an accountant's perspective

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Tax relief – don’t miss out!

The main areas for tax relief are known to many but if you are just starting out or you do your own accounts then you could easily miss out. Here are six areas where you should be claiming tax relief if you qualify – some of these can amount to huge savings for individuals.


1)    Business mileage or fuel

MILEAGE: You could get tax relief when you use your own vehicle for business, or on fuel you buy when using a company car. You can also trace this back several years to claim relief if a self-assessment has not been completed previously.

A point that always needs clarification is what counts as business mileage. Business mileage is the distance travelled doing your job and can include travel to a temporary work place. It DOES NOT INCLUDE normal travel between home and your permanent place of work or private travel.

To work out tax relief for business mileage in your own vehicle follow this calculation for ‘mileage allowance relief’-

Add up your business miles travelled in the tax year and times them by the approved mileage rate.

Then add up any mileage allowance payments received from your employer. Compare your payments received with the approved amount.

If the approved amount is more then you are entitled to Mileage Allowance Relief on the difference. You are also entitled to this relief if your employer pays you no mileage allowance or less than the approved amount.

To qualify for this relief you must keep records of dates, mileage and details of all work journeys.

FUEL: Fuel used for business travel is eligible for tax relief. Again, this is less any payments repaid by your employer. Records of business mileage done need to be kept so the right relief can be calculated.


2)    Professional fees and subscriptions

There are certain fees incurred for having your name placed on professional registers or taking out a yearly membership to an organisation. If these registration fees or membership subscriptions are necessary for your work you could be eligible for tax relief. There are two conditions. The first is that you have to be able to prove that they are necessary to your work and the second is that the organisation is on the list of HMRC approved organisations.

For a list of those organisations go to:

You are not entitled to this relief on life membership subscriptions or any professional fees and subscriptions that you have not paid for yourself.


3)    Specialist tools or clothing

If you personally spend money on any tools or specialist clothing in order for you to do your job you may be eligible for tax relief. You can also go back several years to claim this relief if a Self- Assessment return has not been previously completed.

There are exceptions that include overalls, gloves, boots and helmets that have to be worn so are considered part of the job for certain industries. However, if you must pay for the cost of repairing, cleaning or replacing this type of specialist clothing yourself and your employer doesn’t reimburse you, then you are entitled to tax relief.

You are also entitled to tax relief if you have to buy – out of your own money – the tools you need to be able to do your work. The tax relief also applies to the cost of maintaining and replacing the tools.

You will either be entitled to:

  • tax relief for the actual amounts you spend


  • a ‘flat rate deduction’

Flat rate deductions are amounts that HM Revenue & Customs (HMRC) has agreed nationally – or sometimes locally if conditions are very different – with trade unions or other bodies. See the full list of flat rate deductions here Flat rate expense deductions.

If your industry is not listed on the table, you can still claim a standard amount of £60 for the laundry costs of uniforms or protective clothing.


4)    Capital expenditure

You may be able to reduce your tax bill by deducting capital allowances on equipment or assets that you must use in doing your job, but which your employer does not provide. You can go back several years to claim this relief that was brought in to cover the loss of value to equipment/assets due to wear and tear or general depreciation. Exceptions include cars, vans, motorcycles and bikes.

How you claim for capital allowances is a little complex so I defer you to HMRC’s comprehensive list on the different ways you can make your claim:

  • 100 per cent first year allowances – for investments in green technologies.
  • Annual Investment Allowance (AIA) -you can claim AIA on any purchase of equipment (but not motor vehicles) made on or after 6 April 2010 up to an annual amount of £25,000. If the total expenditure is £25,000 or less, you can claim 100 per cent of that whole amount as your AIA.
  • Writing down allowances – you claim these on the cost of assets you’ve bought during the year for which you haven’t claimed first year allowances. Add to this the value you’ve carried forward from last year of assets that you have claimed first year allowances on. This total amount is called a ‘pool’ – you can claim 20 per cent of this amount for 2011 to 12 and 18 per cent from 2012 to 13. The pool’s value is reduced by the appropriate percentage rate – but you can add the value of new assets you buy. Find out more about writing down allowances and rates by following the writing down allowance link below.
  • Small pools allowance – you can write off the whole balance in a pool where the pool’s value is not more than £1,000.

You can use either first year allowances or writing down allowances – or both.


5)    Household expenses when working from home

If you are employed to specifically work from home and have no alternative options then you may be eligible for tax relief on some of your household expenses. Again, you can go back several years for this if a Self-Assessment hasn’t been previously submitted.

Extra expenses typically include the cost of gas and electricity bills for heat and light used during hours of work. The standard expenses of running a home like mortgage, council tax, line rental, and broadband are not included because they are not specific to business use and would be paid as part of the cost of living anyway.

