There has been a debate raging in Mazuma HQ this week about the use of the word “cheap”. Essentially the service that we provide at Mazuma is extremely good quality for an even better price, but should we describe it as cheap ourselves? If we are looking for a cheap product on the internet then we may well type that phrase into the search engine e.g. cheap accountant, cheap bookkeeping, cheap envelopes etc. Yet, were we to find a website that described its own product as “cheap”, would we put off it?
The answers I’ve had to the question from the folks at Mazuma are as varied as Gordon Brown’s tax changes; however, we are yet to reach an agreement!
The best answer I can divulge is that we may be looking for something cheap but implicitly the word cheap now seems to mean poor quality and none of us want to be classified as cheap by association. So what do we do? I’m a “call a spade a spade” type of person but I’m not sure I can lead the revolution on the word cheap alone!
I do however also hold a grudge against the phrases cost effective, good value, low cost and the like. I think they are poorly disguised substitutes for the word cheap!
So the debate at Mazuma HQ rages on. Cheap accountant anyone?
Tuesday 29 September 2009
Monday 28 September 2009
National Minimum Wage rates 2009
National Minimum wage rates normally change on 1 October each year.
If you need to change your payroll, start thinking about it now!
In spite of negative inflation, there will be increases to the rates of minimum wage on 1 October 2009.
The new rates of minimum wage will apply from 1 October 2009. These show a small increase from the 2008 rates, the increases having been proposed while the rate of inflation was considerably higher than now.
The new rates and rates of increase are :
Full rate (age 22 and over) - new rate £5.80 per hour; old rate £5.73 per hour; increase 1.2%
18 - 21 rate - new rate £4.83 per hour; old rate £4.77 per hour; increase 1.25%
Youth rate - new rate £3.57 per hour; old rate £3.53 per hour; increase 1.1%
Don't forget to tell your accountant if you intend changing the salary of a member of staff.
If you struggle with the constant changes in the PAYE system it may be worth getting your accountant to process your payroll for you.
Help on the minimum wage is available from the HMRC website which has a dedicated National Minimum Wage area.
If you need to change your payroll, start thinking about it now!
In spite of negative inflation, there will be increases to the rates of minimum wage on 1 October 2009.
The new rates of minimum wage will apply from 1 October 2009. These show a small increase from the 2008 rates, the increases having been proposed while the rate of inflation was considerably higher than now.
The new rates and rates of increase are :
Full rate (age 22 and over) - new rate £5.80 per hour; old rate £5.73 per hour; increase 1.2%
18 - 21 rate - new rate £4.83 per hour; old rate £4.77 per hour; increase 1.25%
Youth rate - new rate £3.57 per hour; old rate £3.53 per hour; increase 1.1%
Don't forget to tell your accountant if you intend changing the salary of a member of staff.
If you struggle with the constant changes in the PAYE system it may be worth getting your accountant to process your payroll for you.
Help on the minimum wage is available from the HMRC website which has a dedicated National Minimum Wage area.
Friday 25 September 2009
Award Winning Customer Service!
Mazuma is named the regional winner of ‘Excellence in Customer Service' Category at The Chamber of Commerce Awards 2009!
Mazuma is an accountancy practice serving the needs of small businesses and sole traders, which has grown to a national business since its formation in Cardiff in 2006 by Sophie Hughes and Lucy Cohen. Mazuma has recently successfully launched its accountancy franchise throughout the UK and has recently embarked on a large expansion plan.
Sophie Hughes, Operations Director, Mazuma comments: "This is the second year in a row that we have won this catagory, and the third year in a row that we have been a regional winner in these prestigious awards. We are delighted to have won the Wales region and are looking forward to finding out the national winner in November".
"Accountants have been known to have a poor reputation for customer service so we are delighted that our accountancy and bookkeeping services have received such a good review!" says Lucy Cohen, Commercial Director, Mazuma.
The awards are to be held at a black tie event in the National Martime Museum in London on the 26th November.
Mazuma is an accountancy practice serving the needs of small businesses and sole traders, which has grown to a national business since its formation in Cardiff in 2006 by Sophie Hughes and Lucy Cohen. Mazuma has recently successfully launched its accountancy franchise throughout the UK and has recently embarked on a large expansion plan.
