Accountants are frequently underappreciated for the value they provide to a company and their role in helping it grow and develop. Of course, we deal in the areas of tax and compliance. But there’s so much more we can do. 

We can provide strategic advice and suggest creative ways to save money or increase revenue. Administrative tasks that divert your attention away from your primary business will be eliminated or automated. For tiny businesses, we’re great troubleshooters and strategic counselors. We can assist you in running your company with greater clarity and confidence. Here are 12 services we may provide for your company that you may not be aware of: 

Table of Contents 

1. Launch a start-up
2. Help with business strategy
3. Fix your cash flow
4. Manage your debt
5. Deal with unpaid invoices
6. Write and pitch loan applications
7. Budget smartly
8. Get you staffed up
9. Set up your cloud accounting software
10. Help you manage stock
11. Make your business more efficient
12. Unlock the power of technology

Final word 

1. Launch a start-up

It’s an exciting moment to start a new business, but it requires more than a brilliant idea. You must be confident that it will be profitable and successful, and you may need to persuade investors and lenders of this. That is something we can assist you with. 

We can assist you in putting your idea to the test, determining your startup and operating costs, and generating accurate income estimates. We also know which lenders are most eager to help, which saves you time and directs you to the correct individuals for financing, before assisting you in perfecting your elevator pitch so you can impress those lenders. 

2. Help with business strategy

There are so many moving parts in a business. We can help you get all those parts moving together smoothly. We’ll work with you to set goals – personal, professional, and financial – and give you tools to measure your progress. You’ll end up with a set of key performance indicators (KPIs) that tell you how well your business is doing. And if things aren’t going as planned, we will help you troubleshoot the issues, test solutions, and reset your KPIs as needed. 

3. Fix your cash flow

Sometimes capable businesses struggle because they run out of money at the wrong time. Even a highly active business won’t last long if payments are slow to come in, or expenditure is too high. 

As accountants, we know that revenue ebbs and flows, and that outgoing costs do the same. We can help you predict the effect on cash flow and come up with strategies to manage the situation. We’ll work with you to come up with a spending plan that ensures there is always money in reserve in case of the worst-case scenario. It will help make payday less stressful, supplier relations stronger, and your life easier. 

4. Manage your debt

There are two types of debt: good debt and bad debt. An accountant can assist you in distinguishing between the two. We’ll uncover the most cost-effective borrowing options for your company, balancing repayment flexibility and low-interest rates. We’ll also help you with refinancing if you need it. 

We’ll also recommend when surplus funds should be utilized to repay loans and when they should be reinvested in the company. We’ll do so by looking at the mathematics behind your business and how your debt is organized in order to design a customized approach for you. 

5. Deal with unpaid invoices

Unpaid bills are a part of life in the corporate world. You may not always have the time to pursue debtors, but you cannot afford to ignore the issue. We can help you get rid of your headache. 

When a customer’s bill is due – or overdue – we can set up invoice systems that send automatic reminders to them. Businesses that do not react may be contacted. If invoices are still overdue after this, we can arrange debt finance, in which a company will purchase your unpaid invoices and pursue payment on your behalf. 

6. Write and pitch loan applications

Because obtaining a loan might be difficult, a smart accountant will do more than just compile your numbers. That is exactly what we will do, as well as assisting you in crafting an engaging story. 

Lenders want to see sound financials and forecasts, but an accountant can help you tie it all together in a presentation that sells your company’s bigger picture. We’ll come up with creative ways to present your figures that aren’t just spreadsheets, so your lender can see the potential. We’ll also rely on advanced forecasting techniques that are trusted by loan officers. 

7. Budget smartly

Budgeting in detail can consume a lot of your time and effort. As a result, some companies rely on a hazy set of data that are only guesses. We can assist you in creating a precise and accurate budget that reflects your true business costs. We’ll know how much money you have available to reinvest, and you’ll know how much money you have available to pay yourself. 

8. Get you staffed up

Yes, we can assist you in finding the perfect employees for your company. 

We’ll figure out what kind of hire will have the most impact on the company. We’ll then calculate the cost of hiring, training, and paying a person to ensure you can afford it, and we’ll assist you with payroll, including government paperwork, tax, and insurance compliance. 

9. Set up your cloud accounting software

Your accountant can automate a lot of your business’s accounting so that sales and expense data flows directly into your accounts. We can also provide you with invoicing systems that tell you what’s been paid and what hasn’t. 

Some examples of automated systems that we can implement for you are: 

• cash flow dashboards 

• KPI tracking, so you can check overall business performance 24/7 

• automated accounts payable, so you’re always on top of expenses 

• mobile accounting apps that allow you to manage your finances from the road 

10. Help you manage stock

Do you waste money writing off outmoded or broken products, or do you spend a lot of money on storage? Or do you ever lose money due to a lack of inventory? Inventory management is crucial to running a successful business. 

Your accountant will figure out how much it costs to keep inventory on hand and devise ways to save money. We’ll analyze your sales data to assist you to forecast stock requirements so you can schedule precise orders. We can even set up software that monitors stock levels and places auto-orders for things that are about to run out. 

11. Make your business more efficient

Everything costs money in business. Storage, utilities, staff. If you don’t have the time or expertise to think about these costs strategically, we can do that for you. We identify unnecessary costs in your business and help you develop more efficient ways of working. 

12. Unlock the power of technology

Smart business software can automate a lot of the things you do manually. We can set up affordable software for things like: 

• staff scheduling and time recording 

• point of sale 

• taking payments 

• customer relationship management 

• invoicing 

• payroll 

This is one of the most important things we can do for you. Automating business processes saves time, lowers costs, and ensures everything runs smoothly. 

Final word 

You’ll be surprised at how much of a difference a good accountant can make. We can provide your company with a significant boost in capabilities and insight. 

So, what exactly is an accountant’s job? Basically, everything you require. Because if we can’t solve your business problem ourselves, we’ll refer you to someone who can! 

Our talented and friendly team will review your current business operations and numbers and advise you on the best ways to cut unnecessary expenses, maximize profits, and expand your business, based on nearly ten years of industry experience working with businesses ranging from start-ups and freelancers to SMEs. 

If you are looking for an accountant you can rely on, call us on 020 3002 0436 or send an email to [email protected] 

If your company is organized as a limited liability company, paying yourself dividends in addition to a salary is usually the most tax-efficient way to take money out. We’ll discuss how often you can collect dividends and how the procedure works to help you manage the legal requirements of paying yourself from your business. 

Table of Contents 

What is a dividend? 

How much can my company pay as a dividend? 

When can my company pay a dividend? 

The timing of dividend payments may affect how much tax you pay 

When do I pay tax on dividend payments? 

How does tax on dividends work? 

What about the tax-free Dividend Allowance? 

What are the dividend tax rates and thresholds for the 2021/22 tax year? 

What is a dividend? 

A dividend is a percentage of a company’s profit that is distributed to its shareholders. After all taxes, expenditures, and liabilities have been paid, profit is essentially what is leftover in the business. This leftover money, often known as retained profit,’ can grow over time. Watch the video below to learn more about using dividends to pay yourself from your limited company. 

How much can my company pay as a dividend?   

There is no limit or defined amount, and you can even pay different dividends to your shareholders. Dividends are paid from a company’s profits, therefore the amount paid may vary based on the amount of profit available. Dividend payments cannot be made if the company has no retained profit. You’ll almost certainly land up in hot water with HMRC, with penalties to pay! 

It’s critical to make sure there’s enough money in the firm to handle day-to-day cash flow before paying yourself or your shareholders a dividend. It’s also a good idea to leave some earnings in the business after paying dividends so that cash can be used for other purposes, such as asset upgrades or investments in growth. 

When can my company pay a dividend? 

There are no hard and fast restrictions concerning how often you can pay a dividend, so you can pay yourself or your shareholders as often as you choose. 

Taking ad-hoc payments at odd times throughout the year, on the other hand, can sometimes signal that there are problems with the way money is managed. After calculating what profits are leftover, most corporations disperse them quarterly or every six months. 

