. . . looking for a friendly & approachable accountant for your business?
Information on tax, VAT, PAYE & tax credits.
Help and information for limited companies.
Government services and information.
Audit registration can be viewed at www.auditregister.org.uk under No. 8011438.
Registered as Auditors & regulated by the Association of Chartered Certified Accountants
. . . a quality checked firm
Welcome to our home page. We are a firm of Chartered Certified Accountants based in Derby and dedicated to looking after the needs of small and medium sized businesses and individual taxpayers.
If you are looking for a proactive firm to help you keep more of your income then please contact us. A meeting can be arranged free of charge to discuss your requirements.
Whilst the demands of modern business ensure that we offer a wide-ranging and innovative approach, we firmly believe in maintaining a traditional personal service.
Our clients have the confidence of knowing who is looking after their affairs and that they are able to communicate with them.
We offer a range of accountancy, auditing and taxation services and welcome new clients and those thinking of starting their own business and in need of positive and constructive advice.
. . . proactive business strategies
If you are starting your own business, running it as a sole trader is the quickest and easiest way to do it. However, you will have unlimited liability which means you are personally responsible for business debts.
Another important aspect is that you are taxed on all the profits with little opportunity for tax planning. This is why most businesses will incorporate when business profits increase.
We can assist in all aspects of self-employment, from choosing the best time to start the business, the best time for your year-end, support you through the initial business registration and provide advice on all aspects of tax. We will also advise what business records should be kept. We provide a range of compliance services for sole traders:
• Accounts for HMRC • Completion of self assessment tax return and calculation of tax liability
• Completion of VAT returns, Payroll Services & Construction Industry scheme return submissions
• Tax planning – ongoing analysis of tax saving opportunities (eg. incorporation)
If you wish to know more about our Sole Trader service or would like to arrange a free initial meeting, please contact us on 01332 202660 or send an email.
Partnerships are similar to sole trades, except that they are used when more than one person wishes to own the business.
Each partner's profit share is determined by the partners and it is best practice to record this in a formal partnership agreement.
With partnerships each partner has joint and several liability for the debts of the partnership, so that if one partner cannot pay their share of any business debts, the debt will fall on the other partners.
Even the strongest relationships can suffer in difficult times and disagreements can arise over time. Setting up a partnership agreement from the outset is essential. Our compliance services include:
• Annual accounts for HMRC
• Completion of individual & partnership self assessment tax returns and calculation of tax liability
• Completion of VAT returns, Payroll Services & Construction Industry scheme return submissions
• Tax planning – ongoing analysis of tax saving opportunities (eg. incorporation)
If you wish to know more about our Partnership service or would like to arrange a free initial meeting, please contact us on 01332 202660 or send an email.
We are a member firm of the Association of Chartered Accountants and our rigorous internal procedures mean that limited company clients can be confident that their accounts have been prepared in line with the Association’s high standards of practice and the Companies Act 2006.
Corporate tax planning can result in potentially significant improvements in your bottom line. Our services will help to minimise your corporate tax exposure and relieve you of the administrative burden.
• Determining the most tax effective structure for your business
• Taking full advantage of tax opportunities and reliefs
• Achieving the optimum capital or revenue tax treatment
• Making the most of tax opportunities specific to your industry
• Meeting the rigorous demands of compliance including
corporation tax self assessment
• Acting on your behalf in discussions with the tax authorities
If you wish to know more about our Limited Company service or
would like to arrange a free initial meeting, please contact us on 01332 202660 or send us an email.
Self assessment tax returns are becoming increasingly complex and failing to submit your return on time, or correctly, can result in substantial penalties.
We use our expertise and the latest tax software to ensure that tax returns are completed efficiently, accurately and on-time. We have considerable experience in dealing with HMRC and are also experienced in representing our clients should they be subject to a tax enquiry or investigation.