From 6 April 2012, for payments up to £4 per week (or £18 per month if you’re paid monthly) you don’t need to provide any records of the household expenses you’re claiming relief for. For amounts above £4 (or £18 per month if you’re paid monthly) you will need supporting evidence to show that the amount you are claiming is no more than the additional household expenses you have actually incurred.


6)    Travel and subsistence

If your job requires you to travel on business you may be able to get tax relief on your travel expenses. You can go back several years to get the relief. If you’ve got to make journeys for business purposes you can deduct the relating travelling expenses and any subsistence costs you’ve paid from your taxable income.

A work journey includes when:

  • you have to travel from one workplace to another – this includes travelling between your main ‘permanent workplace’ and a ‘temporary workplace’
  • you’ve got to travel to or from a certain workplace because your job requires you to 

They do not include:

  • ordinary commuting – when you travel between your home (or anywhere that is not a workplace) and a place which counts as a permanent workplace
  • private journeys – which have nothing to do with your job


Travel and subsistence expenses include:

  • public transport fares
  • hotel accommodation where you have had to stay overnight as a part of a business journey that qualifies for tax relief
  • meals you have had to purchase whilst travelling or staying overnight
  • tolls
  • congestion charges
  • parking fees
  • business phone calls, fax or photocopying costs
  • business mileage


So make sure you are claiming tax relief on everything you are eligible for it. Don’t forget to go back as many years as you are entitled to if you have forgotten to claim it in the past!

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The boss is on holiday!

What do some people get up to when their boss goes on holiday? Let’s just be clear – no-one at ABC has ever dreamt of participating in the following common side effects to boss absences:

1. Extra long lunch
2. A little surfing on google, Facebook, eBay, Amazon…
3. Sit in the bosses chair and take a moment to wonder…a moment to just imagine
4. You leave a little earlier from work
5. You chat about your boss to your colleagues at normal volume instead of in whispers
6. You are a little more relaxed than usual
7. There is a bit more chatter around the office that isn’t work related
8. You change your bosses screen saver for when they get back and tell them you did it in your lunch break
9. You send the newbie for MacDonald’s breakfasts for the entire office
10. You do an impersonation of your boss in front of trusted colleagues and before you know it everyone is demanding repeat performances!

Apparently, employees will do at least three of the list above. Take a look around you and see if you can guess what your colleagues might be guilty of. A lot of the time we are very discreet with our deviances from the norm because we are:
1. Scared someone will dob us in
2. Actually very loyal to our employer’s values and respectful of their position

It can entirely shift the dynamic of a team when the boss is absent. This is most notable when there is not an adequate management team to fill in or if a vacuum is left by a particularly intimidating, even bullying boss. A team only demonstrates what it is capable of and what kind of values make it up when the boss steps out of the office. They either shine or self-destruct.

An interesting article on Forbes sheds more light on the matter: ‘In an ideal culture, the boss’s absence should have a minimal impact on the day to day ability of a team to perform at its peak, Kerr adds. “The role of a great boss is to give employees the proper tools, training and expectations so that they can perform their work in absence of the boss. Indeed a bad leader is one who holds onto the reins of power and information so tightly that nothing can happen. A lot of it is tied to trust and empowerment. In a culture where high levels of trust have been established, with similarly high levels of empowerment, then there should be no issue around work not getting achieved.”’

See the whole article here

Ultimately, in a healthy working environment the absence of the boss should not lead to a significant dip in performance. Those who do indulge in some controlled frivolity make up for it when they do get their heads down. Those who respect their boss will not allow any shortcomings in performance to occur and a guilt driven work catch up tends to take hold of even the rowdiest team member before the bosses return.

So, when the cat is away, absolutely the mice will play, but not so as the boss will notice on their return! What happens in the office stays in the office and equilibrium is happily maintained.

For tips on how to make use of the office whiteboard when the boss steps out for a little light-hearted entertainment, go to this link 

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Are you getting top service from your accountant?

For many businesses an accountant is selected as the company is formed and from that moment on they never look back. They don’t even look sideways. The selection of an accountant can often come down to one crucial factor:

• Local company
• Near the office/factory
• Cost effective
• Word of mouth
• Know someone that works there
• Most visible in town
• Trusted large franchise with a good national reputation
• They made an excellent first impression

These are all valuable traits for an accountancy firm to possess and although we would recommend shopping around, enjoying a few free consultations and finding a firm that feels comfortable for you – a gut feeling is sometimes enough! The problem comes when you trust your accountant without paying attention to a thing they are doing. Just because they are dealing with the financial side of things does not mean you can afford to switch off.

