The Business Show 2016

My Digital Accounts at the Business Show 2016

The Business Show Olympia http://www.greatbritishbusinessshow.co.uk/ was held on the 17-18 November 2016; this was the first time that My Digital Accounts attended.  With over 25k visitors we were kept very busy!

It was really great to meet lots of new and established business, along with the professionals who support them.  There was a huge amount of interest in our stand (which looked great btw – thanks Alicia & Harry!) and of course our LED name badges started lots of conversations!  Even more than this, I was really encouraged by the interest and great feedback we received from those of you who took the time to watch a demo of My Digital Accounts- including the new Umbrella Payroll functionality we’ll be launching in the New Year.

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I was personally honoured to be invited to speak at the Cash Flow theatre where I talked about Managing Cash Flow for Freelancers and Contractors.  The theatre was full with small business owners eager to learn practical tips for their businesses.  It was great to see the audience so engaged on a Friday afternoon; some really interesting conversations were started there.

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Image Credit: Megumi Waters

 

Now we’re back at the office and the real hard work begins: contacting everyone who asked for more information and using your feedback to make My Digital Accounts even stronger.

 

 

 

Can Micro-Companies Organise Christmas Parties Tax Free?

Can Micro-Companies Organise Christmas Parties Tax Free?

It’s not just large firms that can benefit, it’s possible for one-person limited companies to benefit from this tax relief.

 

Staff exemption

Most companies that have a staff count of over 5 probably organised their 2016 Christmas party months ago. To make sure that their staff won’t receive a BiK (Benefit in Kind) tax bill, they will have kept the cost within HMRC’s £150 exemption. However for micro-companies, this probably wasn’t the case. Micro-companies with only one or two staff (including directors) might be wondering if they can go for a meal with their partner and still benefit from this tax exemption.

What the law says

The legislation defines fairly clearly who exactly can claim this tax exemption. Section 264 of the Income Tax (Earnings and Pensions) Act states, “Where in the tax year only one annual party or similar annual function to which this section applies is provided for the employer’s employees, no liability to income tax arises in respect of its provision if the cost per head of the party or function does not exceed £150.” Although there are a couple of extra conditions, there’s no cap on the size of the business, meaning the exemption applies for one person limited companies. You can also include guests in the tax exemption, so your spouse/partner can tag along without paying tax or National Insurance.

Company tax deduction

When it comes to CT (Corporation Tax), it doesn’t matter whether or not the Christmas Party is a taxable BiK as it can claim a deduction for the cost either way. However don’t jump the gun and expect a financial advantage. In order to make this tax break, you must maximise the BiK exemption.

My Digital Accounts Tip: Spend whatever you like within the £150 budget, but by going £0.01 over you’ll be taxed the full amount along with a NI charge.

Get-out clause

Naturally you’ll be eager to maximise the annual party tax and NI exemption but it’s not always that simple to keep track of your budget on the night. For example, if you forgot to account for the end of the night Sambucas, you might go over your budget by £5 which would rack up a hefty Tax and NI bill. However there’s a simple way to escape this trap.

My Digital Accounts Tip: Always book the venue in the company’s name and should the £150 budget be exceeded, the director should personally pay the bill and claim back only up to £150 per head from the company, with receipts to prove the costs. This is a great way to make sure the company stays within the tax exemption.