We provide a comprehensive personal tax compliance service for
individuals that includes:
• Completing your personal tax return
• Calculating your liability for the year and advising you of the due dates for payment
• Dealing with claims to reduce payments on account, which can be beneficial
• Dealing with HM Revenue & Customs investigations and aspect enquiries
If you wish to know more about our Self Assessment service or would like to arrange a free initial meeting, please contact us on 01332 202660 or send an email.
CONTRACTORS & IR35
Invoicing your contracting work through a limited company is highly tax efficient.
We are IR35 experts and will advise you on how to structure your next contract to minimise IR35 risk. We will ensure you claim all the tax deductible expenses that you are entitled to. We will work out if you can save money by joining the VAT Flat Rate Scheme. We will complete your accounts and tax returns well ahead of deadlines and provide you with clarity over your future tax payments.
We provide our contractor clients with IRIS Openbooks accounting software which is web based.
Free company incorporation - If you are a new Contractor and sign up with us we will incorporate your new company for free. We will also deal with all the necessary HMRC registrations.
Included in this service • IRIS Openbooks • Annual accounts • Corporate tax return • Self-assessment tax return • Payroll • Tax and accounting advice • VAT returns • IR35 contract reviews
We can also manage your Openbooks account for you.
To find out more about our Contractor service please contact us on 01332 202660 or send an email.
VAT, PAYROLL, CIS, BOOKKEEPING & COMPANY SECRETARIAL
We appreciate that many businesses do not have the size or capacity to employ full-time accountancy staff. We therefore operate a full package of outsourced services to suit your requirements.
VAT • registration and completion of VAT returns
Payroll • comprehensive payroll bureau
Construction Industry Scheme • CIS returns & payments
Book-keeping • maintenance of accounting records
Management Accounting • provision of management accounts
Company Secretarial • annual returns & statutory records
If you wish to know more about these services please contact us on 01332 202660 or send an email.
AUDIT & ASSURANCE
Audits - We strive to provide an auditing service that adds more value than merely the statutory compliance requirement of an audit. We tailor the audit to meet your circumstances and needs, which enables us to identify and resolve the key accounting and control risks facing your business. Using the latest techniques and software we deliver a quality, cost-effective and efficient audit that provides real value to our clients.
Adrian Mooy & Co is a registered auditor with the Association of
Chartered Certified Accountants.
Assurance reports - Whether or not your business is legally required to have an audit, we believe that robust and reliable financial systems are fundamental to building a business of any size. When carrying out an assurance report we will also produce a detailed review of your business processes and controls to identify underlying risks and identify provide suggestions for where key improvements and efficiencies can be made in the business.
If you wish to know more about these services or would like to arrange a free initial meeting, please contact us on 01332 202660 or send an email.
BUSINESS START-UP ADVICE
Before starting out you may need help with business planning, cash flow and profit & loss forecasts.
We can prepare reports for your benefit or for third parties such as banks or investors. You may also want help identifying the best structure for your business. From sole trades and partnerships to limited companies and limited liability partnerships, we have the experience to advise on the best solution for you both operationally and from a tax point of view.
Once your business is established we can assist with budgeting, cash flow management and profit maximisation. You may also want advice on additional financing, efficient profit extraction or development of your internal financial systems.
We have experience in advising on business plans and financial projections, business set up and structure, accounting software selection, profit improvement, profit extraction, tax saving, exit strategies and succession planning.
If you wish to know more about our Business Start-up service or would like to arrange a free initial meeting, please contact us on 01332 202660 or send us an email.
CONTRACTORS & IR35
VAT, PAYROLL & CIS
AUDIT & ASSURANCE
Using us as Your Business Advisor
Forming a Limited Company
Running your own Business
Should you form a Limited Company
Employed or Self Employed
Tax System for the Self Employed
Which Expenses are Allowable
Which Business Structure suits you
. . . keep more of your income
Straightforward and easy to deal with Adrian Mooy & Co provide an efficient, friendly and professional service - payroll, tax returns, annual accounts and VAT returns are always done on time.
They take all the administrative burden away from me so I can concentrate on running my business.