Here are some signals that perhaps your accountant isn’t doing everything in their power to deliver you the service you deserve:

• Poor communication – some people only hear from their accountant as part of a generic mailing list reminding them it is time to bring their books in. We contact our clients to prevent stresses before they occur like the introduction of Real Time Information. We set up workshops and made sure all of their details were up-to-date well ahead of HMRC’s deadline. We also schedule regular meetings with clients to discuss their accounts and make sure they are fully aware of what is going on. Also, if an accountancy firm have not got back to an email you sent within two days – they are not efficient enough – 1 day is the ideal.

• Accumulative errors like misspelt addresses/names, late filing, tax code mishaps….these are all liveable with once provided they apologise and go out of their way to make up for it. But, if the errors keep building then it is time to look elsewhere.

• Escalating costs – since you started with them their costs have seemed to spike and you begin to question whether they are still value for money.

• You talk to other business owners and they seem to have drastically smaller tax bills, a lot more correspondence through from their accountant – in fact they seem almost to be on first named terms with them! An unusually large tax bill could be a sign of poor accounting and the lack of a personal connection is often because you have become a direct debit payment to you accountant and nothing more than that.

It is the little touches that matter here. You should feel valued as a client because accountants are the one group of people you can talk business to, where the other party is in full possession of the facts. They know your business intimately so their value to you should be much more than an email telling you when your books are due in.

A good accountancy firm are a support network and you won’t see them as stuffy suited number crunchers but decent human beings that care whether your cash flow is keeping you awake at night or not! If you have any concerns go in and see your accountants and discuss them face to face. Give them chance to respond and make a difference.

Too many people glue themselves to their accountants without a second thought but they are providing you a service and it is not an exclusive field. If you are genuinely not happy then changing accountants is not the big hassle some people believe it is. If you think you may have been forgotten then your accountant is not delivering the service you need so find one that will!

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A short guide to Inheritance Tax

ABC Accounting Services:

Fantastic piece on Inheritance tax

Originally posted on williamsdenton:

“Nothing in this life can be certain save death and taxes.” Benjamin Franklin.

Combining both of Benjamin Franklin’s oft-quoted inevitabilities, Inheritance Tax has become a growing concern for those nearing or beyond retirement age.

In 2011/12, around 20,000 estates incurred the tax. Equivalent to just over three per cent of all deaths, it’s a small proportion, but the figure was a 3,000 increase on the previous year.

With house prices in North Wales beginning to rise again, Williams Denton has put together this simple guide to help you assess whether your estate could fall over the tax threshold.

What is Inheritance Tax?
It is a tax paid on money and possessions left behind after a person dies.

Is it due on everything?
No. Single individuals can leave an estate of up to £325,000 without any Inheritance Tax being due. Note that the estate would include property, money and possessions less…

View original 383 more words

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Bucking the marketing trend



A recent article on Accountancy Age states that ‘accountants continue to fail in marketing activities’. Research done suggests that less than a third of accountancy firms have dedicated marketing or business development staff. Around a third keep no list of prospective clients, just under half use social media sites to promote their business and record marketing method to conversion stats.

ABC Accounting Services buck these trends and are part of the prosperous minority that embrace marketing with real success. As the research highlights there are three huge necessities when making marketing a priority for your business:

1) Make sure you have staff that are dedicated to marketing even if it is someone who shows a little innovation or independence on the team. Schedule in time that is dedicated to marketing and recording its progress.

2) Hit social media in a big way because clearly tons of your accountancy competitors still are not! There is a captive audience to be reached and tons of different platforms to test your material on. Use Facebook, Twitter, Google+ and LinkedIn to get started then you can always expand onto other sites that are gathering momentum.

3) Measure measure measure – how can you record what works and what does not if you are not keeping detailed information on what approaches you have tried and how many posts/conversations/leads led to full conversion from prospect to client. A simple spreadsheet will record everything you need to know in an easily accessible format.

Maintaining client numbers is hard enough but if you wish to grow and even expand then marketing is an essential tool that no practice can afford to be without. Start things small with a Facebook and Twitter profile. Ensure that someone can manage it and keep the content fresh and engaging. Then you can add networking events – say one every two weeks. Then comes an e-flyer campaign or an external SEO analysis and changes to the website to make sure you are getting the right footfall on your site from internet searches.

As things build then you need to be looking at employing someone who is dedicated to marketing but still able to liaise with staff and make sure your message remains an extension of what your company stands for. You all have to be on the same page and you have to be saying something worthy of the company name. What do you represent? What message do you wish to voice? What would you like to know about your business as a prospective client?

The article states that accountancy firms are continuing to fall short in marketing activities so this accountancy firm sees that as a massive opportunity. We intend to continue what we are doing in getting our message out there in a controlled, imaginative, and measurable fashion. Bucking the trend is the bright course of action here and we are proud to be doing just that!

Happy marketing everyone!

