Paying private bills through your company
When looking at settling private bills via your business there are considerable differences according to weather you are a limited company, sole trader and partnership businesses:
Sole Traders and Partnerships
Sole traders and partnerships are taxed under the self assessment rules. It is possible for sole traders and partners to draw out more than the balance on their current account, to become overdrawn, and suffer no tax consequence. Of course there is no long term future in doing this as funds needed for the business, will be dissipated and the business will drift towards insolvency. Businesses of this type pay tax on business profits, not the amount taken out of the business by the owners.
Limited Companies
Limited companies and their owner directors are treated very differently. A limited company has a distinct legal identity of its own, quite separate from its shareholders and directors. Money that is withdrawn by the owners, in whatever way, always has a tax and possibly National Insurance consequence as money withdrawn by directors will be treated as salaried earnings or benefits, and/or dividends.
The only exception is if you already have money invested in your company that has been credited to a director's loan account in your name. In that case, the payment of a private bill can be debited to this account, reducing the amount the company owes you, without any tax consequence. In most other cases it may be better to plan for the tax consequences and perhaps find a more suitable way to extract funds from the company.
Tips on Getting Funding For Your Business
For companies today, finding funding is often a major challenge as banks continue to be wary of lending. But the money is only part of the picture as clear communication on both sides is equally important to make any company-funder relationship into a lasting success. Here are some tips on how to achieve this:
Research - Check the investor's criteria for preferred investment stages and areas.
Network - Use advisers you trust and use their network to enhance your reputation.
Be credible - Know your markets and your customers, present information professionally, including accurate numbers, practical reasoning and typo-free text.
Have clear goals - Be specific about what you want and what you offer in exchange.
Practice your pitch - Be brief and focus on the key issues that concern your investors. Avoid jargon and remain even tempered and ready to listen.
Negotiate - Know well what you can give up and what is essential to keep and do research on what your investor is likely to compromise on.
Intellectual Property (IP) checklist for technology companies
The rights for intellectual property (IP) that is created and/or owned by your company can be a very important source of income as well as a powerful tool for deterring competitors. To secure all benefits form your IP, you need to keep it confidential and be able to prove its origin and ownership.
Here are some basic tips on how to maximise your ability to secure your IP rights and related benefits...read more....
Reminder of the VAT change coming into effect on 1 January 2010
The standard rate of VAT, which was temporarily reduced to 15 per cent on 1 December 2008, will return to 17.5 per cent on 1 January 2010. For any sales of standard-rated goods or services that you make on or after 1 January 2010 you must charge VAT at the rate of 17.5 per cent. If you have a cash business and calculate your VAT using the VAT fraction you must revert to the VAT fraction of seven fortysevenths from 1 January 2010.
Story links: www.hmrc.go v.uk/vat/forms-rates/rates/rate-changes.htm
------------------------------------------------------
Apple Inc agrees to change their terms and conditions
Apple's contracts set out terms which apply to consumers who buy from Apple and iTunes stores and download software from the web. The OFT identified terms in the agreements which raised concerns under the Unfair Terms in Consumer Contracts Regulation 1999 (UTCCRs). Following constructive discussions with the OFT, Apple has agreed to revise its standard terms and conditions to ensure that they:
- Do not exclude liability for faulty or mis-described goods
- Are consistent with consumer rights under the Distance Selling Regulations
- Are drafted in plain or intelligible language
- Do not potentially allow changes to be made to products and prices after an agreement is made.
If you are unsure of your rights, Consumer Direct is the OFT managed advice service offering information and advice on consumer issues. For information or advice contact 08454 04 05 06 or see www.consumerdirect.gov.uk
-------------------------------------------------------------------
Stress, recession and “fit notes”
Over 13 million working days were lost in Britain alone last year due to stress related absence and this figure is expected to rise as the economy declines. A survey of absence management conducted by the Chartered Institute of Personnel and Development ("CIPD") in 2008 found stress to be the leading cause of long-term absence in non-manual workers.