The timing of dividend payments may affect how much tax you pay 

Profits can fluctuate substantially from year to year for many firms, especially in the aftermath of the epidemic. If you have a particularly lucrative year, you may decide to issue dividends on a tactical basis to help you get through the tough times. This can also result in a more consistent income pattern, making personal financial planning less stressful and possibly preventing you from paying a higher tax rate. 

For example, if your company makes £50,000 in year one and £10,000 in year two, its profits will total £60,000 after two years. Rather than paying a huge payout one year and a modest dividend the following, you may opt to pay £30,000 in dividends every year. 

This means you’ll have a more regular income, and if all your income is from these dividend payments, you’ll be under the threshold for basic rate tax each year. 

When do I pay tax on dividend payments? 

Dividends aren’t taxed at a source like a wage, so you’ll have to declare them on your Self Assessment tax return. Any tax owed on dividends is usually due to HMRC by January following the end of the tax year in which the payout was received. 

For example, if a dividend is given in late March 2020, the tax is due in January 2021. A dividend paid in late April 2020 will be taxed in the following tax year, so you won’t have to pay it until January 2022 (but you can file your tax return early!). 

How does tax on dividends work? 

Dividends are paid from the company’s after-tax profit, so it doesn’t have to pay taxes on any dividends it pays out. Dividends must typically be declared on a Self Assessment tax return, and tax must be paid appropriately. If this is your first time using Self Assessment, we have a guide to help you get started! 

To be more tax-efficient, business owners who operate as a limited company pay themselves a combination of a regular wage and dividend payments. The most tax-efficient compensation for a company director is determined by the number of you in the firm. 

What about the tax-free Dividend Allowance? 

You are able to earn a maximum of £2,000 in dividends in the 2021/22 tax year before any Income Tax is due. This is in addition to your Personal Tax-Free Allowance of £12,570 in the 2021/22 tax year. 

What are the dividend tax rates and thresholds for the 2021/22 tax year? 

For the past three years, the dividend tax rates have stayed stable. After you’ve used up your $2000 tax-free Dividend Allowance and your Personal Allowance, all more dividends you receive, regardless of source, will be taxed. 

The amount of personal tax you must pay on dividend income is determined by your tax bracket (sometimes known as your “marginal rate”). Dividends are tax-efficient because the rates aren’t as high as income tax rates. 

Tax Threshold Name	Tax Threshold Values	Rate of Dividend Tax
Basic-rate	£0 – £37,700	7.5%
Higher-rate	£37,701 – £150,000	32.5%
Additional-rate	£150,001+	38.1%

  

It’s critical to understand how dividends and taxes work, as well as to keep detailed financial records for both the business and your personal income. If you can’t verify that money you get from your company is a dividend, HMRC may treat it as salary payment and tax you accordingly. Because the rate of income tax is higher than the rate of dividend tax, it can be a costly mistake, especially if you also have to pay a penalty! Ouch. 

Learn more about our range of online accountancy services for businesses, or call 020 3002 0436  for a chat. Don’t forget, you can also grab an instant quote online. 

BADR, formerly known as Entrepreneurs’ Relief, is a capital gains tax (CGT) relief designed to encourage people to expand and invest in their enterprises. It is a key source of relief for higher and extra rate taxpayers. Although its advantages have been decreased and it has been threatened with elimination in recent years, BADR has survived to date and continues to give tax savings to company owners. 

On the sale of company assets, BADR is offered, lowering the CGT rate on qualified gains to 10%. (compared to the current standard rate of CGT of 20 percent ). Gains are limited to a lifetime ceiling of £1 million, therefore the present maximum possible tax savings under BADR is £100,000. 

Individuals selling their personal enterprises or partnership interests, as well as directors and workers selling shares in the firm (or group of companies) for which they work, are eligible for the exemption. Trustees may be eligible for BADR under specific instances, although this isn’t covered in depth in this factsheet. 

BADR is not accessible to corporate bodies, such as corporations, and because the relief is only available on the sale of business assets, BADR will not be available to taxpayers on the sale of investment assets. 

Disposals that are BADR-eligible 

The disposal must fall into one of the following categories to qualify for BADR: 

• A substantial sale of a company’s assets. 

• A waste disposal that is linked to a material disposal. 

A substantial sale of a company’s assets 

When evaluating a BADR claim, this is the group that most people fall under. There are three categories of ‘business assets’ that may be eligible for tax relief: 

• A sole trader or partnership business in its entirety or in part. 

• When a firm ceases to operate, an asset utilised in the business is sold. 

• A company’s shares or securities (for example, lending stock). 

Each of these groups has its own set of rules for what constitutes a “material disposal.” 

A single trader or partnership firm in its entirety or in part 

When a person who owns a business, whether as a single trader or as part of a partnership, sells their share of the firm, they may be eligible for BADR. Only assets used in the company at the time of the disposal will be eligible for relief. 

To be a material disposal, you must: 

The taxpayer must have held the business for at least two years before to the date of disposal, and the disposal must reflect either the whole business or, if only a portion of the business is disposed of, a business capable of being carried on in its own right. As a result, a single asset sale is unlikely to be eligible for BADR. 

Property enterprises, with the exception of those that qualify as furnished holiday lettings businesses, are not eligible for BADR. 

Assets utilised in a firm at the moment it is no longer in operation 

There is a time lag between the end of a business and the disposition of the assets utilised in the firm in some cases (especially for single traders). 

BADR may be available on the sale of assets in this situation if the following material disposal requirements are met: 

• The asset must be sold within three years of the business ceasing, and the business must have been held by the taxpayer for at least two years previous to ceasing. 

It’s worth noting that the asset just has to have been in use by the firm at the time of cessation to qualify for relief, not necessarily throughout the whole two-year ownership term. 

A company’s stock or securities. 

Directors and workers who are selling shares or securities in their firm (or group of companies) can use BADR. 

Shares and securities in firms with considerable investment-related operations (such as most family investment companies) will not qualify for BADR since the relief is limited to trading companies and groups. 

The following requirements must be satisfied during the two-year period ending with the date of disposal in order to be considered a material disposal: 

• The taxpayer must work for the firm or another company in the same group as an employee or director. Part-time employees might qualify for the relief because there is no minimum hours restriction. 

• The ‘personal company’ in which the shares (or securities) are held must be the taxpayer’s. This implies the taxpayer must own at least 5% of the company’s ordinary share capital (based on nominal value) and voting rights, and one of the following options: 

– Have a beneficial interest in at least 5% of the company’s distributable earnings and 5% of the assets available to equity investors in the event of a winding up, or 

– Be entitled to at least 5% of the profits from the sale of the whole ordinary share capital of the firm (in determining whether this test is met at any time during the requisite two-year period, the whole of the ordinary share capital is deemed to be sold at its market value on the last day of that two-year period). 

• The business must be a trade firm or a holding company for a trading firm.  

A trading firm is defined as one that is “carrying on trade operations whose activities do not involve, to a considerable amount, activities other than trading activities” according to the law. 

– Any investment-related operations, such as property enterprises and investment portfolios, shall be considered activities other than trading. 

– According to HMRC, a “significant extent” is defined as “greater than 20%.” In reality, the 20% test is applied to a variety of criteria, with the results varying depending on the facts and circumstances of each instance. However, parameters including as turnover, asset base, managerial time, and spending are usually taken into account. 

Additional factors to consider 

• Individuals who own Enterprise Management Incentive (EMI) shares obtained through the execution of a legitimate EMI option are exempt from the aforementioned requirements. If the firm is not the taxpayer’s “personal company,” BADR is eligible for EMI shares if the option was given at least two years before the disposal (eg the taxpayer does not need to have either physically held the EMI shares for at least two years prior to disposal or meet the 5 percent personal company tests above). Exit-only EMI options, in which the option is exercised and the EMI shares are bought only before a sale, may qualify for BADR. 

• Following certain share offerings that dilute a taxpayer’s shareholding below 5%, they may no longer qualify for BADR. In these circumstances, the taxpayer may be able to make an election to preserve their right to BADR on the gain that has accrued up to that point in time, with the gain chargeable at the 10% BADR rate either at the time of the dilution or at a later disposal of the shares (or securities), assuming the other BADR qualifying conditions are met. 

• In some cases, BADR may be offered on shares (or securities) when the firm has ceased to trade in the three years preceding the disposal. Throughout the two-year period leading up to the date of trade termination, the shareholder must fulfil the different BADR qualifying requirements. 

