Author: Amit Roy

HMRC to be preferential Creditor

How are funds distributed among creditors in a restaurant insolvency ?

From 6 April 2020 HMRC will become preferential Creditor in UK insolvencies.

UK treasury has written an easy to read paper on this matter. Explaining the effects of this change and showing hierarchy of distribution of funds in insolvency.

It shows that unsecured creditors like suppliers usually recover 4% of their dues.

I think it’s a good move by the government to secure taxes for the public good.

Restaurant suppliers should make note and negotiate better credit terms.

Creating a Trial Balance in MS Access

A simple and quick way to create trial balance in MS-Access

Step 1 Create tables:

First table : tblNominals

NominalID AutoNumber Primary Key
NominalHeads    Text  

Next table called tblTransactions

Transaction ID AutoNumber Primary Key
TransactionDate Date  
DebitHead Text Lookup to Nominal table : NominalID
Credit Head Text Lookup to Nominal table : NominalID
Amount Currency  

Create another table tblSign

Sign Number Primary Key

Enter only two entries in this table 1 and -1.

Step 2 Enter some transactions in tblTransactions

Step 3 Create a Query. This is the main bit – go slow

Query Design > Select all three tables created above plus add tblNominals once more, so you should have four tables in the query.

tblNominals will have two connections with tblTransactions. Remove one connection and add one from tblNominals_1 in a way that Debit and Credit in tblTransactions should have one connection each from the tbltblNominals and tblNominals_1. Remember PrimaryID is connected.

In first QBE grid Field

Nominal: IIf([Sign]=1,[1tblNominals].[NominalHead],[1tblNominals_1].[NominalHead])

In second QBE grid Field

Total: [Amount]*[Sign]

Also Total : Sum

Good luck !

PS – This trial balance was made with the help of articles from Simon Hurst on accountingweb

Sample Ms Access file: Simple Trial Balance

Update: 11/06/2020

Update:
02/05/2023 – Added queries to generate Profit & Loss Account and Balance Sheet. Link

Claiming Input VAT on Director meals

I am a director, can I claim VAT on my lunch?

Yes, as directors are classified as employees of the business (Notice 700/65 para 2.3) you can recover VAT on lunch.

But as always there a few pot holes down this road to be aware of:

  • Subsistence – A meal taken away from normal place of work on a business trip is allowable.
    (Notice 700 para 12.1.2)

As a guideline, a claim should not be a problem if the business meeting is at least five miles away from the main trading base.

So a meal ordered to your office for lunch is not allowable.

  • Business Purpose – You cannot recover the VAT on meals which are not taken for business purposes (Notice 700 para 12.1.2)

Unfortunately, keeping the director’s tummy full is not a business purpose.

 

  • Exclusive – If the entertainment is provided only for directors or partners of a business the VAT incurred is not input tax. This is because the goods or services are not used for a business purpose. The VAT cannot, therefore, be recovered (Notice 700/65 para 3.2)

Thus, if meal is ordered for director only and not for other staff as well, Input VAT cannot be claimed.

Conversely, VAT can be claimed for employee entertainment like Christmas party when all employees including directors can attend it. Also there is no monetary cap on it.

See also Neil Warren article mentioned below on a planning tip – a small charge for guests.

 

Thus in conclusion, it’s better to avoid claiming Input VAT on meals for directors, unless it can satisfy the above conditions, which in our opinion is a high threshold to cross.

 

Sources:

 

Automatic Pension enrolment for a new employer

Simple step by step guide for automatic pension enrolment for new employer

Things needed:

  1. PAYE reference number i.e. first need to register as an employer with HMRC.
  2. Staging date: date when first member of staff starts work.

 

Next:

  1. Choose a pension scheme
  2. Write to staff: use pension regulator’s draft letters.  See note 1 below
  3. Declare compliance to pension regulator.

 

Note:

1. Currently we use Moneysoft payroll manager and send Postponement letter to all staff.

2. Tax relief on pension: Relief at source or net pay

3. Employee often ask – How do i transfer my old pension to the new employer?

3. Please use pension regulator’s website for more information. http://www.thepensionsregulator.gov.uk

 

HMRC Talking Points : Statutory Maternity Pay

Webinar on SMP included in this blog post

I recently attended a HMRC webinar and later HMRC sent me an email with lots of useful information, which i have added to this blog for future reference:

Here are the web links:

Statutory Maternity Pay and Leave: employer guide
https://www.gov.uk/employers-maternity-pay-leave/entitlement

Statutory Paternity Pay and Leave: employer guide
https://www.gov.uk/employers-paternity-pay-leave

Maternity and paternity calculator for employers
https://www.gov.uk/maternity-paternity-calculator

Get financial help with Statutory Maternity and Paternity Pay
https://www.gov.uk/recover-statutory-payments/if-you-cant-afford-to-make-payments

Acas
http://www.acas.org.uk/index.aspx?articleid=1461

Webinars, e-learning and recordings for employers
https://www.gov.uk/government/news/webinars-emails-and-videos-on-employing-people

If you have questions about statutory payments, please post them on the PAYE and payroll for employers section of HMRC’s online customer forum
https://online.hmrc.gov.uk/webchatprod/community/forums/list.page

Please send your questions, comments and feedback to: no-reply@hmrc.gov.uk.

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