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By Nimbus

Directors salary and Dividends for 2014/15

March 22, 2014 | By |

Another tax year is drawing to a close and it is time to give yourself a pay rise. Last year you were probably receiving £641 a month from your company, but this year you can pay yourself £833.

You might ask “why am I paying myself an annual salary of £10,000? That’s the personal allowance limit and I normally only pay myself the national insurance threshold?” Ordinarily any pay over the national insurance threshold would trigger the payment of 12% employees national insurance and 13.8% employers national insurance. However, for 2014/15 HMRC are giving employers £2,000 towards their employers national insurance contributions. So for the time being it is more tax efficient to pay yourself a £10,000 salary (which will attract £245.28 of employees national insurance contributions). The net tax saving is £163, the difference between the employees national insurance and the corporation tax. Therefore as a company director, it is more tax efficient to pay yourself a monthly salary of £833 and declare a dividend on top.

While the personal allowance has increased, the point at which higher rate tax becomes payable has reduced.  If you are declaring dividends on a monthly basis and keeping them within the basic rate thresholds, the net dividends will fall to £2,389. So your net payments from the company will total £3,222. If you want to take more dividends, you can, but you will be taxed personally at 25% on the net payment.  It might be better to reinvest the money into the business or consider a pension scheme.

Remember these allowances are for each director/shareholder.

If you want more information on extracting money from your company in a tax efficient manner we are your local Brighton & Hove based accountants.


By Nimbus

£2,000 cash back from HMRC?

March 17, 2014 | By |

We usually hear the term cash back from mortgage companies or in the supermarket, however, for 2014/15 HMRC are giving £2,000 back to employers. This is great news for employers and will really benefit their small businesses – a real reward for creating more jobs in the economy.

“How does this work” we hear you say and “what’s the catch”?  Amazingly there a no catches. You save the first the £2,000 of your Employers National Insurance due after 6 April 2014.  This will be deducted from the Employer National Insurance payable when you or your accountant runs your monthly RTI return in the payroll software. The amount is not spread throughout the year, it is available from April onwards and any unused balance in the first month will be rolled forward until it is all used or 5 April 2015, whichever is sooner.

As with all offers there are terms and conditions to stop abuse, but they are limited. If you are caught by IR35 you won’t be eligible and if you have more than one company in your business structure you cannot claim more than once.

If you want to know more about this great offer, contact your accountant. If they have not mentioned this to you then it is probably time to find another accountant. We can make a good suggestion in the Brighton & Hove area….


By Nimbus

Volunteering Project for Graduates

September 5, 2013 | By |

For any small and midsized enterprise, making the wrong hiring decision, even at the graduate level, can have a great impact on the business. Not only does the hiring process take up a lot of valuable resources, but graduates also need time and hand-holding before they really start contributing. Another difficulty with hiring graduates is that they are untested, ie they don’t have a long list of professional references which can be called upon.

graduatesThe traditional recruitment process for young graduates involves a series of interviews with a mixture of technical (position specific) and soft (personality) questions. Then, in most cases, a consensual decision is made on their suitability for the role. Whilst this process can work well, it doesn’t provide a full picture of how a young graduate will actually perform in the workplace. The traditional recruitment process rarely tests graduates for punctuality, work-ethic, team-work, attention to detail, professionalism, adaptability and so on… These attributes are usually only revealed (and sometimes too late) in “real life” situations.

A recently launched company, benevola is addressing some of these issues by providing an innovative hiring solution. Through benevola, small and mid sized enterprises can put their graduate applicants through a short volunteering project at a local charity. They then receive feedback from the charity on the performance of each individual in a “real life” environment. benevola is thus able to not only help small and midsized enterprises test graduates before they hire them, but also help young graduates gain useful CV-enhancing work experience and help charities with volunteers.


By Nimbus


August 16, 2013 | By |

WorkflowMax is a powerful cloud based solution allowing you to manage enquiries, jobs, create quotes and invoice your clients, all in one place. It’s a brilliant way to monitor all aspects of your business and maximise productivity by posting time to each job. As a job-focused business, WorkflowMax has provided us with a clear and affordable way to manage leads, workflow and deadlines, along with providing an easy way for clients to access and view job progress.

We were apprehensive at first, the thought of transferring all our data into the cloud was slightly daunting, but WorkflowMax has been designed to make the process simple. The software provides many useful video tutorials and webinars to get you going, along with templates allowing a quick and easy setup of multiple clients, jobs and costs. Once these are set up you can mould and personalise WorkflowMax to suit you and your business, creating jobs and billable tasks for each client.  The software then allows you to report on a full range of KPI’s, such as profitability per client and lead conversions.

Not only does the solution provide an efficient way to manage your business but it seamlessly integrates with Xero, meaning your invoices, contacts and payments can move automatically between the two systems. Once you’ve connected your Xero account with WorkflowMax you are able to configure what is transferred and what’s not. The exchange is seamless, you don’t have to download any other software or convert files into a specific format.