The HSE has launched a new website that offers advice and guidance for employers to help businesses prevent work related stress. The site can be found at:
www.hse.gov.uk/stress/index.htm
When looking at settling private bills via your business there are considerable differences according to weather you are a limited company, sole trader and partnership businesses:
Sole Traders and Partnerships
Sole traders and partnerships are taxed under the self assessment rules. It is possible for sole traders and partners to draw out more than the balance on their current account, to become overdrawn, and suffer no tax consequence. Of course there is no long term future in doing this as funds needed for the business, will be dissipated and the business will drift towards insolvency. Businesses of this type pay tax on business profits, not the amount taken out of the business by the owners.
Limited Companies
Limited companies and their owner directors are treated very differently. A limited company has a distinct legal identity of its own, quite separate from its shareholders and directors. Money that is withdrawn by the owners, in whatever way, always has a tax and possibly National Insurance consequence as money withdrawn by directors will be treated as salaried earnings or benefits, and/or dividends.
The only exception is if you already have money invested in your company that has been credited to a director's loan account in your name. In that case, the payment of a private bill can be debited to this account, reducing the amount the company owes you, without any tax consequence. In most other cases it may be better to plan for the tax consequences and perhaps find a more suitable way to extract funds from the company.
Tips on Getting Funding For Your Business
For companies today, finding funding is often a major challenge as banks continue to be wary of lending. But the money is only part of the picture as clear communication on both sides is equally important to make any company-funder relationship into a lasting success. Here are some tips on how to achieve this:
Research - Check the investor's criteria for preferred investment stages and areas.
Network - Use advisers you trust and use their network to enhance your reputation.
Be credible - Know your markets and your customers, present information professionally, including accurate numbers, practical reasoning and typo-free text.
Have clear goals - Be specific about what you want and what you offer in exchange.
Practice your pitch - Be brief and focus on the key issues that concern your investors. Avoid jargon and remain even tempered and ready to listen.
Negotiate - Know well what you can give up and what is essential to keep and do research on what your investor is likely to compromise on.
Intellectual Property (IP) checklist for technology companies
The rights for intellectual property (IP) that is created and/or owned by your company can be a very important source of income as well as a powerful tool for deterring competitors. To secure all benefits form your IP, you need to keep it confidential and be able to prove its origin and ownership.
Here are some basic tips on how to maximise your ability to secure your IP rights and related benefits...read more....
Reminder of the VAT change coming into effect on 1 January 2010
The standard rate of VAT, which was temporarily reduced to 15 per cent on 1 December 2008, will return to 17.5 per cent on 1 January 2010. For any sales of standard-rated goods or services that you make on or after 1 January 2010 you must charge VAT at the rate of 17.5 per cent. If you have a cash business and calculate your VAT using the VAT fraction you must revert to the VAT fraction of seven fortysevenths from 1 January 2010.
Story links: www.hmrc.go v.uk/vat/forms-rates/rates/rate-changes.htm
------------------------------------------------------
Apple Inc agrees to change their terms and conditions
Apple's contracts set out terms which apply to consumers who buy from Apple and iTunes stores and download software from the web. The OFT identified terms in the agreements which raised concerns under the Unfair Terms in Consumer Contracts Regulation 1999 (UTCCRs). Following constructive discussions with the OFT, Apple has agreed to revise its standard terms and conditions to ensure that they:
- Do not exclude liability for faulty or mis-described goods
- Are consistent with consumer rights under the Distance Selling Regulations
- Are drafted in plain or intelligible language
- Do not potentially allow changes to be made to products and prices after an agreement is made.
If you are unsure of your rights, Consumer Direct is the OFT managed advice service offering information and advice on consumer issues. For information or advice contact 08454 04 05 06 or see www.consumerdirect.gov.uk
-------------------------------------------------------------------
Stress, recession and “fit notes”
Over 13 million working days were lost in Britain alone last year due to stress related absence and this figure is expected to rise as the economy declines. A survey of absence management conducted by the Chartered Institute of Personnel and Development ("CIPD") in 2008 found stress to be the leading cause of long-term absence in non-manual workers.
The HSE has launched a new website that offers advice and guidance for employers to help businesses prevent work related stress. The site can be found at:
www.hse.gov.uk/stress/index.htm
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Entelliz Weekly Newsletter - Issue 41, 2009
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What Angel Investors Want?
We had a great end-of-year event at the FastTrack Club (1) last week with a panel of highly accomplished angel investors. It was great to have three angels answering the same questions as it highlighted just how much personal experience and individual approach they bring to any venture they get involved with. If anyone ever doubted the mantra that ....read more...