FRS 102

FRS 102 is a financial reporting standard that was introduced in the United Kingdom in 2013. It replaces previous UK GAAP and is designed to bring UK accounting standards in line with International Financial Reporting Standards (IFRS). FRS 102 is divided into four parts: The Framework for the Preparation and Presentation of Financial Statements This… Continue reading FRS 102

Are you recession ready?

Generally its quite hard to predict whether or not there will be a recession with a high degree of accuracy. For example, whilst its possible some people may have predicted the recessions after credit crisis and Covid-19, they would have been a shock to the vast majority of small and medium sized businesses. However, in… Continue reading Are you recession ready?

Mileage allowance

Can directors claim for fuel and motor expenses? We cannot include car repair, fuel and running costs in a limited company’s accounts unless they are for a company car. Directors can claim for 45p per mile for the first 10,000 business miles per year and 25p thereafter. We would normally make an adjustment for this… Continue reading Mileage allowance

VAT Overview

What is VAT? Value Added Tax is an indirect tax aimed at consumers. If a business meets certain criteria then it has to charge VAT on its sales of goods and services. In a supply chain there are usually a series of businesses selling to each other until the final product or service reaches the… Continue reading VAT Overview

Published
Categorized as VAT

Gift Aid

If you give money to charity then you can obtain tax relief if you are a higher rate taxpayer and the donation was made to a registered charity in the EU (plus Norway, Iceland and Liechtenstein). You can also obtain relief for donations made to Community Amateur Sports Clubs (CASCs) that were registered with HMRC… Continue reading Gift Aid

Are legal and professional fees tax deductible?

Fees related to a trade are often allowable but it depends on the nature of the fees. Generally, fees related to the purchase or sale of property/assets and to do with raising equity finance are disallowed for tax purposes. “Capital” expenditure: not deductible Legal and professional fees are “capital” if they relate to an asset’s:… Continue reading Are legal and professional fees tax deductible?

Accounting for invoice finance

How to account for invoice finance? It may sometimes be important to check if the invoice finance is recourse or non-recourse. Examples of lenders are Market Invoice, Bibby, Lloyds etc. But for smaller businesses, the typical accounting treatment will involve: sales invoice is raised: debit trade debtor and credit sales as normal invoice finance received:… Continue reading Accounting for invoice finance

Loss relief

Trading losses If your company makes a loss from its trading operations then it can claim relief against corporation tax. Current year If you make a trading loss, you can offset the loss against profits/gains from other trades or sources in your company in the current year. Carry back against previous year If you can’t… Continue reading Loss relief

Can tax deductions be claimed for bad debts?

Bad debts can receive tax deductions if they are: bad debts that definitely cannot be recovered (eg debtor has already closed down) specific bad debts that are doubtful/unlikely to be received debts released by the creditor as part of a statutory insolvency arrangement Bad debts won’t receive tax deductions if they’re general provisions against overall… Continue reading Can tax deductions be claimed for bad debts?