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IR35 put simply

This is a tedious subject, I know, but HMRC seem to have caused plenty of confusion with their complex guidance once again. So here are the simple facts about IR35.


The IR35 legislation’s main purpose is to act as a deterrent to those knowingly avoiding tax and NI contributions. HMRC announced that to abolish IR35 would lead directly to a £550m estimated loss in revenue. Ultimately, HMRC is increasing the financial burden on contractors with a confusing system – who knows why they do what they do?

Who does it effect?

All contractors who do not meet the Inland Revenue’s definition of ‘self-employment’. The rules essentially mean an increased tax and NI liability which will subsequently prevent contactor companies from retaining profits to grow their business in the future.

In more detail

Contractors who IR35 applies to will be liable to Schedule E taxation and NI FOLLOWING DEDUCTIONS FOR EXPSPENSES. This is important: Expenses can be taken as normal before the tax and NI deductions are calculated. Normal Section 198 expenses may still be claimed. There is also provision to other intermediary contractor’s turnover – these include:

  • Pension payments
  • Business travel
  • Subsistence (accommodation + meals away from home)
  • Professional Indemnity cover
  • Benefits in kind (private medical insurance)

Are you employed or self-employed?

This is the big question and because employment status is often unclear and complex; many contractors find it hard to decide whether IR35 even applies to them.

Use HMRC’s employment status indicator here:

Can IR35 be avoided?

If you can diversify your business interests and change your working practises then a contractor that is clearly self-employed would avoid IR35 legislation. If you can show that you are self-employed and satisfy HMRC’s guidelines then, so long as your contract matches your working practices, IR35 will not affect you.

It is not advised that this legislation is ignored as the financial burden to those who do not make arrangements to meet their tax and NI contributions could be crippling if caught at a later date. Yes IR35 could be revoked or amended but for now it is here to stay and no response would be a poor choice.

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Putting the icing on the cake

My karate coach once said to me:

‘sometimes you have to add icing to the cake’

I looked at him gone out but as he explained and as time has gone by I have grown to appreciate icing more and more.

So this is how he explained it. Icing is added when the cake is ready. You put all the hard work, effort, blood, sweat and tears (we are speaking metaphorically here in case you were wondering what god awful cake I was making in my spare time) into making the perfect cake. You get the temperature just right so it rises – nice and firm on the outside but soft and fluffy on the inside. The shape is flawless and you have left it the right amount of time to cool.

If this were a business then you have reached out to every potential client you can, spent your marketing budget, turned over every commission/contract/sale in record time and delivered top service whilst maintaining top quality on a 24/7, working yourself into the ground, schedule.

The icing is put on when it is time to admire the cake and appreciate all of your hard work. The icing is an awards ceremony, an office party or a day off work! Even half a day off work so that you can have a lie in and roll up to work when you are ready for a change rather than when you have to. It doesn’t really matter what you do because the trick is to do something just for you.

When you are training everyday – head down and rowing against an invisible opponent. Pushing an extra 10kg because it is essential for some reason. Hitting the punch bags harder and faster and sparring with better and better opponents because you have to keep losing to realise where your weaknesses are. My icing was sparring with easier opponents so I could see how far I had come and enjoy a mini victory. Even though those fights would not win me a tournament they made me feel good about myself, gave my confidence, a boost, and just for a moment I could switch my mind off and just enjoy the talent my body had absorbed and watch my automatic fighter step in.

For Belinda Darley this weekend she got to see her business shine in its newly promoted genre of dance. She has grown her clientele over the last six months and brought them all together for a day of tap workshops with The Pulse Collective. The footfall amounted to over 100 happy tappers taking part in Body Percussion, Beginner’s Tap, and Advanced Tap workshops. The day ended with a tap jam where Kane, Ryan and Eilidh showed off their skills and wowed their audience.

It was one of those days that was the accumulation of years of hard work, stress and effort. You could call it a blowout, a blast, a one in a million event that you have to grasp with both hands so for one moment you can say ‘hell yes – this has all been worth it’. Belinda embraced her moment and probably shattered herself out for the rest of the week in doing so but that is what they are all about.

Without the icing the cake is bland, incomplete and just hasn’t fulfilled its full potential. Business is a hard slog so make sure you make time for some icing moments. Take a look at what you have achieved and celebrate it. Belinda has a Facebook page full of thank you’s for organising the day and bringing something big and exciting to Gainsborough. The memories and experience of Sunday will keep on giving and provide the momentum to keep The Studio going for years to come. Icing days are not an over exuberance they are essential moral boosting, grin rendering occasions. You have permission to go out there and pat yourself on the back so go and do it!

If you fancy your own day of tap workshops with Kane D.Ricca leading at the helm then email . For more information on them go to – #RhythmArmy.  


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