Mazuma is expanding by recruiting six new members of staff at their new Head Office, The Hub, in Bridgend.
Mazuma is an accountancy practice that serves the needs of small businesses and sole traders whilst providing excellent customer service since it's inception in Cardiff in 2006. The Hub opened in December 2009 and Lowri Williams has been appointed as General Manager to ensure the continued success of Mazuma during their rapid expansion plans. Samantha Davies joins Mazuma as a Chartered Accountant, heading up a team of ten.
Sophie Hughes, Operations Director of Mazuma comments: "We recently expanded into large premises to serve our national expansion to provide low-cost accountancy services to small businesses across the country. We have recruited six new members of staff including Lowri Williams, who we feel will be a valuable asset to future growth of Mazuma". Lucy Cohen, Commercial Director of Mazuma comments on the appointment of Samantha Davies: "I have been impressed with the excellent experience that Samantha has had within the accountancy field, and we are thrilled to have found a member of staff with the vivacious attitude that matches our brand".
The Hub is also the Head Office for the Mazuma Associate scheme, and the eighth Associate will operating in Newport from January 2010.
Tuesday, 19 January 2010
Monday, 4 January 2010
January's Tax Tips!
Welcome...
To January's Tax Tips & News, our newsletter designed to bring you tax tips and news to keep you one step ahead of the taxman.
If you need further assistance just let us know or you can send us a question for our Question and Answer Corner.
We are committed to ensuring all our clients don't pay a penny more in tax than is necessary.
Please contact us for advice in your own specific circumstances. We're here to help!
Time to Pay Your Tax!
January is the month when those big bills become due for payment, and that includes your tax bills...
- The balancing payment of income tax for 2008/09 is due by 31 January 2010 together with any Capital Gains Tax due for that year.
- The first instalment of income tax for 2009/10 is also due on that date.
- VAT for the quarter to 31 December 2009 must also be paid by 31 January, unless you file and pay your VAT return online, in which case you have another seven days to pay (ten if paying by direct debit).
- PAYE and NIC deductions for the month or quarter to 5 January 2010 must also be paid by 19th January, or by 22nd if you pay electronically.
If you do not have the funds to pay all the tax you owe in January, you should contact the HMRC Business Payment Support Service as soon as possible to arrange a payment plan. Their number is 0845 302 1435, they are open every day apart from bank holidays – Mon to Fri 8am to 8pm, Sat and Sun 8am to 4pm.
The tax officers that man this helpline can agree to spread the tax you owe over a period of up to six months, and suspend any surcharges for late payment that become due within that period, although interest will continue to be payable. However, you must set up a direct debit to pay regular instalments of the total debt. If you miss one of those instalments you will have to pay the surcharges due for late payment, and the balance of the debt will become payable immediately.
If you have a temporary funding difficulty in January you can pay a tax bill of up to £100,000 by debit or credit card through this website: https://www.billpayment.co.uk/hmrc/scripts/help1.asp.This page is part of the HMRC website, but the billpay facility is run by Alliance and Leicester. Please note you will be charged a transaction fee of 1.25% when you pay your tax by this method, and you will also be charged interest by your credit card company at a much higher rate until you pay off the full amount owing.
The Capital Gains Dilemma
The Government needs to raise more revenue to pay off the massive national debt, but it seems reluctant to announce higher tax rates. One tax that looks ripe for an increase is Capital Gains Tax (CGT). The current rate of CGT is just 18%, compared to a top rate of 40% for income tax.
An additional income tax rate of 50% will be imposed on income over £150,000 from 6 April 2010, and there are strong rumours that the rate of Capital Gains Tax (CGT) will also be increased from that date. Nothing has been announced on this issue yet. Some say this silence is deliberate to avoid people rushing to make gains that will be taxed in the current tax year at 18% (or 10% with tax reliefs), rather than pay CGT at a much higher rate in 2010/11.
If you have assets you are planning to dispose of, consider whether you should make that disposal before 6 April 2010 and pay CGT at 18%, or delay and risk paying tax at a potentially higher rate. Discuss this with us before you decide.
Reclaiming Overseas VAT is Now Easier
At last a solution has been found to the problems businesses face when trying to reclaim overseas VAT. From 1 January 2010, to claim a refund of VAT you have paid in another EU county you must complete an online claim in the UK. You don't have to battle with lots of incomprehensible forms in other languages, as the claim will be done entirely in English. The UK tax office will forward your claim to the relevant country, which will process the refund within four months of receipt. You should then receive the payment due within a further 10 days.
To make VAT refund claims in respect of VAT paid in other EU countries you need to first register to use the Tax Office VAT EU refunds system, which is part of the VAT online service. Alternatively we can register on your behalf and submit refund claims for you.
Claims made from 1 January 2010 can cover VAT incurred on expenses in 2009. The deadline for 2009 invoices is 30 September 2010. Unfortunately claims for VAT paid on 2008 invoices are now out of time. Up to five refund claims can be made for each country for each calendar year: one for each quarter and a sweep-up claim for the whole year. The minimum amount of the VAT to be included in each claim has been standardised at €400 euros per quarter, or €50 euros for the sweep-up claim for the full year.
There are a lot of different rules that block the refund of VAT for certain purchases, such as VAT on the purchase of cars in the UK. These blocking rules vary widely across the EU countries but they are summarised in new VAT notice number 723A: Refunds of VAT in the European Community.
Are You Declaring Commissions?
Insurance companies often pay commissions to professionals who recommend certain insurance policies to their clients. For example; hospital consultants may recommend health insurance, vehicle dealers may propose car insurance, and lawyers may put forward accident and legal cover. The professionals in these situations should report any commissions they receive on their tax returns, but sometimes they forget to do this.
The Taxman now has wide powers to ask for information about a person's tax affairs from third parties. He can issue a notice to an insurance company asking for a list of all persons who receive commissions in a certain period, and the amounts paid to each individual.
We understand that HMRC has recently issued several such notices to a number of large insurance companies. When the information requested in these notices is received, the Taxman is likely to open enquiries into the tax affairs of a number of professionals.
If you have received some commission, however small, and you failed to disclose that amount on your tax return, now would be a good time to come clean. If you make a voluntarily disclosure to HMRC, you could benefit from a reduction in the penalty due from 30% of the tax due, down to nil. However, this penalty range (from 0% to 30%) will only apply if the Tax Inspector judges the omission from your tax return to be careless. In most cases the Taxman will view the under-declaration of commission to be a deliberate error, in which case the minimum penalty will be 20%, and the maximum 70% of the understated tax.
