The two Budgets of 2015 produced some of the biggest changes to face our clients. Here’s our guide to five things you really need to be looking at in 2016.
Massively improve your record keeping
The Government want to get rid of the annual tax return. Hooray!
And replace it with a quarterly one. Boo.
Although the proposals are in consultation at the moment by 2020 it’s likely that we’ll have the new system in place.
For disorganised businesses it could see a big increase in accountancy bills as ‘the mess’ needs sorting out 4 times a year.
For really disorganised folk it could see a massive increase in penalties as there will be so many more chances to be late.
And for those doing things themselves there’ll be a big increase in the time spent having to fill in forms.
The answer is to make sure you’re keeping good records, regularly updated and using all the technology that’s out there to make it as quick and painless as possible.
If you’re not already using Xero (cloud based accounting software) and Receiptbank (taking pictures of your invoices so they magically appear in Xero) then ask us for a demo.
Look at your profit extraction
For years it’s been a simple decision for many small businesses. Set up a limited company and pay a small salary and dividends. That all changes in April with the new dividend tax of 7.5%. If you’re paying yourself with dividends then you’ll be paying more tax.
There’s a few things you can do to ease the pain.
You should at least be saving more for a higher bill.
Sort out your autoenrolment
No one can say they weren’t warned but autoenrolment will soon be playing a big part in the lives of anyone employing staff (even your spouse).
You’ll need a scheme in place and a raft of new things to do whenever you employ someone or run your payroll. Think of it as doubling the workload of running a payroll.
Anyone engaged in the pension industry will be run off their feet getting schemes in place as deadlines approach. Don’t wait until the last minute.
Look again at pensions
There’s been some great news in pension freedom – giving you more choices than ever when you retire. It’s also one of the most tax efficient ways to get money out of your limited company.
If you’ve not looked at pensions for a few years – or “don’t trust” pensions then you need to take another look.
Ask us if you’d like more information.
Look at your rental property portfolio
2015 saw a number of announcements aimed squarely at the private landlord.
If you’ve borrowed heavily to buy your properties then you will see your tax bill rise and rise over the next few years. It’s not impossible to be paying more in tax than you’re actually making in money. You might want to read that last sentence again…
If you have a rental portfolio then there may be some big changes you want to make – selling properties, moving them to a limited company etc.
Ask us about your options.
Give us a referral and we will donate a goat to a family in AfricaFind out more