First class! Super accountant! We have been with Adrian Mooy & Co since 1994. They provide a prompt, accurate & reliable service. There is always someone at the end of the phone to help and advise us. They have always delivered and we are more than happy to recommend them.
I have found them to be very reliable and they provide good advice, so I have the peace of mind that I am doing things legally and that my tax matters are being dealt with efficiently.
Glynn Barlow - Driving Instructor
Get in touch...
We are open five days a week please feel free to call. Our office hours are 9am - 5pm Monday to Friday.
61 Friar Gate, Derby, DE1 1DJ
. . . get in touch for a free initial interview
An Introduction to the Tax System for the Self Employed
You must register with HMRC within the first three months of self employment.
In calculating taxable profits you are entitled to claim deductions from your business income in respect of any expenses incurred for the purposes of trade (with a few minor exceptions). When you buy equipment for your business, you will be entitled to deduct the full cost (up to a maximum of £500,000 per year from 6.4.2014)
Tax is payable on the whole of the profits of a trade and the aim of the system is that over the lifetime of your business the profits will be taxed once, and once only.
How is the tax collected? - Tax returns covering income for the year ending 5 April 2014 have to be submitted to HMRC by the ‘filing date’ which is 31 January 2015 for online returns.
Payment of tax - Payments on account of income tax and Class 4 NIC will be due on 31 January 2014 and 31 July 2014. These interim payments will be based on one half of the total liability for 2012-13. The balance of income tax for 2013-14 is due on 31 January 2015 (along with the first interim payment for 2014-15 and any capital gains tax for 2013-14). Interest and surcharges will be levied for late payment.
The self-employed are subject to a two-tier system of national insurance contributions. Class 2 NICs are aligned with self assessment liabilities. Profits between certain limits are subject to Class 4 NICs and payable at the same time as the instalments of tax.
Employed or Self Employed? (Part 1)
The question as to whether someone is employed or self employed is not as straightforward as it might at first appear. Many people assume they are free to choose, but HM Revenue & Customs emphasises that this is not the case.
How do you decide? - Although there is no clear-cut answer to this question, HM Revenue & Customs considers areas such as: • Ultimate control of the work • Profit element, and risk of loss • Provision of materials and equipment • Integration with the employer’s business • The intention between the parties • Usual conditions in the industry.
The employer has responsibility for determining employment status.
What are the practical differences? - Employees are taxed under the PAYE system and are liable to Class 1 national insurance (NI) contributions. If the worker is an employee, the employer also has to pay Class 1 NI.
Employees have rights under health and safety and employment laws, such as the rights to redundancy payments and not to be unfairly dismissed. Moreover, the range of social security benefits is greater for employees than for the self employed.
Self employed workers are taxed under self assessment and are allowed more scope in claiming expenses. They also pay Class 2 and Class 4 NI contributions, the combined burden of which is lower than Class 1 NI. Their ‘employers’ are not subject to NI.
Employed or Self Employed? (Part 2)
What if you are wrong? - It is the responsibility of the person making the payment to get it right. If you treat a worker as self employed and he or she is subsequently ruled to be an employee, you could find that all the payments you have made will be treated as net payments, and you will have to pay the corresponding tax and employees’ NI, as well as the employer’s NI. You have no right in law to recover such items from your employees after the event.
Can you create conditions to favour self employment? - If you want to substantiate a classification of a worker as self employed, we strongly recommend that you have drawn up and enforce a suitable contract defining the services provided. In line with the tests referred to above, you will need to give particular consideration to the following points:
Pricing - One of the main requirements is that self employed workers bear some element of risk in the arrangement, which means you will have to avoid the ‘hourly rate’, in favour of a ‘price for the job’.
Workmanship - Within reason, the more freedom the worker has in the detail of the way the work is carried out the better. You must also make it clear that the worker will have to put right any faulty work at his or her own expense.
Substitution - One of the strongest tests of self employment is the right to substitute a worker who is equally capable of carrying out the work.
Insurance - ll self employed workers should hold public liability insurance.
Provision of equipment - Where practical, the worker should supply at least some of the important equipment or tools.