If you think this applies to you and you are already a client then please speak to us before you contact the tax office about any under-declaration of income, as the way in which you present the information to the Taxman can influence the amount of penalty charged.
Question and Answer Corner
Q. About three years ago I converted a barn into two attractive cottages, which I have since let as furnished holiday lets. Much of the expenditure qualified for capital allowances, and there is large balance in the capital allowance pool carried forward into the current tax year. Will I get tax relief for the balance in the capital allowances pool when the rules for treatment of furnished holiday lettings are changed in April 2010?
A. If you continue to let the cottages after 5 April 2010 you can claim the annual 20% capital allowance generated by your capital allowances pool, but you cannot add expenditure to that pool for equipment or furnishings used within the buildings. The Taxman has confirmed that you can also claim a wear and tear allowance for each tax year from 2010/11 onwards in which you let fully furnished property. The wear and tear allowance is 10% of the net rents received after deduction of council tax, water rates and other charges you pay.
Q. I paid off my company's overdraft with my own money, to allow the company to be closed down using the informal extra statutory C16 procedure. Can I get any tax relief for the money that was used to repay the overdraft?
A. It is possible to get tax relief for a loan made to a trading business, which is not repaid. However, the conditions are strict. The money lent must be used by the borrower wholly for the purposes of a trade it carries on. In this case the company had already ceased trading and funds were used to pay off a bank overdraft before the company was struck-off. In this situation you cannot argue that the money was used for the company's trade as that had already ceased, so you cannot get tax relief for the lost funds. Even if all the conditions for the loan were met, the loss of the funds would be treated as a capital loss in your hands, and not relievable against income tax.
Q. There are 53 Mondays in this current tax year. Does that mean I will be taxed on 53 times the weekly amount of my state pension for 2009/10?
A. Monday is the payment date for most state pensions, and there are 53 Mondays in 2009/10 as 6 April 2009 was a Monday. However, the state pension is taxed on the amount accruing in the tax year, not the amount actually received in the year. The Tax Office always work on the basis that 52 weeks of state pension accrues for each tax year. When it comes to completing your tax return for 2009/10 you should include just 52 times the weekly amount of your pension, excluding any non-taxable benefits such as Attendance Allowance.
New Clients Welcome!
If you are not already a client and are interested in becoming one, we would love to meet with you to discuss how we can help and provide you with a competitive quote for our services.
All new client consultations are provided free of charge and without obligation.
In addition, if there's anyone else who you think would benefit from the newsletter, please forward the email to them or ask them to contact us to be added to the newsletter list.
Key Tax Dates for January 2010
1 Due date for payment of Corporation Tax for the year ended 31 March 2009
14 Return and payment of CT61 tax due for quarter to 31 December 2009
19/22 PAYE/NIC and CIS deductions due for month to 5/1/2010 or quarter 3 of 2009/10 for small employers
31 Deadline for filing 2009 Self Assessment personal, partnership and trust Tax Returns.
Balancing self assessment payment due for 2008/09.
Capital gains tax payment due for 2008/09.
First self assessment payment on account due for 2009/10.
Interest accrues on all late payments.
Last time for HMRC to inform you if it intends to start an enquiry into your 2007/08 Tax Return.
To January's Tax Tips & News, our newsletter designed to bring you tax tips and news to keep you one step ahead of the taxman.
If you need further assistance just let us know or you can send us a question for our Question and Answer Corner.
We are committed to ensuring all our clients don't pay a penny more in tax than is necessary.
Please contact us for advice in your own specific circumstances. We're here to help!
Time to Pay Your Tax!
January is the month when those big bills become due for payment, and that includes your tax bills...
- The balancing payment of income tax for 2008/09 is due by 31 January 2010 together with any Capital Gains Tax due for that year.
- The first instalment of income tax for 2009/10 is also due on that date.
- VAT for the quarter to 31 December 2009 must also be paid by 31 January, unless you file and pay your VAT return online, in which case you have another seven days to pay (ten if paying by direct debit).
- PAYE and NIC deductions for the month or quarter to 5 January 2010 must also be paid by 19th January, or by 22nd if you pay electronically.
If you do not have the funds to pay all the tax you owe in January, you should contact the HMRC Business Payment Support Service as soon as possible to arrange a payment plan. Their number is 0845 302 1435, they are open every day apart from bank holidays – Mon to Fri 8am to 8pm, Sat and Sun 8am to 4pm.
The tax officers that man this helpline can agree to spread the tax you owe over a period of up to six months, and suspend any surcharges for late payment that become due within that period, although interest will continue to be payable. However, you must set up a direct debit to pay regular instalments of the total debt. If you miss one of those instalments you will have to pay the surcharges due for late payment, and the balance of the debt will become payable immediately.
If you have a temporary funding difficulty in January you can pay a tax bill of up to £100,000 by debit or credit card through this website: https://www.billpayment.co.uk/hmrc/scripts/help1.asp.This page is part of the HMRC website, but the billpay facility is run by Alliance and Leicester. Please note you will be charged a transaction fee of 1.25% when you pay your tax by this method, and you will also be charged interest by your credit card company at a much higher rate until you pay off the full amount owing.
The Capital Gains Dilemma
The Government needs to raise more revenue to pay off the massive national debt, but it seems reluctant to announce higher tax rates. One tax that looks ripe for an increase is Capital Gains Tax (CGT). The current rate of CGT is just 18%, compared to a top rate of 40% for income tax.
An additional income tax rate of 50% will be imposed on income over £150,000 from 6 April 2010, and there are strong rumours that the rate of Capital Gains Tax (CGT) will also be increased from that date. Nothing has been announced on this issue yet. Some say this silence is deliberate to avoid people rushing to make gains that will be taxed in the current tax year at 18% (or 10% with tax reliefs), rather than pay CGT at a much higher rate in 2010/11.
If you have assets you are planning to dispose of, consider whether you should make that disposal before 6 April 2010 and pay CGT at 18%, or delay and risk paying tax at a potentially higher rate. Discuss this with us before you decide.
