It is quite common to invoice a customer with terms of “30 days or net monthly account”. Small customers will be expected to pay within 30 days, while large customers will be expected to pay at the end of the month following the month of the invoice, so an invoice sent in February 2018 would be settled by 31 March 2018. Large companies do it this way because they may receive several invoices from a supplier, and will want to settle all of them with a single payment when they do their computerised cheque run. It would therefore be a good idea for the supplier to have sent a statement at the start of March listing all outstanding invoices. Typically the cheque run would be about the 25th of the month, or this March the 26th, the date of this posting. If you give credit and have debts to collect, then you might like to have a discussion with us. Most accountants are also general business advisors as well.
Archives for March 2018
Value Added Tax returns for the quarter ended 28 February 2018 are due to be submitted by 7 April 2018, and any payment which is due should be made electronically by the same date.
Auto enrolment pension scheme contribution rates will increase in the week including 6 April 2018. Employers will need to contribute at least 2% of wages, and employees will need to make up the difference so total contributions are at least 5%. Employees will normally pay 3% and employers will normally pay 2%.
Contributions need to be increased for the full pay period which includes April 6, even if some of the period fell before April 6.
Rates will go up again next year to a total of 8% of wages. Obviously we are now talking serious money. The 1%-each rates that we have had up to now are just a pilot scheme to get people used to making pension contributions.
The end of the income tax year on April 5th 2018 is approaching, and it may be timely to think about some tax planning.
Make ISA contributions if you have not done so already. Current interest rates are so low that it might seem not worth the bother, but ISAs might still serve as the first steps in setting up a private pension scheme for yourself while maintaining some liquidity.
If you are running a small company, then it may be a good idea to have a payroll scheme in existence and to be paying yourself a salary in order to make some use of your Personal Allowance. You may wish to vote yourself a dividend, at least up to the tax-free limit of 5,000 pounds per person. Discuss these topics with your accountant. We can produce dividend minutes and tax vouchers to assist you.
If you have a portfolio of shares, then you may wish to cash some in and to buy others, and at the same time make use of the Annual Exemption for Capital Gains Tax of 11,300 pounds. Again discuss this with your accountant.
Small private companies with a year end of 30 June 2017 and into their second or later year of existence should submit their accounts to Companies House by 31 March 2018 in order to avoid a Late Filing Penalty.
I am starting to feel pleased with my Optical Character Recognition system for scanning bank statements. I was given some bank statements which were computer print-outs from an online account. They were faint and in inverted order. The columns were switched around from the usual order.
The computer-assisted blink comparator was able to highlight at once what was obviously wrong, regardless of the order of the transactions. With the faintness of the statements, a few numbers were misread or were missing, and these needed to be overtyped by me to correct them. After this, I ran the computer routine again, and it was able to see the unusual order of the transactions and to add the right column headings.
Once the statements had been rectified on the spreadsheet, it was easy to read them into the main software. Overall the job took a bit longer than usual, but not excessively so, and I would certainly much prefer OCR to typing it in.
National Minimum Wage rates will increase on 1 April 2018. The average increase will be about 4.5%
It can happen sometimes that when you are an employer, you have not actually made any wage or salary payments for a PAYE month such as the month from 6 February to 5 March 2018. In that case you must submit electronically an Employer Payment Summary as a NIL return by 19 March. This is too easy to overlook.
If you engage a local accountant and business adviser or a payroll bureau to do your wages, then this will be taken care of. In our case we keep a diary and do a batch of payrolls at about the same time each month. Our payroll files are bright yellow like the old P30BC booklet so we do not overlook them.
February and March are quiet months for accountants and we have a bit of spare time. One new activity for us is to update or fine-tune our client-customised keyboard to give a better result.
As an example, if a client makes regular payments to Pioneer, Tesco, Sainsbury’s and Morrisons, then we can redefine the keys F6 … F9 on the keyboard to be able to generate these narratives just for that client. This makes it a lot quicker to type in client data from handwritten records onto our system, and of course once the data is in the system we’re laughing.
It might occur to the reader that life would be easier still if we redefined F6 as Morrisons, F7 as Tesco, F8 as Sainsbury’s and F9 as Pioneer, so there is some similarity in vowel sounds to make it easier to remember. This is the sort of thing we can do in February and March. Overall, doing this gives us a strong feeling that the computer is working with us rather than against us.
Generally the advanced technology campaign is coming to an end now. The new priority is to produce crib sheets and checklists for everything so we can concentrate on service to clients.
Construction Industry Scheme returns for the month from 6 February to 5 March 2018 should be submitted online by 19 March. This includes NIL returns.
It is only too easy to forget the need to submit a NIL return when no payments to subcontractors have been made. If you engage a local accountant to do your CIS returns, then this will be taken care of. In our case we keep a diary and do a batch of work at about the same time each month. We aim to be the Carlisle accountants that businesses will turn to for a range of advice and services.