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VAT on Early Settlement Discounts

To tie in with the EU VAT directive, the long standing VAT rule regarding early settlement discounts is changing from the 1st April 2015.

The current method is to calculate the VAT assuming that the customer pays within the agreed time and, therefore, receives a discount. If the customer fails to receive the discount the VAT is not recalculated and is still charged on the discounted price.

The new legislation will require the supplier to calculate the VAT on the full price and then, if the customer qualifies with the terms for the suppliers discount, the VAT can be adjusted. This will add an extra level of paperwork to suppliers who offer the early settlement discounts and will make them less common.

Auto Enrolment

For many small employers the administration of payroll is about to become more complicated and time consuming. Auto Enrolment will require any qualifying employees to be enrolled in to a qualifying company pension scheme. Once enrolled the employee and the employer will make contributions based on a percentage of their salary. By 2018 this will be a combined 7% deduction which after tax relief will contribute 8% of the salary to the employee’s pension.

The criteria for your employees is descriptive, however, in some cases employees outside of the automatically enrolled group have the right to join the pension scheme.

Your number of employees will determine the date when you will be required to comply with the new legislation. This staging date for your company is available from The Pension Regulator using your PAYE reference number.

Our advice is to prepare in advance for the new rules and use a qualified Independent Financial Advisor to help you set up a pension scheme.

To assist you with your obligations our Payroll Service will automatically calculate your deductions for qualifying employees.

Taking over the family firm

Our existing clients will know that I have recently taken over the day-to-day running of the firm and my father has taken a big step back from the business.

Having worked at Franklins for over 8 years I am confident that I know what has made our firm so successful over the past 30 years.

Accountancy publications continue to predict the demise of the small firm. I think that they miss a number of very important points.

The smaller firms tend to attract small to medium size clients who they are inherently better to work with. We understand the intricacies of running a business in its entirety and can give more practical advice.

We pride ourselves on the relationships we have developed. We have worked with some clients for over 30 years and continue to advise them, their children and their grandchildren.

My father was very conscious that the success of an accountancy business was down to the staff. Not just their skills and knowledge, but also their ability to interact with each other and our clients. We value our staff and our clients appreciate the continuity of service from our team.

If you are unhappy with the current level of service you receive and would like to discuss becoming one of our clients, then please contact the office to book an appointment.

– Peter Franklin

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