Reclaiming Overseas VAT is Now Easier
At last a solution has been found to the problems businesses face when trying to reclaim overseas VAT. From 1 January 2010, to claim a refund of VAT you have paid in another EU county you must complete an online claim in the UK. You don't have to battle with lots of incomprehensible forms in other languages, as the claim will be done entirely in English. The UK tax office will forward your claim to the relevant country, which will process the refund within four months of receipt. You should then receive the payment due within a further 10 days.
To make VAT refund claims in respect of VAT paid in other EU countries you need to first register to use the Tax Office VAT EU refunds system, which is part of the VAT online service. Alternatively we can register on your behalf and submit refund claims for you.
Claims made from 1 January 2010 can cover VAT incurred on expenses in 2009. The deadline for 2009 invoices is 30 September 2010. Unfortunately claims for VAT paid on 2008 invoices are now out of time. Up to five refund claims can be made for each country for each calendar year: one for each quarter and a sweep-up claim for the whole year. The minimum amount of the VAT to be included in each claim has been standardised at €400 euros per quarter, or €50 euros for the sweep-up claim for the full year.
There are a lot of different rules that block the refund of VAT for certain purchases, such as VAT on the purchase of cars in the UK. These blocking rules vary widely across the EU countries but they are summarised in new VAT notice number 723A: Refunds of VAT in the European Community.
Are You Declaring Commissions?
Insurance companies often pay commissions to professionals who recommend certain insurance policies to their clients. For example; hospital consultants may recommend health insurance, vehicle dealers may propose car insurance, and lawyers may put forward accident and legal cover. The professionals in these situations should report any commissions they receive on their tax returns, but sometimes they forget to do this.
The Taxman now has wide powers to ask for information about a person's tax affairs from third parties. He can issue a notice to an insurance company asking for a list of all persons who receive commissions in a certain period, and the amounts paid to each individual.
We understand that HMRC has recently issued several such notices to a number of large insurance companies. When the information requested in these notices is received, the Taxman is likely to open enquiries into the tax affairs of a number of professionals.
If you have received some commission, however small, and you failed to disclose that amount on your tax return, now would be a good time to come clean. If you make a voluntarily disclosure to HMRC, you could benefit from a reduction in the penalty due from 30% of the tax due, down to nil. However, this penalty range (from 0% to 30%) will only apply if the Tax Inspector judges the omission from your tax return to be careless. In most cases the Taxman will view the under-declaration of commission to be a deliberate error, in which case the minimum penalty will be 20%, and the maximum 70% of the understated tax.
If you think this applies to you and you are already a client then please speak to us before you contact the tax office about any under-declaration of income, as the way in which you present the information to the Taxman can influence the amount of penalty charged.
Question and Answer Corner
Q. About three years ago I converted a barn into two attractive cottages, which I have since let as furnished holiday lets. Much of the expenditure qualified for capital allowances, and there is large balance in the capital allowance pool carried forward into the current tax year. Will I get tax relief for the balance in the capital allowances pool when the rules for treatment of furnished holiday lettings are changed in April 2010?
A. If you continue to let the cottages after 5 April 2010 you can claim the annual 20% capital allowance generated by your capital allowances pool, but you cannot add expenditure to that pool for equipment or furnishings used within the buildings. The Taxman has confirmed that you can also claim a wear and tear allowance for each tax year from 2010/11 onwards in which you let fully furnished property. The wear and tear allowance is 10% of the net rents received after deduction of council tax, water rates and other charges you pay.
Q. I paid off my company's overdraft with my own money, to allow the company to be closed down using the informal extra statutory C16 procedure. Can I get any tax relief for the money that was used to repay the overdraft?
A. It is possible to get tax relief for a loan made to a trading business, which is not repaid. However, the conditions are strict. The money lent must be used by the borrower wholly for the purposes of a trade it carries on. In this case the company had already ceased trading and funds were used to pay off a bank overdraft before the company was struck-off. In this situation you cannot argue that the money was used for the company's trade as that had already ceased, so you cannot get tax relief for the lost funds. Even if all the conditions for the loan were met, the loss of the funds would be treated as a capital loss in your hands, and not relievable against income tax.
Q. There are 53 Mondays in this current tax year. Does that mean I will be taxed on 53 times the weekly amount of my state pension for 2009/10?
A. Monday is the payment date for most state pensions, and there are 53 Mondays in 2009/10 as 6 April 2009 was a Monday. However, the state pension is taxed on the amount accruing in the tax year, not the amount actually received in the year. The Tax Office always work on the basis that 52 weeks of state pension accrues for each tax year. When it comes to completing your tax return for 2009/10 you should include just 52 times the weekly amount of your pension, excluding any non-taxable benefits such as Attendance Allowance.
New Clients Welcome!
If you are not already a client and are interested in becoming one, we would love to meet with you to discuss how we can help and provide you with a competitive quote for our services.
All new client consultations are provided free of charge and without obligation.
In addition, if there's anyone else who you think would benefit from the newsletter, please forward the email to them or ask them to contact us to be added to the newsletter list.
Key Tax Dates for January 2010
1 Due date for payment of Corporation Tax for the year ended 31 March 2009
14 Return and payment of CT61 tax due for quarter to 31 December 2009
19/22 PAYE/NIC and CIS deductions due for month to 5/1/2010 or quarter 3 of 2009/10 for small employers
31 Deadline for filing 2009 Self Assessment personal, partnership and trust Tax Returns.
Balancing self assessment payment due for 2008/09.
Capital gains tax payment due for 2008/09.
First self assessment payment on account due for 2009/10.
Interest accrues on all late payments.
Last time for HMRC to inform you if it intends to start an enquiry into your 2007/08 Tax Return.
Wednesday, 16 December 2009
Fact - Mazuma could help your business during the recession!
Here at Mazuma we’re always looking to get feedback from our customers, contacts and the small business community. Over the last few weeks we extended the invitation to thousands of small businesses to complete a short survey about the role of their accounts.
At Mazuma HQ we know that we preach a lot about the importance of keeping your accounts up to date and using them to help run your business, but we were genuinely shocked by the results of our survey.
100% of respondents said that they think that keeping on top of your accounts is important for a business. We were thrilled with this result; it means that all the years of nagging about the importance of accounts is starting to pay off!
94% of respondents agreed that many small business owners find accounts daunting. This figure was not a surprise to us at Mazuma and was the entire reason that Mazuma was created. We think that you should spend time running your business, not faffing around with a piece of bookkeeping software or a spreadsheet.