• There are specific rules that consider a taxpayer’s exchange of shares in one company for shares or securities in another business as not being a disposal of shares for CGT purposes, deferring any capital gain otherwise accruing. If the additional shares or securities bought do not fulfil the BADR qualifying requirements, it may be advantageous for the individual to opt out of the ‘no disposal’ approach, allowing them to crystallise the gain and take advantage of BADR on the share market. 

• BADR, as previously stated, can be applied to shares and securities owned by trading businesses. Because the 5% ‘personal company’ criteria includes rights corresponding to ordinary share capital and voting rights, owning securities (such as loan stock) on their own would not typically qualify for BADR. However, if these assets are held alongside regular shares that fulfil the 5 percent threshold, the securities themselves may be eligible for BADR. 

Disposals that are related 

A taxpayer who has made a ‘material disposal’ of business assets as part of their exit from the company may be eligible for BADR on a subsequent, related disposal of business assets (the ‘associated disposal’). 

Partners or people who own shares (or securities) in a personal corporation are eligible for the relief. Although sole traders are not eligible for this benefit, they may be eligible for BADR on the sale of assets utilised in their firm at the time they stopped to operate, as described above. 

There will be a disposal linked with it, in which: 

• A taxpayer disposes of a business or shares/securities in a corporation in a substantial way. Although there are few exceptions, this generally means that the individual’s ownership of the firm must be significantly reduced: 

– Each partner must sell at least 5% of the partnership’s assets. 

– Shareholders (or security holders) must sell at least 5% of the company’s capital stock (or securities). 

• The sale is done as part of the individual’s exit from the company. HMRC considers this to be a sale of the firm, therefore the individual can continue to work for the company as long as their ownership stake has been considerably decreased. 

• Prior to its disposal, the asset had been used in the firm for at least two years and had been held by the individual for at least three years. 

If the asset was not used in the business for the whole ownership period, or if the firm paid rent for the asset’s usage, the relief available may be limited. 

Other factors to consider 

Making a BADR claim 

BADR must be claimed by the 31st of January following the tax year in which the asset was sold. For example, if a disposal occurs during the tax year 2022-23, a BADR claim must be filed by January 31, 2025. 

Taxpayers often submit a claim for BADR as part of their self-assessment tax return. 

Assurance that BADR criteria have been satisfied 

Individuals cannot apply to HMRC for approval certifying that BADR will apply to a disposal. 

Couples and civil partners’ planning 

Under BADR, each spouse has a £1 million lifetime gain cap. There may be planning possibilities to maximize the possible relief under BADR if spouses or civil partners both have a stake in a firm or asset where only one of them can qualify for BADR. 

Once a year, every business must provide a confirmation statement to Companies House. It ensures that the information they have about your business is accurate. 

A step-by-step guide to registering your business with Companies House. 

Self-employed people’s instructions to completing Self Assessment tax returns 

How to Write a Letter for Late Payment 

What kind of commercial insurance do I require? 

You might be punished if you don’t send the confirmation statement to Companies House on time, so make sure you know what you need to do and when. 

What is a confirmation statement from Companies House? 

In June 2016, Companies House implemented the yearly confirmation statement. It’s intended to make the process of reporting information about your firm more efficient. 

Simply put, the confirmation statement exists to ensure that the information Companies House has about your company is accurate. 

Even if the business or partnership is dormant, all limited corporations and limited liability partnerships must provide a confirmation statement once every 12 months (at the very least). 

You had to give Companies House a snapshot of your company once a year before the government established the confirmation statement. All you have to do now is ‘check and confirm’ that all of the information they have is correct. 

Even if nothing has changed, you should double-check your company’s details to make sure they’re all right. 

What is the procedure for submitting a confirmation statement form? 

According to Companies House, the simplest approach to provide them the information is to fill out the confirmation statement form online. 

If you need to update your company’s information, you may do so in the web form’s ‘extra information’ area. It may be used to update your: 

Statement of capital trading status of shares exemption from keeping a record of individuals with substantial control shareholder information Standard Industrial Classification (SIC) code. 

You may use the Companies House tool to see what information Companies House holds on your firm. 

What is the cost of a confirmation statement? 

Not only would filing the confirmation statement online save you time and money, but it will also save you money. It costs £13 to submit one during a 12-month period, and you won’t have to pay again if you file another within that time period. 

Filing a paper form, on the other hand, would set you back £40, so if you can, submit your confirmation statement online. It also comes with pre-populated data, making it more faster and easier to complete. 

Is it necessary for me to provide a confirmation statement? 

Companies House requires a confirmation statement from you at least once a year, at any time throughout your review term. 

A Review period’ may appear complicated, but it isn’t too tough to comprehend. The evaluation period for new businesses begins on the day of incorporation and concludes 12 months afterwards. If your business was founded on January 1, 2018, the evaluation period would conclude on December 31, 2018. 

The evaluation period for existing businesses begins the day after you file your most recent confirmation statement and ends 12 months afterwards. 

You can submit your confirmation statement early, kicking off a fresh 12-month review period. 

What if I’m late with my confirmation statement? 

Within 14 days following the conclusion of your review period, you must provide your confirmation statement. It’s critical that you remember, since your business and its officials might be punished, and your firm’s registration could be revoked. 

Ready to set up your cover? 

As one of the UK’s biggest business insurance providers, we specialize in public liability insurance and protect more trades than anybody else. Why not take a look now and build a quick, tailored quote? 

The UK Government’s plans for taxation and COVID-19 support packages targeted at firms and individuals during the economy’s phased re-opening were laid out in Chancellor Rishi Sunak’s Budget on March 3rd. 

The UK has borrowed an unprecedented £280 billion so far to safeguard critical areas of the national economy and the spending looks set to continue well into 2021. 

Due to the faster COVID-19 vaccine program, the Office for Budget Responsibility (OBR) estimates that the UK’s economic recovery will be “swifter and more sustainable,” and that the UK economy will rise by 4% in 2021, rising to 7.3 percent in 2022. By mid-2022, the economy will have recovered to its pre-pandemic size, six months earlier than previously predicted. 

The key announcements made in The Budget relating to the UK’s business community and the self-employed include: 

Table of Contents 

COVID-19 Support 

Self-Employment Income Support Scheme 

Furlough Scheme 

Restart Grants for England 

Recovery Loan Scheme 

Business Rates Reduction (England-only) 

VAT for hospitality, holiday accommodation, and attractions 

Stamp Duty Holiday 

Mortgage Guarantee Scheme 

Apprentices 

Taxation 

Individuals 

Income Tax Personal Allowance and the basic rate limit 

Inheritance tax (IHT) 

Pensions – lifetime allowance 

Capital Gains Tax 

Universal credit 

Alcohol, fuel, and tobacco duties 

Companies and Small Businesses 

Corporation tax 

130% super-deduction tax relief 

Losses 

Research & Development (R&D) 

Help to Grow Scheme 

COVID-19 Support 

Budget 2021 contained a number of extensions to the government’s existing COVID-19 assistance packages, as well as a number of new initiatives and incentives focused on safeguarding British jobs and livelihoods. Despite expanding the eligibility for the Self-Employed Income Support Scheme (SEISS), the Budget offered little consolation to the “forgotten millions” of freelancers and small businesses who continue to fall between the cracks of the SEISS and the Coronavirus Job Retention Scheme (CJRS). 

Self-Employment Income Support Scheme 

The fourth SEISS grant, covering February to April, will be paid in line with previous SEISS grants at 80% of average trading profits, up to a maximum of £2,500 a month. 

The government’s funding will be tapered down in the fifth and final SEISS grant, which will run from May to September, focusing mostly on individuals who are still severely afflicted by the pandemic. Individuals whose turnover has decreased by 30% or more will continue to earn 80% of their three-month average trading profits, up to a maximum of £7,500. Where turnover has fallen by less than 30%, then the grant received will only be 30% and this will be capped at £2,850. 

Individuals who were newly self-employed in the 2019/20 tax year were unable to receive the first three SEISS grants. However, since the deadline for 2019/20 self-assessment tax returns has elapsed, the Chancellor is making this demographic eligible for the fourth and fifth SEISS grants. 

