Understanding Tax

Accountants are exceptionally intelligent people who have an experienced knowledge of the accounting world. Accounting in Bedford will sort out your taxes whether they are personal or business taxes. Our well-trained professionals will help assist you with your taxes, bookkeeping and annual accounts.    

 

What is Tax?

Tax is a compulsory payment to the government which is taken from a worker’s income or a business’ profits. Often tax is taken from the purchasing of goods or services in a VAT (Value Added Tax). We all pay VAT as it’s added onto most everyday products that we buy.    

 

Why Do We Get Taxed?

Taxes are essentially a source of income for the government. By paying tax, we are giving money to government funded organisations and services. These organisations and services include the NHS, the welfare and the education system. The tax collected is also used to help projects for the roads and railways.

 

A couple taxes that are quite common are PAYE and corporation tax.

 

PAYE Tax

PAYE tax stands for pay as you earn. This tax works by employees and pensioners having tax deducted under this tax using unique PAYE tax codes. HM Revenue and Customs and your employer will be involved with this. The percentage of tax will be decided based on the amount of money you make. PAYE in Bedford will help you understand your tax code and will look after your taxes for you.

 

Corporation Tax

You must pay a corporation tax if you’re in business. If you’re a limited company or do business as a foreign company with a UK branch or as an unincorporated association, you’ll be required to pay corporation tax. This tax is a little different to other taxes. It isn’t deducted straight away, you have to go through a process. You must register for corporation tax, however, if you’re an unincorporated association, you’ll need to write to HM Revenue and Customs. From here you must keep accounting records and file company tax returns by the deadline given. As this isn’t as straightforward as other taxes, it’s often easier to use an accountant. Corporation tax in Bedford will easily be able to organise your taxes and keep them in check for you. Making sure you never miss a tax payment.

 

Using Your Car for Work Purposes

Can I claim tax back for using my car?

One of the most common expenses that people claim is for business miles this is normally the use of their car for work purposes. You are entitled to tax-free reimbursement for costs of travelling if you are required to travel to fulfil your job.

 

What counts as business travel?

 

Business travel includes journeys you have to make to carry out your work. This includes travel from your place of work to visit your customers using your car, motorbike, bicycle or van. Business travel also counts if you are travelling from your home to visit a client, but only for the extra miles from the distance of your home to your place of work. If you work from two offices for the same job, you can also claim travel between the two as business miles.

 

What are the approved mileage payment rates?

 

For cars and vans, you can claim 45p per mile for the first 10,000 business miles a year and then 25p per mile for every mile after 10,000. For motorbikes, you are entitled to 24p a mile, even after 10,000 and bicycles are 20p for every mile.

If the driver also is carrying another employee during business travel, then an extra 5p can also be claimed towards business mileage.

 

If you would like to find out more, then please get in touch with Bedford Accountants today to see what we can do for you!

All About VAT Returns

The following article will hopefully inform you with everything you need to know about VAT returns.

 

What is a VAT return?

 

A VAT return is a form that you will file with HMRC usually four times a year which will show them how much VAT you are due to pay. You will only need to do this if you are VAT registered. To calculate how much VAT you pay or are owed they look at Your total sales and purchases across a three-month period, the amount of VAT you owe for sales and the amount of VAT you can reclaim for purchases made by your business. If you owe more VAT than you can reclaim then you will need to pay HMRC the difference, if this is not the case, then HMRC will refund the difference to you.

 

 

How to submit a VAT return?

 

You must submit a VAT return online unless for one of the following reasons you are unable to do so…

  • You are unable to because of a disability, your age or the location of where you live.
  • For religious reasons, you do not use a computer.
  • Your business is subject to an insolvency procedure.

 

Here at Bedford Accountants we are experts in this field and be able to guide you every step of the way. As a starting business you have the choice on whether you wish to be VAT registered or not, if you choose not to be then, Bedford Accountants will fill out and submit your VAT return when the time comes to be registered.

All About Income Tax, For Beginners

Income tax may not be something that every person is familiar with. The following article aims to demystify income tax for those of us who may not have encountered it before.

What is Income Tax?

Income tax is a tax that you pay on your income. Not all forms of income are allowed to be taxed, but many are.

Taxable Income

You will have to pay income tax on the following kinds of income:

  • Taxable State Benefits, such as State Pension, Jobseeker’s Allowance, Employment and Support Allowance, Carer’s Allowance, Widow’s Allowance and Incapacity benefit (from the 29th week of claiming)
  • Money earned from employment
  • Income from a trust
  • Most Pensions
  • Rental Income
  • Profits from Self-employment, including profits from websites and apps
  • Benefits from your Employer

Nontaxable Income

You will not have to pay income tax on the following forms of income:

  • ISA Savings Accounts or other tax-exempt bank accounts
  • Tax-free state benefits, including Housing Benefit, Working Tax Credit, Income Support, Child Benefit, Maternity Allowance and Disability Living Allowance
  • National Savings Certificates
  • Premium Bonds
  • National Lottery Wins

Do I Have to Pay Income Tax?