Finally, drum roll please... 100% of respondents said that a monthly accounts service like Mazuma’s Purpleforce service would be beneficial for a small business, especially during a recession. Obviously we were thrilled with that statistic for entirely selfish reasons, but we were also delighted that the small business community recognises the benefits of having access to your accountants monthly and not just annually.
So there we have it folks, Mazuma would be a good investment for you in the current climate!
At Mazuma HQ we know that we preach a lot about the importance of keeping your accounts up to date and using them to help run your business, but we were genuinely shocked by the results of our survey.
100% of respondents said that they think that keeping on top of your accounts is important for a business. We were thrilled with this result; it means that all the years of nagging about the importance of accounts is starting to pay off!
94% of respondents agreed that many small business owners find accounts daunting. This figure was not a surprise to us at Mazuma and was the entire reason that Mazuma was created. We think that you should spend time running your business, not faffing around with a piece of bookkeeping software or a spreadsheet.
Finally, drum roll please... 100% of respondents said that a monthly accounts service like Mazuma’s Purpleforce service would be beneficial for a small business, especially during a recession. Obviously we were thrilled with that statistic for entirely selfish reasons, but we were also delighted that the small business community recognises the benefits of having access to your accountants monthly and not just annually.
So there we have it folks, Mazuma would be a good investment for you in the current climate!
Tuesday, 1 December 2009
Tax Tips for December
Welcome...
To December's Tax Tips & News, our newsletter designed to bring you tax tips and news to keep you one step ahead of the taxman.
If you need further assistance just let us know or you can send us a question for our Question and Answer Corner.
We are committed to ensuring all our clients don't pay a penny more in tax than is necessary.
Please contact us for advice in your own specific circumstances. We're here to help!
Tax Deductions for Franchise Fees
One of the easiest ways to step into the world of business is to acquire the right to operate a franchise. To do this the franchisor, (the person providing the franchise), and the franchisee (the person who is to run the franchised business), will sign a franchise agreement.
A typical franchise agreement will cover various matters each with different tax effects such as:
- the right to operate the franchise for a period, often at specified premises or within a defined geographical area;
- initial services, such as advice on site selection and staff recruitment, training and assistance with the management of the unit;
- ongoing services including marketing, advertising, updating of the franchise and provision of stock and plant.
The grant of the right to operate the franchise and the provision of initial services will normally be covered by a lump sum payment from the franchisee. Ongoing services will be charged for by means of a periodic fee, paid monthly or weekly. Stock and plant items will usually be charged for as required by the franchisee.
The Taxman views the right to operate the franchise as an intangible capital asset. Where the franchisee is a company it can claim the cost of this intangible asset in its accounts, spread over an appropriate period. However, a franchise business operated as a sole trader or partnership will NOT generally get a tax deduction for the cost of an intangible asset. However, where the intangible asset includes know-how relating to industrial processes, mining, agricultural or forestry, the payment can qualify for capital allowances. Both incorporated and unincorporated businesses can claim capital allowances covering the cost of industrial know-how.
Amounts paid for on-going services will be treated as operating costs of the franchise business, and will be tax allowable in all cases. Items of plant will normally qualify for capital allowances, which will give a 100% allowance for the first £50,000 of plant purchased each year.
The tax treatment of the sums payable by the franchisee and received by the franchisor will not necessarily mirror each other. Similar items may also attract different tax treatment under different franchise agreements, it largely depends on the individual circumstances of the deal. In all cases the amounts paid need to be allocated against the different goods, services, and rights provided for under the franchise agreement to determine the correct tax treatment.
If you are looking at a franchise we can advise you on the tax consequences of the deal you are looking at and perhaps how you restructure matters to your maximum advantage.
Christmas Gift Time Mr Taxman!
Many firms are foregoing expensive Christmas parties this year and as an alternative are giving small seasonal gifts to staff and customers. But before you break open the hampers consider what may be allowable for income or corporation tax purposes, and what VAT you can reclaim.
- Gifts to customers of the products or services you normally sell are tax allowable, as long as you are not in the food business.
- Small promotional gifts of any item are also treated as tax allowable for your business if they cost less than £50 each and carry a clear advertisement for the business. However, you cannot get income tax or corporation tax relief for the cost of gifts of food, drink, tobacco and gift tokens of any value.
- A number of gifts worth more than £50 in total should not be made to the same person in any 12-month period.
- If you are VAT registered you can reclaim the VAT on small gifts that cost up to £50 each, including gifts comprising of tobacco and alcohol.
- If the gift cost more than £50 (net of VAT) you must account for the VAT on the item as if you had sold it at cost.
Gifts to your staff are tax allowable, but your employees could be taxed on the value of the gift as a benefit in kind. In that case you would also have to pay Class 1A NI on the value of those gifts. The Taxman does consider some small items to be trivial benefits, which can be given as tax-free gifts to staff members. Trivial items can include seasonal gifts such as a turkey, an ordinary bottle of plonk (not fine vintage or champagne), or a box of chocolates.
Where you are considering making larger gifts to each employee such as a Christmas hamper, you can include the cost of those gifts in a PAYE Settlement Agreement (PSA) with the tax office. The PSA allows you pay the tax and NI due on behalf of your employees.
Avoid the Higher VAT Rate
The standard rate of VAT is due to rise from 15% to 17.5% on 1 January 2010. This small rise in VAT may encourage people to make large value purchases in December 2009 rather than in January 2010, but there are other ways to take advantage of the lower VAT rate.
Where services or goods are invoiced for in advance, the VAT rate applies according to the date of the invoice. Say an organisation normally raises invoices for its annual membership fees on 2 January each year. If the 2010 membership invoices are raised on 1 December 2009 the members don't have the VAT increase and the organisation would receive at least some of its membership income earlier.
The VAT rate to be applied to a sale normally depends on the tax point for that transaction. This tax point is usually when the customer receives the goods or services. However, that tax point is superseded by an earlier date if the money is received before the supply of goods or services, or by the invoice date if that invoice is raised within 14 days of the goods or services being supplied.
When the VAT rate changes in the middle of these dates, you can choose whether to apply VAT at the date when the goods were supplied, or the date the invoice is raised. If you supply goods on say 24 December 2009, but raise the invoice on 4 January 2010, you have the option of charging 17.5% VAT rate based on the invoice date of 4 January 2010, or 15% VAT based on the date the goods were physically supplied.