If you want a solution that will help you monitor your business then we believe that WorkflowMax could be the answer. At Nimbus Accounting we support both Xero and WorkflowMax, to empower our clients to manage and grow their businesses. If you would like to find out more please contact one of our qualified accountants on 01273 782 742.


By Nimbus

Childcare Vouchers for Small Businesses

August 7, 2013 | By |

If like most of our small business clients, you are juggling family life whilst running your business, you might be interested to know more about childcare vouchers and how they can help you financially.

Firstly, the word voucher is misleading and has become a generic term for Companies to use who sell “childcare voucher schemes”.  What we are going to explain is how employers can pay for childcare for their employees, no vouchers needed.

The government, to assist a working family, give you the option of paying for your childcare from your gross wages. The amount you can pay towards childcare is as follows:

Basic rate tax payers                               £55                    £243              £2,915

Higher rare tax payers                             £28                    £124              £1,484

Additional rate tax payers (45%)               £25                    £110             £1,325

As these amounts are deducted from your gross wages, your tax and national insurance contribution will be lower. For example, if you were paid a monthly salary of £1,000, rather than being taxed on that amount, you are taxed on £757 (£1,000 – £243).

There are, as with all government incentives, rules that must be followed:

  • Evidence that the scheme is offered to all staff where appropriate (e.g. the material used to promote your scheme or staff handbook)
  • Details of the child using the childcare, for example their name and date of birth
  • Details of the child carer(s) used, including their registration or approval numbers and, if appropriate, when their approval expires
  • Evidence that your employees participating in childcare schemes are required to inform you of any changes in the registration, approval status, or their child carer

What are the benefits of the scheme?

  • The amount paid to the childcare provider is a tax deductible expense, therefore you are reducing your corporation tax liability!
  • The childcare contribution is available for both parents
  • If you are an owner run business, this scheme will allow you to participate too, which can be a good method of extracting funds from your company

If your current accountant has not suggested childcare payments to you, then maybe you should consider calling Nimbus Accounting. If you would like to discuss this or any other accounting or tax questions, please feel free to get in touch on 01273 782 742 and speak to one of our qualified accountants.


By Nimbus

2013 Budget – Main points for Small Business

March 20, 2013 | By |

What are the main points from George Osborne’s 2013 Budget that effect small business in the UK:

  • From 1 April 2015 all corporations will pay 20% tax
  • From 1 April 2014 all businesses will receive an annual allowance of £2,000 to offset against employer’s class 1 national insurance contribution
  • The introduction of cash accounting for small businesses, more on this in a later blog
  • HMRC will try to simplify the collection of class 2 national insurance contributions for the self-employed
  • Personal tax allowance to be £10,000 from 5 April 2014
  • Basic rate tax limit will be reduced, again, to £31,865 from 5 April 2014
  • Directors loans to increase from £5,000 to £10,000 without becoming a beneficial loan
  • VAT threshold increased to £79,000 from 1 April 2013 and deregistration limit £77,000

By Nimbus

Receipt Bank Integration

March 7, 2013 | By |

Are you bored of entering receipts into your accounting software? Do you find yourself looking through piles of paper receipts? If so, receipt bank can provide another way to manage your records.

Founded in 2010, Receipt Bank is a great asset to all small businesses. It allows you to send all of your receipts by post, e-mail or even photograph on the new IPhone App. Receipt bank will extract all relevant information from each receipt such as supplier, date, amount, VAT etc and export them to your cloud accounting software, including Xero, FreeAgent, Dropbox and more.

When sending to Xero or FreeAgent, Receipt Bank will even code the details to a suggested account, ‘travel’ for example.  All you have to do is confirm these suggestions and once you’re happy, transfer all receipts at once to your online accounting software. This saves an immense amount of time in data entry that can be better spent on other, profit making tasks.  All scanned items are stored securely on your online receipt bank account, as well as your online accounting software and can be accessed with ease.  This digital copy of the invoice complies with HMRC rules, so the paper copies can be disposed, so this cloud solution will even save you storage space!

At very affordable prices for all sized businesses, this tool can really make a difference in saving time, money and effort.

At Nimbus Accounting we recommend Receipt Bank to our clients, if you want to know more, call one of our qualified accountants today. 


By Nimbus

What dividend and salary to pay yourself in 2013/14?

March 6, 2013 | By |

As the 2012/13 tax year comes to an end, there is another change in your personal allowance and tax thresholds to be aware of, coming into effect from 5 April 2013. The question this raises is “How should you extract profits from your business is the most tax efficient manner for 2013/14?”

As always the extraction of funds needs to be a mixture of dividends and salaries, but what is the best solution to utilise all of your allowances while minimising your personal tax liability? We have two methods below, one taking a salary within the national insurance threshold and the other taking a salary within the personal allowance threshold, which will give rise to a small national insurance bill.

