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By Nimbus

Budget 2016: Small business takeaway

March 24, 2016 | By |

With the dust now settling on the Chancellor’s recent budget, we’ve picked out some highlights that will help small business owners as they attempt to navigate through the plethora of proposed legislation.

The headline grabbers were undoubtedly the falling business rates, corporation tax and capital gains tax measures. The reforms to business rates will have the biggest impact as small businesses will look to save significant funds through the proposals, with an additional 600,000 businesses no longer paying any business rates – ever. The Chancellor’s claim is that this will reduce the business rates burden by nearly £7bn over the next five years.

Some would say that the closing of corporation tax loopholes has been a long time coming, but for small business owners they will now have the assurance that the big boys will now be paying their fair share. A number of polls held with small businesses before the budget indicated that the closing of tax loopholes so that big business paid their fair share was the number one desired outcome from the budget.

There was also the extended commitment to funding for small businesses through the British Business Bank. A significant figure of £1bn of financial support was agreed. This will mean that regional councils will be working with the BBB, to help investing in local businesses.

Nimbus believes that small businesses should be at the heart of the nation’s economic growth plan and it looks like the chancellor feels the same way – finally. The closing of tax loopholes and cutting of taxes will motivate local business owners and make them feel valued in the government’s economic ecosystem.

For more support following Budget 2016, get in touch with our team of accountants.



By Nimbus

Should you pay yourself an extra dividend?

November 5, 2015 | By |

Up until the chancellor delivered his Summer Budget it was possible to pay less tax if you ran your business through a limited company, this was because you could avoid National Insurance. If you are one of the many people that took advantage of this structuring then from 6 April 2016 your dividends are going to become more expensive. We covered the changes in more detail in our blog on the summer budget in July, but here are the headline changes that impact dividends:

  • Tax rate on dividends is increasing by 7.5%
  • The old notional 10% tax credit is being abolished
  • The first £5,000 of dividends will be tax free 

If you have retained earnings in your company that you are thinking of withdrawing at some point in the future, why not pay them out before the rate increases in April? It is worth taking a moment to consider if it is sensible to take a dividend before the change, if you are not a higher rate tax payer and you have some capacity to take a dividend without incurring any tax, it might be the time to do so.

For those with a lot of money tied up in their company and thinking of calling it a day, remember that Entrepreneurs relief at 10% might be available. This is certainly the cheapest way of getting your money out of a company structure.

If you would like to discuss dividends or liquidating your company in more detail, give one of our accountants a call on 01273 782 747, or visit our Contact Us page for our email address and Skype details.


By Nimbus

Time to switch Banks?

October 23, 2015 | By |

At Nimbus Accounting we are always reviewing the market for new innovations and solutions to make our client’s lives easier and more efficient. Recently a new bank opened on the high street in Brighton. Metro Bank, which is the first new High Street bank to open in the UK in over 100 years, has entered the market with a clear intention to provide an unparalleled level of service to its customers. You may ask, what is all the fuss about? Well there are several things that Metro Bank do which set it apart from the competition.

As a small business owner, time is the one thing that we all have to manage. Having restrictive opening hours to contend with is something that is very frustrating. Metro Bank is open from 8am to 8pm in the week, 8am to 6pm on Saturday and it is even open on Sundays and Bank Holidays from 11am to 5pm. At last there is a bank that is open when you need them!

From an accounting perspective, the bank has teamed up with Xero to set up direct bank feeds into their accounting software. This shows their commitment to small business. Not only this, they only charge £1 a month per account for the service, which is at least £2 cheaper than the other two main high street banks that have direct feeds. If you have a foreign currency bank account, this will also feed directly into Xero, something that the other banks seem to struggle with.

The good news doesn’t stop there. With the recent news of certain banks overcharging their customers, it is good to know that Metro Bank has competitive charges, offering most services for free if you hold a balance of over £5,000. You also get the manager’s mobile number, so you know that you have peace of mind that a decision maker is on the end of the phone if you need them. It is refreshing that your call is not going through a myriad of automated options before you speak to someone you have never met and knows nothing about you or your business.

To top it all off, when you are putting your feet up for a well-earned holiday, there are no fees to withdraw your money from cash machines in Europe. Not only that, you also get the MasterCard exchange rate, which you can’t beat on the high street. The days of leaving home with your entire spending money for a holiday are over.

We believe that Metro Bank has an offering that the savvy business owner must consider, they have embraced the best bits of traditional banking and added the service that we all require and deserve.

If you would like to discuss how Metro Bank and Xero work together, please give one of our accountants a call.


By Nimbus

How Important Has Having an Accountant Been for Me?

September 1, 2015 | By |

This article details the development of Brighton-based SEO and entrepreneur, Tom Clark, who is currently running Convert Digital amongst other online projects. He discusses the integral role having an accountant has had on his personal finances and the power of thinking bigger.

 Who are accountants for?

