We will need to contact your existing accountant (if you have one) to obtain all your accounting paper work. To do this, all you need to do is sign an authorisation letter which we send to you.
We will then write to your existing accountant and ask them for a copy of your file.
Once we have received the response from your accountant we are good to go.
If you are a sole trader or partner of your business you take your earnings as straight drawings from your business to your personal bank account.
Note – There is a small amount of administration. You must keep a record of all dividends declared together with dividend vouchers. Accountspoint can help you with this.
To pay dividends your family member must be a shareholder of the company. Problems may occur if no or minimal work is carried out and the company is a “personal service company” (i.e. a contractor or freelancer). It is advisable to contact us to discuss the “income shifting” rules.
Declaring a dividend can be used to offset an overdrawn DLA (as long as the company profits are enough to pay the dividend).
Most contractors and freelancers are based from home. They, therefore, can claim for all travel from home to work, as long as their workplace is temporary. A temporary workplace is one where you cannot predict will continue for 2 years.
HMRC’s guideline allowance for mileage in your own car is 45p per mile for the first 10,000 miles in the tax year, 25p per mile thereafter. We can provide you with a mileage log to help record your expenses.
Meals must also be classified as ready to eat; i.e. ingredients from a supermarket cannot be claimed for, a sandwich from a supermarket can be claimed for (HMRC guidelines).
Your personal tax is due in 3 payments:
31/01 – half of previous years tax liability.
31/07 – half of previous years tax liability.
31/01 – balance.
IR35 is aimed at contractors and freelancers and looks at their working practices for each contract they work on.
Accountspoint can advise further on this.