Where you are supplying a service over a period that straddles the VAT increase, the VAT man will, by concession, allow you to charge VAT at 15% for the portion of the work done before 1 January 2010 and 17.5% VAT for work done on or after that date. Alternatively you can apply the usual rules and charge VAT according to the date the invoice is raised, or the payment is received, which ever happens first.
There are tax-avoidance rules which will add an extra 2.5% supplementary VAT charge where the value of the sale (and connected sales) total more than £100,000, or the customer and supplier are connected, or the payment is due more than six months after the date of the invoice. Talk to us if your sales are likely to fall into any of these categories.
Tax Relief on Accountant Fees!
Certain MPs got into hot water recently for including the cost of preparing their personal tax returns in their expense claims. Employees and company directors, including MPs, are not permitted to claim the cost of personal tax advice, or the cost of preparing their personal tax return as a deduction from their taxable income. If those costs are born by their employer, the cost should be treated as a benefit in kind, reported on the form P11D and taxed accordingly.
Where an individual runs his own business as a sole-trader, his personal tax return must include details of the turnover, expenses and profits of his business. The cost of preparing and completing that part of the tax return is tax allowable as that cost relates to the business and not to the individual's personal affairs. Where the remainder of the personal tax return requires little effort to complete the Taxman will, by concession, allow the whole of the cost of preparing the sole-trader's tax return to be treated as a tax allowable business cost.
Mazuma’s New Head Office
Mazuma are delighted to announce the new Head Office (The Hub) for Mazuma has now opened in Bridgend, South Wales.
Located in newly refurbished offices within handy reach of Junction 35 of the M4, The Hub will act as the Head Office facility for Mazuma and the Mazuma Associates.
Sophie Hughes, Operations Director of Mazuma comments: "We are delighted to have a designated Head Office for Mazuma and to welcome aboard a new team of staff members. We are excited to have found such ideal premises and we look forward to many happy years here and welcoming further new members to our team".
The Hub will provide affordable and excellent accountancy services to small businesses throughout the UK that are not currently served by a local Mazuma office. The Hub will create over 30 jobs within the next twelve months and will have the facility to provide Mazuma's award-winning Purpleforce service to all areas of the UK.
Question and Answer Corner
Q. I have acquired a personalised number plate that spells out the name of my business. Can I put it on my business vehicle and claim tax relief for the cost?
A. The Taxman views the cost of a personalised number-plate, over and above what you have to pay to register the car, as an intangible capital asset. Companies can claim a deduction in their accounts for intangible assets acquired since 1 April 2002, but unincorporated businesses cannot. If your business is a company it can write-off the cost of the number plate over a reasonable period, which the Taxman will normally accept to be up to 20 years. If you trade in your own name or as a partnership, your business cannot claim a deduction for the cost, as the number plate does not qualify for capital allowances.
Q. My employer has just paid me a substantial sum described as 'damages' to compensate me for an injury I received at work. Will this payment be taxable?
A. Any payment to compensate for personal injury is not taxable. This applies whether the compensation is paid in one lump sum or as a series of periodic payments. Interest paid as part of the damages award is also tax free but interest paid because of the late payment of the award will be taxable.
Q. Can I set-off the losses from my sole-trader business against my employed income for the year?
A. Yes you can set the losses from your sole-trader business against your earnings from your employment from the same tax year, or from the previous tax year. If you started your sole trader business in the last four years, you can set-off the loss against your other income from the previous three tax years. However, the Taxman will need to be convinced that your sole-trader business is a real commercial business and not just a personal interest that you don't expect to generate a profit from. You will need to submit a personal tax return showing the business turnover, expenses and resulting loss. If your business turnover for tax year 2008/09 is £30,000 or more you will need to provide details on your tax return of the various categories of tax allowable expenses.
Key Tax Dates for December 2009
19/22 PAYE/NIC and CIS deductions due for month to 5/12/2009
30 Deadline for 2008/09 self assessment online returns to be filed if you are an employee and want tax underpaid to be collected by adjustment to your 2010/11 PAYE code (for underpayments of up to £2000 only).
VAT reclaim deadline for submission of all claims for non EU traders wanting to reclaim VAT in the UK
New Clients Welcome
In addition, if there's anyone else who you think would benefit from the newsletter, please forward the email to them or ask them to contact us to be added to the newsletter list. If you are not already a client and are interested in becoming one, we would love to come to meet with you to discuss how we can help and provide you with a competitive quote for our services.
All new client consultations are provided free of charge and without obligation.
Disclaimer
The information contained in this newsletter is of a general nature and no assurance of accuracy can be given. It is not a substitute for specific professional advice in your own circumstances. No action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a consequence of the material can be accepted by the authors or the firm.
To December's Tax Tips & News, our newsletter designed to bring you tax tips and news to keep you one step ahead of the taxman.
If you need further assistance just let us know or you can send us a question for our Question and Answer Corner.
We are committed to ensuring all our clients don't pay a penny more in tax than is necessary.
Please contact us for advice in your own specific circumstances. We're here to help!
Tax Deductions for Franchise Fees
One of the easiest ways to step into the world of business is to acquire the right to operate a franchise. To do this the franchisor, (the person providing the franchise), and the franchisee (the person who is to run the franchised business), will sign a franchise agreement.
A typical franchise agreement will cover various matters each with different tax effects such as:
- the right to operate the franchise for a period, often at specified premises or within a defined geographical area;
- initial services, such as advice on site selection and staff recruitment, training and assistance with the management of the unit;
- ongoing services including marketing, advertising, updating of the franchise and provision of stock and plant.
The grant of the right to operate the franchise and the provision of initial services will normally be covered by a lump sum payment from the franchisee. Ongoing services will be charged for by means of a periodic fee, paid monthly or weekly. Stock and plant items will usually be charged for as required by the franchisee.
The Taxman views the right to operate the franchise as an intangible capital asset. Where the franchisee is a company it can claim the cost of this intangible asset in its accounts, spread over an appropriate period. However, a franchise business operated as a sole trader or partnership will NOT generally get a tax deduction for the cost of an intangible asset. However, where the intangible asset includes know-how relating to industrial processes, mining, agricultural or forestry, the payment can qualify for capital allowances. Both incorporated and unincorporated businesses can claim capital allowances covering the cost of industrial know-how.
