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Accountancy /Bookkeeping

Hammond Barr Accountants

It is a legal requirement imposed by HMRC.

It will ensure you don’t overpay taxes and keep an up to date record of people who owe you money and how much money you owe.

We guarantee to prepare accurate accounts and file them with HMRC with compliant software by the due dates.

Business Startups

Hammond Barr Accountants

We offer a free consultation and advise you how to structure your business. It could be as a sole trader, partnership or limited company.

In addition you are given free access to all our core service and other value added services. As an owner managed business you qualify for a twelve month reduction on our standard fee. The fee is fixed and easy payment terms are available.

VAT

Hammond Barr Accountants

Yes, it is, once your annual turnover reaches £85,000.

The standard rate is 20%; there are four different VAT rates depending on the product/ service.

There are several VAT schemes: standard accrual basis, cash accounting basis, annual accounting basis and the flat rate scheme which generates a profit for your business.

Yes you can, but this would be determined by whether or not it is to your advantage.

As true experts in helping small and medium sized owner managed businesses we can offer specialised advice in all areas of VAT.

CORPORATION TAX

Hammond Barr Accountants

We will advise you of any corporation tax due and what actions to take to reduce the amount payable.

Hammond-Barr will advise you how to declare this and whether or not to carry it back to a previous accounting period to recover tax paid.

Limited Companies

Hammond Barr Accountants

A limited company is a separate legal entity, unlike a sole trader, where profits are attributable to the individual.

The profits of a limited company are charged at the corporation tax rate of 19% (2021 – 2022) whereas profits on a sole trader are charged at 20% up to £50,270 and then 40% thereafter.

Yes, you can take a tax-free wage up to £12,500 each year and dividends from the surplus profit. The first 2,000 per annum is tax-free and £7.5% thereafter up to £37,700.

Yes, shares can be allocated to anyone of your choice and then can receive dividends from the company profits.

Sole Traders /PARTNERSHIPS

Hammond Barr Accountants

If your turnover is below £50,000 a year it is generally more beneficial to be a sole trader.

Your annual profit (income less expenditure) is taxed at the rate of 20% up to £37,700. This is declared on your self-assessment tax return and added to any other income.

The tax is paid in two instalments of 50% by 31 January and 31 July each year.

This is normally 12 months from the date of commencement of trading.

Yes, unlike a limited company, profits are taxed even if you do not take money out.

As a sole trader you will pay Class 2 NIC on profits above £6,515 and Class 4 NIC where profits exceed £9,568 (2021 – 2022)

SELF ASSESSMENT TAX

Hammond Barr Accountants

As a sole trader or partnership your annual profits will be liable to income tax.

A set of accounts are prepared and then your self assessment tax return can be completed and filed online at HMRC.

The standard rate is 20% (to £50,000 per year). It is 40% from £50,000 to £110,000 and 45% above £110,000.

Yes. Class 2 NIC is due on profits above £6,475 (2020-21) and is charged at £3.05 per week. Class 4 NIC is payable when your profits exceed £9,500 per year and is charged at 9% (2020-21)

By 31 January and 31 July following the end of the tax year (5 April).

HMRC TAX ENQUIRIES

Hammond Barr Accountants

These are generally random and can happen at any time. They could be for your PAYE records, tax claims (both personal income and corporation tax) or your VAT claims.

It is therefore paramount that not only should all books and records be accurate but they should also be readily available should an HMRC inspector wish to see them.

Let Hammond-Barr prepare accurate accounts and ensure all your books and records are up to date.

You have the right to appeal within 30 days, but this is a complex area and requires the expert help we can provide.