I had always considered accountants to be a service for ‘big earners’ or large companies that simply wouldn’t be able to keep track of their finances without a helping hand. At the beginning of 2014 I had decided that I would take the leap from working in a web agency, to starting my own SEO business. My perception was that a ‘small player’ like me wouldn’t need an accountant if I do decide to go solo, but it would soon become clear that this was a naivety on my part.

What if you have or plan to have more than one business?

 Being involved in SEO naturally lends its self to wanting to start sideline projects, as you become aware of online opportunities all the time. I was already running another online and offline business, Your Guitar Tutor, so I did have my concerns on how I would keep track of all my finances, what tax I would owe at what time and I didn’t even understand about different company formations. Through a friend, I was introduced to Nimbus Accounting who took the time to understand exactly where I was at and where I planned on going.

What’s your vision?

 For me, the real value of my initial meeting was not only in understanding why Convert Digital should be a limited company, but also why I need to consider my future. At age 24 you don’t typically do too much thinking about the next 10, 20, 30 to 50 years of your life, but this process made me think.

I had always gone along with the mindset that if you can pay your rent, afford the food shopping and get by, you’re doing just fine. Of course this is true, but what if something goes wrong and you lose your job and have no savings? Essentially, I began to realise that I need to be saving and understanding what I am doing with my money. As time went by and my relationship with Nimbus grew, I learnt another very valuable lesson about leveraging your money.

Do what you do best

One of my biggest realisations has been that you need to know when to ask for a helping hand. If you are worrying about if you are calculating your tax bill properly, over-paying or not being efficient enough, then you are taking your attention off the most important thing, which is your business.

Working with these guys has allowed me to do what I do best and not feel fretful about the finance side of the business. When things that impact me change in the financial world, I am made aware, instead of having to routinely checking online.

Xero – know exactly what’s going on

Nimbus set me up with Xero cloud accounting, which has been an incredibly powerful tool for me. This tool essentially shows me at any time what money has come in or out of my business account. I check in every week and make sure the items are reconciled, meaning matched up with the correct code (sale, dividends, entertainment with a client etc) so my accountant can make sure everything will be prepared for year end. I can keep track of which clients are behind on their invoice payments, which pay on time and find value in understanding my customer base in this way.

Helping you with more complex arrangements

When it comes to more complex deals with clients, Nimbus stepped in to consult with me on the various ways I can set up my involvement with other companies.

I planned on offering my services to a client in exchange for 10% of profits and 10% of the exit of the business. I didn’t understand how many different ways this could be arranged, but also how important it is to understand what the different setups will mean for me. Nimbus even held a conference call with my client to discuss the various ways we can go about setting the deal up, so everyone is comfortable. This input has been invaluable and developed me a lot in the past 20 months.


By Nimbus

Did the Summer Budget mark the end of the small incorporated business?

July 11, 2015 | By |

Those businesses that are run through a limited company structure had the advantage of avoiding National Insurance, by structuring the extraction of funds using a low salary and extracting additional funds as dividends. The chancellor announced that from April 2016 dividends for basic rate tax payers would increase from an (effective) 0% to 7.5%. He also announced that the old notional tax credit of 10% would be abolished. So while the rates of taxation for higher rate and additional rate payers are nearly identical at 32.5% and 37.5%, once the tax credit is taken into account the 7.5% is seen to be levied across the spectrum.

The rationale behind this change is to close the tax gap between operating under the corporate structure and the self employed sole trader. Thankfully there is also a new £5,000 tax free dividend allowance for all tax payers, to stop the majority of ordinary investors, with modest dividend income, from having to complete a tax return.

So looking at the changes in monetary terms, the additional cost from next April of someone making a net profit of £28,000, after deducting their salary [equal to their personal allowance] as a directors remuneration, will be approximately £1,700. However, this still leaves them roughly £1,200 better off than someone that runs their business as a sole trader.

The company structure is still optimal, but the decision to incorporate is now more marginal. But lets not lose sight of the other benefits of having a limited company, such as the limited liability status of a company, separation of business and personal assets, slightly different and more generous rules relating to the expenses you can claim, better tax planning opportunities with dividend timing and the status of being a company. In our opinion these benefits are still worth having, despite the additional administrative burden and slightly higher costs.

In preparation for these changes we would suggest making sure that you have paid yourself the optimal amount of dividends in the current year before they become 7.5% more expensive to receive. If you would like any further information on this or any other aspects of your taxation affairs, please don’t hesitate to get in touch with one of our qualified accountants.


By Nimbus

Salary Increase & £2,000 from HMRC

March 23, 2015 | By |

Another tax year is drawing to a close and it is time to make some adjustments to your salary and dividends.

HMRC are continuing their £2,000 give away for 2015/16. This amount is a credit and can only be offset against employers national insurance contributions. So for the second year running it is more tax efficient to pay yourself a salary up to the personal allowance, which has been raised to £10,600. This pay will attract £304 of employees national insurance contributions over the year. The net tax saving is £203, which is the difference between the employees national insurance contribution payable and the corporation tax saved by having the extra salary. Therefore, as a company director it is more tax efficient to pay yourself a monthly salary of £883.33 and declare a dividend on top.