Amounts paid for on-going services will be treated as operating costs of the franchise business, and will be tax allowable in all cases. Items of plant will normally qualify for capital allowances, which will give a 100% allowance for the first £50,000 of plant purchased each year.
The tax treatment of the sums payable by the franchisee and received by the franchisor will not necessarily mirror each other. Similar items may also attract different tax treatment under different franchise agreements, it largely depends on the individual circumstances of the deal. In all cases the amounts paid need to be allocated against the different goods, services, and rights provided for under the franchise agreement to determine the correct tax treatment.
If you are looking at a franchise we can advise you on the tax consequences of the deal you are looking at and perhaps how you restructure matters to your maximum advantage.
Christmas Gift Time Mr Taxman!
Many firms are foregoing expensive Christmas parties this year and as an alternative are giving small seasonal gifts to staff and customers. But before you break open the hampers consider what may be allowable for income or corporation tax purposes, and what VAT you can reclaim.
- Gifts to customers of the products or services you normally sell are tax allowable, as long as you are not in the food business.
- Small promotional gifts of any item are also treated as tax allowable for your business if they cost less than £50 each and carry a clear advertisement for the business. However, you cannot get income tax or corporation tax relief for the cost of gifts of food, drink, tobacco and gift tokens of any value.
- A number of gifts worth more than £50 in total should not be made to the same person in any 12-month period.
- If you are VAT registered you can reclaim the VAT on small gifts that cost up to £50 each, including gifts comprising of tobacco and alcohol.
- If the gift cost more than £50 (net of VAT) you must account for the VAT on the item as if you had sold it at cost.
Gifts to your staff are tax allowable, but your employees could be taxed on the value of the gift as a benefit in kind. In that case you would also have to pay Class 1A NI on the value of those gifts. The Taxman does consider some small items to be trivial benefits, which can be given as tax-free gifts to staff members. Trivial items can include seasonal gifts such as a turkey, an ordinary bottle of plonk (not fine vintage or champagne), or a box of chocolates.
Where you are considering making larger gifts to each employee such as a Christmas hamper, you can include the cost of those gifts in a PAYE Settlement Agreement (PSA) with the tax office. The PSA allows you pay the tax and NI due on behalf of your employees.
Avoid the Higher VAT Rate
The standard rate of VAT is due to rise from 15% to 17.5% on 1 January 2010. This small rise in VAT may encourage people to make large value purchases in December 2009 rather than in January 2010, but there are other ways to take advantage of the lower VAT rate.
Where services or goods are invoiced for in advance, the VAT rate applies according to the date of the invoice. Say an organisation normally raises invoices for its annual membership fees on 2 January each year. If the 2010 membership invoices are raised on 1 December 2009 the members don't have the VAT increase and the organisation would receive at least some of its membership income earlier.
The VAT rate to be applied to a sale normally depends on the tax point for that transaction. This tax point is usually when the customer receives the goods or services. However, that tax point is superseded by an earlier date if the money is received before the supply of goods or services, or by the invoice date if that invoice is raised within 14 days of the goods or services being supplied.
When the VAT rate changes in the middle of these dates, you can choose whether to apply VAT at the date when the goods were supplied, or the date the invoice is raised. If you supply goods on say 24 December 2009, but raise the invoice on 4 January 2010, you have the option of charging 17.5% VAT rate based on the invoice date of 4 January 2010, or 15% VAT based on the date the goods were physically supplied.
Where you are supplying a service over a period that straddles the VAT increase, the VAT man will, by concession, allow you to charge VAT at 15% for the portion of the work done before 1 January 2010 and 17.5% VAT for work done on or after that date. Alternatively you can apply the usual rules and charge VAT according to the date the invoice is raised, or the payment is received, which ever happens first.
There are tax-avoidance rules which will add an extra 2.5% supplementary VAT charge where the value of the sale (and connected sales) total more than £100,000, or the customer and supplier are connected, or the payment is due more than six months after the date of the invoice. Talk to us if your sales are likely to fall into any of these categories.
Tax Relief on Accountant Fees!
Certain MPs got into hot water recently for including the cost of preparing their personal tax returns in their expense claims. Employees and company directors, including MPs, are not permitted to claim the cost of personal tax advice, or the cost of preparing their personal tax return as a deduction from their taxable income. If those costs are born by their employer, the cost should be treated as a benefit in kind, reported on the form P11D and taxed accordingly.
Where an individual runs his own business as a sole-trader, his personal tax return must include details of the turnover, expenses and profits of his business. The cost of preparing and completing that part of the tax return is tax allowable as that cost relates to the business and not to the individual's personal affairs. Where the remainder of the personal tax return requires little effort to complete the Taxman will, by concession, allow the whole of the cost of preparing the sole-trader's tax return to be treated as a tax allowable business cost.
Mazuma’s New Head Office
Mazuma are delighted to announce the new Head Office (The Hub) for Mazuma has now opened in Bridgend, South Wales.
Located in newly refurbished offices within handy reach of Junction 35 of the M4, The Hub will act as the Head Office facility for Mazuma and the Mazuma Associates.
Sophie Hughes, Operations Director of Mazuma comments: "We are delighted to have a designated Head Office for Mazuma and to welcome aboard a new team of staff members. We are excited to have found such ideal premises and we look forward to many happy years here and welcoming further new members to our team".
The Hub will provide affordable and excellent accountancy services to small businesses throughout the UK that are not currently served by a local Mazuma office. The Hub will create over 30 jobs within the next twelve months and will have the facility to provide Mazuma's award-winning Purpleforce service to all areas of the UK.
Question and Answer Corner
Q. I have acquired a personalised number plate that spells out the name of my business. Can I put it on my business vehicle and claim tax relief for the cost?
A. The Taxman views the cost of a personalised number-plate, over and above what you have to pay to register the car, as an intangible capital asset. Companies can claim a deduction in their accounts for intangible assets acquired since 1 April 2002, but unincorporated businesses cannot. If your business is a company it can write-off the cost of the number plate over a reasonable period, which the Taxman will normally accept to be up to 20 years. If you trade in your own name or as a partnership, your business cannot claim a deduction for the cost, as the number plate does not qualify for capital allowances.
Q. My employer has just paid me a substantial sum described as 'damages' to compensate me for an injury I received at work. Will this payment be taxable?
A. Any payment to compensate for personal injury is not taxable. This applies whether the compensation is paid in one lump sum or as a series of periodic payments. Interest paid as part of the damages award is also tax free but interest paid because of the late payment of the award will be taxable.