Furlough Scheme 

Since the first nationwide lockdown in March 2020, the Coronavirus Job Retention System (commonly known as the furlough scheme) has protected over 11 million jobs. The furlough arrangement was supposed to end at the end of April 2021, but the Chancellor decided to prolong it until September. For hours not worked, employees will continue to receive 80% of their present income. 

Crucially, employers will be required to pay 10% towards the hours their employees cannot work in July, followed by 20% in August and September. This is in addition to the employer’s national insurance and pension contributions they are already paying on hours not worked by employees. 

Another key announcement was that eligibility for claiming under the furlough scheme will change from 1st May 2021. From that date an employer can claim for those who were employed on 2nd March 2021, as long as a PAYE RTI submission was made between 20th March 2020 and 2nd March 2021, notifying a payment of earnings for that employee. 

Restart Grants for England 

The government is creating Restart Grants, which are open to businesses across England, to help non-essential merchants, as well as the hotel and leisure sectors, reopen. 

Non-essential retail firms can apply for up to £6,000 in cash subsidies per location, while hospitality, housing, leisure, personal care, and gym enterprises can apply for up to £18,000 per premises given their later reopening date. 

Recovery Loan Scheme 

With the deadline for applications under the Coronavirus Business Interruption and Bounce Back Loan Schemes set for March 31, 2021, eligible UK firms will welcome the launch of a new Recovery Loan Scheme in today’s budget (RLS). 

Until the end of the year, UK firms of any size can apply for loans or overdrafts ranging from £25,000 to £10 million. Invoice and asset finance will also be available for amounts ranging from £1,000 to £10 million. The new scheme’s financing would be backed by an 80 percent government guarantee, encouraging banks to continue lending with confidence. 

Business Rates Reduction (England-only) 

The news that the 100 percent business rates holiday will be extended until June 30, 2021, has given a big boost to eligible retail, restaurant, and leisure enterprises across England. For the balance of the 2021-22 tax year, the Chancellor indicated that business rates will be discounted by two-thirds, subject to caps for bigger enterprises. 

VAT for hospitality, holiday accommodation, and attractions 

The reduction in VAT to 5% for the UK’s tourism and hospitality sector has been extended until 30th September. After this period, VAT for these sectors will rise to 12.5% for a further six months, before returning to the standard rate of 20% from April 2022. The Chancellor believes this VAT commitment will support 150,000 firms in the hospitality and tourism sector that employ over 2.4 million people. 

Stamp Duty Holiday 

The stamp duty holiday in England and Northern Ireland has been extended until 30th June, enabling the huge backlog of transactions to complete before midsummer. Stamp duty land tax (SDLT) remains suspended on the first £500,000 of all property sales. 

Beyond 30th June 2021, the nil rate threshold for SDLT will be set at £250,000 until 30th September 2021 before returning to its usual threshold of £125,000 on 1st October 2021. 

Mortgage Guarantee Scheme 

The Chancellor also announced the introduction of a new low-deposit mortgage guarantee scheme, ushering in a new era of mortgages with a loan-to-value (LTV) of 95 percent. Since the outbreak of the coronavirus, most mortgage lenders have been hesitant to give mortgages with a loan-to-value ratio of more than 90%, forcing buyers to put down a 10% deposit. 

The Government-backed scheme provides certainty to lenders to broaden their eligibility criteria to buyers with only modest deposits. 

The new 95% mortgages available under the Mortgage Guarantee Scheme will be available on properties up to a value of £600,000. 

If they desire, all buyers will be able to lock in their initial mortgage rate for at least five years under the scheme. The scheme, which will be accessible for new mortgages until December 31, 2022, will expand the availability of mortgages for persons with small deposits on new or existing houses. 

Apprentices 

From April 2021, the financial incentive for employers in England to hire new apprentices will rise from £1,500 to £2,000 per trainee, depending on their age, to £3,000 per apprentice. This is on top of the existing £1,000 payment for all new 16-18-year-old apprentices, as well as those under 25 with an Education, Health, and Care Plan. 

A further £126 million has been set aside by the government for a new traineeship scheme aiming to enable more 16-24 year-olds to gain work placements in the 2021/22 academic year. In the next months, this expenditure is expected to fund the hiring of 40,000 more traineeships. 

Taxation 

The Chancellor has committed to continue to support the UK recovery but has also taken steps to balance the books and reduce the record deficit spending. 

Individuals will be hit with a freeze on many allowances and personal tax rate bands. 

While the raised corporate tax rate to 25% will be unwelcomed by businesses, the fact that it will not take effect until April 2023 will be welcomed. Smaller businesses will profit from the new Small Profits Rate, with only 10% of businesses likely to pay the new higher rate of 25%. 

Businesses will also need to plan so they make maximum use of the new loss carry-back rules and a new temporary super-deduction for qualifying capital expenditure, which is available for companies. 

We have highlighted below some of the main changes for individuals, companies, and small businesses. 

Individuals 

Income Tax Personal Allowance and the basic rate limit 

The Personal Allowance and basic rate income tax limit are to be frozen at their 2021/22 levels for the next five years (up to and including 2025/26). 

The Government intends to set the Personal Allowance at £12,570, and the basic rate limit at £37,700. 

The point that you start to pay a higher rate tax, known as the higher rate threshold (the Personal Allowance added to the basic rate limit) will therefore be £50,270 for these years. 

The National Insurance contributions Upper Earnings Limit and Upper Profits Limit will remain aligned to the higher rate income tax threshold at £50,270 for these years. 

Inheritance tax (IHT) 

The Government intend to maintain the IHT tax-free thresholds and the residence nil rate band taper available for Inheritance Tax at their 2020/21 tax year levels for the next 5 years (up to and including 2025/26). 

This means qualifying estates can continue to pass on up to £500,000 and the qualifying estate of a surviving spouse or civil partner can potentially continue to pass on up to £1 million of assets without an Inheritance Tax liability. 

Pensions – lifetime allowance 

There is a limit on the total value of pension benefits you can build up without getting a tax charge when you come to draw your pension. This limit is known as the lifetime allowance and is currently £1,073,100. The Government intends to remove the link to the Consumer Price Index increase for the next five years and freeze the standard lifetime allowance at £1,073,100. 

Capital Gains Tax 

The Government intends to freeze the Capital Gains Tax annual exempt amount at its current level of £12,300 for individuals and personal representatives and £6,150 for most trustees of settlements for the next 5 years (up to and including 2025/26). 

Universal credit 

The £20-a-week Universal Credit uplift will continue for an additional six months. 

Alcohol, fuel, and tobacco duties 

Planned increases to alcohol duties have been suspended for a second year in succession and fuel duty has also been frozen for the 11th consecutive year, which will be welcome news as the economy begins to re-open. 

Tobacco duty had previously increased by 2% plus inflation, with the rate for hand-rolling tobacco increasing by 6% plus inflation. 

Companies and Small Businesses 

Corporation tax 

Corporation tax rates are to set rise from 19% to 25% in April 2023. The Government will introduce a new Small Profits Rate of 19% for companies with annual profits of £50,000 or less. Companies with profits between £50,000 and £250,000 will pay tax at the main rate of 25% reduced by a marginal relief providing a gradual increase in the effective Corporation Tax rate. 

130% super-deduction tax relief 

In a bid to encourage capital expenditure and business growth, the Chancellor has unveiled a new ‘Super Deduction’ tax relief. 

This relief will only apply to companies and will not be available to sole traders or partnerships. 

This measure will temporarily introduce increased reliefs for expenditure on plant and machinery. For qualifying capital expenditure incurred from 1st April 2021 up to 31st March 2023, companies can claim in the period of investment: 

• a super-deduction providing allowances of 130% on most new plant and machinery investments that ordinarily qualify for 18% main rate writing down allowances 

• This will generate an effective reduction in tax of 24.70p for every £1 spent 

• the first-year allowance of 50% on most new plant and machinery investments that ordinarily qualify for 6% special rate writing down allowances (items such as integral assets like hot and cold water systems) 

• This will generate an effective reduction in tax of 9.5p for every £1 spent 

The annual investment allowance (AIA) limit will be £1 million for the period from 1st January to 31st December 2021. 