In the UK, most people are entitled to a tax-free personal allowance. Your personal allowance varies depending on two factors, your age and your total annual income. If you are earning over your personal allowance, you will have to pay tax. However, in some cases, the amount of tax you pay can be reduced if you qualify for tax reliefs. To find out more about tax relief and income tax, either contact an accountant or visit the UK Government website: https://www.gov.uk/income-tax/overview.

How Is Income Tax Paid/ Collected?

There are two methods of paying income tax. The first is PAYE and the second in self-assessment.

  • PAYE- the process whereby your employer deducts income tax and national insurance contributions before paying your wage
  • Self-Assessment- this requires you to fill out a tax return every year if your finances are more complicated

Bedford Accountants are a group of professional chartered accountants offering all manner of accounting services in Bedford. If you are looking for help with anything from personal tax, bookkeeping, annual accounts or company formation, look no further than the experts at Bedford Accountants. Contact us today to find out more about how we can help you.

What Services Does an Accountant Typically Provide?

Although the services an accountant provides can vary depending on the package you decide upon, below is an outline of some of the services to look out for. Furthermore, some services can be provided at additional cost. For example, providing references for mortgages and rental agreements or dealing with correspondence from the Companies House or HMRC.

 

Before you commit to working with a new accountant, make sure you have them explain to you exactly what is included in your particular package. Contact Bedford Accountants for more information on the kinds of services available to you.

 

  • VAT and VAT Returns

If you are looking for accounting services such as VAT returns in Bedford, Bedford Accountants are able to assist any size of business. Furthermore, our team of professional chartered accountants will take care of all of the responsibilities that accompany the process.

  • Corporation Tax

For companies registered with the Companies House, Corporation tax and the rates you pay are related to your business profit. Bedford Accountants provide expert guidance, so you pay the exact amount of corporation tax in Bedford.

  • Payroll & Register Your Business for PAYE

Should you need to take on new employees, payroll can prove quite difficult to manage on your own. Luckily, Bedford Accountants offer excellent services, including payroll in Bedford and PAYE in Bedford.

  • Bookkeeping

Bookkeeping done correctly can ensure that your business has room to grow. If you are looking for help with bookkeeping in Bedford, our team of accountants can help.

  • Annual Accounts

Annual accounts can be tricky to manage. If you require an accountant to carry out annual accounts in Bedford, look no further than Bedford Accountants.

  • Company Formation

If you need help with the financial side of company formation in Bedford, Bedford Accountants team of experienced and professional accountants are here to help.

  • Personal Tax

Personal tax or income tax as it is otherwise known is dependant on the amount you earn. If you are in need of advice and guidance regarding personal tax in Bedford, contact Bedford Accountants.

5 Reasons Why You Should Hire an Accountant

1. Financial projections

If you are the owner of a small business you will be accustomed to managing all of the various aspects of what your business entails. However, you may want to consider enlisting the services of an accountant. An accountant can help you to gain an excellent insight into the prospective success of your business model. They will likely have access to sophisticated software that will enable you to gain invaluable insights into the sorts of numbers you are working with, through financial projections and reports.

2. Legal Matters

An accountant will be able to advise you on the legalities of your chosen business model. Alternatively, if you are still in the early stages of setting up, your accountant can help you choose the one that is right for you. Furthermore, they will help you negotiate the inevitable pitfalls that could arise.

3. Legislation and Tax

Closely related to legal matters, Government legislation and tax laws can be extremely confusing, daunting and difficult to negotiate. An accountant not only has been trained in this area but also has developed a deep understanding of how these systems work and consequently, what you and your business can do to work within these parameters. Accountants can also help with dreaded paperwork, such as tax and VAT returns that come with the running of any business.

4. Keep Your Finances Under Control

If you find yourself in the unfortunate position of financial difficulty due to a loss of control or a limitation of understanding, a good accountant will assist you to overcome these, thereby helping you gain back control.

5. Keeping Up with the Growth of Your Business

Along with the growth of your business comes the responsibility of audits, spending more money on resources and possibly having to deal with banks. These aspects are ones that you can afford to delegate to a professional. An accountant is well equipped to help you when it comes to convincing banks to agree to a loan, checking whether you can afford that new office building and, importantly, helping you deal with an audit. Audits, in particular, are expensive, time-consuming and highly stressful. However, an accountant can guide you through the process in a way that will make you wonder how you ever did without one.
If you are looking for fully accredited accountants and bookkeeping or accounting services in the Bedfordshire locale, get in touch with Bedford Accountants. Our team of professional and exceptional accountants are highly experienced in all aspects of accounting.