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Single Use Carrier Bag Charge – VAT implications

Vat implications of Northern Ireland’s Single Use Carrier Bags Levy

 

On Monday 8th April 2013 the Single Use Carrier Bag Levy came into force.

 

The VAT treatment of the Single Use Carrier Bag Levy in Northern Ireland differs from how it is currently treated in Wales.

 

Practical Implications for a VAT Registered retailer operating in Northern Ireland:

If a retailer charges the minimum allowable charge of 5 pence per single use carrier bag, then the sale is classified as being … “Outside of the scope of VAT”, and as such:

  • The retailer doesn’t charge the customer any VAT on the 5 pence charge for each bag.
  • The retailer does not include the 5 pence proceeds generated from each carrier bag in the Net Sales entry on their VAT return (Vat Return Box 6)
  • The retailer does not include any VAT liability on the 5 pence proceeds generated from carrier bags within VAT due in this Period (Vat Return box 1).
  • The retailer may reclaim any input vat incurred on the initial purchase of these carrier bags.

 

In our next article we’ll take a quick look at the VAT implications of charging more than the minimum 5 pence per bag.

2012 Autumn Statement

 

George Osborne delivered his 2012 Autumn Statement yesterday and we have summarised the key points below:

INDIVIDUALS

  • The Personal Allowance is to increase from £8,105 to £9,440 from April 2013 for those aged under 65. This is part of a plan to ultimately increase the Personal Allowance to £10,000.
  • The band of income tax rate at 20% is being reduced from £34,370 to £32,010 from April 2013
  • The threshold for 40% income tax is to decrease from £42,475 to £41,450 in 2013/14 but will increase by 1% in 2014/15 and 2015/16 to £41,865 and £42,285
  • The 50% band currently applies where taxable income exceeds £150,000 but the rate will fall to 45% next year.
  • New universal credit for Income Tax is coming into effect next year as previously announces
  • The Capital Gains Tax annual exemption is to increase by 1% to £11,100
  • The Inheritance Tax exemption is to increase in 2015/16 from £325K to £329K
  • No new tax was implemented on property
  •  From 2014/15, pensions lifetime allowance is to reduce from £1.5m to £1.25m and annual allowance from £50K to £40K. This restriction of pensions tax relief is a £1bn tax rise for high earners
  • The ISA limit extended from April 2013 to £11,520
  • The Basic State pension is to increase by 2.5% next year which is a rise to £110.15 per week
  • Tougher measures on welfare fraud are announced. Changes to welfare benefits will save £3.7bn in 2015/16
  • Child benefit is to increase by 1% for 2 years with effect from April 2014

BUSINESSES

  • Main rate of Corporation Tax cut by 1% to 21% in April 2014 (was set to be 22%), currently set at 23% for April 2013
  • Increase in Annual Investment Allowance for capital allowances from £25K to £250K from 1 January 2013 for 2 years. This is a huge boost for expanding businesses
  • A number of tax avoidance loopholes are to be closed immediately, and anti avoidance will be further tackled by an increase of 2,500 in the number of tax inspectors
  • New general Anti Avoidance Rule still be introduced in April 2013
  • £5bn to be received over 6 years from undisclosed Swiss bank accounts of UK residents
  • Temporary doubling of small business rate relief was to end 2011 – already extended to April 2013; now extended further to April 2014
  • Tax relief for employee shareholder scheme to be introduced
  • Consultation on new tax incentives for shale gas

OTHER ISSUES

  • The planned 3p rise in fuel duty from January 2013 is now cancelled.
  • Extra £5bn capital investment to be made in infrastructure – Northern Ireland will get its share
  • Broad band investment in various areas across UK
  • Extra £600m for scientific restructure in UK
  • £270m to be made available for improvements in further education in UK
  • £1bm to be made available to expand schools and build 100 new free schools and academies in UK

Thinking of working from home?

The idea of working from home always sounds very idyllic especially to those who have never done it, however some businesses actually struggle to separate work from home life. In many cases, they actually work longer hours and enjoy less quality time with their families.It simply doesn’t work for some businesses, either. Nothing says unprofessional quite like a sink full of plates or the sounds of arguing children. The question is Can you really hold successful client meetings when your office is also your home?

Not to completely shatter the illusion, the home can be a great place to start a business and many of the UK’s finest companies started on the kitchen table. Start-up businesses, no matter where they originate, are not great for escaping stress and freeing up your time.

