News

National Living Wage - April 2019

March 12, 2019

National Living Wage - April 2019 Update


The National Living Wage is an obligatory minimum wage payable to workers in the United Kingdom aged over 25 which came into effect on 1 April 2016.

As of April 2019 it is £8.21 per hour for those aged 25 and over, £7.70 for those aged 21–24, £6.15 for ages 18–20, £4.35 for under 18s and £3.90 for apprentices.

For more information go to National Minimum Wage Rates

Making Tax Digital - Updated

June 11, 2018

Making Tax Digital - Updated


The original Making Tax Digital proposals phased in the implementation of digital record keeping and quarterly updating by businesses, the self-employed and landlords for Income Tax Self-Assessment (ITSA), Value Added Tax (VAT) and Corporation Tax (CT) between tax years 2018/19 and 2020/21.

Following representations about the scope and pace of the reforms, the government announced by Written Ministerial Statement, on 13 July 2017, that businesses would not be mandated to use the Making Tax Digital system until April 2019 and then only to meet their VAT obligations. This will apply to businesses with turnover above the VAT threshold (currently £85,000). Businesses with turnover below the VAT threshold will not be required to use the system but can choose to do so. Businesses will also be able opt in for other taxes, benefitting from a streamlined, digital experience.

This will give small businesses and landlords time to move to the new digital system at a pace that is more suited for them. Making Tax Digital will be available on a voluntary basis for these businesses until it becomes compulsory so that they can choose to join earlier to get a head start on the new process and start to enjoy the benefits of a digital system.

As VAT already requires quarterly returns, there will be no requirement for businesses to provide information on a more regular basis.

All businesses and landlords will now have at least two years to accommodate the changes before being asked to keep digital records for other taxes.

This is a great opportunity for us to take control of this process for our clients. We are currently implementing a strategy to start moving clients over to the digital system and are well ahead of schedule to meet these deadlines… watch this space.

National Living Wage - April 2018

April 1, 2018

National Living Wage - April 2018 Update


The National Living Wage is an obligatory minimum wage payable to workers in the United Kingdom aged over 25 which came into effect on 1 April 2016.

As of April 2018 it is £7.83 per hour for those aged 25 and over, £7.38 for those aged 21–24, £5.90 for ages 18–20 and £4.20 for under 18s.

The New National Living Wage

March 18, 2016

The New National Living Wage


From April 2016, the national living wage will be £7.20 an hour for workers aged 25 and older. The minimum wage will still apply for workers aged 24 and under.


The New Minimum Wage Rates

The National Minimum Wage rate per hour depends on your age and whether you’re an apprentice - you must be at least school leaving age to get it.


Year

21 and over 18 to 20 Under 18 Apprentice*

2015 £6.70 £5.30 £3.87 £3.30
2014 £6.50 £5.13 £3.79 £2.73
2013 £6.31 £5.03 £3.72 £2.68

*This rate is for apprentices aged 16 to 18 and those aged 19 or over who are in their first year. All other apprentices are entitled to the National Minimum Wage for their age.

The rates are usually updated every October - the current rates apply from October 2015.

2015 Budget New Dividends Tax

March 18, 2016

2015 Budget - A new tax on dividends from April 2016

The 2015 Summer Budget announced a major change for small business owners in the form of a new tax on dividends from April 2016. As a shareholder of a limited company, these changes will affect the amount of personal tax that you will pay. We have detailed below a summary of these changes and what they could mean for you. Please read through this carefully and if you have any questions please contact our offices. Please note that all examples used are for illustrative purposes only.


What are the tax rules before April 2016?

Under the old rules, when taking dividends from your company they came with a 10% tax credit. If you are a basic rate tax payer your tax due on those dividends is 10% - the same as the tax credit, and therefore you had no additional tax due. It was only if your income increased into the higher or additional rate bands that you would have additional tax due.


