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4 Things to Get the Right Pay When You’re Changing Job

When you’re changing employment, your attention is more on the new opportunity starting, and finishing with your current job with everything correctly handed over.

Any detail about your pay slips and can therefore be unfortunately left with an assumption that this will just happen automatically through the Payroll and HR Departments of each employer.

However, it’s worth looking at the detail and figures with this early on in order to make sure you don’t miss out. Even though the actual processing of your pay will be completed by the relevant finance or accounts person, the decisions you make now can make a whole lot of difference.

So here are four in particular to make note of:

1. Matching the End and Start Dates

When you hand in your notice with your current employer, this will determine what your end date. Is. When you complete a new contract with your new one this will shape what the start date then is.

In simple terms, one will be after the other and therefore there will be no days left in between where you don’t get paid from either employer.

If you want to have say a holiday break in between, then this is fine of course, however, make sure that you’re aware that you won’t be getting paid for this luxury if you’re not prepared for this.

Also, if you’re not careful you can end up causing such a gap in pay without realising it, for example if it naturally falls over a weekend. So, one job may nicely finish on Friday and the next one on the following Monday, but this means Saturday and Sunday fit in between with no pay.

2. Happy Holidays

In addition to enjoying whatever holidays you have planned, just make sure you don’t pay the price for them.

The norm for your current employer is to apportion these in your final pay anyway, so any holidays that you haven’t used up will mean an additional pay.

Therefore, remember that this can be like getting paid for your holidays up until that point. So, whereas normally you have to use your allowance up every year, here is an opportunity to get paid for those you don’t decide to take in your notice period.

3. Expense Payments

Don’t forget to get all your expenses in with your current employer in plenty of time to be processed without any queries.

Also, watch out for any that do technically run past your employment date, for example subscription to any schemes, that may be queried and may need to be processed with your new employer, along with a general understanding with your current employer with what can and can’t be processed with them going forward.

4. Pay Dates

Really important to know this, as each employer will tend to have different actual pay dates, often at the end of each month but not necessarily.

This will not only need to align with any of your costs going out on standing orders or direct debits, but the first month or so making sure you’re not out of pocket if it means a longer period than a month between these.

5. Bonuses

Always nice to get of course if you do have the privilege of receiving these, therefore, make sure it is not only clear on what will be paid but when it will be.

Often people do leave handing in their notice until they receive a bonus, the receive part being the important emphasis i.e. actually being paid into your bank. But even then, just check that there’s no ability for this to be recovered afterwards if you do hand in your notice.

Paying the Price of a New Job

As you look to change jobs and therefore salaries, make sure these above points are considered even before you hand in your notice and agree a new one.

Even though things might be rosy with a higher-salary, and even though some of this detail will only follow afterwards anyway in a new contract – take the opportunity to still look at now and not regret later on.

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Tips to Make Budgeting Better

budget tips able accountantsEstablishing a budget for something is talked about a lot both in business and your own finances, but often not being fully understood or appreciated.

It’s often perceived as a restrictive thing to simply cut costs for the sake of it, after all if something is not in the budget then it can’t be allowed. And all for someone else to benefit from it seems.

Well in actual fact, they’re a great help, and a form of guidelines for getting what you want. When followed, they will actually lead to something that you couldn’t have necessarily had so well without the budget to help steer your accounts and spending.

It’s a financial action-plan, and should be made as realistic as possible so that everyone is clear what you’re trying to achieve and then the practical steps to achieve this.

Therefore, here are some of our tops tips to making the most of budgets:

1. Suss Out Your Income

This is what money you’re going to receive, whether that’s your salary for your own personal budget, or sales of a good or service for a business.

This needs to be as realistic as possible to reflect the future. Past figures can certainly help, but good judgement on any potential increases or decreases will then shape the budget going forward.

2. Control all the Costs

Then work out what you need to spend, as once this is then deducted from your income then you have the profit left over and what you’re trying to achieve.

