TIP the Wink
Giving you the heads up...
Monthly Newsletter of TI Payroll & Accounting
March 2013, Edition 21
Welcome to March’s Newsletter
Dates for your Diary
As you can see from my photo this month (as always taken by the lovely Lorraine Oates at Powder and Paint), we’re moving!!! We have outgrown our office in Phoenix Business Centre and I have taken the plunge to buy our own premises, it’s all very exciting and I can’t wait to get in! Hopefully it will be at the end of March ... so watch this space. The Canyon Training is still ongoing, my Mini Schnauzer actually dislikes me by Sunday tea time as we’ve been walking that much over the weekends, can’t wait till it’s light nights too. J I still need sponsors too folks if you would help please, you can go online to my just giving site and donate that way (www.justgiving.com/tracyirwin) or you could text TRAC88 £1 to 70070 and this would donate straight from your phone bill. We also have raffle tickets and if I see you in the next month I will be sure to catch you for a raffle ticket too – the prizes up for grabs are awesome! Earlier on this month I read an article on Continuity and it really hit a chord with me to be able to help my clients. The dictionary definition of Continuity is the state or quality of being continuous, however, in business it means getting your clients to pay for your services on a continuing basis similar to a membership. As an example, I really love my car when it’s clean but as I work from 8:30am till 6:00pm I don’t get chance to drive to a car wash. The idea of a mobile valeting company coming to me is great but I will always remember that I haven’t rung them again at 9pm at night so even though my car could do with being cleaned every 4 weeks I only remember to get it done about every 10 weeks. Now if a Mobile Valet company offered me a discount to pay them on monthly standing order, if they said they would keep a track of the diary
March
We are moving!
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Pink Link Furness - Abbey House International Women’s Day National No Smoking Day Red Nose Day Payment to HMRC CIS Submission Due The Business Network Ladies’ Night for Children Today Good Friday
April 12th 18th 19th 19th
Pink Link Furness - Abbey House The Business Network Payment to HMRC CIS Submission Due
Tweeter of the Month Donna Wren @WrenTraining Quality, affordable First Aid and Defibrillator training. You can come to one of our local training venues or we can come to you and train onsite. Lancaster, UK. http://www.wrentraining.co.uk For all your First Aid training needs and a great person to connect with on Twitter, we have featured Donna Wren of Wren Training this month. She is a great retweeter if you are promoting your business too!!
Marketing Tip Testimonals: Do you collect testimonials in your business?? I cannot stress how important these are to your business. What someone else says about you is worth 10 times more than what you can say yourself.
BIG TIP: When you have just won them over with your great product and fantastic customer service this is the best time to ask for a testimonial - they will be only too happy to help.
Follow us on twitter @tr4cyirwin
Find us on
and ring me when my car is due for a wash … this I would be really interested in. Don’t get me wrong, the valet company still has to do a great job and deliver fantastic customer service but this is a “win win” situation; for me it takes away my pain of having to remember to get the car cleaned and I feel special as I’m getting a discount and the valet company gets regular guaranteed custom and money comes into his bank account every month before he even starts work.
could make this work in your company. I can guarantee this will improve both your cash flow and your client retention, you just have to think about it and implement it. I really like feedback so if you do think of how this could work in your business I’d really be interested to hear, email me at tracy@tipayroll.co.uk.
Sounds good? Well I think this Continuity idea can be used in most service businesses you just have to think of a way you
Tracy x
I hope you all have a lovely month in the run up to Easter and I will hopefully be showing off our new offices by the time I write to you next month.
Putting Family on Payroll I have been asked on several occasions by clients wanting to put family on the company payroll to help with finances, we are also worried what HMRC would say about this. The following blog addresses this debate.
Deductible expenses
wages, as long as the amount of salary is at an appropriate level for type of work done.
Create a job There’s no reason you can’t pay your son or daughter to sweep the company car park, clean its vehicles or even help with IT. With some creative thinking we’re sure you could find 101 tasks.
We’ve heard it a thousand times in a hundred different ways, ‘I’ll get the company to pay so it can claim a tax deduction’. Using the company cheque book to pay a nonbusiness expense won’t make it tax deductible. On the other hand, don’t write the idea off completely. Meeting a cost that benefits you in some way doesn’t automatically rule a tax deduction out.
You can create a role for your son or daughter without HMRC as long it serves a function for your company. What’s more, not only will it get a tax deduction for the cost of paying your youngster, it’s tax efficient for you.