Q. Can I set-off the losses from my sole-trader business against my employed income for the year?
A. Yes you can set the losses from your sole-trader business against your earnings from your employment from the same tax year, or from the previous tax year. If you started your sole trader business in the last four years, you can set-off the loss against your other income from the previous three tax years. However, the Taxman will need to be convinced that your sole-trader business is a real commercial business and not just a personal interest that you don't expect to generate a profit from. You will need to submit a personal tax return showing the business turnover, expenses and resulting loss. If your business turnover for tax year 2008/09 is £30,000 or more you will need to provide details on your tax return of the various categories of tax allowable expenses.
Key Tax Dates for December 2009
19/22 PAYE/NIC and CIS deductions due for month to 5/12/2009
30 Deadline for 2008/09 self assessment online returns to be filed if you are an employee and want tax underpaid to be collected by adjustment to your 2010/11 PAYE code (for underpayments of up to £2000 only).
VAT reclaim deadline for submission of all claims for non EU traders wanting to reclaim VAT in the UK
New Clients Welcome
In addition, if there's anyone else who you think would benefit from the newsletter, please forward the email to them or ask them to contact us to be added to the newsletter list. If you are not already a client and are interested in becoming one, we would love to come to meet with you to discuss how we can help and provide you with a competitive quote for our services.
All new client consultations are provided free of charge and without obligation.
Disclaimer
The information contained in this newsletter is of a general nature and no assurance of accuracy can be given. It is not a substitute for specific professional advice in your own circumstances. No action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a consequence of the material can be accepted by the authors or the firm.
Monday, 16 November 2009
Field Sales Executive
£17,000 - £22,000 p.a.
£25,500 - £33,000 p.a OTE
Plus Bonus & Incentives
Mazuma provides outsourced accountancy, tax and bookkeeping services to the small business market through our innovative Purpleforce service. Continued success has brought about the need for a full-time Field Sales Executive to join the Sales Team and play a key role in the development of the business.
This role will involve generating leads and selling Mazuma’s innovative and award-winning outsourced accountancy services throughout South Wales and surrounding areas, reporting to the Commercial Director in the Head Office in Bridgend. This is a new role in the company due to expansion and you will focus on generating a high level of new business.
Working towards set sales targets, you will have autonomy in the role, with the opportunity to progress into a senior role in the company. You will be required to take a strategic approach to developing sales, helping develop new ideas and processes for the sales function. You will be proactive in your search for new business and you will be provided with the tools to do this. You will be rewarded financially with an uncapped bonus structure and incentive schemes.
Requirements
• A proven track record of generating new business in a similar Field Sales business to business role
• Strong new business winner and relationship builder
• Excellent experience in generating business from cold leads
• Extremely target driven and motivated by financial reward
• Accounting or finance background is desired but not essential
• An outgoing, confident, enthusiastic, tenacious and proactive individual who works well under pressure and has the ability to multi-task is sought for this role
Benefits
• £17,000 - £22,000 salary per annum (37.5 hours per week)
• £25,500 - £33,000 OTE per annum
• Bonuses and incentives
• 24 days holiday a year plus bank holidays
• Expenses, laptop, mobile phone and use of company car after probationary period
If you are interested in this position and would like further information or request an application form please contact Sophie Hughes on shughes@mazumamoney.co.uk. Alternatively, please call 0845 310 5654.
Click here for more info
CLOSING DATE: MONDAY 30TH NOVEMBER 2009
£17,000 - £22,000 p.a.
£25,500 - £33,000 p.a OTE
Plus Bonus & Incentives
Mazuma provides outsourced accountancy, tax and bookkeeping services to the small business market through our innovative Purpleforce service. Continued success has brought about the need for a full-time Field Sales Executive to join the Sales Team and play a key role in the development of the business.
This role will involve generating leads and selling Mazuma’s innovative and award-winning outsourced accountancy services throughout South Wales and surrounding areas, reporting to the Commercial Director in the Head Office in Bridgend. This is a new role in the company due to expansion and you will focus on generating a high level of new business.
Working towards set sales targets, you will have autonomy in the role, with the opportunity to progress into a senior role in the company. You will be required to take a strategic approach to developing sales, helping develop new ideas and processes for the sales function. You will be proactive in your search for new business and you will be provided with the tools to do this. You will be rewarded financially with an uncapped bonus structure and incentive schemes.
Requirements
• A proven track record of generating new business in a similar Field Sales business to business role
• Strong new business winner and relationship builder
• Excellent experience in generating business from cold leads
• Extremely target driven and motivated by financial reward
• Accounting or finance background is desired but not essential
• An outgoing, confident, enthusiastic, tenacious and proactive individual who works well under pressure and has the ability to multi-task is sought for this role
Benefits
• £17,000 - £22,000 salary per annum (37.5 hours per week)
• £25,500 - £33,000 OTE per annum
• Bonuses and incentives
• 24 days holiday a year plus bank holidays
• Expenses, laptop, mobile phone and use of company car after probationary period
If you are interested in this position and would like further information or request an application form please contact Sophie Hughes on shughes@mazumamoney.co.uk. Alternatively, please call 0845 310 5654.
Click here for more info
CLOSING DATE: MONDAY 30TH NOVEMBER 2009
Thursday, 12 November 2009
Mazuma Opens 7th Office!
Mazuma are pleased to announce the launch of Mazuma in Preston.
Mazuma is an accountancy practice serving the needs of small businesses and sole traders that has steadily grown into a national business since its formation in Cardiff in 2006. The franchise, The Mazuma Associate Scheme, was launched in October 2008 and seven Associates are now in operation across the UK.
Mubin Mohammed operates from Preston and is delighted to be the first Mazuma franchise operating in the North of England. Mubin comments: Mazuma is a fantastic accountancy practice to join. It is a company which understands and can fulfil the high expectations of fast paced modern society. As Mazuma associates our aim is to provide a stress free service which is great value for money.
Mubin joins after the successful trial of the first Associate that took place over two years, based in the North of Cardiff.
Sophie Hughes, Operations Director of Mazuma GB who operates the franchise, comments: "We have been overwhelmed with the interest that we have received since the launch of our exciting franchise. It is a unique offering and provides people with the opportunity to operate their own business under the vibrant and nationally recognised brand of Mazuma. With the launch of the seventh franchisee and more due to launch early 2010, we aim to reach and better our targets of launching 12 franchisees by the end of 2010. Despite the recession, franchising is set to boom and the Mazuma franchise is a terrific opportunity to take up at this time. We are thrilled to have an Associate based further North".