When the line between home and work gets blurred (which at times it inevitably will), things can get a little complicated. We all know that there are several situations that make working from home more difficult than we originally thought it was going to be. It actually requires a lot of discipline to make sure you’re staying at the top of your game when you’re not in an office environment.

Can you work from home?

If you can work well on your own without the necessity of others to hold you accountable or without that professional interaction you get from working with others then you are probably a good candidate for working at home. However, if you already have problems ‘switching off’ when you come home from work then you could have a problem.

 

How to put this into practice

To work from home you will most certainly need  to be self-motivated and not require others present to ‘push you on’.

You know yourself best — do the hard self-evaluation before you commit to the idea of an office at home.

Make sure you set up a separate workspace. If possible set aside an office space. Locating a corner in the kitchen or living room is not ideal it will not give you the separation that you need and can walk away from and will not make it easy to ‘go home’ at the end of the day. Naturally you need to make sure you have good lighting, ventilation etc.

Be sure to ‘Organise’ Your day

Get up as normal and do all the things you would normally do if you were heading out to work. Go to your office and end your day exactly how you would normally have. Create a proper structure and stick to it

Separating work and personal life

We touched on this in a previous article. Try not to get distracted by your personal to do list or grocery lists etc, try and ignore the personal element during your working day (as far as is possible).

On the other hand do not over work yourself, try not to talk about work when work is over or outside the ‘work room’ and try not to let your hours creep. Although we all do this just make sure there are clear boundaries.

Successfully working from home with kids can be difficult but it is not impossible. Set clear boundaries, let the kids know that the work room is not a room for the kids, help them to understand this and suggest they knock the door etc if they need in and explain to them that this is incase you are on the phone. Keep it clear of toys and other personal items.

It can be easy to feel isolated without the interaction with people during the day, stay in touch with people, clients, friends, colleagues. Where necessary meet clients, over lunch for example to help maintain that adult interaction.

In Conclusion

A few points in conclusion.

Stay productive –  its harder to charge by the hour when you work from home, consider charging for the end result.

Stay driven – but do not become a hermit or loose sight of who you are in the process.

Stay alert – don’t miss the opportunity to grow your business – just because you are based at home does not leave your service or product any lesser than any other.

Stay competitive – but do not undersell yourself just because you work from home.

Something for nothing? …

Fossil fuels, energy efficient equipment and The Carbon Trust

 

Having recently been involved in a review of utility expenses with some of our SME clients I came to challenge the notion that “you can’t get something for nothing in this life”.  Well, on the basis of some number crunching, a lot of meetings and discussions and the like with various others, it would appear that it is in fact possible to get something for nothing.

 

The technology upon which energy efficient lighting, heating, cooling etc. is based has developed so rapidly over the last, say 10 years that if your equipment was installed around that time, or before, then it just might be the case that you could change your lighting, heating/ cooling equipment “for nothing”.

 

In one of the cases that we have been looking into, as I referenced above, we have moved beyond the paper review of the costings, and are now looking at the physical equipment that is being proposed.

 

In that case the lights are ‘burning’ for approximately 50 hours per week.  It would appear that new energy efficient LED based lighting can be introduced to provide a ‘similar level of lighting’ but delivering between 65% – 70% efficiency gain on the current lighting.

 

The Carbon Trust currently provide interest free loans to SME’s based in Northern Ireland and Wales.  These loans are typically repaid over the first 3 – 4 years after installation.

 

The projected cashflow savings (through reduced payments to the electricity supplier) being delivered through the installation of these LED lights, in the case we have looked at, is greater than the monthly repayment of the Carbon Trust loan – albeit only by a small margin during the loan repayment period.  However, once the loan is repaid in full the savings all yours!

 

For more information on Carbon Trust and their interest free loan see their website: http://www.carbontrust.com/client-services/northern-ireland

 

 

Our next article will look at the Enhanced Capital Allowances position and their impact on the acquisition of energy efficient equipment.

The Husband & wife business partnership and a healthy work life balance. Can we have both??

 

When we got married we were both studying our professional exams and training to become accountants. We were attending university together on a Saturday, studying together and living and breathing the same text books for three solid years. It seemed to work OK, however there was one fundamental difference, we were not working in the same firm. Perhaps this is why it seemed to work so well.

Given that we were ‘heading in the same direction’ it seemed inevitable that one day we would go into business together and here we are.

When we first made the decision to work together, I thought this will be great, we had just started our family and it seemed, to me, to be the perfect situation. I could work and still be flexible for my young children and not miss out on them growing up. I was going to be super woman!! However, when I actually started to think about it seriously I thought, what if we ‘kill’ each other, or even worse what if I turn into my husband!! However, we decided to risk it and in January 2010 we decided to just ‘go for it.’ I have to say, if I am honest, there have been arguements, but we have never looked back!!

