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Increase in threshold for Small Companies Regime

What is it ?

 

A company in the UK qualifies as a Small Company if it fullfills two of the following three criterias:

 

Turnover – not more than £6.5m

Balance sheet total – not more than £3.26 m

Employee – not more than 50

 

UK Government has increased these limits to comply with EU Accounting Directive

via a new regulation

 

Turnover – not more than £10.2m

Balance sheet total – not more than £5.1 m

Employee – remain same at 50.

 

From when the rules change ?

Rules change for accounting period begining on or after 1 Jan 2016.

 

Why it is important ?

 

Small companies donot have to get their books audited.

 

This will reduce the administrative burden on lot of small companies and allow them to focus on their business.

Laws for websites in UK

Recently one of my clients asked me about rules and regulations for a website in the UK.

 

I thought it was easy just be truthful about what product and services you sell.

 

But client asked me to check this out for him and to my surprise there are a host of rules and regulations governing e-commerce business.

 

Being an accountant I am no expert on this matter but main items that i found I thought should share with others:

 

1- As customers will be buying service via a website, rules in the link below apply:

It gives detailed information about what customers have to be informed before and after an order.

https://www.gov.uk/online-and-distance-selling-for-businesses/overview

2- Law on Computer Cookies

In simple terms, we must ask consent before installing cookies on their computers.

The link also gives an example and detailed information about this cookie consent.

http://ec.europa.eu/ipg/basics/legal/cookies/index_en.htm

 

3- Advertising rules:

These rules give information about telephone and direct marketing.

https://www.gov.uk/marketing-advertising-law/overview

Main important rules I see among them is telephone marketing and display of price.

 

4 – Data protection:

Organisation which handle personal data need to register , fee is £35 per year.

ico.org.uk

 

I think if a start-ups starts complying with all these rules on day one, it may make the whole project unviable. But every organisation should knows its responsibilities and must have a time bound compliance program as the business grows.

Companies : Micro,Small or Medium

Listed below are criteria for different types of companies in the UK.

Micro companies – Your company will be a micro-entity if it has any 2 of the following:

Turnover Below £632,000

Balance sheet total Below £316,000

Employee Below 10

Small Companies – Your company will be ‘small’ if it has any 2 of the following:

Turnover Below £6.5 million   £10.2 million

Balance sheet total Below £3.26 million  £5.1 million

Employee Below 50

Medium Companies- Your company will be ‘medium’ if it has any 2 of the following:

Turnover Below £25.9 million

Balance sheet total Below £12.9 million

Employee Below 250

National Living Wage

Government has implemented a new `National Living Wage` , this is in addition to National Minimium Wage.

 

For people over 25 year of age – National Living Wage applies for individuals under 25 years National Minimium Wage applies.

 

Government has launched a calculator to check if staff is being paid the minimium wage,

link given below:

 

https://www.gov.uk/minimum-wage-calculator-employers