As the super deduction will not be available to sole traders and unincorporated businesses, they will continue to claim the AIA on eligible capital expenditure. 

It is worth noting that companies with special rate expenditure will only benefit from a 50% allowance. They may be better off allocating the AIA to special rate assets instead. 

Losses 

The trade loss carry-back regulations for unincorporated enterprises and organizations will be temporarily extended from one year to three years to assist viable businesses that have found themselves in a loss-making position. 

Unincorporated enterprises and corporations that aren’t members of a corporate group will be permitted to carry back losses of up to £2 million in 2020/21 and 2021/22 groups. 

Losses for companies that are members of a corporate group may be limited to £200,000 in some cases, although the group, as a whole, should still be entitled to the £2 million caps. 

Research & Development (R&D) 

For accounting periods commencing on or after April 1, 2021, the R&D tax credit for small and medium-sized firms will be capped at £20,000 plus three times the company’s total PAYE and NIC liabilities. 

In the budget, the Chancellor also announced the start of a wide-ranging consultation on research and development (R&D) tax relief to ensure that the UK remains a competitive place for cutting-edge research and development. 

Help to Grow Scheme 

As part of the Chancellor’s vision for an investment-led recovery, the new Help to Grow scheme will provide industry-leading support to growing businesses. The Help to Grow Management program will offer world-class management training via business schools, with the Government contributing to 90% of training costs. Meanwhile the Help to Grow Digital program will provide free expert training and will be delivered by a combination of a voucher covering up to 50% of approved software costs up to a maximum of £5,000 with free online impartial advice. 

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred. 

Table of Contents 

Tax on Cryptocurrency 

How are Cryptoassets taxed? 

Income Tax 

Capital Gains Tax 

What about forks, stakes, and airdrops? 

Cases that are unique and difficult to solve 

Residency and Domicile 

Summing It Up 

Tax on Cryptocurrency 

The rapid growth in cryptocurrency and distributed ledger technology has seen an influx of new cryptocurrency businesses, traders, and investors which has attracted significant attention from HMRC and other tax authorities worldwide. 

As a result, HMRC is actively enquiring into crypto businesses, traders, and investors to ensure that all individuals and businesses involved in cryptocurrency pay their fair share. Ensuring cryptocurrency businesses, traders and investors are structured properly is paramount to keeping tax-efficient and remaining compliant with HMRC. 

How are Cryptoassets taxed? 

Key financial organizations do not regard crypto assets to be cash or money. Cryptoassets are treated similarly to traditional assets such as stocks in terms of taxation and will be taxed appropriately. 

Tax is levied on the underlying activity of buying or selling bitcoin. As a result, crypto traders and investors must evaluate a wide range of activities, from simple purchases to complex trades. and sell orders to hard forks, airdrops, staking, and the like. 

The position is made more complicated as the industry develops with emerging unique and complex cryptocurrencies such as gaming and gambling platforms and the evolution of non-fungible tokens and hybrid tokens used for specific purposes. 

If you are not a tax resident in the UK or do not have a domicile in the UK then you can benefit from favorable tax rules. 

Income Tax 

Income tax is generally applied to individuals who are buying and selling, or receiving cryptocurrency, as part of a trade. 

The most visible is the ‘day-trader,’ who is aggressively buying and selling crypto assets with the goal of making a short-term profit. Even in these situations, it can be difficult to be classified as a ‘trader,’ and HMRC generally accepts that individuals will be liable to the lower capital gains tax rates (see below).  

Individuals must acquire and sell crypto assets with sufficient regularity, level of organization, intention, and sophistication that the conduct amounts to a financial trade in and of itself to be classified as trading. If the trading threshold is met, the net profits will be subject to income tax rates of 20%, 40%, and 45 percent, as well as national insurance rates of 12% and 2%. 

In most circumstances, a person who trades on their own account is unlikely to meet the description of a ‘trader’ for income tax purposes and will more than likely fall within the capital gains tax regime. 

Capital Gains Tax 

Individuals who buy, keep, and sell cryptocurrencies on their own account are generally considered to be engaging in investing activity and are subject to capital gains tax. 

The sale of crypto assets will trigger a taxable event, with the proceeds being matched against purchases in the following order: 

1. Cryptoassets acquired on the same day; 

1. Cryptoassets acquired in the following 30-days 

1. The average cost of any unmatched crypto assets (known as the ‘pool’) 

The amount of the capital gain is the difference between the value of the disposal proceeds and the value of the acquisition cost per the matching rules. 

Capital gains tax is levied on total gains above an annual tax-free exemption, which is present £12,300 for individuals. Gains in excess of this allowance will be taxed at a rate of 10% up to the basic rate tax band (if available), and 20% at the higher and extra tax rates. 

What about forks, stakes, and airdrops? 

Airdrops – When someone takes part in a crypto airdrop, they are believed to have received the asset for free, which will be matched against disposal or added to the pool. The value of the airdrop will be liable to income tax if the person is ‘trading’ and subject to income tax. 

Hard forks – If a fork results in the creation of a new cryptocurrency, the individual must assign a portion of the original coin’s cost to the newly acquired or generated cryptocurrency. This does not result in tax liability, but it does ‘split’ the cost of the previous asset, thereby increasing the liability in the future. If the person is trading, the value of the crypto asset received will be important. 

Staking – Staking is akin to investment income and will be deemed to be subject to income tax regardless of whether a person is trading or not. 

Cases that are unique and difficult to solve 

Crypto assets and the technology that underpins them are continually developing, and present tax rules aren’t equipped to deal with this. 

Care must be taken to ensure that the right tax regulations are applied to arrangements that go beyond the basic limits of acquiring and selling crypto assets via a trade, airdrop, fork, or staking. 

Because the tax treatment will frequently be confusing, it is critical to rely on a tax professional who is familiar with the sector, technology, and concerns. We are continually analyzing unique and difficult instances, with a current focus on the situation of Non-Fungible Tokens (“NFTs”) and NFT-based gaming platforms, in which transactions may be entirely exempt from taxation. 

Residency and Domicile 

For non-resident and non-domiciled individuals, the location or “situs” of cryptocurrencies is extremely crucial. Cryptoassets, according to HMRC, follow the individual’s residency. However, this is a simplified solution to a difficult topic, and HMRC’s approach is not supported by any authority. 

On this premise, if a person is not a UK tax resident, he or she will not have any tax liability in the UK. There are severe anti-avoidance laws in place for anyone who has left the UK, which can result in a tax penalty if tax residency is reestablished in the UK within five years. 

If a person is a tax resident in the United Kingdom but not domiciled there, they can choose the remittance basis. This allows a person to avoid UK taxation on international income and gains until they are repatriated to the UK, and then indefinitely if they are not. 

Based on HMRC’s view of the location of crypto assets, a non-domiciled person would not be eligible for the remittance basis on cryptocurrency income and gains. However, the location of the assets could also be: 

• The location of the exchange entity holding crypto assets 

• The location of the services which host the technology 

However, this would be contradictory to HMRC’s viewpoint, and any such position should be reported as such, with the risk of HMRC questioning and/or challenging any remittance basis claim. 

Summing It Up 

Crypto holders in the UK can seamlessly file their tax returns and pay for them through the HMRC website on GOV.UK. You can easily consolidate your gains through online tax tools like CBM Accounting. However, you can also seek guidance from accountants and crypto tax experts. Paying your bitcoin and other cryptocurrency taxes to HMRC has never been this easy, straightforward, and convenient. 

BBLS, the Bounce Back Loan Scheme, and CBILS, the Coronavirus Business Interruption Loan Scheme, are two of the government’s initiatives to help small and medium companies keep operating during the pandemic crisis. 

Their first goal was twofold: to survive and heal, then to develop. The Chancellor has modified the scope of the schemes and introduced additional precautions as the Coronavirus enters its second wave. 

It is critical to understand the differences between the schemes and the modifications that have occurred if your company took out one of the loans in its original form or if you are thinking about applying for financing right now. 

Our experienced accountants and business advisors at CBM Accounting can provide extensive advice on the best type of finance for your present situation and future objectives, but we hope this quick guide will assist you in making the correct first selections. 