Husband and wife business partnerships are on the rise, we can see this in our client list, through colleagues and friends, and when it works it seems to be working very well.

When a husband and wife go into business together they have the same end goal and dedication. This type of dedication can help young companies get off the ground. When married couples work together, their business can become like their own baby. Their emotional involvement with each other spills over into an attachment with the company, driving people to be more dedicated than they would other-wise be.

Don’t get me wrong the constant interaction, the strain of juggling work and personal life, and the trials of entrepreneurship—especially in a difficult economy—can take a toll. The key however is getting the work life balance right.

I am not a marriage guidance counsellor but I thought I would share a few of our secrets and experiences that have helped make it work for us:

Figure out how you will physically work together. This will be different for every couple. Some couples can work well in the same office space however others may need to be physically separated if they’re going to work well together. If a separate space is necessary for you to make it work, then I suggest you find a separate space.

Make clear your roles. Going into business with your spouse or partner is exciting because you are building something and you will have the same dream. However, how you visualise you get there will most likely be different. Identify each others responsibilities, you will both have different strengths so use them. That way you’ll avoid stepping on each other’s toes and hopefully minimise any arguments.

Understand your working styles. This is another one that often gets forgotten when a couple works together. When we were both training we worked for different companies and naturally developed very different working styles, you need to understand how the other person likes to work, how you each deal with stress, and go into it with similar, or at least clear, expectations about sharing the work. We clashed at the very start on our very different working styles. I am ‘hyper’ organised, like things in a certain way, and especially like a nice tidy desk. My husband however, does not share my enthusiasm for a clear desk, but we got round it, by simply buying separate trays, and once a week we go through these trays and clear it all away. That way I didn’t have to look at lots of loose paper and my husband didn’t feel he had to file everything every two minutes. It is about finding the compromise and using it.

Communicate. It is so easy to forget that communication in a work environment is different from asking if the dishwasher is emptied or agreeing about who’s going to pick up the kids from school. Make sure you’re communicating about the day-to-day stuff as well as the big picture stuff. And if you have other people working for or with you, communicate with them too. Remember you are running a business together not separately!!

Leave work at work. You don’t want to be talking shop over dinner. It’s bound to happen and lets face it, it does, but try and minimise this where possible so as not to have your lives be all work all the time.

Leave home at home. This is the other side of that coin, but it can be less visible on your radar. If you’re working together it will help if you can maintain a professional relationship that’s focused on the business. Making your grocery list while you’re balancing the books can make everything feel smashed together, which is no fun – and not productive – for anyone.

Respect each other. You respect each other in your marriage (hopefully). If your spouse is your business partner you should treat that person the same way you’d treat any other colleague, whether a boss or a peer.

If you can manage all that, you might just be able to live – and work – happily ever after.

The Modern Accountant ????

But Accountants DO NOT blog……

 

This may well be true, yet here we are, accountants, and we are trying our hand at blogging!!

 

It has become a general consensus that accountants are not known for trying out new ideas, and as for social media and blogging well, they simply ‘do not have the time’, it is ‘not necessary’, it ‘will not increase our profits’, it ‘will not add to the quality of service for our clients’ and it is ‘not an efficient use of our time.’

 

While this is all true, and ok, it probably won’t help us understand our clients better, it is most likely not very proactive, and lets be honest, who NEEDS an accountant that blogs?? However, despite all this, and in a bold NEW approach, I have pondered over the last few months that maybe our clients would like to understand US a bit better!!!!

 

I personally have always felt, even way back in my training years, (which feels like a million years ago now but really is not!!!) that it is important to show our clients that there is an ordinary human being behind all the ‘serious’ chat, tax regulations and number crunching. Maybe even someone that dare I say it has a ‘personality of sorts’!!!

 

So based on all this and with a gentle push and encouragement from some of our twitter friends Helen Cousins (@xcelbusiness), Sian Phillips (@_sians) and Sage Ireland (@sageireland) we are going to attempt this blogging thing!!!

 

This is my first ‘introductory’ blog and I hope you will all bear with me as I try to ‘master’ this over the coming weeks.

 

For now i have listed below some of our earlier posts that we included previously. A couple of them were in response to a few past client queries, which actually did end up being ‘a proactive use of our time!’

 

In the mean time if you have any interest in a specific topic you would like to see more information on please feel free to get in touch with us!!

 

and we have social networks too……

 

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