The wholly and exclusively rule
Extra Tax Savings
Companies can’t claim tax deductions for expenses unless these are incurred “wholly and exclusively for the purpose of the trade’. It’s often thought that this rule can lead to trouble where you pay a member of your family. For example, you might employ your son or daughter just to give them work experience they can put on their CV or to give them some cash in their pocket. Clearly there’s an advantage for you and them, but does this break the wholly and exclusively rule?
If your company pays your children you’ll have to find less out of your own pocket to support them. This can make a big difference; where you pay them the money will originate from salary or other income on which you’ve paid tax and NI, but where your company pays them, these deductions won’t apply.
Relationships don’t matter To answer the question above you don’t need to look at what you or your youngsters get out of the arrangement, but what your company gets out of the deal. HMRC’s internal guidance manual (BIM47105) explains it this way: “So where there is “equal pay for equal value” the amount paid is fully allowable, notwithstanding any connection between payer and recipient”.
Value for money So thinking of our subscriber’s situation he needn’t worry about employing his son through the business; his company will be entitled to a tax deduction for his son’s
Tip
Example You pay your two youngsters pocket money of £40 per month each. That’s £960 a year. As a 40% taxpayer this takes £1655 of your salary (£1655 less tax at 40% of £662 and NI at 2% of £33). If, instead, your company pays them, the cost to you directly will be nil. Plus, because their pay is tax deductible the cost to your company is just £768. That’s less than half the cost of pocket money, and what’s more you’ve got a few chores done around the factory or office. In short, you could therefore create a job for your family, e.g. sweeping the company car park, and HMRC won’t object. The company is allowed a tax deduction for their wages as long as it pays no more than the going rate for the work he does. The arrangement is a tax-efficient alternative to pocket money.
Business of the Month
Sarah Bradley Steven Martin and aSSociateS ltd TI Payroll covers all the bases for Sarah’s insurance business Sarah is an independent commercial insurance broker, who loves offering her customers a great deal that fits their individual needs.
broker, trust is important to all parties and being rooted in the local area, Sarah can provide excellent service. By building a solid reputation, Sarah has all the bases covered.
Sarah began her insurance broker business 11 months ago, working as part of a firm of Independent Financial Advisors – Steven Martin & Associates Ltd.
Sarah has been kept busy by complying with the huge level of regulations as a small business owner. But, for Sarah, all this extra work has been worth it. Sarah thinks that these are difficult economic times for the bigger firms. But, with the number of business start-ups continuing to grow, in Sarah’s view, small is definitely beautiful! But she’s not resting on her laurels. Sarah is planning for her business to enjoy continual ‘renewal’ and grow in the future.
It’s not all money, money, money, though. For broking, Sarah leaves going ‘cheap’ to the canaries. Her priority is that her clients have the right level of insurance for their needs. Sarah places a premium on getting her business known around the area. Customers are at the centre of Sarah’s business - she concentrates on retaining her client base. As Sarah says ‘I want to be known as the lady to go to for commercial needs in South Cumbria – especially the Furness area’.
Sarah takes the same level of enthusiasm from her work into her leisure time. She particularly enjoys going to the gym, films, cooking and reading. Sarah also wants to do more fell-walking, which proves she’s not afraid of a challenge!
The advantage that Sarah sees in her business is the face-to-face contact she can offer to local clients. As an insurance
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For Sarah, TI Payroll have helped her business get off the ground. Starting with the basics, such as registering with the tax office, nothing is too much trouble for TI. As Sarah says ‘I just handed it all over to Tracy and she deals with it all’. TI are happy to deal with all your accounting needs. They also offer help for growing your business, such as advising on strategy and ideas on how to improve your marketing. Sarah can testify that the safe money is on TI Payroll to ensure great service. With such a fully comprehensive service on offer, why not contact TI and see how they could help you?
Business Quote
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What could the government do to
ensure that small businesses like Sarah’s are protected from any approaching fiscal cliffs? Keeping unnecessary costs down is always welcome when you’re close to the edge of your spending. Sarah thinks that the government could reduce the amount of business paperwork, which ‘wood’ be good for the trees as well.
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That’s where too many people fail in business they think they’ve got it made. It’s fun being in business, but there’s no rest for the wicked.
Dan Kennedy
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in ‘No B.S. Business Success In The New Economy (No B.S.)’
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payroll administration bookkeeping services
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Simple, efficient, professional - and another job off my to-do list! Andrew Armitage Armitage Online
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construction industry scheme self employed limited companies tax returns SAGE training bespoke social media training secretarial services
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TI Payroll and Accounting Phoenix Business Centre Phoenix Road Barrow-in-Furness Cumbria LA14 2UA tel. 01229 490343 email. tracy@tipayroll.co.uk web. www.tipayroll.co.uk w