4 business topics new business owners need to know about - now
Running a successful business is a difficult task. On top of finding the spare cash to pay yourself for all the extra hassle and convenience of going it alone, turning a profit, and being responsible for other people’s employment, you need to keep up to date with the legislation that affects your business.
Here is Panthera’s quick guide to 4 different topics that new business owners need to know in 2018.
VAT
Value Added Tax (VAT) is charged on most products and services that VAT-registered businesses provide. Your business must register for VAT if your annual turnover is above £85,000. If this is the case for your business, then you must then charge the standard rate of VAT on your products and services.
The three rates for VAT are:
- Standard rate of 20% (This is for most products and services)
- Reduced rate of 5% (this rate applies to a specific set of products, like children’s car seats)
- Zero rate at 0% (This applies to most food, children’s clothes, and books)
If you are registered for VAT, you will need to submit regular VAT returns. Typically, this is every 3 months – it’s something called your “accounting period”. VAT returns are a part of the government’s new Making Tax Digital scheme so you’ll need an online VAT account to submit your return. Your account details will be given to you when you register for VAT.
You can authorise your accountant to submit your VAT returns for you which will save you time and money in the long run.
You will need to keep records of your VAT payments for up to 6 years. These records can be digital or they can be on paper.
RTI
If your business has employees, then you will need to understand how Real Time Information (RTI) fits in to the already complex PAYE process.
RTI is a government initiative that aims to increase the accuracy of the PAYE tax collection system. The more accurate this process is, the less time and money HMRC needs to spend on sending corrections to employees and employers about incorrect tax payments.
You will need to submit information to HMRC each time you pay your employees, rather than at your payroll year end. This is done through sending a Full Payment Submission (FPS), which is normally completed automatically through your payroll software.
If you fail to submit your FPS, you may have pay a fine or a penalty.
Auto Enrolment
As an employer, you will need to deal with auto enrolment and workplace pensions. Legally, you must offer your employees a workplace pension in order for them to save for their retirement. With this scheme, both you and your employees must make payments into this pension.
If your employees are aged 22 or over and they earn above £10,000 a year, they are eligible for the workplace pension scheme.
The mandatory contribution levels for the pension are set to increase gradually over time. By 2019 the contributions will be set at a total rate of 8% (the employer contributions will be 3% and 5% for contributions by the employee themselves).
If your employee decides to opt out of the pension scheme, you will have to automatically re-enrol them every three years. They can then opt out again if they choose to.
GDPR
The EU’s new General Data Protection Regulations (GDPR) are rolling out this month (May 25th 2018) and it will change how your business can market itself to potential customers. The regulations aim to bring data protection laws in line with how businesses actually use data in the modern age.
Your business will now have to receive explicit consent in order to process and handle your customer’s data.
One example of how this will affect your business is with online registration forms. Pre-checked boxes, silence/inactivity, and opt out schemes are no longer regarded as legitimate consent under the new rules.
We can help
Make sure you’re following all the rules you need to follow and using Panthera to save as much money as you can. Call us today on 01235 768 561 or email enquiries@pantheraaccounting.co.uk.