Various areas of the UK are still available and separated by postal regions and population in the areas. You must be a qualified accountant and hold (or be able to apply for) a practising licence through your accountancy body before you commence trading as a Mazuma Associate. We hold extensive training courses on how to build, manage and grow your business and market yourself when you become an Associate so you are not "thrown in at the deep end", and we are on hand for you once you are an Associate to help you along the way with tips and guidance.
If you, or someone you know are interested in this exciting opportunity please call us on 0845 310 5654 or email us at info@mazumamoney.co.uk to request a prospectus and application form.
Mazuma is an accountancy practice serving the needs of small businesses and sole traders that has steadily grown into a national business since its formation in Cardiff in 2006. The franchise, The Mazuma Associate Scheme, was launched in October 2008 and seven Associates are now in operation across the UK.
Mubin Mohammed operates from Preston and is delighted to be the first Mazuma franchise operating in the North of England. Mubin comments: Mazuma is a fantastic accountancy practice to join. It is a company which understands and can fulfil the high expectations of fast paced modern society. As Mazuma associates our aim is to provide a stress free service which is great value for money.
Mubin joins after the successful trial of the first Associate that took place over two years, based in the North of Cardiff.
Sophie Hughes, Operations Director of Mazuma GB who operates the franchise, comments: "We have been overwhelmed with the interest that we have received since the launch of our exciting franchise. It is a unique offering and provides people with the opportunity to operate their own business under the vibrant and nationally recognised brand of Mazuma. With the launch of the seventh franchisee and more due to launch early 2010, we aim to reach and better our targets of launching 12 franchisees by the end of 2010. Despite the recession, franchising is set to boom and the Mazuma franchise is a terrific opportunity to take up at this time. We are thrilled to have an Associate based further North".
Various areas of the UK are still available and separated by postal regions and population in the areas. You must be a qualified accountant and hold (or be able to apply for) a practising licence through your accountancy body before you commence trading as a Mazuma Associate. We hold extensive training courses on how to build, manage and grow your business and market yourself when you become an Associate so you are not "thrown in at the deep end", and we are on hand for you once you are an Associate to help you along the way with tips and guidance.
If you, or someone you know are interested in this exciting opportunity please call us on 0845 310 5654 or email us at info@mazumamoney.co.uk to request a prospectus and application form.
Wednesday, 4 November 2009
A little something to help with Christmas!
It's that time of year again!
The kids are back in school...
Halloween is over...
Summer is but a distant memory...
And Christmas is looming!
Well, to help out with the inevitable burden of Christmas shopping Mazuma is running a special offer.
If you successfully introduce a friend (or even sign up yourself!) to Mazuma and our Purpleforce package before 18th December 2009, then we'll give you £20 worth of Love2shop vouchers which are accepted at 85 leading retailers!
Better still, if you successfully introduce more people than anyone else, not only will you get £20 of Love2shop vouchers for each one, but you'll be in with a chance of winning a bonus £100 worth of Love2shop vouchers! Just imagine how much that would help with the Christmas shopping!
So thinking caps on folks!
Do you work in a serviced office with other small businesses?
Are you based on a building site with tradespeople in need of a tax return?
Is your customer base brimming with sole traders and small Ltd companies?
Why not recommend Mazuma to them?
Don't forget, Mazuma operates Nationwide so there's no need to be close to one of our offices to take advantage of our award winning Purpleforce service!
Think you could recommend us to someone and get your £20 Love2shop voucher right now? Just forward this email to them and ask them to fill out the Get a Quote form here using promo code L2S"yourname" (so we know who to send the vouchers to!).
Once they've signed up we'll pop your voucher in the post to you and you can enjoy a stress free Christmas!
We look forward to hearing from you!
Please note: This offer is not available in conjunction with any other offers or referral schemes. Mazuma GB Ltd reserves the right to offer a different retail voucher of the same value in replacement for the stated Love2shop voucher. Vouchers will only be awarded where the person(s) introduced to Mazuma GB Ltd enters into a contract for Mazuma's Purpleforce service under the terms and conditions described in their letter of engagement. Bonus £100 voucher competition is for individuals who have successfully introduced more than 5 new clients to Mazuma under the conditions previosuly described and who have introduced more clients than any other participant. In the event of a tie a draw will take place.
The kids are back in school...
Halloween is over...
Summer is but a distant memory...
And Christmas is looming!
Well, to help out with the inevitable burden of Christmas shopping Mazuma is running a special offer.
If you successfully introduce a friend (or even sign up yourself!) to Mazuma and our Purpleforce package before 18th December 2009, then we'll give you £20 worth of Love2shop vouchers which are accepted at 85 leading retailers!
Better still, if you successfully introduce more people than anyone else, not only will you get £20 of Love2shop vouchers for each one, but you'll be in with a chance of winning a bonus £100 worth of Love2shop vouchers! Just imagine how much that would help with the Christmas shopping!
So thinking caps on folks!
Do you work in a serviced office with other small businesses?
Are you based on a building site with tradespeople in need of a tax return?
Is your customer base brimming with sole traders and small Ltd companies?
Why not recommend Mazuma to them?
Don't forget, Mazuma operates Nationwide so there's no need to be close to one of our offices to take advantage of our award winning Purpleforce service!
Think you could recommend us to someone and get your £20 Love2shop voucher right now? Just forward this email to them and ask them to fill out the Get a Quote form here using promo code L2S"yourname" (so we know who to send the vouchers to!).
Once they've signed up we'll pop your voucher in the post to you and you can enjoy a stress free Christmas!
We look forward to hearing from you!
Please note: This offer is not available in conjunction with any other offers or referral schemes. Mazuma GB Ltd reserves the right to offer a different retail voucher of the same value in replacement for the stated Love2shop voucher. Vouchers will only be awarded where the person(s) introduced to Mazuma GB Ltd enters into a contract for Mazuma's Purpleforce service under the terms and conditions described in their letter of engagement. Bonus £100 voucher competition is for individuals who have successfully introduced more than 5 new clients to Mazuma under the conditions previosuly described and who have introduced more clients than any other participant. In the event of a tie a draw will take place.
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