Table of Contents 

The First Bounce Back Loan scheme: 

BBLS Modifications: 

The Coronavirus Business Interruption Loan Scheme was the first of its kind: 

Modifications to the CBILS: 

Extending your funds: 

CBM Accounting can help: 

The First Bounce Back Loan scheme: 

• BBLS is intended towards smaller firms, particularly those in the early stages of development, and offers loans of up to £50,000 based on 25% of yearly sales. 

• The government guarantees the loans 100 percent, and the interest rate is set at 2.5 percent for the life of the loan, with the government covering the first year’s interest. 

• The maximum loan duration used to be six years, but that has since altered (see below). 

• There are no payments due for the first 12 months, and there are no arrangement costs or early repayment penalties. 

• You can apply for a loan online with a lender who accepts self-certification and does not need guarantees. You are only allowed to apply for one BBLS loan at a time. 

• Commentators think that, while BBLS offered a vital financial infusion to compensate for lost revenue, the amount available was modest and may not give room for expansion beyond the planned “survival period.” 

• It also had limited flexibility because it was a term loan. 

BBLS Modifications: 

Under the Pay as You Grow scheme, which is part of the Government’s Winter Economy Plan, the Chancellor announced several adjustments to the original BBLS scheme in September. 

The deadline for submitting an application has been extended to November 30, 2020. 

From six to 10 years, the maximum loan duration has been increased. However, you may only pick between six and 10 years; no additional period is available. 

There are interest-only periods available. If you are having trouble making payments, you can request up to three six-month interest-only payment periods. However, if you choose this route, you will wind up paying more interest in the end. 

There are payment holidays available. If you are having trouble making payments, you can request a one-time payment vacation, during which you will not have to make any payments, including interest, for up to six months. You must, however, make six payments to be eligible, and you will pay extra interest altogether. 

Aside from these modifications, the rest of BBLS remains unchanged. 

The Coronavirus Business Interruption Loan Scheme was the first of its kind: 

Small and medium enterprises with up to 250 workers and a turnover of less than $45 million are eligible for the CBILS scheme. Term loans, invoice financing, and credit facilities are all options for borrowing up to £5 million. 

Term loans generally range from £750k to £5 million in financing. The term of the contract could be 3-5 years, with an interest rate of 8-12 percent per year. 

The funding size for invoice finance is generally £100k-5m. The term of the contract maybe two years, with an interest rate of 8-14 percent each year. 

The funding size for credit facilities is generally £100k-5m. The term of the contract may be between two and three years, with an interest rate of 8 to 14 percent each year. 

The money may be utilized for several things, including mergers and acquisitions, repaying existing debt, and investing in future development. As a result, it is a more adaptable source of capital, focusing on both recovery and expansion. 

The government guarantees 80% of the loans, and the lender based on the kind of financing sets the interest rate. A personal guarantee is not required. 

The initial scheme period was six years; however, this has recently been extended (see below). 

There are no payments due for the first 12 months, and there are no arrangement costs or early repayment penalties. 

Businesses are not charged for the 80 percent guarantee, and the first twelve months of interest and the government covers fees. 

Because the application procedure is more complicated and will be personalized to the alternatives you select, it is a good idea to hire an expert to assist you. If you have an outstanding BBLS loan, you cannot apply for CBILS funding. 

Modifications to the CBILS: 

As part of the Government’s Winter Economy Plan, the Chancellor announced two revisions to the original CBILS plan in September. 

The deadline for submitting an application has been extended to November 30, 2020. From six to 10 years, the maximum loan duration has been increased. 

Aside from these modifications, the rest of CBILS remains unchanged. 

Extending your funds: 

If you discover that you require more funds, you have many alternatives. If you have already taken out a BBLS loan, you will not be able to apply for another one, but you may be eligible for CBILS financing. 

You cannot, however, have both forms of funding. Therefore, before applying for CBILS funding, you would have to return your BBLS loan – with no early repayment costs. 

If you have used less than the maximum amount of CBILS money, you may be eligible for further cash under the scheme. This will most likely entail a conversation with your lender, as well as a new application procedure and credit checks. 

The government has stated that a new funding plan will be implemented in the New Year, but no specifics have been released. Analysts think it will be a version of the Enterprise Guarantee Scheme (EFG) that would take the place of CBILS. 

CBM Accounting can help: 

These complicated problems demand careful study before making any final judgments. Our small business experts can assist you in determining the best form of finance for your company, as well as with cash flow, financial forecasts, and a variety of accountancy and providing examples. 

Contact CBM Accounting to learn more about our services and eligibility restrictions. 

We discussed the forthcoming changes to the Government’s Coronavirus Job Retention Scheme, which is set to expire on October 31, at the end of September. More limitations have been imposed since then to combat the spread of Coronavirus, putting businesses under even more strain, with many being forced to close entirely or function for only a few hours. 

As a result, the Chancellor has proposed several modifications to the Job Support Plan, which was supposed to take the place of the furlough scheme as part of the government’s Winter Economy Plan. 

Table of Contents 

Job Support Scheme Modifications: 

Self-employed are now obtaining increased support: 

Grants for additional business: 

We can assist: 

Job Support Scheme Modifications: 

The following are the main features of the new Job Support Scheme, which was unveiled on October 22: 

• The scheme will supplement pay in companies that are unable to rehire full-time staff. 

• The scheme will go live on November 1 and will include all of the United Kingdom’s nations. 

• The employee will be paid up to two-thirds of their regular wage for each hour not worked. 

• For hours not worked, the government would pay up to 61.67 percent of earnings, amounting to £1541.75 each month. Under the old regulations, the highest payout was £697.92, which is more than doubled. 

• Employer contributions to unworked hours will be cut to merely 5% of total hours worked. 

• Employees that work just one day a week will be eligible since the minimum hour’s requirements will be decreased from 33% to 20%. 

• Employees must have worked for the company since at least September 23. They can be added and removed from the scheme at any time, and they can work various hours. At least seven days must be covered by each working arrangement. 

• Employers must contribute to National Insurance and a minimum pension plan. 

• While an employer is claiming a Jobs Support Scheme award on their behalf, employees cannot be fired or placed on notice. 

• Employers who use the scheme will be able to claim the Job Retention Bonus for any employee who satisfies the JRB’s qualifying requirements. This is worth a total of £1,000 for each employee. 

• If a company uses the Job Support Scheme and the Job Retention Bonus combined, they may get almost 95% of their employees’ total pay expenses if they keep them until February. 

Small and medium-sized enterprises with less than 250 employees are eligible for the scheme. To be eligible for the scheme, employees must have “viable occupations.” Businesses in presently closed industries, such as nightclubs, may not be eligible. 

Large corporations are also eligible, but only if they can show that their income has decreased because of the coronavirus. 

Self-employed are now obtaining increased support: 

A similar support scheme for self-employed persons has been updated, and will now offer a lump sum award of 40% of projected earnings, up from 20% previously: 

• Those who qualify for the Self Employment Income Support Scheme Award will be eligible for the grant. 

• From November until the end of January, the award will cover three months’ worth of profits. 

• It will payout 40% of average monthly profits, up to a maximum of £3750. 

• A second award, covering the months of February to April, will be announced later. 

Grants for additional business: 

The Chancellor also announced financial awards of up to £2,100 per month for firms in the hospitality, lodging, and leisure sectors that have been harmed by restrictions in high-alert regions. 

This includes firms in industries that are not legally compelled to close but have been harmed by municipal regulations. 

According to the government, these incentives will be accessible retroactively for regions that have previously been restricted. They are in addition to the greater levels of corporate support offered to Tier 3 local governments. 

We can assist: 

We have skilled and educated accountants who can help if your firm is still suffering – or if you just need some assistance. Keep in touch with CBM Accounting for updates on changes to the work scheme and other accounting, tax, and financial matters. 

We can assist you with all elements of forecasting, tax, corporate finance, and resolving any financial difficulties created by COVID-19 at CBM Accounting. We also have a staff of skilled attorneys that can assist with legal matters such as corporate law, employment law, and commercial law. 

On October 31, 2020, the government’s Coronavirus Job Retention Scheme will end. Employees at hard-hit firms were placed on furlough as part of the scheme, which was implemented in March. 