The tax rates on dividends were as follows:

Basic rate - 10%
Higher rate - 32.5%
Additional rate - 37.50%

For example, if you withdrew £18,000 from your company, this is then grossed up by the tax credit to become a £20,000 dividend. The tax on this would then be as follows:

If at basic rate tax - £0 (£20,000 x 10% less 10% tax credit)
If at higher rate - £4,500 (£20,000 x 32.50% less 10% tax credit)
If at additional rate - £5,500 (£20,000 x 37.50% less tax credit)


What are the new rules from April 2016?


The 10% tax credit will be abolished and replaced with a new £5,000 ‘dividend allowance’. This allowance means that the first £5,000 of dividends will have 0% tax, but all remaining dividends will be taxed at the following rates:

Basic rate - 7.5%
Higher rate - 32.5%
Additional rate - 38.1%

For example, if you withdrew £18,000 from your company, the tax due would be as follows:

If at basic rate tax - £975 (£5,000 at 0% plus £13,000 at 7.5%)
If at higher rate - £4,225 (£5,000 at 0% plus £13,000 at 32.5%)
If at additional rate - £4,953 (£5,000 at 0% plus £13,000 at 38.1%)


Should I still be taking dividends?


For most people under the old rules, the most tax efficient way of withdrawing money from the company was to take a minimum amount as salary, and then take dividends up to the higher rate band. For example; a comparison of the old rules and the new rules with minimum salary and dividends up to the higher rate:


Old Rules

New Rules

Salary £8,060 £8,060
Dividends £34,725* £34,725**
Total Income £42,785 £42,785
Personal Allowance (£11,000) (£11,000)
Tax Due £0 £2,008

*Actual amount withdrawn from the company £31,252
** Actual amount withdrawn from the company £34,725

As you can see, this is a significant tax increase for people with this level of income. However, in general it is currently still more tax efficient to withdraw dividends from the company than it is to take the full amount as salary.


What about my partner who is also a shareholder?


If your company has shares owned by other family members, such as partners or children, you may find that the new dividend tax causes them to have tax payable where they previously never have before. This may mean that they will have to submit a self assessment tax return each year. Whilst this can be an additional administrative burden and have a small cost, it does still mean that you are making use of both partners’ dividend allowance and basic rate tax bands. If you are unsure of the shareholding in your company, or want to discuss the possibility or changing the shareholding prior to April 2016, please contact us for specific advice.


Should I still operate as a limited company?


Whilst the advantages of operating as a limited company have been greatly reduced, in most cases there is still a tax/NI saving in continuing to trade as a limited company.


When does the additional tax get paid?

As the changes come into force from April 2016, they will affect the 2016/17 self assessment tax return, with tax becoming due in January 2018. As detailed above, those people with income within the basic rate band could expect additional tax due of up to around £2,000. This additional tax may create the obligation to make 'payments on account’ to HM Revenue & Customs. Payments on account are where you have to pay tax in advance for the following year by paying an extra 50% tax in January and another 50% tax in July. These payments on account are then taken into account during the preparation of the following year’s tax return.

ABM 10 Blog

June 18, 2015

ABM 10 is on its way… and warehousing just got a whole lot better!

ABM Warehousing Package is compiled with the ideal tools for managing a competitive business, with special focus on stock, assets and single-entry work flow. The package includes the core ABM accounting system with stock control, as well as the recommended Warehousing, Structured Stock, Asset Management and Business Intelligence optional modules.

The package is able to be customised to fit requirements, from removing or adding optional modules to specific bespoke applications developed for clients. The choice between Small Business or Enterprise editions are also available to suit.

ABM's Warehousing module provides logical control and organisation of stock, allowing users to create a hierarchal structure in each warehouse with multiple aisles, levels, etc. and a waiting area for goods not yet put away. The module uses "bins" to organise and group stock depending on the user's grouping method, location, level or stage.

So what’s new?

