Posts Tagged ‘HR’

Should I buy, lease or use HP to obtain that needed addition equipment?

Over the years I have often been asked what is the difference between buying, leasing or using HP to obtain that needed extra piece of equipment. The answer really is different from one company to the next, but here are the general guidelines concerning how they are treated for accounting, Tax and VAT purposes.

Outright Purchase:

From an accounting viewpoint the actual cost of the asset is capitalised in the balance sheet and an annual charge for depreciation is shown in the accounts as an expense in the profit and loss account. This therefore has the effect of showing the asset(s) in the balance sheet at cost, reduced by the cumulative charge for depreciation.

The annual depreciation charge is calculated in accordance with accounting standards, based on the useful economic life of the asset and the residual value.

image creator: Rob Wiltshire

The actual charge for depreciation is not allowed for tax purposes, as this is replaced by capital allowances, which is HM Revenue & Customs deduction regime for allowing capital expenditure against chargeable profits. The first £50,000 of expenditure each year on plant and equipment, excluding cars, qualifies for a 100% capital allowance deduction. Expenditure in excess of £50,000 enters either the 10% pool or the 20% pool, attracting a writing down allowance (WDA) at the appropriate rate.

A temporary first year allowance of 40% is available for expenditure on plant and machinery that exceeds the annual investment limit incurred in the year commencing on 1 April 2009 (corporation tax) or 6 April 2009 (income tax). This allowance applies to expenditure which would otherwise have been allocated to the main 20 % pool but excluding cars and assets for leasing.

Unless the asset is a car, the VAT shown on the supplier’s invoice will generally be recoverable by the purchaser.  VAT on cars is recoverable only in very rare circumstances.

Hire purchase

A HP agreement usually includes an option to purchase at the end of an initial period. Payment of this nominal fee transfers title of the asset and brings the legal agreement to an end.

The asset is treated as if it had been purchased. It is, therefore, capitalised in the balance sheet and depreciation is provided on an annual basis.

The obligation to pay future instalments is recorded as a liability in the balance sheet.

Some things to think about before setting up a new business

 

Here are some of the things I tell people who come to me and say they have an idea for a new business or are just setting up in business for themselves for the first time.

 

  1. Talk to an accountant/ business advisor and get some advice about your business idea. Is it realistic? Is it viable? Don’t just ask family and friends.
  2. decide what form you want the business to take ltd/ llp/ soletrader

You have your way. I have my way. As for the right way, the correct way, and the only way, it does not exist.

I’m Not Sure, What Do You Think?

 

Friedrich Nietzsche once said: You have your way. I have my way. As for the right way, the correct way, and the only way, it does not exist.

 

Over the years, I have met thousands of people- it’s one of the joys of working in retail. One thing I’ve learned to pick up on is how people process information. Mainly because, if they don’t process in the same way you do, it can be quite frustrating- for both parties.

 

Here’s an example that happened to me the other day; stood in our local wine merchants comparing bottles- country of origin, grape, price, what I’m eating that evening. Choice made. End of. Paid for. Home.

 

At the side of me, a couple were debating the same thing- they were mid-conversation when I arrived, weighing up their choices (same as mine). She asked what I thought: I gave my opinion, they asked the lad restocking the shelves:  he gave his (far more informed) opinion. When I got to the till, the cashier asked what I had recommended- apparently my choice was the same as hers, whom they had also asked.

 

They may still be there now, debating the choice available, accosting random strangers for their opinion.

 

The fact is we all process information in different ways, and we all make decisions in different ways based on our different processes. There are no right or wrong ways- just different.

 

In business, the trick is not to communicate in the way that works for you… but in the way that works for your customer. We’ve all met the “Pushy Salesperson”, but sometimes, they are not pushy; they are just overwhelming people with information, using jargon, telling the customer stuff that they are not interested in.

10 top tips for new blog ideas…

 

 

As its Easter and a Bank Holiday we’re not posting a blog from one of our regular contributors but thought we’d post one from us instead.

The most frequent question we get asked as the admin of this site is “what would you like me to write about?” so we’ve written this post about where we get the inspiration for our posts from, or which topics make us read a blog post.

Is your email address or phone number costing you business?

This post is by Helen Stothard

 

What email address or phone number do you advertise for your business? Chances are you may be losing custom if you do not portray the correct professional image.

Frequently we come across businesses advertising yahoo, hotmail or gmail email addresses on the Internet.  Why? For example, Joe Bloggs is a plumber by trade.  If he advertises joebloggs@hotmail.com or joe@joebloggs.co.uk which do you suppose will be treated more seriously?  Which gives the perception of a professional business?

Driving More Profit Through E-Commerce

You can read any number of articles that tell you how easy it is to sell online. Set up an e-commerce site, and the sales will just come rolling in.
But there are rather less sources of advice around to tell you how to do it profitably. So here are a few things to consider:-

The benefits of outsourcing in a small business

This post is by Philippa Bowen

Making the decision to outsource a service, a product, or a process can be the best thing you ever do for your business. It can save you money, people power and physical resources. If you are a small business and are trying to run your company single handed then outsourcing will undoubtedly make the job easier. Well that has always been my opinion and is what I say to business owners when I get asked this question. I also recommend that businesses get into the habit of outsourcing as soon as possible in life of the business. Why?

The weird and wonderful world of networking

This post is by Victoria Roberts

 

Welcome to the weird and wonderful world of networking.  If you’re a virgin networker, don’t be scared…I can gently show you the way.  If you’re a seasoned networker – bravo! I love it too.  If you’re of the tried and didn’t like variety…read on as well…you may be surprised.

After 15 years in the corporate world, I didn’t ‘get’ networking.  The only networking I had been to was the kind of scary ones where you have to be there at the crack of dawn week in week out, cant’ miss it and have to give referrals (“My Auntie Margaret needs her carpet cleaning” cue applause)or the informal ones by the Chamber of Commerce.  They were useless for me…as a woman, walking into a room full of pinstripes suits in a bar was bad enough, never mind trying to make conversation with strangers! Nope, I would stand in the corner with a couple of people I already knew, down my vino and run, which defeated the object.   I prefer some structure and some fun…for my bet, you can’t beat 4Networking (www.4networking.biz) though there are lots of fab networking groups all over.  Google networking in your area and get yourself to a few to try.  However it doesn’t matter who what or how the networking event is, there are some golden rules and some useful tips you need to know.

So for the virginal, tried and died and downright scared…here are my Top Ten Tips to get the most out of your networking:

Are you Compliant?

5 Top Tips for ensuring you are compliant when becoming self employed.

Becoming self employed is not only a very exciting time, but it can also be extremely daunting. Often, when starting out, people are not compliant simply due to a lack of understanding, at d2 Accounting, we have found that lots of new businesses tend to not be aware of their obligations when starting out.

It is important to remember and acknowledge that most business owners start out because they have an interest and / or expertise in a particular field, its important to accept your strengths and weaknesses and seek advice where you lack knowledge. If you are in any doubt at all about your obligations when becoming self employed, please speak to a professional sooner rather than later as they will be able to help and guide you, ensuring you avoid costly mistakes.