Table of Contents 

1. On November 1, a new job support scheme will begin: 
2. Assistance for self-employed continues: 
3. Other Ways of Assistance for Businesses: 
4. Managing the conclusion of the furlough scheme: 
5. September: 
6. October: 
7. Customizable Furlough scheme: 
8. Getting employees back to work: 
9. Procedures for Redundancy: 
10. Taking The Necessary Steps To Get Things Back To Normal: 
11. We can help you get back on track with your business: 

On November 1, a new job support scheme will begin: 

Following weeks of anticipation, the Chancellor revealed the replacement to the vacation plan as part of a Winter Economy Plan on September 24. The ‘Job Support Scheme’ will begin on November 1st and will last for six months. 

The following are the most important aspects of the new plan: 

• Companies that are unable to rehire full-time staff will benefit from the scheme. 

• Employees must work at least one-third of their regular hours to be eligible. The government can raise the minimum amount of hours worked after three months. 

• The government and the employer will each pay one-third of the remaining earnings for the hours not worked. This indicates the employee will receive at least 77% of their salary. 

• Employees must have worked for the company since at least September 23. They can be added and removed from the scheme at any time, and they can work various hours. At least seven days must be covered by each working arrangement. 

• The payment will be based on an employee’s regular wage, with the monthly government contribution limited to £697.92. 

• While an employer is claiming a Jobs Support Scheme award on their behalf, employees cannot be fired or placed on notice. 

Small and medium-sized enterprises with less than 250 employees are eligible for the scheme. Employees must have “viable occupations” to be eligible for the scheme. Businesses in presently closed industries, such as nightclubs, may not be eligible. 

Large corporations are also eligible, but only if they can show that their income has decreased because of the coronavirus. 

Assistance for self-employed continues: 

Self-employed persons will be eligible for a lump-sum award of 20% of their projected earnings under a similar scheme: 

• Those who qualify for the Self Employment Income Support Scheme Award will be eligible for the grant. 

• From November until the end of January, the award will cover three months’ worth of profits. 

• It will cover 20% of average monthly profits up to £1,875, up to a maximum of £1,875. 

• Depending on the conditions, a second award for the self-employed may be available from February 2021 until the end of April 2021. 

Other Ways of Assistance for Businesses: 

The Job Support Scheme is part of the Chancellor’s Winter Economic Plan, which includes a broader package of initiatives. These are some of them: 

• Bounce Back Loan repayment periods would be extended from six to ten years. 

• Lenders participating in the Coronavirus Business Interruption Loan Scheme will be permitted to extend loan terms from the existing limit of six years to ten years. 

• The coronavirus loan deadline has been extended to the end of November. 

• Struggling firms can opt to pay just interest for six months, and those in “serious difficulties” can request to have their repayments suspended entirely for six months. 

• The emergency VAT reduction of 15% for the tourist and hospitality businesses will be extended until March 31, 2021. 

• Businesses who postponed paying their VAT invoices will be allowed to do so in 11 smaller, interest-free installments. 

• Self-assessment income earners would be allowed extra time to pay in installments if they need it. 

The government will also provide several subsidies to firms to reduce unemployment: 

• Every furloughed employee who is kept on until at least the end of January will get £1,000 in compensation. 

• Every out-of-work 16-24-year-old who is granted a ‘high-quality’ six-month work placement will get £1,500. 

• Until the end of January, each apprentice under the age of 25 will get £2,000, while those above the age of 25 would receive £1,500. 

Managing the conclusion of the furlough scheme: 

Employers with furloughed staff will have to handle the final phases of the Coronavirus Job Retention Scheme (CJRS) through the rest of September and October before the new Job Support Scheme starts. 

September: 

• Furloughed employees will get 70% of their salary up to a monthly limit of £2,190 from the government. 

• Employers will contribute 10% of salaries to give furloughed workers with 80% of their income up to a monthly limit of £2,500. 

• Employers will cover the costs of furloughed employees’ NI and pension contributions. 

October: 

• Furloughed employees will get 60% of their salaries, up to a monthly ceiling of £1,875, from the government. 

• Employers will pay 20% of salaries to furloughed workers, up to a monthly maximum of £2,500. 

• Employers will cover National Insurance and pension contributions for furloughed staff. 

Customizable Furlough scheme: 

Employees who were on a flexible furlough scheme – or working part-time – throughout September and October can stay on such scheme until the end of the month. Employers can deduct contributions from their employees’ pay. 

Employers file claims for non-worked hours using the same CJRS mechanism and the claim must cover a minimum of seven calendar days. 

Employers may be required to publish a new contract of employment if employees return part-time under the flexible furlough scheme. 

The experienced CBM Accounting team can assist you with creating employment contracts and/or new employee handbooks, as well as implementing new policies. We may work with small or big businesses to create a new company handbook or design an employment contract that is up to date with current legislation and satisfies the needs of the firm. 

Getting employees back to work: 

Employers who return workers to full-time employment after exiting the CJRS scheme will get a single payment of £1,000 for each returning employer they maintain until January 2021. Under the new Job Support Scheme, that portion of the scheme will be preserved. 

Procedures for Redundancy: 

Employers who are unable to meet the scheme’s obligatory contributions may be forced to contemplate redundancies or other measures. 

Under the present CJRS arrangement, it is permissible to make furloughed employees redundant. Redundancy compensation, on the other hand, must be computed using regular wage rates rather than furloughed wages. 

• Employees who have worked for more than two years and have been laid off are typically entitled to a statutory redundancy payout depending on their length of service, age, and income, up to a statutory limit. 

• Employees who are furloughed will receive statutory redundancy compensation based on their usual salaries, rather than a lower furlough rate, under new government law that went into effect on July 31, 2020. 

Taking The Necessary Steps To Get Things Back To Normal: 

While the government has created a new plan to assist businesses that are unable to restore their personnel, other businesses may be contemplating how to resume operations while keeping expenses low. 

Even though redundancy appears to be the most obvious way to cut labor expenses, companies have alternative options based on their circumstances. 

If other sections of a company are busy yet understaffed, redeployment may be a possibility. This may necessitate retraining and contract modifications. 

If there is a significant likelihood of a company upturn, reducing the hours of full-time employees for a limited time may be a possibility. 

Pay cuts for a limited time might save money if employees accept the rationale for the reduction. The new pay levels, however, must not be less than the National Minimum Wage. 

Unpaid leave for a limited length of time can also help cut costs, but only if employees agree and understand. 

We can help you get back on track with your business: 

We have skilled and qualified accountants, business consultants, and legal attorneys who can help if your firm is still suffering – or if you simply need some advice. 

CBM Accounting can assist you with all areas of forecasting, tax, and resolving any COVID-19-related financial difficulties. 

We also have a staff of skilled lawyers that can assist with any Accounting and financial services connected to employment law. For example, assisting with the creation or revision of new or amended employment contracts or business handbooks, resolving employee conflicts, and giving health and safety advice. 

Keep in touch with CBM Accounting for further information on the furlough plan and other topics. 

Purchasing a business is a fantastic opportunity to avoid some of the years of hard labor that go into starting a company. However, it will not be easy, and it will only be a shortcut to success if you do everything perfectly. While purchasing an existing firm takes time and work, it also necessitates considerable financial resources therefore there are dangers. 

That has not implying you should not think about purchasing a business. If you buy wisely, you will most likely be purchasing an established, strong client base, as well as a proven product or service. When purchasing an ongoing service, existing workers might be worth their weight in gold, but it is critical to handle the process correctly. It may be a smart choice if you take the correct steps and think about the right questions to ask when buying a business. 

CBM Accounting is a one-of-a-kind company strategy that allows us to provide both accounting and financial consulting under one roof. This is especially beneficial if you are planning to sell your firm or if you are thinking about purchasing a business in the UK, both of which we have done before and are enthusiastic about. 

We will look at things you should think about when buying an established business in this article. Get in contact with our experts now if you would like some friendly advice on buying or selling a business, or if you would want a business appraisal. 

Table of Contents 

When buying a business, there are several questions you should ask: 

What is your reason for selling your business? 

Is this a lucrative business? 

What kind of consumers do you have, and are they loyal to the present owners? 

What factors did you consider while determining your current asking price? 