Option 1 – Taking a salary within the national insurance threshold

The national insurance threshold for 2013/14 is £148 per week, therefore you can pay yourself an annual salary of £7,696 (£641 per month).

The basic rate tax band has fallen from £34,370 to £32,010 (any amount over this figure would attract personal tax on dividends), taking into account the above salary and the tax credits on dividends you could take £30,379 of net dividends in 2013/14 before paying any personal tax.


Option 2 – Taking a salary that utilises your personal tax free allowance

The personal tax free allowance for 2013/14 has increased from £8,105 to £9,440, which would be a monthly salary of £786. However, with an annual salary of £9,440 you will incur an employee national insurance bill of £203.04 and an employer’s national insurance liability of £240.67.

Based on the above salary of £9,440 you would be able to take dividends of £28,809.

With this option, due to the increase in salary and the additional employer’s national insurance contribution, there will be a corporation tax saving of £396.94. If we compare the two options we can see the difference in net take home pay.


Option 1

Option 2







Employees NI deductions


Take Home pay



 Total salary and dividends



Employers NI


Corporation Tax Saving


Net over all position



As you can see, by extracting the funds by option 2 you are £29 worse off personally, due to incurring national insurance (£38,075 vs £38,046).  When you consider the overall wealth, including the company, you are worse off by a further £17, so £46 in total. Option two also requires paying PAYE deductions every quarter, so increased administration on top of the cost.

 You may want to take more money out of your company, more options to consider include:

  • Additional shareholders
  • Pension contributions
  • Gift Aid

If these are not an option then the higher rate of tax on dividends ranges from 25% (of the net dividends, up to a total gross income from all sources of £150,000) to 30.5%.

The above calculations are based on an individual under 65 years old and not receiving any other income. They are also for illustration purposes only and do not constitute tax advice. We would recommend that you seek professional advice before planning your own tax strategies.

At Nimbus Accounting, our aim is to make sure all of our clients minimise their tax liability, to help them grow and develop their businesses in these tough economic times. 




By Nimbus

Real Time Information – What does the employer need to do?

February 21, 2013 | By |

PAYE & RTI – A new way of working:

Being creatures of habit, there is a natural reluctance to change the way we do things. Every UK employer is an unpaid tax collector and from April there is yet another rule which must be followed.  Real Time Information (RTI) is HMRC’s latest innovation to keep track of employees during a tax year, ensuring that the Tax and National Insurance deducted from employees during the year is paid to HMRC as and when it is collected by the employer.

Historically, the system allowed scope for the cash strapped employer to delay PAYE payments during the course of the year – not really in the spirit of the tax system, but the temptation was there and it offered an option that was far cheaper and easier than going to the bank and getting an overdraft. As long as the payments were all in by the time the year end P35 was submitted, and it all reconciled, HMRC would be none the wiser. So RTI will put a stop to that and will mean that the PAYE system that all employers operate will be far more regimented.

So how will the changes affect the employer? The simplest way to explain this is to identify some key areas that will make sure you are complying with the new regulations by April:

1. Ensure your payroll software is up to date

2. Check you have all you employees details up to date

3. Verify you have registered for PAYE online

4. Ensure that hours worked are recorded for each employee

5. Update your payroll software to include all casual staff that previously were not included in the software

6. Prepare to run the payroll each time an employee is paid, including hours worked

 7. Ensure starters and leavers are up to date

If you are reading this because you run your own payroll, or your accountant has not told you about RTI, perhaps it is time to think again. At Nimbus Accounting we engage in a constant dialogue with our clients to ensure they are kept up to date with changes that will impact their business and include unlimited contact in our fixed fees. If you would like to discuss this or any other accounts or tax questions, please feel free to get in touch on 01273 782 712 and speak to one of our qualified accountants.


By Nimbus

Penalties for missing the 31 January deadline

January 2, 2013 | By |

If you are one of the many people that is getting over the festive period and now thinking about doing your personal Tax Return, here is a brief reminder of the penalties for missing the 31 January deadline:

  • An initial £100 fixed penalty, which is chargeable even if there is no tax to pay.
  • After 3 months, daily penalties of £10 per day, up to a maximum of £900.
  • After 6 months, an additional penalty of 5% of the tax due or £300, whichever is greater.
  • After 12 months, a further 5% or £300, whichever is greater. If the case is serious, the penalty after 12 months can be up to 100% of the tax due.

The penalties for paying late are 5% of the outstanding tax at:

  • 30 days;
  • 6 months; and
  • 12 months.

Interest is chargeable on these penalties.

If you need an accountant to help and you live in the Brighton & Hove or Sussex area, give one of our Nimbus Accounting accountants a call on 01273 782 742. The cost of delaying this obligation could far outweigh any fees you might pay an accountant, plus an accountant will most probably reduce your tax bill.