accounts?

A. If your clothing is protective or, as is more likely in the case of a driving instructor, has a business logo embroidered on it, the cost of buying these items could be claimed. Also, cleaning costs may be shown in the accounts. The clothing is clearly identifiable as work wear, and is ‘wholly and exclusively’ used for the business. You would not wear it other than for work.
However if you bought ordinary, everyday clothing from, say, M & S the answer is “No”. Under current legislation these items are regarded as having a dual purpose. You could wear them outside of work. They would therefore not be classed as tax-deductible expenses.

So, as always I will have to finish with the advice to ask if you are in doubt. Accountancy firms like ours specialise in looking at individual cases, and it may be the best way to save yourself some money.

Visiting our Driving Instructor section.

The National Association of Retired Police Officers, (NARPO) have teamed up with Stockport based tax and accountancy specialists, TWD Accountants, to offer free online tax advice to its members.

Being a member organisation, NARPO represents retired police officers of all ranks and police widows from forces throughout England and Wales. NARPO offer a range of services to members including advice on pensions and other issues affecting the welfare of their members.

The new online tax advice centre has been designed to provide valuable information to members who have general queries regarding their own personal tax affairs.

The company’s Director, Christine Fairbrother, said “We have worked alongside NARPO for a number of years offering our tax and accountancy services, so when the opportunity arose to provide their members with free online tax advice we were more than happy to oblige.

“The response has been terrific and the positive feedback from many NARPO members has been thoroughly worthwhile.

The Deputy Chief Executive, Steve Edwards, said ‘We are extremely grateful to TWD for providing this much needed advice service. Many of our members already use their tax accountancy services with great success. We will continue to strengthen and develop our relationship with TWD to achieve our aim of providing valuable services for our members.’

To view the NARPO tax advice centre visit:    http://narpo.twdaccounts.co.uk/

To view the TWD Accountants website visit:     www.twdaccounts.co.uk

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About TWD Accountants
TWD Accountants provides fixed fee tax and accountancy services for the self-employed and small businesses, as well as helping many thousands of employed clients with their personal tax issues, from securing tax refunds to carrying out tax health-checks. In most cases, their unique systems mean there is no need for face to face meetings, which helps maintain lower costs lower and avoiding the need for the soaring hourly charges usually associated with traditional high street accountants.

Press contact for TWD Accountants

For more information contact Sarah Auluck at TWD Accountants on 0161 968 7312 or email saraha@twdaccounts.co.uk

Over the past 12 months we have been busy developing our already highly rated accounting software TWD Online.

The updates include:

• Updated interface
• Easier navigation
• Improved VAT reporting
• Ability to delete system income and expense headings.

Also coming in 2012

Our API integration with other online business solutions, such as payroll software and invoice scanning.

To find out more  call 0800 093 9433 or  visit -  https://ukonlinebookkeeping.com/twdonline

We are also in the process of developing our very own Tax Credits calculator, which will be with you soon.

Our TWD Accountants iPhone app is now available in Apples App Store.

The Calculator apps are FREE to download and include the following:

- Car mileage calculator

- Redundancy calculator

- Salary checker calculator

- VAT calculator

Don’t worry if you are interested in another calculator as we have more in the pipeline.

Customer feedback is always much appreciated so please let us know what you think. Contact Us.