This can come across as penny-pinching, which can be good to begin with to trace every penny literary spent to see what happens in reality, but then you can begin to look at things more generally.

It will help to categorise these into different types of spends, and sensible allowances made for uncertainties and issues that may arise, a form of contingency.

3. Place in Perspective

You then need to make sure this makes sense, maybe reflecting previous years budget and what was actually achieved to begin with. However, broad-brush statements to simply increase next year’s budget by say 3% from last year can be very simplistic and not take into effect all the cost and income changes.

You might even need to make a loss in a certain budget on the basis of further gains in future years and budgets, particularly for new business starts.

Of course, you also need to decide what happens at the end of the budget in terms of how quickly an actual accounting of things takes place, and how this is reported against the budget. Where profit is made, then will this be issued to people or kept and re-invested.

Spot-on Budget

Therefore, the best piece of advice for forming and adhering to a budget is to make sure this reflects reality and is realistic. Don’t settle for standard statements, but look at what the income and costs truly are expected to be, and how this fit in with the bigger-picture plans of yourself or your business.

There’s all kind of various tools to then help you do this, from spreadsheets to more advanced online tools and apps – just make sure these match reality though.

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Statement of Cash Flow Easily Explained

cashflow statement able accountantsThese are another popular statement of figures you may see in a set of business accounts that can be helpful to explain the actual cash flow of a business. This difference between cash and say profit on paper is critical, and often missed by people.

In short, this is to do with what actual money you have in the bank at a certain point in time, often at the last day of the accounting year – which may be different to what ‘profit’ you have in the accounts when you take the reality of trading at that point into account.

Let’s say you run a shop and you have £10,000 profit showing on the books, but only £8,000 money in the bank at that time. The £2,000 difference is not ‘missing’ as in you will not benefit or receive it, but more a case of it is tied up with others at that point in time.

So, you might have people owing you money then, which will physically be received in your bank the following month. And you may have bills to pay that have not yet gone out.

Taking these adjustments off each other simply changes the cash to £8,000. If all these were resolved on this day, then it would be £10,000, but in real life there will always be loose ends, and accounts have to adjust for this accordingly in the official version, which cash needs to eventually catch up with.

In terms of some of the official ways these are noted in these Statements of Cash Flow, these include:

• There will be different categories of costs such as operating activities, investing activities, and financing activities

• You have direct and indirect figures to hand, which basically begin with income and costs from the accounts and what changes you need to make to reflect the actual cash-reality at that time

• You may need to add back in expenses that have been assumed in the accounts which are not reality now, for example general expenses, prepaid costs like insurance and salaries, and Accounts Payable (monies you have assumed need to be paid out)

• Likewise, you can deduct off items such as Accounts Receivable (monies you have assumed to be received as income), and increases from say inventories and expenses

• Other expenditure items like buying new equipment and an pre-payments need to also be noted in order to adjust to the cash situation

• A final comparison to what actual money is in the bank and the change in the last period can also show how his all links together

Therefore, once you get the gist of what this Statement of Cash Flow is trying to say it can help provide a reflection of what the actual flow of cash is within a business, as although it may be profitable on paper the issue of not having money moving quickly or sufficiently through the accounts can cause issues.

Once established, you can then compare the actual cash figure with the profit one, and then trail back and see what the changes are that has caused the difference.

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The Balance Sheet Easily Explained

You are bound to come across reference to a ‘Balance Sheet’ at some point when looking into accounts for businesses, particularly for larger ones with a ‘full’ set of accounts being involved.

They’re a key part of the accounts, and therefore as a core financial statement they may be called a Statement of Financial Position. Even if you don’t automatically have one of these, then it’s certainly worth looking into one being provided and understand what they will communicate.

Three Simple Elements

Without getting bogged-down with the detail and numbers, it’s essential to know the very basic principles of what these are all about. This will help then cut through all the financial jargon and get to the bottom-line of what these are trying to communicate to people.