Sophie Hughes, Operations Director, Mazuma comments: "This is the second year in a row that we have won this catagory, and the third year in a row that we have been a regional winner in these prestigious awards. We are delighted to have won the Wales region and are looking forward to finding out the national winner in November".
"Accountants have been known to have a poor reputation for customer service so we are delighted that our accountancy and bookkeeping services have received such a good review!" says Lucy Cohen, Commercial Director, Mazuma.
The awards are to be held at a black tie event in the National Martime Museum in London on the 26th November.
Thursday 24 September 2009
When is paying a dividend illegal?
At Mazuma we see many clients who have a small limited company and use the dividends/salary split to maximise their tax efficiency. However, it can be tricky to know when you can pay a dividend and when it can look, well, a bit dodgy! Here is a low down on the main points to consider.
A dividend may be 'illegal', in that it is contrary to Company Law, when the proper procedures are not followed. If the Taxman examines the paperwork and decides the payment from your company was not a legal dividend he may treat the amount paid as a loan, or even as a bonus payment.
In both cases additional tax may be due from the company and sometimes from you.
To pay a legal dividend it is not sufficient just to write 'dividend' on the cheque stub or against the entry in director's loan account.
We recommend following these steps when paying dividends...
1. The directors should first review the profits available for interim dividends. This is not the same thing as funds in the bank account, as you have to take account of other assets and liabilities. Those deliberations should be recorded as a formal board minute, so if the Taxman ever asks, you can prove the profits were there when the decision to pay an interim dividend was made. If you are signed up for our Purpleforce service your monthly management accounts will assist you in making this decision!
2. If the final accounts for the year are complete and show the accumulated profit and loss account is positive, the directors can recommend the profits, which are not required for investment, can be paid out as a final dividend to the shareholders. The shareholders can either accept the directors' recommendation or suggest a lower figure of dividend. Both these decisions also need to be properly recorded at the time they are made.
3. Dividend vouchers need to be prepared when either a final or interim dividend is paid, for each shareholder showing the total due, the tax credit attached to the dividend and the date of payment.
4. The dividend should be paid. The payment can be transferred from the company's account by cheque or bank transfer into the shareholder's own bank account. If the shareholder is a director his account in the company books may be credited with the dividend due to him or her, but this needs to be done as soon as possible after the decision to pay a dividend is taken.
We can help you with all this paperwork, but it is important that the decision to pay a dividend is made in advance of any payment being paid out of the company.
A dividend may be 'illegal', in that it is contrary to Company Law, when the proper procedures are not followed. If the Taxman examines the paperwork and decides the payment from your company was not a legal dividend he may treat the amount paid as a loan, or even as a bonus payment.
In both cases additional tax may be due from the company and sometimes from you.
To pay a legal dividend it is not sufficient just to write 'dividend' on the cheque stub or against the entry in director's loan account.
We recommend following these steps when paying dividends...
1. The directors should first review the profits available for interim dividends. This is not the same thing as funds in the bank account, as you have to take account of other assets and liabilities. Those deliberations should be recorded as a formal board minute, so if the Taxman ever asks, you can prove the profits were there when the decision to pay an interim dividend was made. If you are signed up for our Purpleforce service your monthly management accounts will assist you in making this decision!
2. If the final accounts for the year are complete and show the accumulated profit and loss account is positive, the directors can recommend the profits, which are not required for investment, can be paid out as a final dividend to the shareholders. The shareholders can either accept the directors' recommendation or suggest a lower figure of dividend. Both these decisions also need to be properly recorded at the time they are made.
3. Dividend vouchers need to be prepared when either a final or interim dividend is paid, for each shareholder showing the total due, the tax credit attached to the dividend and the date of payment.
4. The dividend should be paid. The payment can be transferred from the company's account by cheque or bank transfer into the shareholder's own bank account. If the shareholder is a director his account in the company books may be credited with the dividend due to him or her, but this needs to be done as soon as possible after the decision to pay a dividend is taken.
We can help you with all this paperwork, but it is important that the decision to pay a dividend is made in advance of any payment being paid out of the company.
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