Guide to Self Employed Expenses (Part 1)
Any expenses must be applicable to the running of your business. The general rule is that a self employed person cannot deduct expenses unless they are ‘wholly and exclusively’ laid out for the purposes of the trade, profession or vocation. Keeping up-to-date and accurate records from the start is important for your business.
What records to keep - Anything to do with your business such as cashbooks, invoices, mileage records, bank statements, receipts for purchases, CIS vouchers.
How to keep your records - Either on paper or on computer. For electronic records you must save information in a readable format. As a general rule keep records for six years.
Allowable expenses - In most cases it will be clear if something has been incurred wholly and exclusively for the purposes of business - provided a receipt has been kept as proof of purchase, a deduction should be allowed. Two tables of the most common allowable (and disallowable expenditure) are shown below (Tables 1 & 2)
However, a newly established business is often run from home, perhaps using an existing car for any business travelling that is required and an existing mobile phone for business calls. This can cause problems, because of the ‘duality’ of purpose, inherent in many such costs. It is therefore necessary that you can clearly identify and separate the expenditure between business and private purposes. In Part 2 we look at these particular elements in detail.
Guide to Self Employed Expenses (Part 2)
Motoring expenses - If you use a car both for business and privately, you can claim a proportion of the running costs n the ratio of your business mileage to your total mileage. You must keep a log of business mileage as well as copies of all bills/receipts to calculate the appropriate deduction.
You can alternatively use a fixed rate per business mile to compute vehicle expenses instead of keeping detailed records of actual expenditure. It is available if the annual turnover of a business is less than the VAT registration threshold.
Use of home as office - Where a room at home is used wholly and exclusively for business purposes, a deduction may be claimed for a portion of: insurance, council tax, mortgage interest, rent, repairs and maintenance, cleaning, heat, light and power, broadband and telephone.
Administrative costs, including mobile phone - You can deduct the administrative costs of running your business, including advertising, stationery, postage, telephone and fax. You may also be able to deduct the cost of trade or professional journals or subscriptions.
Disallowed expenses - Some expenses are never allowable for tax purposes, for example, entertaining clients, even if such entertainment directly led to new business.
Private expenditure is also non-allowable expenditure - some examples: ordinary ‘civilian’ clothing, food for sustenance, having somewhere to live.
Should You Form a Limited Company?
Recent tax changes have made it even more important to consider carefully, when running a business, whether it is best to trade as:
• Sole trader – an individual
• Partnership – two or more individuals or companies
• Limited company • Limited liability partnership
We are often asked, ‘Should I form a Limited Company?’ The reality is that there is no easy answer. Each situation has to be judged individually. As well as the obvious issues of tax and national insurance contributions (NICs), there are other potentially relevant factors, such as: • The nature of the business and its expected rate of growth • The degree of commercial risk • Administrative obligations • Personal preferences • Pensions and retirement
In the early years of a business, the privacy of operating as a sole trader or partnership may be attractive. Business funds can be used at will with fewer restrictions than in an incorporated environment. However, we are considering here the features of a limited company. A company is a completely separate legal entity subject to two main areas of regulation – tax and company law. This planning guide looks at some of the advantages and disadvantages of trading as a limited company.
Possible advantages of incorporation
• Incorporation normally provides limited liability. If a shareholder has paid fully for his or her shares, he or she cannot normally be required to invest any more in the company. Although companies with bank borrowings often have to provide directors’ personal guarantees, the protection of limited liability will generally apply in respect of liabilities.
• A company enjoys legal continuity - it can own property, sue and be sued.
• Effective ownership or part ownership of the business may be readily transferred, subject to the provisions of the Articles of Association.
• Shareholders can be paid in dividends (currently free of NICs)
• Growing businesses can re-invest profits after an overall tax charge of 20%.
• Accumulated funds could be withdrawn on a sale of shares with the benefit of capital gains tax (CGT) Entrepreneurs’ relief which reduces the effective CGT rate to 10%.