  • Visual representation of the warehouse structure allows users to easily organise and find stock through point-click operation and fast search facilities.
  • The hierarchal structure allows the user to drill down through as many sub-headings as desired to organise stock as needed. Multiple products can then be stored per “bin” and multiple “bins” can be used per product with serial and lot numbers assigned to products.
  • Effectively handle consignment and bonded goods, as well as place weight or capacity limits and reservations on “bins” as required.
  • After initially receiving stock, transfers from one location to another within the warehouse or to another warehouse is easily made within the system. Organise stock to adapt to your changing environments or stock requests.

  • Accounting Blog

    April 2, 2015

    Tips on choosing the right financial accounting software to do more with less

    As financial management systems (FMS) become more and more sophisticated, public sector bodies face tougher choices to ensure they are selecting the most suitable software package. Making the final decision on the chosen system is important, after all, it can be key to improving productivity and maintaining frontline services while under the cosh of continued cost-cutting.

    FMS’ can now include procurement, planning, forecasting, budgeting, management reporting and analytics, and the right system will deliver clear and immediate benefits such as cost savings, a fast return on investment and productivity gains.

    To help you during a review process, we have put together 10 top tips to selecting the right FMS:

    Evaluate your current system – Review the benefits, or lack of benefits, delivered by the current system – such as real time analytics, flexible budget planning, monitoring and forecasting, high level of support and low ownership costs. Will the system support longer term objectives for shared services? Establishing the reasons why a new FMS is required is the first essential step to choosing the right system and important to secure management buy-in;

    Look at the wider picture – Implementing new software can often be the catalyst for wider organisational changes. Think about which areas the new system will come into contact with and what wider processes might need to change as a result. This will help to decide who should be consulted internally about the new system;

    Establish a project team – Key internal stakeholders who will be impacted by the new FMS should be included in the project team, and a clear leader selected. One of the team’s first tasks will be to clearly define the requirements for the organisation including areas outside of finance;

    Gain input from others – From the start of the project speak to software suppliers to see what is on offer in order to define the tender requirements. Valuable insight can also be gained by speaking to other similar organisations about what FMS they use, how they deploy it and any changes they have implemented. Engaging an independent market analyst should be considered to gain an expert opinion of key suppliers within specific sectors;

    Set a budget and timescale – Design a realistic schedule for the rolling-out of the FMS and plan the cost of the project, remembering to account for any set-up costs, future maintenance payments, and time for analysis and implementation;

    Choose the procurement route – Decide whether you will go through a full Official Journal of the European Union (OJEU) process or through an approved framework. Suppliers listed on a framework will already have been assessed, checked and commercial terms agreed, which can reduce the time, risk and cost associated with procuring back office systems;

    Establish a shortlisting process – Choose what is essential and what is ‘nice to have’ and then compile a scoring system for shortlisting systems;

    Define what a successful project would look like – The desired outcomes and when and how these would be assessed should be established at the start of the project;

    Create a comprehensive tender document – As well as the functionality required by the FMS, a tender document should also include strong references to projects undertaken by similar organisations and the ability to ‘future-proof’ the system in case of a change in IT requirements, for example by offering hosting, and after-sales support; and

    Select a suitable supplier – When selecting a suitable supplier, consider whether they should be UK-based, as this can mean more understanding and quicker responses to legislative changes, whether they run public sector user groups and lastly, whether they are a good fit with the organisation’s culture.

    Whilst selecting a new system may seem like a daunting challenge, with a considered approach the benefits can be reaped by all organisations who are working hard to maintain frontline services on much reduced budgets.



    social-blog

    March, 1 2015

    Going Social!

    Dart-Digital are now available through Facebook, Twitter and Linkedin

    abm-eight-released

    January 16, 2015

    ABM 8 Released

    We are pleased to announce the release of ABM 8. ABM 8 has a new look and users will notice a significant change in the screen design, and now has Ribbons on all screens.

    The resulting changes allow for quicker processing, whereby all regular actions are just one click away.

    Apart from the visual changes there is also a lot of work completed “under the bonnet” giving the basis for further development of mobility and cloud delivery.

    To offer the best value to our clients Dart-Services are proud to be partners with:


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