Is it possible for me to have access to the company’s accounts and other vital records? 

Are there any workers at your company, and are they aware of the prospective sale? 

How much longer does your commercial lease have to run? 

When buying a business, what is due diligence? 

When buying a business, what does leasehold mean? 

When buying a business, there are a few things to keep in mind? 

Do not forget to enlist expert assistance in the deal: 

At CBM Accounting, you can get more assistance: 

When buying a business, there are several questions you should ask: 

Consequently, what are the key questions to ask before purchasing a company? Moreover, how do you know you are not being deceived? Purchasing a business is a significant investment. It is a good idea to make a list of what you will need to feel comfortable with any possible agreement and stick to it. 

What is your reason for selling your business? 

You would not buy a used car without asking a question like this, yet many corporate purchasers either dodge or entirely disregard it. In reality, it is a legitimate question to ask, and answering it may reveal a lot about the seller and the company. 

If anything, hearing a credible, rational justification for the sale will set you up to have greater confidence as you move forward. The worst scenario is that you hear horrible things or do not have a good vibe about the offer, and there are plenty more fish in the sea. People have a variety of valid reasons for selling their homes. When you are a potential buyer, you have the right to ask, as many questions as you want, so do not be afraid to start with this one. 

Is this a lucrative business? 

This may seem like an easy thing to ask, but it is a fantastic method to determine whether a vendor is real. Even the most obstinate merchants might become agitated if there are issues. Keep an eye, out for ambiguity or discomfort, and if you smell a rat, you should certainly investigate more. 

What kind of consumers do you have, and are they loyal to the present owners? 

A company’s customer base accounts for a considerable portion of its worth. You will need to determine whether that clientele is a good fit for your expertise, abilities, and knowledge. Avoid taking on consumers that are a total departure from your usual clientele. Try to stick to what you are familiar with. This question is about value, but it is also about if the company is a good fit for you, which is critical for the future and success. 

You will also want to make certain that you are purchasing the whole client base. It is one thing to change ownership, but it is quite another to develop a client base from start. It might be a deal-breaker if any of the consumers decide to stay with the current owner. Before you can either set a valuation or proceed with the transaction, you will need to know exactly what is going on. 

What factors did you consider while determining your current asking price? 

It is another question that, when written out, may appear to be self-evident, yet it is critical to ask. Sellers are frequently emotionally committed to their company, but this is mostly immaterial for determining a realistic and reasonable price. 

If an expert has not appraised the company, find out how they arrived at their estimate. Even if it was not a deal-breaker if their bond affected it, you will have a clear understanding of what you need to do to proceed realistically. 

Is it possible for me to have access to the company’s accounts and other vital records? 

Any business you want to acquire should have all of the necessary documents. If you want to correctly appraise items, you will need to have tax records, supplier paperwork, and invoices on hand. 

If they are not, it is time to get out of there. You cannot estimate the worth or feasibility of a business until you have records. Correct paperwork is also required to ensure that everything is legal and compliant. 

Are there any workers at your company, and are they aware of the prospective sale? 

When you take over an established firm, employees may be a gold mine of knowledge, assistance, and comfort – or they can be a nuisance. There are legislative duties to consider if the firm has workers, but you will also want to see whether they are satisfied with the transaction. 

It is ideal to be looking at a company that keeps its employees informed about the sale and treats them well. That is a great situation to take over, and it is far preferable to the possibility of dealing with a dissatisfied staff, which can be a huge challenge in and of itself. 

The best, if not the only, way to retain existing employees on your side and working for you is to communicate with them. If you do not ask the question and then act quickly and appropriately, you risk dramatically lowering the company’s worth. 

How much longer does your commercial lease have to run? 

If there’s a lease involved, you will need to figure out how long it will last and how much it will cost if it is only for a short time. Because such expenses are likely to be significant, this is an important component of any purchase involving an established firm. As part of the due diligence process, you will also want to view a copy of the lease. 

When buying a business, what is due diligence? 

In most cases, by the time due diligence arrives, you will have already committed to buying a firm, but that does not mean you cannot back out or change the terms of the agreement. 

After you have verified your plan to acquire and agreed on a preliminary price, you will generally do due diligence. At this stage, the seller should provide you complete access to all business and management accounts and data. 

Buying a business may be an emotional roller coaster, but you must have the ability to walk away at any stage during the process. Due diligence should be the foundation of all of your company evaluations. The only way to accurately assess a company’s worth is to compare its assets and liabilities in black-and-white terms. 

Ensure that the vendor immediately delivers information and paperwork during due diligence. This is not the time to squander your time. Remember, this is similar to buying a used automobile, so you can expect the seller to have prepared everything ahead of time. Keep an eye out for any manipulated statistics or hidden faults. 

• You will want to keep track of stock, the condition and worth of any buildings involved, and equipment and tools, in addition to carefully scrutinizing the books. 

• You will also want to leave due diligence with a good understanding of how well the firm is performing and how it will do in the future. 

• This stage should not be rushed. 

• Sellers are frequently ready to put a transaction on hold while you complete your research, which will generally take several weeks. 

When buying a business, what does leasehold mean? 

You receive the details, stock, and goodwill connected with the commercial activity when you buy a freehold firm, but you also get any commercial property or land. 

If you buy a freehold property, you will have a lot more flexibility in terms of growing the amenities and making changes as you see fit. Aside from the significant variations in worth between a leasehold and a freehold business, leasehold versions can be similar to renting a property where you must obtain permission before hanging a picture. 

However, because different leases have different terms and conditions, you must seek professional advice to fully understand them. That is not to argue that no leasehold company is worth purchasing. Leasehold will on average, be a less expensive method to start operating your show, but it will rely a lot, on what you can afford. 

When buying a business, there are a few things to keep in mind? 

Buying a business is a great opportunity to be on the lookout for issues. Small things may make a huge impact, and warning signals might help you figure out where to search for more serious problems. When buying a firm, the potential benefits are considerable, but the risk of underlying problems is also substantial. 

• Accounts receivable should be avoided. That is not necessarily a deal-breaker, but you must be clear about who is liable for any overdue invoices from the start. 

• Sellers that refuse to reveal or are not forthcoming with financial information are a huge red flag. Keep in mind that you should always be prepared to walk away. 

• In recent months, takings or client numbers have decreased, which is not a positive omen for purchasers. It is also worthwhile to keep track of who those consumers are. You do not want to risk everything on one endeavor; therefore, you do not want to rely on a limited number of clients or cash streams. In an ideal world, you would like to see a broad and long-term client base. 

• A warning sign is poorly maintained premises, tools, or equipment. Equipment maintenance and upkeep may be an excellent predictor of a company’s overall health, and negligence is never a good sign. Not only that, but it implies you are far more likely to need further funding in the future to keep the firm afloat. 

• Customer evaluations may give an eye-opening picture of how a firm works in the internet age. They frequently provide a considerably more trustworthy account than many purchasers do. 

• Unhappy workers, as well as a high employee turnover rate, may have a significant impact on a company’s value and survival. 

• Examine the company’s credit rating. This can provide you with not just a good sense of how much the transaction is worth. but also some insight into the ownership or management. 

Do not forget to enlist expert assistance in the deal: 

There are times when DIY simply will not cut it, and there is no way to gently break the news in this situation. When it comes to receiving the best counsel, there are instances when it is a good investment. Even the most seasoned business person will find it nearly hard to complete all of the tasks necessary to assess and acquire a continuing business. 

When looking for a business, it might be tempting to attempt to save costs wherever possible, but cutting shortcuts is never a smart idea. It is far better to plan for the entire process, and having the correct legal representation is a crucial part of that. 

The quality of business and legal counsel you obtain may determine whether you succeed or fail. Buying a business is not the time to take chances, and even minor details may add up to tens of thousands of pounds in worth – or a major blunder. 

Not only is that, but also having a voice that is not influenced by emotions invaluable. Professional help is the only way to get a balanced perspective and correct assessment, as well as a trouble-free selling. 

At CBM Accounting, you can get more assistance: 

It is nearly always preferable to have two or more heads than one. We can give the critical assistance you will need to make purchasing or selling a business successful at CBM Accounting. Please do not hesitate to contact CBM Accounting and our helpful and pleasant staff.