• Corporate status is sometimes thought to add to the commercial respectability of the business.
• Employees may be offered an opportunity to buy their own stake in the business.
• The National Minimum Wage does not apply to directors (as they are office holders)
Potential disadvantages of incorporation
• Formation of a company incurs administrative costs.
• Customers and suppliers must be informed of a change to limited company status.
• The tax position arising on the incorporation of an existing business needs careful analysis. It may be possible to defer capitals gains tax on the transfer of goodwill etc.
• A company's accounts must be filed on public view with the Registrar of Companies.
• Funds withdrawn from a company normally give rise to tax liabilities.
• Remuneration for directors is subject to both employee's and employer's National Insurance liabilities. Both the company and its directors are liable to NIC on many benefits in kind, and a form P11D must be prepared for each director.
• Tax on directors' remuneration paid monthly is payable on the 19th of the following month through the PAYE system, and corporation tax is payable nine months and one day after the end of a company's accounting period. For a sole trader or partnership, tax is generally paid by instalments on 31 January and 31 July on the current year basis.
• Companies pay tax on capital gains at their corporation tax rate. In a company, a capital gain is reflected in the value of its shares and if these are sold a "double charge" to capital gains tax can arise.
• An individual has greater flexibility in dealing with trading losses.
Forming a Limited Company 1
It is advisable to use a formation agent for this. You first need to decide on the following:
• Whether the company is to be a private or public company limited by shares, or a private company limited by guarantee • The purpose of the company and its capital requirements • Whether the proposed company name is available and acceptable.
An application to form a company is made on Form IN01. This has to be accompanied by a Memorandum of Association (see below), the Articles and the correct registration fee.
The Memorandum of Association is a short document, serving the limited purpose of evidencing the intention of each subscriber to form a company.
New Model Articles have been introduced. There are three types, as follows:
• Private company limited by shares • Private company limited by guarantee • PLC
In practice, companies can be formed using either Model Articles, Model Articles with amended provisions, or bespoke Articles. Companies incorporating as limited by shares (whether private or public) must complete a statement of capital and initial shareholdings as part of the formation documentation. The statement of capital is a new document. It is a ‘snapshot’ of a limited company’s issued share capital at a given time. It also needs to be provided is part of the application to incorporate and with each annual return.
Forming a Limited Company 2
Directors - A company must have at least one director who is a natural person. For each director who is an individual, the following information must be provided:
• full forename and surname, any former name(s) used for business purposes, including maiden name(s) and previous married name(s) • full service address including town, county and postcode (for the public record) • usual residential address • country/state of residence • date of birth, nationality, occupation • the number of shares, if any, the director is to have in the company
Shareholders - The following information must be provided in relation to each shareholder: • full forename(s) • surname • full address including town, county and postcode • the number of shares the shareholder is to have in the company
Directors’ Service Addresses - Directors (and company secretaries where applicable) of both existing and new companies now have the right to set out a service address rather than their usual residential address. The service address may be the company’s registered office. Individual companies have to maintain two registers of directors – one containing, amongst other things, a service address for each director, and a further register containing the residential address of each director (protected information).
Forming a Limited Company 3
Post incorporation matters - First meeting of directors. Once you receive the Certificate of Incorporation, you should hold a first meeting of directors to deal with the following matters:
• appointment (if appropriate) of a chairperson, managing director, and any additional directors, and approval of any employment contracts • issue of share certificates and, if appropriate, allotment of further shares • approval of banking arrangements • disclosure by directors of their interests in any contracts made with the Company • adoption of an accounting reference date • convening of a general meeting (if required)
First general meeting - A first general meeting of the company is required:
• to approve any substantial property transaction between the Company and any of its directors
• to approve any directors’ service contracts to be entered into for terms exceeding five years
Returns - After the first board meeting, the following returns to be made to the Registrar:
• Form SH01 (Return of allotments of shares) • If necessary Form AA01 (change of accounting reference date).
Other matters • Minutes of the first board and general meeting should be prepared • The Company should issue share certificates.