In order to declare a dividend which keeps you within the basic rate threshold, the net dividends for the year will need to be £28,606 (£2,383 per month). If you decide to pay yourself more dividends, you will be taxed personally at 25% on the net dividend payment.

If you have other employees that will naturally utilise the £2,000 employers national insurance credit, it is advisable to keep the salary to the national insurance primary threshold of £8,060 for the year (£671.67 per month) and the net dividends to £30,892 (£2,574 per month).

Hopefully you will have a good year and your total gross income will get close to £100,000. Be careful at this point as the tax rate is an effective 60% over this amount as a result of the personal allowance being withdrawn at £1 for every £2 of earnings over £100,000. It is advisable to keep your income below this threshold unless completely necessary.

If you want more information on extracting money from your company in a tax efficient manner we are your local Brighton & Hove based accountants, feel free to get in touch


By Nimbus

New VAT rules for digital services

December 17, 2014 | By |

There are new rules being implemented on 1 January 2015 concerning VAT on the supply of digital services within the EU. Digital services includes broadcasting, telecommunications and e-services that are electronically supplied. The VAT registration threshold has been reduced to zero for any digital services supplied to domestic and non-VAT registered business consumers in any country other than the one in which you are based.  Therefore, if you only make one supply of a digital service in another EU country and do not register for the Mini One Stop Shop (MOSS), you are required to register for VAT in the country of your customer and account for local VAT accordingly. If you would like more information or assistance registering for MOSS please contact one of our team.


By Nimbus

Income Tax Allowance for Children

November 12, 2014 | By |

Clients are always keen to save tax and we often get asked if their children can work for them. Children are entitled to the same income tax personal allowance, just like their parents. Some might conclude that there is an opportunity to gift a share to their children and shift income to take advantage of this personal allowance. Sadly HMRC have seen this happen a few times before and where gifts from a parent produce income in excess of £100 in a year, that income is taxed as though it was received by the parents. This £100 rule applies until a child gets married or turns 18, whichever occurs first.


By Nimbus

Tax Return Deadline

October 16, 2014 | By |

The first of the deadlines for the 2013/14 Tax Return is the 31 October 2014. This deadline is for those that submit their return on paper.  If you are one of the reducing number that still files on paper and you haven’t made a start yet, it might be time to consider filing online. Registering with HMRC to file online can take up to six weeks, so we recommend that you register immediately to avoid missing the final deadline of 31 January 2015.


The next deadline on the horizon is 31 December 2014. This deadline is for those that owe less than £3,000 of tax and wish to have their tax collected on a monthly basis during the 2015/16 tax year through the PAYE system.


The final filing deadline is the 31 January 2015, for online Tax Returns. There is a fixed penalty of £100 for failing to file a return on or before the filing date. If you file after 1 May 2015, or 1 February 2015 in the case of a paper return, this fine will apply in addition to a penalty of £10 a day for every day the return remains outstanding, up to a maximum of £900.


The 31 January 2015 is also the deadline for paying any tax due, if you haven’t taken advantage of the arrangement above. Late payment of tax will incur interest at an annual rate of 3%, on top of this there is also a surcharge of 5% on any outstanding tax due that hasn’t been paid by 28 February 2015.


At Nimbus we make sure all our clients have plenty of notice of upcoming deadlines. If you would like to work with an accountant that takes care of the deadlines then get in touch.


By Nimbus

Why can’t all businesses have some financial direction?

October 12, 2014 | By |

Do you own your own business and wonder “what’s going on with my finances?” Are you fantastic at growing your business and delivering awesome customer service, but can’t find the time to check that the finances are all in order? Perhaps you just hate the numbers and put it off until there is absolutely nothing else to do or the deadline for filing your accounts is just around the corner? If all this sounds familiar, maybe its time to think about outsourcing your accounting function? If you haven’t, let us explain how it works.

By simply passing the baton of your company finances, Nimbus Accounting can take care of the following:

  • Invoice Management & Debtor control – raising invoices and chasing late payers
  • Managing Purchases – maintaining purchase ledger and scheduling payments
  • Daily bookkeeping – accounting for and reconciling all the transactions
  • Cash Flow Management – we will produce a cash report so you can keep an eye on where the cash is going
  • Monthly Management Accounts – the starting point for discussions, with proactive advice and guidance
  • Strategic Planning – integrating all the above to help you make a plan for the future

Why don’t you consider incorporating Nimbus Accounting into your team, enabling you to do what you do best while we do our thing, which luckily for you is the numbers (we love numbers). As we are a firm of Chartered Accounts, all of your statutory accounts and tax requirements are also taken care of. So there it is, everything you need under one roof.

If you want to find out more, why not give us a call to to arrange a meeting