So, here are three simple elements to explain these.

1. The Meaning

The idea is to have a look at what the financial position is of say a business at just one point in time. So rather than over a period of time, this is a one-off glimpse of how things are right at that point.

And in short, you’re then looking at both the good and the bad things to see how this all pads out. So hopefully you have more beneficial finances to note, otherwise known as Assets, rather than not so good ones knows as Liabilities - which leaves you with some profit and money.

2. The Balance

So, a balance sheet has three sections to log this basic idea.

Firstly, as Assets column which shows what a business owns and has obligation to that is of benefit to them. So, it might be stock or equipment in the business that of course has a value to it.

Secondly, the liabilities are what you still have to pay out on and cover, maybe a business loan or long-term agreement.

And thirdly, if you take off one from the other, you get the resultant equity or what is sometimes called Net Assets, Capital, or New Worth. In short, it’s the end-value or money that you have left at that point in time once you’ve taken off what you owe from what you have.

3. The Allocations

So, once you have the three areas clear you just need to make sure that you know where individual items fall within the Assets and Liabilities.

Simple in principle, however, be careful of certain items being split between the two.

So, taking a business loan out will incur a liability for the re-payments then due, but then once you receive this lump-sum it can go into Assets as cash in the bank, or when this is spent on items noted as assets in there as well.

Balancing the Balance Sheet

As you begin to understand what these Balance Sheets and Statements of Financial Positions are all about, it’s good to start seeing how this is a snapshot of what the finances are at a certain point in time.

You can then see how it’s like two things balancing out to create a resultant profit (and hopefully not loss). Whatever liabilities you have are taken off the assets you hold, and voila – you have a retained profit!

It’s then a case of making sure everything fits into one of these categories, and that they are all correctly balanced against each other.

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July 2019 - Monthly News

Friday 5th July - PAYE Settle Agreement 2018/2019 Deadline

Employers who want to pay tax and national insurance on their employee’s benefits need to pay attention to this deadline. An agreement with HMRC needs to be struck on the benefits and liabilities not shown on the P11D form.

Saturday 6th July - Forms P11D and P11D(b) Deadline

The P11D form needs to show details of any benefits and expenses provided to employees in order to report these to HMRC. For Class 1A national insurance liability the P11D(b) should be used.

Saturday 6th July - Deadline for Share Incentives for 2018/2019

Companies with events that need to be reported for the tax year of 2018/2019 need to adhere to this deadline.

Friday 19th July - Class 1A National Insurance Contributions

Employers providing employees with benefits for 2018/2019 should be reporting these benefits by 6th July. The form P11D(b) should show the amount of Class 1A employer only national insurance liability due. If the payment is being made electronically, the deadline for the payment to clear is July 22.

Interest and Penalties May Apply for Late Payments

Friday 19th July - PAYE Student Loan and CIS Deductions for Month to 5th July

Employers who have made PAYE deductions, and contractors who have used CIS to pay subcontractors need to pay attention to this deadline.

Employers need to make payments for income tax, NI, and student loan deductions to HMRC. Meanwhile contractors need to pay HMRC the tax deductions from subcontractors under CIS.

Any electronic payment needs to be cleared by 22nd July. Failure to do so may result in penalties being applied.

Friday 19th July - Small Employer Quarterly PAYE Payments Due for 6th April to 5th July

Small employers and contractors should pay attention to this deadline. Quarterly payments of income tax, national insurance and student loan deductions are due to HMRC from small employers with those deductions amounting to less than £1,500 each month.

Electronic payments should be cleared by 22 July. Interest and penalties may apply on late payments.

Wednesday 31st July - 2018/2019 2nd Payment Self Assessment Tax Return

This is for the second payment due from individuals on their self assessment tax return accounts to HMRC. This for payments on income tax, Class 4 national insurance, High Income Child Benefit, and capital gains tax.

The deadline is 31st July, late payments may incur interest.

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